How can they cut rates with inflation rising rapidly?
The stock market bounce today shows how eager people still are to "make money in the market." There is not enough pessimism to mark a bottom by a long shot. When the market bottoms any good news will be ignored, not seized upon like dogs and a juicy bone.
No rate hikes, GS has not given them permission yet.
Do you really think they care about the average Joe paying more for food, healthcare, gas, heating costs, etc... No! Just "take a deep breath" and "its a mental recession".
Just ignore the oil step up effect, and there you go.
After all, oil started down, and it will eventually come through the price indices as a moderation of inflation.
As for airlines and trucking companies, well, creative destruction.
A rate cut would be total desperation, followed by massive sales of bonds by foreign investors and a run on the dollar, events which may occur anyway.
But hey, a Fed kickoff is always welcome.
As for today's lovely markets, I love deceased feline bounces. They are very profitable, and offset my short in Ryland, which refuses to roll over and head to the morgue just yet.
But, given some immense patience, I just might have a 125% year.
Beats the crap out of the loss I took last year, and more than makes me whole.
Now. See I admitted losing money. Now I have made money. I also will most likely quit while ahead and start thinking about what to buy next on sale. Long term food, or glod...what goes on sale first?
Good because I lost mine some time ago. Now I've got another good reason to not go rummaging around for that stupid thing.
It's a helpful condition. Otherwise I'd be running around in circles pulling my hair out screaming "The chance of cutting is HIGHER than raising! Are these people INSANE."
A mind is a terrible thing not to waste. Just ask Currently Smoking Cannabis.
The emotions and comments on this board about the daily market ups and downs and day-trading wins and losses are getting a little ridiculous. Some formerly smart people are getting sucked into a suckers' game.
You know we're hitting the end-game, the point when suckers get burned the worst, when the financial media can go from end-of-the-world gloom-and doom to glue-snorting giddy in a day or two. We're there.
It's crazy to try to time this weird market. The volatility is increasing and the movements are nonsense, because they're dominated by speculation and leverage (most of it programmed) that feeds on this type of frantic, decaying situation.
The challenge for any investor in this type of market is to make every trade a winner, and I'll tell you how. You should short or double-short indexes only (not individual stocks) and just basically buy-and-hold them, taking some gains now and then and not getting too greedy.
My goal this year is to make 15-20 trades and make every one a winner. So far, I'm halfway there. But I'm only trading inverse index ETFs that I know have detached from reality related to real value, where the indexes are being black-boxed as volatility tools, completely apart from what the underlying stocks are worth.
Probably one-quarter of the companies in the Russell 2000 Index are basically worthless. You would not pay much for them individually, if anything, to take them private. 10-15% of the Russell 2000 companies are gems. But even for these gems, you would not pay a P/E ratio anywhere close to what the market is paying for all 2,000 companies lumped together in this speculative environment.
I haven't done SKF or DUG yet because I don't understand the underlying fundamentals and am not 80% sure I can do a winning trade in them this year, buy-and-hold. I told you 12 months ago that both Corus and Circuit City were doomed businesses, but I haven't shorted them yet because anything crazy can happen with an individual company, such as Blockbuster almost getting sucked into buying Circuit City. You can get lucky and escape detached fundamentals on individual companies. But not on indexes.
I strongly believe that the fundamentals have become wildly detached on TWM, EEV and SRS and you can turn these into big winners just by being patient and not too greedy.
Before this bear market is over, most Americans who invest will lose 40-60% of their money. That's on top of losing 50-75% of their home equity and maybe their jobs. If you can just make a little profit, you are so much farther ahead than most.
Don't try to time it. Invest smart and try to make all your trades winners. Don't come on this board hyping your day trading wins like barely and sloughing off your losses.
I'm going with my steadfast diagnosis of I haven't a clue and I don't think anyone else really does either, with the complicating symptom of panic, euphoria and variance. I suggest at least two stiff drinks and call someone else in the morning. I'm off hunting misean and my brains - sort of an off-season easter egg hunt. Don't worry, I'll just leave them there, they don't seem to help much at the moment.
Board of Governors of the Federal Reserve International Finance Discussion Papers Number 935 July 2008 FRB: Federal Reserve Board: Error Page ifdp935.pdf
For 2008 and 2009, U.S. long- and short-term interest rates are based on OECD (2008). Beyond a transitional period, long-term rates are set equal to the projected growth of nominal GDP: real growth of 2.4 percent plus inflation of 2 percent, based on the OECD 2009 projection. Short-term rates are set 1 percentage point below long-term rates.
Yea and the guy now in charge of the fed knows how to prevent a great depression except the one he knows how to prevent happened in 1928. The one possible in 2008 he is as clueless as his 1928 counterpart. It is better to armchair quarter back a disaster than deal with one in real time.
But, but didn't Ben Bernanke just this morning commit himself to low inflation? Well... which is it?
Rob Dawg
Currently 2% FFR will do exactly that. Except for oil and corn raw material prices have been declining for months now. After those two are now in line with the big picture, expect the CPI (both core and total) to decline for two years or so.
O-Joe
Rich, I am with you. I was trading the DOG, DXD and DDM for the DOW volatility. Now I am in cash because I can't tell what is up or down anymore! I am in cash and waiting.
Isn't the Fed basically having to choose between poking our eyes out or yanking our ears off? So the choice is to make no choice. Let it get nasty and wait for people to demand something painful. Then give it to em. Us.
The volatility is what sucks people in to becoming day traders. It's happened to me at times, despite having written down in paper "I'm NOT a day trader."
It takes a lot of discipline to create a trading plan, with pre-determined entry and exit points, and stick to it. Days like today will test you.
Even if you are disciplined, I'm not sure it's possible or even desirable to attempt to make every trade a winner. Even if you hit the fundamentals and the technicals perfect, sometimes the market will just turn on you like a vicious animal. Trade long enough, and it will happen. Still you are on to something for sure when you say trade less.
I'm slowly learning that I'm my own worst enemy. When I see my account balance go up, I get too excited; when it's down I despair.
The attitude I'm trying to adopt is like a pro golfer - phlegmatic and indifferent to the daily twists and turns of the market. Drama is for actors.
The ECB seems poised to be the first G-7 central bankto flinch. Inflation is now 3.7%, nearly two percentagepoints above target. Even sharply slowing economies likeSpain where GDP growth has slowed for four straightquarters has seen inflation skyrocket from 2.5% to 4.5%over that period. In Germany, while core inflation has re-mained stable, some pass-through from energy prices towages appears to be taking place. As a result, this infla-tion targeting bank seems likely to raise rates once to4.25%, but we still feel these rates will eventually be low-ered in early 2009. While the Bank of England is an infla-tion targetter, as well, their remit offers a possible out asthey are charged with returning inflation to target in a rea-sonable time period but without creating undue instabil-ity in the economy. While not as direct as the Feds dualmandate to manage inflation and employment, policy mak-ers in the U.K. still have some discretion.
"I also think the Fed will hold rates steady - probably through the end of the year"
I laughed when the bubbleheads were predicting rate hikes. I predict 50bps cut sometime before the end of the year as the DOW crosses below 10k and some major dislocations occur in the financial markets. This suckers rally in financials is going to hurt some boneheads that go long during this rally, which could last a week or 2.
Bear market rallys seem to be designed to bring sucker money back into the market so it can be swept away...
Hello, I am fifteen years old and a Pices. I have long blonde hair, some of my friends call me hot. My turn ons are bear markets, puppies, and football players. My turn offs are mean people, the FOMC, FEMA, and Jim Carmer. I beleive we can achieve world peace through by trading the long side until Christmas, when everybody can buy me presents.
jim said: "How can they cut rates with inflation rising rapidly?"
Two things. One, CPI-U's most recent reading shows 5% inflation. But in September, 2005 (nearly 3 years ago) it was at 4.7%, and for the same reason (oil prices). So inflation may be "high" (however one defines it) but it's not like it's been steadily rising for years and is headed for the stratosphere. If you chart it, it's more like it's at the top of a channel and will come back down.
Two, as far as the Fed is concerned economic growth is a problem today and high inflation is a problem in the future. Given the choice of lower economic growth or higher inflation I'd bet money that they'll focus on the "right now" problem and let the other one slide.
rich, you're so right. How silly of me or anyone else to trade. You're the KING. Strictly Buy & hold investing is such a great strategy. Everything is black and white.
Anyone who thinks the FED is going to raise rates is a fool.
A new statewide count of high school dropouts, based on the tracking of individual students, shows significantly higher numbers than have been reported for years in California.
The dropout report, released Wednesday by the California Department of Education, estimated that one in four high school students - 24.2 percent - failed to graduate with their classes or move into another educational program to continue their high school education. The estimates were derived from data from the 2006-07 school year.
I think the Fed is like a deer in headlights at the moment. They can't raise rates, because they would get crucified by Congress for hurting the economy in a time of recession. They can't lower rates, because they would be crucified by Congress for not fighting inflation. The only politically feasible thing to do is nothing, no matter what is hurting the economy more in their perception. It wouldn't matter if the CPI was at 7% (the real inflation number), 10%, or even higher; it would take balls to make any changes, and Bernanke just doesn't have any.
energyecon, that's quite a swing for MER--$2 in 30 days!
This part of the game has always amazed me. You basically take an average of guesses by people of dubious talent, intellect, and integrity. Then if the co. in question comes up with a better number, we rally!
"Rally news from CNN:
U.S. reverses course, will send envoy to talks with Iran"
I saw that too, but it doesn't strike me as an occasion for a rally. One could interpret it as a ominous signal. Last warning. Last chance. It is a startling demarche.
They could hike or they could cut, but the driver is likely to be growth or the financial crisis.
If growth slows, CPI inflation will gradually tend lower, as that is what happens whenever there is a recession. They could easily have to cut more, although they will resist.
If the recession is too shallow, or there is none, well, the Fed will have to hike to start the "rate renormalization" process. Probably not for a few months, at least.
But what they won't do is react to the current level of the CPI. CPI will head higher or lower in the coming years based on what happens to growth in the near term. I.e. inflation lags the cycle and there's not much use reacting to current levels. And the Fed will certainly not do attempt to do anything about oil prices, despite the belief that some people have that the Fed has a magic wand to drop oil prices via rate hikes.
The only "inflation" story that might cause a hike is a move to defend the dollar; however, that would be a highly unusual action, and would have to be done in conjunction with the BoJ and ECB.
Dubya doesn't do diplomacy. The fact that there's an envoy on his way means we're negotiating - or at least open to negotiation. In any other administration, it could be taken either way.
M. Chichikov,our country is being run by madmen and thieves.They are not terribly predictable,especially with only a few months left to bring on the Rapture and loot the world.
I am still trying to get over the fact that the SEC has suspended a type of trade that is ILLEGAL (Naked Shorting) for 8 days for certain select entities. This is a true hell in a handbasket revelation about the folks who are running our government.
I think I'm going to tell the company I work for that they have to pay me in Euros from now on.
See, the problem is, that banks don't want to lend. If the FED lowers, they'll want to loan LESS.
As usual B.S. Bernutty is fighting the wrong damned war. Rates NEED to rise. Prices NEED to fall. It's the deflation stupid. He's zombifying the economy like the Japanese did.
Problem is, the Japanese had savings. The US don't. So the Japanese path is going to result in severe pain. Over a long time. The raise and take our medicine route is quick and brutal and done.
With all this talk about rates going up or rates going down, thought I might add an anecdotal data point...
A friend of mine refurbishes certain automobile engine parts. One of the items he uses is acetone. He last purchased a 55/gal drum of acetone about 6 months back (beginning of 2008) for $300. He just called yesterday and discovered that the current price is $500. Thats a 66% increase in 6 months.
My guess is he has to pass that along to the customers. Hello inflation.
Currently 2% FFR will do exactly that. Except for oil and corn raw material prices have been declining for months now. After those two are now in line with the big picture, expect the CPI (both core and total) to decline for two years or so.
What are you smoking? In our area, we just got a notice that our electricity bills are going up 22% next month. Electricity is a raw material, a commodity, that almost every household and business pays.
"Speed writes:
Dubya doesn't do diplomacy. The fact that there's an envoy on his way means we're negotiating - or at least open to negotiation. In any other administration, it could be taken either way."
Like most of us I have access only to the open press. But I have a bad feeling about this. I don't believe Mr. Burns is going to Teheran to negotiate - or precisely, to propose negotiations on the basis of any western offers. Those have already been put on the table.
OTOH, it's possible that the Iranians have given a signal.
Politically speaking, I don't understand the Iranians at all. But I don't believe that they would risk war with the US if there were not some truth to the charge that they are trying to build some kind of WMD weapons system. Perhaps they have one already.
War would, for a while, take all our minds off the problems of national and global financial stability.
I am still trying to get over the fact that the SEC has suspended a type of trade that is ILLEGAL (Naked Shorting) for 8 days for certain select entities.
Naked shorting is not always illegal. In particular, market makers can and do "naked short" during their normal course of business. For example, a market maker in a stock's options might sell a put and short the stock; not to manipulate anything, but simply to arbitrage between the options and the underlying.
This new SEC rule really is new. The overall effect will likely be wider spreads on options and more volatility in stocks. (And I do not mean "volatility" in the CNBC sense of "hey it went down"; I mean the literal sense of bigger swings, in both directions.)
Our Federal government is taking several actions that have nothing to do with actual issues and everything to do with attempting to manipulate public confidence. One way or another, this marks the beginning of the end game, I think.
I'm slowly learning that I'm my own worst enemy. When I see my account balance go up, I get too excited; when it's down I despair.
When the market was really getting hammered on Tuesday morning, I put in some limit orders to sell some of my SRS and TWM. But they were about 5% away from the market. They didn't hit, of course. But I'm not unhappy.
I still have double-short positions in very vulnerable, deteriorating situations. I am very confident that I will make more money on them than I already have, over time. But I'll leave those limit orders in, and soon enough they will hit. They always have before. Often, they bounce right off the limits, and I can buy them back soon after for 5-10% less.
This has actually been my trading weakness. I've been too quick to buy them back. From now on, when a limit order hits, I'm going to wait until the price runs down at least 10-15% to buy them back. It has always done that, too.
I'm not sure in this market, with so much leverage, speculation, manipulation and programmed trading, that we are going to see a climactic selloff. I'm thinking it will just be a series of volatility events with gradually lower bottoms, over a period of as long as another year and a half maybe.
Hookay. I've had a belt or 12 and I've been trying to stay out of this topic all day but I've had it...not necessarily with you.
"War would, for a while, take all our minds off the problems of national and global financial stability."
For about 15 minutes. When oil futures hit 3 gazillion dollars the war pig Rah! Rah!er's would be silenced.
"OTOH, it's possible that the Iranians have given a signal."
Right. And the Taliban agreed to hand Bin Laden to Pakistan who would have lap dog dutifully handed him to us. But NOOOO. Shrub boy wants to bomb something to be the tuff guy he is not. So he makes a demand that the US population will see as reasonable and the Taliban will see as a violation of their deepest beliefs. And the Taliban refuse.
Suprise! Well I guess we'll have to bomb you then.
Of course the Afgan war was about a certain pipeline and not Bin Laden. That's why the Unocal negotiator for the pipeline Harmid Karzi is now "President".
So, the read on this mission is the same as the Bin Laden one to Afganistan. Look like we're negotiating in good faith. Make an offer that the Iranian gov't MUST refuse but will sound reasonable to the US population...after being horribly distorted by the propaganda press. Then...kill the US empire...erm I mean attack Iran.
NEW YORK, July 16 (Reuters) - The U.S. Federal Reserve will undertake a $75 billion 28-day Term Securities Lending Facility (TSLF) auction on Thursday, according to the New York Fed on Wednesday.
The Fed will accept riskier Schedule 2 collateral in exchange for Treasuries, which primary dealers can then lend out to get short-term cash loans in the U.S. repurchase market, to help shore up balance sheets, the New York Fed announced on its Web site.
BEIJING, July 16 (Reuters) - The troubles of Fannie Mae and Freddie Mac pose new risks to China's $1.8 trillion foreign exchange stockpile, adding urgency to Beijing's goal of diversifying its reserves, a researcher at a top Chinese think tank said. ...
mp--certainly agree it's no time to be in the mkt. I'm still long a few things, but sold long ago for most. There will be a day when everybody tries to get out at the same time guys. Get out now when you can.
It is not about getting out, it is about getting in LESS, i.e. reducing their dollar allocation for their new purchases. Note that the U.S. still runs a $700+ billion CA defict.
Appreciate your posts, esp. since this blog is underweight Florida housing perspectives (Cobradriver is invaluable as well) <a href="http://www.haloscan.com/comments/calculatedrisk/7335355881740514019/?a=33802#521420>I recommend others take a look at this comment late on prev. thread
OT to everyone,
I live/work downtown Orlando, and early 2007 some coworkers (married couple) were telling me how they planned on purchasing a condo. Unintrusively as possible, I explained my views of local housing costs vis a vis fundamentals (out-a-whack!), even showing them charts from various blogs like CR.
They went ahead and bought a $200k 2/1 with their annual income ~$45k. Their reason was, "But we have to build eqity." It's easy to forget how susceptible people are to the phrase renting is throwing money down the drain.
So as it stands, they've been wanting to quit their jobs (which they hate) and move (anywhere?), but are terribly underwater and unwilling to walk. I have no idea when they'll realize their future with that condo, but this anecdote reflects why I don't believe the market has reached the discredit phase of a financial mania where people liquidate the speculative asset at fire sale prices - the psychology doesn't reflect that yet.
Nitey nite all. Must go to my apt which has NO computer!!! Of course my house in Brevard certainly does.
Posting here is way more fun than watching tv, but is also addictive!
The U.S. Securities and Exchange Commission's emergency rule to curb abusive short selling in major financial stocks has ignited confusion on Wall Street about how it will be enforced.
Nick writes:
I think the Fed is like a deer in headlights at the moment. They can't raise rates, because they would get crucified by Congress for hurting the economy in a time of recession. They can't lower rates, because they would be crucified by Congress for not fighting inflation. The only politically feasible thing to do is nothing, no matter what is hurting the economy more in their perception. It wouldn't matter if the CPI was at 7% (the real inflation number), 10%, or even higher; it would take balls to make any changes, and Bernanke just doesn't have any.
Nick | Homepage | 07.16.08 - 7:23 pm | #
I was driving to accounts today a mulling over the feds dilemma...
My understanding is that under 'normal conditions' there is an FFR interest rate range where the economy is 'neutral'... we have both moderate growth and low inflation.
The fed can operate in that range and not much bad happens... hit the high side of rates and inflation is very low but growth is still reasonably positive... hit the low side of rate range & you get a little more growth & a little more inflation but still not much inflation. Inside that range it is win-win.
Think of it like a tolerance limit for mechanical assemblies... say a shaft running through a hole. In that case the ID of the hole is larger than the OD of the shaft and the difference (ID-OD) is the tolerance limit (or fit). The tighter the tolerance the smaller the space between outside of shaft and inside of hole (ID & OD are nearly the same in size).
There is a situation - called a 'press fit' - where the tolerance limit is actually NEGATIVE... meaning the shaft is larger than the hole & the shaft is literally PRESSED into the hole (the material around the hole deforms to accept the shaft).
Right now I think the fed is in a 'press fit' situation wrt to FFR interest rates. There isn't a range that will produce both low inflation & growth - the fed really has to choose.
If it wants to fight inflation... it has to have rates HIGHER than the current FFR rate by a considerable degree & that will drive UE higher & GDP lower...
On the other hand if the fed wants to promote growth in this deflationary environment it will still have to cut FFR rates even more & that will drive price inflation higher.
In such a situation the 'neutral range' is negative... the usually lower FFR rate where growth is positive results produces unacceptable levels of inflation... the higher FFR rate where inflation rates abate will result in seriously negative growth & unemployment. There is nothing in between that simultaneously satisfies both growth & inflation conditions.
Lots of interesting comments on this -(and a calculatedrisk mention). Most interesting the stories of Indymac employees promising funds were insured, then customers finding out that it wasn't so.
The bit about online acct balances doing disappearing act is also interesting. And the need for customers to prove identity on joint accounts.
Some of this stuff seems like it could have been so easily explained ahead of time.
"Could a point be made about some sort of global diversification being safer than in cash?"
Sure, and yes to both questions, but do you have a staff of Versace-clad Wharton babes to tell you what it is? I don't.
It's almost always about minimizing risks, isn't it? As far as Conjure and I are concerned, the euro is about buying time, that's all, until we can figure out what to do next.
Re: Doc, evidently you didn't get a copy of the memo. The spelling here has gone all wiered ever since the butterfly died on a previous thread last night.
Got it! Thanks for the heads up, I'll be back later to check on grammer!
China has oil contracts with Iran; large ones.
Iran announced it's going to open its bourse and price in Euros.
China buys Euros with Dollars (at any price,) pays Iran.
Dollar collapses.
Oil goes up.
Bomb Iran to collapse the Euro trade.
Oil goes up more.
Misean -- it made me smile a bit to see someone who remembered Unocal's pipeline.
I would suggest cheap vodka and a good mixer. Then go for the cheap beer. Get a good buzz going on the later and the former will go down fine. Make sure it's ice cold though.
But, yeah...people forget this important shite. But people in power don't.
I have a whole box of sugar packets in a box with notes about this. I write the notes with invisible ink. I'm not quite sure how this is a good data storage system...but it works for me.
Inflation and deflation? Despite today's drop in oil, we still have high prices and high demand for food and energy. Otherwise, we would be textbook deflation. How do you reconcile the two?
The Fed is not going to raise rates before the election. It would be the political equivalent of tugging on superman's cape or pissing in to the wind. We are so screwed!
WASHINGTON The FBI is investigating failed bank IndyMac Bancorp Inc. for possible fraud, an official said Wednesday of the government's latest target following the collapse of the nation's subprime mortgage market.
...
What a topnotch idea! I had been thinking of picking fresh strawberries for a daiquiri-like seasonal beverage, but, I donno....maybe; I may not respect myself later though. Maybe skipping the fruit for the beer may work, then I have the hard stuff for later and the booster for the beer... yah, yah. Not to mention that the strawbs are about to be superseded by raspberries ... is this on topic?
The only politically feasible thing to do ( for the FED ) is nothing, no matter what is hurting the economy more in their perception.
Nick | Homepage | 07.16.08 - 7:23 pm |
BINGO !
The Bush admin simply wants to run out the clock then get out of dodge because the financial pain and despair for Joe and Jane middle class American is just going to get worse because of the gross ineptitude and malfeasance of Bush admin. for past 8 yrs.
Obama needs to stick the blame squarely on Bush as McCain continues to flip flop and blabber away to try and get elected.
Japan's private-sector financial institutions held slightly more than 10 trillion yen ($95 billion) in debt securities issued by U.S. mortgage lenders such as Fannie Mae and Freddie Mac as of the end of the fiscal year in March, according to a published report.
Some of the worlds largest sovereign wealth funds are seeking to scale back their exposure to the US dollar in a sign of global concern about the currency.
One big sovereign fund in the Gulf has cut its dollar-denominated holdings from more than 80 per cent a year ago to less than 60 per cent, while Chinas State Administration of Foreign Exchange (SAFE) has been looking to strike deals with private equity firms in Europe as a part of a strategy to reduce its dollar holdings.
Thanks to those above who advised that this is the time in the cycle when hope is not yet dead and those who rush in lose the most. I need to hear that from time to time... I'm too old to get it wrong again.
I need a NIC (Network interface card) for the $299 machine I bought on the way home from work to give it an external IP. I also have to go to my ISP and get my IP range ...which I know...and tell them to fix the f'ing routing problem.
After that...which should happen tomorrow...I might be able to throw something primative up.
Of Course, besides geopolitics, I'm gonna discuss Heavy Metal...
Sigh. Days like today remind that even when I am pretty sure I know what is going to happen, I have no idea when. I'm all for being conservative and reducing risk right now, but I don't know how to do that. I can't spot anywhere safe to put my money - not even cash, because of possible inflation.
"the Taliban will see as a violation of their deepest beliefs."
Flying jets full of fellow American civilians through office buildings full of same was a violation of my deepest beliefs. How do you feel about the Taliban's other deep beliefs like sexually maiming women, stoning homosexuals and dynamiting Buddhas?
Dispatching the Taliban brings to mind the British general in colonial India who, when faced with the traditional Hindu practice of suttee the burning of widows on the funeral pyres of their dead husbands told his Indian subjects:
You say that it is your custom to burn widows. Very well. We also have a custom: When men burn a woman alive, we tie a rope around their necks and we hang them. Build your funeral pyre; beside it, my carpenters will build a gallows. You may follow your custom. And then we will follow ours."
Screw their deepest beliefs. Animals. Good riddance. And thanks for the natural gas too. These comments are poison sometimes.
rich says: This has actually been my trading weakness. I've been too quick to buy them back. From now on, when a limit order hits, I'm going to wait until the price runs down at least 10-15% to buy them back. It has always done that, too.
Rich, you should know that this strategy is suboptimal compared to buy-and-hold: given trading costs, and a random-walk world, there's a low-probability (but still possible) chance that the path of the stock will change before you can buy back in, causing you to lose out on all future gains.
You made an eloquent buy-and-hold ETF index argument earlier. Don't sully it with these market-limit-timing arguments that fail to add anything, and load the scheme with un-needed trading costs and complexity.
I most certainly hope you are wrong. Any war is a terrible misfortune, but a war in the cockpit of the ME almost certainly will have unpredictable consequences. Without being partisan, I believe that all parties have been trying to avoid war. Again, I find it very difficult to understand what Iran is up to. Why are they so provocative? Is it a bluff? But why?
On the basis of intuition alone, I believe that the situation is fragile, and that Burns' presence in Teheran is meant to convey just that.
Chucky you and those other ass wipes in DC have done a fine job of raiding American consumers 401K's. Most of these people who have bought the Wall Street BS would be better off to have the money, hopefully not dollars, under their mattress then giving it to a bunch of insider crooks and thieves.
I understand that Burns is going to Europe, not Iran, to attend a meeting originally planned to be only between EU and Iran representatives. This makes it less of a direct contact between the US and Iran than some believe. But in any case, it's a good step. Talking is always better than dropping bombs.
You made an eloquent buy-and-hold ETF index argument earlier. Don't sully it with these market-limit-timing arguments that fail to add anything, and load the scheme with un-needed trading costs and complexity.
I'm not sullying anything. I'm just telling you what my strategy is. If you don't like it, don't use it.
I'll just focus on the Russell 2000 and TWM. I also have RWM (1 times inverse) but TWM has been more successful so far.
I firmly believe that at the bottom (whenever it is), the Russell 2000 will be in the 400s compared to 680 something now. But I also don't want to get too greedy, and I don't mind raking off 20-30% or so gains on trades. That's why I put in limit sell orders.
If I sell part of a position when R2000 is at 640, I'm willing to let that part go. But if it goes back up to 690, I want back in, because I still believe it's going into the 400s. It's a nuance on a buy-and-hold strategy, a way to fine-tune it. But basically, I'm sitting on some TWM all the way down.
I'll let you know how it goes in a year or so, one way or the other.
All this talk about finances, housing, etc. makes so much sense that I'm waiting until you guys form some type of new political party. For instance, instead of one of the commenters hear having a webserver, it would be much cooler if Misean said something like...
"I'm launching an IPTV channel that will be a counter to Bloomberg and use P2P methods broadcast... CR and Tanta will host and conjure gets a late primetime spot."
If my church is able to streamcast via p2p methods why can't this forum which probably has more $$$ backing than my church? They are using RayV TV btw... quality is probably SDTV, very good for IPTV.
I suppose the question is, when do we get some type of blogspot tv?
It will be interesting to see, in the coming years, if the Boglehead strategy is still viable (shrugs shoulders).
A little Horace by way of Seamus Heaney for the thread tonight:
Anything Can Happen
Seamus Heaney
After Horace, Odes, I, 34
Anything can happen. You know how Jupiter
Will mostly wait for clouds to gather head
Before he hurls the lightning? Well just now
He galloped his thunder cart and his horses
Across a clear blue sky.. It shook the earth
and the clogged underearth, the River Styx,
the winding streams, the Atlantic shore itself.
Anything can happen, the tallest towers
Be overturned, those in high places daunted,
Those overlooked regarded. Stropped-beak Fortune
Swoops, making the air gasp, tearing the crest off one,
Setting it down bleading on the next.
Ground gives. The heaven's weight
Lifts up off Atlas like a kettle lid.
Capstones shift. Nothing resettles right.
Telluric ash and fire-spores boil away.
Just using you as an example, since you're doing something cool... just thinking... it would be much cooler if we had the blogosphere on TV instead of what we have on TV...
I suppose that's the next step, and when that happens, it's game-over Fox/CNN/MSNBC... and it's gonna be game over hack politicians (hopefully)... because we will control the vertical and the horizontal...
re:market-limit-timing arguments that fail to add anything
Who doesn't time the market? If you buy something then sell it (however long that is), even if it's on a weekly basis dollar cost averaging, you're timing the market. I'd rather time less arbitrarily like rich.
Also - key point - even if you're in physical cash (bills) kept in mason jars this year you're beating the stock market (SPX) by 15% as of today's close. And <a href="http://www.haloscan.com/comments/calculatedrisk/7335355881740514019/?a=33802#521393>here's an earlier comment about why I abandoned Random Walk theory a while ago.
Also - key point - even if you're in physical cash (bills) kept in mason jars this year you're beating the stock market (SPX) by 15% as of today's close. And here's an earlier comment about why I abandoned Random Walk theory a while ago.
And your mason jars are beating the dollar by 10%!
"Also - key point - even if you're in physical cash (bills) kept in mason jars this year you're beating the stock market (SPX) by 15% as of today's close."
I just buy Glod and silver...and a bit of platinum and palladium. I've done OK without trading anything.
Pick your poison folks...this is gonna be a bumpy ride.
On Tuesday, the VIX made news when it jumped briefly above 30, a level that hadn't been breached since mid-March, when Bear Stearns Cos. almost collapsed. The VIX eventually drew back and closed little changed at 28.54.
Traders stayed glued to financial stocks, which remain highly volatile. Among the most actively traded companies Tuesday were American International Group Inc., Lehman Brothers Holdings Inc., Merrill Lynch & Co., Wachovia Corp. and Wells Fargo & Co.
"The volatility in financials remains staggering," said Steve Sosnick, an equity risk manager at Interactive Brokers' Timber Hill. "The market is very skittish, a treacherous environment to trade volatility."
The financial system is now fragile enough that Joe Sixpack has the power to bring it down, but Joe doesn't realize it because the problem still isn't on his radar.
If we have one or two more major bank failures over a short period of time, Joe just may decide that it's time to cash out.
If he does, this isn't going to be about macroeconomics, finance, or accounting. It's going to be about mob psychology.
The volatility in the markets reflect the level of uncertainty and--dare I say it--loss of control.
mp-It's kind of funny, because any time I come on here or other similar places, I hear that Joe Sixpack is broke, no savings, living paycheck to paycheck, deeply in debt. Then, all of a sudden, there he is lining up because he had over $100,000 in one single bank. Makes me wonder, you know.
Apart from Everbank CD denominated in Euros, what else might be feasible for moving some dollars into other currency?
Some months was going to go into an Everbank CD denominated in commodity heavy currencies (AUS, CAN, NWY, SAf) but then had to use the money for other purposes. Life intrudes.
The US federal government on Wednesday said it would open 3.9m acres of land in a designated petroleum reserve in Alaska for drilling as a means to help curb rising petrol prices.
Prices should drop a few cents.. in 10 years time.
There are a whole series of ETFs-FXE (euros), FXC (loonie), etc. I have to be honest and point out that none of these currencies has moved much against the dollar in the last several months and to assume the dollar could not strenthen would be quite risky.
homedad, I don't know what to tell you, other than what's already been discussed here. In fact, I've learned of some things here (like Everbank) that I was unaware of.
A couple of weeks ago, I was talking with two UBS guys about the whole "safe haven" idea. Beyond what's been discussed here by everyone else, they were clueless.
Finally, I don't think it's a bad idea to have some rocks in the can. Just in case. How much is determined by your comfort level, or lack thereof.
Declare the dollar outdated and worthless( like the 5 dollar goldpiece) convert all of the outstanding 1's to 5's and you have a monatary "fix". It will soon be equal to the Peso anyway. Why not just speed up the process. All of this economic talk is speculation. The real truth is to just go back to a gold standard and admit all the financial markets are full of smoke and mirrors. Cash is king when it holds value. Gold or oil has value. The dollar has a value.....if you ran out of Charmin. How can we fix what has taken DECADES to deconstruct? Answer: PAIN
And y'know, today thought for first time about getting a rifle. Wife knows more than me about that since her father was an officer of the court and permitted to carry, so she's versed in pistols and rifles.
My dad was a Korean vet and sold his rifles upon returning from the "police action". We weren't allowed to have a gun around.
First, on monetary policy, I am deeply concerned about what the Fed has done in the last year and in the last decade. Chairman Greenspans easy money the late nineties and then following the tech bust inflated the housing bubble and created the mess we are in today. Chairman Bernankes easy money in the last year has undermined the dollar and sent oil to new record highs every few days, and almost doubling since the rate cuts started. Inflation is here and it is hurting average Americans.
Second, the Fed is asking for more power. But the Fed has proven they can not be trusted with the power they have. They get it wrong, do not use it, or stretch it further than it was ever supposed to go. As I said a moment ago, their monetary policy is a leading cause of the mess we are in. As regulators, it took them until yesterday to use power we gave them in 1994 to regulate all mortgage lenders. And they stretched their authority to buy 29 billion dollars of Bear Stearns assets so J.P. Morgan could buy Bear at a steep discount.
Now the Fed wants to be the systemic risk regulator. But the Fed is the systemic risk. Giving the Fed more power is like giving the neighborhood kid who broke your window playing baseball in the street a bigger bat and thinking that will fix the problem. I am not going to go along with that and will use all my powers as a Senator to stop any new powers going to the Fed. Instead, we should give them less to do so they can do it right, either by taking away their monetary policy responsibility or by requiring them to focus only on inflation.
Third and finally, since I expect we will try to get right to questions in the next hearing, let me say a few words about the G.S.E. bailout plan. When I picked up my newspaper yesterday, I thought I woke up in France. But no, it turns out socialism is alive and well in America. The Treasury Secretary is asking for a blank check to buy as much Fannie and Freddie debt or equity as he wants. The Feds purchase of Bear Stearns assets was amateur socialism compared to this.
And for this unprecedented intervention in the markets what assurances do we get that it will not happen again? None. We are in the process of passing a stronger regulator for the G.S.E.s, and that is important, but it allows them to continue in the current form. If they really do fail, should we let them go back to what they were doing before?
I will close with this question Mr. Chairman. Given what the Fed and Treasury did with Bear Stearns, and given what we are talking about here today, I have to wonder what the next government intervention in private enterprise will be. More importantly, where does it stop?
Amazing. A Senator who understands what's going on???
And y'know, today thought for first time about getting a rifle. Wife knows more than me about that since her father was an officer of the court and permitted to carry, so she's versed in pistols and rifles.
My dad was a Korean vet and sold his rifles upon returning from the "police action". We weren't allowed to have a gun around.
Don't get a fricking rifle unless you are hunting deer... out west at that... get a shotgun. There isn't much you have to know/learn to operate a shotgun except not to point it anywhere near yourself or loved ones.
Plus you can hunt with them - even deer if you have enough 'gauge' (use slugs). Too much gauge and upland game turn into a cloud of feathers.
I'd look at 'pumps' not 'semis'. I haven't owned one in years but that's what I'd buy if I was really freaking out.
Okeydohkey now, the deal is IMHO, the revaluation of The Peso was a volatile process which obviously took time to smooth out. Where I live, there are new realtor offices going in, as if nothing is going on in regard to wall street or Fed bailouts, bank failures, oil prices, housing meltdown -- in short damn near a systemic workout.
Hence, there is zero fear for real estate people and banks that made a killing off this subprime era, because they know, The Fed will bail them out -- taxpayers will flip the bill and not blink an eye, and as with The Peso 10 years ago or so, the process to go from decay -- to -- growth didn't take that long.
Oh great, the bubble burst, a few banks fail, some retarded people that took stupid ass bets get screwed.... and then business moves along like a swiss watch and then all the land developers and construction people begin buying $5.00 cups of fat-whipped sugar drinks and life is so fucking good in America, and t all worked out in the course of 8 months -- shortest recession ever .....hahahahahhaaahaha.. ROTFLMAO....... what about inflation, what about oil, what about the dollar in the kittylitter box, what about al the crooks that failed accounting 101, what about The lost trillions?
Can we really stuff the worst economic era into some 8 month box and then write it off and keep a war going and have the worst congress, senate, executive branch, judicial system, etc in the history of America walk away from the greatest crimes ever to be perpetrated? I use the word retarded very freely, but I do so, because the vast majority of people in this country are either stoned, retarded or glued to the TV watching cooking show reruns -- and meanwhile Rome is almost in ruins and so is my dinner...
If you're thinking of something else, well, I think it's a bad idea unless you've been trained in how to kill people.
Exactly.
Even more importantly you have to be willing, almost eager, to do it - not everyone is.
If the crook senses you won't pull the trigger then you and he are in a bad situation - somebody is going to die. If the crook really believes you'll do it - you will both live & he'll do time.
i believe you flyover types call them kitchen cords. In the east coast woods we call them "face cords".
12th Percentile | 07.16.08 - 11:33 pm | #
Ya I've heard both - then I did live out east for a while so who knows where heard it.
At $200/cord that explains why the wood cleaned up so fast after the last round of storms out here. I was eying some fallen timber & it was gone in a heartbeat.
Gross domestic product grew 10.1 percent in the second quarter from a year earlier, down from 10.6 percent in the first, the statistics bureau said today in Beijing. Consumer prices rose 7.1 percent in June, slowing from 7.7 percent in May.
Hmmmm....10.1% , yup whole lot of demand destruction going on for oil.
The prospect of an extra $5 trillion or thereabouts leaking onto the U.S. government's tab from Fannie Mae and Freddie Mac has spooked investors. As the man almost said, a trillion here and a trillion there, and pretty soon you are talking about real money.
S&P estimated that even in a worst-case scenario, bailing out the broker-dealers would cost the U.S. less than 3 percent of gross domestic product, while Fannie, Freddie and Federal Home Loan Banks might drain as much as 10 percent of GDP.
We're starting to approach that tipping point when the oil price is really going to impact economies,'' said Nick Kounis, an economist at Fortis Bank NV in Amsterdam who participated in the survey.We're much more pessimistic about the global economy.''
The oil price has almost doubled over the past year, reaching a record above $147 a barrel last week. That's hurting consumers and companies and fanning inflation enough to force central banks to raise interest rates. With the U.S. housing recession eroding confidence in financial institutions such as Fannie Mae and Freddie Mac, global stocks have tumbled into a bear market.
I guess that's one way for China to liquidate their $2T. Buy oil keeping the price high to kill off American economy... no... would that be cutting their own throat?
IMO, it is totally irresponsible to own a weapon that you can't secure. That means some kind of safe.
Amen. Not only responsible - its your best defense (keep your weapons from the hands of your enemy).
One other detail - keep ammo in a separate location (also locked) that you and your wife know & can get to fast. If you are worried about needing faster than that - get a dog, s/he'll let you know something is up in plenty of time, best security system ever.
Also, training. Your local police or sherrif might offer something.
mp | 07.16.08 - 11:42 pm | #
All my kids went through gun safety training sponsored by sheriff's office & volunteers from hunting orgs... and we hardly even have any weapons in the house. My reasoning is living out here in the boonies damned near everyone else has them & the kids are inevitably going to run into them (at parties, family cabins, etc.) - they better know about them. They aren't 'toys'.
Well, a lot of folks have a lot of experience they don't talk about.
My wife saw my teenage award cloth used to cover my bow in the bow case at my parents. I didn't explain the Sharpshooter Award, American Archer, or many of the other patches. She is from New Jersey, and is mostly afraid of guns. It was just my patches from summer camp when I was a kid.
Both of my parents in their sixties got their concealed weapon permits last year.
Watch out for the little old lady, she just might have a 9mm Sig to discourage that carjacking.
A cord is is 2X4X8. A rick (kitchen cord) is 2X4X4. North-south-east-west the measures are the same but named differently.
If you need a Glock, try the 10mm and see if you can handle it. Big time knock down power. FBI uses 9mm because the have to qualify pencil necked accountants and girls.
So as it stands, they've been wanting to quit their jobs (which they hate) and move (anywhere?), but are terribly underwater and unwilling to walk. I have no idea when they'll realize their future with that condo, but this anecdote reflects why I don't believe the market has reached the discredit phase of a financial mania where people liquidate the speculative asset at fire sale prices - the psychology doesn't reflect that yet.
Anonymouse | Homepage | 07.16.08 - 8:57 pm | #
That's one part of owning a house that some people forget. They must work to pay the mortgage, even if they hate their job. It's a ball and chain. At least when you rent you can afford to change jobs to something more agreeable, even if it pays less. Nothing worse than living for the weekend and feeling that sense of dread wash over you on Sunday evening because you have to go back to work on Monday.
"Buy oil keeping the price high to kill off American economy... no... would that be cutting their own throat?"
If Marx wudda loved the idea, Deng wudda hated it. Deng's "tao guang yang hui" notion was based on a expanding, rising tide lifts all boats geopolitical outlook...of the 80's.
Now, various hands may be forced, relegating TGYH to the discard pile?
I wonder how many people remember her? She's the State Department employee that gave Sadaam the greenlight in 1990 to invade Kuwait, right?
Chinook | 07.17.08 - 12:01 am | #
Re: Kou Jie
Thanks for the link, interesting read and policy. I imagine that would be a "general" strategy, but the ability to cut US off at the knees might be a bit tempting. There is all sorts of analysis and discussion that is way beyond the scope of this blog, for example... What would US military response be if China crippled our economy?
Knowing TBTB, the rich & wealthy, they would instantly want us to go to war to take revenge on the Chinese, but I can't imagine too many Americans, who don't have much standard of living to start with wanting to go fight for the large corporations. So what would happen if President and Congress all of a sudden just instituted a draft because the dollar is peso'rized?
Remember, that under the usual circumstances, handguns are more likely to be use in a family member's suicide than in killing an intruder. PBS - The Silent Epidemic: Depression and many other sources.
I don't think the leadership in China is tempted in the slightest to cut the giant off at the knees. Developments are outpacing their world view, as well as that of everybody else. Bushspan really sped up our decline beyond anyone's imagination.
I have no idea what the US response to our current fix is going to be.
If you're interested in the policy implications from a historical perspective, be sure to follow on the Pillbury link found in that post...
"handguns are more likely to be use in a family member's suicide than in killing an intruder."
Yes. This reminds me of a scene in Hamlet where he is standing on the edge of a cliff, looking out to sea, ready to walk off. Something about 'seeing the roiling beneath,' or something like that. The point being that the situation can sometimes direct the action.
A friend of mine, a former police chief, unexpectedly lost his wife not long ago due to stroke. Normally very balanced, he started thinking about ending the pain one night "because it would be so easy."
Fortunately, he was rational enough to call another friend, who helped him out of it.
My 13 year old son and I practice at Miramar and the BLM site in Jacumba. He's a better shot than I am, and I am not bad.
I keep the gun under my bed, with shells in the nightstand. My plan is for me to go wrestle with the intruder and my son unlock, load, and shoot.
I hope he gets the intruder and not me (ha, ha).
We have some tree rats at our rental. Today, my wife said 'disease.' This evening, my son and I took that as a greenlight to plink 'em with his BB gun, which we did.
Guns can be comforting, fun, and useful. Get one, sir.
My wife was a 'no gun in this house' type. The 'fun' in New Orleans after Katrina convinced her that 'guns can be good to have around.
Sorry to be on-topic but why doesn't that graph have a line for 6%, since that was where the markets were trying to push the effective Fed funds rate a year ago (first anniversary almost here).
homedad43: I'm joining the conversation late, and don't get me wrong I own granddad's shotgun.
On the farm in the 70s, when the world seemed to be coming unglued, we discussed the correct weaponry for protection, how to fight off the marauding bands of have nots looking to take our food, and the like.
The history that I could find says that it doesn't happen that way. That if anything people become more docile, saving string, checking coin return slots, etc. when times get tough.
Buy a gun, it isn't a bad idea. But I doubt that that you'll need to use it because of the current crash.
mp: As far as Conjure and I are concerned, the euro is about buying time, that's all, until we can figure out what to do next.
Better hurry up and decide. I think time is running out. I don't think decoupling is going to work. I think political pressure on the ECB will eventually make America look like a capitalist heaven. Fiscal restraint + France + Spain + Italy = Fireworks. But I still haven't decided either. tick tock.
I wonder how many people remember her? She's the State Department employee that gave Saddam the greenlight in 1990 to invade Kuwait, right?
Chinook | 07.17.08 - 12:01 am | #
yeah she met with saddam, Bush one's ambassador and said the president views this as an arab matter, we have no interest in this...it's up to you
the conversation was taped unbeknownst to april glaspie and can be found on the net
Re Iranian nukes. The only people who need to be worried are the Israelis. And they needn't worry that Iran will attack them. What they worry about is that we can't do an Iraq on an Iran that has nukes. (We invaded Iraq, for your info, because we KNEW it didn't have nukes, but we lied about that to stir up the war fever.) So unless we want to set things up for Israel to attack Iran without provocation the nuke issue is nonsense. This requires more thought you see than most Americans can muster.
Of course Glaspie was following US policy at the time. It was only after Saddam invaded that Bush senior flipflopped on the issue and double crossed him.
I think political pressure on the ECB will eventually make America look like a capitalist heaven. Fiscal restraint + France + Spain + Italy = Fireworks. But I still haven't decided either. tick tock.
GDP YoY:
Spain: 2.7
France: 2.0
Italy: 0.3
Inflation:
Spain: 5.1
France: 3.7
Italy: 4.2
The PIGS have 1 choice: reform labor markets and industrial policies or bail on EMU. Spain's not bailing, France ain't bailing.
"I might have to short ELN based on your lunacy alone. Just for fun.
12th Percentile | 07.16.08 - 11:31 pm | #"
I'll be glad to take your money. Just make sure you find actual shares. I know you live in my neck of the woods, and I really, really, really don't want to run into you without your clothes on. Not for any amount of money.
But, but didn't Ben Bernanke just this morning commit himself to low inflation? Well... which is it?
How can they cut rates with inflation rising rapidly?
The stock market bounce today shows how eager people still are to "make money in the market." There is not enough pessimism to mark a bottom by a long shot. When the market bottoms any good news will be ignored, not seized upon like dogs and a juicy bone.
No rate hikes, GS has not given them permission yet.
Do you really think they care about the average Joe paying more for food, healthcare, gas, heating costs, etc... No! Just "take a deep breath" and "its a mental recession".
"a rate cut is now more likely (in their view) than a rate hike by the September meeting."
You've got to be kidding.
If they cut rates the dollar goes to $1.75 (against the Euro) and I can use it for toilet paper.
Well Rdawg,
we will have low inflation.
Just ignore the oil step up effect, and there you go.
After all, oil started down, and it will eventually come through the price indices as a moderation of inflation.
As for airlines and trucking companies, well, creative destruction.
A rate cut would be total desperation, followed by massive sales of bonds by foreign investors and a run on the dollar, events which may occur anyway.
But hey, a Fed kickoff is always welcome.
As for today's lovely markets, I love deceased feline bounces. They are very profitable, and offset my short in Ryland, which refuses to roll over and head to the morgue just yet.
But, given some immense patience, I just might have a 125% year.
Beats the crap out of the loss I took last year, and more than makes me whole.
Now. See I admitted losing money. Now I have made money. I also will most likely quit while ahead and start thinking about what to buy next on sale. Long term food, or glod...what goes on sale first?
Someday this war's gonna end...
If they cut rates the dollar goes to $1.75 (against the Euro) and I can use it for toilet paper.
Really? That still sounds like mighty expensive toilet paper, unless you're Sheryl Crow.
Chart of misery index versus dow:
Bloomberg.com:
Personal Finance
Cool. Nice crossing going on.
Hey Seb, refute that.
Someday this war's gonna end...
"Chart of misery index versus dow"
It's all in your mind.
I could have been first if I hadn't clicked on the graph and tried to follow the lines!
""Chart of misery index versus dow"
It's all in your mind."
Good because I lost mine some time ago. Now I've got another good reason to not go rummaging around for that stupid thing.
It's a helpful condition. Otherwise I'd be running around in circles pulling my hair out screaming "The chance of cutting is HIGHER than raising! Are these people INSANE."
A mind is a terrible thing not to waste. Just ask Currently Smoking Cannabis.
Cheers,
The emotions and comments on this board about the daily market ups and downs and day-trading wins and losses are getting a little ridiculous. Some formerly smart people are getting sucked into a suckers' game.
You know we're hitting the end-game, the point when suckers get burned the worst, when the financial media can go from end-of-the-world gloom-and doom to glue-snorting giddy in a day or two. We're there.
It's crazy to try to time this weird market. The volatility is increasing and the movements are nonsense, because they're dominated by speculation and leverage (most of it programmed) that feeds on this type of frantic, decaying situation.
The challenge for any investor in this type of market is to make every trade a winner, and I'll tell you how. You should short or double-short indexes only (not individual stocks) and just basically buy-and-hold them, taking some gains now and then and not getting too greedy.
My goal this year is to make 15-20 trades and make every one a winner. So far, I'm halfway there. But I'm only trading inverse index ETFs that I know have detached from reality related to real value, where the indexes are being black-boxed as volatility tools, completely apart from what the underlying stocks are worth.
Probably one-quarter of the companies in the Russell 2000 Index are basically worthless. You would not pay much for them individually, if anything, to take them private. 10-15% of the Russell 2000 companies are gems. But even for these gems, you would not pay a P/E ratio anywhere close to what the market is paying for all 2,000 companies lumped together in this speculative environment.
I haven't done SKF or DUG yet because I don't understand the underlying fundamentals and am not 80% sure I can do a winning trade in them this year, buy-and-hold. I told you 12 months ago that both Corus and Circuit City were doomed businesses, but I haven't shorted them yet because anything crazy can happen with an individual company, such as Blockbuster almost getting sucked into buying Circuit City. You can get lucky and escape detached fundamentals on individual companies. But not on indexes.
I strongly believe that the fundamentals have become wildly detached on TWM, EEV and SRS and you can turn these into big winners just by being patient and not too greedy.
Before this bear market is over, most Americans who invest will lose 40-60% of their money. That's on top of losing 50-75% of their home equity and maybe their jobs. If you can just make a little profit, you are so much farther ahead than most.
Don't try to time it. Invest smart and try to make all your trades winners. Don't come on this board hyping your day trading wins like barely and sloughing off your losses.
I wonder about that, CR. The 13-week T-Bill seems to be screaming for another cut.
Doh! stupid haloscan
Try again:
13-week T-Bill chart
is that v-fib?
I'm going with my steadfast diagnosis of I haven't a clue and I don't think anyone else really does either, with the complicating symptom of panic, euphoria and variance. I suggest at least two stiff drinks and call someone else in the morning. I'm off hunting misean and my brains - sort of an off-season easter egg hunt. Don't worry, I'll just leave them there, they don't seem to help much at the moment.
rich, I always appreciate your comments. Thank you.
Posted earlier under oil:
Board of Governors of the Federal Reserve International Finance Discussion Papers Number 935 July 2008
FRB: Federal Reserve Board: Error Page ifdp935.pdf
For 2008 and 2009, U.S. long- and short-term interest rates are based on OECD (2008). Beyond a transitional period, long-term rates are set equal to the projected growth of nominal GDP: real growth of 2.4 percent plus inflation of 2 percent, based on the OECD 2009 projection. Short-term rates are set 1 percentage point below long-term rates.
scav
Yea and the guy now in charge of the fed knows how to prevent a great depression except the one he knows how to prevent happened in 1928. The one possible in 2008 he is as clueless as his 1928 counterpart. It is better to armchair quarter back a disaster than deal with one in real time.
But, but didn't Ben Bernanke just this morning commit himself to low inflation? Well... which is it?
Rob Dawg
Currently 2% FFR will do exactly that. Except for oil and corn raw material prices have been declining for months now. After those two are now in line with the big picture, expect the CPI (both core and total) to decline for two years or so.
O-Joe
Rich, I am with you. I was trading the DOG, DXD and DDM for the DOW volatility. Now I am in cash because I can't tell what is up or down anymore! I am in cash and waiting.
This market is not for beginners!
Isn't the Fed basically having to choose between poking our eyes out or yanking our ears off? So the choice is to make no choice. Let it get nasty and wait for people to demand something painful. Then give it to em. Us.
Poop.
rich,
The volatility is what sucks people in to becoming day traders. It's happened to me at times, despite having written down in paper "I'm NOT a day trader."
It takes a lot of discipline to create a trading plan, with pre-determined entry and exit points, and stick to it. Days like today will test you.
Even if you are disciplined, I'm not sure it's possible or even desirable to attempt to make every trade a winner. Even if you hit the fundamentals and the technicals perfect, sometimes the market will just turn on you like a vicious animal. Trade long enough, and it will happen. Still you are on to something for sure when you say trade less.
I'm slowly learning that I'm my own worst enemy. When I see my account balance go up, I get too excited; when it's down I despair.
The attitude I'm trying to adopt is like a pro golfer - phlegmatic and indifferent to the daily twists and turns of the market. Drama is for actors.
The ECB seems poised to be the first G-7 central bankto flinch. Inflation is now 3.7%, nearly two percentagepoints above target. Even sharply slowing economies likeSpain where GDP growth has slowed for four straightquarters has seen inflation skyrocket from 2.5% to 4.5%over that period. In Germany, while core inflation has re-mained stable, some pass-through from energy prices towages appears to be taking place. As a result, this infla-tion targeting bank seems likely to raise rates once to4.25%, but we still feel these rates will eventually be low-ered in early 2009. While the Bank of England is an infla-tion targetter, as well, their remit offers a possible out asthey are charged with returning inflation to target in a rea-sonable time period but without creating undue instabil-ity in the economy. While not as direct as the Feds dualmandate to manage inflation and employment, policy mak-ers in the U.K. still have some discretion.
Well put and good advice, Rich.
"I also think the Fed will hold rates steady - probably through the end of the year"
I laughed when the bubbleheads were predicting rate hikes. I predict 50bps cut sometime before the end of the year as the DOW crosses below 10k and some major dislocations occur in the financial markets. This suckers rally in financials is going to hurt some boneheads that go long during this rally, which could last a week or 2.
Bear market rallys seem to be designed to bring sucker money back into the market so it can be swept away...
The Force is strong in you, Rich.
Wise you are, profit you shall.
Hello, I am fifteen years old and a Pices. I have long blonde hair, some of my friends call me hot. My turn ons are bear markets, puppies, and football players. My turn offs are mean people, the FOMC, FEMA, and Jim Carmer. I beleive we can achieve world peace through by trading the long side until Christmas, when everybody can buy me presents.
Rally news from CNN:
U.S. reverses course, will send envoy to talks with Iran
.
Rich:
thumbs up.
Oh losses. Yup, I had those too.
If you can be flat in today's market for the last 12 months you have already won.
Since arriving here, I have been slightly more confident on my plays and timings.
There are some very bright people on this board.
The interesting part is that we don't even know how inside of us are.
Fixed it:
The interesting part is that we don't even know how inside some of us are.
The FED WILL cut to 1% before this cycle is over, period!!!
Who is: Jim Carmer?
Rich,
Thumbs down, try harder.
jim said: "How can they cut rates with inflation rising rapidly?"
Two things. One, CPI-U's most recent reading shows 5% inflation. But in September, 2005 (nearly 3 years ago) it was at 4.7%, and for the same reason (oil prices). So inflation may be "high" (however one defines it) but it's not like it's been steadily rising for years and is headed for the stratosphere. If you chart it, it's more like it's at the top of a channel and will come back down.
Two, as far as the Fed is concerned economic growth is a problem today and high inflation is a problem in the future. Given the choice of lower economic growth or higher inflation I'd bet money that they'll focus on the "right now" problem and let the other one slide.
Sebastia
rich, you're so right. How silly of me or anyone else to trade. You're the KING. Strictly Buy & hold investing is such a great strategy. Everything is black and white.
sheesh.
Anyone who thinks the FED is going to raise rates is a fool.
A new statewide count of high school dropouts, based on the tracking of individual students, shows significantly higher numbers than have been reported for years in California.
The dropout report, released Wednesday by the California Department of Education, estimated that one in four high school students - 24.2 percent - failed to graduate with their classes or move into another educational program to continue their high school education. The estimates were derived from data from the 2006-07 school year.
404 - Not Found - sacbee.com
This country deserves the ass pounding it is almost certain to get.
I think the Fed is like a deer in headlights at the moment. They can't raise rates, because they would get crucified by Congress for hurting the economy in a time of recession. They can't lower rates, because they would be crucified by Congress for not fighting inflation. The only politically feasible thing to do is nothing, no matter what is hurting the economy more in their perception. It wouldn't matter if the CPI was at 7% (the real inflation number), 10%, or even higher; it would take balls to make any changes, and Bernanke just doesn't have any.
ML to report tomorrow. More volatility to come.
CNNMoney.com: 404 Page Not Found
Will we see a similar 'beat' with ML as we did with WFC? Similar trend in consensus estimates though a tad more pronounced with ML:
90 days ago: .76
60 days ago: .47
30 days ago: .16
7 days ago: -1.91
From The Onion::
Recession-Plagued Nation Demands New Bubble!
energyecon, that's quite a swing for MER--$2 in 30 days!
This part of the game has always amazed me. You basically take an average of guesses by people of dubious talent, intellect, and integrity. Then if the co. in question comes up with a better number, we rally!
Oil's going down and all the Presidential candidates want a surge in Afghanistan - we're saved !!!
"Rally news from CNN:
U.S. reverses course, will send envoy to talks with Iran"
I saw that too, but it doesn't strike me as an occasion for a rally. One could interpret it as a ominous signal. Last warning. Last chance. It is a startling demarche.
Wait til winter comes and people are forced to pay $5/gallon for heating oil and propane, $200/cord for wood.
What will Congress do when faced with hundreds of thousands of voters literally freezing to death?
You guys have no idea how bad this can get if house prices don't stabilize and oil prices drop in half.
I posted below, but I suppose I posted on dead threads.
Anyway, so BankUnited, which has my vote as next bank in the crapper, doubled, doubled, i say doubled.
From 44 cents to 88 cents.
Snicker snort, gasp. I am supposed to be impressed?? And WaMu--is up to over $4!!! Wow.
We are all saved--not!!
Lawyerliz,
I'm going to put you on retainer!
They could hike or they could cut, but the driver is likely to be growth or the financial crisis.
If growth slows, CPI inflation will gradually tend lower, as that is what happens whenever there is a recession. They could easily have to cut more, although they will resist.
If the recession is too shallow, or there is none, well, the Fed will have to hike to start the "rate renormalization" process. Probably not for a few months, at least.
But what they won't do is react to the current level of the CPI. CPI will head higher or lower in the coming years based on what happens to growth in the near term. I.e. inflation lags the cycle and there's not much use reacting to current levels. And the Fed will certainly not do attempt to do anything about oil prices, despite the belief that some people have that the Fed has a magic wand to drop oil prices via rate hikes.
The only "inflation" story that might cause a hike is a move to defend the dollar; however, that would be a highly unusual action, and would have to be done in conjunction with the BoJ and ECB.
Dubya doesn't do diplomacy. The fact that there's an envoy on his way means we're negotiating - or at least open to negotiation. In any other administration, it could be taken either way.
M. Chichikov,our country is being run by madmen and thieves.They are not terribly predictable,especially with only a few months left to bring on the Rapture and loot the world.
I am still trying to get over the fact that the SEC has suspended a type of trade that is ILLEGAL (Naked Shorting) for 8 days for certain select entities. This is a true hell in a handbasket revelation about the folks who are running our government.
I think I'm going to tell the company I work for that they have to pay me in Euros from now on.
See, the problem is, that banks don't want to lend. If the FED lowers, they'll want to loan LESS.
As usual B.S. Bernutty is fighting the wrong damned war. Rates NEED to rise. Prices NEED to fall. It's the deflation stupid. He's zombifying the economy like the Japanese did.
Problem is, the Japanese had savings. The US don't. So the Japanese path is going to result in severe pain. Over a long time. The raise and take our medicine route is quick and brutal and done.
What you get for having asshats in charge.
Cheers,
Found an interesting tidbit on Big Picture as explanation for today's rally; makes sense. Posted on the thread below.
Steely Dan - "Black Friday"
YouTube - Black Friday by Steely Dan
YouTube - Steely Dan - "Black Friday"
With all this talk about rates going up or rates going down, thought I might add an anecdotal data point...
A friend of mine refurbishes certain automobile engine parts. One of the items he uses is acetone. He last purchased a 55/gal drum of acetone about 6 months back (beginning of 2008) for $300. He just called yesterday and discovered that the current price is $500. Thats a 66% increase in 6 months.
My guess is he has to pass that along to the customers. Hello inflation.
RayOnTheFarm,
You call yourself a friend. Why didn't you tell him to start buying acetone futures contracts in January.
Sheesh!
Cheers,
What are you smoking? In our area, we just got a notice that our electricity bills are going up 22% next month. Electricity is a raw material, a commodity, that almost every household and business pays.
"Speed writes:
Dubya doesn't do diplomacy. The fact that there's an envoy on his way means we're negotiating - or at least open to negotiation. In any other administration, it could be taken either way."
Like most of us I have access only to the open press. But I have a bad feeling about this. I don't believe Mr. Burns is going to Teheran to negotiate - or precisely, to propose negotiations on the basis of any western offers. Those have already been put on the table.
OTOH, it's possible that the Iranians have given a signal.
Politically speaking, I don't understand the Iranians at all. But I don't believe that they would risk war with the US if there were not some truth to the charge that they are trying to build some kind of WMD weapons system. Perhaps they have one already.
War would, for a while, take all our minds off the problems of national and global financial stability.
"Doc Fiesta writes:
Who is: Jim Carmer?"
Doc, evidently you didn't get a copy of the memo. The spelling here has gone all wiered ever since the butterfly died on a previous thread last night.
@What are you smoking? In our area, we just got a notice that our electricity bills are going up 22% next month.
Yep. 20% increase here.
Ross--that will be an unknown number of gazillion dollars for my retainer, or 1 oz of glod.
Rayonthefarm,
Please don't devulge the name of your friend. Put a little peroxide in the acetone and, well kablui...Don't want the Feds snooping around his garage..
"@What are you smoking? In our area, we just got a notice that our electricity bills are going up 22% next month."
Yep. 20% increase here.
Same here +20% electric, +25% for natural gas I believe.
Kid Clu --
I am still trying to get over the fact that the SEC has suspended a type of trade that is ILLEGAL (Naked Shorting) for 8 days for certain select entities.
Naked shorting is not always illegal. In particular, market makers can and do "naked short" during their normal course of business. For example, a market maker in a stock's options might sell a put and short the stock; not to manipulate anything, but simply to arbitrage between the options and the underlying.
Options market makers are seeking an exemption.
This new SEC rule really is new. The overall effect will likely be wider spreads on options and more volatility in stocks. (And I do not mean "volatility" in the CNBC sense of "hey it went down"; I mean the literal sense of bigger swings, in both directions.)
Our Federal government is taking several actions that have nothing to do with actual issues and everything to do with attempting to manipulate public confidence. One way or another, this marks the beginning of the end game, I think.
When the market was really getting hammered on Tuesday morning, I put in some limit orders to sell some of my SRS and TWM. But they were about 5% away from the market. They didn't hit, of course. But I'm not unhappy.
I still have double-short positions in very vulnerable, deteriorating situations. I am very confident that I will make more money on them than I already have, over time. But I'll leave those limit orders in, and soon enough they will hit. They always have before. Often, they bounce right off the limits, and I can buy them back soon after for 5-10% less.
This has actually been my trading weakness. I've been too quick to buy them back. From now on, when a limit order hits, I'm going to wait until the price runs down at least 10-15% to buy them back. It has always done that, too.
I'm not sure in this market, with so much leverage, speculation, manipulation and programmed trading, that we are going to see a climactic selloff. I'm thinking it will just be a series of volatility events with gradually lower bottoms, over a period of as long as another year and a half maybe.
Pavel Chichikov,
Hookay. I've had a belt or 12 and I've been trying to stay out of this topic all day but I've had it...not necessarily with you.
"War would, for a while, take all our minds off the problems of national and global financial stability."
For about 15 minutes. When oil futures hit 3 gazillion dollars the war pig Rah! Rah!er's would be silenced.
"OTOH, it's possible that the Iranians have given a signal."
Right. And the Taliban agreed to hand Bin Laden to Pakistan who would have lap dog dutifully handed him to us. But NOOOO. Shrub boy wants to bomb something to be the tuff guy he is not. So he makes a demand that the US population will see as reasonable and the Taliban will see as a violation of their deepest beliefs. And the Taliban refuse.
Suprise! Well I guess we'll have to bomb you then.
Of course the Afgan war was about a certain pipeline and not Bin Laden. That's why the Unocal negotiator for the pipeline Harmid Karzi is now "President".
So, the read on this mission is the same as the Bin Laden one to Afganistan. Look like we're negotiating in good faith. Make an offer that the Iranian gov't MUST refuse but will sound reasonable to the US population...after being horribly distorted by the propaganda press. Then...kill the US empire...erm I mean attack Iran.
Cheers,
@This has actually been my trading weakness. I've been too quick to buy them back.
Mine too, man.
"I'm not sure in this market, with so much leverage, speculation, manipulation and programmed trading, that we are going to see a climactic selloff."
Have you got a roomful of Bloombergs staffed by Versace-clad babes with Wharton degrees?
Conjure and I keep preaching it: This is not a good time to be in the market.
Fed to conduct $75 bln, Schedule 2 TSLF auction
| Markets
| US Markets
| Reuters
NEW YORK, July 16 (Reuters) - The U.S. Federal Reserve will undertake a $75 billion 28-day Term Securities Lending Facility (TSLF) auction on Thursday, according to the New York Fed on Wednesday.
The Fed will accept riskier Schedule 2 collateral in exchange for Treasuries, which primary dealers can then lend out to get short-term cash loans in the U.S. repurchase market, to help shore up balance sheets, the New York Fed announced on its Web site.
China flags FX reserve risk from Fannie, Freddie
| Markets
| US Markets
| Reuters
BEIJING, July 16 (Reuters) - The troubles of Fannie Mae and Freddie Mac pose new risks to China's $1.8 trillion foreign exchange stockpile, adding urgency to Beijing's goal of diversifying its reserves, a researcher at a top Chinese think tank said. ...
Dead on the money as usual, Misean. (Uh, no pun intended.)
The Fed will accept riskier Schedule 2 collateral in exchange for Treasuries
I've been saving all my shiny Wriggly DoubleMint chewing gum wrappers for the day when they will accept those, too.
MP,
Now is a great time to be buying or shorting stocks. She goes both ways...
I think it's too late for China to get out.
mp--certainly agree it's no time to be in the mkt. I'm still long a few things, but sold long ago for most. There will be a day when everybody tries to get out at the same time guys. Get out now when you can.
adding urgency to Beijing's goal of diversifying its reserves, a researcher at a top Chinese think tank said. .
How do you diversify $1.8T? They're mostly stuck with $, I'm afraid.
Ross- "Now is a great time to be buying or shorting stocks."
Huh? Is this the Ross version of David Lereah's "Now is a great time to buy or sell a house," or is this snark?
I must be getting too old to tell the difference.
misean
They are sending the number three guy Undersecretary of State William J. Burns. It doing something while doing nothing.
He is going for the mint tea only.
Lawyerliz,
It is not about getting out, it is about getting in LESS, i.e. reducing their dollar allocation for their new purchases. Note that the U.S. still runs a $700+ billion CA defict.
Chinese run off??
OT to Lawyerliz,
Appreciate your posts, esp. since this blog is underweight Florida housing perspectives (Cobradriver is invaluable as well) <a href="http://www.haloscan.com/comments/calculatedrisk/7335355881740514019/?a=33802#521420>I recommend others take a look at this comment late on prev. thread
OT to everyone,
I live/work downtown Orlando, and early 2007 some coworkers (married couple) were telling me how they planned on purchasing a condo. Unintrusively as possible, I explained my views of local housing costs vis a vis fundamentals (out-a-whack!), even showing them charts from various blogs like CR.
They went ahead and bought a $200k 2/1 with their annual income ~$45k. Their reason was, "But we have to build eqity." It's easy to forget how susceptible people are to the phrase renting is throwing money down the drain.
So as it stands, they've been wanting to quit their jobs (which they hate) and move (anywhere?), but are terribly underwater and unwilling to walk. I have no idea when they'll realize their future with that condo, but this anecdote reflects why I don't believe the market has reached the discredit phase of a financial mania where people liquidate the speculative asset at fire sale prices - the psychology doesn't reflect that yet.
How do you diversify $1.8T?
GM: $3.3B
Ford: $6.2B
Apple: $77B
Intel: $56B
General Dynamics: $17B
Yum Foods: $9B
Coke: $61B
Pepsi: $53B
well, that's 1/6th the cashpile, you get the idea.
Nitey nite all. Must go to my apt which has NO computer!!! Of course my house in Brevard certainly does.
Posting here is way more fun than watching tv, but is also addictive!
Hey Ross, where's my retainer?
Anonymous Bosch,
"Dead on the money as usual, Misean."
TY. I'm flattered by the compliment.
Cheers,
The U.S. Securities and Exchange Commission's emergency rule to curb abusive short selling in major financial stocks has ignited confusion on Wall Street about how it will be enforced.
Short sale rule change sparks confusion on Wall St.
| Reuters
The gift of uncertainty, use it wisely.
Nick writes:
I think the Fed is like a deer in headlights at the moment. They can't raise rates, because they would get crucified by Congress for hurting the economy in a time of recession. They can't lower rates, because they would be crucified by Congress for not fighting inflation. The only politically feasible thing to do is nothing, no matter what is hurting the economy more in their perception. It wouldn't matter if the CPI was at 7% (the real inflation number), 10%, or even higher; it would take balls to make any changes, and Bernanke just doesn't have any.
Nick | Homepage | 07.16.08 - 7:23 pm | #
I was driving to accounts today a mulling over the feds dilemma...
My understanding is that under 'normal conditions' there is an FFR interest rate range where the economy is 'neutral'... we have both moderate growth and low inflation.
The fed can operate in that range and not much bad happens... hit the high side of rates and inflation is very low but growth is still reasonably positive... hit the low side of rate range & you get a little more growth & a little more inflation but still not much inflation. Inside that range it is win-win.
Think of it like a tolerance limit for mechanical assemblies... say a shaft running through a hole. In that case the ID of the hole is larger than the OD of the shaft and the difference (ID-OD) is the tolerance limit (or fit). The tighter the tolerance the smaller the space between outside of shaft and inside of hole (ID & OD are nearly the same in size).
There is a situation - called a 'press fit' - where the tolerance limit is actually NEGATIVE... meaning the shaft is larger than the hole & the shaft is literally PRESSED into the hole (the material around the hole deforms to accept the shaft).
Right now I think the fed is in a 'press fit' situation wrt to FFR interest rates. There isn't a range that will produce both low inflation & growth - the fed really has to choose.
If it wants to fight inflation... it has to have rates HIGHER than the current FFR rate by a considerable degree & that will drive UE higher & GDP lower...
On the other hand if the fed wants to promote growth in this deflationary environment it will still have to cut FFR rates even more & that will drive price inflation higher.
In such a situation the 'neutral range' is negative... the usually lower FFR rate where growth is positive results produces unacceptable levels of inflation... the higher FFR rate where inflation rates abate will result in seriously negative growth & unemployment. There is nothing in between that simultaneously satisfies both growth & inflation conditions.
IMO the fed is in a no-win position.
mp - to be honest isn't staying in cash/metals a risk too?
Could a point be made about some sort of global diversification being safer than in cash?
"How do you diversify $1.8T?"
Meh...
Have Iran negotiate with China.
Iran: You get our oil, we get the cash. We'll throw in some Persian rugs. You promise us ICBM protection.
China: OK half. We're gonna buy Rayteon, Northrop, and Boeing. That should take care of things.
Cheers,
"IMO the fed is in a no-win position."
Add in bank insolvency and it all sums up to "Yup."
Meanwhile, back at indymac, on day 3:
The IndyMac fiasco: a three-day run of federal incompetence | L.A. Land | Los Angeles Times
Lots of interesting comments on this -(and a calculatedrisk mention). Most interesting the stories of Indymac employees promising funds were insured, then customers finding out that it wasn't so.
The bit about online acct balances doing disappearing act is also interesting. And the need for customers to prove identity on joint accounts.
Some of this stuff seems like it could have been so easily explained ahead of time.
"Could a point be made about some sort of global diversification being safer than in cash?"
Sure, and yes to both questions, but do you have a staff of Versace-clad Wharton babes to tell you what it is? I don't.
It's almost always about minimizing risks, isn't it? As far as Conjure and I are concerned, the euro is about buying time, that's all, until we can figure out what to do next.
It's almost always about minimizing risks, isn't it?
That's the game I'm currently trying to play.
No Versace-clad Wharton babes to help me out though... although they are probably well worth the investment.
mp,
Re: Doc, evidently you didn't get a copy of the memo. The spelling here has gone all wiered ever since the butterfly died on a previous thread last night.
Retail CRE bust is coming...
Planned retail store closings:
Retail Watch: The Latest Store Closings - dealnews.com
I'm torn: cheap beer, shitty wine or ice tea?
China has oil contracts with Iran; large ones.
Iran announced it's going to open its bourse and price in Euros.
China buys Euros with Dollars (at any price,) pays Iran.
Dollar collapses.
Oil goes up.
Bomb Iran to collapse the Euro trade.
Oil goes up more.
Misean -- it made me smile a bit to see someone who remembered Unocal's pipeline.
Doc...erm...Black Friday,
I would suggest cheap vodka and a good mixer. Then go for the cheap beer. Get a good buzz going on the later and the former will go down fine. Make sure it's ice cold though.
Cheers,
Anonymous Bosch,
I was obviously being tongue and cheek.
But, yeah...people forget this important shite. But people in power don't.
I have a whole box of sugar packets in a box with notes about this. I write the notes with invisible ink. I'm not quite sure how this is a good data storage system...but it works for me.
Cheers,
Ok Cr,
Everybodies in their jammies now, can we have a little bedtime story? PLEAZZZZZEEE?????
Inflation and deflation? Despite today's drop in oil, we still have high prices and high demand for food and energy. Otherwise, we would be textbook deflation. How do you reconcile the two?
Misean:
It's too bad you're not in journalism.
The Fed is not going to raise rates before the election. It would be the political equivalent of tugging on superman's cape or pissing in to the wind. We are so screwed!
FBI Investigating IndyMac For Fraud In Home Loans To Risky Borrowers
WASHINGTON The FBI is investigating failed bank IndyMac Bancorp Inc. for possible fraud, an official said Wednesday of the government's latest target following the collapse of the nation's subprime mortgage market.
...
Misean,
What a topnotch idea! I had been thinking of picking fresh strawberries for a daiquiri-like seasonal beverage, but, I donno....maybe; I may not respect myself later though. Maybe skipping the fruit for the beer may work, then I have the hard stuff for later and the booster for the beer... yah, yah. Not to mention that the strawbs are about to be superseded by raspberries ... is this on topic?
Currently Smoking Cannabis,
"It's too bad you're not in journalism."
I built a blog server today. I just built it again on something I may go live with. Just need to check security stuff.
Nobody we'll read my mindless musings. But it my be fun to fart around.
Cheers,
The only politically feasible thing to do ( for the FED ) is nothing, no matter what is hurting the economy more in their perception.
Nick | Homepage | 07.16.08 - 7:23 pm |
BINGO !
The Bush admin simply wants to run out the clock then get out of dodge because the financial pain and despair for Joe and Jane middle class American is just going to get worse because of the gross ineptitude and malfeasance of Bush admin. for past 8 yrs.
Obama needs to stick the blame squarely on Bush as McCain continues to flip flop and blabber away to try and get elected.
If it's anything like a CR for geopolitics, I'd be excited.
@But it my be fun to fart around.
"Farting around," def. not to be underestimated as a sport and a pastime.
Misean,
That remark would have been tongue-in-cheek if you had used your tongue and cheek properly.
Who knows, Misean? Maybe you could do a section for Improvised Munitions and Tactics.
Did see vodka and cheep beer?
Depth Charges!!! Woohoo!!!
(And you could post that nifty Homepage link next to your signature)
One last news item:
Japan's private-sector financial institutions held slightly more than 10 trillion yen ($95 billion) in debt securities issued by U.S. mortgage lenders such as Fannie Mae and Freddie Mac as of the end of the fiscal year in March, according to a published report.
wait...
Japan's Ministry of Finance has not disclosed the extent of the government's exposure, saying that doing so would affect the market.
i like that...
Some of the worlds largest sovereign wealth funds are seeking to scale back their exposure to the US dollar in a sign of global concern about the currency.
One big sovereign fund in the Gulf has cut its dollar-denominated holdings from more than 80 per cent a year ago to less than 60 per cent, while Chinas State Administration of Foreign Exchange (SAFE) has been looking to strike deals with private equity firms in Europe as a part of a strategy to reduce its dollar holdings.
FT.com / Global Economy - Sovereign funds cut exposure to weak dollar
Uh Oh, Now that agencies which yield mare are good as treasuries why buy them?
bond guy... thanks for the info yesterday on where to find the interest rate historical data. cheers.
Thanks to those above who advised that this is the time in the cycle when hope is not yet dead and those who rush in lose the most. I need to hear that from time to time... I'm too old to get it wrong again.
"Japan's Ministry of Finance has not disclosed the extent of the government's exposure, saying that doing so would affect the market."
Worst possible answer.
Currently Smoking Cannabis, Anonymous Bosch,
I need a NIC (Network interface card) for the $299 machine I bought on the way home from work to give it an external IP. I also have to go to my ISP and get my IP range ...which I know...and tell them to fix the f'ing routing problem.
After that...which should happen tomorrow...I might be able to throw something primative up.
Of Course, besides geopolitics, I'm gonna discuss Heavy Metal...
I appreciate the encouragement though.
Sorry to be so OT CR.
Cheers,
Misean
Geopolitics and Metal...
Have beer, will read. Make it so!
Cool. Hope you make it registered so I can think up a new password. (Got a bucket of unused nicks too, but it's the PWs that challenge me.)
Of Course, besides geopolitics, I'm gonna discuss Heavy Metal...
Double Cool. My fave was .45ACP. Pity I don't have one any more.
Sigh. Days like today remind that even when I am pretty sure I know what is going to happen, I have no idea when. I'm all for being conservative and reducing risk right now, but I don't know how to do that. I can't spot anywhere safe to put my money - not even cash, because of possible inflation.
Anonymouse and Sebastian (from previous thread):
Thanks for the information. It's appreciated.
"the Taliban will see as a violation of their deepest beliefs."
Flying jets full of fellow American civilians through office buildings full of same was a violation of my deepest beliefs. How do you feel about the Taliban's other deep beliefs like sexually maiming women, stoning homosexuals and dynamiting Buddhas?
Dispatching the Taliban brings to mind the British general in colonial India who, when faced with the traditional Hindu practice of suttee the burning of widows on the funeral pyres of their dead husbands told his Indian subjects:
You say that it is your custom to burn widows. Very well. We also have a custom: When men burn a woman alive, we tie a rope around their necks and we hang them. Build your funeral pyre; beside it, my carpenters will build a gallows. You may follow your custom. And then we will follow ours."
Screw their deepest beliefs. Animals. Good riddance. And thanks for the natural gas too. These comments are poison sometimes.
rich says: This has actually been my trading weakness. I've been too quick to buy them back. From now on, when a limit order hits, I'm going to wait until the price runs down at least 10-15% to buy them back. It has always done that, too.
Rich, you should know that this strategy is suboptimal compared to buy-and-hold: given trading costs, and a random-walk world, there's a low-probability (but still possible) chance that the path of the stock will change before you can buy back in, causing you to lose out on all future gains.
You made an eloquent buy-and-hold ETF index argument earlier. Don't sully it with these market-limit-timing arguments that fail to add anything, and load the scheme with un-needed trading costs and complexity.
The a random-walk world is easily disproven by empirical example....
Jimmy Rodgers.
George Soros.
The a random-walk world is easily disproven by empirical example....
Jimmy Rodgers.
George Soros.
DCRogers is correct. A couple of counter examples cannot disprove that most (~90%) day traders lose.
"Don't sully it with these market-limit-timing arguments that fail to add anything, and load the scheme with un-needed trading costs and complexity."
Conjure Bag says, "Ahhhhh-men!"
Misean,
I most certainly hope you are wrong. Any war is a terrible misfortune, but a war in the cockpit of the ME almost certainly will have unpredictable consequences. Without being partisan, I believe that all parties have been trying to avoid war. Again, I find it very difficult to understand what Iran is up to. Why are they so provocative? Is it a bluff? But why?
On the basis of intuition alone, I believe that the situation is fragile, and that Burns' presence in Teheran is meant to convey just that.
Attempting to trade this kind of market is a good way to end up with ulcers, a heart attack, or trip to a psychiatric ward.
And broke.
Lawmakers seek to ban 401(k) debit cards
After retreating over the last few years, companies looking to raid Americans' 401(k) accounts are making a comeback," Schumer said in a statement.
Business & Financial News, Breaking US & International News | Reuters.com
Chucky you and those other ass wipes in DC have done a fine job of raiding American consumers 401K's. Most of these people who have bought the Wall Street BS would be better off to have the money, hopefully not dollars, under their mattress then giving it to a bunch of insider crooks and thieves.
@Attempting to trade this kind of market is a good way to end up with ulcers, a heart attack, or trip to a psychiatric ward.
And broke.
MP,
If I were at or close to retirement age, I would feel the same way.
I understand that Burns is going to Europe, not Iran, to attend a meeting originally planned to be only between EU and Iran representatives. This makes it less of a direct contact between the US and Iran than some believe. But in any case, it's a good step. Talking is always better than dropping bombs.
"and that Burns' presence in Teheran is meant to convey just that."
hopefully not in the April Glaspie sense.
Jimmy Infamy,
"Screw their deepest beliefs. Animals. Good riddance. And thanks for the natural gas too. These comments are poison sometimes."
Well actually they are human beings. And the US military is slaughtering them. If I were being bombed in such a a way..I'd be a bit upset.
Of course we have the big US Poster! Fuck everybody! I don't care!
YouTube - America - Fuck Yeah!
A little brain work might change your mind. Not looking for that to happen.
Cheers,
I'm not sullying anything. I'm just telling you what my strategy is. If you don't like it, don't use it.
I'll just focus on the Russell 2000 and TWM. I also have RWM (1 times inverse) but TWM has been more successful so far.
I firmly believe that at the bottom (whenever it is), the Russell 2000 will be in the 400s compared to 680 something now. But I also don't want to get too greedy, and I don't mind raking off 20-30% or so gains on trades. That's why I put in limit sell orders.
If I sell part of a position when R2000 is at 640, I'm willing to let that part go. But if it goes back up to 690, I want back in, because I still believe it's going into the 400s. It's a nuance on a buy-and-hold strategy, a way to fine-tune it. But basically, I'm sitting on some TWM all the way down.
I'll let you know how it goes in a year or so, one way or the other.
All this talk about finances, housing, etc. makes so much sense that I'm waiting until you guys form some type of new political party. For instance, instead of one of the commenters hear having a webserver, it would be much cooler if Misean said something like...
"I'm launching an IPTV channel that will be a counter to Bloomberg and use P2P methods broadcast... CR and Tanta will host and conjure gets a late primetime spot."
If my church is able to streamcast via p2p methods why can't this forum which probably has more $$$ backing than my church? They are using RayV TV btw... quality is probably SDTV, very good for IPTV.
I suppose the question is, when do we get some type of blogspot tv?
It will be interesting to see, in the coming years, if the Boglehead strategy is still viable (shrugs shoulders).
A little Horace by way of Seamus Heaney for the thread tonight:
Anything Can Happen
Seamus Heaney
After Horace, Odes, I, 34
Anything can happen. You know how Jupiter
Will mostly wait for clouds to gather head
Before he hurls the lightning? Well just now
He galloped his thunder cart and his horses
Across a clear blue sky.. It shook the earth
and the clogged underearth, the River Styx,
the winding streams, the Atlantic shore itself.
Anything can happen, the tallest towers
Be overturned, those in high places daunted,
Those overlooked regarded. Stropped-beak Fortune
Swoops, making the air gasp, tearing the crest off one,
Setting it down bleading on the next.
Ground gives. The heaven's weight
Lifts up off Atlas like a kettle lid.
Capstones shift. Nothing resettles right.
Telluric ash and fire-spores boil away.
YLSP,
"it would be much cooler if Misean said something like..."
This server is kinda punchy. Never know. The Boston tea party was VERY ad hoc.
I'll try to have it up tomorrow. Anything I can do.
Cheers,
Just using you as an example, since you're doing something cool... just thinking... it would be much cooler if we had the blogosphere on TV instead of what we have on TV...
I suppose that's the next step, and when that happens, it's game-over Fox/CNN/MSNBC... and it's gonna be game over hack politicians (hopefully)... because we will control the vertical and the horizontal...
re:market-limit-timing arguments that fail to add anything
Who doesn't time the market? If you buy something then sell it (however long that is), even if it's on a weekly basis dollar cost averaging, you're timing the market. I'd rather time less arbitrarily like rich.
Also - key point - even if you're in physical cash (bills) kept in mason jars this year you're beating the stock market (SPX) by 15% as of today's close. And <a href="http://www.haloscan.com/comments/calculatedrisk/7335355881740514019/?a=33802#521393>here's an earlier comment about why I abandoned Random Walk theory a while ago.
Also - key point - even if you're in physical cash (bills) kept in mason jars this year you're beating the stock market (SPX) by 15% as of today's close. And here's an earlier comment about why I abandoned Random Walk theory a while ago.
And your mason jars are beating the dollar by 10%!
"Who doesn't time the market?"
Conjure and I prefer a top-down approach driven by fundamentals.
Anonymouse
"Also - key point - even if you're in physical cash (bills) kept in mason jars this year you're beating the stock market (SPX) by 15% as of today's close."
I just buy Glod and silver...and a bit of platinum and palladium. I've done OK without trading anything.
Pick your poison folks...this is gonna be a bumpy ride.
Cheers,
Be even cooler if CR would charter a bank. I'd bet it would do a good business.
Ahhhh, that's better!
On Tuesday, the VIX made news when it jumped briefly above 30, a level that hadn't been breached since mid-March, when Bear Stearns Cos. almost collapsed. The VIX eventually drew back and closed little changed at 28.54.
Traders stayed glued to financial stocks, which remain highly volatile. Among the most actively traded companies Tuesday were American International Group Inc., Lehman Brothers Holdings Inc., Merrill Lynch & Co., Wachovia Corp. and Wells Fargo & Co.
"The volatility in financials remains staggering," said Steve Sosnick, an equity risk manager at Interactive Brokers' Timber Hill. "The market is very skittish, a treacherous environment to trade volatility."
sdtfs writes:
Be even cooler if CR would charter a bank. I'd bet it would do a good business.
Most American's would whine about having to put 50% down. Just make sure Tanta is not running the customer service desk, "No Loan for You! Next!"
"Talking is always better than dropping bombs."
Unless you're talking to April Glaspie. Then talking is a path to dropping bombs.
The financial system is now fragile enough that Joe Sixpack has the power to bring it down, but Joe doesn't realize it because the problem still isn't on his radar.
If we have one or two more major bank failures over a short period of time, Joe just may decide that it's time to cash out.
If he does, this isn't going to be about macroeconomics, finance, or accounting. It's going to be about mob psychology.
The volatility in the markets reflect the level of uncertainty and--dare I say it--loss of control.
mp-It's kind of funny, because any time I come on here or other similar places, I hear that Joe Sixpack is broke, no savings, living paycheck to paycheck, deeply in debt. Then, all of a sudden, there he is lining up because he had over $100,000 in one single bank. Makes me wonder, you know.
mp:
Apart from Everbank CD denominated in Euros, what else might be feasible for moving some dollars into other currency?
Some months was going to go into an Everbank CD denominated in commodity heavy currencies (AUS, CAN, NWY, SAf) but then had to use the money for other purposes. Life intrudes.
Thanks
US to open 3.9m acres in Alaska for drilling
FT.com / US / Politics & Foreign policy - US to open 3.9m acres in Alaska for drilling
The US federal government on Wednesday said it would open 3.9m acres of land in a designated petroleum reserve in Alaska for drilling as a means to help curb rising petrol prices.
Prices should drop a few cents.. in 10 years time.
There are a whole series of ETFs-FXE (euros), FXC (loonie), etc. I have to be honest and point out that none of these currencies has moved much against the dollar in the last several months and to assume the dollar could not strenthen would be quite risky.
homedad, I don't know what to tell you, other than what's already been discussed here. In fact, I've learned of some things here (like Everbank) that I was unaware of.
A couple of weeks ago, I was talking with two UBS guys about the whole "safe haven" idea. Beyond what's been discussed here by everyone else, they were clueless.
Finally, I don't think it's a bad idea to have some rocks in the can. Just in case. How much is determined by your comfort level, or lack thereof.
Declare the dollar outdated and worthless( like the 5 dollar goldpiece) convert all of the outstanding 1's to 5's and you have a monatary "fix". It will soon be equal to the Peso anyway. Why not just speed up the process. All of this economic talk is speculation. The real truth is to just go back to a gold standard and admit all the financial markets are full of smoke and mirrors. Cash is king when it holds value. Gold or oil has value. The dollar has a value.....if you ran out of Charmin. How can we fix what has taken DECADES to deconstruct? Answer: PAIN
Money Man, if you're purchasing hard assets right now, the dollar has value here in the US.
Dollar being sold off now in asian trade. Reality sinking in.
BB writes:
Dollar being sold off now in asian trade. Reality sinking in.
BB, how do you track these?
Thanks for the info.
Got rocks in the can and cash in the bank.
And y'know, today thought for first time about getting a rifle. Wife knows more than me about that since her father was an officer of the court and permitted to carry, so she's versed in pistols and rifles.
My dad was a Korean vet and sold his rifles upon returning from the "police action". We weren't allowed to have a gun around.
Ah well.
"rocks in the can"
new to that expression, care to translate?
TIA
curious-er writes:
BB, how do you track these?
http://www.weblinks247.com/indexes/idx24_usd_en_2.gif
INO Equities Stocks Indexes - U.S $ INDEX (NYBOT:DX) Price Chart and Quote
Or open your favorite FX or trading account.
"Unless you're talking to April Glaspie. Then talking is a path to dropping bombs."
Wow, another smirk inducing memory...
BB, thanks.
homedad, the last time I touched a weapon was in the army. I have no desire to touch one again.
Having said that, if you're thinking of hunting game, that's fine if you're into it. I'm not.
If you're thinking of something else, well, I think it's a bad idea unless you've been trained in how to kill people.
Footnote: At this point, I'm sure that I'll be slimed by at least 2 trillion card-carrying NRA members.
Senator Bunning, grilling Bernanke:
First, on monetary policy, I am deeply concerned about what the Fed has done in the last year and in the last decade. Chairman Greenspans easy money the late nineties and then following the tech bust inflated the housing bubble and created the mess we are in today. Chairman Bernankes easy money in the last year has undermined the dollar and sent oil to new record highs every few days, and almost doubling since the rate cuts started. Inflation is here and it is hurting average Americans.
Second, the Fed is asking for more power. But the Fed has proven they can not be trusted with the power they have. They get it wrong, do not use it, or stretch it further than it was ever supposed to go. As I said a moment ago, their monetary policy is a leading cause of the mess we are in. As regulators, it took them until yesterday to use power we gave them in 1994 to regulate all mortgage lenders. And they stretched their authority to buy 29 billion dollars of Bear Stearns assets so J.P. Morgan could buy Bear at a steep discount.
Now the Fed wants to be the systemic risk regulator. But the Fed is the systemic risk. Giving the Fed more power is like giving the neighborhood kid who broke your window playing baseball in the street a bigger bat and thinking that will fix the problem. I am not going to go along with that and will use all my powers as a Senator to stop any new powers going to the Fed. Instead, we should give them less to do so they can do it right, either by taking away their monetary policy responsibility or by requiring them to focus only on inflation.
Third and finally, since I expect we will try to get right to questions in the next hearing, let me say a few words about the G.S.E. bailout plan. When I picked up my newspaper yesterday, I thought I woke up in France. But no, it turns out socialism is alive and well in America. The Treasury Secretary is asking for a blank check to buy as much Fannie and Freddie debt or equity as he wants. The Feds purchase of Bear Stearns assets was amateur socialism compared to this.
And for this unprecedented intervention in the markets what assurances do we get that it will not happen again? None. We are in the process of passing a stronger regulator for the G.S.E.s, and that is important, but it allows them to continue in the current form. If they really do fail, should we let them go back to what they were doing before?
I will close with this question Mr. Chairman. Given what the Fed and Treasury did with Bear Stearns, and given what we are talking about here today, I have to wonder what the next government intervention in private enterprise will be. More importantly, where does it stop?
Amazing. A Senator who understands what's going on???
(Hat Tip to Denninger at MarketTicker.)
"rocks in a can"
rocks=cash
curious-er writes:
BB, thanks.
Here's another link, click on the chart box on the right against individual currencies.
http://www.mgforex.com/eng/#
And y'know, today thought for first time about getting a rifle. Wife knows more than me about that since her father was an officer of the court and permitted to carry, so she's versed in pistols and rifles.
My dad was a Korean vet and sold his rifles upon returning from the "police action". We weren't allowed to have a gun around.
Don't get a fricking rifle unless you are hunting deer... out west at that... get a shotgun. There isn't much you have to know/learn to operate a shotgun except not to point it anywhere near yourself or loved ones.
Plus you can hunt with them - even deer if you have enough 'gauge' (use slugs). Too much gauge and upland game turn into a cloud of feathers.
I'd look at 'pumps' not 'semis'. I haven't owned one in years but that's what I'd buy if I was really freaking out.
$200/cord for wood.
I'd be willing to vote for a politician who had any idea what a cord of wood cost.
11:23 PM Indymac makes the Canadian national news.
Okeydohkey now, the deal is IMHO, the revaluation of The Peso was a volatile process which obviously took time to smooth out. Where I live, there are new realtor offices going in, as if nothing is going on in regard to wall street or Fed bailouts, bank failures, oil prices, housing meltdown -- in short damn near a systemic workout.
Hence, there is zero fear for real estate people and banks that made a killing off this subprime era, because they know, The Fed will bail them out -- taxpayers will flip the bill and not blink an eye, and as with The Peso 10 years ago or so, the process to go from decay -- to -- growth didn't take that long.
Oh great, the bubble burst, a few banks fail, some retarded people that took stupid ass bets get screwed.... and then business moves along like a swiss watch and then all the land developers and construction people begin buying $5.00 cups of fat-whipped sugar drinks and life is so fucking good in America, and t all worked out in the course of 8 months -- shortest recession ever .....hahahahahhaaahaha.. ROTFLMAO....... what about inflation, what about oil, what about the dollar in the kittylitter box, what about al the crooks that failed accounting 101, what about The lost trillions?
Can we really stuff the worst economic era into some 8 month box and then write it off and keep a war going and have the worst congress, senate, executive branch, judicial system, etc in the history of America walk away from the greatest crimes ever to be perpetrated? I use the word retarded very freely, but I do so, because the vast majority of people in this country are either stoned, retarded or glued to the TV watching cooking show reruns -- and meanwhile Rome is almost in ruins and so is my dinner...
mp:
Usually, I concur since that's what my dad told me when I was nagging about getting a rifle so that he could take me deer hunting.
Before we had kids, we moved to a major metro area from small city NC and FIL gave us a pistol "just in case". We kept pistol separate from ammo.
After kids came along, I pressed wife and we got rid of it since I was nervous about an accident (jeez, my kids could climb) and we returned it.
Now kids are older, but I do have conflict which is why I considered but didn't go out and do it. Will have to consider and talk with the better half.
Anonymous: "rocks in a can" = metals in a safety deposit box.
If you're thinking of something else, well, I think it's a bad idea unless you've been trained in how to kill people.
Exactly.
Even more importantly you have to be willing, almost eager, to do it - not everyone is.
If the crook senses you won't pull the trigger then you and he are in a bad situation - somebody is going to die. If the crook really believes you'll do it - you will both live & he'll do time.
But you have to be way beyond convincing.
dryfly- "get a shotgun"
Yeah, a trench broom, or an M203 grenade launcher with shot loads if you want to be a first class killing machine.
Sweet Jesus, where am I? I thought this was "Calculated Risk."
I'd be willing to vote for a politician who had any idea what a cord of wood cost.
12th Percentile | 07.16.08 - 11:27 pm | #
Then ask him if its a kitchen cord or full cord.
Then, all of a sudden, there he is lining up because he had over $100,000 in one single bank
AOTC, you never fail to amuse. In your world all americans have more than $100k in the bank.
Damn the facts. Make your economic decisions based on photos on CNN.
I might have to short ELN based on your lunacy alone. Just for fun.
unirealist writes:
Senator Bunning, grilling Bernanke
I completely agree. He was well-prepared. I assume Bernanke didn't have much of a response.
Sweet Jesus, where am I? I thought this was "Calculated Risk."
Or it could be the Yahoo Stock board.
dryfly
i believe you flyover types call them kitchen cords. In the east coast woods we call them "face cords".
Don't try to reason with ideological perverts. They enjoy it too much.
Re: Bunning
The irony about the Congressional hearings is that all of a sudden the Republicans have found religion...
fiscal responsibility, executive restraint, etc...
Where was this ire during the last 8 years?
hmmm.
I thought rocks in a can was PM in safety box.
Thought wrong.
I do miss the wood stove that we had at the old house, though. The thermostat's going down adn the sweater's coming on this winter.
i believe you flyover types call them kitchen cords. In the east coast woods we call them "face cords".
12th Percentile | 07.16.08 - 11:33 pm | #
Ya I've heard both - then I did live out east for a while so who knows where heard it.
At $200/cord that explains why the wood cleaned up so fast after the last round of storms out here. I was eying some fallen timber & it was gone in a heartbeat.
China's Economic Growth Cools to Slowest Since 2005
China's Economic Growth Cools to Slowest Since 2005 (Update2) - Bloomberg.com
Gross domestic product grew 10.1 percent in the second quarter from a year earlier, down from 10.6 percent in the first, the statistics bureau said today in Beijing. Consumer prices rose 7.1 percent in June, slowing from 7.7 percent in May.
Hmmmm....10.1% , yup whole lot of demand destruction going on for oil.
"I think it's a bad idea unless you've been trained to kill people."
Are you trying to say that all those people in Compton, CA have had some sort of training?
I always wondered what they did with all their free time.
homedad, one final thought about this weapon business.
IMO, it is totally irresponsible to own a weapon that you can't secure. That means some kind of safe.
Also, training. Your local police or sherrif might offer something.
mp:
Points taken, thanks.
New Play being written here; thanks for your posts:
dryfly- "get a shotgun"
homedad, one final thought about this weapon business.
Sweet Jesus, where am I? I thought this was "Calculated Risk."
I completely agree. He was well-prepared.
"I think it's a bad idea unless you've been trained to kill people."
I thought rocks in a can was PM in safety box.
There's Nothing Sacrosanct About U.S. AAA Rating: Mark Gilbert
There's Nothing Sacrosanct About U.S. AAA Rating: Mark Gilbert - Bloomberg.com
The prospect of an extra $5 trillion or thereabouts leaking onto the U.S. government's tab from Fannie Mae and Freddie Mac has spooked investors. As the man almost said, a trillion here and a trillion there, and pretty soon you are talking about real money.
S&P estimated that even in a worst-case scenario, bailing out the broker-dealers would cost the U.S. less than 3 percent of gross domestic product, while Fannie, Freddie and Federal Home Loan Banks might drain as much as 10 percent of GDP.
We're starting to approach that tipping point when the oil price is really going to impact economies,'' said Nick Kounis, an economist at Fortis Bank NV in Amsterdam who participated in the survey.We're much more pessimistic about the global economy.''
The oil price has almost doubled over the past year, reaching a record above $147 a barrel last week. That's hurting consumers and companies and fanning inflation enough to force central banks to raise interest rates. With the U.S. housing recession eroding confidence in financial institutions such as Fannie Mae and Freddie Mac, global stocks have tumbled into a bear market.
"I thought rocks in a can was PM in safety box."
It can be that.
I guess that's one way for China to liquidate their $2T. Buy oil keeping the price high to kill off American economy... no... would that be cutting their own throat?
dryfly
wood is the new copper
"Buy oil keeping the price high to kill off American economy... no... would that be cutting their own throat?"
It would certainly be diabolical. Marx would probably love the idea.
IMO, it is totally irresponsible to own a weapon that you can't secure. That means some kind of safe.
Amen. Not only responsible - its your best defense (keep your weapons from the hands of your enemy).
One other detail - keep ammo in a separate location (also locked) that you and your wife know & can get to fast. If you are worried about needing faster than that - get a dog, s/he'll let you know something is up in plenty of time, best security system ever.
Also, training. Your local police or sherrif might offer something.
mp | 07.16.08 - 11:42 pm | #
All my kids went through gun safety training sponsored by sheriff's office & volunteers from hunting orgs... and we hardly even have any weapons in the house. My reasoning is living out here in the boonies damned near everyone else has them & the kids are inevitably going to run into them (at parties, family cabins, etc.) - they better know about them. They aren't 'toys'.
Well, a lot of folks have a lot of experience they don't talk about.
My wife saw my teenage award cloth used to cover my bow in the bow case at my parents. I didn't explain the Sharpshooter Award, American Archer, or many of the other patches. She is from New Jersey, and is mostly afraid of guns. It was just my patches from summer camp when I was a kid.
Both of my parents in their sixties got their concealed weapon permits last year.
Watch out for the little old lady, she just might have a 9mm Sig to discourage that carjacking.
This is still the wild west.
America is a fascinating place.
Someday this war's gonna end...
A cord is is 2X4X8. A rick (kitchen cord) is 2X4X4. North-south-east-west the measures are the same but named differently.
If you need a Glock, try the 10mm and see if you can handle it. Big time knock down power. FBI uses 9mm because the have to qualify pencil necked accountants and girls.
So as it stands, they've been wanting to quit their jobs (which they hate) and move (anywhere?), but are terribly underwater and unwilling to walk. I have no idea when they'll realize their future with that condo, but this anecdote reflects why I don't believe the market has reached the discredit phase of a financial mania where people liquidate the speculative asset at fire sale prices - the psychology doesn't reflect that yet.
Anonymouse | Homepage | 07.16.08 - 8:57 pm | #
That's one part of owning a house that some people forget. They must work to pay the mortgage, even if they hate their job. It's a ball and chain. At least when you rent you can afford to change jobs to something more agreeable, even if it pays less. Nothing worse than living for the weekend and feeling that sense of dread wash over you on Sunday evening because you have to go back to work on Monday.
"Buy oil keeping the price high to kill off American economy... no... would that be cutting their own throat?"
If Marx wudda loved the idea, Deng wudda hated it. Deng's "tao guang yang hui" notion was based on a expanding, rising tide lifts all boats geopolitical outlook...of the 80's.
Now, various hands may be forced, relegating TGYH to the discard pile?
http://sun-bin.blogspot.com/2005/07/tao-guang-yang-hui-as-strategy-is.html
Unless you're talking to April Glaspie. Then talking is a path to dropping bombs.
lemonparty | 07.16.08 - 10:57 pm | #
I wonder how many people remember her? She's the State Department employee that gave Sadaam the greenlight in 1990 to invade Kuwait, right?
I wonder how many people remember her? She's the State Department employee that gave Sadaam the greenlight in 1990 to invade Kuwait, right?
Chinook | 07.17.08 - 12:01 am | #
Yup.
They should name a missile frigate after her someday.
Goldman Sachs angered by Bear Stearns share price claims
Goldman Sachs angered by Bear Stearns share price claims - Times Online
Dirtiest bastards on the Street.
Re: Kou Jie
Thanks for the link, interesting read and policy. I imagine that would be a "general" strategy, but the ability to cut US off at the knees might be a bit tempting. There is all sorts of analysis and discussion that is way beyond the scope of this blog, for example... What would US military response be if China crippled our economy?
Knowing TBTB, the rich & wealthy, they would instantly want us to go to war to take revenge on the Chinese, but I can't imagine too many Americans, who don't have much standard of living to start with wanting to go fight for the large corporations. So what would happen if President and Congress all of a sudden just instituted a draft because the dollar is peso'rized?
Remember, that under the usual circumstances, handguns are more likely to be use in a family member's suicide than in killing an intruder. PBS - The Silent Epidemic: Depression and many other sources.
YLSP,
I don't think the leadership in China is tempted in the slightest to cut the giant off at the knees. Developments are outpacing their world view, as well as that of everybody else. Bushspan really sped up our decline beyond anyone's imagination.
I have no idea what the US response to our current fix is going to be.
If you're interested in the policy implications from a historical perspective, be sure to follow on the Pillbury link found in that post...
"handguns are more likely to be use in a family member's suicide than in killing an intruder."
Yes. This reminds me of a scene in Hamlet where he is standing on the edge of a cliff, looking out to sea, ready to walk off. Something about 'seeing the roiling beneath,' or something like that. The point being that the situation can sometimes direct the action.
A friend of mine, a former police chief, unexpectedly lost his wife not long ago due to stroke. Normally very balanced, he started thinking about ending the pain one night "because it would be so easy."
Fortunately, he was rational enough to call another friend, who helped him out of it.
h-d-, here's our home security device, here in raucous La Jolla:
http://www.mossberg.com/images/Mossberg_Guns/930/New/50450.jpg
My 13 year old son and I practice at Miramar and the BLM site in Jacumba. He's a better shot than I am, and I am not bad.
I keep the gun under my bed, with shells in the nightstand. My plan is for me to go wrestle with the intruder and my son unlock, load, and shoot.
I hope he gets the intruder and not me (ha, ha).
We have some tree rats at our rental. Today, my wife said 'disease.' This evening, my son and I took that as a greenlight to plink 'em with his BB gun, which we did.
Guns can be comforting, fun, and useful. Get one, sir.
My wife was a 'no gun in this house' type. The 'fun' in New Orleans after Katrina convinced her that 'guns can be good to have around.
Sorry to be on-topic but why doesn't that graph have a line for 6%, since that was where the markets were trying to push the effective Fed funds rate a year ago (first anniversary almost here).
Memories: Not One Cent: Should Ben Bernanke Resign? Who Should Be the New Federal Reserve Chair?
homedad43: I'm joining the conversation late, and don't get me wrong I own granddad's shotgun.
On the farm in the 70s, when the world seemed to be coming unglued, we discussed the correct weaponry for protection, how to fight off the marauding bands of have nots looking to take our food, and the like.
The history that I could find says that it doesn't happen that way. That if anything people become more docile, saving string, checking coin return slots, etc. when times get tough.
Buy a gun, it isn't a bad idea. But I doubt that that you'll need to use it because of the current crash.
JG,
The Mossberg Cruiser is my personal choice for "home defense", too.
mp: As far as Conjure and I are concerned, the euro is about buying time, that's all, until we can figure out what to do next.
Better hurry up and decide. I think time is running out. I don't think decoupling is going to work. I think political pressure on the ECB will eventually make America look like a capitalist heaven. Fiscal restraint + France + Spain + Italy = Fireworks. But I still haven't decided either. tick tock.
I wonder how many people remember her? She's the State Department employee that gave Saddam the greenlight in 1990 to invade Kuwait, right?
Chinook | 07.17.08 - 12:01 am | #
yeah she met with saddam, Bush one's ambassador and said the president views this as an arab matter, we have no interest in this...it's up to you
the conversation was taped unbeknownst to april glaspie and can be found on the net
Re Iranian nukes. The only people who need to be worried are the Israelis. And they needn't worry that Iran will attack them. What they worry about is that we can't do an Iraq on an Iran that has nukes. (We invaded Iraq, for your info, because we KNEW it didn't have nukes, but we lied about that to stir up the war fever.) So unless we want to set things up for Israel to attack Iran without provocation the nuke issue is nonsense. This requires more thought you see than most Americans can muster.
Of course Glaspie was following US policy at the time. It was only after Saddam invaded that Bush senior flipflopped on the issue and double crossed him.
I think political pressure on the ECB will eventually make America look like a capitalist heaven. Fiscal restraint + France + Spain + Italy = Fireworks. But I still haven't decided either. tick tock.
GDP YoY:
Spain: 2.7
France: 2.0
Italy: 0.3
Inflation:
Spain: 5.1
France: 3.7
Italy: 4.2
The PIGS have 1 choice: reform labor markets and industrial policies or bail on EMU. Spain's not bailing, France ain't bailing.
When you don't know what to do, do nothing.
"I might have to short ELN based on your lunacy alone. Just for fun.
12th Percentile | 07.16.08 - 11:31 pm | #"
I'll be glad to take your money. Just make sure you find actual shares. I know you live in my neck of the woods, and I really, really, really don't want to run into you without your clothes on. Not for any amount of money.