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Three Cheese Fondue

Three Cheese Fondue
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  • One Negative Quarter Does Not Make A Recession [View article]
    "It hasn't been a jolt to the equity market because it was most likely only a temporary dip in economic activity."

    This is the problem with economists who attempt to apply their knowledge to trading.
    This is not how the equity markets work. I can tell you that for nothing.
    Your deductive logic can be summed up thus:
    1. event E occurred
    2. there was no immediate downwards reaction from the stock market
    3. (logical conclusion) the stock market is not concerned with event E

    That is not the way that it works!
    Jun 1 11:10 AM | Likes Like |Link to Comment
  • Deflation Is A No-Show Thanks To Easy Money And Rising Wealth [View article]
    Where has that ROFLMAO icon got to?....
    This guy is clearly very intelligent, but he exhibits major dumbness at the same time.
    "Steve Ballmer's shockingly large bid of $2 billion for the Clippers suggests that there is a lot of money out there chasing relatively few sports assets. Could this be a harbinger of a generalized increase in prices in the future? I wouldn't be surprised if it proves to be."
    Jun 1 10:05 AM | 1 Like Like |Link to Comment
  • The Party Is Over In The Treasury Market [View article]
    I see your point but that chart of household wealth that you link to begs at least three questions:
    1) to what extent has U.S. net worth been goosed by both ZIRP and successive rounds of quantitative easing in the U.S., UK and Japan, which in the U.S. has seen the Fed's balance sheet expand to over 4 trillion dollars? It is (by me at least) taken as a given that all assets have been goosed to some extent; the ones primarily of interest are of course real estate and stocks.
    2) will those gains hold over time?
    3) could the author of the article that you link to have foreseen that the Fed would engage in such an aggressive monetary policy?

    With respect to your own presumed argument, tacitly made, to support your argument the answers would presumably need to be
    1) to very little extent
    2) yes they will hold
    3) yes he could have foreseen such actions.

    My own answer would be
    1) massively
    2) maybe, maybe not, but even if maybe, then there will be little progress from here
    3) no, he could not

    When it comes down to it, could anybody have foreseen in September 2009 that nearly five years later, in mid-2014, the Fed would still be on ZIRP, would still be on its 3rd(and a halfth?) round of QE, and not be looking to raise rates for at least another year, but even so that the SPX would have moved up to over 1900?
    May 31 06:42 PM | Likes Like |Link to Comment
  • It's Time To Buy This 3x Leveraged Gold Mining ETF [View article]
    LOL, so your theory applies...except when it doesn't.
    What a joke.
    And you have the nerve to call me a gold bug?
    Ever heard of argumentum ad hominem?
    I'm no gold bug. I'm just somebody who saw somebody put forward a theory of the pricing of gold that doesn't stand up to the merest scrutiny.
    Now, when challenged, you modify your argument: gold, we now hear, is driven in the short term - the short term! - by crisis (or is that CRISIS?), but in the long term, it's driven by inflation perception!
    Aah!! So that's it! There's a short term and a long term. No doubt when you're challenged on the long term you'll bring up a medium term and a very long term.
    Oh, but wait, there's more.
    That inflation never materialized.
    So the market "got it wrong" over 12 years by running gold up nearly ten-fold. All along, the market was buying gold ever higher and higher, thinking, that inflation's coming, I tell ye! It's coming! Keep buying - it's COMING!!!
    But then, ah, it didn't come.
    Uh, okay then.
    Seriously mate, I'd give it up if I were you. You don't know what drives the price of gold any more than the next fellow. Your theories have got more holes in them than a tea strainer.
    Never mind eh.
    May 29 07:14 PM | 1 Like Like |Link to Comment
  • The Trigger For The Next China Economic Correction [View article]
    So if all that you say is true, how come the SSEC is in such a sick state? The way you present it, Chinese stocks are the bargain of a lifetime.
    But if they are so much of a bargain, how come they have been such a bargain *for so long*?
    They have bounced along at 2000 for what seems like centuries now (I jest of course) - see

    I mean, it's not like they've just dipped in some freak act of capitulation. They've just grinded lower, and lower, and lower, over years.

    So, why is that, given all that you say? I'm very interested in hearing why.
    May 29 07:04 PM | 1 Like Like |Link to Comment
  • How Stocks And Bonds Can Both Rally On Nothing [View article]
    "In the bond market, you get rewarded for being right about the economy and inflation; in the stock market you get rewarded for being right about the stock market."

    You know, that's so true, and it's the reason why I now only dabble in ES. I've made good money in bonds and forex this year. Stocks, I don't know why I bother (addiction and habit, mostly).
    May 29 05:41 PM | Likes Like |Link to Comment
  • Massive Layoffs As A Sufficient Condition For An Extension Of The Bull Market [View article]
    Yes, this is like 2006-9 all over again.
    Then, everybody was thinking "inflation is low and going to stay low (because of the China effect); interest rates are therefore going to stay low; everybody is happy; don't stop dancing".
    Well we all know how that worked out.
    May 29 09:58 AM | 2 Likes Like |Link to Comment
  • Why Are Investors So Skeptical When Many Reports On Economy Seem Generally Positive? [View article]
    The trouble is you can quote all those data points but really everyone knows the economies of the major developed countries are creaking along under huge amounts of debt, and there are massive structural problems, and so much ruthless capitalist efficiency and spare capacity that the required number and quality of full-time jobs are just not there any more.

    Really, I'm getting so bored of even looking at these data points. People like you can't see the wood for the trees. "Investors" are buying for all sorts of reasons, and one of them will no doubt be that everybody else is buying. But there's an implicit, joint conceit; everyone knows these economies are shagged. Everyone knows that stocks have been goosed by 4 trn of QE in the U.S. alone. But they keep buying. For whatever reason, they keep buying. Just like they kept buying in 1999. And 2007.

    You keep buying, but I'm staying the hell away. I don't care if I miss 10%, 20%, whatever. I trade forex, bonds, and commodities, and forex and bonds make a hell of a lot more sense and are a hell of a lot harder to rig and less of a casino than the stock market.
    May 28 03:59 PM | 3 Likes Like |Link to Comment
  • Will Natural Gas Break Free From Its Current Price Range? [View article]
    Btw I should probably say, ignore my sniping; I appreciate your articles, for there is a paucity of coverage on NG on SA.
    May 26 09:37 PM | 1 Like Like |Link to Comment
  • Will Natural Gas Break Free From Its Current Price Range? [View article]
    Will LC ever write an article for SA that doesn't have a question as its title?
    May 26 09:29 PM | 1 Like Like |Link to Comment
  • Dollar Poised For Additional Gains [View article]
    Thanks for the clarification Marc. I was I think being a little harsh, and for that I apologise.
    I see now that you are indeed quite bullish on the dollar. I am mildly bullish but I don't believe either the Obama administration nor the Fed wishes to see a substantially stronger dollar, assuming the fundamentals warrant it.
    As you say though, the other side of the crosses is equally important.
    Finally, we all know that GDP is a rear-view mirror thingie, and the forex market leads not lags, so we shouldn't pay much attention to stale, stodgy Q1 GDP numbers.
    May 25 05:10 PM | 1 Like Like |Link to Comment
  • It's Time To Buy This 3x Leveraged Gold Mining ETF [View article]
    "It is driven primarily by sentiment and chief among sentiment drivers of demand are CRISIS....Crisis, by definition is short-term and immediate"

    Gold rose from around $250 in late 1999 through to August 2011, whatever it was, $1900 or something.
    Was the world in crisis for 12 years? I mean, crisis is, by definition, short-term and immediate, right? Does 12 years count as short-term and immediate?

    It seems you started with a theory and...forget to check it against reality. That's kinda lazy.
    May 24 06:41 PM | 1 Like Like |Link to Comment
  • Dollar Poised For Additional Gains [View article]
    MKW seems to think the dollar is not set to make lasting, substantial gains.
    You say "to the contrary" and then point out that this week's 2nd estimate of Q1 GDP is expected to come in negative, which one would expect to be dollar negative.
    Yet your article headline says "dollar poised for additional gains".
    I am confused as to your expectations for the dollar because you appear in your reply to MKW to contradict yourself.
    Meanwhile in text of your article you have studiously avoided, as is your wont, making any predictions.
    Seeing as you have made fence sitting a fine art, could you let us humble students of the market know please what are your real expectations for the dollar going forward?
    May 24 06:33 PM | 1 Like Like |Link to Comment
  • It's Time To Buy This 3x Leveraged Gold Mining ETF [View article]
    EWT? Oh dear...
    May 21 10:05 AM | 3 Likes Like |Link to Comment
  • Is The Fed Making The Same Low-Rate Mistakes? [View article]
    That chart - - is truly scary.
    You are right to ask the question, but the question can be addressed not only to the Fed but to other notionally independent central banks and/or their puppet master governments - e.g. the BoE.
    What happened in 2002 -2006? Low interest rates, used to reflate an economy after the popping of a gargantuan bubble, held (too) low for years on the premise that a specific measure of inflation (which excludes real estate prices) was low, and going to stay low.
    What's happening now? Ditto. No difference. Well, there is a slight difference. Almost unbelievably, the bubble that popped in 2007/8/9 was bigger, more global, and the recovery has been weaker, both in specific countries and globally.
    The bubbles are getting bigger, more frequent, and the recoveries are taking longer, and are shallower. And here's the kicker: interest rates are being held lower, and for longer!
    Still the same recipe for recovery applies: low interest rates, as low as it takes for as long as it takes!!!
    What was it Einstein said about insanity?! LOL!
    The chickens always come home to roost! We just don't know when they will arrive!
    May 21 09:02 AM | 1 Like Like |Link to Comment