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bobdark

bobdark
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  • A Little Post-Election-Day Economic Balm [View article]
    I appreciate the insights regarding the US economy, but this is a global economy and US is affected. You mention none of the global macro factors in play. Exports are declining and US dollar is rising which are negative for corporate earnings. US Growth is severely hampered with Japan monetizing debt and Europe going into a recession. Also, the labor participation is lowest in a generation and the unemployment statistics cited are misleading and do not factor in that most new jobs being created are part-time and that wage growth is practically nil. Your expectations for the next 2 years seem overly optimistic. Thank you.
    Nov 5, 2014. 12:22 PM | Likes Like |Link to Comment
  • The Experiment That Will Blow Up The World [View article]
    YCS looks like no-brainer easy money with the next USD/JPY target probably at least 120 although I'm sure there will be dips along the way and not straight up, JGBD probably will creep down even more until this blows up at which time it will likely go up by multiples. I see YCS as the medium-term play and JGBD as the long-term. Also, it looks like the dollar is going to rise again for a while - UUP could be used.
    Nov 2, 2014. 01:51 PM | Likes Like |Link to Comment
  • What Should Gold Investors Do Now? [View article]
    As far as the Japan action, gold is actually up relative to the decline in Yen that came as a result. I think the fundamentals are saying that deflation is the future for the US with the dollar also going up and non-US QE from Japan and Europe which will devalue their currencies relative to the US dollar and thus be deflationary for the US. I don't doubt that Gold starts to increase in value from here forward, relative to value of all currencies. It points out the importance of physical gold over paper gold such as the GLD ETF which is priced in dollars. The gold trade requires that it be purchased relative to worldwide currencies rather than just US $.
    Nov 2, 2014. 01:10 PM | Likes Like |Link to Comment
  • The Experiment That Will Blow Up The World [View article]
    The problem with the 1930's analogy is demographics. Japan has a dying and aging population which was not the case in the 30s. There is no way to grow out of the situation. Japan has removed all incentives for holding JGBs and will be the only buyer and in so many words has announced this with cutting GPIF holdings in half while increasing it's buying of the bonds correspondingly. When they become the only owner of their own debt, nobody will want the currency. This is the last stage in a very slow process. The fact that they have lasted this long without a major crisis does not mean that it is working. Demographics prevent the can from being kicked down the road for more than a generation. We are down into the final minutes of the clock - probably within next couple of years.
    Nov 1, 2014. 05:55 PM | 3 Likes Like |Link to Comment
  • The Experiment That Will Blow Up The World [View article]
    The BOJ will buy up all of the treasuries if they have to in order to keep interest rates low, but as you said they can't stop the yen from plummeting. The end of this may be hyperinflation and the yen decline going parabolic. Japan will ultimately be forced to raise interest rates and default to restore a functional economy. It's just a matter of how long it takes.
    While all this unravels, it will generate deflationary forces around the world. The default of Japan will swing the pendulum back to hyper-inflationary scenarios in a domino affect - first the Euro zone, and then the US - both of which will also ultimately default. We are seeing the start of a global economic apocalypse that will wildly swing between deflation and hyperinflation leading to sovereign defaults - deflating equities around the world by 50% and then deflating the value of money. The whole system is slowly being reset.
    Oct 31, 2014. 07:28 PM | 4 Likes Like |Link to Comment
  • Markets Misreading Of Fed Statement Is Opportunity In Gold [View article]
    With today's action from the BOJ, even more deflationary pressure is coming to the US and while gold is being hammered, stocks are going up. Once again, the short-nearsightedness of the equities market blinded by search for yield is evident. I think we are quickly coming to a point where gold returns to safe haven status with the currency turmoil even if the short-term scenario is deflationary. With gold hitting lows not seen since 2009 and Japan monetizing it's debt and becoming the owner of JGB of only resort, the risks of paper currencies, equities, and treasuries at generational lows will become more apparent, driving investors back into the only asset classes seen as safe for the longer-term.
    Oct 31, 2014. 07:09 PM | 5 Likes Like |Link to Comment
  • Daily State Of The Markets: The New Battle Cry - Inflation Or Bust! [View article]
    There's no free lunch. While Japan is buying up US stocks, the US Dollar is going up in a corresponding fashion (up 1% on the day) due to the deflationary impact. Yen falling rapidly in value (down almost 2%) and Japan's action puts pressure on Europe and China to devalue as well. Rising USD will have a delayed impact on multinational companies, which is being understated to this point to make Q3 numbers look better than they are. Japan is effectively telling the world that it will monetize it's debt and ultimately default on its debt obligations. It may take another year or two, but we are heading into the next crisis and normalization to the mean will lead to US equities dropping in price by at least 50% over next couple years as a result.
    Oct 31, 2014. 07:01 PM | 1 Like Like |Link to Comment
  • Why The Market Topped Out [View article]
    I believe if there is a liquidity crisis the all asset classes can go down together as the level of overall debt is withdrawn. Even though housing debt is reduced, other forms of debt including corporate, government are taking it's place so overall there is more debt in the system than in 2008.
    I don't know what will trigger the next crisis but ultra low valuations along with ultra-low interest rates globally that do not reflect the real risks are a recipe for a real crisis if something unexpected happens.
    Oct 17, 2014. 08:29 AM | Likes Like |Link to Comment
  • What Does A 5.9% Unemployment Rate Really Tell Me? [View article]
    If you're referring to the data in the article, it is from the Fed Reserve. You can see it for yourself at http://bit.ly/1yJDsXb. The charts and stats in the article and comments are all based on publicly available stats. Labor participation is really at a 36 year low, despite the other misleading statistics regarding the US employment picture - http://on.mktw.net/1yJ...
    Oct 17, 2014. 07:38 AM | Likes Like |Link to Comment
  • U.S. Economy: Halfway To A Recession Already [View article]
    Author was a bit early, but not by much - market is down over 6% since article was published.
    Oct 17, 2014. 07:32 AM | Likes Like |Link to Comment
  • Dow Jones Today Shows Warning Signs [View article]
    Most of the stock market growth has actually been fed by debt growth rather than economic growth with the debt growth being almost exponential. Regardless of how low the interest rates are, a point is reached in which the debt growth has to be slowed to make the interest payments. Essentially, we have slowing inertia for earnings growth which makes stocks less and less desirable to the point where there are more sellers than buyers and then it is a snowball effect. Also, as stocks start to fall, high yield debt increase in risk, interest rates need to rise to account for more risk in the system which then draws more people back to fixed income and safe havens. Bottom line is an unwind similar to a pyramid scheme. I'm not sure if this is going to be a crash or a long steady decline, but the direction is down for the longer term. Even if S&P goes to 2500, that won't change my view, in fact it reinforces the argument for an even worse crash. This era is nothing like the circumstances of the 80s bull run. We are already at much larger extremes in terms of valuations, slower gdp growth, higher debt growth, and poorer demographics.
    Oct 17, 2014. 07:12 AM | 1 Like Like |Link to Comment
  • A Once In Few Years Opportunity Presents Itself [View article]
    That's nothing, I lost huge on TVIX in 2012 - 2013. I believe I will eventually be proven right that the market is extremely overvalued even relative to the 2012 lows and becoming even more certain as the macros begin to unwind, but never estimate the ability for the market to be irrational way past what is logical.
    Oct 17, 2014. 07:02 AM | 1 Like Like |Link to Comment
  • Bubble Stage Of This Bull Market May Be Nigh [View article]
    @RS055 - Thanks for the response. I think your view is accurate. My comment was more related to articles and comments on the web - including in seeking alpha - but maybe that is because I do a lot of searching for articles pertaining to investment risk.
    When I talk to people about the market they largely agree that it is likely overvalued. But, I think you are right, they don't think it is nearly as overvalued as the reality and often what they do in terms of investing is different than what they say.
    Oct 17, 2014. 06:54 AM | Likes Like |Link to Comment
  • Bubble Stage Of This Bull Market May Be Nigh [View article]
    Agreed we are missing irrational exuberance associated with typical bubbles and that there are a lot of bears. However, if you look at the moving average for sentiment surveys and the VIX and for how people are allocating their retirement, it is definitely not bearish. Without arguing the details, there is no question in my mind that valuations are at least 50% too high by the most academically sound measures.
    I don't think irrational exuberance is necessary for the market to correct. Japan is already likely in recession with Europe to follow. QE by overseas countries will continue to create upward forces on the dollar resulting in disappointing earnings from multinationals. With the geopolitical mess and global growth slowing, The black swan could be that GDP growth slows and the US enters recession or the bond bubble blows up.
    I don't know what will trigger the crash and realize it's possible that markets may go up even more, but fair value for the S&P is around 950 and it is certain to fall back to that level at some point.
    Oct 12, 2014. 04:05 AM | Likes Like |Link to Comment
  • AAII Sentiment Survey: Optimism Rebounds, Pessimism Stays Above Average [View article]
    Based on the fact that sentiment is a contrarian indicator, this indicates current decline still has not run its course.
    Oct 10, 2014. 11:07 PM | Likes Like |Link to Comment
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204 Comments
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