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I have a new conspiracy theory based on $1,000 "precious barrier" (see below) thinking.
The powers that be (the government) don't like $1,000 gold. They'll do everything in their power to knock it down (assuming their sophisticated trading platforms can manipulate its price).
Other powers that be (some hedge funds) don't like $1,000 S&P 500. They'll do everything in their power to knock it down (assuming their sophisticated trading platforms have them positioned to profit off its decline).
It's a crazy theory of course. Totally crazy. It just doesn't make any sense that either of the powers that be would start whacking so soon.
Nikkei Comparison Suggests S&P 500 of 1400 by Year End – and 400 by 2014
Merrill Lynch Asia (Bank of America) strategists Sadiq Currimbhoy, Arik Reiss, and Jacky Tang suggest that the S&P 500 could soar another 40% by December 2010 before it collapses completely based on a unique comparison with the Nikkei 225.
...
Were we to apply the same approach to the analysis of the short-term price for gold and silver a record price would result for gold and a dramatic increase would be realized in the price of silver. Gold has gone up only 8% YTD vis-à-vis the S&P 500’s 13.9% or 57.5% as much. Therefore, should the S&P 500 go up 40% one could expect, under this scenario, that gold would go up a further 23% (57.5% of 40%) which would put gold well above that ‘precious barrier’ of $1000 to a record $1175 by year’s end. Again, the results of the comparative analysis seem achievable.
You know what? I'm fine just sitting over here on the sidelines in TIPS and I-Bonds. Permanently.
ICE: Mortgage Delinquency Rate Increased Year-over-year in October
-
From ICE: ICE First Look at Mortgage Performance: Serious delinquencies hit
17-month high while foreclosure activity remains historically muted
• At 3.45% ...
2 hours ago
2 comments:
Mark,
interesting theory. Gold $1000 is a barrier, but the 1000 mark on S&P was blown away. It gave a bit back today though.
GYSC,
In early 1998 the S&P blew through 1000 like a knife through hot butter. It then crashed that summer.
In late 1998 it blew through 1000 like a knife through hot butter again. The coming years were not so kind to it though.
In late 2003 it blew through 1000 like a knife through hot butter yet again. Big time. Unfortunately, the coming years were not kind to it yet again.
In mid 2009 it seems to be blowing through 1000 like a cold knife through hard ice cream. ;)
Just how many more chances to blow through 1000 is it going to get before most investors become as bearish as I am?
The S&P closed at 998.04 today. It will be interesting to see where it goes from here.
I'm pretty much a permabear these days I guess. I see nothing that makes me excited to gamble in the stock market casino again.
I can say that I turned bearish at the end of August in 2004. It's been 5 full years. The S&P 500 was 1100 then.
Hindsight shows that while I don't necessarily believe in market timing, I do apparently believe in market tanking.
I was bearish mostly on the chance the next decade would be awful for investors based on the debt we were taking on as an attempt to keep the party going. I simply did not wish to risk it.
I'm actually more bearish long-term now than I was then though, for the exact same reasons. I'm not a believer that taking on extra debt to keep a party going is a very good idea. However, its not like I have any great ideas on what the alternatives might be.
For example, say you lose your job and turn to the credit card in order to eat. One alternative would be to not eat. Good luck on that one!
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