Stock market rally - kuput?
Submitted by Jive_Dadson on Mon, 08/17/2009 - 08:59
Is the rally over?
All last week, pundits were either declaring the recession was over or asking the question, is it over? Investor sentiment readings were high. I received a bullish talk from the brokerage firm that I use. Those are all danger signals. Today the market is down over 2% a half hour into trading.
So is this the end of the current rally? I made some bets to that effect Friday.
As usual, precious metals fell along with other assets. It's all about the dollar, and has been for quite a while. When the dollar rises, everything else usually falls, and vice versa. When precious metals detach from other assets, you'll know there has been a major phase change.
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Not yet
We're getting close, but I still think we have some irrational optimism driving the markets.
I would suggest that within 60 days, the rally will be over and some reality will set in.
Sell now if you're afraid, but I'm recommending being greedy for just a little bit longer.
www.jzneff.blogspot.com
What do you think about the war on drugs?
How about Operation Wall Street?
Shout it today!
http://www.youshouts.com/index.php
Misguided Worries About Inflation"Where's the Inflationary Beef"
Fiat Mathematical Model
Those who model the world in terms of money supply only, ignoring credit, have missed the boat big time. They have been looking for massive "price inflation" for years pointing out the huge printing by the Fed.
Yes, in isolation, printing is inflation. But its effects are nonexistent when credit, marked to market, is plunging at a greater rate as is the case now.
The Fed and Central bankers, try as they might, simply have not been able to force banks to lend or consumers to borrow. For a real eye opener, take a look at the five charts in US Consumer Credit Shows Steepest Contraction in Over 5 Decades.
http://globaleconomicanalysis.blogspot.com/2009/08/us-consum...
Those calling for higher prices because of all the printing blew the call and those looking only at prices to begin with were not even in the boat.
In a credit based economy one must take credit into consideration first and foremost to have a chance at getting the global picture correct.
Where's the Inflationary Beef?
The answer is: There is none, nor will there be any unless the Fed can coax banks to lend or consumers to go on another huge spending spree.
With alternative measures of unemployment over 16%, with an unprecedented 4.4 million workers have been unemployed and looking for work for 26 weeks or longer, with 1.5 million unemployed on the verge of expiring over 52 week of extended unemployment benefits, and with home prices crashing and $trillions in imaginary "wealth" wiped out, pray tell what is the likelihood of consumers going on a huge shopping spree?
http://globaleconomicanalysis.blogspot.com/2009/08/misguided...
The Markets have one more
The Markets have one more high to make before they fall.
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"Ehhh, What's ups Doc?" Bugs Bunny
"Scwewy Wabbit!" Elmer Fudd
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"Ehhh, What's ups Doc?" B.Bunny "Scwewy Wabbit!"E. Fudd
People's Awareness Coalition: Deprogramming Sequence
This video makes some
This video makes some interesting points and contains a few credit and base money supply charts all the way from 1913 to 2009!!!
http://www.youtube.com/watch?v=uac2vIzThSA&eurl=http%3A%2F%2...
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www.libertybrewcity.blogspot.com
Goldman sach's JPMorgan Bank. citicorp Bank of America
Hold about 176 trillion obligations in the derivatives market. GE is nowhere close!
GE announced that they are bringing Jobs back to the US.
Starting with 1100 jobs where they once had 23000 employees.
They said that their goal was to increase employment by 10%.
As soon as they announced Glen Beck started attacking GE.
O'reilly followed suit on his show and even bringing Glenn Beck on his show and smearing GE. Shorting GE will bring their stock down.
That is the way the establishment sabotages companies that don't adhere to their policies of outsourcing the few jobs we have left.
So don't be so quick to go against GE when they are starting to bring back manufacturing jobs here to the US.
Goldman Sachs shorted the company that was going to build armor for hummers in Iraq causing a long delay in getting those vehicle armored and American servicemen and Women died.
They hate GE because GE owns MSNBC.
They hate GE because GE owns MSNBC.
Two weeks of vitriolic exchanges between cable news hosts Bill O'Reilly and Keith Olbermann have amped up viewership for Fox News as efforts by corporate executives to strike a détente fell apart.
Fox News' Bill O'Reilly and MSNBC's Keith Olbermann, who face off in the 5 p.m. PDT time slot, have been attacking each other's networks ever since news broke earlier this month that executives had sought to tamp down the personal attacks by the two men, whose sparring has long been a staple of the cable news wars.
http://www.latimes.com/entertainment/news/la-et-cable15-2009...
Establishment .....me? lol
Don't hate the player, hate the game. How about sell GE instead of shorting it? If you think GE's mission statement is to exist for the public good versus make money, then I will refer you to Atlas Shrugged. The fact is, GE will continue to suck the life out of any portfolio. The fact that they make war armor does not make me shed a tear. Someone else will step up to the plate. It's called free markets.
Short GE. They are in major
Short GE. They are in major trouble with the SEC and totally bankrupt. Newport value investors say GE is a $2.00 stock. It is now around $11.00. It was at a hig of over $30 a share in Oct 2007. I will find the link.
GE is going to be the next AIG bailout story I think. They own a ton of commercial real estate and worthless paper.
http://forums.wallstreetexaminer.com/index.php?showtopic=826600
I know there was a thread about GE months ago
The only way that is true is if there is another ...
massive wave of redemptions and I think that is highly unlikely at this point.
What is more likely is that GE will split into two separate companies next year, which would be a bullish move, not a bearish one.
WAHOR!!
http://www.dailypaul.com/node/48994
WAHOR!!
http://www.dailypaul.com/node/48994
Investment services banker here....
Depending on who the annuities are through can depend a lot on the return.
I know that 90% of fixed annuities i do guarantee and return of at least your original money when you cash out early. This is of course not adjusting for inflation etc.
Otherwise, you can withdraw up to 10% of the available funds penalty free every year.
Sales people make a 10%
Sales people make a 10% commission on annuities = bad. Plus, they can change what your annuity is worth at anytime. don't do it.
stock trading in the united
stock trading in the united states is not the place to be and i assume it will not be for many a year. undervalued c-h-i-n-e-s-e stocks is where i am at right now! and silver of coarse...
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www.libertybrewcity.blogspot.com
Here is a quote from me on April 20.
In my long term account I have been long since early March and will not go short until September some time.
http://www.dailypaul.com/node/83155#comment-988452
I started a few weeks early,
WAHOR!!
http://www.dailypaul.com/node/48994
WAHOR!!
http://www.dailypaul.com/node/48994
I recently wrote a Blog predicting a major drop in the market...
You can read it here:
The Economy Now: "Green Shoots" Herald Disaster
http://neithercorp.us/npress/
The entire rally was a sham, just like the "Suckers Rally" of 1930 that fooled millions of people to dump their money back into stocks in the midst of the Great Depression. I lay out exactly how you can tell what will happen with the market by tracking the Baltic Dry Index, as well as some other useful tidbits. I also go into what is REALLY going on with the U.S. Dollar right now, and why it is in trouble. Anyway, check it out!
Another hint of deflation
WASHINGTON (MarketWatch) -- Banks were still clamping down on lending to businesses and consumers over the past three months, and they said they planned to keep their credit standards tight for at least a year, the Federal Reserve reported Monday.
http://www.marketwatch.com/story/credit-crunch-likely-to-per...
Not to beat a dead horse here, but if businesses and consumers can't get loans, where are they going to get the money to spend?
Read the argument for D-E-F-L-A-T-I-O-N
We are close to finding out.
We will know by January without a doubt.
You are correct to a point ... M3 is most important when calculating the probability of inflation or deflation.
Having said that ...
There are stimulus programs that are now gearing up full force to put money directly into the hands of consumers and not via financial institutions.
Whether it is enough to stave off deflation is the question of the day.
WAHOR!!
http://www.dailypaul.com/node/48994
WAHOR!!
http://www.dailypaul.com/node/48994
The only source for M3 that
The only source for M3 that I know of is ShadowStats.com. The Fed quit publishing it. Currently, ShadowStats shows M3 growing at 5% per annum, which is about what it was doing in 2005, before the huge expansion.
The deflation story was disastrously wrong for those who bought into it in 2002, and I am not convinced that it is right now. A while back, I allowed myself to be swayed by some "short term forecasts" calling for a crash in precious metals. I bought six month out puts to "insure" my physical gold and silver. You know how that worked out. "Short term" turned out to be rather long term, if ever.
I'll am always eager to admit that I've been wrong. Right now, I am in show-me mode.
It depends on how one bought into it
Since 1999, Prechter has recommended only short term maturity T-bills. These have outperformed just about everything over the past decade.
Why wait for the answer ...
Dabble in areas where you can profit either way.
You have to short retail. That is a certainty.
What is the history of October in troubled times?
The write downs in the financial markets are going to continue as the banks are forced to take ownership of foreclosures and mark them to market so that they can sell them.
Tech can go nowhere but down.
If these turn out to be right, then there are going to be some sure things in credit spreads.
After that, we will know whether there will be deflation or inflation.
WAHOR!!
http://www.dailypaul.com/node/48994
WAHOR!!
http://www.dailypaul.com/node/48994
You know the answer to that question.
Where does practically ALL inflation come from? They will get the money from the Fed. Maybe not directly, but that's where it will come from.
The Fed today announced it will extend the TALF program, which buys securities backed by credit card, auto, and business loans, among other things. Why tighten lending standards when you can sell the debt to the Fed? I was in the car about 5 minutes today, and I heard an ad for low interest rate mortgages on the radio.
The Fed announcement is, well, a Fed announcement. Remember, "The crisis is contained"?
Not banks: The Federal Reserve
http://www.youtube.com/watch?v=Gkf8VG3HL_8&feature=channel_page
"U.S. Congressman Dennis Kucinich (D-Ohio, 10th District) questions Neil M. Barofsky, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), testifying before the House Committee on Oversight and Government Reform, about interest payments made to banks that keep their TARP funds and other government (taxpayer) bailout money with the Federal Reserve, instead of making loans to struggling Americans (the original intent of the TARP, remember?) The Fed makes generous interest payments to the banks for "parking" their "excess reserves" at the Fed.
And guess who will end up paying for this "interest" given to the banks, and everything else? That's right, you and me, John and Jane Q. Suckers!! The dumb, fat sheep!
By the way, Neil M. Barofsky is a good guy here -- don't beat up on him. He's in immediate danger of losing his job (if not his life) becauses he's revealing too many of the Temple's dark secrets. Barofsky deserves our full support."
"There can be only one permanent revolution - a moral one: The regeneration of the inner man."
—Tolstoy
"The body is but a vessel for the soul,
A puppet which bends to the soul's tyranny.
And lo, the body is not eternal,
For it must feed on the flesh of others,
Lest it return to the dust whence it came.
Therefore the soul deceives and despises."
To reinforce your argument-
My wife and I own a company that manufactures commercial lawn mowers. Our relatively modest debt is secured at a debt/collateral ratio of over 2:1. Interest expense is about 2% of revenue. The company has never been late with a bank payment- ever. With the sudden drop in the economy in Summer '08 (right in the middle of our sales season), the company finished the year with a slight loss. Nothing threatening, but a loss none-the-less.
We have no personal debt other than a variable-rate credit-line secured by our home with an outstanding balance of about 60% of its LTV. We have other sources of income, own other paid-for property and both have credit scores of nearly 800.
Not wanting to get caught in the position of "chasing rates" should interest rates suddenly shift upward, last month, we pre-emptively applied for a fixed-rate loan (15 years) to payoff the balance on our home equity line. We have cash in money-markets equal to over 1/2 of the requested loan amount.
I got the call from my banker last week that our mortgage application had been denied due to our business loss from '08. Bear in mind that "the loss" represented ~3% of overall revenue. When viewed from a combined business/personal perspective, we are absolutely cash-flow positive.
The thing that stunned me was when the banker said that 99% (I don't know if this was stated as fact or hyperbole) of mortgages ultimately end-up with Fannie or Freddie and that they are not loaning to anyone with an '08 loss.
My wife and I are fortunate to have lived conservatively and to not have amassed much in the way of debt. But, if we're having this problem, I can only imagine what others are experiencing. Lending criteria has reached the point of absurdity- the banks just aren't loaning money... at least to us.
I recently had a credit card canceled also.
Interesting story, thank you.
I recently had a credit card canceled also. It was an Amex Optima card with a $17,500 limit, the full amount of which I could pull out in a cash advance. Well, not any more. I have perfect credit, but Amex didn't like that potential liability hanging out there, and I don't blame them. We're heading into desperate times, and during desperate times, people do desperate things.
I had that card for over 10 years, though I rarely used it.
There goes half of my potential (credit) spending power, but those figures will never show up in money supply figures. I know of a few others who've had the same thing happen, though for for some it happened to cards they use on a daily basis! Their limit is lowered and suddenly they're over the limit! In addition to fines, they can't spend any more until they first pay it down.
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Read the argument for D-E-F-L-A-T-I-O-N
Do you know what typically
Do you know what typically does well in a deflationary environment?
Should people hold dollars?
I just wanted to hear your thoughts.
is it worth the risk? the
is it worth the risk? the dollar might fail but precious medals will always make a comeback. Foreign currencies are much better choices.
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www.libertybrewcity.blogspot.com
..but....but....jzneff said we were going over 10,000 on the DOW
.
And what is tech ticker video saying today? You guessed it!
The Rally Isn't Dead: Emerging Market Stocks to Own
Posted Aug 17, 2009 01:00pm EDT
Peter Gorenstein
Don't panic. The overnight drop in China and other emerging stocks markets is not only overdue, it's temporary. That's the word from Uri Landesman, the head of global growth for ING Investment Management Americas. In the short term he expects the S&P 500 to pullback, then rise again and end the year around 1135. If that happens, Landesman says, "I would expect those emerging markets to outperform that rise. So, I expect them to behave very much like high beta options on the S&P 500.”
http://finance.yahoo.com/tech-ticker/article/304453/The-Rall...
Yea
And Readers Digest just went bankrupt.
"Obamney care," Nuff said.
celeste; Thanks for that info! Reader's Digest Bankrupt!
* AUGUST 17, 2009, 11:22 A.M. ET
UPDATE: Reader's Digest To File For Bankruptcy
NEW YORK (Dow Jones)--The Reader's Digest Association Inc., which was taken private just over two years ago, said it reached an agreement with its lenders on a restructuring plan that it will likely complete under a prepackaged bankruptcy filing in order to reduce its debt.
The company, which publishes the magazine of the same name and also has marketing operations, also chose not to make a $27 million interest payment due Monday on its 9% senior subordinated notes due 2017. It said it would use the 30-day grace period available to continue discussions with its lenders.
Under the debt-restructuring deal, the company's senior secured lenders will exchange what it said was "a substantial portion" of the company's $1.6 billion in debt for stock.
http://online.wsj.com/article/BT-CO-20090817-707854.html