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There has been black box systems since the Black-Scholes formula was developed. Portfolio insurance in the 80's. Long Term Capital in the 90's was aQuote:
Originally Posted by skier666
Black-Scholes investment house. Sub-Prime reminds me of the junk bond scandel aka Michael Milken.
I'd buy Japan right here looking for a double.
Interest rates are headed lower again which will stabilize housing soon.
My stock portfolio was up 2% today. Why all the worry?
but loan companies are tightening eligiblity requirements, and the easy money buy and flip mindset isn't as common as it used to be. i think '08 will be worse than this year for national housing, maybe a bottom in '09.Quote:
Originally Posted by 4matic
Don Hays of respected institutional service Hays Advisory is a long-time superbull who has gotten over his periodic short-term hesitations, last seen earlier in the summer. See June 18 column
On the face of it, Hays is now as bullish as ever. Earliest this week, his e-service proclaimed "Welcome to the Last Half of this Bull Market." He noted, "The very spirited entrance of this bull market into the last half of its move, that will produce accelerating gains in these next 18-20 months."
For the first time that I recall, however, Hays has begun to suggest that the bull won't be around forever. It appears as throwaway lines "Nobody today is looking at March or April 2009, when our guesstimate is that this bullish stock market might be ready for a meaningful correction (i.e. cyclical bear market.)"
Meanwhile, an issue under the byline of Keith, Hays' son, succinctly summarizes the Hays Grand Strategy. Inflation, in Hays' view, is currently held down by five factors:
* "1. Demographics: An aging world implies lower interest rates and deflationary risks rather than inflation. You have to look no further than Japan as evidence.
* 2. Fed Obsessed with Inflation: Lived through previous inflation era and is obsessed with it.
* 3. Technology and the Internet: Internet alone has drastically reduced the cost of information, lowering the cost and improving the productivity of business decisions (Example: airline ticket low price search vs. 10 years ago).
* 4. Fiscal Policy Competition: U.S. pricing must compete with pricing of every free trade country & vice versa, keeping prices low.
* 5. Free Trade and Globalization (Glut of Labor): Labor makes up 65-70% of the final cost of goods and services. With a global glut of labor, workers lose their pricing power, putting another lid on inflation."
Or, in another Hays summary:
"The Technology Revolution
produces
A Massive New Flat World
which ignites
A Spread of Democracy
which unleashes
A Huge Sponge of New Consumption,
which launches
The Greatest Economic Boom in the History of the World
which results in
Huge Stock Market Potential"
I don't immediately see why this happy situation would end as early as 2009.
But, meanwhile, here's Hays' recommended asset allocation:
* Long-term growth: 100% in stocks.
* Moderate growth: 85% in stocks, 15% in bonds.
* Conservative growth: 65% in stocks, 35% in bonds
End of Story
http://www.marketwatch.com/news/stor...774BB17054A%7D
a "huge sponge of new consumption" doesn't automatically imply low inflation. in fact the more demand for the physical commodities and energy required to produce products for hays's sponge to soak up, the higher the cost of those commodities and energy. hence inflation in the metal, food, fiber and energy markets.Quote:
Originally Posted by 4matic
Ten year rate chart. Blame Greenspan. He overshot on interest rates.
http://www.marketwatch.com/tools/quo...&freq=1&time=8
I'm looking for the CRB to rollover soon and even if it doesn't gov't inflation rates will be low in the US next year. Bernanke said so..Quote:
Originally Posted by up an down
http://futures.tradingcharts.com/chart/CR/W
blame greenspan for what exactly? the fed doesn't determine ten year ratesQuote:
Originally Posted by 4matic
how does anything bernanke says or doesn't say change demand for commodities?Quote:
Originally Posted by 4matic
The ten year failed miserably at the funds rate, 5.25, twice. It's too high. The funds rate should have never been above 4.50. The good news is we have Bernanke to clean up this mess.Quote:
Originally Posted by up an down
Housing slowdown, which is what the fed wanted, will affect commodity prices. Count on it.Quote:
Originally Posted by up an down
i disagree, commodity demand is strong worldwide , a couple hundred thousand new homes not built in the usa won't affect demand muchQuote:
Originally Posted by 4matic
i think the ten year is in a down trend that has little to do with the fed rate.Quote:
Originally Posted by 4matic
http://www.cbot.com/cbot/pub/page/0,...bardensity=LOW not that i was a fan of greenspan, but i don't expect miracles from the fed, bernanke or no bernanke
What do you mean by downtrend? :fmicon: OBTW: That monthly chart from CBOT is 30 days behind..Quote:
Originally Posted by up an down
Erational Exuberance anybody?
Greenspan all though obviously a very intelligent man, was not the best. How about him knee jerking rates up for a "soft landing" in 99, only to do an immediate 180? 7.5% muni's were the best trade of 2000.
Isn't China gobbling up stuff like a dunken pig?Quote:
Originally Posted by 4matic
I work specifically in financials and financial stocks were cheap on Weds, now they are trading very close to August 1998 valuation levels. If I liked something at $30 on Weds I love it at $26 on friday.Quote:
Originally Posted by up an down
In general I think stocks are still cheap vs. historical valuation metrics. Maybe its not the bottom but its going to be close. Too many doom and gloomers out there and its opening up alot of buying opportunities.
WRONG!!Quote:
Originally Posted by CUBUCK
they barely retraced. nmost of them are going to get downgrades in eps very soon- this is just a bounce ... may last till tues.
The financial are still over valued based on this whole CDO mortgage crap. You can trade them for a quick bounce ( +10% max).
barely retraced? You're right the S&P is up 4.5% this year and S&P financial index is down 8.2%. :rolleyes:Quote:
Originally Posted by BeanDip4All
May last til tuesday? Is that what the magic 8 ball told you? Fundamentally there is nothing wrong with 90% of these companies.
well, you've got the credit market, which is in ruins right now.Quote:
Originally Posted by CUBUCK
meanwhile, we can't get any issues done, and deals are falling apart.
and news issue are Libor +7% + - that translates into a 13% - 14% coupon on the new LBO deals. NO WAY! You've got 350 Billion dealing that need to be funded... banks are eating shit. Can't get anyone to buy the debt.
it's a very bad situation, i've heard money markets are in trouble too, how is that for a clincher?
You and your hearsay.Quote:
Originally Posted by BeanDip4All
You think JPM wants to get shut out of another $20 billion dollar PE IPO? These deals will get done because no bank wants to see that steady flow advisory and underwriting fees from PE dry up.
Lets just look back at this at the end of the year and see what happens
Wow. I know jack shit about the market. It's like watching two guys argue in japanese.
Let me just ask my q: Would you get in on a commodities fund right now?
SELL SELL SELL SELL SELLL!
my delicate feminine sensibilities take offense to this! :mad:Quote:
Originally Posted by stupendous man
Don't predict, react!!!Quote:
Originally Posted by BeanDip4All
:redface:
Quote:
Originally Posted by CUBUCK
nope. we will try. Who are you having buying the debt? Not us! Kind of defeats the purpose of all our fees.
it all depends on the credit spreads.
kkr just pulled their ipo and another LBO debt offering; never a good sign when the blue guys cant sell the good stuff.
Street whores!!! All of you!
Word.Quote:
Originally Posted by Cono Este
.....
Quote:
Originally Posted by stupendous man
Commodities funds don't just buy commodities. They trade actively. I wouldn't recomend a commodities fund unless you had a spare $500k sitting around.
Note: If you are talking about a commodities mutual fund that tracks an index like an ETF that's probobly ok.
a black monday tomorrow???:eek: even if not, this could be a very volatile week.
In theory the long term rates should be inversely related to the funds rate. The Fed increases the funds rate to control/decrease inflation. The long term bond rates are highly dependent on expected inflation rates. Therefore, if the Fed takes action to control inflation, long term bonds should rally.
That being said, in the short term, sentiment drives the rates more than fundamentals.Quote:
Originally Posted by 4matic
The NYC retail scene is feeling it already. We took a shot in the ass last week, even the tire kickers are getting scarce and the ones that are coming around are feeling cheap.
looks like the crb is rolling over uphill ...Quote:
Originally Posted by 4matic
Look out.. Monday could be ugly.
Strong downward movement on Friday.
Two days to let steam blow off and calm peoples fears, or two days to let anxiety build, then explode onto the market on opening bell Monday morning.
Oofffhh, the tension is palpable.:cool:
yeah, this week might be very important for and set the tone for at least the next few months... the buy the dips versus the sell the rallies war is on.Quote:
Originally Posted by MeatPuppet
Rates down, gasoline down, oil down, gold down, grains down. Commodities are down big in general. We'll see negative inflation in coming months. If Bernanke gets it right tomorrow, and I suspect he will, there should be a pretty good relief rally for equities.
grains weren't down, especially wheat, but you had the rest of it right, except for that negative inflation prediction :p i don't think a interest rate cut matters for stocks. todays close makes the technical indicators turn bullish. it would not be a great shock for the djia to go up 500 more points this week even if the fed sits tight.Quote:
Originally Posted by 4matic
p.s. i think wheat futures are headed for $7.00+
Grains were down early in the day. Corn is vulnerable to a major decline since there isn't enough ethanol capacity to use all the surplus grain.Quote:
Originally Posted by up an down
Bernanke getting it right doesn't mean a rate cut. It's the wording of his statement and Ben is a genius so expect good things.
CRB was down 2% points today and closed right on it's low.
Where is the inflation you are so sure about? I don't see it..