tradeking13

Expect Further Rise in the S&P 500

So what happened to that $300bln? Did it disappear? Will it reappear when people sell? No. A stock trade (in a secondary market) has two parties: a buyer and a seller. When Party A uses MMF proceeds to buy stock from Party B, they make an exchange. After the trade, party A now is holding stock and Party B has funds held in an MMF. So, was there a withdrawl from MMFs in aggregate? No. Each party is holding each others previous position. This is why it is called trading.

The $300bln was most likely drawn down to buy shares in the multitude of secondary offerings that were done this spring/summer, to buy shares in IPOs, to buy the massive amount of new corporate bonds and Treasuries issued, among other things.

Specious arguments like these (cash on the sidelines, stocks cheap according to the IBES/Fed model, etc.) usually come toward the end of rallies when the fundamentals no longer justify the valuation.

www.hussman.net/wmc/wm...
www.hedgefolios.com/re...

4 Steps to 1050 for the S&P 500

"...the $3.5 trillion still sitting in money market funds moves off the near zero percent interest rate sidelines."

Obviously you are not familiar with the concept of a secondary market. When I take my "sideline cash" and buy stock, the seller now has that cash, so the net effect is zero. That is, the seller who formerly held the stock is now on "the sidelines".

According to Tobin's Q the Bear Market Isn't Over Yet

To get to a q-ratio below 0.40, what level would the S&P have to get to?

Too Early to Dub YouTube a Failure

YouTube should have a .org domain.

Fed Up with Sirius' Childish Customers

"When I tried to take care of business, I learned I was overdrawn over 1 million dollars on an account that was 2 days old. I’ll spare you the details..."

Did you fall prey to one of those Nigerian banking or lottery scams?

Long Term Investors Should Avoid Leveraged ETFs

Actually, I thought about it further. The problem is gains/losses are compounded daily since the security tries to match 2x the percentage move of the underlying index. Your situation of "If the DIA gets back to $137.90 a share, DDM will be somewhere under $66 a share, still down some $30" would only be true if the DIA got back to $137.90 in a single day (highly unlikely).

For example, if the DIA increases 4% for 12 days straight, it will go from $86 to $139 and DDM (increasing 8%) will go from $30 to $78 -- an increase of 152% vs. 60% for DIA.

It seems like the choppy up and down price action that is causing DDM to lose more of it's value than it seemingly should.

Long Term Investors Should Avoid Leveraged ETFs

Thanks for the knowledge. Most (including me) thought of these as leveraged ETFs, the same as using margin to buy the DIA. Obviously, not this is not the case.

Case in point:

10-Oct-08:
DIA: $83.60
DDM: $34.00

4-Dec-08:
DIA: $83.74
DDM: $29.42

DIA is basically flat while DDM is down 13%.

These ultras should only be used for daytrading.

Sirius Stock Up as CEO Buys Two Million Shares

Mel bought 1M shares at $6 a couple of years ago, so let's not get too excited. (BTW, I am a SIRI shareholder)

Sirius and XMSR's Six Year Prison Sentence

There should have been a six-year price cap on gasoline when Exxon and Mobil merged.

Positive Radio Merger Outcome About Two Weeks Away

"Several - more than two but fewer than many"

www.merriam-webster.co...

How To Solve the Housing Crisis Tomorrow

You forgot one thing -- changing the name of our country to the United Soviet States of America.

Are Housing and Mortgage Markets at a Bottom?

These markets will bottom when people give up and stop asking "are we at a bottom?"

Housing Crash Unaffected By Fed Actions

First our currency was backed by gold/silver, then by US gov't debt. Now it's backed by subprime mortgages. We are so screwed!

Where's the Bottom?

When everyone stops asking "where's the bottom?", that's when we'll see the bottom.

NYC Foreclosures on the Rise

IMHO, this sounds like free rent for a year for people who shouldn't have been homeowners in the first place. Who in foreclosure is going to continue paying any amount toward their mortgage with a 1-year free pass in place?