30 year bond resultsbeware

[charliebrown]

Re: 30 year bond resultsbeware

agree. Once inflation really takes hold, are you going to keep your money in a money market paying 0% (No that isn't a typo) T.Rowe Price just posted treas. mm 7 day yield at 0%. Prime reserve is .1%. At vanguard I think we are at .18% tmm, and .30% pmm.

Now if all price inflation kicks in am i going to keep my money somewhere with no interest?? no of course not I'm going to run down to my walmart and buy tuna, batteries, motor oil, blue jeans etc. Extraction of the money out of the money market account will force yields up.

btw... Can money markets survive in this enviroment. Most yield less than .5% many are near zero. What are the economics of this? Will funds start shutting funds down. They are now being operated at a loss.

[touchring]

Re: 30 year bond resultsbeware

Treasury bond rates rising from 2% in December to nearly 4% earlier this week - with foreign purchasers buying less (percentage wise) than before is not a good sign.

The EJ/iTulip predicted quarterly Fed monetization is coming up, but the point is that rates are higher now than before the previous Fed monetization.

If the rates were too high then, what are they now?

If the Treasury auctions were not fine then, why are they fine now?

China has found a new purpose for its dollars - piling up on commodities - though unlike US bonds, there are logistics constraints.

This is what happens when you buy the real stuff as opposed to paper.



http://shipchartering.blogspot.com/2...-iron-ore.html

CONGESTION PERSISTS AT CHINA’S IRON ORE PORTS

11-06-2009
Congestion at China’s iron ore discharge terminals is remaining stubbornly high, with 84 Capesizes waiting to berth, according to local sources. This is the highest tally to date and indicates a rise of 50 Capes since late March.
Meanwhile, preliminary customs statistics reveal that China imported 53.46 Mt of iron ore in May, the second-highest monthly import total. This marks a 37% rise on the same month in 2008.

[flintlock]

Re: 30 year bond resultsbeware

So what does this mean as an investor? Should we hang on to our inflation hedging commodities, or sell and get back in after they(if they?) drop?

[Diarmuid]

Re: 30 year bond resultsbeware

ye of little faith! you're not a believer! you have to believe! you have to believe! you have to believe!

deflation! deflation! deflation!

it's everywhere!

a massive cornary towards the end of the dance would have really made that video "a classic"

[mcgurme]

Re: 30 year bond resultsbeware

Now you see what small businesses in the construction industry have been going through for years. FIRE economy requires constant growth or this happens. Seems like there is always someone who'll do it cheaper. Or course eventually quality suffers in the race to the bottom.

In my case, residential electrical service, there used to be higher barriers of entry. A license was required and you had to pay taxes, insurance, payroll taxes, etc. Now every dufus with a pickup is trying their hand at it, regardless of the law. The authorities refuse to enforce the licensing requirements like they are supposed to, or the labor laws, and its basically anything goes. The upshot of all this is now 50% of my business is fixing their mistakes.

Doesn't what you just wrote ask for more government intervention in things like this, not less?

I mean, this is the product of a truly free market. A race to the bottom. Any schmo can claim to be an expert in almost anything and make a quick buck... while putting many of the real experts out of business.

Some may argue this is the "magic" of the markets. Get rid of those over-priced services and all.

This ignores a basic fact: It costs money to get training. And it takes time. If someone spends that time and money, they'd like to get paid for all those lost years, or else it is not very worth getting that training, is it? But if someone else can skip the training part and under-bid the job based on price (rather than skill), that removes the motivation to get any training. There might be room in the market for a few experts to fix messes left by all the untrained folks, but this room isn't very big. And in the process, we keep slipping to the lowest common denominator.

Personally, I'd rather have licensed, trained contractors doing the electrical work in my home or business. But the problem is, many that I know have either gone out of business, or begun hiring untrained and unlicensed folks, because they can't afford the trained folks. All their competitors use the untrained folks, so they have to as well. The only ones who profit are those that gladly hire illegals to underbid everyone else. And so we sink, to the bottom.

I'm not advocating for bigger government, I am advocating for recapturing the role of government as an arbitrator in the market that expresses the will of the populace. Is our will really a race to the bottom? Do we want to be like Mexico? Might be good for a few rich people, not so much for everyone else.

[mcgurme]

Re: 30 year bond resultsbeware

Now I see? I'm not trying to seem like a jerk. I've been experiencing this for years. But the bubble was helpful to my business.

I'm not trying to take issue with Metalman or Itulip. But let's call some of the changes "rising productivity" and not duh-flation. Sounds cooler now.

Goadam,
I'm a small business owner too; I've felt the squeeze also.

What I've realized recently, based on most of the posters here, is that iTulip is mostly of and for the investment class, i.e. people who seem interested to profit from the markets without producing goods of value (aside from the money). They don't make or sell food, shelter, cars, bikes, or anything .. they shuffle money around to try to get more of it. (If you are reading this and find it offensive, please ask yourself why. The above is just a statement of fact). This is good for those of us who have money to invest, and that's why I hang out here (to shuffle my pittance of a retirement fund around so that something is left for my kids' college someday).

But from the narrow perspective of investments, your or my small business do not matter in the scheme of things. What matters is not the diversity of businesses in a community, the resilience of the community, or the quality of life. The only thing that matters is where and how money is flowing. It matters not whether that money flows from your community to Little Rock, Arkansas, to Bejing, to be recycled back to DC and then into the hands of a migrant who sends it back to Mexico; not once again touching your community or mine in the process. From an investment perspective, it is not a good thing if that dollar stays and recycles within your community, it means less profit for those who want to take a free financial ride. Yet from your community's perspective, it matters very much whether the dollar recycles or not - that is life and death for most small businesses.

Most folks seem to have been convinced (or maybe conned is a better word for it) that "investment" must take priority over everything else. Investment in what? 401K plans that are completely controlled by Wall Street? Investing in the destruction of our communities by large companies that could care less? (yes, that is the difference - many small businesses actually care about their community. no large corporation gives a hoot).

I've recently decided that the inflation/deflation debate here is kind of quaint from that perspective. The fact is, nearly all of us are being squeezed, unless we happen to be rich enough, have enough time, and have enough knowledge to shuffle money around endlessly to profit from the madness that is our world. I believe it is likely that even those here who think they can profit from that shell game will end up mostly disappointed as things continue.

And until we address the underlying problem(s), it really doesn't matter whether it is inflation or deflation. Either one will result in a continued squeeze for small businesses and individuals. Death by electrocution or death by firing squad? It is still death.

I laud iTulip for their foresight and insight into economic events - and that information has been useful for my business planning purposes - but it does not address the basic fact that we are going to continue to have our well-being as entrepreneurs and workers in the real economy squeezed by the corporate titans and their governmental sock puppet. That is, until enough people decide to do something about it, rather than sitting around piling up the gold and firearms.

[raja]

Re: 30 year bond resultsbeware

Doesn't what you just wrote ask for more government intervention in things like this, not less?

I mean, this is the product of a truly free market. A race to the bottom. Any schmo can claim to be an expert in almost anything and make a quick buck... while putting many of the real experts out of business.

Some may argue this is the "magic" of the markets. Get rid of those over-priced services and all.

This ignores a basic fact: It costs money to get training. And it takes time. If someone spends that time and money, they'd like to get paid for all those lost years, or else it is not very worth getting that training, is it? But if someone else can skip the training part and under-bid the job based on price (rather than skill), that removes the motivation to get any training. There might be room in the market for a few experts to fix messes left by all the untrained folks, but this room isn't very big. And in the process, we keep slipping to the lowest common denominator.

Personally, I'd rather have licensed, trained contractors doing the electrical work in my home or business. But the problem is, many that I know have either gone out of business, or begun hiring untrained and unlicensed folks, because they can't afford the trained folks. All their competitors use the untrained folks, so they have to as well. The only ones who profit are those that gladly hire illegals to underbid everyone else. And so we sink, to the bottom.

I'm not advocating for bigger government, I am advocating for recapturing the role of government as an arbitrator in the market that expresses the will of the populace. Is our will really a race to the bottom? Do we want to be like Mexico? Might be good for a few rich people, not so much for everyone else.

All those years of training?

Maybe you're thinking of doctors, lawyers, etc., but does it really take "years of training" to be a plumber, electrician, or many other jobs?
The reason the "any schmo" can take away work from the "experts" is that 90% of the work does not require extensive training, in fact, a majority of it requires almost no training.

I have a few rental properties, and I do all the repairs except for working on central heat/air units. Just recently repaired a hot water heater -- dead simple after getting on the Net and reading an article on it. Repairing leaking fawcetts, faulty light switches, and the like -- no problem.

I have no training. I don't know what training is required for these kinds of jobs. Three semesters at a community college? Certainly not years.

The above being said, someone who has been in the field can no doubt do the job faster . . . but better? Not in 95% or more of cases, especially if you work with a friend who has done the task once himself. If you spend some time reading a self-help book or website, you're not going to burn down your house by repairing a light switch.

Even if I was going to build a house, all I'd need to do is work together with someone who's done it once before.
Yeah, every once and awhile there's a disaster . . . but isn't that true of contractor work?
My experience is that the bossman is usually very experienced and knowledgeable . . . but he goes off to another job and leaves the idiots that work for him to do the work, and the result is usually unacceptable.
We remodeled a farmhouse recently, and after the boss left, I noticed that the workers were not insulating a window properly. I mentioned it, and they then did it correctly. I asked if the other 10 windows they had done were correct, and they said yes. I opened them up with a contractor friend, and they were incorrect -- the workers had lied. It turned out badly because the bossman was a neighbor, and the workers were his sons. He couldn't quite swallow the facts, and now regards me as an enemy. (You know how people are -- they blame you when they are at fault, especially if you catch them in a lie).

I disagree also with the "slipping to the lowest common denominator" idea.
In the days before regulation, there were word of mouth recommendations. If you wanted a job done, you'd ask around to find out who's good and who's not. That's what we do when we need something major. If more people did that, the "shmos" would get eliminated. Who's going to hire someone with a bad rep?

In the future, as America sinks into poverty, look for a lot more people doing their own work, and increasing numbers of people with little training doing work for others. Cutting costs will become paramount, and near-worthless training will become expendable. Reputation, not diploma, will be what insures good work.

[mcgurme]

Re: 30 year bond resultsbeware

All those years of training?

Maybe you're thinking of doctors, lawyers, etc., but does it really take "years of training" to be a plumber, electrician, or many other jobs?
The reason the "any schmo" can take away work from the "experts" is that 90% of the work does not require extensive training, in fact, a majority of it requires almost no training.

I have a few rental properties, and I do all the repairs except for working on central heat/air units. Just recently repaired a hot water heater -- dead simple after getting on the Net and reading an article on it. Repairing leaking fawcetts, faulty light switches, and the like -- no problem.

I have no training. I don't know what training is required for these kinds of jobs. Three semesters at a community college? Certainly not years.

The above being said, someone who has been in the field can no doubt do the job faster . . . but better? Not in 95% or more of cases, especially if you work with a friend who has done the task once himself. If you spend some time reading a self-help book or website, you're not going to burn down your house by repairing a light switch.

Even if I was going to build a house, all I'd need to do is work together with someone who's done it once before.
Yeah, every once and awhile there's a disaster . . . but isn't that true of contractor work?
My experience is that the bossman is usually very experienced and knowledgeable . . . but he goes off to another job and leaves the idiots that work for him to do the work, and the result is usually unacceptable.
We remodeled a farmhouse recently, and after the boss left, I noticed that the workers were not insulating a window properly. I mentioned it, and they then did it correctly. I asked if the other 10 windows they had done were correct, and they said yes. I opened them up with a contractor friend, and they were incorrect -- the workers had lied. It turned out badly because the bossman was a neighbor, and the workers were his sons. He couldn't quite swallow the facts, and now regards me as an enemy. (You know how people are -- they blame you when they are at fault, especially if you catch them in a lie).

I disagree also with the "slipping to the lowest common denominator" idea.
In the days before regulation, there were word of mouth recommendations. If you wanted a job done, you'd ask around to find out who's good and who's not. That's what we do when we need something major. If more people did that, the "shmos" would get eliminated. Who's going to hire someone with a bad rep?

In the future, as America sinks into poverty, look for a lot more people doing their own work, and increasing numbers of people with little training doing work for others. Cutting costs will become paramount, and near-worthless training will become expendable. Reputation, not diploma, will be what insures good work.

I'm someone who does some of her own electrical work, car repair, cutting down trees, electronics repair, etc. You're right, that is cheaper than hiring someone. Problem is, if we all do that: 1) we have no time for specialization, and 2) there is no economy.

The medical field is an example. We have very specialized doctors (over specialized IMHO) who keep a tight lid on competition. People can't/don't want to pay for them, so they go to less expensive alternatives ranging from Chiropractors to Homeopathy. Many of these alternative "healers" have a great reputation - and even the ones who don't, seem to stay in business for a long while. Long enough to do damage (I know of two cases of people going to chiropractors who screwed them up for life). There probably are some legitimate, alternative cures out there. But there is no reasonable mechanism for separating "wheat from chaff".

Here's an example. I know for a fact that ionic silver acts as an antibiotic (I have tested it in my lab). It is less expensive and potentially less harmful than most antibiotics developed by Big Pharma. But I defy anyone to find definitive answers as to: 1) what brand is best, 2) what dosage to use in humans safely, 3) which types of infections it might cure and which it won't, etc. If you do a Google search (I have) you will find every different viewpoint, and they all conflict. Nobody is an expert because everyone can claim to be one. Maybe it will eventually sort itself out, but it hasn't done that at all in the 10 years since I first had someone tell me about ionic silver. Because there is no standards body, no regulation, it is a free-for-all. It is not good for the consumer or the businesses involved.

That's the same trouble with self-professed expertise in anything. If you are applying that to your own life, that's fine - nobody else is at risk. But if you are applying it to others' lives, then you are potentially putting them at risk. Say I was to move into one of your apartments, how am I to know that your wiring job is not faulty and likely to lead to a deadly fire that gets me or my family? After all, I can't inspect wiring hidden behind the wall, and you have no license to show that you are doing a good job.

You might have a wonderful reputation based on 20 years of being a landlord, and none of your buildings have ever burnt down. But all it takes is once. (Please note, I am just using this as an example, I am not insinuating anything about your work or your buildings).

So, yes, that returns me back to my point. There is a reason for regulation. It is to prevent unscrupulous people from taking advantage of us in harmful ways. And letting amateurs do the work on the cheap makes this much more likely.

You state that electrical work is simple, doesn't need a degree. I happen to be a highly technical person who has been installing a solar system in my home. The codes are full of complexity. The complexity is not just there for the sake of it (at least not most) - it is there because of real world experiences with fires and short circuits in older solar systems. Just becoming familiar with the codes is much more than your average amateur is going to be able to do. I can't imagine the average low-paid, un-trained worker putting together a safe and code-compliant system like this. They might try, but I know better. So I'm doing it myself (there are extremely few trained and licensed installers around here, because they won't get the training due to the fact that they get under-bid by those without training, so getting the training does not pay off - there are no standards). Round and round it goes.

[grapejelly]

Re: 30 year bond resultsbeware

The medical field is an example. We have very specialized doctors (over specialized IMHO) who keep a tight lid on competition. People can't/don't want to pay for them, so they go to less expensive alternatives ranging from Chiropractors to Homeopathy. Many of these alternative "healers" have a great reputation - and even the ones who don't, seem to stay in business for a long while. Long enough to do damage (I know of two cases of people going to chiropractors who screwed them up for life). There probably are some legitimate, alternative cures out there. But there is no reasonable mechanism for separating "wheat from chaff".

Here's an example. I know for a fact that ionic silver acts as an antibiotic (I have tested it in my lab). It is less expensive and potentially less harmful than most antibiotics developed by Big Pharma. But I defy anyone to find definitive answers as to: 1) what brand is best, 2) what dosage to use in humans safely, 3) which types of infections it might cure and which it won't, etc. If you do a Google search (I have) you will find every different viewpoint, and they all conflict. Nobody is an expert because everyone can claim to be one. Maybe it will eventually sort itself out, but it hasn't done that at all in the 10 years since I first had someone tell me about ionic silver. Because there is no standards body, no regulation, it is a free-for-all. It is not good for the consumer or the businesses involved.

That's the same trouble with self-professed expertise in anything. If you are applying that to your own life, that's fine - nobody else is at risk. But if you are applying it to others' lives, then you are potentially putting them at risk. Say I was to move into one of your apartments, how am I to know that your wiring job is not faulty and likely to lead to a deadly fire that gets me or my family? After all, I can't inspect wiring hidden behind the wall, and you have no license to show that you are doing a good job.

You might have a wonderful reputation based on 20 years of being a landlord, and none of your buildings have ever burnt down. But all it takes is once. (Please note, I am just using this as an example, I am not insinuating anything about your work or your buildings).

So, yes, that returns me back to my point. There is a reason for regulation. It is to prevent unscrupulous people from taking advantage of us in harmful ways. And letting amateurs do the work on the cheap makes this much more likely.

You state that electrical work is simple, doesn't need a degree. I happen to be a highly technical person who has been installing a solar system in my home. The codes are full of complexity. The complexity is not just there for the sake of it (at least not most) - it is there because of real world experiences with fires and short circuits in older solar systems. Just becoming familiar with the codes is much more than your average amateur is going to be able to do. .

Regulation is really there to protect the entrenched providers and maintain a monopoly. That wouldn't appeal to consumers, so they are fed the line that it is there to protect them.

For instance, licensing of electricians keeps their rates high, and protects insurance companies. There are many incompetent electricians who are licensed.

Nowadays, reputation travels so easily on the Internet that regulation is not required because the Internet takes care of reputation in a ruthless way.

I will add that physicians who operate on people for back pain have done far more damage than have chiropractors.

What does this have to do with 30 year bonds?

[kartius919]

Re: 30 year bond resultsbeware

I don't think it is that simple. Banks are also loaded with commercial and residential MBS and CDO. There are also credit card debt, student loans, etc. Deflation would destroy their portfolio and balance sheets. Holding treasuries will not be enough to balance out their loses. Also, Ag is the important commodity in the near term future, not oil or metals.

[flintlock]

Re: 30 year bond resultsbeware

All those years of training?

Maybe you're thinking of doctors, lawyers, etc., but does it really take "years of training" to be a plumber, electrician, or many other jobs?
The reason the "any schmo" can take away work from the "experts" is that 90% of the work does not require extensive training, in fact, a majority of it requires almost no training.

That's probably about the most ignorant thing I've read on Itulip.com since Starving Steve's history of Stalin.:mad: Changing out light fixtures and switches hardly makes for the equivalent of a licensed electrician. And that same attitude is why I can go onto almost any unlicensed job in my area and find dozens of code violations and some amazingly stupid stuff done by amateurs who think they know about electricity. People who say they "wired their own house" only to fail any serious inspection that requires it to actually pass the NEC and not just work when you flip the switch. HUGE difference between just making electricity work and making it work safely.

I have a business degree AND an several professional contractor licenses. The training and skills needed to master electrical work far exceeded any I needed to get that business degree from a major university. While its nowhere near the level of education you need to be a doctor, saying it requires almost no training shows how little you really know about the subject. Have you ever even seen the National Electrical Code?

Sure, a lot of the funtions electricians or plumbers do are routine. But its not good enough to get part of the job right. We have to get it all right. There's a lot more going on than just what is readily visible. I've been doing it for 25 years and I'm still learning. And I don't even work in sector that requires a high level of skill. In my opinion, I wouldn't even consider most men trustworthy until they have at least 5 years experience. Anyone can pull wire and bend pipe. That's the manual part. Its the mental part the novices don't understand. And that's where the problems start. With people who think they understand but don't. Half my business is now going behind jacklegs. They range from just incompetent to downright criminal. And unfortunately, only another electrician can fully understand how wrong these types are. When you know and understand the code, its downright scary what these idiots are doing.

I can show you dozens of pictures I've taken of burned out panels, house fires, and other disasters from work by people with a "anyone can do this" attitude. I could write a book on the amazingly stupid stuff amateurs do. And they really believe they did it correctly. Being only 90% correct can kill someone. All I'll say is you had better know your limitations. I have a sticker on the back of my truck that says, "Beware the Handyman!" When I arrive to troubleshoot a problem, the first thing I ask is " Did you have any work done recently, and if so, were they licensed?" At least 75% of the time, the problem is related to the unlicensed individual screwing things up. Almost never is there a problem on a licensed and inspected job other than routine parts failing. The work might not be up to my standards, but it is usually correct.

I'm not saying these trades are rocket science. And I really do understand that people can do some jobs despite little training. But its like knowing how to take off in a plane but not how to land. Smart people bring along a qualified pilot. I do all the work around my house. I change out plumbing fixtures, but I don't presume I could plumb my whole house. I fixed a capacitor on my AC unit, but I don't know how to size a system. Like Dirty Harry said, " A man has to know his limitations".

You no more have an understanding of what it is to be a well trained electrician than someone who puts a bandaid on a kid's knee thinks he knows what it is to be a doctor. :rolleyes:
[/quote]

[jtabeb]

Re: 30 year bond resultsbeware

That's probably about the most ignorant thing I've read on Itulip.com since Starving Steve's history of Stalin.:mad: Changing out light fixtures and switches hardly makes for the equivalent of a licensed electrician. And that same attitude is why I can go onto almost any unlicensed job in my area and find dozens of code violations and some amazingly stupid stuff done by amateurs who think they know about electricity. People who say they "wired their own house" only to fail any serious inspection that requires it to actually pass the NEC and not just work when you flip the switch. HUGE difference between just making electricity work and making it work safely.

I have a business degree AND an several professional contractor licenses. The training and skills needed to master electrical work far exceeded any I needed to get that business degree from a major university. While its nowhere near the level of education you need to be a doctor, saying it requires almost no training shows how little you really know about the subject. Have you ever even seen the National Electrical Code?

Sure, a lot of the funtions electricians or plumbers do are routine. But its not good enough to get part of the job right. We have to get it all right. There's a lot more going on than just what is readily visible. I've been doing it for 25 years and I'm still learning. And I don't even work in sector that requires a high level of skill. In my opinion, I wouldn't even consider most men trustworthy until they have at least 5 years experience. Anyone can pull wire and bend pipe. That's the manual part. Its the mental part the novices don't understand. And that's where the problems start. With people who think they understand but don't. Half my business is now going behind jacklegs. They range from just incompetent to downright criminal. And unfortunately, only another electrician can fully understand how wrong these types are. When you know and understand the code, its downright scary what these idiots are doing.

You no more have an understanding of what it is to be a well trained electrician than someone who puts a bandaid on a kid's knee thinks he knows what it is to be a doctor. :rolleyes:

[/QUOTE]

Ditto for pilots, anyone can pay their money to get a license, would I fly on that airplane? That's another matter ENTIRELY.

Side note: A have a doc friend who flies with us, he was commenting that medical school and pilot school were so similar. I asked why. He said "well you know the difference between the top grad and the guy in the bottom third?" I said " you mean like competent professional vs IDIOT who barely passed?" He said "yes, SAME THING IN MEDICAL SCHOOL".

I said "Damn, there are pilots that I would not trust if I was a passenger on their plane". He said "same think in the medical profession".

Made me THINK long and hard about our medical providers. (And I asked him for PERSONAL referrals for providers after our conversation).

[phirang]

Re: 30 year bond resultsbeware

I suggest you read up on the Fed's B/S and what its member banks have done...

[flintlock]

Re: 30 year bond resultsbeware

Yeah, I went on a small plane flight with a friend who was a "licensed" pilot. Only after I got to know him better did I realize how stupid that was. The guy had only the minimal hours required and later knowing what bad judgment the guy had, I'd never have flown with him.

I think I know some of those "bottom of their class" doctors.

[portobellovcs3]

Re: 30 year bond resultsbeware

Phirang, I suspect you are correct. The big banks want to destroy their smaller competition so that they have the whole pie (although it may be quite a bit smaller) all to themselves. A new round of deflation is perhaps just what they are getting ready to unleash for their own benefit.