iTulip?

[Anarchist]

Hello everyone, I see that EJ hasn't posted an article for over a year.

Is iTulip officially dead? If not, can someone fill me in on the current status?

Thanks,
A

[vt]

Re: iTulip?

Very much alive.

On the pay side there has been significant and valuable ongoing comment on a variety of topics by EJ.

The January, 2014 article had a terrific amount of information. Subscribers have seen many regular updates that are not article bound.

Plus this is one heck of a difficult global economy to read, with central bank manipulation abounding.

[Anarchist]

Re: iTulip?

Thanks for your feedback. Has the asset allocation been accurate?

[vt]

Re: iTulip?

EJ and other posters provide interesting and valuable information.

[Adeptus]

Re: iTulip?

I haven't subscribed in over a year because I am waiting for the new article to arrive, which has no official ETA as far as I know. EJ has made rough estimates multiple times in the past 6 months but I find that whilst EJ is great at projecting the future of the global economy, he is he bad at sticking to suggested dates of article releases. On that note, I also understand here at iTulip the majority prefer quality and accuracy over frequency (of articles).

For me personally, I have a full time job and family etc and have no time to keep up with weekly updates and random comments from EJ/Fred, across dozens of private forum threads, so I personally would much rather see at least 1 quarterly article with whatever the latest thought processes are, nicely summarized.

Even better, I'd pay to listen/watch video updates from EJ if they were able to be produced on a somewhat regular basis. I've found that EJ is articulate and to the point in interviews and even great at summarizing whatever his latest theme/thesis is. His articles on the other hand, are extremely long, his sentence structure unusually complex, requiring multiple reads of the article (more like a small novel if I print it), and nearly always leave me guessing as to what the actual direction is of X subject is. Having said this, I do understand that the waters have gotten so muddy, and that the economic direction of entire continents these days hinge on which word is used by Central Banks in their monthly speeches, making traditional methods of projection far less useful. It's a gargantuan and extremely complex task to do what EJ does, and I appreciate it, just wish the delivery was a bit different.

[jk]

Re: iTulip?

i think the economy now is a puppet of various official and private institutions. the fed in particular, by virtue of taking control of the whole rate curve, is riding a tiger and doesn't know how to get off. if our immediate to intermediate economic future is determined by the decisions of a relative handful of individuals, as opposed to being the product of ongoing economic processes, there is no prediction possible. ej has indicated that when the fed finally tries to get off that tiger and raise rates, there'll be hell to pay.

i know i used to feel that it was easy to see what was going on. i got out of the stock market before the 2000-2001 top, and convinced my business partner to do the same because i knew i'd have to deal with his anxiety if he took big losses. i bought gold at around $400, and i knew there was a housing bubble well before i found itulip. i paid for my insight by prematurely shorting housing. i don't find this environment analyzable, at least for me. it's all rigged, and will have what appears to be a glow of health until the rigging falls apart.

my fear is that we are approaching a replay of 1937.

[GRG55]

Re: iTulip?

i think the economy now is a puppet of various official and private institutions. the fed in particular, by virtue of taking control of the whole rate curve, is riding a tiger and doesn't know how to get off. if our immediate to intermediate economic future is determined by the decisions of a relative handful of individuals, as opposed to being the product of ongoing economic processes, there is no prediction possible. ej has indicated that when the fed finally tries to get off that tiger and raise rates, there'll be hell to pay.

i know i used to feel that it was easy to see what was going on. i got out of the stock market before the 2000-2001 top, and convinced my business partner to do the same because i knew i'd have to deal with his anxiety if he took big losses. i bought gold at around $400, and i knew there was a housing bubble well before i found itulip. i paid for my insight by prematurely shorting housing. i don't find this environment analyzable, at least for me. it's all rigged, and will have what appears to be a glow of health until the rigging falls apart.

my fear is that we are approaching a replay of 1937.

jk's comments support what EJ has posted. He feels the economy and markets are now driven by political decisions, the Fed has no idea what it is going to do next (they are making it up as they go) since it (and many other major Central Banks) are wandering around in uncharted territory, and therefore the outlook is virtually impossible for anyone, including EJ, to discern with any degree of confidence. If the Fed doesn't know what it is going to do, how would anyone else?

[llanlad2]

Re: iTulip?

jk's comments support what EJ has posted. He feels the economy and markets are now driven by political decisions, the Fed has no idea what it is going to do next (they are making it up as they go) since it (and many other major Central Banks) are wandering around in uncharted territory, and therefore the outlook is virtually impossible for anyone, including EJ, to discern with any degree of confidence. If the Fed doesn't know what it is going to do, how would anyone else?

I've been thinking about this recently and I think it's fair to say that the economy and markets have always been driven politically by powerful groups but in favour of who has always been up for grabs. I think we are transitioning from one in favour of bankers (which we were used to and so could predict) towards one in favour of "other" business interests whose needs are no longer aligned with bankers. However it is not totally clear to the general public that this has happened yet.
My thinking is that CEOs and executives at SP 500 companies all made out like bandits in the last 25 years along with the bankers with the continuous fall in interest rates etc. However the newer generation of Executives (especially those in the retail sector) can't maintain and justify their pay. Their interests are no longer aligned with those of the banks. The bankers are now denying them a free ride to which they feel they are entitled just like their predecessors.
Call me optimistic but I don't think we are headed for a 1937 style "mistake". It's just against the interests of too many other powerful lobby groubs. The Starbucks, Apples, GMs, Fords etc of this world depend on consumers in the long run. They depend on disposable income. Now consumers will have to earn their disposable income rather than cash it out of the house. Business knows this. Slow real wage rises are happening and interest rates will be allowed to lag behind without crashing the economy. So called bond vigilantes may demand higher interest rates but they won't have their wishes fulfilled.

[GRG55]

Re: iTulip?

I've been thinking about this recently and I think it's fair to say that the economy and markets have always been driven politically by powerful groups but in favour of who has always been up for grabs. I think we are transitioning from one in favour of bankers (which we were used to and so could predict) towards one in favour of "other" business interests whose needs are no longer aligned with bankers. However it is not totally clear to the general public that this has happened yet.
My thinking is that CEOs and executives at SP 500 companies all made out like bandits in the last 25 years along with the bankers with the continuous fall in interest rates etc. However the newer generation of Executives (especially those in the retail sector) can't maintain and justify their pay. Their interests are no longer aligned with those of the banks. The bankers are now denying them a free ride to which they feel they are entitled just like their predecessors.
Call me optimistic but I don't think we are headed for a 1937 style "mistake". It's just against the interests of too many other powerful lobby groubs. The Starbucks, Apples, GMs, Fords etc of this world depend on consumers in the long run. They depend on disposable income. Now consumers will have to earn their disposable income rather than cash it out of the house. Business knows this. Slow real wage rises are happening and interest rates will be allowed to lag behind without crashing the economy. So called bond vigilantes may demand higher interest rates but they won't have their wishes fulfilled.

There is nothing unique about the S&P 500 companies, or their CEOs. Can anyone name one business enterprise that does not depend on consumers? Even the investment banks need someone willing to pay to "consume" their products and services (and gawd knows some of those folks would sell their own grandmothers if they got paid to do so).

[drumminj]

Re: iTulip?

Can anyone name one business enterprise that does not depend on consumers?

Government contractors, or other entities that sell only to governments?

I suppose theoretically the government's ability to purchase products is dependent upon tax receipts, and thus ultimately citizens/"consumers", but in a world of fiat, that doesn't appear to be the case -- at least for the time being.

[GRG55]

Re: iTulip?

Government contractors, or other entities that sell only to governments?

I suppose theoretically the government's ability to purchase products is dependent upon tax receipts, and thus ultimately citizens/"consumers", but in a world of fiat, that doesn't appear to be the case -- at least for the time being.

Selling to government still requires a demand to be created by that government.

What funds that demand - current taxes, muni bonds, other sovereign debt, whatever - is irrelevant to the contractor, unless and until the lack of government funds reduces or eliminates the demand from that government for that contractors goods or services.

[Raz]

Re: iTulip?

i think the economy now is a puppet of various official and private institutions. the fed in particular, by virtue of taking control of the whole rate curve, is riding a tiger and doesn't know how to get off. if our immediate to intermediate economic future is determined by the decisions of a relative handful of individuals, as opposed to being the product of ongoing economic processes, there is no prediction possible. ej has indicated that when the fed finally tries to get off that tiger and raise rates, there'll be hell to pay.

i know i used to feel that it was easy to see what was going on. i got out of the stock market before the 2000-2001 top, and convinced my business partner to do the same because i knew i'd have to deal with his anxiety if he took big losses. i bought gold at around $400, and i knew there was a housing bubble well before i found itulip. i paid for my insight by prematurely shorting housing. i don't find this environment analyzable *, at least for me. it's all rigged, and will have what appears to be a glow of health until the rigging falls apart.

my fear is that we are approaching a replay of 1937.

You have almost exactly mirrored my thoughts.

* This is why I'm now relying even more so on technical analysis.

[dcarrigg]

Re: iTulip?

Selling to government still requires a demand to be created by that government.

What funds that demand - current taxes, muni bonds, other sovereign debt, whatever - is irrelevant to the contractor, unless and until the lack of government funds reduces or eliminates the demand from that government for that contractors goods or services.

That's the real crux of the issue. They've been very successful at pushing austerity on the middle/lower classes and procuring tax breaks and lower rates for themselves. So a small number of people make a lot more and everyone else makes a little less. But the more you do it, the lower receipts will be, since you're shifting a bigger chunk of the GDP pie into the upper brackets, where it's easier to hide offshore and play accounting games, and from labor to capital, where it's taxed more lightly. Meanwhile the masses have less money to spend. Only thing that can make up for the dearth in aggregate demand and fill the budget gap it creates is sovereign debt. Then they don't like the debt, so they say the middle class on down have to pay more and take pay and benefit cuts. Then the economy slows and they say the upper class needs another tax cut to get it going. The problem recurs. Deficits explode; economies implode; sovereign debt to the rescue. It's the story of postwar America at least.

[GRG55]

Re: iTulip?

That's the real crux of the issue. They've been very successful at pushing austerity on the middle/lower classes and procuring tax breaks and lower rates for themselves. So a small number of people make a lot more and everyone else makes a little less. But the more you do it, the lower receipts will be, since you're shifting a bigger chunk of the GDP pie into the upper brackets, where it's easier to hide offshore and play accounting games, and from labor to capital, where it's taxed more lightly. Meanwhile the masses have less money to spend. Only thing that can make up for the dearth in aggregate demand and fill the budget gap it creates is sovereign debt. Then they don't like the debt, so they say the middle class on down have to pay more and take pay and benefit cuts. Then the economy slows and they say the upper class needs another tax cut to get it going. The problem recurs. Deficits explode; economies implode; sovereign debt to the rescue. It's the story of postwar America at least.

Sovereign or "government" debt in whatever form is a method of deferring taxes, nothing more.

If a government floats a bond with a 20 year duration to build a bridge that might last 100+ years (if properly maintained) I don't see that anyone would be concerned. But if that same government is floating a bond issue to cover the shortfall in pension payments to existing municipal retirees, they are shifting that cost onto future taxpayers.

[dcarrigg]

Re: iTulip?

Sovereign or "government" debt in whatever form is a method of deferring taxes, nothing more.

If a government floats a bond with a 20 year duration to build a bridge that might last 100+ years (if properly maintained) I don't see that anyone would be concerned. But if that same government is floating a bond issue to cover the shortfall in pension payments to existing municipal retirees, they are shifting that cost onto future taxpayers.

Good news for investors is that munis have Chapter 9 and a state legislature to slash pay and benefits whenever they want. Bondholders never take a haircut. Not in America. They'd rather let the city/state burn to the ground first. Saw it in Scranton where they dropped the police force to minimum wage, but didn't ask the bondholders on the crooked downtown parking garage deal to pay a penny.

But I was thinking national scale anyways, not municipal. Lots of things effect sovereign debt. Have to look at the yield curve vs. inflation. Have to look at raw power. There's one historical surefire way to re-write the books. Just load the guns. It's more than just a method of deferring taxes.