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The Fake
In March 2008, both the government propaganda mill and the “chartists” on Wall Street claimed that the January 2008 market lows were the “end” of the bad times. The market rally was sustainable they claimed.
In this March 13, 2008 posting, Mike took issue with the claim:
I remain amazed that there are sufficient fools who believe that if one looks at simplistic lines on a chart it is a “good time to buy.” Today’s rally off of the opening carnage can only be described as bizarre if one assumes that it is in fact “buying” - as discussed at the end of this post, I think we go down very hard into the close and suspect this is an effort to run up prices sucker in little guys and let big guys unload lots of damaged goods - in particular the huge bid in homebuilders is simply mind boggling … Carlyle blowing up is the first of many. The credit markets are in ruins. However, the automatons in the herd think that since someone somewhere said the bottom is in because the January lows held, they all better run run run to buy or get left behind … I finished an article Tuesday night about what is “priced in”. I will post it here soon. The bottom line is that what is priced in is a miracle rebound in the economy NOT a recession … I suspect that the next bomb to drop will be the fed action next week. no matter what they do it will cause significant selling that will break the lows set Monday and we will see a free fall. I seldom get so specific because as we have seen illogical behavior has been had in spades since Jan 23. I state the foregoing because it is pretty clear to me that there are a ton of new bag holders who will panic when this “bottom” proves to be as illusory as the prior ten.