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Mark Bern, CFA
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Mark Bern (formerly K202) intends to continue writing solo and has shed other work-related relationships that required anonymity. CPA since 1990 a CFA charter holder since 2000. He has a bachelors degree in Business Admin. with a concentration in Economics. His experience includes both private... More
  • OG's Quick Chat # 93 - 8/22/2010 109 comments
    Aug 22, 2010 5:54 PM | about stocks: SPY
    OG has asked me to take over responsibility for the Quick Chats so that she can sort out some personal things.  OG will be back with us soon after her hiatus.. At that time she will resume posting QC Instablogs.  Until then, I will be your host.  Please be respectful and enjoy the liberty of this space.

    List of stocks mentioned in QC #92:

    (NYSE:ANR), (NYSE:ACI), (BGZ), (NYSE:BP), (NYSE:BTU), (NYSE:CAT), (NYSE:CLD), (NYSE:COP), (NYSEARCA:EUM), (NYSEARCA:EUO), (OTCPK:GDLNF), (NYSE:GS), (OTCQX:GWMGF), (NYSE:HXL) (OTCQX:HUDRF), (OTCPK:LYSCF), (NYSE:MCP), (OTCPK:NXTH), (PCX), (NYSE:POT), (OTCQB:RMCP), (NYSEARCA:TWM), (NYSEARCA:SH),  (NYSEARCA:TZA), (NYSE:URI), (NASDAQ:VRNM), (NYSEARCA:VXX), (NYSE:XOM)



    Disclosure: SPXU, TWM, SRS
    Stocks: SPY
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  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » The last comment from QC # 92 came from tripleblack:

     

    LOL, ran across a bookmark and a "note to self" to track down how Dr. Phil Gray's 2010 hurricane predictions turn out. Dr. Gray, of course, is a huge booster for Global Warming (and coincidentally gets tons of funding from the topic).

     

    His prediction is that between June 1 and Nov 30, 2010 (the usual "Hurricane Season" for Atlantic storms), there will be 5 Major Hurricanes, out of 6-9 total hurricanes.

     

    We're almost exactly half way through Hurrican Season, so its a good time to check the scorecard...

     

    Number of hurricanes: 1, Hurricane Alex (struck Mexico)

     

    There is another tropical storm right now, Danielle, cruising around the South Atlantic. One to watch, of course.

     

    No way to tell what will happen over the next 3 months, but so far, so good. Maybe we will be lucky this year (and Dr. Phil, not so lucky - a few more years of this sort of result, and he might lose some warmist funds).

     

    Just protecting whatever trend is there, it seems likely that there will be another hurricane over the next 3 months.

     

    6-9 seems unlikely.
    22 Aug 2010, 05:55 PM Reply Like
  • Dialectical Materialist
    , contributor
    Comments (4458) | Send Message
     
    I think there is a lesson in here for all of us investors who think we know what's coming in the markets. Predicting hurricanes and market plunges is very inexact work. You may think you know something about the "temperature" and the "currents" of the market. You may have modeled what forces need to come together to move the market up or down. Heck, you may even see the storm clouds gathering on the horizon. But actually predicting things that are by definition fluid and ever changing is just a mess. Some folks fool themselves into thinking they have a model that accounts for the key variables and looks at how things are most likely to come together. But we just don't know.

     

    I throw that out there because the consensus I have been reading here and which I for the most part agree with is that:

     

    1) Things are bad in the economy
    2) Things are worse than the string pullers either realize or admit publicly
    3) There is likely to be some sort of "save face", act of desperation, Crazy Ivan, October Surprise or at the very least applying lipstick to the pig this fall before the elections
    4) There is no stopping the inevitable decline in our economy at least in the short term
    5) The markets will eventually catch up with reality and there will be some dark days
    6) At this time we can all take stock, pat ourselves on the back for having accumulated dry powder and begin to get our toes wet in the market once more.
    7) 2011 may be a bad "financial hurricane" season.

     

    I am just throwing this out there because this is the model I have been reading -- or at least I think it is what I have been reading. And it makes me wonder if we are missing something. Is there a shoe (or a 16 ton weight) dangling over our heads? Is there something we are not modeling that we will all say should have been obvious when looking back on the fall at Christmas?

     

    In any case, just because the conditions are ripe for a hurricane doesn't mean one will certainly form. What if we muddle through the fall in this dreaded trading range and nothing happens?

     

    No agenda, just thinking out loud.
    22 Aug 2010, 06:13 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    I agree with your assessment that trying to predict things that are inherently complex is a mess. However, I argue that going through a formal modelling process has a great deal of value.

     

    Modelling is about trying to understand a complex process. If a model fails to predict, at least you have some information on what did not work, and potentially why it did not work. That is how models improve. Modelling a system with large numbers of random events impacting it will lead to a great deal of noise in the model (lack of fit). However, irrespective of the amount of noise, some systematic associations (signal) will be present, and that will result in the model performing better than chance.

     

    Experience in any endeavour is a valuable asset. Experience is gained by years of observations. Observations of what happens in the presence of certain events. Observations of what happens when a business does X and Y occurs. Experience involves the generation of a "mental model". The greater the experience, the greater its valuation with respect to making appropriate decisions. Mental models based on years of experience can also fool people into thinking they understand what is happening.

     

    Gathering historical data, and analysing it results in the generation of similar knowledge as the equivalent number of years of experience. This is why a data analyst often gets told by experienced managers that they already knew the results of the data analysis. What the experienced managers fail to recognize is that someone working for a day or so just generated the same level of knowledge it took them twenty years to accumulate.

     

    They also fail to appreciate that the associations are now codified so other people with less experience can now bring themselves up to the same level of experience, and to start building on that knowledge base. In addition, the codified knowledge stays with the organization when the people with the real world experience leave.

     

    In the event that some random event strikes, decisions based on experience and models based on historical data could be wrong, but that does not discount the value of either real world experience or models based on historical data. Instead, the exception is noted, and guesses are made as to why the model failed, and new models are formulated.

     

    Models based on only a few data points are less stable than models based on many data points, but even models based on only a few data points have value. If the engineers responsible for the decision to launch the Challenger had bothered to have an applied statistician look at their data, history might have been different. The data was nosy, but when one obvious outlier was removed, the association between lower tempetures and number of seals damaged on the solid fuel boosters was reliable.

     

    Predictive models are using some variables to predict another. Data fitting models are used to reveal trends. If you have several points, and those points are defining a trend, than the fitted function can provide an estimate of where future performance is trending. Technical analysis is an exercise in data fitting.

     

    The act of discovering a trend leads to guesses as to why that trend exists. Those are of course just guesses, but those guesses are generated in response to the fact that there is a trend present. This channels questions along lines of why is a trend present, and what would it take to reverse that trend? This type of reasoning focuses people on thinking up reasons responsible for the current trend, and on the other hand, reasons necessary to reverse the current trend. So while data fitting models do provide some evidence for future, near term predictions, their primary value is to focus attention on the possible reasons for the existence of a trend, and what kinds of events could occur to reverse that trend.

     

    Models reflect an inexact representation of reality. However, the process of generating a model (mental or mathematical) can lead to improved understanding of reality.
    23 Aug 2010, 01:04 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    seekingalpha.com/artic...

     

    Great article by Mr. Mauldin, though it coincidentally includes a great article by David Rosenberg which I linked into one of my long comments in the last QC, its STILL well worth reading.

     

    But here's the part I wanted to enlarge upon, the New taxes coming at us in 2011:

     

    www.atr.org/six-months...

     

    Quite the list:

     

    [quote] In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:

     

    First Wave: Expiration of 2001 and 2003 Tax Relief

     

    In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:

     

    Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:

     

    - The 10% bracket rises to an expanded 15%
    - The 25% bracket rises to 28%
    - The 28% bracket rises to 31%
    - The 33% bracket rises to 36%
    - The 35% bracket rises to 39.6% [quote]

     

    I almost have these numbers memorized, so frequently have I been forced to resurrect them to convince disbelieving liberals that yes, the Bush tax cuts saved THEM money on their taxes just like it did for the rich folk. Sticker shock after that first (smaller) pay check arrives in January is going to be nasty. Probably better to stay home and off the roads the first Friday in January!

     

    [quote] Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.

     

    The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones. [quote]

     

    Another one that is widely (and wildly) misunderstood. $1million then a 55% haircut, WILL see some wild scrambling around after estate planners come December!

     

    [quote] Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013. [quote]

     

    My personal favorite, of course. And lest we forget, this will result in loads of investors cashing in their goods in 2010, to take profits and pay for them in 2010 taxes to avoid 2011. When this wave of selling hits the markets, it might get ugly. Speaking of waves...

     

    [quote] Second Wave: Obamacare

     

    There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:

     

    The Tanning Tax. This went into effect on July 1st of this year. It imposes a new, 10% excise tax on getting a tan at a tanning salon. There is no exemption for tanners making less than $250,000 per year. [quote]

     

    LOL, this is one I had missed. Lump it in with the other "sin" taxes, like the sky high cigarette taxes they just added. Hey, maybe all those smokers ARE making $250k a year, it could happen, LOL!

     

    [quote] The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

     

    The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

     

    Brand Name Drug Tax. Starting next year, there will be a multi-billion dollar tax assessment imposed on name-brand drug manufacturers. This tax, like all excise taxes, will raise the price of medicine, hurting everyone. [quote]

     

    Another key step in the ongoing war on the drug companies by government worldwide. Its the Voldemort equivilant of the Borg: "You WILL be punished for individual achievement!"

     

    But the message is getting through. Pretty soon they will all just start selling each other generic drugs at rock bottom prices that don't work anymore.

     

    [quote] Economic Substance Doctrine. The IRS is now empowered to disallow perfectly-legal tax deductions and maneuvers merely because it judges that the deduction or action lacks “economic substance.” This is obviously an arbitrary empowerment of IRS agents. [quote]

     

    Extraordinarily scary bit, here. Carte blanc for the IRS. If that doesn't send shivers down your spine (and the spines of every small business and entrepreneur in America)...

     

    [quote] Employer Reporting of Health Insurance Costs on a W-2. This will start for W-2s in the 2011 tax year. While not a tax increase in itself, it makes it very easy for Congress to tax employer-provided healthcare benefits later.

     

    Third Wave: The Alternative Minimum Tax and Employer Tax Hikes

     

    When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. These major items include:

     

    The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers. [quote]

     

    Most of us here on SA will be in this group. Better bone up on what this means, gang, its about to get up close and personal.

     

    [quote] Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”

     

    Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs. [quote]

     

    Note the bit about R&D. Remember what I just said earlier about the war on the drug companies. This WILL impact them, and particularly the small cap companies like (NVAX) and (VICL) which many of us own.

     

    [quote] Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families. [quote]

     

    Major changes here, with a subtle agenda.

     

    [quote] Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there. [quote]

     

    Read more: www.atr.org/six-months...
    22 Aug 2010, 06:25 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » DM - I absolutely agree. To not agree would be to say that I know everything that is, has been, and is yet to come. Really, I only know a relatively small portion of what has been or is and only have clues as to what is on the horizon. Our models, I think have discounted almost everything of significance that is known to the public at this point. But to the point, we don't know what is being brewed in the back offices of Wall Street, Washington, Tel Aviv, Islamabad, Moscow, or Bejing. And then there may be a radical in NYC or DC ready to make the big sacrifice and bomb some portion of the power grid or a server farm that disrupts everything for a few days. There may be a few hundred of them out there ready to attempt a coordinated attack in various places across the globe. I don't think there is a threat of that sort. But, it is just one of a myriad of things that we cannot plan for (like a bill from Congress the sneaks through during the fall session while the right members are available to vote and the wrong ones are out on the campaign trail).

     

    We just have to adjust for the unknown when it becomes known, and fast. My only fear is that they slip something by all of us and we don't have the ability to act before the herd. It is a risk. But having this group ever vigilant is the best way to guard against it, IMHO.
    22 Aug 2010, 06:33 PM Reply Like
  • Dialectical Materialist
    , contributor
    Comments (4458) | Send Message
     
    Mark, I guess as I have thought about it the real risk to bracing for a market downturn is in missing some runaway train. And given the relative odds of that, I guess that's a risk worth taking. All of the more likely risks -- like the ones you cite -- seem to be on the downside and would involve more of a "should I be in dollars or gold" kind of question. I don't care if I don't make a gaziilion dollars on a downturn as long as I am fairly sure I won't lose much.

     

    I just have this nagging concern that things seem inevitably headed lower and inevitability is a slippery fish in the market world.

     

    And TB has just ruined my Sunday with his list of impending taxes, thanks very much! Hard to see the economy growing in that field. They've mistaken defoliant for pesticide again and are about to spray the crops...
    22 Aug 2010, 06:55 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » DM - I have some of the same feelings. I can't help but wonder if there is any basis in a contrarian viewpoint. The Renegades aren't the only ones looking for a market slide at this point. We seemed to be seeing it on the horizon a lot earlier than most, but since it hasn't happened yet we're no better off outside of the possible levels of conviction.

     

    At this point, with what seems like a majority against more stimulus, I wonder how the market would respond to another stimulus bill passing, especially one of significant size. Could they somehow sell it and get the market to rev higher for the elections? Would people believe the same lies as before even if the POTUS told them that this time it would be different and that there would be accountability and results? Would enough people believe him to turn consumer confidence higher? Would Wall Street be able to ignore the general public and just move the market higher on the basis that more stimulus will boost profits again?

     

    And the big question: Would everybody temporarily forget all the new taxes and the rises to the old ones that are about to hit?

     

    Or maybe the better question would be: Is the American Public really that stupid? Or does that even matter to the market? Probably not. If investors are ensured of higher revenues and profits because of additional massive stimulus, will they look beyond the next quarterly results and consider what the additional mound of debt will eventually do to the economy? But that's then and this is now is what I can almost hear them saying. There has to be a wall or cliff or something at the end of the road, beyond which the can cannot be kicked. Are we there yet? I don't know.
    22 Aug 2010, 07:25 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Its still not too late for the Regime to change course. It's too late to avert a problem, simply too much time has been squandered - too much money wasted - too much debt loaded onto the taxpayer...

     

    But things could be greatly improved by simply, as you so succintly put it DM, NOT spraying the crops with defoliant.

     

    This would require a 180 degree refersal of dogma, however, and that is probably not going to happen...

     

    But "probably not" is different from "certain".

     

    Right now I see a combination of "all the above".

     

    They will trim some of the tax increases around the edges, in minor ways, and then try to sell the meaningless tweaks as acts of gracious kindness destined to create jobs.

     

    They will pull more money forward from the huge pile of future pork created by the stimbill, and seek out deserving (ie, union dominated) sectors to create temporary new government dependency, which will again be sold as acts of gracious kindness destined to create jobs.

     

    They will create meaningless tax "cuts" that are actually simple one time handouts, carefully targeted to benefit some (as yet undetermined) special interest group we here probably have never even heard of.

     

    Etc.

     

    The train heading full bore for the cliff will feature a crew crawling all over it repainting the bolts, and studying ways of converting the engine from burning diesel to "clean coal". No one will touch the throttle, of course.
    22 Aug 2010, 07:40 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    What's in the future for us and the market? Think in terms of the bond action recently and the *massive* drop in yield combined with average and above bid-to-cover.

     

    Then view these videos

     

    www.youtube.com/watch?...

     

    Under each video is a link to the next in the series.

     

    Everything is according to plan now, just as in past major dislocations. Keep in mind that treasury bonds are issued to withdraw liquidity from the system, not to finance deficits.

     

    Discussion of this can be found in various articles (and the comment sections provide a *lot* of "meat on the bones") here.

     

    pragcap.com/

     

    Click the "Tools and Resources" drop down and pick "The Best Of".

     

    Sharing all we know, how do we position to profit while we also try to correct the system with unknown outcome? Do we try? Or do we just try to make the best of it here and now?

     

    HardToLove
    22 Aug 2010, 09:24 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » HTL - I watched all 9 videos and am mulling it all over in my feeble little mind. It does make sense and the dots are connected, but it also gives me a lot less hope for the future if I resign myself to this as reality.
    23 Aug 2010, 04:24 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    HTL: Are you sure about that observation, that treasury bonds just reduce liquidity but don't finance government deficits - at least at times like this, when debt is growing by leaps and bounds, and the bulk of the money raised by the auctions immediately goes to spending, much of it of the deficit variety?

     

    Also, its one thing when T's are sold into the marketplace - and another when they are sold to a quasi government enterprise like the Federal Reserve. In THAT case, it is indeed reducing liquidity, and the anticipation is that they will hold the bonds to maturity - but since the money USED to make the purchase is potentially part of the cycle itself, it doesn't really succeed very well at doing that, imo. The camouflage announcement from the Fed that they are using "income" from their portfolio to make the purchases, else it WOULD just be a merry-go-round. Those of us that have believed for some time that the Fed has been enabling this merry-go-round $carry trade are doubtless the target for that Fed announcement...

     

    HAS the Fed been routinely propping up the auctions, keeping interest rates extremely low and stable, and quietly creating billions and billions of dollars to do it?

     

    Interest rates on the debt are a giant concern for the Federal government. When rates go up, their costs go much higher, and can consume huge portions of the budget (assuming we ever GET another budget, ha, another reason to wish the incumbent Democrats ill). When in a deficit condition (and its hard to be in MORE of a deficit than we are right now), ALL of that additional funding would be part of the deficit, IF the auctions started to falter and interest rates shot up.
    22 Aug 2010, 09:38 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    IIRC, while reading the Pragmatic Capitalism web site (highly recommended) articles

     

    pragcap.com/

     

    I learned that the government spends to create money and then bonds are issued. I've read (and partially learned) so much recently about this whole scheme, I could easily be confused. The gist of what I recall is that the bonds serve to both soak up some of the liquidity created and to keep balance of the books.

     

    I'll have to find the particular article again and I'll post it to a reply here... Aha! Found one of the many there. Here's a snippet.

     

    ------------------------
    The government bond market is merely a monetary tool that the central bank utilizes to control the cost (or supply) of money by controlling the level of reserves in the system. So, when the government auctions bonds they are merely targeting reserves in the system. This action is mandated by Congress as an accounting tool and so is seen as a source of funding, however, in reality the Central Bank is merely draining reserves that the Treasury already spent into existence – reserves that were deposited at various banks (read this process in greater detail here).
    ----------------------...

     

    pragcap.com/the-myth-o...

     

    The Fed and secondary markets are whole different animals. I do know that the Fed buys them and sells them as part of the action controlling the amount of liquidity in the system. As a result, when Fed buys, money is added to the system and when Fed sells, liquidity is reduced in the system.

     

    Anyway, since I could be misunderstanding so much of all this, I think you'll be better able to comprehend all that if you go to the site and read so many of the fine articles there.

     

    Plus, you can then set me straight, if needed, as the potential for confusion by me is so great as I get inundated with so many new concepts and there details.

     

    HardToLove
    23 Aug 2010, 09:54 AM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Thanks HTL. That actually dovetails nicely with my own take on the subject, where the idea is to issue sufficient debt to AVOID outright money-printing which depreciates the dollar instantly (whereas the debt does so more slowly, long term). Hence the alarm with the recent reports (I believe you brought us one here on the QC recently) that about $1.5trillion of new money might have been created WITHOUT offsetting debt auctions.

     

    One of the reasons this would be alarming is that it would represent a literal extra-Constitutional excursion on the part of the Executive Branch. Black letter Federal law holds that the national debt is firmly under the control of the Congress, who via legislation "spend the money" and establish maximum debt levels.

     

    Since I am anticipating a constant barrage of these extra-Constitutional adventures over the next few years, I am therefore not surprised at all that they have occurred in the recent past, and are apparently happening right now.

     

    In this case, this ocean of "off the books" dollars is the sort of thing which makes me nervous about the "flight to safety" with government bonds, and particularly those investment vehicles that game the yields.
    23 Aug 2010, 10:08 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    It's even more alarming if you view the videos (or read the articles, if preferred) from councilonsper that I posted recently and give any credence to what's proposed therein. I would be less likely to give serious consideration if I had not seen well-cited prior publications that seem to support the site's description of what is really going on in the world banking circles.

     

    HardToLove
    23 Aug 2010, 10:33 AM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    I watched some of those. Frankly, I am very open to these ideas right now - it dovetails with events, and the panicked environment which still exists. However my gauge on the groups and individuals involved is that, to them, they are "fighting the good fight".l If you could read Geithner's mind, I strongly suspect that he sees himself in a heroic role, saving the country and the planet, rather than performing some more devious or perverse role. Same with the bankers.

     

    In my opinion we are looking at an Oliver North situation rather than some ancient and evil conspiracy. Self-deluded nutballs with too much power and too little transparency, and a warped but fervently held belief in their own "cause".

     

    In their minds they are all like Joan of Arc, while a more objective observer might see them as a bumbling group of Don Quixote wannabes.
    23 Aug 2010, 10:41 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    The series does mention several times that many (most?) of the participants see themselves exactly as you describe. He states that only at very high levels and within a very select small group (that remains "out of sight") is there awareness of what is going on. And even then, the folks believe in their "statism" and see what they are doing as a good thing.

     

    HardToLove
    23 Aug 2010, 10:50 AM Reply Like
  • Dialectical Materialist
    , contributor
    Comments (4458) | Send Message
     
    Think about some of the bad parents you have known who were convinced they were doing the right thing. All it takes is for the person in power in a relationship (parent, world banker, or what have you) to not understand that his or her priorities are not the only relevant considerations in the system. The series mentions multiple times that this banking system doesn't just devalue human relationships and free time, it literally makes no allowances for them. The banking system which is expanding into all parts of our lives doesn't understand or appreciate that we are more than simply economic actors. That art, love, family, and even death and sorrow are part of what makes us human. A well meaning system administrator can still do a lot of evil if we define evil as separating human beings from the things that make them human. Stallin and Hitler were not cited as system managers for no reason...
    23 Aug 2010, 11:19 AM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    www.bloomberg.com/news...

     

    Some more fat for the bond fire. Not a time or place to park long term, imo.

     

    The whiplash this Fall will be fierce, follwed by whatever strikes via lame ducks and the New Year.

     

    Steep V-shaped recovery in 2nd half of 2011? (But will strike a glass ceiling around DOW 11k?)

     

    Inflation watch remainder of 2011, followed by 2012 insanity.
    23 Aug 2010, 12:34 PM Reply Like
  • Dialectical Materialist
    , contributor
    Comments (4458) | Send Message
     
    So when the bond market cools down, are interest rates headed higher? If so it seems that would be very bad for the housing market and hence bad for the economy so it seems like it would keep bonds attractive which should in turn keep interest rates low... In other words, I think there are a lot of reasons for bonds to stay warm for some time to come yet.
    23 Aug 2010, 02:38 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Straight bond plays are going to take a long time to wrinkle out, either way, as always. Should we get into some nasty inflation a year or two down the road, detaching from bonds will be messy and expensive.

     

    The choice will be to keep the money there and watch currency depreciation and inflation eat it alive, or bail at a steep discount.

     

    Getting in right now might indeed be a good play - the herd is about finished departing from equities (all the stats I'm looking at indicate that the flood of capital from equities has already hollowed out the markets), so I'm thinking that there will be some who will continue this trend, though at a lower level, and some will detach from cash (which is even larger than bonds right now) to enter the bond play...

     

    But it looks like the mass movement is pretty much done.

     

    Of course, some folks are confusing the weak equity markets with this flight from the hedgies, quants and mutuals - whereas I see the cause and effect to be reversed, the money has fled equities because of problems with the markets, and are NOT the CAUSE of the problems. The chicken (disaffection with equities) definitely came before the egg (movement out of equities and funds). Flipping the process advances the CYA activities among the hedgies, quants and pundits, but its upside down.

     

    Sure, inflation is still more potential than real, but when it DOES break loose, it is likely to do so in a big way and very quickly.
    23 Aug 2010, 02:56 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    I'm concerned that there may be some land mines waiting amid the T-bill landscape, particularly for those seeking to bet the direction of the interest rates. Like currency bets, I can see a hundred reasons their behavior will detach from events in the macro economy - the markets - or even the government. From everything I have been reading (Rocks has some posts on this topic on SA with charts that show a marked divergence from the bond markets and the equity markets) a huge divergence is already in place. With the bond markets now MUCH larger than the equity markets, it would seem obvious that when the inevitable adjustment to some form of balance occurs, the movement will be much more violent on the "lighter" of the two.

     

    So this indicator is pointing pretty aggressively at an equity crash.

     

    I'm thinking it will move BOTH ways, with surprises on the bond side, plus the anticipated smack down for equities. Those anticipating very little effect in the bonds (or even making money while the equities hit the rocks) may be shocked.

     

    The bond markets SHOULD not behave in this way, but they are - and therefore, judging the future upon their past behavior might be very risky.
    22 Aug 2010, 10:14 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5045) | Send Message
     
    On Tata Motors (TTM)
    seekingalpha.com/artic...
    22 Aug 2010, 11:40 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » OG - Thanks for the post. TTM is one of those long positions I plan on getting into when I feel safe to do so. For me, though, right now is not the time.
    23 Aug 2010, 04:27 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Mark: Your comment where you wondered about the potential for a contrarian view of the current economic landscape to the rather "down" consensus which appears to be coalescing among most of SA participants has me thinking. I'll be seeking out that viewpoint, and see what I can bring to the fold...

     

    Meanwhile, this morning I went through my normal news tickers which I frequent, doing my "morning paper" as I think of it. As usual I have my trusty notebook, and noted down the headlines that meant something to me. Then I decided to flip the page, and start a new list drawn from NON-financial sources.

     

    Here it is:

     

    HP/Dell in bidding war for 3Par

     

    FDA needs more power, they say

     

    Brookfield buys Prime

     

    Moody's downgrades Bahrain sovereign debt

     

    South Korea's pension fund is studying large investment in U.S. pipelines

     

    HSBC negotiating for $6.8billion majority in Nedbank

     

    Its an interesting collection. Now, is there a common, actionable thread...

     

    Lots of M&A acvtivity, I've been expecting that, with large deals floating around. Part of my current thesis is that M&A will pop now, representing companies sitting on cash with a stock price they consider to be in peril (but still high) seeking to cash it in - to "use it before they lose it" by purchasing underpriced companies they lust after. I'll be digging around Pharma today looking for opportunities in m&a, again according to my thesis which calls for the big fish to start gobbling up the little fish. In that area, I think the bigs are already running a bit late...

     

    Overall, I consider a phase of m&a activity like this to be a chartable mark, a telltale of an impending downturn following an earlier drop. Use it or lose it...

     

    Sovereign debt downgrades of troubled countries continues, and has not bottomed by any means. Though I consider Moody's and the other rating agencies dinosaurs when it comes to any role in corporate paper, their templates probably still work for sovereign debt.

     

    South Korea's pension fund shopping our pipelines was really interesting to me, since I am doing the same thing, and perhaps even for the same reasons. I presume their managers (some of the smartest in the business, btw) are doing this to lock in high yields in well-regulated near-monopoly companies which throw off lots of cash flow even in bad times. This implies, of course, the iminent arrival of "bad times".

     

    HSBC choosing this particular time to buy big into Nedbank is revealing in its own way. I have been waiting for a consolidation in this area, and it is finally starting to happen. It appears to me that HSBC's timing is perfect, but we will see shortly which way the currency wars bounce, and how much the troubles in the Eurozone erode the balance sheets of companies like HSBC. This is another play for nailing down assets which might just keep them afloat with the return of bad times, and I view it as both revealing and well-played (though I would not put any money in HSBC, regardless).

     

    Sorry, Mark, no signs in this cursory review of those contrarian indicators, but I will make it a point to keep looking.
    23 Aug 2010, 09:28 AM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » I suppose we could look at the Wall Street Analysts' consensus earnings expectations for the remainder of the year at 13% and consider that as contrary. It all depend on whether enough investors actually believe and follow Wall Street analyst expectations. anymore. The market does seem to move based upon how companies actually do relative to analyst expectations. That would indicate that maybe the majority of investors still believe in the rose-colored outcome and are just lulled to sleep by the incessant, inane estimates before they are revised lower.
    23 Aug 2010, 04:22 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » TB - Actually, I think it was DM who first proposed the contrary viewpoint argument. I was just drawn into the discussion with him and expressed my own opinions on the subject.
    23 Aug 2010, 04:28 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    (CPST): Capstone Turbine Corporation Receives Order for 18 C65s for Prominent Oil & Gas Developer in Eagle Ford Shale Play

     

    "Capstone distributor Pumps & Service received its second order in the past eight weeks from a major oil and gas company exploring large shale reserves – or plays – in the United States. The market for Capstone turbines and microturbines in this industry is vast. The market is expected to grow substantially, especially since the U.S. Environmental Protection Agency's (EPA) Clean Air Act has strict requirements for emissions levels at natural gas sites."

     

    Gory details and PR blather here.

     

    www.globenewswire.com/...

     

    HardToLove
    23 Aug 2010, 09:37 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    AHA! A clue as to who was the NG supplier that ordered the previous round for the shale plays, from that same article.

     

    ----------------------
    The order Pumps & Service received two months ago from North America's largest gas producer featured a Capstone C600 microturbine that will be installed at a site pumping gas from the Marcellus Shale Play that spans West Virginia, Pennsylvania and Southern New York.
    -----------------------

     

    The key phrase is "North America's largest gas producer". If we know that, we can do some prognistication.

     

    HardToLove
    23 Aug 2010, 10:01 AM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Precisely what logic dictates should happen.

     

    And right on time, too.

     

    Now that (CPST) is focused on their bottom line and has a handle on costs and pricing, they have a bright future imo.
    23 Aug 2010, 10:11 AM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    (CPST) is up 6% today. It makes a lot of sense for a gas provider to buy their own electric generation capability for their on site usage since I would think they are getting the gas right out of the ground. Oil companies that are burning off gas should be looking at this... why burn oil you can sell when you can use an asset you are throwing away anyway? I was hoping for CPST at about .55 to re-enter... I will reevulate in a few days after the dust settles.
    23 Aug 2010, 03:15 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    Oil co.'s, especially overseas (Russia is the biggest), already do this. They take advantage of two prime features: ability to generate from "flare gas", which formerly was just burned off as waste, and the remote unattended monitoring and diagnostics, most desired in Siberia and any harsh environment and where service call folks are a *long* way away. This latter feature has also allowed good penetration to the off-shore oil platforms.

     

    It seems that it is only recently that some U.S. land-based operators have begun to see the advantages (possibly not noticed before because conventional I.C. Diesels were plentiful, cheap and familiar). The increased EPA scrutiny probably opened their eyes. >8-O Oh! I can save $ too?!

     

    HardToLove
    23 Aug 2010, 03:39 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    OK, here's a sort-of contrarian play. Deep driller (NE) Noble. Stock down about 50%, one of the babies thrown out with the BPleak bathwater. (RIG) owned the rig they rented to BP, and we still don't really know why it popped (though it would appear to be due to dumb management errors rather than any inherent flaw in the equipment). So (RIG) has an extra layer of risk, obviously, but (NE) had nothing to do with that event, so their stock SHOULD recover.

     

    I've added them to page 1 of my watch list, and I may be a buyer when I get back into the equity market.
    23 Aug 2010, 09:41 AM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    OK, just glanced at my market indicators, lots of zero's, and my portfolio is flat as a pancake. One of the most boring Monday equity markets I can remember.

     

    Sold part of my (EDVMF), the rest of (CRT). Took profits in (FRMSF.PK) and (PBT).

     

    Added (SLW) and (TWM).

     

    (LYSCF.PK) bought 9.4% of Northern Uranium (NOURF.PK).
    23 Aug 2010, 11:55 AM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    www.bloomberg.com/news...

     

    Titanium shortage seems likely. I believe some of us used to be invested in this commodity.

     

    I just checked, and was surprised to see (TIE) down for the day. If there is going to be a supply disruption, the market isn't jumping that way...

     

    Yet.
    23 Aug 2010, 12:58 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    finance.yahoo.com/bank...=

     

    Looks like the new "Buy and Hold" mantra is "Bonds".

     

    It will be interesting to look back in 10 years and see who was right.
    23 Aug 2010, 02:28 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Remember (NOURF.PK), Northern Uranium, with (LYSCF.PK) picking up 9.4% of their stock this morning?

     

    Up 60.87% since.
    23 Aug 2010, 02:34 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9597) | Send Message
     
    Trip: (NOURF.PK) I show only 4000 shares traded today?

     

    ####

     

    Whole dang market is low in volume today. But that's to be expected this time of the year; augmented by so much $ going into bonds, and away from equities. S&P at 17 times earnings means to me, that even if stocks are beginning to look cheap, I believe cheaper prices are yet to come; just as we all pretty much believe that September and into October, the markets will slide.

     

    Question: From another room today I overheard something about a jobs bill being discussed? Is this true? 'Nother stim plan in the works? I would expect this to be true. And that might goose the markets into election season.

     

    If there is a jobs bill, it had better be inclusive of things USA made. Not some foolhardy high speed Florida and Illinois trains, that would be made in China. Or, inefficient wind and solar power farms built.

     

    We need more nukes, and the bridges and roads fixed. We need a better, more efficient electrical grid, and more incentives to make both public and private buildings more efficient. We need to lift the ban on drilling for oil, now.

     

    If we're going to kick the can, then lets kick it toward long term answers retaining tangible benefits, things that will have to be done, repaired or fixed, no matter how bad the economy may get.
    23 Aug 2010, 03:00 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    I believe the real volume occurred on the ASX exchange for Northern Uranium. Their volume on the pink sheets is negligible.

     

    Looks like Mr. Miekka of HO fame is putting his money behind his theory, he bailed out of the markets completely today. His plan pretty much mirrors those of many of the Gades at this point.

     

    blogs.wsj.com/marketbe.../

     

    And yes, there are rumors of at least 3 (THREE!) new stim bills in the works, all of them Christmas trees with ideological ornaments liberally hung on their branches, and "Jobs" as the camouflage. One with a Crap n' Tax skeleton - one with Card Check neatly hidden in the small print and some new taxes on big corporations - and one with a long list of liberal pork leavened with some alternative energy projects. These are just rumors pouring forth from the usual anonymous sources, though, so discount everything until something more substantial appears. I'll pull together a writeup after I track down more data.

     

    Ever since the Fed announced they were buying hundreds of billions in Tbills, I've been waiting for the politicians to start scheming to buy votes with that money.

     

    And yes, I would expect the pork to include those imported trains, solar farms and wind turbines. Anything Voldemort ever mentioned in a campaign speech is now on a shopping list somewhere.

     

    We will HEAR that the bills include all the good things you mention, but as usual, Pelossi is quite correct: They will PASS the emergency jobs bill so that we can all discover what is in it AFTERWARD. Since I live in strongly Red state (and a Libertarian region within that state) I expect nothing for the local scene.

     

    The oil drilling ban is set to expire Nov 30, and the most recent proclamation from Salazar (which I posted in its entirety in the last QC) makes it clear that they are re-visiting EVERY drilling operation anywhere on the North American continent. The hidden function of the Emergency Jobs Bill will be to act as a weapon to attack Big Oil (for instance) and extract whatever it is they desire from them. I keep expecting a huge extension of the Super Fund, particularly now that they achieved their $20b BP slush fund and kept it seperate from such things. Look for this to be buried somewhere in the fine print, along with the happy news that they are NOT going to shut down every single oil project along the coasts of the United States.

     

    Keep an eye on the huge swaths of marine property which are being gathered up into giant protected spaces. This action will be formalized in these new bills as well.
    23 Aug 2010, 03:21 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6775) | Send Message
     
    Low volumes in the market seem to reflect a lack of confidence.
    24 Aug 2010, 12:13 AM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6775) | Send Message
     
    Of course low market volumes don't rule out high volumes in individual stocks like those above.
    24 Aug 2010, 12:14 AM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    I bought some (S) today... am looking at (DT)... I already own (VZ). These are all Apple iphone related plays. (T)s network is limiting iphone growth... Apple has to widen its mobile vendor base....
    23 Aug 2010, 03:44 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5045) | Send Message
     
    Re: T's network limiting Aapl phone growth, mid-July it came out that Aapl had a software issue from the time of the release of the 1st I-phone in 2007. Looks like it was Aapl's fault, not T- bandwidth problem.
    Here you go:
    www.bloomberg.com/news...
    23 Aug 2010, 04:11 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    Hi OG
    That was Apples Antenna problem which was indeed responsible for dropping calls. Here is a short synopsis of an article that appeared in Fortune today…

     

    (August 23) Verizon and Apple at loggerheads?
    by Philip Elmer-DeWitt

     

    Apple (AAPL) needs another carrier to maintain the iPhone's current rate of growth in the U.S., says Kaufman Bros.'s Shaw Wu in a note to clients Monday, but it doesn't necessarily have to be Verizon (VZ).

     

    According to Wu, Apple's share of AT&T's (T) 90-million subscriber base is approaching saturation. Verizon, with 93 million subscribers, would be the logical next step. But between them, Sprint (S) with 48 million and T-Mobile (DT) with 34 million, would get Apple into the ballpark.

     

    In any event, Wu is convinced that something is about to happen:

     

    From our checks with industry and supply chain sources and a recent SEC 10-Q filing by AT&T mentioning that exclusivity with "a number of attractive handsets" could end, we have conviction that the iPhone could likely finally be at another carrier besides AT&T here in the U.S. in 2011 and potentially at Verizon in 2011 or 2012... We believe the argument for AAPL to pursue Verizon sooner than later is to address the growing presence of Android. What better way to do that than where Android has seen the majority of its success?

     

    But, he adds:

     

    From our understanding, the Verizon negotiations are not finalized with important details still being ironed out, including technology and economics. We think it is premature to rule out T-Mobile or Sprint (who also uses CDMA but WiMAX for 4G). In addition, there is the possibility of multiple U.S. carriers being signed.
    tinyurl.com/2ecpvzw
    _______________________

     

    If you want to capture more of the smart phone market, you expand the number of networks your phone can run on. That way your market share is not totally dependent on one networks coverage area or local capacity.

     

    That also lets you compete against competitors that are currently dominating other networks because your phone does not run on them. So to better compete against Android, you go head to head with them on the same networks.
    23 Aug 2010, 04:47 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5045) | Send Message
     
    No, not the antennae issue- that was a new wrinkle with the latest release.
    Here you go regarding the three year old problem:
    <Software Update

     

    The company also said that a software error, dating to the June 2007 release of the first iPhone, has resulted in overstated signal strength, leading users to believe they had better reception than they did. Apple said on July 2 that a software fix will be released “within a few weeks.”

     

    With the fix, Apple said it’s adopting a new formula to more accurately calculate how many bars to display.

     

    Apple has released an updated version of the iPhone each year since the first model made its debut, including the iPhone 3G in 2008, and the speedier iPhone 3GS in 2009. The iPhone was Apple’s biggest moneymaker last quarter, outselling the Macintosh computer and accounting for 40 percent of sales.
    23 Aug 2010, 04:55 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    The need to expand to other networks is not related to any weakness in (T)s network services or to software errors, or antenna design errors.

     

    Right now, if a person is in an area where (T) has no coverage, they can't buy an iPhone. So the iPhone's sales potential is limited by the exclusive contract deal with (T). In the beginning that did not matter, but now, in order for Apple to continue to substantially increase its iPhone sales, the best way of doing that is to expand the number of people that have the potential to buy an iPhone.

     

    The way to remedy that is to offer the iPhone on several different networks. That way the potential sales base is greatly expanded beyond the size of (T)s 90M current customers. Note, the article is not talking about the bandwidth saturation of (T)s network, they are talking about expanding the size of the market that could purchase an iPhone.

     

    If Apple wants to go after Android, the best way of doing that is to provide the consumer with a choice of Android or the iPhone. Apple would be entering new markets, and that will increase competition in those markets. Increased competition is a good thing for the consumer because it almost always results in cost reductions.
    23 Aug 2010, 05:18 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    Economic trend confirmation indicator? The Intertanko indicative rates for the Suezmax tankers I'm watching for (NAT) have been headed consistently down for the last week or so.

     

    There was some previously damping affect by new builds coming on-line, but I expect most of the effect of that has been seen.

     

    I've played several bear options since the ex-date and made some nice profit on top of some of the profits I took as (NAT) ran up.

     

    I'll be exiting (NAT) at the next "top" during the Fibonacci moves. There is more downside yet, so I might do some more short covered calls and long puts yet.

     

    Have to see the charts at end of day, but initial indication is it will continue down.

     

    HardToLove
    23 Aug 2010, 03:54 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    (CPST): either shorts or day traders came back into market @ 15:13 EDT and ate up most of today's gain.

     

    Daily chart still indicates weakness, although there is one indication of a turn up. But this is likely only the result of the spike from today's news.

     

    Weekly looks like we may be bottoming - a few days more needed to make a better assessment. And, of course, need to see what the shorts do.

     

    HardToLove
    23 Aug 2010, 04:03 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Off-topic gift to my friends. No actionable investment stuff in this post, just upcoming movie info from some of my buddies who make scifi happen. Release dates are approximate, of course. If anyone has a special interest, shott me a messasge and I'll see if I can answer the question.

     

    Nov 12 "Skyline" SF movie, aliens are harvesting us like grain. Not highly recommended by the smof legion ("Secret Masters of Fandom")

     

    Nov 19 "Harry Potter and the Deathly Hallows - Part One" Smart movie makers have finally figured out that the huge novels are best interpreted in 2 parts. Double the profits, too. After they gutted the plot with their asinine changes in the last movie, it will be interesting to see how they salvage themselves.

     

    Nov 26 "Red Dawn" Remake of the old 80's invasion flick. Ironic that it closed production about the same time Patrick Swayzee (who starred as a teenager in the original) died. The original was surprisingly watchable, for a low budget throwaway. Maybe this one will be even better, but somehow I suspect it will fail.

     

    Dec 3 "The Warrior's Way". Korean assasin hiding in a western town. Could be good, particularly if they can get us hooked on the characters and then stick to the oddly compelling eastern/western theme.

     

    Dec 10 "Narnia and the..." Next in the series. More of the same. Almost incomprehensible rendition of the books original complex plot, according to a buddy who should know. Regligious undertones are disrupted (perhaps on purpose?), and that could cause problems. 99.99% of the moviegoers will never notice, though.

     

    Dec 17 "Tron". Another remake. Original was way ahead of its time, so its hard to picture how THIS one can accomplish the same today.

     

    Jan 14 "Green Hornet" Comic based plot that has seen a series and earlier movie. Remake, or will they find more in the comic books that never made it to the screen before? We'll see.

     

    Feb 18 "I Am Number Four" Last survivors of a planet destroyed by bad aliens migrate to earth (most of them are teenagers, luckily enough for the target audience targeted by the producers). Almost inevitably this will be horrible.

     

    Mar 11 "Battle: Los Angeles". Think "300" without the history but with lots of big guns and things that go boom. Ripped directly from a video game plot, would be my guess. Might be entertaining IF they can make their characters interesting. Odds not good.

     

    Mar 11 "Mars Needs Moms". Yes, its EXACTLY what it sounds like, Martians come to earth to abduct moms. Could be Freudian, who knows. There was a similar plot in one of the worst SF movies of all time made back in the 50's.

     

    Mar 18 "Paul". I know a lot about this one, but am currently sworn to secrecy. Could be a real sleeper.

     

    May 6 "Thor". Yep, the God of Thunder hisself. Marvel comics again.

     

    May 20 "Pirates of the Carribean: On Stranger Tides". They never say never.

     

    Jun 3 "X Men" Prequel/origins.

     

    Jun 17 "Green Lantern". DC comics this time.

     

    Jun 24 "Cars 2". I loved the original.

     

    Jul 15 "Harry Potter, Part 2" Wrap up of the whole deal.

     

    Jul 22 "Capt. America". Marvel again.

     

    Jul 29 "Cowboys and Aliens". Believe it or not, I am really looking forward to this wacky movie. Think "Raiders, cowboys, horses and nasty aliens" (and yes, Harrison Ford is in the movie). It will either be really good or extremely bad.
    23 Aug 2010, 04:36 PM Reply Like
  • Joseph L. Shaefer
    , contributor
    Comments (1501) | Send Message
     
    Triple, if Cowboys & Aliens is all those things, it should be a hoot.

     

    (Whew -- with that title, as Nevadan I would have just thought it was about a cattle drive through Area 51!)
    23 Aug 2010, 05:09 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    LOL, Joseph, that cattle drive image is a good one.

     

    I believe they are going to play this one straight, though. If its just a campy romp, I won't like it. Those things make good short features, not full length movies.
    23 Aug 2010, 05:31 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » TB - Thanks for the list. There are a few I'll be interested in seeing in the theater for the effects. I love going to the movies, but even the afternoon prices have gotten ridiculous! I know I'm cheap, but with all the electronics available in the home all I can think is why do prices go up. I would think that with dvd releases coming sooner and sooner and all the large HD screens getting more affordable that, at some point, movie-goers would start to rethink the value proposition. But, I know...we live in a material world and no one is really worried about money anymore. I guess I'm just getting old and out-of-date.
    23 Aug 2010, 06:41 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    "Dec 3 "The Warrior's Way". Korean assasin hiding in a western town. Could be good, particularly if they can get us hooked on the characters and then stick to the oddly compelling eastern/western theme."

     

    Unless it tops 1971's "Red Sun" with Charles Bronson and Toshiro Mifune, ...

     

    That was a pretty good one.

     

    HardToLove
    23 Aug 2010, 07:03 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Yes. Just the eastern/western I was thinking about.
    23 Aug 2010, 08:09 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    If you know some people ignorant of the real nature of our money system, who might eventually think about whether or not we really should have a Federal reserve system, two very watchable videos I've not viewed for a long time.

     

    "Money As Debt" (1 of 5)
    www.youtube.com/watch?...

     

    and

     

    "Money As Debt II Promises Unleashed" (1 of 8)
    www.youtube.com/watch?...

     

    HardToLove
    23 Aug 2010, 07:19 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9597) | Send Message
     
    Thanks, Trip! I'm looking forward to Cars2. First one was incredible. Will see the Harry Potters if I'm around. The last one (I have never read the Harry Potter series) was great on IMAX.

     

    I want more Kira Knightly period pieces (Silk, and Pride and Prejudice were terrific!), but Pirates will have to do.
    23 Aug 2010, 07:38 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Production is ongoing (full cast is set, no real headliners) of Ayn Rand's "Atlas Shrugged". Lamentably, its probable that Hollywood will wreck a great book one more time. Alarming and ironic if its release coincides with ACTUAL news events of a similar nature.
    23 Aug 2010, 08:17 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6775) | Send Message
     
    Hollywood was making a film about action in "Casablanca," about the time the U.S. army had the same idea.

     

    seekingalpha.com/insta...
    24 Aug 2010, 05:22 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9597) | Send Message
     
    This is one of, if not the most apalling story I have ever read of inhumane abuse that has happened during my lifetime. I'm darn near ashamed to be human. These Congolese assholes should be sought out and eradicated in a most unpleasant way:

     

    www.msnbc.msn.com/id/3...
    24 Aug 2010, 12:51 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    (AEM) Raised to $84.50 from $74.50 by Raymond James.
    Raised to $82.50 from $76 by National Bank.

     

    HardToLove
    24 Aug 2010, 09:33 AM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    Picked up (ACI), (RTP) (DUK), and (FRO)
    24 Aug 2010, 10:44 AM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Greetings gang. (JAG) program was triggered this morning @ $5.81. YH would be proud. I didn't post yesterday as I was taking care of my 10 year old Jack Russell, she got a blood transfusion. They are doing blood tests for a blood born parasite vectored by ticks called Retickulitis (SP?) an immune system degeneration called IMHA or cancer. She can be treated for the first two. Results should be back this afternoon. I didn't go over the posts from the week end QCs but will try to do so this evening. This thread has some very interesting observations and links though. As for bonds as most of you know I divested my sovereigns and am holding only very safe high yield TE munies and HY corporate at 51% of my total portfolio. Bond markets have been behaving as oddly as equities for the last 10 months or a little longer. dfbell seems to be on top of the bond market as well but I'm not cognizant of his bond holdings. I too expect a major down turn in 2011 for the reasons detailed by the other Gades, so no point in rehashing them.
    24 Aug 2010, 10:56 AM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    Good luck with the doggie. If yours are like mine have been over the decades, they are close friends and companions and their travails affect us deeply.

     

    I hope all ends up to the positive.

     

    HardToLove
    24 Aug 2010, 11:06 AM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    I hope your Russel is OK. I treat pet ownership very seriously, myself. I once paid a large sum of money for a mastectomy for a cat...
    24 Aug 2010, 11:57 AM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » Robert - I hope it turns out treatable and that your best friend comes through it all in spectacular spirits! Good luck and hang in there. We'll pray for a good outcome.
    24 Aug 2010, 02:49 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9597) | Send Message
     
    Robert: (JAG) may have been a good pick up. They are going to start "pouring" bullion from their new Caete mine this month. When the news hits, the stock should rise. I bought some today, too.

     

    Flip to page 17 from their latest quarterly presentation:

     

    www.jaguarmining.com/i...
    24 Aug 2010, 11:46 AM Reply Like
  • Mayascribe
    , contributor
    Comments (9597) | Send Message
     
    Robert: Best of luck with your Jack Russell. They are great dogs, extremely smart, highly protective, and a whole lot of fun.

     

    This is going to be hard to believe, but In Copan, my friends Tanya and Garnel have a Jack Russell. They own a restaurant in town, and also one at a bird sanctuary, about 4 KMs out of town. The Jack Russell, "Lolita," has twice "hired" a taxi on her own volition, to take her out to the bird park.

     

    On my previous trip, when Garnel and Tanya had two restaurants in town (before the landlord made their lease impossibly expensive, shut them down, took over the restaurant, and now is getting his but kicked). When I would walk from one restaurant to the other, Lolita would dash ahead and behind, clearing out all the street dogs, making sure there was safe passage. Of course in Copan, almost all street dogs are wooses.

     

    Lolita is quite fussy about whose lap she will sit in, and she will only climb up into two men's laps. One is the owner of the bird park, and the other is yours truely. Great dog!

     

    Good luck again with yours!
    24 Aug 2010, 12:49 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Maya: I've been doing some digging on the new stimbills stirring in the Congressional hinterlands...

     

    One outline that has popped up involves more money for education, plus the usual list of targeted law enforcment and community organizing.

     

    I'm calling it "No Teacher Left Behind".

     

    Or maybe, "No Teacher Left Behind, the Sequel".
    24 Aug 2010, 12:50 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9597) | Send Message
     
    TP: Did not the teachers and cops stim bill already occur? I discussed this with Mark in his latest "Scariest" thread. Here is the link:

     

    seekingalpha.com/insta...
    24 Aug 2010, 05:07 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6775) | Send Message
     
    "No teacher left behind" means that some of their students DO get left behind.
    24 Aug 2010, 05:21 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Maya: Greetings. It certainly did. You may recall Princess Pellosi called the house back to order after they recessed to geter done. They paid for it by cutting food stamps a couple of years down the road. This one is a seperate measure but probably won't survive.
    24 Aug 2010, 05:23 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Macro currency moves are in flux.

     

    Hedgies are moving big money around, selling euros against dollars and then plunking money in yen.

     

    Japan's leftist government is frozen in the headlights, fearful that if they DO seek to intervene, they will just get flattened by the markets and lose control altogether.

     

    80/$ looks like the immediate goal, and with 85 support quickly pierced, its right there.

     

    Will Japan pour more QE onto their economy? LOL, maybe they will use the Geithner/Bernanke Gambit. Sort of the financial ecosystem's version of asexual reproduction.
    24 Aug 2010, 12:55 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    "Why Quantitative Easing is Likely to Trigger a Collapse of the U.S. Dollar" from Hussman 8/23/10

     

    www.hussmanfunds.com/w...

     

    Lead paragraph:
    ----------------------...
    A week ago, the Federal Reserve initiated a new program of "quantitative easing" (QE), with the Fed purchasing U.S. Treasury securities and paying for those securities by creating billions of dollars in new monetary base. Treasury bond prices surged on the action. With the U.S. economy predictably weakening, this second round of quantitative easing appears likely to continue. Unfortunately, the unintended side effect of this policy shift is likely to be an abrupt collapse in the foreign exchange value of the U.S. dollar.
    ----------------------...

     

    The article goes on to speak to:
    - Purchasing Power Parity (PPP), addressing long-term parity
    - Interest Rate Parity, affecting short-term parity
    - Why quantitative easing is likely to trigger a collapse of the U.S. dollar

     

    A key statement in the article:
    ------------------------
    So the argument here is not that quantitative easing will create inflation which will hurt the dollar. The argument is more subtle. It is that we are running a fiscal policy that is long run (though not short-run) inflationary, and that the monetary policy of quantitative easing prevents longer term interest rates from acting as an adjustment variable, since the Fed is essentially announcing that it will lean on the Treasury bond market. By suppressing Treasury yields, the Fed forces the exchange rate to bear the full weight of the adjustment.
    ----------------------...

     

    On the philosophical front, are these two notable paragraphs.
    -------------------------
    My impression is that Ben Bernanke has little sense of the damage he is about to provoke. A central banker who talks about throwing money from helicopters is not only arrogant but foolish. Nearly a century ago, the great economist Ludwig von Mises observed that massive central bank easing is invariably a form of cowardice that attempts to avoid the need to restructure debt or correct fiscal deficits, avoiding wiser but more difficult choices by instead destroying the value of the currency.

     

    Von Mises wrote, "A government always finds itself obliged to resort to inflationary measures when it cannot negotiate loans and dare not levy taxes, because it has reason to fear that it will forfeit approval of the policy it is following if it reveals too soon the financial and general economic consequences of that policy. Thus inflation becomes the most important psychological resource of any economic policy whose consequences have to be concealed; and so in this sense it can be called an instrument of unpopular, that is, of antidemocratic policy, since by misleading public opinion it makes possible the continued existence of a system of government that would have no hope of the consent of the people if the circumstances were clearly laid before them. That is the political function of inflation. When governments do not think it necessary to accommodate their expenditure and arrogate to themselves the right of making up the deficit by issuing notes, their ideology is merely a disguised absolutism."
    ----------------------...

     

    HardToLove
    24 Aug 2010, 01:15 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    BTW, read the market climate section in the article. It puts the anticipated market response down right in the timeframe we've been discussing:
    ----------------------...
    Treasury securities have advanced sharply on the initial quantitative easing purchases by the Fed. Meanwhile, the jump in unemployment claims to 500,000 and the surprising drop in the Philadelphia Fed index are both consistent with the weakening economic conditions that are clearly implied by leading measures. If anything, those deteriorations appear to be early, not late-stage observations.
    ...
    Suffice it to say that the much earlier deterioration in economic measures is not encouraging, but it also opens up the possibility that we may see some misleading "improvement" in the data in the next few weeks before we get into the more typical window of deterioration.
    --------------

     

    hardToLove
    24 Aug 2010, 01:24 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Thanks for all the good wishes gang she is indeed a family member loving, loyal and fun. As you may well know all paws go to heaven. I'm hoping she can be treated and stay with us for a while longer though. Penn West Energy (PWE) has entered a 50/50 JV with Mitsubishi Corporation which will impact the Wildboy conventional gas field and the Cordova Embayment unconventional field Mitsubishi's half is around $800M. Reported on Market Wire.
    24 Aug 2010, 01:17 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Maya: Greetings. Thanks for the link. Hopefully third time will prove to be the charm. I've never made money on (JAG) so this could be where I recoup some losses. LOL.
    24 Aug 2010, 01:20 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Added 1000 shares (TWM), just in case the edge is closer than it appears.

     

    Note that oil dumped early, but has recovered.

     

    I'm thinking oil will be my preferred buy Q1, if not earlier. Its looking enticing to me.
    24 Aug 2010, 02:36 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9597) | Send Message
     
    Someone please put the handcuffs on me! I'm tempted to plough into (NVAX) right now, especially with, "the $2B initiative to develop drugs and vaccines to prevent the spread of infectious diseases." NVAX trading at $2.03. RSI way oversold, below all the moving averages, the flu season approaching....

     

    finance.yahoo.com/news...

     

    But I believe the DOW is heading toward 9500. We are really close to the psychological 10000 figure.
    24 Aug 2010, 02:59 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    I bought today… I am anticipating a stick save coming up…
    Strange movement of the Euro today… I bought more EUO on the dip.

     

    I don't see the precipice as imminent. I anticipate increased volatility of SPX in the range of 1110 and 1050. Current VIX is over 27…
    24 Aug 2010, 03:09 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Wait a little longer, Maya. I have ceased looking at my target prices on stocks, now is the time to just keep gauging the macro and political scenes. Individual stocks will follow the broad moves, with few exceptions. Its a big brush market coming, and the only debate is HOW big the broom.

     

    OK, the usual disclaimer, IF the planetary PTB's abruptly discover common sense (particularly our very own PTB's in DC), things can turn (temporarily) on a dime.

     

    I'm surprised to see that the American equity funds are still emptying out to the tune of $1.5billion per day. That huge gurgling sound must be the last few dollars sucking into cash and the bond funds.

     

    If we thought the light volume equity markets of the last few months were a Beach Ball / empty basketball court (plus whatever other appropriate analogies we've been using), imagine what's coming.

     

    I wonder what a bowling ball rolling around inside an empty 5000 gallon tanker would sound like?
    24 Aug 2010, 03:14 PM Reply Like
  • Joseph L. Shaefer
    , contributor
    Comments (1501) | Send Message
     
    Re the continued exodus from equities to bond funds:

     

    I'm benefiting because I was an early adopter of inverse ETFs and have been warning of an equity slide for more than a month. BUT --

     

    A bond market in which IBM can raise $1.5 billion selling 3-year bonds at 1% is definitely overheated. I now have tight trailing stops on all bond funds. When they are triggered I'll stay mostly in effectively-no-interest cash until I see real bargains in the equities markets.
    24 Aug 2010, 03:21 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » I read the articled linked below with a little astonishment. It may not describe "the" black swan event but I liked the fact that the author considered Treasuries as the big lever in financial markets. The bond market is the big gorilla, so maybe he is on to something.

     

    seekingalpha.com/artic...
    24 Aug 2010, 03:06 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    I agree. Rocks referenced this sort of scenario last week with his diverging charts demonstrating the detachment between the bond markets and equities. Every day the divergence becomes more extreme, and the mismatch in the relative balance between the historic proportions grows.
    24 Aug 2010, 03:19 PM Reply Like
  • Albertarocks
    , contributor
    Comments (2230) | Send Message
     
    Hey trip, I'm happy you spotted that. I think it's extremely telling. So I'll post that chart here again just for reference. Amazingly, with the strong market sell off of the past few days, that ratio just continues to get stretched. The elastic band is really, really getting pulled here. I interpret it as showing that although equities are falling hard, bonds are rising (rates are falling), even faster. Try as it might, the equities markets can't catch up to the acceleration in treasuries. I have to assume that eventually we're going to see the markets fall much faster or the bond market finally begin to correct. Undoubtedly it would be a combination of those two of one type or another.

     

    Weekly version:

     

    stockcharts.com/h-sc/u...

     

    Daily version:

     

    stockcharts.com/h-sc/u...

     

    Whether or not that would indicate a top in the bond bubble remains to be seen, but in my opinion the FED has signaled that it's going to support that bond market no matter what. Bernanker would love to have rates at zero right across the board if he could. Nobody's told him yet though... he can't.

     

    I'd read that article that Mark mentioned on ZH. I don't know who Gonzalo Lira is but his vision certainly gives some valid points to think about. I don't envision it happening that way, not that explosively, but I really appreciated what he wrote. Thanks again for noticing the chart. It gives me a sense of pleasure that a few people out there can see what I've been getting at.
    24 Aug 2010, 04:23 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Good reason not to be in Ts. I'm not. Given the scenario that a quasi or defacto dictatorship would arise to bring about order PM and real estate would not be safe havens at all. FDR seized the nations gold and he wasn't a true dictator ( At least no one admits it.). Chavez and Mugabee seized their respective nation's land and wealth with out opposition because they are dictators. Why would those be safe here? If you can flee do so. If not stock up on food, fuel, guns and ammo.
    24 Aug 2010, 04:46 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » Maya - I think you are right about the Dow heading lower. Once we crack the psychological barrier of 10,000, the market will drop to support pretty fast, I think. What it will do from there depends on a lot of things. But my biggest concern is what will the HFTs decide to do.
    24 Aug 2010, 03:09 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Exactly. Da Boyz already dominate the market. Shortly they will BE the market, at which time bizarre things can happen.

     

    Dump the DOW 2000 points in 500 milliseconds, then execute millions of trades in the next 500 milliseconds?

     

    No sweat.

     

    Circuit breakers will follow along, years too late, and then we'll see more fog and mirrors and puzzled looking pundits.

     

    DIfference will be that this time the primary targets will be each other and the mutual funds NOT part of DaBoyz.

     

    Imagine a pod of killer whales circling some huge blue whales. Much faster than the blues, they charge in and pull off chunks of quivering blubber the size of a spare tire, as barrels of blood surge into the cold sea... The mutual funds will scream and bleed.

     

    Devil take the hindmost.

     

    Any retail customers left will be cut off at the ankles and deposited in the land fill.
    24 Aug 2010, 03:24 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    Believing that gold will see some upward pressure, I've started thinking about (DGP), a double long. With (GLD) breaking above $120 now, it seems a nice inexpensive ($32.54) hedge.

     

    Thoughts?

     

    HardToLove
    24 Aug 2010, 03:44 PM Reply Like
  • Mayascribe
    , contributor
    Comments (9597) | Send Message
     
    That hyperinflation black swan article was an interesting take, Mark. But I discount it. There is way, way too much money on the sidelines right now looking for good deals. That will provide support. There are a lot of "causation holes" in his domino effect senario. DOW 5000 ain't happening. Still glad I read it.

     

    If I'm wrong, though, I won't get hurt too much. I've paired my brokerage account into as much cash as I can, and parked the cash in a tax free fund. The gamer account is almost all cash. And in my bank accounts, I have picked up a few 90 day CDs. Yeah, they don't pay much, but I don't expect to do much with the money any time soon, so a CD is a little better of nothing than nothing at all.

     

    The (JAG) move today is a minor one, albeit highly risky...it's a news cycle event trade, maybe two or three weeks tops.
    24 Aug 2010, 04:50 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » Silentz - You out there, buddy? You better get in there if there's going to be any chance of a stick save today! I hope you're all warmed up. It looks like it could be nasty out there.
    24 Aug 2010, 03:45 PM Reply Like
  • H. T. Love
    , contributor
    Comments (17297) | Send Message
     
    yeah, looks like the Zamboni is out of service and the ice is really chopped up.

     

    HardToLove
    24 Aug 2010, 03:46 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    Rats, a stinking reverse stick!

     

    I have some questions …

     

    We all agree there is going to be a significant drop in equities…

     

    I think we also have some degree of consensus on the amount of the anticipated drop: S&P 850 to 900…

     

    The two pieces of information that are missing are the trigger event(s) and the mechanism(s)…. in fact, the trigger event and the mechanism may be closely inter-related, or they may be separate.

     

    The identification of the trigger events and the mechanisms would seem to provide clues on the key piece of information necessary to make money on the anticipated drop - Timing.

     

    When is the anticipated drop most likely to occur? That brings up questions on the nature of the drop. Will the drop be sudden, or will it be a slow circling of the drain?

     

    HT has posted on one of the potential mechanisms… Quantitative Easing….. The article he referenced seems to identify maximum strains occurring in October.

     

    I also suggested the primary drop as occurring in October because that is when US third quarter GDP numbers will be released. Those numbers are likely to be leaked to favourites weeks in advance, so I anticipate things to start happening after the second or third week in October.

     

    Rocks had posted on the HO, and it has signalled… but once again, that signal identifies danger, but its imprecise with respect to timing. The Death crosses have signalled, and once again, those clearly identify danger, but are less imprecise as to timing.

     

    TB has discussed political events as a potential trigger, but those events don't occur until November… TB has also identified increased taxes as a significant factor, but once again those don't occur until 2011.

     

    So where does that leave us? Are we going to continue to slide downward until one of the suggested events takes the market over the cliff? Or do we oscillate within a trading range until the deep sleep occurs?

     

    Have I missed any of the trigger events and mechanisms discussed in previous posts?

     

    I think organizing these thoughts along some kind of an outline structure would be helpful…. what do you guys think?
    24 Aug 2010, 04:29 PM Reply Like
  • Joseph L. Shaefer
    , contributor
    Comments (1501) | Send Message
     
    User, I don't personally see a trigger event as necessary. I think we've already had the trigger event and we are <in> the decline. If we need to find a mechanism, call it ennui! The markets were tired, overextended, rising on hope and hype, and faulty or outright fabricated statistics. Sooner or later the truth will out. It did...
    24 Aug 2010, 04:59 PM Reply Like
  • Joseph L. Shaefer
    , contributor
    Comments (1501) | Send Message
     
    PS -- If you are looking for further events beyond tired blood, I wrote an article back in July (Why, This Summer, the Odds Favor a Declining Market) and I gave my top 3 reasons / choices / extended events / mechanisms as: Housing, Jobs and Taxes. I added the national debt, plunging retail sales, a China slowdown, problems with our large trading partners in Europe, and a government that, having spent all our money, now seems hell-bent on spending that of our children and grand-children – all before November. But as I said back then, "I think the first 3 will be quite enough to destroy any market rally all by themselves, thank you."

     

    We still have more houses than buyers, more workers than jobs, and more taxes than are reasonable to be able to save and invest for the long pull. I think some people just Rip van Winkled through this and are now shocked to discover that things are not getting better by following the current policies -- just as the recollection settles in that the government told us if we just sat back and watched the "stimulus" at work, all would be better by the summer before elections and we would see 4% GDP growth.

     

    Since revised.
    24 Aug 2010, 05:06 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    User, I have been focused on little else than this timing issue for over 4 months now. Unfortunately, there are some variables that make timing problematic:

     

    Direct analysis, for instance. The perception of the markets as largely populated by "the herd" may have once been correct, but that herd has already voted with their feet and left the equity markets. Applying traditional market history, charting, and fundamental analysis is so distorted by conditions as to be potentially very deceiving. A glance at the bulging conditions for the past year in cash and money markets paying essentially minus returns tells the story of the MOST terrorized members of the herd, while the heavily overweight bond market indicates where most of the remainder are sitting, waiting for the coming storm. The few still bouncing around the empty equity markets are not even a footnote to the quants, hedgies and Boyz who rule them now.

     

    Any statistician will tell you that it might be possible to make a good guess as to what a large mass of people will do, but to make the same determination for individuals is impossible.

     

    Given the small numbers involved, this is essentially what is needed, and I doubt it can be done.

     

    Trying to guess WHEN and IF that herd might be enticed back into the equity markets (given the recent history) is also difficult. Extreme and abrupt swings have occurred, many of them with no explanation and no historical basis (flash crash, anyone?), and the huge mass of investors will be very tardy to make any sort of move.

     

    Even when a trigger event transpires, the impact on the markets could be very asymmetrical. Either far worse than merited, in the nature of "a final straw that broke the camel's back", or the opposite, where once again we see dire bad news shrugged off because it did not please Da Boyz to allow the markets TO react on that particular day.

     

    I'm seeing clear signs that the markets are breaking down on a basic, functional level. Take particular note of the oddly smug assertions over the past 2 years from Da Boyz, in which any query about their quant/hft methods are answered with the assurance that "They are good things, they add liquidity to the markets". The glaring omission of any sort of true investigation into the Flash Crash and the multitudes of other egregious examples by the Regime is telling. As is the continuing flight of capital from our equity markets. We are left with hollowed out markets populated with zero sum trading spikes bracketing 6 martini lunches for Da Boyz.

     

    On a macro level, ie, when examining large portions of the national economy and the political and geopolitical scene, sufficient data and mass analysis remains to arrive at a considered judgement, though again, this is just a portion of the picture. All these things GET us to this point, and give us fair warning, but then we hit a snag.

     

    Da Boyz constitute a short circuit, or better yet, a secret SWITCH which is extremely hard to predict.

     

    Overall I am still of the opinion that the current market will stagger like a drunken sailor toward the elections, but it may fall off the pier before getting there.

     

    I am unsure how long the fall will be, or how hard the crash at the bottom. We are not at much of a "height" right now, so the fall might not be all that impressive. These things are unpredictable for all the reasons I laid out above.

     

    Returning to the political arena, we can expect further attempts at QE, at further deficit spending pouring money in random spots, BEFORE the elections. These are obviously unpredictable as to timing, size and character - at least, with any specificity - but I am convinced they are heading our way.

     

    SHOULD these things be combined with tax cuts and a reversal of the longstanding dogma from the Regime, much can happen which will run contrary to the expectations now on the table.

     

    I feel this is unlikely, but as I prefaced this whole essay witht he idea that small groups of humans are unpredictable, and this all depends on a very small oligarchy's feelings...
    24 Aug 2010, 05:10 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » "A very small oligarchy" that wants to be re-elected to another term and is willing to sell it's soul to get it.

     

    I think we grind lower and lower until the oligarchs step in with the next "miracle" to save the nation, create jobs, and heal the economy. It won't do any of that for more than a few more months, but it will feel good. Then we'll all be trying to figure out where the top is again and how much further will it fall the next time. This is becoming a game of cat and mouse. We just need to steal the cheese before the cat catches us.

     

    Hey, User, you could probably teach us a few things in that area!
    24 Aug 2010, 05:26 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5045) | Send Message
     
    Robert, I hope your dog gets better soon. Mine died in March and we are still basket cases over it. We decided we can't go through this anymore. So, we just keep bringing bags of dog food over to the local no kill shelter in his memory.
    Do you guys ever read Doug Kass? I don't care for his politics but when he says to go long, I tune into his thinking. He's a good contrarian, and here he addresses the Hindenburg omen:
    www.thestreet.com/stor...
    24 Aug 2010, 04:53 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Oy, Gee: Greetings. Thanks for the good wishes. Taking food to the no kill shelter is a exceptional gesture.
    24 Aug 2010, 05:40 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5045) | Send Message
     
    Sorry, the Kass article is below. The Hindenburg article is a separate piece. Mea culpa.
    24 Aug 2010, 05:40 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » User - There are couple of gov announcements coming this week that could be triggers either for a further drop or for a rally (depending on how bad they are relative to expectations): Thursday will give us another initial claims report from BLS and Friday the Bureau of Economic Analysis will issue its first revision to second quarter GDP. Either one, if worse than expected could have a negative affect on the market. But, if initial claims comes in below 500k I suspect that could prop the market a bit as "not as bad as expected" and "jobless claims improve" reports will be all over the place. Everyone is expecting the revision for Q2 GDP to come in around 1.4%. Actually, a lot of folks are worried that it could be worse. If it comes in at 1.4% or more it could provide a rebound spark also. If it comes in at 1.0% or below, it could send the market down. In other words, expectations are already built into the markets and hitting them could cause a relief rally. But that would just prolong the inevitable. New Home Sales comes out tomorrow. I noticed that most builders' stocks were up today, apparently assuming that people must have bought more new homes since they didn't buy existing homes. I'm not in that crowd, but we'll see. If that one is also really bad, like going back down to May levels after a nice rise in June (or even lower) it will show that the wheels really are coming off of the housing wagon.

     

    I'm not trying to tell you which one will be "the event" because I don't think anybody knows for sure. But any one of these could make another dent and if they are all bad in succession, that may just do it. But even then I still don't think the market will fall into a big dive without some pauses and rallys.

     

    BTW, we did break down below 1060 on the S&P 500 which I really think was one of the last support levels before 1022. There was a lot of congestion there, but apparently not enough. Erik McCurdy has a nice article out there. His point may not be as relevant as as it was before today, but I like his view from the TA and CA side of things.

     

    seekingalpha.com/artic...
    24 Aug 2010, 04:59 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    I may as well throw my two cents in here. I'm not looking for a singular trigger but a cumulative efect resulting in a continual down trend with lower highs and lower lows. We have been watching this play out as TPTB try to stave off the inevetable. With each round of "Fixes." it becomes more apparent that they are loosing more control of the situation. I think that some sort of extension of the Bush tax cuts will be emplaced before the election to enable incumbent Democrats to claim them. That may provide some short term upward pressure but that too will be temporary as the market strives for equilibrium. So with the exception of a few programs I will continue to watch from the Jacuzzi and accumulate cash. I'm with Maya on the article linked by HTL. It is an intertesting possibility but I consider it unlikely. Churchill said it best I think when saying that Americans will always do the right thing, but only after trying every thing else. There may be some short term upward pressure if the Republicans gain control of the House, Senate or both. Should that happen we will have to wait and see what happens thereafter. They may be able to stave off a complete market collapse but I think S&P 850-950 is not out of the question for 2011 even if they manage to drag team Obama to the center kicking and screaming.
    24 Aug 2010, 05:57 PM Reply Like
  • FocalPoint Analytics
    , contributor
    Comments (5803) | Send Message
     
    S&P downgrades Ireland on financial sector cost

     

    Standard & Poor's said late Tuesday it downgraded Ireland's long-term sovereign credit rating to AA- from AA because of the high cost to prop up that country's financial sector. The outlook is negative. "The downgrade reflects our opinion that the rising budgetary cost of supporting the Irish financial sector will further weaken the government's fiscal flexibility over the medium term," said Trevor Cullinan, an S&P credit analyst, in a statement.
    24 Aug 2010, 05:24 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5045) | Send Message
     
    Here's the Kass Article, the Hindenburg article is up above. Sorry, I'm a little confused.
    www.thestreet.com/stor...
    24 Aug 2010, 05:39 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    Oy, Gee: Greetings. You seem to have agitated a Troll. Perhaps they want a no kill shelter of thier own. LOL.
    24 Aug 2010, 06:28 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Often trigger events are anti-climactic, because people see them coming and take action, if only to flinch.

     

    I just listed the long litany of coming tax increases, for instance. Sure, some folks will remain blissfully unaware until their paycheck grows hands and whacks them upside the noggin with a 2x4, but most investors are aware that badness is coming, and taking steps, or at least laying plans. So the "trigger" has already occurred, in a big way. Same thing with Obamacare and its long list of fees, regulations, taxes and market distortions.

     

    Corporations have entered their cash bunkers to wait it out, essentially frozen in place by the political event horizon propigating from Jan 1, 2011. The actual "trigger" has not exploded just yet, but the effects are very much with us, and readily seen in things like stalled growth, skyhigh unemployment, and low expectations for future job creation.

     

    I agree with Joseph, ample bad things have already been baked into the pie - the wonder is not that these things are there, lurking in the immediate future, but that their mere presence has not already pulled us into a double dip recession.

     

    Beyond this really crappy situation, we are held hostage to the weekly, monthly and quarterly parade of well-massaged numbers trickling in from various government and industry soruces.

     

    "Indicators" they are called...

     

    I fear they are land mines instead, and we are in the middle of the field, one foot plated on an active mine that has just loudly clicked, with our other foot hovering in mid air as we try not to move and set it off.

     

    Unstable as hell.
    24 Aug 2010, 05:41 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    David Rosenberg is one to watch: finance.yahoo.com/news...=
    24 Aug 2010, 05:48 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Wow. Check out the Yen, up 1.1000 right now.

     

    Crazy stuff. Meltdown in progress.
    24 Aug 2010, 05:51 PM Reply Like
  • tripleblack
    , contributor
    Comments (13440) | Send Message
     
    Looks like Bernanke has the votes. Forget the minor "qe" announced last week...

     

    He's comin' out of Jackson Hole next week, guns blazin'!

     

    "QE" this time, large and economy size.

     

    The drunken sailor is about to get a big injection of Adrenaline right in the tookus. It won't sober him up, and he'll still be erratic as hell, but he'll be a moving a lot faster running toward the pier.

     

    Will he fall off before the elections?

     

    WIll he run into a wall and knock himself unconscious?

     

    Shoot, guys, this is like one of those Japanese reality shows.
    24 Aug 2010, 06:03 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10803) | Send Message
     
    As the blindfolded MC cracks the whip and the crazed MD prepares the adrenaline shot while cackeling about something with poison in it.
    24 Aug 2010, 06:23 PM Reply Like
  • Mark Bern, CFA
    , contributor
    Comments (4768) | Send Message
     
    Author’s reply » Please go to QC # 94:

     

    seekingalpha.com/insta...
    24 Aug 2010, 07:13 PM Reply Like
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