# The Next Bear Phase



## wayneL (2 June 2011)

Firstly as I stated here some time ago, I'm still generally a bear, but that I didn't believe that we'd return to a bear market for quite some time.

Lat night's Dow sinkage got me thinking... I don't think we are at the cusp of a major selloff yet, despite generally poor economic conditions and last night's action, mainly because Uncle Ben's helicopter is still fueled up and on standby.

But it is IMO getting closer to being in the foreseeable future.

So how about a bit of soothsaying? When is the next bear starting?


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## Tanaka (2 June 2011)

Bonds up, S&P500 down. We are in a bear market right now! Nothing can save the US economy now (maybe I have been reading too much zerohedge.com). I challenge anyone to find me an economic metric on the US that has substantially improved since the GFC. Things are worse for the US now than during the GFC, I’d go so far to say we never left the GFC. This is the second wave down baby. Hope you find your life preserver b4 the ship sinks. :holysheep:


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## ginar (2 June 2011)

Tanaka said:


> Bonds up, S&P500 down. We are in a bear market right now! Nothing can save the US economy now (maybe I have been reading too much zerohedge.com). I challenge anyone to find me an economic metric on the US that has substantially improved since the GFC. Things are worse for the US now than during the GFC, I’d go so far to say we never left the GFC. This is the second wave down baby. Hope you find your life preserver b4 the ship sinks. :holysheep:





too many bears around , makes me start thinking like a bull . old rene had it right , buy in gloom and sell in boom , in my time frame its looking gloomy ... nudge nudge wink wink


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## mr. jeff (2 June 2011)

Tanaka said:


> Bonds up, S&P500 down. We are in a bear market right now! Nothing can save the US economy now (maybe I have been reading too much zerohedge.com). I challenge anyone to find me an economic metric on the US that has substantially improved since the GFC. Things are worse for the US now than during the GFC, I’d go so far to say we never left the GFC. This is the second wave down baby. Hope you find your life preserver b4 the ship sinks. :holysheep:




I'll give you a good metric. The exchange rate of the US dollar. They can afford to export again. Might be cynical, but it has definitely changed for their better.
What if they just raise the debt ceiling and go to QE3 ? Do they have a choice in this ? They can't default and they can't just say "well we tried.... now we are going to face reality" they can just debase their debt a bit more, much easier on the people.

Alternatively, maybe they could bring all their military home, send them in to the investment banks and take all that gold and cash in the interest of national security. I swear Bin Ladens second in command is in Goldman Sachs vaults. and accounts. 

Sorry.


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## Tanaka (2 June 2011)

mr. jeff said:


> I'll give you a good metric. The exchange rate of the US dollar. They can afford to export again.




Good point mr. jeff 

I'll rephrase, find me a good metric that has substantially improved since the GFC that hasn’t been unethically manipulated :


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## Glen48 (2 June 2011)

Every USA family owes just under 700K, Ben will wait until the Dow tanks and say I told you so and bring on printing pumps 104% with throttle up.

There  is no rush to buy back in after all the last depression took 27 years to get back to 1930 levels and this one will be worse than 30's.
 Thanks to the net we can keep up with World news and get bad news on time and most know about the last depression and will be aware of what a depression is all about.
The Chinese bubble is about to pop very soon and take out all the commodity producing countries.


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## Wysiwyg (2 June 2011)

Glen48 said:


> There  is no rush to buy back in after all the last depression took 27 years to get back to 1930 levels and this one will be worse than 30's.



You're not driving taxis in Manilla are you.  

I don't see the up trend getting too far off track. Bear trap at the worst I reckon (hope).


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## Tanaka (2 June 2011)

Has everyone seen this site? 

http://www.usdebtclock.org/


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## drsmith (2 June 2011)

Can't have a bear thread without a contribution from Marc Faber.


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## sammy84 (2 June 2011)

Wysiwyg said:


> You're not driving taxis in Manilla are you.
> 
> I don't see the up trend getting too far off track. Bear trap at the worst I reckon (hope).





I'm with you here. Not enough speculative money back in the market. Volumes are still down on pre GFC average, your average Joe isn't quitting to become a day trader. We have been trading sideways now for nearly 2 years, so I can't imagine there are too many weak holders in the market. 

In my mind the XAO would need to hit about 6000 before we look for the next down leg.


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## isplicer (2 June 2011)

http://www.marketwatch.com/story/ne...6-02?mod=MWCommentaryandBlogs&mod=marketwatch


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## tothemax6 (3 June 2011)

drsmith said:


> Can't have a bear thread without a contribution from Marc Faber.



Lol, I search youtube every week for more words from Marc Faber. He is my favourite TV investor personality by far - he actually knows what he is talking about (and his accent is awesome).
The lecture he delivered to the Mises Institute was epic (and on youtube).


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## tothemax6 (3 June 2011)

isplicer said:


> http://www.marketwatch.com/story/ne...6-02?mod=MWCommentaryandBlogs&mod=marketwatch



I saw him use the phrase 'multiplier effect'. That by itself was enough to warn anybody the guy has no value as a forecaster. 
'multiplier effect' is to economics as 'skyhook' is to civil engineering, or 'stomp' is to ballet.


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## tommymac (3 June 2011)

Tanaka said:


> Has everyone seen this site?
> 
> http://www.usdebtclock.org/




I look at this site every now and again. I still get astonished by how quickly it rises.


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## Country Lad (3 June 2011)

drsmith said:


> Can't have a bear thread without a contribution from Marc Faber.




Ah yes, good old Marc - he has predicted 11 of the last 3 bear markets.

Cheers
Country Lad


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## TabJockey (3 June 2011)

I think this is the bottom, or close to, of Aus Equities. I think June wont do much but Spring is going to finally break that resistance at 5000.

Been 90% cash since March and will start buying when technical indicators start turning up.


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## Julia (3 June 2011)

TabJockey said:


> I think this is the bottom, or close to, of Aus Equities. I think June wont do much but Spring is going to finally break that resistance at 5000.



Can you outline the basis for your belief above?


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## cynic (3 June 2011)

Tanaka said:


> Things are worse for the US now than during the GFC, I’d go so far to say we never left the GFC.




GFC ?!!!

What GFC?

We haven't even touched it yet - it's still coming! 

And it's gonna be bigger than anything we've seen to date! This one's gonna be the grandaddy of all that's gone before!

(Amongst other things , I am anticipating that the DOW(n) Jones Index will drop below the 2000 level within my current lifetime.)

P.S. This post is my optimistic assessment of the situation!


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## TabJockey (3 June 2011)

TabJockey said:


> I think this is the bottom, or close to, of Aus Equities. I think June wont do much but Spring is going to finally break that resistance at 5000.
> 
> Been 90% cash since March and will start buying when technical indicators start turning up.






Market breadth  compared to historical breadth during previous lows. The reaction of stocks to bad news, has declined. I get the feeling that the market has a high concentration of sturdy holders as opposed to weak hands.


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## Intrinsic Value (3 June 2011)

cynic said:


> GFC ?!!!
> 
> What GFC?
> 
> ...




You could be right but I hope you aren't.

Thing is that if it all goes pear shaped again and some quite respected analysts are predicting just this then there will not be any capacity for bailouts.

Pump priming the economies wont be an option and that means things could get very nasty indeed.


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## skc (3 June 2011)

Intrinsic Value said:


> You could be right but I hope you aren't.
> 
> Thing is that if it all goes pear shaped again and some quite respected analysts are predicting just this then there will not be any capacity for bailouts.
> 
> Pump priming the economies wont be an option and that means things could get very nasty indeed.




I like this passage from an ex-hedge fund manager.



> Where are you going to buy proection on US government's credit? I mean, if the US defaults, what bank is going to be able to make good on that contract? Who are you going to buy that contract from, the Martians?




The book is called "Diary of a very bad year - Confessions of an anonymous hedge fund manager". By Harper Perennial. A very entertaining and informative read.


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## Glen48 (3 June 2011)

Think most yanks now realise QE1 didn't work so they tried QE2 and it didn't work and most assume QE 3+ will be the same and OZ home owners will see house prices tank and quickly sell so they don't get caught like USA or so they think.
 Buy bullets and beans


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## Synergy (3 June 2011)

XAO   4,666.60   -16.60

Looks like we've entered the devil bear phase...


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## cynic (4 June 2011)

Intrinsic Value said:


> You could be right but I hope you aren't.




Yes - this is one of those rare occasions when I'd rather be wrong.

Unfortunately, I have it on good authority that events of this magnitude will inevitably occur.


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## Intrinsic Value (7 June 2011)

cynic said:


> Yes - this is one of those rare occasions when I'd rather be wrong.
> 
> Unfortunately, I have it on good authority that events of this magnitude will inevitably occur.




There are quite a few respected analysts who agree with you.

I am holding 60 percent cash at the moment after liquidating a few weeks back.

Even if things do go bad I can afford to hold on to the good stocks I have and then take adavantage of any bargains.


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## wayneL (7 June 2011)

cynic said:


> Yes - this is one of those rare occasions when I'd rather be wrong.
> 
> Unfortunately, I have it on good authority that events of this magnitude will inevitably occur.




I agree, but after calling the last one way too early and underestimating the propensity for gu'mints to prop things up, I refuse to call a time frame.

However I am as certain as my @rse points to the ground that there is a particular deep pool of doo-doo somewhere on the road ahead and we will drive staright into it.


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## Uncle Festivus (7 June 2011)

Intrinsic Value said:


> There are quite a few respected analysts who agree with you.
> 
> I am holding 60 percent cash at the moment after liquidating a few weeks back.
> 
> Even if things do go bad I can afford to hold on to the good stocks I have and then take adavantage of any bargains.




What's the point of holding 'good' stocks when the market may well be suspended when crunch time comes? Banks & resources will be the hardest hit.

This (point of view) is interesting in that for even those who do have a balanced view of all things financial etc that what is coming is just another opportunity to BTFD, as we have been accustomed to do because we now know The Fed or their equivalent will magically hold it all together? 

But if you have a real good think about it there is no room for a severe & protracted equity or economic downturn ie the next bear phase is not 'priced' in because to actually go there is _the_ end game? There is no 'ammo' left to buy their way out of a new bear. There is even more debt now than before the GFC started. There is no self sustaining 'recovery'.

Unfortunately for us we have the last vestige of prosperity firmly aligned to a quasi capitalist/communist experiment called China, and when world trade collapses again (BDI??), highly indebted Australia will have to start counting the chooks coming home to roost.

Cash in bank won't be the same as cash in hand, and there will be no guarantee that markets will even be open for trade? Not possible? Back in 2007 was the GFC plausible? While the very same people who said all was contained and US housing was a minor aberration are still in charge ie Bernake & the banking cartel (with Goldman Sachs squid tenticles?), - how are they explaining away the recent weakness in various data?

Mean reversion for humanity?


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## KurwaJegoMac (7 June 2011)

TabJockey said:


> Market breadth  compared to historical breadth during previous lows. The reaction of stocks to bad news, has declined. I get the feeling that the market has a high concentration of sturdy holders as opposed to weak hands.




+1. Firmly agree. We've had a lot of bad news in recent months and no where near the same reactions received a year ago to similar news. Given all the bad news hanging around atm, you've got to wonder why we're still holding up as well as we are...


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## wayneL (7 June 2011)

KurwaJegoMac said:


> +1. Firmly agree. We've had a lot of bad news in recent months and no where near the same reactions received a year ago to similar news. Given all the bad news hanging around atm, you've got to wonder why we're still holding up as well as we are...




What do you think would make these folks sell?


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## KurwaJegoMac (7 June 2011)

wayneL said:


> What do you think would make these folks sell?




Nothing at all. Things look peachy all around the world :


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## IFocus (7 June 2011)

wayneL said:


> I agree, but after calling the last one way too early and underestimating the propensity for gu'mints to prop things up, I refuse to call a time frame.
> 
> However I am as certain as my @rse points to the ground that there is a particular deep pool of doo-doo somewhere on the road ahead and we will drive staright into it.




I just hope the doo-doo doesn't some how become a serious war.


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## Intrinsic Value (7 June 2011)

Uncle Festivus said:


> What's the point of holding 'good' stocks when the market may well be suspended when crunch time comes? Banks & resources will be the hardest hit.
> 
> This (point of view) is interesting in that for even those who do have a balanced view of all things financial etc that what is coming is just another opportunity to BTFD, as we have been accustomed to do because we now know The Fed or their equivalent will magically hold it all together?
> 
> ...




If it gets that bad then nothing will save us.

Maybe living on a farm where you grow you own vegetables and have chooks and cattle etc is the only real hedge against a complete meltdown of all the financial systems.

You have mentioned Australia being leveraged to China but India is also a sleeping giant and one that could mean even greater prosperity for Australia in the long term.

I am still bullish long term but in the short to medium term there could well be a GFC2 that could cause even greater hardship than the previous GFC1. 

I don't think it is going to be the end game as you put it but the hard medicine has not yet been taken and the inevitable pain will need to be delivered sooner or later.


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## LifeChoices (7 June 2011)

Let's face it no one really knows if we are going belly up or not. My personal feeling is there is a good chance that it may happen in my lifetime. Most of my time on earth has been pretty peachy, and I'm at a stage of life where I'm feeling pretty bearish.

What I'm interested in is: when some of you say the world is going to end, things will never be the same again, etc -  and you put your views on a public forum and tell other people what you think - does it make you feel better when you do that?

Are you bearish guys:

1. just spruking to help the rest of us plebs deal with the future or
2. hoping we all fail and drown, so you can stand above us and say "I told you so" or
3. just pessimistic people


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## Wysiwyg (7 June 2011)

Intrinsic Value said:


> I don't think it is going to be the end game as you put it but the hard medicine has not yet been taken and the inevitable pain will need to be delivered sooner or later.



You posted some sense and I am wondering what type of pain you believe will be delivered? For example house price crash or manufacturing severely affected or diminished resource demand and the resultant unemployment rise?


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## cynic (8 June 2011)

LifeChoices said:


> What I'm interested in is: when some of you say the world is going to end, things will never be the same again, etc -  and you put your views on a public forum and tell other people what you think - does it make you feel better when you do that?
> 
> Are you bearish guys:
> 
> ...




All of the above!


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## Aussiejeff (8 June 2011)

KurwaJegoMac said:


> Nothing at all. Things look peachy all around the world :




Yup.

DOW *UP* 25% in last 12 months to-date. This during a time when manufacturing & employment have barely improved. 

Seems dem speccies must know somefink da rest of us don't! 

Either that, or their speccy dream is about to turn into a nightmare...

Oh well, best not be negative. 

Party on....


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## Tysonboss1 (8 June 2011)

drsmith said:


> Can't have a bear thread without a contribution from Marc Faber.





Or a comment from Buffett,


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## wayneL (8 June 2011)

Interesting comments from the Oracle. But we must acknowledge that Warren is not known for prescience, just recognizing value when it appears. Also as he is quite elderly now, his outlook may be jaundiced by his own limited time-frame.

Doesn't mean he's wrong, just some thoughts.


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## trainspotter (8 June 2011)

Invstopedia states "Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in."

Which seems pretty damn obvious to me.


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## Tysonboss1 (8 June 2011)

wayneL said:


> Also as he is quite elderly now, his outlook may be jaundiced by his own limited time-frame.




Age can be a  strength in investing and economics due to the fact the both knowledge and experiance is cumulative. One of Warrens key strengths is the knowledge base that he has built up over the decades, Combined with the fact that he doesn't pretend to know the unknowable.


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## Wysiwyg (20 June 2011)

Have to concede this bear phase is looking to drag on like some boring 2 a.m. black and white movie. 
	

		
			
		

		
	



	

		
			
		

		
	
 Thanks o.p. for letting us in on the know.


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## skc (20 June 2011)

Tysonboss1 said:


> Or a comment from Buffett,





That buffet interview was done back in July 2010...things may have changed a bit since?


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## Tysonboss1 (20 June 2011)

skc said:


> That buffet interview was done back in July 2010...things may have changed a bit since?




Like what?


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## Uncle Festivus (21 June 2011)

LifeChoices said:


> Let's face it no one really knows if we are going belly up or not. My personal feeling is there is a good chance that it may happen in my lifetime. Most of my time on earth has been pretty peachy, and I'm at a stage of life where I'm feeling pretty bearish.
> 
> What I'm interested in is: when some of you say the world is going to end, things will never be the same again, etc -  and you put your views on a public forum and tell other people what you think - does it make you feel better when you do that?
> 
> ...




#1 please. Couldn't care less about 2, optimistic about my own financial future......

It's simple mathematics and a confidence game really. You can try to understand what's going on or just believe that a a group of fellow human beings with little more than currency printing presses will eventually be able to save us.

And no, it doesn't make me feel any better for it, but I can't stand by and read post's which are just as bullish, usually prefaced with the words 'I hope' and based on little more than a guess rather than some solid data.

These black swan events can be calculated to an extent - it has been calculated when Japan will no longer be able to rely on domestic savings to fund their deficits and will have to go cap in hand to the rest of the world - 2016. That was before the earth quake and tsunami so that date is probably a lot sooner now. Etc etc 

Ditto for the worlds largest economy - income is not greater than expenses, and will never be unless the obese citizens start to live within their means ie substantial lowering of living standards - something which no politician is willing to take the blame for. 

Some tips - get educated, look past the 'expert' opinions on data and the excuses they have for why it's not meeting expectations eg the weather etc,. Find out what GDP is. Find out what money is. Find out who controls it and where it ends up etc


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## wayneL (5 August 2011)

wayneL said:


> Firstly as I stated here some time ago, I'm still generally a bear, but that I didn't believe that we'd return to a bear market for quite some time.
> 
> Lat night's Dow sinkage got me thinking... I don't think we are at the cusp of a major selloff yet, despite generally poor economic conditions and last night's action, mainly because Uncle Ben's helicopter is still fueled up and on standby.
> 
> ...




I can hear Uncle Ben's fleet of Iroquois' starting up from here.


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## builder2818 (5 August 2011)

They said the XJO should be trading at around 5500 points by the end of year. Does this mean the 'experts' have got it wrong?

Hahaha........who is going to bail the governments of the world out now they have exhausted themselves bailing others out?


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## Aussiejeff (5 August 2011)

builder2818 said:


> They said the XJO should be trading at around 5500 points by the end of year. Does this mean the 'experts' have got it wrong?
> 
> Hahaha........who is going to bail the governments of the world out now they have exhausted themselves bailing others out?




_Remember this day in history_ - *4th Aug 2011*.

The day GFC II "officially" began.

Watch in awe as the good ship "Ozecon" flounders in a sea of red today. Man the lifeboats!! Abandon ship before the close of trade (lest more horror is visited upon the Dow tonight)!!!

Now, amongst all the Bullhype over the last few weeks, who woulda thunk it possible?

Talk about chickens coming home to roost. Expect Juliar to broadcast to the Nation shortly with soothing words such as "our economy is strong & we WILL return to surplus in 2013". Haw, haw, haw!!! Bank guarantees announced next week, anyone?



A bit of data fer y'all... 







> *The VIX, as the Chicago Board Options Exchange Volatility Index is known, jumped 35 percent to 31.66 at 4:15 p.m. in New York, the highest level since July 2010 and the biggest rise since Feb. 27, 2007.* The index measures the cost of using options as insurance against declines in the Standard & Poor’s 500 Index, which fell 4.8 percent and had the biggest nine-day drop since the March 2009 start of the bull market.
> 
> *“It’s fear,” Luke Rahbari, a VIX options trader at Stutland Equities LLC in Chicago, said in a telephone interview. “There’s definitely a lot of uncertainty in the market, whether you want to talk about European banks, European sovereign debt, slowing growth in the U.S.” *
> 
> Global stocks had their biggest one-day rout since March 2009. A measure of global equities fell 10 percent from this year’s high in May, entering its first correction in more than a year, amid concern about a recession. The MSCI All-Country World Index of stocks in developed and emerging markets slid 4.3 percent to 310.94, falling 13 percent from its May 2 high.



http://www.bloomberg.com/news/2011-...arch-as-economic-data-pushes-down-stocks.html


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## wayneL (5 August 2011)

Time to recycle some of my favourite cartoons?


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## Aussiejeff (5 August 2011)

wayneL said:


> I can hear Uncle Ben's fleet of Iroquois' starting up from here.




*coff, splutter*

Wot's that? Outta gas????


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## Aussiejeff (5 August 2011)

wayneL said:


> Time to recycle some of my favourite cartoons?
> 
> View attachment 43840




LOL

I did notice my monitor was a bit furry round the edges this morning....


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## Aussiejeff (5 August 2011)

Maybe Coles knew something when they decided to release their *"Down, down, prices are down"* jingle ads!


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## skc (5 August 2011)

Aussiejeff said:


> _Remember this day in history_ - *4th Aug 2011*.
> 
> The day GFC II "officially" began.




I would have picked Tuesday 2 Aug as D-Day for its theatrical value.



builder2818 said:


> They said the XJO should be trading at around 5500 points by the end of year. Does this mean the 'experts' have got it wrong?
> 
> Hahaha........who is going to bail the governments of the world out now they have exhausted themselves bailing others out?




There is a rumour that the Martians are thinking of bailing us out.

There is also a rumour that the XJO will do a 2-for-1 consolidation, so the 5500 is still on target for the end of the year.



wayneL said:


> Time to recycle some of my favourite cartoons?




Where's that thread showing despite traders on the floor?



Aussiejeff said:


> Maybe Coles knew something when they decided to release their *"Down, down, prices are down"* jingle ads!




I am wearing my big red foam hands today while trading.


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## Aussiejeff (5 August 2011)

> =Aussiejeff - Expect Juliar to broadcast to the Nation shortly with soothing words such as "our economy is strong & we WILL return to surplus in 2013". Haw, haw, haw!!! Bank guarantees announced next week, anyone?




Gee, already? Swaneee jumped the gun.. must be very worried... 







> FEARS of a global economic recession are climbing as a dramatic fall on Wall St sparks a worldwide sell-off response, but Australia is in a relatively strong position due to strong fundamentals, according to the Federal Treasurer.
> 
> Treasurer Wayne Swan has moved to soothe investors' nerves amid plunging global share markets, saying Australia is a world apart from the situation in Europe and the United States.
> 
> ...



http://www.heraldsun.com.au/news/br...opean-us-decline/story-e6frf7ko-1226108933381

See?Sunshine 'n Lollipoops all round! Buy, buy, buy!!!


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## Uncle Festivus (6 August 2011)

> Treasurer Wayne Swan has moved to soothe investors' nerves amid plunging  global share markets, saying Australia is a world apart from the  situation in Europe and the United States.




Yes, luckily we can survive thanks to one of the most stable & transparent economies in the world - China, who apparently don't trade at all with either Europe or the US???


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## Aussiejeff (8 August 2011)

Bears will rejoice over this news - arguably what could be the final nail in the Obama Mis-administration's bulging coffin...



> *Treasury Secretary Timothy F. Geithner, a central figure in the U.S. government’s bailouts of Wall Street banks and efforts to raise the debt limit, told President Barack Obama that he intends to remain in his job. *
> 
> Geithner, 49, will stay on at least through the 2012 election, according to an administration official who was not authorized to comment publicly.
> 
> *Geithner, the last remaining member of Obama’s original economic team*, made his announcement after months of speculation over his future. He told White House officials this year that he was considering leaving once a deal to raise the nation’s borrowing limit deal was reached. Obama signed an increase in the limit on Aug. 2.




http://www.bloomberg.com/news/2011-...to-stay-in-his-job-as-treasury-secretary.html

Maybe this is the galling news that has spooked the overnight US futures to *-259*!!


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## Aussiejeff (8 August 2011)

> *Standard & Poor have shown a "stunning lack of knowledge" in their unprecendented decision to downgrade the US credit rating, says US Treasury Secretary Timothy Geithner*.
> 
> "I think S&P has shown really terrible judgement and they've handled themselves poorly, and they have shown a stunning lack of knowledge about basic US fiscal budget math and I think they came to exactly the wrong conclusion," Geithner has said in an interview with NBC News.



http://www.news.com.au/business/mar...ts/story-e6frfm30-1226110570466#ixzz1UOAQnnp9

Keep it up, Timmy. Your sour-grapes petulance will be rewarded, I'm sure...


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## Aussiejeff (19 August 2011)

With so many exchanges worldwide having banned short selling after the last downward plummet all of a week or so ago, pray tell where will the quick market bounce that used to result from shorts covering their positions (ie booking the profits) come from now? 

Outta some smart-ar$e political bum$?



PS - US futures *-491* - and counting....


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## tech/a (19 August 2011)

So are you shorting indexes.?


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## Aussiejeff (19 August 2011)

tech/a said:


> So are you shorting indexes.?




Not this little black duck! 
No tech, I'll leave that to those with the brains and/or desire to live that vicarious day-to-day rollercoaster existence.
I lost the stomach for day trading post GFC1 when I woke out of a daze, looked in the kitty and the cupboard was almost bare.... 

Cheers and good luck!

aj


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## MR. (19 August 2011)

Uncle Festivus said:


> Yes, luckily we can survive thanks to one of the most stable & transparent economies in the world - China, who apparently don't trade at all with either Europe or the US???




Now, now I sense the start of rumours there UF.  As if, China’s major export partner/s. Ha ha.….. China ain’t dat silly neither are we or da markets…. As if all those Chinese factories and major container export facilities had Europe or the good ol' US of A in mind ! :nono:

“Don’t worry there Rose, I have built you a good ship,  we are the sole supplier for China’s endless thirst of commodities.â


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## Uncle Festivus (28 May 2014)

Are we there yet?

Or, let's see what happens when lot's of people get lot's of margin calls?


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## Wysiwyg (28 May 2014)

Uncle Festivus said:


> Are we there yet?



No. Soon?


> Or, let's see what happens when lot's of people get lot's of margin calls?



Interestingly there has been no market decline to coincide with this supposed peak in margin lending as there has been previously. 

 Future could be :-
a) market continues moving sideways
b) market goes onto higher highs
c) market falls away somewhat more than recent minor corrections

Does probability follow chart pattern?


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## Uncle Festivus (29 May 2014)

Wysiwyg said:


> No. Soon?
> Interestingly there has been no market decline to coincide with this supposed peak in margin lending as there has been previously.
> 
> Future could be :-
> ...




The decline in the market is about 4-5 months after the margin peak, so taking the Feb margin top then June/July would be the start?? 

Wonder why nobody ever talks about the elephant in the room - oil -  as having a major negative impact on the global economy? Boiled frog syndrome?


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## Knobby22 (29 May 2014)

I don't think we can have a real crash yet.
Firstly the market is still dominated by traders. Plenty of people on short trades.
Secondly we haven't had a real bull market yet, no real exuberance. 

I don't believe there will be a crash before 2016.
If the market did fall back it would just be a flattening, not a decent crash. It needs more time.


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## Uncle Festivus (9 June 2014)

Another view of stretching rubber bands....& inevitability?


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## Wysiwyg (9 June 2014)

Uncle Festivus said:


> Another view of stretching rubber bands....& inevitability?



Looking for the greater fools right now.


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## Faramir (9 June 2014)

Does this article titled "Five reasons to be wary of the markets" in ABC news reinforce the above graph.

http://www.abc.net.au/news/2014-06-...-wary-of-the-markets/5509068?section=business

Maybe an EFT (that I was thinking of) is not a good idea after all???


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## DeepState (10 June 2014)

Uncle Festivus said:


> Wonder why nobody ever talks about the elephant in the room - oil -  as having a major negative impact on the global economy? Boiled frog syndrome?




Just FYI, although I am interested in your thoughts.

This is the inflation adjusted price of WTI Cushing.  Current prices are pretty flat relative to 2006 levels:





The "Total Gasoline & Other Energy Goods" component of PCE from NIPA is about 3.5% of total expenditure.


In the last year, much of consumption growth has arisen from the oil intensive components:


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## sydboy007 (10 June 2014)

DeepState said:


> Just FYI, although I am interested in your thoughts.
> 
> This is the inflation adjusted price of WTI Cushing.  Current prices are pretty flat relative to 2006 levels:




I think the flat oil price says more than the fact spending on new cars is up (relatively)

After rising for decades, total vehicle use in the U.S. ”” the collective miles people drive ”” peaked in August 2007. It then dropped sharply during the GFC and has largely plateaued since, even though the economy is recovering and the population growing. The Federal Highway Administration reported vehicle miles travelled during the first half of 2013 were down slightly, continuing the trend.

Even more telling, the average number of miles drivers individually rack up peaked in July 2004 at just over 900 per month. By July of last year, that had fallen to 820 miles per month, down about 9 percent. Per capita car use is now back at the same levels as in the late 1990s.

Possibly the new car sales is helpimg via improved efficiency, but then the New York Times haas some telling info on how the recovery has bypassed the majority of workers in the USA:

http://www.nytimes.com/2014/06/07/upshot/good-news-on-jobswhy-arent-we-happier.html?src=twr&_r=2

_And consider wages. The average private-sector worker took home $838.70 a week in April. In January 2008, if you use April 2014 dollars, that was $818.31. In other words, in the last six and a half years, the average private-sector American worker has seen a total inflation-adjusted pay increase of only 2.5 percent, a lousy $20 a week._

Negative real interest rates, falling real wages, I can understand why they're driving less.


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## sptrawler (10 June 2014)

sydboy007 said:


> I think the flat oil price says more than the fact spending on new cars is up (relatively)
> 
> After rising for decades, total vehicle use in the U.S. ”” the collective miles people drive ”” peaked in August 2007. It then dropped sharply during the GFC and has largely plateaued since, even though the economy is recovering and the population growing. The Federal Highway Administration reported vehicle miles travelled during the first half of 2013 were down slightly, continuing the trend.
> 
> ...




Good point Syd, over the same period our average wage has gone from $850/wk to $1100/wk about 30%.


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## Uncle Festivus (10 June 2014)

DeepState said:


> Just FYI, although I am interested in your thoughts.
> 
> This is the inflation adjusted price of WTI Cushing.  Current prices are pretty flat relative to 2006 levels:




It certainly is a story of _real_ prices and relativity. If you had included the data pre the start of your chart it would have shown prices far lower than the $100 average or so. So when you add in stagnant real incomes, oil at $100 is a major 'drag' on the US economy, yet they still wonder why they can't achieve 'escape velocity' from the GFC Depression?



> The Sentier Research monthly median household income data series is now available for April. The nominal median household income was down $84 month-over-month and up only $1,420 year-over-year. Adjusted for inflation, it was down $222 MoM and only $409 YoY. The real numbers equate to a -0.42% MoM decline and a 0.78% YoY increase. *In real dollar terms, the median annual income is 7.6% lower (about $4,383) than its interim high in January 2008*.




The bottom line is that nominal data is not showing the real story (pardon the pun)ie it's actually a lot worse than the stock indices exhuberance would indicate?

Storm Clouds
I see several data set's (long term averages) rolling over now. 
The Fed taper will soon have an effect. 
Interest rates simply cannot rise without junking a lot of companies who used cheap funds to goose earnings through reducing the free float of shares and paying divs from debt etc. 
The Corporate house flippers have hit the yield wall, in fact are starting to offload already
The student loan bubble
Consumer credit at new record high
more..........


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## brty (10 June 2014)

RY,



> This is the inflation adjusted price of WTI Cushing




WTI for delivery at Cushing Oklahoma has not been a true indication of oil prices because it is the land locked hub where much of the Canadian oil sands and N Dakota Bakken oil have been sent. There are price distortions in the WTI price because of this. 

Using Brent prices are more indicative of overall world oil price. It would be interesting looking at the same inflation adjusted graph for Brent from 1998. I believe such a graph would support UFs statement....



> Wonder why nobody ever talks about the elephant in the room - oil - as having a major negative impact on the global economy? Boiled frog syndrome?


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## DeepState (10 June 2014)

Uncle Festivus said:


> It certainly is a story of _real_ prices and relativity. If you had included the data pre the start of your chart it would have shown prices far lower than the $100 average or so. So when you add in stagnant real incomes, oil at $100 is a major 'drag' on the US economy, yet they still wonder why they can't achieve 'escape velocity' from the GFC Depression?
> 
> 
> 
> ...




Thanks Uncle.  This is great.

There are always risks.  I'm not going to debate these with you...largely because I agree they are real (pun again!).  People's opinions will vary on the weighting, I guess.  It would be a complete freak if I weighted them the same as you.  But I'm not here to convince you of anything.  Just wanted to whack up some observations and exchange views.  Hope that's ok.

The inflation adjusted oil price for earlier years was certainly below the 2006 figure.  But the economy grew nicely (too quickly? Unevenly?) despite it.  From 2006 to now, a period of 8 years or so, the real oil price has been fairly stable and thus it seems unusual to claim that it is a drag  because it has not actually increased materially.  If you are saying it's just damned high...then I'm in agreement and a lower price would stimulate demand.  But a static (real price) would not generally be regarded as a drag to GDP which is a change in production in real terms.

In relation to the median income...that absolutely reflects the hollowing out of the US middle class.  But there is also the concept of average which brings this figure right up. And, in any case, when unemployment was so high, why is it surprising the median household income drops? People within families lost jobs or went part-time. As the rate of unemployment is dropping towards the NAIRU, we would expect to see this rise. 

You can see the PCE components and these are growing in heavy oil consuming areas so the relationship between oil and consumption as proposed doesn't seem to play out.

Check this out.  It's a chart showing real Personal consumption growth together with the consumer confidence index.  Both are recovering and I would hazard a guess that a lot of it has to do with an improvement in labour market conditions across a whole swathe of areas.  I am hopeful that we do not see consumption growth reach the level prior to the GFC...that was very credit driven as you clearly know.  With high debt loads (as you have pointed out), that type of growth rate is probably not feasible anyway..for private consumers.  For companies, hmmm. 





And this....from Bullard of St Louis Fed.  Shows a polar graph of the labour market conditions and highlights that the market is moving back towards the good ol' days from the depths of despair.




GDP growth (saar) for the rest of 2014, 2015 and 2016 are expected to be above 3% per annum according to Fed dot point forecasts and surveys of professional forecasters.  This is above any concept of escape velocity, particularly when long term potential growth is only 2% per annum.

Is the market overvalued?  Yeah.  But the thing just keeps on going and going.  What might we be missing, do you think?


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## Smurf1976 (10 June 2014)

Am I the only one who has spotted that the real oil price is basically a wedge?

My explanation - maximum price the economy can support without falling in a heap isn't rising to the extent that production costs are rising. The two lines are about to cross - then what? 

The cost of production won't likely drop, indeed it seems that the shale "boom" is already petering out to some extent because prices haven't risen quickly enough to sustain it. So either we get higher prices that are sustained, someone decides to take a financial hit and accepts minimal returns from oil field development, or we get less production of oil. Suffice to say that should this latter scenario occur, well then it's likely to be the single biggest "tipping point" that you or I will live through since it would signal what many have long predicted - an all time peak and decline in production is upon us.

My thought is that we're probably not at the point of a peak in production yet, but that we are likely at the point of a peak in consumption in "developed" countries. 

*The developed countries, in general, use oil far less efficiently at the margin than do developing countries. 

*Real incomes in developed countries are, in general, not going up to any great extent whereas they are rising rapidly in some large, lesser developed regions.

In short, China and others will be able to outbid American motorists and other large volume / low value consumers for an increasing share of the available oil. If you have a growing economy and a small, efficient engine and are using that oil to produce an income then that's one thing. Completely different if your real income is declining and you've got a V8 that you drive for pleasure. The latter will decline in order to make way for more of the former.

Price rises modestly in nominal terms, production remains roughly flat at best, China imports more oil, countries like the US cut consumption effectively making way for the likes of China. That's pretty much where we've been recently, the only thing that's changing is that the slightly rising price and slightly rising production seems likely to give way to a faster increase in the price and flatter production, thus accelerating the trend of declining consumption in some countries.


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## DeepState (10 June 2014)

brty said:


> RY,
> 
> 
> 
> ...




My observations were clearly related to the US only and UF has seen that and returned observations along those lines.

Further, here is a graph showing Brent vs WTI:




Notice:

1. Brent and WTI have converged.  I am not going into any depth about reasons.  It should be clear the market reacts to such gaps.

2. Brent came from above WTI in the post-crisis period of the GFC, from around when the banking rupture of the Eurozone grew to become acute and had to be stopped by whatever it took and QE2 ended.  UF's statement about elephants in the room, given the context of his discussions, related to lack of take-off due to the drag of oil.  When an input comes from above...it helps growth rates.  As oil prices decline, actually, amazingly, higher growth is supported. Brent declined in real and absolute terms (in USD, with - very hopefully - obvious implications for other localities). At divergence to your assertions/speculations/..., this is not supportive of UFs argument on a world scale.  It actually diminishes it relative to the observations drawn from WTI for the US context and beyond.  Further, the prices have converged and have become irrelevant in any case.  

If UF meant for his observations to go back eight years or so which is  very long period to be talking about headwinds from oil especially given strong growth leading into 2008, my statement about real oil prices in 2006 are similar to current levels is accurate and could be taken to refer to either WTI or Brent. It is a wash.  If UF means to go back further than that, WTI traded in line with Brent and neither supports UF's view more than the other.

The convergence has occurred, at least partly, because the US is increasingly moving towards energy independence including energy drawn from the same areas that caused the imbalance between WTI and Brent in the first place:


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## DeepState (11 June 2014)

sptrawler said:


> 1. what I can't understand is, everyone said inflation would take off with money printing. It didn't.
> 
> 2. So why can't the Fed remove money, in a controlled manner, as the economy picks up?
> 
> 3. If anyone had told me, Jeep Grand Cherokees would outsell Toyota Landcruisers and Prados, in Australia. I'd have told them they were dreaming, but they are.




1. Much of the money that was "printed" is created when the Fed and others (it operates differently in some cases like the ECB..which has not printed as yet) buys high quality assets like government bonds (I'm not actually joking), depositing electronic money into the appropriate accounts of the buyer. It's very reasonable to think of it as buying bonds on eBay and getting funds into your bank account via BPay.

The idea behind that was to encourage spending and investment.  But much of the money paid to the banks never left the central bank at all.  It just sat there.  So a powerful transmission mechanism never got started.  What did get traction was the fact that the interest rates lowered and this stimulated the economy by making projects cheaper to finance.

It did not lead to inflation because the additional demand created did not yet absorb the huge amount of idle capacity still in the economy, lying dormant.  This is in the form of idle factories, unemployed people etc.  Prices on these were falling in an effort to find a floor where demand would bite.  Hence the problem was more to do with deflation or disinflation than inflation.

Where printing produces high inflation is more like when they are pushing demand beyond the point where supply can adequately respond, or by printing so much that the users of currency think it is a joke and abandon it.

2. They probably will.  The next stage is to bring QE3 purchases to a halt in measured steps which will stop he balance sheet from growing.  The step after that is to normalize the Fed funds rate.  The step after that will be things like not reinvesting bond coupons and - this might be a stretch if done anything like in the next 3 years -  letting maturing bonds roll off instead of reinvesting them.  There is a chance that they will never shut this facility down in the next forty years.  This type of thing already exists on the Fed balance sheet from a bygone era.  Obviously it was smaller, but it has been done.

3. I am surprised when I am not surprised.


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## sydboy007 (11 June 2014)

an interesting chart I saw this morning.  I'm ambivalent as to whether a falling AUD is going to be a benefit or curse for us now that so much manufacturing has been lost and imports have become a far larger part of the manufacturing that's survived.

The bulk commodities chart shows how far the ToT has already turned, but there could still be a long way to go, though I expect that now a lot of new production is more expensive the floor will likely end higher that in the past.

Some analysts are still tipping iron ore juniours


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## Uncle Festivus (11 June 2014)

DeepState said:


> If UF meant for his observations to go back eight years or so which is  very long period to be talking about headwinds from oil especially given strong growth leading into 2008, my statement about real oil prices in 2006 are similar to current levels is accurate and could be taken to refer to either WTI or Brent. It is a wash.  If UF means to go back further than that, WTI traded in line with Brent and neither supports UF's view more than the other.
> 
> The convergence has occurred, at least partly, because the US is increasingly moving towards energy independence including energy drawn from the same areas that caused the imbalance between WTI and Brent in the first place:




Probably got a bit side tracked there, but for the US consumer on the street it is definately an ongoing higher expense than in the past, no matter which way it is viewed, to which I was mainly alluding to originally. Energy/oil independance does not appear to have flowed through to the bowser in lower prices so essentially means zip to the consumer? Bearing in mind that that very independance is predicated on a continued oil price above something like $90 (I recall) because it's so expensive to extract?


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## sptrawler (11 June 2014)

DeepState said:


> 1. Much of the money that was "printed" is created when the Fed and others (it operates differently in some cases like the ECB..which has not printed as yet) buys high quality assets like government bonds (I'm not actually joking), depositing electronic money into the appropriate accounts of the buyer. It's very reasonable to think of it as buying bonds on eBay and getting funds into your bank account via BPay.
> 
> The idea behind that was to encourage spending and investment.  But much of the money paid to the banks never left the central bank at all.  It just sat there.  So a powerful transmission mechanism never got started.  What did get traction was the fact that the interest rates lowered and this stimulated the economy by making projects cheaper to finance.
> 
> ...




Thanks for the explanation, appologies for side tracking the thread.


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## Uncle Festivus (11 June 2014)

sptrawler said:


> Thanks for the explanation, appologies for side tracking the thread.




It's actually very relevant - 

"The step after that is to normalize the Fed funds rate."

It's already "normalized" - they simply cant revert to any "normal" rate without the whole lot "recessionizing" again, more so companies with record debt.

There has been a structural degradation in the fed rate for several decades now in order to continually juice & goose the economy - this is the new norm?

You will also notice that nearly every time the Fed finally acted on rates it was too late and a recession ensued?


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## DeepState (11 June 2014)

Uncle Festivus said:


> 1. Probably got a bit side tracked there,
> 
> 2.  but for the US consumer on the street it is definately an ongoing higher expense than in the past, no matter which way it is viewed, to which I was mainly alluding to originally. Energy/oil independance does not appear to have flowed through to the bowser in lower prices so essentially means zip to the consumer?
> 
> ...




Hi Uncle

1. Yeah.  Let's keep it focused to real world issues.


Oil price hikes have been implicated in just about every major recession since Yom Kippur, so I hear where you are coming from in a big picture sense.

2. If you are talking is truly historic terms, that extend beyond 15 years, no doubt about it.  My reason for raising this is perhaps the timeframe which I believe is relevant for statements about oil prices holding back growth is somewhat shorter.  As an indication, we could look at the period since 2006 where crude and gasoline stayed flat in real terms.  Or we could look at the post acute phase of GFC.  Neither of these timeframes would indicate that rising oil prices held back economic growth because oil and gasoline prices basically did not rise over that period in real terms.

FYI, here is a chart showing nominal WTI and nominal GDP for the US for the last 15 years.  Crack spreads are missing for translation to Gasoline, but WTI is light.  It shows that GDP grew fine anyway despite rising oil prices and that, in line with prior statements, is recovering to beyond take-off speeds despite where oil/pump is trading  today.





Furthermore, the PCE basket has only 3.5% of total expenditure in the form of gasoline and related goods.  In other words, material changes in oil prices like +/- 10% do not impact total consumption very much at all.  In my view, it is very difficult to make a case that static real oil prices since 2006 or 2010 posed much of a headwind to GDP recovery via the consumer channel via pump prices.  It would also be hard to make that argument over the last 15 years.

3. The additional production would include elements of the cost curve that are high. It also includes shale gas which does not immediately translate to a reduced oil price.  I guess the point of query still relates to whether oil prices have held back GDP growth in the last decade and a bit when oil prices did shoot up a lot or are preventing it from recovering.  Personally, I'm not seeing much evidence of it.  Nonetheless, that one phrase of yours prompted me to have a look.


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## Smurf1976 (11 June 2014)

Uncle Festivus said:


> Energy/oil independance does not appear to have flowed through to the bowser in lower prices so essentially means zip to the consumer? Bearing in mind that that very independance is predicated on a continued oil price above something like $90 (I recall) because it's so expensive to extract?




I very much doubt that the US will become self sufficient in oil anytime soon. If they do, it will almost certainly be due to a combination of technology moving away from internal combustion engines combined with a substantial collapse of underlying transportation demand as such.

https://images.angelpub.com/2014/24/24895/eia-tight-oil-6-10.png


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## DeepState (11 June 2014)

Uncle Festivus said:


> It's actually very relevant -
> 
> "The step after that is to normalize the Fed funds rate."
> 
> ...




Good stuff. More FYI:

No argument that pulling back from this level of stimulus is going to be hard and must proceed carefully.  First tick up in Fed Funds rate is expected in late 2015.  That's just a tickle.  The longer term equilibrium rate is expected to be 4%.  No-one is saying that rates need to get there in any hurry.  That said, with inflation moving closer to the 2% target and unemployment getting down to the NAIRU of about 5.5%, the current picture points directly to returning monetary policy to a more conventional stance.

Cash on corporate balance sheets are also extraordinarily high and now being channeled out via buy backs, dividend reinvestment etc.  At the same time, there are other firms with a lot of debt. They will have some years to get themselves in order.

On the Fed rate, it should be acknowledged that the structural down trend has a reason.  From the mid 1970s, inflation expectations went bananas due to developments in the Middle East and the Fed policy at the time was not inflation targeting.  It took Volcker to start sorting that out in 1980 and it takes years/decade for credibility in that policy to take hold given the history.  In the mid 1980s and late 1980s, there was an inflation scare (as if to illustrate the importance of maintaining credibility) and the Plaza Accord.  Since then, monetary policy has looked pretty normal until the GFC....which is thoroughly abnormal and absolutely meant to juice and goose the economy.

Monetary policy is a lagging indicator.  But they do not possess much forecasting power either.


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## DeepState (11 June 2014)

Smurf1976 said:


> Am I the only one who has spotted that the real oil price is basically a wedge?
> 
> My explanation - maximum price the economy can support without falling in a heap isn't rising to the extent that production costs are rising. The two lines are about to cross - then what?
> 
> ...




Hi Smurf

Awesome post.  Wanted to add my own thoughts, largely in support of your position.

This is the IEA forecast for oil demand.  It shows Americas flat and Asia rising.  Broadly in-line with your view:





US crude oil production from the US EIA.  US oil production peaks before too many years pass:





US oil consumption from light vehicles declines and energy mix increasingly turns to gas for power load.  The oil consumption for light vehicles needs care:





Emissions standards in the US are tightening right up.  So it is probably not correct to imagine that there will necessarily be less cars and less mile travelled just by looking at oil consumption dropping:





You can expect to see electric cars and hybrids becoming more prevalent too as the abundant gas resources in the US get channeled into electricity and then cars that use it.


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## DeepState (11 June 2014)

sydboy007 said:


> After rising for decades, total vehicle use in the U.S. ”” the collective miles people drive ”” peaked in August 2007. It then dropped sharply during the GFC and has largely plateaued since, even though the economy is recovering and the population growing. The Federal Highway Administration reported vehicle miles travelled during the first half of 2013 were down slightly, continuing the trend.




Miles travelled links very closely to employment.  You got a job, you need to get to it.  The plateau was actually a surprisingly robust outcome given declines in employment that occurred.  Even the unemployed still need to drive.  As employment, which now is past it's pre GFC peak, picks up further, we can expect the miles travelled to resume its upward path.


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## Smurf1976 (12 June 2014)

A thread titled "The Next Bear Phase" has turned into a thread about oil resources.

I see that as rather telling in itself about the oil situation. Opinions vary as to future production rates but I doubt that anyone here is expecting a return of actually cheap oil anytime soon. Regardless of the timing of an actual peak, a shift has already occurred. 

As for hybrid cars etc, yes they are a workaround of sorts to a constrained oil supply. But they're not as cheap as oil at $20 per barrel like we used to have (and still would if not for the geological reality).


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## brty (12 June 2014)

I think it is no coincidence that oil's price is high when numbers like this come out....



> U.S. May car sales jump to 1.6 million, beating expectations




from here....

http://www.reuters.com/article/2014/06/03/us-autos-sales-usa-idUSKBN0EE18L20140603

It also puts the electric and hybrid car numbers in the graph above into perspective. In the last 3 years only 200k units, yet all LV at a rate of 16.8m/a.


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## Uncle Festivus (17 September 2014)

Fed note to all holiday work experience students at market trading desks as follows - 

Do not let Dow go below blue line. Please use provided funds as necessary. Thank you - The Fed/PPT/Presidents Working Party.


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## Uncle Festivus (6 November 2014)

Slow golf clap for The Fed/PPT/Presidents Working Party - well done for the woody! Still didn't get you elected though.

But then......



> What could go wrong? Let’s begin by analyzing last week’s hollow Halloween rally:
> 
> 1. On Friday, Oct. 31, five stocks were primarily responsible for Dow’s advance. The previous day, Visa V, +2.58%   had accounted for around 123 points of the 221-point rally. Take away Visa and the rally was a lot less impressive.
> 
> ...




http://www.marketwatch.com/story/th...-is-for-suckers-2014-11-05?link=mw_home_kiosk


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## Uncle Festivus (30 May 2015)

Another record for margin debt, another 1000 points for the Dow.....






> It’s not just margin debt that hit a record high. Investor net worth, which is the inverse, or investor cash and credit balances less total margin debt, just dropped to ($227 ) billion, a new record low, meaning not only is the amount of investors leverage at an all time high, but investor net worth is also at an all time low.
> 
> Why? Because there is one more thing that is at record highs. As we showed a few days ago, complacency has also never been higher now that market participants enter what Deutsche Bank dubbed the Mania phase of the market cycle.


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## Uncle Festivus (9 October 2015)

Looks like the market got it's way after the hissy fit 'correction' - way to bully your local central bank, deliberately tank the market?

But then again, there was never to be any rate hike, probably not in the near future either - the system is broken and only a fully fledged recession will fix it?

Now the idiot's are ramping again in a self fulfilling surge higher, despite the deteriorating fundamentals.

I think a lot of the smaller sheeples were taken out with the flash crash and rehearsal 'correction' in August, leaving only the hedge and bigger manipulators, sorry, dealers to make this market. 

Humans never learn. It's gonna be ugly......


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## Wysiwyg (9 October 2015)

Uncle Festivus said:


> Looks like the market got it's way after the hissy fit 'correction' - way to bully your local central bank, deliberately tank the market?



 The wind has certainly changed for the time being. It seems to me illogical to sell out of the share market so desperately on a possible small interest rate rise. Other data is forming that is yet to manifest to us not privy.


----------

