Sell Side calls for calm after "Global Market Wipeout" !!

[vinoveri]

http://www.bloomberg.com/news/2014-0...k-wipeout.html


Uh, market moved up greater than 150% and now we have a 5%+ correction in US equities (OK, a little more in emerging markets), and we need to be all calmed down b/c of a 5% wipeout.

A call for calm under such a benign correction (so far) is a bit disturbing and translates into a call to sell imo (assuming you have anything to sell that is)

[Fox]

Re: Sell Side calls for calm after "Global Market Wipeout" !!

What makes it "different this time" is that everyone really over extended themselves to give this rally legs. Hedge funds, Central Banks, Retail investors, Institutionals; everyone went all in to make 2013 a record year.

Now that everyone is all in, who is left to buy?

The calls not to panic are just the talking heads trying to stoke up some bag holders. However there is no more money on the side lines. Even the Fed, with infinite disposable cash, is packing it in.

So now the bear market begins. Each sell will produce losses and a little less money to pump up a rally. This knocks on to the hollow economies such as china and Europe, and the cycle becomes vicious. Each peak will be slightly lower, each dip slightly longer, wash rinse repeat until the bottom is in two years from now. And then when everyone says "Never invest in equities again" back up the truck and enjoy 50% yearly gains.

It would be laughable if it wasn't for the fact that this is the third rendition of this script in 15 years.

[GRG55]

Re: Sell Side calls for calm after "Global Market Wipeout" !!

What makes it "different this time" is that everyone really over extended themselves to give this rally legs. Hedge funds, Central Banks, Retail investors, Institutionals; everyone went all in to make 2013 a record year.

Now that everyone is all in, who is left to buy?

The calls not to panic are just the talking heads trying to stoke up some bag holders. However there is no more money on the side lines. Even the Fed, with infinite disposable cash, is packing it in.

So now the bear market begins. Each sell will produce losses and a little less money to pump up a rally. This knocks on to the hollow economies such as china and Europe, and the cycle becomes vicious. Each peak will be slightly lower, each dip slightly longer, wash rinse repeat until the bottom is in two years from now. And then when everyone says "Never invest in equities again" back up the truck and enjoy 50% yearly gains.

It would be laughable if it wasn't for the fact that this is the third rendition of this script in 15 years.

I don't think the stats show "retail" got in on this baby in a big way. If the Fed makes nice cooing noises and a reflation mentality is accepted (taper if necessary, but not necessarily taper) they might be able to salvage this thing until 2018 as EJ has suggested. Plenty of time for the sheeple to participate and lose their shirts...

[BadJuju]

Re: Sell Side calls for calm after "Global Market Wipeout" !!

I hope not. I want gold to skyrocket so Mega and I can pick up tricks on the cheap.

[Fox]

Re: Sell Side calls for calm after "Global Market Wipeout" !!

I don't think the stats show "retail" got in on this baby in a big way.

Actually I think you're right about that. With the baby boomers retiring or staving off jobloss or financial collapse, the retail investor is pretty much dead it seems. Although the calls for the small guys to "Buy now!" where becoming pretty maniacal last quarter.

But its the FEDs game, and the Fed (at least Plosser) see's the skies as bright.
Philly Fed's Plosser: Speed up the taper
"What is the argument for continuing to increase monetary policy accommodation when labor market conditions are improving rapidly, inflation has stabilized..."

And this on a day when the jobs report was a big miss. Damn, there's some good shit floating around today. I'm missing out.

Anyways, leading indicators (of which Emerging markets and Canada is one) show that things are heading south this year. Perhaps Plosser is stoking high expectations to help gain that "reflation mentality" you mentioned when TSHTF.

Either that or he needs to change his bong water. I think the Fed is sounding pretty loopy these days

[vinoveri]

Re: Sell Side calls for calm after "Global Market Wipeout" !!

I don't think the stats show "retail" got in on this baby in a big way. If the Fed makes nice cooing noises and a reflation mentality is accepted (taper if necessary, but not necessarily taper) they might be able to salvage this thing until 2018 as EJ has suggested. Plenty of time for the sheeple to participate and lose their shirts...

or if that doesn't quite work, they can always buy corporate bonds and equities - granted they likely wouldn't do so until the market goes down a lot - but with what they've already done, such would not be too shocking; I even think that is why iTulip is hesitant to call a short; the line has already been crossed and the Fed has not been checked, and no one really knows how or when they will step in - but that they will in fact is not in question. Note we don't hear too much more about the secretive Plunge Protection Team; it's because we no longer need them; everything is out in the open (well sort of if you're paying attention) and the Fed can choose how and when to ride to the rescue - there is simply no way to predict when/how it will end absent a sovereign debt or currency crisis.

[DRumsfeld2000]

Re: Sell Side calls for calm after "Global Market Wipeout" !!

Martin Armstrong has said the same thing. I believe that he still expects a melt up in the next few months coming from retail and the big collapse in 2015.