Hello everybody.
Middle east is starting to warm up. Yemen,Bahrain, Iran.
Just make me think, so maybe maybe they are not a bunch of fanatics who want to spread muslim religion over the world and eat people alive; instead, they (at least the youth who is filling the ranks to swell revolts) ask for freedom. They use "western" gadgets and ask for western ideals, like democracy and they look sick and tired of their local tirants.
Yes I think that they check the west through the window of internet and the homogenization due to technology is advancing at breakneck speed now.
Good for them.
Regarding Equities I mentioned Feb 13 as an important point; I mentioned that Friday 11 and Monday 14 could see an increased in volatility.
Only Friday happened, where the grinding lower gave place to a nice jump, but yesterday nothing worth mentioning occurred.
My view was like two or three days up fast to see it reversing Tuesday or Wednesday.
I'm checking futures now and looks like the correction is failing again.If today or tomorrow keeps hanging up there I'm abandoning the idea of a decent correction because the longest the advance without falling, the more chances of an important upward move.
This sounds counterintuitive but is due to the fact that we are aproaching an excellent time for moving up in around 2 1/2- 4 weeks so if a drop doesn't appears now (or during this week) the main trend is going to be with less ballast in a short while, and is going to go up.
So I'll check today, tomorrow and Thursday and then abandon the idea of a correction that deserves that name.
It caught my attention the lack of nervousness past week due to the middle east conflict, will see if 3 new countries at once can somewhat scare risk markets, I wouldn't hold my breath honestly.
Dan
Rock said...
ReplyDeleteI waited until now to comment on the post, and hopefully nobody will read it.
The US is broken. It is broken irreparably.
The US economy changed from an applied capital manufacturing country to a fat-cat consumption economy based on services. There is no way to change it back short of a structural reorganization.
Employment in the US is structural. It is not cyclic, as the post and article might lead you to believe.
The unemployment rate is mis-reported because of participation numbers.
China is broken. It can be repaired and has started taking steps to do the repair. To continue it needs to change accounting principles so that they are honest and on-balance sheet. Inflation is starting and will be painful.
The Eurozone is broken. It is broken irreparably. It leans on Germany, which is an applied capital manufacturing country. What the US used to be.
Going forward, China must finish its reforms, and help the US continue to go further in debt, and assist the Eurozone so all h__l doesn't break loose as a result of the imbalances. We have seen China starting this, backing Portugal bond sales. Probably others.
How do we go forward?
1. Assume your $ will be worth less in the worldwide market. Luckily the US can pretty much feed itself, so we won't have the huge food inflation %age.
2. Buy a house. We are nearing bottoms in Florida and Arizona. In desirable areas, like NYC, Washington DC, SFBay, San Diego, and where Dss lives, the prices are stabilizing, and perhaps rising a little. Decide where you want to live and go there. Now is good. 2011 is the pivot year for prices; we will see some lower prices in some areas, and some higher prices in others.
3. Avoid taxes. Get a good accountant, take him to dinner, and have him show you how.
4. Begin to move assets into tax-free investments. Munis won't fail. If you can start a business in your house, do so. Or become a church.
I intend to, over the next week or so, re-read Conquer the Crash with an eye from the current market situation.
And lastly, we must become like other countries. We must encourage theft from the east, and not prosecute the kiddies that do the thieving.
February 15, 2011 3:10 AM
The above comment belong to Rock.
ReplyDeleteDastro said...
Rock
I"kidnapped" your post an move it to my post so I can count one more comment at the end of the day.
Oh don't worry about being broke and think it mathematically.
We just need a fourth country or continent broke and then is easy to multiply them negatives numbers become positive, see solved it.
I'm serious if everybody goes down the drain the problem start becoming nominal only.
Think about it.
Dan
February 15, 2011 3:28 AM
The Beach Ball Trade is this, picture a beach ball floating on the water, then you try to push it down so that it is completely submerged and then you let go - it whooshes up and out of the water quite forcefully.
ReplyDeleteAs kids, we used to play this game in the pool to see whose beach ball would snap back furthest into the air.
I have no knowledge of how that comment got here.
ReplyDeleteWhat are you guys doing up so early?
@Dastro
ReplyDelete(You weren't supposed to move that comment here)
I have not been able to find an ETF for Yemen or Algers. I think Algeria's oil production is about 3X Egypt's, and I wasn't able to find Yemen's production (worldwide market percentage), but I'm thinking when the poo hits the fan, oil stocks will see the upswing in price.
If you've got any ETF suggestions, please post here.
I actually did pretty well with EGPT, realized a 5.2% gain, short and long. My ex-mother-in-law did better. I don't know how she does it.
Morning all! Excellent post Dan
ReplyDeleteVERY interesting video of Jeffrey Sachs on Bloomberg. Watch the entire 8 minutes if you can. I think he nails it. Finally, a little truth-telling.
ReplyDeletehttp://www.youtube.com/watch?v=bCPz2SzROFQ
Finally a down day - can it follow through though?
ReplyDeleteThe world's elites have basically never had it better, and what's their plan/response now? You got it, it's to take even more at the expense of everyone else. This is not going to end well for them either. Can't they see this?
ReplyDeleteSLV rocking and rolling again.
ReplyDeleteManny - I don't think they can, I think many of them are so self deluded that they think nothing will ever change. Look at how long it took Mubarak to be forced out, and we both know that he was probably forced out by the military - even with millions of his own people on the streets demanding his head, he was defiant until the very end.
ReplyDeleteI think self delusion runs VERY deep in the ruling classes.
Manny - Video is EXCELLENT, also highly recommend it. Agree that he hits the nail on the head. . . We're cutting things like funding for clean water, or Army Core of Engineers, things we will eventually be forced to pay more for at a future date because we're cutting in the wrong places.
ReplyDeleteManny - The money quote
ReplyDelete"we're going to keep driving down the poorest of the poorest of the poor, and that's where we are. This is a game that's going to come to end in a bad way"
@Mannwich
ReplyDeleteI watched that interview live.
To me, it says nothing new, nothing I did not know. It does not change my trading, or how I want to make money here.
Sorry. The US is broken. Nothing short of a structural reorganization will fix that. I think Dastro copied my comment, above, that says exactly that.
What kind of structural reorganization? Think about it. The possibilities are few, and in all of them, the federal government as we know it fails to exist.
So the structural reorganization won't happen. So let's go trade. I'm sorry for the poor. The uneducated. Those with Summer teeth. Damn, I'm so sorry, I gave 20% of my trading profits to St Jude's last year. But not 100%.
This year I hope to match, or better that number. I can't work for project head start anymore. I can't become a missionary. All I can do is the best I can do and donate to those who need it.
What about you?
Rock - I don't think we're going to go as far as the government it's collapsing. God forbid that were to happen, trading, or even being employed are going to be secondary concerns for most people.
ReplyDeleteAgree that things are broken, and agree that a sea change will eventually come our way, I'm maybe more hopeful that things will be slow enough in falling apart that honestly elected governments will still prevail. . . .
One thing I always keep in mind when it comes to "the government falling apart" is the fact that our government is, by far, the most heavily armed in the history of the planet. Second amendment right aside, we all know what just two or three tanks, or one stealth bomber could do to 100,000 angry and armed individuals.
Our government will never cease to exist unless it collapses from the inside. . . .
At least that's how I see it, but what do I know? :-)
Agree Rock. I just thought it was striking that someone who's in the mainstream would be so honest about it.
ReplyDeleteWe're trying to do our part as well on the "giving back" front, but this year it's mostly on a local basis with an educational/mentoring/tutoring program for at-risk kids in the Twin Cities. I'm involved in the Associate Board (interim) head and am running (and giving to) a fundraiser for them right now. Probably can never really do enough though, which is the governments and those who have the most need to.
Excellent video, Manny. 30 years of this class war is now coming to fruition. No one should be surprised at the outcome.
ReplyDeleteYou knew we were lost when single payer went out the window and tax cuts for the rich and corporations were kept in place.
America is going to be a very ugly place in a few years.
Manny - So admire that. I really need to start getting into giving back to the community. Way way behind on that.
ReplyDeleteNot sure if someone posted this link before, but it is a compelling narrative of the uprising, the planning and execution.
ReplyDeleteA Tunisian-Egyptian Link That Shook Arab History
"CAIRO — As protesters in Tahrir Square faced off against pro-government forces, they drew a lesson from their counterparts in Tunisia: “Advice to the youth of Egypt: Put vinegar or onion under your scarf for tear gas.”
"The exchange on Facebook was part of a remarkable two-year collaboration that has given birth to a new force in the Arab world — a pan-Arab youth movement dedicated to spreading democracy in a region without it. Young Egyptian and Tunisian activists brainstormed on the use of technology to evade surveillance, commiserated about torture and traded practical tips on how to stand up to rubber bullets and organize barricades. "
Wow! a massive 0.40% correction, at last! ...
ReplyDeleteSeriously, hope selling gains traction this week, like Dan mentions.
Stalling at the station, 1330 Wolf Street, then retracing its way home back to the 1K, where it belongs (?) :D
Which is counter to the MSM and US government meme that these protests were a fluke just came out of thin air and were not well organized.
ReplyDeleteWolfie,
ReplyDeleteThe day ain't over! Plus we are simply consolidating under the highs of the past few days.
Marketwatch's Paul Farrel eviscerates "Dictator Ben":
ReplyDeletehttp://www.zerohedge.com/article/paul-farrell-fed-dictator-bernanke-needs-be-toppled
@Denise, day's not over: yes. But no meaningful action so far, from my POV :(
ReplyDeleteMeanwhile . . . .
ReplyDeleteFund-manager bullishness hits a record level
Fund managers are more bullish toward global equities than at any time in the past decade.
This brings up a rather strong feeling of deja vu for some reason. . .
ReplyDeletehttp://pragcap.com/datapoints-all-signs-point-to-stagflation
* Robust signs of consumer spending in Q4 appear to be a flash in the pan. Earlier reports of a slow-down in consumer spending were confirmed by this morning’s retail sales report. Headline sales for January were positive at 0.3%, however, the gains are largely attributable go gasoline price increases. Analysts were expecting a 0.5% increase. Gasoline sales were up 1.4% while housing related goods showed notable weakness. The commodity price increase is starting to pinch consumer wallets – not the results the Fed is looking for from keeping “assets higher than they otherwise would be”.
* Manufacturing continues to show signs of life as the Empire State Manufacturing survey remains consistent with recent reports. The NY region said business conditions were marginally improved over last month. The index rose to 15.43 from 11.92 last month. New orders slowed slightly while hiring slowed to just 3.61 – not good forward looking indications. All in all, it was more mixed than the headline figure might make you think.
* Import prices jumped 1.5% in January vs expectations of 0.8%. The gains are primarily in non-core inflation with food and energy remaining very volatile. Energy costs were up 14.3% while food prices are up 14.8%. Prices for other finished goods was just 0.1%. This is consistent with the pinch seen in the retail sales report. None of this really bodes all that well for the future outlook as consumer spending appears to be trailing off somewhat and prices cut into spending. Is stagflation in our future?
Thor,
ReplyDeleteThe fundamental difference (not technical) is that businesses both domestic and global are doing well, big business, big corporations.
Small business, individuals, many are still swirling the toilet, trying to survive. The structurally unemployed have been written off by everyone, Obama, the congress, and corporations.
The news has been dominated by the worst of the economic conditions, less has been said about how great the largest corporations have been doing. This makes the average Joe very bearish on the whole economy, which is wrong.
The largest global corporations will be doing well no matter what happens to the world economies.
That is the reason why many money managers are loving the big caps these days and selling small caps and emerging markets.
@Denise: Crony capitalism/socialism/fascsim-lite for big businesses and Wall Street, real capitalism (or even more difficult than that due to aforementioned situation with big corps and Wall Street) for the rest of us.
ReplyDelete'70 style stagflation has been BR's (and mine only lately) call for a bit now, I think.....
ReplyDeleteManny - Oh really? Damn, I'm not following BR as closely as I once did (lack of time). I've been firmly in the deflation camp for a couple of years . . .maybe stagflation is in our future again.
ReplyDeleteI wonder if that means we're going to see 20% interest rates again some day. . .
Manny,
ReplyDeleteYou have been spot on lately!
@Thor: I haven't been over there either in the past couple of weeks, but I believe that's been his premise for a while now making several comparisons to market rallies (and dips) in the '70's.
ReplyDelete@Thor: This one's for you. Want to buy a house? LOL. Do you know about this place?
ReplyDeletehttp://www.nytimes.com/2011/02/16/us/16hollywood.html?_r=1&hp
@Denise: To be fair, I've only come around to the stagflation train of though recently, as I can see that the Fed won't stop until we get there. The question is, what do they do once we arrive at that point, which could be very soon? They seem to be boxed in to me.
ReplyDeleteManny,
ReplyDeleteI haven't made up my mind about stagflation, but I certainly did live through it and it was not fun. In the end, we all survived and suddenly it was the 80's! Which ushered in a huge bull market.
manny - Yes I do! I live not too far from that canyon (Runyon Canyon) which is the canyon you go hiking in between the Hollywood sign and the Griffith Observatory (from Rebel without a cause).
ReplyDeleteYou walk right past that house when you take the "long" hiking trail, it's been there for years sitting empty. Every once in awhile someone will write something on the side of it, my favorite was "This is Greed"
Manny - to be fair, that house has been abandoned like that since I moved to LA in 2004. The downturn in the economy has nothing to do with it.
ReplyDelete@Thor: Oh yeah, I noticed that in the article. Just thought it was an interesting story.
ReplyDeleteBut I also have been saying that I agree with the market entering a period of consolidation within a large trading range like the 1966-1982 period.
ReplyDeleteWhether or not stagflation is a part of it or a cause of it remains to be seen.
The biggest cost to investors during that time was that real stock prices were decimated due to inflation, even though the averages were marking time.
Good time to own a home, though, if you had a mortgage.
Manny - just finished the rest of the article. Yes it was really good. I had no idea what the real history of this place was.
ReplyDeleteReally surprised at all the squatters. This house sits on top of a bluff in the middle of the Hollywood Hills - the nearest large street is Hollywood Blvd. and that's quite a drive to get up to it. There are no homes anywhere near it though, so maybe that's what makes it so attractive to squatters.
JPM has only 8 trading day losses in all of '10. LOL. Is that even statstically possible in an unrigged game?
ReplyDeletehttp://www.zerohedge.com/article/jp-morgan-says-it-had-perfect-trading-second-half-2010-lost-money-just-8-days-2010
Surging food prices and its effects on poverty..
ReplyDeletehttp://www.zerohedge.com/article/world-bank-president-zoellick-says-surging-food-prices-have-pushed-44-million-people-extreme
and still rising! China is entering another drought. This next year should be an interesting one.
ReplyDeletesemi-surprised that we've managed to stay below 50 today. Course there's still another hour left to trade.
ReplyDeleteThought this was an interesting story. Didn't realize Apple was muscling in in so many different areas.
ReplyDeleteApple move on subscriptions comes with hurdles
Under the plan unveiled on Tuesday by Apple, sales through the new service would be billed through the App Store, same as regular apps are purchased.
Such a service has been widely expected for some time, and Apple teamed up with News Corp. earlier in the month to launch The Daily, a “newspaper” for the iPad selling for 99 cents a week. News Corp. is also the owner of MarketWatch, publisher of this report.
A tell about possible home sales climate in the upcoming selling season?
ReplyDeletehttp://www.calculatedriskblog.com/2011/02/socal-weak-home-sales-record-low-new.html
Manny - yet I still read about new housing projects going up all the time! You'd think with sales this low they'd cut WAY back on new home building!
ReplyDeleteSorry Rock
ReplyDeleteIt was just my stupidity.
I knew that I was late in putting my post and could cause problems to you and Wolfie so as soon as I read that you shouldn't be suppose to posting there I took the long comment I copied the long comment and pasted it in the next post.
When I came back I realize that is not what you meant.
No excuses, my kidnapping wasn't a good move, apologize for that again.
Dan
SPPI brought good numbers but still anybody took it over, damn it I think I should make some calls.
ReplyDeleteDan
What's happening in the markets today? Looks like not much.
ReplyDeleteDan
Dan - if you ever get stuck at the last minute, or don't have time, please feel free to take a day off. I feel bad that you had to rush and were up so late :-( Denise and I are both here to cover anyone should time not permit. It's a blog, I'm sure everyone has tons of other things going on in their lives that will often take precedence. :-)
ReplyDeleteThank you Thor it's fine life is a deadline anyway. :)
ReplyDeleteDan
HAH! What a joke!
ReplyDeletePresident Barack Obama used his first press conference of the year Tuesday to defend his new budget plan against critics who say it doesn’t move quickly enough to cut the federal government’s massive deficit and fails to confront the difficult choices needed to reform ballooning entitlement programs.
“You guys are pretty impatient. If something doesn’t happen today, then the assumption is it isn’t going to happen,” Obama said. “My goal here is to actually solve the problem….It’s not to get a good headline on the first day.”
Read more: http://www.politico.com/news/stories/0211/49563.html#ixzz1E3zhwVQG
We're impatient because the budget cuts are little more than window dressing. I swear, it's the blind leading the blind. I hear Mubarak might be looking for work though.
Thor,
ReplyDeleteJust like in the video, Sachs was talking about the idiocy of allowing more than $1 trillion in tax cuts mostly to the wealthy, continue, and then looking around for pennies to be taken out of every social program and voting bloc that can't vote.
Odd - was getting an error message for the longest time :(
ReplyDelete@Rock, first comment : good thoughts.about manufacturing to service based transition, I believe "the plan" was that it was ok to let emerging countries have the manufacturing work, while our people move to the next activity in economic evolution :services. problem is obviously this sector doesn't make for the job losses.
ReplyDeleteso what now? Where's the next activity to move on? hard to imagine how this beautiful economic theory can extend indefinitely.
or maybe we can edit the old thesis by making it circular : at the end of a service based economy is a transition through extreme poverty. and social unrest. then, at last, a new agricultural nation is born anew.
beginning is the end.. is the beginning.
BTW, congrats Rock for your trading profits charities. I believe you're right to mention it at times. i at least take some inspiration from such positive moves, as i do hearing from Manny's work with less fortunate people.
ReplyDeleteI too am hoping to give, financially mainly. Actually, believe it or not, That's my whole motive for trying to make money, through trading and sometimes later in business i hope.
call me a freak, but I'll try my best to be successful, so as to make my life useful to others, and to give the most i can to causes i find right. my deadline for success is age 55. then, off to Buddhist life. I won't need no pension. :p
I hope it doesn't sound too creepy or out of touch with reality. Let's say it's my own theorical guidelines. whether i end up achieving anything meaningful shalln't really matter for my ego in the end. would just be great for whoever comes to enjoy the fruits.
ReplyDeleteWolfie - I like your plan! The older I get, the more meaningful I want my life to be. There was a time in my 20's when I was on the fast track to business success, blah blah blah - worked for a big advertising agency, had a fancy title. Then I had a pretty rough 5 year period starting around 32 and that changed my outlook on what really matters in life and what's empty, meaningless, bullshit. Most of what I was, and continue to do, in my career is bullshit.
ReplyDeleteNo more climbing the ladder for me, I've straightened my finances out to such an extent that I'll be more than fine if I never make any more money than I make right now. I see people my own age (almost 40!) working 60 and 70 hours a week trying to make ends meet, or work hard enough for that big raise or promotion.
No thanks, there are far far FAR more important things in life than work.
Obviously, not having children, or any desire to have children, makes the above "plan" quite a bit easier. . . .
ReplyDeleteMy grandmother always told me I'd be lonely in my old age.
@Thor:glad you're not doomed to burnout anymore ;) i would struggle to attend a work where I don't feel like I'm building something meaningful though. though I shall get rid of it in the end, passion is still what's fuelling me currently in my professional life.
ReplyDeleteBut I think you're spot on on slowing down. Too many poor lads who realize this only when it's too late. And now for the first and last time, they turn back on their life,realizing they' d never asked where they' d been in such a hurry to get to their whole life.
Sad.
Lol Thor. sure helps not having children. same here,and confident i won't change my mind.
ReplyDeleteThor,
ReplyDeleteNo problem accessing site.
on those fine words, have a great evening Thor and all.
ReplyDeleteThor - Much agreement with you, a lot of what I know I learned from my grandmother and I believe one of the biggest keys to being finacially succesful is contrary to what most people believe.
ReplyDeleteFinacial success is not how much we make, but how much we save (Or live within our means) However it seems like most people spend up to and beyond their income, if they make $50k a year they spend $60, so when they make $80 they spend $90 always chasing never catching.
I am pretty much in the same boat as you, at the beginning of the pay period, I pull out x amount and leave it untouched and after all the bills and food are paid for I usually have a little bit left over.
It is nice not NEEDING to go to work, yea I would like to make more money, but do not need to.
Anyway it seems like too many people have bought into the "As long as I have a line of credit I am rich" mentality.
Mutt
Being lonely in your old age only remains to be seen.
ReplyDeleteThere are no two ways about it my kids are by far the most expensive things I have, but they are also great motivation.
But even if you had 100 children there is no gaurantee they would keep you from being lonely in your old age.
I would not trade my kids for anything at the same time, I have no expectation they will entertain me when I am old.... Come over and eat out of my frig and "borrow" money maybe...
You will only be lonely if you allow yourself to be.
Mutt
Egypt Leaders Found ‘Off’ Switch for Internet
ReplyDeleteThe blackout was lifted after just five days, and it did not save President Hosni Mubarak. But it has mesmerized the worldwide technical community and raised concerns that with unrest coursing through the Middle East, other autocratic governments — many of them already known to interfere with and filter specific Web sites and e-mails — may also possess what is essentially a kill switch for the Internet.
Because the Internet’s legendary robustness and ability to route around blockages are part of its basic design, even the world’s most renowned network and telecommunications engineers have been perplexed that the Mubarak government succeeded in pulling the maneuver off.
But now, as Egyptian engineers begin to assess fragmentary evidence and their own knowledge of the Egyptian Internet’s construction, they are beginning to understand what, in effect, hit them. Interviews with many of those engineers, as well as an examination of data collected around the world during the blackout, indicate that the government exploited a devastating combination of vulnerabilities in the national infrastructure.
Denise - WOW! Great article! So basically the government used it's own security holes to bring down the internet. That's pretty scary shit. Makes you think twice about their future willingness to join any war on Israel. With those kinds of holes Israel could shut their entire air defense network down.
ReplyDeleteMutt - VERY wise words my friend. Fortunately I have a lot of very close, old friends who also don't have children, we'll be going over each others houses in our old age to eat out of the fridge and borrow money :P
Ok, going out on a limbe here (well, maybe not!), but I'm calling it now. I see us getting a pretty decent correction followed by some retail buyers buying the dip, which should give us a nice rally going into year-end.
ReplyDeleteI thought it was interesting that my Dad emailed the other day wanting advice on his GNMA's and whether he should sell them to buy equities. I'm betting others are having these thoughts and may just buy that next dip en masse. I advised him to be very careful though, given his age (74) and time horizon, as well as the fact that we've basically had an unprecedented straight up rally now since March '09.
Manny - woohoo, good call! I think I'll join you on that side of the trade if that's ok with you ;-)
ReplyDeleteWowzers on your dad! It always makes me nervous when older people talk about buying stock! My uncle is in his mid 60's now and has lost so much money in the stock market, both in 01' and 08'. Never learns his lesson!
Manny, Denise, and ICan - How is that spring thaw? Are you all getting it? Is where ICan from colder than Minny?
ReplyDeleteWe're getting ready for 5 days of rain. I try hard not to complain . . .ok no I don't.
I don't think he really wants to buy stocks, but the return on money markets and CD's are crap and he's VERY worried about his bonds. This is the shit that Ben is doing with his policies that are screwing people like my Dad and almost trying to force them to take risks they shouldn't be taking to get a return on their retirement stash. I don't think he's going into stocks though. Me, my brother, and brother-in-law all advised him against it at this point.
ReplyDeleteThe spring thaw has been AMAZING, Thor. Earliest that I can remember it since we've lived here. Still tons of snow left, but I can actually see grass under my pine tree in the front yard! At this rate, most of the snow will be gone by the weekend, which is really awesome after the winter we've had. I'm sure we'll get at least one more big storm in late Feb/March, but at least a lot of the existing stuff will have melted by then.
ReplyDeleteManny - AH! I didn't realize that, not at all! That makes total sense. My grandparents put all of their money in T-Bills. It didn't occur to me that retired people with even a modest nest egg might be forced to invest in riskier assets in order to have enough money to survive on. That's really depressing. :-(
ReplyDeleteSheesh Manny, that puts a whole new spin on it, an brings it much closer to home. The media is more focused on higher food prices in the third world causing revolutions, they're totally ignoring the self imposed rape of our retired people. Many of these people are of The Greatest Generation. How is that for a final FUCK YOU for all that you have sacrificed for this country.
ReplyDeleteMy bro-in-law advised him to look at something called "floating rate funds". I'd never heard of them. Has anyone else?
ReplyDeleteApparently Floating Rate Funds are designed to rise in both principle and yield -when interest rates are rising. The current yield is in the 6% range now. Rates have yet to being moving higher, but those days are nearing.
@Thor: Ben is trying to make speculators out of all of us, and particularly the very wrong people at the VERY wrong time. Convenient for Wall Street to find bagholders (AGAIN) for the shit equities they want to unload. Trust me, it's going to happen AGAIN. Question is, how many more times can it happen before the Sheeple fight back?
ReplyDeleteAbsolutely going to happen again. I just hope we can see it coming, and on time to . . . well to nothing, how can you prepare really?
ReplyDeleteManny,
ReplyDeleteAnything that is giving an extraordinary return will have risk attached to it. Think about it, 30 y bonds yield 4.6, the safest thing in the world. Individual munis can be had at about 5% and there are some very safe bets there.
I have not heard of floating rate funds or what kind of instrument they could be.
Thor,
ReplyDeleteWe have the snow melted from most of the roof, which is good because we had a really bad ice dam that had formed and now is gone.
Other than than there is still 2-5 feet piles of snow everywhere, but our driveway is clear and most sideways that had been shoveled or blown are clear. Streets are clear. Mostly the snow is on the parkways, parking lots are still terrible with giant snow piles everywhere.
Hopefully the next few days will see some more snow melt.
@Thor, I don't think you'll see it coming or rather you will, but won't quite believe it, just like last time. Only way to prepare is to buy out of the money puts on some high flyers like netflix. Eventually they will pay off.
ReplyDeleteAgree with that Greg. By the time you see it, the market will have been down hundreds of points which makes entry not optimal due to a fear of a snap back (beachball).
ReplyDeleteMany of the worst sell offs begin overnight so it takes some guts to get in when you see it.
Puts make sense when the VIX is low.
Good advice Greg. Well I couldn't think of a nicer group of people to weather the next shit storm with :-0
ReplyDeleteGreat point, greg. Agreed Denise, but if inflation becomes a problem that many think it will be, fixed income people like seniors won't want to be in bonds, so what do they do? Stick to money markets and accept an erosion of their buying power?
ReplyDeleteI wonder if buying that dog VXX may ultimately pay off as well? Shouldn't that thing go off if/when we get a significant sell off again?
ReplyDelete@Thor: The only thing is, the next shit storm could still be years away.......
ReplyDeleteI don't think it's coming this year, but then again, wouldn't be shocked if it did.
I'm thinking we have a few years as well. If we just go by historical standards, we could be due for another recession within three or four years maybe? And no guarantee that the next recession is another crash, we could have a light recession, followed by a big crash even later. . .so many possible scenarios.
ReplyDeletenot historical standards . . . historical something, I can't find the word! :-P
ReplyDeleteSpeaking of "shit storm", look who's back in the news.....
ReplyDeleteFrom Prison, Madoff Says Banks ‘Had to Know’ of Fraud
http://www.nytimes.com/2011/02/16/business/madoff-prison-interview.html?_r=1&hp
Not sure that if there is a bad inflation that anything is spared, not bonds, stocks or other financials.
ReplyDeleteA house with a big mortgage did very well in the earlier time frame, not sure if that will hold true, as you want to have debt if there is inflation, pay back with cheaper dollars.
Maybe this is where some commodities come into play but for retired people I don't think that is the safest bet either as it pays no interest.
Of course they knew of the fraud, GS knew as they would not put their funds into Madoff even though many of their clients asked to invest there.
ReplyDeleteBanks have to play dumb and let the investigations come to them, no matter what there will be law suits just for the discovery.
True Denise, but haven't stocks typically done well (or better than bonds anyway) in the early stages of inflation?
ReplyDeleteLucky eleven?
ReplyDelete@Denise: Definitely, but to hear some (including Bernie himself) come right out and say it is a bit striking, no? Or maybe it isn't anymore, as people don't seem to care, it seems? After all, stocks are marching right back up to previous all time highs, and Sheeple statements are looking good again.......on paper, anyway.
ReplyDeleteManny,
ReplyDeleteIf you look at inflation adjusted returns for the 60's, 70's and early 80's they are devastating. Probably you could Google some stats. Sure, some stocks did way better than inflation and the market averages but most did not.
Manny - people have NO memory anymore, it's as if no one can remember anything longer than a few years. Look at how quickly we turned around and elected the same idiots who got us into this mess in the first place - and that was just TWO years ago!!! It's MADNESS. Wake the fuck up people, jeeeeeeez
ReplyDeleteSeriously, we're having discussion in government right now, very serious discussions, on how to lessen regulation of the financial industry. It's criminal. The wolves have gotten into the chicken coop and they don't give a shit if anyone knows it.
ReplyDeleteI think that they have to prove the allegations which might be more difficult. No matter, Madoff didn't do it alone, and there will be lawsuits flying around long after he is dead.
ReplyDeleteMadoff is obviously trying to take down more people and institutions with him.
Rock is going to be upset that our evening conversation bumped Dastro's comments numbers up so high ;-)
ReplyDeleteMight something like be what brings the markets down? The budgetary impasse? Who caves? I'm guessing the O-man, as usual, caves more than the GOP.....
ReplyDeletehttp://www.huffingtonpost.com/2011/02/15/obama-veto-threat-of-gop-_n_823783.html
Manny,
ReplyDeleteIt will be something out of left field that has been percolating under the radar.
I hate to say this, but I hope thy shut the government down again.
ReplyDelete@Thor,as the saying goes...at first we learn a lot, in the medium term we learn something, in the long term, we learn nothing, or something to that effect. The trick Thor, is accepting that you are part of the insanity, while realizing you just have to be a bit more sane than the next guy. Kinda like two guys running from a lion, you don't have to be faster than the lion.
ReplyDeleteGreat point,greg, but this time I'm not even sure we learn anything (at least en masse) even in the short term anymore.
ReplyDelete@Denise: Probably true, although I thought that Egypt and the upheavals rolling across the Middle East might do that, and yet the market basically let out a collective yawn.
@Thor...your 10.55....how will you know?
ReplyDelete@Manny, I think we only learn when it effects us directly. The rest is just news.
ReplyDeleteProbably true, greg. It's "news" when it happens to other people. Great point.
ReplyDeleteGreg - "faster than the lion" . . . Hah, that's true!
ReplyDelete& 11:04 - ! :-)
It's been a quiet coup, so people don't notice it an mainstream media just obfuscaate even more the population so they are not aware of the dynamics.
ReplyDeleteWall Street banks are the lords, but really no fucking kidding here (among some others) people in general doesn't grasp what that means.
There's an article at the Atlantic magazine from one or two years ago that is called The Quiet Coup.
Google and read it is excellent as a primer.
Dan
Does anyone watch Raising Hope? So funny.
ReplyDeleteSo when you hear stories of the economic devastation that is the State of California, and how people are fleeing in droves. Keep in mind . . .
ReplyDeletehttp://la.curbed.com/archives/2011/02/50_off_venice_million_dollar_home_moves_it_into_escrow.php
Look at what you get in Venice for 600K, and that's Venice, never mind Santa Monica, or Huntington Beach, or anywhere in Orange County.
Then consider Northern California and the Bay Area. The state is increasingly stratified between very very wealthy and very very poor.