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But, but, o-joe told me that CR's 500 pt future posting was the bottom.
Retards!
This is just the start!
SDS is still down $6 from its peak at its inception ~2 years ago.
Hey Boo-Boo, how about a picnic basket?!
Sorry couldn't help myself!
Remember that as the cost of energy increases, so does the cost to extract virtually all forms of energy and raw materials, produce solar panels, etc.
The expenses for all businesses are set to rise dramatically, and there's very little ability to pass on further increases to the end consumer.
Original producers have already absorbed as much of the hit as they can. Check out the PPI inflation numbers.
don't worry analysts expect a 60% increase in S&P earnings during the 4th quarter
I hear asphalt and plastic are going to be hot this summer!
I know I'm not the first one to consider this... some months ago, we lost the original 'banker' to his bunker. Now, it looks like Sebastian and O-Joe may wind up in the same undisclosed location. That would leave just us non-optimistic 'realists' around. That would be sad.
Oh well, 20 percent is just a number. It doesn't mean we're in a recession.
Right?
crickets chirping
Remember that as the cost of energy increases, so does the cost to extract virtually all forms of energy and raw materials, produce solar panels, etc.
NOT...all these other alt-e are now ocst effective with the cost of oil $144.
jk
Hi, Bear, I miss'ya
But Abbey Cohen told me the S&P was going to 1600..
Lehman offers employees worthless Lehman paper for worthless Government paper:
Lehman Raises Stock Portion of Staff Pay, Person Says (Update1) - Bloomberg.com
The most amusing thing is that Lehman believes that this move will boost morale. As a survivor of the tech bust whose company did the same thing, I can assure you the employees will not be happy.
The wright b model might need some adjustemnts...
NFP tommorow prediction - loss of 100k
Just to elaborate a little further, that will mean margin compression for most companies -- which is okay, given that profit margins have been ridiculously high for years, and profits themselves are very high relative to GDP.
The real problem is that this increase in costs isn't "going" to anybody. There is no wage/price spiral. This isn't inflation. Even oil producers are going to be less profitable with a declining EROEI and increasing production/development/exploration costs.
We can only hope that end-user demand is destroyed sufficiently that the costs for exploration and development of further resources is reduced, because alternatively things look pretty messy. It's tough to work out the economics of increasing production, or even better, a transition towards wind + solar. Solar production would have to increase at a compound rate of 25% every year for ~60 years in order to replace much of our current fossil fuel use.
Treasuries would look great to me if I weren't so scared of their leverage in yet more bailouts.
Sebastian is too busy furiously placing orders for S&P minis to respond.
"This is just like 1987!"
The most amusing thing is that Lehman believes that this move will boost morale. As a survivor of the tech bust whose company did the same thing, I can assure you the employees will not be happy.
Yes, it just highlights that there is an extreme morale problem.
crispy&cole writes:
But Abbey Cohen told me the S&P was going to 1600..
That was NASDQ Crispy.
dk - perhaps it would be better to short long term treasuries if you really want to hold dollars.
Rob - two C&C employees took deals:
404 - Page not found
Well in Lehman's defense the other two options for paying bonuses where tokens to use the executive bathroom and jelly beans. Jelly beans were narrowly defeat by the stock idea.
Looks like the post Canada Day hangover is packing a punch this year. TSX down over 400 points. Where's the aspirin...
I think more Americans are finally realizing that 25+ yrs of industrial production decline and increasingly financial engineered driven bullshit for the US economy ( especially last 8 yrs under Bush ) with massive market bubbles has created systemic damage that will take at least decade to fix.
All aboard the SHORT BUS!
So how are Bernanke's rate cuts working out for everybody?
I assume we're living in a better world today because of them.
Where is David Lereah? Seriously, is Lereah in hiding?
HAAAHAHAHAHAHA!
I'm am absolutely relishing the imposition of an inconvenient reality.
Kipten!
The containment wessel, she can't take it any longer!
I'm sad. We weren't supposed to turn into a third rate economic power with first rate nuculer weapons? Daddy said so. He helped me be Presdent. All his friends said they'd be there for me. Where'd everybody go?
Stephen Colbert's phobia about bears is only going to get worse now.
Rob Dawg writes:
crispy&cole writes:
But Abbey Cohen told me the S&P was going to 1600..
That was NASDQ Crispy.
No, that was Abbey on S&P, but 8 years ago.
Let's see, can't tap the housing ATM, credit card lines are being cut, jobs cuts are occurring, and the stock portfolio is being obliterated.
How can the average joe buy an IPhone 3G this year?
w, I don't feel comfortable at all with shorting long-term treasuries because of the significant negative carry, and because I don't really think inflation per se will increase much. I rather anticipate more of a rise in real long-term interest rates. Profit would thus depend entirely on what the government will do, which is, for me, totally unpredictable. I'm awful at politics.
Shorting common feels a little more natural to me here, particularly small-caps. They have recently outperformed and are generally highly exposed to further constrictions in liquidity, further decreases in consumer spending, and further increases in energy costs. I don't think that's factored into current valuations at all.
I'm also a total idiot with zero training.
Lereah didn't last too long at Move INC.
Now at
Dr. David Lereah - President - Reecon Advisors - GLG Council Partner
See the wikipedia for more
Don't worry folks, the American economy is so advanced that it no longer requires workers.
Troy writes:
SDS is still down $6 from its peak at its inception ~2 years ago.
Troy | 07.02.08 - 4:24 pm | #
Yes its a huge scam by the man to steal your money.
If you don't understand the path dependent nature of a product designed to return 200% of the daily return (positive or negative) of an index then you have no business trading it.
Hear, hear, km4. I'm starting to perceive increasing comprehension, too.
In Boston, there has been a steady decline of optimism. Just one year ago, you could find average people who would swear that housing and the economy would improve by 2008. Now, with a massive winter heating bill staring the populace in the face, increasing unemployment affecting friends and family, and housing prices continuing their downward grind, you hear optimistic comments less and less.
Here's to reality. The sooner we face it, the sooner good times can return.
Everything will be fine up until the Olympics, then the election blah blah blah.
Seriously. That tripe actually used as a valid reason to invest.
HAHAHAAHAHAAH!
Good day for bears!
I should also mention that I'm on the other side of all your potash trades, suspecting the rising cost of oil as input for both farmers and producers will make them a lot less profitable. You should load up on those longs too.
@How can the average joe buy an IPhone 3G this year?
Simple, sell organs.
Who thinks the ECB has the balls to raise interest rates tomorrow?????
Market has priced in a rate hike, amid much criticism. If Trichet holds the rate steady does that cause the US market to jump tomorrow?
Relax. Everything is fine. This is just a buying opportunity.
"I expect to see the stock market a good deal higher than it is today within a few months."
- Irving Fisher, Yale Economist, October 16, 1929
The Stock Market Crash of 1929
Every time history repeats itself, the price goes up.
That would leave just us non-optimistic 'realists' around. That would be sad.
I'll be happy to take on the mantle!
Granted, I'm short all kinds of banks and HBs and airlines. But I'm pretty sure I've been observing the kookier sorts of gold-bugs/perma-bears/whacko political posters/closet survivalists that are coming out of the woodwork here for years, and by comparison I suppose I'm optimistic as all hell.
Mike,
If you don't understand the path dependent nature of a product designed to return 200% of the daily return (positive or negative) of an index then you have no business trading it.
Hear, hear! It's a trading vehicle. You use to capture short-term moves. Skiffy, too. Etc, etc.
But Abbey Cohen told me the S&P was going to 1600..
Harpo Marx has been wrong for a long time.
I just want to know how Leather Hocklear is doing Elvis?
"How can the average Joe buy an IPhone 3G this year?"
Those are for nimrods not averages Joe's. Joe is fishing around in the couch trying to scrap up enough for a 6-pak
dk, I am a novice too, but Faber and Seeking alpha make a strong case:
Treasury Bonds: The Short of the Century -- Seeking Alpha
Gav,
Who thinks the ECB has the balls to raise interest rates tomorrow?????
I think they're just dumb enough to do it. Inflation should be the least of their worries.
ac writes:
So how are Bernanke's rate cuts working out for everybody?
I assume we're living in a better world today because of them.
The cure is officially worse than the disease.
Odds are that Ben B and the Fed tells Trichet to cool it and hold steady giving equities some explosive upside in to the weekend. Then Ben B will promise to give him private lesson on how to talk tough about inflation while doing nothing about it.
YouTube - Sub-Prime Mortgage "SCANDAL"...
Here's a unique view of the housing bust.
This guy is hillarious. And I thought I was angry - d'oh!
Is it just me, or are earnings expectations just a wee bit optimistic?
S&P500 Forward Earnings Estimates
I've heard of turning the corner before, but +68% for 08Q4 is a bit of a stretch. S&P would have us buying with both hands...
If we don't get a bounce here soon we may start having real problems with margin calls.
@I assume we're living in a better world today because of them.
The cure is officially worse than the disease.
"A little more than a little is by much too much." Someone pretty smart once said...
IMO the ECB will raise rates. It will hurt foolish borrowers and lenders, but encourage long term savings and investment.
The NASDAQ peaked on March 12, 2000, at 5,048.62.
Making an Angry Saver a Happy Saver?
Sorry, that should be March 10, 2000.
Yossarian said: "Now, it looks like Sebastian and O-Joe may wind up in the same undisclosed location."
I'm not in hiding, there's just nothing of value coming out of this blog or the comments. Ironically, CR has completely adopted the mainstream media approach to the news. Bad news, presented in the most negative light possible, is what "sells". So does taking cheap shots at policy makers who aren't here to defend themselves.
You can't get reasoned, "actionable" information out of a situation like that, it inspires mindless mob behavior in the comments, and as everyone knows, you can't reason with a mob.
Sebastia
Jim Cramer, June 26, 2008
"The big institutional investors have lost all confidence in the market," Cramer said. "They're not like you."
"You have to accept these declines," Cramer said. "Investors should raise cash by selling marginal positions and buy stocks that they like," he said.
========================
Russian sailors: "Emergency! Everybody to get from street!"
Officer Jones: "We have... GOT... to get organized!"
Chief Mattocks: "I thought all the nuts went home on Labor Day."
Bartender: "All right! All right! But only on one condition; everybody pays cash!"
Where oh where is Abby Joseph Cohen when we really need her????
Gone into hiding, I presume.
So does taking cheap shots at policy makers who aren't here to defend themselves.
If some of those policymakers read this blog, it would benefit them.
Angry Saver - thanks for the laughs. BTW, if we're "drinking with bob", who's buying?
Sebastian - what good news do you see?
Thanks BB,
Personally I think Trichet holds tomorrow. There is intense political pressure to do so, and risk of causing a dollar collapse if he raises is not worth it.
I fully expect to my portfolio of PMs and banking Puts to get crushed by a surprise announcement...
Crossing my fingers for a raise.
I'm NOT taking a beating in the stock market or struggling with a mortgage I can't afford. But I'm definitely feeling the inflation pain. I do a lot of driving and it is brutal on the budget. Really brutal.
I can't imagine the pain people are feeling if they bought into the stock, real estate and spend, spend, spend nonsense.
OUCH!
Jim - Abby was demoted months ago. It was fun while it lasted...
IMO the ECB will raise rates. It will hurt foolish borrowers and lenders, but encourage long term savings and investment.
Homeboy, all it's going to do is make the Italians wish, one more time, that they'd never yoked themselves to the Germans. Thankfully, most of the pain from this particular move will fall on Europeans. For the moment....
Drinking with Bob for President or better yet - Chairman of the Federal Reserve.
sebastian, the tenor of this blog is more bearish, but not mainstream at all. the word "realistic" comes to mind as does "prudent". Although i agree with some of the posters here, who don't tend to add value.
And speaking of value, did I not say what the Dow should be quite awhile ago, and I said 11,200. I think that's value
Here's a far-flung proposition that could Black Swan the hell out of the markets: Didn't Bush vow (22/6/08) to get bin Laden before he leaves office? Not that he could, but just sayin'.
Sebastian writes: CR has completely adopted the mainstream media approach to the news. Bad news, presented in the most negative light possible
Seb - go back and re-read the post we are 'commenting' on here. HTF can you say that is the most 'negative light possible'? I think CR's post is remarkably matter-of-fact. If you want UberBear spin, I suggest Mish.
Man-moth writes:
@How can the average joe buy an IPhone 3G this year?
Simple, sell organs.
This is currently illegal, but TPTB are looking for a new bubble to blow. I think you could be on to something here. Organ flipping?
Although i agree with some of the posters here, who don't tend to add value.
I don't think you meant to say what you said.
IMO the ECB will raise rates. It will hurt foolish borrowers and lenders
nope. it will hurt EVERYONE in the EU. it is a really, really stupid move because the issue isn't inflation at all. when the economy grinds to a halt and exports plunge, it will cause a lot of things, but savings won't be one of them.
Not that he could, but just sayin'.
Moth, you've heard something?
@Organ flipping?
LOL Damn, just spewed my PBR! Yeah, that's what it's come to, PBR.
Re: "Drinking with Bob for President or better yet - Chairman of the Federal Reserve."
Fed Chairman gets my vote. He would add a certain "je-ne-sais-quoi" to those boring Humphrey-Hawkins testimonies...
RussiaÂ’s New President Sees Larger Economic Role
U.S. Is in No Shape to Give Advice, Medvedev Says - NY Times
Dmitri A. Medvedev ( Putin's hand picked replacement ) said in an interview that an America in “essentially a depression” was in no position to lecture.
Now please mention that F2F to our current Idiot-in-Chief who still sees a strong dollar as economic conditions in America continue to plummet.
Just the beginning as financial markets realize that energy will only get progressively more expensive slashing disposable income throughout the world.
The world will deleverage and it will be vicious. The hard part is that there will be no sustained recovery out of the smoldering ashes of the world's financial system without a radical change in banking from fractional reserve banking to sovereign credit banking.
Ipodius,
Stable money & prices are far more important than bailouts in the long run. Much pain is on the horizon.
However, consider a saver like me. I will absolutely not lend at low rates. At high rates I will. I believe that this time around, lower rates will discouarage LENDING.
Things are not as they seem. The Greenspan model of throwing liquidity at the problem is history.
RussiaÂ’s New President Sees Larger Economic Role
I thought we were at "Peak Oil"? The Russians have precisely one thing to credit for their current good fortune (relative to the Yeltsin years), and it isn't their brains, per se.
At high rates I will. I believe that this time around, lower rates will discouarage LENDING.
Why the qualifier? Low real rates always discourage lending. High real rates always discourage borrowing. This is non-controversial. It also means that demand for your money will tend to dry up just when you're willing to part with it.
Who is we ?
From memory...
The USA reached Peak Oil production in 1970
Most other oil producing counties between early 2000's and 2015 ( and I think this includes Russia )
The Mideast esp Saudi Arabia and Iraq between 2020 - 2025.
Michael McKinlay wrote: "The world will deleverage and it will be vicious."
You've hit the nail on the head. This deleveraging cycle couldn't happen at a worse juncture. Perhaps this combined with our peak-oil paradigm will provide a lesson for the next SEVERAL generations. Not likely, but perhaps...
However, consider a saver like me. I will absolutely not lend at low rates. At high rates I will. I believe that this time around, lower rates will discouarage LENDING.
Very interesting perspective. This kind of attitude is why I expect real interest rates -- though not necessarily nominal rates -- to rise.
Sebastian,
As someone who disagrees with some of your views, I'd still like to hear them. I agree that some of the comments have been extremely rude, but I suggest you simply ignore those who cannot remain civil.
Hope you'll keep contributing.
Regards
Why the qualifier? Low real rates always discourage lending. High real rates always discourage borrowing.
That's not what happened when Greenspan lowered rates to 1%. LENDING boomed. I don't think that will happen this time around. Outside of treasuries, rates are rising. The ECB might recognize this and opt for stable prices over a life line to foolish borrowers and lenders.
I believe that this time around
I believe this time around, rates aren't behaving the way the central banks would like them to, are they? And my comment was more EU specific, although it can apply to here. The issue here is deflation, not inflation as many of us have said. The ECB if fighting the wrong battle.
How can the average joe buy an IPhone 3G this year?
Evidently, average joe can't buy high-end video cards. nVidia down 26% after hours. I don't think people realize how weak consumer sales in May and June were.
km4 - The Saudis are peaking as we speak. It is literally twilight in the desert. They have given us nothing but lip service to the contrary. Unless, of course, you buy into the speculator thingy...
Gavshire Hathaway writes:
Thanks BB,
Personally I think Trichet holds tomorrow. There is intense political pressure to do so, and risk of causing a dollar collapse if he raises is not worth it.
Trichet will do his duty as he is mandated to. Am Betting that he will raise rates and signal for more to come.
See Article :-
ECB's Trichet Warns of "Explosion" in Inflation
ECB's Trichet Sees Risk of `Exploding' Inflation (Update1) - Bloomberg.com
Actually, in the coming years of higher oil prices, the United States (Oil Shale) and Canada (Alberta oil sands) will be doing better once the resources are developed. Rumors of our demise as a resource producing nation are greatly exaggerated.
At any rate, several people on this blog have economics-by-journalists disease; by which I mean anyone decrying "fractional reserve banking" or the runaway transfer of the American economy from manufacturing to finance.
Ahem.
"Kevin Phillips is not an economist. The gold standard was a silly but useful anachronism that was useful for limiting money supply growth before central bankers knew what money supply growth was."
That is all.
20% down? The average for a bear is supposed to be at least 30%, but this is no average bear. I don't think we're even half way there yet.
p.s.: Sounds like our resident bull is pouting a bit.
"The issue here is deflation, not inflation as many of us have said. The ECB if fighting the wrong battle."
That remains to be seen you mishbot.
Sebastian writes:
Ironically, CR has completely adopted the mainstream media approach to the news. Bad news, presented in the most negative light possible, is what "sells".
When you are used to getting polyanna news from the sunshine pumpers on CNBC, Fox, and even Bloomberg, the facts do appear bearish.
Ritholtz at The Big Picture had a good column regarding how the public feels versus the pundits/economists who look at the data and say that the economy is still fine. When GM reports terrible sales (on pops on the day) but the MSM conveys it as better than expected and therefore bullish, that epitomizes the financial media over the last 8 years.
@Moth, you've heard something?
No, just thinking what that sob could do to try to stanch the bleeding. Isn't he now seen as the worst pres of all time? That and I've got that Black Swan meme in my head (scared shortless).
angry saver,
As long as we who save are the minority, we shall be screwed. No matter who wins in november. But at least with obama, the presses shall run fast and furious. And we all know what to do then...
Got gold?
tj - agree (pouting). many of us here and other blogs have been stating our case for years only to be shot down by the perma-bulls, then when they are wrong they attack us for being right...sad
I just read this in a prior (recent/Mishkin) link posted by Diablo's Panties, and it must therefore be very true!
"Structurally strong oil price is a re-distributor rather than a destroyer of growth, wealth and earnings, but recent acceleration is too much too soon and could be partially self correcting."
This is good news for asphalt and plastic costs and thus hyperinflation at TacoBell will not make me feel as bad tonight!
How many attacked Jas for his EXTREME bearish case...you know what, he has been more correc than O-joe and Sebastian!
Ipodius,
The 1970s had falling stock & bond prices and rising real estate & commodity prices. CPI goods also rose. It was called inflation.
Today is the same except that real estate is also falling. The solution is not more free money - we've tried that. Personally, I don't think there is a soulution.
I see inflation in needs, deflation in wants and assets (especially leveraged assets).
I call it painflation. You can call it what ever you want.
crispy,
At least now the bulls can't point to the market as some kind of indicator we're not in a recession. Besides, technicalities aren't realities.
squeezed - Is yours the slowly but surely moderating attitude of a former mishbot?
How can the average joe buy an IPhone 3G this year?
Cash out what's left of the 401k.
Angry Saver writes:
I see inflation in needs, deflation in wants and assets (especially leveraged assets).
Funny that's what Marc Faber said too.
And it certainly is happening now an inflation of prices.
The 1970s had falling stock & bond prices and rising real estate & commodity prices.
This is a different world than the 70s Angry. We have falling asset prices across the board, and increasing prices. That is deflation. If commodities crack, then all you'll be left with is falling asset prices because they still have a ways to go yet.
You can call this what you want, but it sucks across the board. Unless you view this, as I do...opportunity in destruction.
before central bankers knew what money supply growth was."
That concept has been around a few thousand years.
Granted, it's psychologically important, and psychology matters a great deal (I would think especially so in consumer-driven economic systems) but this is sort of an arbitrary magic number. With the variance we've seen recently, couldn't things go up tomorrow and everyone (not nec. this peanut gallery) will be yelling bottom? Being merely a dumb geographic digit-jockey myself, things looks about as bad as they did yesterday and the populace not necessarily any smarter. Any excuse for a party though, especially when the crowd seems to have a fine taste in single malts.
Re: "Cash out what's left of the 401k"
I agree, because if you don't, the underwriters and pirates at the 401K's and pension plans will be playing hedge funds trying not to burn more cash..... See Pension Protection Act and DOL's exceptions to prohibited actions by underwriters and stuff that related to hedge funds swapping your cash for trash!
hearing from the grapevine...this month is seeing lots of layoffs meaning AUG umemployment could be down more than 200k.
I guess big players in the market is already sniffing it
Trichet's economy has a stronger union/labor representation than is present in the US. His concerns regarding a wage and price spiral are, in that context, not unrealistic.
Please recall he operates under a single mandate of price stability, unlike the FED.
This just in (or...an exercise in cliff-diving):
Danger: Open Trench
Unless you view this, as I do...opportunity in destruction.
Not yet. I foresee things getting much worse. I think we're in for difficult times.
The real problem is that this increase in costs isn't "going" to anybody. There is no wage/price spiral. This isn't inflation.
-ndk
I accept the definition of inflation as a monetary phenomenon only-growth in the money supply irrespective of the price level. But, I've got a question: We could still have deflation if wages went up as well as prices, couldn't we? I was always under the assumption that the money supply can't increase unless credit is extended (someone is loaned money). If people are stuck paying higher prices, and say they get raises to compensate, you could still have deflation if consumers were unwilling to borrow and banks were unwilling to lend, couldn't you?
"Look for the bare necessities
The simple bare necessities
Forget about your worries and your strife
I mean the bare necessities
That's why a bear can rest at ease
With just the bare necessities of life..."
--Bowling for Soup
burnside writes:
Trichet's economy has a stronger union/labor representation than is present in the US. His concerns regarding a wage and price spiral are, in that context, not unrealistic.
Please recall he operates under a single mandate of price stability, unlike the FED.
Couldn't agree with you more.
Ben remembers the Depression, Trichet remembers Weimar Republic.
Ben already showed his hand and now it's Trichet's turn. I think we'll know who jawbones and who walks the walk.
Ipodius,
This is a different world than the 70s Angry.
Agreed. As best I can tell, it's a combination of the 1930s AND the 1970s.
Painflation!
OK wise one(s)a question. I told the spousal unit to dump the S & P index fund last year (didn't listen). Now he calls me and asks me when to sell. Now? Wait for a bear market rally?
At any rate, several people on this blog have economics-by-journalists disease; by which I mean anyone decrying "fractional reserve banking" or the runaway transfer of the American economy from manufacturing to finance.
Too true. El Presidente sabe lo que dice.
The Non-Accelerating Inflation Range of Unemployment
Economics and...: The Non-Accelerating Inflation Range of Unemployment
On the other side, even the most ardent Laxtonite advocate of the convex Phillips curve will have to acknowledge that, if we push unemployment high enough, we will get fairly rapid disinflation – or conversely, that there are limits to the unemployment effects of even the most draconian disinflaitonary (or deflationary) policy. The early 1980s would seem to provide an example. I might also cite the rapidity with which deflation materialized during the early 1930s, as well as the relatively small absolute unemployment increase in 1990s Japan.
And speaking of value, did I not say what the Dow should be quite awhile ago, and I said 11,200. I think that's value
ipodius, we're there now. Are you saying you think the Dow is a buy now? Honestly? The momentum is down big time. We haven't even had a 5% down day yet. How can you possibly think the Dow is a deal now?
I'm a firm believer in contrarian investing, but I gotta say you've got guts to turn bullish now.
"Athenian money meanwhile had defined a pattern which was to repeat in other empires which were to follow:- dominance of trade; influx of gold to balance exports; public wealth; liberty; overconfidence; the discovery of loosely managed money as a stimulating solution to stagnation in an economy near its zenith; an ongoing success born of cultural momentum and monetary expansion which was to persist for decades before finally the emptiness of the monetary promise was exposed, leading to rapid national collapse."
Gold : prices, facts, figures & research : A brief history of money
herewego:
Now. Unless it's spare change.
It's just an opinion but maybe you oughta wait for a pullback in commodities and then look into that.
Precious metals looks extremely bullish now though.
Of course we'll know more tomorrow after Trichet.
herewego,
When in doubt go to cash.
Brazil announces US$49 billion in agriculture credits to boost production
Page not found - - CNBC.com
Brazil is already the planet's top exporter of beef, chicken, sugar, coffee and orange juice. It comes in a close second to the United States for soy exports.
tj & the bear writes:
When in doubt go to cash.
Just not the USD.
Hey BB. My side of the money is all in junior mining stocks. Wonder when those will (finally) catch fire. I'm thinking that commodities have to come down and stabilize before the sector recovers.
But, I've got a question: We could still have deflation if wages went up as well as prices, couldn't we? I was always under the assumption that the money supply can't increase unless credit is extended (someone is loaned money).
Yes, by definition, basically. Money is created through fractional reserve lending. There are two caveats. One is if banks choose not to lend, or consumers choose not to borrow, because of either general sentiment or lack of economic opportunity. Monetary velocity slows and/or the reserve ratio ends up rising. See Japan.
The other is significant direct monetization of debts by the central bank, which is quite unlikely at present even in light of the steps we've already taken.
This would be a liquidity trap, and it cuts central banks off at the knees, to some extent.
I conceded my bad call on a short term bottom in the Haloscanned thread. I'm now short via SDS.
I wanted to mention that the fact that it's profitable to short into weakness is very telling of how bad an intermediate decline this is.
But that being said... I smell some real fear forming, and exuberance by the bears. We could hit an intermediate bottom at 1170 (50% retracement of Oct. 2002 low to Oct 2007 high), rather than the 1080 I thought would be good support. But we'll see.
How can you possibly think the Dow is a deal now?
All I will say is that I said that this is where I calculated it should be trading at. Now that we've reached reality, we can take a look at forward earnings and make decisions. That does not mean it can't go lower. It just means we're now off the froth and have reached reality. That's an important indicator to me.
The other is significant direct monetization of debts by the central bank ... This would be a liquidity trap, and it cuts central banks off at the knees, to some extent.
No kidding. It's very "creative," though.
Supply Response and Self-Unfulfilling Recession Prophecies
Economics and...
Here I’m going to suggest a third mechanism whereby forecast recessions may tend to prevent themselves. The idea comes from this YouTube video, in which a model* discusses, among other things, her concerns about the weakening economy. Her response to those concerns: “I’m trying to book up as much work as I possibly can and get some savings cushions built up.”
herewego writes:
Hey BB. My side of the money is all in junior mining stocks.
Don't particularly like stocks now, too much risk in management etc, besides aren't juniors extremely vulnerable to all that manipulation due to their small cap, much talk of naked shorts.
Anyway you seem to know what you're doing and if they take off you could really be swimming in it, now if only the other one will follow.
Me i prefer the commodities, it looks like a secular run now and those things last for some time.
But that being said... I smell some real fear forming, and exuberance by the bears.
True. The thing is, the banks (particularly the regionals) still look like they'll be taking an additional bath on alt-A/CRE. Tough to justify covering given that and a weak economy. What's the catalyst up?
scav,
Ya got an 'Amen' brother on the locals taste in beverages!
I told you dudes this was it.
Head between knees, everyone!
Currently Smoking Cannabis writes:
I told you dudes this was it.
You need to continue smoking, you ain't seen nothing yet.
When in doubt go to cash.
Just not the USD.
LOL. The 20% I moved out of SDS went right into FXC . . .
Maybe it's time for a song! How about, "Like A Rock"?
BG,
I hate to say it (because it's such conventional thought right now), but I think what takes us up is a healthy correction in crude.
Plus, if you look at the DOW, it's within 300 points of its weekly downtrend channel. And it's frankly going parabolic to the downside and needs a healthy retracement to go down further. But I went short today as I said, just not fully short like I was until Friday.
But I'd just love to see SPX 1256.98 taken out and held with quality of volume tomorrow. With an NFP number like negative 150k (certainly possible), we could see the SPX down to 1225.
Oh, Oh, Cramer is on. He's pressing buttons and horns and making funny sounds. I may only be able to take 30 seconds more......Aghhhhh. This episode should be labelled as " over cliched " ( thump,thump, listener has succumbed, CPR is fruitless. Amen.
S&P p/e = 16.02
S&P E/P (earnings yield) = 6.788% (including divs)
10 year Treasury = 3.959%
S&P overvalued by at least 3%
Look for at least another 40 point drop in S&P and as this non-recession kicks in with heavy unemployment, lower priced homes, zero car sales, bank failures and more denial from The Fed and Bush, we will see The Dow go under 10K by election time easily!
Here's how the banks are doing.
Market Observation - Tim W. Wood 12.04.2009
He's calling SP500 at 780 and DJIA at 7500, and he might be too high.
Dude I'm burning a fatty. I already got my tent, water purifier, and a little bag of bullion. My Bushville pad is going to be sweet.
The social fuze should be lit soon.
Oh, and today is a new closing low on the S&P500 since the top last year. On a closing basis, everyone who's bought since August 2006 is in a losing position.
Oh sorry, I forgot commodity inflation, including $200 oil, parabolic asphalt costs, plastic costs, material costs not factored into any budget or model. I forgot about oil; make that Dow under 10K by August and Global Liquidity Trap by XMAS.
Currently Smoking Cannabis writes:
The social fuze should be lit soon.
Enjoy, oh enlightened one.
Currently Smoking Cannabis - I find ketamine more effective on down days like today.
On a closing basis, everyone who's bought since August 2006 is in a losing position.
My latest 401K started June 2006. It was in MMs until April, then got transferred to an IRA in June.
SDS has been bery, bery good to it. Daily gains have been greater than the annual yield from the MM on numerous occasions.
That was me at 6:11 above with the bank link.
MISH borrowed my name yesterday and I just got it back.
Troy,
Nice. Kicking bull ass. Both houses and stocks deflating at once. I'm lovin' it.
Yeah they are extremely vulnerable, but I'm hoping the institutional leverage/manipulation will evaporate when there are more competitors in the game. (Plus the game is pretty transparent given the size of the market.)
I enjoy the Venture it as it's probably the only place where a small investor can benefit from the economies of scale. I certainly can't fund the purchase 10,000 shares on an American exchange. And watching a stock surge from 69 cents to a $1.87 in a matter of days is a thrill.
You do, of course, have to have the dicipline to sell it before it goes back to $1.00.
it's a combination of the 1930s AND the 1970s.
Painflation!
having lived in Japan for most of the 90s I know the score to this movie.
Anonymouse,
So you're still looking for a pretty substantial drop. Well, if Trichet follows his mandate.....
Not good policy, IMHO, but it should keep oil headed up and SPX headed down for the moment.
Nymex at 144 and Brent at 145.. someone should investigate GS.. oh wait that's paulson's bank isn't it.
I was going to buy back in at some point under 10k. Now, maybe under 9000.
herewego:
In the end the fundamentals will prevail, all the best for your juniors.
I was going to buy back in at some point under 10k. Now, maybe under 9000.
I'm waiting for cold fusion.
If you don't understand the path dependent nature of a product designed to return 200% of the daily return (positive or negative) of an index then you have no business trading it.
"help, help I'm being scammed by The Man with today's 3.66% positive return!"
Seriously, there are some marginal discrepancies looking at SDS vs. SPX over the various time frames. Nothing too serious though.
I'm much more concerned about counter-party risk should we see ourselves trying to ride it down to 755 or whatever.
Whoever runs this thing was happy taking our money 2006-2007, but 2008-2009 is certainly the test of the honesty of this system.
The one wild card is bank rates to attract cash and bond yields looking for cash. Sure the retards at pension/mutual funds will be trading in and out of short term notes, but that will literally soon be a suicidal game of musical chairs. In a trap, cash will slow even further, so I'm not sure banks will be able to offer higher terms/yields for cash and of course, cash aint gonna be available from anywhere. This is where I see hyperinflation kicking in, as we witness scarcity in supply & demand. Cash will be rare, as will food, oil, everything will grind to a halt, thus I imagine some pension people will get out of short term plays and lock in long term, just in terms of walking away from short term cash burn. Meanwhile The Fed will be coordinating global efforts to keep ultra wealthy political supporters happy and continuing to deny that problems exist anywhere.
In a nutshell, I have to say that yields go down as well, because corporate earnings will vanish and the issue of reporting decreased net revs will go on, and down, and down, until many corps will be delisted. Hence, CD yields will cave in, as well as bond yields. Stocks will be dead in the water. As for housing, if you have no job, no income, no way to make money and have some money in a fairly safe bank, you may be able to continue living there, if you cut costs. As for the rest -- I assume they will be a collective swarm of hornets that will be physically looking at what congress and the senate can do for them -- and the concept of elected official bullshitting people will become very ugly!
theyieldcurve writes:
I'm waiting for cold fusion.
It's already here :-
Scientist Creates Cold Fusion For the First Time In Decades - Energy - Gizmodo
i remember someone said when CR posts about the market, it's a contrarian indicator. but i still feel S&P should break down to 1240, before rebounding. also noticed the XLE is down 3% today, any significance?
and did Paulson really say he wants "orderly failure" of banks?
Thanks, BB. I caught that in the news several weeks ago. I'm sitting on the fence until more info becomes available.
safe_as_apartments writes:
Lehman offers employees worthless Lehman paper for worthless Government paper
Worthless???
Lehman shares rose $1.40, or 6.7 percent today. They all made a killing. Oh... what's that? They've declined about 66 percent this year? Oops!
jack writes:
nd did Paulson really say he wants "orderly failure" of banks?
Like LTCM.
jack,
Wake up, no model related to finace has any meaning and T/A bullshit from 1989 aint worth a shit, and if yah don't get it, no model has $200 oil and the price is moving faster than any information or model....got it? This is a wake up call to save your cash and get ready for BAD times!
To Troy who lived in Japan for most of the 90's:
Was it so bad? Here's an excerpt from Marc Faber.
“But of course, deflation, if you think of it, is disastrous for the rich people, because it means stock prices go down, it means real estate prices go down, so the rich class benefits the least. And as I mentioned in Japan: the rich got hit. I mean, if you look at the pattern in Japan and if you go, today, to Japan you would think that Tokyo is a boom town: you would never think that the stock market is down 70% from the highs in 1989; and you wouldn’t think that property prices are down 70% from the highs in 1989. But a normal family, their wages are the same as in 89, 90. Maybe their wages have actually even increased by 1 or 2% per annum, but they can now rent an apartment 50% cheaper than at the time; they can join a golf club for 80% less than in 1990; and they can buy consumer goods cheaper, because of cheap imports from China and so forth. So, actually, the typical Japanese household isn’t complaining about this deflation, and it’s cash money, and that you have to see.”
nd did Paulson really say he wants "orderly failure" of banks?
Like LTCM.
I hear FDIC has been on a hiring rampage. Go figure.
I believe the LEH shares they gave away are vested for three years.
Will they even be around in three years?
No.
GM Falls to Lowest Since 1954 After Merrill Suggests Bankruptcy
GM Falls to Lowest Since 1954 After Merrill Suggests Bankruptcy - Bloomberg.com
About as incredible a headline as it can get.
Tricky's threat to raise was all that was needed. He can pass tomorrow and we're still headed for the Black Swan dive. Too bad our guys are all talk and no bite.
About as incredible a headline as it can get.
Guess I'll fire up the "Who Killed the Electric Car" DVD I've got tonight.
Was it so bad? Here's an excerpt from Marc Faber
Tokyo had increasing roving packs of homeless when I was there. ca. 1994 I made the mistake of trying to do a cookout in the park across the street, where in one corner that was blue-tarp long-term urban campers.
Trying to get a proper career type job was HORRIFIC for professional women coming out of college in the 90s. You were better off trying to land a job as a stewardess; at least SOMEBODY was hiring every year for that.
About as incredible a headline as it can get.
Guess I'll fire up the "Who Killed the Electric Car" DVD I've got tonight.
There's a sequel in the works titled "Extreme Schadenfreude". Here's a sneek peak...
Extreme Schadenfreude
Apparently, there's a cliff-diving scene.
Ultima Ratio
\tBy Friederich Georg Juenger (1898-1977)
\t\t\tTrans. from the German
Conceit of the titanic
Falls to rust,
Everything metallic
Unforged to dust
Passionately mad
With foolish faith,
Lost everything they had
Both steel and lathe
Shapelessly it lies
In uselessness -
Patience! It will pass
To nothingness
All that time they made
What shattered them,
Lifted overhead
What threw them down
[Sie schafften stets ja mit,
Was sie vernichtet,
Und fallen mit der Last,
Die sie errichtet.]
The time to buy will be right around DOW 8K
That will be the point of max fear and panic, lots of blood and screaming, then bingo!
Trichet remembers Weimar Republic
plus whenever the last time rioting XXX shut down YYY for two days with ZZZ.
YO, yo, yo
anyone have information on the amount of margin calls on the S&P?
Thanks
Hamptons' Kobe Club Brings $375 Steak to Beach Crowd: Food Buzz
Hamptons' Kobe Club Brings $375 Steak to Beach Crowd: Food Buzz - Bloomberg.com
Do you think these guys feel the deflation/inflation?
QQQQs down AH on some warnings.
About margin calls... This is exactly when they come in as entire accounts get savaged, forcing a vicious circle. If both ECB hikes and jobs are lighter than forecast I wouldn't be the least bit surprised to see trading halted.
Need to see what Kudlow has to say. LMAO!
This is a test for Mr. Gates
I didn't realize the markets close early for holiday @2:00EST tomorrow. That affects the probability of SPX breaking 1256.98 with quality of volume. It can still go down hard but it needs the volume. Oh well. We'll see what NFP says. I'm hoping for +100k losses.
Eurozone inflation at 4%, industrial orders up 2.5%(3.6% in EU27), producer prices up 1.2%, trade surplus of 2.3bn.
ECB will go to 4.25% and hold depending on inflation. Given the data, it makes sense to be slightly tight on policy while still providing liquidity to banks.
Ya know, what BB should have done in January.
Ya know, what BB should have done in January.
Resigned?
Alec writes:
Ya know, what BB should have done in January.
Resign.
BB - great minds think alike...
I didn't realize the markets close early for holiday @2:00EST tomorrow.
Then you;ll be really suprised when you try to place an order after 1pmEST then cause that's when they close em tomorrow...
theyieldcurve writes:
BB - great minds think alike...
Let's not let it get to our heads, lest the Trichet holds, Jobs are up and Dow rallies 300 while Kudlow announces the arrival of King dollar.
Let's not let it get to our heads, lest the Trichet holds, Jobs are up and Dow rallies 300 while Kudlow announces the arrival of King dollar.
That must be the ketamine kicking in. Enjoy the buzz.
Well that just changes about all my projections.
That must be the ketamine kicking in.
That's what the market needs...a little vitamin K. dance dance dance lol
Wait, I forgot one last thing with Dow 8K, i.e, although the S&P is currently overvalued by at least 3%, we really need to factor in an adjustment for inflation and then take another look at the 10 year Treasury, and IMHO, this is so far out of control, all you can do is wait for Dow 8K!
does the margin debt also count those who borrow to short the DOW?
Anyone traded the markets long enough to remember an NFP day on half trading hours? Plus we get initial claims, ISM services, ECB rate decision and Trichet's speech. What were they thinking!?
I buy that the U.S. is deflating. From within this deflating nation, it feels like inflation because what we have to purchase from abroad is more expensive - so the experience causes confusion. But our own (or leveraged) assets are devalued. And labor can't get a wage increase to speak of.
The only possible good thing about the gas price escalation happening at the same time as the housing/ financial market crisis is that now the whole nation pretty much realizes we are each and everyone screwed. Instead of just the irresponsible people over there who messed up and must not be relieved of acute punishment, we now all have a stake in finding a road to recovery. [Lots of people still hyperventilate with rage that the Barney Frank legislation is a bail out. I see it as making things bearable enough for the house elves to keep performing their slavery.]
Anyone traded the markets long enough to remember an NFP day on half trading hours? Plus we get initial claims, ISM services, ECB rate decision and Trichet's speech. What were they thinking!?
The perfect storm? Nawwwwwwwwwwwwwwwwwww...
Lehman Raises Stock Portion of Staff Pay, Person Says
Lehman Raises Stock Portion of Staff Pay, Person Says (Update1) - Bloomberg.com
Someone is bullish.
In January Fortis chief executive Jean-Paul Votron said that his Dutch bank wouldn't need to raise more money. Now he needs $13 billion. In April Lehman Brothers (nyse: LEH - news - people ) Chief Richard Fuld said that the worst of the credit crisis had passed. Two months later Lehman reported a $3 billion loss. Bear Stearns (nyse: BSC - news - people ) Chairman Alan (Ace) Greenberg dismissed concerns about Bear's liquidity as "totally ridiculous." We all know how that turned out.
Truth or Dare - Forbes.com
Either oil is seriously overpriced, or there's an underpriced commodity patiently waiting in the wings. Remember, the (crude oil):(mystery commodity) ratio is 6:1 on a BTU basis...
Mystery Commodity Chart
My apologies for the sensationalism. It's a Canadian thing...
Need to see what Kudlow has to say
I'm waiting for Mr Buy-And-Hold Brinker
Oh another little trivia, if anyone thinks the DOW was bad, the Nikkei finished lower 10 sessions in a row now, looks like it may continue on that trend.
HTML links were never a forte in this household....
Mystery Commodity Chart
theyieldcurve writes:
$INDU - SharpCharts Workbench : StockCharts.com
? s...id=p47895298256
You sound more like Mr.Pickens everyday, are you into his turbine thingy too?!
DoubleD--Man, I loved that movie.
I know most here think oil will not go down even 10%. But just suppose that it does go down, and if it goes down 20% or 30%. Those are healthy corrections in oil's longer term uptrend.
But that would undoubtedly, in my mind, cause at least a short term, if not intermediate term, buying spree in the stock market.
So when oil starts to correct - and we'll know it when we see it - I'm no longer short period.
We also seem to be near some kind of short or intermediate bottom next week so this would all make sense timing wise.
at gas is starting to really show up in people's utility bills. The utilities that didn't hedge enough are jacking rates up to 25-40%.
You sound more like Mr.Pickens everyday, are you into his turbine thingy too?!
Never been a Pickens fan. Just see a tar sands sector up here with a rabid appetite for the gaseous stuff. Not to mention the home heating sector, electrical grid, etc.
Enlighten me on this Pickens turbine thingy...
In return, maybe GM will suggest bankruptcy for Merrill.
theyieldcurve writes:
Enlighten me on this Pickens turbine thingy...
He's going into wind big time, just purchase USD6b worth of turbines from GE if memory serves me right, be a few years before they are operational.
Seems he's putting his money where his mouth is, and he does indeed see a shortage of the black gold and all things energy.
Anonymouse - Having been brainwashed into the peak oil paradigm, I only see oil correcting significantly if the (global) economy really starts to head south. My take on it is that our energy problems will continue to constrain any bull move.
At this point, I would be a bit gun-shy wrt buying "tradeable" rallies. Ritholz, although I'm a fan, may have pulled the trigger prematurely in these past 24 hours.
El Cliffo writes:
In return, maybe GM will suggest bankruptcy for Merrill.
Lol. Funniest thing i heard a few days ago was the tit for tat downgrades of the banks and IBs.
In the end, investors just shorted everything.
theyieldcurve,
I agree with peak oil. I'm also a trader and understand nothing goes straight up or straight down. Corrections/retracements are healthy.
Ritholtz is an ass.
Ritholtz is an ass.
Taken under advisement. In all fairness, I was taken aback by his recent "tradeable rally" call.
Bear Market? Technically yes. But we've just begun. Average bear market drops about 35% from the peak. We just hit 20%. We're a little passed half way for an "average" bear market.
Does this have the look of being just an "average" bear market? Look at all the headwinds. This is a perfect strom.
Oh boy, hold on tight. Wealth destruction at its best. Opportunities will abound!!!!!
Trichet will do his duty as he is mandated to. Am Betting that he will raise rates and signal for more to come.
Boy I hope so, I put 50K down on Trichet doing the "right" thing!
Drew writes:
Boy I hope so, I put 50K down on Trichet doing the "right" thing!
You're not much of a gambling man, betting that the french will capitulate to german demands.
You're not much of a gambling man, betting that the french will capitulate to german demands.
Didn't say I didn't like a sure thing.
Ambak is a penny stock now
Saw the other day where some Monet painting sold for 80 million after the owner died.
What will change after Obama is elected ? Capital gains rates.
In the runup to the election, and after if Obama wins, people will be unloading stock to lock in the 15% rate.
Anyone who thinks $4.29 gas won't lead to a recession is on ludes.
What's the trading possibilities for mass starvation from rising fuel and food commodity prices made worse from the coming war on Iran? Is there any money to be made from starvation of the global poor?
My guess: Trichet has to raise rates, because he's put his credibility at stake. However, I expect a very mushy accompanying statement.
How are credit default swaps on countrywide doing?
crispy&cole, the jas/sebastian/jas dynamic hereabouts feels like the left/right game that led America to attack truth to power and suck up to the status quo. That's business!
Still, I'm grateful that Seb took someone's bait upthread. His pretensions above the fray sound frail and snotty today.
Michael McKinlay wrote @ 5:12 pm
Just the beginning as financial markets realize that energy will only get progressively more expensive slashing disposable income throughout the world.
thats right o
will only get progressively more expensive slashing disposable income throughout the world.
scary to think that 2000-era home prices reached that position in a "$1 gasoline" world.
While theoretically $5 gas might make the core more valuable, since the core must, in the end, price itself relative to the margin, if the margin prices itself down to meet the conditions of $5 gas then the core must follow.
Eventually.
In the runup to the election, and after if Obama wins, people will be unloading stock to lock in the 15% rate.
But if you wait until after the election you can claim more losses?
Just assuming, don't really know how your tax system works.............
I don't know. I am playing the fact that the ECB holds due to financial weakness. They will signal concern about higher inflation and state that they are in a tightening mode. This will allow them to look at the data coming in from Spain and the UK. At least, this is what I hope as I sell off my short term bonds tomorrow. I have been fortunate not to lose any money on this trade. Pretty nice as MGEMX has lost 20% since I sold it. Finally leveraged up some free money after fixing my cash flow issues. Finally loaded for bear. Fun times ahead.
I guess this is stale thread by now, but here's my $0.02. I'm a lowly biochemist and not at all smart enough to know about deflation, reflation, inflation, conflation or proflation. Nor do I have models that tell me where the Dow, NAS, S&P are going in the next day, week, month, year or lifetime.
I'm not going to short the whole world because: (1) I think it could be dangerous to do so with so much negative sentiment and (2) I am philosophically averse to shorting whole baskets of companies-no objection to shorting a particularly poorly run outfit, but I can't believe all 500 companies in the S&P are incompetently managed.
So what am I doing? Holding cash-mostly USD, because I live here and spend it every day and I really don't see much further downside to the $ from here and possibly upside. Holding a few stocks that I believe have special drivers that are independent of the market. My largest holding is up close to 50% so far this year. Looking for additional opportunities as they present themselves.
You are certainly free to mock this approach. It's worked very well for me over many years and I plan to stick with it. When a storm comes you don't go out in a brand new boat, you batten down the hatches on the boat that's seen you through other storms and ride it out.
"What will change after Obama is elected ? Capital gains rates."
Sort of.
Obama want to eliminate the 15% cap gains and dividend rate for those married-filing-joint couples with AGI over $250,000.
In the runup to the election, and after if Obama wins, people will be unloading stock to lock in the 15% rate.
This is just election pandering; I don't see this getting by Congress, even a filibuster-proof Democratic one, when we're in the midst of a long, protracted recession.
ipodius writes:
The 1970s had falling stock & bond prices and rising real estate & commodity prices.
This is a different world than the 70s Angry. We have falling asset prices across the board, and increasing prices. That is deflation. If commodities crack, then all you'll be left with is falling asset prices because they still have a ways to go yet.
You can call this what you want, but it sucks across the board. Unless you view this, as I do...opportunity in destruction.
ipodius | 07.02.08
Werd ipodius....
I've decided to forget all of the "true" valuation models I learned about. I'm just going to gauge traffic on this site, and it is increasing immensely. When most (and we're getting very close) are calling for outright anarchy and destruction of society (and seemingly enjoying it??), that's when I buy. If I'm wrong, so be it then we're all screwed, until then, I'm buying my tickets to see Eddie Vedder, and I'm going to enjoy it.