Quote of the Day..........

From CalculatedRisk blog:

christofay writes: What does "AAA" mean in today's world?
Almost Anything Allowed
for a select few.christofay 03.12.08 - 9:59 pm #

Global Recession Underway?

What caused commodities price increase in the last 4 years.? Is it synchronous Global Expansion or is it the Peaknics theory, that there is only limited supply of Commodities that will cause a relentless price increase for the foreseeable future?


What made me look into this question is, almost absolute confidence exhibited by Commodity Bulls, that this time it is different and the price will rise relentlessly for foreseeable future. I am especially was suprised by a guest on Kudlow show, his first name was Kevin (did not get his last name), who said with total confidence that Crude will go to 150 and Gold will go to 1500. It is very well possible that he may be right.


But this is where I am going with this. Given that USA is in a Recession (whether it is DEEP or shallow we will know only in fullness of time), Japan is in one. Europe, either it is already is on or will there soon. Given that three Biggest Blocs of Economies are/in recession, can India or China continue with relentless growth and de-couple from other big economies.


If you want to know about growth of India or China all you need to do look at their market indices. Sensex and Shanghai respectively. Sensex went from 21200 to 15,975.52. That a shave of about 5000 points. Shanghai Composite Index lately has been week. FXP which is a Untrashort on top 25 stocks in China is going up.


In other words, is it possible we will going to have a global recession with China and India considerably slowing down. To conclude whether this is how things will unfold, keep on two instruments, they are DUG and SMN ( Disclosure: have positions in both).


You can learn a lot just by observing, just keep an eye on these two:

It is my opinion, if Crude stays about 85/- by next year at this time, then it would safe to conclude it is indeed different this time. But I am betting otherwise, that is price of Commodities will come down a lot.


Thanks for reading

Bill Gross Calls for Nationalization....

Here is widely respected Bill Gross:

http://www.ft.com/cms/s/0/d0b3bc18-ea56-11dc-b3c9-0000779fd2ac.html

Quote from Jon Markman.....

I subscribe to Jon Markman's terrific service. Todays report from Jon, carried the following quote:

It’s interesting that all the bad news was concrete while the good news was pretty flimsy.

The above simple quote, effectively sums-up where we are today.

Goldman takes out Aug Lows

I know this is old news, But mighty Goldman Sachs (GS) takes out Aug lows.

Here it is.......... Are we all set for a Cliff Diving, that means taking out 1308 on SP500 ?

Quote of the Day.........

“You can almost draw it out in a diagram,” said Bernard Baumohl, managing director at the Economic Outlook Group in Princeton, N.J. “With home prices going down, consumers cut back on spending. If consumers cut back on spending, the economy weakens further. If the economy weakens further, fewer people are able to afford mortgages so home foreclosures increase.”

--- 1 March , NYT

Watch the Volume on SP500.......

You can learn a lot by seeing......as the old saying goes.

Hence take a look at the volume when the market goes down, compared to when Market goes up.....as the volume is shown by the white oval in the volume section

When the market goes down, suddenly volume jumps, its like people are coming out of nowhere to sell-stuff.

The market is still in down-trend, watch for Jan lows....and this could get scary in a hurry