Friday, August 03, 2007

Bond turmoil worse than Internet bubble: Bear CFO

http://biz.yahoo.com/rb/070803/bearstearns_markets.html?.v=1


this quote by the Yahoo editor stuck out:
"Bond market turmoil sending investors fleeing from risk may be a worse predicament than the 1980s stock market fall and Internet bubble burst, Bear Stearns Chief Financial Officer Sam Molinaro said on Friday.

DJIA now down over 200.

I'm sure this will be all the talk of the HBB soon.

Got popcorn?
Neil

edit: These stock market oscillations fit in with my recession model even though they really worry me. As long as the market stays above (DJIA ~12,500) this summer. Note: I'm fudging. Its ok to have a crash in mid-September+ per my estimates. We don't have to be strict about the Autumn equinox on September 23rd. But if a world wide stock market crash happens in the next 5 to 6 weeks... I'll be really worried. That is *not* in line with my predictions. If the crash happens in October... all according to plan. ;) Market now down (DJIA -250 at 13,185) pretty quickly...

5 comments:

Rob Dawg said...

Neil,
Are we talking 20% off highs to 11,500 or 9,600-9,800 (erasure of the insane 11,500 to 14,000 plus a big normal correction) or Dow 7,000 harbinger of severe recession?

wannabuy said...

It will drop more than 20% off the highs after ~ September 15th. Its if the DJIA it drops below ~11,500 before September 15th that scares me.

Why? There is a certain seasonality and pace to manias. If that seasonality is broken... its a sign of their being more pain than I know about.

I'm trying to talk with my coworkers enough to get a *really* good feel of what its like out there. One coworker who has many blue-collar friends (many, popular guy) is my best source. People just tell him everything at these huge BBQ's his neighborhood throws. So I hear about all the layoffs, job switches, pay cuts, etc.

So if the market drops too far too early... bad news.

But there is no doubt its going to keep going down. I just expect it to do it in mid-September to end October. That is when the bond meltdown and normal mania "seasonality" say it should happen. Earlier? I must readjust my model.

Got popcorn?
Neil

tj & the bear said...

Don't know, Neil... things are suddenly happening very fast. Cramer's breakdown will be all over the net this weekend, so we could easily see 12,500 Monday.

Go check out Doug Noland's latest at PrudentBear. Here's a quote: But this evening I have feelings that for me recall the disturbing emotions following the terrible 9/11 tragedy.

Anonymous said...

Bye FL

Hey it's me! I post on Ben's blog. Do you have AIM messenger? Id like to discuss this kind of stuff in real time.

wannabuy said...

TJ,

Kramer's video is everywhere in the bear world. I personally find it amusing; but is it getting enough coverage outside of the bubble world? I think so... if the market goes below 12,500 next week... I'll be starting to worry the "D word" might better describe the upcoming economy. But I'm not willing to admit that yet. ;)

The low turnover in mortgage bonds and corporate "junk bonds" during July was very enlightening. 20% of normal turnover... That is going to put a damper on the economy, especially housing, very quickly.


Bye FL: I haven't set up AIM. Alas, the best "real time" for this stuff is Ben's HBB. "Real life" stuff is keeping me occupied this weekend, so I cannot fully participate in the discussions that might indeed prove to be coming prior to a historic moment. I think we'll look back on this bubble as we now look back onto the roaring 20's. A time of glamorous prosperity but where financial over-speculation undermined the economy.

Got popcorn?
Neil