The $ is getting K I L L E D

[nero3]

Re: The $ is getting K I L L E D

What I am saying metalman is that when that article was written, the idea behind it was that the dow would just keep going down, after that first bounce like the nikkei in the 90-s. But I promise you that the cult-script or whatever you call it, after that have been, or will be rewritten, so you instead have a higher nominal dow, in the decade ahead (instead of a lower nominal dow).

[metalman]

Re: The $ is getting K I L L E D

What I am saying metalman is that when that article was written, the idea behind it was that the dow would just keep going down, after that first bounce like the nikkei in the 90-s.

try reading the article (s). they say...

1st year.... down.
2nd year... 2 bounces (looks like one to me)

long term... down, ala nikkie... as fire econ debt is deflated/inflated away... if fire econ reform then 5 yrs, if not, longer. 5 yrs? 10? 20 ala japan?

But I promise you that the cult-script or whatever you call it, after that have been, or will be rewritten, so you instead have a higher nominal dow, in the decade ahead (instead of a lower nominal dow).

coming from a buffett cult follower, i'll take that as a compliment.

cult script? itulip identified an political/econommic process and timed it.

nuts.

[metalman]

Re: The $ is getting K I L L E D

You cheap shot.The point is that if you go back to the 1960-s, you will understand that the nikkei became inversely to US government bonds, just as the Dow got cheaper and cheaper through the seventies, the nikkei got more and more expensive, just as chinese shares are behaving as an inflation hedge now, and in 82, they was two separate worlds. The bear market in US government bonds, that was the driver of the nikkei tanked to, as inflation peaked and gave the nikkei a blow off phase, lasting to late 89. It's when you start way back, that my graph makes sense. In around 1965 the Nikkei was around 1,3 times the dow , the nikkei went on to around 8 times the level of the Dow in 82 , to more than 10 times, when the bubble peaked.

some day you will learn to tell asset and commodity price inflation apart. until then i think we're done arguing.

[cobben]

Re: The $ is getting K I L L E D

"Clearly, if a pretty graph looks like another pretty graph there must be something there."

http://www.skepdic.com/apophenia.html

"Apophenia is the spontaneous perception of connections and meaningfulness of unrelated phenomena. The term was coined by K. Conrad in 1958 (Brugger).
. . .
According to Brugger, "The propensity to see connections between seemingly unrelated objects or ideas most closely links psychosis to creativity ... apophenia and creativity may even be seen as two sides of the same coin."
. . .

Brugger's research indicates that high levels of dopamine affect the propensity to find meaning, patterns, and significance where there is none, and that this propensity is related to a tendency to believe in the paranormal.*
In statistics, apophenia is called a Type I error, seeing patterns where none, in fact, exist.
. . .
See also pareidolia, sympathetic magic, and synchronicity."

[metalman]

Re: The $ is getting K I L L E D

That's where I think we are now, in the sense that companies might enjoy some cost cutting now, and then later some margins due to lower commodity prices while they stay down.

After 2003, you had a boom for many stocks between 2003-2004, then they flattened out as the commodity bubble blew up and started to hurt profit margins. Typically Airline companies and Chip companies.

I think we are in that 2003-2004 phase now.

wait... earlier you said we ere in a 1975 phase. which is it?

[nero3]

Re: The $ is getting K I L L E D

"Clearly, if a pretty graph looks like another pretty graph there must be something there."

http://www.skepdic.com/apophenia.html

"Apophenia is the spontaneous perception of connections and meaningfulness of unrelated phenomena. The term was coined by K. Conrad in 1958 (Brugger).
. . .
According to Brugger, "The propensity to see connections between seemingly unrelated objects or ideas most closely links psychosis to creativity ... apophenia and creativity may even be seen as two sides of the same coin."
. . .

Brugger's research indicates that high levels of dopamine affect the propensity to find meaning, patterns, and significance where there is none, and that this propensity is related to a tendency to believe in the paranormal.*
In statistics, apophenia is called a Type I error, seeing patterns where none, in fact, exist.
. . .
See also pareidolia, sympathetic magic, and synchronicity."

The difference between the madman and the genius lies in the quality of the perceptions. Had I been anything like that article suggest, I doubt more or less everything I have written here about the market and it directions have turned out right.

[nero3]

Re: The $ is getting K I L L E D

wait... earlier you said we ere in a 1975 phase. which is it?

The early phase of an expansion, is pretty much the same in any expansion. In terms of this secular bear it is like 75, relative to the cycle as a whole, but inside the cyclical bull, it is like the early phase from 2003, or as in the start in any cyclical bull inside a secular bear, even 75, however, the main difference is that I don't see gold going down, as it did in the 75-76 era.

[cobben]

Re: The $ is getting K I L L E D

"The difference between the madman and the genius lies in the quality of the perceptions. Had I been anything like that article suggest, I doubt more or less everything I have written here about the market and it directions have turned out right."

Yes, now my comment was not to one of your posts, nero, in any case you need not feel attacked, I appreciate much of your thoughts.

Painting different possible scenarios, including historical analogies as you are fond of, can be a very useful exercise. It's just that any correlation, historical or other, eventually breaks down when the fundamentals change, and you can never know ahead of time when that will happen, but it will.

[Munger]

Re: The $ is getting K I L L E D

The difference between the madman and the genius lies in the quality of the perceptions. Had I been anything like that article suggest, I doubt more or less everything I have written here about the market and it directions have turned out right.

The current time is 6:16. You:

[nero3]

Re: The $ is getting K I L L E D

"The difference between the madman and the genius lies in the quality of the perceptions. Had I been anything like that article suggest, I doubt more or less everything I have written here about the market and it directions have turned out right."

Yes, now my comment was not to one of your posts, nero, in any case you need not feel attacked, I appreciate much of your thoughts.

Painting different possible scenarios, including historical analogies as you are fond of, can be a very useful exercise. It's just that any correlation, historical or other, eventually breaks down when the fundamentals change, and you can never know ahead of time when that will happen, but it will.

I feel that the mistake many have done when it comes to Japan, is to take it out of the inflationary context of the years since 1998/2001 when the CRB bottomed, and not having a dept of understanding, it takes 10 hours in my opinion to understand it is like japan, and then another 90 hours to understand how, and why it's not. (To someone that did not know anything at all beforehand).

[touchring]

Re: The $ is getting K I L L E D

As some other poster mention, I am not talking about a secular bull-market for the dow jones. However a secular bull for China is very possible. I am talking about a cyclical recovery, but I don't think the dow will see any nominal low that is lower than 666 on the S& P 500, ever, in history.

That's possible, but the market is Chinese highly manipulated as you know. The Shanghai stock market is not dependent on the Chinese economy and vice versa. Now the problem is what happens when the old men in the CCP decides that the bubble is getting dangerous and inflation combined with rising unemployment and the resulting unrests (e.g. Xinjiang food riots and Jilin killing of factory manager) is a dangerous combination.

When we think about China, we must consider that China's a third world country, it is not Japan, Norway or America. Many of the Uighurs are surviving on $1-$2 a day - and still they are not the poorest community in China. No one charges at machine gun totting ready to fire soldiers with knives and sticks unless out of complete desperation.

Whichever direction the stock market goes - up or down (secular bull or whatever you call it), the situation in China is getting perilous by the day - the real economy and social stability i mean. Every year china has 15-20 million new workers entering the job market - nearly equal to the whole of Scandinavia.

[Moe_Gamble]

Re: The $ is getting K I L L E D

China got a one way ticket. Spend like drunken sailors. Pump the money supply like crazy like they have done. Attract foreign money to stabilize the currency, as is happening, and then watch commodity prices rise, and create a negative real rates environment in the rest of the world, simply because China wakes up. It's this negative real rate environment, that is China's gift, to the rest of the world (that is what the west need).

Insightful and very helpful. Thank you.

[nero3]

Re: The $ is getting K I L L E D

That's possible, but the market is Chinese highly manipulated as you know. The Shanghai stock market is not dependent on the Chinese economy and vice versa. Now the problem is what happens when the old men in the CCP decides that the bubble is getting dangerous and inflation combined with rising unemployment and the resulting unrests (e.g. Xinjiang food riots and Jilin killing of factory manager) is a dangerous combination.

I'll doubt they dare to step on the brakes. I'll refer to George Soros theory on reflexivity here. It's possible that "make believe" will turn this in the direction the bulls think it will, even the fundamentals at this time is rather lousy.

A very interesting piece in the gloomboomdoom report for August, was that he had the statistics of cash levels relative to the market cap of the US market's, and the last time they was as high as in this crisis was in around 1983, and cash levels were higher in 83, than during any time time the last 29 years (except now). That could hint towards a secular US bull, even as unlikely as it seems. With that much cash, and negative real interest rates, it's at least good "fundamentals" for a bull-market in something. I think it is interesting, because my impression is that the average joe that did not do his homework and is bearish, still think cash is a fraction of the US market cap as in 2000) (not in the 80-85 % range as it is now, and over 100 % when it was peaking)

[nero3]

Re: The $ is getting K I L L E D

Insightful and very helpful. Thank you.

I think this kind of bubble where the perception of an undervalued currency creates some sort of gold rush, have occurred many times in Asia, especially in Japan and South Korea before, and possibly countries like Cambodia, North Korea or Vietnam in the future as China mature. Even I think the situation in China is more similar to the situation in Japan than Korea. You had the situation in the late eighties when the South Korean and Taiwanese exchanged went down a lot, only to come back much stronger, in a sense it reminds of todays situation. I think the straight line the Shanghai index moves in, with very low volatility is very fascinating, and most certainly a proof it's a bubble. However, I think it's going higher. Perhaps a superbubble That we see 6-8000 within the next years would not surprise me at all.

[dummass]

Re: The $ is getting K I L L E D

Pay them no mind Nero; they are just jealous of your natural talents. Like you said before, you are better looking, younger, stronger and smarter than they are. :rolleyes: