Is the stock market going to tank?

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Originally Posted by Toadman

^^^^^^^

Those folks back in Feb. who shorted the Euro are looking pretty good right now.



If Deutschland does block participation, then world markets will take a 10% hit. It'll be Lehman Bros. and then some all over again. Rebalanced my 401 (k) last week. Sadly my plan doesn't have a lot of options for a market decline. (T Rowe Price). Pretty much a few bond funds, one being federal gov't T bills. The other is a Money Market fund, which is basically earning Fed Window rates. But better that than losing 20%-30% of my balance.

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I was thinking how all of this is devolving into almost pre WW2 relationships within Euroland, with France walking around with their noses in the air playing smarter and better than anyone, and the Germans hunkering down into their bunkers. The Brits, ah, well, may be sending us some really good rock and roll in a few years, because, when those kids have no future, they put out some great records.

I've actually made a little (a little) money by getting to the IRA/401k switch into Treasuries before most. When those two people died in Athens a day before the FlashCrash, I made that move. Lucky me. Total safety right now.

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Originally Posted by Benny Profane

I've actually made a little (a little) money by getting to the IRA/401k switch into Treasuries before most. When those two people died in Athens a day before the FlashCrash, I made that move. Lucky me. Total safety right now.

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Bond funds are good while rates are going down, but as soon as rates start to go up, you will lose principle value in the acct, so watch rates and bail at the bottom.

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Originally Posted by liv2ski

Bond funds are good while rates are going down, but as soon as rates start to go up, you will lose principle value in the acct, so watch rates and bail at the bottom.

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All it will take is for the Fed to do a quarter point move, and they know it. That will a milestone day, but, I really don't think you're going to see that for maybe years. But, when we all get a hint, we live in a world when someone can get on their IPhone and move all their "money" in a few minutes while in a meeting or watching the game or getting a blow job. It's not like Treasury Bond funds will drop in a day. But, maybe they're working a a Bond Fund FlashCrash, the bastards.

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Originally Posted by liv2ski

Bond funds are good while rates are going down, but as soon as rates start to go up, you will lose principle value in the acct, so watch rates and bail at the bottom.

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Y'all need to be out of bond funds well before the Fed moves rates. They are only going to move rates when the economy is considered "ok". And they have shown an unwillingness to fuck around or do this remotely prematurely. Get back into stocks well before the Fed considers the economy good enough to raise rates.


For now though...go with a bonds, Treasuries should be a good play for now. Safe. And possibly could jump a bit if things dont improve in stocks. I just dont think stocks are going to plummet again. Yeah, theyll be volatile, up and down 600 points, but the forced selling that caused a lot of the shit last time is gone, and the economy just plain isnt good, limiting the upside. Volatility, but more of a "whatever" in my mind longer term. Good time to day trade for any of you animals

When the fed starts to tighten it may not affect the long end for a while. The yiel curve is pretty steep now tightening may just flatten te curve which would encourage bank lending. With any bond fund I think you are better in a blended type that manages risk both currency and country. I hold PTTRX.

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Originally Posted by 4matic

The yield curve is pretty steep now tightening may just flatten te curve which would encourage bank lending.

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not sure how a flattening YC encourages bank lending...care to explain? banks are most willing to lend in the steepest YC environment. i.e. they want to borrow short term cheaply and lend long term expensively.

I just got turned on to a cool trick. If you don't have a subscription to the WSJ and can't see most articles, just copy and paste the headline into Google, go to the link, and, wahlah, free access to that article. It's fun to stick it to the man, especially if it's Murdoch.

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Originally Posted by Benny Profane

I just got turned on to a cool trick. If you don't have a subscription to the WSJ and can't see most articles, just copy and paste the headline into Google, go to the link, and, wahlah, free access to that article. It's fun to stick it to the man, especially if it's Murdoch.

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I pay a boat load of cash for an internet subscription. Looks like it's time to cut that loose.

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I know there are a couple of you that read this guy but all that read this thread should. Not a fan of mutual funds myself and Hussman's funds are included but he is smart. Worth a read every Monday. If you can get by the "Doom and Gloom" attitude and take the data for what it is worth , you will benefit in the long run...following the advice or not.


Here's the latest link:

http://hussmanfunds.com/wmc/wmc100607.htm

From the article schwerty linked, something that everyone needs to read and remember:

"A dollar spent by the government is always a dollar taken from somebody and diverted from some other activity. The only question is whether the dollar spent is more productive, or satisfies a more desperate human need, than the alternative activity would. If not, the spending is hostile to economic growth and public welfare. There is no free lunch. At best, what people call "stimulus" can only occur if the dollars spent by government are more productive than they would have been if they were allocated privately. I cannot imagine how allocating public funds to the same reckless stewards of capital that made the bad loans in the first place can possibly be a productive use of capital." -John Hussman

this ones for benny: http://www.zerohedge.com/sites/defau...0To%20Cash.pdf

this ones for everyone: http://online.wsj.com/article/SB1000...reel_lifeStyle

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Originally Posted by grapedrink

this ones for benny: http://www.zerohedge.com/sites/defau...0To%20Cash.pdf

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that is really good! Ballsy call for a quant desk

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Originally Posted by mtnwriter

not sure how a flattening YC encourages bank lending...care to explain? banks are most willing to lend in the steepest YC environment. i.e. they want to borrow short term cheaply and lend long term expensively.

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I'm looking at this as now banks can borrow at zero and invest at 3% guaranteed. If the yield curve flattens banks will have to expand risk somewhat to seek return. I could be mistaken for sure..

Cramer Calls Market "Stupid, Rapacious, Arbitrary, Capricious And Downright Ridiculous", Tells Viewers To Stay Out
http://www.zerohedge.com/article/cra...lous-tells-vie

Wow, never thought I would hear the king of "pump the markets" go the other way. It must be a sign of the coming Apocalypse.:eek:

Cramer said sell in 2008 at 11,200.

Said buy Apple $150 lower than it is now.

Is anyone perfect?

There was a pretty interesting article in the WSJ over the weekend comparing the 16-year period where the DOW hovered around the 1,000 mark before making it's final crossover to the one we are experiencing now with the 10,000 mark. Unless there's an influx of new technology that ALL business can benefit from (similar to the late 90s push with the rise of the internet and more affordable and accessible computers), I can't really see any reason for the DOW to trend much higher over the next 5-10 years. There simply isn't anything out there that can create the same buzz; perhaps alternate energy will pave the new pathway but I still think we're long away from a low-cost, high-efficiency impact.

http://finance.yahoo.com/banking-bud...d=bb-budgeting

http://news.businessweek.com/article...3PCQH1A1I4H-14

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Originally Posted by 4matic

I'm looking at this as now banks can borrow at zero and invest at 3% guaranteed. If the yield curve flattens banks will have to expand risk somewhat to seek return. I could be mistaken for sure..

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It's my opinion banks are building a warchest of money b/c of the exposure they have to underwater mortgages that some day they will have to realize a loss on.

until then it seems that the government will continue to keep rates low to support the housing market in the hope that the economy will pick up.

Not sure how that is going to happen ... I'm a bit of a boom and gloomer ... more of a realist though. Market returns and the global economy are two seperate entities now that the world stock exchanges has turned into a casino...it's disgusting really.

Today, our Quant guy at CIBC World Markets [Peter Gibson - Top rated quant analyst in 20 of the last 22 years] referred to 10 yr Treasury Bills as the best indicator of when to sell and buy stock.

If 10 year T-Bills hit a yield of 4.1%, sell everything. Yield of 2% seems to be the floor and a good time to buy stock.

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Originally Posted by NPG

There was a pretty interesting article in the WSJ over the weekend comparing the 16-year period where the DOW hovered around the 1,000 mark before making it's final crossover to the one we are experiencing now with the 10,000 mark. Unless there's an influx of new technology that ALL business can benefit from (similar to the late 90s push with the rise of the internet and more affordable and accessible computers), I can't really see any reason for the DOW to trend much higher over the next 5-10 years. There simply isn't anything out there that can create the same buzz; perhaps alternate energy will pave the new pathway but I still think we're long away from a low-cost, high-efficiency impact.

http://finance.yahoo.com/banking-bud...d=bb-budgeting

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I tend to agree with you NPG.
I think we're at an inflection point. Call it a need for economic evolution. There is only so much oil out there. We'll need other options. Instead of drilling deeper, get a little smarter. Instead of protecting banks, use that money for job creation. Give scientists/engineers a $100 Billion Dollars: see how they do with cancer research, see what they can discover with nanotechnology, see if they can create a better source of alternative energy.

You know society has failed when corporations control a country through politics and the media.

how do you inflate away debt when there is no inflation?

http://www.zerohedge.com/article/ici...ore-fund-flows

"As we predicted previously, in the past week domestic equity mutual funds experienced another whopper of a redemption. ICI reports that for the week ended June 9, domestic equity mutual funds saw $3.7 billion in outflows, 3 times the prior week's outflow, the sixth sequential outflow in a row, and $27 billion in outflows year to date. Yet stocks, which persist in ignoring all fundamental flow data, are not only above their 200 DMA, but also positive for the year, as the pathetic algo games on no volume continue to diverge the market from any semblance of reality. Good luck Fed, SEC, and Primary Dealers in restoring credibility to this joke of a market".

Damn, I am so out of the market now, as in 100% US Treasuries:rolleyes2

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Originally Posted by dapesche

how do you inflate away debt when there is no inflation?

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Can you say that in Japanese?

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Originally Posted by liv2ski

http://www.zerohedge.com/article/ici...ore-fund-flows

"As we predicted previously, in the past week domestic equity mutual funds experienced another whopper of a redemption. ICI reports that for the week ended June 9, domestic equity mutual funds saw $3.7 billion in outflows, 3 times the prior week's outflow, the sixth sequential outflow in a row, and $27 billion in outflows year to date. Yet stocks, which persist in ignoring all fundamental flow data, are not only above their 200 DMA, but also positive for the year, as the pathetic algo games on no volume continue to diverge the market from any semblance of reality. Good luck Fed, SEC, and Primary Dealers in restoring credibility to this joke of a market".

Damn, I am so out of the market now, as in 100% US Treasuries:rolleyes2

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What is a stock market "Primary Dealer"? And, isn't the public always wrong?

Also, if you are in treasury why is that any less of a "joke" when PRIMARY DEALERS are in bed with the FED and always have been?

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Originally Posted by 4matic

What is a stock market "Primary Dealer"? And, isn't the public always wrong?

Also, if you are in treasury why is that any less of a "joke" when PRIMARY DEALERS are in bed with the FED and always have been?

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At this time, due to economic reasons, I think there is a better chance of rates staying the same to maybe going down a bit, regardless of what the Primary dealers may bid. That means my money should be pretty safe.
In contrast, the fix has clearly been in for the last year in the stock market. I know we have widely different opinions on this issue, but I am convinced the FEDs PPT has been relentlessly propping up a weak market. At some point their efforts will fail and the market will have a HUGE correction, which will be beneficial to money in US Treasuries.
I am just not as trusting of the stock market as you are. Feel free to carry on.

Interesting article:http://www.theatlantic.com/magazine/...e-market/8122/

Gold Rises to Record as Shelter From U.S., Europe Concerns :cool:

http://www.bloomberg.com/apps/news?p...d=aeqMXB0mHoj0

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Originally Posted by 4matic

Heh. Yeah. Beats gold. I just don't believe in the PPT. Program trading for sure but the fed isn't buying stock.

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Originally Posted by 4matic

The Nikkei has rallied 14% in a week. Up big again tonight.. Often, it is a currency move that triggers a big change in relative values. I have a feeling that there is going to be a 1985 Plaza Accord type agreement by the G20 on currency rates specifically directed to realign Yen/Yuan/Dollar. In 1985currency crosses were way out of whack after a prolonged recession and we're close to that now. My opinion is this will be bullish for US blue chip stocks and might be the catalyst for another leg up. There is definately a macro undercurrent with regard to currency, gold, and interest rates. The US Fed is going to need help from the Asian countries to exit stimulus and stabilize growth. jmo..

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/\My post from January 2010 and now: :p

China to ease yuan-dollar peg

http://www.marketwatch.com/story/chi...rts-2010-06-20

SP futures are up 17 on the news.

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Originally Posted by Moeghoul

Gold Rises to Record as Shelter From U.S., Europe Concerns :cool:

http://www.bloomberg.com/apps/news?p...d=aeqMXB0mHoj0

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My comment on the tin was tongue and cheek but if you're long gold good for you. SP is not far behind and gaining.

From yesterdays update:

"Reinhart and Rogoff observe that following systemic banking crises, the duration of housing price declines has averaged roughly six years, while the downturn in equity prices has averaged about 3.4 years. On average, unemployment rises for almost 5 years. If we mark the beginning of this crisis in early 2008 with the collapse of Bear Stearns, it seems rather hopeful to view the March 2009 market low as a durable "V" bottom for the stock market, and to expect a sustained economic expansion to happily pick up where last year's massive dose of "stimulus" spending now trails off. The average adjustment periods following major credit strains would place a stock market low closer to mid-2011, a peak in unemployment near the end of 2012 and a trough in housing perhaps by 2014. Given currently elevated equity valuations, widening credit spreads, deteriorating market internals, and the rapidly increasing risk of fresh economic weakness, there is little in the current data to rule out these extended time frames.

In recent months, I have finessed this issue by encouraging investors to carefully examine their risk exposures. I'm not sure that finesse is helpful any longer. The probabilities are becoming too high to use gentle wording. Though I usually confine my views to statements about probability and "average" behavior, this becomes fruitless when every outcome associated with the data is negative, with no counterexamples. Put bluntly, I believe that the economy is again turning lower, and that there is a reasonable likelihood that the U.S. stock market will ultimately violate its March 2009 lows before the current adjustment cycle is complete. At present, the best argument against this outcome is that it is unthinkable. Unfortunately, once policy makers have squandered public confidence, the market does not care whether the outcomes it produces are unthinkable. Unthinkability is not evidence.

Moreover, from a valuation standpoint, a further market trough would not even be "out of sample" in post-war data. Based on our standard valuation methods, the S&P 500 Index would have to drop to about 500 to match historical post-war points of secular undervaluation, such as June 1950, September 1974, and July 1982. We do not have to contemplate outcomes such as April 1932 (when the S&P 500 dropped to just 2.8 times its pre-Depression earnings peak) to allow for the possibility of further market difficulty in the coming years. Even strictly post-war data is sufficient to establish that the lows we observed in March 2009 did not represent anything close to generational undervaluation. We face real, structural economic problems that will not go away easily, and it is important to avoid the delusion that the average valuations typical of the recent bubble period represent sustainable norms".

A long article, but very well written and a must read IMO.
http://www.hussmanfunds.com/wmc/wmc100628.htm

it is but it's going to bounce back 30 seconds later :fm:

9600 Dow, then we bounce higher into September. Magic 8 ball never lets me down.

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Originally Posted by Moeghoul

9600 Dow, then we bounce higher into September. Magic 8 ball never lets me down.

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Cold Shoulder: Goldman Warns If 1,040 Is Taken Out In S&P, 865 Is Next Stop.

You may want to check that 8 ball.

http://www.zerohedge.com/article/col...-865-next-stop

Do the opposite of what GS publicly announces, its worked really well for them. :fm:

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Originally Posted by Moeghoul

Do the opposite of what GS publicly announces, its worked really well for them. :fm:

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I know, to funny. Hey which one of you fat fingered traders just crashed Citi?

good thing those circuit breakers for individual stocks were there :rolleyes:

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Originally Posted by OldLarry

good thing those circuit breakers for individual stocks were there :rolleyes:

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What is the current speculation for todays citibank 6%+ tank? Is it that they broke 4.00 price yesterday closing at 3.99 that made investors panic where the next support would be?

Just curious, interesting to see the individual circuit breaker kick in. (and do nothing to stop sell off)

jesus fucking h christ almight motherfucker

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Originally Posted by frozenwater

What is the current speculation for todays citibank 6%+ tank?

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9774 dow....another ~170 to go. Should be thru it with Friday's shitty jobs #.

I think those shitty job #s are baked in.

Nahh, it's like constipation, Mr. Market's gotta push a little harder to drop his turd, he got some movement at the end of today..looking for a full release into Friday. No stool softeners for Mr. market, he enjoys grunting one out the hard way.Crap