Category: stocks

Couple of Good Roubini and Einhorn Articles

As some of you know, Nouriel Roubini and David Einhorn are, IMHO, two of the best minds in their fields and I’ve been posting some of their stuff on here since at least 2006 (list of posts here).  Here are their latest articles:

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Market Update: Why I Closed My March Longs

Just time for a quick market update (here’s my prior update) and explanation of my May 6th tweet (the time stamp says 9:46 PM because I’m in Sweden, six hours ahead of USA ET, where it was 3:46 PM):

Just closed out all stock positions (long) I put on in the beginning of March: http://bit.ly/3299rF. Biggest gain: RIMM 89%; loss INTU -8%.

Comments on the chart below:

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Quick Market Update: High and Tight

This chart (taken intraday today), shows some very tight, low-volume action above a moving average that has not held for a long time. This comes after the gap up of a few days ago, which is also still holding.

We really could break either way here, but this action, combined with multiple other signs of decreased fear and flight-to-quality (risk assets and gold are up, spreads are down) and ability to hold on “bad news” (Jobless claims jump to 573,000, a 26-year high), is interesting.  The Fed is printing massive amounts of money.  It’s going to go somewhere (eventually).  Cheers!

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Rally Attempt Ends, NBER Makes It Official

Just a quick post to note the end of the rally attempt (its start was noted here: Market Update: Good News/Bad News).

Here is the Yahoo Finance arket summary and here are the volume leaders. As you can see, it was a 90% downside day and not a single stock was up on the volume leaders list (except a short ETF).

Also of note is today’s National Bureau of Economic Research (NBER) “news”: “The economy’s yearlong downturn, officially declared a recession.” I put “news” in quotes because their “economic indicator” (or whatever you prefer to call it) is backward looking, just like all non-market based economic indicators are.  Here is an LA Times article and here is the official NBER release.  Here is a blog I published over a year ago (in November 2007) saying the U.S. was likely already in a recession and why (includes annotated chart).

The only forward looking indicators, of course, are market-based ones, such as the stock markets and bond markets themselves, which discount things around 6-12 months in advance, which means (as always), that the bear market low will occur 6-12 months before the recession ends.

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