Best of the Week
Most Popular
1.London House Prices Bubble, Debt Slavery, Crimea 2.0 - Russia Ukraine Annexation - Nadeem_Walayat
2. Gold And Silver – 2014 Coud Be A Yawner; Be Prepared For A Surprise - Michael_Noonan
3.Sheffield, Rotherham Roma Benefits Plague, Ch5 Documentary Gypsies on Benefits & Proud - Nadeem_Walayat
4.Glaring Q.E. Failure Spotted - Money Velocity Is Falling Rapidly - Jim_Willie_CB
5.Don't Miss the Boat on Big Biotech Catalysts: Keith Markey - Keith Markey
6.Gold Prices 2014: Do What Goldman Does, Not What It Says - David Zeiler
7.Bitcoin Price Strong Appreciation to Be Followed by Declines? - Mike_McAra
8.Gold Preparing to Launch as U.S. Dollar Drops to Key Support - Jason_Hamlin
9.Doctor Doom on the Fiat Money Empire Coming Financial Crisis - Andrew_McKillop
10.The Real Purpose Of QE - It’s Not Employment - Darryl_R_Schoon
Last 72 Hrs
Rome Wasn't Burnt In A Day - 24th Apr 14
When Does Government Policy Become Criminal Behavior? - 24th Apr 14
The Great Recession Grinds On - Measuring Misery around the World - 24th Apr 14
Apple, Facebook Beat Expectations - Stock Markets Long-term Recap - 24th Apr 14
Broad Stock Market Situation on the Remains Tense as Companies Release Quarterly Earnings - 24th Apr 14
How High-Frequency Traders Use Dark Pools to Cheat Investors - 24th Apr 14
Stock Market Bears Wrong Again, Apple to Push Dow to New All time High - 24th Apr 14
Gold Prepared for the Attack of the Short Sellers - 24th Apr 14
Weak U.S. Housing Data Supports Euro - 24th Apr 14
Killing the Maximum-Wage Myth - 23rd Apr 14
U.S. Quarterly Economic Review - Optimism at the Fed - 23rd Apr 14
Why Mohamed El-Erian Left Pimco - Video - 23rd Apr 14
QE Is A Fraud Perpetrated By Made Men - 23rd Apr 14
Gold and Miners Outperform Once Again - 23rd Apr 14
G-20 and the US Tell the Bank of Japan to End Quantitative Easing - 23rd Apr 14
How to Get in the Trading Game and Profit - 23rd Apr 14
Fed Follies, U.S. Housing Market Fiasco - 23rd Apr 14
What Will December 31, 2014 Financial Headlines Look Like? - 23rd Apr 14
Why Gasoline Prices are Surging Again - 22nd Apr 14
Cold War 2.0 - 22nd Apr 14
The JIS – Junk Ideology Syndrome - 22nd Apr 14
How to Avoid Losing All Your Money - 22nd Apr 14
Silver Up, Stocks S&P Down - 22nd Apr 14
U.S. Mainstream Media Propaganda Setting the Stage for War With Pakistan - 22nd Apr 14
U.S. Interest Rates are NOT Rising! - 22nd Apr 14
A Crisis vs. the REAL Crisis: Keep Your Eye on the Debt Ball - 22nd Apr 14
Bitcoin Implications of Lack of Price Action - 22nd Apr 14
Japan - The Twilight Of The Rising Sun - 22nd Apr 14
Is This What a Credit Bubble Looks Like? - 22nd Apr 14
The Dark Side Of The Silver Mining Industry - 21st Apr 14
Strong U.S. Dollar Rally Could Pull Rug From Under Gold and Silver - 21st Apr 14
Silver Feeble Rally Fails to Hold Breakout, Falling Back Towards Support - 21st Apr 14
Stock Market Smart Money – All Out or More to Go? - 21st Apr 14
Fast Rising Pump Prices Counterattack - 21st Apr 14
Extreme Climate Change And Life On This Planet - 21st Apr 14
Gold and Silver Stocks Sitting Tight - 21st Apr 14
Stock Market Minor Correction Imminent - 21st Apr 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

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

© 2005-2014 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

Free Report - Financial Markets 2014