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Northern Dancer

Northern Dancer
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  • The Next Bubble? [View article]
    Chill out a bit AIP. There's a McDonalds there.
    May 14, 2010. 01:44 PM | 3 Likes Like |Link to Comment
  • The Next Bubble? [View article]
    I believe that it's mainly due to the fact that the USA is the largest member of the IMF. Canada (just an example) is a relatively small member, yet it too contributed to the Greek bailout (actually to the bailout of all of Europe with an entire god damned trillion Euros), as did all the other 185 country members. But the USA is stuck with the largest portion because it is the largest member. It's actually all about the owners of the FED controlling everything in the whole god damned world. That's why I was certain that it would never be the Eurozone itself who bailed out Greece. The FED is hell bent on the destruction of the USA and this is just another in a long series of methods they're using right out in the open for the entire world to see.
    May 14, 2010. 04:33 AM | 11 Likes Like |Link to Comment
  • Running of the Bulls... For the Hills [View article]
    I'm bullish as hell. On SPY and IWM put spreads. Does that count?
    May 12, 2010. 09:35 PM | 3 Likes Like |Link to Comment
  • Is the 'Can't Lose Market' Back? [View article]
    On Monday, after the announcement that 1T Euros would be made available for governments to borrow in order that they could make their next mortgage payment, most of the European markets surged about 8%. Common sense says that they should have reacted by falling 8% on that horrendous news. What in hell is wrong with this picture? I mean if I can't make my mortgage payment on my home which is worth only a fraction of the mortgage value, my banker isn't going to lend me more money to ensure that I can make my next mortgage payment on a property with no equity with money he already knows I don't have. That would be one stupid banker. ??????? Eureka! I've stumbled upon the reason for all the world financial woes.

    And one other thing is certain, if that stupid banker loaned me that money (the idiot) my stock sure as hell wouldn't surge 8% the next day. Thanks for absolutely nothin' FED. You've just ensured that the ultimate demise of society will be all the worse for your asinine and selfish efforts in guiding the IMF to this decision.
    May 12, 2010. 08:58 PM | 2 Likes Like |Link to Comment
  • The Treasury sells $38B in three-year notes at 1.414% (.pdf). Bid-to-cover ratio of 3.27, vs. a recent 2.96; indirect bidders take 50.7%, vs. a recent 54.2%. Direct bidders take 16.5%. Treasurys pared losses slightly: 30-year futures -0.26%; 10-year -0.05%; 5-year -0.05%.  [View news story]
    My wife once bought a case of mouse traps at a liquidation sale of a bankrupt distributor. They were cheap at 15% of retail. We had no use for 484 mouse traps though because there were no mouses where we lived... hadn't seen a mouse in 12 years. In fact we were beginning to think mice were a myth and yet, she bought 484 stinkin' mouse traps because "they were cheap". Buying bonds makes about as much sense in my view when the interest they pay is approximately zero. Same as mouse traps. Oh, did I say she was my wife? I meant ex-wife.
    May 12, 2010. 08:01 PM | 1 Like Like |Link to Comment
  • Home Price Drop of 30% Possible for 2010 [View article]
    Buzzer, some a-hole has no sense of humor. Either that or they're goin' right over his head. lol
    May 11, 2010. 01:57 PM | 2 Likes Like |Link to Comment
  • Home Price Drop of 30% Possible for 2010 [View article]
    Jack Daniels said he witnessed it so I believe BetTheHouse, absolutely. Even the bar maid Maria mixed the drink. You know... Maria my aunt? Tia Maria.
    May 11, 2010. 12:10 PM | Likes Like |Link to Comment
  • A Greek Tragedy Is Not Priced In [View article]
    Thanks for another great article. In case nobody has told you yet, you have a real nice writing style. It's always nice to find an article that is just a nice easy coherent read. Tyler Durden (although I like his fiery, defiant attitude) could learn a thing or two about writing if he'd only make time to take a breath once in a while and read some of your articles. Thanks again for the great perspective and information.
    May 4, 2010. 01:42 AM | 7 Likes Like |Link to Comment
  • April was fairly uneventful in terms of total returns for the major asset classes, with one exception: REITs. But the yield on equity REITs has dipped below the 10-year Treasury yield, which in the past has signaled rough times ahead for real estate stocks.  [View news story]
    "REITs are still undervalued in the aggregate."

    No they're not. They're way, way overvalued "in the aggregate". There's one thing and one thing only that determines the values of investment real estate and that's a cap rate that is acceptable enough to satisfy the buyer's (or owner's) needs. That cap rate, as you know (?), is applied to the net revenue to arrive at a value. When interest rates are at zero, they can only rise or go sideways. Therefore the cap rate can only rise or go sideways (hint: they're not going sideways). And as anybody who knows anything about evaluating real estate understands, when the net revenue (if there is any) is divided by a rising cap rate, the resulting "value" of a property plummets.

    Since interest rates aren't likely to fall much from here (after all, it's pretty hard to get rates below zero, where they basically are now), commercial and residential rental real estate is so overvalued I wouldn't buy any today for half the asking price, when it's more than obvious that rising rates are going to ensure that its value is going to be slashed by at least (seriously... "at least") 50% in the next 18 months. Or are you suggesting that treasury and bond rates are never going to rise from here? I've got news for ya.... they are going to rise from here, despite what Bernanke says. Did you know that Bernanke does not control rates on treasuries and bonds? The bond market and bond vigilantes do.

    The only place I'm gonna cut you some slack here is the possibility that as Europe crashes and burns due to massive, massive credit contraction resulting from sovereign defaults (yes, some of them are going to default), the rates on US treasuries could possibly be held in check as the world scrambles for "safety". There is no "safety" in buying American debt since it too is going to have to pay the piper, but for a period of a year or two, it will still probably be perceived as desirable. But when American debt becomes desirable due to the fact that the rest of the world is on fire and 2 year notes are only considered as the least rotten apple in the barrel, rather than the good old reasons of a robust economy, don't expect real estate values to rise... especially when they're empty and getting emptier.

    Your accounting rules bullshit is just nonsense... if the buildings are empty and facing rising mortgage rates, they are not undervalued, no matter what kind of accounting nonsense is applied. If they can't generate enough net income to cover their own mortgage payments and operating expenses... they're sunk! You should know that. I respectfully suggest you get out of that school as soon as possible and get some real experience.
    May 4, 2010. 12:33 AM | 2 Likes Like |Link to Comment
  • Concern grows that "the U.K. is the next Greece," but Paul Krugman says Britain is different, largely because it has its own currency. Greece "is in the euro straitjacket... Britain can offset the depressing effects of fiscal austerity with loose monetary policy; Greece can’t."  [View news story]
    Thanks for the nice comments vivando. I've thought of posting articles, but haven't done it so far. Some participants on SA have even encouraged me to write a book. I've begun to look at how to get an e-book produced but haven't taken it much further than that. If someone near me could show me how to properly put an e-book together, I'd have absolutely no problem writing a book. But nobody I know has that kind of information and I just haven't found the time to research how to do it properly.

    Anyway, no I'm not bullish now ....I am more bearish than ever. What I was saying above is that I'm expecting the deflationary cycle that we're currently in to continue and in fact accelerate. That would cause the USD to continue to strengthen. Therefore, almost everything priced in US dollars would go the other way... down. And of course that includes the US equities markets. I was speaking of a stock market rally that would ensue once the deflationary cycle has run its course and the dollar resumes it's down trend. If I'm right (and I admit that I could be out to lunch), the stock markets would fall for a long period, perhaps as much as a couple of years. That would also mean a rise in the dollar's value for the same period of time. I realize that sounds illogical, but really it "is" logical... if the rest of the world (well much of Europe at least) slip closer and closer to default, as it appears will be the case.

    So no... I'm still bearish. We have to see how the next correction (which might have started last week) develops. If it stalls and finds support somewhere near the July lows, I'd be open to the possibility that that might be all the correction we're going to get. It depends on the shape of that correction. But for now, I think the equities markets are finished rising. Perhaps one more weak push higher but I doubt new highs would be attained. I don't know for sure... nobody does except the corrupt manipulators. But those are my thoughts... we'll see how it unfolds.
    May 2, 2010. 11:18 PM | 1 Like Like |Link to Comment
  • U.S. GDP Growth Rate Unsustainable; Recovery Will Fade [View article]
    > The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency <

    In other words, it's a guess. How in the world could such an "estimate" be taken seriously when it's based on incomplete data and data that is "certain" to be revised? The estimates for Q1 growth are also based on the "assumption" that the consumer "borrowed and spent" the economy back into healthy growth. I call *bull* on that one. Besides, if that were the case, it's still bad news. That would just be more of the "same old" that got us into this mess in the first place... expecting consumer spending (using their housing as a credit card) to continue to expand the economy and bail us out yet again. That isn't going to happen any more... at least not in this decade. And when the government removes the stimulus prop... it's truly game over. But then who among us didn't already know that... deep down? But the one thing the vast majority of investors are "not" aware of is how devastating the removal of the liquidity prop is going to be. Yet... it has to be done. The pain and riots haven't even begun yet in America, but they're coming. Greece, move over.
    May 2, 2010. 11:03 AM | 10 Likes Like |Link to Comment
  • Concern grows that "the U.K. is the next Greece," but Paul Krugman says Britain is different, largely because it has its own currency. Greece "is in the euro straitjacket... Britain can offset the depressing effects of fiscal austerity with loose monetary policy; Greece can’t."  [View news story]
    > Britain is different, largely because it has its own currency. Greece "is in the euro straitjacket... Britain can offset the depressing effects of fiscal austerity with loose monetary policy; Greece can’t." <

    ...which is exactly why Britain never joined the Euro union in the first place. The global banking cabal know what they're doing. Knowing full well that by saddling members of the Eurozone with the inability to inflate themselves out of trouble, the cabal have purposely set up Britain and the USA with that ace up their sleeves. The problem is that as Europe implodes, there will actually be a rush to buy American dollars in a deflationary world for the USA and a defaulting world for Europe. England is caught somewhere in between because while they can still print like there's no tomorrow, the demand for British pounds wouldn't be very strong relative to the dollar, but still stronger than the Euro.

    So it appears that as insane as it sounds, the USD should hold up the best for the next couple of years as the global credit crisis worsens. It looks like Bernanker is pushing on a rope. He can hold rates down forever if he wants to, but the bond market will show him who's boss. Deflation it is... for the USA! But just wait until the credit contraction has run it's course. We're going to see the American dollar resume it's downtrend with a vengeance and a stock market rally that will dwarf anything ever seen so far.
    May 1, 2010. 12:52 PM | 1 Like Like |Link to Comment
  • We don't know whether the SEC or Goldman Sachs (GS) will win if the case alleging fraud goes to trial, John Dorfman says, but he knows one thing: Investors should buy Goldman either way. Remember Exxon's (XOM) devastating oil spill - and the 1,000% return in the 21 years since.  [View news story]
    Investors should buy GS either way? Is Dorfman (columnist for Bloomberg) giving that great advice because Goldman's CDS surged today to 160 bps? Yeah, that advice makes a lot of sense... about as good advice as suggesting you should let your children play on the freeway because cars might run out of gas soon. A person could theoretically be jailed for advice like that.
    Apr 26, 2010. 11:01 AM | 3 Likes Like |Link to Comment
  • What Goes Around Is Coming Around to Wall Street [View article]
    That's it in a nutshell Jack. As Mr. Hui said: "Underlying the elegance of these mathematical models (and that’s all they are) are assumptions about the symmetry of information and the rationality of human behavior".

    "The symmetry of information"... that's a mouth full that's directly related to the notion of "honest reporting". We're not seeing a hell of a lot of honest reporting of quarterly results IMHO.

    "The rationality of human behavior"... that's the bombshell that's speaking directly to the idea of honesty, it's counterpoint market manipulation, and the governing bodies that oversee the actions of not only the banks but all traders. If that governing body did its job correctly, it would ensure (to a fairly large extent) that the actions of the largest traders would at least be "rational". That overseeing body is currently the SEC (aka the FED's comedy branch).

    So the summary of this great article is astutely placed right at its beginning, in it's smartly chosen title : "What Goes Around Is Coming Around to Wall Street ". And that's a scary truth.

    Another great article Cam.
    Apr 26, 2010. 10:07 AM | 3 Likes Like |Link to Comment
  • Voicing the concern shared by many, Canadian Finance Minister Jim Flaherty says Greece's €45B rescue package may not be enough. "There is concern [among some G-20 members] about making sure that the package is enough so that it's a one-time event."  [View news story]
    Ok, if the Canadian finance minister is issuing a warning, I think it's probably a good idea to sit up and pay attention to what he's saying. After all, not only does he know what it takes to run a country into the depths of debt despair, he knows how to steer his big ship properly and avoid that iceberg. One report I read said that the Canadian minister was making quite a lot of noise about it and seemed to be quite adamant, raising a few eyebrows at the G20. Most countries either don't know how to avoid it or don't have the fiscal discipline to avoid it. Flaherty has both.

    He's saying that "some countries" fear this first round won't be enough. I think what he's really saying is that he too doesn't think it's enough and is warning that "you'd better get this right the first time, because if this doesn't work, the second kick at the cat is going to be a catastrophe". And at first glance, considering how difficult it seems to be to put together this bailout package, I'd bet Flaherty is seriously concerned. And considering that he has a great eye this type of economic situation, it undoubtedly behooves the European Union and the IMF to pay attention to him and to hurry up and get their fiscal priorities in order.

    But how would countries justify giving a whole lot more assistance to Greece, when they can barely agree on this initial package and they can barely keep their populations from rioting in the streets as it is? This is a nasty situation and I'd have to agree with JoeChase, I don't think this is going to be anywhere near enough to completely put the Greek problem to bed. Not near enough... not to mention the next potential default crisis that emerges with a different country (which one of the 30 will it be?)
    Apr 25, 2010. 10:34 PM | 3 Likes Like |Link to Comment