Rogoff And Reinhart On Austerity And Debt: The Current Financial Situation [View article]
Freddy: I love your posts. My modeling suggest it's much closer to 2019 than 2024. Remember what Volcker did in 1982-3? We should have begun raising interest rates in 2001, slowly and steadily, drying up the debt-inflation that we accrued during the Business Cycle Growth Phase 1983-2001. We did not. Now we are paying for it.
Several more things have to happen. 1) Gold needs to reverse and climb relentlessly through 2018 or 2019; 2) the Fed needs to respond by jacking up rates. Volcker jacked them up to 23%. This time rates may go even highter.
Japan's core CPI dropped for the sixth consecutive month in April as prices fell 0.4%, indicating how far the Bank of Japan has to go in achieving inflation of 2%. However, it's still very early in the game, while it's worth noting that overall CPI rose 0.3% on month and that core CPI for the Tokyo area grew a preliminary 0.1% in May, the first increase in over four years. [View news story]
Early in the game? This is the fifth generation of Japanese QE since 1989. It's late in the game.
What? Japan's price inflatino fell in April .4%, for the sixth consecutive month. In other words, deflation increased.
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Japan's core CPI dropped for the sixth consecutive month in April as prices fell 0.4%,...
Friday, May 31, 2:03 AM ET Japan's core CPI dropped for the sixth consecutive month in April as prices fell 0.4%, indicating how far the Bank of Japan has to go in achieving inflation of 2%. However, it's still very early in the game, while it's worth noting that overall CPI rose 0.3% on month and that core CPI for the Tokyo area grew a preliminary 0.1% in May, the first increase in over four years.
Soaring margin debt (and plunging cash balances) trigger a sell signal at BAML, which says the last time this big a move happend was April 2010 - just ahead of a 2-month, 16% decline in SPY. Alongside this is short-term sentiment which has risen to levels consistent with selloffs in the past. [View news story]
Tack: You are absolutely right. High margin debt does not cause stocks to fall. What causes stocks to fall? Human emotion; fear. Does there need to be a trigger? No. The lead seller sells and then the second seller sells, and then the third; and fear sets into the markets. And then a lot of people want to sell, afraid they will lose their gains. Then comes margin calls. And then we have a rolling collapse of the markets. The markets would not fall so hard so fast without this massive amount of margin. Yes, margin doesn't cause stocks to fall, but it makes the fall much worse. It also makes the institutions holding the debt more likely to fail. It's a house of cards. High margin is why brokerages fail also.
I think it's never different this time. The cycles are there for our benefit.
Plato wrote: "The laws of nature are the thoughts of God."
You can never just have one side of a trade. We have physical/material evolution and then we have spiritual evolution, which is painful and which is about losing and recovering something we have lost, our humility.
This is the story of Earth.
Other planets have other cycles and other laws. When you go to another planet, you have to learn the new laws and the new cycles.
IS THIS THE BEGINNING OF THE BIG SELL-OFF WE'VE ALL BEEN EXPECTING AND PERHAPS DREADING? [View instapost]
Yes. We have to get rid of the Federal Reserve. That's the first thing we need to do.
I love your comment on 'a new clean straight jacket. Is that the best we can hope for? As long as the banks are running the world, I'm afraid so.
I think the TBTF banks need to be restructure along the lines of the Public Utilities System. We don't need megabanks. We need banks that provide steady service to the world, not manic-depressive boom-bust cycles which makes ua all feel like millionaires one day and like paupers the next.
Love your comments generally, Freddy. Have to disagree about the depth of this depressions. Catastrophic economy reversals come EVERY 36 years. This one runs from 2001 through 2019 -- and with the debt load we (and the world) has run up from 1983-2009....there is not way this cannot be a HUGE catastrophe economy. Nothing we could have done would have averted this. We could have begun raising interest rates slowly and steadily in 2001 and avoided the Housing Bubble, the commodity bubble, and the current Bernanked last gasp bubble, which would have give us a hard landing but not as hard a landing as we are heading for with all this dead to collapse.
Rogoff And Reinhart On Austerity And Debt: The Current Financial Situation [View article]
Several more things have to happen. 1) Gold needs to reverse and climb relentlessly through 2018 or 2019; 2) the Fed needs to respond by jacking up rates. Volcker jacked them up to 23%. This time rates may go even highter.
Love your posts.
Michael
D.R. Horton's Stock Is Set To Soar [View article]
Japan's core CPI dropped for the sixth consecutive month in April as prices fell 0.4%, indicating how far the Bank of Japan has to go in achieving inflation of 2%. However, it's still very early in the game, while it's worth noting that overall CPI rose 0.3% on month and that core CPI for the Tokyo area grew a preliminary 0.1% in May, the first increase in over four years. [View news story]
Japan: More Output, Less Deflation [View article]
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Japan's core CPI dropped for the sixth consecutive month in April as prices fell 0.4%,...
Friday, May 31, 2:03 AM ET
Japan's core CPI dropped for the sixth consecutive month in April as prices fell 0.4%, indicating how far the Bank of Japan has to go in achieving inflation of 2%. However, it's still very early in the game, while it's worth noting that overall CPI rose 0.3% on month and that core CPI for the Tokyo area grew a preliminary 0.1% in May, the first increase in over four years.
Investors Should Avoid AVT, Inc. [View article]
American Industry Collapsing Into Q2 [View article]
Deere's Second Quarter Earnings Preview [View article]
Soaring margin debt (and plunging cash balances) trigger a sell signal at BAML, which says the last time this big a move happend was April 2010 - just ahead of a 2-month, 16% decline in SPY. Alongside this is short-term sentiment which has risen to levels consistent with selloffs in the past. [View news story]
APPLE STILL HAS NOT BOTTOMED. [View instapost]
Plato wrote: "The laws of nature are the thoughts of God."
You can never just have one side of a trade. We have physical/material evolution and then we have spiritual evolution, which is painful and which is about losing and recovering something we have lost, our humility.
This is the story of Earth.
Other planets have other cycles and other laws. When you go to another planet, you have to learn the new laws and the new cycles.
Thanks for your comment.
IS THIS THE BEGINNING OF THE BIG SELL-OFF WE'VE ALL BEEN EXPECTING AND PERHAPS DREADING? [View instapost]
I love your comment on 'a new clean straight jacket. Is that the best we can hope for? As long as the banks are running the world, I'm afraid so.
I think the TBTF banks need to be restructure along the lines of the Public Utilities System. We don't need megabanks. We need banks that provide steady service to the world, not manic-depressive boom-bust cycles which makes ua all feel like millionaires one day and like paupers the next.
Housing can never again become a roulette wheel.
Things can change. But WE have to change them.
IS THIS THE BEGINNING OF THE BIG SELL-OFF WE'VE ALL BEEN EXPECTING AND PERHAPS DREADING? [View instapost]
IS THIS THE BIG SELLOFF WE'VE ALL BEEN EXPECTING? [View instapost]
Is The U.S. Economy In Trouble? [View article]
Downgrading Down Under [View article]
Downgrading Down Under [View article]