Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

[springbok]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

It appears that half of Americans are keeping their investments in cash. They do not trust the stock market - got burned 2008. Bonds are fragile and there is no return.

The FED has one job - protect the big banks (6 this time) - no matter what. Job creation - not their problem - just a reason to justify to the public the inflation they are imposing - about $1T (trillion!) per annum. Of this $85B (billion) per month, $45B goes to prop up the banks. The banks were supposed to use this money to clear their balance sheets of all the putrid debt they accumulated, eg derivatives. Unfortunately, boy will be boys (Good Old Boys) and thing have got worse.

Add to this the Govt debt $17T (ignore the unfunded liabilities $90T-$200T - still debt since I last checked) and increasing rapidly - there is no debt limit. The current interest rate of about 2% has the GOVT forking out $0.34T for interest payment on the annual (not unfunded) debt. What happens if the interest rate rises - eg 5% or 7%. Pretty much all of the taxes collected will be needed just to service the debt.

This is why I believe the FED will continue QE just to keep the interest rates low and continue to bail out the big banks.

In the meantime, the beneficiaries of this policy are the banks, stock market and real estate. Anybody looking for return is betting in the stock market. As a result the stock market has risen dramatically even though there is no productivity or earnings improvement. Astonishingly as it may seem, this is likely to continue in the foreseeable future. Where else can you place your bets if you are chasing returns.

[Fox]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

The question is, without the existential threat of war what is the political imperative to spend enough public funds to get the country out of the hole that its politically powerful financial sector got it into?

Hmm, I would have thought with a derivatives implosion and/or banking collapse, the US would have the political imperative. If banks get killed, the FED neutered, and a wipe out of private savings and debt, somebody will have to pick up the pieces. No war required. However the only thing that would really stand in the way is the US's current outstanding debt. Here's were a Chinese centric war would be convenient.

If the US could have world support to cancel it's Chinese debt, there's $4T that could be used for public works projects and getting the US's crumbling infrastructure up to spec. And because it's a wartime measure (against a country nobody really likes or cares about), the bond vigilantes would be happy.

so looks like the Millennial could very well be the next war generation after all.

The Irony in all of this is that if the FED's $4T went to Public works projects in the first place the current crisis, next crisis, and future war could all have been avoided.

But then that could have been said of all major historical turning points; and so history repeats.

Thanks for the charts. I hadn't seen a breakdown of how the war "was good for the economy" before

[thriftyandboringinohio]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

..The Irony in all of this is that if the FED's $4T went to Public works projects in the first place the current crisis, next crisis, and future war could all have been avoided...

Spot on. Of all the projects we can choose to crank up public spending and put people to work, war seems the most insane.

We love to laugh at Keynes' economics with jokes about paying people to dig holes and then fill them back up.
Even worse to build lots of expensive machinery with the goal of blowing it all to pieces while killing people and destroying buildings and infrastructure.

The broken window fallacy writ large.

[gwynedd1]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

Spot on. Of all the projects we can choose to crank up public spending and put people to work, war seems the most insane.

We love to laugh at Keynes' economics with jokes about paying people to dig holes and then fill them back up.
Even worse to build lots of expensive machinery with the goal of blowing it all to pieces while killing people and destroying buildings and infrastructure.

The broken window fallacy writ large.

But its not a fallacy....What is ironic is just how much marginal theory is used in neo classical economics to justify their views. Yet its easy to use this principle showing the broken window fallacy not to be a fallacy. Financial transactions do not follow a barter model. A third party is always involved.

In Adam Smith's book his first guiding principle was the division of labor. He noted most improvement came from actual producers. If this is true, then its producers who can make better use of a surpluse of time or capital. The broken window will have an impact on the marginal utility of all labor, not isolated to the transaction. All labor will become more expensive as marginal utility rises. This could shift a large surpluse to labor and the producers who have all the actual ideas.

The fallacy is to use a barter model in a finacialized economy.


Keynes BTW, said it was better than nothing. It was not his recomendation. It would certainly be better consume labor for a useful purpose, driving up marginal utility for labor in a useful way.

[bill]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

Open up US arm export sales to the world. As conflicts escalate arms export peddle is pushed harder.
Eventually we get dragged in, convert to war economy.

http://www.propublica.org/article/in...on-arms-export

Oct 14, 2013
The United States is loosening controls over military exports, in a shift that former U.S. officials and human rights advocates say could increase the flow of American-made military parts to the world’s conflicts and make it harder to enforce arms sanctions.
“It’s going to be easier for these military items to flow, harder to get a heads-up on their movements, and, in theory, easier for a smuggling ring to move weapons,” said William Hartung, author of a recent report [4] on the topic for the Center for International Policy.

Under the new system, whole categories of equipment [5] encompassing tens of thousands of items will move to the Commerce Department, where they will be under more “flexible” controls [6]. Final rules have been issued for six of 19 categories of equipment and more will roll out in the coming months. Some military equipment, such as fighter jets, drones, and other systems and parts, will stay under the State Department’s tighter oversight.
Commerce will do interagency human rights reviews [6] before allowing exports, but only as a matter of policy, whereas in the State Department it is required by law.
The switch from State to Commerce represents a big win for defense manufacturers, who have long lobbied in favor of relaxing U.S. export rules, which they say put a damper on international trade. Among the companies that recently lobbied on the issue: Lockheed, which manufactures C-130 transport planes [7], Textron [8], which makes Kiowa Warrior helicopters, and Honeywell, which outfits military choppers [9].
Overall, industry trade groups and big defense companies have spent roughly $170 million over the last three years lobbying on a variety of issues, including export control reform, a ProPublica analysis of disclosure forms shows.
The administration says [6] in a factsheet that “spending time and resources protecting a specialty bolt diverts resources from protecting truly sensitive items,” and that the effort will allow them to build “higher fences around fewer items [10].” Commerce says it will beef up [11] its enforcement wing [12] to prevent illegal re-exports or shipments to banned entities [13]. The military has also supported the relaxed controls [14], arguing that the changes will make it easier to arm foreign allies [15].
An interview with Commerce Department officials was canceled due to the government shutdown, and the State Department did not respond to questions.

http://www.defensenews.com/article/2...Over-Influence

That emphasis on restraint was one of the major changes made to the Conventional Arms Transfer policy announced last week.
President Barack Obama on Jan. 15 approved the first update of the policy since 1995. The document determines the factors US government agencies weigh when considering potential arms deals.
The 1995 policy directive is classified, but those familiar with the update process said much of the criteria for evaluation remained, with some additional emphasis on preventing weapons from falling into the wrong hands or being used for human rights abuses. The text of the revised policy was made public.

http://www.whitehouse.gov/the-press-...rms-transfer-p

The White House
Office of the Press Secretary
For Immediate Release
January 15, 2014




Presidential Policy Directive -- United States Conventional Arms Transfer Policy



January 15, 2014

PRESIDENTIAL POLICY DIRECTIVE/PPD-27

SUBJECT: United States Conventional Arms Transfer Policy

Conventional weapons have continued to play a decisive role in armed conflict in the early 21st century and will remain legitimate instruments for the defense and security policy of responsible nations for the foreseeable future. In the hands of hostile or irresponsible state and non-state actors, however, these weapons can exacerbate international tensions, foster instability, inflict substantial damage, enable transnational organized crime, and be used to violate universal human rights. Therefore, global conventional arms transfer patterns have significant implications for U.S. national security and foreign policy interests, and the U.S. policy for conventional arms transfer has an important role in shaping the international security environment.

United States conventional arms transfer policy supports transfers that meet legitimate security requirements of our allies and partners in support of our national security and foreign policy interests. At the same time, the policy promotes restraint, both by the United States and other suppliers, in transfers of weapons systems that may be destabilizing or dangerous to international peace and security.

Goals of U.S. Conventional Arms Transfer Policy

United States conventional arms transfer policy serves the following U.S. national security and foreign policy goals:

1. Ensuring U.S. military forces, and those of allies and partners, continue to enjoy technological superiority over potential adversaries.
2. Promoting the acquisition of U.S. systems to increase interoperability with allies and partners, lower the unit costs for all, and strengthen the industrial base.
3. Enhancing the ability of allies and partners to deter or defend themselves against aggression.
4. Encouraging the maintenance and expansion of U.S. security partnerships with those who share our interests, and regional access in areas critical to U.S. interests.
5. Promoting regional stability, peaceful conflict resolution, and arms control.
6. Preventing the proliferation of conventional weapons that could be used as delivery systems for weapons of mass destruction.
7. Promoting cooperative counterterrorism, critical infrastructure protection, and other homeland security priorities.
8. Combating transnational organized crime and related threats to national security.
9. Supporting democratic governance and other related U.S. foreign policy objectives.
10. Ensuring that arms transfers do not contribute to human rights violations or violations of international humanitarian law.

http://www.bis.doc.gov/index.php/reg...gister-notices

Published 2014

Rules published in other years: 2013 | 2012 | 2011

Publication Date	Federal Register Citation	Title of Federal Register
1/2/14	79 FR 22	Revisions to the Export Administration Regulations: Military Vehicles; Vessels of War; Submersible Vessels, Oceanographic Equipment; Related Items; and Auxiliary and Miscellaneous Items That the President Determines No Longer Warrant Control Under the United States Munitions List; Final Rule; Correction
1/2/14	79 FR 264	Control of Military Training Equipment, Energetic Materials, Personal Protective Equipment, Shelters, Articles Related to Launch Vehicles, Missiles, Rockets, Military Explosives, and Related Items

---

79 FR 22
1/2/14
Revisions to the Export Administration Regulations: Military Vehicles; Vessels of War; Submersible Vessels, Oceanographic Equipment; Related Items; and Auxiliary and Miscellaneous Items That the President Determines No Longer Warrant Control Under the United States Munitions List; Final Rule; Correction
PDF Format
This rule corrects a final rule that appeared in the Federal Register of July 8, 2013 (78 FR 40892), which becomes effective on January 6, 2014. That rule adds to the Export Administration Regulations (EAR) controls on military vehicles, vessels of war, submersible vessels, oceanographic equipment, auxiliary and miscellaneous equipment, and related items that the President has determined no longer warrant control on the United States Munitions List.

---

79 FR 264
1/2/14
Control of Military Training Equipment, Energetic Materials, Personal Protective Equipment, Shelters, Articles Related to Launch Vehicles, Missiles, Rockets, Military Explosives, and Related Items
PDF Format
PDF Format State Rule
This rule will add to the Commerce Control List certain energetic materials, personal protective equipment, shelters, military training equipment, articles related to launch vehicles, missiles,rockets, military explosives, and related items that the President has determined no longer warrant control on the United States Munitions List (USML). The rule was published simultaneously with a Department of State rule that will revise the categories on the USML that currently cover these items. Both rules will become effective on July 1, 2014.

http://www.itulip.com/forums/showthr...496#post219496

[thriftyandboringinohio]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

...It would certainly be better consume labor for a useful purpose, driving up marginal utility for labor in a useful way.

Thanks gwynedd, it seems we agree.

[verdo]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

The Irony in all of this is that if the FED's $4T went to Public works projects in the first place the current crisis, next crisis, and future war could all have been avoided.

Good luck getting the tea party to sign on to that

[ProdigyofZen]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

Good luck getting the tea party to sign on to that

Or the CEO:

A CEO, a tea party member, and a union worker are all sitting at a table when a plate with a dozen cookies arrives. Before anyone else can make a move, the CEO reaches out to rake in eleven of the cookies. When the other two look at him in surprise, the CEO locks eyes with the tea party member. “You better watch him,” the executive says with a nod toward the union worker. “He wants a piece of your cookie.”

[gugion]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

I like Hussman's commentaries. He certainly seems to keep things in perspective.

However the proof is just not in his pudding. The performance of his funds are pretty typical. You would think if someone had any real sense of finding the tops and bottoms of the last couple of decades, their funds would be through the roof. The return of Hussman's funds are all similar to others in the same class.

I suggest you read Hussman's prospectus. He does not try to "find tops and bottoms". His funds started in 2000 and he has beaten the market since then, with much lower drawdown. Drawdown is what most investor's fail to consider. Remember that a 50% decline requires a 100% gain just to get back to the prior peak. Hussman has avoided the major drawdowns of the 2000-2002 and 2007-2009 bear markets. In addition, if you care about valuation, his valuation metrics are solid. So the question is, if the S&P 500, in nominal terms, will be exactly where it is now (~1850) in 7-10 years (which is what his metrics imply), why would he, as a fund manager with fiduciary responsibility, dare aggressively allocate client funds long the market? It would be irresponsible.

[gwynedd1]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

Thanks gwynedd, it seems we agree.

Agreeing is just a luxury. As long as the essentials of respect are maintained you might surey disagree with me.


But I am glad we agree. I like the occasional luxury.

[gwynedd1]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

Good luck getting the tea party to sign on to that

Would not even need that. If one were to use endogenous money theory on that kind of money, how much does a rich man's vault differ from a bank? If a quadrillionaure purchased the United States from another quadrillionaure from one vault to another, are they really going to forcast inflation when all it is essentially a transfer of power with a nominal price tag attached to it?

[Woodsman]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

Here's were a Chinese centric war would be convenient....

Who here volunteers their grandchildren and children for the battlefields? Any takers?

[porter]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

The Fed indeed is pretty much out of tricks to stimulate the economy. For once the deflationists finally have an argument.

The question is, without the existential threat of war what is the political imperative to spend enough public funds to get the country out of the hole that its politically powerful financial sector got it into?

.


That's easy. An existential threat of war, of course.

[thriftyandboringinohio]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

Existential threats come in different degrees and types, and some that are very different are equally threatening.
Classic war between large standing armies is not really more terrifying than a new financial crisis 50% bigger, deeper and more sudden than the one we had in 2008.

Another financial crisis tha wipes out 401K's and jobs might be just as motivating to the average person as, say a US-China war over Taiwan.

[Fox]

Re: Has anyone been paying attention to the Nasdaq? It's at a 13 year high...

Who here volunteers their grandchildren and children for the battlefields? Any takers?

Well when I say war would be convenient, I didn't mean for me or my children. However for those that will never fight, I'm sure they will find it very convenient to volunteer my children; even more so when they stand to profit.

Wasn't it Stalin that said; "When 5 people die it's a tragedy. When 5 million people die, it's a statistic"

Personally, I'm hoping to be gone when it happens. Lot's of great sailing in the Caribbean and South America.