jeremiah74

Based on M2 Growth, the Dollar Should Be Stabilizing

" From the start of this year, the M2 money supply has been basically flat, growing by only 1.8% over the last ten months. What can we learn from these data? Here are some ideas:

"The 13% decline in the value of the dollar over the last seven months largely reflects the 10% increase in the money supply in 2008. "

"In 2009, the growth in M2 money supply has stabilized at less than 2%, and this means the value of the dollar will stabilize later this year or by next year at the latest. In fact, this dollar stabilization has already happened over the last several months, with only about a -0.60% decline in the major dollar index since early August. "

well, here are my ideas:
- the velocity of money is slowing because the Fed's balance sheet has still been expanding this year more than what M2 did as you suggest. this doesnt bode well for the advertised V type recovery in the economy (you are also advertising this in many of your articles)

- since you didnt bother to mention what other central banks do with their base money supply, how can you conclude anything about the dollar versus other currencies ??? what kind of analysis is that ??

money supply surely plays a part in a currency's value, but looked at in isolation it can not be considered serious analysis

Why Deflation Makes for Ugly Headlines

it would look worse.
so right now things should 'feel' a lot worse than they are one's reply would be.. but i think since the 20's there has also been a cultural shift. a cultural shift of social democracy. whereby its considered to be the authorities job to relieve economic pain at all cost. this has created a CNBC culture of 'things will be fine in the end'
because of this cultural shoft things dont feel worse right now, despite the internet and the fast flow of information and opinions

More V-Shaped Recovery Signs

OK, so if this is a good indicator for the future performance of the economy why was it so high right at the end of 2007, just before economic activity collapsed in 2008 ? and it did have a 'V' in 2008 as well, while in the end it proved to be noise only. i bet in Q1 2008, you also saw a 'V' ..

this is a coincident indicator at best

According to Treasury Spread Model, No Chance of a Douple-Dip Recession

honestly Sir, if you are an economics professor I would expect some more wisdom from you

the Fed is engaged in QE and has lowered rates to record lows, SPECIFICALLY to counter the effect of rates, on the short AND long end of the curve, on the economy. they make sure rates stay low even in the 30yr segment to make mortgages and corporate funding cheaper . so the whole curve has become a policy tool. this was not the case in the past, so the yield curve's predictive power in this case is gone..

seriously, you teach people economics ???

your comments however are highly entertaining in general. remind me of Baghdad Bob in the Iraqi war,who said they are winning while the marines were already within eyesight to where he gave the press conference..

Bond Yields Are Rising? Dollar Will Too

rates in the short end are what need to rise to cause people to buy dollars. but thats not to say that wont happen, but i think one needs to keep an eye on the 2yr rates and not the 10

everyone now is in euphoria about a recovery. given the broader picture - debt implosion, savings rate up, employment..etc this does seem like wishful thinking. to me it seems impossible that the developed worls gets away with it all so easily: public money supports growth, while public money remains cheap. you cant have your cake and eat it too.

i think what awaits us will be a sobering up on the equity valuation front and a pain trade in rates, with a rise in yields or a move sideways.

"Stretching the Tape"

JG SAvoldi

I've been following you on twitter for the last few days, just before it went 'off the air'. I dont disagree with your conclusions. On the methods I cant comment.

I also think that just because you were wrong on these short term calls doesnt mean your model cant work. I personally would only bury it after following it for a longer time frame. Which I cant anymore because its been discontinued

We are at a turning point in the markets, I believe (may be wrong) in times like these it becomes very difficult to forecast anything because each buyer/seller's motivation start to diverge and what the eventual vector of all the transactions will be is more unpredictable than usual.

I give you the benefit of the doubt, because if you have indeed invested as much energy into your model as you claim, there ought to be some results.

Nevertheless, I would have been more impressed if a higher percentage of your calls had worked recently. You sure caught the wheat move, and its not just a mirror of the usual dollar selling + gold melt up. Wheat moved more. But EURSEK is really pretty much at the lows, maybe 1.5% off the lows. Thos dont make up for the missed call you had on the dollar and equities. But again.. time will tell.

Tuesday Outlook: Commodities, Global Markets

"Jim Rogers has been out and about lately stating that he would not buy stocks anywhere, but, is bullish on commodities (off course). His rationale? If there is economic recovery commodities will do well and if economic recovery is poor commodities will do well, due to the debasement of paper currencies due to paper printing. Win Win given current conditions."

I have respect from Jim Rogers. but these kind of reasonings; if something is x it leads to outcome A, and if its -x it also leads to outcome A dont tend to work with hindsight even if they seem to make sense initially

if paper money debased, but economies struggle i dont see how thats good for aluminium or copper. may be precious metals.. but commodities as a whole ?? bollox..

Sold SPY Calls and Sitting on a Mountain of Cash

this is all conspiracy theory, and i hate conspiracy theories in general, BUT:

it is also somewhat circumspect to me, that since the March lows (which I think caught the new administration by surprise) we indeed have seen a lot of 'stick saves' maybe its not Ben sitting in a room with a phone calling a broker. but perhaps there is some behind the scenes cooperation between the Fed and someone like Goldman Sachs to prop up the mkt, financed by the Fed. the Fed gives them a put too, by doing what it can to talk up the mkt

after all, confidence is an important part of economic agents (i know its a nerdy word, but its meant to cover households and corporations alike)

and whats the best way to shore up confidence, in today's fast information flow and media dominated world.. ? well.. push the stock market up, and everyone will get more confident in the future and make the whole thing self fulfilling by investing, spending, taking risks..etc

we will of course never know if this is all true, and even if we will it will be years from now, when noone will care (probably well into the next bull market)

Bond Expert Thursday Wrap: Things Got Ugly

agree with popey.. i was an equity bear and a bond bull recently. wasnt my best few weeks on the profitability side, but at least the long 10yr note (and bund) positions didnt selloff depsite the equity rally, so only lost on those.. but now, while im still an equity market bear, im not a bull on governement bonds. oct8-oct9 it does look like bearish price action/chart patterns.. we'll see

Massive Stock Market Crash Imminent According to BAM Model

you have one agressive call here..
been looking at your stuff the last two days, and im not in disagreement on the direction, but maybe on the size of the move

i think treasuries overnight (oct8 to oct9) have built a top (in price). a move higher in rates (gotta watch the short end, LIBOR..etc) can spark a move towards the $ higher rates in the US + strengthening dollar can pull the rug from under the risky markets like stocks, AUD..etc where a lot of the momentum trading money has flowed in the last 2 months.

its also a time of the year where noone will risk losing money, so once the carry house of cards begins to wobble people will not pull out in no time

The Case for Dumping Dollars, Buying Gold

"MJJP, you are correct that gold is valuable only because someone says it is. But, if enough people in the world say (and think) that gold is valuable, then...it is valuable. It is called a market."

yes, but the thing is that people might change their mind on how valuable it is. so at the end of the day, gold isnt a safe store of value its just another bet like buying bonds or stocks.

there really is no safe way to store wealth, because wealth is really an abstract concept. if you want to store value you can pile up things like food and fuel, that you are likely to consume. this would be a safe store of your current wealth. but this can not be said of gold.


now the secret plan to create a global currency, sounds a lot like the James Bond film, Goldfinger. establishing a currency like this would have more costs than benefits, and I think will remain the domain of spy novels and films

Tobin's 'Q' Shows Market Is Still Cheap

"nothing is cheap when it gets cheaper" - unknown ship merchant from 1500 B.C.

BLS vs. ADP Numbers: Employment Outlook Is Improving

this is still very far from being a V. it can be a V or a W. you are again hoping, and not thinking..

Confidence Among Consumers Is Rising, Slowly

"Confidence Among Consumers Is Rising, Slowly "


How about:

"Downward trend still looks in place, despite second order move higher."

Inflation: Not if but When

can only join the above commenters inwhat they are saying.. they are right and this article is wrong in its main conclusions