3 : Yesterdays New Moon Turn was confirmed by todays price action – the next downleg is on just might be a little tricky as the German vote tomorrow will trigger a minor rally which can be sold. I think the plot will go down like this as the Troika who come to Greece on Thursday will likely find that Greece is more bankrupt than claimed ( it all started with Greece not needing any money) but only at the weekend so nothing disturbes the window dressing. Monday markets start to sell off until Thursday where the ECB will cut rates first time suggesting more to come and start another upleg. The only question is can we take out the 1100 support and make the panic sell out to 1050 now actually it can go as low as 1000 but therefor we rather need Greece to default, which could happen as the German hardliners will be driving a tough bargain. Greece would be better off defaulting and creating an own currency anyway. That are all short term evaluation within 6 months though we are heading for the 800 SPX, even 666 retest is a likely assumption.
Submitted by Tyler Durden on 09/28/2011 – 16:24Bond China Copper Crude David Rosenberg Gluskin Sheff Greece Lehman Lehman Brothers Meltdown Precious Metals Program Trading program trading Real estate Recession REITs Rosenberg Volatility
When one compiles the annals of the great deflationists of the early 21st century, they will be hard pressed to decide who is deserving of the title most ferocious deflationist in a runoff between David Rosenberg and Gary Schilling. And while David did not have much notable to say today, despite his daily release of interesting and insightful commentary from his perch atop Gluskin Sheff, Gary Schilling took advantage of the media vacuum to appear on Bloomberg TV and preach, what else, deflation. Among the topics touched upon were the #1 issue du jour – the Chinese hard landing, presented earlier here, and the resulting collapse in copper, on bond market volatility, on investing and speculation, and lastly on the S&P, which just like Rosenberg, he see as deserving of a 10x multiple applied to a soon to be revised S&P 500 EPS of 80 (do the math). All in all sensible stuff except for one thing: his statement “Inflating away is an excess supply world is almost impossible, even for the Fed” leaves a little to be desired. While he may be spot on, it does not mean the Fed will not try. And try it will: we expect rumblings for full blown LSAP to commence in a few days, and QE4 in which the Fed will pull a BOJ and buy ETFs, REITs (in addition to MBS and Agency bonds) early in 2012, after which it will be time to quietly depart from these continental US, or else load up on lead, spam and precious metals.