Sunday, October 31, 2010

Our Annual Post Of The Top 41 Untruths Perpetuated By Wall Street

We have put this posting up in October for four years now. These are major themes we wrote about years ago.  Obviously before our first post of this list. When this was first posted, we were still in a bull market so obviously they were generally considered to be views of a crackpot by the brilliant savants on Wall Street and our political leaders in Washington.

All of these untruths have proven to be accurate or there are seeds still building in their development. Since we are far from out of this crisis, none of my work or analysis on these issues has changed.  It may appear that they have but in fact all the crooks are doing is making many of the unfulfilled untruths that much worse before they manifest themselves.

If nothing else, this is a reminder of the constant media manipulation and self-delusion that belief systems create. As an example, it's pretty hard to remember before the collapse all of the incessant babble on CNBC and on Wall Street about how much global liquidity existed. And how bullish that was for the future. Contrarily, we were writing of coming liquidity shocks and the highest risk of a credit crunch in my lifetime - views that no one else was talking about before the collapse. 

The same pinheads now talk of quantitative easing guaranteeing the world will again be awash in liquidity.  Remember we have put up at least a dozen posts in the last fifteen months remarking of a dynamic of Wall Street and financial firms batting countless assets back and forth including stocks and commodities and how this would resolve itself.   In other words, the same incompetent financial geniuses with the same beliefs of endless liquidity never seem to go away.  That's because they keep getting bailed out by the corrupt corporatocracy.  Were we to have a working democracy and a merit-based economy, these incompetent and often crooked savants would have been marginalized ages ago.

Top 41 Untruths Perpetrated by Wall Street
  1. We will get a healthy and much needed 10% correction and restart the second phase of a multi-year bull market
  2. Buy this dip because because earnings were great
  3. There is too much global liquidity for the markets to go down
  4. Interest rates must go up to kill the commodity run, inflation and the global equity markets
  5. China is an economic miracle
  6. The 21st century is the Asian century
  7. The U.S. (and I guess by implication all democracies) has lost its economic leadership
  8. The stock market is cheap
  9. Risk management.....Well, need I say more
  10. Continued globalization is a foregone conclusion
  11. Emerging markets and (Brazil, Russia, India, China) are a safe havens while the U.S. economy and dollar craters
  12. American manufacturers cannot compete and offshoring or doom is inevitable
  13. The dollar is doomed because America is a land of spend happy dunces
  14. Capital equipment spending will rise from the ashes and drive us to a new bull run
  15. The Federal Reserve will save the economy and by implication the stock market when they cut rates
  16. Financials are defensive stocks because they pay a dividend
  17. Defensive stocks are a great investment in any coming market decline
  18. Inflation is out of control and interest rates must go higher
  19. This has been the best global growth story ever and it's unstoppable
  20. The American consumer and the housing market are the major concerns behind a recession. (They are symptoms.)
  21. Oil is at a permanently high plateau
  22. Commodities are in a twenty year bull market (Maybe many years of yo-yo action)
  23. The rest of the world will pull the global economy through US weakness
  24. Global companies get more than half of their earnings overseas and that makes them a great investment
  25. There is always a bull market somewhere. (Yeah, and it will likely be in the U.S. dollar comparatively)
  26. Sentiment is too bearish for the market to sell off
  27. The U.S. doesn't drive the global economy any more
  28. Markets must exhibit mania and blow off to have a peak (That's double speak for people who don't know what's going on and they need a sign from God to see a market topping)
  29. The Federal Reserve is printing money (Total baloney)
  30. Alan Greenspan caused all of this (Although he didn't help)
  31. Goldman Sachs is a great investment
  32. This can't be a top because Goldman is levered to the hilt
  33. Wall Street is smart money
  34. It is different this time
  35. The real estate slow down will be contained
  36. The US is a service economy and manufacturing doesn't matter anymore
  37. The consumer loves high gasoline prices (or more eloquently spoken by Wall Street as high oil prices haven't hurt the consumer)
  38. Unemployment is at 4.5% and by implication the economy is great
  39. Apple and Google are the next great thing and deserve their stratospheric valuations (As I said before, I'd rather own all of the equities in Thailand than Google for the same sum of money.)
  40. The Fed equity valuation model tells us the market is very undervalued
  41. This final one is for emphasis and has actually been discussed above: the dollar will crater if the Fed cuts rates.
posted by TimingLogic at 11:59 PM

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