You see, what's very different about the market now is that the selling is not technical or fundamental. Therefore you can't really rely on any 'normal' idealogy to time or pick. The selling is clearly deleveraging by hedge funds meeting margin calls and the like. So in that environment, you really don't know where it stops. I heard someone say on CNBC Wed that the thought was that most 30 to 40 to one levered up funds were down to 18 to 20 now. The goal is 10. GS for example is now a bank, not an investment bank. So they have to meet the fed's rules on leverage which is 10 to 1 based on deposits. They were basically a large hedge fund trading 40 to 1.
You'll know when you get an end to this when the last hour of the day consistenly for a week or so doesn't end with a 400 point selloff in seconds.
I think many are just waiting to see the end of that. Why buy big when you just get sold off into the close? Basically you're just buying out someone else's problems.
You want a conspiracy theory??
Here's a good one -- what if this selling is not based on what it appears?
Think about it -----
Pull up a chart of the DOW or SPX going back 5 years. It's looks like someone spent the last 7 years climbing up a hill and then committed suicide by jumping off that hill. What took 7 years to create ended and was wiped out in 3 months.
Some are suggesting, and these 'some' are not nutjobs, that there's a bigger play at work here.
Ask this question --- how does IRAN pay for this new move into nuclear weapons developement? How does Russia pay for all this new power they have been building up around the world? How does Venezuela mask their problems and project that 'power' if you want to call it that?
How do all these bad guys do all this stuff?? Money. Where do they get it? Simple -- oil.
Oil at under $50 doesn't work for them. But over $100 it's like taking candy from a baby - the baby of course being the US.
All problems we have internationally have to do with us trying to keep peace in all the places we need oil from. Who cares about Darfur? No resources for us there. But the mid east and Russia and South America? Same problems as Darfur, but they have oil.
Our problems have been multiplied by these bastards getting rich which allows them to now be 'players'. And the only thing they all understand is war. It's in their blood based on their collective thousands of years of history.
So, how do you fix this problem? Make them go broke. How? The only way is to kill the price of oil.
How do you do that? Well, you have to kill the demand. How do you do that? Well, sadly, the good of the many outway the good of the few and that means killing the economy. As the market gets sold off, those foreigners who are losing their ass oil price wise know what's going on and the then in turn selling all US assets they have as a 'f'-u.
But we don't care. We're letting them just sell. Sadly, much collaterall damage is happening. But in the bigger picture it will be a good thing.
It makes a hell of a lot of sense. The biggest reason I'm inclined to believe it is because you hear litterally nothing out of both parties - especially the Democrats who now are in control. Where the hell is Obama? Chances are he has been told what's going on. He benefits two ways here by letting it --
1) the world problems 'fix' themselves.
2) he'll be able to start out with a much lower stock market which makes the comparables at re-election time easy to beat
3) he won't have to deal with a bunch of rich middle easterners giving him constant trouble the next 4 years because they'll all be broke.
Just think about it.
I heard this from someone I know who works on Wall Street who told me that's the buzz as to 'why'.
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