# Where are all the bears now?



## Tyler Durden (16 December 2012)

I remember it wasn't too long ago that there was all this talk about Greece leaving the Eurozone, Spanish banks defaulting, the US debt ceiling getting higher and higher, and more and more job cuts were happening in Australia.

All those things haven't changed much since they first arose, yet over the last six months the XAO has kept rising and rising, see chart:




Does anyone have an explanation for this? 

Also, back then, around April/May 2012, there were a lot of bears talking down the market, talking gloom and doom, but those voices seem to have disappeared somewhat. I'd prefer to enter the market at around 4000-4200, but does anyone think the market currently is undervalued?

I am still a bear because I believe those global issues remain a serious concern, but seems that the market doesn't care. So am I the only bear at the table?


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## medicowallet (16 December 2012)

I am still a bear, and resisting the temptation to come out of hibernation due to artificially low interest rates.

imo keep interest rates moderate to stifle the housing market whilst the mining sector is still relatively strong, rather than run the risk of losing both.


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## Julia (16 December 2012)

medicowallet said:


> I am still a bear, and resisting the temptation to come out of hibernation due to artificially low interest rates.
> 
> imo keep interest rates moderate to stifle the housing market whilst the mining sector is still relatively strong, rather than run the risk of losing both.



+1.  I don't think it's enough to explain all the gain in the XAO, but falling interest rates will have driven many back in.


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## So_Cynical (16 December 2012)

The market does what it does, up and down and on and on.



			
				Tyler Durden said:
			
		

> around April/May 2012, there were a lot of bears talking down the market, talking gloom and doom, but those voices seem to have disappeared somewhat. I'd prefer to enter the market at around 4000-4200, but* does anyone think the market currently is undervalued?*




While the market may well be undervalued now, back in April/May 2012 it was great value, everything i bought back then has gone up...anyway we are due for a little down leg soon, i am very reluctant to buy into this top.


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## ROE (16 December 2012)

That why using macro factors to buy stocks doesn't works, by the time you see good news most stocks
has gone already ...

better to buy all weather stocks at reasonable price regardless of economic cycle.....up and down and round about you collect dividend then 10 years past it worth a lot more than what it is today 

here is something most people doesn't know...if you buy stocks that can consistently maintain dividend or grow dividend most beat everything else hand down  the longer you hold the richer you get by a significant factors...


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## tinhat (16 December 2012)

Supply and demand. I was looking at the chart for CBA this morning and wondering at what price might I want to sell; but why would I want to sell something (which I only bought fifteen months ago) that is yielding 10% before tax? Take 30% profit now or keep a 10% perpetual annuity (albeit with modest risk but also with earnings growth upside).

We are probably going to continue to see some recovery in commodity prices in the medium term. Add-in that the market is still risk-off and that there are plenty of small caps that have been hammered or underperformed that still have sound fundamentals. Now pop a Ben Bernanke QE4 cherry on top and well; I'm optimistic about the first quarter of next calendar year at least.


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## white_goodman (16 December 2012)

medicowallet said:


> I am still a bear, and resisting the temptation to come out of hibernation due to artificially low interest rates.
> 
> imo keep interest rates moderate to stifle the housing market whilst the mining sector is still relatively strong, rather than run the risk of losing both.




you didnt think divvy stocks would rise in a low rate environment as people were starved for yield?

im in for a big amount (relative to cash on hand) cos the economic playbook was laid out in front of us regardless of potential macro shocks... they refuse to let asset prices/wealth fall anymore, not politically tenable... now the deabte on whether this is economically efficient/right is another matter


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## medicowallet (16 December 2012)

white_goodman said:


> you didnt think divvy stocks would rise in a low rate environment as people were starved for yield?
> 
> im in for a big amount (relative to cash on hand) cos the economic playbook was laid out in front of us regardless of potential macro shocks... they refuse to let asset prices/wealth fall anymore, not politically tenable... now the deabte on whether this is economically efficient/right is another matter




Of course they do,

but I was taken a bit by how low they have gone.  I really think that the reserve does not realise how good it was leaving a bit of pressure on housing and consumption.


But I am still happy I haven't really purchased much recently, as unlike you, I am prepared to wait to see if the macro shocks play out.. you never know, I could be buying your shares at a discount in 12 months.


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## white_goodman (16 December 2012)

medicowallet said:


> Of course they do,
> 
> but I was taken a bit by how low they have gone.  I really think that the reserve does not realise how good it was leaving a bit of pressure on housing and consumption.
> 
> ...




i could also be selling them much higher, the same price or relatively lower... the market moves, act accordingly


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## medicowallet (16 December 2012)

white_goodman said:


> i could also be selling them much higher, the same price or relatively lower... the market moves, act accordingly




At my stage, capital preservation and the enablement of opportunities is more attractive than putting the chips on the table.

Acting accordingly depends upon what your beliefs and needs are, and I don't need to invest, and believe that holding cash now is more valuable than an exposure in either RE or shares.

MW


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## white_goodman (16 December 2012)

medicowallet said:


> At my stage, capital preservation and the enablement of opportunities is more attractive than putting the chips on the table.
> 
> Acting accordingly depends upon what your beliefs and needs are, and I don't need to invest, and believe that holding cash now is more valuable than an exposure in either RE or shares.
> 
> MW




you realise in share markets u can effectively put all ur chips on the table then remove all the chips on the table 5 days of the week?


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## young-gun (16 December 2012)

Tyler Durden said:


> I remember it wasn't too long ago that there was all this talk about Greece leaving the Eurozone, Spanish banks defaulting, the US debt ceiling getting higher and higher, and more and more job cuts were happening in Australia.
> 
> All those things haven't changed much since they first arose, yet over the last six months the XAO has kept rising and rising, see chart:
> 
> ...




There is no explanation, there is nothing going on out there to support such moves, and as said above it's largely the banking sector lifting it up. The current market is a wolf in sheeps clothing, in fact the entire global economy is. It's probably just the big hedge funds doing their usual rotation between sectors.

Just ask yourself what happened when the GFC hit, they printed money, bailed out banks, and lowered interest rates. There hasn't been any grave repercussions of these actions YET. However these steps that have been taken are going to be the same thing that brings down the house of cards.

What ammo have they got left when the next economic downturn hits? NONE. The world hasn't risen out of the last one. Printing money is the only option left. There is a US treasury bubble now that will burst in the near future(maybe 24 months). The only reason yields are so low is because other nations don't want to use their accumulated US$ to inflate their own currency, so they buy US debt. However so long as the US keeps debasing their currency nations such as china will eventually pull the pin and say no more. Yields will start to creep and the US debt will become un-serviceable.

China will eventually announce that it wants to achieve reserve status, and it will be a currency backed by gold.

The debt based fiat currency system has run it's course. It's still trying to unwind, but isn't being allowed as White pointed out above. They can't fight it forever, something has to give.

Sorry for the rant, but yes, I am still bearish and will continue to be until there is a cleansing session

JMO above*


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## white_goodman (16 December 2012)

young-gun said:


> However so long as the US keeps debasing their currency nations such as china will eventually pull the pin and say no more. Yields will start to creep and the US debt will become un-serviceable




this scenario cannot happen until China become more of a consumer economy, or else chinese exporters are in a shambles... imo 24-48 months till yields increase/china problems


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## McLovin (16 December 2012)

ROE said:


> That why using macro factors to buy stocks doesn't works, by the time you see good news most stocks
> has gone already ...
> 
> better to buy all weather stocks at reasonable price regardless of economic cycle.....up and down and round about you collect dividend then 10 years past it worth a lot more than what it is today
> ...




Exactly right.


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## young-gun (16 December 2012)

white_goodman said:


> this scenario cannot happen until China become more of a consumer economy, or else chinese exporters are in a shambles... imo 24-48 months till yields increase/china problems




They are trying to make the shift, whether it will occur on a large enough scale is another story. It's almost a race to the bottom. China also has a huge debt bubble that will need to deflate at some point. The US needs to start producing things again. Problem is it's very easy for companies to cost cut and send jobs off-shore, very difficult to bring jobs back on shore as profits would deteriorate rapidly, some may even go under in such an attempt.

I would like to think China, although it will have some big headwinds, is in a better position than the states. However with the amount of mystery that seems to shroud the Chinese economy I guess it would be hard to judge.

You may be right on the timeline, it may actually be even longer, just hard to say what the catalyst will be.


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## So_Cynical (16 December 2012)

young-gun said:


> What ammo have they got left when the next economic downturn hits? NONE. The world hasn't risen out of the last one. Printing money is the only option left. There is a US treasury bubble now that will burst in the near future(maybe 24 months).




You seem to be confusing America with the world, the world is a big place...a place where lots of growth is happening...2011 data below but still very relevant..Philippines GDP growth is over 7% this year.

http://www.delawareinvestments.com/...ile/equity-capabilities/emerging-markets.html
~


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## young-gun (16 December 2012)

So_Cynical said:


> You seem to be confusing America with the world, the world is a big place...a place where lots of growth is happening...2011 data below but still very relevant..Philippines GDP growth is over 7% this year.
> 
> http://www.delawareinvestments.com/...ile/equity-capabilities/emerging-markets.html
> ~




Let's face it though, the US/europe/china are really all that matters, with those 3 making about 50% of global GDP. I've never seen markets rally because the phillipines had a good year.


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## medicowallet (16 December 2012)

white_goodman said:


> you realise in share markets u can effectively put all ur chips on the table then remove all the chips on the table 5 days of the week?




Wow, I didn't realise it was this easy!!!   Thanks for the tip 

On a serious note, there are few who pick tops or bottoms, and I do not dare think I am one of those, but to buy from sellers under pressure has often resulted in me making money.

MW


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## So_Cynical (16 December 2012)

young-gun said:


> Let's face it though, the US/europe/china are really all that matters, with those 3 making about 50% of global GDP. I've never seen markets rally because the phillipines had a good year.




Yep and China is doing fine, US and Euro is old world, the rest is new world...The New world is doing ok.

Global GPD growth this year is all New world with the US and Euro accounting for less than 5%


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## CanOz (16 December 2012)

aye, shes been a topsy turvy market...even my trend following strat has had its ups and downs...

If it were easy, everyone would be doin' it!

As the famous fundies say...look longer term!

CanOz


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## skc (16 December 2012)

I must admit I am a bear but I am back in the market. The writing is on the wall and the status quo is being protected. While I don't think it will end well, I have to back my ability to manage the risk.

Like Zerohedge's tagline: On a long enough timeline the survival rate of everything drops to zero.

I also believe I will die one day... but it doesn't mean I shouldn't have a go at living (if the analogy makes any sense).

BTW, when the last bear turns into a bull, that's a sell signal...



So_Cynical said:


> You seem to be confusing America with the world, the world is a big place...a place where lots of growth is happening...2011 data below but still very relevant..Philippines GDP growth is over 7% this year.
> 
> http://www.delawareinvestments.com/...ile/equity-capabilities/emerging-markets.html
> ~




Probably shouldn't form a view of world growth by the size of geographical area. All the greens on Africa probably has less absolute $ growth than half a province in China.


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## oneagainstthem (4 January 2013)

Tyler Durden said:


> I remember it wasn't too long ago that there was all this talk about Greece leaving the Eurozone, Spanish banks defaulting, the US debt ceiling getting higher and higher, and more and more job cuts were happening in Australia.
> 
> All those things haven't changed much since they first arose, yet over the last six months the XAO has kept rising and rising, see chart:
> 
> ...




the trouble with being a bear in this market is that the politicians around the world are more interested in keeping the markets high to hide the fact that most of the world is skint,and they have screwed up on a massive scale, and so they keep throwing more, very cheap money at the banks who then invest it in the markets to keep themselves in a well paid jobs, which keeps the markets high and most of the people fooled,and therefore politicians look like they are doing something right, but this insanity can't last for ever and sooner or later the bills have to be paid, regardless of accounting tricks, because unlike Greece, everybody can't write off most of their debts and jump straight back into debt again,the US have only just moved the edge of the cliff,again,and they will never fall over the edge if they keep doing this, but sooner or later they will have to face the fall, and the bears will come back with a vengeance, only to be stopped with the banning of short selling. Who said the markets are not manipulated !!


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## Uncle Festivus (4 January 2013)

young-gun said:


> There is no explanation, there is nothing going on out there to support such moves, and as said above it's largely the banking sector lifting it up.




The US Fed is 'printing' $100BILLION a month that gets distributed around the globe eventually - it's gotta go somewhere even if it is into junk that has poor fundamentals. Until there is a loss of confidence in the global default currency? The irony is that if the US does get a recovery, when rates start to rise, they will be wiped out! There is no QE exit strategy.

Breaking - Fed may now end QE at end of 1013???



> Stocks swiftly dropped on the release of the minutes, and the dollar DXY +0.68% gained, signaling market participants pricing in tighter conditions than they had previously expected.
> 
> Almost all Fed members thought that the $40 billion per-month program to buy mortgage debt started in September was working, but there was also uncertainty about whether the benefits would last and that the *potential costs could rise* as the size of the Fed’s balance sheet increased.


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## Garpal Gumnut (4 January 2013)

I'm bearish. It will be short and sharp and nasty, and hopefully no silly politicians will try to "rescue".

The whole system needs a good sell off, to clean it out. Bankruptcies, arbs jumping off computers backwards on to their smartphones.

US, Japs, Euro, Brazil, Argentina, Russia, all need a good correction.

Chinese too if they were a market economy. 

gg


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## Vixs (4 January 2013)

Uncle Festivus said:


> The US Fed is 'printing' $100BILLION a month that gets distributed around the globe eventually - it's gotta go somewhere even if it is into junk that has poor fundamentals. Until there is a loss of confidence in the global default currency? The irony is that if the US does get a recovery, when rates start to rise, they will be wiped out! There is no QE exit strategy.
> 
> Breaking - Fed may now end QE at end of 1013???




The exit strategy can only be to maintain the level of debt (or increase it) and keep meeting interest payments as they get cheaper with inflation and time. Should the time come when bills actually need to be repaid, the US will actually have to face some austerity measures themselves. That time hasn't arrived yet.

We know the phrase is that you don't need to be able to repay your debt, only service it. They're only acting on it for political point scoring - I doubt the Republicans give a crap or are that opposed to further debt - they just want to take potshots at the Democrats with the political football of the moment...government debt.

It makes me uneasy thinking about the hyperinflation that has to come.


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## young-gun (4 January 2013)

Uncle Festivus said:


> The US Fed is 'printing' $100BILLION a month that gets distributed around the globe eventually - it's gotta go somewhere even if it is into junk that has poor fundamentals. Until there is a loss of confidence in the global default currency? The irony is that if the US does get a recovery, when rates start to rise, they will be wiped out! There is no QE exit strategy.
> 
> Breaking - Fed may now end QE at end of 1013???




Agreed, they're playing with fire. I don't know what is going to trigger the loss in confidence. I would like to say severe currency debasement but over the past few decades it probably couldn't get any worse than it has been(with the exception of hyper inflation.) and yet everyone is more than happy to take it on. After all they can't pump all those dollars back into their currency, so might as well buy some more.

When the GFC struck, banks were bailed out, interest rates were lowered sharply, stimulus was embarked on etc. None of this has been stopped for the past 5 years, what do they do when we are struck with the next crisis(likely this year or next)? They have no where to go, last resort will be mass printing or deflation. It's just a matter of how long they can keep this puppy going before facing the music. Seems like a long time unfortunately.

PS did you mean 2013? or 3013?



Garpal Gumnut said:


> and hopefully no silly politicians will try to "rescue".




Not a chance??


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## young-gun (4 January 2013)

Uncle Festivus said:


> Breaking - Fed may now end QE at end of 1013???




And it appears it's just whispers. A general statement made by some 'officials'.



> "Several (officials) thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet," the minutes said.
> 
> A few of the voting members on the central bank's policy-setting Federal Open Market Committee thought asset buying would be warranted until about the end of 2013. *A few others highlighted the need for further large-scale stimulus but did not specify an amount or time frame*.




http://www.cnbc.com/id/100352475


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## sydboy007 (4 January 2013)

Just waiting for the debt ceiling negotiations to start up, and when the the bond vigilantes realise Germany is already bankrupted from the "credits" they have built up int eh TARGET2 system.

TARGET2 is the central clearing / settlement system for the euro area and each night all trades are basically balanced out.

In October 2012 Germany had 695 billion euro in credits to balance out the deficits of counter party trades.

Basically Germany is damned if the Euro survives - via being stuck in a low growth economic zone for a decade or more, or they are screwed if the euro dies and they are left trying to get back all the money they have lent to the euro system.

I would say the only thing propping up markts at the moment is the financial repression being forced upon a lot of countries by their Govts trying to debase their currencies by artificially lowering interest rates to below CPI and forcing them to buy shares and chase yield in the hope of an above CPI income.

Whenever the next bout of fear kicks in the swing back to bonds will be swift.


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## Struzball (4 January 2013)

Garpal Gumnut said:


> I'm bearish. It will be short and sharp and nasty, and hopefully no silly politicians will try to "rescue".
> 
> The whole system needs a good sell off, to clean it out. Bankruptcies, arbs jumping off computers backwards on to their smartphones.




If only markets were rational and did what was good for them.  Too much funny business going on and I don't think that means a crash any time soon, maybe when the allords is at 10,000 it will crash back to 5000, but even then, maybe it will get pushed to 20,000 instead?

The only thing I know is market is going up at the moment, and has been since 2003.
Six months ago it was heading down and had been since 2007.


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## Aussiejeff (4 January 2013)

Uncle Festivus said:


> The US Fed is 'printing' $100BILLION a month that gets distributed around the globe eventually - it's gotta go somewhere even if it is into junk that has poor fundamentals. Until there is a loss of confidence in the global default currency? The irony is that if the US does get a recovery, when rates start to rise, they will be wiped out! There is no QE exit strategy.
> 
> Breaking - Fed may now end QE at end of* 1013???*




Wow... that was a looooooooooong time ago..... 

On topic, the bears all died out when the world ended recently....


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## CanOz (4 January 2013)

Struzball said:


> The only thing I know is market is going up at the moment, and has been since 2003.
> Six months ago it was heading down and had been since 2007.




Which market?


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## Struzball (4 January 2013)

CanOz said:


> Which market?




Disregarding the shenanigans in between of course.


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## Knobby22 (4 January 2013)

No time to be a bear. Stop watching doomsayers on conservative TV and buy.
Sharemarket will keep going up now that Obama is re-elected.
I'm fully invested and made 6% this week.


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## notting (4 January 2013)

Eyeing the US Debt Ceiling, spain, and France.
Awakening to the sound of Ben talking of an early end to QE - predictable.
Very much looking forward to all the debates on the ceiling.
Waiting for the herd to turn.
At this time of year, bears thinking, it's a muppet rally, I mean don't we smart people normally sell the news!
Was there any smart doubt that the Cliff would be straddled.
I'm not one today at least.


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## Tyler Durden (3 February 2013)

> Has the global equities market officially entered a bull cycle or is it illusory?
> 
> Craig Drummond, the chief executive and country head of Bank of America Merrill Lynch, Perpetual's head of equities, Matt Williams, Tyndall's head of equities, Bob Munster, Deutsche Bank's Scott Mailer, and others believe the rally isn't a false start, but a clear shift in the cycle.
> 
> ...




More at http://www.smh.com.au/business/brok...the-bulls-as-drought-ends-20130201-2dq20.html

I still think this is a false run, *especially* if the basis is Draghi's comment - printing more money does not solve problems in the long term.

I call a huge fall in the XAO in May this year.


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## CanOz (3 February 2013)

The reaction in the markets to the LTRO payments shadowed the NFP release...Gold went nuts.

Here's an article from Zerohedge...the author is Tyler Durden...

CanOz


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## young-gun (3 February 2013)

Tyler Durden said:


> More at http://www.smh.com.au/business/brok...the-bulls-as-drought-ends-20130201-2dq20.html
> 
> I still think this is a false run, *especially* if the basis is Draghi's comment - printing more money does not solve problems in the long term.
> 
> I call a huge fall in the XAO in May this year.




Depends. This global rally may very well be as a result of all the fed interference. They were trying to re-inflate housing but it's obviously finding stocks around the world. I would expect this rally to continue for some time yet, given the fed is still printing open-ended.


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## Tyler Durden (3 February 2013)

Also, people are starting to get angry:


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## Gringotts Bank (3 February 2013)

Sentiment wins again.  http://www.insideinvestorrelations..../19242/investor-sentiment-rises-sharply-2013/

Seems like all the commentators feel like the next high will be higher than the current, and the current leg hasn't even ended yet.  Might be easier just buying a Aus200 CFD.

Funds too:
http://www.hsbc.com.au/1/2/about/news/13/130118


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## Gringotts Bank (3 February 2013)

^^^So is this good or bad?

Contrast with this:

*Fund Manager Sentiment Reaches Extreme Bearish Levels*

Posted: *September 6, 2011* 

Hedge fund managers have turned very bearish against domestic stocks.  The new data from BarclayHedge/TrimTabs Investment Research Survey showed that Bearish Sentiment on the S&P 500 rose handily in August to 42% versus what was only a reading of 27% bearish in July.  While this is often viewed as a contra-indicator, the report shows that over half of those surveyed believe that the economy is already or will slip into recession. 

Read more: Fund Manager Sentiment Reaches Extreme Bearish Levels - 24/7 Wall St. http://247wallst.com/2011/09/06/fund-manager-sentiment-reaches-extreme-bearish-levels/#ixzz2Jpe97YTT


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## Gringotts Bank (3 February 2013)

What I'm trying to get at is.... what is the current read on sentiment?  It's not extreme I don't think.  Very positive but not extreme.  So buy the dips.


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## tinhat (3 February 2013)

Gringotts Bank said:


> What I'm trying to get at is.... what is the current read on sentiment?  It's not extreme I don't think.  Very positive but not extreme.  So buy the dips.




The last time I started putting trailing stop losses across a large proportion of my portfolio was in early 2011 and that served me well (not that all my subsequent decisions did!). I'd be quiet happy to be stopped out of a lot of my positions at the moment (except for those I'm holding for income). I suspect though that there will be another leg up some time this year. I just hope it all happens before Easter so I can chill for a while. The last couple of years have been a roller-coaster.

No stop losses yet, but I've got a few rising sell conditional orders in with my broker.


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## So_Cynical (4 February 2013)

Have decided to complete the 3 open trades i have that are in profit, was going to let 2 of em run but changed my mind, gona take 20K out and sit on the side lines for a while...wait.


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## Muschu (4 February 2013)

So_Cynical said:


> Have decided to complete the 3 open trades i have that are in profit, was going to let 2 of em run but changed my mind, gona take 20K out and sit on the side lines for a while...wait.




Care to disclose which 3 trades SC?  Interesting decision which I would like to follow.  No expectations of course.

Regards

Rick


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## So_Cynical (4 February 2013)

Muschu said:


> Care to disclose which 3 trades SC?  Interesting decision which I would like to follow.  No expectations of course.
> 
> Regards
> 
> Rick




Actually just noticed that its 4 open trades in profit, just that NHC isn't in enough profit (Currently 5.69%) to complete the trade.

PTM 16.8% profit, BSA 17.4% profit, CPU 11.6% profit, 

CPU and PTM are both trades that i have been in for over 2 years, both with multiple average downs...18% of the portfolio value tied up in them....keep in mind Rick that i have a hopeless record for picking tops, i just cant see this rally going much above the last two tops (5000).


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## skc (4 February 2013)

Gringotts Bank said:


> What I'm trying to get at is.... what is the current read on sentiment?  It's not extreme I don't think.  Very positive but not extreme.  So buy the dips.




Yup. "Not extreme" sums it up well.

Individual stocks may suffer from missed results this month, but those that offer income will be bid back up before long. 

There are no major risks on the horizon until May - where the debt ceiling will re-surface and Fed may wind back QE. But until then, I don't think 5000 will offer much resistance. It will probably shoot past it for a couple hundred points just to make it a nice bull trap come May.


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## Uncle Festivus (4 February 2013)

Sentiment is clearly 'risk ignore' while the 'forced' rotation into equities continues as freshly printed money burns holes in pockets while looking for yield. 

And the sustainable annualised rate is....?



> The Standard & Poor’s 500 Index gained 6.1 percent this year after advancing 13 percent in 2012.




The Dow is still only 350 pts from the previous September high.....

It's a one way valve as lot's of sweaty (and leveraged to the hilt) trigger fingers lay ready to hit the sell button at the first signs that the party is over, whenever that is......and the final chapter of wealth destruction commences?



> According to a Bloomberg report, hedge-fund leverage is at its highest level since 2004. At the same time, investors have started taking on more margin debt, which stands at its highest level since early 2008. It seems like the money is flowing into stocks, which should be bullish for equities. Looking at the statistics, however, provides a more sobering view. Here's what you should consider doing.
> 
> While most investors would see the current leverage as a sign of strength, John Hussman of the Hussman Funds reviews the statistics. What he found is that stock margin debt is more than 2% of GDP. That may not sound like a big deal, but *this level of margin debt has only been seen three times* according to Hussman: “the 2000 market peak, the 2007 market peak, and the intermediate market peak of February 2011 (not a terrible outcome, but still followed by an 18% decline in the S&P 500 over the following 7 months).”






> Margin debt is fueling the market rally, and the investors behind the wheel have no fear.
> Consider the Risk Aversion Index.
> 
> By this composite measure, investors are more complacent than they were at the 1987 top, just before the biggest crash since 1929; the 2000 top, which in real terms has never been exceeded; and the 2006-2008 top, when real estate, stocks and commodities all registered their all-time highs in nominal terms.




Federal Reserve board members on a hunting trip......


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## Knobby22 (4 February 2013)

Margin levels in Australia are still low. Interest rates are falling. There are a number of forces here causing the rise.
The Australian economy is doing well. The real story will be told with the profit reports. 

Is it merely a short term bull market that will be enveloped by a larger bear market? We shall see but if you have been out of the market since mid last year, you have missed a lot. Even the Depression had good opportunities to make money in short term bull markets between the secular bear markets.

I am not convinced that we are still in a bear market. Asia is firing. The emerging countries around the world seem to be doing well The USA is re-inventing itself as it always does and Europe - well they are the fly in the ointment. No one really knows what will happen next so I am going with the flow...for now. I've been heavily invested since late October.


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## white_goodman (4 February 2013)

Knobby22 said:


> Margin levels in Australia are still low. Interest rates are falling. There are a number of forces here causing the rise.
> The Australian economy is doing well. The real story will be told with the profit reports.
> 
> Is it merely a short term bull market that will be enveloped by a larger bear market? We shall see but if you have been out of the market since mid last year, you have missed a lot. Even the Depression had good opportunities to make money in short term bull markets between the secular bear markets.
> ...




+1 

I even had the same timing with Sept/October ha


----------



## Tyler Durden (5 February 2013)

Good to know I have some support:



> US stocks fell, driving the Standard & Poor's 500 Index to its biggest decline of the year, on concern that the European debt crisis may intensify and a smaller-than-forecast increase in American factory orders.




http://www.smh.com.au/business/us-stocks-slump-on-renewed-europe-fears-20130205-2dv9p.html


----------



## Muschu (5 February 2013)

So_Cynical said:


> Actually just noticed that its 4 open trades in profit, just that NHC isn't in enough profit (Currently 5.69%) to complete the trade.
> 
> PTM 16.8% profit, BSA 17.4% profit, CPU 11.6% profit,
> 
> CPU and PTM are both trades that i have been in for over 2 years, both with multiple average downs...18% of the portfolio value tied up in them....keep in mind Rick that i have a hopeless record for picking tops, i just cant see this rally going much above the last two tops (5000).




Thanks for response SC...appreciated


----------



## Uncle Festivus (6 February 2013)

Monday - to infinity & beyond.
Tuesday - yes, but what about ******?
Wednesday - don't worry about that, just buy.
Thursday - yes, but what about ******?


----------



## Porper (6 February 2013)

Uncle Festivus said:


> Monday - to infinity & beyond.
> Tuesday - yes, but what about ******?
> Wednesday - don't worry about that, just buy.
> Thursday - yes, but what about ******?




Uncle, your blinkered view is going to cost you dearly. You churn out as many negatives as you can while the stock market bounds along like a rocket. Yes, we maybe on borrowed time but why not profit from the current opportunities?

And please, no more DOW charts in Gold or any other bull**** commodity you care to throw at us. You'll be pricing the DOW in the cost of Possum skins before long just to feed your addiction to negativity.

You have been totally wrong in your doom & gloom outlook over the past few years...move on and join in on the profits available. We all know all is not well in the world but life and the markets will do what they've always done...prosper and continue to improve over the longer term.


----------



## tech/a (6 February 2013)

Porper said:


> Uncle, your blinkered view is going to cost you dearly. You churn out as many negatives as you can while the stock market bounds along like a rocket. Yes, we maybe on borrowed time but why not profit from the current opportunities?
> 
> And please, no more DOW charts in Gold or any other bull**** commodity you care to throw at us. You'll be pricing the DOW in the cost of Possum skins before long just to feed your addiction to negativity.
> 
> You have been totally wrong in your doom & gloom outlook over the past few years...move on and join in on the profits available. We all know all is not well in the world but life and the markets will do what they've always done...prosper and continue to improve over the longer term.




Personally I agree with both of you.

I havent and wont venture into portfolio trading.
Because one morning we will find ourselves giving up a great deal of profit if not all
as the US finally pulls its debt driven head in.

But in the meantime there are profits there.
My solution has been Index futures FTSE specifically.
The odd quick moving equity.

No reason why you cant wear two hats.


----------



## Knobby22 (6 February 2013)

To be fair Uncle Festivus did call the initial GFC crash.


----------



## FlyingFox (6 February 2013)

tech/a said:


> Personally I agree with both of you.
> 
> I havent and wont venture into portfolio trading.
> Because one morning we will find ourselves giving up a great deal of profit if not all
> ...




+1.


----------



## white_goodman (6 February 2013)

Knobby22 said:


> To be fair Uncle Festivus did call the initial GFC crash.




broken clock yada yada


----------



## explod (6 February 2013)

http://www.lombardifinancial.com/re...Alert/index.php?dept=PC&sb=BAR&sdate=02052013

If you put up the charts, have a bit of a read of the economic factors from other sources to back this up I think some of you may save yourselves.

Tick up to Uncle and tech/a as what he knows and trades in short spurts will hold him.  Not for the newbie or inexperienced IMHO.

No more than June I'd say and the drop over the next six months on the Dow following that will be in excess of 50%, (I am calling August to February as the main falling period) and more than last time.  Can no longer drop interest rates to further stimulate, inflation creeping in around the edges, banks in the Euro region going under.  Whwew, could go on, but look about objectively, where is the content within reasoning for the case for continued stock market rises?  

Be interesting to see what can be found.


----------



## Aussiejeff (6 February 2013)

explod said:


> http://www.lombardifinancial.com/re...Alert/index.php?dept=PC&sb=BAR&sdate=02052013
> 
> If you put up the charts, have a bit of a read of the economic factors from other sources to back this up I think some of you may save yourselves.
> 
> ...




....thousands of rotting Bear carcasses washed up on the shores of the Lucky Country. Apparently all drowned by a t$unami of cheap ca$h.


----------



## brty (6 February 2013)

Explod, from your link....



> Every morning, I wake up and ask this one question: when will Germany come to its senses and pull out of the euro? After all, Germany is the only real engine of the European Economic Community




Whenever I read such garbage, I really do have to question the knowledge of the author. 

Germany is the last economy that would want to leave the euro. The low euro makes German exports relatively cheap, if they left the euro there would be a big hit on the economy as a revalued Dmark would curb exports, simple economics 101.


----------



## white_goodman (6 February 2013)

brty said:


> Explod, from your link....
> 
> 
> 
> ...




the only counter which i dont concede is that the coat of bailouts/guarantees cost more than the loss of export competitiveness.. on a political and economic level the Germans are in for the long haul


----------



## FlyingFox (6 February 2013)

Aussiejeff said:


> ....thousands of rotting Bear carcasses washed up on the shores of the Lucky Country. Apparently all drowned by a t$unami of cheap ca$h.




Cash might be cheap but what happens when it's too cheap or useless e.g Argentina, Zimbabwe. There might be enough golden fleece's among the carcasses......

P.S I'm not a goldbug but everything is relative. Incomes and assets tend to have a very hard time keeping up in high inflation environments.


----------



## FlyingFox (6 February 2013)

brty said:


> Germany is the last economy that would want to leave the euro. The low euro makes German exports relatively cheap, if they left the euro there would be a big hit on the economy as a revalued Dmark would curb exports, simple economics 101.




True. But can they afford to prop everyone else up? Also if they go for their own gold based currency (they are repatriating all their gold reserves) they can value it however they like if it is not floated.


----------



## McLovin (6 February 2013)

FlyingFox said:


> True. But can they afford to prop everyone else up? Also if they go for their own gold based currency (they are repatriating all their gold reserves) they can value it however they like if it is not floated.




The location of Germany's physical reserves, short of having them stolen, is immaterial.

They are also not repatriating all of their reserves. They're taking 300t from NY but leaving 1,200t there. All of their reserves at the BoE will remain. 50% will remain in foreign bank vaults.


----------



## FlyingFox (6 February 2013)

McLovin said:


> They are also not repatriating all of their reserves. They're taking 300t from NY but leaving 1,200t there. All of their reserves at the BoE will remain. 50% will remain in foreign bank vaults.




I stand corrected. Thanks.


----------



## McLovin (6 February 2013)

FlyingFox said:


> I stand corrected. Thanks.




I'd like to see the insurance bill for the cargo. Even worse, imagine you had a container of uninsured widgets on the ship and the gold was lost.


----------



## Knobby22 (6 February 2013)

explod said:


> http://www.lombardifinancial.com/re...Alert/index.php?dept=PC&sb=BAR&sdate=02052013
> 
> If you put up the charts, have a bit of a read of the economic factors from other sources to back this up I think some of you may save yourselves.
> .




Did you subscribe explod?
I'd like your opinion on his solutions if you have. I do think there will be a correction. There always is even if it stays a bull market.

brty is right about Germany. Maybe the Euro will implode but Germany wants to keep it. It beggars its neighbours but enables the Germans to compete against the US in the currency devaluation "wars".


----------



## FlyingFox (6 February 2013)

McLovin said:


> I'd like to see the insurance bill for the cargo. Even worse, imagine you had a container of uninsured widgets on the ship and the gold was lost.




LOL. Somehow I don't think they would transport gold on container ships. But who knows....


----------



## McLovin (6 February 2013)

FlyingFox said:


> LOL. Somehow I don't think they would transport gold on container ships. But who knows....




There should have been a winky, for sarcasm.


----------



## explod (6 February 2013)

Knobby22 said:


> Did you subscribe explod?
> I'd like your opinion on his solutions if you have. I do think there will be a correction. There always is even if it stays a bull market.
> 
> brty is right about Germany. Maybe the Euro will implode but Germany wants to keep it. It beggars its neighbours but enables the Germans to compete against the US in the currency devaluation "wars".




When the dust settles and the sun comes out it will be seen that no one could compete with the US in the currency war looming.

Their rating agencies (Moody's et al , *and some info coming out about their outright cheating the last few days too*) (will try to find that link later) have been busy the last four or five years downgrading everything but themselves so that the rise in the Dow is also attributable to news and ratings crapola too.  The US debt, to GDP, to population is the highest on the planet.  To repay that, (they wont, they will default) but to try will see the US dollar speed to the bottom to worthless trash.


----------



## explod (6 February 2013)

> Then There Was This. Well, it finally happened. a Ratings Agency has been accused of knowingly understating the credit risks of bonds and derivatives that were central to the financial meltdown.
> 
> The U.S. Justice Dept. filed a complaint yesterday in Los Angeles, accusing McGraw Hill and Standard & Poors (S&P) of three types of fraud.  This is the first federal enforcement action against a credit-rating firm for alleged illegal behavior related to the crisis. Apparently, the U.S. Gov’t and S&P, which is owned by McGraw Hill, were trying to settle this behind closed doors, but when the U.S. asked for $1 Billion and an admission of wrongdoing, S&P balked. So, now the Gov’t is left filing a complaint.




As promised in my last post.  From :

http://www.dailypfennig.com/2013/02/05/u-s-files-complaint-against-sp/


----------



## explod (6 February 2013)

Knobby22 said:


> Did you subscribe explod?
> I'd like your opinion on his solutions if you have. I do think there will be a correction. There always is even if it stays a bull market.
> 
> brty is right about Germany. Maybe the Euro will implode but Germany wants to keep it. It beggars its neighbours but enables the Germans to compete against the US in the currency devaluation "wars".




Nah, not when we have so many friends here at ASF putting it all together .


----------



## aclassic (6 February 2013)

explod said:


> Nah, not when we have so many friends here at ASF putting it all together .




Plenty of Bulls here.

Haven't any of you been watching and listening to the various Aussie December indicator figures?

obviously not.

Opposite to bullish expectations!!!!!!


----------



## Knobby22 (6 February 2013)

explod said:


> When the dust settles and the sun comes out it will be seen that no one could compete with the US in the currency war looming.
> 
> Their rating agencies (Moody's et al , *and some info coming out about their outright cheating the last few days too*) (will try to find that link later) have been busy the last four or five years downgrading everything but themselves so that the rise in the Dow is also attributable to news and ratings crapola too.  The US debt, to GDP, to population is the highest on the planet.  To repay that, (they wont, they will default) but to try will see the US dollar speed to the bottom to worthless trash.




The USA is run by the wealthy elite for the wealthy elite. My bet is they won't default but will instead inflate their way out of the debt, this will of course beggar the middle class but so what.


----------



## explod (6 February 2013)

Knobby22 said:


> The USA is run by the wealthy elite for the wealthy elite. My bet is they won't default but will instead inflate their way out of the debt, this will of course beggar the middle class but so what.




The real wealthy elite will not give a damn about a default either.

The US economy is about 200 trillion, the Rothschilds family spread across a number of nations (they know no borders) hold/control a value of 300 trillion.


----------



## Uncle Festivus (6 February 2013)

Porper said:


> Uncle, your blinkered view is going to cost you dearly. You churn out as many negatives as you can while the stock market bounds along like a rocket. Yes, we maybe on borrowed time but why not profit from the current opportunities?
> 
> And please, no more DOW charts in Gold or any other bull**** commodity you care to throw at us. You'll be pricing the DOW in the cost of Possum skins before long just to feed your addiction to negativity.
> 
> You have been totally wrong in your doom & gloom outlook over the past few years...move on and join in on the profits available. We all know all is not well in the world but life and the markets will do what they've always done...prosper and continue to improve over the longer term.




Unless you are standing right behind me watching me trade, how do you come to the ASSUMPTION that I haven't or don't make money? I really can't see that because I post info that shows up the fraud going by the name of the global financial system and the central banks printing presses, you can then just ASSUME that I never go long?
So just for you  won't be posting any more charts - of anything.



white_goodman said:


> broken clock yada yada




As usual, nothing of any substance to contribute to the forum other than derision/belittling of other posters.

See you all on the other side.


----------



## Porper (6 February 2013)

Uncle Festivus said:


> Unless you are standing right behind me watching me trade, how do you come to the ASSUMPTION that I haven't or don't make money? I really can't see that because I post info that shows up the fraud going by the name of the global financial system and the central banks printing presses, you can then just ASSUME that I never go long?
> So just for you  won't be posting any more charts - of anything.




It would be fair to assume you are bearish given your prior posts uncle. But you are correct I don't know how you trade.

As for you not posting any more charts...that's just childish. Just because I am not interested in your doom and gloom doesn't mean everybody else isn't.


----------



## white_goodman (6 February 2013)

Uncle Festivus said:


> As usual, nothing of any substance to contribute to the forum other than derision/belittling of other posters.
> 
> See you all on the other side.




if you say stupid things you should be ridiculed...




The market is not telling us that it is selling off at the moment. The market is not telling us that a bear trend is upon us...

we are paid on price..

the economics can actually get worse (US potential default) and id expect people to pile more into stocks..

the bad economy = bad stock market paradigm is over, and overly simplistic

or on the other hand you can find any news story to confirm a bias, trade against the market consensus and get burnt... how are those XAO 1000 'forecasts' going?

you are arguing with people on economics that they probably agree with and not looking at the market itself


----------



## medicowallet (6 February 2013)

The more I read about how people "got back in at just the right time", the more bearish I become.

Now I am officially in 100% cash, no property, nothing!   (Well, outside my SMSF that is)

MW 
(A very minor Bull until about a week ago)


----------



## FlyingFox (6 February 2013)

white_goodman said:


> the economics can actually get worse (US potential default) and id expect people to pile more into stocks..
> 
> the bad economy = bad stock market paradigm is over, and overly simplistic





This implies that the stock market is little more than a lottery governed by the whims of the "elite". It goes up because people think it will and vice versa....


----------



## Trembling Hand (6 February 2013)

FlyingFox said:


> This implies that the stock market is little more than a lottery governed by the whims of the "elite". It goes up because people think it will and vice versa....




No thats way too simplistic and thats why we have 10000000000 bears watching in horror as the market keeps on going up.

There is a lot in what he is saying there. It has little to do with your assertion.


----------



## FlyingFox (6 February 2013)

Trembling Hand said:


> No thats way too simplistic and thats why we have 10000000000 bears watching in horror as the market keeps on going up.
> 
> There is a lot in what he is saying there. It has little to do with your assertion.




On the contrary, stock prices are meant to be an indicator of company health and by proxy the market is an indicator of economic health. If the two are diverging than then there is _possibly_ something wrong.

Perhaps my choice of words were a bit exaggerated but I don't think I ever said that this divergence is not possible but what does it say for the markets and the economy when it does happen? Is it just the cheap money forming another bubble to be burst further down the line?

Over any sufficiently long period of time both the bears and bulls will be right. It just depends on your timelines for being in and out of the market. If your *actively trading* then perhaps nothing much of what the bears are saying matters. However investment and or growth that is engineered just for the sake of it will bear consequences.


----------



## Macquack (6 February 2013)

FlyingFox said:


> However investment and or growth that is engineered just for the sake of it will *bear* consequences.




Very clever.


----------



## Trembling Hand (6 February 2013)

FlyingFox said:


> On the contrary, stock prices are meant to be an indicator of company health and by proxy the market is an indicator of economic health. If the two are diverging than then there is _possibly_ something wrong.




Remember when the topic du jour of the bears was how oil going from $30 to $60 was going to cause out of control inflation and wreck company profits? Back in the early naughty's. It was economics 101 and there was no arguing against it if you were sensible.....


----------



## white_goodman (6 February 2013)

FlyingFox said:


> Perhaps my choice of words were a bit exaggerated but I don't think I ever said that this divergence is not possible but what does it say for the markets and the economy when it does happen? Is it just the cheap money forming another bubble to be burst further down the line?




perhaps, perhaps not... maby the gap will close with the real economy catching up as the market stagnates, or the market drops to meet the reality or perception of the economy...

what im trying to say is that you cant necessarily argue the market is going down cos the economy is effed... and arguing on economics in a market thread when there is an obvious divergence doesnt make sense...

The market is plain as day a bull market, if the economic fundamentals arent there then it can be chalked up to printing press, flight for yield, game theory, "animal spirits" or whatever the soup dujour

imo i forecast stocks to go much higher when US budget solvency/inflation is at hand... all that cash rolling over in short term treasuries will flood to property,shares when this happens (Im assuming), so bad economy but market up more.. Until the market diverts from this trend and other things come to light you have to go with it or sit on the sidelines as an ego trip so you can say in 5 years 'see I was right', whilst everyones made triple digit returns


----------



## brty (6 February 2013)

WG,

Well stated, especially this bit...



> The market is plain as day a bull market




My preferred statement on this was written many years ago in  Reminiscences.

"It's a bull market, you know"

Though your line is very good. 

It is a concept that many find hard to believe given current general conditions, yet similar occurrences have happened many times before. When everything looks clear ahead, with no visible problems at all, is the time to look for the top of a bull market, not while everyone is worrying about the future.


----------



## young-gun (6 February 2013)

brty said:


> not while everyone is worrying about the future.




People often confuse the members on this forum with 'everyone'.

Talking to everyday people they either
A - Don't know what's going on.
B - Don't care what's going on.
C - think that this rally is sustainable, and is somehow warranted.
D - Think that the global economy is just rosie, and that it's just a few minor headwinds up ahead, nothing we haven't dealt with before....

or E - are concerned as to what is on the horizon. Which in my experience is a very very small minority.


----------



## FlyingFox (6 February 2013)

white_goodman said:


> perhaps, perhaps not... maby the gap will close with the real economy catching up as the market stagnates, or the market drops to meet the reality or perception of the economy...
> 
> what im trying to say is that you cant necessarily argue the market is going down cos the economy is effed... and arguing on economics in a market thread when there is an obvious divergence doesnt make sense...




Yes at any given point in time you can have a market going up and a economy in bad shape. The point is whether this will last? This is the argument between long term investing and trading (see tech/a's earlier comment). All the ordinary blokes with money in stocks in super get smoked in the process. 



white_goodman said:


> The market is plain as day a bull market, if the economic fundamentals arent there then it can be chalked up to printing press, flight for yield, game theory, "animal spirits" or whatever the soup dujour




Agreed. The stocks are going up for now. If your trading, time to make money.



white_goodman said:


> imo i forecast stocks to go much higher when US budget solvency/inflation is at hand... all that cash rolling over in short term treasuries will flood to property,shares when this happens (Im assuming), so bad economy but market up more.. Until the market diverts from this trend and other things come to light you have to go with it or sit on the sidelines as an ego trip so you can say in 5 years 'see I was right', whilst everyones made triple digit returns




True. However the returns will only be there if they are realized. In such an environments companies close quickly and liquidity turns pretty solid. If you can time it and preserve your capital then you might never have to work again. Something to aspire to for everyone...


----------



## white_goodman (6 February 2013)

FlyingFox said:


> Agreed. The stocks are going up for now. If your trading, time to make money.




trading could = 5 years. Its been a while since March 09 lows, Im invested/trading until the market breaks down. We could not be in a buy and hold market for 3 decades possibly, cycles of trading/investing for 4-5years then purging... who knows, it could be a lifetime till that buy and hold forever market is back, which seems silly as all you have to do to 'trade' is look at a weekly chart for a few minutes a week essentially


----------



## tinhat (6 February 2013)

Looking at the XJO it is weighted around a few banks, miners, insurance/financials, the big two retailers, Telstra and a few oil/energy companies.

The flight to yield is not over yet. Quite a few of the "blue chips" from the above are still yielding around 6% net of franking credits. The demand for these shares is going to go up in my opinion. The supply is going to be constrained. I for one am not interested in selling any "blue chip" shares when they are paying dividend yielding in the range of 7-12% return on my investment (grossed up).

So we have banks still yielding good dividends with a stable outlook.

Miners coming off a cyclical bottom for now anyway.

Supermarkets - about as defensive as you can get and still yielding 5.6% grossed up (eg, WOW).

As for the price of oil and what return on investment the oilers are likely to get over the medium term I have no idea, except that I suspect there will be a market for oil and electricity even post the collapse of western civilization.

Around 1991 (may have been 1992) I remember going into my local NAB branch. The teller was a bit gob-smacked as two retiree aged customers left. She said to me, "that couple just bought $200,000 of long dated [I think she said five year] term deposits at 16% interest p.a." They must have loved Paul Keating. Well, history could prove me completely wrong, but the last few years have been the most fantastic opportunity to buy companies such as Telstra, CBA, etc at fantastic yields.

Sure, different people, different risks, but for the time being I forecast more dividend chasing money flowing into the Aussie stock market. Yes owning CBA, WES, TLS is more risky that money in a government guaranteed bank account but retirees such as my mother (SMSF pension phase) wouldn't be taking overseas holidays if the only return on capital she was receiving is term deposit interest rates. A lot of people can afford to live off bank interest only. A heck of a lot of self funded retirees cannot. It's a risk, but when the financial apocalypse arrives at least my mother can say she got to see Turkey.

Right now, I suspect the bubble is in the bond markets.


----------



## chrislp (6 February 2013)

FlyingFox said:


> All the ordinary blokes with money in stocks in super get smoked in the process.




Double-digit returns push super funds to new highs


----------



## FlyingFox (7 February 2013)

young-gun said:


> People often confuse the members on this forum with 'everyone'.
> 
> Talking to everyday people they either
> A - Don't know what's going on.
> ...




+1 and I believe the vast majority fall into A and B and when pushed will say C or D.


----------



## Trembling Hand (7 February 2013)

FlyingFox said:


> Yes at any given point in time you can have a market going up and a economy in bad shape. The point is whether this will last? This is the argument between long term investing and trading (see tech/a's earlier comment).* All the ordinary blokes with money in stocks in super get smoked in the process.*




I don't understand where the bit I put in bold is coming from? Does that mean its not fair cuz the market doesn't make sense and send out screaming "its ok to buy and hold for the next 2 years" signals.


----------



## tech/a (7 February 2013)

To me it means
The ordinary guy with SMSF is reactionary to immediate news and will be too slow in a crash situation.
OR
The ordinary guy in a superfund will just get smacked as the superfund holds for the long term.

Point is they arent *capable* or in the position to control their own risk.
There maybe things in place but they just dont know how to best utilze them.

On the general populace.

I believe they are reactionary to immediate news.
They view say the Greek crisis like a Plane crash in Pakistan---glad I wasnt on that plane.
To them the news doesnt or wont (in their view) affect them.
Commentary explains away the movements of the stock market *EVERYDAY*.
Simple really!

The bigger picture is just an opinion and may not happen.
After all We dont have to worry about such things---we will all be in the same boat--so why worry about something we cant control and may not happen enyway!

But like the God fearing ---we will be ok as we have--*FAITH*.


----------



## FlyingFox (7 February 2013)

tech/a said:


> To me it means
> The ordinary guy with SMSF is reactionary to immediate news and will be too slow in a crash situation.
> OR
> The ordinary guy in a superfund will just get smacked as the superfund holds for the long term.
> ...




Exactly. Not everyone has a SMSF. For the majority,*investing* in the stock market is via super or long term holdings and in many cases they might be misinformed about the risks associated with their investments. Or what if you happen to retire during the crisis?


----------



## tech/a (7 February 2013)

FlyingFox said:


> Exactly. Not everyone has a SMSF. For the majority,*investing* in the stock market is via super or long term holdings and in many cases they might be misinformed about the risks associated with their investments. Or what if you happen to retire during the crisis?




A real and present danger.

The only thing I have been able to come up with as a safeguard is passive income from various sources.

(1) Business---not everyone has access to a business that will continue with minimum to no input during retirement. But perhaps (If your capable) some surplus income could go here.

(2) Property for rents on freehold--majority Industrial sheds.

(3) Shares provided they remain above purchase price--IE little or no erosion of initial capital.

(4) Short term discretionary trading---I use the FTSE pretty easy to supplement an income from just this ---many other instruments you could become proficient at---but you MUST be able to go long and short.
Not expensive to trade a few contracts.

(5) Be debt free

This is my setup for semi then full retirement.
All will change if the crash we have to have belts us---still would rather be* here than *




> A - Don't know what's going on.
> B - Don't care what's going on.
> C - think that this rally is sustainable, and is somehow warranted.
> D - Think that the global economy is just rosie, and that it's just a few minor headwinds up ahead, nothing we haven't dealt with before....




*THERE!*


----------



## FlyingFox (7 February 2013)

tech/a said:


> A real and present danger.
> 
> The only thing I have been able to come up with as a safeguard is passive income from various sources.
> 
> ...




Sage words.


----------



## tech/a (7 February 2013)

Oh God thats all we need a Sage Duck


----------



## FlyingFox (7 February 2013)

tech/a said:


> Oh God thats all we need a Sage Duck
> 
> View attachment 50887




If the _suit_ fits :


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## FlyingFox (7 February 2013)

Trembling Hand said:


> I don't understand where the bit I put in bold is coming from? Does that mean its not fair cuz the market doesn't make sense and send out screaming "its ok to buy and hold for the next 2 years" signals.




No I mean it's not fair that the market is being moulded to such an extent that there maybe no relationship between the market and the economy. The market, derivatives etc are meant to help trade in real objects. Does it make sense that the paper gold market as an example is 100X the real one? Does it make sense to artificially prop up companies and markets? What happens when things get back to the real economy?


----------



## Trembling Hand (7 February 2013)

FlyingFox said:


> No I mean it's not fair that the market is being moulded to such an extent that there maybe no relationship between the market and the economy.




Says you. Its only a few times in retrospect one can look back at the market in general and say its out of whack with where we end up.

Tech 2001
Euro/US Housing 2007
Market bottom 2008
etc



FlyingFox said:


> The market, derivatives etc are meant to help trade in real objects. Does it make sense that the paper gold market as an example is 100X the real one?




Err?! Not sure where you have got that beauty?! Open interest in the gold futs is about 1300 tons. Wiki is telling me that 2011 world production was 2700 tons. 



FlyingFox said:


> Does it make sense to artificially prop up companies and markets? What happens when things get back to the real economy?




No not really but its the system we have and the way its always been. Which I suspect is a large part of where we are at. The ones that know where the system is going know/think that that will continue to be the game, thus looking 6 months to a year ahead and running with it.


----------



## skc (7 February 2013)

FlyingFox said:


> No I mean it's not fair that the market is being moulded to such an extent that there maybe no relationship between the market and the economy. The market, derivatives etc are meant to help trade in real objects. Does it make sense that the paper gold market as an example is 100X the real one? Does it make sense to artificially prop up companies and markets? What happens when things get back to the real economy?




The market and the economy are related but there's nothing wrong with it moving out of sync or even in opposite direction. Remember the market (i.e. share price) is nothing more than the supposed present value of future cash flows. And the key to any present value type calculation is the discount rate.

What drives the discount rate is both perception of risk and opporutnity costs. Right now, perception of risk is reducing while opportunity costs are falling (via lower interest rates). So what you are seeing is a rising share price / market even in the absence of earning growth... or what you might have read as PE expansion in the press.

There's nothing fair or unfair about it.


----------



## McLovin (7 February 2013)

FlyingFox said:


> Exactly. Not everyone has a SMSF. For the majority,*investing* in the stock market is via super or long term holdings and in many cases they might be misinformed about the risks associated with their investments. Or what if you happen to retire during the crisis?




Over the last 10 years the total return of the All Ords has been ~9%/annum. Considering that mixed into that is the worst crisis since the Great Depression, I'd say passive long term share ownership has proven itself a sound investment.

I realise that isn't a popular view because the end of the World is coming etc.



			
				skc said:
			
		

> The market and the economy are related but there's nothing wrong with it moving out of sync or even in opposite direction. Remember the market (i.e. share price) is nothing more than the supposed present value of future cash flows. And the key to any present value type calculation is the discount rate.
> 
> What drives the discount rate is both perception of risk and opporutnity costs. Right now, perception of risk is reducing while opportunity costs are falling (via lower interest rates). So what you are seeing is a rising share price / market even in the absence of earning growth... or what you might have read as PE expansion in the press.
> 
> There's nothing fair or unfair about it.




Exactly. Prices were too low. In 2011 it was like shooting fish in a barrel. IMHO, the market isn't ignoring the risks in Europe it understands them better than it did 2-3 years ago and is pricing accordingly.


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## Julia (7 February 2013)

FlyingFox said:


> Or what if you happen to retire during the crisis?



One of the reasons for having a SMSF is to have the hands on control needed to move quickly to preserve capital if necessary.


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## sinner (7 February 2013)

McLovin said:


> Over the last 10 years the total return of the All Ords has been ~9%/annum. Considering that mixed into that is the worst crisis since the Great Depression, I'd say passive long term share ownership has proven itself a sound investment.
> 
> I realise that isn't a popular view because the end of the World is coming etc.




lulz, easy to take some random day and say hey we performed good since that day. Hell over the last 25 days the total return of the XAO has been 5.9% or 59% annualised! 

Fact is tho (from 2011):


> Research from the Industry Super Network shows that over 14 years from 1996,  the average performance of a super fund was just over 5 per cent.
> 
> Retail funds on average performed at 3.66 per cent while cash over the same period was 4.23 per cent.




and when you take volatility into account, the RaR on passive buy/hold/pray stocks is crap compared to Aussie cash. Plain and simple. Nobodies buying the XAO, they're all scrambling over the top and bottom ends of the market.


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## FlyingFox (7 February 2013)

Trembling Hand said:


> Says you. Its only a few times in retrospect one can look back at the market in general and say its out of whack with where we end up.
> 
> Tech 2001
> Euro/US Housing 2007
> ...





hmm only 3 times in the last decade......



Trembling Hand said:


> Err?! Not sure where you have got that beauty?! Open interest in the gold futs is about 1300 tons. Wiki is telling me that 2011 world production was 2700 tons.



And how much physical gold is actually backing the futs? I understand your point that it futures are designed in that manner but its the abuse of some of these systems that is concerning.



Trembling Hand said:


> No not really but its the system we have and the way its always been. Which I suspect is a large part of where we are at. The ones that know where the system is going know/think that that will continue to be the game, thus looking 6 months to a year ahead and running with it.




Agree with you on most of that. Not sure if this is the way it's always been.....


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## FlyingFox (7 February 2013)

sinner said:


> Nobodies buying the XAO, they're all scrambling over the top and bottom ends of the market.




+1. An undamped, driven system..... Reminds me of the interview with some broker during the GFC and how he said something along the lines of that volatility is great because we make more money. Can't seem to find that video.


----------



## notting (7 February 2013)

Just thought I'd throw in a bit of growl here for all the bears who have been scratching down gold stocks over the last few months.
The other place the bears might be is looking at the coal situation and the Chinese asphyxiation issue.

China is faced with a choice, 
1. Choke off growth by stopping the electricity production or 
2. Choke the people.

As we saw with uranium and Japan this kind of thing can be quite detrimental to a commodity.

Coal burning in the home is also a common way for 'the people' to keep warm in their little dog boxes.  
They are having a rather cold winter partly because the sky is black during the day from pollution.

It's not certain how this is all going to play out but if it starts hitting headlines because babies and old people are well, dropping dead, as in the Japanese Nuclear meltdown, well a bear could only be too pleased, unless he's a panda.

Hmmm How's Whitehaven going today?


----------



## Trembling Hand (7 February 2013)

FlyingFox said:


> And how much physical gold is actually backing the futs? I understand your point that it futures are designed in that manner but its the abuse of some of these systems that is concerning.




Huh?! Just stating that the system is "abused" doesn't make it true. You are wrong about paper 100X physical now you are being even more vague!

Which is normally where the bears argument ends.


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## FlyingFox (7 February 2013)

Trembling Hand said:


> Huh?! Just stating that the system is "abused" doesn't make it true. You are wrong about paper 100X physical now you are being even more vague!




http://en.wikipedia.org/wiki/Gold_Anti-Trust_Action_Committee

See second paragraph under activities and appropriate citations. 



Trembling Hand said:


> Which is normally where the bears argument ends.




Just because I question the status quo does not make me a bear. I have never said that you can't or shouldn't make money from the markets nor that the world is going to end tomorrow. It would be much better if we refrain from putting labels on people and making fun of them just because the facts and/or opinions they provide are different from yours.


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## Trembling Hand (7 February 2013)

FlyingFox said:


> http://en.wikipedia.org/wiki/Gold_Anti-Trust_Action_Committee
> 
> See second paragraph under activities and appropriate citations.




Oh god! Thats where a little knowledge leads this discussion done a path of angst and frustration!! Its completely bogus. The OPEN INTEREST is only 1300 tons less than HALF the years production.

For f sake this argument is universal wrong with people who state the paper to physical line. Just because I buy and sell a futs today causing the open interest maybe to momentarily increase by 100 ounce of physical does not make it a manipulated market.

You cannot add up all the transaction in the futures today, tomorrow, Monday, Tuesday and then on and on till the end of the year and arrive at a value to say "look the amount is 100 time the physical market".

Do you understand where you are being taken for a ride on that calculation?


----------



## Tyler Durden (20 February 2013)

In the last week or so there's been many headlines in the news about the stock market reaching x, y, z year highs. 

I always come back to the line "buy low, sell high". I wonder if this is a good time to sell? My friend in finance once told me, when news gets into the mainstream, it's pretty much the beginning of the end.


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## Garpal Gumnut (20 February 2013)

Tyler Durden said:


> In the last week or so there's been many headlines in the news about the stock market reaching x, y, z year highs.
> 
> I always come back to the line "buy low, sell high". I wonder if this is a good time to sell? My friend in finance once told me, when news gets into the mainstream, it's pretty much the beginning of the end.




A timely post,

I have sell orders in tonight, the first for some 6 months.

Who knows whither?

gg


----------



## Struzball (20 February 2013)

Tyler Durden said:


> In the last week or so there's been many headlines in the news about the stock market reaching x, y, z year highs.
> 
> I always come back to the line "buy low, sell high". I wonder if this is a good time to sell? My friend in finance once told me, when news gets into the mainstream, it's pretty much the beginning of the end.




Most people cut their profits short and let their losses run. Wouldn't selling now be cutting profits short?


----------



## McLovin (20 February 2013)

I'm horrible at predicting where markets are going but from what I can see it doesn't look overcooked at the moment. Down at 4,000 there was value everywhere. I'd say the market is somewhere around fair value. It's not that the risk has changed it's just that the perceived risk was much, much higher.

The tanking thread makes interesting reading.


----------



## Klogg (21 February 2013)

McLovin said:


> I'm horrible at predicting where markets are going but from what I can see it doesn't look overcooked at the moment. Down at 4,000 there was value everywhere. I'd say the market is somewhere around fair value. It's not that the risk has changed it's just that the perceived risk was much, much higher.
> 
> The tanking thread makes interesting reading.




Agreed - except I'm of the opinion that the banks are a little overcooked... Let them pull back a bit and the market is spot on IMO.


----------



## tinhat (21 February 2013)

Klogg said:


> Agreed - except I'm of the opinion that the banks are a little overcooked... Let them pull back a bit and the market is spot on IMO.




I completely disagree. The earnings outlook for the major banks is stable to mildly positive- at least that seems to be the market perception (and mine).

Funding costs are easing as international credit markets continue to thaw and the no-one is anticipating that the banks will have any trouble raising their tier one capital requirements through the issuance of hybrids at moderate spreads. This will ease the pressure on the banks to raise funds via retail deposits and ease pressure on margins.

With the interest rates on deposits continuing to fall, for the medium term at least I see further demand for bank shares which are still yielding around 7-8% grossed up. I think a lot of investors will be willing to tolerate a lower yield than that.

The one sector that could drag on the indexes is the materials sector.


----------



## tech/a (21 February 2013)

While money continues to be created then the Bull will rage.
When it stops beware the Bear and the Stag.


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## db94 (1 March 2013)

http://www.businessinsider.com/walt...sis-2013-2#the-wealth-effect-is-an-illusion-7

EDIT: dunno how credible this guy but i found it an interesting read none the less. Also keep in mind it is the US markets


----------



## RandR (3 March 2013)

Time for a little 'sequester' to bring the bears back from their cave?

http://www.abc.net.au/news/2013-03-02/obama-signs-order-for-budget-cuts-after-talks-fail/4549136?section=business

Sounds exciting.


----------



## Tyler Durden (3 March 2013)

RandR said:


> Time for a little 'sequester' to bring the bears back from their cave?
> 
> http://www.abc.net.au/news/2013-03-02/obama-signs-order-for-budget-cuts-after-talks-fail/4549136?section=business
> 
> Sounds exciting.




In terms of long term planning, is this necessarily such a bad thing? Isn't it just one way of cleansing an economy that is spending more than it earns?


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## Tyler Durden (10 March 2013)

Very interesting article:



> ''How come the sharemarket is going up, when the economy keeps tanking?''
> 
> The textbook answer to this question is that share prices don't reflect the world as it is, but as investors expect it to be a year or two from now. Markets are forward-looking indicators, not backward ones.
> 
> ...




http://www.theage.com.au/business/this-time-it-really-is-going-to-be-different-20130308-2fqw0.html

I think every time there has been a significant bull or bear trend, someone says "this time it's different", as if to imply that it will last. To me, it's never different. There will always be greed and fear, which drives the market up and down.


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## Tyler Durden (16 March 2013)

This is why I'm still a bear:



> The question that is being debated increasingly actively inside the EU is whether enough is being done. Job queues in Spain and almost everywhere in Europe, with the exception of Germany, are dangerously high and still growing.
> 
> Data released this month showed that employment in the 17 nation euro area fell by 0.3 per cent in the December quarter and by 0.7 per cent in 2012. Employment in Spain fell by 4.5 per cent and the unemployment rate in Spain in January was 26.2 per cent: Spain's youth unemployment rate is 55 per cent.
> 
> Employment in Greece, Portugal, Italy, France Denmark, Belgium, the Netherlands and Finland also fell in 2012, and unemployment across the euro area climbed from 10.8 per cent to 11.9 per cent in the year to January. The unemployment rate in Greece is about 27 per cent. In France it is 10.6 per cent and in Italy is 11.7 per cent




http://www.smh.com.au/business/europes-debt-shaded-by-cost-of-managing-it-20130315-2g67y.html


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## pixel (16 March 2013)

While I'm by no means a perma-Bear, over the past few weeks I have noticed an increasing number of indications that a top "of sorts" may have been reached or be imminent. As one of many examples, let's check the US S&P500:

Judging by the volume spike, last night was a witching day in the US.
Scrolling back through last year, similar spikes were recorded on 16/03, 15/06, 21/09, and 21/12.
That in itself doesn't mean much, as far as trend prediction is concerned. In the past, those witching days have not consistently led to significant changes of trend. However, in combination with the Bearish MACD Divergence, it's probably a good idea to be prepared for a pullback. 

How far? If it's a mild one, it may only drop by about 30 points. But as the recent rally looks rather overdone on lowly volume, I doubt it'll stop at the previous High; so I'd guess 1500-1510 could be our first support zone. Failing that, 1480 or even the low 1460's could come into play.




PS: Shanghai has already reached a top a few weeks ago; if that plays out as a Head and Shoulders pattern, even the lower support zone could come under threat, which would translate into a 20% drop from the early February Highs:


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## Trembling Hand (16 March 2013)

pixel said:


> Judging by the volume spike, last night was a witching day in the US.




So what?


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## Tyler Durden (16 April 2013)

Remember how at the beginning of the year, there were a lot of published opinions about how this year would be a bull market? Then Cyprus happened...

There were also articles about how this would be a bull market for gold as well...and now the last two days have happened...

I am still calling 2013 to be an overall bear-ish year.


----------



## howmanyru (16 April 2013)

Tyler Durden said:


> Remember how at the beginning of the year, there were a lot of published opinions about how this year would be a bull market? Then Cyprus happened...
> 
> There were also articles about how this would be a bull market for gold as well...and now the last two days have happened...
> 
> I am still calling 2013 to be an overall bear-ish year.




I tend to agree. Funny, i went to visit my local motorcycle store yesterday only to see a big fence surrounding it, - gone bust. So i drove to the next store, empty. No motorcycles to look at, so went to the local bargain centre that's been there forever - gone broke. It was an ominous feel, also noticed lots of vacant shops. Sure, motorcycles are discretionary, but to me it's an early warning sign that tradies (and others) are not buying their toys any more. Then i spoke to another guy selling motorcycle accessories, said it's the worst market he has seen for 30 years. All that money printing is not making it into the real economy.


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## FlyingFox (16 April 2013)

howmanyru said:


> I tend to agree. Funny, i went to visit my local motorcycle store yesterday only to see a big fence surrounding it, - gone bust. So i drove to the next store, empty. No motorcycles to look at, so went to the local bargain centre that's been there forever - gone broke. It was an ominous feel, also noticed lots of vacant shops. Sure, motorcycles are discretionary, but to me it's an early warning sign that tradies (and others) are not buying their toys any more. Then i spoke to another guy selling motorcycle accessories, said it's the worst market he has seen for 30 years. All that money printing is not making it into the real economy.




The repercussions of the GFC are only just hitting Oz. We were shielded by all the mining investment and the "we are different, all is well" mentality. Compounding everything are policy decision made by governments long ago without foresight.


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## Tyler Durden (16 April 2013)

Thing is, those same authors are nowhere to be seen now. I reckon if there are a few more down days, then the mainstream media will jump onto the bear bandwagon and claim the rest of the year will be a bear market.


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## young-gun (17 April 2013)

howmanyru said:


> I tend to agree. Funny, i went to visit my local motorcycle store yesterday only to see a big fence surrounding it, - gone bust. So i drove to the next store, empty. No motorcycles to look at, so went to the local bargain centre that's been there forever - gone broke. It was an ominous feel, also noticed lots of vacant shops. Sure, motorcycles are discretionary, but to me it's an early warning sign that tradies (and others) are not buying their toys any more. Then i spoke to another guy selling motorcycle accessories, said it's the worst market he has seen for 30 years. All that money printing is not making it into the real economy.




Hopefully it drives second hand prices a little lower, I'm dying to get back on a bike, just got better places to put money atm unfortunately.

Re. tradies, construction is definitely slowing. I've been going from high rise to high rise no problem for the past 6 years. Looks like this may be my last one for a while, buildings just arent going up, big or small, I'm sure they will be looking at knocking off some dead wood soon.


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## Tyler Durden (2 May 2013)

We've just entered May, and the market seems to be holding up. Perhaps I am wrong and there won't be the annual fire sale in May?


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## Smurf1976 (2 May 2013)

Tyler Durden said:


> We've just entered May, and the market seems to be holding up.



The index might be holding up but a lot if individual stocks aren't.

Of those I'm watching, HHL, MAH and GRR were all down 6+% today alone and no doubt there are many more.

As for the "real" economy, a friend recently mentioned that his son and three of his friends are all looking to leave the state (Tasmania) moving to Queensland to get work. It's about as dead as it can get down here - the best he can get is a manual labouring job working on the NBN and he's been offered an apprenticeship in Qld. So a big regional difference there.

On the plus side, it's become very easy for me to get various contractors to do even the smallest jobs. Only this week, someone spent a lot of time to look at and quote on a job that would take less time to actually do than they spent quoting on it (and no, I didn't pay a cent up front for the quote). A few years ago they wouldn't have bothered to turn up. That says it all really. There's not much work out there, or at least not enough to keep everyone busy.


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## ROE (2 May 2013)

Tyler Durden said:


> Thing is, those same authors are nowhere to be seen now. I reckon if there are a few more down days, then the mainstream media will jump onto the bear bandwagon and claim the rest of the year will be a bear market.




Here something you can keep an eye on ... stock market up 1% or 2% ...a few headlines about it going up...

stock market down 1-2% ...you get the translation to massive headlines of 13 Billion got wiped off the market today, shock horror Oh no.. and they have a whole page live feed it every 15 minutes and list which stock got hammer 

Fear sell I love it , no better time to buy than when Fear took hold ...


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## Tyler Durden (2 May 2013)

Smurf1976 said:


> As for the "real" economy, a friend recently mentioned that his son and three of his friends are all looking to leave the state (Tasmania) moving to Queensland to get work. It's about as dead as it can get down here - the best he can get is a manual labouring job working on the NBN and he's been offered an apprenticeship in Qld. So a big regional difference there.
> 
> On the plus side, it's become very easy for me to get various contractors to do even the smallest jobs. Only this week, someone spent a lot of time to look at and quote on a job that would take less time to actually do than they spent quoting on it (and no, I didn't pay a cent up front for the quote). A few years ago they wouldn't have bothered to turn up. That says it all really. There's not much work out there, or at least not enough to keep everyone busy.




My views on the national and global economy haven't changed and are still bear-ish, but I just think somehow, some way, the ASX is defying all this.

But on your point, I thought it relevant to point out that when I left the office in the CBD today at 5pm, I saw a huge line at my usual bus stop which stretched for some distance. It was a Thursday night - late night shopping night - so why isn't everyone shopping? Why are they all going home at 5pm? Sure, it's possible they may have been going to shop at another suburb, so my premise is based on the assumption that people in the CBD will stay in the CBD for shopping on a Thursday night.


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## sptrawler (2 May 2013)

Tyler Durden said:


> My views on the national and global economy haven't changed and are still bear-ish, but I just think somehow, some way, the ASX is defying all this.
> 
> But on your point, I thought it relevant to point out that when I left the office in the CBD today at 5pm, I saw a huge line at my usual bus stop which stretched for some distance. It was a Thursday night - late night shopping night - so why isn't everyone shopping? Why are they all going home at 5pm? Sure, it's possible they may have been going to shop at another suburb, so my premise is based on the assumption that people in the CBD will stay in the CBD for shopping on a Thursday night.




If commodity prices tank, we are in it to our armpits.
We should all start chanting god bless China.IMO
Gold is off the boil, nickel and copper are languishing, it's not good.


----------



## chops_a_must (3 May 2013)

Some might find this interesting:

http://quantifiableedges.blogspot.com.au/2013/05/what-happens-after-6-months-of-gains.html


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## moXJO (3 May 2013)

Is our market just viewed as safe by the foreign yield chasers?
Forward looking I'm not so sure business will be doing that well to justify the bull run, but maybe I'm just plain wrong.


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## Klogg (3 May 2013)

sptrawler said:


> If commodity prices tank, we are in it to our armpits.
> We should all start chanting god bless China.IMO
> Gold is off the boil, nickel and copper are languishing, it's not good.




And now Iron Ore is taking a beating once more... Spot price was down almost 5% overnight.

Lets see how AGO/FMG open... (I generally track those as IO price proxies)


----------



## chops_a_must (3 May 2013)

The data continues to surprise to the upside.

The market is leading the data, again.

Where is that floor trader fella?


----------



## G Gekko (4 May 2013)

I can't help but feel that a change in government will turn a corner in investor & consumer confidence. I'm not trying to be political, but a Coalition government will bring back memories of everyone making cash easily. The economy was riding high, the sharemarket high, and property was booming. Not that all economic indicators will go back to how they once were but it may cause people to feel a little more optimistic.


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## Trembling Hand (4 May 2013)

chops_a_must said:


> Where is that floor trader fella?




On the floor.... getting a ten count. Like all the other bears.


----------



## chops_a_must (4 May 2013)

More like flooredtrader you reckon?

Or even flawtrader?


----------



## burglar (4 May 2013)

chops_a_must said:


> More like flooredtrader you reckon?
> 
> Or even flawtrader?




That's low!   :


----------



## Intrinsic Value (5 May 2013)

If you look at the fundamentals sooner or later when the money printing runs out of steam then the tea party is going to end and if you aren't fast enough to get out then you will be caught with your pants down.
It still might be a year or two away but I believe it is inevitable.


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## FlyingFox (5 May 2013)

Intrinsic Value said:


> If you look at the fundamentals sooner or later when the money printing runs out of steam then the tea party is going to end and if you aren't fast enough to get out then you will be caught with your pants down.
> It still might be a year or two away but I believe it is inevitable.




Curious, which fundamentals are you referring to?


----------



## Intrinsic Value (5 May 2013)

FlyingFox said:


> Curious, which fundamentals are you referring to?




The mountain of debt out there that can never be repaid by countries such as Japan, USA and a lot of the Euro countries. 

This big round of money printing is the last hurrah and after that there is nothing left.

GFC1 will look like at afternoon tea party compared to what is around the corner via GFC2.


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## FlyingFox (5 May 2013)

Intrinsic Value said:


> The mountain of debt out there that can never be repaid by countries such as Japan, USA and a lot of the Euro countries.
> 
> This big round of money printing is the last hurrah and after that there is nothing left.
> 
> GFC1 will look like at afternoon tea party compared to what is around the corner via GFC2.




You mentioned public debt. What are your thoughts on private debt?

P.S I read through my initial question and it sounded like I was disputing your claims. I am not; I would just like more discussion around it.


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## FxTrader (5 May 2013)

Intrinsic Value said:


> The mountain of debt out there that can never be repaid by countries such as Japan, USA and a lot of the Euro countries. This big round of money printing is the last hurrah and after that there is nothing left. GFC1 will look like at afternoon tea party compared to what is around the corner via GFC2.




It seems likely, given the continuing weakness in so many sectors of the major world economies, the currency wars (debasement) will continue, sovereign debt will continue to skyrocket and asset prices will continue to rise in response to unprecedented money creation.  All that printed money has to go somewhere, principally stocks and bonds.  Japan announces it will create billions of Yen out of thin air and the stock market there soars.  It's likely to end badly but not in the near term.

It's interesting to see the money pouring into defensives lately, investors chasing yields as lower interest rates drive the lemmings into the market.  I note with some interest that valuation specialists like Stockval and Skaffold are showing prices running way ahead of valuations on just about everything that's rocketed up in 2013.  Such distortions are usually worth paying attention to.


----------



## Intrinsic Value (5 May 2013)

FxTrader said:


> It seems likely, given the continuing weakness in so many sectors of the major world economies, the currency wars (debasement) will continue, sovereign debt will continue to skyrocket and asset prices will continue to rise in response to unprecedented money creation.  All that printed money has to go somewhere, principally stocks and bonds.  Japan announces it will create billions of Yen out of thin air and the stock market there soars.  It's likely to end badly but not in the near term.
> 
> It's interesting to see the money pouring into defensives lately, investors chasing yields as lower interest rates drive the lemmings into the market.  I note with some interest that valuation specialists like Stockval and Skaffold are showing prices running way ahead of valuations on just about everything that's rocketed up in 2013.  Such distortions are usually worth paying attention to.




No one knows when things will turn bad it could be a year or two away but all the signs are there.

You cant keep printing money you don't have ad infinitum without consequences.


----------



## burglar (5 May 2013)

These guys agree with you!!


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## CanOz (5 May 2013)

There are a few bears around....all be it most are licking ther wounds from Fridays scramble to cover...






> Near-Record NYSE Margin Debt Leads to Caution: Chart of the Day






> By David Wilson
> May 2 (Bloomberg) -- Borrowing to buy U.S. stocks is close
> enough to a record to cause concern that prices may not rise
> much longer, according to Cullen Roche, founder of Orcam
> ...


----------



## odds-on (8 May 2013)

Hi,

I only ever go long on single stocks and have no experience of using ETFs, so take it easy...

Any thoughts on this product? I think it might come in handy later this year.

http://www.betashares.com.au/products/name/bear-fund/#each-overview

Feedback will be appreciated.

Cheers

odds-on


----------



## white_goodman (9 May 2013)

Intrinsic Value said:


> The mountain of debt out there that can never be repaid by countries such as Japan, USA and a lot of the Euro countries.
> 
> This big round of money printing is the last hurrah and after that there is nothing left.
> 
> GFC1 will look like at afternoon tea party compared to what is around the corner via GFC2.




the amount of moeny printing isnt as large as people think, the amount of treasuries held by the Fed is at historical norms of around 15% of total... the 'issue' is that roughly half is under 2 years expiry and may cause inflationary pressures if they arent rolled over as they typically are


----------



## drsmith (9 May 2013)

CanOz said:


> There are a few bears around....all be it most are licking ther wounds from Fridays scramble to cover...




Even more interesting would be the graphic of margin debt in proportion to the overall capitalisation of the S&P500 and over a longer time period.


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## Uncle Festivus (11 May 2013)

drsmith said:


> Even more interesting would be the graphic of margin debt in proportion to the overall capitalisation of the S&P500 and over a longer time period.




To the end of march.....a bit higher now....




A lot more irrational exuberance left yet.....giddy up!


----------



## Trembling Hand (11 May 2013)

Uncle Festivus said:


> A lot more irrational exuberance left yet.....giddy up!
> 
> View attachment 52126




I'm surprised its so low! Been sitting between 2-3 % for ever


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## Knobby22 (11 May 2013)

I'd like to see how it compares to margin levels in the late 80's when the last crash occurred.

The world's not in a good place so people are trying to protect their money. The share market which contains many large operators with businesses that are difficult to compete with due to government regulation and oligopoly behaviour are logical places to invest in.


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## Uncle Festivus (12 May 2013)

Giddy up.....


----------



## chops_a_must (12 May 2013)

I'm certainly on watch at the moment.

Finally, some "experts" seem to be bullish.

And there are some classic top formations in charts like CSL and TLS starting to pop up.


----------



## sydboy007 (12 May 2013)

I wont vall myself a bear, but I am starting to sell out of the stocks I own that have shot up 305+ over the last few months.

Starting to move into some bonds that pay a decent yield - 4%+ CPI seems to be a yield I can live with these days.

I might miss out on the tide going higher and higher, but I'm comfortable to leave some for the next guy to take a punt on.


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## MARKETWINNER (12 May 2013)

Yes we cannot see bears now even in Japanese market. Lot of analysts were talking about X-Japan those days. 

When there were bears we should have invested in global markets. Some really missed the train. Instead of becoming bullish on stocks many became bullish on gold.

I think it is time to become bearish on AUD and NZD when others have bullish view on these currencies. It is time to become bullish on some bear currencies.

Lower AUD and NZD will benefit some sectors in Australasia in the coming quarters and years.


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## sptrawler (12 May 2013)

I've been moving into the market, money printing appears to have been well managed. The rich in the U.S and U.K have been buying up cheap assetts with cheap loans.
So the capitalist system roll on.


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## Uncle Festivus (14 May 2013)

sptrawler said:


> I've been moving into the market, money printing *appears to have been well managed*.




What's there to manage - just hit the print button? It's the _exit_ that can't be managed.........without consequences.




POMO night tonight so BUY!


----------



## white_goodman (14 May 2013)

Uncle Festivus said:


> What's there to manage - just hit the print button? It's the _exit_ that can't be managed.........without consequences.
> 
> View attachment 52162
> 
> ...




US Fed is quite conservative, I wouldnt be too worried at the exit, they have tools (IOR,OMO) to manage if they think inflation etc is creeping in (which it hasnt hence the Evans rule), the worry is the inter temporal budget constraints of the treasury and its inflation/bond market implication... Fed % of US treasuries is at historical averages circa 15%, the notion that they are the only buyers is false


----------



## FxTrader (14 May 2013)

white_goodman said:


> US Fed is quite conservative, I wouldnt be too worried at the exit, they have tools (IOR,OMO) to manage if they think inflation etc is creeping in (which it hasnt hence the Evans rule), the worry is the inter temporal budget constraints of the treasury and its inflation/bond market implication... Fed % of US treasuries is at historical averages circa 15%, the notion that they are the only buyers is false




You either must be joking or just misinformed.  The Fed's balance sheet of US T Bonds is approaching 2 Trillion Dollars and constitutes over 90% of bond purchases, the total balance sheet is now over 4 Trillion!  Historical averages mean nothing in the context of this unprecedented experiment (gamble) by the Fed.  There is no graceful exit possible.


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## white_goodman (14 May 2013)

FxTrader said:


> You either must be joking or just misinformed.  The Fed's balance sheet of US T Bonds is approaching 2 Trillion Dollars and constitutes over 90% of bond purchases, the total balance sheet is now over 4 Trillion!  Historical averages mean nothing in the context of this unprecedented experiment (gamble) by the Fed.  There is no graceful exit possible.










http://macromarketmusings.blogspot.com.au/2012/11/the-biggest-myth-about-fed.html


----------



## Intrinsic Value (14 May 2013)

FxTrader said:


> You either must be joking or just misinformed.  The Fed's balance sheet of US T Bonds is approaching 2 Trillion Dollars and constitutes over 90% of bond purchases, the total balance sheet is now over 4 Trillion!  Historical averages mean nothing in the context of this unprecedented experiment (gamble) by the Fed.  There is no graceful exit possible.




There will be plenty of blood on the floor sonner or later. It is not a matter of if rather it is when.


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## white_goodman (14 May 2013)

Intrinsic Value said:


> There will be plenty of blood on the floor sonner or later. It is not a matter of if rather it is when.




the oracle of our time..


----------



## white_goodman (14 May 2013)

there is no easing policy at the moment, inflation (evans rule), NGDP growth trend gap, unemployment indicators say absolute the opposite, Fed policy is too tight/conservative..

low IR doesnt correlate to easy policy (if anything theres a slight bias in the data that it means tight policy)..

theres a fundamental disconnect here between the smh economics with real macro

EDIT: and confusion with CB accounting


----------



## Trembling Hand (14 May 2013)

white_goodman said:


> there is no easing policy at the moment, inflation (evans rule), NGDP growth trend gap, unemployment indicators say absolute the opposite, Fed policy is too tight/conservative..
> 
> low IR doesnt correlate to easy policy (if anything theres a slight bias in the data that it means tight policy)..
> 
> ...




At last some puts it out there.


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## FlyingFox (14 May 2013)

This is just personal opinion from my observations so please don't think of it as the bible. I think one of the factors that most have ignored on either side of the argument that white_goodman pointed out was that the macro conditions have changed and dramatically and they will continue changing. 

World population growths rates are levelling off. People are the key drivers of economic activity. Most of the big middle class drive in India and China is probably behind us. 

The demographic dividend of most if not all the developed countries is behind us. The big shifts in macro factors that have driven economic growth are behind us. 

Whatever the Fed or any other country prints has to contend with this change in macro conditions. Personally I would be just as worried about the situation where they are not printing enough as the one where they are printing too much.

As always the truth is probably somewhere in between the two extremes.


----------



## FxTrader (14 May 2013)

white_goodman said:


> http://macromarketmusings.blogspot.com.au/2012/11/the-biggest-myth-about-fed.html




If you are going to go chart hunting in blogs to support the assertion that the Fed is behaving responsibly and just returning to historical norms then look at the charts here...

http://monetaryaffairs.blogspot.com.au/2013/03/federal-reserve-holdings-of-treasuries.html

*"By the end of 2013, the Fed will own 45% of the 30-year Treasury market, and between 35%-40% of the 7-year and 10-year segments. These are pretty huge figures."*

This is the harsh reality played down in the highly questionable charts and conclusions drawn in the marcromarketmusings blog. 

I find the notion that the Fed is somehow not monetizing debt incredible nonsense.  Operation twist, financing trillions of government debt issuance via purchase with money created by the Fed, is unsustainable voodoo economics.  The arguments to the contrary are a case of wishful thinking at best.


----------



## white_goodman (14 May 2013)

FxTrader said:


> If you are going to go chart hunting in blogs




yes I will, many of the leading economists in the world of macro are in the econoblogosphere..

re wishful thinking.. there are risks, but they are on the fiscal side imo, with a tad over 50% of treasuries under 2 year maturity this combined with ongoing fiscal deficits will be the engine for inflation and CB 'losses' if govt credibility comes into question

saying certain policy is destined for inevitable results is intellectually backward, even being fairly well read in macro and having post grad quals still doesnt mean I would make sweeping statements like that, even Krugman gets close to a right idea some times..

the printing = bad, buy gold, buy bitcoin tinhat silver 5000 meme is a little tired, we are in uncharted territory, I think a fiscal austerity regime with a working market toward NGDP level targeting would be my ideal based on data/research ive been seeing... this would mean less of a role for fiscal which is ideal considering the political process/vested interests.

decades ago we thought the phillips curve was the be all and end all, then it was monetarism and steady money supply growth (MV =PY with V constant), then great moderation was inflation targeting and all the ZIRP/oil shock problems related with that.. The fact so many people are 'expecting' the CB to consume losses also makes me believe that it wont be an issue. Theres going to be bumps along the road but the Fed won't be eating the catastrophic end of times losses that the zeitgeist/nwo/illuminati/zerohedge crowd believe it to be in all probability

the trend for CB's is in more unconventional policy, although rules based matched with forward guidance/expectations management... the days of tinkering with overnight cash rates may well be over considering the western world are near 0%, pros and cons, ill wait and see what type of stuff comes out


----------



## CanOz (14 May 2013)

white_goodman said:


> yes I will, many of the leading economists in the world of macro are in the econoblogosphere..
> 
> re wishful thinking.. there are risks, but they are on the fiscal side imo, with a tad over 50% of treasuries under 2 year maturity this combined with ongoing fiscal deficits will be the engine for inflation and CB 'losses' if govt credibility comes into question
> 
> ...




That's a great post Whitey


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## Tyler Durden (14 May 2013)

This might be one of the few Mays where there isn't a huge sell off


----------



## Knobby22 (14 May 2013)

CanOz said:


> That's a great post Whitey




I agree though I don't  understand all of it. "zeitgeist/nwo/illuminati/zerohedge crowd" What the!!


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## Uncle Festivus (15 May 2013)

The FED has absolutely no effect on equity prices.......

Operation Date:	 	05/14/2013
Operation Type:	 	Outright Coupon Purchase
Release Time:	 	10:15 AM
Close Time:	 	        11:00 AM
Settlement Date:	 	05/15/2013
Maturity/Call Date Range:	05/15/2020 - 02/15/2023
Total Par Amt Accepted (mlns) :$3,306
Total Par Amt Submitted (mlns) :$13,677

Strip out Tuesdays, big fat flatline........


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## Uncle Festivus (15 May 2013)

"In the fourth quarter of 2012, the Dow Jones Industrial Average had negative earings-per-share (EPS) growth and revenue growth of less than 1%. Thus far in the first quarter of 2013, the Dow Jones Industrial Average has had EPS growth of about 1%, but revenue has declined by 2.65%.

*One might also suggest that without aggressive share-repurchase programs, the EPS results would be far worse than they are because the actual earnings in real dollars is declining for the companies that comprise the index. In reality, for two consecutive quarters, the Dow has actually been contracting.*

This information may surprise some investors because when earnings are reported, they are always compared to analyst estimates, and investors sometimes forget to look closely at combined year-over-year growth rates.

For the Dow, year-over-year quarterly growth rates have been *steadily declining since 2010*. After the credit crisis, the growth rates were phenomenal, but those were compared to horrible results posted during the crisis, comps were easy, and earnings were just recovering from that meltdown.

In addition, *every quarter since 2010 has seen lower and lower year-over-year growth rates* for the companies comprising the Dow, and now year-over-year growth rates have reached 0%. This has officially happened two consecutive quarters in a row, but the Average keeps on moving higher. Eventually, earnings will need to increase substantially or prices will need to fall."

http://www.marketwatch.com/story/lack-of-growth-in-the-dow-reaches-dire-stage-2013-05-13


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## Uncle Festivus (15 May 2013)

The "conservative" US FED?




"With the Fed buying about $85 billion a month in Treasuries *and mortgage bonds*, the net supply to the private sector will be about zero as the central bank effectively soaks up about 90 percent of new issuance of those assets."


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## white_goodman (15 May 2013)

Uncle Festivus said:


> The FED has absolutely no effect on equity prices.......




who's arguing against that?


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## white_goodman (15 May 2013)

A piece showing differences between Bernanke the Chairman and Bernanke as the academic

http://thefaintofheart.wordpress.com/2013/05/10/bernanke-has-not-listened-to-bernanke/

How are those big short positions going Festivus?


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## Uncle Festivus (15 May 2013)

white_goodman said:


> A piece showing differences between Bernanke the Chairman and Bernanke as the academic
> 
> http://thefaintofheart.wordpress.com/2013/05/10/bernanke-has-not-listened-to-bernanke/
> 
> How are those big short positions going Festivus?




Looks like lunch at Maccas today......


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## Uncle Festivus (15 May 2013)

Some excellent data prints today. So was someone talking about ending QE this year because of the 'recovery'?


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## Uncle Festivus (16 May 2013)

white_goodman said:


> A piece showing differences between Bernanke the Chairman and Bernanke as the academic
> 
> http://thefaintofheart.wordpress.com/2013/05/10/bernanke-has-not-listened-to-bernanke/
> 
> How are those big short positions going Festivus?




Mmmmm....KFC today


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## Tyler Durden (16 May 2013)

Not sure if you're trying to say Macca's/KFC is cheap........or expensive.


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## white_goodman (16 May 2013)

Uncle Festivus said:


> Some excellent data prints today. So was someone talking about ending QE this year because of the 'recovery'?




Evans Rule

http://au.businessinsider.com/fed-announces-evans-rule-2012-12


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## white_goodman (16 May 2013)

Uncle Festivus said:


> Mmmmm....KFC today




wow looks pro..


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## Uncle Festivus (16 May 2013)

white_goodman said:


> Evans Rule
> 
> http://au.businessinsider.com/fed-announces-evans-rule-2012-12




Just have to ensure that the entity you base the rule(s) on is calculated correctly?

Walking, walking........

"The Fed is now linking future monetary policy moves to hard economic thresholds on *unemployment and inflation*."

......and stop.


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## white_goodman (16 May 2013)

Uncle Festivus said:


> Just have to ensure that the entity you base the rule(s) on is calculated correctly?
> 
> Walking, walking........
> 
> ...




you could throw in the calcs for just about every macro aggregation... they are all wrong in many aspects, but that doesnt mean anything... when those numbers are reached itll give you a guide on Fed Policy...

You seem to be stuck in a mind frame of what the world should be, not what is...The Fed is a bad performer for the past 100 years and is easy to critique, still basing decisions on what they should be doing or what would happen in an ideal world isnt anything to work from, work on what they will do and are doing..


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## white_goodman (16 May 2013)

heres a good video on the market monetarist view of present situation..


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## Trembling Hand (16 May 2013)

white_goodman said:


> heres a good video on the market monetarist view of present situation..




Very interesting. Would love to hear a rebuttal from the Bears.........


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## Uncle Festivus (17 May 2013)

Trembling Hand said:


> Very interesting. Would love to hear a rebuttal from the Bears.........




Stuffing Yen in yield holes?

Bad 

On Monday, Japanese yields moved higher even as the BOJ scooped up  ¥1.2 trillion of JGBs maturing in one to 10 years at three separate operations””exactly the opposite effect the BOJ had been hoping for, strategists said.

With liquidity deteriorating, "*a risk-free investment has now become risky*," said Manabu Tamaru, senior investment manager at Baring Asset Management (Japan). "Thus investors are demanding a risk premium under the BOJ's buying program."

FONT=*Comic* Sans MS 




Good 

Though yields fell, politicians and bond investors chalked up the overall rise in rates to a *brighter economic outlook* pushing money out of safe-haven sovereign debt. Japan posted a 3.5% increase in gross domestic product for the first three months of the year, government data showed Thursday, far outpacing its industrialized peers.

"When money begins to move, then you've got to be resigned to the fact that there's no choice but for JGB yields to rise" as *the economy recovers*, Finance Minister Taro Aso said in Parliament Thursday, adding that some investors were likely selling bonds to buy stocks.

The Bank of Japan currently is buying more than  ¥7 trillion of government bonds per month, equal to more than 70% of new issuance.


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## FlyingFox (17 May 2013)

white_goodman said:


> heres a good video on the market monetarist view of present situation..





Great video. Thanks! A lot of interesting points brought up and I like the idea of nominal GDP targeting is really good. 

However there were some issues brought up that are perhaps more interesting.

Personally targeting is great when you have an underlying trend  is maintained because of demand. The targeting helps smooth out kinks in the supply or demand and nominal GDP is arguably a better way to target. 

However what happens when there is a change from the status quo, when the economy is transitioning? Should we stick to targeting?

Granted that the lack of stimulus is bad. But more thought should be given to the fact that these models and targets where developed at a different time. The last century or century and a half has been completely different to anything else prior and possibly anything else in the future. 

If the underlying macros are changing, is it not more prudent to try and get to the new normal than just try and keep to targets developed in boom times?


----------



## white_goodman (17 May 2013)

FlyingFox said:


> However what happens when there is a change from the status quo, when the economy is transitioning? Should we stick to targeting?




it should be important to not theres a a massive difference to a target and a level target... level targeting means doing more or less to keep on a fairly linear target of NGDP growth, our current inflation 'target' has no implication for the next year or the previous period (ie catch ups or slow downs)..

there are adjustments theoretically regarding NGDP relative to rates of business/personal taxation and a move towards growth of nominal wage targeting... the theory isnt 100% fleshed out its largely been developed in the blogosphere and is outpacing the peer review academic process.. which is pretty cool in a way. The term Market Monetarism was only coined by Lars Christensen in 2011, so yeah its got some ways to go before making its way full into academia/policy. In saying the former head of Bank of Canada and future BOE govern or Carney is all for it..
the arguement on where to start the level target from is up for debate but isnt overally crucial moving forward as long as there is some level target, and you can't really have a flexible target that is changed arbitrarily, sort of defeats the purpose in terms of guidance and expectations.. When there are real productivity gains you will see low inflation all else being equal and vice versa... we are getting a quasi experiment in Japan atm, which future Fed chairwoman Romer has commented on being most interesting in terms of the macro space atm... good news ahead if it seemingly works in Japan, as uncle festivus has shown above (higher rates are a good thing), and other indicators are showing much better economic numbers filtering out. Who would have thought the Keynesian magic bullet of fiscal policy might finally be shelved


----------



## white_goodman (17 May 2013)

Uncle Festivus said:


> The Bank of Japan currently is buying more than  ¥7 trillion of government bonds per month, equal to more than 70% of new issuance.




we are in Abenomics now, I dont see what you are trying to suggest other than a gotcha that isnt a gotcha?

the monetarist theory of increasing HPM or the CB balance sheet = hyperinflation, is an idea stuck in the middle ages... despite how good the economist who thought it up was, the ultra tight MP of the past 20 years in Japan is hopefully over, for their sake, only cost them 200% in debt/GDP to figure it out


----------



## FlyingFox (17 May 2013)

white_goodman said:


> it should be important to not theres a a massive difference to a target and a level target... level targeting means doing more or less to keep on a fairly linear target of NGDP growth, our current inflation 'target' has no implication for the next year or the previous period (ie catch ups or slow downs)..
> 
> there are adjustments theoretically regarding NGDP relative to rates of business/personal taxation and a move towards growth of nominal wage targeting... the theory isnt 100% fleshed out its largely been developed in the blogosphere and is outpacing the peer review academic process.. which is pretty cool in a way. The term Market Monetarism was only coined by Lars Christensen in 2011, so yeah its got some ways to go before making its way full into academia/policy. In saying the former head of Bank of Canada and future BOE govern or Carney is all for it..
> the arguement on where to start the level target from is up for debate but isnt overally crucial moving forward as long as there is some level target, and you can't really have a flexible target that is changed arbitrarily, sort of defeats the purpose in terms of guidance and expectations.. When there are real productivity gains you will see low inflation all else being equal and vice versa... we are getting a quasi experiment in Japan atm, which future Fed chairwoman Romer has commented on being most interesting in terms of the macro space atm... good news ahead if it seemingly works in Japan, as uncle festivus has shown above (higher rates are a good thing), and other indicators are showing much better economic numbers filtering out. Who would have thought the Keynesian magic bullet of fiscal policy might finally be shelved





Interesting. What happens when you have a productivity fall for example due to the rebalancing of age distributions eg. in Japan and Italy?


----------



## white_goodman (17 May 2013)

FlyingFox said:


> Interesting. What happens when you have a productivity fall for example due to the rebalancing of age distributions eg. in Japan and Italy?




all else being equal to get to your trend target it must be made of real growth in output and growth in the price level(inflation), less of one means more of the other. There are feasible tweaks to the level target with relative tax rates, population growth and nominal wage growth, but im only in my infancy upon reading it..

Sumners blog and Marco Nunes are probably the best imo


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## Uncle Festivus (17 May 2013)

white_goodman said:


> we are in Abenomics now, I dont see what you are trying to suggest other than a gotcha that isnt a gotcha?
> 
> the monetarist theory of increasing HPM or the CB balance sheet = hyperinflation, is an idea stuck in the middle ages... despite how good the economist who thought it up was, the ultra tight MP of the past 20 years in Japan is hopefully over, for their sake, only cost them 200% in debt/GDP to figure it out




What's a gotcha?

Only get goods inflation if monetary inflation escapes? Looks like the difference between the US & Japan - Japan making a mess of it if they can't "control" it?

Last nights data response = not efficient markets?

Quiz - which yield bubble?


----------



## white_goodman (17 May 2013)

Uncle Festivus said:


> Last nights data response = not efficient markets?




what data? the JGB yields are up hence bond prices down despite BOJ purchases?

thats the point..

higher yields mean better growth prospects for Japanese economy

is your objection that the stimulus is working? or that its working too well and they wont ever step off the gas, which is another argument that I can agree with in many ways..


----------



## FlyingFox (17 May 2013)

white_goodman said:


> all else being equal to get to your trend target it must be made of real growth in output and growth in the price level(inflation), less of one means more of the other. There are feasible tweaks to the level target with relative tax rates, population growth and nominal wage growth, but im only in my infancy upon reading it..
> 
> Sumners blog and Marco Nunes are probably the best imo




I agree with what you are saying. I am not disputing the mechanisms but rather the reasons behind the mechanism. At steady state of output (say population growth and productivity growth are relatively constant and positive and the population composition is relatively constant), the targeting works great. Say a nominal GDP target of 5% is chosen with 3% output and 2% inflation. 

If you then try and use this target at a point where the output trend reverse (population decreases or change in composition or productivity decreases) than inflation all of a sudden needs to make a larger component. (output=0%, inflation = 5%; output = -2%, inflation=7%). See where this is heading?

While inflation targeting under shoots, nominal GDP targeting will, at least in theory result in strong inflation in these situations (assume you can get the money flowing). 

Obviously due to the debt levels, personal and sovereign, this is the desired result. I can see the Japanese policies are trying to do this, directly or indirectly but at what cost?


----------



## white_goodman (17 May 2013)

more on Abenomics..

http://macromarketmusings.blogspot.com.au/2013/05/abenomics-and-supply-of-safe-assets.html


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## Uncle Festivus (18 May 2013)

white_goodman said:


> what data? the JGB yields are up hence bond prices down despite BOJ purchases?
> 
> thats the point..
> 
> ...




The data, the ones that matter, 


confirmation the EU (France & Italy) is still in recession = miss/worse than expected  

Germany & the UK barely into positive GDP

German Prelim GDP q/q 0.1% v 0.3% exp v -0.7 rev from -0.6 = miss/worse than expected 

US Unemployment Claims 360K v 332K exp v 328K rev higher from 328k = miss/worse than expected  

US Housing Starts 0.85M v 0.98M exp v 1.02M rev down from 1.04M = miss/worse than expected  

US Philly Fed Manufacturing Index -5.2 v 2.5 exp v 1.3 prev = miss/worse than expected  

US Empire State Manufacturing Index -1.4 v 3.6 exp v 3.1 prev = miss/worse than expected 

German ZEW Economic Sentiment 36.4 v 39.5 v 36.3 = miss/worse than expected

US Mortgage Delinquencies 7.25% v 7.09% prev = trend rising

US Factory Orders m/m -4.0% v -2.8% exp v 1.9% rev down from 3.0% = miss/worse than expected

US ISM Manufacturing PMI 50.7 v 51.0 v 51.3 = miss/worse than expected

S&P 500 revenue growth = 0% (only 46.9 percent have beaten revenue expectations)

Thomson Reuters notes that S&P 500 first-quarter revenues (so far) have fallen 0.2 percent; to the extent that companies reported positive revenue “surprises,” this may well be due more to the low expectations than to the ability of companies to post higher sales. That means that for a majority of companies in the S&P 500, any growth in profits is coming not from robust growth but rather as a result of cost cutting.

OEX 100 investors have been covering their short positions at a very fast pace ”” a major force driving the latest rally. Have all the shorts been squeezed out yet?

US rate volatility has recently pipped up, and this has been led by a sharp increase of Japanese rate volatility as a result of the easing policies of the BoJ.  *A rise in bond yields in Japan accompanied by a rise in bond volatility could be very damaging, especially as Japan has to refinance about 50% of GDP’s worth of debt each year.*

Etc etc ie the melt up continues eg DAX................


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## CanOz (18 May 2013)

This is the really dangerous part now for the mom and dads, buy and holds....they see the US making fresh all time highs and then want to get involved....

CanOz


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## Uncle Festivus (18 May 2013)

CanOz said:


> This is the really dangerous part now for the mom and dads, buy and holds....they see the US making fresh all time highs and then want to get involved....
> 
> CanOz




Cue sucking sound of mom and dads, buy and holds being enticed into the QE vortex....never to return

Maverick (US): He's going vertical, so am I! 
Goose(Japan): We're goin ballistic Mav, go get em!

Keep an eye on this, rolling over before the seasonal peak....

Railfax report


----------



## white_goodman (18 May 2013)

CanOz said:


> This is the really dangerous part now for the mom and dads, buy and holds....they see the US making fresh all time highs and then want to get involved....
> 
> CanOz




thats not really saying much though, all time highs can be followed by all time highs for a long time... similar things have been said the entire run up..


----------



## Porper (18 May 2013)

white_goodman said:


> thats not really saying much though, all time highs can be followed by all time highs for a long time... similar things have been said the entire run up..




The media, especially Buisness programs on T.V are getting bearish...again. They say a major correction is imminent.

Maybe, but sentiment isn't high. Far from it. The average trader/investor hasn't been making money on this run. Far from it, most have seen their accounts decline or go sideways;unless they've been trading the top 100 stocks which most don't.

The trend is up and trying to predict a downturn without evidence is futile. It's nothing more than an educated guess. We all do it but the strength is clear to see so why try to fight it.


----------



## Vixs (18 May 2013)

Porper said:


> The media, especially Buisness programs on T.V are getting bearish...again. They say a major correction is imminent.
> 
> Maybe, but sentiment isn't high. Far from it. The average trader/investor hasn't been making money on this run. Far from it, most have seen their accounts decline or go sideways;unless they've been trading the top 100 stocks which most don't.
> 
> The trend is up and trying to predict a downturn without evidence is futile. It's nothing more than an educated guess. We all do it but the strength is clear to see so why try to fight it.




I don't think your statement that most investors haven't been making money on this run reflects reality, as I'd say that most peoples investments are in blue chip stocks.


----------



## Porper (18 May 2013)

Vixs said:


> I don't think your statement that most investors haven't been making money on this run reflects reality, as I'd say that most peoples investments are in blue chip stocks.




Right so "most people" invest in Blue Chip stocks?  Hmm, ok but beg to differ and would be interested where you get that stat from. Even those in managed funds tend to diversify which will have dragged profits (if any) down. 

Point is we aren't in a raging Bull Market (not in Australia anyway) so those suggesting the market is overheated like it was back in 2007 are dreaming i.m.o.


----------



## Uncle Festivus (18 May 2013)

Porper said:


> The average trader/investor hasn't been making money on this run. Far from it, most have seen their accounts decline or go sideways;unless they've been trading the top 100 stocks which most don't.






Porper said:


> Right so "most people" invest in Blue Chip stocks?  Hmm, ok but beg to differ and would be interested where you get that stat from. Even those in managed funds tend to diversify which will have dragged profits (if any) down.
> 
> Point is we aren't in a raging Bull Market (not in Australia anyway) so those suggesting the market is overheated like it was back in 2007 are dreaming i.m.o.




Maybe if _you_ generalise you might have to back it with a stat too? "Most have seen their accounts decline"?? If "most" are not making money in this market they never will??


----------



## Porper (18 May 2013)

Uncle Festivus said:


> Maybe if _you_ generalise you might have to back it with a stat too? "Most have seen their accounts decline"?? If "most" are not making money in this market they never will??




Don't misquote me Uncle...decline or go sideways I said. Take a look at the Small Ords compared to the XJO. Chalk and cheese.

I thought you would have focussed on the negatives with you being bearish the past few years. Still waiting for your predicted Armageddon.

Hope you haven't been short whilst you've been predicting the end is nigh. Good luck with that strategy.


----------



## Klogg (18 May 2013)

Porper said:


> Point is we aren't in a raging Bull Market (not in Australia anyway) so those suggesting the market is overheated like it was back in 2007 are dreaming i.m.o.




If you own the banks or Telstra, you're in a raging bull market. If you own resource stocks, you're getting slaughtered. Otherwise, you've seen a slight increase.

And comparing the current market to '07 is pure fantasy! Last I checked (was a couple weeks back) we were at a market P/E of ~15... Even though it's only one metric of many, it's a good indication that we're nowhere near that sort of market hype.


----------



## tinhat (18 May 2013)

Klogg said:


> If you own the banks or Telstra, you're in a raging bull market. If you own resource stocks, you're getting slaughtered. Otherwise, you've seen a slight increase.




It's a stock pickers market alright. There are dozens of high quality company stocks that have gone through the roof in this current bull market - not just the banks and Telstra. From the top of my head:

FLT
WEB
IIN
TPM
MTU
MNF
MMS
DMP
SUL
APE
AGI
CCP
CSL
CTX
GEM
IAG
REA
CRZ
CTD
RMD
TOX
WES
RHC
NVT
IVC

Alas, I don't own enough of them. It's not a market for buy and hold though. Got to set stop losses and keep to them and get out of the underperformers. Another problem is that for a fundamental/value investor, many of those companies have appeared overpriced the whole way through the bull run. They started with higher PEs, lower yields and seemed fully priced, or not priced at a good discount to earnings and forecast earnings yet their share prices have gone up as they have been risk rerated - going from PEs of 14 to 20+. A few in this category for me have been RHC, SUL, DMP - they've seemed expensive the whole way through and just get more and more so.


----------



## FlyingFox (18 May 2013)

white_goodman said:


> more on Abenomics..
> 
> http://macromarketmusings.blogspot.com.au/2013/05/abenomics-and-supply-of-safe-assets.html




Given that Japan has had 20 years of deflation and stagnation, it is debatable that they have come off of the highs to what is normal given their macros. Therefore a policy like Abenomics can be effective ( personally I think Japan has gone past the point of no return although that has little to do with economic and fiscal policy).

Do you think something like that will work in the US? Europe? Australia?


----------



## white_goodman (18 May 2013)

FlyingFox said:


> Given that Japan has had 20 years of deflation and stagnation, it is debatable that they have come off of the highs to what is normal given their macros. Therefore a policy like Abenomics can be effective ( personally I think Japan has gone past the point of no return although that has little to do with economic and fiscal policy).
> 
> Do you think something like that will work in the US? Europe? Australia?




europe is hard to say as they are under a quasi gold standard, US especially future chairwoman Romer are looking very closely at the Japan experiment. Here in Aus our CB has performed quite well over the past few years and I dont think we will need to resort to anything too radical unless we really fall of a cliff somewhere... im just speculating though, these things are hard to forecast when theres so much CB intervention taking place atm and all the market relationships/correlations breakdown/change..

http://thefaintofheart.wordpress.co...h-commodity-exporters-but-different-outcomes/

The demographic headwinds in japan will be interesting moving forward, lets just hope they dont institute any Krugman 'death panels'... I know that id like to see some inflationary expectations trickle into japan before you get the full weight of deflationary demographics


----------



## Uncle Festivus (19 May 2013)

Porper said:


> Don't misquote me Uncle...decline or go sideways I said. Take a look at the Small Ords compared to the XJO. Chalk and cheese.
> 
> I thought you would have focussed on the negatives with you being bearish the past few years. Still waiting for your predicted Armageddon.
> 
> Hope you haven't been short whilst you've been predicting the end is nigh. Good luck with that strategy.




Misquote? 'Go sideways' is = not making money is it not?

Actually, your post reminds me of the posters in 2008 who scoffed at those who pointed out some minor economic fundamental anomalies and who dared to discuss anything but rising bull markets, until, that is, they crashed. Then a few naked swimmers were left exposed. The only difference between then and now is that we have QE Unlimited and 'whatever it takes' rhetoric to continually juice the equity markets at least, until they (C word). 

Perhaps a permabull can explain, and I mean really exlain it, why the DAX futures melted up Friday night?
I believe that only now are we seeing some short capitulation/exhaustion, so getting interesting.......

-----------------------------------

The same person who was in charge then is still in charge, and his calls have been ineptly wrong. 

(March 28, 2007) "At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency."

"The GSEs are adequately capitalized. They are in no danger of failing."

(Two months before Fannie Mae and Freddie Mac collapsed and were nationalized) "They will make it through the storm."

(June 10, 2008) "The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."


----------



## Porper (19 May 2013)

Uncle Festivus said:


> The same person who was in charge then is still in charge, and his calls have been ineptly wrong.




A bit like yours Uncle. You have been bearish for years and still are. Where is the DOW now? All time highs and surging. Funny thing is when people like yourself continually call for a top and are always wrong you jump on the  "it's manipulated" bandwagon. What's it matter why markets are going up? You can blame the Fed and money printing all you like. The charts don't lie...and never do.

If futures rolling over during one session is your best evidence that the end is nigh you are dreaming mate. Yes there maybe a pull-back coming up as nothing runs in a straight line higher indefinately. But a retracement will probably be a buying opportunity.


----------



## Uncle Festivus (19 May 2013)

Porper said:


> A bit like yours Uncle. You have been bearish for years and still are. Where is the DOW now? All time highs and surging. Funny thing is when people like yourself continually call for a top and are always wrong you jump on the "it's manipulated" bandwagon. What's it matter why markets are going up? You can blame the Fed and money printing all you like. The charts don't lie...and never do.
> 
> If futures rolling over during one session is your best evidence that the end is nigh you are dreaming mate. Yes there maybe a pull-back coming up as nothing runs in a straight line higher indefinately. But a retracement will probably be a buying opportunity.




No, I was right back then - Bernanke wasn't. 

I didn't say the end is nigh for the DAX did I? So in the absence of any reason, you don't know why the DAX did a woody after hours either?


----------



## white_goodman (19 May 2013)

Uncle Festivus said:


> No, I was right back then - Bernanke wasn't.




love them broken clocks

you saying you expected Bernanke as chairman should be talking up the chances of a fat tail event pre crisis... they are conservative for a reason...they arent economic oracles, most of the most favoured CB DSGE models show one thing, the folly of trying to predict with any mathematical certainty..

dont take this as a Bernanke loving comment his performance has been subpar even against his own metrics/advice


----------



## Uncle Festivus (19 May 2013)

white_goodman said:


> love them broken clocks
> 
> you saying you expected Bernanke as chairman should be talking up the chances of a fat tail event pre crisis... they are conservative for a reason...they arent economic oracles, most of the most favoured CB DSGE models show one thing, the folly of trying to predict with any mathematical certainty..
> 
> dont take this as a Bernanke loving comment his performance has been subpar even against his own metrics/advice




Not sure why the broken clock analogy keeps getting airplay - the timing has always been the unknown but the conclusions from hard data is more certain? You can't fight demographics with QE?


----------



## FlyingFox (19 May 2013)

Uncle Festivus said:


> You can't fight demographics with QE?




Doesn't mean they won't try....


----------



## qldfrog (19 May 2013)

Klogg said:


> If you own the banks or Telstra, you're in a raging bull market. If you own resource stocks, you're getting slaughtered. Otherwise, you've seen a slight increase.
> 
> And comparing the current market to '07 is pure fantasy! Last I checked (was a couple weeks back) we were at a market P/E of ~15... Even though it's only one metric of many, it's a good indication that we're nowhere near that sort of market hype.



which is why I believe the sideway is probably the average story for the average punter...
Would be nice to have some figure if anyone has any?

banks, telstra, rio/bhp and a couple of bets mostly in resources is my definition of the average portfolio and this ends up in sideway
I know in my case I just average 0 win/gain  overall after heavy brokerage costs.
In positive with dividends and franked $, also managed to pay my put options out of the small profit but nothing to boast of.
But i am maybe not the average, the people I know are loosing overall...


----------



## white_goodman (19 May 2013)

Uncle Festivus said:


> Not sure why the broken clock analogy keeps getting airplay




because you have been 100% wrong the past 4 years thinking the market is going to crash.. your position without any timeframe is never wrong.. bearish at t=infinity


----------



## FlyingFox (19 May 2013)

Porper said:


> The charts don't lie...and never do.




Charts serve a purpose. They tell you what is happening in the market but very little about why. If all you do is trade and want to make money, then fair enough. Otherwise they are akin to the blind men and the elephant. None of them were wrong, but none of them were right either.


----------



## FlyingFox (19 May 2013)

FlyingFox said:


> Doesn't mean they won't try....




And on that ... this is a useful chart for all ...

https://en.wikipedia.org/wiki/File:Population-doubling.svg


----------



## Trembling Hand (20 May 2013)

Uncle Festivus said:


> I didn't say the end is nigh for the DAX did I? So in the absence of any reason, you don't know why the DAX did a woody after hours either?




Err it was all over the place,

RAN Squawk,







> Chatter has circulated that the ECB have contacted European banks in order to gauge conditions for negative deposit rates


----------



## Uncle Festivus (20 May 2013)

white_goodman said:


> because you have been 100% wrong the past 4 years thinking the market is going to crash.. your position without any timeframe is never wrong.. bearish at t=infinity




I've always siad that it's been unsustainable (fueled by QE) and that the timing is the only thing unknown. 4 years calling for a crash?? I stuck my neck out about 5 months ago and said it looked toppy, which I got wrong. Makes no difference to me either way - just keep trading long and short then till it doesn't? 

The market continues to go the opposite direction to the fundamentals so it's still the timing issue. And we can look forward to the 5th second half recovery that won't materialise?

For eg CAT - well they will be taking the shades off coz their futures not so bright is it, and that was before the USD took off. Bernankes problem is now whether to _increase_ QE to match, and better, Japan to save US manufacturing jobs.

Caterpillar Inc (CAT.N) posted disappointing quarterly results and cut its 2013 profit forecast on Monday to reflect a drop in demand for heavy equipment from its mining customers.

But the world's largest maker of construction and mining equipment said it believed the pullback in spending by miners was temporary, and *its shares rose on news it was reviving a buyback program and would purchase $1 billion in stock this year.*

"the pullback in spending by miners was temporary"? Not according to BHP?

May 15, 2013 - BHP Billiton's new chief executive Andrew Mackenzie has outlined plans to slash capital spending by almost a fifth. In his first major address as head of the world's biggest resources company, Mr Mackenzie said capital and exploration expenditure would be cut to $US18 billion ($A18.28 billion) in 2013/14, from a peak of $US22 billion during this financial year.

"*The rate of spend is expected to decline substantially thereafter*," he told a mining conference in Barcelona on Tuesday night (AEST).

So that's how they juice up the P/E ratio to justify current valuations - through reducing the free float of equities.
Then get the accountants to work on watered down accounting standards eg mark to market.

All looks rosy through the smoke & mirrors..........


----------



## Porper (21 May 2013)

Uncle Festivus said:


> I've always siad that it's been unsustainable (fueled by QE) and that the timing is the only thing unknown. 4 years calling for a crash?? I stuck my neck out about 5 months ago and said it looked toppy, which I got wrong




Timing is always the issue...especially for the bears that have been calling for a crash over the past 3-4 years. When the market does crash you'll all be blowing your own trumpets.



Uncle Festivus said:


> The market continues to go the opposite direction to the fundamentals so it's still the timing issue.




Back to the timing issue Uncle...that seems to be your only defense!! Markets always go in the opposite direction to the fundamentals. Simply because there are always perceived problems in the economy. Look at 87. U.S trade deficit was apparantly out of control and totally unsustainable..would bring the world financial system down. Didn't happen...won't this time either.



Uncle Festivus said:


> All looks rosy through the smoke & mirrors..........




It's always smoke and mirrors and that wont change. Trick is to play along and not fight it.  I don't comment on the GFC for one good reason...I am no expert and an opinion is just that...a best guess. 

If your car breaks down would you trust your next door neighbours 16yr old apprentice to fix it or take it to an authorised technician qualified to do the work? It's exactly the same situation only we are talking about running global economies. Government advisors (and Helicopter Ben for that matter) get their jobs for very good reasons. They are qualified and have an understanding of the system!! Armchair critics can bang on about QE etc until the cows come home...maybe it was the only solution at the time that would avoid taking us into the abyss. The world isn't going to end Uncle...much to your apparant annoyance.


----------



## Uncle Festivus (21 May 2013)

Porper said:


> Government advisors (and Helicopter Ben for that matter) get their jobs for very good reasons. They are qualified and have an understanding of the system!!




(March 28, 2007) "At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency." B Bernanke

I rest my case as to the incompetence of the so called 'expert' - he's just a GS lapdog doing the 'yes' job assigned, perhaps even enjoying his 15 mins of fame. Just more of Greenspans ethically dubious solutions to a simple problem - simply let the system purge naturally every now and then and we wouldn't be in this predicament?



Porper said:


> Armchair critics can bang on about QE etc until the cows come home...maybe it was the only solution at the time that would avoid taking us into the abyss. The world isn't going to end Uncle...much to your apparant annoyance.




So it _was_ going into the abyss 5 years ago but now that they print money it won't? So that is the perpetual solution?

Again you are assuming - I never said the world is going to end did I? Although I'd be a tad annoyed if it did 

Even optimists should practice pessimistic planning - you're going to need it.


----------



## white_goodman (21 May 2013)

Uncle Festivus said:


> (March 28, 2007) "At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency." B Bernanke




what is wrong with this statement?

go visit the timeline


----------



## McLovin (21 May 2013)

Uncle Festivus said:


> (March 28, 2007) "At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency." B Bernanke




There's nothing wrong with this statement.

I think you're so married to your opinion that it's impossible for you to even consider an alternative.


----------



## Intrinsic Value (21 May 2013)

Record high sovereign debt and record low interest rates.

What happens if interest rates rise?

Sovereign debt default that is what.

Then the so called rosy picture can change very rapidly.


----------



## Vixs (21 May 2013)

McLovin said:


> There's nothing wrong with this statement.
> 
> I think you're so married to your opinion that it's impossible for you to even consider an alternative.




What do you mean there's nothing wrong with that statement? That was a few months prior to the turd hitting the fan at Mach 10 and splattering all over the world!

That's a 'we're all fine' at a time when the world was about to learn that the bankers had been spending their time polishing turds for the last few years.


----------



## white_goodman (21 May 2013)

Vixs said:


> What do you mean there's nothing wrong with that statement? That was a few months prior to the turd hitting the fan at Mach 10 and splattering all over the world!
> 
> That's a 'we're all fine' at a time when the world was about to learn that the bankers had been spending their time polishing turds for the last few years.




a few months prior and??? what else...

theres nothing wrong with his statement, you're a simpleton or ignorant if you dont understand why


----------



## McLovin (21 May 2013)

Vixs said:


> What do you mean there's nothing wrong with that statement? That was a few months prior to the turd hitting the fan at Mach 10 and splattering all over the world!




It's a statement that infers it's qualified by probabilities ie "at this juncture", "seems *likely* to be contained". It's by no means a definitive yes/no. So the statement in itself is not incorrect, even the analysis that led to the statement may be correct, all that happened was the lower probability event occurred.


----------



## skc (21 May 2013)

McLovin said:


> It's a statement that infers it's qualified by probabilities ie "at this juncture", "seems *likely* to be contained". It's by no means a definitive yes/no. So the statement in itself is not incorrect, even the analysis that led to the statement may be correct, all that happened was the lower probability event occurred.




Or they got the probability wrong.

I take that the statement has as much a political slant as an economist's honest opinion. The statement needed to be said that way... if it says sub-prime is doomed, it will trigger sub-prime's doom even if it wasn't.


----------



## Uncle Festivus (21 May 2013)

white_goodman said:


> what is wrong with this statement?
> 
> go visit the timeline




Red arrows = March 28, 2007

The housing crash had been going for 2 years. They would have been fully aware of economic conditions with the data at their disposal.


----------



## Uncle Festivus (21 May 2013)

McLovin said:


> There's nothing wrong with this statement.
> 
> I think you're so married to your opinion that it's impossible for you to even consider an alternative.




What's the alternative to facts?



white_goodman said:


> a few months prior and??? what else...
> 
> theres nothing wrong with his statement, you're a simpleton or ignorant if you dont understand why




Was that neccessary?


----------



## chops_a_must (21 May 2013)

I always get the feeling Uncle loves the bullets.

I think if you really wanted to have a crack, I'd just praise him.


----------



## McLovin (21 May 2013)

skc said:


> Or they got the probability wrong.




Of course, but there's no way of knowing that based on the snippet provided by UF.



skc said:


> I take that the statement has as much a political slant as an economist's honest opinion. The statement needed to be said that way... if it says sub-prime is doomed, it will trigger sub-prime's doom even if it wasn't.




Definitely.


----------



## Knobby22 (23 May 2013)

I'm getting bearish about the Australian economy.
When the $ drops petrol will go up, destroying confidence. Everyone counting on the real estate market to reignite. Can't see it happening. Sure the lower $A will help exports, but manufacturing has to rebuild, it will take many years...if ever. 

 I predict a short term squeeze.

There will probably be a good opportunity to get into some mining shares at some stage though.


----------



## moXJO (23 May 2013)

Knobby22 said:


> I'm getting bearish about the Australian economy.
> When the $ drops petrol will go up, destroying confidence. Everyone counting on the real estate market to reignite. Can't see it happening. Sure the lower $A will help exports, but manufacturing has to rebuild, it will take many years...if ever.
> 
> I predict a short term squeeze.
> ...




In NSW it's like someone flicked the on switch with construction work for me. Started roughly a month or so ago. Talking to some of my old apprentices in sydney and all of them are flat out with work as well. I'm still of the opinion that we are in for a rough ride but I am getting to the stage where I might have to turn work down as I have to much on. It is a lot of new houses as well which I haven't seen this many in a few years now.
 Perhaps its people taking advantage of the low interest rate?


----------



## Intrinsic Value (23 May 2013)

If the top end of the town in mining like BHP and RIO and making substantial cuts to CAPEX and labour costs and predicting a normalisation of commodity prices and much less demand from China then it would seem to me that Australia might even be heading into a significant downturn in the medium term.

Without the huge stimulus from mining I doubt that the rest of the economy can carry the country.

The so called two speed economy will disappear and then will only be one speed and that speed will be a very slow one.


----------



## FlyingFox (23 May 2013)

Thought I would share this. I am a collector and user of fountain pens. Don't ask why but I love them. Anyways, I also tend to use bottled ink and in particular  inks from a company called Noodler's Ink. Noodler's ink is run by a gentleman by the name of Nathan Tardif. 

Lets just say that Nathan has some strong views on many things including QE (a bit too far left for many here but humor him). As such he released a set of three inks that are designed to dry very very quickly. These are all named after Ben Bernanke. 

In the link below he shows a mock video (upto 5:20) and then a bit more commentary and details on the ink.

http://www.youtube.com/watch?feature=player_embedded&v=ev1fVQFT0cE

I am not posting this as my opinion and I don't necessarily agree with everything Nathan says but I hope it proves interesting and/or entertaining to some.


----------



## MrBurns (23 May 2013)

> Wilson HTM investment adviser Peter Esho told the ABC that the "yield trade is unwinding", as investors position themselves for the possibility of higher interest rates in the medium term.
> 
> That is why higher dividend paying stocks such as banks, telcos and retailers bore the brunt of today's sell-off, with telecommunications stocks down 3.8 per cent and the financial sector down 2.7 per cent.




Go figure


----------



## Tyler Durden (23 May 2013)

Seems like the market took a downturn due to Bernanke's somewhat equivocal comments about possibility of stopping any future QE.

So...the market was bumped up all this time because people thought more money would be printed and this money would end up in the market? And now that the money printing might stop, people are pulling out? Which would make sense, because I haven't seen any improvements in fundamentals within the global or national economy.


----------



## Trembling Hand (23 May 2013)

Tyler Durden said:


> Seems like the market took a downturn due to Bernanke's somewhat equivocal comments about possibility of stopping any future QE.




He never said anything like that.


----------



## white_goodman (23 May 2013)

Trembling Hand said:


> He never said anything like that.




+1

evans rule... its fairly clear what indicators they have said they need to achieve before they look at turning it off somewhat


----------



## Tyler Durden (23 May 2013)

Trembling Hand said:


> He never said anything like that.




He may not have, but the market seems to have interpreted it like that.


----------



## MrBurns (23 May 2013)

Tyler Durden said:


> He may not have, but the market seems to have interpreted it like that.




That and Ford ?


----------



## Trembling Hand (23 May 2013)

Tyler Durden said:


> He may not have, but the market seems to have interpreted it like that.






MrBurns said:


> That and Ford ?




No
NO! 
NO!!!!


----------



## Intrinsic Value (23 May 2013)

You don't have to be a genius to figure that the US stock market has been significantly boosted by QED. The  money has to go somewhere.

Similarly when that stimulus ends there will be a stampede to the exit doors and plenty of people wont make it.


----------



## Uncle Festivus (23 May 2013)

white_goodman said:


> How are those big short positions going Festivus?




Just gotta go.....Oporto




BTFD?




TOKYO (MarketWatch) ”” Japan’s economy minister said Thursday that the government is not worried about a sharp decline in share prices earlier in the day, saying the move represented large-scale profit taking orders triggered by weak Chinese data.

Profit taking - all *-1143* pts & *-7.3%* of it?

The global recovery is going well.....

The unexpected contraction in China's factory activity in May has heightened the risk of a further slowdown in the second quarter, after the world's second largest economy grew at its slowest pace in three years over January to March


The U.S. flash manufacturing purchasing managers' index fell to a 51.9 reading in May from 52.1 in April


----------



## Porper (24 May 2013)

Uncle Festivus said:


> Just gotta go.....Oporto
> 
> View attachment 52364
> 
> ...




Yes, I apologise Uncle you have been correct all along. Dow up nearly 50.0% since Octber 2011. And crashed nearly 2.0% from all time highs. Yes, you have been right to be bearish all this time.


----------



## Uncle Festivus (24 May 2013)

Porper said:


> Yes, I apologise Uncle you have been correct all along. Dow up nearly 50.0% since Octber 2011. And crashed nearly 2.0% from all time highs. Yes, you have been right to be bearish all this time.




Apology accepted. I would have used March 2009 as my starting point - 112%?

Also, thank you HPQ for saving the Dows' *rse on 'beating' expectations but stinking results all the same.....

A quarterly earnings report provided the evidence of Hewlett-Packard's deteriorating condition.

The results included the *seventh consecutive decline* in HP's quarterly revenue from the previous year.

The *10% decrease* in revenue during the three months ending in April represented *the largest drop so far* during the downturn.

HP earned 1.1 billion dollars (£723 million), or 55 cents per share, during its fiscal second quarter. That was *down 32%* from 1.6 billion dollars (£1.05 billion), or 80 cents per share, last year.

Revenue in the period totalled 27.6 billion dollars (£18.1 billion), *down* from nearly 30.7 billion dollars (£20.1 billion) last year.

-------------------------------
Better-than-expected earnings from HP are great, but let's not forget that every operating segment is in decline, and *profit only beat expectations by virtue of massive cost-cutting efforts.*
-------------------------------

CEO Meg Whitman plans to continue cutting costs by *axing another 29,000* jobs by the end of fiscal year 2014.

They can always flip burgers while not being counted as unemployed?


----------



## FxTrader (24 May 2013)

Tyler Durden said:


> View attachment 52359
> 
> 
> Seems like the market took a downturn due to Bernanke's somewhat equivocal comments about possibility of stopping any future QE.
> ...




It would appear the bears have awoken (let's call it profit taking) from their slumber after a sustained period of irrational exuburance associated with unprecedented money creation by central banks led by helicopter Ben and co.  The secret to economic prosperity it seems is magic pudding, just print/create money by the truckload, inject it into your economy and presto, economic growth with no consequences (LOL).

Just like the irrational sell-off during the GFC period, the recent irrational run-up in equity markets and ridiculous market "valuations" of many companies was overdue for correction.  Helicopter Ben's utterances and the Fed's policies are the root cause of these boom and bust cycles.  When operation "twist" unwinds (as it must at some point) the hope is that it will be orderly, don't bet on it!


----------



## McLovin (24 May 2013)

The S&P is off about 1% since the thunderous news that Ben is apparently, maybe, not sure going to end QE and this is evidence of???

Our trade position has significantly worsened, and the two speed economy is about to become the one, slow, speed economy, but the market has been rising and the dollar was staying high. So there was plenty of foreign money chasing yield. Pretty evident when you look at how lopsided the rally has been. It looks like those positions are being unwound. How much further could the banks and TLS realistically gone, they were already looking very stretched.


----------



## Uncle Festivus (24 May 2013)

The HPQ ramp is typical of the mindset currently and can apply to most of the underlying fundamentals for most US companies ie revenue misses but earnings rises from internal cost cutting etc plus share buybacks making P/E's look good.

Anyhow, something is happening that may render all that irrelevant. Here we go again as Japan wobbles again - Japan might just be the black swan event......watch the leveraged longs scramble to get out....and infect globally.

Bass Sees BOJ Bond Purchases Overwhelmed as Investors Dump Debt


----------



## white_goodman (24 May 2013)

FxTrader said:


> When operation "twist" unwinds (as it must at some point) the hope is that it will be orderly, don't bet on it!




you don't seem to realise what operation twist is..


----------



## FxTrader (24 May 2013)

white_goodman said:


> you don't seem to realise what operation twist is..




I certainly do, but just in case how is this...

_"Operation Twist, or 'Twist', is a policy by which the Federal Reserve sells short-term government bonds and buys long-dated Treasuries, in an effort to push down long-term interest rates and therefore boost the economy"._  Over 2 trillion dollars now and growing at 85 billion/month.  Also known as monetizing government debt, although this is denied by the Fed.  

According to the Fed itself...

_"The Federal Reserve System of the United States creates the country’s monetary base. The monetary base consists of currency (Federal Reserve notes and coins) in circulation and deposits (Federal Reserve credits) held by depository institutions at regional Federal Reserve Banks. Since August 2008, the Fed has tripled the monetary base from about $0.8 trillion to $2.7 trillion. More than half of this new money was used to purchase U.S. government bonds (Treasury debt)"_  Like I said, magic pudding money creation.

As opposed to QE purchases of MBS, yet more market meddling by the Fed.

Bernanke has been so wrong, so often for so long he is frankly an embarrassment to his position.  I will be quite surprised if his and the Fed's market distorting policy experiments don't end very badly indeed.


----------



## white_goodman (25 May 2013)

FxTrader said:


> I certainly do, but just in case how is this...
> 
> _"Operation Twist, or 'Twist', is a policy by which the Federal Reserve sells short-term government bonds and buys long-dated Treasuries, in an effort to push down long-term interest rates and therefore boost the economy"._  Over 2 trillion dollars now and growing at 85 billion/month.  Also known as monetizing government debt, although this is denied by the Fed.
> 
> ...




congrats youve mastered the stage 1 interpretation


----------



## Uncle Festivus (30 May 2013)

Interesting......




Banks bubble busted.

Continuing the global banking scam of 'profits' by cutting costs and eliminating loan loss provisions coz all is good again......

Official statistics show banks, credit unions and building societies have grown profits, but *mostly due to cutting costs*.

The Australian Prudential Regulation Authority's (APRA) quarterly statistics show authorised deposit taking institutions (ADIs) posted profits of $7.1 billion for the March quarter.

That was a 2.7 per cent increase on the December quarter that preceded it, and a 30.4 per cent jump on last year's March quarter.

ADI profits for the year to March were $26.55 billion, up only slightly from the 12 months to March 2012 where they recorded a combined net profit of $26.49 billion.

However, APRA's report shows the jump in profit was not all good news for the banking sector - banks only recorded a 0.1 per cent rise in net interest income between the December and March quarters.

Other operating income actually fell $293 million.


----------



## white_goodman (31 May 2013)

http://www.nationalreview.com/article/349636/low-interest-rate-blues-david-beckworth

what low interest rates mean, what it indicates etc..


----------



## Uncle Festivus (11 June 2013)

Even the bankers advisers have a few concerns about QE and it's effect on creating unsustainable bubbles, and the consequences of it's withdrawal in a few [SUP]years[/SUP] time?

Makes it a bit harder for those who think QE has no effect on equity prices to justify their position?

Members of the Federal Reserve’s advisory council, which includes the Board of Governors, have expressed strong concerns over the Fed’s low-interest rate policies and its bond-purchase program, which they say could trigger unmanageable inflation and an "*unsustainable bubble" in the stock* and bond markets.

Some members also expressed anxiety over the recent surge in markets stating that the *equity and fixed-income markets are bloated*.

*The strongly worded sentiments expressed in the minutes clearly suggest that overvalued markets could come down to more realistic levels when the Fed stops its quantitative easing program.*

And then this - 


Uncertainty exists about how markets will reestablish *normal valuations* when the Fed withdraws from the market. 

It will likely be difficult to unwind policy accommodation, 

and the end of monetary easing may be painful for consumers and businesses,” the minutes stated.



Given the Fed’s balance sheet increase of approximately $2.5 trillion since 2008, the Fed may now be perceived as integral to the housing finance system.

http://www.ibtimes.com/federal-rese...ion-unsustainable-bubble-stocks-bonds-1287261

http://federalreserve.gov/aboutthefed/fac-20130517.pdf

How is our sustainable bull going?


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## white_goodman (11 June 2013)

Uncle Festivus said:


> Even the bankers advisers have a few concerns about QE and it's effect on creating unsustainable bubbles, and the consequences of it's withdrawal in a few [SUP]years[/SUP] time?
> 
> Makes it a bit harder for those who think QE has no effect on equity prices to justify their position?
> 
> ...




where is inflation a problem?


----------



## FxTrader (11 June 2013)

white_goodman said:


> where is inflation a problem?




You mean real inflation or the illusion portrayed by official government stats the way they are calculated now?

http://www.shadowstats.com/alternate_data/inflation-charts


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## banco (11 June 2013)

FxTrader said:


> You mean real inflation or the illusion portrayed by official government stats the way they are calculated now?
> 
> http://www.shadowstats.com/alternate_data/inflation-charts




You'll notice those charts basically shadow each other so if you use either/or inflation is still at historical lows.


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## FxTrader (11 June 2013)

banco said:


> You'll notice those charts basically shadow each other so if you use either/or inflation is still at historical lows.




What??  Perhaps you're not looking at the scale.  Depending on the calculation method there is a variance of 4 to 8%.  There is a huge difference between 1% vs 5% or, using the 1980 based formula, 1% vs 9%.  Historic lows of 9% real inflation, that's wonderful news! 

The Fed is actually trying to create inflation and succeeding by any genuine measure.


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## FlyingFox (11 June 2013)

banco said:


> You'll notice those charts basically shadow each other so if you use either/or inflation is still at historical lows.




The methods for computing and the composition of basket of goods change over time. Therefore it's not a clear comparison when comparing to historical numbers.


----------



## FxTrader (11 June 2013)

Uncle Festivus said:


> Even the bankers advisers have a few concerns about QE and it's effect on creating unsustainable bubbles, and the consequences of it's withdrawal in a few [SUP]years[/SUP] time?
> 
> Makes it a bit harder for those who think QE has no effect on equity prices to justify their position?
> 
> Members of the Federal Reserve’s advisory council, which includes the Board of Governors, have expressed strong concerns over the Fed’s low-interest rate policies and its bond-purchase program, which they say could trigger unmanageable inflation and an "*unsustainable bubble" in the stock* and bond markets.





It's truly interesting when the Fed's advisory council drops a bombshell like this.  It's likely a very reluctant admission they are concerned that the great bond market manipulation experiment called QE may blow up and cause serious problems for the US economy.  But without this admission they would look like total fools if this came to pass without a forecast from them warning of just such an outcome.


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## chops_a_must (11 June 2013)

The bears are definitely out of hibernation!


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## DB008 (11 June 2013)

chops_a_must said:


> The bears are definitely out of hibernation!




Sell in May and Go-away?


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## banco (11 June 2013)

FlyingFox said:


> The methods for computing and the composition of basket of goods change over time. Therefore it's not a clear comparison when comparing to historical numbers.




Yes but the trends track each other (ie they both decline and go up by a very similar %) and if you look at a long term chart of either measure you can see that compared to the peaks and troughs of the past we are in a shallow trough.


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## FxTrader (11 June 2013)

banco said:


> Yes but the trends track each other (ie they both decline and go up by a very similar %) and if you look at a long term chart of either measure you can see that compared to the peaks and troughs of the past we are in a shallow trough.




The point is the real rate of inflation is much higher than reported by government stats.  How well the trends match is of little relevance to consumers contending with higher real inflation.


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## Tyler Durden (20 June 2013)

The bears can come out and play now


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## Aussiejeff (21 June 2013)

Tyler Durden said:


> The bears can come out and play now




*Y-a-w-w-n-n-n.................*



*Zzzzzz.....zzzzz.......zz........*


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## Uncle Festivus (21 June 2013)

Why the Fed would like to taper but can't?

Home loan rates going up - retail more likely above 4.5%




The Fed is the market now?




No taper here?




The great housing recovery  - construction jobs are now back to 1997 levels.....


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## FxTrader (21 June 2013)

Uncle Festivus said:


> The Fed is the market now?




The market manipulation by the Fed with QEx has been sustaining the current bull market in equities for some time now.  Any hint of a pull back of Fed heroin causes these overextended/overvalued markets to lurch downward.

QE must be maintained for a lengthy period and will be given helicopter Ben's likely successor.  I expect the markets will correct another few percentage points before a strong rebound.  Buying opportunities are starting to emerge again.


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## MrBurns (21 June 2013)

FxTrader said:


> The market manipulation by the Fed with QEx has been sustaining the current bull market in equities for some time now.  Any hint of a pull back of Fed heroin causes these overextended/overvalued markets to lurch downward.
> 
> QE must be maintained for a lengthy period and will be given helicopter Ben's likely successor.  I expect the markets will correct another few percentage points before a strong rebound.  Buying opportunities are starting to emerge again.




Strong rebound ? 
On what basis ?

Are these stocks oversold or just adjusting to a new environment = no rebound.


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## FxTrader (21 June 2013)

MrBurns said:


> Strong rebound ?
> On what basis ?.




When it becomes clear that "tapering", if it occurs at all this year or next, will likely be quite small in pace and scale.  Only a small decrease in the QEx heroin dose, hence I think the market will rebound.   Just my reading of the signals coming from helicopter Ben.


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## MrBurns (21 June 2013)

FxTrader said:


> When it becomes clear that "tapering", if it occurs at all this year or next, will likely be quite small in pace and scale.  Only a small decrease in the QEx heroin dose, hence I think the market will rebound.   Just my reading of the signals coming from helicopter Ben.




Well yes you're probably right there, it's the timing of the rebound that will be interesting.


----------



## mr. jeff (21 June 2013)

MrBurns said:


> Well yes you're probably right there, it's the timing of the rebound that will be interesting.




I definitely agree that the reaction is quite ridiculous. 
Nothing wrong with profiting from it though - might as well trade any good opportunity.
There will have to be a clarification type statement issued if the market continues like this -  similar to last time.
The rebound should offer a great long. Just got to identify it.

I don't think the base level has been reached yet though.


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## FxTrader (22 June 2013)

Investors looking at the correlation between QEx "asset" purchases and equity prices are quite rightly concerned about any withdraw of QE.  For example, one wonders when looking at these charts what would happen to equity prices when the balance sheet line begins to move downward...


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## CanOz (22 June 2013)

Last night saw some sector rotation into defensive stocks, according to the Bloomy. The US markets closed in the green. 

Also, some things going on with yields in emerging markets...got to find out more about that...

CanOz


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## Uncle Festivus (27 June 2013)

So Mr Market is saying that he would prefer a recession than for QE to be tapered???

NEW YORK (MarketWatch) ”” U.S. stocks jumped Wednesday, pulling benchmark indexes into positive terrain for the week, as a revision in economic growth calmed concern about U.S. monetary policy.

Gross domestic product expanded 1.8% from January through March, down from an earlier estimate of 2.4%, the Commerce Department reported.

Long time time market gurus like Stanley Druckenmiller can no longer use established methodology to 'price' anything so they have stopped trading because the market is totally fixated on QE and nothing else as an equity valuer.

Bernanke was asked during his conference last week about rising interest rates, his response - "Well, we were a little puzzled by that. It was bigger than can be explained I think by changes in the ultimate stock of asset purchases within reasonable ranges. So I think we have to conclude that there are other factors at work as well....."

He just admitted he & they haven't got a clue about what's happening - they are simply using a 'suck it & see' approach to fix the generational and structural problems facing both the US and generally the world that politicians will not address.

Just means the end qtr is getting even closer now. This will be spectacular......


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## Porper (27 June 2013)

Uncle Festivus said:


> So Mr Market is saying that he would prefer a recession than for QE to be tapered???
> 
> 
> Just means the end qtr is getting even closer now. This will be spectacular......




Yes well it was supposed to be spectacular back in 2007 Uncle...look we we are now. All the Bears and doom and gloom merchants have been wrong.

You can't just keep banging the "end is nigh" drum forever without admitting you got it wrong. We are due a healthy correction due to the MASSIVE rally but nothing more i.m.o.

You could be waiting for armageddon for the rest of your natural life...it ain't going to happen Uncle.


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## Uncle Festivus (27 June 2013)

Porper said:


> Yes well it was supposed to be spectacular back in 2007 Uncle...look we we are now. All the Bears and doom and gloom merchants have been wrong.
> 
> You can't just keep banging the "end is nigh" drum forever without admitting you got it wrong. We are due a healthy correction due to the MASSIVE rally but nothing more i.m.o.
> 
> You could be waiting for armageddon for the rest of your natural life...it ain't going to happen Uncle.




No, not wrong - the GFC is still playing to it's ultimate conclusion.

The GFC wasn't spectacular enough for you? In their own words, the global financial system was close to imploding?

A mere recession will be all it takes to 'make it happen', so don't be too confident in the ability of central banker to save the world. You do know that the recovery is premised on there being no recession until at least 2020, at least according to the governments own projections? And a GDP above at least 3% pa until 2020

Unemployment is still not back to 2000 levels yet, let alone made enough jobs for the millions who have joined the workforce since then. And when talking about U let's not get carried away with the 'official' U of 7.6% as we all know, at least those who care to see how these things are derived, that the true level is still greater than 12% if you use the same participation rate as before the recession.


----------



## Knobby22 (27 June 2013)

One swallow doesn't make a summer.
I expect the correction to continue after a brief upturn.

These is a light at the end of the tunnel. Better hope it's not a train.


----------



## howmanyru (27 June 2013)

I am still bearish on the economy. While all that money printing has gone somewhere, it hasn't gone directly into my pocket. I don't have any more money to spend because banks, auto companies and the stock market got bailed out. Your average Joe punter like myself is in a worsening position, despite the massive increase in global liquidity. There is more competition for jobs, soaring insurance and utility bills, etc, etc. I imagine that is why inflation is mysteriously low despite flooding the system with cash - it just doesn't equate to more money in average peoples pockets each week.


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## CanOz (27 June 2013)

Wow, i bet there's a few bears that got shaken out lately...me included. Got stopped out of all my shorts and stopped into a couple of longs again...

CanOz


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## Porper (27 June 2013)

CanOz said:


> Wow, i bet there's a few bears that got shaken out lately...me included. Got stopped out of all my shorts and stopped into a couple of longs again...
> 
> CanOz




A bit of short covering going on without doubt but how long can this rally last? Not very long is my bet.

As soon as everybody and their dog starts to buy we'll be heading south again...could be wrong.


----------



## mr. jeff (27 June 2013)

CanOz said:


> Wow, i bet there's a few bears that got shaken out lately...me included. Got stopped out of all my shorts and stopped into a couple of longs again...
> 
> CanOz




Yep I got cut out.


----------



## CanOz (27 June 2013)

Porper said:


> A bit of short covering going on without doubt but how long can this rally last? Not very long is my bet.
> 
> As soon as everybody and their dog starts to buy we'll be heading south again...could be wrong.




Hi Porper, great to see ya here again!

Yeah i agree totally, in fact the SPX is setting up for a classic LBR grail pattern, so we'll see if we pause at the EMA and roll over again...usually there should be some trade-able patterns appear in US Stocks at the same time...

CanOz


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## Uncle Festivus (29 June 2013)

Might be hearing a bit more about these -  interest rate swaps - a $300Trillion market?

..........................

If holding companies are now on the wrong side of that trade, that would mean a rash of collateral calls. The 10-year treasury swap rate has seen, by far, the most significant upward movement since the taper talk began. It was such a dramatic move that it would seem that some traders are being forced out of their positions and into more netting at the margins; that is to obtain an opposite trade to extract oneself from the original position. 
.....

But the derivative markets are far different. Rising interest rates can and likely already have reduced liquidity through the same process that destroyed bank liquidity in 2007 - collateral calls. With so much of this both OTC and inside the opaque world of bank holding companies, we will have absolutely no idea how much impact interest rates can have, and neither will regulators directly.

..........................

http://www.realclearmarkets.com/articles/2013/06/14/the_new_crowded_derivatives_trade_100401.html


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## Uncle Festivus (18 July 2013)

That's odd! Bernanke spoke & the markets didn't move 200 pts? Central Banker Rhetoric Fatique perhaps. 

They'll need to have a few more jawboning tricks to keep the bull going in light of such excellent data from GDP revisions, retail sales, housing starts & building permits - the former beacons of the new & improved recovery?

Is it a duck or a swan?


----------



## Trembling Hand (18 July 2013)

Uncle Festivus said:


> Is it a duck or a swan?
> 
> View attachment 53408




Tyrannosaurus Rex


----------



## mr. jeff (18 July 2013)

Uncle Festivus said:


> That's odd! Bernanke spoke & the markets didn't move 200 pts? Central Banker Rhetoric Fatique perhaps.
> 
> They'll need to have a few more jawboning tricks to keep the bull going in light of such excellent data from GDP revisions, retail sales, housing starts & building permits - the former beacons of the new & improved recovery?
> 
> Is it a duck or a swan?




Ha very funny! Rhetoric Fatigue, good term. Rhetoric is a fancy word for.....bankers talking?
I agree, where will the next great news come from to keep the move going?

Maybe God/The Bernank could next say "we will never remove stimulus, actually we will increase it at the rate of inflation we desire -  for EVER"

Possibility of a double top perhaps... watching with interest as this limbo is strange - good news still is bad, but also good really, and bad news is actually quite bad but good due to stimulus. 

Still trying to work this one out. It's been 5 years and I'm still having trouble with it!


----------



## Aussiejeff (18 July 2013)

mr. jeff said:


> Maybe God/The Bernank could next say "we will never remove stimulus, actually we will increase it at the rate of inflation we desire -  for EVER"




I'm surprised he/they haven't already set something along those lines in stone already.

Let's face it, THE GREATEST CON THE WORLD HAS EVER SEEN (aka take trillions from the public pockets/purse and give it all to the banksters and pollies to play with) has been a rip-roarin', raging success on their behalf.

The sheeple have been bluffed to acquiescent death. Planet Debt is now the Bankster's oyster, to do with what they may.

Who owns (ie bankrolls) the rating agencies? Hmmmm....
Who owns (ie bankrolls) the stock exchanges? Hmmmm...
Who owns (ie bankrolls) the governments? Hmmmm... 

Correct. Here, have a cookie....nom, nom..

Enjoy their partay...


----------



## Uncle Festivus (18 July 2013)

Trembling Hand said:


> Tyrannosaurus Rex




Ha Ha Hmmm? Didn't they end up extinct 

Master Bernanke and his share market T Rex.......

[video=youtube_share;93B072j-E3I]http://youtu.be/93B072j-E3I[/video]

"I have a big head & little arms -I'm just not sure how well this plan was thought through - Master?"


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## Aussiejeff (19 July 2013)

Uncle Festivus said:


> Ha Ha Hmmm? Didn't they end up extinct
> 
> Master Bernanke and his share market T Rex.......
> 
> ...




Looks like Godzilla has been stompin' this hole...*Detroit Becomes Biggest U.S. City to File for Bankruptcy*http://www.bloomberg.com/news/2013-...-biggest-u-s-city-to-file-for-bankruptcy.html

But wait....markets still soar! What planet am I on?


----------



## Trembling Hand (19 July 2013)

Aussiejeff said:


> But wait....markets still soar! What planet am I on?




Old news. Small stuffed city. Next.....


----------



## FxTrader (19 July 2013)

Trembling Hand said:


> Old news. Small stuffed city. Next.....




Old news for Detroit perhaps, but municipal bankruptcy is set to gain pace in the U.S.  The equity investor wonderland that has been created by the Fed may last for awhile yet but when the music stops the informed (and indsider) investors will have left the game.  It may be prudent to buy long dated put options over equity positions while they are still cheap and volitility low.


----------



## explod (20 July 2013)

Benny Boy is human after all, a few too many slugs of whiskey and out comes the real story.

Helecopter Ben is a *Bear*



> Claiming he wasn't afraid to let everyone in attendance know about "the real mess we're in," Federal Reserve chairman Ben Bernanke reportedly got drunk Tuesday and told everyone at Elwood's Corner Tavern about how absolutely ****ed the U.S. economy actually is. Bernanke, who sources confirmed was "totally sloshed," arrived at the drinking establishment at approximately 5:30 p.m., ensconced himself upon a bar stool, and consumed several bottles of Miller High Life and a half-dozen shots of whiskey while loudly proclaiming to any patron who would listen that the economic outlook was "pretty goddamned awful if you want the God's honest truth." "Look, they don't want anyone except for the Washington, D.C. bigwigs to know how bad **** really is," said Bernanke, slurring his words as he spoke. "Mounting debt exacerbated””and not relieved””by unchecked consumption, spiraling interest rates, and the grim realities of an inevitable worldwide energy crisis are projected to leave our entire economy in the ****ter for, like, a generation, man, I'm telling you."




From Zero Hedge today.


----------



## wayneL (20 July 2013)

explod said:


> Benny Boy is human after all, a few too many slugs of whiskey and out comes the real story.
> 
> Helecopter Ben is a *Bear*




I suddenly like him


----------



## Aussiejeff (20 July 2013)

wayneL said:


> I suddenly like him




Apparently, so do many of the opposite sex..http://en.mediamass.net/people/ben-bernanke/sexiest-alive.html


----------



## Smurf1976 (20 July 2013)

When people get drunk they let their guard down. And then the truth comes out. Seen that one plenty of times.

The only real question is how long the game can be kept going. Debt could theoretically be written off and "start afresh" since it is ultimately just a human construct rather than a hard physical limit. But the energy situation can only be fixed by real, physical actions and that's a massive task that is currently being largely ignored.


----------



## Uncle Festivus (20 July 2013)

explod said:


> Benny Boy is human after all, a few too many slugs of whiskey and out comes the real story.
> 
> Helecopter Ben is a *Bear*
> 
> From Zero Hedge today.




Too bad it's not true though - it's from The Onion 2 years ago, responsible for gems  like this - 

Markets In Turmoil As Price Of Money Skyrockets To $90 A Dollar

http://www.theonion.com/articles/markets-in-turmoil-as-price-of-money-skyrockets-to,32939/


----------



## Trembling Hand (21 July 2013)

Uncle Festivus said:


> Too bad it's not true though - it's from The Onion 2 years ago,




Yeah that doesn't matter to explod though. ITS ON THE INTERNET!!!!


----------



## Uncle Festivus (28 July 2013)

Bots by Bernanke buy better bulls? Who needs humans?


----------



## Uncle Festivus (4 August 2013)

Uncle Festivus said:


> Might be hearing a bit more about these -  interest rate swaps - a $300Trillion market?
> 
> ..........................
> 
> ...




What market isn't manipulated? What else will/can they get away with? They will either be eventually jailed or justice will be delivered by the citizens.................



> US regulators 'find evidence' of banks fixing derivative rates
> 
> US regulators have reportedly been handed evidence that traders at some of the world’s biggest banks manipulated a key rate for derivatives, pocketing millions at the expense of pension funds in the process.
> 
> ...


----------



## Uncle Festivus (11 November 2013)

I've been hibernating - have I  missed anything 




Do bulls get dandruff?


----------



## Knobby22 (11 November 2013)

Hitting a wall.


----------



## Uncle Festivus (22 November 2013)

The Fed's head & shoulders 'free' market.........


----------



## Trembling Hand (22 November 2013)

Uncle Festivus said:


> The Fed's head & shoulders 'free' market.........
> 
> View attachment 55457




Yep thats the game, but when it stops there will be another one.


----------



## Uncle Festivus (3 November 2017)

Yawn.....awakening......capitulation......crowded trades on the way up.........deep pockets needed on the bid this time though......


----------



## explod (3 November 2017)

Don't know really,  Dow could run towards 30,000 by christmas,  plenty of free money and dud gold  bars turning up at the Canadian Mint. 

"Move along Son,  nothing to see here"


----------

