Obviously, a nice bounce this week so far. Jury is out if this lasts.
I give it maybe through mid January before the wheels fall completely off.
There are many variables, the largest is Europe. To the chart!
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| From WebSufinMurfs FinancialBlog2 |
Thursday, December 1, 2011
This week in late chart
Been very busy with work, here is the chart update.
Obviously, a nice bounce this week so far. Jury is out if this lasts.
I give it maybe through mid January before the wheels fall completely off.
There are many variables, the largest is Europe. To the chart!
Obviously, a nice bounce this week so far. Jury is out if this lasts.
I give it maybe through mid January before the wheels fall completely off.
There are many variables, the largest is Europe. To the chart!
Monday, November 28, 2011
Europe Stick Save
Looks like we got a market near-term bottom Friday, as Germany and France announces a "stick save" for the crisis. It can't work, but that doesn't matter. The market has sold off hard, and on any good news, a relief rally should happen.
So I'll hold off this week in charts until the close Monday, to show the "bottom" depicted.
I may move harder into cash in a week or 3, when a relief rally looks ending.
So I'll hold off this week in charts until the close Monday, to show the "bottom" depicted.
I may move harder into cash in a week or 3, when a relief rally looks ending.
Saturday, November 26, 2011
Media Consolidation
I posted back on November 2nd 2008, on a post on Blame Republicans or Democrats, where I articulate the high level actions that have contributed together to bring the western world into financial stress.
Back then we were voting for a president, and I stated :
As for either president, either one will face what is now looking almost certainly to be a Depression due to the actions being taken now. Either will face huge debt that they can't pay for. I am torn......
Fast forward to November 2011, and it looks to me that we are in a continual recession/depression since 2008. (I can make the case since 2000, but it is less apparent to most.) We are on-track for this time period to be relabeled a depression in a few years.
One key aspect of this situation is the media of blame, from my 2008 post is the media. The media has not been doing a great job of informing the public, or even civil to those who try, as I showed in Hostile Media on non-mainstream opinions. The root of this is lack of competition for the eyes and ears of the public through TV, magazines, and newspapers. In the post Blame Republicans or Democrats, the source of the lack of media variety was born by Ronald Reagan, bringing us to the top 5 giving 80% of the information me and you get.
Today I have a more current depiction to better illustrate from "Frugal Dad" blog, thanks to my friend Bob. It depicts this change of information suppliers. My hope is over the next decade people will shift to bloggers and other news sources like I have. Although it can present questionable information, to date I don't find it less reliable than the top 6 news providers, and in most cases more insightful.
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Source: Frugal dad
Back then we were voting for a president, and I stated :
As for either president, either one will face what is now looking almost certainly to be a Depression due to the actions being taken now. Either will face huge debt that they can't pay for. I am torn......
Fast forward to November 2011, and it looks to me that we are in a continual recession/depression since 2008. (I can make the case since 2000, but it is less apparent to most.) We are on-track for this time period to be relabeled a depression in a few years.
One key aspect of this situation is the media of blame, from my 2008 post is the media. The media has not been doing a great job of informing the public, or even civil to those who try, as I showed in Hostile Media on non-mainstream opinions. The root of this is lack of competition for the eyes and ears of the public through TV, magazines, and newspapers. In the post Blame Republicans or Democrats, the source of the lack of media variety was born by Ronald Reagan, bringing us to the top 5 giving 80% of the information me and you get.
Today I have a more current depiction to better illustrate from "Frugal Dad" blog, thanks to my friend Bob. It depicts this change of information suppliers. My hope is over the next decade people will shift to bloggers and other news sources like I have. Although it can present questionable information, to date I don't find it less reliable than the top 6 news providers, and in most cases more insightful.
Friday, November 25, 2011
Hostile Media on non-mainstream opinions
I watched two videos today that are both worth watching.
First is Ron Paul, and his opinion on a wide variety of topics.
The second is a financial adviser who is not very optimistic of Europe, Japan, and I imagine, the USA.
What struck me when I watched these was the outright hostility of the interviewers.
The one interviewing Ron Paul was very aggressive in his questioning. Each one was positioned to make Ron Paul look fringe. (which he is!) I'd love to see the same interview-er with other candidates to see if the questions are this deep, confrontational, and at times dismissive!
The second the interviewer clearly had an agenda to paint the adviser as profiting from main street losses.
As in my thankful post, this man could have avoided the interview and kept his opinion to himself.
Instead he stood strong to meet in the public eye and stand his ground.
It no wonder its so hard to get the straight scoop when the media is on a mission. Shut up and conform already!
This woman says there where very few investors that knew the world was heading into financial turmoil. Why is that? oh, maybe the media isn't questioning what is presenting at face value? Nah, the media has zero responsibility to keep the masses informed, they should do like I do, read bloggers and watch random videos.
In this clip the interviewer says you can't buy insurance of a house you don't known. She is actually right. All DERIVATIVE MARKETS should be killed off or deeply restricted, and minimize leverage. Just take a look at Israel for a model of what is sane. It is these exotic Derivatives in an unregulated, opaque market that are a problem. Don't attack this man for participating in the market! Go after the construct, and fix it!
First is Ron Paul, and his opinion on a wide variety of topics.
The second is a financial adviser who is not very optimistic of Europe, Japan, and I imagine, the USA.
What struck me when I watched these was the outright hostility of the interviewers.
The one interviewing Ron Paul was very aggressive in his questioning. Each one was positioned to make Ron Paul look fringe. (which he is!) I'd love to see the same interview-er with other candidates to see if the questions are this deep, confrontational, and at times dismissive!
The second the interviewer clearly had an agenda to paint the adviser as profiting from main street losses.
As in my thankful post, this man could have avoided the interview and kept his opinion to himself.
Instead he stood strong to meet in the public eye and stand his ground.
It no wonder its so hard to get the straight scoop when the media is on a mission. Shut up and conform already!
This woman says there where very few investors that knew the world was heading into financial turmoil. Why is that? oh, maybe the media isn't questioning what is presenting at face value? Nah, the media has zero responsibility to keep the masses informed, they should do like I do, read bloggers and watch random videos.
In this clip the interviewer says you can't buy insurance of a house you don't known. She is actually right. All DERIVATIVE MARKETS should be killed off or deeply restricted, and minimize leverage. Just take a look at Israel for a model of what is sane. It is these exotic Derivatives in an unregulated, opaque market that are a problem. Don't attack this man for participating in the market! Go after the construct, and fix it!
Thursday, November 24, 2011
Thankful
My blog is pretty much all about reporting some very scary stuff, that could be viewed as negative.
Today's post is the positive.
I am most thankful for the life me and my wife have built, with our son Joey. She has been everything I could ask for and more. She is understanding, caring, strong, and very hard working to make the home life I enjoy today.
I am very thankful for all the wonderful people that has been my lifelong support system. My immediate and extended family. My friends, who have been there for the good and bad. Of all my friends, especially to the "Friday night" crew, you know who you are. :)
For my work, and more importantly, the absolutely fantastic, smart people it is my pleasure to work with every day. By extension being employed by a multi-national corporation, reasonably well compensated in this rough economic environment that I expect to last 10 years from now.
For where I live, a relatively insulated community surrounded by affluent towns. I hope it provides better for my family in the dark times ahead.
For technology, for my entire life has been permeated by it in every possible aspect. Technology provides for me through my job, finding my wife, for my enjoyment (gaming!), and for the information flow and framework to bring this post.
I am thankful that even though this country will be shaken to it's very foundation, to date, it remains relatively free.
For my health, and the health of my closest friends and family, with unfortunately a couple of exceptions.
And finally, for the unsung heroes that are fighting for a better tomorrow, by donating their time for our collective benefit. This includes all that have done so 100's of years leading us to today, and doing so today for a better tomorrow. Of the many people that fit this description, I am especially thankful for the financial bloggers. Mish, Karl Denninger, Gary of Smart Money Tracker, Slope of Hope, the minions on ZeroHedge, and the many financial insightful who voice their opinion on the public court. For without their efforts, we would have zero chance to be aware of the problems that we must collectively face and overcome.
I am most thankful for the life me and my wife have built, with our son Joey. She has been everything I could ask for and more. She is understanding, caring, strong, and very hard working to make the home life I enjoy today.
I am very thankful for all the wonderful people that has been my lifelong support system. My immediate and extended family. My friends, who have been there for the good and bad. Of all my friends, especially to the "Friday night" crew, you know who you are. :)
For my work, and more importantly, the absolutely fantastic, smart people it is my pleasure to work with every day. By extension being employed by a multi-national corporation, reasonably well compensated in this rough economic environment that I expect to last 10 years from now.
For where I live, a relatively insulated community surrounded by affluent towns. I hope it provides better for my family in the dark times ahead.
For technology, for my entire life has been permeated by it in every possible aspect. Technology provides for me through my job, finding my wife, for my enjoyment (gaming!), and for the information flow and framework to bring this post.
I am thankful that even though this country will be shaken to it's very foundation, to date, it remains relatively free.
For my health, and the health of my closest friends and family, with unfortunately a couple of exceptions.
And finally, for the unsung heroes that are fighting for a better tomorrow, by donating their time for our collective benefit. This includes all that have done so 100's of years leading us to today, and doing so today for a better tomorrow. Of the many people that fit this description, I am especially thankful for the financial bloggers. Mish, Karl Denninger, Gary of Smart Money Tracker, Slope of Hope, the minions on ZeroHedge, and the many financial insightful who voice their opinion on the public court. For without their efforts, we would have zero chance to be aware of the problems that we must collectively face and overcome.
Wednesday, November 23, 2011
Stansberry Investors Video on Political and Macro Economics
This video looks familiar, I believe have already posted it.
But I couldn't find the link quickly.
So here it is (again?) Video from Standberry Investors on the macro economics and politics, and a possible future.
Thanks for my brother for the forward
Monday, November 21, 2011
Wednesday, November 16, 2011
Jim Grant Speaks about global financial insanity
This Jim Grant Interview is great. I love the internet, I get so much real information about reality vs the fantasy or outright void of information provided on mainstream news.
At around 3:40 market in the video, Mr. Grant points out that mark to fantasy accounting is bad, but what is worse is the central banks have zero accountability for their own accounting.
The New York Fed is leveraged 100 to 1. MF Global, the 8th largest bankruptcy ever in the US was leverages 80 to 1 as a comparison.
Assuming thats true, why not leverage 1 googloplex to 1? Mathematically there isn't much of a risk difference, since you can be insolvent in a heartbeat if accounting was accurately measured. I just don't agree with Jim at all the insinuation that fiat currency isn't good currency. I really do hate the gold-bug mantra that shiny rocks is money. Gold as money is more draconian than the current system by a long shot.
Further, the Federal reserve will NOT take mark to market losses, but instead have a direct "running tab" with the treasury. What is the difference between US currency and Zimbabwe? Each month there is less of a difference. Currency deserves respect and STRICT rules to enforce it in spirit. Nothing less is acceptable.
Assuming thats true, why not leverage 1 googloplex to 1? Mathematically there isn't much of a risk difference, since you can be insolvent in a heartbeat if accounting was accurately measured. I just don't agree with Jim at all the insinuation that fiat currency isn't good currency. I really do hate the gold-bug mantra that shiny rocks is money. Gold as money is more draconian than the current system by a long shot.
Further, the Federal reserve will NOT take mark to market losses, but instead have a direct "running tab" with the treasury. What is the difference between US currency and Zimbabwe? Each month there is less of a difference. Currency deserves respect and STRICT rules to enforce it in spirit. Nothing less is acceptable.
Tuesday, November 15, 2011
European Crisis ahead
I am continually amazed at how incredibly irresponsible people are at their jobs and responsibilities. The European situation was obvious to me and many other bloggers years ago that they where sitting on a pile of lies. A pile that makes the USA lies look not that bad.
And here we are, day after day, month after month of the European political drama of denial and patchwork promises to stabilize the union. What have Europeans gotten for all this effort? Their (and US) tax dollars thrown at bankrupt countries, banks, and other financial institution with NOTHING done to address the root cause, excessive debt, lack of transparency, and mark to fantasy accounting.
Greece's bond rates I have published before soared. Now its spreading to Italy, Spain, Portugal, Ireland, Belgium and even France!
The leader for being the next Greece fiasco is Portugal, with soon to follow Ireland, Spain, or Italy.
Once one of these countries become the next Greece, I predict we won't have a 3rd, but a 3rd, 4th, 5th, and 6th at the same time.
Prediction: Europe is incapable of doing the right thing, as America has proven it isn't either. So we must have a European crisis. And Germany WILL buckle and print the euro just like America.
Next its a coin toss on who goes down next, China, US, or a long list of other countries.
But for those who think the US is untouchable, your just like most Europeans 1 year ago.
Once those countries buckles, then its time for the global currency crisis. I still think 2013-2018. It takes quite a while for this to play out.
And here we are, day after day, month after month of the European political drama of denial and patchwork promises to stabilize the union. What have Europeans gotten for all this effort? Their (and US) tax dollars thrown at bankrupt countries, banks, and other financial institution with NOTHING done to address the root cause, excessive debt, lack of transparency, and mark to fantasy accounting.
Greece's bond rates I have published before soared. Now its spreading to Italy, Spain, Portugal, Ireland, Belgium and even France!
The leader for being the next Greece fiasco is Portugal, with soon to follow Ireland, Spain, or Italy.
Once one of these countries become the next Greece, I predict we won't have a 3rd, but a 3rd, 4th, 5th, and 6th at the same time.
Prediction: Europe is incapable of doing the right thing, as America has proven it isn't either. So we must have a European crisis. And Germany WILL buckle and print the euro just like America.
Next its a coin toss on who goes down next, China, US, or a long list of other countries.
But for those who think the US is untouchable, your just like most Europeans 1 year ago.
Once those countries buckles, then its time for the global currency crisis. I still think 2013-2018. It takes quite a while for this to play out.
How bad off is China?
Jim Chanos, my favorite investor, spoke of a statistic I cannot correlate.
He stated that if you look at the "implicit" debt obligation is 200% of China's GDP.
Notice Chanos did not provide the same analogy for the US.
Both videos a great watch.
He stated that if you look at the "implicit" debt obligation is 200% of China's GDP.
Notice Chanos did not provide the same analogy for the US.
Both videos a great watch.
Sunday, November 13, 2011
This week without stock charts
Over the last few months or so I have become a little disturbed about the market. Europe his dire news all the time, the lack of US job growth, increasing housing defaults, increasing poverty, very large bankruptcies through fraud ( MF Global, top 10 of all time ) and other bad news.
Ignoring the press, the spin, the bloggers, everyone there are a few facts you can't ignore.
Price of gas remains high, price of gold has remained relatively strong, and other natural resource prices are not collapsing. And through this the US dollar has NOT risen like a rocket. Sure, it has gone back up compared to other currencies, but not nearly what I would have expected. After all, the news is focused on destabilization of the euro.
Throw in the market has shrugged all of this off.....what does it tell you?
My gut is telling me we maybe seeing the initial effects of monetary inflation, in a deflationary economy. And in such an environment, we'll see very odd stuff. I can't imagine being short in this environment, nor long, except natural resources.
For now I am continuing to try to sit tight, and wait for Thanksgiving weekend. Remember, congress has to come to terms with the government budget. Expect disappointment, and a possible US dollar decline. If the dollar does decline, we may see a nice market rally, contrary to popular thought.
AVL got some strength earlier in the week. Gold and silver look good, and of course gold miners.
Good luck, its an impossible scenario no matter what you chose.
Ignoring the press, the spin, the bloggers, everyone there are a few facts you can't ignore.
Price of gas remains high, price of gold has remained relatively strong, and other natural resource prices are not collapsing. And through this the US dollar has NOT risen like a rocket. Sure, it has gone back up compared to other currencies, but not nearly what I would have expected. After all, the news is focused on destabilization of the euro.
Throw in the market has shrugged all of this off.....what does it tell you?
My gut is telling me we maybe seeing the initial effects of monetary inflation, in a deflationary economy. And in such an environment, we'll see very odd stuff. I can't imagine being short in this environment, nor long, except natural resources.
For now I am continuing to try to sit tight, and wait for Thanksgiving weekend. Remember, congress has to come to terms with the government budget. Expect disappointment, and a possible US dollar decline. If the dollar does decline, we may see a nice market rally, contrary to popular thought.
AVL got some strength earlier in the week. Gold and silver look good, and of course gold miners.
Good luck, its an impossible scenario no matter what you chose.
Friday, November 11, 2011
David Rosenberg Interview on economy
Mr. Rosenberg is a well known former Merrill strategist gives a great view of the economic conditions, and investment sectors to look at.
I completely agree that a turn around must come from the politicians leading the nation.
I completely agree that a turn around must come from the politicians leading the nation.
Thursday, November 10, 2011
Steve Jobs and Life
I don't believe I even mentioned on this blog the passing of Steve Jobs.
As an IT guy, but not an Apple-ite, Jobs has been a presence in my life, indirectly affecting my daily work.
He is a rare item, a true leader in every sense of the world.
A true leader does NOT mean perfect, nice, or even civil. It means as a man he can lead others to move heaven and earth, shaping the future out of nothingness.
I read a post on Slope of Hope about Steve Jobs. It read to me as an honest assessment of Jobs and the impact on all of us. I am one of those who does not like to mix god-talk with topics. So ignoring the god references, and the statement Jobs was the best business man ever, the rant reads true.
An entertaining read from Slope of hope,
As an IT guy, but not an Apple-ite, Jobs has been a presence in my life, indirectly affecting my daily work.
He is a rare item, a true leader in every sense of the world.
A true leader does NOT mean perfect, nice, or even civil. It means as a man he can lead others to move heaven and earth, shaping the future out of nothingness.
I read a post on Slope of Hope about Steve Jobs. It read to me as an honest assessment of Jobs and the impact on all of us. I am one of those who does not like to mix god-talk with topics. So ignoring the god references, and the statement Jobs was the best business man ever, the rant reads true.
An entertaining read from Slope of hope,
Steven Paul Jobs and the Meaning of Life
Update: Thanks to bob to a nifty site recanting the experiences of working at Apple as an engineer in the early days, web site called Folklore.org
Wednesday, November 9, 2011
Where is the bull market?
The US stock market has been fairly resilient during the European debt crisis. The US dollar has risen during this crisis and held it's gains.
But so far, the US stock market has not clearly entered into a bull market, and has been trading in a range.
But there has been one area that has been resilient, price of gold, price of gas at the pump, and the price of food. The common thread of course is natural resources. Granted, all have come off their highs, but their prices have not collapsed. Sure, copper collapsed, and so did corn, but those bubbles are reflections of how strong the overall commodity market is.
I am cautiously optimistic that during the European drama, that gold maintains relative strength. This is a stark contrast to 2008, when oil hit a high and started to collapse, the entire commodity market swooned AHEAD of the market collapse.
To be clear, gold is not money, and there are no guarantees of it doing well in a Euro collapse, if that transpires. But in 2008 people looking for safety ran to USD and euro. Then when US decided to openly devalue it's currency, some ran to the Euro, driving it up significantly against the USD.
If the Euro does enter a crisis, people that got burned may not be so quick to run back to the USD, but instead into gold. And I am also following Gary of the Smart Money tracker into Gold Miners (ETF's GDX and GDXJ).
The hope being that money MUST flow somewhere in a crisis. With the US Dollar not clearly going to soar for years to come, and no one trusting China's currency there isn't many options.
Japanese Yen and USD will continue to do well I believe in the short term. Many people will flow into them, as they have done for 30 years, when looking for saftey. But the key is to look at what happens once all the people run from Euro and other currencies into USD and Yen?
Maybe, if we have a global currency collapse. But I doubt that. It is more likely when the dust settles in the Euro, the USD will have seen it's final rally, as there are no buyers left. Similar to what happened in the US stock market in 2009. But the time the S and P 500 hit 666, there where no more sellers left, only one way left is up.
By the time the USD hits the high at the Euro crisis, whenever that is (next week, next year?), there will be no more surge of buyers. Then there is only one way, down.
With gold I want a foothold BEFORE the USD hits a high, to be positioned for the finale.
Good luck.
But so far, the US stock market has not clearly entered into a bull market, and has been trading in a range.
But there has been one area that has been resilient, price of gold, price of gas at the pump, and the price of food. The common thread of course is natural resources. Granted, all have come off their highs, but their prices have not collapsed. Sure, copper collapsed, and so did corn, but those bubbles are reflections of how strong the overall commodity market is.
I am cautiously optimistic that during the European drama, that gold maintains relative strength. This is a stark contrast to 2008, when oil hit a high and started to collapse, the entire commodity market swooned AHEAD of the market collapse.
To be clear, gold is not money, and there are no guarantees of it doing well in a Euro collapse, if that transpires. But in 2008 people looking for safety ran to USD and euro. Then when US decided to openly devalue it's currency, some ran to the Euro, driving it up significantly against the USD.
If the Euro does enter a crisis, people that got burned may not be so quick to run back to the USD, but instead into gold. And I am also following Gary of the Smart Money tracker into Gold Miners (ETF's GDX and GDXJ).
The hope being that money MUST flow somewhere in a crisis. With the US Dollar not clearly going to soar for years to come, and no one trusting China's currency there isn't many options.
Japanese Yen and USD will continue to do well I believe in the short term. Many people will flow into them, as they have done for 30 years, when looking for saftey. But the key is to look at what happens once all the people run from Euro and other currencies into USD and Yen?
Maybe, if we have a global currency collapse. But I doubt that. It is more likely when the dust settles in the Euro, the USD will have seen it's final rally, as there are no buyers left. Similar to what happened in the US stock market in 2009. But the time the S and P 500 hit 666, there where no more sellers left, only one way left is up.
By the time the USD hits the high at the Euro crisis, whenever that is (next week, next year?), there will be no more surge of buyers. Then there is only one way, down.
With gold I want a foothold BEFORE the USD hits a high, to be positioned for the finale.
Good luck.
Sunday, November 6, 2011
Where should your money be?
I am not going to endorse or reject this video. I think it is worth readers to watch, and give thought to the content. At the very least, it was interesting to see how they used the movie It's a Wonderful Life to make their point.
At the end, it refers you to the web site Move Your Money for more information.
As food for thought, check out youtube and surf, I found this one, all interesting.
At the end, it refers you to the web site Move Your Money for more information.
As food for thought, check out youtube and surf, I found this one, all interesting.
Saturday, November 5, 2011
Lost Power
As some of you have heard, the NJ area was hit hard with an early snow.
I was without power from Tuesday until Thursday. Between that and being in a wedding Saturday, I didn't have time to post. I should have time this week.
I was without power from Tuesday until Thursday. Between that and being in a wedding Saturday, I didn't have time to post. I should have time this week.
Tuesday, November 1, 2011
Greece destabilizing fast, time for European meltdown?
Greece is destabilizing fast. Greek prime minister George Papandreou replaced the top brass in Army, Navy, and Air Force in a surprise move. This is following another surprise move by announcing holding a public vote on EU bailout agreements, as soon as next week.
Government Greek 1 year bonds now pay a return of 205%!!!
If you bought 10,000 euros of Greek government 1 year bonds, in 1 year, the bond will be worth 30,000 Euros!
The current proposed plan is to cut bond debt by 50%. So if the 10,000 euros turned to 5,000 Euros, in 1 year it would be worth 15,000! Still a 50% gain for 1 year in bonds.
It should be obvious that this is not risk free. There is a reason why the rates are so high.
Because the government is destabilizing and you may get ZERO return on your bonds.
And if Greece falls, expect Spain, Portugal, Italy, and Ireland to be not too far behind.
If Europe enters into a classic deflationary collapse, which is once again it is looking to be, the entire market could get a big flush.
Good luck. We live in truly historic times.
Government Greek 1 year bonds now pay a return of 205%!!!
If you bought 10,000 euros of Greek government 1 year bonds, in 1 year, the bond will be worth 30,000 Euros!
The current proposed plan is to cut bond debt by 50%. So if the 10,000 euros turned to 5,000 Euros, in 1 year it would be worth 15,000! Still a 50% gain for 1 year in bonds.
It should be obvious that this is not risk free. There is a reason why the rates are so high.
Because the government is destabilizing and you may get ZERO return on your bonds.
And if Greece falls, expect Spain, Portugal, Italy, and Ireland to be not too far behind.
If Europe enters into a classic deflationary collapse, which is once again it is looking to be, the entire market could get a big flush.
Good luck. We live in truly historic times.
Monday, October 31, 2011
This week in chart
The dollar has bounced, and the market fell, no surprise here.
The question is can the dollar find footing, I suspect not yet.
So today, I bring the market view of the last 6 months, to put 10-31 market trade in context.
The question is can the dollar find footing, I suspect not yet.
So today, I bring the market view of the last 6 months, to put 10-31 market trade in context.
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| From WebSufinMurfs FinancialBlog2 |
News round up
I haven't done this in a while, but there are multiple news events worthy of your eyes.
MISH'S Global Economic Trend Analysis
Race to Debase Currency Back On - Japan Finance Minister Promises to "Intervene Until I'm Satisfied"
Head of EFSF says Bailout Fund Could One Day Issue Bonds in Yuan - My Spin - this would eventually lead to WW3
Czech PM Considers Referendum to Halt Joining EU - Unintended consequences by EU doing the 'wrong' thing.
Treaty of Debt - An Eye Opening Video on the ESM Bailout Mechanism
Spain's Unemployment "Unexpectedly" Rises to 21.52%
Shanghai Homeowners Smash Showroom in Protest of Falling Prices; Developer Warns on Price Drops; "Twilight Zone" of Phony Accounting and Shadow Money
The "Most Transparent Administration Ever" Seeks Law to Respond to Freedom of Information Requests with "Information Does Not Exist"
The Market Ticker
Word on the street, Greek bond deal WILL trigger CDS default event
Slope of Hope
Compare the Stock Market in the Great Depression to today (worth a quick look at the charts)
Zero Hedge
Interview with Author about Germany's hyperinflation after WW1
MISH'S Global Economic Trend Analysis
Race to Debase Currency Back On - Japan Finance Minister Promises to "Intervene Until I'm Satisfied"
Head of EFSF says Bailout Fund Could One Day Issue Bonds in Yuan - My Spin - this would eventually lead to WW3
Czech PM Considers Referendum to Halt Joining EU - Unintended consequences by EU doing the 'wrong' thing.
Treaty of Debt - An Eye Opening Video on the ESM Bailout Mechanism
Spain's Unemployment "Unexpectedly" Rises to 21.52%
Shanghai Homeowners Smash Showroom in Protest of Falling Prices; Developer Warns on Price Drops; "Twilight Zone" of Phony Accounting and Shadow Money
The "Most Transparent Administration Ever" Seeks Law to Respond to Freedom of Information Requests with "Information Does Not Exist"
The Market Ticker
Word on the street, Greek bond deal WILL trigger CDS default event
Slope of Hope
Compare the Stock Market in the Great Depression to today (worth a quick look at the charts)
Zero Hedge
Interview with Author about Germany's hyperinflation after WW1
Sunday, October 30, 2011
Savings and loan bubble vs mortgage loan bubble
For those readers who can remember 1989, they will remember that the savings and loan bubble back then was blamed for the early 90's recession. When the bubble popped, the prosecution began.
Even though I was barely an adult, I do remember the media coverage of the prosecutions.
Below is a street interview of Bill Black, where he recalls his part of the prosecutions in the S&L fraud, and compares it to today. He also refers people to the blog http://neweconomicperspectives.blogspot.com/ for more information.
Although I agree with the outrage that we have entered in to large, unabated, lawless era. I don't view it as the same outrage as most. The protesters, Karl of the Market Ticker, are screaming Stop the looting and start the prosecuting!.
I the lack of the prosecutions, or law enforcement as a reflection of society. The lack of law enforcement tells me the average person in government, police, and politics, do not have passion for taking the harder road and diligently enforcing the letter of the law. It is relatively easy to prosecute a man for petty theft, violence, or assault. It is quite another to work a case involving intricate situations with vague boundaries to make a case and prosecute to the fullest extent of the law.
The country must degrade to the point that the AVERAGE person is ACTING upon this desire. I don't believe this will change until 51% of Americans are motivated to participate in the system, not just vote. I fall into this category, so I am not preaching from up high.
Interesting ad-hoc video below, audio interview from earlier this year can be found here.
Even though I was barely an adult, I do remember the media coverage of the prosecutions.
Below is a street interview of Bill Black, where he recalls his part of the prosecutions in the S&L fraud, and compares it to today. He also refers people to the blog http://neweconomicperspectives.blogspot.com/ for more information.
Although I agree with the outrage that we have entered in to large, unabated, lawless era. I don't view it as the same outrage as most. The protesters, Karl of the Market Ticker, are screaming Stop the looting and start the prosecuting!.
I the lack of the prosecutions, or law enforcement as a reflection of society. The lack of law enforcement tells me the average person in government, police, and politics, do not have passion for taking the harder road and diligently enforcing the letter of the law. It is relatively easy to prosecute a man for petty theft, violence, or assault. It is quite another to work a case involving intricate situations with vague boundaries to make a case and prosecute to the fullest extent of the law.
The country must degrade to the point that the AVERAGE person is ACTING upon this desire. I don't believe this will change until 51% of Americans are motivated to participate in the system, not just vote. I fall into this category, so I am not preaching from up high.
Interesting ad-hoc video below, audio interview from earlier this year can be found here.
Thursday, October 27, 2011
When does the other shoe drop
It is quite clear the markets are in rally mode. Nothing moves in a straight line, but assuming Europe does succeed in advancing its voluntary debt forgiveness but this is not a default according to law plan, markets may levitate for a while.
But there is a fly in the ointment on multiple fronts. First there is this Christmas sales. The US Economy is still judged by public consumption. So if sales are poor, or margins cut deep, companies may not have a good season.
But lets assume that sales do OK, what else is on the horizon?
Think back to August, what news was on every tv, every hour, and had a buzz about on every news program?
Think back.
Wait for it......
The US debt default, end of the world. How quickly we all forget the end of the western world almost happened in August. And it was true! right? It wasn't political.....wait....maybe it was overblown slightly. It was a crisis right?
I am here to tell you there was ZERO crisis. But it doesn't matter about reality, it is the perception that matters. And at that time, the debt ceiling increase passed, but under the condition of a special super committe is formed to determine government spending. That the committee must come up with 1.5 trillion debt reduction over 10 years.
What a freaking joke. The government will agree to basically cut 150 billion a year on a 3.7 trillion dollar budget for 10 years. Does anyone at all believe any of this?
Again, it doesn't matter about the reality. But one thing is for sure, next year is an election year. That means the Republicans and Democrats are going to be filling the airwaves AGAIN about budget, this time deadline November 23rd.
So before we look to the sky for how far the market will run, consider that the news will once again be financial topics, and being spun loudly for November 23rd. The market hates uncertainty.
My bet? I don't want to be long markets into November 25th, right after Thanksgiving. Between the Christmas sales and newly passed budget cuts, I am not betting on a new market high.
Between now and then, Gold goes up, dollar goes down, markets climb or trade in a range. I'll stick to gold, gold miners, and silver.
Good luck
UPDATE: 10-28-11 @ 8:50 am Election worries drive deficit talks
But there is a fly in the ointment on multiple fronts. First there is this Christmas sales. The US Economy is still judged by public consumption. So if sales are poor, or margins cut deep, companies may not have a good season.
But lets assume that sales do OK, what else is on the horizon?
Think back to August, what news was on every tv, every hour, and had a buzz about on every news program?
Think back.
Wait for it......
The US debt default, end of the world. How quickly we all forget the end of the western world almost happened in August. And it was true! right? It wasn't political.....wait....maybe it was overblown slightly. It was a crisis right?
I am here to tell you there was ZERO crisis. But it doesn't matter about reality, it is the perception that matters. And at that time, the debt ceiling increase passed, but under the condition of a special super committe is formed to determine government spending. That the committee must come up with 1.5 trillion debt reduction over 10 years.
What a freaking joke. The government will agree to basically cut 150 billion a year on a 3.7 trillion dollar budget for 10 years. Does anyone at all believe any of this?
Again, it doesn't matter about the reality. But one thing is for sure, next year is an election year. That means the Republicans and Democrats are going to be filling the airwaves AGAIN about budget, this time deadline November 23rd.
So before we look to the sky for how far the market will run, consider that the news will once again be financial topics, and being spun loudly for November 23rd. The market hates uncertainty.
My bet? I don't want to be long markets into November 25th, right after Thanksgiving. Between the Christmas sales and newly passed budget cuts, I am not betting on a new market high.
Between now and then, Gold goes up, dollar goes down, markets climb or trade in a range. I'll stick to gold, gold miners, and silver.
Good luck
UPDATE: 10-28-11 @ 8:50 am Election worries drive deficit talks
Europe Celebrates Lawlessness
The fiscal problems in America and Europe have driven government sanctioned fraud globally. In March 2009, with the global crisis hitting lows, the FASB changed accounting rules to allow banks to mark 'assets' at a valuation they determine, rather than what the asset is worth on the open market. This was called mark to market accounting, instituted back in the Great Depression.
The idea is that assets have value, equivalent to what others are willing to pay for it. For example, if I state my house is worth the amount I paid for it, but nobody today will buy for that price, then what people will pay for it today would be the 'mark to market' price.
Since then, banks across the world have enjoyed a great run, and why not? Their assets in accounting terms don't lose value. Its a great gig.
Europe now proposes that Greece will be able to write down their bond debt by fifty percent AND this will not trigger a default on their debt. The second part is key here. If the debt write down is not termed a default, it cannot be an event that triggers legal action when defaults happen.
This to me rings of what I see in society often today, avoiding responsibility by changing the rules. This will have ramifications that I believe will far outweigh the benefits in the years ahead.
How can anyone enter into financial agreements if accounting rules can change, if definitions like debt default are altered to suit the "other side of the tables" needs?
The answer is, if you act responsible with your money, you can't You will avoid entering into such agreements in an industry that has a track record of avoiding adhering to the construct the agreement was based upon.
If the Greece plan comes to pass, the event will AVOID triggering the debt default agreements (like insurance) called Credit Default Swaps. In the near term, this is a fantastic thing. I have covered before how CDS coverage exceeds gobal GDP by multiple times. If CDS is not triggered, is greatly reduces the change of a financial depression. Thats the good news.
The bad news if money is not treated with respect, and does not have a rigid enforcement of law, the other result is currency collapse.
While I am not stating that a currency collapse will happen, I am stating there is no free ride for avoiding responsibility, there will be consequences. For today, time to celebrate, markets will go up. Watch gold and gold miners, I may buy more.
My Favorite quote during this event is
"The world is watching Europe and Germany; it is watching whether we are ready and able, in the hour of Europe's most serious crisis since the end of World War II, to take responsibility," Merkel told parliament.
The way I see it, above was a twist of words, below I have fixed it.
"The world is watching Europe and Germany; it is watching whether we are ready and able, in the hour of Europe's most serious crisis since the end of World War II, enforce responsibility," what Merkel should have told parliament.
The idea is that assets have value, equivalent to what others are willing to pay for it. For example, if I state my house is worth the amount I paid for it, but nobody today will buy for that price, then what people will pay for it today would be the 'mark to market' price.
Since then, banks across the world have enjoyed a great run, and why not? Their assets in accounting terms don't lose value. Its a great gig.
Europe now proposes that Greece will be able to write down their bond debt by fifty percent AND this will not trigger a default on their debt. The second part is key here. If the debt write down is not termed a default, it cannot be an event that triggers legal action when defaults happen.
This to me rings of what I see in society often today, avoiding responsibility by changing the rules. This will have ramifications that I believe will far outweigh the benefits in the years ahead.
How can anyone enter into financial agreements if accounting rules can change, if definitions like debt default are altered to suit the "other side of the tables" needs?
The answer is, if you act responsible with your money, you can't You will avoid entering into such agreements in an industry that has a track record of avoiding adhering to the construct the agreement was based upon.
If the Greece plan comes to pass, the event will AVOID triggering the debt default agreements (like insurance) called Credit Default Swaps. In the near term, this is a fantastic thing. I have covered before how CDS coverage exceeds gobal GDP by multiple times. If CDS is not triggered, is greatly reduces the change of a financial depression. Thats the good news.
The bad news if money is not treated with respect, and does not have a rigid enforcement of law, the other result is currency collapse.
While I am not stating that a currency collapse will happen, I am stating there is no free ride for avoiding responsibility, there will be consequences. For today, time to celebrate, markets will go up. Watch gold and gold miners, I may buy more.
My Favorite quote during this event is
"The world is watching Europe and Germany; it is watching whether we are ready and able, in the hour of Europe's most serious crisis since the end of World War II, to take responsibility," Merkel told parliament.
The way I see it, above was a twist of words, below I have fixed it.
"The world is watching Europe and Germany; it is watching whether we are ready and able, in the hour of Europe's most serious crisis since the end of World War II, enforce responsibility," what Merkel should have told parliament.
Wednesday, October 26, 2011
Gold explodes upward
Today, Gold exploded up, also silver. Gold miners had a nice up day also. Gary of the Smart Money tracker is convinced its time to buy.
I am real nervous. We are on the cusp of an announcement from Europe. If your of the belief the Germans will cave and finance the debt of Spain, Greece, Portugal, and Ireland, then buy Gold and miners on the open Wednesday.
If you think the Germans won't go for this, then a deflationary collapse is about to begin. In such a collapse, I have a hard time believing gold rockets up.
So I am splitting the baby. I am buying a little bit of GLD (gold) and SLV (silver) . Why? Because if the metals explode up, it will be very hard to buy. Each day you will look and say "that has to come back down". It may not. I'd rather have a toe hold to use as leverage to buy more as gains amass.
Conversely, if gold and silver are indicating a rise, but instead collapse trapping all of us in those sectors, I want to minimize losses by not taking huge positions.
I cannot day trade, i have no time. I don't like stop losses since as we saw today, metals can move huge swings in a day.
In addition, probably buy 100 shares of gdxj, the junior gold/silver miners.
Again a toe hold, and each day I wait for the market move of Europe indicating, inflationary or deflationary event in the year ahead. Also if the Fed announces yet another attempt to break the USD into a death spiral.
One thing is on the side of Gold and silver, no matter what happens fear tends to push up the precious metal sectors, and European fear can only help Gold Silver.
I am real nervous. We are on the cusp of an announcement from Europe. If your of the belief the Germans will cave and finance the debt of Spain, Greece, Portugal, and Ireland, then buy Gold and miners on the open Wednesday.
If you think the Germans won't go for this, then a deflationary collapse is about to begin. In such a collapse, I have a hard time believing gold rockets up.
So I am splitting the baby. I am buying a little bit of GLD (gold) and SLV (silver) . Why? Because if the metals explode up, it will be very hard to buy. Each day you will look and say "that has to come back down". It may not. I'd rather have a toe hold to use as leverage to buy more as gains amass.
Conversely, if gold and silver are indicating a rise, but instead collapse trapping all of us in those sectors, I want to minimize losses by not taking huge positions.
I cannot day trade, i have no time. I don't like stop losses since as we saw today, metals can move huge swings in a day.
In addition, probably buy 100 shares of gdxj, the junior gold/silver miners.
Again a toe hold, and each day I wait for the market move of Europe indicating, inflationary or deflationary event in the year ahead. Also if the Fed announces yet another attempt to break the USD into a death spiral.
One thing is on the side of Gold and silver, no matter what happens fear tends to push up the precious metal sectors, and European fear can only help Gold Silver.
Tuesday, October 25, 2011
Ron Paul Speaks
I am actually scared if Ron Paul becomes president. I do admire the man for keeping the eye on the ball about reforming the government and pulling back spending.
But he has touted in the past the Gold standard for money. I am completely against tying money to shiny rocks, dull rocks, or any other natural resource with independent value of work done and work owed.
But Ron Paul is ALWAYS worth listening to. Where else will you get new ideas, insight into fundamentals, and ideas on actually reforming the government? I don't completely agree with Ron Paul, but I agree more than most other candidates. I had hoped (and still hope) Chris Christie joins and becomes president. Other than him, I see a wasteland from the top two parties.
But he has touted in the past the Gold standard for money. I am completely against tying money to shiny rocks, dull rocks, or any other natural resource with independent value of work done and work owed.
But Ron Paul is ALWAYS worth listening to. Where else will you get new ideas, insight into fundamentals, and ideas on actually reforming the government? I don't completely agree with Ron Paul, but I agree more than most other candidates. I had hoped (and still hope) Chris Christie joins and becomes president. Other than him, I see a wasteland from the top two parties.
Monday, October 24, 2011
European Union, the 20th Deadline to resolve is Wednesday
Wednesday's deadline for the Eurpean union to resolve their sovereign debt, after a string of deadlines for over a year to resolve, is now in focus this week for the markets.
I haven't commented much since I was so confident zero would get done, and I was right.
But this week, there may be a peep, I doubt final answer on the European crisis. But we may actually get some foothold of the new reality out of Europe this week.
We could hear it Wednesday, but I suspect just one more kick the can into Friday for an announcement.
In any event, this is a crucial decision of Europe that will shape all of western countries next couple of years. I just don't believe the right thing will be done. Instead I expect more paper games to cover the crisis, until the crisis gets so big, no European country can avoid the vortex created.
It just boils down to take your medicine now, or wait until Europe is on the hospital operating room with a massive near fatal heart attack to see the outcome.
I haven't commented much since I was so confident zero would get done, and I was right.
But this week, there may be a peep, I doubt final answer on the European crisis. But we may actually get some foothold of the new reality out of Europe this week.
We could hear it Wednesday, but I suspect just one more kick the can into Friday for an announcement.
In any event, this is a crucial decision of Europe that will shape all of western countries next couple of years. I just don't believe the right thing will be done. Instead I expect more paper games to cover the crisis, until the crisis gets so big, no European country can avoid the vortex created.
It just boils down to take your medicine now, or wait until Europe is on the hospital operating room with a massive near fatal heart attack to see the outcome.
Market Commentary
If I exclude the possibility of the US Dollar hyper-inflating (which in the next year or two seems highly unlikely), I am now very pessimistic for the market.
I can't stress hard enough that cash is king.
See yesterday's post, and combine that with Gary of the Smart Money Tracker private pay advice (I won't republish, join to read) I am more bearish than ever.
I may be tempted to buy double inverse funds.......to catch the down swoop in a "positive" way.
Good luck.
I can't stress hard enough that cash is king.
See yesterday's post, and combine that with Gary of the Smart Money Tracker private pay advice (I won't republish, join to read) I am more bearish than ever.
I may be tempted to buy double inverse funds.......to catch the down swoop in a "positive" way.
Good luck.
Sunday, October 23, 2011
The US Market Charts in the BIG picture
Today, I have two grand market valuations to look at over the century. One is S&P 500 in terms of it's valuation RELATIVE to gold valuation. (in essence, if we used gold as money) The second is the S&P 500 since 1870 to today.
Regular readers know I do not believe gold is money. But it does serve as a relative valuation to judge how fiat currencies are valued relative to non-fiat valuation. I would rather have chart of the US market in relative terms to all commodities (averaged). In absence of that, the gold chart will do.
The charts deliver one message to me. In relative or non-relative terms, from a charting perspective, the markets are headed don to 700 range....AGAIN. This is using historical trends projected into the future. I DO NOT think this is a required outcome. Man can change laws, and change "Relative valuations" but doing things such as breaking currencies. Then the charts are meaningless.
To the charts!
Regular readers know I do not believe gold is money. But it does serve as a relative valuation to judge how fiat currencies are valued relative to non-fiat valuation. I would rather have chart of the US market in relative terms to all commodities (averaged). In absence of that, the gold chart will do.
The charts deliver one message to me. In relative or non-relative terms, from a charting perspective, the markets are headed don to 700 range....AGAIN. This is using historical trends projected into the future. I DO NOT think this is a required outcome. Man can change laws, and change "Relative valuations" but doing things such as breaking currencies. Then the charts are meaningless.
To the charts!
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
Friday, October 21, 2011
Greece, Spain, Portugal, Italy, Ireland
Greece, Spain, Portugal, Italy, Ireland are at risk of outright failure, unless Germany backs all their debt. Time will tell. Some nice video debate. Nigel Farage is my European Parliament hero.
Thursday, October 20, 2011
A step closer to Americas Financial end game
Question, what is the designation of the Federal Deposit Insurance Corporation?
Lets take a look at Wikipedia:
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. As of November 18, 2010, the FDIC insures deposits at 7,723 institutions.[2] The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages banks in receiverships (failed banks).
More is available on Wikipedia, but the gist is, it insures people cash deposits. (savings, checking, etc).
It is not for insuring corporate trading or risky assets.
But what if a bank, that exists due to suspending accounting practices since the Great Depression, and is solvent due to new legal accounting tricks, wants FDIC insurance?
What if that same bank has over 1 Trillion dollars in deposits AND has dodgy derivatives from a previous purchase, should the bank be allowed to transfer those dodgy debts from it's high risk trading group to the bank holding company, thereby shifting risk to the FDIC?
Apparently the answer is, yes. No matter how much risk assets have, and even though those assets have ZERO to do with normal banking, the assets (debts) can be shifted from the higher risk trading group into the bank holding company, and thereby force the FDIC to insure something that no corporation in their right mind would ensure.
This may be great for the depositors of that bank, but it won't be good for the other savings depositors from more stable banks. If an event is triggered, this will become a tax on all savers in banks NOT insolvent to pay off the debts to the insolvent bank.
If BOA ever triggers a FDIC event, FDIC will be insolvent for years to come just from BOA.
Good luck on the banks to follow. From article:
Bank of America is the only U.S. lender that lacks a rating of A3 or higher among the five firms listed by the Office of the Comptroller of the Currency as having the biggest derivatives books.
From FDIC
The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.
This entry has earned the recognition in the Financial Ground Zero event series.
Lets take a look at Wikipedia:
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. As of November 18, 2010, the FDIC insures deposits at 7,723 institutions.[2] The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages banks in receiverships (failed banks).
More is available on Wikipedia, but the gist is, it insures people cash deposits. (savings, checking, etc).
It is not for insuring corporate trading or risky assets.
But what if a bank, that exists due to suspending accounting practices since the Great Depression, and is solvent due to new legal accounting tricks, wants FDIC insurance?
What if that same bank has over 1 Trillion dollars in deposits AND has dodgy derivatives from a previous purchase, should the bank be allowed to transfer those dodgy debts from it's high risk trading group to the bank holding company, thereby shifting risk to the FDIC?
Apparently the answer is, yes. No matter how much risk assets have, and even though those assets have ZERO to do with normal banking, the assets (debts) can be shifted from the higher risk trading group into the bank holding company, and thereby force the FDIC to insure something that no corporation in their right mind would ensure.
This may be great for the depositors of that bank, but it won't be good for the other savings depositors from more stable banks. If an event is triggered, this will become a tax on all savers in banks NOT insolvent to pay off the debts to the insolvent bank.
If BOA ever triggers a FDIC event, FDIC will be insolvent for years to come just from BOA.
Good luck on the banks to follow. From article:
Bank of America is the only U.S. lender that lacks a rating of A3 or higher among the five firms listed by the Office of the Comptroller of the Currency as having the biggest derivatives books.
From FDIC
The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.
This entry has earned the recognition in the Financial Ground Zero event series.
Wednesday, October 19, 2011
Most disturbing video I have seen in years
As I have repeated, China is not the world economic savior of the world in the near future. I think there will be a revolution of sorts in China, and the rebirth may be a rival for world leader. Apparently a Mish reader hopes so.
The first driver in the video didn't come down, but tried to kill the little girl instead, because he knew that killing someone in an accident would probably involve a lump sum and maybe sometime in the prison, whereas being responsible for her medical bills would mean bankrupting his family. The legal system, which is enacted by and for the governing elites, is inefficient (at best) and corrupted, especially any level of governments are involved (and they are involved in almost everything). From their own observations, many people lose hope; many turn cynical; and even more just become numb. Avoiding uncertainty at all cost is not a bad strategy to protect oneself.
A media friend of ours who lives in Shanghai calls the current time in China "The Carnival before the Judgement Day". And indeed tension if built up inside and I won't be surprised it hits a wall soon. Unlike many more patriotic Chinese, I do not want China to become a new world power soon - at least not in the current form. The still growing economy is the only legitimacy left for this system to maintain in power, and I am actually hoping for an economic hard landing in China if that's what takes to wake people up to challenge the status quo for the better.
A media friend of ours who lives in Shanghai calls the current time in China "The Carnival before the Judgement Day". And indeed tension if built up inside and I won't be surprised it hits a wall soon. Unlike many more patriotic Chinese, I do not want China to become a new world power soon - at least not in the current form. The still growing economy is the only legitimacy left for this system to maintain in power, and I am actually hoping for an economic hard landing in China if that's what takes to wake people up to challenge the status quo for the better.
Click the link above for the full Mish article, and video. It's moments like this that remind me how quickly and low people will sink once the conditions for self preservation surmount moral decency.
Monday, October 17, 2011
This Week in Chart
The USD may start to resume it's climb, after a nice pull back for two weeks.
I think it all depends on USD move where the market goes from here.
A never-ending-decline of USD with never-end-rise in the market isn't possible, nor desirable.
So something will shift.
From a charting perspective, we are in our range created after the multi-year trend breakdown.
So for now, its watch and see. I am still very nervous that the market breaks down from here.....but when am I not? :)
To the chart
I think it all depends on USD move where the market goes from here.
A never-ending-decline of USD with never-end-rise in the market isn't possible, nor desirable.
So something will shift.
From a charting perspective, we are in our range created after the multi-year trend breakdown.
So for now, its watch and see. I am still very nervous that the market breaks down from here.....but when am I not? :)
To the chart
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| From WebSufinMurfs FinancialBlog2 |
Friday, October 14, 2011
China is imploding
As I have posted before, China's near term over-extension of credit makes them NOT the saviour of the world economy. Building cities that no one lives in does not lead to a solid foundation for an economy.
I have featured Jim Chanos before. He is back in the news, some good clips to watch.
At the end, Jim throws down the true issue, are we a fair, capitalist system or a broken financial system that rewards the money risk takers and punishes the average person. Jim, its the latter.
I have featured Jim Chanos before. He is back in the news, some good clips to watch.
At the end, Jim throws down the true issue, are we a fair, capitalist system or a broken financial system that rewards the money risk takers and punishes the average person. Jim, its the latter.
Wednesday, October 12, 2011
Time for Markets to end the Rally?
Back on October 5th, I posted "Time for markets to Rally".
Back then, I said I doubt this lasts more than 2 weeks.
Here we are, October 12th, and two weeks from the 5th will be the 19th.
We are in the home stretch for the rally to potentially end.
The next leg down should be not very nice if your long the markets.
Today I am going to consider adding to my exit of stocks. Each day is really playing chicken with the market. There is now law that the rally can't run for 2 months more. But with the observations of China, Europe, USA, and other issues bubbling to the top, I have my doubts.
On October 5th, pre-open, the S&P 500 was at 1,120. Today pre-open markets at 1,195.
On October 4th, markets stretched down to 1075. So from 1075 to 1,200 (I expect a up cross today) is +125, or +11.6%.
In a world where US government bonds for a YEAR make under 1%, an up gain in +8 days of 11.6% is impressive. Don't be greedy, for the next down swing should go below 1075, more than 12% lower from here. See the bear at the top of this blog, he is still in control until proven otherwise.
Good luck
End of day: S&P 500 hit 1220 on 10-12-2011. That is a 13.5% in eight days. The gains count only if you keep them.
Back then, I said I doubt this lasts more than 2 weeks.
Here we are, October 12th, and two weeks from the 5th will be the 19th.
We are in the home stretch for the rally to potentially end.
The next leg down should be not very nice if your long the markets.
Today I am going to consider adding to my exit of stocks. Each day is really playing chicken with the market. There is now law that the rally can't run for 2 months more. But with the observations of China, Europe, USA, and other issues bubbling to the top, I have my doubts.
On October 5th, pre-open, the S&P 500 was at 1,120. Today pre-open markets at 1,195.
On October 4th, markets stretched down to 1075. So from 1075 to 1,200 (I expect a up cross today) is +125, or +11.6%.
In a world where US government bonds for a YEAR make under 1%, an up gain in +8 days of 11.6% is impressive. Don't be greedy, for the next down swing should go below 1075, more than 12% lower from here. See the bear at the top of this blog, he is still in control until proven otherwise.
Good luck
End of day: S&P 500 hit 1220 on 10-12-2011. That is a 13.5% in eight days. The gains count only if you keep them.
Monday, October 10, 2011
Federal 1 year bonds at 150 percent interest rate returns
Well, not US federal bonds.....
Here in America, a US bond gets near zero percent for a 1 year bond. In Greece, you can buy a Greece 1 year debt bond and get 150% interest rate!
Imagine that, give Greece 1,000 bucks, and in a year, you will get 2,500 bucks back in euros!
So why invest anywhere else but Greece?
For one thing, you must have faith that the European Union will save Greece by paying for their debts. And so far, Germany is having cold feet to pay for Greeks heavy debt load. Next up of course will be Spain, Italy, and eventually Ireland....again.
So if your the optimistic sort, it's a great time to buy Greek government bonds.
For those like myself, I'll take good old US bonds under 1% for now.
BTW, Greece offers us all a glimpse of a potential future for all western countries, if we don't start changing our behavior.....NOW.
Here in America, a US bond gets near zero percent for a 1 year bond. In Greece, you can buy a Greece 1 year debt bond and get 150% interest rate!
Imagine that, give Greece 1,000 bucks, and in a year, you will get 2,500 bucks back in euros!
So why invest anywhere else but Greece?
For one thing, you must have faith that the European Union will save Greece by paying for their debts. And so far, Germany is having cold feet to pay for Greeks heavy debt load. Next up of course will be Spain, Italy, and eventually Ireland....again.
So if your the optimistic sort, it's a great time to buy Greek government bonds.
For those like myself, I'll take good old US bonds under 1% for now.
BTW, Greece offers us all a glimpse of a potential future for all western countries, if we don't start changing our behavior.....NOW.
Western Financial Collapse and the East
Nice quick summary of the world economics, and I agree with this man 100%.
Friday, October 7, 2011
Global Financial Meltdown In Two To Three Weeks
Not sure if the title of this post has any merit. An adviser to the International Monetary Fund said it. Does that give it more weight? Remember, his focus is Europe, and I do agree Europe is in a old-school Great Depression, deflationary collapse. And I do agree the next crisis is waaaaaay worse than 2008, and its going to happen in the next 12 months. You decide if the video makes a compelling argument the next "3 weeks".
The video references Credit Default Swaps, which was the underpinning to a possible global collapse in 2008. Here we are in 2011, with no transparency, and no significant improvement on unregulated CDS, which exceed total global GDP in liability. Apparently there is only one way to fix this mess, and that is after a collapse. We had 3 years to reform CDS, and we didn't. WE will, when its forced.
My greatest short-coming in all of this is lack of understanding how people when faced with apparent obvious issues refuse to address them. The European union I recognized over a year ago starting to fall apart, and no significant progress to address was done. Same with CDS, this was an obvious issue back in 2008.
I hesitate to put timelines on such historic events, but I did quote it was time for this to begin in June 15th post "Three strikes, time for global economic implosion".
The video references Credit Default Swaps, which was the underpinning to a possible global collapse in 2008. Here we are in 2011, with no transparency, and no significant improvement on unregulated CDS, which exceed total global GDP in liability. Apparently there is only one way to fix this mess, and that is after a collapse. We had 3 years to reform CDS, and we didn't. WE will, when its forced.
My greatest short-coming in all of this is lack of understanding how people when faced with apparent obvious issues refuse to address them. The European union I recognized over a year ago starting to fall apart, and no significant progress to address was done. Same with CDS, this was an obvious issue back in 2008.
I hesitate to put timelines on such historic events, but I did quote it was time for this to begin in June 15th post "Three strikes, time for global economic implosion".
Wednesday, October 5, 2011
Time for markets to rally
The market is in overall down mode, but yesterdays extreme mid-day down action would have shaken all nervous stock holders out. Now there are more buyers than sellers. Plus the usd has risen at breakneck speed. It too must now move lower. Combination is a market rally. I doubt this lasts past 2 weeks.
The bear is still in control. Good luck
Wall Street Protests
Although I may be very critical of financial situation of US government and law enforcement, I haven't been commenting on the Wall Street Protesters.
The reason is I am unsure of who is pulling the strings of the protesters.
One of my favorite bloggers, Karl Denninger. He appeared on CNBC on this topic, watch below
The reason is I am unsure of who is pulling the strings of the protesters.
One of my favorite bloggers, Karl Denninger. He appeared on CNBC on this topic, watch below
Tuesday, October 4, 2011
Monday, October 3, 2011
This Week in Charts
As of week of September 11th, this market is in a down trend, that should last for a full year or more.
Expected top to bottom losses of 35% (or more). I'll re-evaluate when S&P 500 hits 780 OR the long term indicator flips into bull mode.
This blog will be pretty freaking boring for months to come, until I can see some glimmer of hope for natural resources or the market.
Cash is better than putting it anywhere else.
To the chart that matters, the market range.
Expected top to bottom losses of 35% (or more). I'll re-evaluate when S&P 500 hits 780 OR the long term indicator flips into bull mode.
This blog will be pretty freaking boring for months to come, until I can see some glimmer of hope for natural resources or the market.
Cash is better than putting it anywhere else.
To the chart that matters, the market range.
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| From WebSufinMurfs FinancialBlog2 |
Saturday, October 1, 2011
European Stock Market is Toast
I am not so sure about the title of this post actually happening, but it's what this trader says about Europe.
What I do agree is Europe will in the next two years will be forced to breakup the Euro.
If German law is observed, then it becomes quite likely that the Euro will fail much sooner.
Once Europe implodes, then the world will follow. Notice what this man says about Goldman Sachs....
What I can safely say is Prediction #2 of my 2011 prediction list is fulfilled, whatever happens.
In the end, all markets will implode without a severe intervention by world banks, which to date, seem to be taking a defensive stance for once. Fun times.
What I do agree is Europe will in the next two years will be forced to breakup the Euro.
If German law is observed, then it becomes quite likely that the Euro will fail much sooner.
Once Europe implodes, then the world will follow. Notice what this man says about Goldman Sachs....
What I can safely say is Prediction #2 of my 2011 prediction list is fulfilled, whatever happens.
In the end, all markets will implode without a severe intervention by world banks, which to date, seem to be taking a defensive stance for once. Fun times.
Monday, September 26, 2011
This Week In Charts
Nothing much to add, market in overall downtrend as described at top of this blog. (click)
Natural Resources getting CRUSHED for the last few weeks, however a near term (long term?) bottom probably happened today. Expect a bounce
The stock market is trading in a range, that I expect overall breaks downward eventually, for the next 6 months to a year.
The S&P 500 chart.
Natural Resources getting CRUSHED for the last few weeks, however a near term (long term?) bottom probably happened today. Expect a bounce
The stock market is trading in a range, that I expect overall breaks downward eventually, for the next 6 months to a year.
The S&P 500 chart.
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| From WebSufinMurfs FinancialBlog2 |
Thursday, September 22, 2011
Ok, what now?
We now have our answer, the Federal Reserve Banks announcement was not received well, as the market dropped like a rock as it announced. The deflationary collapse is continuing today, and since Europe is in a deflationary collapse that cannot be controled, the rabbit hole may go deep.
If S&P 500 breaks below 1,100, gloves are off, next target support is 1,000 then possibly to 780-666 range.
I am holding some longs, but refuse to buy any longs until this indicator crosses upwards (click).
At some point, gold may stop losses and be the one to buck the trend if people start running to it as a safe haven. Over the looong haul (10 years) of course, this can't work either, but it may be a trade I jump into if I see support.
All resource stocks should fail with the market, the next couple of days wont be fun for anyone.
Good luck.
If S&P 500 breaks below 1,100, gloves are off, next target support is 1,000 then possibly to 780-666 range.
I am holding some longs, but refuse to buy any longs until this indicator crosses upwards (click).
At some point, gold may stop losses and be the one to buck the trend if people start running to it as a safe haven. Over the looong haul (10 years) of course, this can't work either, but it may be a trade I jump into if I see support.
All resource stocks should fail with the market, the next couple of days wont be fun for anyone.
Good luck.
Wednesday, September 21, 2011
Two day Federal Reserve Meeting
Back on September first, with post titled "Know when to hold em, when to walk away", I stated I didn't like the market setup, between then and the Federal Reserve meeting late September. The market is slightly lower since then, and dropped quite a bit lower earlier in the month.
Today marks the second of a two day meeting for the Federal Reserve Bank. They will of course announce today.
The question is, what can they announce to change anything? Assuming they don't announce something extreme that immediately tanks the US dollar, there isn't anything they can do to "save" the global economy. They cannot provide political and global leadership to stimulate economic prosperity.
The function of the Federal Reserve Bank is to set banking and monetary policies. Although extreme banking and monetary policies helped put us into the global economic imbalance situation, it isn't purely caused by the banking actions.
Overall we have a deflationary situation with western countries not producing enough to cover their expenses, with Asian countries providing the production of goods and increasingly services at much lower cost. The US does not have a new innovation driver that will pull the economy out of this funk, nor does Europe. There is a fundamental economic imbalance between countries that must eventually correct. Having the federal reserve bank lower rates, or do some other trickery does not provide a cure to the western economies, it can only provide pain killers to give short temporary relief.
I'll leave the door open it is possible the Federal Reserve announces something so extreme, that the markets move. Generally speaking the Federal Reserve Bank is near out of any significant options. I expect in the years ahead their announcements will become increasingly marginalized as the wizard behind the curtain is exposed.
For me, this is very disturbing, back in 2008 and since then I have marginalized the Federal Reserve Banks ability to make any sort of dent in the fundamental economic driver of the USA and western countries. Here I am now facing that very reality becoming more obvious to the world, and now that it's here, the precipice is presenting itself. Now I hope that the fed proves me wrong!
Today marks the second of a two day meeting for the Federal Reserve Bank. They will of course announce today.
The question is, what can they announce to change anything? Assuming they don't announce something extreme that immediately tanks the US dollar, there isn't anything they can do to "save" the global economy. They cannot provide political and global leadership to stimulate economic prosperity.
The function of the Federal Reserve Bank is to set banking and monetary policies. Although extreme banking and monetary policies helped put us into the global economic imbalance situation, it isn't purely caused by the banking actions.
Overall we have a deflationary situation with western countries not producing enough to cover their expenses, with Asian countries providing the production of goods and increasingly services at much lower cost. The US does not have a new innovation driver that will pull the economy out of this funk, nor does Europe. There is a fundamental economic imbalance between countries that must eventually correct. Having the federal reserve bank lower rates, or do some other trickery does not provide a cure to the western economies, it can only provide pain killers to give short temporary relief.
I'll leave the door open it is possible the Federal Reserve announces something so extreme, that the markets move. Generally speaking the Federal Reserve Bank is near out of any significant options. I expect in the years ahead their announcements will become increasingly marginalized as the wizard behind the curtain is exposed.
For me, this is very disturbing, back in 2008 and since then I have marginalized the Federal Reserve Banks ability to make any sort of dent in the fundamental economic driver of the USA and western countries. Here I am now facing that very reality becoming more obvious to the world, and now that it's here, the precipice is presenting itself. Now I hope that the fed proves me wrong!
Monday, September 19, 2011
The Bear is Back
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| From WebSurfinMurf's Financial Blog |
The Bear is back, he has been violated and abused for over two years.
Out of ALL Long stocks, and even resource stocks should get somewhat routed. The next upswing I think will be an explosion for resource based stocks on the upswing.
My target for market turn around is around presidential election 2012. The deflationary collapse of Europe can make all of this much worse.
See post "Downturn ahead in stocks" for more detailed information. The lines have crossed, click here for latest charts.
A 1% gap or more between crossings is a more firm confirmation, I'll post once I see such a gap. For me, this is good enough to listen to. Those who think the USD is dead are in for a rude awakening, if they haven't gotten one already. The USD crisis isn't until after the next upswing and the next cycle of down pressure. I still think 2013-2014, possibly as late as 2018, depending on how events unfold.
S&P 500 sit at 1216, GLD at 173, TNX at 20.76, TYX at 33.41, OIH at 130, APPL at 400.5, USO at 33.4, AVL at 3.96, REE at 7.99, GDX at 64, RJA at 10.10, US dollar index at 77
Thursday, September 15, 2011
Gold break trendlines
It is looking VERY grim for gold prices in the near term, broke trend line onto the downside.
Considering how far and how fast gold went up, there could be a bit of a pullback in gold akin to what happened to silver.
Keep in mind that China and other speculative countries likely are margined to the max on gold and silver.
The price deceleration may accelerate, or quite possibly right here and now is the near term low and the price rise will resume, but I doubt it.
I will likely just exit gold and sit this out, like I should have in the first place.
Good luck
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| From WebSufinMurfs FinancialBlog2 |
Wednesday, September 14, 2011
Europe heading for all out implosion, 2008 style
America led the world into the first major wave of what I think will be a decade long crisis, back in 2008.
In 2011/2012, it is looking like Europe leading the world down rabbit hole number two.
The European banking system looks much worse than America's.
The major advantage the US has, is the US printing press for new currency has not hit any significant limitation.
Europe however doesn't have the same luxury. The Euro is basically a currency PEG among all member nations.
The Euro can't just print trillions of dollars and drop it from helicopters like Ben Bernanke.
This difference will result in a very harsh, and nasty deflationary collapse in the European union.
I suspect with Europe going down, the world will follow just like the world did with America.
Unfortunately, all of this will continue to add to the strain to the global system.
Two American banks with 4.3T dollars are at a stunning 22x leverage to capital, a recipe for disaster.
Four European banks with 4.8T Euros are at 69x leverage, and without unlimited currency printing, a sure fire collapse is fast approaching.
I had thought this would be kicked into much later 2012, but the posts I keep reading is starting to sway me that we may not make it out of 2011 without fireworks.
In 2011/2012, it is looking like Europe leading the world down rabbit hole number two.
The European banking system looks much worse than America's.
The major advantage the US has, is the US printing press for new currency has not hit any significant limitation.
Europe however doesn't have the same luxury. The Euro is basically a currency PEG among all member nations.
The Euro can't just print trillions of dollars and drop it from helicopters like Ben Bernanke.
This difference will result in a very harsh, and nasty deflationary collapse in the European union.
I suspect with Europe going down, the world will follow just like the world did with America.
Unfortunately, all of this will continue to add to the strain to the global system.
Two American banks with 4.3T dollars are at a stunning 22x leverage to capital, a recipe for disaster.
Four European banks with 4.8T Euros are at 69x leverage, and without unlimited currency printing, a sure fire collapse is fast approaching.
I had thought this would be kicked into much later 2012, but the posts I keep reading is starting to sway me that we may not make it out of 2011 without fireworks.
High Frequency Trading explained
You may hear the term High Frequency Trading quite a bit.
Here is a video series that explains HFT, how profit is made, and implications.
Brought to you by ZeroHedge, click here
Here is a video series that explains HFT, how profit is made, and implications.
Brought to you by ZeroHedge, click here
Sunday, September 11, 2011
Down Market Ahead in Charts
This week, I am refocusing on the one market indicator that has been accurate in the last 20+ years indicator for market rising and declines. Even when wrong, it is wrong for very short period of time, and does not result in significant market earnings miss. As video explains, you can wait for a 1% gap in the line cross to help rule out false positives. The line decline is so steep however, I think when they do cross, we will likely cross a 1-2% difference quite quickly. As I posted on July 17th, I expect this to happen in September.
If you haven't done so, I strongly encourage you to watch the video at the end of this post, and reflect on the chart below. This market indicator should be respected as an emotional-less, fact driven indicator. You can see my own mistake of disregarding this old indicator, and it did hurt my own accounts.
If we experience a year long bear market, chances are, everything will do poorly, including natural resource related investments. At the tail end of this however, I suspect resource stocks will bounce back with a viscous vengeance. I will keep my core position in gold miners purchased back in 2008, as well as AVL and other ETF's like REE, as longer term plays. GLD (Gold) or Silver prices may do well, but could have a severe correction at any moment and carries significant risk.
Using the last two major 20/50 SMA line crossing, we can see the market declined about 35-37%. Assuming a 35% decline from the current market value, it would target S&P 500 of 780. Once the lines do cross, I'll re-adjust for a final target for market bottom in the years ahead.
I am of the belief that this next decline may actually be the final leg down in the years ahead, it will depend on the government reactions and currency war progression. A related read I highly recommend is An Imminent Downturn: Whom Will Our Leaders Defend?
As always, seek a professional investor, I am not one, just an arm chair observer.
NOTE: The indicator hasn't yet crossed, but a cross does look imminent, I will post when it does cross.
UPDATE: For latest chart, click here
Good luck!
If you haven't done so, I strongly encourage you to watch the video at the end of this post, and reflect on the chart below. This market indicator should be respected as an emotional-less, fact driven indicator. You can see my own mistake of disregarding this old indicator, and it did hurt my own accounts.
If we experience a year long bear market, chances are, everything will do poorly, including natural resource related investments. At the tail end of this however, I suspect resource stocks will bounce back with a viscous vengeance. I will keep my core position in gold miners purchased back in 2008, as well as AVL and other ETF's like REE, as longer term plays. GLD (Gold) or Silver prices may do well, but could have a severe correction at any moment and carries significant risk.
Using the last two major 20/50 SMA line crossing, we can see the market declined about 35-37%. Assuming a 35% decline from the current market value, it would target S&P 500 of 780. Once the lines do cross, I'll re-adjust for a final target for market bottom in the years ahead.
I am of the belief that this next decline may actually be the final leg down in the years ahead, it will depend on the government reactions and currency war progression. A related read I highly recommend is An Imminent Downturn: Whom Will Our Leaders Defend?
As always, seek a professional investor, I am not one, just an arm chair observer.
NOTE: The indicator hasn't yet crossed, but a cross does look imminent, I will post when it does cross.
UPDATE: For latest chart, click here
Good luck!
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| From WebSufinMurfs FinancialBlog2 |
Saturday, September 10, 2011
An Imminent Downturn: Whom Will Our Leaders Defend?
John P. Hussman, Ph.D. of Hussman funds posted a well thought out description of the choices that face us ahead. I am not going to do it injustice by creating a couple sentence summary.
It's a good read, I highly recommend it, click here An Imminent Downturn: Whom Will Our Leaders Defend?
It's a good read, I highly recommend it, click here An Imminent Downturn: Whom Will Our Leaders Defend?
Friday, September 9, 2011
US dollar on the move
Just fyi, USD exploding up, breaking out of trading range.
Unsure what if anything effect on stock market.
One effect should be cheaper imports.
Gold is taking a hit.
Unsure what if anything effect on stock market.
One effect should be cheaper imports.
Gold is taking a hit.
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| From WebSufinMurfs FinancialBlog2 |
Thursday, September 8, 2011
Past fear, time to rally?
First, Obama's speech was more forceful than I thought. But overall its more of the same, spend now, save later. Notice how its 3 YEARS after the 2008 crisis, and the country knows we are STILL in a crisis. Notice how root cause of the crisis is never addressed, what is addressed is pandering to the people most affected, the under and unemployed. In general I liked his speech, but I'll wait to see what is actually done to render a final verdict. (Full text here)
Anyway, to the markets, Gary of the smart money tracker pointed how how extreme the market is oversold. The futures seem neutral, so I will follow his lead an rebuy my longs.
Yea, I panicked Monday, but the indexes are only slightly higher than they where on Monday.
Back to buying gold miners, AVL, and natural resources. A break below S&P 500 of 1,100 will still freak me out. (News Alert, that affect AVL here)
The most extreme wild card out there is europe. If European union breaks up, who knows what the market reaction will be.
Good luck
Obama's speech.
Anyway, to the markets, Gary of the smart money tracker pointed how how extreme the market is oversold. The futures seem neutral, so I will follow his lead an rebuy my longs.
Yea, I panicked Monday, but the indexes are only slightly higher than they where on Monday.
Back to buying gold miners, AVL, and natural resources. A break below S&P 500 of 1,100 will still freak me out. (News Alert, that affect AVL here)
The most extreme wild card out there is europe. If European union breaks up, who knows what the market reaction will be.
Good luck
Obama's speech.
Wednesday, September 7, 2011
Obama speaks Thursday, will market be disappointed?
In my post last week titled "Know when to hold them, when to walk away", I pontificated that Obama's job speech may disappoint this week.
Obama has not yet delivered his speech, and he still may give a huge surprise resulting in a market upswing as optimism returns to the USA economy.
However, early leaks are saying the jobs bill will be 300 billion out of an annual 3.5 trillion dollar government budget. The 300 billion will be comprised of tax cuts, as well as jobs programs.
Considering the US GDP is marked at about 14 trillion, US government annual budget is at 3.5 trillion, and less than 50 billion will be in direct jobs programs, I'll make a call on the market reaction Friday after Obama's speech.
It will be a non-event, and may even disappoint.
Obama has not yet delivered his speech, and he still may give a huge surprise resulting in a market upswing as optimism returns to the USA economy.
However, early leaks are saying the jobs bill will be 300 billion out of an annual 3.5 trillion dollar government budget. The 300 billion will be comprised of tax cuts, as well as jobs programs.
Considering the US GDP is marked at about 14 trillion, US government annual budget is at 3.5 trillion, and less than 50 billion will be in direct jobs programs, I'll make a call on the market reaction Friday after Obama's speech.
It will be a non-event, and may even disappoint.
Tuesday, September 6, 2011
Greece bonds, a great buy at 88% ROI for 1 year?
The US 1 year US treasury bonds pay 0.005%, yes, you read that correctly, essentially zero.
For baby boomers in search of fan-tastic rates of return, one has to look no further than Greece. Greece 1 year bonds are now offering OVER 88% interest rates.
Basically a 1 year investment in a Greece 1 year bond, your ROI will far exceed any other investment offered in the world. The currency, the Euro, is currently relatively strong compared to US dollars. Germany and France keep throwing billions at Greece, Italy, Spain, Portugal, and any other country in the European union facing challenges in the bond market.
So if you have faith that the European union will NOT be dissolved in the next year, and the Euro value will be maintained, look no further buy Greek 1 year bonds.
I for one, do believe the European union is headed for a cataclysmic disruption, that will result in either a Euro fractional-zation or economic implosion by all its members. I have no idea about timeline or depth that the debt defaults will come.
But quite obviously, people living IN Greece and Europe do not have faith that Greece will be around in a year as part of the euro. For if they did, they would be buying 1 year Greek bonds and driving rates below 88%.
Now imagine, if you are a retiree in Greece, and you purchased long term fixed income assets, like US retirees are doing in droves right now, a year or two ago.
What would those long term fixed assets be worth, when the 1 year rate is 88%? Answer is simple, a complete routing of your retirement savings locked in at a much lower lower rate. Those retirees would be dumping longer term debt notes at huge losses just to "get out" of their lower rate lock in.
Greece serves as an example of what retirees are facing in the USA. High risk investments for mediocre returns, or near zero rates (US 30 year at 3.75%). For those locking in a great 3.75% rate for 30 years, the warning of unseen dangers can be illustrated by Greek bonds.
In honor of this post, I added a US Government bond rate link on the right, reflecting current bond rates for future reference.
NOTE: I don't believe US debt will have significant rate issues probably until 2013-2020? (I suspect 2014).
For baby boomers in search of fan-tastic rates of return, one has to look no further than Greece. Greece 1 year bonds are now offering OVER 88% interest rates.
Basically a 1 year investment in a Greece 1 year bond, your ROI will far exceed any other investment offered in the world. The currency, the Euro, is currently relatively strong compared to US dollars. Germany and France keep throwing billions at Greece, Italy, Spain, Portugal, and any other country in the European union facing challenges in the bond market.
So if you have faith that the European union will NOT be dissolved in the next year, and the Euro value will be maintained, look no further buy Greek 1 year bonds.
I for one, do believe the European union is headed for a cataclysmic disruption, that will result in either a Euro fractional-zation or economic implosion by all its members. I have no idea about timeline or depth that the debt defaults will come.
But quite obviously, people living IN Greece and Europe do not have faith that Greece will be around in a year as part of the euro. For if they did, they would be buying 1 year Greek bonds and driving rates below 88%.
Now imagine, if you are a retiree in Greece, and you purchased long term fixed income assets, like US retirees are doing in droves right now, a year or two ago.
What would those long term fixed assets be worth, when the 1 year rate is 88%? Answer is simple, a complete routing of your retirement savings locked in at a much lower lower rate. Those retirees would be dumping longer term debt notes at huge losses just to "get out" of their lower rate lock in.
Greece serves as an example of what retirees are facing in the USA. High risk investments for mediocre returns, or near zero rates (US 30 year at 3.75%). For those locking in a great 3.75% rate for 30 years, the warning of unseen dangers can be illustrated by Greek bonds.
In honor of this post, I added a US Government bond rate link on the right, reflecting current bond rates for future reference.
NOTE: I don't believe US debt will have significant rate issues probably until 2013-2020? (I suspect 2014).
Monday, September 5, 2011
This week in charts - All hands on deck
Due to various reasons, I am not very well positioned to capture the market plunge that was experienced Friday and likely this week.
I am positioned to avoid the pain that should come to those long the market, as I posted Thursday night to GET OUT OF THE MARKET!
A market plunge below S&P 500 of 1,100 is very ominous, next stop is likely on the express train down to 2009 lows of 666. For those that read this blog regularly, you will remember on market plunge day back on August 8th, I did not panic...well, now I am. :)
I give you this week in charts, and lets just say it may not be a very Merry Christmas this year.
Good luck, and Obama, prove me wrong and give the country some juice, even if it is BS, and lets kick the can yet again, in hopes tomorrow someone fixes this mess.......which of course, there is no Santa.....
Short call outs!
DXD - 19.61 - double inverse short, should go higher! HIGH risk
FAZ - 60.62 - Triple inverse short banks, should go higher! HIGHEST risk
NFLX - 213 - should go much...much...MUCH lower. (dropped from 235 on Thursday to 213 already)
- lost access to many movies, the bandwidth issue will get them eventually, raised prices, and
- my guess is many ordinary people bought this stock, so pro's will crush them
PCLN - 528 - good company model, hard to bet against....but I still think lower
DECK - 85.90 - eh, probably lower, really a coin toss, but its an old short I can't let go.
ODP - 2.29 - Shorted on 7/1 @ 4.24, probably going to zero...Office Depot.
DGP - 71.76 - DOUBLE Gold ETF - if you like gold, you'll love this ETF, with 2x daily moves than gold.
- Crazy high risk!
In first chart, I reference the long term trading indicator, read more here.
I STRONGLY reading latest news this week at Mish's blog, click here.
From Mish's blog, I can't believe this guy said this publicly. Geesh:
Deutsche Bank CEO says "It's Obvious Many Banks Will Not Survive if Forced to Value Sovereign Debt at Market Prices"
To the charts!
I am positioned to avoid the pain that should come to those long the market, as I posted Thursday night to GET OUT OF THE MARKET!
A market plunge below S&P 500 of 1,100 is very ominous, next stop is likely on the express train down to 2009 lows of 666. For those that read this blog regularly, you will remember on market plunge day back on August 8th, I did not panic...well, now I am. :)
I give you this week in charts, and lets just say it may not be a very Merry Christmas this year.
Good luck, and Obama, prove me wrong and give the country some juice, even if it is BS, and lets kick the can yet again, in hopes tomorrow someone fixes this mess.......which of course, there is no Santa.....
Short call outs!
DXD - 19.61 - double inverse short, should go higher! HIGH risk
FAZ - 60.62 - Triple inverse short banks, should go higher! HIGHEST risk
NFLX - 213 - should go much...much...MUCH lower. (dropped from 235 on Thursday to 213 already)
- lost access to many movies, the bandwidth issue will get them eventually, raised prices, and
- my guess is many ordinary people bought this stock, so pro's will crush them
PCLN - 528 - good company model, hard to bet against....but I still think lower
DECK - 85.90 - eh, probably lower, really a coin toss, but its an old short I can't let go.
ODP - 2.29 - Shorted on 7/1 @ 4.24, probably going to zero...Office Depot.
DGP - 71.76 - DOUBLE Gold ETF - if you like gold, you'll love this ETF, with 2x daily moves than gold.
- Crazy high risk!
In first chart, I reference the long term trading indicator, read more here.
I STRONGLY reading latest news this week at Mish's blog, click here.
From Mish's blog, I can't believe this guy said this publicly. Geesh:
Deutsche Bank CEO says "It's Obvious Many Banks Will Not Survive if Forced to Value Sovereign Debt at Market Prices"
To the charts!
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
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| From WebSufinMurfs FinancialBlog2 |
Saturday, September 3, 2011
James LeGrand, Author of Evolve
James Legrand is a former coworker at my previous company, Navisys.
James is one of the most positive individuals I have had the pleasure to work with. James is also author of a book called Evolve!
James is also concerned about the Economic shift ahead. I have already stated I favor natural resource investments, preparing personal resources, and yes, own a gun. While I am not ready for calling mad max, but being prepared is a good thing.
James favors gold/silver for reasons slightly different than mine. I am not concerned of USD collapse in the next few years. But I do like gold/silver increasing as China and India rise with wealth, and the 2.5 billion people in that country buy more precious metals.
Other than that one point, everything else James talks about I completely agree with, be prepared.
Friday, September 2, 2011
Very scary news items released
Last night I posted "Know when to hold them, when to walk away". When I did that post, I had NOT looked at the blog Zero Hedge yet. I wish I had.
This morning, while checking my RSS feed, to my surprise is very disturbing news, making FAZ and other inverse funds look great, and me wishing I had posted "when to walk away" on Wednesday night instead.
Item 1, Regulators going after High Frequency Trading firms, reviewing code to understand their scalping logic. This is a milestone step for the government to change trading rules to reduce or eliminate HFT. While I support the idea, I also recognize that about 70% of the trading volume of stocks is now computers. Any disruption in the perverted trading arena will likely be a negative one.
Item 2, US Government filing suite against a dozen banks, including BAC for fraudulent practices on mortgages. Filing may happen TODAY (Friday 9/2). Obviously a massive pile on lawsuit from 50 states and now federal regulators can't be good for banks in the near term. Granted once the dust settles, and accounting practices returned to pre-2009 era rules, I'll be optimistic once again about banking. But that means quite a bit of volatility between these two events.
Item 3, Wikileaks releases 65 GB of email archive stolen from Bank of America, uncensored. I am pretty sure executives in BAC did not envision their private communications years later being placed on a global bit torrent. I am also pretty sure at a minimum one damning email will emerge to support the federal and state lawsuits. It isn't unreasonable to think BAC may become the fall guy in this next wave of state and federal lawsuites.
Well there ya have it, quite a bit of significant news. This post has achieves the status of entering Financial Ground Zero series. Good luck.
Thursday, September 1, 2011
Know when to hold them, when to walk away
For those who may have not heard, President Obama is giving a speech that includes a job plan next week.
Considering all I have written in this blog over the years - since GW Bush was in office - I am not one that is optimistic of quick fix schemes.
So while it is possible Mr. Obama surprises me with his speech, it is more likely to disappoint.
What will likely follow is a market swoon, which may eventually reach a climax with the Federal Reserve Board making an announcement late September about QE3, or some other action, to pump the system, yet again.
Given where the market is, the questions I have over Obama speech next week, and the Federal Reserve Board's 2 day special meeting at end of September, I just don't like the setup.
When your gambling at a poker table, and the participants make your skin crawl, sometimes it just best to not play.
The market hasn't yet hit S & P 500 at 1250 like I had hoped, but its close enough. Today's high was 1,229. Reflecting back, today was probably the best day to sell.
So I will be a day late, but it is better to act than to be a deer in headlights.
Bottom line:
Selling longs
Keeping core gold miner positions
Keeping AVL
** Update 2013 ** Below looks simply insane to me, the 3x funds are a horror show and PCLN hit 1000
** Update 2013 ** Below looks simply insane to me, the 3x funds are a horror show and PCLN hit 1000
I may add some to DXD or other inverse funds. For those of a true gambling nature, FAZ right here may be interesting. Take a look at this chart, looking good. FAZ at 55 is a true gambler's play, a 3x inverse banking fund, that can explode or implode on any given day.
Oh and the short of the year? Probably PCLN, look at the last 10 days...up 20%!!
DISCLOSURE: I am short PCLN at about the current price, 529.
Good luck.
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