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Most Recent Articles: .. .. Deflation with Inflation: No Recession, but Depression? "06.15.08 .. in order to survive, we will be forced to become a fascist aggressor or a socialist state. With the failure of Iraq, the latter seems more likely..."
.. Oil and war speculation "..the markets have reacted to oil price surges driven solely by speculators, and a preemptive strike possibility that has not even occurred...."
.. Bank of America & Countrywide: A signal of a housing bottom? The lender will once again have the position of strength.... ..
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Next for the Economy: The Greatest Bull Run in History? An analysis of the stock market and economy since the Bear Stearns incident in March '08...
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No Recession, but Deflation? The March '08 UCLA economic report so far is 'right on target.... .... .. ..
The UCLA Anderson Forecast Highly Recommended! ... Most Recent Articles: .. The Schizophrenic FED Gambit .. Bearish on Housing, Bullish on Stocks ..
Analysis of California Bank Earnings Highly Recommended!
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Q2- '08: Riverside-San Bernardino tops the list...
. Q2 2008 6-07-08:- Speculation on war and oil Home Page
9/11/2008 Update: I am avoiding stocks and real estate investments at this time; more attractive prices may be down the road. Possible continued dollar strength and deflationary trend. Hyperinflation is still expected with all the bailouts and debt our country has; and this is the long term outlook. Additionally, when the fed finally takes action, they may overcompensate its reaction to adverse dollar resilience. The markets today are not in any way logical or make sense; no one can predict what will happen, no matter what their credentials. In this type on environment, it seems wise to stay uncommitted and readily liquid until the hyperinflation makes itself apparent. Consult your financial professional; not investment advice (see disclaimer below).6.7.08: Israeli preemptive strike on Iran drives down markets 400 points!...Oh wait, that didn't happen; but the markets reacted precisely as if it had. Stocks were hammered this last Friday, plummeting below DOW 12,300 as we return to the same pricing levels surrounding the Bear Stearns implosion in march 08.
So we have to take a look at the why: Why did the market drop 400 points on Friday? Well, lets see: first of all, oil speculation. Oil speculation driving oil prices up 10 points in a single day on a statement. The statement implying (not even directly saying) a preemptive strike by Israel against Iranian nuclear sites. This statement was made by an Israeli government official; who despite being credible is in the midst of his own domestic scandal and is not even in power to act on the statement! Not a very legitimate method for devaluing a profitable corporations stock.
Lets say Israel does in fact attack Iran. How is this bad for the overall economy? Although it may cause short term disruption in the oil markets, a strategic preemptive strike by Israel on nuclear sites reestablishes the world order, and eliminates a significant threat to it.
The real culprit for the past two months has been oil. Oil returned to its highs, making a huge 15 point rally over two days, and causing enormous market volatility. There was a day where stocks and oil did not run adverse to each other on 6.5.08; both up sharply, then on Friday the inverse trend returned with a vengeance. Once again, oil speculation is what has driven the market, and speculation only. Some television pundits have said demand is what has driven oil up: and I am sure they have significant positions in oil. However, when asked to explain this demand, the response is usually in abstractions. Point being, there is no quantitative proof that actual demand is fueling the oil price surge.
Consequently, the markets have reacted to oil price surges driven solely by speculators, and a preemptive strike possibility that has not even occurred.
As far as the stock market valuation, there has been some improvements in the financial sector, namely large cap banks. Since the general earnings implosion in financials Q4 '07, Bank of America, US Bancorp, and Union Bank have shown improved earnings from Q4 '07 to Q1 '08. Therefore, yes things are difficult right now, and unpredictable; but do we face the same issues and uncertainties as when Bear Stearns collapsed? I don't believe so; the markets in theory have already recovered from the sub prime implosion and Bear Stearns, thus the 13,000+ run up. The financial sector is not primarily responsible for what happened over the past week, although it did play a part. That being said, any signs of earnings recovery in the large cap banks will bring significant restoration to the markets.I am looking to make stock market entries at the 12,000 and 11,800 level, if we see those levels. The fundamentals of this recent sell off are shaky at best; and real opportunities arise from these types of events... NOT!
Written by: The Sniper
. © 2008 Realtech Partners, Inc. All Rights Reserved. Email.
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**ARTICLES** Most recent listed last
. Q1-Feb 10 '08: - The Perfect Storm of Economic Downfall Q2- '08: So what do we do now? . .. Q1-Feb 21 '08:- The Counter Intuitive Market Force: But Housing is the Exception Q2- '08: Analysis of CA Bank Earnings . ... Q1-Feb 21 '08:- The 5% Income Rule Q2- '08: Riverside-San Bernardino tops the list... . ... Q1-Feb 21 '08:- A Compelling Argument for Alternative Investments Q2 '08: - Oil and war speculation . ... Q1-Feb 26 '08: True Market Analysis, or Self Interest? Q2 '08:- Bank of America & Countrywide: A signal of a housing bottom? . ... Q1- '08: No Recession, but Deflation? Q2 2008: Deflation with Inflation: No Recession, but Depression? . 3.17.08: Next for the Economy: The Greatest Bull Run in History? Q2- '08: The Schizophrenic FED Gambit .. Q2- '08: Bearish on Housing, Bullish on Stocks
Realtech Partners, Inc. - © 2008. All Rights Reserved. Email
DISCLAIMER: Not associated with any city, county, civil entity, or government body. No warranties are stated or implied. Use at own risk. External web sites are not endorsed. Users agree to all terms. These articles merely reflect the opinions of this author and are by no means a guarantee of future economic conditions. Though the author strives to provide accurate and relevant data, he sometimes relies on external sources and cannot assure the reader of the accuracy contained within. These articles are provided for information purposes only and are not meant to provide investment advice to anyone. Please consult with your professional financial planner for investment advice.
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