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  • frankcastle313 frankcastle313 Jan 24, 2014 10:22 AM Flag

    Wonder if this is beginning of a big market correction

    It has seemed inevitable for a long time but the market has kept marching on lol.....hopefully QCOR will continue to be a safe haven for a downward market

    Sentiment: Strong Buy

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    • From Bloomburg

      Indeed, despite a few high-profile blowups, earnings for S&P 500 companies that have already reported are tracking ahead of expectations.

    • Last year I ran a financial model regressing the changes in stock market earnings yield to those of bond market yields. I used S&P 500 earnings yield as proxy for the equity market and the 10 year US Treasury for the bond yield. Interestingly, the signals given by my model month after month had been consistently pointing to decline in the equities.

      However that didn't happen and the rally persisted at least till the end of 2013. Although covered by the media, the reason for the persistence was due to the 'unnatural' behaviour of most money managers (index-based) seeking higher yield equities offered vis-a-vis bond yields that were artificially depressed due to the Fed's pumping through QE. It actually helped running the financial model as it confirmed a few things about mindless index-based investing: (1) money managers believe in efficient markets, (2) the Fed model is used to shift money between asset classes and (3) money managers have herd-like behaviour.

      Real suckers are retail investors who may have been tempted to put their money with the herd thinking the party has just gotten started.

      On the global front, the QE has hurt the rest of the world. The QE money actually went to emerging markets especially in real-estate and the equity markets creating pockets of bubbles. US M2 growth doesn't reflect the QE effect on ground.

      By my model the correction that is underway is to the tune of ~40%. Ridiculous as this decline may sound, would mostly be due to the taper effect and China effect.

      But we, my friends, if all goes good will be going against the market this year. Good luck!

      • 2 Replies to na33mahmed
      • Where does the USA being energy independent in 15 or so years factor into the equation? Some people believe that 3% GDP growth for an econmy our size is great... In a few years when the USA prints 5% GDP growth... I think some economists will be in awe.... I am with Nomad... Infrastructure MLPs (and Railroads) need to triple to accomadate the "new way" we distribute our energy.


      • What else would you expect when the rest of the world embraces corporate fascism over pure, free enterprise capitalism!! Only Iceland will be spared this global calamity as they were smart enough to capture, prosecute and incarcerate the globalist bankers who tried to prop up their prosperity through debt and then ask for payment from their citizens!

        Although I do agree with you that QE was designed to go to a select few who through it away into real estate both domestically and internationally, I don't agree that we are about to see the big 40%(approx) correction/recession. This isn't the big one yet...

        Again, to summarieze Peter Schiff: The FED WILL NOT BE TAPERING. Their measly 10b reduction was just a ruse to make you think they will somehow pull the other 70b in the next year. If anything, QE will only increase!!

        in 1939, the US had an industrial base able to manufacture their way out of the Great Depression, today, this country is mostly service based. With the Fed (which isn't federal at all btw), the US govt (both parties, which is now becoming clear that it's really just one party), the lazy populace (about half) and a drugged up society, we are at the threshold of another Great Depression. You can point to no only obvious similarities to 1928, but you can also point to thousands of anecdotal examples of why this will occur AND how dug in and prepared the govt is getting. I know this is a just a Yahoo Message Board and most don't care about the hot air "greatest Bull Market Ever" argument (which btw is only 15% above where the market was in 2008 highs), but there is no escape for basing your investment future on free market PRINCIPLES when the REALITY is that our globalist based economy is corporate fascism at the most benign level.

        Keep doing me the favor and continue to thumb down my posts without countering my argument with facts and logic. Please no more Peter Schiff bad, Obama GOOOOOD logic - I laugh every time!


        Sentiment: Buy

    • Here is why I think you are right and there is a 10% plus market correction... Peter Schiff is right yet again boys and girls... While I find it hard to have much optimism in key numbers resembling the Carter years, individual business and sectors will go against the grain of the overall global economy and fiat currency printing and monetary manipulation. Argue all you want, but you know the government is lying out of its #$%$ with almost every economic data point including GDP and inflation and EMPLOYMENT.

      We all know that wallstreet cheers when the economy added 200k jobs all while 600k leave the workforce... They love touting the fact the "economy added 7million new jobs since the GREAT recession" - while almost 20m jobs have been lost all the while. These people are not borderline criminals, THEY ARE CRIMINALS.

      Here is where the correction comes in: Helicopter Ben will "begin tapering" conveniently as he steps down so when the whole thing crashes he can say, "well when I left, things were gong fine". We dug our graves in 2008 when our dear leaders began this bailout and monetary "easing" scheme. Why bother with sound money when all you have to do is borrow from future unborn generations, from China and tax prosperity that much more. Now they are calling for raising the debt ceiling earlier than thought because they can't even get the damn tax "revenue" they were hoping for. The unemployment number of adding 67k jobs while losing over 500k in Jan is 1930's #$%$ reborn. Inflation is off the charts and if you believe the govt.'s CPI numbers, I have a bridge I can sell you in my bathtub.

      This will all come crashing down in the Obama presidency at some point. For now, there will be a market correction as reality sets in until the govt. begs for even MORE POWER AND CONTROLS and that will make everyone feel better...

      I'm looking at 10%-20% correction at this time. Sure it may be fine next week, but this trend will continue into february.


      Sentiment: Buy