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“O-BenTi” Trio Might Finally be Winning

Published on April 17, 2009

“O-BenTi” Trio Might Finally be Winning

April 17, 2009

Obama, Ben and Tim (O-BenTi, I just created this name to save writing space) might finally be winning the recession war (only time will tell whether or not it is sustainable or going to result in another bubble). Their “glimmer of hope” campaign seems to be working nicely; even the consumer sentiment index says so, offering a hint that the deepest part of the recession may be passing. According to Bloomerg :

Reuters/University of Michigan’s consumer sentiment index rose solidly to 61.9 vs. 57.3 two weeks ago. Interestingly, one-year inflation expectations shot up 1 full percentage point to 3.0 percent. Gas prices are on the rise, as they typically are as the driving season begins, but the gain also hints that consumers expect economic conditions to normalize. There may also be a hint that some consumers could be anticipating monetary inflation, certainly a factor that has fed investment demand for gold and oil”.

Did you notice the positive flow of news these days, almost every where in the media, be it newspaper, magazines, TVs, Internet, everywhere “glimmer of hope” is the buzzword. And I think turning sentiments positive was one of the biggest challenges for the O-BenTi trio, once sentiments improve a significant part of the puzzle is solved.

I hope this is really the beginning of economic turnaround. However, I have my doubts if this is it would have turned so quickly? do you think the worst is over? It was hardly a month ago when sky was falling, dollar’s reserve currency status was (and probably still is) being challenged. Major banks are done with their earnings. I don’t know how much is “reality” behind these “reported” numbers and hence a reflection of true economy. We’ll know in a few weeks time when real representatives of American economy starts to pour earnings and share the outlook.

Markets haven’t taken a breather in spite of all bad stream of news and have been rising on every “light at the end of the tunnel”.  I wonder if we are about to see a surprise reversal or we’ll never see these lows again.

What are your thoughts?

Profitable Trading, OP

3 Comments

  • Avatar SK says:

    I think alot of the bank numbers provided a one off boost to the market. Lets face it, banks have been given billions of dollars in bailouts so it would be very shocking if they could turn a bit of a profit with all that free money! I dont think this rally has much steam left in it, but the next serious sell off should form a capitulation bottom which could be a basis for a sustained rally over the next year or so. How much this rally will be driven by inflation I dont know, but as you note above infaltion it coming… so im looking to go long on gold soon.

  • Avatar OptionPundit says:

    Dear SK,

    Thanks for your comment. We have a wonderful combination going in favor of banks i.e. accounting rules, bail-outs, complexity (general public will find it challenging to understand the crap) and the complex business models of the banks. Even analysts themselves find it difficult to estimate the earnings for banks/investment banks let alone the public. Check out the past earning estimate/actual, so managing numbers for banks, in the current environment, isn’t difficult.

    Regarding whether or next sell-off will be an opportunity, I respectfully differ. I base my view generally based on the market action. I shall let buying forces and selling forces determine who is stronger. Let the volumes and price action determine the quality of the bottom. Your view may very well turn out to be right, I’ll determine mine only then and therefore no pre-emptive buying; also the journey from here to there, whether the internals deteriorate for worse and so on.

    Gold, so far I have never sold a gold coin. I just buy.

    Cheers and thanks for sharing, OP

  • […] manipulate primary trend of the markets” unless the excesses of past have returned to normal. But O-Benti trio may have finally done that no one else has done in the […]

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