dryfly, Rob Dawg, Hoopajoops LTD, thanks ... and have a great Thanksgiving. I usually do my best to limit my consumption ... and if I don't, I'm doing a little hiking this weekend to work it off.
BTW, I'm sitting in downtown Disney in the heart of Orange County at this very moment (eat your heart out, Dawg and it's as packed as I've ever seen it. What recession?
I'll second that on the sheer number of comments recently albrt. However this uniquely North American holiday of Thanksgiving is all about friends and family, so I'll forgo self-imposed lurker status and wish everyone a happy holiday.
Thanks also to CR and Tanta for the yeoman duty in keeping us all informed in these interesting times. In particular, thanks for the calm words and analysis in the midst of all the hype. Get better soon Tanta, we need the snark.
Max writes:
BTW, I'm sitting in downtown Disney in the heart of Orange County at this very moment (eat your heart out, Dawg and it's as packed as I've ever seen it. What recession?
I'd love to get their tracking data. You know, zip codes, ticket type, park spending. I bet they know more about where the economy is headed than the entire D.C. brain trust.
Rob, Max, I seem to recall that amusement parks tend to be packed with families with kids out of school. So, I'd be more curious about the YoY comparison than the relative number there right now.
Happy Thanksgiving. I spend a ridiculous amount of time on this blog, because the posts (we miss yours, Tanta) are original, insightful and balanced, and the comments are.... entertaining!
In times like these I am grateful for not having to rely on MSM for news and insights. Thanks to CR and the thoughtful crew.
And best wishes to Tanta for a full recovery and quick return. I was always challenged by her posts, and a bit cowed by those trenchant calls for better comments-- a distinctive feature of the blog and much missed.
I have noticed that many mainstream economists/ financial types have delusions about their level of understanding of the financial world. The reality is that those trained in economics and finance are often the most ignorant of the true nature and scope of their actions.
What is the purpose of money or economic activity? I am suggesting that the true purpose of such concepts and activity is to prevent people from killing each other. The fringe benefits of money and economic activity such as as trade, "progress" and wealth creation are secondary.
However many mainstream economists and financial types believe that money is real. Though many of them profess to believing that money is merely a medium of exchange and storage of commercial activity, their actions suggest otherwise. It is curious that kids stop believing in santa claus and the easter bunny as they grow up but start believing in the "realness" of money. Money whether gold based or fiat based is not real. Neither is debt, your favorite economic model or theory. Money is worthless if it cannot create new wealth or keep people from killing each other.
The concept of money, as most people understand it, was created in a feudal and mercantile age when the majority had a subsistence level existence. It is therefore not surprising that it evolved mainly to keep people from killing each other and simultaneously control people (we are just smart apes who seek short term dominance over long term gains).
However the full fruits of industrialization, various historical events and widespread multi-generational acceptance of concepts like fiat currency have made the consumption of the average person the only dominant driver of the economy (consumer economy). While some people express moral misgivings about such a transformation, the reality is that people who advocate a move away from materialism, towards conservatism, fiscal discipline, frugality are the merely the priests of a new religion. They seek to control and dominate the lives of other people just like the 'priests' of every religion from catholicism to environmentalism and "capitalism".
Many educated people harbor subconscious fantasies about a return to a world where their less well educated peers are peons, serfs and slaves. The problem with this approach is quite simple- the level of complexity and hidden supports that keep our society functioning will collapse and we will cease to live in a functional society.
Many educated people also harbor the fantasy that they can return to a medieval age where the level of complexity was "about right" for the "human brain". This belief is mistaken for a few reasons-
a] We have no comprehension about the full capability and potential of the human mind. For most of history we have lived in tribes of less than 200 people, however given the right conditions we have been able to repeatedly form large complex societies. The same minds that are supposed to be capable of only forming medieval societies at best also create complex mathematical models that can ruin the world (as you might have heard recently). While our motivations may be base, our ability to perform complex tricks to obtain those base aims is rather surprising. Complex scams are hardly restricted to the financial sectors- the entire medical industry, construction industry and pretty much any regulated/licensed/ union job is essentially based on a complex scam.
b] Living in medieval society was no picnic. People who visit heritage parks or attend renaissance fairs have a rather incomplete understanding of the hardships in those periods. This situation is not unlike many outdoors enthusiasts who rail against development but who depend on the gear, technology and laws of modern society.
c] Western (white majority) societies are in decline. Throughout history, the intelligentsia of declining societies have always rationalized their downturns as natural, global , inevitable and understandable. The common thread through such declines has always been the belief that "we have reached the peak of human achievement and it is downhill for every human from here on". History suggests otherwise. However this phenomenon has never hit western societies on this scale and scope- until now.
d] Emergent systems guided by chaos and evolutionary pressures are unlikely to return to their starting point- or even retrace their steps. Much has changed in the 70 odd years since GD1, especially in regards to the permutations and combinations of possiblities.
I believe that the best way forward for us a species is to think about the following concepts.
1] What is money? Why should it retain its value? What is the use of money if it cannot buy you wealth. What use is your 1913 pre-fed dollar if it cannot buy you a circa 2008 - 4 dollar walmart prescription for your kids strepthroat. Do you have any clue about how many kids got rheumatoid arthritis or pneumonia from then untreatable strepthroat. Most people who died in the 1918 flu epidemic died from seconday bacterial pneumonia not the virus.
Gold based or strict credit economies cannot create the infrastructure and technological breakthroughs we are accustomed to. We are quite pathetic at predicting the effects and potential of any any new innovation/ product or service- nothwithstanding the beliefs of of famous and clever white (and asian) men who have proved so wrong about the future of the areas in which they were considered to be experts. Rationing money for innovation would be rather similar to the soviet practise of command economics. In any case it is possible to employ 30-60 people for the total yearly income of an average mid-level investment banker who plays paper games, misjudges opportunities, screws over innovators and also loses your investments.
2] Do banks have any "real" money in a fiat currency based world. Given that the vast majority of banks are either insolvent, propped up zombies or the walking dead- why do we need them (in their current form)?
I believe that banks in a fiat currency world are best operated as utilities, not as the fiefdoms and the extortion rackets they have been to date. The biggest problem with this alternative model is that bankers cannot make obscene amounts of money by shuffling contracts and sucking money from the consumer economy.
I propose that we pay for sending the current crop of bankers on a one way trip to the sun. It would be cheaper to put bankers and their families in launch vehicles directed towards the sun, than bail them out of their fictional mathematical games. The 'Zenit' rocket system can put one kg of stuff in orbit for less than three thousand dollars- You could put a family of bankers in orbit for less than a million. Building the launchers for putting bankers in orbit would create more real jobs than the trillions wasted in the futile efforts to make banks lend to consumers.
3] Large misguided credit expansions, abuses and bankruptcies are inevitable in a species like ours. We like to screw our fellow human for a quick buck. The real question then is how we mitigate the negative effects of such abuses. I believe that any abuses which do not exceed a certain % of GDP should be watched but not intervened in - the dotcom boom created a very good high speed network that we are only now using to it's full potential. The factors that should prompt intervention are high relative size of the bubble to the GDP) and the low potential to create jobs or useful capabilities (housing- we already had a surplus).
I, for once, would welcome a bubble in space exploration, engineering, chemistry, biotechnology or anything else that produces lots of jobs with the small prospect of big unexpected breakthroughs.
4] In a system where the future is unpredictable, can credit be repayed completely or even partially? Given the factors I have listed in 3], periodic widespread debt forgiveness might be necesary to keep the system from collapsing. What do bakers lose anyway? Paper, ink, electrons? They certainly do not lose their previous paychecks, commisions, fees and other assorted loot made from the issuance of bad credit.
Would 1.2 Trillion to repay credit cards + 1 Trillion to repay student loans + 1.5 trillion to pay other personal debt have stimulated economic growth better than pissing the money in a black hole to honor CDS bets (and keep apperances in this nonsensical paper game). Hell, yes!!
5] Maybe we should accept that the two major roles of money are 1] keep people employed / civilized 2] create new wealth through innovation in the non-financial world. It might be time to give up on ideas such as full repayment of debt, money having a constant value and paying sociopaths to manage your wealth. Honestly, how many people who invested in the financial world are gonna make more money (inflation adjusted) than they put in- and guesses on gross percentages.
But first we must put the banksters and their handmaidens into incinerators- heating water in boilers might be the most productive thing they have done in their lives.
RE Disney: The demographics didn't skew any particular way. Crowded, lots of teens, full extended families, parents with strollers ( why, I'll never know) etc. The stores were packed too.
Happiest, to all folks. Thank you to CR and Tanta.
I'm amazed anyone has time to comment anymore.. I'm floored that threads seem to hit hundreds of posts... I'm amazed I can't find all the posts I want to read (rich, I never found your gold miner musings... buried under chaff).
I still read this site first, even thought it's a Red Queen race now. Non-denominational blessings to all.
Thank you CR for providing the forum. Thank you to everyone for the insight. The posts and comments here make what is happening make just a little bit more sense. Happy Thanksgiving to you all.
i have been chasing threads with this comment for a while. it is usually the last post.
if tenants in my apartment wrote 1000 insurance policies on my refrigerator breaking down the payout would be many times the value of the fridge when it eventually broke, causing some distortions in the building's finances.
furthermore, if the policies were payable in cookies i bake in my kitchen the demand for the cookies i make would shoot through the roof after the fridge died since every contract would have to be settled in my cookies (money).
this is what is going on globally and it is absurd. the dollar has risen solely due to the short squeeze from the settling the fraudulent, unbacked insurance derivatives (cds etc.). the liquidity black hole lets the fed print as it pleases with no immediate ramifications. the printed money is being used to take over corporate america at fire sale prices. this is how ben's helicopter works.
In order for the scam to continue it is absolutely imperative that the entire world pretend that there are not maybe 4 or 5 times more credit default swap derivatives out there than the value of world gdp.
This is the white elephant in the room that few will mention. Except, in this case, it is more like a trojan white elephant with a short sparking fuse for a tail.
Also see deflation: - Toyota Motor Corp. and Nissan Motor Co., Japan's largest and third-largest carmakers, cut global production last month as the intensifying financial crisis stifled car sales.
Toyota's output fell 15 percent to 700,146 vehicles, and Nissan's production dropped 18 percent to 278,581 vehicles in October, the company said in separate statements today. Honda Motor Co., the second-largest carmaker, said global output rose 1.4 percent to 368,245 units.
Toyota said last week it planned to reduce U.S. output of Sienna minivans by about half, slow the speed of one of two assembly lines in Georgetown, Kentucky, and extend its scheduled Christmas-New Year shutdown at U.S. plants by two days. Nissan on Oct. 31 said it plans to cut global production by at least 200,000 vehicles by March 31.
Japan insurers say may freeze or sell Treasuries holdings
...
TOKYO, Nov 26 (Reuters) - A plunge in Tokyo shares and a surge in the yen battered Japanese life insurers in the six months to the end of September, making these conservative investors yet more cautious amid the global financial upheaval.
One of the top insurers, who together control assets roughly matching the economy of Spain, said it would even be moving some money out of U.S. Treasuries because of their falling yields.
"We will keep the amount of our foreign securities holdings but reshuffle them by moving funds from U.S. bonds to products that offer higher yields if possible," said an official at Meiji Yasuda Life Insurance, the nation's third-largest life insurer by assets.
...
Treasuries rose, pushing the 10-year noteÂ’s yield to a record low, as durable-goods orders fell twice as much as forecast and consumer spending dropped by the most in seven years, reinforcing concern the recession is deepening.
The yield on the benchmark 10-year note dropped as low as 2.9731 percent, surpassing the record set on Nov. 20 as Treasuries of all maturities plummeted. It was the least since the Federal ReserveÂ’s daily records on the note began in 1962 and since 1958 on a monthly basis. Bonds have rallied since yesterdayÂ’s U.S. plan to buy mortgage securities prompted hedging by investors, pushing yields toward last weekÂ’s lows.
“We’re going to be at low rates for at least a year as we work our way through this,” said Brian Edmonds, head of interest rates at Cantor Fitzgerald LP in New York, a primary dealer. “Right now we’re in a market where we’re focusing on keeping it together week by week.”
In a uniquely American tradition, I have purchased 4 turkeys, two lbs of stuffing, three boxes of instant mashed potatoes, two quarts of gravy, and five cans of cranberry sauce, all with a rubber check written to the local Safeway. I will eat all of it in one sitting tomorrow, and when all is said and done I have every expectation there will be no unpleasant consequences from either the bad debt or the overconsumption.
My neighbour has raised the price of a heartbeat default swap by over 400bps this weekend, or so my wife tells me.
Safeway, meanwhile, has moved my bad check into its Level 3 assets, and has applied for TARP funds since I managed to talk most of my neighbourhood into buying their turkeys with worthless paper as well.
On a serious note, Happy Thangsgiving, and hopes for a healthy speedy return for Tanta.
Can someone explain The Excel file to me; how does one start the animation event, is there a scroll or what? I see the pages and variations, but how do start the movie?
also my warmest wishes from Cambodia, finding a turkey here has been nothing less of a fool's errand... guess carabao will have to suffice!
have thought about changing my handle to Comrade so and so, but that's already baked into my current one.
reflecting on Jas the other day I think he plays the role of Don Alphonso in our version of Mozart's 'Cosi Fan Tutte' and we play the two naifs Guglielmo & Ferrando, or is it the other way around?
...and Rob Dawg, what were you doing trolling for pleasure ponies?
Amazing how many horses are for sale through Ventura County. And all of the empty horse facilities being advertised. Now I see people in places like TO and Agoura offering an extra stall in the back yard for rent. There was definitely a boom in new facilities being built over the last decade. My own place was used for breeding race horses by the previous owner who had something like 20 horses. Our two Mexican mutts will enjoy having the run of the place.
Thanks CR and Tanta, and to all who contribute to this special sea of knowledge which gives regular swimmers a very good chance to emerge not always completely dry.
Our virtual academy, where people can exchange ideas and thoughts from around the world, has been an incredible blessing on my life. It has the potential to be a tremendous tool for our policymakers too, and your citation in the paper at the Fed was a good indication that they'll use it someday. I'm definitely thankful for Calculated Risk, and thank you for the update on Tanta. She's sorely missed. There are a lot of posts tagged "You Must Be Kidding" that she'll have make up when she returns.
A very, very happy Thanksgiving to the two best bloggers in the world. Specially crossed fingers for Tanta and hoping she's able to imbibe to her heart's content this holiday!
Specifially, my attempt to measure the increase of total memes in circulation. My dataset starts from 1990, before the Internet was public, so the population is highly skewed towards geeks, college students, the military.
I was positive that total keywords in use would increase over time as the internet encompassed larger numbers of diverse cultures.
Surprise. The keyword count remains shockingly steady, although it changes composition by a few percent each year.
If you assume that memes are the product of a Darwinian environment, then copious amounts of rationalization and denial are to be expected as the financial system gives way under the weight of trillions of empty promises.
The result of that is pain.
Some things can't be fixed. People are herd animals and they just plain don't think very well.
Free market - "the amusing idea that one million dumb people can guess better than five smart people can plan".
Why do you kooky witches keep following me around?
In a system where the future is unpredictable, can credit be repayed completely or even partially? Given the factors I have listed in 3], periodic widespread debt forgiveness might be necesary to keep the system from collapsing. What do bakers lose anyway? Paper, ink, electrons? They certainly do not lose their previous paychecks, commisions, fees and other assorted loot made from the issuance of bad credit.
sorry to not have been the first to gush all over your post like a prom queen on a quest to lose her virginity. I took one look and said, nope, dat guy is gasbag number 1.
It was incredibly thought provoking and I have many questions, sil vous plait?
O! And welcome to the now growing effort to demand a jubilee. More and more people are coming to this conclusion.
And Broward, we may have been operating at maximum capacity. But it has been a rather profitable experiment, don't you agree? With all its imperfections, money has wrought some killer apps.
But satan, the part about where money keeps us from killing one another. Sure, so does pot. Perhaps if those assembled would lighten up on the legal reasons why it's not legal yet. Shit, think of the tax revenue from the sale of a legal weed that does no wrong!
Think about it, we've managed to accumulate most of the credits. Like John Wayne used to say: Lock up a hundred sons of bitches, give 'em each a dollar then lock 'em in a room for a year. I guarantee you, there'll be two or three of the sons of bitches with all the money.
Lots of very interesting minds here, and while I can be charged with begging, but this post is special for the shadowy areas of my intellect where nothing distinct resides.
Conclusion -People were already operating at their maximum sustainable rate of "thinking" before the Internet appeared.
There's just no room left to jam more stuff in. Old stuff is thrown away to make room for new stuff.
So, this observation, does it serve to lead one to a postulation, or perhaps a call to service: Given all other factors equally concerning this, the human mind must be trained to adapt to an ever changing world.
Cliche may actually work when the device is properly deployed.
And about the meme. I have followed this when my wife exposed me to it. The rash is finally clearing up. It does seem to me that we humans have a distinctly dominant propensity to see evil in everything. And there may indeed be substance to this, given the world seems to have a highly effective greed gland. Although, think about it, do we want the truly slimy in charge to continue to exert their will ahead of the people's?
CR: I think the flood control thingy must be working. I am an sehr alte Mensch. I wouldn't mind if you spread it out a little more, maybe a two or even three minute stopper in the tubes.
It is, after all, when stripping the stockings off it, a knob. A tuner, a concept from the forties. O! but technology, if by technology you mean a sultry, sweaty slut that appeals to all ones baser angels, how she has served!
To CR, Tanta & my fellow blog trogs: Me & mine have much to be thankful for. In particular, I thank our hosts and those commenters who shared their wisdom & wit, and by doing so, lit a small candle in the dark.
I can count at least 6 (maybe more) among family & friends who have so far managed to rescue their meager hard-earned savings. They don't read this blog, but I do, and have passed along the knowledge. I know they would thank you, too.
I believe the stock markets will hit new lows either the week of December 1st or the week of December 8th, no matter what market pundits or technical indicators are saying. The reason being that 4Q08 numbers at many S&P500 companies are truly horrendous, with 4Q08 revenue down 10-20% sequentially and very weak bookings (book-to-bill ratios of 0.8 or below) indicating an even weaker 1Q09. As always, analysts are still predicting S&P500 earnings to be up in 4Q08 and also in 1Q09 while, with revenue declining rapidly, S&P500 earnings might be completely wiped out at some point in 2009-2010. Over the next two weeks (the week of December 1st and the week of December 8th) we will have several mid-quarter updates from S&P500 companies and I do expect the bottom to fall out of the stock market as investors look at the numbers - especially 1Q09 guidance - in disbelief. I do not believe there is a way to get around fundamentals this time - even in the very short term, except maybe over a time-frame of days - because the economies of all major countries are just deteriorating too rapidly. Regards, APM
Full disclosure: I am short on the S&P500, Bovespa, and Hang-Seng and long on Gold and Silver.
Satan, I agree with much of what you wrote, as usual. But there are plenty of people who criticize materialism not in the name of religion but of balance.
Net cash outflow to U.S.-based stock mutual funds was -$72.3 billion in October, -$56.4 billion in September and -$195.4 billion YTD.
Another $14.0 billion drained out of hybrid funds (stocks and bonds) in October.
Net cash outflow is defined as New Sales + Exchanged in minus Redemptions + Exchanges Out. It doesn't measure appreciation or price loss, just cash flows.
I'm guessing these funds will have another $200 million in net cash outflows from stock/hybrid funds in November and December combined.
Here's an articles about a big hedge fund suspending redemptions.
When hedge funds suspend redemptions, it makes their investors edgy and they have to lay off risk in the illiquid assets by selling other assets, outside the hedge fund (if they have any left).
Anak(Unrated) writes: Byz, do tell. Or are you waiting for a less festive thread?
Not much to tell. Night noises. I fucked up completely when I saw the dude lurking on the walk and left the door unlocked when I went to get the gun. He was in the living room when I came back with the rifle. SO SLACK OMG.
He lived and the situation was reported to the 5-0. I think beyond that the narrative ends 'cause it's like, potential legal shit.
A drunk once stumbled through my sister's front door, thinking it was his house. She ran out and got the police. No one got hurt. I'm sure not everyone is so lucky.
Every situation is different. Under certain circumstances you can use deadly force.
"If you quantize general relativity in the background of a Kaluza-Klein toroidal compactification, you will find out that different parameters describing the shape of the torus become scalar fields in four dimensions" - Lumo
As another year passes, I'm shocked to find that this is the fourth Thanksgiving I've been lurking here! CR & Tanta (and bacon, banker, MP, MS, Dawg, heck - even Jass - and too many other posters to mention), I give thanks for the education I've gotten and continue to get here.
Best to all - we do have plenty to be thankful for.
My best holiday wishes to our congenial hosts, and to all my fellow travelers here. (Even to the irritating ones, now shouting silently in their personal padded room thanks to CRCompanion!)
May Tanta, and all those with personal struggles (medical and otherwise), end the year with reserves of both strength, and peace. May 2009 be a year of new discoveries for us all!
“For the last 21 months, food manufacturers, restaurants and livestock producers have been absorbing significant costs that in my view are likely to be passed on to consumers in 2009 and beyond,” said Mr. Lapp, a former chief economist at ConAgra Foods.
"APM writes:
I believe the stock markets will hit new lows either the week of December 1st or the week of December 8th, no matter what market pundits or technical indicators are saying."
APM, you feel good about your shorts with the S&P in the mid to high 800s? What prices do you feel solid with your shorts, what level do you look to reverse?
Consider this, given all of the horrible news we have received over the last month plus, we just recently tested the previous lows on Dow, went a bit lower on S&P. There is obviously a lot of support below Dow 8,000.
That said, I can see events colliding to cause us to hit mid to high Dow 6,000s, but we'll snap right back imo. Per Rich's post above, there is increasing reserves and cash on the sidelines which will only increase the buying power and demand available for stocks in mid 2009. Capitulation has been strong but maybe not fully realized. Once it has, if it does (depending on investor/system reactions to the effects of government games) then fear of missing out will rapidly react to provide a higher band of movement in the stock indicies.
There has been zero positive economic news in the last year plus, and we don't expect anything positive in the next 4 months or so. But the market has caught up in many ways with the economic realities, we will bottom, and unlike many others, I believe we will bottom >0.
We are in the winter of economic news and soon there will be signs, however small, of improvement (not hayday events again, just evidence that the worst has been avoided and we have to deal with ugly).
As I posted yesterday, this market was not a speculative stock bubble as was 1920's and 2000's. The financial engineering led to higher faux earnings that were not sustainable, but the p/e's themselves while too high, were not stratospheric. Therefore, I believe calls for sustained levels below Dow 7,500 or SP 740 are not likely.
"“For the last 21 months, food manufacturers, restaurants and livestock producers have been absorbing significant costs that in my view are likely to be passed on to consumers in 2009 and beyond,” said Mr. Lapp, a former chief economist at ConAgra Foods."
Michael Mitchell, a spokesman for Kraft Foods, said that the companyÂ’s food ingredient costs this year were running $2 billion higher than in 2007, a 13 percent increase, but that the company had raised its overall prices by only 7 percent.
William P. Roenigk, senior vice president and chief economist for the National Chicken Council, said his industry had been losing money for more than a year. Chicken producers are now trying to recover those costs by reducing production, which will eventually alter the balance between supply and demand. “The time is coming when we’re going to see a very significant increase in the retail price of chicken,” he said.
People in the restaurant business said they did not like raising prices during an economic downturn. “If anything in this environment, one would be looking at the ability to offer much greater emphasis on value pricing in restaurant menus,” said Hudson Riehle, chief economist of the National Restaurant Association. “In contrast, exactly the opposite is happening. Our operators are being forced to raise menu prices at the highest rate since 1990.”
"As I posted yesterday, this market was not a speculative stock bubble as was 1920's and 2000's. The financial engineering led to higher faux earnings that were not sustainable, but the p/e's themselves while too high, were not stratospheric. Therefore, I believe calls for sustained levels below Dow 7,500 or SP 740 are not likely."
Boomers are older, much poorer, and much closer to that ol' retirement age. Those PE's you're talking about assume a few things that aren't going to be there going forward.
We also have so much to be thankful for. Our Thanksgiving day feast overflowed the main dining room, so we are hosting our family and friend in one of our air conditioned tennis courts this year.
We are thankful for our many inherited trillions, which free us up from real work so that we can devote ourselves to controlling the world. We are grateful for the most recent trillion we made selling toxic garbage around the world, and for the next few trillions being printed up now for us. We especially look forward to taking charge of all those additional trillions that the hoi polloi think they have "invested," once we have bankrupted the ninth firm on the fine-print CDS trigger list.
We are grateful for our new President, so acceptable to the masses, while fully in our pocket.
We wish those few like us pleasant holidays and a happy new year. The rest of you can kiss our Harvard rings.
If you believe that once cash moves to the sidelines in a nasty bear market, it's automatically sitting there waiting to jump back in, then why is Japan's market today worth 20% of what it was in 1990?
Our economy and stock market is tracking Japan 1990 pretty closely, no?
When people get seriously burned, they become both poorer and hopefully wiser. Now, a lot of people in the U.S. have been burned twice in 7 years. With the declines in real estate and stocks at the same time, they're a lot poorer.
When the bond market settles and quality bonds are yielding 10-12%, that's where people will put their money, not stocks. I can't predict the next market twist. But people who are looking for a big stock market rebound to recover what they lost in 2008 will probably be disappointed.
Misean, the p/e's I was referring to ie 26 was in mid 2006, prior to the indicies falling over 50%. 50% in just over 13 months...worst year in history, correct? The majority of that coming in the last two months. There has been warp speed catching up accomplished by the markets after lagging behind reality for over 18months.
The downturn of the Tech bubble took place over three years, we surpassed that in 13 months. If we are in a depression, then I am wrong, if we are in a "deep worldwide recession" which is where I stand, then I may not be. My position is the depression has been avoided, but we're still in the muck.
Great stuff. Love the Pig and Excel art. I believe it means more than Tanta says, though. It's symbolic. We shouldn't marginalize this expression, or the expression of doodling.
I often doodle in meetings and I've been accused of not paying attention which couldn't be further from the truth. When I doodle, I listen much more intensely than if I'm not, and just looking at the faces. When I doodle, I take my eye off the faces and just hear the words. When you do this, you gain a whole new perspective, because you're not distracted by body language. It reminds me of this Fed-Ex commercial:
Holy #$%$ again, Baltic Dry at 733. New low for this cycle and in inflation-adjusted terms a low for at least 20 years. Even with Baltic Dry in the 800's operating costs for many ships exceeded shipping fees.
I don't think we're in a depression, either, thanks to all the central bank easing all over the world. I think we're entering a long stretch of stagflation.
I'm not shooting for 50% plus investment returns in the future, like some of us did this year with shorts. It's going to be choppy. Rallies like the last four days can come out of nowhere at this stage in a bear market.
I think oil is at or nearing a bottom. And oil stocks do look a little cheap because they generate such strong earnings and big companies don't need more financing.
I've decided to buy oil stocks, mainly as hedge balance for my ultra shorts (EEV, TWM, QID and maybe some SRS). The energy commodity ETFs, like USO and DBE, are good, but they don't balance as well day-to-day as energy stocks. I'm not going to pick oil stocks. I'm just going with XLF. So it's a long/short hedge that big oil will outperform risky companies where earnings are collapsing and financing is thin. I'm betting on a flight to quality in stocks.
Through today, 3719 companies have reported for Q3. Total earnings are $62.9 billion, down 62% from this quarter last year (which itself was a down earnings quarter). But $48.3 billion of those earnings were from the oil & gas sector.
How weak is the U.S. economy? By next quarter the whole economy ex-oil will probably be earnings negative = "nil P/E" for the S&P 500 ex-oil. And that situation could continue straight through 2009.
Thanksgiving is a joke of a holiday, so I never say Happy Thanksgiving. Thanks shouldn't be relegated to a particular day, or weekend, of the year. Also, Thanksgiving has come to mean the ackowledgement of our material harvest, so to speak, so at this point, we are merely giving thanks for the abyss we about to enter as a result of our gorging.
Let's give thanks to chose who conquered this land and genocided the indigenous population so that we could later destroy it.
The Google folks did some collaborative holiday art using their Google Docs online spreadsheet very similar to what you did, only it was done by multiple people in realtime.
Throughout history human civilizations have always tried to justify how they had reached the peak of existence. sadly it always ended the same way.. but you know current western civilization is different S
Look Broward, we still do not understand very basic stuff such as
1] How does the cerebral cortex change the filter settings of the the thalamus with such precision (and the feedback loops) . You do know that the thalamus filters sensory information for further processing by higher brain centers, right?
2] The nature of perception of chronic pain.
So though we do not understand how the brain can process/ extract relevant info from complex sights and handle chronic pain, you claim that we know the limits of what the human brain is capable of by using mathematical methods (created and processed by a subset of the brain) to understand the limits of the human brain, when you have already subconsciously decided what those limits are- talk about self-delusion. Humans are quite good at self delusion.
//Broward Horne writes:
a] We have no comprehension about the full capability and potential of the human mind
Speak for yourself. An interesting outcome of large-scale data-mining -//
"I propose that we pay for sending the current crop of bankers on a one way trip to the sun. It would be cheaper to put bankers and their families in launch vehicles directed towards the sun, than bail them out of their fictional mathematical games. The 'Zenit' rocket system can put one kg of stuff in orbit for less than three thousand dollars- You could put a family of bankers in orbit for less than a million. Building the launchers for putting bankers in orbit would create more real jobs than the trillions wasted in the futile efforts to make banks lend to consumers."
If I were to buy a house today, and want to protect myself against downside risk, what can I do?
Buy a house because you want to live in it (or own a second home). Don't want to do that? Research the markets you're buying in to look for real regional economic growth. If wages are declining or remaining static, unemployment is rising, but house prices are going up, it's a poor long-term investment.
But it's best not to buy a house as an investment vehicle. It's difficult to hedge against such obviously non-fungible items like houses. I suppose you could look for a commodity that increases in value as home prices drop? Gold maybe? I dunno.
It's best to buy a house because you want to live there, not because you're using it as an investment vehicle.
Rian - my situation is different. The is a likelihood that I will be forced to sell the house within the next 2-3 years due to the nature of my work. (I'm a consultant)
So, I not thinking of it in investment terms, but in terms of protecting my equity.
I have always been in favor of legalizing all drugs, prostitution and other human "vices". If we accept what we really are, it is easier to control the downsides of such behavior.
Think about it-
1] Do all humans get addicted to any given drug (no! only 5-10% of people end up as addicts). Addiction is a mental condition (not even a disorder). I would argue that bulimia is food addiction and working in an investment bank is money addiction.
2]Even drugs like methamphetamine/ amphetamine, cocaine, heroin do not cause addiction in the majority of users. In WW2, the soldiers of all combatant countries used various amphetamines like candy. The same goes for opiates- how many ended up with addictions?.
One of the oldest studies, we have, about regular opiate use in surviving soldiers from the american civil war suggests that less than a few percent of those who used the then new injectable forms of morphine- for real pain or recreation ended up regular users.
The main problem with legalizing that stuff is that wannabe alpha apes in our society can no longer shoot, imprison, boss and lord over beta apes. Therefore we have to invent laws and regulations that have no rationale except to rationalize control and oppression.
Many many thanks to both bloggers and commenters. I was quite a neophyte when I first started reading this blog. Back then, I was trying to fight my real estate assessment by using things I learned here to prove that my house was overvalued based on current market conditions. Watching everything unravel was so fascinating that I have been reading ever since. I was able to knock about 50K off my assessment and saved much more by prudently moving retirement money out of equities even while the mainstream media was saying everything was great. So Calculated Risk is one of the things I am most grateful for.
I'd like to add one thing about buying oil stocks (XLE) now. Until last week, I thought Obama was gonna slap some big taxes on them, like he kept ranting about in the campaign.
Thanksgiving has to be one of the Mrtgage pig's favorite days, since it is the one day when almost nobody is eating pork. Here is to wishing everyone a tasty turkey and to offer my thanks to CR, Tantaa and all (most) of the regular posters here. Also people, please remember today that the current crisis has real world consequenses that go beyond portfolio values. the story of the Denver farment and the gleeners should be a real eye opener to everyone- 40,000 people out to pick potatos in the US of A should be a serious wake up call, and for people to think about how much worse than that it is in most of the rest of the world. Be thankful that you were not born in the slums of Calcutta or Sao Paulo. Be thankful that our long national night mare is coming to an end on Jan 20. Even in tough times, there is much to be thankful for.
Rob Dawg writes:
Ahh Thanksgiving. When it is okay to overconsume. Best.
Rob Dawg | Homepage | 11.27.08 - 1:02 am | #
Not when you get to my age, Rob. Takes way too long to work off the excess, if ever.
Happy Thanksgiving to everyone. Going to American City Diner this afternoon (Chevy Chase) for their (not really) famous turkey, mashed potatoes and gravy.
Here's a chart for you and yours! Hope it elucidates something. - Persecuted Comrade Anonymouse
Interesting, I think TA is usually only useful for confirming market actions/trends but it is also able to rhyme with past situations. What is the record for days remaining under the 200MA? Looks like 906, volume and 200 day are headed for a train crash.
About price and volume... Between Thanksgiving and New Years volume is normally very light. Likely going to be the same this year. The light volume usually tends to favor upward moves. I am not inclined to bet heavily here. either way. In fact, I am taking some off daily.
Bearly,
What makes you think the next 90 days are going to even be on the historical charts? I'm thinking redemptions, broker churn, volatility, short stops and squeezes are going to move the volume.
Yes we miss you Tanta. Take as long as you need to get well and to get back to posting. We will wait patiently while our thoughts are with you.
Happy thanksgiving to all.
Let me add my thanks for such a wonderful blog. I've learned more about how money works here, than in a lifetime of formal schooling.
And once I got my economic ducks in a row,I even bought myself a real live pony! If the world is going to hell in a handbasket, at least I can harness up the Shetland for a cart drive
<a href="http://img505.imageshack.us/img505/562/lastholidayspxvolzn0.png>Here's a look at last year around holiday time.
Maybe we're in for a bit of consolidation but I'd wary of another unhappy New Year.
And Satan, I think that we have not gone up in complexity. I think most minimize how much complexity there always was, because we have no idea how complicated being a hunter/fisher/gatherer society person is. Such people know more about their surroundings than we will ever learn, and we have forgotten what they know, and so tend to minimize how hard and how complex it is. Not to speak of animals. Dogs (I prefer cats personally) not only are social animals that have learned and evolved to mooch the hell out of us, but they are 1000,000 times better at smelling than we are. We really haven't the faintest idea what it is like to be a dog, or how complex the smell interactions are.
"because we have no idea how complicated being a hunter/fisher/gatherer society person is."
Still have them. We just found better ways to make tools for them. Which means more of us are available to figure out other stuff. Which we did.
We are all now niche producers. Let's take you and I for instance. Now I have a business and econ degree, so I probably understand law better than you understand compputing. But really, I am no more capable of filing a PROPER court document than you are of setting up an IPSEC TCP/IP mesh VPN network between 15 locations.
It's a Turducken lawyerliz and from what I hear they are tasty. Emeril has made them before on his show, I think that's how they gained in popularity. I'm sitting here procrastinating while I should be cooking...
[What makes you think the next 90 days are going to even be on the historical charts? I'm thinking redemptions, broker churn, volatility, short stops and squeezes are going to move the volume.
Rob Dawg]
Could be. I expect a fair amount in the way of tax loss selling this year to protect positions cleared earlier. We may see selling pressure but institutional activity is normally quite light. Hard to know how people will respond to any possible Obama admin changes.
Bearly,
Yeah, tax losses and admin uncertainty are concerns. The institutional issue might be the key. End of quarter/year portfolio polishing used to mean getting fully invested in name brand stocks. This time it might be prudent to have a large cash position to show the clients.
Tanta hasn't been heard from for some time and is sorely missed. Especially her tart, cutting to the truth, posts that banish all the customary blather that surrounds the issues she understands better than anyone. Come back to haunt us or rather enlighten us, Tanta. The sooner the better.
Thanks to CR,TANTA and all the commenters here.Gobble! Gobble! I have been coming here almost from the start and have learned much here.I have touted this site as being very valuable toward trying to understand our changing world.Like most here,I saw this storm coming a long time ago and tried to tell others so they could prepare.I wish that I/we had not been right,but here we are.Some of this just happened thru the process and some of it was caused.I/we would like to see all/some of those who caused this pay in some way,but we know that's not going to happen.It's really going to be a different world in a few years,maybe for the better or maybe for the worse. I think we're all "Gone on the Arfy Darfy never to return"..........Yours in Peace
Comrade Kristina writes:
It's a Turducken lawyerliz and from what I hear they are tasty. Emeril has made them before on his show, I think that's how they gained in popularity.
I'd guess John Madden on the
Thanksgiving Day football broadcast a couple years ago. Much greater penetration through the gluttonous part of the population.
..... Daily thanx CR and Tanta for the great work 24/7 you put into this endeavor...
We here at the Ranch realize the many things we're thankful for......
....our garden which gave us and hundreds of seniors food thruout the summer....MilkShake for all the milk, butter,& cheese.....the chickens for the eggs....my two teenagers for the help around here...for Salli keeping me humble and "down to earth"....and the "big guy in the sky" for giving us another year to get better prepared for the coming onslaught.
Ll, Misean, satan, Broward-
I'd say the human mind is still evolving to handle the complex interaction of humans (soap operas and office politics.) Mainly in small groups, but great strides forward in 'mass' psychology. The mind will always have more potential than anyone actually uses, so I'd like to know if the population in general is using less available processing power or just getting dumber.
Meme research will be more valuable when we know that most cultures are involved with the internet,...it could be a 'natural' limitation of being only able to handle a certain number of thoughts a the same time,...or not. Catch phrases and fads show that how eager we are to seize on an easy way to collapse the slow process of building a community of like minds into a single phrase,...like 'Comrade or ponies'. For all the intelligence shown on this blog, we're still mostly average in the skill of personal interactions.
Many thanks to CR for this great forum, and all the fantastic posters, who never fail to enlighten and entertain. If we can maintain civility, there may be hope for us yet.
I am wishing the best for you and look forward to many more posts. This blog, its writers, and even many of the comment posters have really been one of the most stimulating, intelligent, and enjoyable experiences. I cannot thank you enough.
I just want to give Thanksgiving that Mr. Scrooge's counting house was bailed out.Of course me Da was laid off and we are living on the street and me leg rotted off and.........Oh well "Bless the Banks and Counting Houses each and every one"
Happy Thanksgiving to all, especially Tanta & CR !
Tanta, I hope you had a wonderful & joyfilled day with your family & that you didn't eat the Mortgage Pig ! You are greatly missed by all of us, and we hope that you will be able to return soon.
I love Tanta's mortage pig! She gave the strength to sell my house (which, at the time, I thought was worth a lot more) for double of what I paid for it. If I owned this house today, I would get basically what I paid for it. Tanta Rocks!
The pig leads to a post about a pig. This is a feature I intend to incorporate into my hoopajoops securities.
Happy TGD to both CR & Tanta and everyone else here.
Ahh Thanksgiving. When it is okay to overconsume. Best.
dryfly, Rob Dawg, Hoopajoops LTD, thanks ... and have a great Thanksgiving. I usually do my best to limit my consumption ... and if I don't, I'm doing a little hiking this weekend to work it off.
Best Wishes.
Happy Thanksgiving to everybody and especially to Tanta.
Happy Thanksgiving to CR, Tanta and all the community here.
I can't keep up with the comments anymore, but all the best to everyone, especially Tanta.
Happy Turkey Day to all!
Me & my shepherd hike up our hill most weekday mornings, but it's a li'l wet in the southland for that right now.
Happy Thanksgiving everyone! You guys are my touchstone in this time of turmoil, and I can't express my appreciation enough.
Happy Thanksgiving to all from vader.
Happy Thanksgiving to Tanta & CR.
BTW, I'm sitting in downtown Disney in the heart of Orange County at this very moment (eat your heart out, Dawg
and it's as packed as I've ever seen it. What recession?
Escapist pursuits can thrive in depressions.
I'll second that on the sheer number of comments recently albrt. However this uniquely North American holiday of Thanksgiving is all about friends and family, so I'll forgo self-imposed lurker status and wish everyone a happy holiday.
Thanks also to CR and Tanta for the yeoman duty in keeping us all informed in these interesting times. In particular, thanks for the calm words and analysis in the midst of all the hype. Get better soon Tanta, we need the snark.
Max writes:
and it's as packed as I've ever seen it. What recession?
BTW, I'm sitting in downtown Disney in the heart of Orange County at this very moment (eat your heart out, Dawg
I'd love to get their tracking data. You know, zip codes, ticket type, park spending. I bet they know more about where the economy is headed than the entire D.C. brain trust.
Happy Thanksgiving Tanta & CR
Rob, Max, I seem to recall that amusement parks tend to be packed with families with kids out of school. So, I'd be more curious about the YoY comparison than the relative number there right now.
I remember wishing you Happy Thanksgiving a year ago. You are partially a source of our profits.
We give thanks in no uncertain terms! And Tanta, get better and better!
A Wild Turkey toast to Tanta and CR
--- the Green Mountain Boys and Girls chime in here too. Thankee kindly!
time to visit the tipping jar and the tip jar
Andrew,
There's a string of blackout dates coming for some season ticket classes. Could be just frontloading for we frequent visitors.
Happy Thanksgiving to all.
Just want to wish CR, Tanta, and all of the smart, funny, interesting folks here, a happy Thanksgiving.
Oh yeah, and the few nimrods, too..
Now I feel horrible for making a stupid joke instead of wishing CR, Tanta, and you usual gang of idiots a happy thanksgiving.
Happy thanksgiving all!
Thanks for all the time here CR and many thanks to Tanta as well!!!!!!
Doc Holiday & Kona
Rob, that would make sense in these times. Could also be a few people having a last party on an already paid up season ticket before frugality hits.
CR, Tanta, and all the rest -
Peace, and too much pig, turkey, sqwerl, or pony.
Peace to CR, Tanta, the Natives, and all piggies.
Thank you CR & Tanta. Always appreciate your work!
Happy Thanksgiving, y'all.
Best to all. I wonder whether Tanta's family really approves of her being high priestess of the Cult of CR.
Speaking of ponies:
craigslist | Page Not Found
You can have your very own Pleasure Pony!
CR, Tanta, All
Happy Thanksgiving. I spend a ridiculous amount of time on this blog, because the posts (we miss yours, Tanta) are original, insightful and balanced, and the comments are.... entertaining!
In times like these I am grateful for not having to rely on MSM for news and insights. Thanks to CR and the thoughtful crew.
And best wishes to Tanta for a full recovery and quick return. I was always challenged by her posts, and a bit cowed by those trenchant calls for better comments-- a distinctive feature of the blog and much missed.
Happy Thanksgiving everyone.
I have noticed that many mainstream economists/ financial types have delusions about their level of understanding of the financial world. The reality is that those trained in economics and finance are often the most ignorant of the true nature and scope of their actions.
What is the purpose of money or economic activity? I am suggesting that the true purpose of such concepts and activity is to prevent people from killing each other. The fringe benefits of money and economic activity such as as trade, "progress" and wealth creation are secondary.
However many mainstream economists and financial types believe that money is real. Though many of them profess to believing that money is merely a medium of exchange and storage of commercial activity, their actions suggest otherwise. It is curious that kids stop believing in santa claus and the easter bunny as they grow up but start believing in the "realness" of money. Money whether gold based or fiat based is not real. Neither is debt, your favorite economic model or theory. Money is worthless if it cannot create new wealth or keep people from killing each other.
The concept of money, as most people understand it, was created in a feudal and mercantile age when the majority had a subsistence level existence. It is therefore not surprising that it evolved mainly to keep people from killing each other and simultaneously control people (we are just smart apes who seek short term dominance over long term gains).
However the full fruits of industrialization, various historical events and widespread multi-generational acceptance of concepts like fiat currency have made the consumption of the average person the only dominant driver of the economy (consumer economy). While some people express moral misgivings about such a transformation, the reality is that people who advocate a move away from materialism, towards conservatism, fiscal discipline, frugality are the merely the priests of a new religion. They seek to control and dominate the lives of other people just like the 'priests' of every religion from catholicism to environmentalism and "capitalism".
Many educated people harbor subconscious fantasies about a return to a world where their less well educated peers are peons, serfs and slaves. The problem with this approach is quite simple- the level of complexity and hidden supports that keep our society functioning will collapse and we will cease to live in a functional society.
Many educated people also harbor the fantasy that they can return to a medieval age where the level of complexity was "about right" for the "human brain". This belief is mistaken for a few reasons-
a] We have no comprehension about the full capability and potential of the human mind. For most of history we have lived in tribes of less than 200 people, however given the right conditions we have been able to repeatedly form large complex societies. The same minds that are supposed to be capable of only forming medieval societies at best also create complex mathematical models that can ruin the world (as you might have heard recently). While our motivations may be base, our ability to perform complex tricks to obtain those base aims is rather surprising. Complex scams are hardly restricted to the financial sectors- the entire medical industry, construction industry and pretty much any regulated/licensed/ union job is essentially based on a complex scam.
b] Living in medieval society was no picnic. People who visit heritage parks or attend renaissance fairs have a rather incomplete understanding of the hardships in those periods. This situation is not unlike many outdoors enthusiasts who rail against development but who depend on the gear, technology and laws of modern society.
c] Western (white majority) societies are in decline. Throughout history, the intelligentsia of declining societies have always rationalized their downturns as natural, global , inevitable and understandable. The common thread through such declines has always been the belief that "we have reached the peak of human achievement and it is downhill for every human from here on". History suggests otherwise. However this phenomenon has never hit western societies on this scale and scope- until now.
d] Emergent systems guided by chaos and evolutionary pressures are unlikely to return to their starting point- or even retrace their steps. Much has changed in the 70 odd years since GD1, especially in regards to the permutations and combinations of possiblities.
I believe that the best way forward for us a species is to think about the following concepts.
1] What is money? Why should it retain its value? What is the use of money if it cannot buy you wealth. What use is your 1913 pre-fed dollar if it cannot buy you a circa 2008 - 4 dollar walmart prescription for your kids strepthroat. Do you have any clue about how many kids got rheumatoid arthritis or pneumonia from then untreatable strepthroat. Most people who died in the 1918 flu epidemic died from seconday bacterial pneumonia not the virus.
Gold based or strict credit economies cannot create the infrastructure and technological breakthroughs we are accustomed to. We are quite pathetic at predicting the effects and potential of any any new innovation/ product or service- nothwithstanding the beliefs of of famous and clever white (and asian) men who have proved so wrong about the future of the areas in which they were considered to be experts. Rationing money for innovation would be rather similar to the soviet practise of command economics. In any case it is possible to employ 30-60 people for the total yearly income of an average mid-level investment banker who plays paper games, misjudges opportunities, screws over innovators and also loses your investments.
2] Do banks have any "real" money in a fiat currency based world. Given that the vast majority of banks are either insolvent, propped up zombies or the walking dead- why do we need them (in their current form)?
I believe that banks in a fiat currency world are best operated as utilities, not as the fiefdoms and the extortion rackets they have been to date. The biggest problem with this alternative model is that bankers cannot make obscene amounts of money by shuffling contracts and sucking money from the consumer economy.
I propose that we pay for sending the current crop of bankers on a one way trip to the sun. It would be cheaper to put bankers and their families in launch vehicles directed towards the sun, than bail them out of their fictional mathematical games. The 'Zenit' rocket system can put one kg of stuff in orbit for less than three thousand dollars- You could put a family of bankers in orbit for less than a million. Building the launchers for putting bankers in orbit would create more real jobs than the trillions wasted in the futile efforts to make banks lend to consumers.
3] Large misguided credit expansions, abuses and bankruptcies are inevitable in a species like ours. We like to screw our fellow human for a quick buck. The real question then is how we mitigate the negative effects of such abuses. I believe that any abuses which do not exceed a certain % of GDP should be watched but not intervened in - the dotcom boom created a very good high speed network that we are only now using to it's full potential. The factors that should prompt intervention are high relative size of the bubble to the GDP) and the low potential to create jobs or useful capabilities (housing- we already had a surplus).
I, for once, would welcome a bubble in space exploration, engineering, chemistry, biotechnology or anything else that produces lots of jobs with the small prospect of big unexpected breakthroughs.
4] In a system where the future is unpredictable, can credit be repayed completely or even partially? Given the factors I have listed in 3], periodic widespread debt forgiveness might be necesary to keep the system from collapsing. What do bakers lose anyway? Paper, ink, electrons? They certainly do not lose their previous paychecks, commisions, fees and other assorted loot made from the issuance of bad credit.
Would 1.2 Trillion to repay credit cards + 1 Trillion to repay student loans + 1.5 trillion to pay other personal debt have stimulated economic growth better than pissing the money in a black hole to honor CDS bets (and keep apperances in this nonsensical paper game). Hell, yes!!
5] Maybe we should accept that the two major roles of money are 1] keep people employed / civilized 2] create new wealth through innovation in the non-financial world. It might be time to give up on ideas such as full repayment of debt, money having a constant value and paying sociopaths to manage your wealth. Honestly, how many people who invested in the financial world are gonna make more money (inflation adjusted) than they put in- and guesses on gross percentages.
But first we must put the banksters and their handmaidens into incinerators- heating water in boilers might be the most productive thing they have done in their lives.
Errm, satan.. Not to niggle, but this is the TGD thread. Next time link to your manifesto and post a summary.
RE Disney: The demographics didn't skew any particular way. Crowded, lots of teens, full extended families, parents with strollers ( why, I'll never know) etc. The stores were packed too.
Agreed, Andrew... no dis to Stan's commentary.
Happiest, to all folks. Thank you to CR and Tanta.
I'm amazed anyone has time to comment anymore.. I'm floored that threads seem to hit hundreds of posts... I'm amazed I can't find all the posts I want to read (rich, I never found your gold miner musings... buried under chaff).
I still read this site first, even thought it's a Red Queen race now. Non-denominational blessings to all.
Happy Thanksgiving wishes to all--especially Tanta and CR--from Conjure Bag and mp.
Here's a little old poetry for Tanta:
.. the slithy toves did gyre and gimbal in the wabe
At the risk of sounding a little too bullish, Happy Thanksgiving to all!
Thank you CR for providing the forum. Thank you to everyone for the insight. The posts and comments here make what is happening make just a little bit more sense. Happy Thanksgiving to you all.
wow satan,
awesome comment.
i have been chasing threads with this comment for a while. it is usually the last post.
if tenants in my apartment wrote 1000 insurance policies on my refrigerator breaking down the payout would be many times the value of the fridge when it eventually broke, causing some distortions in the building's finances.
furthermore, if the policies were payable in cookies i bake in my kitchen the demand for the cookies i make would shoot through the roof after the fridge died since every contract would have to be settled in my cookies (money).
this is what is going on globally and it is absurd. the dollar has risen solely due to the short squeeze from the settling the fraudulent, unbacked insurance derivatives (cds etc.). the liquidity black hole lets the fed print as it pleases with no immediate ramifications. the printed money is being used to take over corporate america at fire sale prices. this is how ben's helicopter works.
In order for the scam to continue it is absolutely imperative that the entire world pretend that there are not maybe 4 or 5 times more credit default swap derivatives out there than the value of world gdp.
This is the white elephant in the room that few will mention. Except, in this case, it is more like a trojan white elephant with a short sparking fuse for a tail.
the dollar rally is a short covering rally.
Total OT: Ten-year U.S. Treasury CDS widened to 54.7 basis points from Tuesday's close of 50.0 basis points, according to credit data company CMA DataVision.
US Treasury CDS hits record high on govt programs - Forbes.com
Also see deflation: - Toyota Motor Corp. and Nissan Motor Co., Japan's largest and third-largest carmakers, cut global production last month as the intensifying financial crisis stifled car sales.
Toyota's output fell 15 percent to 700,146 vehicles, and Nissan's production dropped 18 percent to 278,581 vehicles in October, the company said in separate statements today. Honda Motor Co., the second-largest carmaker, said global output rose 1.4 percent to 368,245 units.
Toyota said last week it planned to reduce U.S. output of Sienna minivans by about half, slow the speed of one of two assembly lines in Georgetown, Kentucky, and extend its scheduled Christmas-New Year shutdown at U.S. plants by two days. Nissan on Oct. 31 said it plans to cut global production by at least 200,000 vehicles by March 31.
Global turmoil batters Japan life insurers'
Money & Finance - AOL Money Canada
Japan insurers say may freeze or sell Treasuries holdings
...
TOKYO, Nov 26 (Reuters) - A plunge in Tokyo shares and a surge in the yen battered Japanese life insurers in the six months to the end of September, making these conservative investors yet more cautious amid the global financial upheaval.
One of the top insurers, who together control assets roughly matching the economy of Spain, said it would even be moving some money out of U.S. Treasuries because of their falling yields.
"We will keep the amount of our foreign securities holdings but reshuffle them by moving funds from U.S. bonds to products that offer higher yields if possible," said an official at Meiji Yasuda Life Insurance, the nation's third-largest life insurer by assets.
...
Treasuries rose, pushing the 10-year noteÂ’s yield to a record low, as durable-goods orders fell twice as much as forecast and consumer spending dropped by the most in seven years, reinforcing concern the recession is deepening.
The yield on the benchmark 10-year note dropped as low as 2.9731 percent, surpassing the record set on Nov. 20 as Treasuries of all maturities plummeted. It was the least since the Federal ReserveÂ’s daily records on the note began in 1962 and since 1958 on a monthly basis. Bonds have rallied since yesterdayÂ’s U.S. plan to buy mortgage securities prompted hedging by investors, pushing yields toward last weekÂ’s lows.
“We’re going to be at low rates for at least a year as we work our way through this,” said Brian Edmonds, head of interest rates at Cantor Fitzgerald LP in New York, a primary dealer. “Right now we’re in a market where we’re focusing on keeping it together week by week.”
In a uniquely American tradition, I have purchased 4 turkeys, two lbs of stuffing, three boxes of instant mashed potatoes, two quarts of gravy, and five cans of cranberry sauce, all with a rubber check written to the local Safeway. I will eat all of it in one sitting tomorrow, and when all is said and done I have every expectation there will be no unpleasant consequences from either the bad debt or the overconsumption.
My neighbour has raised the price of a heartbeat default swap by over 400bps this weekend, or so my wife tells me.
Safeway, meanwhile, has moved my bad check into its Level 3 assets, and has applied for TARP funds since I managed to talk most of my neighbourhood into buying their turkeys with worthless paper as well.
On a serious note, Happy Thangsgiving, and hopes for a healthy speedy return for Tanta.
Can someone explain The Excel file to me; how does one start the animation event, is there a scroll or what? I see the pages and variations, but how do start the movie?
oooops, I see: press ctrl-page down to animate the movie!
Yes, very nice movie!
also my warmest wishes from Cambodia, finding a turkey here has been nothing less of a fool's errand... guess carabao will have to suffice!
have thought about changing my handle to Comrade so and so, but that's already baked into my current one.
reflecting on Jas the other day I think he plays the role of Don Alphonso in our version of Mozart's 'Cosi Fan Tutte' and we play the two naifs Guglielmo & Ferrando, or is it the other way around?
cheers
Happy Thanksgiving to CR, Tanta and all US-ian CR crowd. Best wishes to Tanta for speedy recovery as well.
OT: What happened to Hang Seng in the last hour?
Big shout out to Tanta, and a happy turkey day to everyone.
Happy Thanksgiving everyone.
...and Rob Dawg, what were you doing trolling for pleasure ponies?
Amazing how many horses are for sale through Ventura County. And all of the empty horse facilities being advertised. Now I see people in places like TO and Agoura offering an extra stall in the back yard for rent. There was definitely a boom in new facilities being built over the last decade. My own place was used for breeding race horses by the previous owner who had something like 20 horses. Our two Mexican mutts will enjoy having the run of the place.
Thanks CR and Tanta, and to all who contribute to this special sea of knowledge which gives regular swimmers a very good chance to emerge not always completely dry.
Happy Thanksgiving to all of you, from accross the Pond. And big thanks for CR and the bestest wishes for Tanta!
Our virtual academy, where people can exchange ideas and thoughts from around the world, has been an incredible blessing on my life. It has the potential to be a tremendous tool for our policymakers too, and your citation in the paper at the Fed was a good indication that they'll use it someday. I'm definitely thankful for Calculated Risk, and thank you for the update on Tanta. She's sorely missed. There are a lot of posts tagged "You Must Be Kidding" that she'll have make up when she returns.
Happy Thanksgiving from Australia.
A very, very happy Thanksgiving to the two best bloggers in the world. Specially crossed fingers for Tanta and hoping she's able to imbibe to her heart's content this holiday!
a] We have no comprehension about the full capability and potential of the human mind
Speak for yourself. An interesting outcome of large-scale data-mining -
http://realmeme.com:8080/roller/page/realmeme?entry=the_cultural_diffusion_resurrected_part
Specifially, my attempt to measure the increase of total memes in circulation. My dataset starts from 1990, before the Internet was public, so the population is highly skewed towards geeks, college students, the military.
I was positive that total keywords in use would increase over time as the internet encompassed larger numbers of diverse cultures.
Surprise. The keyword count remains shockingly steady, although it changes composition by a few percent each year.
http://www.realmeme.com/roller/page/realmeme/?entry=document_diversity_the_saga_continues
Conclusion -People were already operating at their maximum sustainable rate of "thinking" before the Internet appeared.
There's just no room left to jam more stuff in. Old stuff is thrown away to make room for new stuff.
Saturation.
Feel free to come up with an alteernate conclusion.
If you assume that memes are the product of a Darwinian environment, then copious amounts of rationalization and denial are to be expected as the financial system gives way under the weight of trillions of empty promises.
The result of that is pain.
Some things can't be fixed. People are herd animals and they just plain don't think very well.
Free market - "the amusing idea that one million dumb people can guess better than five smart people can plan".
Why do you kooky witches keep following me around?
superb!
Merry Thanksgiving to all. May we all remember what we hold most dear.
Best wishes to Tanta, friends and family.
My condolences for those lost in Bombay.
Nothing says "you are not welcome to visit my apartment at 3:30 in the morning" like socketing an assault rifle in someone's nostril.
And so my day's story began.
Good morning everyone.
Happy Thanksgiving. Hope yours started less excitingly than mine.
We miss you Tanta! Hope you feel well enough to tolerate us soon.
Byz, do tell. Or are you waiting for a less festive thread?
satan wrote:
In a system where the future is unpredictable, can credit be repayed completely or even partially? Given the factors I have listed in 3], periodic widespread debt forgiveness might be necesary to keep the system from collapsing. What do bakers lose anyway? Paper, ink, electrons? They certainly do not lose their previous paychecks, commisions, fees and other assorted loot made from the issuance of bad credit.
sorry to not have been the first to gush all over your post like a prom queen on a quest to lose her virginity. I took one look and said, nope, dat guy is gasbag number 1.
It was incredibly thought provoking and I have many questions, sil vous plait?
O! And welcome to the now growing effort to demand a jubilee. More and more people are coming to this conclusion.
And Broward, we may have been operating at maximum capacity. But it has been a rather profitable experiment, don't you agree? With all its imperfections, money has wrought some killer apps.
But satan, the part about where money keeps us from killing one another. Sure, so does pot. Perhaps if those assembled would lighten up on the legal reasons why it's not legal yet. Shit, think of the tax revenue from the sale of a legal weed that does no wrong!
Think about it, we've managed to accumulate most of the credits. Like John Wayne used to say: Lock up a hundred sons of bitches, give 'em each a dollar then lock 'em in a room for a year. I guarantee you, there'll be two or three of the sons of bitches with all the money.
Lots of very interesting minds here, and while I can be charged with begging, but this post is special for the shadowy areas of my intellect where nothing distinct resides.
Broward Horne writes:
Conclusion -People were already operating at their maximum sustainable rate of "thinking" before the Internet appeared.
There's just no room left to jam more stuff in. Old stuff is thrown away to make room for new stuff.
So, this observation, does it serve to lead one to a postulation, or perhaps a call to service: Given all other factors equally concerning this, the human mind must be trained to adapt to an ever changing world.
Cliche may actually work when the device is properly deployed.
And about the meme. I have followed this when my wife exposed me to it. The rash is finally clearing up. It does seem to me that we humans have a distinctly dominant propensity to see evil in everything. And there may indeed be substance to this, given the world seems to have a highly effective greed gland. Although, think about it, do we want the truly slimy in charge to continue to exert their will ahead of the people's?
CR: I think the flood control thingy must be working. I am an sehr alte Mensch. I wouldn't mind if you spread it out a little more, maybe a two or even three minute stopper in the tubes.
It is, after all, when stripping the stockings off it, a knob. A tuner, a concept from the forties. O! but technology, if by technology you mean a sultry, sweaty slut that appeals to all ones baser angels, how she has served!
Comrades - Happy Thanksgiving to all.
Happy Thanksgiving to all! May you all get to eat lots of great food - but not too much of it!
To CR, Tanta & my fellow blog trogs: Me & mine have much to be thankful for. In particular, I thank our hosts and those commenters who shared their wisdom & wit, and by doing so, lit a small candle in the dark.
I can count at least 6 (maybe more) among family & friends who have so far managed to rescue their meager hard-earned savings. They don't read this blog, but I do, and have passed along the knowledge. I know they would thank you, too.
I believe the stock markets will hit new lows either the week of December 1st or the week of December 8th, no matter what market pundits or technical indicators are saying. The reason being that 4Q08 numbers at many S&P500 companies are truly horrendous, with 4Q08 revenue down 10-20% sequentially and very weak bookings (book-to-bill ratios of 0.8 or below) indicating an even weaker 1Q09. As always, analysts are still predicting S&P500 earnings to be up in 4Q08 and also in 1Q09 while, with revenue declining rapidly, S&P500 earnings might be completely wiped out at some point in 2009-2010. Over the next two weeks (the week of December 1st and the week of December 8th) we will have several mid-quarter updates from S&P500 companies and I do expect the bottom to fall out of the stock market as investors look at the numbers - especially 1Q09 guidance - in disbelief. I do not believe there is a way to get around fundamentals this time - even in the very short term, except maybe over a time-frame of days - because the economies of all major countries are just deteriorating too rapidly. Regards, APM
Full disclosure: I am short on the S&P500, Bovespa, and Hang-Seng and long on Gold and Silver.
Satan, I agree with much of what you wrote, as usual. But there are plenty of people who criticize materialism not in the name of religion but of balance.
The best do it quietly, by example. Like this guy:
ABOUT NEW YORK; Out of Sight, Till Now, And Giving Away Billions - NY Times
Happy Thanksgiving to CR, Tanta and all here.
Net cash outflow to U.S.-based stock mutual funds was -$72.3 billion in October, -$56.4 billion in September and -$195.4 billion YTD.
Another $14.0 billion drained out of hybrid funds (stocks and bonds) in October.
Net cash outflow is defined as New Sales + Exchanged in minus Redemptions + Exchanges Out. It doesn't measure appreciation or price loss, just cash flows.
I'm guessing these funds will have another $200 million in net cash outflows from stock/hybrid funds in November and December combined.
Here's an articles about a big hedge fund suspending redemptions.
Satellite Halts Hedge Fund Withdrawals, Fires 30 After Losses - Bloomberg.com
When hedge funds suspend redemptions, it makes their investors edgy and they have to lay off risk in the illiquid assets by selling other assets, outside the hedge fund (if they have any left).
The unwind continues apace.
So, who exactly is buying?
Anak(Unrated) writes:
Byz, do tell. Or are you waiting for a less festive thread?
Not much to tell. Night noises. I fucked up completely when I saw the dude lurking on the walk and left the door unlocked when I went to get the gun. He was in the living room when I came back with the rifle. SO SLACK OMG.
He lived and the situation was reported to the 5-0. I think beyond that the narrative ends 'cause it's like, potential legal shit.
A drunk once stumbled through my sister's front door, thinking it was his house. She ran out and got the police. No one got hurt. I'm sure not everyone is so lucky.
Every situation is different. Under certain circumstances you can use deadly force.
Ode to a digital pig:
Excel Art: DIY for corporate geeks! | Corrente
A simple physics exercise as an analogy to economics:
The Reference Frame: Dow Jones money: a stable future economy
"If you quantize general relativity in the background of a Kaluza-Klein toroidal compactification, you will find out that different parameters describing the shape of the torus become scalar fields in four dimensions" - Lumo
Happy Thanksgiving to all. Much to be grateful for.
Rich "So, who exactly is buying?"
Last Thursday afternoon was me...and I'm sure there might have been a short covering or two out there
Happy Thanksgiving to All!
As another year passes, I'm shocked to find that this is the fourth Thanksgiving I've been lurking here! CR & Tanta (and bacon, banker, MP, MS, Dawg, heck - even Jass - and too many other posters to mention), I give thanks for the education I've gotten and continue to get here.
Best to all - we do have plenty to be thankful for.
My best holiday wishes to our congenial hosts, and to all my fellow travelers here. (Even to the irritating ones, now shouting silently in their personal padded room thanks to CRCompanion!)
May Tanta, and all those with personal struggles (medical and otherwise), end the year with reserves of both strength, and peace. May 2009 be a year of new discoveries for us all!
I'm shocked that to find that Hank Paulson is still employed by the US taxpayer.
Best wishes to Tanta, CR, and all.
“For the last 21 months, food manufacturers, restaurants and livestock producers have been absorbing significant costs that in my view are likely to be passed on to consumers in 2009 and beyond,” said Mr. Lapp, a former chief economist at ConAgra Foods.
Happy Thanksgiving CR, Tanta, and you large group of nutters in the blogosphere.
Gotta go hunting now. See, if you track squirrels to their lairs, you can get 'em before the sun comes up.
Nostrovia,
"APM writes:
I believe the stock markets will hit new lows either the week of December 1st or the week of December 8th, no matter what market pundits or technical indicators are saying."
APM, you feel good about your shorts with the S&P in the mid to high 800s? What prices do you feel solid with your shorts, what level do you look to reverse?
Consider this, given all of the horrible news we have received over the last month plus, we just recently tested the previous lows on Dow, went a bit lower on S&P. There is obviously a lot of support below Dow 8,000.
That said, I can see events colliding to cause us to hit mid to high Dow 6,000s, but we'll snap right back imo. Per Rich's post above, there is increasing reserves and cash on the sidelines which will only increase the buying power and demand available for stocks in mid 2009. Capitulation has been strong but maybe not fully realized. Once it has, if it does (depending on investor/system reactions to the effects of government games) then fear of missing out will rapidly react to provide a higher band of movement in the stock indicies.
There has been zero positive economic news in the last year plus, and we don't expect anything positive in the next 4 months or so. But the market has caught up in many ways with the economic realities, we will bottom, and unlike many others, I believe we will bottom >0.
We are in the winter of economic news and soon there will be signs, however small, of improvement (not hayday events again, just evidence that the worst has been avoided and we have to deal with ugly).
As I posted yesterday, this market was not a speculative stock bubble as was 1920's and 2000's. The financial engineering led to higher faux earnings that were not sustainable, but the p/e's themselves while too high, were not stratospheric. Therefore, I believe calls for sustained levels below Dow 7,500 or SP 740 are not likely.
"“For the last 21 months, food manufacturers, restaurants and livestock producers have been absorbing significant costs that in my view are likely to be passed on to consumers in 2009 and beyond,” said Mr. Lapp, a former chief economist at ConAgra Foods."
Go ahead, make my day.
They'll drop dead the moment they do.
Nostrovia,
Mr. Lapp does not understand that if folks don't have $ they cannot spend $ no matter what the retailers need.
Happy T-Day Vader.
Nostrovia,
Michael Mitchell, a spokesman for Kraft Foods, said that the companyÂ’s food ingredient costs this year were running $2 billion higher than in 2007, a 13 percent increase, but that the company had raised its overall prices by only 7 percent.
William P. Roenigk, senior vice president and chief economist for the National Chicken Council, said his industry had been losing money for more than a year. Chicken producers are now trying to recover those costs by reducing production, which will eventually alter the balance between supply and demand. “The time is coming when we’re going to see a very significant increase in the retail price of chicken,” he said.
People in the restaurant business said they did not like raising prices during an economic downturn. “If anything in this environment, one would be looking at the ability to offer much greater emphasis on value pricing in restaurant menus,” said Hudson Riehle, chief economist of the National Restaurant Association. “In contrast, exactly the opposite is happening. Our operators are being forced to raise menu prices at the highest rate since 1990.”
happy thanksgiving to everyone.
GiezCubed,
"As I posted yesterday, this market was not a speculative stock bubble as was 1920's and 2000's. The financial engineering led to higher faux earnings that were not sustainable, but the p/e's themselves while too high, were not stratospheric. Therefore, I believe calls for sustained levels below Dow 7,500 or SP 740 are not likely."
Boomers are older, much poorer, and much closer to that ol' retirement age. Those PE's you're talking about assume a few things that aren't going to be there going forward.
Nostrovia,
Best wishes to all today, especially Tanta and CR for this forum.
Get well soon, Tanta. We simpletons need your reality checks and explications!
Goin' to be a heap of folks eating at cheaper eateries or at home.
Near my home is complete shuttered restaurant, all the equipment gathering dust. So don't tell me that I have to pay higher prices.
1 currency soon yogi writes:
Every situation is different. Under certain circumstances you can use deadly force.
It's so true. Always be sure to know the ins and outs of lethal force defense in your jurisdiction.
We also have so much to be thankful for. Our Thanksgiving day feast overflowed the main dining room, so we are hosting our family and friend in one of our air conditioned tennis courts this year.
We are thankful for our many inherited trillions, which free us up from real work so that we can devote ourselves to controlling the world. We are grateful for the most recent trillion we made selling toxic garbage around the world, and for the next few trillions being printed up now for us. We especially look forward to taking charge of all those additional trillions that the hoi polloi think they have "invested," once we have bankrupted the ninth firm on the fine-print CDS trigger list.
We are grateful for our new President, so acceptable to the masses, while fully in our pocket.
We wish those few like us pleasant holidays and a happy new year. The rest of you can kiss our Harvard rings.
If you believe that once cash moves to the sidelines in a nasty bear market, it's automatically sitting there waiting to jump back in, then why is Japan's market today worth 20% of what it was in 1990?
Our economy and stock market is tracking Japan 1990 pretty closely, no?
When people get seriously burned, they become both poorer and hopefully wiser. Now, a lot of people in the U.S. have been burned twice in 7 years. With the declines in real estate and stocks at the same time, they're a lot poorer.
When the bond market settles and quality bonds are yielding 10-12%, that's where people will put their money, not stocks. I can't predict the next market twist. But people who are looking for a big stock market rebound to recover what they lost in 2008 will probably be disappointed.
Broward-
Your "real meme" project keeps producing interesting results. I hope you continue your investigations.
I "sense" a book or multimedia work outlining your conclusions some day...
"Notes on the Zeitgeist", perhaps?
Happy Thanksgiving everyone. And thank you all for contributing your thoughts.
Misean, the p/e's I was referring to ie 26 was in mid 2006, prior to the indicies falling over 50%. 50% in just over 13 months...worst year in history, correct? The majority of that coming in the last two months. There has been warp speed catching up accomplished by the markets after lagging behind reality for over 18months.
The downturn of the Tech bubble took place over three years, we surpassed that in 13 months. If we are in a depression, then I am wrong, if we are in a "deep worldwide recession" which is where I stand, then I may not be. My position is the depression has been avoided, but we're still in the muck.
CR and Tanta, have a very Happy Thanksgiving filled with good food, great wine and hearty laughter while surrounded by those you love.
Let me say thank you for this site. I am very grateful for all you do.
Is Excel art comparable to Dos graphics?
Also, a very Happy Thanksgiving to all here at CR.
Our thanksgiving was in October. It's too cold to give thanks in November up here.
CR and Tanta, et al, thank you for providing us with your insight and dedication to truth.
Official CR cult member #532131
Elite Banker, LOL and oh so true. Thanks for the laugh this early in the morning.
GiezCubed,
"My position is the depression has been avoided, but we're still in the muck."
Really? Well I hope you're correct. You did get the memo of the $8T bailout?
That's happened exactly when before?
Think about that for a minute or two.
Nostrovia,
Bailout? I thought those were profitable investments and Ben/Hank are getting their 2 and 20 to incent their wise choices on our behalf.
"Elite Banker, LOL and oh so true. Thanks for the laugh this early in the morning."
Your welcome.
And Tanta, I thanked CR and you last night with little hope that you would be reading.
But this thread is for you, so please accept my most effusive thanks, and earnest hope of a complete and rapid recovery!
Our thoughts are with you, Tanta! Among the things I give thanks for is the backformation of the word "ept".
Great stuff. Love the Pig and Excel art. I believe it means more than Tanta says, though. It's symbolic. We shouldn't marginalize this expression, or the expression of doodling.
I often doodle in meetings and I've been accused of not paying attention which couldn't be further from the truth. When I doodle, I listen much more intensely than if I'm not, and just looking at the faces. When I doodle, I take my eye off the faces and just hear the words. When you do this, you gain a whole new perspective, because you're not distracted by body language. It reminds me of this Fed-Ex commercial:
YouTube - Fed Ex Stolen Idea
My thanks and happy thoughts to everyone!
All the best!
Jas - I hope your friends/family are not affected by the attacks...
I'm with Interesting Times.
I will, however, enjoy the football!
Happy Thanksgiving to CR, Tanta and the whole community.
Yeah, good stuff, Elite Banker dude, or dudette.
Holy #$%$ again, Baltic Dry at 733
. New low for this cycle and in inflation-adjusted terms a low for at least 20 years. Even with Baltic Dry in the 800's operating costs for many ships exceeded shipping fees.
I don't think we're in a depression, either, thanks to all the central bank easing all over the world. I think we're entering a long stretch of stagflation.
I'm not shooting for 50% plus investment returns in the future, like some of us did this year with shorts. It's going to be choppy. Rallies like the last four days can come out of nowhere at this stage in a bear market.
I think oil is at or nearing a bottom. And oil stocks do look a little cheap because they generate such strong earnings and big companies don't need more financing.
I've decided to buy oil stocks, mainly as hedge balance for my ultra shorts (EEV, TWM, QID and maybe some SRS). The energy commodity ETFs, like USO and DBE, are good, but they don't balance as well day-to-day as energy stocks. I'm not going to pick oil stocks. I'm just going with XLF. So it's a long/short hedge that big oil will outperform risky companies where earnings are collapsing and financing is thin. I'm betting on a flight to quality in stocks.
Just look at the WSJ's quarterly earnings update.
The Wall Street Journal Online - WSJ.com Log In
Through today, 3719 companies have reported for Q3. Total earnings are $62.9 billion, down 62% from this quarter last year (which itself was a down earnings quarter). But $48.3 billion of those earnings were from the oil & gas sector.
How weak is the U.S. economy? By next quarter the whole economy ex-oil will probably be earnings negative = "nil P/E" for the S&P 500 ex-oil. And that situation could continue straight through 2009.
Thanksgiving is a joke of a holiday, so I never say Happy Thanksgiving. Thanks shouldn't be relegated to a particular day, or weekend, of the year. Also, Thanksgiving has come to mean the ackowledgement of our material harvest, so to speak, so at this point, we are merely giving thanks for the abyss we about to enter as a result of our gorging.
Let's give thanks to chose who conquered this land and genocided the indigenous population so that we could later destroy it.
Thanks for raising the alarm.
rich @ 9:04am,
You meant XLE, not XLF, right?
Happy Thanksgiving, all!
Peace and joy and healing to Tanta.
And blessings on you both for the great work you do in educating us duffers.
Fair Economist & others(?) --
Many thanks for your Baltic Dry surveillance. I watch it myself and at this point know that I will see it here faster than I'll think to check it.
You meant XLE, not XLF, right?
Exactly. Thanks!
Happy Thanksgiving!
Great art.
The Google folks did some collaborative holiday art using their Google Docs online spreadsheet very similar to what you did, only it was done by multiple people in realtime.
Here's a time-elapsed video of it:
YouTube - Collaborative Spreadsheet Art
Happy Thanksgiving from India!
Happy Thanksgiving to You, to Tanta and all of the smiles the pig brings because joy and laughter can be the glue that holds us together.
Happy Thanksgiving from Lithuania!
Hubris, my favorite sin..
Throughout history human civilizations have always tried to justify how they had reached the peak of existence. sadly it always ended the same way.. but you know current western civilization is different S
Look Broward, we still do not understand very basic stuff such as
1] How does the cerebral cortex change the filter settings of the the thalamus with such precision (and the feedback loops) . You do know that the thalamus filters sensory information for further processing by higher brain centers, right?
2] The nature of perception of chronic pain.
So though we do not understand how the brain can process/ extract relevant info from complex sights and handle chronic pain, you claim that we know the limits of what the human brain is capable of by using mathematical methods (created and processed by a subset of the brain) to understand the limits of the human brain, when you have already subconsciously decided what those limits are- talk about self-delusion. Humans are quite good at self delusion.
//Broward Horne writes:
a] We have no comprehension about the full capability and potential of the human mind
Speak for yourself. An interesting outcome of large-scale data-mining -//
Way OT:
When I buy a stock long and want protection on any downside, I can write an option.
If I were to buy a house today, and want to protect myself against downside risk, what can I do?
(Other than not buy the house)
Happy Thanksgiving to CR & Tanta and the rest of the mottley crew of posters.
NorkaWest
P.S. Does anyone know how to stuff an squirrel.
I know my imagination is limitless.
Just to prove Broward wrong I'm going to change some of my economic preferences and not tell anyone.
"I propose that we pay for sending the current crop of bankers on a one way trip to the sun. It would be cheaper to put bankers and their families in launch vehicles directed towards the sun, than bail them out of their fictional mathematical games. The 'Zenit' rocket system can put one kg of stuff in orbit for less than three thousand dollars- You could put a family of bankers in orbit for less than a million. Building the launchers for putting bankers in orbit would create more real jobs than the trillions wasted in the futile efforts to make banks lend to consumers."
GOOD ONE SATAN! :--)
Friggin bankers and economists. Useless eaters.
Buy a house because you want to live in it (or own a second home). Don't want to do that? Research the markets you're buying in to look for real regional economic growth. If wages are declining or remaining static, unemployment is rising, but house prices are going up, it's a poor long-term investment.
But it's best not to buy a house as an investment vehicle. It's difficult to hedge against such obviously non-fungible items like houses. I suppose you could look for a commodity that increases in value as home prices drop? Gold maybe? I dunno.
It's best to buy a house because you want to live there, not because you're using it as an investment vehicle.
Rian - my situation is different. The is a likelihood that I will be forced to sell the house within the next 2-3 years due to the nature of my work. (I'm a consultant)
So, I not thinking of it in investment terms, but in terms of protecting my equity.
Interesting Times said: "The is a likelihood that I will be forced to sell the house within the next 2-3 years due to the nature of my work."
Pay close attention to the transaction costs. 2-3 years is usually too short a time for an equity increase (if any) to negate the transaction costs.
Volker the Viking,
I have always been in favor of legalizing all drugs, prostitution and other human "vices". If we accept what we really are, it is easier to control the downsides of such behavior.
Think about it-
1] Do all humans get addicted to any given drug (no! only 5-10% of people end up as addicts). Addiction is a mental condition (not even a disorder). I would argue that bulimia is food addiction and working in an investment bank is money addiction.
2]Even drugs like methamphetamine/ amphetamine, cocaine, heroin do not cause addiction in the majority of users. In WW2, the soldiers of all combatant countries used various amphetamines like candy. The same goes for opiates- how many ended up with addictions?.
One of the oldest studies, we have, about regular opiate use in surviving soldiers from the american civil war suggests that less than a few percent of those who used the then new injectable forms of morphine- for real pain or recreation ended up regular users.
The main problem with legalizing that stuff is that wannabe alpha apes in our society can no longer shoot, imprison, boss and lord over beta apes. Therefore we have to invent laws and regulations that have no rationale except to rationalize control and oppression.
Many many thanks to both bloggers and commenters. I was quite a neophyte when I first started reading this blog. Back then, I was trying to fight my real estate assessment by using things I learned here to prove that my house was overvalued based on current market conditions. Watching everything unravel was so fascinating that I have been reading ever since. I was able to knock about 50K off my assessment and saved much more by prudently moving retirement money out of equities even while the mainstream media was saying everything was great. So Calculated Risk is one of the things I am most grateful for.
I'd like to add one thing about buying oil stocks (XLE) now. Until last week, I thought Obama was gonna slap some big taxes on them, like he kept ranting about in the campaign.
Now, that looks a lot less likely.
Obama has sobered up.
Thanksgiving wishes to everyone and their families.
Special wishes for Tanta.
Happy Thanks Giving.
<a href="http://img230.imageshack.us/img230/5281/spxvoljawscf3.png>Here's a chart for you and yours! Hope it elucidates something.
Forgot how much I miss Tanta and her writing. She's in my thoughts.
Happy Thanksgiving, Tanta, CR, and all.
Thanksgiving has to be one of the Mrtgage pig's favorite days, since it is the one day when almost nobody is eating pork. Here is to wishing everyone a tasty turkey and to offer my thanks to CR, Tantaa and all (most) of the regular posters here. Also people, please remember today that the current crisis has real world consequenses that go beyond portfolio values. the story of the Denver farment and the gleeners should be a real eye opener to everyone- 40,000 people out to pick potatos in the US of A should be a serious wake up call, and for people to think about how much worse than that it is in most of the rest of the world. Be thankful that you were not born in the slums of Calcutta or Sao Paulo. Be thankful that our long national night mare is coming to an end on Jan 20. Even in tough times, there is much to be thankful for.
Happy Thanksgiving everyone!
Thanks to one and all for their insightful commentary on this turkey of a financial system.
I agree, Satan.
Enjoy =Thanksgiving all,
And remember to set those alarm clocks so you can get up at 4A tomorrow and snatch up all those deals ! LOL!!!
Rob Dawg writes:
Ahh Thanksgiving. When it is okay to overconsume. Best.
Rob Dawg | Homepage | 11.27.08 - 1:02 am | #
Not when you get to my age, Rob. Takes way too long to work off the excess, if ever.
Happy Thanksgiving to everyone. Going to American City Diner this afternoon (Chevy Chase) for their (not really) famous turkey, mashed potatoes and gravy.
Wish you all a very Happy Thanksgiving.
On this holiday, Special thoughts to Tanta and her family .
CR - you're a treasure. Thank you for all that you do.
"long national night mare is coming to an end on Jan 20."
Erm...no it's not. Dumpster diving blogs are the wave of the future. Unfortunately nobody who needs them will be able to read them.
Nostrovia,
Here's a chart for you and yours! Hope it elucidates something. - Persecuted Comrade Anonymouse
Interesting, I think TA is usually only useful for confirming market actions/trends but it is also able to rhyme with past situations. What is the record for days remaining under the 200MA? Looks like 906, volume and 200 day are headed for a train crash.
PCA,
I think so Brain, but how do we get the big arrows to stop hitting the little arrows in the butt.
Knurd!
Nostrovia,
That is one excellent chart. Thanks!
If only to be different and miror the contrarian I am at times:
Merry Christmas to CR and Tanta and all the minyans who post!
Nut'in better than the smell of fresh pecan pie in the morning!
JohnR(VA) writes:
Rob Dawg writes:
Ahh Thanksgiving. When it is okay to overconsume. Best.
Not when you get to my age, Rob. Takes way too long to work off the excess, if ever.
Are you my cardiologist? In his thick Mandarin accent; "Recovery.. short; easy. Golden Age verrrry looong. Not so easy."
Happy Thanksgiving to one and all!
A good day to reflect on what is really important: Family, Friends, Food, and Health...
.
@Persecuted Comrade Anonymouse: why on Earth 0.618 retracement of previous move? What's the significance of that?
...why on Earth 0.618 retracement of previous move?
Google; "fibonacci 0.618 retracement"
About price and volume... Between Thanksgiving and New Years volume is normally very light. Likely going to be the same this year. The light volume usually tends to favor upward moves. I am not inclined to bet heavily here. either way. In fact, I am taking some off daily.
Bearly,
What makes you think the next 90 days are going to even be on the historical charts? I'm thinking redemptions, broker churn, volatility, short stops and squeezes are going to move the volume.
Yes we miss you Tanta. Take as long as you need to get well and to get back to posting. We will wait patiently while our thoughts are with you.
Happy thanksgiving to all.
Thanks to all,and Tanta,My prayers for a quick and complete recovery.
between this and that?
between Beethoven and Schubert
is paradise
if you can find it...Pass the word and enjoy the dinner!
.
Let me add my thanks for such a wonderful blog. I've learned more about how money works here, than in a lifetime of formal schooling.
And once I got my economic ducks in a row,I even bought myself a real live pony! If the world is going to hell in a handbasket, at least I can harness up the Shetland for a cart drive
I would like to give thanks for the fact that even though two-thirds of the toy factories in China have closed recently, there's still one-third left!
So there will be some toys under the tree for American kids this year, after all.
And they will be a lot less contaminated than last year!
<a href="http://img505.imageshack.us/img505/562/lastholidayspxvolzn0.png>Here's a look at last year around holiday time.
Maybe we're in for a bit of consolidation but I'd wary of another unhappy New Year.
"And they will be a lot less contaminated than last year!"
The most profitable committed the most fraud in materials. I think you got that call wrong this time, rich.
Nostrovia,
Clapper Capitalism!
Clap On, Clap Off
Best to all today
Have loosed the man girdle for the day of gluttony; turkey plucked and roasting. Much like all the 2X ETFs yesterday is their special squeeze.
Tanta & CR & everyone:
It's hard to be thankful but we must keep trying.
I give thanks for Tanta, CR and the many contributors who have informed me immensely over the last 3 years.
Because of you, I have managed to avoid even greater personal financial losses.
All my best to everyone.
-- Still hiding out in NM
All the best for Tanta, I hope she recovers soon. And a happy Thanksgiving for all of you Americans.
Happy Thanksgiving, CR and Tanta!
Happy Turkey Day.
To all.
And Satan, I think that we have not gone up in complexity. I think most minimize how much complexity there always was, because we have no idea how complicated being a hunter/fisher/gatherer society person is. Such people know more about their surroundings than we will ever learn, and we have forgotten what they know, and so tend to minimize how hard and how complex it is. Not to speak of animals. Dogs (I prefer cats personally) not only are social animals that have learned and evolved to mooch the hell out of us, but they are 1000,000 times better at smelling than we are. We really haven't the faintest idea what it is like to be a dog, or how complex the smell interactions are.
Have loosed the man girdle for the day of gluttony; turkey plucked and roasting. Much like all the 2X ETFs yesterday is their special squeeze.
classic fotos at 11, not. Fred Garvin, Male Prostitute.... but sqeezed it be.
Tanta, CR, all.
Enjoy your day
Tanta and CR
Happy Thanksgiving
Alice B. Toklas Turkey Stuffing makes the holiday even brighter.
And probably helps with the side effects of chemo.
When I buy a stock long and want protection on any downside, I can write an option.
If I were to buy a house today, and want to protect myself against downside risk, what can I do?
(Other than not buy the house)
Interesting Times | 11.27.08 - 9:28 am |
Fire Insurance!
NorkaWest wrote:
P.S. Does anyone know how to stuff an squirrel.
NorkaWest | 11.27.08 - 9:28 am | #
actually
you should use the squirrel to stuff the turkey!!
happy thankgiving to Tanta, CR and all our fellow posters (and imposters
)here at CR
Persecuted Comrade Anonymouse | Homepage | 11.27.08 - 9:56 am | #
A-mouse,
Interesting that SPY closed right at the simple 20 DMA...
On tv yesterday, they had a chicken stuffed in a duck stuffed in a turkey, called, ummm a turkucken or something like that.
chicken in a duck in a turkey huh
must have taken 8 hours to cook at 175 degrees!!
i usually start drinking wine as the bird goes in the oven
yeeesh
ll,
"because we have no idea how complicated being a hunter/fisher/gatherer society person is."
Still have them. We just found better ways to make tools for them. Which means more of us are available to figure out other stuff. Which we did.
We are all now niche producers. Let's take you and I for instance. Now I have a business and econ degree, so I probably understand law better than you understand compputing. But really, I am no more capable of filing a PROPER court document than you are of setting up an IPSEC TCP/IP mesh VPN network between 15 locations.
Happy Thanksgiving.
Nostrovia,
It's a Turducken lawyerliz and from what I hear they are tasty. Emeril has made them before on his show, I think that's how they gained in popularity. I'm sitting here procrastinating while I should be cooking...
[What makes you think the next 90 days are going to even be on the historical charts? I'm thinking redemptions, broker churn, volatility, short stops and squeezes are going to move the volume.
Rob Dawg]
Could be. I expect a fair amount in the way of tax loss selling this year to protect positions cleared earlier. We may see selling pressure but institutional activity is normally quite light. Hard to know how people will respond to any possible Obama admin changes.
Happy Thanksgiving to all!
Off to play some backyard football if anyone is interested:)
Cheers
~n
Bearly,
Yeah, tax losses and admin uncertainty are concerns. The institutional issue might be the key. End of quarter/year portfolio polishing used to mean getting fully invested in name brand stocks. This time it might be prudent to have a large cash position to show the clients.
Tanta hasn't been heard from for some time and is sorely missed. Especially her tart, cutting to the truth, posts that banish all the customary blather that surrounds the issues she understands better than anyone. Come back to haunt us or rather enlighten us, Tanta. The sooner the better.
Thanks to CR,TANTA and all the commenters here.Gobble! Gobble! I have been coming here almost from the start and have learned much here.I have touted this site as being very valuable toward trying to understand our changing world.Like most here,I saw this storm coming a long time ago and tried to tell others so they could prepare.I wish that I/we had not been right,but here we are.Some of this just happened thru the process and some of it was caused.I/we would like to see all/some of those who caused this pay in some way,but we know that's not going to happen.It's really going to be a different world in a few years,maybe for the better or maybe for the worse. I think we're all "Gone on the Arfy Darfy never to return"..........Yours in Peace
Happy Thanksgiving everyone, and thanks to CR and Tanta for this place.
dirk - what about ham? mortgage pig might not like that part of the feast.
personally i wonder if the pig is behind the surge in squirrel recipes. self-preservation by transference.
since xmas decorations are up already, can we start on eggnog yet?
Happy Thanksgiving to Tanta and CR
Comrade Kristina writes:
It's a Turducken lawyerliz and from what I hear they are tasty. Emeril has made them before on his show, I think that's how they gained in popularity.
I'd guess John Madden on the
Thanksgiving Day football broadcast a couple years ago. Much greater penetration through the gluttonous part of the population.
best wishes to Tanta, I got a good laugh outta the mortgage pig once again.
..... Daily thanx CR and Tanta for the great work 24/7 you put into this endeavor...
We here at the Ranch realize the many things we're thankful for......
....our garden which gave us and hundreds of seniors food thruout the summer....MilkShake for all the milk, butter,& cheese.....the chickens for the eggs....my two teenagers for the help around here...for Salli keeping me humble and "down to earth"....and the "big guy in the sky" for giving us another year to get better prepared for the coming onslaught.
A long winter is coming......
And, for some, it's a very special Henry Paulson kind of Thanksgiving.
Ll, Misean, satan, Broward-
I'd say the human mind is still evolving to handle the complex interaction of humans (soap operas and office politics.) Mainly in small groups, but great strides forward in 'mass' psychology. The mind will always have more potential than anyone actually uses, so I'd like to know if the population in general is using less available processing power or just getting dumber.
Meme research will be more valuable when we know that most cultures are involved with the internet,...it could be a 'natural' limitation of being only able to handle a certain number of thoughts a the same time,...or not. Catch phrases and fads show that how eager we are to seize on an easy way to collapse the slow process of building a community of like minds into a single phrase,...like 'Comrade or ponies'. For all the intelligence shown on this blog, we're still mostly average in the skill of personal interactions.
Many thanks to CR for this great forum, and all the fantastic posters, who never fail to enlighten and entertain. If we can maintain civility, there may be hope for us yet.
Happy thanksgiving Tanta (and CR)!!
I am wishing the best for you and look forward to many more posts. This blog, its writers, and even many of the comment posters have really been one of the most stimulating, intelligent, and enjoyable experiences. I cannot thank you enough.
-Stefa
HAHAHAHA, this is great. Yes, I'm a dork. Happy Thanksgiving!
I just want to give Thanksgiving that Mr. Scrooge's counting house was bailed out.Of course me Da was laid off and we are living on the street and me leg rotted off and.........Oh well "Bless the Banks and Counting Houses each and every one"
Happy Thanksgiving to all, especially Tanta & CR !
Tanta, I hope you had a wonderful & joyfilled day with your family & that you didn't eat the Mortgage Pig ! You are greatly missed by all of us, and we hope that you will be able to return soon.
I love Tanta's mortage pig! She gave the strength to sell my house (which, at the time, I thought was worth a lot more) for double of what I paid for it. If I owned this house today, I would get basically what I paid for it. Tanta Rocks!
A belated Thanksgiving to all.
And to all a good night.
Er, afternoon.
Well, actually, could be morning.
Depends on where you are.
But then, you probably knew that.
So why am I bothering telling you?
You might think I just like talking.
You'd be right, but that's not the point.
Really, I'm trying to call your attention to something.
What was I saying?
Oh, great, now I forgot.
I hate it when that happens.
Something about food...
Ah, yeah. I love leftovers.
No, that wasn't it.
You're still here?
Yikes! And I thought I didn't have a life.
Don't get me wrong, I love CR as much as the next blog groupie.
I'm just surprised that I have maintained your interest for this long.
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