October 7, 2011
Lions, and Tigers, and Bears
As a life-long Detroit sports fan, this has been a good fall. The historically woeful Detroit Lions are 4-0, and the Detroit Tigers, after ousting the loaded New York Yankees last night, will play for the American League pennant. These are good things, at least from my perspective.
Bears, on the other hand, less so. The Wall Street Journal reports: Market Nears Bear Territory: U.S. Stocks Down Almost 17% Since April High on Europe, Economic Concerns. The report explains:
By midday Tuesday in Asia, Japan's Nikkei average fell 1.6%, South Korea's Kospi fell 4.6% and Hong Kong's Heng Seng slipped 0.2%.
Investors blamed the drop on continuing fears of European debt defaults, which are sowing fears of a global recession. They pointed to a warning from Greece that it would fail to meet its government-deficit targets this year, which reinforced a widespread concern that Greece would default.
A global manufacturing index compiled by J.P. Morgan showed the manufacturing sector contracting for the first time in more than two years as indexes of industrial activity in Europe, Japan and Brazil all showed output falling.
That report trumped somewhat positive U.S. economic news. September manufacturing activity and vehicle sales were slightly better than expected, as was August construction data, although all three remain soft.
What do these "animals" have in common? Well, the question to me is whether the bear market is paralleling the Lions' struggles, which culminated in the first-ever 0-16 season in 2008 or is more like the Tigers of 2009. In 2009, the Tigers had a epic collapse to end the season (though less epic, perhaps, than this year's Red Sox), when they missed the playoffs, losing to the Twins in a 163rd and deciding game.
The 2008 Lions were just bad. They lacked the talent and ability to do what was necessary. The 2009 Tigers had some talent, had the ability, but lacked the belief they could do what was necessary. My view of the market is that it is closer to the 2009 Tigers. There's some good things happening, but no one believes in those good things enough to turn the corner. But maybe I'm wrong; maybe the market is the 2008 Lions. Either way, as the Journal points out, it looks like it's going to be a Bear.