market review since 2007: when, what and why

老黄

2007 Q3
   first sign of bear market
   the market was volatile.
   quant funds blew up
   the Fed stepped in
   treasuries up
  short squeeze turned up to be a big bull trap.
   tips up, oil up, gold up. Mainly because few people thought the problem would be this bad and many believed that lower interest rate would trigger inflation.

老黄

10/2007 -- 3/2008
    now people gradually realized that a recession was coming on its way
    but they still believe that it was managable
    the market was betting on reflation
    the sentiment is that the problem could be largely contained within real estate
    lower interest rate was necessary to save housing sector and troubled banks
    but would also trigger inflation in other areas.
    Gold was up also due to flying to safety in addtion to inflation concern
    Oil had a big squeeze

老黄

4/2008 -- 6/2008
   the market stablized somewhat
   oil had a final push      
   gold reached its resistance
   inflation concern tamed in spite of oil overshoot.

老黄

7/2008 -- 8/2008
   stock market hovering around low level
   gold started to fall
   oil started to fall
   tips started to fall
   tlt started to rise
   these are all deflationary signs.
   This was the prelude of the big crash

老黄

9/2008 -- 11/2008
   the darkest days
   banks blew up
   oil plundged
   unprecedented measures were taken by the Fed and the govi.
   gold was also dragged down by deflation and tight liquidity.
   dollar bounced from its low as people found out that europe was in no better shape.

老黄

11/2008 -- 12/2008
   year end rally
   gold up (buy dip, safe haven)
   TLT squeeze
   oil to its bottom (oil contango, oil inventory on the seas)

老黄

1/2009 -- 3/2009
   O8 in WH
   oil bottomed in Feb.
   market capitulate in March without exceptional weakness in other markets. so we should have known.