Margin of Safety » Mr. Market http://amarginofsafety.com "...to distill the secret of sound investment into three words..." Fri, 26 Jun 2020 18:44:00 +0000 en hourly 1 http://wordpress.org/?v=3.2 It’s 1931 http://amarginofsafety.com/2011/11/09/its-1931/?utm_source=rss&utm_medium=rss&utm_campaign=its-1931 http://amarginofsafety.com/2011/11/09/its-1931/#comments Wed, 09 Nov 2011 23:48:08 +0000 Ray Galkowski, CFA http://amarginofsafety.com/?p=1064 Continue reading →]]> I channel Dow Jones Market Talk, which channels Brad DeLong, who channels Rogoff, Reinhart, and Krugman.

MARKET TALK: It’s 1931

DOW JONES NEWSWIRES

5:20 (Dow Jones) “I have been complaining for some time now that Reinhart and Rogoff think that the time is always 1931 and that we are always Austria,” Brad DeLong writes on his blog, “that the great fiscal crisis is about to erupt and send us lurching down toward Great Depression II. Well, right now guess what? The time is 1931, and we are Austria. The Federal Reserve needs to buy up every single European bond owned by every single American financial institution for cash before the increase in eurorisk leads American finance to tighten credit again and send us down into the double dip.”

(paul.vigna@dowjones.com) (http://delong.typepad.com/sdj/2011/11/time-to-spread-foam-on-the-runway-the-federal-reserve-needs-to-act-now-to-firewall-off-the-eurocrisis.html)

I thought Mr. Market was finally coming to his senses in the third quarter, only to see him lose his mind again in October. Was that the last hurrah? The world is in too precarious a position to have equity markets rally as they did. And, we as contrarian value investors need Mr. Market to come back to reality (and perhaps get depressed again) before we can become net buyers. Today was a good day in that regard, but there is a long way to go.

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]]> http://amarginofsafety.com/2011/11/09/its-1931/feed/ 0 Mr. Market Yawns at G-20 Failure to Fix Europe’s Problems http://amarginofsafety.com/2011/11/04/mr-market-yawns-at-g-20-failure-to-fix-europes-problems/?utm_source=rss&utm_medium=rss&utm_campaign=mr-market-yawns-at-g-20-failure-to-fix-europes-problems http://amarginofsafety.com/2011/11/04/mr-market-yawns-at-g-20-failure-to-fix-europes-problems/#comments Fri, 04 Nov 2011 20:06:41 +0000 Ray Galkowski, CFA http://amarginofsafety.com/?p=1047 Continue reading →]]> In the last 45 minutes of trading on October 4, the US stock market shot up almost 4% on a rumor that France and Germany would talk about a plan for the Euro debt crisis. Since then European leaders have met several times to distribute “hopium” to observers, but nothing of substance. Despite the lack of substance, the US market has risen almost 16% since the intraday low on October 4.

Today, the G-20 closed with no plan and little hope for one. The markets’ reaction? Yawn. Mr. Market is an unusual animal.

European Union Leaders Emerge With Little From G-20

By CHARLES FORELLE and
DAVID GAUTHIER-VILLARS
Of THE WALL STREET JOURNAL

 CANNES, France — The European Union had hoped to come to a meeting of the Group of 20 large economies here with a grand plan to rescue the euro zone from its debt crisis and leave with the firm support of its international peers.

Instead, it departed the two-day summit Friday with precious little to show. No G-20 country committed to help seed the euro zone’s bailout fund, and the nations resolved only to continue talking about providing additional firepower through the International Monetary Fund.

Meantime, Greece’s political maelstrom swirled, shaking up the summit’s agenda. Friday afternoon, Prime Minister George Papandreou was holding on to his office by a thread ahead of a midnight no-confidence vote.

One step emerged, but it was small: Italy, the focus of substantial worries in European debt markets, agreed to permit the IMF to monitor its progress with fiscal reforms.

 

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