Master NL,
Thanks for your excellent analysis and generous sharing. I followed your analysis from this May, relatively new at HT. Still I benefited a lot and learned a lot about your methodology. Just want to say thank you and all the HTers Here I try to discuss questions you mentioned. One opinion out of many.
From Merrill Lynch's report I read back in June, 2008. David Rosenberg, their chief economist and a famous bear on WS, pointed the recession is reality, the avg recession is 10 months, this recession started from Dec, 2007. There are three stages in this downturn. Housing bubble burst, credit crunch, then consumer consumption squeeze. Inflation will be reduced based on the unemploment (wage) and the burst of commodity bubble. Core CPI will be down.
Housing started to drop since Fall 2006, from then to BSC collapse, the default rate keep rising, finally pointed to a burst in MBS bonds. Even the CEO of BSC did not realize how fast the firm could fall and this dramatic liquidity squeeze. Currently, the credit spread almost widened to the level last saw when BSC collapsed, Bill GROSS started to buy in MBS backed by FRE and FNM for the opportunity fund and shouted financial tsunami is coming. By saving FNM and FRE, mortgage market will be stabilized, this is the start of the saving of financial system. Hopefully it will work. I firmly believe financial will lead the market up, but since we are in the recession, it will not be an easy and straight road.
Just my 2 cents.
First of all, two thumbs up to NL's great analysis and deep thought.
As I have said previously, Fed's intervention provides a short term support to Finacial that would stablize the sector for a while until the next storm. However, I truely believe that, Fed's move will only delay the crisis, but not resolving it. Furthmore, Fed's move will eventually jave negative effect on the US$. Looking at the chart even now, US$ still does not turn around from its downtrend. Fed is not stupid, they know that by strengthening US$ now will do more harm to the economic recovery than helping it. But they have no choice now due to the higher inflation. Election year is always a tricky year and TA sometimes simply does not work due to so many external factors and government intervention.
I would add to my position in SKF if it can drop to 100 level and will be an aggressive buyer if it drops to 90s. By the way, Fed's rescue plan will do great harm to the shareholders of 2F once they realize that they are being trapped by the Fed. What the Fed is doing now is, they literally nationalize 2F without acknowledging it.
The next couple of months will be painful for commodity sectors including gold holders. However, I believe the oil and commodities will resume its uptrend early next year. One thing we should not ignore is that, Chinese government now is shifting gears toward growth rather than fighting inflation. Banks in China will start to relax loans to accelerate the economy growth in China.
[ 本帖最后由 股帝 于 2008-9-6 11:04 编辑 ]
狗仔卡
发表于 2008-9-6 02:49 AM
发表于 2008-9-6 04:22 PM
