Finster's FDI Index pointing deflation ??

[sunskyfan]

Re: Finster's FDI Index pointing deflation ??

I couldn't agree more. Hard currency will trump all, including commodities, until there is confidence in the regulatory regime of the world (not just the US).

[Starving Steve]

Re: Finster's FDI Index pointing deflation ??

No idea if he is right or wrong. I assume his call is based on the "Dow Theory" giving a buy signal as that is what he is famous for using. Regardless, it's a lot easier for the Fed/Treasury Dept./Administration to inflate the stock market than the real economy.

However, if there is a stock market "boom" or "bubble" it will be in the context of a depreciating US Dollar, not DE-flation.

If the Fed is using the stock market to re-inflate the economy, then stocks would go up, and the dollar might become a hot currency, at least to play stocks in New York. Once the bubble bursts (in windmill and solar stox) and the stock market tanks, you are right: the dollar would be dumped. But I am not an economist; I am just trying to reason through this "buy" signal by Richard Russell.

Once the dollar is dumped and stocks crash, Bernanke would be in deep doo-doo in trying to pull liquidity out of the market. He would have to pull the liquidity out of the market before the stock market crashes, which would probably lead to a crash anyway.

Anyway, this mess that the Fed has gotten itself into is getting exciting. The Controller General in the U.S. Treasury says that the Fed has pumped not $2 trillion of liquidity into the economy but $23 trillion when properly accounted for..... We soon shall see how this mess sorts itself out.

[rjwjr]

Re: Finster's FDI Index pointing deflation ??

Do you believe Richard Russell is wrong, that he made a bad call with his buy signal? He is the oldest and most trusted stock market guru, but anyone can be wrong.

I thought Warren Buffet was the most trusted stock market guru. Most of the investing public doesn't know Richard Russell from Nipsy Russell.

I suspect liquidity will NOT be drained from the economy right now, and the stock market suspects this too. The liquidity will go for one or more bubbles within the stock market.

How can you reconcile your comment that liquidity will NOT be drained with your call for deflation? How, exactly, does this deflation occur if not via reduced liquidity?

I think the inflation will come when oil goes back to $147, but oil needs more time to cement a nice base here in the $60 or $70/barrel range.

Again, I think you have your "cause and effect" somewhat confused here. Oil to $147 will cause many other prices throughout the economy to rise, but it's a devaluation in the dollar that will actually cause the inflation. From that inflation, oil and commodities will rise first, then their price increases will have compounding and rippling effects on value-added goods and services.

[metalman]

Re: Finster's FDI Index pointing deflation ??

I thought Warren Buffet was the most trusted stock market guru. Most of the investing public doesn't know Richard Russell from Nipsy Russell.

russell's dow theory worked when the usa economy was industrial... not so much for the fire economy.

[rjwjr]

Re: Finster's FDI Index pointing deflation ??

russell's dow theory worked when the usa economy was industrial... not so much for the fire economy.

Richard or Nipsy?

[sishya]

Re: Finster's FDI Index pointing deflation ??

I recently thought the turn in Finster's FDI index will be in Jan 2010, after Wall street has given itself big Christmas Bonus after the big rally for last 8 months. But it looks like it started turning this week. Maybe the whole idea is to lead us blind people into the nearest ditch.

Yesterday's/Today's S&P move surprised me. 20 points up/30 points down.
Where is the logic.

[cobben]

Re: Finster's FDI Index pointing deflation ??

"Yesterday's/Today's S&P move surprised me. 20 points up/30 points down"

The equity markets are in the hands of the Big Bankstas' black box trading systems short term, they might just produce a crash ala 1987 as there are likely no real money buyers waiting on the sidelines at current levels if all the black boxes switch to "sell!!" at the same time.

Finster's FDI has nothing directly to do with the equity markets.

[jiimbergin]

Re: Finster's FDI Index pointing deflation ??

Stream of consciousness thinking is not the way to accurately convey your thoughts...

In order to inform others of what you are thinking, you first have to translate your thoughts to where someone else can read them. Language has served that purpose quite well the past few thousand years. Theres a reason for that.

Please try and put your thought into better coherency than just: "OMG, !!@)243313 DID yusu see that/a market moooovee todayyyyy!!!!" *cough* megametalmannero3thunderdownunderstarvingsteve *cough*. It will help the community well!

kthxbye

;)

I think MM was perfectly clear to anyone who read EJ's article. He said go from short to long treasurys and the yield curve seems to indicate that he was right.

[Mashuri]

Re: Finster's FDI Index pointing deflation ??

For the Elliott Waver's out there, this move down from the top has been a textbook impulse wave, and I made some short-term $$$ on wave 3. As for my long term investments, I'm pretty much all-in shorting various markets now (been scaling in over the past month or so). I have stops in place (there's a very slim chance for one more new high to be happen), but the technicals have finally gone all red. The Bear is Back!

[Mashuri]

Re: Finster's FDI Index pointing deflation ??

I think MM was perfectly clear to anyone who read EJ's article. He said go from short to long treasurys and the yield curve seems to indicate that he was right.

I will go long treasuries if they break out of their current channel. So far, no go.

[Thailandnotes]

Re: Finster's FDI Index pointing deflation ??

The Bear is Back!

Come on, it's still a bull market...

[Chomsky]

Re: Finster's FDI Index pointing deflation ??

Come on, it's still a bull market...

Different kind of bull market.

[stumann]

Re: Finster's FDI Index pointing deflation ??

"looks like we are in deflation mode again "

the uptick in both graphs seems to be due to the one-off $10-20 trillion in US govt. bailout $$$ from both the Bush & Obama administrations.

could well be now that the perception of deep pockets waiting in the wings is gone, the Index could begin to accelerate in its decline

[metalman]

Re: Finster's FDI Index pointing deflation ??

"looks like we are in deflation mode again "

the uptick in both graphs seems to be due to the one-off $10-20 trillion in US govt. bailout $$$ from both the Bush & Obama administrations.

could well be now that the perception of deep pockets waiting in the wings is gone, the Index could begin to accelerate in its decline

where is finster? one must not finish what one starts?

[goadam1]

Re: Finster's FDI Index pointing deflation ??

where is finster? one must not finish what one starts?

this is the strange thing about virtual communities. who is Finster? Where did he go? I hope he and his are well.