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    • Wed Apr 23rd 16:04 PM | Rating: 0 0
      Commented on:
      The Economic Guessing Game Has Begun
      We believe that the long term 21year decline in USA interest rates hit bottom in 2001 and will be in an up trend ( with pauses ) until 2050.

      The down trend in real estate prices will continue until then.

      P/E multiples on bonds and stocks will rise until 2050 causing bear markets with some rallies until then. Earnings per share will rise so that stock market prices will rise on balance.

      The exchange rates for the USA dollar will stop falling and then rise and there will be more exports and fewer imports, but only if the USA Government stops wasting money.
      View article »
    • Wed Apr 23rd 13:23 PM | Rating: 0 0
      Commented on:
      U.S. Corporate Profits of Doom
      If you are asking if the USA appears to be headed into a recession, the answer would be yes based on your data. The graphs shown have patterns which follow the year over year per cent changes in real USA GDP (not shown) during its recurring business cycles. The USA is still going down in the current cycle.

      The USA economy has suffered a huge loss in the realizable value of domestic asset holdings. And, as a result, a huge loss in borrowing capacity for individuals and corporations. Real profits and real wages are going down rapidly. And, interest rates are going up. As interest rates go up, bond prices go down, as do home prices and common stock prices, and the prices of foreign currencies as USA assets are sold and the proceeds placed in foreign assets. Large corporation with foreign activities have their earnings kicked up when foreign profits are expressed in USA dollar terms as the dollar falls.

      Banks are not making loans for the time being. We are in what is called a credit crisis.

      View article »
    • Wed Apr 23rd 11:32 AM | Rating: 0 0
      Commented on:
      Shorting Homebuilders - A Sure Thing
      Stop by our site to see our experimental short portfolio of 30 stocks across many industries.

      Our advice is to know a date or a price at which you will cover.
      Fit your shorts to the business cycle. Make any short position a very small part of your portfolio. Short positions are risky even if successful, do not make as much money as long one.

      View article »
    • Fri Apr 18th 13:39 PM | Rating: 0 0
      Commented on:
      World Crisis Not Dissimilar to 1929-1932
      The click above did not work

      please try

      financialtrax.googlepa...
      View article »
    • Fri Apr 18th 13:24 PM | Rating: 0 0
      Commented on:
      World Crisis Not Dissimilar to 1929-1932
      One could say that it is not now 1929-1932 but rather 1938. The stock market crash of late 1929 to 1932 was repeated in late 1999 to 2003.

      As of now or 1938, the crashes are in USA mortgages and USA bonds which are in the process of defaulting and USA stocks which see lowered price to earnings ratios. The USA dollar is rising against USA bonds, USA real estate, USA stocks yet falling against commodities and foreign currencies.

      The USA dollar in 2008 is like the British Pound in 1938, falling from $5 to $2 USA dollars per pound. Foreign holders of USA dollars are cashing out into other currencies and non perishable commodities which since 2001 have bin raising against all currencies.
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    • Thu Apr 17th 14:34 PM | Rating: 0 0
      Commented on:
      A new Bullish Divergence
      Look for an upswing in many common stocks and averages from mid April 2008 into late May 2008. Then sell in May and go away or maybe short. The following low should be in late October 2008. Then up again into May 2009 and down again to October 2009.

      After that the upward move should be very rewarding.

      We look at previous movements in like periods of past business cycles.

      Good luck.
      View article »
    • Thu Apr 17th 14:05 PM | Rating: 0 0
      Commented on:
      States Step In as Foreclosures Balloon - Housing Market Tracker
      Reasoned house purchase and sale decisions are very hard to make. Most people at most times in their lives are better off to rent than to buy.

      Transaction cost are very high, 6% to do a round trip.

      Market conditions are very hard to learn, what is the going price for a particular kind and size house.

      Taxation on the house can bankrupt the owner and drive the price down and may be completely out of line for the services rendered.

      The investment is highly leveraged which means either big gains or big losses are possible in the money invested.

      Commutation costs in time and money are very important in evaluating the worth of a house to you.

      School services are impossible to evaluate. Can anyone in the school pupil or teacher or friend or parent conjugate the verb to be? Can anyone there identify the play in which the line "And this above all else, to thine own self be true, and though then can not then be false to any man.

      How about, there is a time in the affairs of man which taken at the flood, leads on to ..........


      Today, most people should not own a house during their lives unless it is on the farm that they own and work.

      Renting is a great alternative that you should investigate.

      You can make your return on alternative invetments.

      Good luck.
      View article »
    • Thu Apr 17th 12:57 PM | Rating: 0 0
      Commented on:
      Wall Street Breakfast: Must-Know News
      Today's "Must Know" news presents news appropriate to the moment.

      1. MER got itself into a financial mess by ignoring the basics of the business cycle. The Federal Reserve Bank runs short-term interest rates on USA dollars up until they exceed long-term USA bond yields. This causes those who borrow short and lend long to loose money as the market value of long bonds falls due to higher interest rates. Once that happens, the short borrowings can not be repaid with the proceeds of long bond sales. A cash shortage results at MER. Losses on sales and on the present value on the unsold long bonds in inventory must be reported.

      This situation is particularly bad in this cycle because foreign investors are pulling out of the dollar and selling their long USA bonds and short USA notes. No one wants to take their places because the USA dollar is falling against foreign currencies.

      Nokia is in the same position as USA companies were in the past. As the Euro rises relative to other country currencies in which their products are sold, the financial revenues reported in Euros falls relative to costs of production also reported in Euros. And, non Euro competitors are happy to price cut against Nokia in Euro land keep their revenue in Euro and ride the currency up against thir own currency.

      The cash hog situation is getting a lot of attention in US Congress lately. Why should corporate managers get big pay checks and etc for retirement packages voted to them by the board of directors they over pay and hand pick based on their willingness to channel company funds to the president that brought them on board.

      Basic truth is that big cash balances are evidence that top managers is incompetent and should be fired fast. Cash should be paid to share holders so they can invest it, to buy companies with good products, and to support in house invention and product development and marketing

      l
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    • Wed Apr 16th 15:50 PM | Rating: 0 0
      Commented on:
      Commercial Real Estate Imploding
      Great article. The facts presented support my own observations about retail traffic flows and the number of empty store fronts I see locally. Everything has gone wrong for consumers. They have lost jobs, or lost hours at jobs. There is no reason to sink more money in houses because the owners can't sell for what is already sunk. Banks will not loan. Banks are loosing cash inflow on existing loans and mortgages. We are back to the 1930 with loss numbers that are 100 times bigger.
      View article »
    • Wed Apr 16th 15:33 PM | Rating: 0 0
      Commented on:
      Morgan Stanley: A New Hypothesis on the Euro's Strength
      The Euro zone is huge in population and huge in investment opportunities. Why should Euro companies hold USA dollars investments as USA investments decline in USA dollar value due to lower USA price to earning ratio values? That is, USA dollar prices fall for USA real estate, USA bonds, USA stocks and etc.
      View article »
    • Wed Apr 16th 15:09 PM | Rating: 0 0
      Commented on:
      Treasury Yields and the Dollar
      We have the view that the USA dollar will continue to fall against the Euro and not so much against the Yen. USA dollar interest rates will be dragged upward by the huge losses in USA mortgages, house values, stocks, and bonds. Foreigners are and will continue to loose huge amounts in USA dollar investments expressed in USA dollars and will drag the money home for better returns. They will find it costly to underwrite exports to the USA and will pull their funds out and into their own currency as soon as possible. USA interest rates are now going up a multi decade hill as they try to overtake inflation.

      Visit us at financialtrax.googlepa...

      To see why we believe that the long term decline in interest rates will reverse to increasing interest rates until 2050.
      View article »
    • Tue Apr 15th 12:20 PM | Rating: 0 0
      Commented on:
      George Soros Discusses the Double Jeopardy
      Welcome to the big leagues where lofty opinions about national financial structures and currency exchange rates are common tea time chatter.

      One might point out that that financial history can be seen as the rise and fall of monopolies, cartels, currencies, and interest rates on those currencies all within a particular nation-state. And there are many nation-states on planet Earth each questing for the well being of the human power groups within that hold winning political power.

      Currency exchange rates play a big role in displaying the scores by which the winners and losers are identified.

      Interest rates in USA dollar terms have been declining since 1980. The 20 year decline from 1980 to 2000 took the dollar value of all USA asset classes higher. Houses sold for more and more while the monthly payment on the house stayed the same. More debt cost the same as less debt in the prior year did. The same old bond sold for more and more as the years went by. No one defaulted. So, every one wanted to lend US dollars and foreigners were happy to sell goods in the USA, take payment in USA dollars, and hold them while their value grew. Foreigners undersold USA producers to get their hands on USA dollars. This led to some not so-so-great results on both sides of the trade. Money did not get invested in the exporting countries and Japan, for example, stagnated. All around the globe, other nations did too.

      On the USA side, during the 1980 to 2000 period, there was a huge collapse in manufacture companies and jobs as other businesses in other countries undersold USA companies and took their business away. Then, as internet access expanded, service sector jobs were also taken overseas and lost in the USA as those services were under sold.

      Let us not forget the Wall Street wonder kids who worked at getting foreign dollar holders and themselves more on their USA dollar money. How? By leveraging, buying existing high interest rate debt with dollars borrowed at new lower interest rate debt.

      But, what happens when the 1980 to 2000 run down in USA interest rates comes to an end? It had to, unless everyone wold tolerate zero interest rates and the infinite food and asset prices caused by zero interest rates.

      Now the USA is at the end of interest rate reduction. Foreigners can no longer undersell us and make gains as our interest rates keep on falling. Foreigners do not want to hold their low interest rate USA bonds because they loose value as the dollar falls. Now the game is played backwards, commodity prices go up in USA dollars, USA interest rates go up, USA asset prices fall, USA price to earnings ratios fall, house prices fall, and etc..

      The bottom line is and will be for some time is that people who borrowed USA dollars to buy USA assets will be treated as USA people were treated in the 1930's.

      And then in 200
      View article »
    • Mon Apr 14th 17:28 PM | Rating: 0 0
      Commented on:
      Why GE's Miss Matters
      There is a 2 year period in the typical USA business cycle when many common stocks decline in price. This period usually follows a 4 or 5 year period during which stock prices rise for many stocks causing the stock averages to rise. The Federal Reserve Bank typically raises interest rates as the stock averages rise.

      In the current business cycle, we expect the 2 year decline to run from October 2007 to October 2009.

      To monitor this decline and see what it does to a diverse portfolio of common stocks, we set up such a portfolio in a spread sheet which measures the short portfolio gain by the amount of declines in the stocks therein.

      To see this test portfolio visit our site at
      financialtrax.googlepa...
      and click the Portfolio (sample) tab
      then click the next Portfolio (sample) tab.

      This a an academic experiment and not a recommended investment.
      See your own investment advice consultant before investing.
      View article »
    • Mon Apr 14th 14:04 PM | Rating: 0 0
      Commented on:
      Bullish on All Metals
      Business cycle years in which USA dollar interest rates are falling have been supportive of gold price upswings as well as increases in gold mining stocks and also mutual funds such as the Fidelity Select Gold Funs which holds gold mining stocks. For example, in the 2001 through 2003 period, gold rose from $280.00 to $400.00 per ounce and in the same period the Fidelity Select Good Fund shares rose from $10.00 to $31.00 each by the end of 2003.

      Who knows what will happen as the Fed cuts rates starting in late 2007. History could repeat.

      To check this data, you can go to financialtrax.googlepa...
      and click on Commodities and then click on the Moore site click and then look at short term interest rate history and then look at gold prices.

      Gold mining stocks per cent change amplify the gold bullion because in the short their costs per unit of gold extracted stays constant while the whole increase in the revenue from the unit of gold sold passes through to profits.
      View article »
    • Sun Apr 13th 13:05 PM | Rating: 0 0
      Commented on:
      Shiller at BAAS: Housing Will Continue to Fall
      The decline in USA Dollar interest rates lasting from 1980 to 2000 made that period one in which unit prices on houses, cars, aircraft, farm equipment, commercial real estate, and other assets like stocks and bonds to rise relative to the yearly dividends they paid without causing inflation. That is to say, the price to earnings ratios on stocks, bonds, and other assets rose as interest rates declined.

      The USA had a bull market in asset values from 1980 to 2000. Then after 2000, interest rates stopped going lower and began rising for the first time since the end of the 1970's. It was hard to take interest rates below 2%. As interest rates moved higher, assets which could not earn more immediately suffered price declines due to lower price to earning ratios (P/E's). In order to maintain a set price your assets have to earn more as interest rates go up. Houses save their owners rent. If the rent saved stays constant or falls and the price to earnings ratio falls, the house price takes a big step down.
      View article »
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