Seeking Alpha

Hilsenrath: Taper on table, but look for dovish guidance change

  • The jobs report definitely puts the taper on the table in December, writes Jon Hilsenrath, but it's not all good news. The household survey - out of which comes the UE level - shows the jobless rate fell from 7.2% in September to 7% in November, but employment rose just 83K against a decline in the labor force of 664K. Another way of saying this is the labor force participation rate fell to 63% last month from 63.2% in September (and 63.6% a year ago).
  • While this probably won't stop the taper, it could mean a change in guidance, says Hilsenrath, where the FOMC either places less emphasis on the unemployment rate (there's already evidence of this) or indicates it wants to see headline UE at less than 6.5% before considering rate hikes.
  • Communication success: Markets are finally believing tapering does not equate to tightening. As investors braced for the taper in September, they also priced in the Fed's first rate hike by the end of 2014. Braced again for the taper today, futures markets aren't indicating the first rate hike until late in 2015.
  • Treasury ETFs: TBT, TLT, TMV, SHY, IEF, TBF, PST, EDV, TTT, TMF, TLH, ZROZ, SBND, IEI, DLBS, TYO, DTYS, VGLT, UST, BIL, SHV, UBT, TLO, TBX, VGSH, VGIT, GSY, LBND, DTYL, SCHR, SCHO, TYD, ITE, TYBS, TENZ, DTUL, TUZ, SST, DTUS, FIVZ, TBZ, DFVL, DLBL, DFVS, TYNS
Comments (59)
  • mekats
    , contributor
    Comments (102) | Send Message
     
    but employment rose just 83K against a decline in the labor force of 664K. My BLS release says that employed rose 818k and not in labor force declined 268k? Are you using NSA data?
    7 Dec 2013, 09:56 AM Reply Like
  • Angel Martin
    , contributor
    Comments (1291) | Send Message
     
    the 83K is in comparison to Sept household employent

     

    the fed is signalling (via Hilsenrath) that 7.0 unemployment is not good enough and they have moved the goalposts to 6.5 %

     

    so, for now, risk on !
    8 Dec 2013, 08:47 AM Reply Like
  • Patent News
    , contributor
    Comments (1312) | Send Message
     
    NSA?
    7 Dec 2013, 10:17 AM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (695) | Send Message
     
    Non Seasonally Adjusted.
    8 Dec 2013, 09:40 AM Reply Like
  • bbro
    , contributor
    Comments (9319) | Send Message
     
    At the start of the business cycle in May 1954 the Labor Force participation rate was 59.1....at the start of the business cycle in May 1958 the Labor Force participation rate was 59.8 and at the start of the
    business cycle in March 1961 the Labor Force Participation rate was 59.7. The direction of the Labor Force participation rate moves to a different drummer than the economy.... use as a market predictor at your own peril.
    7 Dec 2013, 10:20 AM Reply Like
  • pokernut
    , contributor
    Comments (66) | Send Message
     
    Hilsenrath is full of lies. He knows very well the Fed will NEVER taper.
    7 Dec 2013, 12:02 PM Reply Like
  • SMaturin
    , contributor
    Comments (2100) | Send Message
     
    Rumor has it that Kermit Hilsenrath and Miss Piggie Yellen will appear on Dancing With The Stars soon. They should be the hit of the season on Wall Street and at Goldman Sachs private shindigs.
    8 Dec 2013, 07:42 PM Reply Like
  • djierardi
    , contributor
    Comments (8) | Send Message
     
    "Communication success: Markets are finally believing tapering does not equate to tightening. As investors braced for the taper in September, they also priced in the Fed's first rate hike by the end of 2014. Braced again for the taper today, futures markets aren't indicating the first rate hike until late in 2015."

     

    I don't understand how this follows. The Fed has deferred tapering by at least 3 months. The markets have deferred tightening by at least three months. This doesn't say anything at all about "tapering is/is not tightening"; its just a response to Septembers non-taper event.
    7 Dec 2013, 12:18 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    djierardi,

     

    the fed hasn't "deferred" tapering as your comment suggests, please go back and read the FOMC minutes, none of the targets have been met , therefore we haven't seen tapering .

     

    The bottom line is that the Fed did what the Fed said the Fed would do. Unemployment is above the stated threshold and inflation is below - thus, no taper. I find it amusing how so many find this simple fact so mysterious ..
    7 Dec 2013, 12:49 PM Reply Like
  • harrik
    , contributor
    Comments (34) | Send Message
     
    Taper is removing some (not all) of the extraordinary easing. This will come two years before the FED will increase the FED funds rate. "Successful Communication" simply means the market is no longer going to fear the removal of the FEDs bond purchasing. The market has had seven months to figure this out, and in the meantime the economy has shown evidence that it is getting stronger. Additional evidence that the feds are feeling more comfortable with the strength of the financial markets and the banks specifically is the billion dollar fines the too big to fail banks are now incurring on a regular basis.
    7 Dec 2013, 04:36 PM Reply Like
  • King Rat
    , contributor
    Comments (569) | Send Message
     
    harrik, that is good insight. I disagree in part because QE is in a roundabout way helping hold rates down and do not see how ZIRP can be maintained for two years without QE. However you are totally right that other fed actions do show they see strengthening more than their words demonstrate.
    7 Dec 2013, 08:07 PM Reply Like
  • omarbradley
    , contributor
    Comments (966) | Send Message
     
    you are incorrect although not "via the data." because the Fed had had a policy of "extended for an extended period of time"...once they surprised the market with "taper" you had a bloodbath. i'm not saying it was the wrong thing to do...it actually confirmed a very negative bias i had this year going into the year...but you have to understand what is new here...the Fed and "guidance." well...guidance isn't any good if you change your mind and then don't explain to anybody why. now we have an "inability" to guide...and greed suddenly turns to fear. in this case instantly vis a vis gold, silver and the commodity complex in general. (which are way over-levered to the long side all the time.) now instead of combating deflation we now are stoking it. the President was right to demand an immediate replacement in my view. given the total lack of action on Syria and now the ACA being basically "nothing"...i'm not sure what can make a positive difference in the immediate term. should the Fed double down massively on QE here...as i think it should now...i would not be surprised to see the ten year drop to one percent.
    7 Dec 2013, 10:38 PM Reply Like
  • omarbradley
    , contributor
    Comments (966) | Send Message
     
    false. "successful communications" is understanding that when you say one thing and suddenly say the opposite you are no longer successfully communicating. in other words the opposite of "extended for an extended period" is the EXACT opposite of "taper" (raise now.) this put the market in a panic (the "bond market" that would be...what the Fed ostensibly "controls") and needless to say a lot of "coal in people's stockings" this year.you think you're bigger than the Bond Market? take a good hard look at Japan. that's 30 years of deflation that may be about to come unraveled in a very bad way.
    7 Dec 2013, 10:46 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    omar,

     

    now Japan is the crisis of the month !!, the naysayers will soon run out of countries -- , Greece, Spain , Italy ,Cyprus, then they went back to throwing in the entire Eurozone again and of course lets not forget the Syrian episode,
    Did i mention tax hikes , sequestration, debt ceiling ,
    Being "fed obsessed" and "crisis oriented" hasnt worked --perhaps another view is warranted
    http://seekingalpha.co...
    8 Dec 2013, 09:08 AM Reply Like
  • RSDallas
    , contributor
    Comments (2) | Send Message
     
    Do you really believe this? This market is 50% reliant on the efforts of the Fed. Period. The market will collapse by 50% maybe to recover to a 40% drop and then it will be back down from there.
    8 Dec 2013, 02:34 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    RS,
    good luck with your 50% correction theory.. sounds like the crisis mentality i just mentioned that hasn't worked ...

     

    Best of luck !!
    8 Dec 2013, 02:41 PM Reply Like
  • evan.prospect
    , contributor
    Comments (687) | Send Message
     
    What percentage of USTs is the Fed buying every month that the Treasury issues?

     

    IBs have been loaning money to institutional clients and hedgies at very low rates and those clients have been putting the funds to work into the markets (aka carry trade)...precisely the misallocation of funds and the mis-pricing of risk about which some are increasingly worrying. How long this fluffing up lasts, nobody knows but it is deeply concerning.

     

    In sum, too many greedy people in the markets and retail investors are starting to get involved more. It's high time to prepare oneself to profit off of the greed of others.
    8 Dec 2013, 11:22 PM Reply Like
  • SharkDude
    , contributor
    Comments (551) | Send Message
     
    Oh the government moving the goalposts? Have't seen that in the last 5 years. QE is fraud. QE is corporate welfare. Interesting how the president gave a speech this week about income inequality all the while the FED is one major cause for wealthy people to get even wealthier. Right under his nose.
    7 Dec 2013, 12:36 PM Reply Like
  • Growfast
    , contributor
    Comments (273) | Send Message
     
    10+ Year Treasury yields have increased as a result of discussions on tapering, despite FED dovish comments relative to raising Fed Funds rate much later 2015 and depending on data. The amount of increase in the 10+ Year Treasury yields seems to be a bit of an over-reaction to announcement of an upcoming taper. As a result, I would anticipate the possibility of TLT to increase a bit and TBT to decrease a bit as the Treasury markets adjust near-term, although the long-term trend would be for slowly increasing yields (up TBT).
    7 Dec 2013, 12:43 PM Reply Like
  • Voice of common sense
    , contributor
    Comments (119) | Send Message
     
    Clearly, Hilsenrath is a mouth piece for the fed. Isn't this a form of market manipulation?
    7 Dec 2013, 03:05 PM Reply Like
  • pokernut
    , contributor
    Comments (66) | Send Message
     
    During the past 5 years, the Fed bond has purchased more than $4 trillion in bonds, adding an estimated .25% to GDP. Why would they taper now?
    7 Dec 2013, 04:22 PM Reply Like
  • SharkDude
    , contributor
    Comments (551) | Send Message
     
    The FED wrongly thinks they will taper or end QE on their terms. The bond market will force their hand.
    7 Dec 2013, 05:16 PM Reply Like
  • Growfast
    , contributor
    Comments (273) | Send Message
     
    Shark - You may be correct; however, in Yellens' testimony, she stated that she would not allow the markets drive taper decisions. Will be interesting to see how that turns out. Minimal effect on markets, that is easy to hold to. But, if market dynamics respond in unexpected or extreme ways that may affect the progress of the economy, she may have to reverse that position.
    7 Dec 2013, 05:46 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    I've asked this elsewhere to no avail:

     

    Has Yellen actually SAID or WROTE that she is considering a taper of bond purchases during an exact time frame?

     

    I can't find any evidence of such.
    7 Dec 2013, 07:22 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    Shark,
    most feel the way u do reflected in your comment
    "The FED wrongly thinks they will taper or end QE on their terms. The bond market will force their hand."

     

    Those same folks with that pre- conceived notion have been wrong throughout the entire recovery .

     

    another scenario for the 'fed obsessed " crowd to consider..
    http://bit.ly/1cRgnTY

     

    http://bit.ly/1cRgnU2
    7 Dec 2013, 08:27 PM Reply Like
  • sarichter
    , contributor
    Comments (275) | Send Message
     
    Excellent blog post. It is funny how people have to find a scapegoat for their own poorly timed decisions. Oh well... enjoy the hot air while it lasts :)
    8 Dec 2013, 05:59 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    Actions speak louder than words.

     

    I don't agree with her philosophy but I respect that.
    18 Dec 2013, 06:56 PM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (695) | Send Message
     
    To me, until we see people start to get good pay raises and have the confidence to quit their existing job for a better and/or lucrative one , the improved jobs numbers, while an improvement, by themselves are not so exciting.

     

    Aggregate demand is just not that strong, and globalization and mechanization will continue to take their tolls. I would not get too myopic about Friday's jobs numbers..."McJobs" numbers, that is.
    8 Dec 2013, 09:46 AM Reply Like
  • sarichter
    , contributor
    Comments (275) | Send Message
     
    There may have been many 'mcjobs' created, but overall job opportunity is shifting from traditional labor to more tech-oriented labor. There are still tons of job positions open that pay pretty well (certainly better than that stupid $10/hr minimum wage they are proposing).
    8 Dec 2013, 07:46 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    Where is the QE eternity crowd hiding now and their ill fated thesis on equities . Perhaps back in the bunkers waiting for the next debacle ?--

     

    It's all about the economy , don't be fed obsessed

     

    http://seekingalpha.co...
    18 Dec 2013, 06:14 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    I'm right here.

     

    No, I don't just post during the sunny days.

     

    I show up when things don't go as predicted as well.
    18 Dec 2013, 07:01 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    DVL, $900 billion a year in money printing is still huge. Fed credibility is shot, even with the little bone they throw out to the market. Hey we cut 10 bil of digital money printing for the month, but we still need to digitally print 75 billion.
    F&G, please explain how great the economy is when real median incomes are falling behind year after year eventhough we have had so called subdued inflation?
    Great economy where financial profits make up close to 40% of s&p earnings. How much of financial profits coming from the spreads and commissions by Fed buying of treasuries and mbs? The refi game is over. Double digit inflation is least expected outcome.
    18 Dec 2013, 07:10 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    Yeah, I know, but I was sure they wouldn't taper because now they HAVE to keep tapering. The market will be looking for an eventual shrinking of the balance sheet which is politically impossible.

     

    Imagine the market reaction if they announce an increase in purchases next year.

     

    The final frontier is tightening...that is their "Snake River Canyon" motorcycle jump.

     

    With an announcement of tightening while U6 remains above 10% and continued 0% wage growth in the U.S. I'd expect gold to flirt with $2,000.
    18 Dec 2013, 07:40 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    Hammer,
    for those that are still in denial

     

    http://bit.ly/1cxkymJ
    http://read.bi/1cxkymL
    http://cnb.cx/1cxkyCY
    http://bit.ly/1cxkyD1
    http://bit.ly/1cxkwuR
    http://bit.ly/1cxkyD7
    http://bit.ly/1cxkwuV
    http://bit.ly/1cxkwv1

     

    Need more evidence about the economy & the recovery
    18 Dec 2013, 07:47 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    DVl,

     

    The final frontier is exactly right except you have the market impact wrong. its gold that will be in that position as the fed continues to reduce asset purchases the environment for gold becomes toxic. .. Many Gold aficionados will be jumping the snake river canyon and unfortunately they won't make the other side as they wait for gold to rebound from a triple digit print in '14...
    Baby boomers and above will have a long and maybe unsuccessful wait for gold 2000 ... The secular bear market for the metal has just started.....
    18 Dec 2013, 07:59 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    Fear&Greedtrader:

     

    You should have learned from my predicting no taper that you shouldn't predict sub $1k gold in 2014.

     

    The VIX collapse today of nearly 15% with gold down only modestly should be a clear, bright red warning against for those who are trend predicting gold.

     

    The time to rail against gold was when it was above $1,750.

     

    Now that it is range bound along the bottom between $1,175 and $1,300 it is time to take off the "angry at gold" glasses and put on the "let me look at the gold market objectively" glasses.
    18 Dec 2013, 09:38 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    DVL,
    thanks for the advice but the two examples on predictions are not related ,, IMO.

     

    I do have the "objective" glasses on and it continues to say - Gold will not do well in the upcoming economic & interest rate environment .. It's not complicated..

     

    For the record i have "railed" against gold from 1600 when it was about to enter into a "bear" market . and continued all the way down to present. Maybe somebody got the message , if not, so be it .. , its all here on SA..

     

    Best of luck !
    19 Dec 2013, 09:15 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    Fear&greedtrader:

     

    Objectivity means analyzing without emotion or prejudice.

     

    You have been absolutely ranting against gold on this site and anyone who dares push back you attack and nearly insult.

     

    Most anti-gold folks just state their case and leave it at that but your postings are usually highly emotional as if gold were an ex-wife you can't stand.

     

    When gold has a bear market bounce or even (dare I say it) reverses and goes back towards the high one thousands I get the feeling you are going to be curiously silent on gold (whereas I post pro-gold commentary when it falls $40 per day).
    19 Dec 2013, 11:55 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    DVL,

     

    I'l be vocal on gold if and when the environment changes in its favor as I try to use whatever i can to increase wealth , gold is no exception..

     

    I am as vocal as the guys that sit here and pound out article after article that promote gold no matter what the price So , I don't have an ex wife that i am mad at and don't appreciate your silly insinutations..

     

    You post pro gold commentary at all levels , even in a bear market , so your approach is ill fated to say the least..
    19 Dec 2013, 12:34 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    So...Fear&greedtrader where are all of your pro-gold posts from the time gold was @ $800?

     

    $800 to $1,900...seems like one could have made money there.

     

    Or was your statement less than honest?
    20 Dec 2013, 09:10 AM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    DVL i see alot of the gold is a bubble posters at 800-1000 long gone. Now the posters pumping gold at 1700-1900 are long gone. dvl a monster box of silver maples under 10k and 24k 1 oz American buffalos under 1000 would entice me to act. would be at a pretty good discount to marginal costs of mining. i do think the western CBanksters going to take gold down to 1000 to demoralize gold holders. this is their objective to drain the confidence. not working in the up and coming countries, only in clueless western countries.
    20 Dec 2013, 10:20 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    DVL
    I wasn't here on SA when gold was @ 800.

     

    However my commentary and my blog are as transparent as anyone here on SA ----Nothing to hide ..

     

    Perhaps many here are less than honest -with themselves as their conviction to holding on and perhaps adding at these levels , now indicating an oversize position that has gone terribly bad..

     

    Could folks have made money from 800 to 1900 , of course ,,but most i debate here are holding on, Didn't u say that ? didn't u say you would welcome gold at lower prices to add ? It seems that would indicate more than a casual 5- 15% position,, hence your fierce defense of an indefensible position ....

     

    if u traded it and made money on the way up good for you .. from the commentary i see here on SA it seems many didn't sel as it went up --- as they are holding on ... when most were caling for gold 2500 ..

     

    Food for thought ..
    20 Dec 2013, 12:07 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    Fear&Greedtrader:

     

    Please stop insinuating and just come out and write it down:

     

    Do you believe that I am lying when I say gold is less than 15% of my net worth?

     

    And, please, give me a straight answer.

     

    If so, then how can I debate with someone who makes up their own reality? That would be like debating an imaginative child.

     

    I fiercely defended my AIG position in 2011/2012 and that was less than 3% of my portfolio.

     

    In what world does someone judge another's position size based on their commentary on an Internet stock website?!?

     

    And yes, if I woke up tomorrow and gold was trading at 67ยข per ounce I wouldn't be sad...I'd be in HEAVEN.

     

    They have a term..."backing up the truck"...that'd be me.

     

    You used the word "traded" in your last paragraph and that gives me a little more insight into your misunderstanding about those of us who understand gold and its historical place in a fiat money printing world.

     

    By the way, the taper has been announced and gold stubbornly is nowhere near crashing toward $1,000 per ounce.

     

    Why do central banks hold gold? (I've asked that question 8 times now and NO ONE will touch it.)
    20 Dec 2013, 03:23 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    The imaginative one is you sir,,
    There is no debate with you when u write stuff like this :

     

    "By the way, the taper has been announced and gold stubbornly is nowhere near crashing toward $1,000 per ounce.

     

    You wont "get it" until it finally happens ...

     

    Good day !!

     

    Good Day !!
    20 Dec 2013, 03:35 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    Fear&Greedtrader:

     

    I've been hearing about gold in the triple digits since the summer but where is it?

     

    Heck, we even have a taper now and gold still won't hit $1,000.

     

    Does anyone know why?
    20 Dec 2013, 06:50 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    You wont "get it" until it finally happens ...

     

    Good day !!
    20 Dec 2013, 07:30 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    I wish gold did what you fantasize it will do but unfortunately it won't budge below $1,000 so I can buy a lot more. :(

     

    Maybe one day you will be right and I can take advantage of the deep value.
    21 Dec 2013, 12:02 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    Dvl remember these digital money printers control a massive portfolio throwing off interest so it is not only 75 bil a month.
    Bridges suddenly collapse so do dams. It is not apparent until after the fact.
    18 Dec 2013, 07:44 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    Agreed, The Hammer.

     

    Remember how arrogant and confident the Fed lovers were in 2006?

     

    I do.

     

    Reality has a way of slapping those grins off of their faces.
    18 Dec 2013, 07:54 PM Reply Like
  • dnorm1234
    , contributor
    Comments (828) | Send Message
     
    >Reality has a way of slapping those grins off of their faces.

     

    And the gold-bugs are immune to that, I'm sure.
    20 Dec 2013, 12:17 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8145) | Send Message
     
    Immune to what?

     

    The fact that trading 150 ounces of gold for cash could have bought you a house in 1913 AND 2013 but the same notional amount of cash in dollars could do no such thing?

     

    Immune to that?
    20 Dec 2013, 03:28 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    F&G not in denial and i do see the fed did help to refi the economy with their manipulations BUT the end game is coming since it is no longer the consumer or banking system stretched , it is the govt.
    Corp profits as % of gdp-- may turn to no wind in sail. F&G the stats always look great at the top and look like S%$! at the bottom. Stats looked great in 2007 and in 2000 too BUT fundamentals were not supported except by financial engineering. Curious to see how much these phony interest rates (debt refi'ing) and stock buybacks have contributed to eps growth
    The market is reflecting all of this news in terms of valuation imo.
    18 Dec 2013, 07:59 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    Hammer
    citing 200 and 2007 here is complete nonsense and has already been debunked. Believe what u wish ....

     

    Now it sounds more like frustrated bear syndrome.. with the "it's coming " and it's "all fed related" songs ..

     

    We are in a secular bull market for equities ,, dips along the way for sure , but the market will be higher in '14 than it is today ..
    18 Dec 2013, 08:05 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    The fundamental difference between me and you is that you see no problems with the current monetary and fiscal policies in place and their eventual impact on the financial system.
    18 Dec 2013, 08:32 PM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3518) | Send Message
     
    @ The Hammer

     

    The difference is that you're commenting on the current market based on eventual effects. Fear&Greed is commenting based on the current market & data.

     

    You may both be right, but to make money, you've got to be focused on the current info.

     

    The eventual will show signs of the cracking, before it cracks. It may be subtle at first, but there will be signs. ...and maybe solutions & other factors that make the problems shift and get solved in currently unexpected ways. ...or lead to the next bubble or "improperly regulated or unregulated" triggered problem.
    18 Dec 2013, 08:48 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    Hammer,

     

    Plenty of problems around , but i see a resolution and or fix, as opposed to those that wish to believe everything turns out badly ,,

     

    Most cant grasp the market psychology that the market doesn't trade on the 'absolute" it trades on "change " whether it be for the better or worse , In this case the market has seen and continues to see the positive change in the world economy ..

     

    Best of luck to you ...
    19 Dec 2013, 09:18 AM Reply Like
  • The_Hammer
    , contributor
    Comments (3809) | Send Message
     
    Land unfortunately markets discount the future. why did markets bottom in 09 when consumer sentiment close to record lows and earnings crashed down?
    The market will be falling long before the bad news is front page. Buying the dips in 2000 and 2001 cost investors some major pain. LUzer topped at 72 but was a bargain at 30 then 20 then 10 then 8 then 5 then giveup at $2. Valuations are not cheap in this market anymore but more than fairly valued.
    18 Dec 2013, 09:07 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (4540) | Send Message
     
    Hammer ,

     

    and the preconceived notion that there is no time to "get out " is incorrect, http://seekingalpha.co...

     

    and the folks that have taken that approach have been left for dead..

     

    U are talking about an event now, that may take place way down the road.. Ask those that took that approach in 2010- mid 2011 -- they are still waiting for that event and have left 120% gains on the table they are truly left for dead and now are frustrated bears..

     

    This is a secular bull market , by the time many investors finally realize that we will be at the top,, as they will be satisfied that "everything is rosy" ----we aren't there yet , its a long way off..
    19 Dec 2013, 09:27 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (3518) | Send Message
     
    Hammer:
    Seems to me, buying a dip from 72 to 30, less than 1/2 price... is not a dip. It's a falling knife. Plus a buy at 30 might hurt at 2, but do well when it climbs back up.

     

    The time to sell is when the market is falling, not when it hits the front page. That's what I meant by there will be signs. I didn't buy a house during the housing runup, even though I was shopping actively (because I needed to move). Prices felt unreasonable, so I never jumped in. I was offered a ridiculous percent of my income in loans, and burst out laughing at the loan provider, & told him 28% of income was the max I was going... I did finally buy, right after the crash. There were signs. And I wasn't even aware a risk was coming; I was just using common sense. So I'm thinking there will be for the next "reactiveness" too.
    19 Dec 2013, 09:37 AM Reply Like
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