India Stocks: Counter Rally...The final Trap?

Tuesday, November 25, 2008

Global markets are rallying....why?   Citibank has been saved from immediate bankruptcy...what a ridiculous state of affairs.

Markets are built on good business fundamentals...visibility in revenue streams, visibility in economic outlook, visibility in customer health....VISIBILITY.  Saving Citibank will neither bring back corporate earnings nor economic growth for the foreseeable future.  Read the following linked article for more on Citibank:
Citi:  More than meets the eye

In the middle of this pitch black, dark fog do not rush when there is a glimmer.  The edge is close...the drop is precipitous.  Equity markets are not built on volatility and uncertainty.  Staving off bankruptcy through a government bailout is not a joyous occasion...it is a hammer on the head reminding all of us, AGAIN, these are bad times.

DO NOT believe this rally to be anything but a trap....it could be a huge rally....but the subsequent fall will reverberate and all the smiles will be wiped out completely.  And our spend-thrift housewife, also called the Indian Finance Minister, has this solution to our problems:

Recession, Banish The Thought
I bought December 2500 Nifty puts for Rs 93 as a compliment to our Finance Minister.

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4 Post Comments:

Tekkie said...

Hi,
I thought your article was brilliant. It is time people realised that Governments` role in this particular crisis is very limited. The institutions, which have got into this mess must resolve it over time. As for our Finance Minister, he seems to think that all of us were born yesterday...

Regards,


Suresh

Lee said...

Suresh

The Government is thinking only of elections...a decent chance to mitigate this crisis being frittered away in denial...Unfortunate.

Anonymous said...

Lee, your comments seem very insightful. Neophyte investors like myself are searching for ways to sort out truth from illusion. Is there any glimmer of hope on the horizon? When will this turmoil end?

Robert

Lee said...

All we know is that the turmoil WILL end...but there is a long way to go...Sec Tsy and Fed are still trying to get a handle on the problem...solution steps will come after that...stay in cash as much as possible...Wait for spring/summer 2009.

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