The markets continued to stall yesterday as many investors wondered if the March rally had finally run its course.
Contributing to the weakness was famous speculator George Soros when he chimed in with his view that the rally was pretty much done.
Additionally, investor Mark Faber added fuel to the downside move by saying that that the S&P; 500 could drop as much as 10% to around 750, because the market had moved up too quickly.
As I pointed out yesterday, economic prospects do not look very inviting at this time, which means sudden moves to the downside remain a distinct possibility. Mish at Global Economics minced no words when he commented on the signs of the alleged recovery:
These “signs of recovery” that cheerleaders have been seeing are mostly nonsense. The stock market has been rallying because Treasury Secretary Geithner and President Obama are willing to screw taxpayers out of trillions of dollars for the benefit of banks. Such action will not reduce defaults, restore lending, or do a damn thing for cash strapped consumers out of a job with no job prospects.
I couldn’t have said it better myself.
Comments 3
Ulli,
I saw someplace where they posted the earnings of the S&P500; and they have been decreasing every week for a very long time. This doesn't look good for a new bull market to start any time soon. Maybe if one looks out about 6 months they may find hope, but who knows?
Jo
Jus spare me with the gov is screwing taxpayers out of trillions. I am so sick of the gov caused the collapse, the gov led Lehman go pushing the mkt down, the gov didnt stay on top of this stuff, the gov rescinded GSpig act. The gov, the gov the gov screwing peopple out of trillions. Let call the spade. It was corp greed that caused the collapse spinning these financial instruments. It is/was Paulsen giving the banks & AIG hundreds of billions he is one of them. Paulsen is the wolf in sheeps clothing. Geitner and Summers are his clone. Oh the mkt wud collapse under its own greed if left alone and it does it everytime it manages to get out from regulaton. Hell way back when I was an econ major, it had been ascertained that the best form of capitalism was ""managed capitalism"". The mkt needed regulation to stay on keel. In the intervening 35 years the chaps on the right got rid of all that reg that kept mkts from disintegrating. Jus spare me blaming the ""gov"" for everything
“Anonymous” is correct-there was no government. It was busy creating and conducting wars at enormous cost in lives and dollars, and yacking about those terrorists in caves in the Mideast. This from a government that spends multi-billions on Home Security and defense but can’t cleanup some pirates in small boats! Then we get Paulson, Obama, Geithner, Summers et al who couldn’t care less about Main Street, but about banks and Wall Street where they learned their trade and have big friends. And those guys went wild, why not? If I could take multi-millions home in yearly salary, and continue to do so with taxpayer money, I would go wild too! The problem is that consequently we have dug such a big hole that we, our children and grandchildren will be attempting to dig us out for a long time.