"Not a bear-market rally but the greatest sucker rally in history"-Barrons

Barron's magazine

http://yahoo.smartmoney.com/barrons/

Jeremy Grantham — of Grantham, Mayo, Van Otterloo & Co

"With 35 years experience under his belt and $48 billion under management at the firm he helped found, Grantham is well worth listening to.
...
The simple story is the market is overpriced and will go to a trendline P/E, which we now believe is 16 times...Currently, the market is around 24 times trailing earnings, on a fairly generous earnings estimate. This is not just a bear-market rally but the greatest sucker rally in history.
...
What is unique to this cycle is debt has not declined. It has, in fact, risen dramatically at the government level, quite dramatically at the corporate level, dramatically at the foreign level and very substantially and steadily at the consumer level. This is not a good picture."

-in the article he says the boom is tied to third year of the presidential cycle, when everything booms regardless of value to pump jobs, and further that 2004 should be "neutral", and 2005-6 will probably be "painful" a "black hole".

Wow!-The "nut cases" and I having been saying this for years, and now it's in Smartmoney, Barron's, and publicly out of the mouth of a huge trader.

-I think DC will try anything to hold it together, but it all depends on the actions of the international community.-

Do you think that the bubble will burst sooner or later?
When and why?

edit: to remove redundancy

NT

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I sit at home and wait for people like you to post here....

That is until I can cash my welfare check...

:evilgrin:

Anyway, you gotta do the beer run, remember? And pick up some cheez whiz while you're at it, OK?

We need all of the welfare money for beer and crack.

Priorities!

Easy times are just around the corner when that cheap BFEEª Afghan heroin hits the street.

born this week.

She will be in the hospital for a while so you get an extra check and don't even have to buy formula. Here's a tip, you don't have to buy formula even when she gets out, they give that suff away at the soup kitchen so get in the dillac and pick it up, and then go get pregnant with number 8! As long as you can keep popping them out you’ll be rich!

The Kmart at 75 and 116 will take food stamps for beer, and return cash so we can go by some stash! Life doesn't get any better than this, let's just hope the Republicans don't get any more power!

Hope is for fools. Stick to the facts, pal.

Do you invest your nest egg in the market in order to help the fraud actually win it this time? If you do I feel sorry for your ass.

Squaaaaak!

My attitude is that all the big guys are selling and going to leave the american populace holding the bag again.

Do you think this huge trader (48 billion) is "hoping" for a crash too?

If you read the article, the third presidential year boom theory, has nothing to do with who is in office, in fact he claims it started with Roosevelt.

Are you hoping the market will never have anything to do with actual return on investment and the bubble will continue to swell until a burst causes unbelievable pain, suffering, and misery?

the boom ran from 1927 thru October 1929. The Great Crash followed, then the Great Depression.

Typical of the Rethugs to accuse FDR of what Hoover and other Rethugs before him (including both Harding & Coolidge) did.

Cut taxes for the rich and protected favored industries.

Look around. Look at the fundamentals. Look at the ethical state of Wall Street. Look at the U6 unemployment reports(The REAL numbers...). Look at the off-shore movement of jobs, manufacturing and capital.

Then ask yourself if realism trumps pie-in-the-sky bullshit.

Sure hope you don't lose your job soon.

We may be Democrats, but we speak the same language. Make use of it.

Do you sit at home hoping that the "Bush boom" won't be a MOAB on the economy?

Well, guess what: it's gonna be time to pay the piper soon.

Why should we cheer when middle class Americans buy stocks at prices 30, 40, 50 or more times earnings, particularly when these stocks pay no dividends? And when many of these companies have declining or negative profits? No jobs are created, except for a few criminals at brokerage houses. No goods and services are created by overvalued stocks. This is pure speculative mania, better that it crash now than later when the problem is even more out of control. A real conservative would deplore this situation.

What do you mean will. It stalled the very day after Bush* was selected. It is being pumped up by every means they can find but none will last. People just don't trust Bush* on anything especially the economy. We went from the largest surplus in American history when Bush* was sworn in to the largest deficit in American History in a matter of months. We don't have to wish for him to fail. He is very capable of that on his own. Just review his history in Business and Government.

Look at the average length of unemployment, the deficit created by a CONservative congress and president, high corporate and personal debt it goes on and on. WE don't want the economy to be bad and the Republicans are oh so clever to say it's us Democrats we want a bad economy, we need it. No, IT IS BAD. People are dying daily in IRAQ the situation is a blood and money pit. These are the facts. 7.2% increase in GDP HAS NOT create any jobs of any real significance. Look at some point the Republicans will have to take responsiblity for their actions. If we lose in November and 2005 is "painful" like the article above implies then by what possible measure would it have been the democrats fault. Congress has been run by tax hating spend crazy set of Republicans since 1994, Bush has rubber stamped their priorities and congress his. It's all the republicans babies, the economy, Iraq, North Korea, terrorism...

As in, you find a Greater Fool than yourself to sell to.

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rockefeller, and bet the house on George the monkey.

stock market behavior where a stock rises in price as long as a "greater fool" is willing to buy it at a higher price....


I have so much time on my hands waiting for my welfare check that I can learn all kinds of interesting things...

The news is getting out-
Millions of widows, retired people, pensioneers, savers, working people may not have to spend the rest of their lives living in the street if they take action now.

Read this article

http://www.msnbc.com/news/989734.asp?0si=-&cp1=1

Wealthy ("Super-Rich") losing faith in Wall Street

Survey finds 79 percent do not trust corporate management

A survey of some of the nation’s wealthiest individuals, released Wednesday, strongly suggests that the wave of corporate scandals has shaken their faith in the credibility of corporate managers.

ACCORDING TO THE SURVEY by U.S. Trust, 79 percent of the nation’s super-rich “question the reliability” of corporate financial statements and do not trust the recommendations of equity analysts. A slightly smaller number, 67 percent, said they do not trust corporate management, and 65 percent do not trust independent auditors.

Yeah, Barron's, the super rich, the huge traders, smart money, and I are just talking out of our asses, unlike some others

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for starters. Putting a leader in that will govern for ALL of us, not just a chosen few. Sure, it will take on hell of a long time to clean up this mess, but Bush is only for himslef and his cronies. If Bush gets re-selected, we are soooo fucked. It could be over. If it isn't already.

there are nine to choose from.

1. Change Federal income tax rates to what they were in 1969, adjusted for inflation.

2. Increase taxes on the wealthy to make up for changes since 1969 on Social Security and Medicare.

3. Single payer health plans

4. Tax property in excess of $10 million.

5. A real industrial policy.

6. Nationalize the banks.

7. Re-institute the WPA. Tax broadcasters to fund PBS, NPR, and non-profit alternative radio and TV.


That's a good start.

The last thing this country needs is a functioning federal government and a reasonable tax structure.

Farce that it is likely to be

(I hope I am wrong, but since Bunnpypants* ascended the throne by applying Totalitarian Rules to the situation I've seldom been wrong)

The Busheviks will use every trick and sucker-ploy to keep it shooting upwards.

After 2004, they will let the whole thing go, it having served it's purpose.

But it should be ok until Nov. 2004 and might even reach 11,000...

that if the economy continues to improve and Iraq doesn't turn into a shooting gallery * will be difficult to beat....

you're smoking?

and four presidents to get out for good....


If you think we can beat * on the situation in Iraq alone I have what you're smoking... I prefer a pipe over papers....

it took quite a long time to get to 150 a week. And Americans today don't have the tolerance for that shit. I would hope we learned something from Nam.

them I have seen present targets, some of which are hit and others that aren't (all at once, anyway.)

My neighbor kid (19) is there and his emails call it precisely that: a bidirectional shooting gallery. Also a quagmire. If you wish, pm me and I will give you an email address to him and you can take it up with someone who is there.

I am heavily invested and I have made some substantial profits since the war started in Iraq, I plan on getting the hell out the markets shortly after the election however, because I have a bad feeling things are going to hit the shitter.

if your sitting on a 20% to 30% gain since the war started, get out now. What do you think this is, 1999?

next year, and I tend to believe him. He got me back in the markets at the ground level earlier in the year.

*edited to say that this same guy recognized the peak in 1999 as well.

And I won't bore you with my amatuer market analysis, which has been quite wrong in the past. But how much is your portfolio up this year? 20%? 25%? 30%? Ask your broker how many times the markets have seen a 40% gain in a year. Then ask him if he thinks this will be such a year.

my broker tells me that it would not be uncommon for it to continue to run up since we have come up from such low lows.

But ask him anyway.

Just like Bill Fleckenstein, David Tice, et.al. Believe me, the Bulls can debunk all of this shit, and the Bears will come right back at them. And so on.

You should have learned not to trust financial commentators when the bubble burst. You should think for yourself and watch your stocks like a hawk. Buy and sell according to your rules, not theirs.

The mean ratio in most bear markets go down to about 13/1 or less. I personally would not buy a stock with anything higher than a 15/1 ratio, myself.

economy into a death spiral. A terrorist attack, another financial scandal, or more instability in the mideast could drag our economy down.

Has returned to the market. Which means that the same greedy jerks are stealing money again.

Glider pilots know what I'm talking about. you think you got humungous lift, but you don't notice that you're pulling back and losing airspeed until it's almost too late....

Is that what he means? this isn't a bull, but something phoney?

This is one of the biggest bear market, sucker's rallys of all times. Just when the bear resumes is a bit of puzzle. I think anytime now is appropriate. Whether Bush and Greenspan can prop up the market for another year is questionable. We've got nowhere to go but down. PEs are at historic highs, not bear market bottoms. The insiders have been selling for months, so bag holders beware.

I'm awaiting a pullback that I felt was due in October myself.
There's little volume and a shrinking group of popular issues going higher.Hot money has been selling all the way up and is out the door,looking for income property.

Most traders feel, to quote a Wave trader I know "like someone running on ice at full speed with the old legs pumping, but going nowhere."

There's too much false movement being pumped up by the funds handing off and selling amongst themselves. The Hedge traders are net short and the margin (leverage) of the Bond traders is at record highs , higher than the LTCM credit meltdown peak of leverage.

None of this looks good kids. This current market by any reasonable measure is one of the most "highly over valued" markets in history. We are seeing things like insider selling NOW ---at all time highs, after weeks and recent months of decade plus extremes. Investor
Intelligence reports "Bullish" percentage readings consecutively above 50% --- setting all time records for this long lived survey of advisory sentiment. The same over valued speculative stocks that lead the market to the mania/bubble top in 2000, are once again leading this rally, "real" Bear to Bull market changes are supposed to see leadership changes, that has clearly not happened here.

All this is good argument for a decline, which makes anyone entering the market at these levels "suckers" if a decline happens.

Mike Draculick , an Elliot Wave technical analyst I'm familiar with, says "Bear markets are supposed to KILL speculative sentiment, does or has anyone seen that in this rally? Recently Nasdaq margin levels exceeded those seen at the 2000 high, no "speculation" huh? And why are key market stocks like GE/WMT/IBM/MSFT lagging and trading so badly? None of this is short term timing data, I try to use Ewave patterns and technicals for that. But I think it should put in a proper perspective what the "common sense" risk/reward parameters are from current levels. As we saw in 1999/2000 these things can get and go to even more ridiculous levels, lets watch and see just how crazy this one gets. It seems that to many 1999/2000 never happened, apparently it was just a bad dream. Since movie "sequels" are so
popular, it appears very possible Bubble 2 is now playing at your local stock market. Now, how long will it run.......