Sentiment re: US Equities -- apocalypse coming??

Discussion in 'Trading' started by bungrider, Mar 28, 2003.

  1. Let's put aside the ethical discussions about war and talk about (gasp) trading!

    Has anyone else noticed the increasingly apocalyptic forecasts by economists appearing on the news??

    And many posters here (myself not included) have repeatedly brought up the overwhelming amounts of household debt.

    Plus the homebuilders and the defense stocks seem like their uptrend may be over, and gold is staying strong despite reports of large selling.

    And now there is a fear of inflation.

    Plus that derivatives exposure, which is theoretically hedged, but then again, lots of hedge funds go bust...

    No politics here. Just economics...
  2. curbs in again today (mon) right near the open...

    gold rallying...

    uh oh
  3. Inflation is already here and in spades...I just think that the entire economic community has grown so fearful of the dreaded "I" word since the 1970's that they will find any way whatsoever to avoid admitting to it...It is ravaging the insurance industry, home prices flying higher despite a major recession, food costs, oil, etc, etc...
  4. It's called the Wall of Worry. It's almost always easier to construct a scary hypothetical using a parade of horribles. Who knows, occasionally that's the way it plays out but statistically, that has not been the way to make money. Usually things have a way of muddling through.
  5. true enough...But I always felt that "wall of worry" was a phenomenon that existed only during corrections inside an existing bull market...Now that it has turned into a prolonged bear market, I think it is fairly safe to say that the brief "optimistic" 10-15% razor sharp rallies are the "wall of hope"..
  6. Yes, it is a bit tough to know what the true role of equity panic selling is going to be in any economic slide right now, when many of them are still extremely overvalued, such as EBAY...

    Another thing that I found a bit odd (but never followed up on) was the significance of the last FOMC meeting, when they did not make any comments on the current state of the economy, or the effect of the war (and I could be totally wrong here; like I said I haven't folllowed up on it).

    And Buffet's comments about how a major re-insurer has stopped paying out also stick in my mind, and I haven't followed up on it either.

    If anyone can spell out the deal with Buffet and the significance of the FOMC lack of comment for me, I'd be much obliged...

    Thanks in advance,
  7. Well, from what I remember the FOMC was basically taking the stance that they cannot determine "visibility" going forward without a definite time horizon for the war...So when the FOMC is saying stuff like this, in addition to the major conglomerates, its not such a good thing...Buffett has been throwing out the hints of derivatives disasters for awhile now...Sort of like when Soros makes his macro-economic commentary from time to time...

    One thing that I know for certain...Since the war began, I rarely even hear more than a brief soundbite about the economic situation...If you remember a year ago, when the Enron scandal was still in all the headlines, nowadays, the interest seems very anemic...No one seems to really have much to say good or bad...Its just alot of the same "no visibility" chatter that just suspends judgment on the current state of affairs...
  8. lindq


    That's why they call trading "Climbing the wall of worry", right? I can't recall a time...ever...when there wasn't at least five things to worry about.

    Pick five, at any time:

    Fed Meeting
    Greenspan's briefcase
    Warnings season
    NO warnings
    NO earnings
    Fraudulant earnings
    Too MUCH earnings
    Gap up
    Gap down
    NO war
    Long war
    Oil prices
    Energy prices
    Terrorist threats
    NO terrist threats
    Maria Bartoromo's hair
    Trade imbalaces
    Foreign Currency Crisis
    Your currency crisis
    ANY crisis
    CEO fraud
    CFO fraud
    SEC investigation (ouch)
    FBI investigation
    FTC investigation
    FCC investigation
    System failure
    Internet failure
    Failure to execute
    Failure to pay the mortgage
    Failure to tell your wife

    and on...and on...and on.
  9. I often think about this same concept. There is always something it seems. I have learned to overlook the commentary and just focus on the numbers and implications of news events.
  10. :D

    Yeah, no left out "money supply" :D

    My impetus in starting this thread was that we're starting to see economists on CNBC come out and get downright apocalyptic about the economy, as opposed to the hopefulness that many previously shared despite the weakening economic data over the past few years...

    Now, as traders, we all knew that this selloff would keep going, and it was funny last spring when Maria finally started talking about "short-selling" -- but what I'm finding interesting is the change in sentiment from the economists that you now see on the news from being moderately hopeful to totally bearish...
    #10     Mar 31, 2003