Here we are again, and the psychologically important April highs. We've had quite the election and the economy is now clearly slowing down. Things feel a bit stale to me, yet here we are, with a new even <i>more</i> business friendly congress coming in January, and a pledge by our friend Ben Bernanke, to pump another 600 Billion dollars into our economy.
So, my question to you all this morning is - Where do the markets go, from here.
Let's hear it!
All that printed money hiding in Commodities and EMS and risky assets. China, South Korea thinking of imposing some sort of penality on new hot money. Japan, England coming up with fresh bundles of worthless paper.
ReplyDeleteWhat can go wrong, as long as the market has CBs's back up?
Watching the market has, now, become a 24/7 job for an average investor.
I Can
Ireland in big trouble.
ReplyDeleteMacroman blog
Don't fight the Fed.
ReplyDeleteTreasuries up (except for 30 year), rates down.
Bucky down.
commodities up. Anything with real hard stuff behind it, is up like GDX. (I wonder what's happening to the coals?????)
FTO reports tomorrow.
ReplyDeleteLook at the pop. Think somebody got the word?
Up, up and awwwaaaaaaaaaaaayyyyy, my beautifuulllllll baaaaaa-llooooooooooonnnnnnn.
ReplyDeleteSorry, no P3 today.
And, to think, there are some that think the Fed can't push the markets around. After all we've seen, I can't see how anyone can still hold onto this train of thought.
ReplyDeleteTLT slightly though.
ReplyDelete@I Can: But the "average investor" doesn't need jobs when we can watch the markets go up every day. Ben will make us all rich, or feel that way for a while anyway. Again.
ReplyDelete@ Jeff, (9:47)
ReplyDeleteBlack Swan(s)!
CBs are killing capitalism. Greenie and BB same.
I Can
"Killing?" I think it's murdered, chopped up and eaten at this point.
ReplyDeleteSome perverse form of global crony "capitalism" is all we have left where the global elites all take care of each other while the rabble are left to fend for themselves, so naturally we go at EACH other's throats instead of theirs. Much easier that way.
My little baby short barely down a smidgeon today. I feel good about hanging on here. It hasn't been moving with the markets as much as other stocks have (for various reasons, I'm guessing). I think I'm in good shape. For now.
ReplyDelete@Jeff,
ReplyDeleteIndia are afraid of revolt from masses. That's why they are giving massive subsidies on food.
Free power and water subsidies to grow rice in semi-desert areas.
I Can
Trader Mark - "Bernanke is forcing our hand" www.fundmymutualfund.com
ReplyDeleteI Can
@I Can: As long as we're medicated on our multiple diversions and i-Thingy's here in the States, I don't think you'll see any real fear in our leaders of the people.
ReplyDeleteBernanke may be "forcing our hand", right into emerging markets and commodities.
ReplyDeleteManwwich (9:45) - No kidding.
ReplyDeleteIt wont last long and it ain't going to look perty when it ends, but the market WILL push back.
I just hope I am in Canada or someplace like that when it happens.
Mutt
@ Jeff,
ReplyDeleteThe world needs a good leader(s) who can stop these moron money printing machines and let the market be.
Otherwise, the whole world will pay for this binge.
I Can
There's our little rally. A day late. Goodbye April highs! Manny - good call my friend :-)
ReplyDelete@Mutt,
ReplyDeleteGo to booming Calgary, if you come to Canada. Beautiful wild rose country, near the rockie. I went to University there.
I Can
@Thor: But I thought we'd get a big sell off by now. Maybe that's still coming.
ReplyDeleteNow I'm not so sure. Bubble economy is in full force. Bottom line is I said this before but most people don't care WHY the market is rising (see housing market craziness for that), but just HOW they can make money off of it. So until that cultural ethos ends in this country (don't hold your breath), these games will continue.
Wannwich - Leftback left a post at the old "Andygangs" web site about bucky being down big this morning.
ReplyDeleteIt was then that it struck me what BB master plan is. The guy is a genius, plan and simple genius.
He sells China and other countries our debt in strong dollars, MASSIVE amounts of our debt. The then starts to deflate the value of our dollar. When it reaches negative numbers, he buys back all the debt with this negitive money, so the other countries now owe us money.
Once we buy back all our debt the U.S. Will own the world. Bahahahahahahahahaha
Who know BB was so smart?
Mangy Mutt
@Mangy,(10:28).
ReplyDeleteYou havn't dealt with Chinese govt. obviously. They are shrewd and cunning. They are selling the Americans all that crap.
I Can
I-Can, Many years ago, a group of us went up that way, to the Banff area I believe and Calagary has a heck of a Rodeo. I have never been, but it was advertised pretty heavily.
ReplyDeleteMutt
Interesting, Mutt. But does somethhing nastier happen before then, say maybe a war or something? This is the stuff wars are made of......
ReplyDeleteI-Can see that is the genius of BB plan. In fact now that my eyes have been open to just how smart he actually is. I bet, the U.S. hasn't actually been buying the Chinese crap, but hoarding it.
ReplyDeleteWe probably have warehouses full of this cheap Chinese crap,
So when the U.S. Buys back all our debt with negative dollars, China's economy will suffer at which point we sell China back all their crap.
Mutt
Mannwich - That is part of the plan, the U.S. will send only the Babyboomers to war, which will help solve the S.S. and Medicare issue. And if that does not work, the U.S. will enact a draft that only takes the infirmed and orphans.
ReplyDeleteMutt
LOL Mutt. Brilliant! The Geriatric Battalion!
ReplyDeleteMutt - Re Boomers - Like I keep saying - RENEW!
ReplyDeleteMany - Can you hear the sound of that next bubble forming? I can!
Face ripper in progress. Poor bears.
ReplyDeleteTrend day up so far.
ReplyDeleteIf and when U$D turns, watch what happens in EMs. That will be ugly.
ReplyDeleteI know lot peopl's ego is inflated right now, because, "They are so smart". But, their, Guru is even shrewder - BB
I Can
I wonder how much more inflation this is going to cause in China and India. They're the main beneficiaries of the inflation this causes aren't they?
ReplyDeleteThe new "normal" on unemployment, QE or now QE? Look at this graph. Looks that way to me....
ReplyDeletehttp://www.calculatedriskblog.com/2010/11/weekly-initial-unemployment-claims.html
It's one giant confidence game. The Fed hopes that by inflating assets people FEEL richer, even if in reality they aren't. Amazingly cynical policy, but knowing the American public and human nature, it will probably work for a while anyway.
FEEL richer, and then spend money (and faux-wealth) they don't have, thereby blowing another debt bubble, or at least keeping the last one from truly deleveraging, I should say....
ReplyDeleteI have to commend you all. You finally got it.
ReplyDeleteYou know
1. MBS have been sold over the counter. Where? We're told by USG they don't know and want to regulate that. OK. But we know where they went. A lot of them went overseas. Check out who got the first TARP payments: many many European banks. Did you see one, single Chinese bank on that list? Nope. Think there were Chinese banks that bought 'em? Or do you think Chinese bankers are stoopid?
2. MBS are securities. Not the original ownership paper. When China called up ol' Hank and said "we want our money or we're taking over your property", they were given a lesson in gambling with derivatives, and told the only way they could get some of their money back was to inflate their currency. The Chinese didn't like that very much. Pounding sand is not something Chinese like to do, believe me.
3. So the Chinese went to Currency War. Ol Ben and Tim got together and said "we can win this thing" and began to devalue the Bucky. Same thing as getting the Chinese to let their currency appreciate.
4. The Chinese realized this is happening. Uh-oh, they decided before they have riots in the streets, they better go buy up all that property in the US that's under water. Now, ask yourselves why the repossession by the banks went from delaying tactics to suddenly "pedal to the metal" mode. Do you think the Chinese can buy any of my three houses? No way. My kids are getting those. But if I'm under H2O, I might love to sell to them. Well, I guess the banks better take over the property that's at risk, right?
Think about it, ladies and gentlemen. We are at full-out currency war. And, we will win this thing.
I hope I don't get a knock on my door. It's 12:00 midnight here. Hard to pack in the dark....
Hard to disagree with that, Rock. Well stated. We're definitely in at least a stealth currency war at this point. It's all about currencies.
ReplyDeleteManny - but how? Banks aren't loaning, credit card limits have been slashed, no more money left in home equity for people to pull, and wages are falling. . . .
ReplyDeleteRock - I was just thinking that this morning! That the currency war everyone has been talking about this year has been taking place for awhile now for the reasons you just outlined. The Chinese hoard dollars as a way to keep their own currency cheap, Ben and Timmay must be saying "you want dollars? Here, choke on them then". There's no way we're going to get inflation in this country any time soon, at least not in the way we'd expect. Unemployment is too high for there to be any wage inflation, we're seeing the opposite in fact.
ReplyDeleteWill be fascinating to see how this whole thing plays out. Not well I'd imagine.
If I feel richer - Does that mean I am?
ReplyDeleteMutt
@thor:
ReplyDeleteBanks can't loan. They are insolvent. They have reserves built up to cover when a change in American sentiment causes them to mark their ass-ettes to the market value. Thank God we got gridlock. If we got full Rep or Tea, we might be in real trouble.
And there is job growth. Granted, my unprofessional observation about the increase in traffic is immaterial, but it's clear that ADP reports and job numbers are rising albeit slowly.
How can each of us help? I saw posts here that said "I buy American made car parts". That's why you cannot legalize MJ: so many many jobs would be vaporized overnight.
We can win this war. We will win this war.
@Thor: But expect higher food and energy prices, which, of course, don't matter to the Fed as real "inflation" because they don't measure it.
ReplyDelete@Thor: But maybe their 401k's and other accounts are rising, what's left of them anyway? And those who feel left out of the game will get suckered into buying stocks again. Trust me, they will. The ones that aren't already broke anyway.
ReplyDeleteThor - All things being equal, except age, can you imagine what it would be like having this play out if we were 20 years younger?
ReplyDeleteFortunatly we are at a stage in our lives where we can watch this play out. Sure it will still be painful for us, but what about all those 20ish year olds, just finishing up with school, huge education debts yet still idealist enuff to think it doesn't matter.
Yup we grew up in a time of relative non-History (the 80's) but now we are watching unfold what might be the most historic events in the last 100 years.
Yes it will be interesting to watch this play out.
Mutt
True, Mutt. I feel really badly for the youngsters. Most of them don't even know it yet how screwed they are.....
ReplyDeleteWhen they figure it out, watch out. They might just put down the electronic devices and get a little upset.
LOL :)
ReplyDeleteManny and Mutt - Sort of. The one thing the folks 20 years younger than us have over us is time. They'll have far more time to weather through this than we will. My grandparents were in their 20's during The Depression, so although they had nothing until after the War, they were young enough to build their next eggs back up over 30 years. I don't know that people our age will have this luxury. What if we really are Japan? Things have been stagnating there for 20 years now!
ReplyDeleteYes Thor, but TIM-ING is everything. Graduating into a stagnant job market and boat loads of student loans erases some of that luxury of time you suggest. If they can't get decent jobs in a sufficient period of school, they can't learn the skills needed to make it in our economy. Same goes for those who've been unemployed for too long.
ReplyDelete@Thor: And if things truly suck, I'm not sure I'd want more TIME.....
ReplyDeleteWhat I'd want is no debt and heaps of cash stashed where the Fed or other CB's (or Wall Street) won't crush me, wherever that might be.
;-)
Another bailout needed for BAC? John Paulson probably hopes so and is "banking" on it. Pun intended.
ReplyDeletehttp://www.bloomberg.com/news/2010-11-04/bank-of-america-edges-closer-to-tipping-point-commentary-by-jonathan-weil.html
Thor,
ReplyDeleteI've got a question for you if you are around.
if VZ offers an iPhone next year and AT&T loses exclusivity, how many people do think will actually switch? A lot, a little, some trivial amount? As I'm to understand it roughly 80% of the people with AT&T are on business plan or on Family Talk and running quick numbers I figure a family of four could spend up to $2,000 just to switch over to VZ, potentially losing the unlimited data access they might be grandfathered into with T as well.
So, this is your area, what do you think? You think a lot of people will switch, or do you think they will generally stay with T?
Mannwich (12:49) - That is the fear I have about the future generation. They will just sort of exist.
ReplyDeleteFor the majority they probably will not find a decent job in the field of thier degree, for the rest they will go from one crummy job to the next while dragging along thier student loans.
Not the way I would want to enter this job market.
Thor - I think things are a little different then when our grandparents went through it. The country was still expanding and had a lot of room for growth. That growth has slowed down over the last 20 or so years and what growth there has been/is is being sent to where cheaper labor is.
I do not see this ending as nicely for the up coming generation - But like you said, we kind of get to watch it unfold
Mutt
@ben22: I know you directed this at Thor, but let me chime in. I know many people who HATE AT&T and their service. In the past I had been one of the, but since I get good service here , I'll keep them for now.
ReplyDeleteI have family in Northern CO who can't get a signal at all there in many places in Fort Collins, a pretty sizable city of 125K people. Zero bars and dropped call after dropped call. I'm pretty sure they're all switching to VZ whenever it's offered.
Manny,
ReplyDeleteI've never had the iPhone, but I'm curious for those that bought early, have the service issues gotten better as T invested further in the infrastructure for it, they've spent many millions to try and improve that so I'm curious if there has been any noticeable improvement.
I'm really wondering if it is a practical expense in this kind of economy to switch and also wouldn't people be a bit shy of going with the first phone on VZ platform perhaps waiting to see the second/third, etc generation. I think maybe it's been overstated how many people will switch when you start to consider what current T subscribers might give up and the costs associated, but I'd like the perspective of someone that works with that equipment every day.
anyway, thanks for your thoughts, I've heard a lot of bad things about the service with T but never used one myself, I have a crap cell phone with Verizon, I never have any trouble with service.
@ben22: That's true. Much of it will indeed depend on the costs and hassle to switch. I've been with AT&T for 11 years now (the only carrier I've ever had) and although I've come close to switching many times (mostly when I was in NYC when the service was really unreliable and customer service atrocious), I never pulled the trigger. It seems like their service for me here in the TC works fine, for the most part. It's hard to know how many will really pull the trigger. My wife, a former Sprint customer, who was getting horrible deal with no data plan (all she had was a regular phone), eventually switched to T with me last year when I bought her an iPhone for Christmas.
ReplyDeleteBen - I have Verison too, we came by way of Sprint. My phone is ok, but the service so far has been great (But keep in mind I came from Sprint...)
ReplyDeleteIf I understand correctly what you are laying out. Is it cost effective for people who already have a data plan built in to take a $2000 loss, to switch over to a first generation phone on an unproven platform. Especially with most families struggling finacially and no real hope for an economic windfall.
Simple answer would be NO!
But how is it going to be marketed, how many people are going to be falling off their contracts and at what rate?
Hard to tell, people are fickle and when they can be influenced by marketing they become nuratic - They don't want to miss out on a wonderful deal, no matter how much it costs them.
Interesting question you put forward.
Mangy Mutt
Ben22 - Hey there! Good question. I can give you a couple of impressions based on our install base here in the office (about 45 iPhones now) as well as the conversations I've had with our AT&T rep about their coverage.
ReplyDeleteRight now, I would say that about 20% of our iPhone users would be more than happy to move off AT&T, this is mostly because they do not have good coverage at home (I'm one of these people). I'd say there are about as many folks or more who have not switched their Blackberries to iPhones because they like the coverage T-Mobile has here.
So - how many people are going to switch? I'd say quite a few. However. AT&T is very close (six months tops they tell us) from moving to 4G. The story our account reps are telling us (and I would say is probably mostly true) is that AT&T has suffered the last few years because they have been in the process of massive improvements in their network. According to them, they have been taking the pain in service now, so that in 2011, they can truly have the largest and fastest network with the best coverage.
Personally, I'm going to stick with AT&T through the winter and spring to see what this new network is going to look like.
One thing to keep in mind - is that a lot of the coverage issues with AT&T has been caused by so many iPhones coming online over the last few years - almost all of which are heavy data users putting a strain on their networks.
I think that as the smart phones really reach saturation, and especially after iPhone is opened to Verizon, you'll start seeing similar coverage and quality of service issues with the other carriers. Certainly Verizon.
Mutt,
ReplyDeleteyes, that's my basic question, I've been looking hard at the books of AT&T and VZ of late, I'm curious that perhaps VZ investors have overstated the benefit from the iPhone moving forward while T is really cleaning up their balance sheet, they've paid down over $1billion in debts in the last quarter while increasing cash by $2.1 billion, for example. Of course T says this won't be a problem (losing exclusivity), but what else are they going to say.
no doubt marketing can be powerful, but so can a lack of money when you need to drop a decent chunk of change to switch, of course, there's always credit, I guess.
Lots of people are counting T out on account of VZ offering the phone, I'm skeptical.
Ben - Also, keep in mind that the cancellation charges for moving your phone on AT&T is now pro-rated. Not sure if that's for all of their accounts, or just the business one's, but even waiting just a year will cut the cancellation plan in half. Also, with a family of four - I don't think the cancellation charges apply to all four of those phones - if it's on a family plan, only the main line would be charged the cancellation fee, not the add on $9.99 one's. Again, this is how it works for the business accounts. . . consumer might be different (but isn't always . . . )
ReplyDeleteBen - According to our account reps, AT&T is fine with losing exclusivity because they feel strongly that the iPhone is going to become more and more popular and even with their new network on the way, they would not have the capacity to cover all iPhone's exclusively. Of course, this might have just been them putting a happy face on losing it, but I do believe it makes a certain amount of sense.
ReplyDeleteI'm with you, I don't think having the iPhone on Verizon is going to do all that much for their bottom line.
thor,
ReplyDeletethanks, see, we can talk normally from time to time.
this:
"One thing to keep in mind - is that a lot of the coverage issues with AT&T has been caused by so many iPhones coming online over the last few years - almost all of which are heavy data users putting a strain on their networks"
so the prduent iPhone user should probably just wait, if say 20% do leave, less people on the network plus the upgrade and it should work pretty well I'd assume, maybe even really well.
also, that's interesting regarding the date of switch to 4G, I'd expect early on VZ will have some issues with the whole set-up and as I'm to understand they'll start to offer the iPhone in January next year, perhaps T gets to 4G in enough time to lessen some of the blow as some of that 20% may hold off since they'd gone through that mess with T once before.
going to be interesting to watch this play out
thanks.
You're welcome Ben, any time!
ReplyDeleteSky is the limit right?..
ReplyDeleteCan't go that far from now.
I will wait for a pullback before (maybe) reloading on longs. Will depend how this pullback will print on the charts.
WolfStreet - Yesterday was the pull back.
ReplyDeleteThe new normal - is a pullback = less then 1% up.
Mutt
Are you all enjoying your fall? It's 93 here today bitches :P
ReplyDeleteHeading to the beach for lunch it's so nice out!
Can you imagine if this market works it's way back up to another new high in the next year or so?
ReplyDeleteCan you also imagine the crash that will follow?
Thor - The crash that is going to come scares me.
ReplyDeleteOur generation came into an economy that was just starting to loose it's jobs over seas, but there was still a lot of oppertunity for those who worked for it. We also did not get into debt unless we choose to (House, car, stuff like that)
This generation is coming into an extremely soft job market, with huge debt they had to take on, just to be able to get a job. Their parents are burdend by loss of jobs, underwater houses and huge debt of their own.
BB has done everything in his power to prop up the stock market, he entered into this dead end road with the first round of QE, yet there was still time to stop or turn around. All he did with QE2 was speed the car up and give just fewer escape routes.
We are as good as failed now, but we have the top down and the wind blowing in our hair, most do not realize how fast we are heading toward the end, but if we get QE3....
Anyway, I am not a happy camper with this whole thing. CUZ it WILL CRASH!!! (just when???)
Mangy Mutt
The Curmudgeon over at TBP made a prediction a couple of weeks ago for oil back at $100. Looks like that was a pretty good call.
ReplyDelete$4.75 gas here we go again!
Maybe but not there yet, Thor.
ReplyDeleteMy short now even on the day. Was up 5% at one point.
ReplyDeleteMeaning I was down 5% on it. Might nibble on some more here.
ReplyDeleteManny - I know. I'm one of those people who was and still is waiting for oil to go back below $50. The demand certainly isn't there.
ReplyDelete