Monday madness

Discussion in 'Economics' started by Robertd892, Aug 6, 2011.

  1. So whats your bet? Did the market react to the downgrade before it happened. OR was the last week of losses a precursor to whats coming Monday?

    I am completely sidelined(not even in gold), to many factors in play that could potentially make 08's downturn look like a little pot hole in the road. Simply to much risk! The potential reward....just aint worth it.

    (Rule 1, dont be greedy)
  2. Eddiefl


  3. pitz


    Will this finally give rise to a long-awaited disconnect between the US market, and that of the rest of the world?

    I've been sitting here, for almost the past 3 years, scratching my head as to why the world markets have been so tightly correlated, when the misbehaviour has mostly been concentrated in just a small handfull of countries.

    Look at Canada, for instance, earnings amongst Canadian firms barely fell over the past few years and have made a full and complete recovery without currency debasement. Did the Canadian market deserve to fall as severely as the US markets during the 2008 crash? Of course not.
  4. How awesome would it be for gold to go up like 10% or so in a day.

    Headlines globaly would spell armageddon.
  5. 377OHMS


    Great post. Any thoughts on why that tight correlation occurs?
  6. pitz


    As I said...I've been scratching my head. But I do believe that there is a significant amount of cross-ownership of foreign firms, by US interests, and vice versa. So capital pressures on the balance sheets of US investors get reflected in liquidations of foreign stocks, and vice versa.

    At some point, and I believe this point is soon to, if it hasn't already arrived, the USA's dick simply isn't big enough to swing over all the other asset classes in the world and influence their behaviour.

    As for Monday, I'm personally looking for a down day in the US stocks, but the foreign stocks will be nicely green. This is what happens when there is actual capital flight. No longer will trashy bubbles like Google, Netflix, salesforce, etc., be able to command P/E premiums that are unjustifiable by anything they could possibly create and sell.
  7. i wouldn't be surprised if the dow opened up 300 or down 300 on monday
    either way, both scenarios are a sell imo
    personally positioned 50% long and 70% short in stock port.
    cash in fut. port.

    leaning more towards the negative scenario. all the doomsayers were on tv last night.
    we'll see
  8. AK100


    It could very well happen.

    But then what happens to the price of Gold shares?

    How about 20% down? Sadly, that's only half a joke it could happen.
  9. AK100


    Anyone got an idea what German Bunds might do?
  10. There goes gold....
    #10     Aug 7, 2011