Shopping at Amazon?
Wait! If you click on the Amazon banner link at the top of the page first, HCN will get a percentage of anything you purchase for 24 hours!
Open predictions
Our local book authors
User login
Who's online
There are currently 33 members and 173 guests online.
Currently online
- traderwalt
- picosec
- Bad Dawg Bobby
- nova
- Former Idealist
- josap
- 1 currency now -yogi
- ResistanceIsFeudal
- MattFea
- BarleyReturns
- Antipodes
- bearly
- RayOnTheFarm
- Feckless Ness
- aleister perdurabo
- Tom Stone
- Rajesh
- CalculatedRisk
- shill
- Comrade Kristina
- prairiedog
- RATM
- Mike in Long Island
- montas ankle
- Spatch
- butter
- Lazlo
- Blackhalo
- Comrade Alexei Mikhailovich
- adornosghost
- MSM
- sporkfed
- dr munch
Recent Recommendations
Now THAT is a chart to strike fear in any sensible person!
Can we haz grizzlies now?
Goldilocks economy?
So, looking at that chart, it means there's a 75% chance that the bottom-calling spammers are right, right?
So, looking at that chart, it means there's a 75% chance that the bottom-calling spammers are right, right?
LOL. They've been noticeably absent today.
This means we're at the bottom, right?
Once again, saved by the Pig from posting at the end of a stale thread!
And, in light of bear markets in general (okay, so it ain't really on topic, but anyway...)
This AM I related that I had seen an agriculture deal last week; this PM, reading the day's emails, this from RGE Monitor re ag commodities:
"Fundamental drivers such as biofuel production, population growth, and the rising income and protein demand of developing countries, argue for a secular bull market. In the medium-term though, the exit of speculators and the supply overhang from production growth may bring downward pressure especially in grains. As the global economy recovers, agricultural prices should speed their uptrend, tempered by the fact that agricultural commodities are renewable resources unlike metals and fossil fuels."
Peering into my crystal ball...
Thursday night, Treasury will announce it intends to spend the rest of the money after all, with pre-agreement from the Congressional leadership to go along.
They have got to announce something by Friday to do some op-ex ball-busting.
LOL. They've been noticeably absent today.
They covered and went short yesterday. Didn't you get the memo?
So far we're out in front of the Great Depression.
Fugly!
this porridge is too cold!!!
I'm pleased we've more than half the pain behind us.
Thai? You mean like a Thai restaurant?
No fair. The speed of events today are far faster. Let's see an alog based on time from the current crisis. I'd bet the '29 ties the tech bubble and '08 looks a lot like the energy crisis.
girlbear --
I am sure it is. But is the bed too hard, or too soft?
CR: it would appear, and I'm no expert, that the wolf wave five is yet to come, if past is prologue.
Of course I could be wrong.
I have not heard a lot of bottom callers today, which makes me worry we are near or at a short-term bottom.
Reduced some short positions today because, really, why would anyone want to have any stake in this market at all?
And if that's so, then 1450 here we come, just not right away. Lots of pain and suffering ahead. The grind goes on.
And if that's so, then 1450 here we come, just not right away. Lots of pain and suffering ahead. The grind goes on.
S&P 1450? Woohoo.... my black swan SPY 130 calls will be ITM.
Oh, wait..... that's not what you meant at all, is it?
Some things in the auto hearings not reported:
GM Wagoner was using code words when he told Barney Franks committee that some of GMs cars were crossovers.
Frank was caught off camera asking the UAW chief: Would you please join me for dinner afterwards, Mr. Gentlefinger?
It must have been living hell to have gone through the big one.. each apparent rally followed by another drop, month after month after month, all the way done 90 percent.
Yesterday I checked all the SFP announcements and their maturity dates. The SFP program still has $510B outstanding, which will mature in its entirety between 11/20 and 1/29/09 ---- How is the Treasury going to repay these short term loans? Sorry to keep asking but I am very curious!
Liquidity trap - Wikipedia, the free encyclopedia
In monetary economics, a liquidity trap occurs when the nominal interest rate is close or equal to zero, and the monetary authority is unable to stimulate the economy with traditional monetary policy tools. In this kind of situation, people do not expect high returns on physical or financial investments, so they keep assets in short-term cash bank accounts or hoards rather than making long-term investments. This makes a recession even more severe, and can contribute to deflation.
................
Sounds likely to me....
Come to Jeebus.
Interesting times indeed. Not unexpected -- at least here -- but interesting nonetheless.
(shoot wrong tread... sorry...)
And we don't even have an official recession yet
At the beginning of the year,I told myself...Self I am going to come back in to this market after a 30% drop. That flew by and I didnt even think about getting back in. The real economy has only been affected since the last quarter. Before that it was all banks and financials.I believe we still have some down side left. I just hope its only a few more quarters.
Frazier.
Come home.
Come to Jeebus.
Katie Couric is sounding a little grim. She is so nice too.
stoned by the chariot:
Ben: "So you think it'll crash"
Hank: "What"
Ben: "The US Empire"
Hank: "Fuck it."
(Taken from the previous thread)
mp writes:
@yagij
The US economy is now in a liquidity trap.
Repeating, the US economy is now in a liquidity trap.
With all the baggage that brings.
Monetary policy? Forget it.
We're going fiscal now, baby. Big time.
mp | 11.19.08 - 6:46 pm
The new hot stock? Everything old becomes new agai
What a fun chart !
Someone should email it to Congress ...
People keep saying this will not be another Great Depression because our government has quickly responded to the financial crisis, which did not happen in the GD. But looking at these charts, it is amazing how quickly this has happened in spite of our government's incredible willingness to throw money at the system.
A lot of stuff is down over 60% already.
BHP: $95.61->$28.32
INTC: $27.99->$12.49
GE: $39.95->$14.45
But that graph tells me that it's not yet time to feast.
OT, but with a historical connection.
Auto bailout is dead. CNN report: Big Three auto CEOs flew private jets to ask for taxpayer money. Yes, old news... but in case you missed the nut graf:
Rep. Brad Sherman, D-California, asked the three CEOs to "raise their hand if they flew here commercial. Let the record show, no hands went up. Second, I'm going to ask you to raise your hand if you are planning to sell your jet in place now and fly back commercial. Let the record show, no hands went up."
Yes, that is THE Rep. Brad Sherman (D), who did us proud in his fight against the $700B bailout.
Wait... he won that one too, right???
Oh sh*t.
So the initial crash of 1929 was most like our 1987 crash. The others (including the present) were slower to develop. But they all had a steep slide. Scarry stuff.
Where is the bottom?
Could someone socialize this for me.
I would have said add some color but CRs got that covered.
Just talked to broker friend of mine. He doesn't think this 50% downtrend is justified at all. For over a year I've thrown nuggets of truth at him, completely ignores it. He's been buying all the way down. And I thought I had a high pain threshold. This is typical of what I see out there. There's a lot of people out there yet doing hope trading and losing their shirts.
Bond Girl --
Stock valuations were arguably extremely high and based on historically high profit margins, very low risk premia, etc.
Rapid correction could just be efficient.
Bond Girl
During the 20's they didn't have the equivalent of 4,000 Billion in derivatives...
Bond Girl writes:
But looking at these charts, it is amazing how quickly this has happened in spite of our government's incredible willingness to throw money at the system.
Bond Girl | 11.19.08 - 7:08 pm
The problem isn't money, is it? It is we are all in a bad game of Calvinball where the rules change by multiple parties at same/different times, and the rest of us can only respond after the fact.
Wouldn't transparency be a better tool than encouraging recklessness? Also, if J6P is held liable for his debts, why does it matter that the bank can ignore its own? J6P can affect the banks, but only choose not to play.
Hence, the trap?
When the stock market started falling, it was not uncommon to hear the blame placed on daytraders and amateur investors
The collapse in financials and especially the rise in CDS spreads is not something the Powers That Be can ignore ("It's happening again"). I really do expect some sort of surprise announcement tomorrow night or Friday morning.
They cannot allow this to continue unchallenged.
We should just all be jet-pooling...
One can look at the graph and feel either comfort or peril.
The two most recent crashes were over when they reached about 50%. That's comforting.
The peril is that all three other crashes lasted longer than the current one.
Personally, I see the peril. None of the fundementals driving the crash have changes. Houses are still too expensive relative to income. Financials holding these assets are still loosing money... at an accelerated rate. The crisis is spreading, not contracting.
The question I have from that chart is, "Will it be the deepest of the four?"
This makes me sad.
yagij
It's the Wall Street Banks ... the worst of them can be found at The Clearing House LLC on the board.
Those bastards will pull us all down.
Japan drops 3% in 5 minutes:
Nikkei.com - Market Live
PeakVT writes:
A lot of stuff is down over 60% already.
BHP: $95.61->$28.32
INTC: $27.99->$12.49
GE: $39.95->$14.45
I have been told GE is a mirror of the US economy and a barometer of its health. If this is true we have another 20%pts to go.
Why the hell did I buy C today...buyers remorse no matter how much I convince myself it was for the longer term.
Behold...the past and the future in 2 dimensions.
I wish this were just a bad dream... I think I will go on vacation for a couple years... Or go to sleep like Rip Van Winkle.
Please wake me up when this is over.
ades-
The money-printing and bailouts have telegraphed the markets that we won't have true price discovery until liquidity-trap conditions are in place.
They have essentially flailed their way into a self-fulfilling prophecy.
"In light of the rising frequency of human - grizzly bear conflicts, the Alaska Department of Fish and Game is advising hikers, hunters, and fishermen to take extra precautions and keep alert of bears while in the field.
We advise that outdoorsmen wear noisy little bells on their clothing so as not to startle bears that aren't expecting them. We also advise outdoorsmen to carry pepper spray with them in case of an encounter with a bear. It is also a good idea to watch out for fresh signs of bear activity.
Outdoorsmen should recognize the difference between black bear & grizzly bear excrement. Black bear excrement is smaller and contains lots of berries and squirrel fur. Grizzly bear excrement has little bells in it and smells like pepper."
Gotta love the Japanese markets. All those 'defensive' cross shareholdings work in both directions
Watch for a 50% decline on the S&P 500. That would put it in the high 700s, which would match the dotcom decline. I do think, however, that the causes of this decline are more serious than those of the dotcom decline. I won't be surprised to see it trade sideways in a range of 500-700, for some time.
It's also interesting that the rate of decline (percentage) now is steeper than '87, etc.
People shouldn't make big investments at this level. Wait for some evidenec that the downtrend has reversed. The IBD way is to wait for a rally on high volume, the wait some more for a 2nd, follow-through rally on high volume. But we have seen how recent rallies have fared.
Max writes:
Japan drops 3% in 5 minutes:
Max | Homepage | 11.19.08 - 7:15 pm
USD to JPY -> 95.83
Could we see 90 by 12/31?
Thx Nemo - I needed that
eed. massive. infrastructure. projects. now!
Very Off Topic : A True Story For Those With A Warped Sense Of Humor
Yesterday, in the vicinity of everyone's favorite GA town of Alpharetta, there was a very bad traffic accident. An SUV hit a bridge support at 130 miles per hour. Today the local news played the 911 tape of a caller trying to report the wreck--It's very reminescent of a Monty Pyton skit.
Caller (polite, calm female with southeren accent) : "I would like to report a terrible accident on GA 400 south bound. A car hit a bridge, and there is one fatality."
911 Operator: (snooty, superior female banker voice with no accent): "How do you KNOW there is a fatality ?"
Caller: "He is in pieces."
911: Operator: "Are you SURE there is a fatality ?"
Caller: "He's cut in half."
911 Operator: "Are you SURE that there is one fatality?"
USD to JPY -> 95.83
Could we see 90 by 12/31?
By June 2009 for sure. When do those Obama Bonds come out again?
"... Black bear excrement is smaller and contains lots of berries and squirrel fur. Grizzly bear excrement has little bells in it and smells like pepper."
LOL Definitely the funniest thing I've read all day!
TBT got crushed today. Damn Great Depression 2.
Hmmm...
Interesting charts there...yep...Weeell Goodbye!
Nostrovia,
Show Me The Pony
Wait to post. I gots to clean up my 'puter screen - blew chunks!
(sad that I found that funny, though)
Obama announces who for Treasury ?
Somebody call?
Well folks. Clearly this is the absolute bottom. I think today is the last day of capitulation and its back up to 10k from here over the next month or so. Strap yourselves in for take-off. Big money coming back soon. All the charts agree. This is going to be a huge rally with all the shorts getting squeezed. If you are out of the market you missed the bad days, but now is the time to get back in so you don't miss the good ones.
Looks like a bloody day in Asia. Nikkei down 4% to 7962 early.
"Note that the Great Depression crash is based on the DOW; the three others are for the S&P 500."
Shows the superiority of the S&P 500. DOW is sooooo GD.
Nostrovia,
"...Black bear excrement is smaller and contains lots of berries and squirrel fur. Grizzly bear excrement has little bells in it and smells like pepper."
Great, now we have to fight black bear for squirrel too?
Looks like a bloody day in Asia. Nikkei down 4% to 7962 early.
~~~~
The world will follow our lead down ...
Sandinista protesters intimidate opposition in Nicaragua
MANAGUA: Waving sticks and hurling stones, thousands of protesters backing the leftist Sandinista party angrily took to the streets here to support the results of local elections earlier in the month that the opposition says President Daniel Ortega rigged to expand his power.
The opposition leader, Eduardo Montealegre, had called for a march through the capital in protest of the Nov. 9 elections, which he says the Sandinistas stole to deny him the mayoralty of Managua. But the pro-government forces, some of them federal employees released early from their jobs to join the fray, surrounded Montealegre's backers, who then disbanded.
Anonymous writes:
So, looking at that chart, it means there's a 75% chance that the bottom-calling spammers are right, right?"
not a bottom but looks like time for a bounce... even the acute drop from 1929 did retrace.
Of course with these low volumes we depend on the concerted trading-manipulations do decide on this.
TBT got crushed today. Damn Great Depression 2.
Currently Accounting
My TLT did just fine.
The problem is comparability and sample size is so small. ISTR the recession of 1981-1982 was even worse than that ten years earlier even if the bear market wasn't as bad as 1972-1973 and, unlike the oil price shock recession, had a real estate, bank (S&L) and hedge fund collapse associated with it. Unfortunately unlike now it also had a tightening monetary policy because Volcker was putting the squeeze on inflation and, while interest rates were falling, they were still very high as was inflation.
Still, it seems closer on the whole to the current period than 1972 or 2000 given those disinflationary factors, at least to these relatively untrained eyes.
Show Me the Pony,
LOL,
"911: Operator: "Are you SURE there is a fatality ?"
Caller: "He's cut in half."
911 Operator: "Are you SURE that there is one fatality?"
Caller: Nope, It's a T1000 and it's reassembling itself. Here's your sign.
Nostrovia,
Senate cancels vote on automaker bail-out
S&P futures back down to 808 and falling.
I'm starting a new business.
Home Funeral Consultant.
rumour: PPT has been out of action because they're stuck long at S&P 1200.
Chairman of local county commission is multi-line car dealer - Dodge trucks + some Japanese 2nd tier. On local TV begging for the bailout. Local huge insider Republican is Chevy dealer - totally silent, as is his showroom. These were HIGH FLYIN DUDES over the past few years, now eatin a little pie. This is Kristina's county, BTW.
Re: Nikkei
Futures anticipated this hours ago; anything above 7800 is actually "up" by comparison
How many trading days left in November ?
Roubini called for S&P bouncing in the 600-700 range at the bottom of this bust. Looks prescient again...
What's up Wally? Recounted for Al's camp today. Picked up a few in Ramsey. Very clean process out here, but stupid cold.
Roubini called for S&P bouncing in the 600-700 range at the bottom of this bust. Looks prescient again.
~~~~
Roubini has underestimated the stupidity and greed of Congress, The White House and Wall Street.
mmckinl,
"How many trading days left in November?"
Two, if we're down big Friday.
Nostrovia,
Roubini needs a new mural.
Looks a lot like a chart I saw recently in either the NYT or WSJ. betcha this shorty guy stole it from there. hackers out there please provide link to the original.
So many posters here are yuks yuks and /or cavalier....well if you have a net worth of at least $2M then OK otherwise do no pass go and into the Reality Lounge
Clusterfuck Nation by Jim Kunstler : In the Reality Lounge
"I regard the most dangerous fantasy in America right now to be the wish that we can keep running things just the way they are now (my recurring synecdoche of WalMart, Walt Disney World, and the interstate highway system) by replacing oil and gas with "alternative fuels." This just ain't gonna happen. We're going to use every kind of alt.energy there is and they will still require us to live very differently than we did the past sixty years. The public just doesn't get this. I don't know whether President-elect Obama gets this. I hope he does, and I hope part of his new mission will be to clarify this state of affairs for the public in clear and effective speech. It's going to tick off a lot of them, but it's the theme music playing in the reality lounge right now, and Mr. Obama would be advised to take up the tune".
Cheers
Anyone who plans on doing inverse EFTs tomorrow or beyond, are you thinking about counterparty risk?
I grabbed more TBT. Stocks to bonds must soon wind down.
Dudes name is Doug Short. Figures. Those evil shorters need to be taken out back and shot.
Tanking the market during the holidays. Ought to be a law.
Nostrovia,
The world will follow our lead down ...
mmckinl | 11.19.08 - 7:26 pm | #
Japanese are very efficient. They will do it even better.
It's gone from the tech crash to the 29 crash and now is in slow grind down mode in both. How far it goes depends on how bad it gets. The multiple bounces off of 8200 on reduced volume has the knife catchers loaded up and going under.
At one point I was thinking of knife catching at 7500, but at this point, no way. I'm sticking baby toes in on BAC, but I wonder if they can keep paying any divy right now.
Are there any papers on the self-reinforcing nature of chartist theory?
OT-
Black bears are the human stalkers, Grizzlies shy away unless really really hungry.
It will probably end when every bull's back is broken and no one will sell at the bid. It has to be that bad to turn sentiment around.
My TLT did just fine.
At what point is this trend going to reverse? I think the long bond yield is already under the average inflation rate for the past 50 years.
reptillian(Unrated) writes:
It will probably end when every bull's back is broken and no one will sell at the bid. It has to be that bad to turn sentiment around.
reptillian | 11.19.08 - 7:39 pm | #
This probably isn't a 'sentiment' market. Just sayin'...
OMG. I like just looked at my stocks and its all totally bad. I shouldn't have used that margin thing. Wait. What happened to my wachovia stock? Oh shit. Where is my circuit city? Oh, there is is. What does .PK mean? I totally shouldn't have taken a home equity loan against my Las Vegas apartment to play the market. The bank keeps calling and leaving messages on my phone. I dom't want to talk to them. They prob. just want to give me another credit card or something. Oh wait. Did I forget to send in my mortgage and credit card payments for the las couple of months? Shit. I knew I forgot something while I was on vacation in Hawaii. Almost maxed out my amex on that trip.. Almost. Glad I still have the discover. Wait. Someone is knocking on the door. They seem pissed. Strange.. I always pay my bookie on time. Gotta go..
PeakVT --
Long-term trend shows it on the way to zero.
dryfly,
"Japanese are very efficient. They will do it even better."
ROFL.
We could learn a thing or two here...oh wait we already did...aparently.
Nostrovia,
I still think the graph should carry on to the point that it hits the previous peak, though that would make the dotcom crash and the present unfortunate events merge into a single gigantic double-top.
1987 recovered by 1990, 1973 took until 1982, 1929 took until 1954. So, if it's no worse than the Great Depression, I'll have broken even before I retire.
I decided I had too much of my money in bonds and not enough in shares on 1 October this year, which suggests that I should not be discussing finance at all ... I've still 10x as much in short-term bonds (near enough CDs), with banks that the UK government guarantees, as I have in the stock market.
PSgirl writes:
Anyone who plans on doing inverse EFTs tomorrow or beyond, are you thinking about counterparty risk?
I feel like the whole system could melt down at any time. If you're going to play with these things as a novice (which we've both acknowleged we are), you need to admit to yourself that it's not far removed from a casino, except you don't have to drive to the Indian reservation or put up with the smoking.
Currently Accounting writes:
TBT got crushed today
and will continue to get crushed. Unsterilized Fed purchases
Chop, chop, chop Chop, chop, chop Chop, chop, chop Chop, chop, chop Chop, chop, chop Chop, chop, chop Chop, chop, chop---Whew!Chop, chop, chop....
this chart clearly illustrates the risk
Dow Market Plunge Watch
the credit expansion era has ended.
"and will continue to get crushed. Unsterilized Fed purchases"
WHOA! Are you saying Fed is monetizing the long end?
Is there a data source?
Barley writes: Why the hell did I buy C today...buyers remorse no matter how much I convince myself it was for the longer term.
That makes sense... as, famously said, in the longer term, we are all dead.
Counterparties are no fun. Last time I went to one I levered up on Vodka and feel off onto the new travertine tile floor. Man that stung.
Nostrovia,
Long-term trend shows it on the way to zero.
Sweet. I'll make sure to take out an I/O when it does.
Not Surprising...
This has been the greatest credit bubble the world has ever seen. Why would the crash of it be any different. One for the ages folks.
Black bears are the human stalkers, Grizzlies shy away unless really really hungry.
Comrade Alexei Mikhailovich
Wow, are you ever going to be surprised on your next hike in Alaska when you come across that griz.
Dentist wants to cover my back molars in gold.
Debating whether to extract them now and avoid the expense.
So, second worst drop in modern history, in terms of elapsed time, and not over yet. Is that what I'm seeing?
The 1929-1932 drop of 90% looks more like a series of six(?) 30-40% drops with 10-20% rallies in between...
In other words, except for the countertrend rallies, it was like living through the last 2-3 months over and over again for 3 years. Wow.
BTW, whoever said events moved faster nowadays was wrong. The 1929 crash was far faster. Also the descent into WW2 (and the completion of that war) was damned quick. Things haven't changed as much as we'd like to think. Remember, Germany and Japan were both thoroughly defeated in less time than it's been since 9/11. Anyone seen Bin Laden lately?
What happens in the stock market will depend on what Obama does ...
If he tries small projects we are done ...
YIKES!!!
Good comparison, but you forgot the Nikkei, which is still down 78% (and counting) nineteen years after the peak.
Why the hell did I buy C today...buyers remorse no matter how much I convince myself it was for the longer term.
Barley | 11.19.08 - 7:15 pm | #
Don't feel so bad you've got some company. I bought C, GE, GS, WFC and BOA in the last 1/2 hour of trading.
We could learn a thing or two here...oh wait we already did...aparently.
Nostrovia,
Comrade Misean is Dope
Not yet. Haven't learned anything yet. Still have Fed rate above zero. But they are threatening to drop it soon! Yay. Put your fingers at the corner of your eyes and pull. Instant Japanese. Just like the Fed.
Spinners working overtime:
CNBC: No Auto Bailout? Investors May Just Say 'No Problem' No Auto Bailout May Be No Problem For Wall Street - CNBC
Comrade Wisdom Seeker,
"Anyone seen Bin Laden lately?"
I understand he's set up a day trading facility and is naked shorting US markets. I also understand he's driving up spreads on CMBX.
Nostrovia,
Bush,Paulson,Bernacke will soon head off to exile in Paraguay.
Biggest crooks the world has ever seen.
How many trillions have been stolen for their friends
CNBC: No Auto Bailout? Investors May Just Say 'No Problem'
~~~~
Imbeciles ...
I could be wrong. But how about deleveraging negative feedback loop momentum investing?
I'm not saying to bet the farm.
But I am dollar cost averaging into inverse ultra shorts.
Max Keiser,
"Not yet. Haven't learned anything yet. Still have Fed rate above zero. But they are threatening to drop it soon! Yay. Put your fingers at the corner of your eyes and pull. Instant Japanese. Just like the Fed."
Well the Japanese were in inflation so to get close to negative rates they had to ZIRP...which really helped a lot. Now, see we are in a....oh...never mind.
Nostrovia,
Couldn't resist watchin Kudlow - he's beginning to foam at the mouth and twitch like they do with rabies. Ugly.
I still think a better chart to look at to compare what we are going through is likely to be the Nikkei 225 tracking the Japanese experience in the 80s.
Japan had an even larger real-estate bubble burst, topped with an equally impressively mis-managed bank bailout fiasco and a dose of deflation.
Quotes for ^N225 - Yahoo! Finance
We're just entering the very edge of the US deflation story (as today's core CPI hints) - and may have a long long way to go.
"We are all Japanese now"
HOLY KOWABUNGA
Uruguay, not Paraguay
http://2.bp.blogspot.com/_Et4TQ-a0gGU/SQ3CPK9WPYI/AAAAAAAAA20/KHyakou46zU/s1600-h/excess_reserves_chart.png
"I'm starting a new business.
Home Funeral Consultant."
There's a great Cuban movie in which the bureaucrats refuse to bury this guy, Paco, because the id that entitles him to be buried at state expense is missing. The family has to take the body back home and pack it in ice. Buzzards perch on the roof.
What fascinates me most is that the more severe recent weakness has been caused by large Treasury issuance.
Last week, however, the US debt was actually down a bit, and this week there was only about $35B of new issuance.
If the market behaves like today anyway, God help us when the Treasury pumps out another $125B in a week.
Maybe this is why they really canceled TARP Phase II.
BTW, whoever said events moved faster nowadays was wrong. The 1929 crash was far faster.
Comrade Wisdom Seeker |
Leverage was much simpler then.
What are the crabapple futures looking like?
mmckinl writes:
What happens in the stock market will depend on what Obama does ...
If he tries small projects we are done ...
mmckinl | 11.19.08 - 7:53 pm |
Hell, if he tries big projects we are done .
Yeah, I gotta agree that letting GM or Ford go bust would be psychologically devastating in middle
America.
Hell, a significant number of us were
conceived in American cars. Most Americans didn't know a Lehman's from a Bear Stearns but you tell them Chevy and Ford are gone and they will
think the Final Days are upon us.
They may well be too. Losing our domestic auto industry would hollow out this country industrially. The Brits to this day bemoan the loss of their's.
Many gurus that I respect, like Marc Faber, ContraryInvestor.com, ComstockFunds.com, Hussman, Shilling, etc.. all saw the stock crash coming.
But I must say, so far only Shilling has advised owning 30-year Treasurys. The others have recently steered towards TBT to bet against the long bond, but so far Gary has been right and they have been wrong.
It'll be interesting to see if the gubmint can change this with some kind of additional outrageous expenditures.
For those of you who want to get up to speed on what's really going on, read the links I posted on the previous thread.
"I understand he's set up a day trading facility and is naked shorting US markets"
Happened before 9/11. Airlines, corps. HQ'd inside WTC, etc.
Max Keiser(Unrated) writes:
Black bears are the human stalkers, Grizzlies shy away unless really really hungry.
Comrade Alexei Mikhailovich
Wow, are you ever going to be surprised on your next hike in Alaska when you come across that griz.
Max Keiser | Homepage | 11.19.08 - 7:50 pm | #
I was going to comment on the same thing - maybe Alexei means Russian Bears... NAFTA Zone Black Bears are slightly more dangerous than Black Labradors. Slightly. Griz are a whole other thing. Then there are Polars - UNREAL scary...
Plantagenet,
"If the market behaves like today anyway, God help us when the Treasury pumps out another $125B in a week.
Maybe this is why they really canceled TARP Phase II."
I said that earlier this week. China and Japan had a word with Paulson at the G20 last weekend I suspect.
Nostrovia,
Thanks for posting these incredible charts - and if you go over to dshort.com website there is more good stuff on the recovery process.....which may be equally important....you might want to post that here as well.
This is a really big discussion on the blogosphere which has really made me think hard.
Thank you for your efforts.
"Hell, a significant number of us were
conceived in American cars. "
i wonder how many will be buried in them.
My sources tell me bin Laden posts to CR. Anyone have any guesses as to who it is?
Recovery! What recovery?
Perhaps it's just the general aura of panic but the Fed seems to be pursuing a policy that has not been officially announced yet; e.g., Bernanke's Cash Injections Risk Eclipse of Main Rate (Update1) - Bloomberg.com
Shorter version: The Fed now seems to be pursuing a quantitative easing strategy, effectively abandoning interest rate targets in the process of purchasing assets to pump up the money supply.
"Hell, a significant number of us were
conceived in American cars."
There's a little girl somewhere in Virginia named Shirlington, because that's where her Mom and Dad, in their van, were stuck in the commonplace no going anywhere for an hour traffic jam. They looked at one another and shrugged, and nine months later...
Scared me
At what point is this trend going to reverse? I think the long bond yield is already under the average inflation rate for the past 50 years.
PeakVT
Nice chart NEMO
I think 7-10 will flip dramatically. I'll be out TLT shortly.
There are two many folks now wanting to support economies with fiscal deficits - EU is talking 136B, or 1% of each respect economy. Most, like Russia, are now burning through reserves (USDs and gold) at never seen before pace.
At some point the cash holders will start bidding up prices. When demand exceeds supply prices go up - unless BB caps long term rates.
My bet 7 and 10s will be up 4-5% full points by Q3, 09.
Nemo writes:
Bond Girl --
Stock valuations were arguably extremely high and based on historically high profit margins, very low risk premia, etc.
Rapid correction could just be efficient.
Nemo | Homepage | 11.19.08 - 7:10 pm
Let's hope most have sufficient resources on hand to weather this storm. I'm guessing from corporate bond yields that many do not.
Black bears are the human stalkers, Grizzlies shy away unless really really hungry.
Comrade Alexei Mikhailovich | 11.19.08 - 7:39 pm |
Reverse that.
The problem Obama, or any president, faces with any 'infrastructure' type
stimulus is, as noted, America doesn't
move as fast as it once did.
The Empire State Building was built in
a year. You couldn't get planning approval for that in a year today. Look at the WTC. Seen any thing rising
above the Manhattan skyline since 9/11?
The Golden Gate Bridge was a local inistiative undertaken in the mid 30's
and it was built in what, 2 years.
Hoover dam was built in much the same
time span.
I'm afraid, beyond make work type public service jobs, any major public
works initiatives will be delayed, fought over and studied to death even
as our economy collapses around those
fighting over the plans.
Morocco Bama,
"My sources tell me bin Laden posts to CR. Anyone have any guesses as to who it is?"
Elvis. That Osama's quite the cut up.
Nostrovia,
Anonymous writes:
Currently Accounting writes:
TBT got crushed today
and will continue to get crushed. Unsterilized Fed purchases
After reading this paper and this speech, I believe the FED will consider buying long-term bonds. But those same sources discuss the importance of "signaling" as a policy instrument, which leads me to believe that the FED might tell us before they start buying long-term bonds. Just my guess.
Pictures of Dubai
As for China: new skyscrapers (60-120fl) are being announced, approved, and started just about every single day still.
Louise Yamada, a technical analyst, had an interesting hypothesis that the current bear cycle really started in 2000 and it closely resembles 1929-1943's extended bear cycle where price levels and interest rates were dropping as they are now. According to her hypothesis, the current market is where the great depression bear market was 1937-1938.
http://media.bloomberg.com/bb/avfile/News/Surveillance/vuESQ5yufgKo.mp3
mp(Excellent) writes:
For those of you who want to get up to speed on what's really going on, read the links I posted on the previous thread.
Link to mp's previous post.
(Note: If you click on the octothorpe at the end of a post, it will give you a URI direct to that comment. You may have to wrap it in an anchor to keep it safe from truncation)
Obama needs to decapitate the Wall Street Banks and use printed not borrowed money to recapitalize the banking sector.
for a start ...
said that earlier this week. China and Japan had a word with Paulson at the G20 last weekend I suspect.
But it was subtle and nuanced message - probably while doing a tea ceremony... "Hanky-san... please no more TARP. Buy back your regrettable MBS like you so honorably promised... [long pause]... So sorry. Should we do haiku now?"
Hank-san no more TARP
Regrettable MBS
Please to buy back now
?
("You call that a Haiku? You're just counting syllables!!")
What happened to YLSP's inheritance? Thanks to sportsfan's recommendation of a wire transfer I was able to put the money into some UltraShort stocks this morning.
Part of the reason I wanted to get to the money ASAP was to be on the right side when it all comes tumbling down.
My poor relatives... hope they sold!
pump up the money supply.
RW
raising cash!
@dryfly
Don't know about you, but I've seen a MASSIVE amount of equipment come on the market over the last four weeks.
For example, forklifts out the KAZOO, a lot of them nearly new.
All to be had on the cheap.
dryfly,
The Japanese, yes. The Chinese probably came out with a Tsun Zuh quote then pointed to a map of Taiwan and the South China Sea on there pirated iPhones.
Nostrovia,
started just about every single day still.
EvilHenryPaulson
Well Pakistan will be happy!
I don't understang "going fiscal." Anyone help?
The Japanese, yes. The Chinese probably came out with a Tsun Zuh quote then pointed to a map of Taiwan and the South China Sea on there pirated iPhones.
LOL - ya they may look the same to us round eyes but they aren't the same are they?
Maybe the Japanese need to be a bit firmer.
A cool December morning
Pearl Harbor,
A Nip in the air!
Tiberius writes:
Dentist wants to cover my back molars in gold.
Debating whether to extract them now and avoid the expense.
Tiberius | 11.19.08 - 7:50 pm | #
Wisdom teeth? Take them out! I did the gold thing and ended up taking them out anyways. But gold was cheaper in the early 90s.
anybody got the CRVIX chart up, looked a little spikey today.
What really strikes me about this is that 73 and dotcom were relatively slow-burn crunches.
I'm wondering about a couple of things, and this goes to market participation and the velocity of information. In 29, does anyone have data about concentration risk, ie how many were active in the market, and information channels ie how did people get the information that led them to unwind, how the runs happened?
I have an idea on velocity of information and interconnectedness which makes a certain amount of sense if you look at the concentration of downward verticals in 29 and now, which are almost identical.
Goes like this: 29 was initially one country market and relatively few participants but one the bad news came out, many knew, quickly enough, to unwind, but the bad news and real economy effects took time to affect other countries, let alone other parts of the Us real economy, which is why the jag down takes longer.
The 2008 unwind involved vastly more market participants in numerous countries but who were linked by new information technology and program trading, why made it much more like the 29 smaller circle of investors.
That's why you get the almost identical vertical concentrations in 29 and now. The market is behaving as if it were a small herd panicked, even though we know it's large, distributed, and multinational. The down jag is later for a different reason, which goes to psychology and overcoming the idea the this time it's different, the problem is contained, we have decoupling and other nice fairy stories to tell to frightened children.
Parents don't succeed by saying there IS an alligator under the bed...
Just an idea.
CC
Cracker --
Well, there's my version. Haven't corrected for daylight saving time yet, and it's missing some samples from a couple of weeks ago, but otherwise fairly accurate
Wisdom teeth were pulled 30 years ago, these
are the next molars but I have a small mouth and
every dentist complains about the lack of access.
I'm thinking I could spend $1000 per tooth, still lose them to decay and have to get them pulled anyway.
Dentists.
Wisdom teeth? Take them out! I did the gold thing and ended up taking them out anyways. But gold was cheaper in the early 90s.
Octavio Richetta | 11.19.08 - 8:19 pm | #
ova,
"http://www.youtube.com/watch?v=VQXECBdPgEA"
Try this link.
Actually it means fiscal policy. How much more fiscal can be used afte $700B TARP and stimulus checks is in doubt.
Fiscal policy just waistes precious resources for the most part, and the gov't has no money.
Nostrovia,
hat tip nemo.
A close relative just had their pension cut significantly. Someone who has no debt and never dabbled in stocks.
Everyone is going down with this ship.
whoops forgot to use "preview"
Re: "going fiscal"
As opposed to "monetary". Monetary is when the Fed makes loans to dodgy businesses. Fiscal is when Congress gives your children's money to dodgy businesses.
"Scared me"
The only thing you have to fear is that your long you little panzy.
Or "Dodge-y" businesses, as the case may be
Don't know about you, but I've seen a MASSIVE amount of equipment come on the market over the last four weeks.
For example, forklifts out the KAZOO, a lot of them nearly new.
All to be had on the cheap.
mp | 11.19.08 - 8:15 pm | #
Yup - I don't watch the equip market as close as you (I sell the parts don't buy the equipment)... But I'm recommending all the guys I work with to have their eyes open and wish list already made up. Large bed CMMs are on the top of the list at a couple places.
Thanks Misean and Nemo.
Hey CC,
In case you missed it last night, I got confused and assumed that one post was a joke rather than an informative one in a joking style
mp(Excellent) writes:
Pulling forward from last thread -
I sincerely hope so. We can worry about sovereign risk later.
I respectfully disagree, mp.
First I think the creditors lowered the boom at G-20. Maybe they will let Obama have a free hand, maybe not. Regardless, enforced austerity is a real possibility.
Second, I don't see any faster route to state failure than massive expenditures to try to replicate the new deal. Our state is hermetically sealed against amateur participants due to technocratic bias primarily brought into place since the New Deal.
Until the technocratic bias is removed, there's not going to be a stimulus that achieves meaningful effect because it won't be widespread enough in its direct effect. They will diddle the needles quite successfully, but the control console is not the plane.
It is probably the more humane answer but the Bushites have made the budgetary circumstances impossible and the milieu that brought sucha regime to power isn't capable of making good policy choices.
Again, respectfully, I see this as a route straight into policy paralysis due to inability to fund ongoing operations.
IMO -- the US state needs to dramatically curtail outlays and dramatically increase revenues. The effects on the populace will be quite horrifying but the state is not going to be able to "grow past this".
MP
I remember about 9 months or a year back you posted a report about son of MP buying some equipment for cash and how he negotiated by taking a drink of soda - the pause caused the seller's price to drop. Cash is king in major deflation. You called it very well.
Regards to Conjure.
I'm going to check the last thread for the links you posted. Can't wait to see what they are.
Cheers
Sorry, italic error. Only the first line is mp.
Fiscal policy just waistes precious resources for the most part, and the gov't has no money.
Nostrovia,
Comrade Misean is Dope | Homepage | 11.19.08 - 8:23 pm | #
You aren't reading your Tsun Zuh - your 'enemies' aren't Austrians - they won't do what an Austrian would do. Think like them... until the bond markets blow up 'no money' isn't a problem. Not even a 'constraint'.
Also, Cracker, you posted something for my attn last night. What did you want me to do with that?
Byzantine_Ruins,
If you want to cut government spending, thus government borrowing, then you will need to cut outstanding private debt by even more to avoid the deflationary cycle. Would you be prepared to do that?
EHP - huh? I'm usually flippant, ignorant, and unhelpful. Apologies for the exceptions.
Cooper's fkn panopticon has me labeled as all three permanently.
So nice to find some stability in this crazy world.
CC
So..... after reading mp's fantabulous set of links..... liquidity trap.
Well.
Hmm.
And when does the rest of the world figure this out? I want to stay off the streets on that day.
First I think the creditors lowered the boom at G-20. Maybe they will let Obama have a free hand, maybe not. Regardless, enforced austerity is a real possibility.
It is a possibility - no doubt about it.
So which of those G20 volunteered to no longer export to the US & instead buy or 'tradables'? Is there even a short list?
Someone mentioned the GM 2 for 1 sale. Well of course this makes sense, don't you need a spares provision?
cant rightly recall what I may have posted, was it a song about the devil, or the busted ARM that is the US treasury market? or was it the list of the post 1997 or investors into the IMF slapdown after the Asian Currency crisis in '97?
dryfly,
"You aren't reading your Tsun Zuh - your 'enemies' aren't Austrians - they won't do what an Austrian would do. Think like them... until the bond markets blow up 'no money' isn't a problem. Not even a 'constraint'."
You mistake how I shall defend myself vs. how I think the enemy will act.
Knurd!
Nostrovia,
oh hai
i took corporate jet
just to say hai
i can haz glamour shot like nouriel?
You mistake how I shall defend myself vs. how I think the enemy will act.
Knurd!
Now THAT is the Austrian I've learned to respect.
Thanks for all the charts CR, am going to frame some. I have a meet with my financial adviser and like to print and take them with me. This is the adviser that slammed her hands on the desk and said: Your Selling! about 1 1/2 years ago. Dumb bitch, but she gets me good rates on GIC's. Talked with her a few weeks ago to set up my meeting, she said buying opportunity of a life time, get in now, I said I will wait a little longer.
Cracker(Unrated) writes:
cant rightly recall what I may have posted
Link to your post.
Was that you? Wasn't sure if you wanted a report on my current condition or if you wanted my observations on the business or something.
Nardelli should get into chocolates next.
dryfly,
Glad you're business trips have brought you home to post dude. Missed ya. Been busy so if you're day commenting, I'm missing it.
Nostrovia,
dryfly(Excellent) writes:
So which of those G20 volunteered to no longer export to the US & instead buy or 'tradables'? Is there even a short list?
I think Paulson's public admission of us humiliating ourselves as a nation probably shortens the list up a bit.
I think the Chinese have the stones to stage a buyer's strike, as then they could blame us for their half of the US-Chinese bubble implosion disaster.
byz ruins,
I replied in the condo post. Just wanted to know a teenny little bit about what you might think.
I will respond there, if you so desire.
Nemo,
Those market opening spikes happen at lunch time PST. Insane.
Nostrovia,
@Byzantine
Hey, no problem. If we didn't disagree now and then, we wouldn't have anything to talk about.
Right?
MP
just had a look at your posts. Yes, absolutley: liquidity trap, very serious defaltion, and the need for New Deal 2.0. Not a doubt in my mind.
I see Conjure hit a bullseye today. Nice going, little guy. Hope you get an extra helping of muchies tonight.
Did you see the front page NY TImes article about cars stacking up at the port of Los Angeles, alongside the port's major export, paper for recycling? Maybe they'll pay me to drive one of the cars away some day soon.
From now until January 20 is going to be an awfully scary time. After that it will get better. It will just be frightening.
B_R,
"I think Paulson's public admission of us humiliating ourselves as a nation probably shortens the list up a bit."
GE, GM, Ford, HOG, C, Merill,...
/Ducks!
Nostrovia,
Nemo: bear joke was funny. (But I seem to recall someone posted that on CR about a year ago--you?)
Cracker(Unrated) writes:
byz ruins,
I replied in the condo post. Just wanted to know a teenny little bit about what you might think.
I didn't see it. We can talk anywhere you want. Drop a url to your reply if you don't want to repeat yourself.
Everyone's entitled to opinions,
I open my mouth and shit, I got millions.
Glad you're business trips have brought you home to post dude. Missed ya. Been busy so if you're day commenting, I'm missing it.
I been out.
Usually I have my laptop & will either post at night from a hotel or stop in at a Panera or other 'hotspot' during the day if not in my office - but I spilled coffee on my laptop a couple weeks ago and it is in service purgatory at Dell... I have one of those golden service contracts they USED to give small biz guys - until they learned we were all klutzes & morons (me being no exception)... so I've been quiet lately. I doubt I'll ever be given one of those again... unless maybe the Fed includes those policies in the TARP.
Been lurking though via blackberry the last couple days - the internet version of autism.
Hank Paulson is a Christian Scientist and a conservationist. Chairman of the Board of Directors for the Nature Conservancy.
What if Hank is more concerned with global warming and animal extinction than saving the developed world?
What happened at the G20
Please hank tell us
Why no Tarp or no more money
GM goes bankrupt
SAIC buys the remains
And China soon becomes
a leading auto manufacturer.
Say goodbye to Taiwan
While your at it
If you want to cut government spending, thus government borrowing, then you will need to cut outstanding private debt by even more to avoid the deflationary cycle. Would you be prepared to do that?
~~~~
We are 50 trillion in debt ... business, private and public. Until that debt is substantially reduced through writeoffs deflation goes on ...
Liquidity traps are Keynsian nonsence. This is a solvency issue.
You can put cash into the banks but they cannot be required to lend it. Go ahead CONgang TRY.
What is happening is that there are no credit worthy buyers who need loans. And the big banks aren't credit worthy to begin with.
Thus, as MV == PQ. Now Austrians see this as an equivalence not an equation (it is not usefull for differential equations) it is instructive. It says Money time Velocity of money flow is equivalent to Prices times Quantity produced.
Now the Fed is trying to pump M, but V is crashing due to the solvency thing. So prices fall. Liquidity ain't got nothing to do with it. Solvency does.
Nostrovia,
Peter-san's Nikkei chart. It looks like the Himalayas! Which one is K2?
EvilHenryPaulson(Excellent) writes:
Byzantine_Ruins,
If you want to cut government spending, thus government borrowing, then you will need to cut outstanding private debt by even more to avoid the deflationary cycle. Would you be prepared to do that?
I would move to greatly reduce credit through liberal BK, leverage restrictions and lender regulation. Also the draconian fiscal policies would smother the economy. It would not be deflationary, it would be deflated.
Flatly, I think if you can keep deaths in the seven figures and maintain administrative steerage over the whole of the 50 states, you are a gold medal winner in this scenario.
History will be a lot crueler to the US than to Japan for any lost decades.
CC,
your point on information velocity is very valid
information velocity == stock market decline velocity
simple
dryfly,
"I have one of those golden service contracts they USED to give small biz guys - until they learned we were all klutzes & morons (me being no exception)..."
Buy a nice Toshiba at Best Buy...Get the I break it you fix contracts.
I "accidently spill beer" on my laptops every 18 mos. Till they go TU, it's worked for years.
Nostrovia,
GREAT DEPRESSION 2.0 ?
Someone writes: Hank Paulson is a Christian Scientist and a conservationist. Chairman of the Board of Directors for the Nature Conservancy.
huh? writes: What if Hank is more concerned with global warming and animal extinction than saving the developed world?
There are many cogent arguments to be made against Hank Paulson and his actions. I have made many of them. But cheap ad hominem attacks (you can go look it up) are worthless as political, economic, or intellectual, comment.
Reward: Promotion to Irritating. bai!
huh?: Is that the organization that oversees all the national parks and other protected areas in the U.S. ?
Memo:
19 November 2008
From: All China National Financial Security Bureau
To: MSS
RE: MISEAN
It has come to our attention that capitalist running dog foreign commenter MISEAN has utilised gravely offensive alternate spelling of pinyin correct Sun Zi.
Quotes are not only insupportable, but reference splittist spelling. These forces must not divide our great country and wound the pride of the people, who are firmly and multiethnically united behind our proud party.
Request immediate countermeasures, URL, email, and site blocking.
Recommend Titan Rain policy.
Yours
Chi Mao
Chairman
Steering Committee
CNFSB
The Fed now seems to be pursuing a quantitative easing strategy
remember the good old days when the market went up with rate cuts?
Becky's Buffett not doing well.
Buffett's Berkshire Falls Most in at Least 23 Years (Update2) - Bloomberg.com
The teachers told us, the Romans built this place
They built a wall and a temple,
an edge of the empire garrison town,
They lived and they died, they prayed to their gods
But the stone gods did not make a sound
And their empire crumbled, 'til all that was left
Were the stones the workmen found.
And all this time the river flowed,
In the falling light of a northern sun.
おそらくCRとタンタ場合は、コメントセクションを懸念していると、言うことができます...不透明されていないと思います。
byz ruins....thats for you.
nobody picked up on my "stoned by the chariots" by slow down, as a play on words, during todays testimony on the Hill.
Chi Mao: may a Righteous Wind blow up your a**.
CC,
Bwahaahahahahhahahahahhahaha!
"Recommend Titan Rain policy. "
Bwahahahahaahahahhahahahahahahahhahahahahahahahahha!
I gotta clean the bear off my monitor. No beer.
Knurd!
Nostrovia,
I don't read hanzi man. =)
I see lots of numbered boxes, in fact, as I don't even have the char set installed. =)
Counterpointer, trans?
OK, it looks like the Medium 3 US automakers have to wait until Feb at the earliest for the $ to flow into their coffers. Going to be a lot of suppliers and dealers not getting paid until then?
Meanwhile down south Nissan and the other "real" automakers are going to be idling plants. Since Nissan and the others build in clusters the impact will be concentrated. By clusters, I mean their suppliers all build next to them.
There will not be much of a Christmas this year. That will kill retailing. Also, it will not be helpful for the Asian countries. Plus US shippers etc.
So, figure in that they can run on fumes for awhile. That puts the first big wave around early Spring. That in turn feeds back into commercial real estate.
Sound good?
If we're quoting bad Sting lyrics:
They say a city in the desert lies
The vanity of an ancient king
But the city lies in broken pieces
Where the wind howls and the vultures sing
These are the works of man
This is the sun of our ambition
Bold words from a man who owns a castle.
yet you talk about the Japanese and the end of empires?
--
History will be a lot crueler to the US than to Japan for any lost decades.
Byzantine_Ruins
Thaksin, CC
I would argue that it's the low volatility which allows for the forming of herds in the market. It's not about what would happen given information at first, bur rather what could happen over time. With a long enough period of low volatility, you get the ironic version of the efficient market hypothesis.
That is effectively the same as all listed corporations having webs of cross shareholdings (eg not only every stock inherently leveraged, they are inherently leveraged as a single block). You can never fall of a cliff, if you never go up the mountain type of deal
Information velocity is relevant, but only to the extent that market participants use new information to trade shares. That's why a handful of big players in 1929, or news media reporting market stories, have the effect they do. (info delta) x (shares traded/total traded) kind of deal
I think due to such things as credit downgrades and fund rules that there are both incontrovertible information deltas AND a big portion of shares being traded specifically because of them.
Oh, and if there is a big 1st wave that will be bad. The economy is like New Orleans. It won't be able to handle it and the financial levies begin breaking.
PeakVT writes [from prior thread]:
[quoting Comrade V
wealth as we know it?]
Can someone help me understand whether Krugman wants to erode/destroy all existing (
"In an inflationary situation, which is what Krugman is advocating, "stuff" will still have utility, and once the currency re-stablizes, value. Cash, stocks, bonds - not so much. Conversely, debt will be less burdensome. All this is a Good Thing if you think deflation is worse. Clearly Krugman does"
Thanks Peak. You confirm my understanding that Krugman is simply advocating one class [debtors] over another [savers] and pushing the latter back into physical assets. As someone else here likes to say "wash, rinse, repeat". And people here believe this is a good thing? Please help me understand why?
The bear is the symbol on the California state flag, isn't it? There you go...
Any calls prior to today in the latest bear phase are Wrong.
anyone want to try today?
ps.. i bought a boatload, all in, on one name
Nova, Speculatin' Pony:
Cracker(Unrated) writes:
yet you talk about the Japanese and the end of empires?
The Japanese don't speak hanzi either. =)
SP 780 is the magic number, break that and it will ugly sooner then later. Break DJI 5300 and the only stock you will want is canned. I keep trying to buy calls against DOG and others, but no one is selling. Tells me resistance will hold near here. Look for March 09 to be the peak of the next rally, then wave 5 down till late 2009. Just shy of the first 100 days and no miracles, the market will have no hope left. The sideline cash will be in the market and it will fail quickly. Where we end is unknown since most of this has never happen before. Yes I am including 1933.
Yes, a speculating pony applying what I have learned. To bad I only have a little knowledge to offset big guesses.
Becky's Buffett not doing well
i wonder what the mark looks like on that Put he wrote for $4billion.
Byz - no do Japanese. Barely do English. Hanyu my thing.
Misean - thank dog someone got the joke.
CC
That was a mipaste. =)
Nova: Speculatin' Pony:
So, figure in that they can run on fumes for awhile. That puts the first big wave around early Spring. That in turn feeds back into commercial real estate.
Yeah. IMO another big "wave" coming up and there may thus be some notable non-auto implosions before / around xmas, as many people have been running on fumes of various sorts for a while.
The American stock markets are nothing. I still find it awe-some that the Dow is now above the Nikkei. Buy and hold they says, buy and hold...
Comrade Counterpointer(Excellent) writes:
Byz - no do Japanese. Barely do English. Hanyu my thing.
Ahh, assumed it was Chinese. I just see placeholders for the chars so can't really tell.
Don't feel so bad you've got some company. I bought C, GE, GS, WFC and BOA in the last 1/2 hour of trading.
Octavio Richetta
nice... you only needed 28 more minutes of patience for the scoop.
i give that a solid 9.5 performance.
Byz - you not on a Mac?
Anyhow it's all kanji.
But the gag is still the same: who speaks zhongwen? No one. They speak hanyu. They WRITE zhongwen.
CC
96 bottles of Yen on the wall
96 bottles of Yen
If one of those bottles should happen to fall
95 bottles of Yen on the wall...
Monkey says pig is getting restless.
Comrade Counterpointer(Excellent) writes:
Byz - you not on a Mac?
CF-29 toughbook.
But the gag is still the same: who speaks zhongwen? No one. They speak hanyu. They WRITE zhongwen.
That's cool. I don't savvy any of the asian lingos. =)
Goldman Sachs forecasts that the private sectors financial balance private borrowing net of private investment will swing from a deficit of 4% of GDP in 2005 to a surplus of around 10% of GDP at the end of 2009. That means that the US private sector will go from being a net borrower to a big net saver.
The overall swing is far larger than the swing from a deficit of around 6% of GDP to rough balance that accompanied the .com crash.
setser
Oh Glod!...we're so cooked.
At least it's a dry heat.
Game over man, game over.
It won't make any difference.
We need a bigger boat.
It's not my fault.
So we just float away with the trash.
Minogs!
Just a few shots, sir.
Try and guess these sci fi movie quotes.
I'll do a $25 tip jar for the winner.
Nostrovia,
"You aren't reading your Tsun Zuh - your 'enemies' aren't Austrians - they won't do what an Austrian would do. Think like them... until the bond markets blow up 'no money' isn't a problem. Not even a 'constraint'."
This is a very interesting perspective to this whole issue, but gets into the very important issue of whether East and West can truly ever understand each other.
I can tell you from being married for 10 plus years to a Chinese woman that we still have misunderstandings that come down to the difference between how Asians and Whites think and act culturally.
And her father? No chance I will ever fully understand how he thinks. Cultural misunderstandings are very hard to overcome even with the best intentions.
Couple that with a Chinese government that is made up of both the old guard (pre 1986) and new guard and you have a government that is very hard to figure out.
How can a White person ever understand how important "face" is to an Asian and how much this can drive very important decisions.
How long did it take the Chinese to understand that the US government has multiple facets of government that can and do disagree and this is not slap in the face to Asians (who tend to govern with one voice).
Buy a nice Toshiba at Best Buy...Get the I break it you fix contracts.
I "accidently spill beer" on my laptops every 18 mos. Till they go TU, it's worked for years.
My son has one of those - the only trouble with that is we live in the 'shadow' of Best Buy (my son literally w/in a couple miles) and aren't completely blissfully ignorant of their status... I think they might be closer to the big 'tango upgrade' than a lot of us suspect... you know credit crunches couldn't possibly have a negative impact on BBY? Right?
So I've heard a lot of small talk about the Federal Reserve purchasing long term Treasuries to drive down those rates. Anything to say?
here's one in old_bruins, its a tough translation though:
whale blubbers goin to fitty clownbucks a barrell.
In the Obamanation, mandate tax on whales desire to create more blubber.
gas tax, on tap.
not a price floor, rather a price support for the dirty thirsty krill.
"The Golden Gate Bridge was a local inistiative undertaken in the mid 30's
and it was built in what, 2 years.
Hoover dam was built in much the same
time span. "
I think you are remembering some hyperbole.
American Experience | Golden Gate Bridge | Timeline | PBS
The Golden Gate Bridge began construction in January 1933, and opened to vehicles in May 1937 so construction was four years. The "Golden Gate Bridge and Highway District" which financed and planned it was formed in december 1928 and seems to have started design work pretty quick, so eight years from the creation of the organization that build it. The project had been rumbling since 1919.
This is, I think, comparable to the timeline for the construction of the new Narrows Bridge in Washington State. It was approved by voters in 1998, with design and construction starting in late 2002 and completion in early 2008. So ten years from authorization and six of construction.
Hoover Dam appears to have taken quite a lot longer than two years:
WGBH American Experience - Hoover Dam
1922: first proposals of such a dam
1928: feasibility studies of a dam.
1929: Hoover takes charge of negotiations to build Colorado River projects.
1931: Bidding opened in march and contracts awarded.
1932: River diverted (so lots of digging and temporary construction, probably lots of other pre-construction activity).
1933: First concrete pour.
1935: Filling of reservoir starts, three months later concrete pouring stops.
So from bidding to completion was four years, all of which was after the depression started. The project also was already in progress in terms of negotiation, general plans, and authorizing legislation for at least three years, and as long as nine years.
Once construction actually starts I don't think we are a lot slower than we were back then, and we haven't been in a particular hurry to "do stuff" to keep people employed.
The Empire State building was built quickly, but was it really that much faster than the projects in the skyscraper races around the world today? Dubai, etc? It was built quickly because the whole point of building things like that was bragging rights to "the tallest building".
But to get off this fluff I think you are right that big projects like that can't be short term stimuli. They take a while to start up.
I think that what I would do for a quick infrastructure stimulus is take a two phase approach.
Phase I would be a federal grant program to accelerate already approved maintenance and construction projects at the federal, state, and local levels. No review of the "value" of projects would be done as these projects have all passed such review already. The review would only be of how they could speed up or quickly expand. Phase I projects could be as simple as building and repairing sidewalks.
Phase II is another federal grant program to extend and enhance existing projects. Add luxury points to things (all that lovely detail we see on WPA era infrastructure). Build a bit bigger or further than was previously budgeted. Hopefully we are now soaking up enough money to start being a bit choosy.
Phase III is for completely new projects and things that were in early planning or just kind of on the drawing board. Things like the GG Bridge or Hoover Dam. Attention needs to be paid here to whether these things are a good idea. There may be good reasons why they were languishing.
re: Treasuries
I keep reading here about how 3-month yields are almost to zero.
It's not about yield. It's about return OF capital, not return ON capital.
Treasuries seem to me to be a very good place to reside unless and until commodities begin to show some signs of life. That may be a while, with global demand falling off already and the great unwinding only just underway.
Boise, Idaho. Preparing tommorows skinheads today.
BOISE, Idaho The mayor of an eastern Idaho town where second- and third-grade students on a school bus chanted "Assassinate Obama" after the Nov. 4 election has publicly apologized, saying there's no excuse for such behavior.
@EvilHenryPaulson
I don't know if it is true or not but a crashing market will drive up long bond, bringing yield and then mortgage rates down.
It would be one way to do it.
EHP @ 9:21
Yes, and apparently Krugman and like minded believe this is a bad thing. Lets save the debtors and screw the savers. OK, how to trade this? Buy more physical assets. Huh? Any other ideas?
Nikkei down 75% since about 10 years ago and still going down. That is frightening.
But to get off this fluff I think you are right that big projects like that can't be short term stimuli. They take a while to start up.
But the money flow for studies can be almost immediate - just not to J6P - rather to engineers & architects & such.
You confirm my understanding that Krugman is simply advocating one class [debtors] over another [savers]
It's not quite that simple. With either inflation or deflation, there is harm throughout the economy, which eventually circles around to both debtors and savers. A job loss is a job loss is a job loss, and most people in this country work for a living or depend on someone who does. Krugman believes that the total harm to the country as a whole in a deflationary situation is worse than the total harm in an inflationary situation, mostly because with inflation the job losses will be less.
And most people aren't simply "savers" or "debtors" - they are doing both - ie, they have a 401K and 20 years on a mortgage. And "savers" aren't simply plopping cash in the bank. They are "investing" in a variety of different assets, some of which will do better, others worse.
Tomorrow, no.
Beyond, yes. Every day that I make money in inverse ETFs, I get more worried that the guy who buys my shares is gonna get screwed in the end. It's just terrible.
lawn grass,
The Nikkei 225 is down 80% from 20 years ago o_0
Any guess where GS may end up at year end?
EHP,
I heard as much, but not sure if it is just rumor.
Bond Girl,
I've seen the rumor all over. Someone, somewhere with credibility started it for some reaso
Looks like it's taking less and less time for bad bear markets. Where it took 40 years from 1930 to 1970, it took 30 to the next one (2000), and now < 10 (2008)!
But with a long enough time horizon, the stock market is always the best place to be.
POIC
Having spent years in both countries, and boiling down a substantial career to its essence, I can observe this about US-China relations:
US wants love
China wants respect
Incommensurable. Just never going to happen.
Go figure what happens next. I have no idea.
CC
This is a repost, but still has legs. I think this market will be more like 1906 due to the fact that there is lots of cash out there seeking "a bottom" we will have a protracted bleed, lasting many years. nothing like the 180 days of the '29 market:
http://2.bp.blogspot.com/_H2DePAZe2gA/SPKbc9n6TxI/AAAAAAAAF-Y/xbxrr4m7u_I/s1600-h/InfDji200_0810.png
Hey....
The Treasury got the debt ceiling boosted by $700bn for TARP, but only intend to use $350bn of that for now. Which would allow $350bn for the Fed to get new Treasuries for which they could use to sell short / buy long (you can't do that with the MBS is the primary investment these days)
Cracker(Unrated) writes:
gas tax, on tap.
not a price floor, rather a price support for the dirty thirsty krill.
Not a bad idea.
.......I'm quite sure that tomorrow Dow will recover 8000 again ....Asian markets are low , reflecting yesterday's US market ... but Chinese market is pretty strong and steady.....other Asian markets will follow Chinese market rather than US one......
"Having spent years in both countries, and boiling down a substantial career to its essence, I can observe this about US-China relations:
US wants love
China wants respect
Incommensurable. Just never going to happen.
Go figure what happens next. I have no idea."
How very true CC.
Peak @ 9:30 PM
Good point, not that I like it. There is a generational issue involved. Many "older" people reduced debt as they entered retirement and weighted asset allocation on the liquid side. People like Krugman are still making a social judegment by preferring wage earners/debtors over those whose principal interest is preserving wealth. All policy which crushes fixed income returns and advocates future inflation is prejudicial against this group. They are silent, uncounted but much more numerous (and sometimes much younger) than most people assume. Who speaks for them?
Thus, as MV == PQ. Now Austrians see this as an equivalence not an equation (it is not usefull for differential equations) it is instructive. It says Money time Velocity of money flow is equivalent to Prices times Quantity produced.
Now the Fed is trying to pump M, but V is crashing due to the solvency thing. So prices fall. Liquidity ain't got nothing to do with it. Solvency does.
We are going to end up owning them (the banks) Misean via some sort of preferred stock thingie or something - we will sell treasuries and buy preferred and insolvency will be banned and what could possibly go wrong?
Oh and target 'jobs stimulus' toward the borrowers so they can do their job (borrow) - again what could backfire?
Just don't tell the bond market yet - our little secret - okay?
"Having spent years in both countries, and boiling down a substantial career to its essence, I can observe this about US-China relations:
US wants love
China wants respect
..........Yeah , Sino-American war in 2010.....very plausible, if the economy wont be recovered next year....the one and only solution for this crisis.....
rich - for every winner in the stock market, there has to be a loser, right? In other words, is there ever a win-win situation? That seems axiomatic to me.
EHP,
I was wondering where they would find the capacity, given their ahem constraints.
But it would not surprise me. They have to know that everyone is watching the long bond now (and swap spreads...), which is interesting.
I have no idea how the market would take such news, but I think it is pretty safe to say that things are getting ugly again. Which is probably why I am not taking the contrarian route nowadays.
POIC
Should I be depressed that 15 years of analysis can be summed in 6 words?
Not sure.
CC
POIC:
How can a White person ever understand how important "face" is to an Asian and how much this can drive very important decisions.
Just spend a little time around dudes from the ghetto or dirt poor hillbillies. I don't think face is that hard to "get". Not that I've got princely manners or anything, but understanding the general mechanics does not seem that hard.
Oh, great GoogaMooga, can't you hear me talking to you.
Comrade Counterpointer(Excellent) writes:
Should I be depressed that 15 years of analysis can be summed in 6 words?
Only if it's "why did I ever start this?" Presumably the "fun" is learning along the way.
If after 15 years of analytics you can't come up with a few succinct (facile?) chestnuts, you suck.
She won't answer to the wheel Capt,we're going on the rocks.
The guy who went on a killing spree had 19 real estate properties !!
Suspect in triple-slaying owned 19 properties
Peter Schiff SUCKS writes:
The guy who went on a killing spree had 19 real estate properties !!
.......excessive greed made this tragedy....
"Perhaps it was a result of anxiety"
-- Bubba Zinetti
Byz - well, I had a whale of a time. Best part was negotiating with the PLA and esp navy.
I'd have to say that lian and guanxi increasingly now sound like branding concepts from Madison Ave, rather than recognizable concepts and practices that we all deal with in life and work here anyway. Jeez, who hasn't seen a boss annoyed with public dissent, or someone seeking a job through contacts??
Anyhow, poster upthread on the Hoover Dam reminded me of this:
(it's not too early EST to start frivolous music posts, no?)
YouTube -
CC
Peter Schiff SUCKS writes:
The guy who went on a killing spree had 19 real estate properties !!
He is Asian. I guess this would be considered losing face, POIC?
Very tragic.
Sea of Storms writes:
She won't answer to the wheel Capt,we're going on the rocks.
Thanks for the laugh...
PSgirl - astute analysis - probably had a lot to do with it.
People like Krugman are still making a social judegment by preferring wage earners/debtors over those whose principal interest is preserving wealth.
Judgments like this are made all the time. And I suspect the number of people who depend on fixed income AND aren't financially savvy enough to re-arrange their assets for an inflationary scenario is less than the number of people who would be thrown out of work in a deflationary scenario.
PSgirl - no, hell, this is one of the issues, it might have been seen as defending personal or family honor. And be accepted by his family as such after the event.
Not cool at all, and criminal. But not beyond knowledge either.
CC
Comrade Counterpointer(Excellent) writes:
Byz - well, I had a whale of a time. Best part was negotiating with the PLA and esp navy.
Was this in their role as a private business owner or in their role as a security organization? I'm imagining you in some sort of Buroughsian scenario advising whose cousin needs juiced to sell STD test kits to a PLA knock shop.
I hope it was something prosaic like fire control raders. =)
radars. Jeeze I suck at this game tonight.
I'm going to have to save this "Chart of Doom" for future reference.
Inflation in 0% in '29, -3% in '30 and (!!!) -9% in '31. Given the duration of the "great depression" time series and the high value of the inflation number, the graph should be redone with real rather than nominal numbers to have any kind of validity. The net effect is that the '73 dump (a period of relatively high inflation) would look deeper, and the '29 dump will look flatter.
Cheers.
By the way, thanks CR for all of your work today. You are amazing.
Anybody else get laid off today?
What bothers me is that I work(ed) for a profitable unit of a profitable firm. I had the impression people liked me.
There is another odd twist in my story. Other parts of the firm are pissed about my departure. It appears that Subsidiary A cares less about what Subsidary B thinks than a few months ago.
Maybe the proper analogy for the current environment is the Titanic. Hindsight shows there should have been more lifeboats.
EHP
put this Nikkei chart on that Dow S and P crash chart
http://finance.yahoo.com/q/bc?s=^N225&t=my&l=on&z=m&q=l&c=
This is without any Googles, so don't laugh too much!
least it's a dry heat. ALIENS
Game over man, game over. ALIENS
It won't make any difference. umm...ALIENS
We need a bigger boat.
It's not my fault. EMPIRE STRIKES BACK
So we just float away with the trash. EMPIRE STRIKES BACK?
Minogs! STAR WARS?
Just a few shots, sir. no idea, one of the Star Wars flicks
Try and guess these sci fi movie quotes.
I'll do a $25 tip jar for the winner.
Nostrovia,
Comrade Misean is Dope | Homepage | 11.19.08 - 9:21 pm | #