Hey at least it's a dialog now.
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Hey at least it's a dialog now.
I have read this guys info since 1999. Talk about a prema bear. But if he is correct as he has been mostly over the last 2 years, Katie bar the door. Sorry to say the US dollar and Bond charts didn't copy and past. They looked bleak to say the least. Rydex funds have a 2X short S&P 500 fund and a Short US Treasury fund that I am looking at, any other ideas?
Money and Markets 2009 Archive View This Issue On Our Website [»]
Memorial Day Disaster
by Martin D. Weiss, Ph.D.
Dear liv2ski,
This would normally be my time for a quiet Memorial Day at home.
But even as we seek calm, investors overseas are doing precisely the opposite.
They're dumping U.S. assets.
They're driving those assets down in price.
And they're threatening to sink our entire economy into a THIRD phase of this crisis.
Remember: The first phase was the debt disaster. The second phase was the collapse in the economy. Now, in the third phase, Treasury bonds and the U.S. dollar are getting hit hard, largely due to foreign selling.
The latest drama began this past Thursday ...
The supply of U.S. Treasury bonds dumped on the market was so overwhelming, even the Federal Reserve, with all its massive efforts to buy up bonds, could not stop the avalanche.
By the time most traders left for the weekend Friday afternoon, ALL of the gains in bond prices the Fed had been able to engineer in recent weeks were wiped out — vanquished by market forces beyond the Fed's control.
Why The U.S. Government Is the Next Victim of the Market's Revenge!
Look. In each successive phase of this debt crisis, investors have consistently attacked and destroyed the market value of institutions that owned large amounts of toxic assets — Countrywide Financial, Fannie Mae, Citigroup, Bank of America and many others.
The shares of these companies were pummeled; their ability to raise new capital, virtually extinguished.
Now it's the U.S. government that's the next victim of the market's revenge.
Why?
Because the government never was — and never will be — immune to market selling. Like private corporations, it borrows. Like any borrower, it has creditors. And like all creditors, it's ultimately up to THEM — not up to the borrower — to decide what to do with their money.
But unlike most borrowers, the U.S. government has arrogantly thumbed its nose at its creditors. Without remorse.
"We can do anything we damn please," was the message from Uncle Sam.
"We can spend our money wantonly. We can bail out our giant corporations to our heart's content. We can even debase our currency.
"But YOU, our creditors, are stuck with us. No matter what we do, you've got to keep loaning us more money, endlessly."
Our creditors swallowed hard and tolerated this message for a while. But not now.
Now they're fed up. They can't take it anymore.
Now, explicitly or implicitly, the U.S. government has assumed the liability for TRILLIONS of dollars of bad mortgages, sour commercial paper, and sick consumer credit.
Now, directly or indirectly, the U.S. government has placed its own credit and credibility in grave jeopardy.
And now, our creditors are raving mad, dumping U.S. bonds and the U.S. dollar.
The Immediate Consequences ...
Treasury bond prices aren't the only U.S. assets plunging. The U.S. dollar is also plunging against major world currencies. It has just fallen below 6-month lows. It's almost certainly going to fall further.
Gold has surged dramatically, coming within striking distance of the $1,000 level — and beyond.
Meanwhile, new, unexpected supplies of bonds are being tossed on the market on TOP of the massive supplies the Treasury must issue to finance its mammoth $1.84 trillion budget deficit estimated by the Obama administration for fiscal 2009.
Long-term interest rates are getting ready to soar far further. And as rates rise, consumers and businesses will have to pay through the nose to borrow. Or they won't be able to borrow at any price.
You can expect a sweeping, devastating impact on the economy, especially in the real estate market. Even with LOWER mortgage rates, commercial real estate is already collapsing. With HIGHER mortgage rates, any hope for stabilization will be dashed.
Thousands of insurance companies and banks will suffer a new round of losses that could make the subprime mess seem small by comparison.
The Dow will plunge to our target of 5,000; the S&P, to 500.
A Unique Convergence of Events
If all of these events can tell you anything, it's that you now have the kind of opportunity that generations of investors could only dream about.
You have the ability to read the handwriting on the wall; to know in advance what is most likely to happen next.
Treasuries bond prices are already sinking. Interest rates are rising. The dollar is falling. Unemployment is surging. Commercial real estate is collapsing. General Motors is going bankrupt.
This is the recipe for disaster I've been warning you about.
But it's also a prescription for some of the greatest profits of all time, using contrarian investments designed to profit from the decline.
For instructions on how, when and where, click here for the updated report I've just posted to the Web.
Good luck and God bless!
Martin
--------------------------------------------------------------------------------
About Money and Markets
For more information and archived issues, visit http://www.moneyandmarkets.com
Hey, nuthin' wrong with being a permabear. Somebody's getting some strange out of it.
http://static.10gen.com/www.business...X=400&maxY=300
Roubini: Chicks Love Me For My Brain
When Gawker started reporting about Nouriel Roubini's personal life last year, the man nicknamed "Dr. Doom" was furious. But now that he's been famous for several months, and had plenty more coverage of his life, he seems willing to embrace it all.
NYMag reports on a recent event at an Israeli charity:
An economist is someone who knows 1,001 sexual positions but doesn't have a girlfriend," Nouriel Roubini quipped last night in his speech at Israeli charity the OR Movement's dinner to honor his work as an economist. But judging by the company kept throughout the night — we never saw him without a drink in hand, and at least two girls on his arm — this was false modesty.
"The recession has been great for me," Roubini, whose nickname of Dr. Doom belies the permanent grin on his face, told us when we caught up with him later, as a line of girls formed to be photographed next to him. "They love my beautiful mind," he confided. "I am ugly, but they're attracted to the brains. I'm a rock star among geeks, wonks, and nerds."
Later he said the type of parties he likes are the ones where there are 10 girls to one guy and that his friend Bill Clinton "is a fan of this ratio."
Ok, too much information.
Even a clock is right twice a dayQuote:
Originally Posted by Benny Profane
WSJ report came out today/tomorrow with analysts who actually called what was going to happen and how it would affect economy and stock market. Rather than just say "the end is near" until it hits (and then proceed to absolutely pimp his newfound sex symbol status).
I think your clock might be broken.Quote:
Originally Posted by Brock Landers
And dartboards are consistently more accurate than most analysts.Quote:
Originally Posted by Brock Landers
Inferior analysis is actually worse than a dartboard (or index) approach, because you still pay fees. But the dartboard isnt more or less accurate than inferior analysis- just cheaper.
Superior analysts call things before they happen on specific stocks or industries as opposed to an economist being an eternal bear and then being proved 'right' at every market downturn. Because thats only accurate 30% of the time at best.
Dart board will work just fine if you have good money management rules. That's what the game is all about.
SP00 back over 900 and gold down $20 at one point.....
+1Quote:
Originally Posted by 4matic
...............
Dartboard incorporates a cheap method and diversification all in one. With the alternative being any Tom Dick and Harry picking their own stocks ('inferior analysts') the only real option is index investing. If you know what yorue doing, invest in sector indices/ETFs.Quote:
Originally Posted by 4matic
Anything past that is, to a degree, speculating. But when you have the resources and the need for research from a good firm, with superior analysts, you can find superior gains. Commonplace at the institutional investor level.
That's worked out well over the past few years. Following those superior folk. And their gains.Quote:
Originally Posted by Brock Landers
What is your alternative? Oh, wait...you never have an alternative. All you do is bitch and moan about anything and everything and you NEVER have an alternative or a solution. If you wouldnt follow the advice of a good analyst, what would you do?
Things cant always be a bull market, though Im sure youd be bitching about something then too. Probably something along the lines of "woe is me...all my money is buried in the back yard..."
Well, my alternatives at the moment are Tips, emerging markets, and Munis. When the market tests the lows again, I'll jump in a little bit in a domestic index fund. Quick and fast. Too bad I'm not privy to the insider trading around the banks the last few months. A lot of people made millions on that illegal shit, but I wasn't born right or went to the right school.
Can you believe the market shot up today after the "consumer confidence" numbers came out? How do they measure that shit? Who does that? WTF does it mean? And this an hour after Case/Schiller reminded us that housing has barely slowed it's downside. Hell, in some places in America, it's starting to accelerate. That's the key, you know. With the housing water line slowly going out like a putrid tide, more and more "consumers" are locked in, with no new credit to spend for many years. It is, after all, a 70% consumer economy. With no credit cards or home equity, where in the hell is the money coming from? And, therefore, earnings? Christ, by the end of the year, there will be a ghost mall in every county in America. Forgetaboutit in a few years, when all the option arms reset, and foreclosures are still snowballing.
Oh, and by this time next week, GM will be bankrupt.
I turn on CNBC, but they're just telling me that we are stuck in socialism, and that's our problem. Kudrow is interviewing Cheney tomorrow night. Fucking Cheney. Go figure. What's he got to do with the economy?
How in the hell can you listen to any "analyst" after what happened in the late 90's? You actually trust these people?
Are you confusing TV analyst with a securities analyst? I was talking about someone researching companies and industries. Those are the "superior analysts". People who pick undervalued companies to buy and overvalued companies to sell for a full time job, no makeup or commercial breaks. The "Institutional Investor" types. They arent really likely to tell you where to put your money, theyll tell you what stocks to buy in a certain sector. Good analysts contribute to portfolio alpha, meaning excess returns over the benchmark despite management fees. Marginal analysts take away whatlittle they add by charging fees. Thats all I was saying earlier.
You need to stop watching CNBC and MSNBC and all that shit. Its entertainment.
The consumer confidence numbers are a quantitative way to get a qualitative answer...consumers arent in the depths or despair as they were a few months ago. Things dont have to be good, they have to get "less bad" first.
I am with Benny on the market being up almost 200 pts on the Consumer Confidence numbers being a sucker rally. I am glad this rally rolled around so I could get 100% out with 25% more cash than the acct was worth a few months ago though. Thank you suckers:DQuote:
Originally Posted by Brock Landers
Nikkei is is breaking out and could run another 1000 points. The Russell 2000 is close to a new recovery high and was up almost 5% today; it could also run. The selloff in bonds is not all bad. That money could flow into equities. A move to SP00 1100 is still only a 50% retracement of the entire move down. I still believe too many people are expecting a correction. Look for Google to make a big move here..
(As an aside, I don't understand what you were doing if you were waiting for a rally like this to get out, since it only added a few percent to your 25% return - not enough to absorb the risk of waiting for it, I wouldn't think.)Quote:
Originally Posted by liv2ski
How do you know the market isn't undervalued apart from the consumer confidence numbers? Maybe the Wilshire 5000 should really be at 11,000 (or more) right now, given the current state of the economy and the best guess(es) as to the future, and what you term a sucker rally has the market still well short of where it should be. Have you done that analysis? I doubt it. (I have no idea if the Wilshire 5000 at 9300 is too high, too low, or just right.) There may be (teams of) analysts out there doing it, but I doubt that includes anyone posting in this thread.
The "Instituitional Investor" types consistantly know dogshit about the companies they rate - at least based on my experience comparing their ratings to the actual workings of the company. Listening in on these "superior analysts" at conference calls is a quick confirmation of this.Quote:
Originally Posted by Brock Landers
The only consistently knowledgeable group with successful trading histories had insider information. Supplier Salesreps with knowledge of deliveries and a rough understanding of product cycle were ideally positioned.
Exactly. And, from what I can see right now, that's today's market, and any retail investor is a fool and a sucker to jump in and play with the insiders. But, as I said, this fool will be sucked in at the the next low.Quote:
Originally Posted by Hugh Conway
Again, how the fuck can you trust any of these so called analysts after the dot com late 90s? What substantial reforms were instituted since then to help me trust those scoundrels?
Absolutely nothing. Other than a suggestion to implement some regs in the OTC derivatives market and tinkering with some short selling regs, the same system of fail is still in place.Quote:
Originally Posted by Benny Profane
and that little thing about separating I-banking functions from research....Pretty significant and caused a real change in the way industry operates. Previous to the global settlement analyst pay had ties to investment banking activity which is no longer the case and improves the objectivity and quality of the research product.Quote:
Originally Posted by Moeghoul
While research analysts aren't right 100% of the time they provide institutional investors access to management and generally offer years of knowledge and insight on both the industries and companies they cover. While they can't strip out all the systematic risk in the market, because of sector focuses, analysts do a good job in identifying firm specific risks.
While that doesn't always translate into higher or lower stock prices based on an analyst recommendation, it does provide portfolio managers with the tools necessary to make investment decisions.
WTF is going on today. Part of the market is screaming deflation trade (oil equities down, gold down, equities in general down, dollar up) but another part of the market is screaming inflation (debt land with treasuries gapping lower and HY moving higher).
Anyone care to interpret?
In less than two years we have gone from inverted yield curve to the steepest in history..
Reaction to treasury auction today. The dollar index has some strong support at the 80 level, gold's got resistance around 961, the sideways seesaw in equities continues. Oil/commodities traded higher on the weakening dollar, my best guess is we see a small rally in the dollar index above 80 to82 range for a few weeks before it slides under 80 again. Global economy is still contracting and an acceleration downward of the biz cycle will hit by end of June. That's what my chinese fortune cookies told me, I did the best to translate them into english. My magic 8 ball concurs.
Some institutional analysts are good. The problem is it's really hard to know which ones.Quote:
Originally Posted by Hugh Conway
Also you might also be looking at sell-side analysts - ie the ones employed by IBs (eg. Abby Cohen, the old Henry blodgett). Despite the fiction of the Chinese wall there's still conflict of interest.
There are lots of good buy-side analysts - the ones employed by funds; but their research isn't available to the public. I've worked with some on the semi and electronic games side and they're fantastic researchers and do the kind of work that you're talking about HC - ie getting down to nitty gritty; really checking inventory etc..