Bond Market Instability in a Liquidity Trap [View article]
Ok, try this: if the dollar falls from excess liquidation and insufficient export demand for US goods, while US rates stay low...what happens to that Dollar-Yen carry trade Japan has been living off of?
Bond Market Instability in a Liquidity Trap [View article]
I did this as a reply, but would like others to see it to comment generally.
"Speaking of electric cars, there was a story in a financial program that a Prius has about 50 pounds of rare earths in it...and that China controls nearly 85% of the world supply of rare earths, the rest, mostly Canada, being available only at prohibitive development cost...and that China has severely curtailed exports of rare earths. "
Bond Market Instability in a Liquidity Trap [View article]
Sounds like Buzzer is long and one of those millions trying to "gin" up the markets, talking his book. I was taking the generic part of the typical consumer...he perhaps was either missing the point, or bragging how he is not the typical consumer, and wanted to avoid the discussion about the real economy.
Ok, that's what's makes a market, and perhaps I was being too subtle, taking the role of most consumers, i.e. the end consumption demand that drives spending and retail borrowing (or lack thereof), thus retail and corporate revenues (or lack thereof), thus retail and corporate spending and investment (or lack thereof), thus bank revenues from lending (or lack therof), and investment borrowing, thus employment (or lack thereof), thus jobs (employing consumers...or not employing them), thus...end user demand (or lack thereof)...to the point that consumers eventually de-leverage as a habit...and if it becomes a habit, then a deflationary cycle ensues, because if I am willing to hold off purchases until the price is lower, and I do and it is...that's deflation, isn't it? Lower prices? And that case, if I have a job to offer, and I give it to the guy who will take it for the least pay, that's deflating wages, isn't it? That's what the administration and all of wall street and the media are all afraid of, aren't they, that those of us who are unemployed will expect this to continue, and those of us who see it may worry we could lose our jobs too, and so everyone de-leverages (don't buy that new car every two or three years, and hold out for lower prices...). The pillars of economics in reverse, debt bubbles in reverse...printing new money to push the string harder...as I said, couldn't this turn out like Japan?
Bond Market Instability in a Liquidity Trap [View article]
Of course, all this can be turned right around, by lying about the figures...which the ISM just did. Notice the regional figures, at great disparity to the national...and the strong basis of the national figure reliance on phantom "employment." It is true that the markets can be buoyed up indefinitely if a corrupt government owns the only information and the media are owned by interests dependent on rising markets...no one will ever really know the true story, and will decide what to do based on the information available to them. So perhaps tulips really can continue building indefinitely.
Bond Market Instability in a Liquidity Trap [View article]
Funny thing about "liquidity," which I think is an outstanding metaphor. Say we extend the analogy/metaphor of liquidity, say thinking of what water is to something. Adding liquidity makes it more "liquid," more available, it moves around more. But another way of saying that is it is "thinner." Or, "dilute." So rates may have to go up to offset the lower value of the dollars.
Hmmm, rates going up while demand for goods/services goes down.
Remember Jimmy Carter years? Remember long rates at 20%, while demand and GNP was faltering or staying the same?
Remember Japan, whose government and central bank was similarly purchased by the uncompetitive, over-leveraged (real estate bubble-driven) commerical banks, and their Kieretsu? What ensued? For how long? (Hint: Nekkei 40,000 then, under 10,000 now).
Bond Market Instability in a Liquidity Trap [View article]
And finally, I am no longer using debt to finance by drawing on my "future." Uh oh, no more debt demand from me. Maybe the other future based pricing mechanism, P/E, therefore also has to adjust with this new assumption. Uh oh, what does that say about PE ratios' future? Uh-oh.
Bond Market Instability in a Liquidity Trap [View article]
More: expectations. If I, the consumer, who also buys houses, think prices will be a bit lower tomorrow, I will wait on my purchase until then. So I'm not spending...and when I do, it is later, for a lower price...because I now expect that as my HABIT.
Don't we call that deflation? Less spending now, and prices going lower because demand is for a lower price? I don't see a brighter future from which to rely on anticipated future cash flow income...well, If that is a new value and habit, because I fear I won't get a job or will lose mine, I expect lower prices and will wait on my new purchases (cut my demand)...that is a deflationary cycle, no?
Bond Market Instability in a Liquidity Trap [View article]
Wonderful thing about theory. In theory, theory and practice are the same. In practice, they are different.
One big problem with all this: as end demand that drives most of the economy, the consumer does not want to borrow, because he does not want to spend, until he knows he will keep his job or find another. If there is a paradigm shift back to the 1930s-1960s, in which savings and return of principal, and paying cash for goods/services, then we could return to the historical 50+% of the population owning treasuries, instead of the 5% now; that's a lot of bonds. And people who invest for return of principal don't trade, and don't switch asset classes.
Ask your parents if you aren't old enough or don't think history swings in broad cycles. In the end, the tail can only wag the dog for so long.
Chesapeake Midstream Partners Priced IPO at High End of Range [View article]
Mo, what about your yield, Nightly Business Report remarks you pay a "hefty" dividend, which is therefore a very material part of your offering for investors' consideration. What is the dividend, and calendar, monthly? quarterly? (xd in what month, and how much later from record is payout date?) ?
"In what might be interpreted as a response to changing market conditions, Goldman Sachs, which made record profits from its commodity trading division during the first half of last year when energy contango was at its peak, has just announced that it is winding down some of its raw materials trading activities. Are the pickings now becoming too slim?"
Either that, or GS has been doing what it was doing to the Europeans in that Paulson deal, and the torches are once again shining...certain sorts of insects don't like light. But probably not, they don't worry about regulation or about getting caught...they've taken care of that possibility politically. But I'd suspect that either way, if GS isn't interested in taking the back side for its own trading, no one else should be either. So either USO/UNG is now worth owning when oil or gas looks positive on fundamentals...or GS sees a flattish market for energy for a while going forward, and no big contango or backwardation to pad in with in these sorts of funds. So perhaps they see a tight range for awhile, not a lot of volatility? Are the markets signalling backwardation going forward? Those big supplies do have to get eaten up, don't they?
5 Options Plays That Make 500% if the Market Falls: July 2010 Edition [View article]
Can you get to the point and focus on that please? It would knock out maybe 70% of the verbiage, but then, if you want to maximize word output, maybe please consider a private hobby in writing Victorian novels and leave your time here for crisp succinct communication...if you really want to have people read. Thanks.
Long / Short Is Better for Long-Term Investors Than Long Only [View article]
Specific ideas would have been nice; and for everything you could have said in ten words, you used 10,000 and mostly lost me, I don't have time for long 19th century novels...really good information lost in a forest, would like you to write more but please stay on point and be effectively succinct. You're trying to get a message through, not grow a forest. Thx.
Bond Market Instability in a Liquidity Trap [View article]
Bond Market Instability in a Liquidity Trap [View article]
"Speaking of electric cars, there was a story in a financial program that a Prius has about 50 pounds of rare earths in it...and that China controls nearly 85% of the world supply of rare earths, the rest, mostly Canada, being available only at prohibitive development cost...and that China has severely curtailed exports of rare earths. "
Bond Market Instability in a Liquidity Trap [View article]
Ok, that's what's makes a market, and perhaps I was being too subtle, taking the role of most consumers, i.e. the end consumption demand that drives spending and retail borrowing (or lack thereof), thus retail and corporate revenues (or lack thereof), thus retail and corporate spending and investment (or lack thereof), thus bank revenues from lending (or lack therof), and investment borrowing, thus employment (or lack thereof), thus jobs (employing consumers...or not employing them), thus...end user demand (or lack thereof)...to the point that consumers eventually de-leverage as a habit...and if it becomes a habit, then a deflationary cycle ensues, because if I am willing to hold off purchases until the price is lower, and I do and it is...that's deflation, isn't it? Lower prices? And that case, if I have a job to offer, and I give it to the guy who will take it for the least pay, that's deflating wages, isn't it? That's what the administration and all of wall street and the media are all afraid of, aren't they, that those of us who are unemployed will expect this to continue, and those of us who see it may worry we could lose our jobs too, and so everyone de-leverages (don't buy that new car every two or three years, and hold out for lower prices...). The pillars of economics in reverse, debt bubbles in reverse...printing new money to push the string harder...as I said, couldn't this turn out like Japan?
Bond Market Instability in a Liquidity Trap [View article]
Bond Market Instability in a Liquidity Trap [View article]
Bond Market Instability in a Liquidity Trap [View article]
Hmmm, rates going up while demand for goods/services goes down.
Remember Jimmy Carter years? Remember long rates at 20%, while demand and GNP was faltering or staying the same?
Remember Japan, whose government and central bank was similarly purchased by the uncompetitive, over-leveraged (real estate bubble-driven) commerical banks, and their Kieretsu? What ensued? For how long? (Hint: Nekkei 40,000 then, under 10,000 now).
Bond Market Instability in a Liquidity Trap [View article]
Bond Market Instability in a Liquidity Trap [View article]
Don't we call that deflation? Less spending now, and prices going lower because demand is for a lower price? I don't see a brighter future from which to rely on anticipated future cash flow income...well, If that is a new value and habit, because I fear I won't get a job or will lose mine, I expect lower prices and will wait on my new purchases (cut my demand)...that is a deflationary cycle, no?
Bond Market Instability in a Liquidity Trap [View article]
One big problem with all this: as end demand that drives most of the economy, the consumer does not want to borrow, because he does not want to spend, until he knows he will keep his job or find another. If there is a paradigm shift back to the 1930s-1960s, in which savings and return of principal, and paying cash for goods/services, then we could return to the historical 50+% of the population owning treasuries, instead of the 5% now; that's a lot of bonds. And people who invest for return of principal don't trade, and don't switch asset classes.
Ask your parents if you aren't old enough or don't think history swings in broad cycles. In the end, the tail can only wag the dog for so long.
Chesapeake Midstream Partners Priced IPO at High End of Range [View article]
Chesapeake Midstream Partners Priced IPO at High End of Range [View article]
Commodity Headwinds Disappear [View article]
Either that, or GS has been doing what it was doing to the Europeans in that Paulson deal, and the torches are once again shining...certain sorts of insects don't like light. But probably not, they don't worry about regulation or about getting caught...they've taken care of that possibility politically. But I'd suspect that either way, if GS isn't interested in taking the back side for its own trading, no one else should be either. So either USO/UNG is now worth owning when oil or gas looks positive on fundamentals...or GS sees a flattish market for energy for a while going forward, and no big contango or backwardation to pad in with in these sorts of funds. So perhaps they see a tight range for awhile, not a lot of volatility? Are the markets signalling backwardation going forward? Those big supplies do have to get eaten up, don't they?
5 Options Plays That Make 500% if the Market Falls: July 2010 Edition [View article]
Long / Short Is Better for Long-Term Investors Than Long Only [View article]
Is ECRI Growth Rate Index Signaling a Double Dip? [View article]