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You have to wonder when you see statistics like this (through 9:30 this morning):
Remove SPY, ETFC and LEHMQ (none of which trade on the NYSE) from the list and you get 606 million shares.
How many shares have traded in total with one hour in?
1.491 billion.
Forty percent of the volume is comprised of four used dogfood stocks, just as we've seen for the last couple of weeks - all people passing shares back and forth among each other, many of it being "computer HFT games."
The other used dog-food stocks (LEHMQ and ETFC) are really no better; they just don't trade on the NYSE. Lehman is particularly ridiculous as that's a formally-bankrupt company!
Fannie (FNM) and Freddie (FRE) are two of the most outrageous abuses I've seen in a long time, second only to AIG (AIG). All three of these should be delisted as their equity value is quite literally bupkis.
This just goes to illustrate - the market is currently being levitated on literal trash. Again today we see the Casino trying to suck in people; I got emails from two more associates over the weekend telling me that their "advisors" are telling them "you have too much cash allocated; now is the time to buy."
Now is the time to buy, after a 50% move?! Where the hell were these so-called "advisors" at SPX 666!
Nobody - and I do mean nobody - is talking about what this sort of volume pattern means. Well, I will: this is the sort of pattern that precedes an all-on equity market collapse. It strongly implies that the only volume support that the market has is from "hot money" speculators. Lest you think this is sustainable let me point out that just a few weeks ago the very same so-called "commentators" said the same thing about China's market. Here's what happened:
The white box down below is the target on the break downward out of that flag last night - the top of the box is the critical "must hold" level from the first retrace off the bottom and the bottom of the box being the the start of the entire move. If they're lucky the market holds around the 250-275 level, but I wouldn't bet on it.
That's nasty - The Shanghai market has already lost roughly 25% from its recent peak, and it took just three weeks to lose what required roughly three months to put on.
How do you like those odds, folks? Pay close attention to the lessons from the East, lest you get to learn them the hard way right here.
A 25% loss from the recent highs on the SPX places the S&P 500 around 775.
I smell a repeat of 2001/2002, when the very same "analysts" said the bear market was over and everyone jumped back into the pool going into the end of 2001, only to get destroyed in the collapse that followed and took out the 2001 low.
Heh, I might be wrong on this, but those who "believed" in the Shanghai market are missing 1/4 of their money - so far.
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This article has 170 comments:
What irritates me is those “advisors” pushing their clients to buy stocks now. I recall vividly early March. In spite of the fear mongering from the “experts”, I bought aggressively. However, my resolve was weakened by the fear mongering from these experts and I sold too quickly. Those same jackasses who couldn’t see the buying opportunity in early March, NOW recommend buying. And CNBC throughout this process has typified that back-asswards thinking.
Over the last 2 years, track records are being established. As a result, almost all my research now is through bloggers who have earned credibility. And I have completely stopped watching Cheerleading Central and am suspicious of everything that comes out of the WS propaganda machine, for which the shills at CNBC serves as the mouthpiece.
"Citigroup and Bank of America have received hundreds of billions of dollars of government support, but, precisely because of that support, they’re not on the FDIC’s list. Adding them to it would multiply total problem assets 10 times, to $3 trillion."
blogs.reuters.com/rolf.../
I think the only thing lower is a "used dogfood stock with fleas"!
1. Both view financial markets as institutions to be wilfully and ruthlessly manipulated for the benefit of corrupt reigning elites. They have becomes means of State policy for directing the flow of capital to the politically favored ; as tools for stealing from Little money and giving to Big money.
True financial markets always seek to disrupt the status quo for the benefit of the many; false markets are used to preserve it for the benefit of the few. Both Govts abhor true transparent, competitive, innovative and ethical markets. Wall St adores both Govts.
2. The creation of multiple bubbles is now the central economic tenet of both governing elites. However, in mid 2009, the multiple bubbles are compressing faster than the Govts can propagate them.
3. Both Govts view the ordinary citizen with contempt. Both use manifestly false "statistics", propaganda and economic vapors to delude and control citizens
4. Both Govts view and use the MSM as complicit and fawning arms of the State
On Aug 31 12:47 PM User 353732 wrote:
> The US and Chinese govts have become true fellow travellers. We
> have policy convergence.
> 1. Both view financial markets as institutions to be wilfully and
> ruthlessly manipulated for the benefit of corrupt reigning elites.
> They have becomes means of State policy for directing the flow of
> capital to the politically favored ; as tools for stealing from
> Little money and giving to Big money.
> True financial markets always seek to disrupt the status quo for
> the benefit of the many; false markets are used to preserve it for
> the benefit of the few. Both Govts abhor true transparent, competitive,
> innovative and ethical markets. Wall St adores both Govts.
> 2. The creation of multiple bubbles is now the central economic tenet
> of both governing elites. However, in mid 2009, the multiple bubbles
> are compressing faster than the Govts can propagate them.
> 3. Both Govts view the ordinary citizen with contempt. Both use manifestly
> false "statistics", propaganda and economic vapors to delude and
> control citizens
> 4. Both Govts view and use the MSM as complicit and fawning arms
> of the State
But I agree with your sentiments. We know Las Vegas is a fixed game in a fixed house. Wall Street is still pretending they are an even playing field. We know better.
On Aug 31 12:36 PM Dave Wrixon wrote:
> At least China has some economic fundamentals. I would sooner take
> my cash to Vegas than Manhattan.
This same process has been used for years, I fear. The banks slowly accumulate shares in a stock they like. They issue reports that the stock is a neutral, or they even downgrade it so they can accumulate more. When they have established their position in the stock they issue an UPGRAD or a BUY rating. When they want to sell they issue a STRONG BUY rating. Selling into strength, they have plenty of liquidity to get out on top.
This way the 'smart money' beats the retail investor (the 'dumb money') during every bull market.
I guess the game is up.
You have been wrong since the S&P at 666 bottom. Time to admit you were wrong. I sold a big chunk of my physical precious metals to add position at the S&P 666 low. I had been right, what had you recommended at that time?
The imminent collapse is in the US dollars, not in the equity and commodity market. Too many people keep too much of their asset in US dollar cash, that is the problem. The FED is monetizing the US debt. They have no choice. If I am the FED chairman I will do exactly the same and print more money as there is no other choice.
China is reducing its US bonds holdings, not adding. Capitals are escaping form the US soil and go to emerging markets. China's only sound strategy to fight hot money flooding into China, is to print its own money to absorb the hot US dollar inflow.
The recent China market plummet is based on unfounded fear that the Chinese banks are tightening up liquidity. Nothing is further from the truth. The Chinese government will not and can NOT tighten up liquidity, as long as the hot money keeps flowing in. The hot money much keep flowing in as it has no where else to go.
Commodities and shipping will be the best bull play for the next few months. Keep your money in US dollar cash if you want to lose it all at the end of day. "Short the phone book" and your money will be gone even faster.
seekingalpha.com/autho...
Let me explain the problem with your thinkings. You, like most people, intuitively consider the US dollar as money and as a constant measurement of valuation. But the US dollar, otherwise known as Federal Reserve Notes, is not money. It is a debt coupon. A debt coupon which is leveraged on the prospect of US economy and the ability of US government to collect future tax to pay off the debt. The dollar is NOT a constant, gold is a constant of valuation measurements.
The corrent US deficit policy is driving market capital to flee the US market and go some where else. The deficit can not be covered by more borrowing from foreigners. It must be covered either by monetization of debts, which causes the US dollar to collapse and forces market capital to flee from US dollar assets, or by heavier taxation, which also forces market capital to flee the looming tax burden and it causes the US economy to deteriorate and capitals fleeing away.
So any way you put it, it is extremely bearish for the US dollar. Relatively it is bullish for commodities and equities of companies that are responsible for commodities. Hyperinflation is coming. Are you positioned to protect yourself yet? Where can you put your money in? Not in cash, not in any debts, it can only be in commodities and equities.
seekingalpha.com/autho...
No one wants to see the US dollar collapse. That does not mean it will not happen. It will still happen and every one wants to get out of the dollar before it happens. With a huge mountain of US dollar assets, how can China avoid becoming a bag holder? The only way of avoid being a bag holder, is for China to be going on a global shipping spree, spend the money as fast as possible, buy anything that China can physically ship back to its soil.
That's why besides commodities, shipping will be extremely bullish as well. There are plenty of evidence of China's global shopping spree now that no one should have any doubt what China is up to.
On Aug 31 01:01 PM Tony Petroski wrote:
> I've heard of "Dead-Cat Bounces." "Used Dogfood Stocks?" What is
> the origin of that phrase?
I acquired a few puts this AM when I saw Shanghai and the yen leap. The Far East is about to put some moves on.
I think a bigger underlying problem is that many of the SA authors and other bloggers want/wanted the system to fail, so they could I told you so. However, this strategy will almost never make you any money because it's too extreme. Once the S&P gets back to 1300-1400 in a few years, will it still make sense to be stocks? It’s too early to tell, but I’ll make that decision when we get there.
Nobody wants the system to fail. We just want to know the truth. There is too much lying and cover up and when te lies blow up, who do you think will be left holding the bag? People, who think everything is ok and back to normal.
Taken to its logical conclusion, you end up with one guy in Phoenix with a single dollar bill that is worth more than all the real estate in Phoenix, if not the Galaxy.
The USD is not a pure medium of exchange. Its not a neutral workhorse officiating between markets. It’s a reserve currency, and has ASSET value, expressed as a premium to other fiat.
As this value erodes, so will the purchasing power of the USD. So yes – there is rampant asset deflation. In all assets. Including the USD. Those who can’t see the currency crisis ahead, well, can’t see the currency crisis ahead.
Yes, the Fed doesn’t want to lose control, and would prefer an orderly asset deflation with plenty of opportunity for Washington to transition America toward a far leaner, greener, more self sufficient future.
Given the amount of leverage that’s now coming unwound, and considering the apparently rampant fraud and corruption and moral hazard and counter-party risk, I just don’t see this going down smoothly.
If you’re prepared to believe that Obama can go on television and explain all this to the American people …
“Sorry folks, it turns out all those stocks and bonds and real estate assets and life insurance policies and pension promises you bought into are worthless. You got tricked fair and square, and now its time to move on … “
… without a USD collapse, then you should be buying US Dollars and Treasury notes with wild and speculative abandon.
There will be serious real deflation, with a collapsing currency right behind it.
Don’t underestimate the power of politics (here and abroad). Calls for debt and tax relief will prove overwhelming to those supporting continued enforcement of higher taxes and debt slavery to support existing covenants.
This market is without warrant and doesn't deserve to be where it is. It's being propped up by govt dollars and HFT creating ghost volume. It's going to crash hard.
So do us a favor and shutup. The majority of people on this board will not be fooled by your sideline cheers.
On Aug 31 03:03 PM DonFurio wrote:
> This is the same idiot author who wrote an article in May "The Case
> for Getting Short". Good thing I've been long and will continue to
> buy. Unless you are a very short term trader, listening to these
> idiots will usually cause u to miss out on a lot of gains. You should
> do what've said for a long time now, buy every month, and you can
> always buy more if you feel shares are depressed, but if you don't
> have that discipline you'll probably miss out on a lot of gains.
>
>
> I think a bigger underlying problem is that many of the SA authors
> and other bloggers want/wanted the system to fail, so they could
> I told you so. However, this strategy will almost never make you
> any money because it's too extreme. Once the S&P gets back to
> 1300-1400 in a few years, will it still make sense to be stocks?
> It’s too early to tell, but I’ll make that decision when we get there.
Another day and the market did not collapse. It isn't going to collapse until the last bear becomes a bull.
When the bears on Seeking Alpha become Bulls, then it is time to sell.
Great expression Karl!
On Aug 31 01:01 PM Tony Petroski wrote:
> I've heard of "Dead-Cat Bounces." "Used Dogfood Stocks?" What is
> the origin of that phrase?
For perspective the pre-lehman was 1275 . We are still 27% below the start of the panic and 30% below the pre-Bears Stearn level.
On Aug 31 04:20 PM dhansen548 wrote:
> Another day and the market did not collapse. It isn't going to collapse until the last bear becomes a bull. When the bears on Seeking Alpha become Bulls, then it is time to sell.
so for the better part of a decade i have had buckets laying around just to 'collect fallling $usd's',,,,,,,,,,,,for i do not care about the daily moves the world market prices it at for that is all digital. in october 2004 Fidel Castro out lawed the $usd in Cuba,,,,,,,and yet the flow of actual $usd TO cuba has GROWN,,,,,,,,,so that is alot of cubans just waiting for the american adoption papers to show up. once those cubans are here in america they will be richer than most americans who did not save cold hard cash. (how do we feel about saying yes sir to a cuban boss? i dunno,,,but their kids are better educated (strangely) than ours,,,,,,,,all they need is a free arena to strut their stuff.
now back to my ideas on the $usd.......after you collect them in buckets,,,,,,you dont listend to wallstreet or bankers by 'investing them or saving then in a money market account',,,,,,,,,nope,... use the plain and simple space bag and the old shovel in the garage.
a banker nor wallstreet can rape your cash if they cant get their hands on it.
Karl,,,,,,, we should be near a top,,,an old friend George called me last week giddy that his account is near back to the levels it was pre 2008 crash this man ignored me at the top when i told him to go to cash,,,,,,,,,flat out cash! his recent celebration of being near break even ignores the lost year of his investments. the scary thing is George is in an important position at his employer and 'he doesnt get it' even now.-tag
On Aug 31 01:53 PM Mark Anthony wrote:
> Karl:
>
> Let me explain the problem with your thinkings. You, like most people,
> intuitively consider the US dollar as money and as a constant measurement
> of valuation. But the US dollar, otherwise known as Federal Reserve
> Notes, is not money. It is a debt coupon. A debt coupon which is
> leveraged on the prospect of US economy and the ability of US government
> to collect future tax to pay off the debt. The dollar is NOT a constant,
> gold is a constant of valuation measurements.
>
> The corrent US deficit policy is driving market capital to flee the
> US market and go some where else. The deficit can not be covered
> by more borrowing from foreigners. It must be covered either by monetization
> of debts, which causes the US dollar to collapse and forces market
> capital to flee from US dollar assets, or by heavier taxation, which
> also forces market capital to flee the looming tax burden and it
> causes the US economy to deteriorate and capitals fleeing away.<br/>
>
> So any way you put it, it is extremely bearish for the US dollar.
> Relatively it is bullish for commodities and equities of companies
> that are responsible for commodities. Hyperinflation is coming. Are
> you positioned to protect yourself yet? Where can you put your money
> in? Not in cash, not in any debts, it can only be in commodities
> and equities.
>
> seekingalpha.com/autho...
On Aug 31 01:14 PM Michael Clark wrote:
> I thought Vegas had collapsed, was now a ghost town, and had been
> incorportated in to Elko.
>
> But I agree with your sentiments. We know Las Vegas is a fixed game
> in a fixed house. Wall Street is still pretending they are an even
> playing field. We know better.
concerning gold,,,,,,it is not a constant of valuation measurements. gold is no dif than anything else built then sold with debt backing. the miners take on debt to mine and that is passed forward to each set of buyers along the food chain.
in 2001 i was talking to myself for the most part on yahoo about the value of a gold stock BGO-------now bought out. but as time has gone on i find it hard to give credibility to 'bears' who push gold stocks/product.....bec... it is very much the same as what we see/saw in real estate,,,,,,,somebody elses debt included.
fwiw,,,i also dont consider a person a 'bear' if they are recommending oil or gas or whatever. and i will tell you why:
that person says he is a bear and yet buys growth assets. he is involving himself in another form of a ponzi scheme. for if his bearish beliefs are very true,,,,,then what idiot is buying more oil or gas or gold for a lack of end customer? they say its to protect themselves from the devaluation of the currency. no,,,they are telling themselves the very same thing other before them told/marketed them in books or whatever. gold and oil and gas as we see it now for awhile has been bursting and has had its own bubbles of 'bears',,,,,,,a true bear knows that when a real market tank comes,,,,,,,it will be a global run on currencies not commodities and once all of the currencies are way UP there,,,,,then everyone is scared,,,,,,,,then you buy the commodities for when the fear bubble busts.
i dont see a fear bubble busting for some time.....so far the sheeple have been passive. i will sit up and take notice when whispers of pinata politician party's or whack a banker become more main stream.----------and i will look away and wont convict.
fd-no position in gold,,,,,,,,family trust of oil/natgas. (and its not time to buy ANY of it)
On Aug 31 01:53 PM Mark Anthony wrote:
> Karl:
>
> Let me explain the problem with your thinkings. You, like most people,
> intuitively consider the US dollar as money and as a constant measurement
> of valuation. But the US dollar, otherwise known as Federal Reserve
> Notes, is not money. It is a debt coupon. A debt coupon which is
> leveraged on the prospect of US economy and the ability of US government
> to collect future tax to pay off the debt. The dollar is NOT a constant,
> gold is a constant of valuation measurements.
>
> The corrent US deficit policy is driving market capital to flee the
> US market and go some where else. The deficit can not be covered
> by more borrowing from foreigners. It must be covered either by monetization
> of debts, which causes the US dollar to collapse and forces market
> capital to flee from US dollar assets, or by heavier taxation, which
> also forces market capital to flee the looming tax burden and it
> causes the US economy to deteriorate and capitals fleeing away.<br/>
>
> So any way you put it, it is extremely bearish for the US dollar.
> Relatively it is bullish for commodities and equities of companies
> that are responsible for commodities. Hyperinflation is coming. Are
> you positioned to protect yourself yet? Where can you put your money
> in? Not in cash, not in any debts, it can only be in commodities
> and equities.
>
> seekingalpha.com/autho...
I thought China has already shown us a pretty solid preview of the global market in the next few weeks / months - DOWN! Why are these plunge protection teams not letting the market correct itself.
Currencies are like governments - inert, dead weight. I hold some of everything, including gold. But it's silly to stockpile cash or near cash equivalents. So the question isn't which government, but what investment?
Speculation in oil & gas is on a tear again, most of it gambling on marginal or nonexistent pipe dreams (no pun intended). Chinese and Russian flagship companies are at the forefront of this E&P splurge, trading in dollars.
On Aug 31 01:59 PM Mark Anthony wrote:
> And look at China...
I share both of your views. Yesterday I made a bet and put a sticky on the fridge, "Within 2 years the US government will either be outright giving people money to revive the consumer economy, or the US will be falling into Great Depression 2.0." I don't mean ad hoc George Bush stimulus checks. I mean a more systematic creation and distribution of free money (or possibly consumption coupons that can be converted to dollars by retailers who accept them as money for the purchase of goods) to be given to all Americans. And I mean a real freefalling deflationary depression with collapsing asset prices and 1000s of bank bankruptcies and millions of private and small business bankruptcies.
We are in the midst of the deflation of asset prices that had been supported at bubble levels by debt. Now that the defaults are rolling in it is clear that the debtors cannot make good so the price levels supported by their debts are not sustainable. As credit fueled spending reverses and becomes increased savings and debt paydowns, first the retail sector and the commercial real estate it occupies falls putting many out of work, exacerbating the deflationary spiral. This is what the real economy is doing, deflating down from unpayable levels of debt fueled consumption.
The first consequence of this is that the banks who lent all the money to those defaulting borrowers are now insolvent, especially the big Wall St 'too big to fail' who marketed and lent against all the MBS and other derivatives based on these now deflating real estate assets. But the powers that be are desperate not to lose their wealth and power.
Rather than accept their capitalist punishment and ignobly slink off into bankruptcy, the powers are cheating by transferring their private losses onto the public via TARP and all the Fed's invisible machinations with the US currency. The powers, including the administration, Fed, and big banks, are blowing desperately to reflate asset prices to stave off insolvency. But to save these banksters from insolvency they are risking national insolvency with unrepayable levels of government debt.
Taxpayers buy $4500 clunkers from their neighbors to reflate the auto sector. Taxpayers make first time homebuyers' $8000 downpayments to reflate real estate. Taxpayers who have savings suffer near 0% interest rates on their savings so that banksters can borrow cheap money from the Fed to play the stock and commodities markets to manufacture imaginary 'profits'. Obama wants taxpayers to buy overpriced windmills and solar farms and pay carbon taxes so that cheap coal power costs more than expensive wind and solar. But 1/2 of the taxpayers are already underwater or insolvent or unemployed so how can they be expected to do 'more' to save the banksters from richly deserved bankruptcy?
The deflationary forces are too large for the present reflation measures to succeed. The entire economy is deflating. To succeed, reflation must be at least as large scale as the economy wide deflation that is now happening. I've written in a previous comment that for $2.5 trillion the government could send out a $1000 check to every American with a SS number, each month for a year. If the economy is still deflating after a year they can do it again, and keep doing it until deflation is arrested and some inflation starts to surface.
In behind the scenes play the Fed has already created and doled out about $2.5 trillion to "undisclosed recipients", so it's not as if the $2.5 trillion price tag is out of the ordinary in the current environment; and it's not as if the Fed has any qualms about nakedly creating and handing out that quantity of money. I think this is about the right scale and method of counterdeflationary measure that might actually work to prevent GD 2.0.
The banksters don't have to go bankrupt, and neither does America. If insolvent banksters can be "relieved" by injections of freshly created money, then the insolvent American consumer can be relieved in the same way.
The folks who are betting on a deflationary collapse are the most out of touch with logic and history, blinded by the blaze of the 1930's, that they (95%, anyway) never lived through and, apparently, completely misinterpret, when it comes to monetary policies and their effects. The Great Depression was probably the last deflationary collapse in history, and, of course, was due to a disastrous reduction in the money supply, which saw the 1929 levels not again reached until 1939.
While there have been myriad international economic disasters in the last 70 years, no economy in the world has suffered a deflationary collapse. Why is that? It's because all governments learned that fiat money supplies can be expanded ad infinitum. There may be inflation; there even may ultimately be loss of trust in the currency; the one thing there won't be is deflation.
Even if one is not optimistic about the performance of corporations or the economy as a whole, everybody should be "optimistic" about the advance of prices. Currencies abide by the same rules as all other commodities: the more you print, the less value they enjoy relative to all other things. Hence, the nominal value of everything will advance.
Don't let the mixing and reversing of terms fool you. When you borrow you are not leveraging you are being leveraged. Learn how fractional reserve money systems work and you'll understand just how weird things are right now.
On Aug 31 11:56 PM Tack wrote:
> So many people mesmerized into thinking the world, or even the U.S.,
> is ending and, in the process, setting themselves up for financial
> hardship as they bet on collapse and failure, and wallow in their
> cynicism, rather than making sensible evaluations of current realities
> and choosing appropriate investments.
>
> The folks who are betting on a deflationary collapse are the most
> out of touch with logic and history, blinded by the blaze of the
> 1930's, that they (95%, anyway) never lived through and, apparently,
> completely misinterpret, when it comes to monetary policies and their
> effects. The Great Depression was probably the last deflationary
> collapse in history, and, of course, was due to a disastrous reduction
> in the money supply, which saw the 1929 levels not again reached
> until 1939.
>
> While there have been myriad international economic disasters in
> the last 70 years, no economy in the world has suffered a deflationary
> collapse. Why is that? It's because all governments learned that
> fiat money supplies can be expanded ad infinitum. There may be inflation;
> there even may ultimately be loss of trust in the currency; the one
> thing there won't be is deflation.
>
> Even if one is not optimistic about the performance of corporations
> or the economy as a whole, everybody should be "optimistic" about
> the advance of prices. Currencies abide by the same rules as all
> other commodities: the more you print, the less value they enjoy
> relative to all other things. Hence, the nominal value of everything
> will advance.
On Aug 31 01:01 PM Tony Petroski wrote:
> I've heard of "Dead-Cat Bounces." "Used Dogfood Stocks?" What is
> the origin of that phrase?
On Aug 31 01:32 PM Mark Anthony wrote:
> Karl:
>
> You have been wrong since the S&P at 666 bottom. Time to admit
> you were wrong. I sold a big chunk of my physical precious metals
> to add position at the S&P 666 low. I had been right, what had
> you recommended at that time?
If you had a gold star over on the forum you would have seen my call of the SPX 666 bottom less than 10 handles off that level. As we approached it I was adding "dogfood" stocks in size - long.
Yes, I sold them all off too early, around SPX 875. I don't play the final blow-off stages of parabolic moves, as it is almost impossible to get the exact exit point right, and as was seen in Shanghai, being wrong by JUST ONE DAY can ruin you.
Far too many of you folks are too young and inexperienced to remember 1987. I was working in downtown Chicago at the time, and was drinking with CBOE traders the Friday before it happened. They knew Friday night, but there was ABSOLUTELY NOTHING they could do about it. There were two groups of guys in the bar that night - those who knew they were going to be quite wealthy Monday, and those who knew they were going to be BROKE.
Learn through those who have been there, even if in their young adulthood, or you'll get to learn the hard way.
On Aug 31 11:56 PM Tack wrote:
> So many people mesmerized into thinking the world, or even the U.S.,
> is ending and, in the process, setting themselves up for financial
> hardship as they bet on collapse and failure, and wallow in their
> cynicism, rather than making sensible evaluations of current realities
> and choosing appropriate investments.
>
> The folks who are betting on a deflationary collapse are the most
> out of touch with logic and history, blinded by the blaze of the
> 1930's, that they (95%, anyway) never lived through and, apparently,
> completely misinterpret, when it comes to monetary policies and their
> effects. The Great Depression was probably the last deflationary
> collapse in history, and, of course, was due to a disastrous reduction
> in the money supply, which saw the 1929 levels not again reached
> until 1939.
>
> While there have been myriad international economic disasters in
> the last 70 years, no economy in the world has suffered a deflationary
> collapse. Why is that? It's because all governments learned that
> fiat money supplies can be expanded ad infinitum. There may be inflation;
> there even may ultimately be loss of trust in the currency; the one
> thing there won't be is deflation.
>
> Even if one is not optimistic about the performance of corporations
> or the economy as a whole, everybody should be "optimistic" about
> the advance of prices. Currencies abide by the same rules as all
> other commodities: the more you print, the less value they enjoy
> relative to all other things. Hence, the nominal value of everything
> will advance.
On Sep 01 08:11 AM Karl Denninger wrote:
>
On Sep 01 08:11 AM Karl Denninger wrote:
>
On Aug 31 03:46 PM The EconomicJoker wrote:
> Where are your pom pons cheerleader? Personally you are one the sinister
> group of people out there rah rahing the world to purchase used dog
> food. There is no reason in hell I'm putting money long into this
> market and you deserve a backhand for saying so.
>
> This market is without warrant and doesn't deserve to be where it
> is. It's being propped up by govt dollars and HFT creating ghost
> volume. It's going to crash hard.
>
> So do us a favor and shutup. The majority of people on this board
> will not be fooled by your sideline cheers.
>
> On Aug 31 03:03 PM DonFurio wrote:
On Aug 31 12:12 PM mikemichaelson wrote:
> This clown still thinks the S&P 500 is going to 200. Admit when
> you're wrong Karl.
Short answer is YES!
50% DOWn, 50% up, now 50% DOWn!!!
I guess you sell the dollar as long as Ben Bernanke has personally guaranteed that he is going to ride roughshod over the US Dollar by buying every TBond the world refuses to buy, making sure that interest rates are not allowed to go up, even as the market it indicating that is what should happen.
Of course, even the house can go bankrupt. Isn't that what is happening to some Vegas casinos; isn't that what happened to the real estate boom in Vegas? Jesus, it's getting hard to tell the good guy from the bad guy. Seems like everyone is dressed in black at the moment.
On Aug 31 09:06 PM anarchist wrote:
> so play the house?
The depression of 1893-1911 was the same; the depression of 1857-1875 was the same; the depression 1819-1837 was the same. The depression of 1965-1983 was a stagflation that exhibited both depression with high unemployment (+12% nationally) and high inflation (how high did Volcker have to jack up rates to finally defeat the inflation?)... The depression of 2001-2019 will be the same: panics and crashes and periods of optimism, growth, green shoots, followed by another down leg.
Night cycles have rallies, have resistance to deflation of the bubbles; Day-Cycles have pullback, have resistance to the inflation of the bubbles. It's never one direction without opposition.
On Aug 31 12:13 PM Paulo wrote:
> Time to buy some SDS (just done that) or whatever, no?
On Aug 31 12:13 PM basehitz wrote:
> I am also suspicious that when the phony support fails, those trading
> machines will work just as fast in reverse.
>
> What irritates me is those “advisors” pushing their clients to buy
> stocks now. I recall vividly early March. In spite of the fear mongering
> from the “experts”, I bought aggressively. However, my resolve was
> weakened by the fear mongering from these experts and I sold too
> quickly. Those same jackasses who couldn’t see the buying opportunity
> in early March, NOW recommend buying. And CNBC throughout this process
> has typified that back-asswards thinking.
>
> Over the last 2 years, track records are being established. As a
> result, almost all my research now is through bloggers who have earned
> credibility. And I have completely stopped watching Cheerleading
> Central and am suspicious of everything that comes out of the WS
> propaganda machine, for which the shills at CNBC serves as the mouthpiece.
On Sep 01 02:29 AM beandog wrote:
> I would short Karl and long equities for the next decade.
China would have to triple the size of its economy - and the US would have to stand still - if China were to pull even with the US in GDP.
Consider the following numbers, culled from official Chinese statistics:
1. About 65 million Chinese people live in households with more than $20,000 a year in income.
2. Around 165 million make between $2,000 and $20,000 a year.
3. About 400 million Chinese have household incomes between $1,000 and $2,000 a year.
4. About 670 million have household incomes of less than $1,000 a year.
As you see China is a land of extraordinary poverty.
And some dreamers to think that China can pull US and the world out of financial rut...
On Aug 31 12:36 PM Dave Wrixon wrote:
> At least China has some economic fundamentals.
BENJAMIN SHALOM BERNANKE WANTS EQUITY HOLDERS TO GET RICH AND CASH/DEBT HOLDERS TO GET POOR
So buy oil buy gold buy quality stocks, miner stocks, ag. stocks, etc.
These are FAKE green shoots, the economy will tank, but so will the USD. Make money from the depression and buy real assets.
That said "used dogfood" sounds more like excrements like crap or sxit which the mentioned stocks like LEHMQ, FNM, FRE, AGI are.
On Aug 31 01:01 PM Tony Petroski wrote:
> I've heard of "Dead-Cat Bounces." "Used Dogfood Stocks?" What is
> the origin of that phrase?
If the experts told you the sky was green, would you believe it?
Our money is crap, and no one wants it.
China is moving out of it slowly. They are smart, they don't want a run on the currency, so they buy gold little at a time.
Fannie, Freddie, and AIG are shell games. They are worthless if not for the taxpayer. It is necessary to keep them active in order for the government to keep up the lie.
Do you believe that the "Cash for Clunkers" program has helped the auto industry long term?
In my business, I told my sales force the moment you give a customer 10% off, they will never buy at retail again. If you give them 20%, you can never get them to accept 10%. Unless the government wants to continue the program, the consumer will wait.
IMF predicts US GDP to fall by 2.8 per cent this year and to stagnate next year. In the Great Depression, GDP fell by 30 per cent.
Sustained, persistent deflation is hardly likely given Ben Bernanke's fleet of cash-laden helicopters.
On Sep 01 10:29 AM Michael Clark wrote:
> Those doubting the capacity of deflation to endure, please remember
> that America had a depression from 1929-1933, a recovery, a depression
> 1936-7, an attempted recovery, a deflationay depression from 1937-1940,
> a World War from 1941-1945, and a depression 1946-1947, that was
> just about as bad as the depression from 1929-1933. Were these all
> different depressions, or the same depression with a connected root
> structure? They were the same depression.
>
> The depression of 1893-1911 was the same; the depression of 1857-1875
> was the same; the depression 1819-1837 was the same. The depression
> of 1965-1983 was a stagflation that exhibited both depression with
> high unemployment (+12% nationally) and high inflation (how high
> did Volcker have to jack up rates to finally defeat the inflation?)...
> The depression of 2001-2019 will be the same: panics and crashes
> and periods of optimism, growth, green shoots, followed by another
> down leg.
>
> Night cycles have rallies, have resistance to deflation of the bubbles;
> Day-Cycles have pullback, have resistance to the inflation of the
> bubbles. It's never one direction without opposition.
Chinese casino mentality.
On Aug 31 01:53 PM Mark Anthony wrote:
> Karl:
>
> Let me explain the problem with your thinkings. You, like most people,
> intuitively consider the US dollar as money and as a constant measurement
> of valuation. But the US dollar, otherwise known as Federal Reserve
> Notes, is not money. It is a debt coupon. A debt coupon which is
> leveraged on the prospect of US economy and the ability of US government
> to collect future tax to pay off the debt. The dollar is NOT a constant,
> gold is a constant of valuation measurements.
>
> The corrent US deficit policy is driving market capital to flee the
> US market and go some where else. The deficit can not be covered
> by more borrowing from foreigners. It must be covered either by monetization
> of debts, which causes the US dollar to collapse and forces market
> capital to flee from US dollar assets, or by heavier taxation, which
> also forces market capital to flee the looming tax burden and it
> causes the US economy to deteriorate and capitals fleeing away.<br/>
>
> So any way you put it, it is extremely bearish for the US dollar.
> Relatively it is bullish for commodities and equities of companies
> that are responsible for commodities. Hyperinflation is coming. Are
> you positioned to protect yourself yet? Where can you put your money
> in? Not in cash, not in any debts, it can only be in commodities
> and equities.
>
> seekingalpha.com/autho...
No depression looks exactly alike. But if you study American history you will see that we have a depression about every 36 years and that each lasts pretty close to 18 years, before the energy of expansion returns.
According to my calculation the darkest part of this depression will be 2010-2019. We are not going to grow our way out of this depression until we unwind all the debt we've taken on. Where is the growth engine? Consumers who are losing their jobs, who are in debt 110% of income; as our government adds more and more debt each second...
I don't believe the cheerleaders who are claiming everything is fine. We have a lot more darkness ahead of us -- we're not out of the woods. In fact, we've just entered to woods. The global economy is sinking; and it won't hit bottom until 2019.
On Sep 01 11:26 AM Living4Dividends wrote:
> Michael Clark - you are equating the current crisis as a repeat of
> the Great Depression. According to the majority of reputable economists,
> the two are not even close.
>
> IMF predicts US GDP to fall by 2.8 per cent this year and to stagnate
> next year. In the Great Depression, GDP fell by 30 per cent.
>
> Sustained, persistent deflation is hardly likely given Ben Bernanke's
> fleet of cash-laden helicopters.
>
> On Sep 01 10:29 AM Michael Clark wrote:
On Aug 31 03:03 PM DonFurio wrote:
> This is the same idiot author who wrote an article in May "The Case
> for Getting Short". Good thing I've been long and will continue
> to buy. Unless you are a very short term trader, listening to these
> idiots will usually cause u to miss out on a lot of gains. You should
> do what've said for a long time now, buy every month, and you can
> always buy more if you feel shares are depressed, but if you don't
> have that discipline you'll probably miss out on a lot of gains.
>
>
> I think a bigger underlying problem is that many of the SA authors
> and other bloggers want/wanted the system to fail, so they could
> I told you so. However, this strategy will almost never make you
> any money because it's too extreme. Once the S&P gets back to
> 1300-1400 in a few years, will it still make sense to be stocks?
> It’s too early to tell, but I’ll make that decision when we get there.
Congratulations,..you've kicked up some dust..that's the important point (to me) causing people to think. Not easy thing to do, with so many sleep-walkers unwilling to do the hard work of due dilligence before investing. Also, you've put your opinion "out there" no waffling (right or wrong ) unlike many economist who go: "on one hand this could happen, but on the other hand this could happen"..almost 90% are always wrong..yet they still keeping their (Ahemm!..so called) jobs.
The other point is, when investing, or getting "very logical information".. it helps to remember that :"there are no facts...only our interpretations of them.
gato
On Aug 31 01:01 PM Tony Petroski wrote:
> I've heard of "Dead-Cat Bounces." "Used Dogfood Stocks?" What is
> the origin of that phrase?
Isn't it interesting how investor "opinion" is so polarized? For example, "BaseHitz" provides an excellent, thought provoking response to your commentary. On the other hand, "mikemichaelson" provides a response that has no basis or substantiation for his shallow assertions!
P.S. Adding "fuel to the fire" is the recent China decision to allow State-owned firms to default on commodity hedges. I guess the Chinese have finally "had it" with the massive fraud by NY investment banks, selling China worthless crap!
However what he and others have failed to say is that large cap multinational stocks have not been as inexpensive since 1997
Add that to the fact that real estate and T bills are not going to yield any reasonable returns at these levels and commodities pay no dividends and it is clear that the stock market is hardly overvalued although some sectors like financials and retailers are.
On Sep 01 10:02 AM perceptions_now wrote:
> Is a Crash Impending?
>
> Short answer is YES!
>
> 50% DOWn, 50% up, now 50% DOWn!!!
Thank you for any advice you may choose to offer
charlesc1997@yahoo.com
On Aug 31 01:32 PM Mark Anthony wrote:
> Karl:
>
> You have been wrong since the S&P at 666 bottom. Time to admit
> you were wrong. I sold a big chunk of my physical precious metals
> to add position at the S&P 666 low. I had been right, what had
> you recommended at that time?
>
> The imminent collapse is in the US dollars, not in the equity and
> commodity market. Too many people keep too much of their asset in
> US dollar cash, that is the problem. The FED is monetizing the US
> debt. They have no choice. If I am the FED chairman I will do exactly
> the same and print more money as there is no other choice.
>
> China is reducing its US bonds holdings, not adding. Capitals are
> escaping form the US soil and go to emerging markets. China's only
> sound strategy to fight hot money flooding into China, is to print
> its own money to absorb the hot US dollar inflow.
>
> The recent China market plummet is based on unfounded fear that the
> Chinese banks are tightening up liquidity. Nothing is further from
> the truth. The Chinese government will not and can NOT tighten up
> liquidity, as long as the hot money keeps flowing in. The hot money
> much keep flowing in as it has no where else to go.
>
> Commodities and shipping will be the best bull play for the next
> few months. Keep your money in US dollar cash if you want to lose
> it all at the end of day. "Short the phone book" and your money will
> be gone even faster.
> seekingalpha.com/autho...
On Aug 31 04:20 PM dhansen548 wrote:
>
> Another day and the market did not collapse. It isn't going to collapse
> until the last bear becomes a bull.
> When the bears on Seeking Alpha become Bulls, then it is time to
> sell.
Knock it off, I'm almost there.
> Yesterday I made a bet and put a sticky
> on the fridge, "Within 2 years the US government will either be outright
> giving people money to revive the consumer economy, or the US will
> be falling into Great Depression 2.0." I don't mean ad hoc George
> Bush stimulus checks. I mean a more systematic creation and distribution
> of free money (or possibly consumption coupons that can be converted
> to dollars by retailers who accept them as money for the purchase
> of goods) to be given to all Americans. And I mean a real freefalling
> deflationary depression with collapsing asset prices and 1000s of
> bank bankruptcies and millions of private and small business bankruptcies.
>
>
> We are in the midst of the deflation of asset prices that had been
> supported at bubble levels by debt. Now that the defaults are rolling
> in it is clear that the debtors cannot make good so the price levels
> supported by their debts are not sustainable. As credit fueled spending
> reverses and becomes increased savings and debt paydowns, first the
> retail sector and the commercial real estate it occupies falls putting
> many out of work, exacerbating the deflationary spiral. This is
> what the real economy is doing, deflating down from unpayable levels
> of debt fueled consumption.
>
> The first consequence of this is that the banks who lent all the
> money to those defaulting borrowers are now insolvent, especially
> the big Wall St 'too big to fail' who marketed and lent against all
> the MBS and other derivatives based on these now deflating real estate
> assets. But the powers that be are desperate not to lose their wealth
> and power.
>
> Rather than accept their capitalist punishment and ignobly slink
> off into bankruptcy, the powers are cheating by transferring their
> private losses onto the public via TARP and all the Fed's invisible
> machinations with the US currency. The powers, including the administration,
> Fed, and big banks, are blowing desperately to reflate asset prices
> to stave off insolvency. But to save these banksters from insolvency
> they are risking national insolvency with unrepayable levels of government
> debt.
>
> Taxpayers buy $4500 clunkers from their neighbors to reflate the
> auto sector. Taxpayers make first time homebuyers' $8000 downpayments
> to reflate real estate. Taxpayers who have savings suffer near 0%
> interest rates on their savings so that banksters can borrow cheap
> money from the Fed to play the stock and commodities markets to manufacture
> imaginary 'profits'. Obama wants taxpayers to buy overpriced windmills
> and solar farms and pay carbon taxes so that cheap coal power costs
> more than expensive wind and solar. But 1/2 of the taxpayers are
> already underwater or insolvent or unemployed so how can they be
> expected to do 'more' to save the banksters from richly deserved
> bankruptcy?
>
> The deflationary forces are too large for the present reflation measures
> to succeed. The entire economy is deflating. To succeed, reflation
> must be at least as large scale as the economy wide deflation that
> is now happening. I've written in a previous comment that for $2.5
> trillion the government could send out a $1000 check to every American
> with a SS number, each month for a year. If the economy is still
> deflating after a year they can do it again, and keep doing it until
> deflation is arrested and some inflation starts to surface.
>
> In behind the scenes play the Fed has already created and doled out
> about $2.5 trillion to "undisclosed recipients", so it's not as if
> the $2.5 trillion price tag is out of the ordinary in the current
> environment; and it's not as if the Fed has any qualms about nakedly
> creating and handing out that quantity of money. I think this is
> about the right scale and method of counterdeflationary measure that
> might actually work to prevent GD 2.0.
>
> The banksters don't have to go bankrupt, and neither does America.
> If insolvent banksters can be "relieved" by injections of freshly
> created money, then the insolvent American consumer can be relieved
> in the same way.
That was one of the most refreshing post in a long time. So, I am not the only one thinking that we could literally see distribution of dollars.
I however think that the only way to address the problem is by coming to terms with the future expectations of our standard of living and focusing on value creation.
On Sep 01 10:57 AM Albert Ling wrote:
> Yes, we should all sell our stocks, except:
>
> BENJAMIN SHALOM BERNANKE WANTS EQUITY HOLDERS TO GET RICH AND CASH/DEBT
> HOLDERS TO GET POOR
>
> So buy oil buy gold buy quality stocks, miner stocks, ag. stocks,
> etc.
> These are FAKE green shoots, the economy will tank, but so will the
> USD. Make money from the depression and buy real assets.
Reminds me of 2006; so many traders and investors who were left behind by the rally of 2003 to 2005 were predicting a massive pullback or another meltdown when the stock markets kept going up for months on ends.
Economic data did'nt support the stock prices, Wall Street was in bubble mania, second dip will happen and will be far worse than 2002, etc.
Come September 2006 and they eagerly awaited the crash. Two days of selloff as September 2006 approached and the major pullback or meltdown was already in the bag.
Then the stock markets went vertical up resulting in the best last quarter of the year they ever had. The exact opposite of a meltdown as traders and investors simply throw out their bearish towels and joined the rally.
In order to have another September 2008; the prior months should be coming from the highs not from the lows. That way, traders and investors will be manning their posts and ready to sell come September.
We simply have no such ingredient this past few months. We are coming off the lows after a massive 18 months panic panic selling that ended March 2009 - which was considered over-done by most accounts. Stock markets had already been priced into Denninger's Armageddon Scenario.
Stock markets need to rally another 30% just to get back to August 2008 levels prior to Sept/Oct 2008 meltdown.
Armageddon was in the air way back May, June, July, and August 2008 before the September/October crash.
We don't have such a situation these days.
What we have is a situation similar to the preceding months of September 2006.
So it is very hard to bet against another melt up similar to Sept/Oct/Nov/Dec 2006.
Look at the forest instead of the trees. I visit Denninger's website and he is good in picking dead trees.
You have contradicted yourself in your own article. One one hand you imply that volumes are not sufficient to maintain the rally and on the other you point to AIG which with very high volumes fell from $55 to around $35 in a few days.
This Fall is different from last Fall in that there is more false hope and ginned up money supply and impending higher taxes, unemployment, and less consumer spending.
What will a recovery be based on, higher taxes, government deficits, and trader bonuses?
C'mon now gang...stash your cash before it is too late...
It's like suckering people into a poker pot when you know you have the winning hand.
The average investor does not hold the winning hand.
On Sep 02 02:49 AM ukdaytrader wrote:
> Your article makes a good read, even though I don't agree with it
> !
>
> You have contradicted yourself in your own article. One one hand
> you imply that volumes are not sufficient to maintain the rally and
> on the other you point to AIG which with very high volumes fell from
> $55 to around $35 in a few days.
On Aug 31 12:12 PM mikemichaelson wrote:
> He still thinks the S&P 500 is going to 200. Admit when you're
> wrong Karl.
On Sep 01 07:25 PM Northstar10000 wrote:
> Idiots..Stop talking about a market implosion until I complete the
> final leg Of my SDS position. My kids need the bucks for school.
>
> Knock it off, I'm almost there.
You are inheritly a deflationist and you actually believe that people should all sell everything of value and rush to hoard the only Ponzi assets without value, the US dollar and dUS treasury bonds. You are fundamentally wrong.
Debt is money. Destruction of debt is destruction of money and hence is deflational. That is the arguments of deflationists. However they forget one thing. The biggest debt is the US debt. The biggest debt bubble is the US dollar. The dollar we hold are called Federal Reserve Notes. The treasury department prints the US treasury bonds and sell them to the FED. The FED hoards the treasury bonds and prints Federal Reserve Notes. These FRN enters circulation and is the cash we use. Therefore, every US dollar is a note of debt.
There is no destruction of US dollar debt. They are printing more dollars and hence creating more debts. This debt is forcefully borrowed from the world as a whole. Every dollar the world holds is one dollar of debt lended to the US government. They inflation away the debts. The end result is the collapse of the dollar when the world refuse to lend to the US government any more.
seekingalpha.com/autho...
seekingalpha.com/artic...
I am not a general US market bull. I am a US dollar bear and physical assets and related equity bull. Commodity producers and shippers, regardless in which country they are located, are equally valuable and equally bullish. Anything that has something to do with US dollar, are bearish, like banking stocks.
I am looking for opportunity to short some bank stocks. When hyperinflation hits, people will want to get their money out of banks. And then ALL banks will either fail or become nationalized, leaving shareholders with nothing.
But the bigger opportunity is long anything that has to do with commodities. My most favorite commodities are palladium, and tellurium. My most favorite mining stocks are SWC and PAL. More than half of my asset in in this one mining stock, SWC. Laugh all you want Karl Denniger. But before long I will prove to you what an excellent choice I made.
BTW, palladium did best performance among all precious metals recovering from the Dec. 5, 2008 low point, except for rhodium, which did even better.
On Sep 02 12:55 PM Mark Anthony wrote:
> As foreigners refuse to accept more US dollars and refuse to extend
> more credit to the US government, there will be gigantic flood of
> US dollars coming home from overseas, fighting for each and every
> bit of physical assets they can find and buy. There will be hyper-inflation.
> Average American's purchase power will be greatly diminished, NOT
> because they do not have the dollars, but because there is not much
> available that their dollars will buy. America will have to export
> real goods to the world for fair exchange of commodities we need:
> oil, strategic metals like platinum, palladium, rare earth, and industry
> goods.
>
> I am not a general US market bull. I am a US dollar bear and physical
> assets and related equity bull. Commodity producers and shippers,
> regardless in which country they are located, are equally valuable
> and equally bullish. Anything that has something to do with US dollar,
> are bearish, like banking stocks.
>
> I am looking for opportunity to short some bank stocks. When hyperinflation
> hits, people will want to get their money out of banks. And then
> ALL banks will either fail or become nationalized, leaving shareholders
> with nothing.
>
> But the bigger opportunity is long anything that has to do with commodities.
> My most favorite commodities are palladium, and tellurium. My most
> favorite mining stocks are SWC and PAL. More than half of my asset
> in in this one mining stock, SWC. Laugh all you want Karl Denniger.
> But before long I will prove to you what an excellent choice I made.
>
>
> BTW, palladium did best performance among all precious metals recovering
> from the Dec. 5, 2008 low point, except for rhodium, which did even
> better.
The only people that wish this markets to fall is those that missed out on the recent massive rally.
Unemployment is an issue, but bear in mind a large number of US companies sell globally so factor it in, but its not the end of the world some people in the US are unemployed.
Even with internal US consumption all that is happening is a transfer of revenue from the high end retailers to the dollar stores.
People still need to buy things.
I could go with all of these "recovery" scenarios IF all of the resources that were consumed based on abused credit these past two or three decades were renewable resources. That, however, is simply not true... If you use a resource and you can't pay for it, that resource is still gone -- we are all going to pay for what happened one way or the other.
No green shoots, no giant bounce in 2010 to a 2007 lifestyle. But if it helps you sleep at night, believe whatever you want...
I followed the link and read it, Dr. Irwin Kellner did NOT make the case exact how the FED was supposed to "withdraw" liquidity from the system. He did not explain how it was physically and mathematically possible for the FED to do so. Or did the FED just play some number magic? Magic can impress a 3 year old. We are grown ups who are no longer impressed by magic. Anything physically and mathematically impossible, is impossible, regardless what magic the FED is playing.
I am not impressed and I believe he is totally wrong and is probably just another talking head.
On Sep 02 02:05 PM Gary A wrote:
> The Fed is withholding liquidity, sneaky as they are. So yes, there
> will be a crash in the economy that will likely catch up to the stock
> market. www.marketwatch.com/st...
The March bottom was more likely a retest on the real bottom that occurred in 2008.
Yes, the market can sell off without warning and volatility can be nasty. But the run in the market is real because it's liquid and people have to put money to work with asset diversification. The market, like it or not, is the only liquid game left in town since the leveraging of assets in residential and commercial real estate is broken--no other casinos are open for business!
To crash again like the period post-1929 would be financial Armageddon. I believe Bernanke and the "plunge protection ninjas" are aware of this risk and will do whatever it takes to keep liquidity in the markets.
To me, it's less likely we will follow the chorus of doom and gloomers chanting for second chance opportunities to buy at lower entry points.
But this is why I am a strong, strong advocate of hedging because I can't afford to be wrong. Keep yourself protected with put insurance at a minimum and reduce your margin debt to equity ratios--even better, preserve cash to take advantage if there is a major sell off in the market.
So, folks, ride this donkey even though people will be kicking and screaming all the way up.
INITIAL MARKET DROPS
From September 1929 to October 1929, the market dropped 48%.
From October 2007 to March 2009, the market dropped 56%.
So the drop percentage was pretty close, but the recent drop took longer.
DEAD CAT BOUNCE
From October 1929 to April 1930, the market jumped 48%.
From March 2009 to July 2009, the market jumped 48%.
FINAL DROP
From April 1930 to July 1932, the market dropped 86%.
From July 2009 to 2012, the market will drop ??????
You have to try real hard to ignore these numbers.
On Aug 31 12:30 PM logicalthought wrote:
> Personally, I don't know if Denninger's timing is right or wrong,
> but I just love the phrase "used dogfood stock"...
>
> I think the only thing lower is a "used dogfood stock with fleas"!
Put away your own pom-poms and look at the data genius.
Housing prices up, sales up, Productivity up, Manufacturing up, Leading Indicators up, Profits up. Initial claims down. The yield curve is flashing recovery. These are facts. Check them. Where are your "facts" aside from conspiracy theories and a sore loser attitude from selling in February. Sorry you went into cash then. Not my problem.
Stocks will be unsettled here. They will move sideways. We said there would be a pull back and they would roil around for a while.
Q3 earnings will be interesting. I am betting on a continued improvement and beats. You can bet the other way.
The doom and gloom is overdone and in the market. Yes we had a big move up but from absurd levels. This is pretty clsoe to fair value now. To buy in here you need to believe that earnings are improving and the outlook is better. To sell here you need to believe the opposite. Given the data that would be a lot of wishful thinking.
We have a lot of cheerleaders on here who are like you. They negative case has cred because "they are out there telling you to buy - while they sell" That's easy to say - prove it. Prove with facts the nonsense that you and the rest of the clown show spout. Bring facts and information to the table. You can't. Who's the cheerleader now?
Good luck.
The "surprise" could be strong growth and inflation. Look out if you are short in cash. You will get creamed either way.
On Aug 31 03:46 PM The EconomicJoker wrote:
> Where are your pom pons cheerleader? Personally you are one the sinister
> group of people out there rah rahing the world to purchase used dog
> food. There is no reason in hell I'm putting money long into this
> market and you deserve a backhand for saying so.
>
> This market is without warrant and doesn't deserve to be where it
> is. It's being propped up by govt dollars and HFT creating ghost
> volume. It's going to crash hard.
>
> So do us a favor and shutup. The majority of people on this board
> will not be fooled by your sideline cheers.
>
> On Aug 31 03:03 PM DonFurio wrote:
+25% unemployment? +50%!!! reduction in Industrial production, 60% reduction in trade and incomes and crop prices, 25%!!! reduction in GDP.
You really think this today is like that then?
How old are you? Do you remember 1982-3? 1990-1? Do you recall 1973-4?
You have no idea. Sincerely. Engage brain. Step away from the keyboard. Stop typing and think.
On Sep 02 05:34 PM mark joseph wrote:
> Just to be simple and unemotional about this let’s compare the Great
> Depression stock market drop to what is going on now.
>
> INITIAL MARKET DROPS
> From September 1929 to October 1929, the market dropped 48%.
> From October 2007 to March 2009, the market dropped 56%.
> So the drop percentage was pretty close, but the recent drop took
> longer.
>
> DEAD CAT BOUNCE
> From October 1929 to April 1930, the market jumped 48%.
> From March 2009 to July 2009, the market jumped 48%.
>
> FINAL DROP
> From April 1930 to July 1932, the market dropped 86%.
> From July 2009 to 2012, the market will drop ??????
>
> You have to try real hard to ignore these numbers.
Basically, the leaders are failing.
Data points to the short side better then those long. Extrapolated from IBD timesaver table and my proprietary spreadsheet data, there have been three DOWN DOWN DOWN signals in the ratio of the stocks up verses stocks down in the timesaver table of IBD since Aug 18. LAST SEPTEMBER had the same set up and no other sell offs had this extreme action... THREE IS HUGE.
In my spreadsheet and in my blog I noticed the nuances of the market correction Friday at noon. I immeditately went on my blog and gave my readers my blessing to buy short. The data squew in the spreadsheet is strongly short at this juncture. The mathematical model has never failed me.
We have price support with ETFs... Double and tripple that are up in price and reaching higher highs and higher lows for the past three days. (do your research)
We have a 10 year note that has dropped from 3.46 to 3.50 to 3.30 as smart money flees equities and heads to safety.
Watch what is actually going on, measure it mathematically and make some inferences from the data squew. It is really very simple to do. I am a retired truck driver and it was strange to me to have "advisors" telling people to buy now so I went back to college to finish my finance degree so I can tell people the truth, near term be fleaing the long side of the market. Take a small 20% short hedge and take all your profits out of the market. It will sell off near term. How much??? We have to break 973 to know. So far? 973.
Potential? 665.
Why? There is no liquidity in the system. California is issuing IOUs, Cities and towns and school boards are now out of funds. Bill Cosby is begging African Americans to stay in school. Cash for clunkers is over and the government is hoarding the cash rather than paying it out.
My coin business? Common coins are tough to sell at any price, uncommon coins sell instantly for whatever I want to sell them for.
The north american boarder crossing from my condo... STRONG truck traffic compared to this time last year. Uptick in freight volumes in the local truck load sector as car plants get up and running to build out the 200,000 cars that sold in the clunkers program. Look for near term GDP to move above 0 but then to colapse in the next quarter. The only stock anyone can buy right now? BWLD. Everyone will want a chicken wing and a beer in front of a tv screne no matter what the economy.
Impending? Check the rearview mirror, 'cause the market already crashed in 2008.
If you manage a portfolio, you have to be invested in the market. And this viral anxiety is really causing many funds to underperform the market waiting for this correction that everyone else is anticipating...
If you believe the premise, then you should be loading up on SPX put options across the board.
If you don't believe this, but want some protection against a major correction anyway, you should pick out some SPX put options along the low 900 level, or even the high 800's as generalize portfolio insurance
I think this market has a less than 10% chance of even revisiting or coming close to the March lows, but as an investor I can't ever afford to be wrong so I remained hedged against long positions!
Fundamentals are improving slowly, price did rise too fast (as usual).
I am not expecting a crash, just a typical retracement where buying on the dip makes sense.
How far of a retracement ? I'll wait until the end of Oct.
Buy list ?
China
India
Russia
Oil index
SP 500
> Personally, I don't know if Denninger's timing is right or wrong,
> but I just love the phrase "used dogfood stock"...
>
> I think the only thing lower is a "used dogfood stock with fleas"!
I think the usual pair-up with used dog food is maggots -- a not-inappropriate sobriquet for the perps in this game of Russian (Wolfhound) roulette.
On Aug 31 12:30 PM logicalthought wrote:
> Personally, I don't know if Denninger's timing is right or wrong,
> but I just love the phrase "used dogfood stock"...
>
> I think the only thing lower is a "used dogfood stock with fleas"!
On Aug 31 01:01 PM Tony Petroski wrote:
> I've heard of "Dead-Cat Bounces." "Used Dogfood Stocks?" What is
> the origin of that phrase?
On Sep 01 07:28 PM 1776again wrote:
> Sum it all up: the Chinese do communism better than we do !
What a doh head. Don;t worry Karl, the Donfurio's of hte world are required to be hte bag holders. It is ordained that way.
Man and the Tack comes up with the Eric Jan sen gem about there never being deflation in a Fiat currency coutnry. The least you could do cite your reference instead of stealing Itulip's ideas.
Japan is a perfect example. Here's the kicker dude or dudette. You see the utter destruction of your investments and yet you'll hang on to the notion that hyperinflation did it.
It's OK though these concepts are hard to grasp. The sucker bounce sure has made people think they are smart. I'm glad I unloaded today. Thanks for buying folks.
phew got out just in time. (As usual because I'm the first to admit I don't feel comfortable with my investments. The difference between us is I'm absolutely happy to book 100% profits for 5 months work.)
If you feel the market is about to crash, then what's your play? Short? Cash? Guns? Ammunition? Dry bulk? Water?
If you make such an argument, aren't you obligated to point out a trade in this?
Or do you just get to scream fire in a crowded theater?
Example: If you think the market will dump, then load up on SPX puts across the board. That's a trade based on the premise of the market crashing...
If you are bullish, as I am, buy some put protection anyway!
Look, folks, the more I hear this fear-mongering mantra repeated, the more I'm willing to take the opposite side of the trade--hedged, of course, in case I'm wrong..
Regardless, I am not liquidating or selling my stocks because money managers that missed the move up want to chase you out of your positions and buy lower
On Aug 31 12:47 PM User 353732 wrote:
> The US and Chinese govts have become true fellow travellers. We
> have policy convergence.
> 1. Both view financial markets as institutions to be wilfully and
> ruthlessly manipulated for the benefit of corrupt reigning elites.
> They have becomes means of State policy for directing the flow of
> capital to the politically favored ; as tools for stealing from
> Little money and giving to Big money.
> True financial markets always seek to disrupt the status quo for
> the benefit of the many; false markets are used to preserve it for
> the benefit of the few. Both Govts abhor true transparent, competitive,
> innovative and ethical markets. Wall St adores both Govts.
> 2. The creation of multiple bubbles is now the central economic tenet
> of both governing elites. However, in mid 2009, the multiple bubbles
> are compressing faster than the Govts can propagate them.
> 3. Both Govts view the ordinary citizen with contempt. Both use manifestly
> false "statistics", propaganda and economic vapors to delude and
> control citizens
> 4. Both Govts view and use the MSM as complicit and fawning arms
> of the State
On Aug 31 07:50 PM Dialectical Materialist wrote:
> I'm a third in cash, a third in silver, and a third in equities.
> I have no clue what is going on anymore...
On Aug 31 12:30 PM logicalthought wrote:
> Personally, I don't know if Denninger's timing is right or wrong,
> but I just love the phrase "used dogfood stock"...
>
> I think the only thing lower is a "used dogfood stock with fleas"!
financialtides.blogspo...
There is one only one big difference, now and then... Today, rather than "news" outlets we have corporate and government cheerleaders with only one goal in mind, to make you think that there really is no problem and that everything you see around you is all in your mind. Today we have highly polished "PR" professionals who can put a spin to the positive on anything; if they were around for the White Star Line when the Titanic sank, I'm sure they would have pushed the "new artificial reef" aspect of the sinking over the loss of life.
I have a degree in economics from UCLA and anyone with a basic understanding of business or the economy understands that most of what the governments report via statistics is fabricated or distorted, only to be "revised" at a later date.
If this were only a question of confidence in our economy, it would work, but our current crisis has a deep structural collapse at the root. No CNBC, CNN or Obama nonsense is going to change that.
On Sep 02 09:59 PM FB5000 wrote:
> Truly. You believe this is a repeat of the Great Depression.
> +25% unemployment? +50%!!! reduction in Industrial production, 60%
> reduction in trade and incomes and crop prices, 25%!!! reduction
> in GDP.
>
> You really think this today is like that then?
>
> How old are you? Do you remember 1982-3? 1990-1? Do you recall 1973-4?
>
>
> You have no idea. Sincerely. Engage brain. Step away from the keyboard.
> Stop typing and think.
>
>
>
>
As we have been saying since St. Patrick's Day; "All the surprises are on the upside"
While everyone else is getting a tan and drinking beer because "the market is like watching paint dry" , I'm glued to the screen. This is exciting for a technical trader.
Prediction , Karl Denninger will get capitulate on his amageddon scenario and get long at 10,000 on the DOW
Regardless, there are signs along the I-5 in California saying Congress created a dust bowl. Considerate of them as what would a Depression be without a dust bowl?
There are so many fragile pieces to the economy that when one piece fails the masses will follow. Not sure if it will be commercial real estate, pensions, bank failures, consumer bankruptcy, and the potential list goes on. Once the herd starts to move it will be a stampede.
Massive amounts of undisclosed toxic assets still remain on the banks books hidden by mark to market. The PPIP, which is the butt end of the Tarp program to pass the banks debt to the public, is not off to a good start. In addition I understand that 95% of all mortgages in this Country are now government (insert taxpayer) backed through Fannie, Freddie and Ginnie.
But the jobless numbers come out, unemployment continues to climb to record highs and the market goes up. Rejoice, the Legendary Jobless Recovery is at hand.
On Sep 02 02:38 AM Econ 101 wrote:
> Invest in real assets...Food, drink and arms to protect ourself from
> those that would take from you. Be it the Crips or Bloods or the
> US congress. 40% of the San Juaquin valley wasnt in production because
> of a water shortage.
Soon after your proposal ($1000 checks per month to all citizens) is put into practice holders of cash (domestic and foreign) will try to spend their dollars to buy either non-perishable consumer goods or other real assets or commodities.
There will be a run on the dollar (specially by foreign holders of dollars) and then high inflation. Bond market will crash.
Savers and owners of debt (specially foreign) will see this as a form of cheating. I agree it could work (low probability). But risks a currency collapse (high probability).
I propose we deal with this issue more honestly, openly and in a more straightforward manner. I propose we:
1) Stop all bailouts. This will get the liquidation (bankruptcy) process going.
2) Yes. we will probably have a GD 2 (extreme deflation).
3) Stock market will crash (could be as much as -90%)
4) Real estate values will crash (could be as much as -70%)
5) Most mortgage holders will probably go bankrupt and lose their homes.
6) Yes. We will probably have some chaos (low probability) or a lot of chaos (high probability) and very high unemployment (could be as much as 50%).
7) We will have to default on our national debt.
8) We will have to balance federal and state budgets. Reduce government worker salaries, benefits and pensions.
9) Federal and state governments will become much smaller. Far fewer entitlements.
10) We can then start re-building a more sustainable economy. In contrast a currency collapse will be much more painful. it will lead to total chaos as predicted by gold bugs.
On Aug 31 11:13 PM derryl wrote:
> MadCow2 wrote, "If you’re prepared to believe that Obama can go on
> television and explain all this to the American people …“Sorry folks,
> it turns out all those stocks and bonds and real estate assets and
> life insurance policies and pension promises you bought into are
> worthless. You got tricked fair and square, and now its time to move
> on “ … without a USD collapse, then you should be buying US Dollars
> and Treasury notes with wild and speculative abandon. There will
> be serious real deflation, with a collapsing currency right behind
> it. Don’t underestimate the power of politics (here and abroad).
> Calls for debt and tax relief will prove overwhelming to those supporting
> continued enforcement of higher taxes and debt slavery to support
> existing covenants."
>
> I share both of your views. Yesterday I made a bet and put a sticky
> on the fridge, "Within 2 years the US government will either be outright
> giving people money to revive the consumer economy, or the US will
> be falling into Great Depression 2.0." I don't mean ad hoc George
> Bush stimulus checks. I mean a more systematic creation and distribution
> of free money (or possibly consumption coupons that can be converted
> to dollars by retailers who accept them as money for the purchase
> of goods) to be given to all Americans. And I mean a real freefalling
> deflationary depression with collapsing asset prices and 1000s of
> bank bankruptcies and millions of private and small business bankruptcies.
>
>
> We are in the midst of the deflation of asset prices that had been
> supported at bubble levels by debt. Now that the defaults are rolling
> in it is clear that the debtors cannot make good so the price levels
> supported by their debts are not sustainable. As credit fueled spending
> reverses and becomes increased savings and debt paydowns, first the
> retail sector and the commercial real estate it occupies falls putting
> many out of work, exacerbating the deflationary spiral. This is
> what the real economy is doing, deflating down from unpayable levels
> of debt fueled consumption.
>
> The first consequence of this is that the banks who lent all the
> money to those defaulting borrowers are now insolvent, especially
> the big Wall St 'too big to fail' who marketed and lent against all
> the MBS and other derivatives based on these now deflating real estate
> assets. But the powers that be are desperate not to lose their wealth
> and power.
>
> Rather than accept their capitalist punishment and ignobly slink
> off into bankruptcy, the powers are cheating by transferring their
> private losses onto the public via TARP and all the Fed's invisible
> machinations with the US currency. The powers, including the administration,
> Fed, and big banks, are blowing desperately to reflate asset prices
> to stave off insolvency. But to save these banksters from insolvency
> they are risking national insolvency with unrepayable levels of government
> debt.
>
> Taxpayers buy $4500 clunkers from their neighbors to reflate the
> auto sector. Taxpayers make first time homebuyers' $8000 downpayments
> to reflate real estate. Taxpayers who have savings suffer near 0%
> interest rates on their savings so that banksters can borrow cheap
> money from the Fed to play the stock and commodities markets to manufacture
> imaginary 'profits'. Obama wants taxpayers to buy overpriced windmills
> and solar farms and pay carbon taxes so that cheap coal power costs
> more than expensive wind and solar. But 1/2 of the taxpayers are
> already underwater or insolvent or unemployed so how can they be
> expected to do 'more' to save the banksters from richly deserved
> bankruptcy?
>
> The deflationary forces are too large for the present reflation measures
> to succeed. The entire economy is deflating. To succeed, reflation
> must be at least as large scale as the economy wide deflation that
> is now happening. I've written in a previous comment that for $2.5
> trillion the government could send out a $1000 check to every American
> with a SS number, each month for a year. If the economy is still
> deflating after a year they can do it again, and keep doing it until
> deflation is arrested and some inflation starts to surface.
>
> In behind the scenes play the Fed has already created and doled out
> about $2.5 trillion to "undisclosed recipients", so it's not as if
> the $2.5 trillion price tag is out of the ordinary in the current
> environment; and it's not as if the Fed has any qualms about nakedly
> creating and handing out that quantity of money. I think this is
> about the right scale and method of counterdeflationary measure that
> might actually work to prevent GD 2.0.
>
> The banksters don't have to go bankrupt, and neither does America.
> If insolvent banksters can be "relieved" by injections of freshly
> created money, then the insolvent American consumer can be relieved
> in the same way.
And then you can add 1987 and 2008. Anyone see a pattern here? They all happened under republican administrations. Since 1981 three republican administrations have added over $11 trillion to our national debt, with an average of $750 billion a year with the last administration. We're still operating under Bush's final budget until next month with over a trillion deficit and his proposed budget that he submitted in January of this year for FY 2009/2010 had a $1.2 trillion deficit. These are the facts and they are not in dispute so don't give me a thumbs down because you don't like hearing the truth. This economy was driven into the ground with the world's financial system teetering on the brink of total collapse, yet it seems the majority of posters on Seeking Alpha had the delusional expectation that the new administration would have fixed everything by now and have positive growth rates and growing employment in their first few months in office. It took Clinton six years to bring our budget into balance from a much less precarious situation. It will take much longer to dig ourselves out of the huge hole that we now find ourselves in, especially given the non cooperation and obstructionism from the party that put us there.
A lot of you are advoating very harsh measures. A return to the gold standard. We got off that because it makes the money supply unmanageable. It is sound policy to expand money in the current environment. It is also sound policy to use fiscal tools to prime the pum
Since you have a good memory remember Penn Central and the day the US - almost - rean out of money? Barely a blip now. Do you remember the S&L crisis. 900 banks bust in one year alone. Can you recall the year? what was S&P then? What is it now?
The US economy is the greatest wealth creating machine ever conceived. That is not cheerleading just a statement of fact.
A lot of you are so focused on ideology and some sort of political agenda that you are locked into a world view that is hurting your ability to adapt and profit from opportunity.
Good. More for me. I need people on the other side of trades. Much better that they are irrational.
On Sep 04 01:29 PM bottoms-up wrote:
> Personally, I remember all of those periods in our economic history.
>
>
> There is one only one big difference, now and then... Today, rather
> than "news" outlets we have corporate and government cheerleaders
> with only one goal in mind, to make you think that there really is
> no problem and that everything you see around you is all in your
> mind. Today we have highly polished "PR" professionals who can put
> a spin to the positive on anything; if they were around for the White
> Star Line when the Titanic sank, I'm sure they would have pushed
> the "new artificial reef" aspect of the sinking over the loss of
> life.
>
> I have a degree in economics from UCLA and anyone with a basic understanding
> of business or the economy understands that most of what the governments
> report via statistics is fabricated or distorted, only to be "revised"
> at a later date.
>
> If this were only a question of confidence in our economy, it would
> work, but our current crisis has a deep structural collapse at the
> root. No CNBC, CNN or Obama nonsense is going to change that.
I scour for any information on Leading Economic Indicators.
Posted is just one of the many that confirm, there will be NO double dip recession.
The Leading indicators that I post, requires no trust of me.
These are simply tools that most, if not all, of the professionals
use.
I try to use all of the tools possible, in order to
to make as professional a business decision as possible.
Believe what you want, as I have nothing to gain or lose.
However, these are truly some of THE tools that Goldman, Morgan,
Merrill, use.
.09% chance of a double dip.
newyorkfed.org/researc...
This article explains how the yield curve significantly outperforms
other financial and macroeconomic indicators in predicting recessions
two to six quarters ahead.
By Arturo Estrella and Frederic S. Mishkin, Current Issues in
Economics and Finance (2) 7, June 1996
On Aug 31 08:22 PM tagthatstock wrote:
> Karl,,,,,,, we should be near a top,,,an old friend George called
> me last week giddy that his account is near back to the levels it
> was pre 2008 crash this man ignored me at the top when i told him
> to go to cash,,,,,,,,,flat out cash! his recent celebration of being
> near break even ignores the lost year of his investments. the scary
> thing is George is in an important position at his employer and 'he
> doesnt get it' even now.-tag
This means that bailouts are just beginning and will require bigger and bigger sums of taxpayer money as time goes on. The government will resort to borrowing more and more and eventually to printing money when treasury debt auctions start failing. The end result of this path is a currency collapse and probably total chaos as expected by gold bugs.
One other way to deal with this issue is to stop the bailouts and let the dominoes fall. Defaults and cross-defaults will cause many, many depository institutions (even very large ones) to collapse leading to extreme decrease in money supply as bank deposits are destroyed. Deposits of failed banks cannot be used to pay bills, make purchases and/or service debts.
Which will probably lead to even more defaults as unemployment increases and debtor's are unable to service their debts. This process will probably cause extreme deflation as businesses lower prices in a bid to survive. This will also lead to wage cuts, increased unemployment and a deflation spiral and much chaos. But probably less chaos than a currency collapse.
Is there a better way?
Here is my idea:
1) We essentially need an orderly bankruptcy and liquidation of the United States' financial system.
2) I suggest we create a government owned bank and transfer all deposits of the private commercial banking system to the new government owned bank. This "transfer" is really just new money creation. This new money will be digital cash (electronic version of physical paper cash). Very much like reserves at the FED.
3) Note that the plan will not create net new money since we will be destroying all deposits of the commercial banking system in the process.
4) All assets of the commercial banking system will be transferred to the government and auctioned off in an orderly manner over the next 10 years. The proceeds from the sale would go the United States treasury and not the commercial banks. The assumption here is that commercial banks deserve nothing since the entire industry would have been most likely destroyed any way. Even good banks would have been destroyed due to bank runs and defaults if the government had allowed the dominoes to fall. Of course bank shareholders, bank bond holders and counter parties of bank derivatives would not receive anything.
5) After the transfer FDIC protection will be removed for any private bank which wishes to remain in business or any new private depository institution or bank. From that point on the government should make it absolutely clear that there will be no more bailouts and no more conversions. This will discourage (but not completely eliminate) fractional reserve deposit banking and private money creation that results from pyramiding of government created money. This will also limit debasement of the currency that results from fractional reserve deposit banking. In fact, we can have "free banking" from that point on and not even have reserve requirements or capital requirements. All depositors who use private banks will be fully at-risk. The industry will have to set the interest rate high enough to attract depositors.
6) The new government bank will act as an electronic "piggy bank" only. All deposits will be 100% reserve and it will not make any loans. Loan making will be left to the private banking system (with no deposit insurance or a possibility of a future bailout). The new government owned bank exists only as a "safe" money storage and a payment clearing system so the public does not have to carry around physical paper cash to make purchases and pay bills.
6) Of course this plan is not without pain or cost. Cost of funds for banks and borrowers will probably rise as bank deposits are a source of very low cost money for the banks. Nothing is free. We are just exchanging higher cost of funds for removal of systemic failure risk. Economically we are recognizing that when money is loaned there is always credit risk.
7) We are just separating the payment and clearing transaction system which is absolutely necessary for day-to-day commerce (no credit risk) from the loan banking and investment system (has credit risk).
Tomorrow is a new day, and I'm still convinced that the market is bigger than those who would try to use it to bilk citizen's of their hard earned savings. If not next time, surely the time after that.
On Aug 31 01:59 PM Mark Anthony wrote:
> And look at China. Surely China does NOT want be the last bag holder
> of US treasury bonds. No one wants to be a bag holder.
>
> No one wants to see the US dollar collapse. That does not mean it
> will not happen. It will still happen and every one wants to get
> out of the dollar before it happens. With a huge mountain of US dollar
> assets, how can China avoid becoming a bag holder? The only way of
> avoid being a bag holder, is for China to be going on a global shipping
> spree, spend the money as fast as possible, buy anything that China
> can physically ship back to its soil.
>
> That's why besides commodities, shipping will be extremely bullish
> as well. There are plenty of evidence of China's global shopping
> spree now that no one should have any doubt what China is up to.
On Aug 31 01:59 PM Mark Anthony wrote:
> And look at China. Surely China does NOT want be the last bag holder
> of US treasury bonds. No one wants to be a bag holder.
>
> No one wants to see the US dollar collapse. That does not mean it
> will not happen. It will still happen and every one wants to get
> out of the dollar before it happens. With a huge mountain of US dollar
> assets, how can China avoid becoming a bag holder? The only way of
> avoid being a bag holder, is for China to be going on a global shipping
> spree, spend the money as fast as possible, buy anything that China
> can physically ship back to its soil.
>
> That's why besides commodities, shipping will be extremely bullish
> as well. There are plenty of evidence of China's global shopping
> spree now that no one should have any doubt what China is up to.
On Aug 31 12:12 PM mikemichaelson wrote:
> He still thinks the S&P 500 is going to 200. Admit when you're
> wrong Karl.
On Sep 06 09:09 PM VOTEFORBRAD.COM wrote:
> Freddie Mac is up in value because the housing market has bottomed
> out and FRE is turning out of the red. Freddy bottomed out at 0.25.
> The government will not let it fail, and smart people bought in at
> that price. Now there is a frenzy because dumb people are slow to
> catch on. It will top out at around $25 or so late next year, which
> means $50,000 today will be $600,000.00: Merry Christmas, 2010!
On Sep 05 06:29 PM FB5000 wrote:
> You are right. It is really different this time. The End of Days
> are upon us. We will all be living in cardboard boxes or deserve
> to becasue we need to take our medicine.
>
> A lot of you are advoating very harsh measures. A return to the gold
> standard. We got off that because it makes the money supply unmanageable.
> It is sound policy to expand money in the current environment. It
> is also sound policy to use fiscal tools to prime the pum
>
> Since you have a good memory remember Penn Central and the day the
> US - almost - rean out of money? Barely a blip now. Do you remember
> the S&L crisis. 900 banks bust in one year alone. Can you recall
> the year? what was S&P then? What is it now?
>
> The US economy is the greatest wealth creating machine ever conceived.
> That is not cheerleading just a statement of fact.
>
> A lot of you are so focused on ideology and some sort of political
> agenda that you are locked into a world view that is hurting your
> ability to adapt and profit from opportunity.
>
> Good. More for me. I need people on the other side of trades. Much
> better that they are irrational.
>
>
>
>
>
>
>
>
WE will create our future by the our actions, not our opinions.
Anyone making investment decision this way would have just as much success playing some game of chance.
On Sep 02 05:34 PM mark joseph wrote:
> Just to be simple and unemotional about this let’s compare the Great
> Depression stock market drop to what is going on now.
>
> INITIAL MARKET DROPS
> From September 1929 to October 1929, the market dropped 48%.
> From October 2007 to March 2009, the market dropped 56%.
> So the drop percentage was pretty close, but the recent drop took
> longer.
>
> DEAD CAT BOUNCE
> From October 1929 to April 1930, the market jumped 48%.
> From March 2009 to July 2009, the market jumped 48%.
>
>
> FINAL DROP
> From April 1930 to July 1932, the market dropped 86%.
> From July 2009 to 2012, the market will drop ??????
>
> You have to try real hard to ignore these numbers.
Considering for the moment there is some basis for all the assertions that the TBTF have trillions of off-balance sheet or otherwise unrecognized losses, will these not consume any profits for a very long time?
One hypothesis that I cannot rule out is that TPTB are reducing their exposure in the TBTF prior to nationalization. Thoughts?
On Sep 06 09:09 PM VOTEFORBRAD.COM wrote:
> Freddie Mac is up in value because the housing market has bottomed
> out and FRE is turning out of the red. Freddy bottomed out at 0.25.
> The government will not let it fail, and smart people bought in at
> that price. Now there is a frenzy because dumb people are slow to
> catch on. It will top out at around $25 or so late next year, which
> means $50,000 today will be $600,000.00: Merry Christmas, 2010!
On Aug 31 01:01 PM Tony Petroski wrote:
> I've heard of "Dead-Cat Bounces." "Used Dogfood Stocks?" What is
> the origin of that phrase?
And...if you look at all the other recessions including the Great Depression our current circumstance most closely RESEMBLES Fall 1930.
We can't predict with certainty what will happen; however, if you look at all the fundamentals the chance of another Great Depression are greater than other scenarios.
On Sep 07 10:58 AM bricki wrote:
> The problem with these types of comparisons is that the fundamental
> background behind the two events is completely different. The result
> is that all you have constructed is a logical fallacy, an example
> of post ergo propter hoc.
>
> Anyone making investment decision this way would have just as much
> success playing some game of chance.
>
> On Sep 02 05:34 PM mark joseph wrote:
On Aug 31 01:01 PM Tony Petroski wrote:
> I've heard of "Dead-Cat Bounces." "Used Dogfood Stocks?" What is
> the origin of that phrase?
I sure hope so
-------------------
Don't Get Massacred !
Gudovac1941.blogspot.com
blog.mtrig.com/mtrig/b...
We have a very influencial Senator, but...because of Lobyists we have battalion cheifs making over $500,000.00 a year and EMT supervsors making $250,000.00! The stupidity of our politicians never stops! My nieces are in overcrowded schools w/ under paid teachers! Our city councils are corrupt (from inside land deals to liquor licensing)!
VOTER REVOLUTION!!!
I am VOTING EVERY INCUMBENT OUT OF OFFICE! On both State and Fed. levels...IT MUST STARTE SOMEWHERE! Sep 09 12:31 AM |Report abuse| Link | Reply 00 wyn: Comments (10) • StockTalk (1)FollowWatch as our BS IGNORANT "politicians" buckle again to reward, and allow the same insolvent banks to keep making markets in derivatives (a very profitable pat of their 'banking').
And what about allowing shareholders the chance of cuting pay for our Multi million dollar 'executives'...before I get any replys...read a book by Taleb "Fooled By Randomness" (just so you understand how stupid these pay packages are)!
I'm SO PISSED I can hardly type............
It's much simpler than what most of you assume. Just follow the price, be nimble, take on risk, but be cautious. I went to cash at the end of 2007 and fully returned to the market by the end of March 2009.
To put it mildly, I have made a lot of money, and I don't intend to lose it as I did in 2001. Had I done in 2000/2001 what I did in this last crash, I would be worth nearl twice as much as I am actually worth right now. Just follow the market averages. The trend IS your friend. Don't buy single stocks; instead, use ETFs. Yes, you can put all of your eggs into one basket; HOWEVER, you must watch this basket like a mother bear is watching her cub. It's that easy. Bickering and arguing about something which may happen or may not happen is possibly entertaining, but it's not profitable, but it is profitable to follow the trend. For starters, just trace the 200 or 125 SMA or EMA. Go back a decade and check it out. Good luck trading.
Even if this were the long term truth, how has the current crop of legislators distinguished themselves? Certainly not through austerity. The excuse- this time it is different! We need to spend our way into prosperity. Of course in good times it is - We are a great country and should do this because it reflects our character as a nation.
Well, I've seen our character. Spend, spend, spend... The only place it seems to controlled is at the municipal level in small city government. I really don't think either party should be given a pass by any citizen who is not on a government payroll.
On Sep 05 12:02 PM jdl51 wrote:
> "How old are you? Do you remember 1982-3? 1990-1? Do you recall 1973-4?"
>
>
> And then you can add 1987 and 2008. Anyone see a pattern here?
> They all happened under republican administrations. Since 1981 three
> republican administrations have added over $11 trillion to our national
> debt, with an average of $750 billion a year with the last administration.
> We're still operating under Bush's final budget until next month
> with over a trillion deficit and his proposed budget that he submitted
> in January of this year for FY 2009/2010 had a $1.2 trillion deficit.
> These are the facts and they are not in dispute so don't give me
> a thumbs down because you don't like hearing the truth. This economy
> was driven into the ground with the world's financial system teetering
> on the brink of total collapse, yet it seems the majority of posters
> on Seeking Alpha had the delusional expectation that the new administration
> would have fixed everything by now and have positive growth rates
> and growing employment in their first few months in office. It took
> Clinton six years to bring our budget into balance from a much less
> precarious situation. It will take much longer to dig ourselves
> out of the huge hole that we now find ourselves in, especially given
> the non cooperation and obstructionism from the party that put us
> there.
I also add to your approach dividend stocks w covered calls although I lost on my banking segment thanks to Kudlow, Stein, and the rest of the CNBC optimists. Thankfully, I had taken almost all financials off the table.
On Sep 09 06:33 PM samretlew wrote:
> Guys,
> It's much simpler than what most of you assume. Just follow the price,
> be nimble, take on risk, but be cautious. I went to cash at the end
> of 2007 and fully returned to the market by the end of March 2009.
>
> To put it mildly, I have made a lot of money, and I don't intend
> to lose it as I did in 2001. Had I done in 2000/2001 what I did in
> this last crash, I would be worth nearl twice as much as I am actually
> worth right now. Just follow the market averages. The trend IS your
> friend. Don't buy single stocks; instead, use ETFs. Yes, you can
> put all of your eggs into one basket; HOWEVER, you must watch this
> basket like a mother bear is watching her cub. It's that easy. Bickering
> and arguing about something which may happen or may not happen is
> possibly entertaining, but it's not profitable, but it is profitable
> to follow the trend. For starters, just trace the 200 or 125 SMA
> or EMA. Go back a decade and check it out. Good luck trading.
Jim Willie says that if you took a 2x4 timber and struck Karl up-side his head, it would not leave a mark, just like the Pentgon has no marks on it's side either.
Author, can you prove this statement, or at least say what 'size' you were in for?
All I ask of you is: 1) to be respectful in discoarse (or go on a yahoo message board where rage trumps intellectual discussion), 2) Challenge the fundamentals of my response instead of insults (fundamentals are far worse today than they were in 1930.. debt, trade deficits, GDP dominated by consumption not production) 3) (last but not least) switch to decaf.
On Sep 02 09:59 PM FB5000 wrote:
> Truly. You believe this is a repeat of the Great Depression.
> +25% unemployment? +50%!!! reduction in Industrial production, 60%
> reduction in trade and incomes and crop prices, 25%!!! reduction
> in GDP.
>
> You really think this today is like that then?
>
> How old are you? Do you remember 1982-3? 1990-1? Do you recall 1973-4?
>
>
> You have no idea. Sincerely. Engage brain. Step away from the keyboard.
> Stop typing and think.
>
>
>
>