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Bullitt

Decoupling? Again?

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For those who forgot, a quick recap: From October of 2007 until present, bulls claimed that China would be the ultra stellar growth module for the entire universe. Nothing mattered at all because China would buy all commodities and drive global profits. Today, the rhetoric is still there but another look under the hood shows otherwise.

I've read much about how what happens in Spain, Greece, Ireland, Italy, Brazil, Germany, and Portugal doesn't matter because the problem is contained. One of the ONLY markets to be going up right now (for the sake of argument) are US markets. Some things to think about here
1. Decoupling is a myth, as evidenced in 2007-2008
2. All markets are linked together in the global economy and with the ease of buying global assets in today's investing world, we're more linked up than 2 years ago.
3. If what is going on in the Eurozone doesn't matter, then why did the Fed lend over $300 Billion to Deutsche Bank, and $290 Billion to Credit Suisse in 2008? That lending was just the tip of the foreign iceberg alone compared to the trillions of what was believed to systemic risk.

First up, Greece. Nice Head and Shoulders pattern there that will probably be aborted by another US trillion $$ next week. Right now, it doesn't look good, but I'm sure easy money Monday can fix that in a jiffy.

Market is Closed Today-greece-png

Portugal, another mess. Nice divergence here too and below 50DMA.

Market is Closed Today-port-png

Italy, same story, only uglier. Well below the April highs as well.

Market is Closed Today-italy-png

OK, here's one that should be even more worrisome as Spain has a larger economy than Greece, Ireland and Portugal combined. As chartists always say, "The Charts don't lie". Nice failed reverse H&S from June and still well below the April highs.

Market is Closed Today-spain-png

Finally, the super growth engine of mankind. China, or in this case the Shanghai. To the moon Scotty!

Market is Closed Today-china-png

Again, the talking heads and mutual fund propaganda is filled by agendas. Why isn't anybody talking about the fact that the UAW sold nearly $3 billion of stock and Canada General Investment Group sold nearly $1 billion of GM stock? I guess it's all overshadowed by the few insiders who have been politically patriotic and purchased 800, 1,000 or 150 share lots of GM. Mutual fund companies and pension funds are obligated to remain 70-90% invested at all times so when you hear some guy with a brainwashed opinion claim that, "We're adding to quality here," understand that he's just looking to buy what he thinks will go down less since he can't really go to cash.

The next bailout? As hard as this may be to watch, this is what they want. (rated R, it may offend some): http://tinyurl.com/2uplbbf

Why worry, the fed has limited all contagion forever. It's chocolate cake, ice cream and sprinkles and strawberry fields forever.

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Comments

  1. Birchtree's Avatar
  2. tsptalk's Avatar
    This seem inevitable. The big question is, when does our market start pricing it in?
    Updated 12-03-2010 at 11:47 PM by JTH
  3. JTH's Avatar
    Quote Originally Posted by tsptalk
    This seem inevitable. The big question is, when does our market start pricing it in?
    We'll price it all in one day with a nice flash crash II the sequel...
  4. grandma's Avatar
    Neither the TinyURL link, nor copy&paste, are working for me. Any suggestions on what next to do?
    FYI, I am of age & am allowed into 'R' rated events.... ;/)
    Updated 05-04-2013 at 03:21 PM by grandma (clarification...)
  5. Bullitt's Avatar
    Grandma, the link was removed by youtube. I think it was a video of some people getting trampled and injured by a mob as soon as the doors opened at Target on black friday.
  6. grandma's Avatar
    Oh, Wow! It didn't occur to me it wasn't -(removing the word `just')- Wall Street traders after each other, & devastating drops....


    Quote Originally Posted by Bullitt
    Grandma, the link was removed by youtube. I think it was a video of some people getting trampled and injured by a mob as soon as the doors opened at Target on black friday.

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