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Article: Goodbye, expansion; hello, recession

This is old news for anyone who follows markets and economics and thinks for themselves, but it's interesting that the mainstream media is finally starting to understand. See the following article from CBS MarketWatch. As a sidenote, a rally attempt should appear soon, after the swift fall from recent market highs. Cheers!

Goodbye, expansion; hello, recession
Commentary: Signs are everywhere, particularly in the plight of the consumer
By Dr. Irwin Kellner, MarketWatch
Last Update: 11:29 PM ET Nov 12, 2007

PORT WASHINGTON, N.Y. (MarketWatch) -- No matter where you look, signs of a recession are beginning to proliferate. Indeed, it's getting more and more difficult to come up with reasons to expect this aging expansion to continue.

Keep Your Eye on the Bouncing Chinese Ball (and Google)

iShares FTSE/Xinhua China 25 Index (Amex: FXI): 8:40 PM NYC time, November 8th: Just a follow up on my most recent three blogs, which focused on China.

We talked about the Chinese stock market as the bellwether for the global rally off the August lows, marked on the chart above. That rally has now faltered, as indicated by the 1 (pullback off new high), 2 (subsequent attempt at new high) and 3 (close below the low at point 1).

It should be noted that today’s action also shows an intraday rally that developed below the 50-day moving average (shown) and closed at/above it. And on strong volume. The end result was a hammer-type candle, which is easily visible at the other places on this chart from which rallies began. Does it mean that the selling of the past week has been completed? Perhaps, but...

Article: Roots of credit crisis laid at Fed's door

Just as we've been saying for years... and why AlansBubble.com exists.
Click here for the CBS MarketWatch.com article. Cheers!

Margin Call

The problems housing, mortgage and U.S. dollar problems that Cubetrader has been writing about since before the frenzy even peaked are now blossoming in the form of margin calls and forced liquidations at all manner of portfolios around the globe. As we know, forced liquidations happen at distressed prices, which are also exactly the best time to pick up assets for pennies on the dollar, that is provided that your timing is correct.

What happens when these portfolio managers find they’ve painted themselves into a corner and are getting margin calls but can’t sell what they want to sell at the price they want because it’s a fire-sale situation is that they move up the food chain and are forced to start selling their higher quality (not distressed priced) assets. But when too much of that happens, guess what, bids on those assets start dropping, forcing more pain on our hapless portfolio managers.

Eventually, when the cascade stops, we find assets have been transferred from the weak and over-leveraged hands to the strong and bargain-shopping hands. Same as happened after LTCM collapsed. Same as every time. Wash, rinse, repeat. Welcome to the rinse cycle. Cheers!

Click through to read a pretty good CBS MarketWatch article:

Here's MarketWatch.com's Take

Read this article in conjunction with my most recent two postings. Cheers!

Nine to one
A rare and bullish technical event occurred Wednesday
By Mark Hulbert, MarketWatch
Last Update: 5:43 PM ET Mar 21, 2007

ANNANDALE, Va. (MarketWatch) -- The most bullish thing a market can do, as the saying goes on Wall Street, is to go up.

I disagree.

It is even more bullish for it to go up as it did on Wednesday.

That's because Wednesday's stock market action was so strong that it triggered a rare technical signal that, far more often than not in the past, has heralded higher stock prices over the subsequent several months.

The particular technical signal is referred to as a "Nine To One Up Day." It refers to...

This Is The Main Reason Why We’re Looking at a Recession in 2007

That’s why the yield curve has been inverted and why the current bull market extension is just that, an extension of an old, tired bull market, not the begging of a new one. With a very high probability, we can’t have a new bull market until after we have a new bear market. See my Housing Market Article Index, which goes back to October, 2004, just after I put my money where my mouth was and...

Crox Earnings Preview

Crocs, Inc. (NASDAQ: CROX): 9:07 AM NYC time, August 2nd: Tomorrow CROX earnings report (its second ever as a public company) is expected to be a blowout. That’s good news / bad news. Why do I say that?

Alan "Looking in the Rearview Mirror" Greenspan on Housing Boom: “It’s Over”

Now that he's handed off his the mother of all credit and asset bubbles to Ben Bernanke, Alan Greenspan feels safe saying what anyone with their eyes open has know for 1-2 years:

From a May 18th CBS Marketwatch article: At the 30th anniversary dinner honoring the Bond Market Association Greenspan said that he thought the housing market boom was history. He said much of the recent weakness stems from a slowdown in investment demand for housing. "Everything is going in the same direction," he said.

Note: He's also said that an end to the global liquidity glut will lead to lower asset prices (duh).

Housing Trends – From the Coasts to the Mountains

As discussed here over the past year or so, the trend away from (1) crowded, expensive and dangerous coastal cities, (2) soupy Florida, and (3) overheated (literally 120 degree summertime highs in the sun) and under-watered Arizona has now taken hold and should gain momentum over the coming years. See continuation of this post for CBS-MarketWatch.com article on the latest existing home sales trends and a taste of what’s to come. Also, check 59729.com in a couple of days when I go live with my Ennis Montana website. I’m not hearing those Ted Kazinski / Unabomb jokes when I mention Montana anymore (that was the standard reply when I mentioned Montana up until about a year or two ago). Cheers!