Tuesday, July 7, 2009
Rosenberg's retest rehashed
David Rosenberg seems to have been enamored with the market's choppiness, as he came out yesterday with the call that the market is ready for a retest.
But let's first look at the background of this call. We had Joe Biden saying this:
"The figures we worked off of in January were the consensus figures and most of the blue chip indexes out there," Biden said."We misread how bad the economy was, but we are now only about 120 days into the recovery package," Biden added. More jobs will be created in coming months, he said.
The Blankfein excuse! Remember Goldman's 7 point con job of what went wrong? Point (2) was "...too many financial investors and institutions simply outsourced their risk management. Rather than undertake their own analysis, they relied on the rating agencies to do the essential work of risk analysis for them. This was true at the inception and over the period of the investment, during which time they did not heed other indicators of financial deterioration."
So Biden and Obama used Goldman's technique of "outsourcing" on the economy, just like Goldman "outsourced" their risk management by "relying" on the rating agencies (the difference being that GS shorted every sub-prime securitization that they sold to their clients).
So now we have the excuse for the next stimulus plan, but this time, it won't be outsourced to Nancy Pelosi, and thus it may actually be productive.
Rosenberg begs to differ.
He says that the correction that started at 946, (when he said it could get to 1040) is now in full force, and we should expect a 20% pullback, bonds to rally, and commodity prices to fall.
Well, bonds had their rally and are now ready to fall, oil is already almost through with its correction, and with the CFTC news, we should get rid of the last speculators who have been gunning commodities and crude, which will mildly help the consumer, but help Wall Street more.
Rosie, put on shades, when he should of put on the rose-colored glasses.
And it's not that the economic news is getting dramatically better; which it isn't, it just is grudgingly----and this news is already reflected into the current prices of stocks.
And I think Rosie's crystal balls are cracked.
You may say that I'm a dreamer
But I'm not the only one
Posted by Palmoni at 12:31 AM