Why Are We Not Surprised

Sept 18. 2007 Hans Lysglimt

The markets are crashing.
We have been predicting this since November 2007.
If you have not yet sold all your shares, please do now.
The DOW is going under 10 000 and further down.
The Oslo index i going below 200.
No one would listen to us in November 07, they thought us crackpot doom-sayers.

The central banks are banding together to have the taxpayers bail out the financial industry.
We wrote Tuesday that we would be surprised by the central banks actions. Well there you go, surprise, this is a new one. And they have several more up their sleeves, I expect more interesting forms of intervention. In the end I expect the FED to actively go to NYSE and buy shares directly as a “temporary measure” – yeah right.

Remember that this is all a political game in the end. The politicians must ensure stability at any cost, or they are ousted. The masses must be kept calm, if they rise that is the end of it.

The wheels must keep turning, the rat race must go on.

The markets are heading south big big time. If you have followed my advice you are mainly in cash, some gold and in some put options. You are doing good, not making massive amounts of money right now but doing well. From my advice you have made some money when most have lost substantially. And, perhaps more importantly, you have avoided massive losses. You have avoided thinking in June that the worst was over and gone in with leverage. You have stayed out, in cash. You are here to see another day.

The markets are panicking, the media is panicking. You must not panic. You should sell your shares, but it is to late to start buying put options now, they are fully priced in the fear and panic. Shorting the US market 1:1 is still a good deal, do it carefully though. Sweden has fallen so much it should now start to bottom out somewhere, way to early to enter though.

Oslo fell at one point 9.19% on Tuesday. We almost see this as funny. This is not a rational professional market, as people have been led to believe. Things are as they should be again. The Oslo stock market was traditionally not very much respected, it was seen as a cowboy market. A market that falls 9.19% is a cowboy market. So we are back to where we were. All is as it should be. I expect Norway to fall further, and also to have daily trading reduced dramatically. A reversion back to mean. Oslo was for a few years seen as a regular professional capital market, it is not, we are going back to cowboy times again.

The Russian stock exchange stops trading and refuses to open on Thursday. Again, funny. If you have listened to my advice you have sold everything Russian a long time ago. Stay out, stay out, stay out of Russia – for the rest of your life.

What is happening on the capital markets is tragic for millions of individuals. We feel for them, they have been deceived by the political system that our times lives under.

It is never to late to think about your personal situation. Scale down, stop buying and craving for status items, the whole status game will take a different turn now. Near and close values will be in vogue.

We are on the sunny wonderful island of Gran Canaria for some sunshine and good reflections. Watching the spectacle from here gives an interesting perspective.

September 18. 2008. Gran Canaria, Spain. Hans Lysglimt

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