Contributing to the Great Bond Bubble of 2010? That isn't like you.Quote:
Originally Posted by Benny Profane
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Contributing to the Great Bond Bubble of 2010? That isn't like you.Quote:
Originally Posted by Benny Profane
100 year bonds? What could go wrong for the railways!Quote:
Originally Posted by Missing Sock
I was in there, sitting n a comfy chair, before everyone else rushed in. Thank you, fear.Quote:
Originally Posted by Missing Sock
Can't call it a bubble. It's just refuge for most. Speculators and ponzi schemers inhabit bubbles.
Fixed income mutual funds had a record $375 billion of inflows last year compared to a 20 year average of $52 billion and almost 3x the next highest year. Add another $202 billion year to date. And that is just mutual funds never mind the separately managed institutional accounts......I'm sure there is just a wee bit of speculative money in there don't you think?Quote:
Originally Posted by Benny Profane
It's not speculation. It's running to safety. A bubble happens when assets are bought with leverage. Have you heard your local cab driver or shoeshine boy talking up T Bills?Quote:
Originally Posted by Missing Sock
It wouldn't be this bad if it wasn't for the FlashCrash. Attitudes were starting to thaw right before that, and then, whoosh, everyone went back into their shells. That, and, oh, sovereign debt defaults getting kicked down the road.
The Boomers have been hit hard in the past decade with two crashes, and, now, a mini crash that the SEC still can't explain. It's all about capitol preservation, now.
We've heard our resident pizza delivery driver talking up bond fundsQuote:
Originally Posted by Benny Profane
I wouldnt blame it on the flash crash, Id say it was much more due to Europe's debt going to shit and really bringing attention to the U.S. and what our government is doing in relation to what the PIIGS did not do. A couple tough days of economic data and youve got a bit of a slide. But in reality its a sideways market, and Ive been in bonds now for a while not because I think stocks suck or anything, but I think earning 2% relatively safely outdoes earning 0% from a sideways stock market (ok maybe that does suck).Quote:
Originally Posted by Benny Profane
Defintely inching my way back into stocks- if all of the shitty news we have been fed over the past 4 months hasnt killed the market (where is this double dip thats been predicted by some for over a year now) maybe we are at a sort of bottom marketwise, where shitty news is already priced in.
I just dont think its out of the realm of possibility that if you take out the forced selling in 2008/March 2009, we would be somewhere around where we are now.
When I stick my head out of the foxhole, I'm going for low debt companies paying good dividends and solid international exposure. And I'm keeping some high quality bonds.
Deflation's making me more money than anything now. Western ski condos are down 30%, and have a long way to go.
That article is a monster. Care to paraphrase? I've always enjoyed your analysis.Quote:
Originally Posted by mtnwriter
more wisdom from the resident boiler room expert. next up: if my aunt had a penis she'd be my uncleQuote:
Originally Posted by Brock Landers
Pete, NPR did about a 5 minute segment on this very article today; I'm sure you can find it at their site.Quote:
Originally Posted by Platinum Pete
i'll defer to NPR...they did a pretty succinct job unless you'd like more inside color, then i'm happy to oblige. unfortunately, my rough and tumble would be that without knowing for certain in the case of propublica is that they may have had some inside info and done some sniffing and guessing around, but i can say for certain that it happened in my shop in the past - and pretty much to the exact way described.
to wit - when our inventory of unsold mezz was unsold and there was a fear of "blockage" we often began to warehouse within our own structures with the *hope* of eventually clearing the decks - aka CDO^2 and CDO^3. this becomes pretty spider webby but in essence, as the article alludes to, it geometrically exacerbates the risk of the inherent portfolio and created a veritable junglefuck for any investor unfortunate enough to bid.
in most cases this meant selling off to landesbanken who were super greedy for yield and abnormally averse of asking questions and reading prospectuses. the result is usually a triple a rated tranche that quickly went from par to $.03 to be scooped up by some hedge fund with avarice and experience.
also, i think if you go to cnbc, the propublica and (sic) NPR links are listed.
Barrons
Stacked Deck
By ALAN ABELSON
Investors seem to be whistling by the graveyard; what, me worry?
A POLISH CHAP LIVING IN GERMANY went to the doctor, so reported the BBC last week, complaining of what he thought was a cyst in his scalp that turned out to be a .22-calibre bullet lodged in the back of his head. The bullet had not, fortunately, penetrated his skull and it was duly removed.
People get plugged all the time these days, of course, but supposedly this happened in 2004 or 2005. In other words, this poor fellow had been carrying around the bullet in his head for five or six years.
The victim, apparently, of a stray celebratory bullet fired at midnight during a New Year's party, the man claimed he was too soused to be aware of being shot but allowed as he felt as if he had received a blow to his noggin. So how come he waited all this time to do something about it?
He explained to the police that although he did remember having a sore head, "he wasn't really one for going to the doctor." We can only conclude that not only is he blessed with a remarkably hard bean, but he also must have a visually impaired barber. Or, maybe it's the latest fashion in Germany to walk around with a bullet in your scalp.
To Société Générale's Albert Edwards, who recounts this incident in his latest market rant, the fellow's lack of awareness is akin to the blithe insouciance of equity investors to the prospect of the global economy sliding back into recession, accompanied by another leg down in the bear market. "The vast bulk of the investment industry," he exclaims, "fails to appreciate that we are locked in a structural bear market" that is about to enter its "final, even bloodier phase."
Albert repeats his oft-voiced conviction that the bear market won't end until stocks become dirt cheap, with the S&P 500 some 800 points below its current price of around 1050 and, equally important, "revulsion in equities as an asset class hangs in the air like a fog."
He contends that excessive valuation is particularly true of our market, but warns that other markets just about everywhere, even those less richly priced, will not escape the full fury of the raging bear. We think we're safe in characterizing his foreboding as not an optimistic forecast. However, his prediction of 250 on the S&P 500 does smack a bit of excessive devaluation.
But we second his notion that the surest sign of a true bottom will be when investors en masse become thoroughly sour on stocks—as they were, as we recall, at the end of the great 1973-74 bear market. Such total disenchantment was decidedly lacking in the aftermath of the dot-com bust and the 2008-early-'09 collapse, despite the enormous damage both ugly episodes wreaked on investors' net worth. Enthusiasm for equities was temporarily chilled but far from extinguished. As Exhibit A, we offer the rousing 80% rally from last year's depths.
However, we don't think investors have been quite as comatose as Albert suggests. For one thing, there has been something of a stampede out of stocks into bonds in a desperate search for yield in a zero-interest environment. In the process, government bonds gained a formidable 1.8% in this fading month, while the Dow lost 3%.
But most importantly, individual investors feel, as Alan Newman of Crosscurrents puts it, "the deck is stacked, the game is rigged against them." And they feel that way because it is. As Alan laments, "The public has gotten the shaft from Wall Street, from the SEC, from short-oriented hedge funds and now from high-frequency trading."
The market everyone knew, he says, has disappeared, and in its place is an arena in which the long term not only doesn't count, it doesn't exist. Indeed, we suspect that the metamorphosis from exchange to casino is the root of individual investor disaffection. And the singular virtue—if that's the word—of the ultimate meltdown Albert Edwards is yearning for would be to clear the air, restore the long-term to its rightful place in the investment quiver and eventually restore Jane and John Q.'s faith in the stock market.
Did we hear somebody say, "Dream on"?
OUR RATHER BLEAK OUTLOOK FOR EQUITIES is in no way diminished by Friday's dead-cat bounce, inspired by that fancier of deceased felines, Ben Bernanke. Speaking at the annual central bank hootenanny at Jackson Hole, Wyo., Mr. Bernanke gave eloquent point to Harry Truman's famous crack about how he'd love to find a one-handed economist who wouldn't be forced to revert to that profession's well-known tendency to reply to every question with on the one-hand this, on the other hand that.
We pored over the text of his speech, all 19 pages of it, and we have to admit it was quite comprehensible, in welcome contrast to the all-but-indecipherable mutterings of Alan Greenspan. And to his credit, Bernanke acknowledged that the recovery is hardly what it might be. Alas, when it came to sharing with us his blueprint for a swifter, more sustaining recovery, he reverted to the old wishy-washy it all depends.
What it all depends on is the recovery which seems to us, anyway, in dire need of resuscitation. Either Mr. Bernanke doesn't really have a grip on the dismal state of the economy, which is doubtful, or doesn't know what to do about it, which is downright discouraging.
What the Street seized on as an excuse to rally after the market's trashing earlier in the week was the chairman's articulation of what the Fed might do in the way of monetary easing if the economy continued to drag. He listed three possibilities: a resumption of so-called quantitative easing (QE, to use the Street lingo), which involves fresh purchases of longer-term securities; reducing the interest rate on the reserves banks hold with the Fed, and changing the statement issued after Federal Open Market Committee meetings to reassure investors not to worry that rates might go up in their lifetime.
Fiddling with the interest on bank reserves and happy talk in the post-FOMC meeting blah-blah seem pretty meager antidotes for what ails the economy. So it all comes down to QE and the evidence that it has a real and necessary impact is slim at best. Which suggests, we're afraid, that the Fed is out of live ammunition.
O.K., so why is the stock market rallying? You tell us.
"THE MARGINALIZING of the Individual Investor" is the title of a piece Harald Malmgren and Mark Stys penned for the summer edition of International Economy magazine. Mr. Malmgren runs the eponymous Malmgren Global, which advises financial institutions, sovereign wealth funds and a scattering of governments and central banks around the globe. Mr. Stys is chief investment officer of Bluemont Capital.
We personally know neither of these gentleman, but Malmgren was kind enough to send us an e-mail and a copy of their article, which has the jazzy subtitle of "the inside story of flash crashes, systemic risk and the demise of value investing."
It's an excellent job of analyzing High Frequency Trading and the rest of the algorithmic crew and describing their baleful effects and we strongly recommend you try to get your hands on a copy of the magazine. As it happens, their theme is right in keeping with our riff above on what's essentially eating the individual investor and wrong with the market.
In his cover letter, Malmgren describes the extensive research he and Stys did into high-frequency trading (HFT, for short). They queried the HFT operators on everything from their funding to how they interacted with the big financial houses and why they were eager to achieve global reach.
High-frequency trading, Malmgren and Stys note, is focused solely on ramping up speed and volume to maximize tiny gains. And they assert: "Investment strategies based on fundamentals have been swept aside by high-frequency algorithms hunting for inefficiencies in daily prices and super arbitrage opportunities."
As a result, individual traders, they report, are confronted with overwhelming momentum-driven forces unrelated to corporate performance. A 'fair price" may exist, but "high-frequency traders are not seeking fair prices—they are focused solely on immediate profit."
And, add Malmgren and Stys, "unfortunately, high-frequency trader interaction with computerized algorithms of large-cap financial institutions is providing opportunities for virtually undetectable market manipulation."
They point out that "in an environment where the range and speed of price movements is ever-increasing, fundamental valuations of a company would seem to be increasingly arbitrary without the ability to distinguish accelerated price movement from actual value."
Malmgren observes that HFT provides an illusion of almost limitless liquidity, liquidity that can vanish abruptly if a few HFT platforms take a break. Implicit, he says, is "mammoth systemic risk."
And since high-frequency traders have become the dominant market makers and shakers, their capacity to turn on a dime and sell off everything, means that a market correction could go much faster and far deeper than the Street imagines.
I just knew as soon as I saw this thread had a new post by Benny it was going to be him copy and pasting an entire news article.
I did that as a fucking favor, moron, because Barrons is a pay site. You're fucking welcome.
one of those pay sites where you can search the title on google news and read it for free?
anyway I don't read any of that shit, it fucks with my trading...and you wonder why you are a permabear.
i'm intrigued by the tgr "traders", if active fund managers with endless resources, decades of experience and dozens of full timer staffers dedicated to reading and analyzing data can't beat passive indexing over the long term.. how exactly does some part time tgr day trader do it?
Big fish make waves, little fish don't.Quote:
Originally Posted by grapedrink
little fish? there probably isn't anyone on here that even qualifies as a minnow. any "traders" here that can claim their equity portfolio beat SPY over the last five years after factoring in transaction costs and taxes?
there are some. they post occasional wheat, not the constant chaff of the junior analystsQuote:
Originally Posted by grapedrink
www.compoundstockearnings.comQuote:
Originally Posted by grapedrink
Not spam, I know quit a few people that make substantial returns using these guys techniques. I for one have been out of the market since May, but many people made lots of $$$ through July. Me, I am not so trusting of the market when the Plunge Protection Team is at work. I will wait for the clear shorting opportunity that is close.
im not even going to begin to get into all the things wrong with that website but lets just look at this as simply and logically as possible. if you had a technique that would earn you 100% returns a year, why in the world would you waste a second of your time selling seminars? you'd obviously be a genius because you know how to not only beat the market but completely decimate it. a genius would obviously know there's about a million times more money to be made running a hedge fund than selling workshops online. even a retard would figure that one out pretty quick, just doesn't add up :)Quote:
Originally Posted by liv2ski
Not 100% returns, but 3-6% monthly on the money you sell a covered call on, assuming your called out. There are times a prudent investor will not be anywhere close to 100% invested, so that will lower your returns at times. They do have techniques for generating returns in a downward market, but I honestly haven't put in the time to learn them.Quote:
Originally Posted by grapedrink
Regarding your other comments, not everyone wants to be a hedge fund mgr. The guys that started that business are already very comfortable and do make plenty of money on the monthly subscriptions to the services they offer (tech analysis). I think they are very happy to be the big fish in their pond, knowing they offer a valid service to investors who are tired of getting bent over by wall street and their broker.
But whatever, everyone needs to find their own path to financial security.
1300 gold, 21+ silver, and a 2nd attempt at 11,000 on the dow. Commodities are in full bull mode. Giddy up.
Quote:
Originally Posted by Moeghoul
Financials are the key. JPM above $40 and we'll be up 250 plus today.
Gold struggling with the dollar getting ripped is odd right here.
Gold precedes the move. 1300 is a century mark, so I'm not surprised to see selling here by traders. I was dumping miners into the rally. USDX took a nosedive thru 81 support after the fed meeting. Jap intervention = FAIL.Quote:
Originally Posted by 4matic
Interevention only works, and it will work, if all the G20 participate like the Plaza Accord of 1985.Quote:
Originally Posted by Moeghoul
the landscape has changed a bit in the past 15 years. Under the current political climate and financial problems, foreign CB's net sellers of US debt, talk about an SDR monetary unit, etc, I'd be amazed if the G20 could agree on anything.Quote:
Originally Posted by 4matic
Edit: Central banks are slow learners, but they're catching on. Hint: start dumping yer gold when it leaks out that the bank of Japan is buying gold.
http://www.cnbc.com/id/39376353
1310 is resistance. I got plenty of dough for a pullback into the 1260-1280 zone. USD is tumbling thru support levels.....almost daily. Mr. market is grunting hard to get to 11,000.
Moeghoul, I appreciate your posts, but is there any way I could get you to change that avatar? Shit bugs me out every time I see it.
did anyone seen this guy that predicts the Dow to hit 1000?:eek:
http://seekingalpha.com/article/2273...y-not-possible
I interviewed Precther on FNN in 1986 when he was a super bull calling for 3600 on the DJI. Who'd have thought?Quote:
Originally Posted by sidewall
I saw him yesterday on CNBC. 1000 is just a number to indicate how bearish he is. Until a cycle or something else changes that is the target. It is not a real prediction as such other things can change on the way down.
Lurking this thread, so thanks for the insights, but will point out to you number-crunchers that 1985 was 25 years ago...:DQuote:
Originally Posted by Moeghoul
Prechter's been out to lunch for 9 years on the the gold and commodity run.Quote:
Originally Posted by 4matic
Quote:
Originally Posted by Lizhnik
You're from Moscow, you should recognize her. It's the same babushka that sells you yer beets and potatoes at the veggie stand. ANd she stays. Try squinting.
He's on the phone with the market makers, "Higher, bitches, higher!"
Ok, I retired her for the time being, but here's a parting shot for ya.Quote:
Originally Posted by Lizhnik
Thanks man, she's seriously nastier than any babushka I've ever seen.