Higgenbotham wrote:Don't quote me on it,
Sorry, I couldn't resist.
Sorry, I couldn't resist.
Barton Biggs, the hedge-fund manager who recommended buying U.S. stocks in March of last year when the S&P 500 sank to a 12- year low, said American equities may rise another 10 percent to 15 percent over the next couple of months.
“I’m very struck by the level of bearishness everywhere I go,” said Biggs, who runs New York-based hedge fund Traxis Partners LP. “I’m not obsessed with history. I’m bullish because I think the global economic recovery is on track and is going to be surprisingly strong. The world was falling apart in 2009. There’s been a tremendous change.”
I'm guessing it could be over as early as next week, maybe sometime in the middle of next week. Anybody else? Any of you still short and thinking the end is nigh?
Higgenbotham wrote:The "South Sea Bubble" scenario. Someone else sees it too. And as he does a nice job of pointing out, it would seem to be the Maximum Ruin scenario.
http://www.minyanville.com/businessmark ... 0/id/27263
Can they suck the public in?
The inflection point appears to be here.
The other possibility is that bullishness and inflation fears have reached their maximum point. These comments and the comments I quoted from Biggs could indicate the market may have reached its apex or is very close.
John wrote:He seems to be predicting a huge surge until June, and then a huge crash.
Doesn't that contradict what you're saying?
Higgenbotham wrote:> We're really in a heap of trouble, John.
The "Dumb Money" indicator, which is shown in figure 1, looks for extremes in the data from 4 different groups of investors who historically have been wrong on the market: 1) Investor Intelligence; 2) Market Vane; 3) American Association of Individual Investors; and 4) the put call ratio. The "Dumb Money" indicator has turned bullish to an extreme degree. Extreme bullish readings in the indicator imply that a price move is nearing its end, and the ascent of prices is surely to show. This is our expectation 85% of the time. The other 15% of the time or what I like to call "it takes bulls to make a bull market" scenario, the market will continue meaningfully higher despite increasing bullish sentiment. We saw this in 1995, 2003, and 2009 when the markets were coming off of long periods of under performance. I am not banking on this time being different.
John wrote:Higgenbotham wrote:> We're really in a heap of trouble, John.
As you know, Higgie, I agree with everything you're saying, but
there's one more angle. I've come to believe that whatever crisis is
coming, it's probably not going to begin on Wall Street. I believe
that the probability is higher that it will begin in Europe or China.
In Europe there could be a major crisis beginning in any of the
PIGIES, and China is extremely unstable, both financially and
Of course, it's a distinction without a difference, because if a
crisis begins in Europe or China, it will then spread to Wall Street
before you can say "Jack Robinson."
Do you think it could begin with a bankruptcy of one of the states like California? Or the sudden realization that the banks are insolvent and the government really can't stand behind them any longer? Or do any problems in the US occur as a result of problems on the periphery (the smaller and more unstable countries like Iceland, Greece, etc., which eventually works its way up to larger countries like Spain or China and gets to the point where a bankruptcy occurs in an entity that is "too big to save") because the periphery is naturally weaker? In other words, the dominoes fall in approximate order of size and the US is the largest, so anything here falls last.
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