Tuesday, September 2, 2008

Teenage Angst

Having just hosted a birthday party for my teenage son in my house and backyard, teenage angst certainly comes to mind. The place sure smelled like teen spirit.

But angst is not limited to teens and I present a quote from market technician and financial astrologer Arch Crawford from his latest tome:

"Meanwhile, our “ivory tower” economists declare there is no Recession, yet. We can openly declare not EVER having witnessed this degree of angst amongst both blue and white collar acquaintances, and even upon the faces of strangers in public places!"

Other than the insanely rich, everyone I know is feeling economic pressure.

A friend of mine who works in real estate (lawyering and investing, not brokering) was at the house recently and said that nobody has yet picked up on the coming disaster in commercial loans. He said they had the same garbage-y terms and were ripe for bank killing.

So now that the initial "we survived a hurricane" rally has retreated and the market has shown its true colors, and as I wrote last week in Barron's Online, I'd rather hold cash than stocks this year.

Now, who wants some bearish picks?

10 comments:

Fitz said...

Is it not safe to say that any issues that rely on 'irrational exuberance', or 'animal spirits', would be a short candidate ?

Doug said...

What you got in mind fitz? There needs to be some technicals to confirm also a lack of consolidation areas on it's way down is always nice. Is there a negative divergence in stochastics/MACD?

Doug said...

Mike, I noticed you stated that your friend says there is still a coming disaster for banks, seems like the market factored this in already, if I'm not mistaken hasn't the financial sector been getting pounded for a long time now. I'm certainly not insinuating that it can't go lower because there is always zero(lol).
Or is he refering not so much to the market as the general public and the talking heads on television?
One last comment on the article and the economy, I want the politicians to get out of the way, stop spending so much on crap,and lower taxes on the "wealthy", when was the last time you got a job from a poor person?

T.C.B. said...

Doug.
I think what market has factored in is "Residential slump" only.
I believe we are yet to see a commercial one manifesting in the market.
I think we will see it soon enough.
Through the history of real estate market, commercial always follow residential cycles.
This time though, the lag between them is exceptionally long, and that to me is foretelling of long extended slump before us.

Market Dog said...

People:

It does no good to analyze daily, but rather step back, take a breath and watch the long term. The day to day noise is just that...noise, press, media attempting to talk up the market (no...not CNBC....HA!)
It is like weight loss.....one does not gain 100 pounds in a month, but over a longer term. Digest the market as such and you will see that the market acts in the same manner. Thsi will take months and months, but in the end...all will work itself out for better or worse....and I am in the WORSE camp. Financial rallies are a chance to SELL. We have not seen the bottom. In fact (for example) on a long term study chart, look at Citi (C)....$10 is in the cards, but it won;'t get their tomorrow. Just like it didn't drop to where it is today from $50. Patience....that is my message.

Good trading. Rooooof!

Market Dog said...

And....I apologize for the typos...I am tired and have been up for the last 19 hours...time for bed....Rooof!

Doug said...

I hear what your saying tcb, I live in pinellas county florida, extremely densely populated and there is a lot of commercial real estate that is vacant and for rent.
And to add to your guys' bearishness, what a bloodbath today for the bulls, I closed my puts that I have been holding for two weeks now for a nice profit,didn't get exactly the best price, but I'll take what I got. Trying to claw my way back from a huge loss I took by going long too early before the July 15 lows and the decay rate of my calls nearly wiped me out.Those options have some sharp edges on both sides of the sword....

Quick Takes Pro said...

Doug,

I wrote a long time ago that the banks had bottomed but were in for a long period of healing. In other words, the market is looking out ahead and probably does see the commercial loan problem coming.

Quick Takes Pro said...

tcb

Perhaps the commercial problem will show up in the office REITs

Quick Takes Pro said...

market dog,

I agree that financials are still sick but I am not really a seller anymore unless I find a stock that has not already cratered and sports deteriorating fundamentals (did I just say that?)