US - 2009 Predictions

[LenaHuat]

Yes, Winston, I recall Blair's dire prediction.

The US federal budget will hit the US$9 trillion figure next year.
Well, I can't wrap my brains around this figure

But some serious-minded SWFs and global institutional investors might well have concluded that the US is now the poorhouse, funded far too cheaply by the rest of the world. I now think that the market's optimism over the pte sector's capability to take over the baton from governmental stimulus is overextended.

[kennynah]

it is very clear that the private sector cannot hold up america....

[LenaHuat]

Winston's gotten it right :-

The number of problem US banks and thrifts rose sharply to 416 in the second quarter of 2009 from 305 in the prior quarter, as the industry reported a $3.7 billion loss, the Federal Deposit Insurance Corp said Thursday.

The FDIC said the industry swung back to a loss in the second quarter after reporting a $7.6 billion profit in the first quarter, primarily due to costs associated with rising levels of bad loans and falling asset values.

The agency reported its insurance fund used to safeguard bank deposits dipped 20 percent in the second quarter to $10.4 billion.

[-dol-]

it is very clear that the private sector cannot hold up america....

Not at this level.

But at a lower level, America's private sector has what it takes to come back.

The potential is there but there are too many parasites and freeloaders feeding off. The system needs serious cleansing.

[LenaHuat]

I see a big bear trap ahead. Be very careful abt the US market. The US labor market is seriously in a deep cesspool. The employment landscape is structurally changed in many ways. I'm too lazy to type out the issues here but U can read them on ABCNews, CBCNews etc. Capital expenditure/investments in the pte sector have pretty much dried up.

[kennynah]

Hi L,

i tend to think the fundamentals are rather known to serious players...and these have been more or less discounted into the equities prices...

just as recent as 5 weeks ago, i was not as convinced that the market knew what it was doing...in that it simply got carried away with extended purchases..

and most certainly...i'll be the first to admit here that i was the fool to have thought so...but i needed confirmation to nullify my original bearish outlook....and i got that from the indexes movement since about 2 weeks ago... when spx broke through and stayed convincingly above 950 region...

i didnt like it that my opinion was wrong....as one can guess, i can be rather opinionated...my bad...but to survive in this trade... i had to move on... and so, i did...

i hope you are doing well....

[winston]

May need to separate the US Equity Market from the US Economy. They may not move in tandem..

Almost everyone is convinced now that the US Economy will be slow for the next two years. The question is whether the stock market would also be slow over the next two years ?

There's US$3.5t in US Money Market Funds,not to mention the money in Cash and Fixed Deposits, as well as the foreign money that wants a piece of the American Pie as well ..

[kennynah]

May need to separate the US Equity Market from the US Economy. They may not move in tandem....

not sure if i can accept this thought process yet... sure, there always appears to be a gap between expectations and reality...exhibited in US equities markets (which gets its largest sponsorship from money market funds) and the real economy... we've all developed into highly trained beings to anticipate events... and it is no further from the truth that there isnt any other ways to invest... becos, one needs to simply ask and answer this question ... "will you wait until sunny clear skies before you invest?" .... clearly, the answer is a big NO... remember the famous adage...BUY on FEAR....never BUY when Bright and Sunny... bcos the latter approach are for the losers who give you and i our profits...

[OE2008]

Is there a fractal pattern here? Will history shows us the way forward or makes fools of us.? There was divergence and topping in Sept.

http://stockcharts.com/h-sc/ui?s=$SPX&p ... 8718676947

[kennynah]

OE2008 : sorry, i dont understand your point above...could you please elaborate your thoughts? thanks..