Comparing Stock Market Crashes
Submitted by
CalculatedRisk on Thu, 10/30/2008 - 3:22pm (183 comments)
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Nemo?
And doubtless further to go
Now that is very interesting! nice visual
Epic fail. Err, fall.
These are all pikers compared to the (first) Great Depression. I except the present crash, which is yet to complete.
Language is a limiting descriptor for what we are about to live through. We just gettin warmed up people.
Sucks that we are only maybe halfway through it in percentage terms.
Excellent chart, CR. Tufte would have been proud.
I still contend the August 2007, 5 sigma washout with bells and whistles galore of FED intervention, was the start of the crisis, not October 2007..we are 14 months into the crisis, and 11 months into "recession"
Great graphs..
It almost makes it look like gambling!
"Here's what a real bear market looks like: Icelandic Stocks Drop 77% as Trading Resumes After 3-Day Halt"
unknown
Better hope the Dollar keeps levitating ....
They need to add the crash from the 30s to the chart. I think the NY times did this just a little while ago.
I'd say we were in for more trouble, except for the "reverse Bart Simpson hair pattern" we saw in the last hour the other day.
Time for ultrashorts again?
A rip roaring rally at this point would be nice to re-set the bearish bets before the long slide back down.
Hey CR--this might be a lot to ask, but would you consider putting title tags on the haloscan pages? That way if we have multiple comment pages open, we can easily toggle to the one we want to go to.
Thanks for a great site!
Is this chart saying the current real yield of TIPs is close to 4%!?
St. Louis Fed: Series: DFII7, 7-Year Treasury Inflation-Indexed Security, Constant Maturity
The think has gone crazy the last 2 weeks.
I think the aspect of the current crash that stands out is its steepness . I was looking at a weekly chart of the DOW, comparing this crash with '29-'32 and the steepness was similar.
I had also forgotten all those sustained bear market rallies during the dot.com crash - I was on the sidelines for all of that ride. I'm sure we'll get a big rally like that, but it's hard to see how it can be sustained with all the bad "real economy" news coming out.
Nut Dobbs bashing Dems and Reps over Wall street bonus.
A lot of people are comparing this downturn to the 1970s. One very big difference, average people weren't nearly as dependent on credit and asset prices then. HELOCs didn't exist, credit cards were still a novelty.
Where this is really going to show up is in pensions. In those days, pensions were in bonds. Now, not only do the people who lack a defined payment pension scheme have their money in stocks (in a 401k), the defined pension funds are mostly in stocks as well. The fund for Massachusetts' employees is down slightly less than the S&P 500.
Hartford's share price fell by 50+% today because they had their assets bet heavily on equities, financial equities.
Our whole economy is built on asset prices.
It's really hard to see where the backstop is for this economy.
Nice chart. Thanks Will.
Faster pussycat...kill kill
Real GDP fell only by 1% in 1974.
Wall St. managed to get rich though.
From the lead article at the WSJ right now:
http://online.wsj.com/article/SB122540927284586151.html?mod=testMod
Since the start of 2002, Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. have paid a total of $312 billion in compensation and benefits. Bonuses generally account for about 60% of total Wall Street compensation, meaning that the five firms paid out an estimated $187 billion in bonuses.
--
The 1987 "crash" was the least significant, economically. It was a pure short-term speculative phenomenon.
It was a come-on signal for born-and-bred American dopes who later turned into Scam Lovers. Breeding of American dopes is a fascinating process. Americans are uniquely bred dopes; that is what is important to recocnize.
Jas
That would make an awesome t-shirt.
graphs of stock indexes in the US fail to capture what's happening on the globe. What's remarkable is that govts around the planet are keeping all hell from breaking loose.
It seems to me that none of the others shown in the graph was characterized by the real possibility of a global financial meltdown like this one is.
That's why this one will eclipse them all, and probably rival the Great Depression.
IMHO.
Bob_in_MA:
Yeah, I agree that the credit addiction - both personal, corporate and government really differentiates this crash from both the '70s and the '30s. And thus far, all the response has been geared towards feeding the addiction, not getting the "patient" into rehab.
... surprised to see some readers expecting us to drop fast again.
The way I see it looks like the graphs form a nice set of shard edges that are good for bleeding people to death...
I think the short ban did a lot of damage however...
How could HIG be that heavily weighted in financial stocks and NOT hedge via SKF?
Nice chart pron, CR. "Nice" as in "pretty", not as in, well, "nice".
--
"That's why this one will eclipse them all, and probably rival the Great Depression. IMHO."
ShortCourage,
You are welcome to Jas Jain School of Economics.
Jas
Bob_in_MA,
Our whole economy is built on asset prices.
It's really hard to see where the backstop is for this economy.
I agree and for the reasons given, I consider the stock market now too big to fail, i.e. I believe that fiscal measures will not stop until the stock market recovers.
The slippery road to inflation...
anyone else read how an analyst called Hartford's CFO about how she could be comfortable with her debt when she couldn't quantify it?
That's gonna leave a mark.
TIPS Expected Inflation Estimates
This series has been discontinued. We believe the method is not providing accurate estimates due to the unusual circumstances of the current financial environment.
If the FED itself can't do it, then who can?
TIPS Expected Inflation Estimates ::
Federal Reserve Bank of Cleveland
So what would the graph look like if the dollar was relatively stable?
I'm assuming if we kept everything in 2007 dollars, the damage would be a lot worse?
"I'm assuming if we kept everything in 2007 dollars, the damage would be a lot worse?"
Try dividing by gold and plotting back a decade. It will take your breath away.
Jas,
No, no, no... Don't lump me in with the "Jas School of Economics".
Anybody who paints an entire nation, with a broad stroke, as idiots. Or paints the entire leadership class as crooks, does not have a firm grip on reality.
Jas,
Although I do share much of your anger and frustation at some of the individuals in this nation.
I still contend the August 2007, 5 sigma washout with bells and whistles galore of FED intervention, was the start of the crisis, not October 2007..we are 14 months into the crisis, and 11 months into "recession"
The start of the depression was 2001.
Greenspan succeeding in deflecting it with unprecedented cuts in interest rates because he knows at least as much as any of us. The cuts begat the apparent "recovery" which never really was.
This is what happens when you choose the wrong Driving Academy.
Anybody who paints an entire nation, with a broad stroke, as idiots.
At least he's easy to ignore, since he always signs his posts.
Other people are harder, although any time anyone mentions "MSM" or "fiat currency", you can pretty much assume they're wingnuts.
Subject Hungary:
Global Economy Matters: After Wearing The Hair Shirt For Over Two Years Hungary Is Now Helped Into The Straight Jacket
... One way forward which many are considering right now across Eastern Europe is early euro adoption. The Hungarian government and the central bank have now pledged to meet euro- adoption requirements for the deficit, inflation and national debt by next year. Hungary still doesn't have a target date for the switchover to the euro, due to the earlier deficit overruns and ongoing inflation issues, but given that we are now likely to see sustained GDP contractions, deficit reductions and price deflation rather than inflation, I doubt Hungary will continue to have difficulty meeting existing EU/ECB criteria in the future. The issue is rather going to be, what sort of shape will the Eurozone itself be in when Hungary finally does get the opportunity to officially present its application form? ...
TIPs. What an incredible stupid idea. Who would ever trust a debtor who had the power to rewrite the inflation rate?
I never did understand why anyone was buying those things. Completely unsurprised that they've "discontinued the series".
What a sad joke.
Almost as sad as 401k plans, the tax that doesn't look like a tax.
Krish writes:
TIPS Expected Inflation Estimates
This series has been discontinued. We believe the method is not providing accurate estimates due to the unusual circumstances of the current financial environment.
How interesting. They probably feel they cannot separate inflation expectations from liquidity expectations.
re: TIPS
Don't forget that any protection you receive if the gov't admits to "some" inflation is taxed!
although any time anyone mentions "MSM" or "fiat currency", you can pretty much assume they're wingnuts. -Eric
Lmao... I guess the MSM and fiat currency don't exist in Eric's world.
I don't have access to a charting service w/ data from the '70s, but I'd like to note that I believe at no time during those previous crashes was the S&P below its 10-year (520 week or 120 month) moving average. That fact alone makes this crash epic. You could have dollar cost averaged your money into a 0% bank account and made a better return.
Larry Kudlow is retarded...still spitting the NeoCon yapping point that lowering gas prices from stupid to rediculous is a "tax cut". Where did CNBC find this crack whore?
The market is a confidence game, no confidence, no game.
re: TIPS
For the ultimate reaming, get your TIPS as part of a "TIPS bond fund" that is really TIPS + toxic waste.
Bogleheads :: View topic - Fidelity TIPS Fund Punished by Subprime Loan Losses
Cynical Yes:
CONfidence and, yes, it appears Larry has fallen off the wagon.
Plantagenet,
Glad I'm with Vanguard. At least they're fairly honest.
Lmao... I guess the MSM and fiat currency don't exist in Eric's world
On the contrary, it think it's clear that fiat currency does exist in his mind.
One of the problems of accepting left or right dogma is that you're forced to accept certain assumptions which just aren't true.
Noam Chomsky and George Lakoff have empirical evidence that just blows me away, in spite of the fact that they're leftists. There is no question that the MSM exists and I've proven to my own satisfaction over the years by monitor how and when the memes fluctate over the internet.
Lmao... I guess the MSM and fiat currency don't exist in Eric's world.
I'm all for discussing whether or not we should have fractional reserve banking, and/or a gold standard. But it's a fairly reliable indicator that when the phrase "fiat currency" comes out of someone's mouth, it's usually followed by rhetoric and foaming.
I'm also all for discussing whether or not the press is doing a fair job of covering issues (Obama v. McCain, the economy, you name it). But again, when someone on a blog drops the "MSM" acronym, it's not usually followed up by erudite discussion.
You guys should see the shameless ads Barney Frank is running in MA. Totally ignoring the fact that he has been the head of the Finance committee for the past two years and did nothing in that time, and voted for the bailout, he is acting like he is the populist hero standing up to financial interests. Sickening.
Rah, me dumb redneck hate MSM. Fiat currency caused me be archetype of Eric's making. Rah. Dey tuk ar jabs!
CR, nice chart. Curious what you use for chart generation software...
Would be nice to see recovery plots in another chart for the previous crashes. I assume that the previous crashes stop at the bottom in this chart.
We need to decide on the name for this one, as "Housing Bubble / Credit Crisis" is too wordy. I'm leaning toward "The Great Deleveraging", but I'm sure that others have their own favorites...
No matter how bad the MSM is, things are 1000x better with the Internet than back in the days of the 3 big networks.
Jas,
How long do you plan to keep all your money in US treasuries?
thanks
"The start of the depression was 2001."
I agree. Viola, greenspankme waves his wand, lowers mortgage rates, create ARMS at even lower rates.
Housing appraisals at quadruple the value. Mortgage companies call to tell the sucker to remortgage home or a HELOC at the lower rate and hey greenspankme installs "inhome" ATM's that pumps out cash according to its' "appraised value."
There's been no job creation unless you worked for the federal government. Wages stagnant, benefit cuts, higher deductibles, yada yada yada.
The dirty dog has come home to bite us in the ass
More on the LA Times theme:
http://gawker.com/5071525/obama-to-pay-billions-for-la-times-silence
Looks to me like the record of Toonces the driving cat after he got driving TIPS.
Nice chart porn.
How long will it take until deflation is defeated?
View of the Day: Policymakers repeat history
FT.com / Investor's notebook - View of the Day: Policymakers repeat history
Should investors be concerned that the policy stance being adopted by central banks risks repeating the mistakes of seven years ago?
Simon Derrick, strategist at Bank of New York Mellon points out that expectations for aggressive interest rate cuts across the globe have risen sharply in recent days.
This would seem to be the right policy response to the current crisis, he says.
However, it is also difficult not to recall that it was the availability of cheap dollars and other currencies from the start of 2002 onwards that fuelled so many of the extreme market bubbles that ended up unravelling this year, he adds.
Mr Derrick says that perhaps the most telling signal with regard to an official stance towards monetary policy came on Wednesday evening from Alistair Darling, the UK chancellor of the exchequer.
He noted that the Bank had discretion over how long it took to hit its inflation targets and can support, in line with its statutory requirement, the governments wider economic objectives.
In other words, forget inflation targeting for the moment and focus on growth instead.
JT writes:
"You guys should see the shameless ads Barney Frank is running in MA."
Nothing that guys says surprises me. I spotted him for a snake the first time I saw him speak on C-SPAN. I really can't believe that his partisans can't see it. But if you dare to criticize him on a blog, you'll get slammed by the DailyKoz contingent faster than you can say "Blarney Wank".
By definition, memes are purged through a darwinian process which means the surviving memes are hard to dislodge with new ideas.
People have a range of variation that they can tolerate so their belief systems tend to be self-reinforcing. They read what confirms their viewpoints and ignore what does not. Noam Chomsky demonstrated this decades ago.
Oligopolies function as a implicit conspiracy. They don't need explicit exchange of information, just the correct external signals to coordinate action. The MSM is an oligopoly and I suspect that the majority of participants don't even realize that they're bound into a certain, finite framework of thought.
The start of the depression was 2001.
Greenspan succeeding in deflecting it with unprecedented cuts in interest rates because he knows at least as much as any of us. The cuts begat the apparent "recovery" which never really was.
Broward Horne | Homepage | 10.30.08 - 8:06 pm | #
As with anything, it depends on where you lived. If you lived in the bubblicious housing world, like Sacramento, the Inland Empire, parts of Florida, there was an explosion of jobs related to housing construction, remodeling and sales. I've seen it firsthand in Sacramento, just as I am seeing the job losses now.
The mindset that created the common delusion which led to The Crash is the mindset of the MSM.
People function in a system of shared beliefs about reality, which is almost never 100% reality-based.
This is why I'm not upset when Jas says Americans are born-n-bred dopes. From my viewpoint, the majority wallow in a self-serving belief about reality... which is why we are here today, reading about The Crash.
Broward_Horne,
"The start of the depression was 2001. "
Nope. LTCM. That's when they started papering over everything. Y2K was an excuse to really unleash the dot bomb...then came real estate. Some real grumpy type Super Colander Tin Foil Hat wearer's, like myself, might argue that it started when Nixon closed the gold window.
Nostrovia,
"explosion of jobs related to housing construction, remodeling and sales"
What percentage of construction jobs were illegal aliens and paid under the wire?
In terms of TIPS, Bloomberg today says the 5 year bond has a yield lower than the 5 year TIP (2.81 vs. 2.88). How can that possibly happen? Even with a liquidity fluke you'd have to have virtually no chance of any inflation, since TIPS yields don't go below their face coupon even in deflation.
" Tin Foil Hat wearer's, like myself, might argue that it started when Nixon closed the gold window."
Comrade Misean is Dope is correct. When you're living in a depression all your life it's the 'norm.' At least in the 70's you could pay for college, apartment and food with a part-time job.
B_H,
"The MSM is an oligopoly and I suspect that the majority of participants don't even realize that they're bound into a certain, finite framework of thought."
Gonna disagree here. I have a few journalist friends. They are told they have to make their story fit the current "template" (ie meme).
sm_landlord,
"Nothing that guys says surprises me."
Barney Fudd.
Nostrovia,
where's the relief rally gonna come from?
All the do-gooders plugin money into the market...all the salaried jobs increasing 401k allocations?
crisis abated, go all in...its what a patriot would do.
mass layoffs, consumer retrenchment, long term debt costs exploding (unless uncle Sammy got yer back),
throw bucky inder the bus already with a couple a coupon passes and lets get the velocity of money running for hard assets.
Banks asking for credit card debt forgiveness
Banks losing billions in unpaid credit card bills urge government to forgive consumer debt
WASHINGTON (AP) -- With defaults on credit card debt spiraling amid a global financial downturn, banks already reeling from the mortgage crisis are losing billions more from unpaid credit card bills.
Big banks have formed an unusual alliance with consumer advocates to urge the government to allow huge portions of credit card debt to be forgiven, a turnabout from recent years when the banking industry lobbied strenuously to make it harder for consumers to erase their credit card debts in bankruptcy.
Expired
This crash would be far, far worse without the fed and treasury bailing out the world via the future work of Americans. What a sham.
We should have let the equity and preferred shares of these criminal enterprises known as banks go to zero. Let the bond holders take haircuts too.
These scam artist bankers are actually taking bonuses this year. Apparently, CONgress feels the tax payer owes these dingbats a living.
This is the biggest swndle in history.
rps writes:
"What percentage of construction jobs were illegal aliens and paid under the wire?"
Others' observations may differ, but what I saw on construction sites was about 90% illegals. Since you can't legally pay an illegal, there was a huge industry generating fake papers. Thus they were not really paid "under the wire", as you put it, they were paid "legally" against fake SSNs. It would be interesting to get an accounting of where all of those SS dollars went when the numbers were for dead or non-existent people. Not to mention the withholding dollars.
The industry surrounding them was probably 99% citizens, however. Not so sure about the gang bosses.
Fair Economist,
"How can that possibly happen? Even with a liquidity fluke you'd have to have virtually no chance of any inflation, since TIPS yields don't go below their face coupon even in deflation."
The bond market is much smarter than the casino...erm...stock market.
It's shouting deflation.
rps,
Nostrovia,
Big banks have formed an unusual alliance with consumer advocates to urge the government to allow huge portions of credit card debt to be forgiven
Do banks need govt permission to forgive credit card debt? More bailout i guess.
@The bond market is much smarter than the casino...erm...stock market.
lol. and true.
I read and read to find the catch in the bank forgiveness. Finally, there it was:
"And there would be a tax benefit. Borrowers would be able to defer payment of income taxes they owe on the forgiven part of the debt until after the remainder was paid off. The lenders could wait until then to book their loss on the forgiven debt.
"Both parties win," Talbott said."
Fair economist,
Be careful with the EXISTING short duration tips yields. You can lose all of the previously gained inflation in a deflation. The worst part is, you may have already paid taxes on the previous inflation.
Newly issued tips with a 3% yield look attractive to me. Especially in a tax sheltered account.
Misean, even with the certainty of deflation, the TIP should still have the same yield as the regular bond. And while deflation is obviously a real possibility, it's far from certain.
Bob_in_MA | 10.30.08 - 7:52 pm |
...you nailed it
sm_landlord,
I had an illegal using mine. IRS told me to use a tax ID number they sent me.
I'm using my SSN now, after they sorted it out.
Happened after I had my wallet stollen in '01.
Apparently my income wasn't similar to the illegal who was also contributing.
Nostrovia,
Comrade Misean;
Did they give you credit for the extra contributions?
Oh, well.
Crash is the wrong term. This implies some kind of disaster, when in fact these "crashes" are just a return to reality and proper functioning of the market in terms of assigning accurate values to assets. This provides an efficient means to interact with the real economy by allowing easily managed information to be used as a substitute for cumbersome real world wealth (a piece of paper is easier to move, store, and trade than a pile of gold, 6 floors of an office building, or part of a company).
These "crashes" aren't disasters, the are a return to integrity, utility, and efficiency.
The real disaster occurred during the excesses that separated the markets from reality and perverted their intended purpose making them mechanisms for redistributing wealth to the most unscrupulous at the expense of those with the most personal, social, and professional merit.
People call them bubbles, but they're more like plagues.
Do banks need govt permission to forgive credit card debt? More bailout i guess.
I believe that if the same thing with mortgage rewrites. If the debt is owed by the credit card company, the CC company can change the terms w/o government permission. The problem occurs if the CC debt is part of an ABS, which would trigger the Trust Indenture Act provisions against loan modification without majority approval.
ah, a chmosky reference....
here is some data porn i learned today (and no, i dont have links, but i trust the source): 6% of japanese citizens are invested in stocks. 20% of germans. 55% of americans.
i admit - i am slow - but it just dawned on me today what 401k plans are REALLY about (i.e. you are ~forced~ to expose your savings to equities or bonds).
Fair Economist,
"Misean, even with the certainty of deflation, the TIP should still have the same yield as the regular bond."
Why? If the regular is offering x% > Tips y%, in a deflation, you make more on the non tips. No?
I'm fleshing this out. No? is a question, non-rhetorical. Feedback is welcome. I'm not being a jerk here...I really am fleshing it out. Fair's question just ignited an intellectual query in my brain. Any thought on this would be cool.
Nostrovia,
People call them bubbles, but they're more like plagues.
They sure do a lot of damage.
Thanks Basel.
comrade misean: I have a few journalist friends. They are told they have to make their story fit the current "template" (ie meme).
The template has always been ``who, what, when, where, how''
the current meme may be used to spice up an otherwise boring intro
traditional memes: sex, money, religion, violence, corruption, rich and powerful people
always been that way, brought to perfection by the yellow press of the '20s....
Most journalists (i presume you mean reporters) have to be slapped about the head many times to even get the template right, they rarely pick the right meme and have to be told by their editors, as you note...
Misean, the TIP "face value" is a floor, even with infinite deflation (hah!). The coupon is a lot less than 2.88 but the price of the bond is depressed to the point that the effective yield is 2.88 even at the floor. Hence the WTF.
Re: TIPS
The Fed did not discontinue the TIPS; they discontinued publishing charts and analysis of the TIPS spread. That site used to have a bunch of nice charts showing this very important form of inflation expectations. It was one of my favorites.
Fair Economist --
As Bond Girl succinctly mentioned, the explanation is (probably) the liquidity premium. Treasuries are more liquid than TIPS, so there are fewer worries about finding a seller now and a buyer in the future. Hence the Treasuries trade at a slight natural premium, making it possible for their raw yield to fall below that of the TIPS.
sm_landlord - You are right, each line ends at the bottom of the downturn (with possible exception to the current crash if October 27th was the bottom).
I have a recovery graph made as well, though recoveries are much slower. IMO the recovery graph is slightly more depressing.
comrade wtdwtshtf - I'm a Tufte fan as well (took his one day seminar a couple years ago). CR is a master with graph design.
Nemo: I get liquidity premia, but even a 50% chance of 2% inflation should give the TIP a 1% premium, which should outweigh any liquidity premium. Hard to believe the expectations and worst-cases for inflation are so low, not when the Fed can always inflate if it tries hard enough.
Ran into some academics noticing something that Tanta's been commenting on for years:
http://research.stlouisfed.org/wp/2008/2008-039.pdf
The funny thing is that you can pretty much come to this conclusion by comparing mortgage issues to outstandings (i.e. in a heck of a lot less than 45 pages).
mouse-
(from previous thread) - +1 on the biafra reference. your stock just went up in my book, kid.
i was there ~in the day~. the mab. the farm. before your time.
btw, i think you are too pessimistic - bet we get to $SPX 1200 before the next leg.
I love the fact Maryland is going to have a vote to amend the state constitution to allow slot machines, they suddenly have to make up a $650 Million budget short fall, somehow they projected $650 M a year in revenue from slots. You know what they say about assumptions...
Fair Economist,
When TIPS yield more than the nominal bond, the break even spread (the nominal yield minus the real yield, or the amount inflation would have to average for the TIPS investor to break even) is negative. This generally implies deflation.
This is complicated by the liquidity premium, but it is not surprising that investors would be pricing in deflation in the current environment.
Once the afterglow of the rate cuts subsides it will be interesting where the markets go.
Nikkei-down 357, afterglow maybe officially over, that was good for 72 hours or so.
Fair Economist --
Well, it either implies "unnatural" demand for real Treasuries (can institutional investors buy TIPS?), or it implies an actual expectation of deflation.
There are certainly people in this very forum who are expecting deflation, to the point that anyone who lacks their perfect conviction is a "dope".
Bond Girl --
I thought TIPS paid you something extra based on CPI, but that the "something extra" was never negative even for negative CPI.
Do I misunderstand how TIPS work?
Basel Two,
"Do banks need govt permission to forgive credit card debt? More bailout i guess."
Wrong question. The banks want the Fed/Treasury to pay them for the cut.
sm_landlord,
"Did they give you credit for the extra contributions? ;-)"
Erm...no.
Nostrovia,
The data must have been showing DEFLATION and they did not want to officially put it out! That is what I would suspect.
TIPS Expected Inflation Estimates
This series has been discontinued. We believe the method is not providing accurate estimates due to the unusual circumstances of the current financial environment.
Krish | 10.30.08 - 8:01 pm | #
Comrade Misean,
Free flat screens for everbody
At this point in the crisis, it's clear that the PTB are breathtakingly incompetent and venal.
They are out of rabbits pulled from the big magic hat. The hat is empty.
The day that a systemic collapse hammers down on every American is the day George and Dick decide we need an even bigger war.
The progression looks like this:
Housing crisis --> liquidity crisis ---> solvency crisis and stock makret crash ---> wag the dog ---> new alliances around the world ---> new currencies.
I think we are in deflation and I think long end rates are going up. To me, deflation means less money for everything and that includes U.S. gov't bonds. I'm interested to see how the bond market trades after the gov't announces how it is going to pay for its brilliant programs.
Fair Economist, Bond Girl,
There is more to it, especially with short duration TIPs.
Consider: If we toggle back and forth between inflation and deflation, you could get hit with taxes on the TIPS inflation followed by losses caused by deflation. Taxes are due yearly as current income. Deflation/inflation has no calendar.
That scenario and the uncertainty has a price.
TIPS should have same interest rate as a regular bond + MASSIVE risk premium for allowing the issuer to determine the offical rate of inflation.
Many TIPS holders may understand this in the near future.
I thought TIPS paid you something extra based on CPI, but that the "something extra" was never negative even for negative CPI.
Not so Nemo. Only the par value is protected from deflation. Inflation gains are reversed by subsequent deflation.
Can someone explain the difference in futures quotes:
Pre-Market Data, Stock Market Quotes, Fair Value, Futures, Volatility Index, World Markets Information - CNBC.com
CNBC shows Dow down 324 pts
Stock Futures on Bloomberg
Bberg shows Dow down 92 pts
Is it only the contract size?
Broward - please do not sully this site with Chomsky and Lakoff. These clowns are my original home academic territory, as is their debunking, so let's keep it to eco and finance.
Having said that, two Sundays ago I did promise a sociolinguistic analysis of market failure, ie a failure of conversational maxims (see Grice), but other demands have taken over. Also I'm doing a piece on market technicals as postmodern groupthink, which might put up some nice balloons to have a shot at.
Best
CC
Just heard CNBC's Melissa Francis and Larry Kudlow tell us how if we limit executive pay we won't get the best "talent" for out financial companies. These people are hilarious -- they should be on Saturday Night Live.
Bond Girl, (via Nemo)
Treasuries are more liquid than TIPS, so there are fewer worries about finding a seller now and a buyer in the future. Hence the Treasuries trade at a slight natural premium, making it possible for their raw yield to fall below that of the TIPS.
FE,
I get liquidity premia, but even a 50% chance of 2% inflation should give the TIP a 1% premium, which should outweigh any liquidity premium. Hard to believe the expectations and worst-cases for inflation are so low, not when the Fed can always inflate if it tries hard enough.
Bond Girl,
When TIPS yield more than the nominal bond, the break even spread (the nominal yield minus the real yield, or the amount inflation would have to average for the TIPS investor to break even) is negative. This generally implies deflation.
This is complicated by the liquidity premium, but it is not surprising that investors would be pricing in deflation in the current environment.
Thanks all...boss phone call.
But as I suspected it's deflation. Bond people see the flow of funds and deleveraging occuring. Hell earlier today...maybe Barely...thought AIG's cash burn was soaking up derivative bets.
Dunno. Could be. But with over 40+ leverage...rapid deleveraging will race past the fed faster than the Road Runner.
Wile E. Fed is gonna eat the TNT in his plan.
Nostrovia,
We bottom in 2012 at 450 on the S&P.
Just my guess... what's your?
SpeciousRiches
Specious Riches
SpeciousRiches
But, I've been told that our stock market has not crashed; it was up today, no?
What I see here in the chart is the tightly wound volatility that is so compressed in each downturn. The swings we see today are not good IMHO, because a bottom is not in yet.
SpeciousRiches
Can you tell me if you have a website?
"The start of the depression was 2001."
Let's see:
Anyone else care to add to the list?
Re: Just heard CNBC's Melissa Francis and Larry Kudlow tell us how if we limit executive pay we won't get the best "talent" for out financial companies.
Brown @ FEMA after Katrina is a great example of having high quality help in place too!
Anyone else care to add to the list?
End of the NY Yankees threepeat?
SpeciousRiches
Maybe you should call your webpage
SpaciousRiche's?
sue,
Comrade Misean,
Free flat screens for everbody
Girl, my monitor is so sick, I'd tell them to keep it. 25" HD Samsung...all the bells and whistles.
Nostrovia,
Maybe you should call your webpage
SpaciousRiche's?
Anonymous | 10.30.08 - 9:35 pm
He has a website? How come you know and I don't. Is it a secret?
Not so Nemo. Only the par value is protected from deflation. Inflation gains are reversed by subsequent deflation.
Angry Saver | 10.30.08 - 9:25 pm | #
And that is why one should only buy recently issued TIPS with little prior inflation credits.
Just heard CNBC's Melissa Francis and Larry Kudlow tell us how if we limit executive pay we won't get the best "talent" for out financial companies.
I guess they are implying that our financial system would be even more insolvent without these titans of incompetence.
Whew! Aren't we lucky. Just think how big the bailout would have been if we had even more incompetent people in charge.
AngrySaver - seems like it would require a very specific sequence to make a TIPS come out bad. Suppose you had 10% inflation this year and 10% deflation then next, then stability. You'd make the 10% gain, pay say 40% taxes, ending up 6%. You'd then lose 4 coupon payments at 0.65 for a total of 2.6%. You're still ahead. If the inflation/ deflation cycle is 0.65% you could come out maybe a percent or so to the bad; but that's a small loss in a very specific situation.
Re: How come you know and I don't
I don't know, I thought you knew? I'm afraid of the name so I'm just guessing there is a webpage, but I could be wrong?
Broward - please do not sully this site with Chomsky and Lakoff. These clowns are my original home academic territory, as is their debunking, so let's keep it to eco and finance
As I said, people who are bound to dogma often can't view anti-dogmatic evidence without prejudice.
Chomsky's empirical analysis of newspaper stories on Vietnam is enough for me, since I've seen the same mechanism across the Internet.
People just can't think very well. It takes time and effort, like all things. Free Marketeers never like to address those concepts because, well, because markets are all so magically delicious like Lucky Charms... because... they don't want to invest the time and effort to figure that they're... oops, teey're not!
A self-perpetuating illusion.
don't know, I thought you knew? I'm afraid of the name so I'm just guessing there is a webpage, but I could be wrong?
Anonymous | 10.30.08 - 9:37 pm
Heck, I can't even pronounce that word. Speciacious?
End of the NY Yankees threepeat?
Basel Too
I shoulda known the end of the world was near when my Red Sox finally won a World Series. Twice in 4 four years must mean the universe is contracting.
RE,
"Just heard CNBC's Melissa Francis and Larry Kudlow tell us how if we limit executive pay we won't get the best "talent" for out financial companies."
Yeah, I mean where could we get talent like the friggin' asshats we have now. They were dancing because the musicians on the Titanic didn't stop until the nose dive downwards.
Brilliant!
Nostrovia,
And that is why one should only buy recently issued TIPS with little prior inflation credits.
Buy at issuance without a middle man from Treasury Direct. No deflation worries whatsoever.
Tips are a good deal here (imo)especially in a tax defered account.
Misean, you gotta admit they're very talented at extracting money from the government and from naive investors!
Comrade Misean is Dope writes:
[in response to TIPS thread]
"But as I suspected it's deflation. Bond people see the flow of funds and deleveraging occuring. Hell earlier today...maybe Barely...thought AIG's cash burn was soaking up derivative bets."
There is a reasonable fear of CPI deflation over the next year or so based on the collapse of oil and commodity prices from the peak, without even needing to plug in any economic forecast. But current TIPS pricing is indicating that the deflation will be longer than just that short term payback.
There's two competing theories. The first is that bond investors are sniffing out the chance that this is "The Big One" (depressions are great for nominal Treasuries). The second theory is that the "Short Bucky" crowd, in addition to selling the US dollar and buying commodities, levered up in TIPS big time. And they all got Mr. Margin Call on the phone at the same time.
Feel free to choose whichever theory you find convenient.
Speciacious is like speciphus only it sounds like speciphious, but check my spelling
Yesterday, someone's comment about "derivatives as bets in a small town" example sparked a thought and I suddenly realized that the derivative market is basically a P2P network without standards.
It's the perfect example of how and why free markets fail. No engineer with experience believes you can build a complex system ad hoc, but somehow, free marketeers believe that you can because it's... "magical".
It makes total sense that the derivatives market failed because you have a unknown (and growing) number of nodes connected in an unknown (but growing) number of ways using an unknown (but growing) number of types of connections.
The freaking thing HAD to fail. It was grown ad hoc with no standards and no planning. Imagine if you tried to build a software program or large corporate network like that.
I've seen both approaches. Ad hoc only works at small scales. In retrospect, the concept of an unregulated derivatives market is lunacy that was guaranteed to fail.
B_H
"Free Marketeers never like to address those concepts because, well, because markets are all so magically delicious like Lucky Charms... because... they don't want to invest the time and effort to figure that they're... oops, teey're not!"
Not to quibble, but do you an economy in the last 90 years that qualifies as "free market"? I'd like to know, because there are none in my rather vast research.
Nostrovia,
There is no problem at all. This has been a great market.
Just buy at the bottom, sell at the top, since and repeat.
If you do not know how to time tops and bottoms, follow someone who knows how to do it, such as the blog below.
(read posts where the bottom of October 10, October 16, and October 23 were timed. Enough to more than double your money).
Stock Trading | Forex | Financial Markets
Fair Economist,
It's can be worse if you don't buy at issuance. Tip inflation payments are twice a year, yet the bonds trade hands daily. Also, TIP funds are getting dumped because investors can't figure out what duration and purchase price TIPs they are holding.
I own some of these. I can say that there are certain outcomes that I thought were black swans that clearly aren't.
"In the weeks after the election, as the political stalemate persisted, the value of Zimbabwes currency plummeted. Before crossing the border from South Africa, I had exchanged a hundred American dollars for three trillion five hundred billion Zimbabwean"
And can I have that in pennies?
Fair Economist,
Misean, you gotta admit they're very talented at extracting money from the government and from naive investors!
Yes they are EXTREMELY good con men.
Bond Guy,
There's two competing theories. The first is that bond investors are sniffing out the chance that this is "The Big One" (depressions are great for nominal Treasuries). The second theory is that the "Short Bucky" crowd, in addition to selling the US dollar and buying commodities, levered up in TIPS big time. And they all got Mr. Margin Call on the phone at the same time.
Feel free to choose whichever theory you find convenient.
I choose number one. My knowledge of the bond market is trivial compared to yours. But I still like my logical theory as to how it works, on a non-technical basis. Im fairly confident. But thanks for the thoughtful comment.
Nostrovia,
I've got $0.72 in my pocket. Based on interviews i've seen with the head of GM, that would seem like a bit much for him for an annual paycheck.
I love the "we can't attract talent if we don't pay hundreds of millions to some old white dude" argument.
It is a lot like the republicans are fiscal conservative argument.
All of the companies that "attracted" talent are losing money. And the Republicans keep borrowing like crackhead cubs fans.
The experiment with this recession, is to flood the economy with a tsunami of cheap easy credit, while unemployment and inflation rocket upward. To the best of my knowledge, this has never been done before, so this should be exciting to see how this will work!
It makes total sense that the derivatives market failed because you have a unknown (and growing) number of nodes connected in an unknown (but growing) number of ways using an unknown (but growing) number of types of connections.
The freaking thing HAD to fail.
The derivative market didn't 'fail'... it was just 'self-pruning'.
Broward,
Funny you should mention P2P... Most of the people that jumped on the P2P bandwagon thought they could just build this magical virtual system, where everyone connects to everyone else, with no concern for the fact that all the "virtual" data has to move through "real" wires.
The result was predictable: oversold technology that really didn't work so well.
Doc, aren't interest rate cuts the response to pretty much any recession? It seems to me it's been done many times.
Doc Holiday,
"The experiment with this recession, is to flood the economy with a tsunami of cheap easy credit, while unemployment and inflation rocket upward. To the best of my knowledge, this has never been done before, so this should be exciting to see how this will work!"
Well if exciting means:
Oh my Glod! Run to the hills, were freaking doomed. Every man for himself. AHHHHHHH!
Then I would agree.
Nostrovia,
dryfly,
"The derivative market didn't 'fail'... it was just 'self-pruning'."
VERY NICE. I was working on that. No need to bother.
Damn dude, one sentence. Efficient.
Nostrovia,
futures are derivatives and there is a new thread
New threadage.
Nemorouno won.
Nostrovia,
I think the key thing to watch will be taking the consumer out of the credit loop and then expanding lending and expansion for corporations that are being bailed out. I guess the assumption is, that these bailout entities like Harley Davidson will grow market share and be more competitive with fewer customers, who have less cash on hand, i.e, this is where the new wave of credit will kick in, i.e, this narrow band of people with unlimited cash will turn to credit in efforts to support the economy. This is essentially a new twist on trickle down economics, with the twist being the lack of cash anywhere in the system -- but of course, the reason this all works, is because of taxpayer revenues being channeled into the synthetic tsunami which is kind of like this:
Waveyard To Be World's Largest Adventure Super Park
Waveyard To Be World's Largest Adventure Super Park | SURFLINE.COM
The $250 million outdoor super park features visionary designs and technologies that deliver a diverse range of experiences including surfing, rafting, kayaking, climbing, scuba diving, snorkeling, skateboarding, mountain biking, fly fishing, canoeing, volleyball and boogie boarding. In addition, Waveyard will be home to a 320 room resort hotel, 150 resort villas, a 30,000 square foot conference center, a spa and wellness center, a massive sand beach, numerous restaurants, a 55,000 square foot indoor water park, 150,000 square feet of sports and entertainment retail, 30,000 square feet of office space, an amphitheater and numerous residential communities.
Projects stall amid lack of financing
Projects stall amid lack of financing | Arizona Business, personal finance, technology news for East Valley and Phoenix | eastvalleytribune.com
Bo Morris, spokesman for Scottsdale-based Waveyard Development LLC, insists the water park proposed on Mesa-owned land at the Loop 101 and 202 freeways is on target to break ground as planned late this year or early next year.
"We're still on our timetable," he said.
Broward - you get me wrong. What I'm saying is that the internally consistent reason set of sociolinguists like Chomsky and Lakoff, which can be argued on their merits, is less applicable and far more controversial, and justifiably so, when the extension comes. The extension is taking a theatre of language beyond its inherent analysis, and even its baseline epistemology, to broaden it out to theories or commentaries about social life or politics. Worse when done en bloc. Broad-banded political messages cannot be derived from socoilinguistics.
This is just bad dumb and wrong on so many counts, philosophically, professionally and practically. The equivalent is the Sapir-Whorf hypothesis that that the poor and undereducated could not conceive of that which they had no learned word for, or that language begets mind. Again, rubbish.
I'll put this idea up again, for a market to work efficiently, everyone needs to speak the same language, the stakes must be real and transparent, the mechanism design of trades needs to be efficient, and there need to be obvious and clear ways to open and close from the market.
What I've said previously on this board and will now repeat is that in sociolinguistic terms this market has suffered a comprehensive conversational failure. And will continue to do so. Conversational failures impact confidence, which impact willingness to be part of failed conversations.
The numbers simply follow the conversational failure. And compound.
Comments welcome.
CC
someone's comment about "derivatives as bets in a small town" example...
--BH
That was my analogy.
Not argue with you, but isn't a unknown (and growing) number of nodes connected in an unknown (but growing) number of ways using an unknown (but growing) number of types of connections... just the way most large cities evolved?
Have you studied the phenomenon in that context?
Banks asking for credit card debt forgiveness
Still waiting for the bailout of people who own their homes free and clear, have no credit card debt, no auto loan, no student loan, no liens, no unpaid taxes, no unpaid bills, and have returned at least 50% percent of the tools they borrowed from the guy next door.
It's gotta be coming soon, right?
The extension is taking a theatre of language beyond its inherent analysis, and even its baseline epistemology, to broaden it out to theories or commentaries about social life or politics.
--CC
Isn't that just what you're doing when you argue in sociolinguistic terms this market has suffered a comprehensive conversational failure. And will continue to do so. Conversational failures impact confidence, which impact willingness to be part of failed conversations.
--CC
Watch out for the mote in your own eye, perhaps?
I find your dismissal of Sapir-Whorf a bit facile. As for Chomsky, I find his political analyses incisive but his psycholinguistics pretty much incomprehensible.
Really good article on data security getting lax, data stolen or lost:
"It is frequently assumed that established financial services firms have the information security threat well-covered. That assumption is frequently wrong. Despite spending hundreds of millions to attempt to manage risk, significant gaps remain in the due diligence and ongoing monitoring of the business relationships that give third parties access to financial systems and data. We have encountered multiple projects involving vendors providing products and services to financial services companies, thereby having access to the Fort Knox of financial systems and accounts, and the data elements allowing entry to those accounts; however, many of the security protections, reviews, and controls that were supposed to be in place for vendors with this level of data access were bypassed. And this was during the good times."
As Finance Roils, Don’t Neglect Information Security « Your Mortgage or Your Life…
Still waiting for the bailout of people who own their homes free and clear, have no credit card debt, no auto loan, no student loan, no liens, no unpaid taxes, no unpaid bills, and have returned at least 50% percent of the tools they borrowed from the guy next door.
You have already reached nirvana. You don't need a bailout.
You have already reached nirvana.
That's odd, because I feel like a chump for trying to do the right thing.
Still waiting for the bailout of people who own their homes free and clear, have no credit card debt, no auto loan, no student loan, no liens, no unpaid taxes, no unpaid bills, and have returned at least 50% percent of the tools they borrowed from the guy next door.
It's gotta be coming soon, right?
In order to allow this to unwind in a defensible fashion without having huge losers and winners, I believe that we will see across the board devaluation, i.e. a G20 agreed upon money supply multiplier. How about this for controversy?
Listen for this on NPR.
Calm, detailed, conversation, with good interview questions.
The kind of thing many people would -- a month ago -- blown off as impossible.
Now it's current events discussion.
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Fri, Oct 31, 2008 -- 2:00 AM
Aurora Forum: Naomi Klein
Aurora Forum: Naomi Klein -- In her latest book, "The Shock Doctrine: The Rise of Disaster Capitalism," journalist Naomi Klein exposes the strategies of powerful people who cash in on chaos and exploit catastrophe. But, she says, popular renewal and repair movements are gaining the strength not only to take back state power -- but also to change the power structures of the state. Naomi Klein appears in conversation with Terry Karl at Stanford University's Kresge Auditorium. Audio currently not available for this program.
dang, excess copypaste, sorry.
Re: TIPS
"The principal amount of the security is adjusted for inflation" or deflation as the case may be. However: "At maturity, the securities will be redeemed at the greater of their inflation-adjusted principal or par amount at original issue".
Summary of Treasury Inflation-Protected Securities
How about this for controversy?
That would be controversial, for sure. I think I see where you are going with that, but the response in a system as chaotic as the current markets? shiver
I work for a large financial institution. I would consider donating a chunk of this year's bonus to some deserving cause related to the credit crisis.
The funny thing is, I'm having a pretty hard time coming up with a person or charity that I view as completely innocent that isn't already getting a Federal handout or guarantee.
I feel like Diogenes looking for an honest man. This forest of ponies the government has given away doesn't make it any easier.
I'm having a pretty hard time coming up with a person or charity that I view as completely innocent that isn't already getting a Federal handout or guarantee.
Clearly you missed my earlier post.
Clearly you missed my earlier post.
PeakVT | 10.31.08 - 12:06 am |
I was just going to suggest you...and me.
I feel like a chumpette and I could certainly use some extra cash to start covering my portion of the bailout.
I don't see how we're at the bottom yet. The news is terrible and the market goes up. The Feds are throwing money at bad money...the banks aren't lending it because it's already lost. I wish that someone would just come out and say it.
The interesting thing about all of those crashes is that the market bounces a few times.
Fabulous graph. Thanks.
I echo sm landlord's request to see the recovery of the crash bottoms... and, why not add GD?
The dramatic recent drop in the current episode was 23% over 10 days... similar declines, also followed by extreme volatility, seem to form a bottom, not a midpoint... no such rapid decline occurred during GD, though the first major drop was 39% over 34 days, subsequently followed by a four-month rally...
One might conclude that we have either passed the bottom or, at least, that we will have an extended rally...
Another consideration is that equities were not as over priced (so far above trend) in Oct 2007 (40% above trend) as at the beginning of GD (200% above trend) and dotcom (100% above)...
It took two full years for the market to fall below trend (around 110) during the GD, naturally there was overshoot to come... dotcom never fell below trend, helping to fuel the next equity bubble... we went below trend, IMO around 10300, Oct 6, and remain below now... we could see a sideways move for an extended period, falling further below trend during a weak recovery...
Beware consumer discretionary (use SCC to hedge longs), IMO energies are a great buy at these prices, peak oil is here...
Bloomberg: Volvo, the second largest truck builder in the world announced for the 3rd Qtr. of 2008 that they had orders for, ready with the drum roll, 155 trucks, YES..155 TRUCKS.. HOLY CRAP, THATS WORSE NUMBERS THAN IN THE GREAT DEPRESSION.. Last 3rd Qtr., 2007, they had orders for 41721, yep, 41721..
Wellllll, what does THAT say about the wonderful WORLD ECONOMY..!!! WALL STREET HAS DONE IT TO US AGAIN, WHEN WILL WE EVER LEARN..!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
You'd then lose 4 coupon payments at 0.65%
Not my understanding. As a subsequent poster indicated, the principal is adjusted up or down, then the coupon rate is applied for your interest payment, biannually, so some interest is always paid. Both principal and interest payment rise or fall with CPI. The guarantee comes at maturity, so the holder always gets par value even after net deflation. Holder pays tax on both interest, which is paid out, and the principal increase. Not sure what the result is if principal declines more than interest paid over the year, it's never happened yet. Because of the tax angle, the I Bond cousin is a better way for some, as tax is deferred until redemption/maturity, and you can peel off (partially redeem) over time.
I don't try to divine inflation trends from regular vs TIPS yields in the secondary market, too many other factors in play.
Can we stop flogging the Volvo truck news? It was bad reporting. The 115 number is the net after subtracting canceled orders from the past, not the number actually built in the quarter. Kinda like GM's $39B writedown of future tax reductions that it will never get, not that it was real money.
I'd like to see that chart with Oct 1929-1933 shown too.
I'd like to see a chart showing both the crash and the recovery so we can get some idea of what the bottoming process looked like.
Jas Jain school of people who use the word "dope" excessively. In every post, every lecture, every day, till the end of time.. thats all the Dean of the school, Jas Jain, really has to contribute
bred dopes
dopes, dopes, dopes.. american dopes..
do you ever have anything else to say? dopes dopes dopes..
yeah, got it.. a while back.. its getting annoying now..
Finally my own "cure". I take what I write with a grain of salt although this one is well reasoned.
Some numbers here are important. Seekingalpha.com has a graph of total private and public debt. Total credit in the US economy is 3.6 time the GDP. This is roughly twice what it was under Bill Clinton. The peak of Clinton years was rougly 1.8 a little among the maximal peak during the great depression. This is a difference from 1.8 times the GDP. The current debt level is unsustainable. With the redistribution of income upwards taking place since Reagan and the US Gini coefficient .49 neck and Neck with the Ivory coast and far out of the range of the Western World, this is bound to happen. This number scales from zero to 1 and the World Maximum is .7. It .1967 it was .38 high but in the European range, Sweden now is .26 for example. Public Debt us .6 GDP not good but
In the current climate this was inevitable. As the economy contracts more will default on their debt. As more of the public fails to pay the rich investors who had too much capital accumulated and too little ability to invest will themselves find their assets devalued and default on the levered debt. As Marriner Eccles mentioned in his memoires if the public lacks the wealth to buy the Goods and services produced by the economy then a deflationary spiral eventually becomes inevitable. More lending by large institutions to the consumer will simply at best postpone the problem.
So what can we do to avert a Depressionary Spiral? The plan should be to replace Debt by Equity. The real good news is this is deflationary, a hyperinflation which could equally well happen is a danger which is much more difficult to deal with. In a deflationary environment the government which has leeway. On the Monetary side the interest rate card has already been played. In any event cheap and plentiful credit will do no good if there is nobody at the base of the chain to buy it. This is what happened in the 1930s and will likely happen now.
There is very good news here because with understanding their is much the state can do. First off It can enforce this massive revaluation in the market. Let the creditors loose their shirts as much as possible without having the Chinese sell off us Debt and turn the United States into Argentina.
Second it can buy up much of the excessive debt at the base of the food chain, i.e. Credit Card Debt, mortgages ... etc. With debt in hand the repayments can be adjusted down 50% and relatively generous terms can be enforced by forcing heavy penalties on the assumption of new debt by people who cannot afford it.
Third, as the market has done a damn poor job recently in investing in useful goods and services. The state has given us the internet, air plane technology, drugs, advances in ultrasound, the microprocessor, and other things through direct research, investmaent in labs and other thngs. Its time we let them make large investments and spin them off to alternative energy.
Fifth at this point even Martin Feldstein, Reagan's chairman of the council recommends a large investment in infractructure. Its about time we do this. If we want an advanced American economy its what is necessary.
Reply to this comment
What program trading?
It was caused by "portfolio insurance"
The program trading crash and current crash in its latest phase look similar.. why is that?
Someone please explain why the market goes up when the news is really terrible?
look, there's always another 50% to fall
you can never reach bottom
it recedes into the distance
it may not be a soft landing, but it is infinite
Hi,
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Apart from Elections another major concern for Indian stock market is Inflation. There was a time when we were concerned about rising inflation but now we are conscious about this falling inflation.
So big question is what should day traders and investors do?
Frankly speaking day traders are least concerned about the market they simply follow trend and make maximum out of it. But yes investors should keep there portfolio light till the elections get over.
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Regards
SHARETIPSINFO TEAM