johnm

Dollar's Decline Has Contributed to Market's Recent 'Rise'

One more chart would be usefull. The S&P priced in ounces of gold.

Tobin's 'Q' Shows Market Is Still Cheap

The q ratio at the end of the four "great recessions" of the past was around 0.3 in 1921, 1932, 1949 and 1982. I dont think we are at the bottom of this great cycle (the down leg that started in 2000).

Market Lessons: Buy Low, SELL High

The 1968 - 1982 secular bear market looks similar to the
1929 - 1942 and 2000 - ???? bear markets if the proper unit of
accounting is used. Paper money wont do it because the Fed keeps debasing the dollar. But if you use a universal unit of value like ounces of gold and express the Dow (S&P) in ounces of gold, the path of the market is very similar in these three secular bear markets.

Two Great Market Bounces

Back then we were on a gold standard. It is more informative to compare the DOW chart priced in ounces of gold. If you print enough paper bills everything can go to the moon.

Nine Roadblocks to a Bull Rally

You are confusing me with FACTS.
I do not know what to do now, shouldn't I
BUY BUY BUY?
Isn't everything supposed to go up
when the fed is dumping hundreds
of freshly printed $B into banks via
securities purchases and
keeping the fed funds to zero?
Please don't force me to measure the value of
things in gold or silver, it is too sobering.

Inflation: As Inevitable as Death and Taxes

There are winners and loosers in an inflationary environment
but I do not think it is as simple as you put it.

Some loosers I see are:
- wage earners that are in no position to negotiate
salary increases
- people on fixed incomes (retired people mostly)
- investors in long term fixed income instruments
- in general conservative people with savings

Some winners I see:
- owners of businesses that make usefull stuff and
can pass on price incresses to their customers
- leveraged investors in equities, fixed assets (real estate, land etc),
commodities
- in general the people that can borrow money at low rates
as soon as it leaves the feds printing press and invest it
wisely (as an example, not everyones wealth evaporated
during the Weimar Republic, a small group of investors with
access to loans levered up, bought businesses and made
a ton, of course we know what followed)


On Jun 23 06:04 AM Dave Wrixon wrote:

> Inflation favors the HaveNots against the Haves. It is a great leveler.
> Basically most existing wealth is destroyed and all that is left
> is peoples ability to generate income from their wits and their labor.
> It is devastating if you are retired on a fixed pension, but often
> much better if you have debts.
>
> Deflation favors the Haves against the HaveNots. It make the Rich
> richer (relatively) and the makes the Poor Poorer (absolutely). That
> is why the social repercussions are so much more severe. If you are
> going to have revolution, it is the disenfranchised youth rather
> than bitter octogenarians which pose the greatest threat.

Consumption Junction: 2 Thoughts on the Declining Savings Rate

In an evironment where the nominal interest rate does not
cover the real inflation rate, what is the incentive to save
(the fed is running the printing presses overtime) ?
No wonder people try to game this by leveraging to the hilt and
expecting their debt to inflate away.

Donald Luskin: Gold and the Upside-Down Bell Curve

I have seen many articles on SA touching on Ben Bernanke's
helicopter approach. The question usually asked is whether
it is going to help the economy or not. I have not seen
anyone ask a really important question which is:
who is under the helicopter and who is 100 miles away from it?

Uptick Rule Debate Needs Some Clear Heads

I am neither for or against the rule, but what I am for is a level
playing field.

Trading is one of the most competitive endeavors. If a subset of
market participants are exempt from the rule, they are given a
vicious edge over the ones who have to follow the rule.
So if you insitute an uptick rule, I say enforce it on everyone.
Do not give an exemption to specialists, market makers, block
trader, option market makers ... (the list could go on).

My view is that with or without a rule, the fundamentals will be
reflected in the stock sooner or later but the rule can indeed
change the short term dynamics in the market.

Monday's Market Surge: Head-Fake or the Start of a Real Turnaround?

A lot of articles I read call for a bottom (some for the start of the bull)
yet at the same time they mention that the sentiment is very negative.
I thought that the contrary sentiment indicator meant that when all hope
for a bottom is lost is the time to buy.
Am I missing something?

Don't Be Fooled - Short Selling Restrictions Do Work

It could very well be that the short selling of financial shares is not a
bear raid or some deliberate attempt to dirve down the share price but
simply someone's hedge for a large CDS position.
Unfortunately this type of hedges generate a negative feedback loop
if the CDS notional is large (shorting stock to hedge against the probability of default depresses the prices increasing the probability of
default therefore needing more shorting).
The move to regulate the CDS market should fix this to some extent.