Bearish Information

[bart]

Re: Bearish Information Re. Bonar is week's biggest turkey.

Peter Schiff discusses a potential declining scenario of the bonar.
...

I can do better than scare about the Dow, and I don't even have to talk about the international value of the dollar/bonar. Inflation itself has been truly disgusting.

About a week ago, I put together a long term picture of a number of items like the Dow, gold, housing., etc. since the '60s. Here's the one for the Dow:



In 1963, the Dow was 700 --- just adjusting for CPI, its only at about 1750 today. If a more real CPI figure is used (shadowstats.com numbers), it's not even at 1100.

[Finster]

Re: Bearish Information Re. Bonar is week's biggest turkey.

Peter Schiff discusses a potential declining scenario of the bonar.

http://www.safehaven.com/article-6367.htm

Schiff says, "This week the U.S. dollar was carved up like a Thanksgiving turkey. Against the Swiss franc, euro, British pound, and Japanese yen, the dollar lost 3%, 2.2%, 2% and 1.8% of its value respectively. To put those declines into perspective, in terms of the euro the Dow Jones's 60 point plus decline this week translates into the equivalent of a 320 point decline when measured in euros. In fact, year to date the Dow is only up by about 3.5% when priced in euro's, compared to its 14.5 % advance when measured in depreciating U.S. dollars. From its high in 2000, the euro price of the Dow is down by over 27%. In terms of gold, the world's only legitimate money, the picture is even worse. Priced in gold the Dow is off better than 50% from its 2000 peak, and actually down over 7% thus far this year. So much for Wall Street's phony rally!"...

In 1995-2000, the dollar fell against stocks some 50%, and no one was wringing their hands then. When it comes to inflation, we are hypocrites. When it is showing up in the prices of stocks, we celebrate. When it's showing up in the price of oil, we cry in our beer.

This is why we can't get rid of inflation, when it's first getting going, it feels good. We demand more and more of it. Only when the full effects are felt do we regret getting what we wished for.

[Jim Nickerson]

Re: Bearish Information Re. Collapse, gold up, oil down.

http://www.fiendbear.com/Uncommon%20Common.htm

Aubie Baltin CFA, CTA. CFP. PhD Why Hasn’t “IT” Happened Yet?

"OIL and Gold are NOT, I repeat linked. GOLD is in its own BULL MARKET and is independent from everything else except maybe Silver. As the Stock Markets around the world begin to break down and the full force of the bursting real estate bubble makes itself felt, the USA will head into recession and the rest of the world will then soon follow suit. The USA will then show a 3% drop in oil consumption and you will not believe how far down the price of oil will drop. The world is awash in both OIL and Fiat Money especially US dollars. The next best thing to owning Gold is shorting OIL Buying both Oil and Gold is not a smart diversification unless you want to lose everything you will make in Gold to oil. The same holds true for base metals, they cannot maintain their lofty prices once the world heads into recession. With GOLD we are talking money and the only substitute for fiat money is GOLD and Silver."

[DemonD]

Re: Bearish Information

Wow, bearish on oil? In the words of Ace Ventura, "Alllllllllllllllllllllllllllllllllllrighty then."

[Jim Nickerson]

Re: Bearish Information Re. Producers vs. consumers

November 30, 2006
Americans Will Shop Till their Dollars Drop
by Peter Schiff

http://www.safehaven.com/article-6410.htm

Schiff opens with, "It never ceases to amaze how televised media reports on the U.S. economy are almost exclusively about shopping. Such reports almost always feature images of sales clerks frantically stocking shelves and long lines of consumers swiping their credit cards. In contrast, reports about the economy of Japan or China typically include footage of smoke stacks billowing, production lines moving, robots assembling, and people actually making things. Doesn't it ever occur to anyone producing these segments just how ridiculous this is?"

"The sad reality is that it is foreign producers that will eventually have the last laugh. Sure we will screw them by repudiating our debts through inflation, but in the end they will enjoy all of the abundance of their productive capacity and we will suffer the wide-spread shortages that result from our lack of it. Their standards of living will soar just as ours plunge."

[DemonD]

Re: Bearish Information

the problem with production is that you can get an inflation of production... your goods are worthless if there is no one to sell them to. might there be a bubble in manufactured goods from china? just something to ponder... ::shrug::

[jk]

Re: Bearish Information

the problem with production is that you can get an inflation of production... your goods are worthless if there is no one to sell them to. might there be a bubble in manufactured goods from china? just something to ponder... ::shrug::

the issue is matching the production to the needs of potential consumers. i have a hunch that chinese factories producing dvd players and hd tv's will have to be retooled to produce something a bit different for the domestic asian market.

[DemonD]

Re: Bearish Information

I am looking for, but can't find anything recent, articles on a Chinese RE bubble.

The closest I got was this http://www.theepochtimes.com/news/4-11-10/24279.html from 2004 though.

As much as I believe everyone who talks about gold, and the dollar going down, I think there may be a little too much faith put in the chinese to retool their manufacturing facilities for their domestic consumers. The chinese are certainly more well-positioned than the US for the coming world economic downturn, but it's not like they are going to be flying high while we are down. And what if their RE market is in a bubble and it too pops? They certainly won't be finding many more domestic consumers than they have now.

[Jim Nickerson]

Re: Bearish Information Re. 1929 Redux ?

http://www.safehaven.com/article-27015.htm

December 03, 2006
Broadening Tops in 1929, 1957, 1987, 2000 and 2006
by Robert McHugh

"Of the five periods analogued, the current 2002-2006 pattern best replicates the 1929 pattern, suggesting 2007 could turn ugly."


Interesting analogies.

[bart]

Re: Bearish Information Re. 1929 Redux ?

http://www.safehaven.com/article-27015.htm

December 03, 2006
Broadening Tops in 1929, 1957, 1987, 2000 and 2006
by Robert McHugh

"Of the five periods analogued, the current 2002-2006 pattern best replicates the 1929 pattern, suggesting 2007 could turn ugly."


Interesting analogies.

And a simpler and potentially predictive chart showing the period around 1929 and 2000:

[Jim Nickerson]

Re: Bearish Information Re. Oil

December 03, 2006
Crude Oil Rallies, but a Widening Contango Could Lead to a Collapse in Oil Prices During 2007
by Nadeem Walayat

http://www.safehaven.com/article-27020.htm

Having no serious knowledge of futures, likely most in this article flew over my head.

"So the opportunity brewing for traders are not on the longside but on the short side sometime during mid 2007. As and when the inventories lead to crude oil being dumped on the market when the contango starts to contract significantly, which will further drive spot AND futures prices lower, leading to speculators such as hedge funds also dumping their positions, it is not inconceivable that crude oil could fall as low as $40, in a state of backwardation (higher spot, lower futures). Which would once more set the stage for long positions in crude oil. Until then being long of crude oil is definitely not as profitable as it looks on face value! This possibly also holds true for other commodities that are in contango i.e. such as Gold where Dec 06 is at $644, but Dec 06 is at $682, therefore producers can sell current gold for a 6% profit, as they hold on to and build inventories."

"In summary the key point I am making is - Look for a markets in contango to short, and look for markets in backwardation to go long on. To take advantage of contango, look to invest in the producer rather than the commodity itself i.e. an oil company or a gold miner."

[bart]

Re: Bearish Information Re. Oil

December 03, 2006
Crude Oil Rallies, but a Widening Contango Could Lead to a Collapse in Oil Prices During 2007
by Nadeem Walayat

http://www.safehaven.com/article-27020.htm

Having no serious knowledge of futures, likely most in this article flew over my head.

"So the opportunity brewing for traders are not on the longside but on the short side sometime during mid 2007. As and when the inventories lead to crude oil being dumped on the market when the contango starts to contract significantly, which will further drive spot AND futures prices lower, leading to speculators such as hedge funds also dumping their positions, it is not inconceivable that crude oil could fall as low as $40, in a state of backwardation (higher spot, lower futures). Which would once more set the stage for long positions in crude oil. Until then being long of crude oil is definitely not as profitable as it looks on face value! This possibly also holds true for other commodities that are in contango i.e. such as Gold where Dec 06 is at $644, but Dec 06 is at $682, therefore producers can sell current gold for a 6% profit, as they hold on to and build inventories."

"In summary the key point I am making is - Look for a markets in contango to short, and look for markets in backwardation to go long on. To take advantage of contango, look to invest in the producer rather than the commodity itself i.e. an oil company or a gold miner."

Contango is just a fancy term for the current cash price of something to be lower than a future price. This is the normal condition of prices. Backwardation is the opposite - the current cash price of something is higher than a future price.

I also disagree with his interpretation, since I believe a backwardation condition in oil has more to do with manipulation than with supply and demand. Yes, oil could break below $50 next year if global economies take a large hit... but before too much attention is paid to all the talk about high inventories, do take into account both that bad weather can make a huge difference, and even more than that, calculate the actual average days inventory on hand instead of just raw total inventory. It will be found that inventories are not high but rather well below average currently.

[Jim Nickerson]

Re: Bearish Information RE. XAU BEARISH>BULLISH

Tim Ord, Ord Oracle, 12/06/06 http://www.decisionpoint.com/TAC/ORD.html

Analyzes the Rydex Precious Metals Fund and Cumulative Net Cash Flow, suggests the rally in RYPMX may be heading for a reversal.

Also suggests that XAU may rise to 250, but expects 115 to be hit first.

[Jim Nickerson]

Re: Bearish Information Re. QQQQ correction or more?

http://www.decisionpoint.com/TAC/RHODES.html

Richard Rhodes, 12/9/06, analyzing the relative strength of SPY:QQQQ.

The current technical behavior suggests "a potential trend change is in the very near future." "...it is our opinion that tactical short positions can now be considered with a greater probability of success than in recent month."

Bottom line in his opinion: "QQQQ is set to underperform in the weeks and months ahead."

[Jim Nickerson]

Re: Bearish Information Re: Gold

James West http://www.buythebottom.com/blog/ follows COT data.

12/7/06 Gold.
"Net-commercial position increased by 1,252. From a long-term perspective I am bullish on gold, but in the intermediate-term I am turned off by the recent wave of commercial selling. As of right now I am somewhere between neutral and bearish on this market. All that means is that from a commercial-perspective I currently see more downside than upside potential."