[MaterialExcess]

$this->bbcode_second_pass_quote('', '
')But here's the kicker: Even Grantham thinks you probably need to be bullish right now. The reason? Most bubbles, he notes, go through a short but dramatic "exponential phase" just before they burst.

"My colleagues," wrote Grantham, "suggest that this global bubble has not yet had this phase and perhaps they are right.

[MaterialExcess]

$this->bbcode_second_pass_quote('', '
')But here's the kicker: Even Grantham thinks you probably need to be bullish right now. The reason? Most bubbles, he notes, go through a short but dramatic "exponential phase" just before they burst.

"My colleagues," wrote Grantham, "suggest that this global bubble has not yet had this phase and perhaps they are right.

[Newsseeker]

The question is what will it take to pop it?

[Newsseeker]

$this->bbcode_second_pass_quote('Raphael', 'S')o is it The Dome or Bubble of the Rock that is about to pop?

namaste

Raphael

[Niagara]

Yesterday GM reported Q1 profits 90% lower year-over-year
News like that in the 1970's would have been catastrophic. Today we yawn.

Against a backdrop of record high gas prices, maxed out credit cards and spiraling consumer debt plus the sub-prime carnage we see:

-the DOW at record highs
-now the S&P has topped 1500
-The Naz reaching for the stratosphere too

Unbelievable. Is the current stock market becoming another bubble to distract us from collapsing real estate?

How high will she go before that familiar 'popping' sound?

[Twilight]

$this->bbcode_second_pass_quote('Niagara', 'H')ow high will she go before that familiar 'popping' sound?

[dinopello]

Generally, Its a bull run since 2003, so some downturn this year or next should be expected. GM wasn't a part of that bull run though. I think they are on their own trajectory (and it ain't pretty).

[FoxV]

The latest version of the Bubble Machine is the "Leveraged Buyout" (LBO). Since the MBS and CDO market has fallen apart, hedge funds and such have come up with a new way to earn their 20% commissions

Basically some company/fund burrows a huge amount of cash (billions) to buy a company, then they gut it to make it "more profitable". Next they have the company borrow a huge amount of cash to pay the new parent company dividends and restructuring fees. Then once its all finished, they sell the company off again to cash out the original investment. (who would buy these companies afterward is anybody's guess because the company is not only stripped apart, but saddle with a huge debt load)

this is another form of debt leverage to make a large amount of money from a small amount of upfront capital. And as to be expected a money printing machine. I didn't realize it at the time, but I have noticed a lot of the stock market increases for the past 6 months or so have been attributed to Mergers and take over deals.

IMHO this bubble has a "blow off" feel to it. Basically the last ditch effort to rip off the average investor before it all crashes down. The numbers are higher in this game, and the acceleration of deals is quicker.

I thought this bubble would gives legs to the market for a while, but I don't think so anymore, I think its a sign we're at the final inning of the game

[steam_cannon]

Regarding a similar article, I remember that someone on the site
mentioned this "THE DOW IS CRASHING (in value)"

-----------------------------------------------------------------------------------------------------------

THE DOW IS CRASHING
A Story in Pictures by Mike Maloney
April 16, 2007

http://www.financialsense.com/fsu/edito ... /0416.html

Average Dow Stocks valued in Crude Oil


Average Dow Stocks valued in Gold


-----------------------------------------------------------------------------------------------------------
"To get a truer picture of comparative values, compare the Dow to the price of gold. When the purchasing power of gold is compared to the purchasing power of the Dow, the Dow appears to be crashing. That means the average investor will need at least a 15 percent annual return on their stocks or mutual funds just to stay ahead of the U.S. dollar's purchasing power erosion -- that is, just to break even."
http://finance.yahoo.com/expert/article ... cher/26878


-----------------------------------------------------------------------------------------------------------

Also regarding a bubble, the Housing Market Index...


-----------------------------------------------------------------------------------------------------------

[dinopello]

$this->bbcode_second_pass_quote('steam_cannon', 'R')egarding a similar article, I remember that someone on the site
mentioned this "THE DOW IS CRASHING (in value)"

-----------------------------------------------------------------------------------------------------------

THE DOW IS CRASHING
A Story in Pictures by Mike Maloney
April 16, 2007

http://www.financialsense.com/fsu/edito ... 7/0416.htm

[steam_cannon]

$this->bbcode_second_pass_quote('FoxV', 'T')he latest version of the Bubble Machine is the "Leveraged Buyout" (LBO). Since the MBS and CDO market has fallen apart, hedge funds and such have come up with a new way to earn their 20% commissions

Basically some company/fund burrows a huge amount of cash (billions) to buy a company, then they gut it to make it "more profitable". Next they have the company borrow a huge amount of cash to pay the new parent company dividends and restructuring fees. Then once its all finished, they sell the company off again to cash out the original investment. (who would buy these companies afterward is anybody's guess because the company is not only stripped apart, but saddle with a huge debt load)

Basically another form of debt leverage to make a large amount of money from a small amount of upfront capital. And as to be expected a money printing machine. I didn't realize it at the time, but I have noticed a lot of the stock market increases for the past 6 months or so have been attributed to Mergers and take over deals.

IMHO this bubble has a "blow off" feel to it. Basically the last ditch effort to rip off the average invester before it all crashes down. The numbers are higher in this game, and the acceleration of deals is quicker.

I thought this bubble would gives legs to the market for a while, but I don't think so anymore, I think its a sign we're at the final inning of the game

[threadbear]

I do this rough approximation in my head, where housing prices in overheated markets like the Bay area and Vancouver B.C decline back to where they were about 7 years ago.

In many areas of Vancouver's lower mainland prices have tripled. A million dollar house could slide back down to around 330,000, in the next few years. Meanwhile gold, compared to housing, has held it's own--to some extent--against consumer goods and services inflation, but hasn't kept up with real estate, at all.

So a drop in real estate should be accompanied by a commensurate increase in the price of gold. Oil will continue upwards but demand destruction should prevent it from going over 100.00 per barrel.

Gold, on the other hand, could easily double, and I'm just assuming a tripling or quadrupling is a distinct possibility.

The Dow, at the moment, isn't reflecting the strength of the American economy but the profits generated in their foreign subsidiaries and from their cash reserves that have been converted to foreign currencies.

Foreign economies will eventually cool, for a number of reasons, at which point the Dow will surely crater. This is a last gasp, the last hurrah, where every bit of liquid capital from the idiot class is being squeezed to keep it pumped. I wouldn't touch it with a ten foot pole.

[steam_cannon]

$this->bbcode_second_pass_quote('threadbear', 'F')oreign economies will eventually cool, for a number of reasons, at which point the Dow will surely crater. This is a last gasp, the last hurrah, where every bit of liquid capital from the idiot class is being squeezed to keep it pumped. I wouldn't touch it with a ten foot pole.

[dinopello]

$this->bbcode_second_pass_quote('threadbear', ' ')Foreign economies will eventually cool, for a number of reasons, at which point the Dow will surely crater. This is a last gasp, the last hurrah, where every bit of liquid capital from the idiot class is being squeezed to keep it pumped. I wouldn't touch it with a ten foot pole.

[threadbear]

$this->bbcode_second_pass_quote('dinopello', '')$this->bbcode_second_pass_quote('threadbear', ' ')Foreign economies will eventually cool, for a number of reasons, at which point the Dow will surely crater. This is a last gasp, the last hurrah, where every bit of liquid capital from the idiot class is being squeezed to keep it pumped. I wouldn't touch it with a ten foot pole.

[Niagara]

I have 2 short positions right now; GM and QQQQ (which is a Nasdaq 100 tracking stock).

At one point I thought GM was circling the drain. I'm not so sure anymore. Their North American operation is toast, that's a given. However they are showing some good growth in Asia and other parts of the world.

So if they can get the Delphi negotiations behind them they may have a new lease on life.

The broader markets are a great short IMHO. Cubes, Diamonds or Spiders - take your pick.

[Carlhole]

I think that a portion of the investment dollars that had been circulating in the real estate realm has headed to the stock market and has been pushing up valuations there. So I would be expecting to see another bubble pop eventually.

[BigTex]

Just remember how "out of nowhere" that adjustment in February felt to everyone. Total shock. Even Cramer was subdued.

The moment before the bottom falls out the party is always still rocking.

Whenever this market begins to correct it will be a shock to everyone.

If you play about equal parts stocks, long bonds and gold, you're set for just about any economic malfunction. No need to load up exclusively on gold for protection, because there may well be another 1-2 years in this bull market and there is no need to sit it out completely because you think it is inflated.

Pay down your debt, too. That's about the best investment there is.

[dukey]

the stock market is a giant fraud
who makes all the money ?
the insiders ..

[threadbear]

$this->bbcode_second_pass_quote('BigTex', 'J')ust remember how "out of nowhere" that adjustment in February felt to everyone. Total shock. Even Cramer was subdued.

The moment before the bottom falls out the party is always still rocking.

Whenever this market begins to correct it will be a shock to everyone.

If you play about equal parts stocks, long bonds and gold, you're set for just about any economic malfunction. No need to load up exclusively on gold for protection, because there may well be another 1-2 years in this bull market and there is no need to sit it out completely because you think it is inflated.

Pay down your debt, too. That's about the best investment there is.