Imminent and severe market correction

[swm79]

Lol ...Daily Reckoning is such a "balanced" newsletter to refer to lol......says it all really.........:fu::321::headshake:shake:

I thoughts bonds were at current levels due to the spectre of coming deflation??!!!!!!

just becuase i quoted it doesnt mean i believe its the gospel

what does it "say"? i'm interested to hear what quoting the Daily Reckoning says about me?

havent heard anything but snide remarks out of you yet jiggy

 

[moXJO]

Might take a while before any correction. Market just wants to keep moving up, even the down days of the Dow quickly turn around. Lay back and enjoy the sunshine

 

[swm79]

Might take a while before any correction. Market just wants to keep moving up, even the down days of the Dow quickly turn around. Lay back and enjoy the sunshine

we're just sitting in a little holding pattern at the moment me thinks...

two months ago better than expected retail sales and NY manufacturing data, PLUS positive commentary from Bernake and Buffett would have put a rocket under the Dow.... but 0.59% isnt doing anything for me

i think once the market realises that the times for the laggards switch is over and they see that the stimulus has run out/is put on hold and reality sets in i.e. the rally was due to the thirst for risk on FY10 figures (even though MONTHLY figures werent good enough for the market in the years gone by) and that the FY09 figures leave a lot to be desired... PLUS nothing has been fixed - infact its WORSE because banks and big business are falling back on the "the govt will just bail us out if the s*%t hits the fan".... add to that the fact that chinas domestic consumption is NO WHERE NEAR where it need to be to pull everyone else out.... plus about 13 other things.... and you can hear the distant grumble of bears

 

[Real1ty]

we're just sitting in a little holding pattern at the moment me thinks...

two months ago better than expected retail sales and NY manufacturing data, PLUS positive commentary from Bernake and Buffett would have put a rocket under the Dow.... but 0.59% isnt doing anything for me

i think once the market realises that the times for the laggards switch is over and they see that the stimulus has run out/is put on hold and reality sets in i.e. the rally was due to the thirst for risk on FY10 figures (even though MONTHLY figures werent good enough for the market in the years gone by) and that the FY09 figures leave a lot to be desired... PLUS nothing has been fixed - infact its WORSE because banks and big business are falling back on the "the govt will just bail us out if the s*%t hits the fan".... add to that the fact that chinas domestic consumption is NO WHERE NEAR where it need to be to pull everyone else out.... plus about 13 other things.... and you can hear the distant grumble of bears

Of course 2 months ago better retail sales would see a bigger rally but look where the market was then compared to now.

The market has been factoring in these expectations and if they are met then the market won't rally hard although if they were exceeded they might and conversely if they miss we will sell off.

Not a bad "holding pattern" to be in when in the last 9 days each daily candle is green and we have gone from 991 to 1051.

How is the stimulus going to run out when the US and China stimulus is over 2 years?

My take on things is that there is also a possibility of further stimulus.

For all the negative figures that can be assumed there are probably more positive figures or at least less bad/improving that either have been released or can be expected.

The grumbling of the bears has been anything but distant and has been a roar for months.

They are going to be right eventually but when?

 

[moXJO]

we're just sitting in a little holding pattern at the moment me thinks...

two months ago better than expected retail sales and NY manufacturing data, PLUS positive commentary from Bernake and Buffett would have put a rocket under the Dow.... but 0.59% isnt doing anything for me

i think once the market realises that the times for the laggards switch is over and they see that the stimulus has run out/is put on hold and reality sets in i.e. the rally was due to the thirst for risk on FY10 figures (even though MONTHLY figures werent good enough for the market in the years gone by) and that the FY09 figures leave a lot to be desired... PLUS nothing has been fixed - infact its WORSE because banks and big business are falling back on the "the govt will just bail us out if the s*%t hits the fan".... add to that the fact that chinas domestic consumption is NO WHERE NEAR where it need to be to pull everyone else out.... plus about 13 other things.... and you can hear the distant grumble of bears

Yeah some quick play US shorts I have on are turning against me pretty fast atm (dare say I will be out or hedge tonight). I agree that it probably is worse now than then. Also you have to wonder if any lessons were learnt, as we now go into greed overdrive. But it has surprised to the upside and may continue to do so for a while?
The US media and Govt seem to be working together in blasting sunshine. And lets face it - if Rudd can become so popular to so many, by doing so little then it is possible they can talk this market run up for a while yet. Of course in the end you realize its all smoke and bs.
I dare say greed is just back in the house

 

[swm79]

Of course 2 months ago better retail sales would see a bigger rally but look where the market was then compared to now.

Granted. We were miles off where we are now two months ago... but 0.59% on some good news that exceeded expectations AND Buffett telling the market HE'S fully invested and sees some really good opportunities out there... PLUS Bernake saying the US is out of the slump... that would HAVE to be worth more than 0.59% normally.

The market has been factoring in these expectations and if they are met then the market won't rally hard although if they were exceeded they might and conversely if they miss we will sell off.

will be interesting to see what the Q3 numbers say then!... S&P trading at 19x - thats the highest level since... thats pricing in SIGNIFICANT earnings uplift in that quarter.... hows that going to happen with millions and millions out of work.... its almost as though the GFC never happened

How is the stimulus going to run out when the US and China stimulus is over 2 years?

well, they can only issue SO many bonds before they start screwing up the monetisation policy... no one's going to be buying US bonds shortly - China and Japan are offloading them as quick as they can... i understand what you're saying but Obama is already talking about doing away with the next lot of stimulus - good job OB... and where did the stimulus go anyway? it didnt pay out toxic debts like it was supposed to!

My take on things is that there is also a possibility of further stimulus.

i dont doubt it... but it would be silly

For all the negative figures that can be assumed there are probably more positive figures or at least less bad/improving that either have been released or can be expected.

agreed, there probably is a lot of positive figures.... just hard to see them

The grumbling of the bears has been anything but distant and has been a roar for months.

They are going to be right eventually but when?

i dont know... i started hearing them a few weeks ago... as for when they come out of their hibernation - thats anyone's guess... but hopefully SOMEONE lets me in on the info!!!

with all that said - i still remain fully invested - I'm bearish... not 100% bear

 

[jiggy]

lol all this wishful thinking for the bears to come out is becoming a joke ....you guys have been saying this now for 4 months.

I suggest you close out all the short positions alot of you have obviously blown yourself on and do something that really isn't rocket science.........................follow the market.

yes yes yes one day the market will fall and retrace and you can all claim what big gun traders you were for predicting falls in the market 4 to 6 months out but missed out on 45% plus gains when the market went up.:321:

You will all be big heroes............heroes in your own mind

 

[moXJO]

lol all this wishful thinking for the bears to come out is becoming a joke ....you guys have been saying this now for 4 months.

I suggest you close out all the short positions alot of you have obviously blown yourself on and do something that really isn't rocket science.........................follow the market.

yes yes yes one day the market will fall and retrace and you can all claim what big gun traders you were for predicting falls in the market 4 to 6 months out but missed out on 45% plus gains when the market went up.:321:

You will all be big heroes............heroes in your own mind

Wow... your wisdom knows no bounds

Do you know what everyone is trading and over what timeframe then?
What is the problem with discussing the numbers or concerns out loud?
Or must we all be sheep and follow the leader, on some idiots guide to stock investing

Keep the trolling to a minimum.
Honestly it adds nothing by acting like a five year old with a big stick and poking at the bears.

 

[cutz]

You will all be big heroes............heroes in your own mind

Hey dude, you seem to think the market is a one way street, it's not.

Analogy >> The market is like an elastic band, the further you stretch it the harder it'll snap back into place, and when it does we can all get jiggy with it.

 

[explod]

jiggy
lol all this wishful thinking for the bears to come out is becoming a joke ....you guys have been saying this now for 4 months.

he he, some of us have been saying it would happen for four years and last October it did.

I suggest you close out all the short positions alot of you have obviously blown yourself on and do something that really isn't rocket science.........................follow the market

A suggestion like that is close to financial advice, which is illegal unless you are a qualified financial adviser.

yes yes yes one day the market will fall and retrace and you can all claim what big gun traders you were for predicting falls in the market 4 to 6 months out but missed out on 45% plus gains when the market went up

How do you know we mised the 45% plus, what and how we trade has little to do with our discussions on world economics. I have had a number of trades in the last few months very much better than that. Some also not so, but that's trading. I know others more active than I doing very much better and you can track them on ASF and they still discuss the bad economic fundamentals on this thread with the same concerns as most for the longer term.

You will all be big heroes............heroes in your own mind

You seem to be doing a very good job of that yourself, except you back it up with around about ziltch

 

[mazzatelli]

Is jiggy Wheep0 reincarnated?

 

[moXJO]

Is jiggy Wheep0 reincarnated?

Not enough bragging from jiggy about his huge portfolio, or that we have reached 4600.
Hmmm.... but there is a lot of useless content and bear bashing in jiggys posts, so the possibility is there.

 

[explod]

Thought the following rather cute from Cuck Butlers daily blog today:-

"Reason Magazine is one of the few magazines I read with any regularity. In the current edition, they had a couple of items that I thought were especially interesting. Ironic, actually.

The first was about a comic book the Fed has published discussing inflation, as well as defending its autonomy. You can view it by following the link below. What you should find interesting is that they make several clear mistakes in describing inflation – for instance, by saying that if the price of oil goes up, that causes inflation. And on the very first page, they state that “The dictionary defines inflation as a substantial and continuing rise in the general price level.”

But that is not what the dictionary says – every entry I checked always includes “… related to an increase in the volume of money,” or words to that effect. Kind of scary, when the organization charged with fighting inflation doesn’t actually know what it is.

You can read the comic yourself here, straight off the New York Fed’s website. http://ia301540.us.archive.org/2/items/gov.frb.ny.comic.inflation/gov.frb.ny.comic.inflation.pdf

 

[swm79]

Thought the following rather cute from Cuck Butlers daily blog today:-

they know what it is - they create it but they dont want to be seen to be creating it.

there's two ways the govt can take money off you 1) tax 2) inflation... everyone knows about tax... but inflation is the "hidden tax"

the reason gold was taken off the standard i.e. money not backed by gold anymore was to "allow expansion of world trade"... backing a currency with gold helps to maintain the value of the paper currency. if you know that your $1 note is redeemable for a set quantity of gold then it will maintain value. It means the banks cant - or shouldnt - create more paper money than the reserves they have in gold to back it up.

The 'inflexibility' of gold makes it harder to for governments to spend and makes it harder for banks to lend. gold forces a govt and its central bank to be disciplined - they cant circulate more money without having an increase in their gold reserves.

if they did then the paper money would not be fully backed by gold and that would cause the value of money to decrease.

every currency you can name is worth significantly less today than it was thirty years ago... thats not (for the most part) because prices have risen, its because currencies have been devalued... central banks and governments have printed MASSIVE amounts of money.

if money still had the backing of gold then global economies would not have one-hundredth of the current problems we have

the fact that the UN and other government organisations are proposing to replace one currency backed by nothing with another currency backed by nothing tells me that they are intentionally pursuing guaranteed economic destruction.

and the devaluation of your money and wealth.

why does the UN want to create a universally backed reserve currency???? because if you can control that, you'll control the world.

Rothschild quote: Give me control of a nation's money and I care not who makes the laws.

 

[Nyden]

they know what it is - they create it but they dont want to be seen to be creating it.

there's two ways the govt can take money off you 1) tax 2) inflation... everyone knows about tax... but inflation is the "hidden tax"

the reason gold was taken off the standard i.e. money not backed by gold anymore was to "allow expansion of world trade"... backing a currency with gold helps to maintain the value of the paper currency. if you know that your $1 note is redeemable for a set quantity of gold then it will maintain value. It means the banks cant - or shouldnt - create more paper money than the reserves they have in gold to back it up.

The 'inflexibility' of gold makes it harder to for governments to spend and makes it harder for banks to lend. gold forces a govt and its central bank to be disciplined - they cant circulate more money without having an increase in their gold reserves.

if they did then the paper money would not be fully backed by gold and that would cause the value of money to decrease.

every currency you can name is worth significantly less today than it was thirty years ago... thats not (for the most part) because prices have risen, its because currencies have been devalued... central banks and governments have printed MASSIVE amounts of money.

if money still had the backing of gold then global economies would not have one-hundredth of the current problems we have

the fact that the UN and other government organisations are proposing to replace one currency backed by nothing with another currency backed by nothing tells me that they are intentionally pursuing guaranteed economic destruction.

and the devaluation of your money and wealth.

why does the UN want to create a universally backed reserve currency???? because if you can control that, you'll control the world.

Rothschild quote: Give me control of a nation's money and I care not who makes the laws.

And, just how the hell would a gold backed currency work? Please explain it to me.

Because, as far as I can gather - it would, and cannot work with our current levels of population, and population growth. As more people are born, more people need actual money, to hold and to purchase goods and services, yes? So, as populations continue to double, and triple in size - more paper money is needed.

How does the world keep up with gold production as to ensure that the gold backing is not diluted? Gold is freaking finite!! My god, gold would be worth $100,000 per ounce, who in the right mind would accept that a yellow rock, the size of my finger nail would equal to the price of half a house?

So, the dilemma over time? Either print more money, and dilute the backing, to a point where a $100 bill represents 1/100th of a nanometer of gold, or never print more money again, and have money exponentially increase in value over time, leaving zero reason for anyone who has it to actually work, or place their money into productive endeavors!

Yeah, money backed by gold would be fan-freaking-tastic for future generations.

So sick of these nonsensical conspiracy theories, and hatred of fiat money. If you're so clever, come up with a feasible alternative, that doesn't involve your yellow rock buried in the hard making you a millionaire overnight.

Rant over.

 

[Knobby22]

I agree. Even after all this time we have people wanting to go back to the 19th century way of doing things. Basing everything on a bit of metal. The ultimate conservatives.

Look at history. The countries that first came out of the Great Depression wrer the ones that decided to get rid of the gold standard and put liquidity into the system.

The current malaise is caused by poor government regulation and poor central bank decisions. Australia's success shows that if you control these things you won't go broke.

There are a lot of interest groups influencing the media particuarly in the USA to get their short terms aims up against the good of the world. Take what they say with a kilo of salt.

 

[swm79]

And, just how the hell would a gold backed currency work? Please explain it to me.

Because, as far as I can gather - it would, and cannot work with our current levels of population, and population growth. As more people are born, more people need actual money, to hold and to purchase goods and services, yes? So, as populations continue to double, and triple in size - more paper money is needed.

How does the world keep up with gold production as to ensure that the gold backing is not diluted? Gold is freaking finite!! My god, gold would be worth $100,000 per ounce, who in the right mind would accept that a yellow rock, the size of my finger nail would equal to the price of half a house?

So, the dilemma over time? Either print more money, and dilute the backing, to a point where a $100 bill represents 1/100th of a nanometer of gold, or never print more money again, and have money exponentially increase in value over time, leaving zero reason for anyone who has it to actually work, or place their money into productive endeavors!

Yeah, money backed by gold would be fan-freaking-tastic for future generations.

So sick of these nonsensical conspiracy theories, and hatred of fiat money. If you're so clever, come up with a feasible alternative, that doesn't involve your yellow rock buried in the hard making you a millionaire overnight.

Rant over.

ok, have you settled down now?

i never passed any judgment. i never said get rid of it and i'm not proposing an alternative

merely stating the way things happen.

i havent developed a "faith" in gold... just a respect for the current trend. i dont even own gold and i only have one stock in my portfolio that is a gold producer

so if you think i'm part of the tin hat brigade, you're wrong

 

[nunthewiser]

I hold physical Gold

have done for years , im fine with it ...... i dont trade the actual physical metal it was merely bought as a "rainy day" item

just another diversification of assets to me

i have no problems with anything you guys arre saying regarding Gold but my reasons for owning have nothing to do with your reasons

nice to see it growing in value over the time tho

one day i might need it .. if not it will give my kids something to do for years trying to work out my treasure map when i kark it

 

[Uncle Festivus]

Hey dude, you seem to think the market is a one way street, it's not.

Analogy >> The market is like an elastic band, the further you stretch it the harder it'll snap back into place, and when it does we can all get jiggy with it.

Especially when that elastic band is the DXY/USD? When things, commodities & stock markets, rise in price solely because of exchange rate variations and not intrinsic supply/demand fundamentals, this is telling me there is something seriously wrong with the currency in which they are all priced in?

The green light to unrestrained money making has been given by Bernanke, so make it while we can?

And, just how the hell would a gold backed currency work? Please explain it to me.

Because, as far as I can gather - it would, and cannot work with our current levels of population, and population growth. As more people are born, more people need actual money, to hold and to purchase goods and services, yes? So, as populations continue to double, and triple in size - more paper money is needed.

This is the fatal flaw part of anti gold standard arguments - an increasing population does not come with the guaranteed right to 'money', there has to be a 'living within ones means' component as well. All the current system does, as shown so spectacularly recently, is to waive the right of money creation to a select group of people who may or may not have the best interests of the rest of the population in mind when they make laws & decisions.

I'm not sure even if it's practical to go to a pure gold standard any more as we are too far down the fiat road, although it's technically possible. No central banker or politician in their right mind would cede control of the money machine to one that restricts debt & credit to a sustainable growth rate anyway, so we might as well go along for the ride and keep guessing as to when it & how it will ultimately end.

 

[swm79]

so we might as well go along for the ride and keep guessing as to when it & how it will ultimately end.

with Joe Citizen losing i'd say!

Bernake: "yyyeeeesssss, yes, you like the credit dont you???... thats it... yes, of course you want the plasma... here, here's an advance... take two!... dont worry you can pay for it later!... here take another credit card!"