Sell the rallies says Dennis Gartman

MARC FABER BLOG

Wednesday, September 30, 2015

Many vested interests in rising asset prices

Greece has defaulted before and repeatedly. Greece is relatively small compared to, let’s say, Italy. For a country like that to go bankrupt it would have huge consequences... 

I mean I am less concerned about say Spain, Italy, France, and Greece defaulting than a big one defaulting. You understand? The US is not in a very good position either, if you look at their unfunded liabilities. 

I mean the whole system in the world is in a complete mess. 

But so far the central banks and the authorities were able to paint fresh paint on the cracks and so they are not that visible. And don’t forget; who actually has something to say in economics? Most of the people are university professors but they are somewhat linked to the Federal Reserve or to another central bank through consultancy arrangements and so forth.

Basically they are bribed to support the system. Number two, the financial system consists of money managers, hedge funds, the large long bonds, long equities funds like Fidelity and PIMCO and so on. 

All these guys are interested in money printing because it lifts the asset values and with rising asset values the fees go up and the performance fees go up so nobody has interest actually in an honest economic policy, they all are in favor of Bernanke´s bailout of problems that occurred in 2008.

DYI Comments:  Over the long run money printing has that effect of lifting asset values(Is Japan the exception?), however over the shorter term despite massive QE markets can and do fall dramatically as exampled by the 2008-2009 market drop.   Due to our massive overvaluation Dennis Gartman is far more correct.

1, 2015

Sell the rallies says Dennis Gartman

Essentially repeating what we said here ...., there are still many who deny that this is a bear market, we fear that it has a good distance to the downside yet to travel. Merely to get to “The Box” shall take the S&P to 1420? 1550! Rallies are to be sold. 

........ and there will be many who will argue that this is the start of the next bull market; that the worst is now behind us and that the global nearly 20% decline from the highs is sufficiently deep to have discounted all of the ill economic news that bear markets must do.  

We are of the opinion that the worst is not yet behind us; that a mere less-than-handful of months from the highs is insufficient as far as “time” is concerned for a bear market to have run its course and that new lows still lie ahead. We shall consider each and every rally then to be interim and corrective in nature, as we consider today’s rally.

 DYI