All financial asset classes rallying?

[vinoveri]

Any opinions as to whether we're at the stage yet where the CB liquidity is finding its way back into asset speculation? i.e., are we going to run back up to 14k+ on the dow and $100+ oil?

"We are thus in a situation where a return to optimism would trigger a huge

inflow of liquidity into markets of risky assets."
http://cib.natixis.com/flushdoc.aspx?id=42853

[Rantly McTirade]

Re: All financial asset classes rallying?

Note the date of that report you attached.
The beginning of the week that saw the SPX
drop over 18%.
I'd be skeptical of their analysis.

[vinoveri]

Re: All financial asset classes rallying?

Note the date of that report you attached.
The beginning of the week that saw the SPX
drop over 18%.
I'd be skeptical of their analysis.

They were referring to "when optimism returns" not the date of publication I believe. My question is has optimism (or better yet "confidence" in our CB saviors) returned to open the floodgates of all this pumped liquidity to see paper assets skyrocket again (and my gas bill go back to $4/gl)? Is it time to ride the wave, or wait to short again?

[Guest]

Re: All financial asset classes rallying?

Beware of piling in too heavily here. In fact conservative investors should stay the heck out of it until the second leg down has completed some time in the first half of 2009. From what I'm reading, we are going to go down a lot further after this rally! This is not a reversal of the new primary bullish $ trend. This is just a severely overbought USD starting a very sharp correction. There will be another larger leg to the (deflationary, for lack of a better word) bear market in the first quarter of 2009.

I think this downleg in the USD and resulting snapback rally in the CRB, Precious Metals and commodities in general (as well as stocks) is a selling opportunity to raise some serious cash. The ensuing second leg down in this bear may be god-awful. And if the second leg down breaks the 2002 lows then what I'm reading says it's shaping up to be the worst bear market in 200 years. No time to be playing daredevil unless you have very deep pockets.

[jdv]

Re: All financial asset classes rallying?

Beware of piling in too heavily here. In fact conservative investors should stay the heck out of it until the second leg down has completed some time in the first half of 2009. From what I'm reading, we are going to go down a lot further after this rally! This is not a reversal of the new primary bullish $ trend. This is just a severely overbought USD starting a very sharp correction. There will be another larger leg to the (deflationary, for lack of a better word) bear market in the first quarter of 2009.

I think this downleg in the USD and resulting snapback rally in the CRB, Precious Metals and commodities in general (as well as stocks) is a selling opportunity to raise some serious cash. The ensuing second leg down in this bear may be god-awful. And if the second leg down breaks the 2002 lows then what I'm reading says it's shaping up to be the worst bear market in 200 years. No time to be playing daredevil unless you have very deep pockets.

Well said.

[hellstan]

Re: All financial asset classes rallying?

Any opinions as to whether we're at the stage yet where the CB liquidity is finding its way back into asset speculation? i.e., are we going to run back up to 14k+ on the dow and $100+ oil?

"We are thus in a situation where a return to optimism would trigger a huge

inflow of liquidity into markets of risky assets."
http://cib.natixis.com/flushdoc.aspx?id=42853

Natixis, french investment bank of a big retail banking company,
is not the best call for this (or any market). Their former chief
strategist, frenchman Marc Touati, famously (and ridiculously)
called french index CAC rocketing to 7000 before the end of
2000. You know what has been the final word of that story :
CAC crumbled from its peak at 6400 and never got past 5400
again.
So I'll take every advice from Natixis with a pinch, or even a truckload,
of salt…

PS : Natixis is now worth around 2 euros, from 14 last 2006.