Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Update - Nadeem_Walayat
2.Will Deutsche Bank Crash The Global Stock Market? - Clif_Droke
3.Gold Price In Excess Of $8000 While US Dollar Collapses - Hubert_Moolman
4.BrExit UK Economic Collapse Evaporates, GDP Forecasts for 2016 and 2017 - Nadeem_Walayat
5.Gold Stocks Massive Price Correction - Zeal_LLC
6.Stock Market Predicts Donald Trump Victory - Austin_Galt
7.Next Financial Crisis Will be Far Worse than 2008/09 - Chris_Vermeulen
8.The Gold To Housing Ratio As A Valuation Indicator - Dan_Amerman
9.GDXJ Gold Stocks - A Diamond in the Rough - Rambus_Chartology
10.Gold Boom! End Game Nears As Central Banks Buying Up Gold Mining Companies! - Jeff_Berwick
Last 7 days
Why Trump Lost, Hillary Won the 1st U.S. Presidential Debate - 29th Sept 16
Is a Dollar Crash Imminent After the Senate Overrides Obama Veto on Saudi 9/11 Bill? - 29th Sept 16
2017: Gold and Silver's Year of "Public Recognition" - 29th Sept 16
Did Trump Win the 1st US Presidential Election Debate? - There's Something Happening Here... - 29th Sept 16
FED Goes from ZIRP to NIRP! - 29th Sept 16 - Chris_Vermeulen
Here’s Why You Should Be in Cash Right Now - 28th Sept 16
The Fed Put a 50% Tax on Your Retirement Plan - 28th Sept 16
Massive Chinese Debt And Why They Are On A Gold Buying Binge! - 28th Sept 16
Stocks Commodities and FX Markets Waiting Technically While Fundamental Data Neutral Poised - 28th Sept 16
This Commodity Has Perked Up its Investors' Portfolios - 27th Sept 16
Charting the Continuing Gold Market Correction - 27th Sept 16
Stock Market Crash and Recession Indicator Warning: Extreme Danger Ahead - 27th Sept 16
Financial Markets and FX Setups 27th Sept - 27th Sept 16
Crude Oil, Forex and Stock Market Trend Forecasts - 27th Sept 16
Why There is Trump - 27th Sept 16
Save Up to 70% in Shopping Expenses for Daily Items - 27th Sept 16
Gold’s Moving Averages and Long-Term Outlook - 26th Sept 16
September Stock Market - The Not So Silent Demise of Deutsche Bank - 26th Sept 16
SPX sell signal confirmed - 26th Sept 16
SPX is testing the next level of support - 26th Sept 16
Outrageously Entertaining US Presidential Campaign Final Stages - What Happens Next? - 26th Sept 16
BoJ, FOMC and Where To Now? - 26th Sept 16
Stock Market New All Time Highs Next - 26th Sept 16
Why Trump Will Win US General Election 2016 Prediction Forecast - 26th Sept 16
Martial Law Rolls Out Across the US As Jubilee Nears - 26th Sept 16
Stock Market More Correction Likely - 25th Sept 16
US Presidential Election Forecast 2016 - Trump Riding BrExit Wave into the White House - 25th Sept 16
US Economy GDP Growth Estimates in Free-Fall: FRBNY Nowcast 2.26% Q3, 1.22% Q4 - 24th Sept 16
Gold and Gold Stocks Corrective Action Continues Despite Dovish Federal Reserve - 24th Sept 16
Global Bonds: Why Our Analyst Says Things Just Got "Monumental" - 24th Sept 16
Where Did All the Money Go? - 23rd Sept 16
Pension Shortfalls Could Be 4X To 7X Greater Than Reported - 23rd Sept 16
Gold Unleashed by the Fed - 23rd Sept 16
Gold around U.S Presidential Elections - 23rd Sept 16
Here’s Why Eastern Europe Is Doomed - 23rd Sept 16
Nasdaq NDX 100 Big Cap Tech Breakout ? - 23rd Sept 16
The Implications of the Italian Banking Crisis Could Be Disastrous - 22nd Sept 16
TwinLakes Theme Park Summer Super 6 FREE Return Entry for Real? - 21st Sept 16
Has the Silver Bullet Run Out of Fire Power? - 21st Sept 16
Frack Sand: The Unsung Hero Of The OPEC Oil War - 21st Sept 16
What’s Happening With Gold? - 21st Sept 16
Gold vs. Stocks and Commodities, Pre-FOMC - 20th Sept 16
BrExit UK Inflation CPI, RPI Forecast 2016, 2017 - 20th Sept 16
European banks may be more important than the Fed this week - 20th Sept 16
Gold, Silver, Stocks and Bonds Grand Ascension or Great Collapse? - 20th Sept 16
Mass Psychology in Action; Instead of Selling Gilead it is Time to Take a Closer Look - 20th Sept 16
Hillary - Finally Well Deserved Recognition for Deplorables - 20th Sept 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

Forget Goldman Sachs; Only Fools Rush Into Stocks

Commodities / Gold & Silver Stocks Mar 27, 2012 - 07:06 AM GMT

By: Money_Morning

Commodities

Best Financial Markets Analysis ArticleShah Gilani writes: Is Goldman Sachs (NYSE: GS) playing us all for Muppets when they say stocks now present a generational buying opportunity?

The investment bank's 40-page bullish report, titled "The Long Good Buy: The Case for Equities," says to forget the huge run-up since 2009, forget the 25% rise in equities over the last five-and-a-half months, and forget bonds. This party is just getting started.


Are they right? Yes, they are.

Should you heed their advice and sell your bonds and load up the truck with equities? Hell no.

Goldman's report is like me forecasting increasing dark towards evening. It's too obvious. Of course stocks are a better buy than bonds in the long run when bond yields are so low.

But there's this little problem of timing that they don't address.

If you load up on equities now, and there's a correction, or worse, a double-dip in major market economies, and you get taken to the cleaners, unless you're young enough to hold onto your stocks for a generation, you may be done... as in toast.

Right now is not the time to jump onto the bull market. It looks great, I agree. But this creature is getting restless, and coming into the spring, some caution may be warranted.

If you want to get in, have patience. There's plenty of time, if the markets are presenting a generational buying opportunity.

By the way, they already have had a generational run, and you probably missed it. Did you load up in March 2009? Did you load up in October of last year?

Piling on right now is exactly when the fools rush in. Forget Goldman. You know they fleece their clients. Just because you aren't a client doesn't mean they're not out to use you, too.

The markets didn't rally on the Goldman report. They shrugged it off as mere public relations, perhaps to defray that conversation about the firm playing its clients like puppets.

What drove markets last week was China. There are increasing worries that the Chinese economy may be slowing more than anticipated. If that is the case, if Chinese GDP growth slows to below 7.5%, global markets will cool down. If its GDP growth falls to 5%, or lower, global markets could crash.

Yes, I mean crash, as in, drop 50% in short order.

I'm not saying that's going to happen. But if it does, well, you might not want to dump all your government bonds just yet.

Now, about Jon Corzine...

Proof That Something Is Very Wrong with Our Legal System
Seriously, what is wrong with America's regulatory apparatus? We make laws that don't get enforced when the criminals are too powerful, too connected, and probably have too much dirt on too many other important people to be taken to task.

The guy authorized (forget that "allegedly" stuff; according to the person who he gave the instructions to, he did it) the transfer of customer funds out of MF Global to JPMorgan Chase.

Why? Because they needed to pony up some cash to maintain trading positions they had taken - speculative trading positions that helped sink the company.

There are CFTC regulations about co-mingling customer funds with firm accounts. There are regulations about safeguarding customer accounts. There are laws that support the regulations and penalties for breaking the laws. Regulations are laws.

What I don't understand is this.

Why isn't Corzine being charged with signing off on MF Global's bogus financials as its CEO and being prosecuted under Sarbanes-Oxley?

Stay tuned, because I'm more than curious why this whole affair has the stink of a government cover-up. There's more to this than meets the eye, and inquiring minds need to know.

Lastly, did you hear the one last Friday about BATS?

This Is BAT-ty as Hell
If you don't know, BATS stands for "Better Alternative Trading System." And it is a behemoth of a trading venue. It's an electronic exchange that accounts for more than 10% of total equity trading volume on any given day.

The firm was started by a high-frequency trading pioneer who wanted a better place to do his trading and a better place to attract flies to his spider web.

BATS wanted to raise $100 million in its own IPO last week. It didn't float its new shares on the NYSE. It didn't float them on Nasdaq. It floated its new shares on its own BATS network exchange.

This was a first for BATS. Their IPO was the first IPO to be launched at the BATS trading venue.

And what a blast they had, debuting their own stock on their own exchange.

It was unfortunate - some might call it plain old bad luck - that the day of the IPO, regulators said they were launching another deeper, longer look into the effects of high-frequency trading and the relationship some exchanges (can you say BATS out of Hell) have with high-frequency trading outfits. In other words, they want to know, are there any disadvantages to regular investors? DUH, are these people imbeciles, or what?

For your information, the NYSE and regulators approved a massive new computer warehouse the size of a few football fields across the Hudson from the NYSE, in beautiful New Jersey (maybe the Jersey Shore... and maybe it's run by someone called Snooki or The Situation).

Why so big? So that high-frequency trading firms and hedge funds can "co-locate" their servers right next to the Exchange's servers to reduce "latency" - which means the nano-seconds it takes to push orders around and get them filled.

DUH, these idiots gave HFT folks space next to their computers so they can trade faster, and they didn't know what they were doing? Please, this is comical.

Do I need to mention that Jon Corzine was New Jersey's governor when this was happening? No, you probably knew that.

Anyway, BATS had a bad morning, reading the news after it priced its IPO on Thursday night. But, as bad as the news was for BATS on Friday morning, things were about to get a lot worse.

BATS trading system blew up its own IPO. A software glitch sent the IPO share price from its debut at $15.25 (well below the $16 it was priced at the night before) down to a fraction of a penny in a matter of seconds.

It was all over in about nine-and-a-half seconds. The IPO was withdrawn, and a lot of insiders' dreams of summering on the Jersey Shore were squashed.

Now, don't get me wrong, I never wish anything bad on anyone. Well, usually not. But somehow I can't help but laugh at this extraordinary kerfuffle.

Source :http://moneymorning.com/2012/03/27/forget-goldman-sachs-only-fools-rush-in/

Money Morning/The Money Map Report

©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife