Why Only Fools Think the Bottom Is In

[Supercilious]

Re: Why Only Fools Think the Bottom Is In

I think there is a pattern,like in the brain of a person, that exists in the market's, that's all connected to how the liquidity bubble that have been lasting from Greenspan in 1987 operates. All the fed have to do is to reach a certain point in their money printing at the same time there is enough good signals from the market. I think we already are there. When this tipping point is reached. The patient will just go back to his old ways (carry trades, cheap money, stocks on margin etc). Then perceptions about recovery turns into reality. It's the perceptions that controls the fundamentals.

I think that was very well said nero. In some way the whole debate about the "recovery" doesn't make too much sense.

Those who argue the recovery is not real are in some way right, because there was no change to sound fundamentals required for a real recovery. The scam show goes on. Nothing really has changed in this crisis (some may argue things are even more corrupt and fraudulent than before). I think though, the "recovery is fake" camp makes a fundamental mistake, believing Mr Market is guided by the solid fundamentals of free and open markets.

Well,... I have news for that camp. Mr Market is high as a kite on the derivatives LSD and bailout shrooms he got from the Wall Street shack and from Uncle Fed. His sense of reality has been replaced by a psychedelic dream. And as nero said it's the perception that controls everything. So, if Mr Market sees the Chosen One, riding his magic unicorn down the rainbow, and brining him Hope and Recovery,... then Recovery we will have.

On the other side the "recovery is real team" also forgets that real life cannot be build on the psychedelic illusions even if those illusions are pushed forcefully by Uncle Fed and the Smart Money Masters. Yes it is true, illusions can last for a very long time (more than the average lifespan of a human being), but in the end there is always a rude awaking to the crude and unpleasant reality.

If the Money Illusionists will be able to maintain this illusion past our lifetime, then the Obama Miraculous Recovery (TM) will be as solid as ... gold ... (at least for us). If the illusion collapses, we will all see in horror that Mr Market, Mr Bank, and Miss Treasury have no clothes.

There was that old mayan proverb: "Can a man kill a God? Yes, when he stops believing in Him."

For time being Mr Market is God... so, let's get another dose of bailout shrooms from Uncle Fed and celebrate the Recovery

[Penguin]

Re: Why Only Fools Think the Bottom Is In

I'd agree as far as the Wall Street/banking industry goes.

That battle is over, the banks won. There is no way in God's green earth that any bank of any substance will be allowed to fail. Now that Wall Street has figured that out their stock has been deemed safe and will reflect this in price. That much I'll allow. Worse comes to worse, they'll print and directly infuse to the banks.... it has gotten that out of control.

But that is a far cry from saying that the economy will recover.

I know US unemployment stats are self cleaning, after losing your job you only have a few months to count in the final tally and then you are removed from them altogether in the headline numbers. And I know that you have a lot of stats like that in the pipeline.

But you still have the problem of how does Joe and Jane Sixpack buy a new Harley, bass boat, cabin in the hills, and swimming pool without a reliable line of mortgage equity to draw upon. That was the lifeblood of the consumer driven economy. And even with the ungodly amount of money poured into housing in the past year and all the foreclosure stops of the GSEs and the incredibly cheap money the government has provided they have not been able to stop the drop in housing prices.. hell they haven't even slowed it down?

How does that get fixed?

The rally in stocks is driven on faith in the government, but the reason to buy a house or a Harley or a new truck don't go on faith. It goes on jobs and available credit, largely driven by housing equity the last couple years.

At least that is the view from the cheap seats.

Will

[nero3]

Re: Why Only Fools Think the Bottom Is In

you can't have a recovery without an economy, and the economy (fire) is a wreck... with no obvious way to get better.

did you read the next bubble? it's gotta be $20 trillion+ to stop the debt deflation. where's it gonna to come from?

That's actually not how I see it. You see it as a solvency issue similar to guys like Paul Krugman and Nourel Roubini because of the "perceived" liquidity trap, coming debt deflation spiral, return of house prices to where they came from, or below their baseline level adjusted with the official (junk) CPI, an evil circle that just goes on and on, and no matter how much the fed prints, it will never be enough due to political limitations, as to where there will be no way to stop it until it have run it's course. This is a fatalistic view.

The way I see it, the fed don't have to supply 20 trillion. They have to use enough money to keep things going tempoary, and when the economy shows sign of recovery, the carry trades, the risk taking, the willingness to come out of treasuries appears, and when that happens, voila, the yield curve turns very humpy, and you have a selffullfilling recovery, with weak yen, weak dollar, weak franc and humpy yields curves. The market will then worry about inflation, and the consumer will lend, even more, however in a more sluggish way, infrastructure spending, and the stimulus packages will help jumstart the economy, I think the real growth will come from emerging markets. The best I think will happen in the US, will be something resembling stagflation.

[metalman]

Re: Why Only Fools Think the Bottom Is In

I think that was very well said nero. In some way the whole debate about the "recovery" doesn't make too much sense.

Those who argue the recovery is not real are in some way right, because there was no change to sound fundamentals required for a real recovery. The scam show goes on. Nothing really has changed in this crisis (some may argue things are even more corrupt and fraudulent than before). I think though, the "recovery is fake" camp makes a fundamental mistake, believing Mr Market is guided by the solid fundamentals of free and open markets.

Well,... I have news for that camp. Mr Market is high as a kite on the derivatives LSD and bailout shrooms he got from the Wall Street shack and from Uncle Fed. His sense of reality has been replaced by a psychedelic dream. And as nero said it's the perception that controls everything. So, if Mr Market sees the Chosen One, riding his magic unicorn down the rainbow, and brining him Hope and Recovery,... then Recovery we will have.

On the other side the "recovery is real team" also forgets that real life cannot be build on the psychedelic illusions even if those illusions are pushed forcefully by Uncle Fed and the Smart Money Masters. Yes it is true, illusions can last for a very long time (more than the average lifespan of a human being), but in the end there is always a rude awaking to the crude and unpleasant reality.

If the Money Illusionists will be able to maintain this illusion past our lifetime, then the Obama Miraculous Recovery (TM) will be as solid as ... gold ... (at least for us). If the illusion collapses, we will all see in horror that Mr Market, Mr Bank, and Miss Treasury have no clothes.

There was that old mayan proverb: "Can a man kill a God? Yes, when he stops believing in Him."

For time being Mr Market is God... so, let's get another dose of bailout shrooms from Uncle Fed and celebrate the Recovery

don't see anyone here arguing that rallies are not possible during a debt deflation... they did 1930 - 1938 and in japan since 1990... but a bull market? do you know what debt deflation is?



in the 2000-2001 near death experience only business debt levels refused to rise with mr greenspam's crazy money games. this time? the only debt not falling is federal debt... and household debt is negative for the first time since wwii.

are you saying timmy and ben and china can turn all of these around... household, biz, state/local govt?

ever read steve keen? Interview: Steve Keen - New World Order or New Era of Global Bickering?

honestly, it's great to have a bull among the bears to keep us sharp, but your repetition of your position without answering qustions does not make it stronger.

[metalman]

Re: Why Only Fools Think the Bottom Is In

That's actually not how I see it. You see it as a solvency issue similar to guys like Paul Krugman and Nourel Roubini because of the "perceived" liquidity trap, coming debt deflation spiral, return of house prices to where they came from, or below their baseline level adjusted with the official (junk) CPI, an evil circle that just goes on and on, and no matter how much the fed prints, it will never be enough due to political limitations, as to where there will be no way to stop it until it have run it's course. This is a fatalistic view.

The way I see it, the fed don't have to supply 20 trillion. They have to use enough money to keep things going tempoary, and when the economy shows sign of recovery, the carry trades, the risk taking, the willingness to come out of treasuries appears, and when that happens, voila, the yield curve turns very humpy, and you have a selffullfilling recovery, with weak yen, weak dollar, weak franc and humpy yields curves. The market will then worry about inflation, and the consumer will lend, even more, however in a more sluggish way, infrastructure spending, and the stimulus packages will help jumstart the economy, I think the real growth will come from emerging markets. The best I think will happen in the US, will be something resembling stagflation.

so... you believe that the financial system and economy are a pile of unspent fuel just waiting for a spark to set them off? interesting. i prefer to look at the actual data. it shows the economy slowing since 2004, then the housing market rolling over, then the financial markets, then the debt markets, then the real economy. to get it going means the reverse process... rebuild the real economy, the debt markets on it, the financial markets get weaned off gov't support, and in... oh... 10 yrs or so the housing market starts to recover.

[grapejelly]

Re: Why Only Fools Think the Bottom Is In

so... you believe that the financial system and economy are a pile of unspent fuel just waiting for a spark to set them off? interesting. i prefer to look at the actual data. it shows the economy slowing since 2004, then the housing market rolling over, then the financial markets, then the debt markets, then the real economy. to get it going means the reverse process... rebuild the real economy, the debt markets on it, the financial markets get weaned off gov't support, and in... oh... 10 yrs or so the housing market starts to recover.

agree.

In fact, everything the government does to "jumpstart" the economy and so forth, will make it worse. The real economy is falling very fast. And government efforts to bailout the financial system load up more debt and speed the train further off the cliff.

Right now we are in a period of more optimism that will be shown as completely unjustified in some months from now.

Unemployment is going to hit 15% and at least 1/3 of retailers will be belly up. Housing is going to continue to fall. There is a vast overhang of housing on the economy, and the bailout has prevented the adjustments that would have been made through bankruptcies, so the patient will be sick for far longer.

[rjwjr]

Re: Why Only Fools Think the Bottom Is In

I think that was very well said nero. In some way the whole debate about the "recovery" doesn't make too much sense.

Those who argue the recovery is not real are in some way right, because there was no change to sound fundamentals required for a real recovery. The scam show goes on. Nothing really has changed in this crisis (some may argue things are even more corrupt and fraudulent than before). I think though, the "recovery is fake" camp makes a fundamental mistake, believing Mr Market is guided by the solid fundamentals of free and open markets.

Well,... I have news for that camp. Mr Market is high as a kite on the derivatives LSD and bailout shrooms he got from the Wall Street shack and from Uncle Fed. His sense of reality has been replaced by a psychedelic dream. And as nero said it's the perception that controls everything. So, if Mr Market sees the Chosen One, riding his magic unicorn down the rainbow, and brining him Hope and Recovery,... then Recovery we will have.

On the other side the "recovery is real team" also forgets that real life cannot be build on the psychedelic illusions even if those illusions are pushed forcefully by Uncle Fed and the Smart Money Masters. Yes it is true, illusions can last for a very long time (more than the average lifespan of a human being), but in the end there is always a rude awaking to the crude and unpleasant reality.

If the Money Illusionists will be able to maintain this illusion past our lifetime, then the Obama Miraculous Recovery (TM) will be as solid as ... gold ... (at least for us). If the illusion collapses, we will all see in horror that Mr Market, Mr Bank, and Miss Treasury have no clothes.

There was that old mayan proverb: "Can a man kill a God? Yes, when he stops believing in Him."

For time being Mr Market is God... so, let's get another dose of bailout shrooms from Uncle Fed and celebrate the Recovery

I wouldn't suggest a career move into investment advisor or the like.

[nero3]

Re: Why Only Fools Think the Bottom Is In

so... you believe that the financial system and economy are a pile of unspent fuel just waiting for a spark to set them off? interesting. i prefer to look at the actual data. it shows the economy slowing since 2004, then the housing market rolling over, then the financial markets, then the debt markets, then the real economy. to get it going means the reverse process... rebuild the real economy, the debt markets on it, the financial markets get weaned off gov't support, and in... oh... 10 yrs or so the housing market starts to recover.

I think you have filled your head with so much faulty information from "professors" living in an academic world, that it would take several hours to convince you. I am sure I could achieve it, but I'm afraid I don't have the time. Think of these professors as music critics or music historians, not musical people, or gifted musicians, you could put guys like Warren Buffet into that category. Here is a graph for you:
http://finance.yahoo.com/echarts?s=U...l=UNP;range=my
The development in the railroad share from 2000-2008 is the real inflation rate, as railroads tend to track inflation. Here you also have the real inflation:

The same does emerging market shares. Strength in these market's tend to show the devaluation of the dollar. The same is the case with gold.
House prices barely tracked that, and then corrected. House prices are a hard asset. Just like commodities. I should add that I know real estate, as I own a lot of real estate. It's not a bubble the way some guys such as Robert Shilling suggest. It was a bubble for sure, but the stupid CPI blows it way out of proportion. The 100 year old data series brings no meaning with the adjustments done to the CPI after 1980. This is why professors don't tend to be investing geniuses, or rich.

This is from the UK, but paints the same picture as the railroad shares, or the shadowstats CPI:



I espect the housepricecorrection to stop where it is now on a nominal basis. The built in inflation pressures are much higher now than in the 1990-s. Due to that, house prices will level off much faster than in the 1990-s, as there now is a pent up stagflation problem coming, causing a nominal prise rise / real price decline, while the RMB appriciate, yields rise, and the stock market in general recover as after 1975.


Here are one of the better blogs:
http://www.noisefreeinvesting.com/blog/

Go back in the archives to you get to railroad shares, look at the salary vs expense ratio, and you will understand that you have very high inflation and a squeeze of worker salaries. In the glass house world of professors like krugman, they sure don't notice this. A lot of real estate have not increased more in price, than the increase in cost of various expenses related to getting rid of garbage, paying for heating oil, etc.

This trash driver company, is an example of a stock that are able to pass on inflation. That's why they rise. Inflation that's not measured by the CPI.
http://finance.yahoo.com/echarts?s=R...l=RSG;range=my

House prices are much, much cheaper than you think.

[rjwjr]

Re: Why Only Fools Think the Bottom Is In

Why does this thread even exist. You can discuss your gut feelings and reads of investor sentiment all you want, but this has already been addressed by the Grand Puba and here's your answer...

Debt Deflation Bear Market: First Bounce - Eric Janszen
March 27, 2009, iTulip

In a recession, a recovery in personal consumption, incomes, and retail sales signals the start of recovery. The virtuous cycle of credit growth–and its corollary, debt growth—combine with rising incomes as the rate of unemployment growth slows. Credit expansion leads the economy out of the cycle, followed by incomes. That is what many stock market participants think they are seeing now, as previous experience has trained them to see. But they are wrong.

[Supercilious]

Re: Why Only Fools Think the Bottom Is In

don't see anyone here arguing that rallies are not possible during a debt deflation... they did 1930 - 1938 and in japan since 1990... but a bull market? do you know what debt deflation is?

Yup, bull market. Never underestimate the propensity of people to be fooled over and over again by corporate-government manipulation.

this time? the only debt not falling is federal debt... and household debt is negative for the first time since wwii.

and your point is ...?

are you saying timmy and ben and china can turn all of these around... household, biz, state/local govt?

I don't know about timmy, He doesn't strikes me as a genius with a bright future, but as long as he is obedient he will be ok ;)
So ben and timmy (or who is going to replace timmy) can turn all these around (by screwing China and others, because the losses have to go somewhere). Remember "can" is not equal to "will", but for time being I don't see any sign that the new bait-and-switch is going to fail.

honestly, it's great to have a bull among the bears to keep us sharp, but your repetition of your position without answering qustions does not make it stronger.

I know. That is a valid criticism. Maybe I should start answering to those questions one by one, but each time when I started to answer a question in depth you got upset.

On the other hand, it would more exciting if we let Mr Market to show us the way.... I wanted to say the "shrooms way".

[karim0028]

Re: Why Only Fools Think the Bottom Is In

Well,... I have news for that camp. Mr Market is high as a kite on the derivatives LSD and bailout shrooms he got from the Wall Street shack and from Uncle Fed. His sense of reality has been replaced by a psychedelic dream. And as nero said it's the perception that controls everything. So, if Mr Market sees the Chosen One, riding his magic unicorn down the rainbow, and brining him Hope and Recovery,... then Recovery we will have.

For time being Mr Market is God... so, let's get another dose of bailout shrooms from Uncle Fed and celebrate the Recovery

No matter how elaborate a rouse; at some point fantasy hits a brick wall called reality; and reality always wins.....

[occdude]

Re: Why Only Fools Think the Bottom Is In

I agree with Rick. What with unemployment gowing up almost exponentially month to month, who could think otherwise? This is a countertrend rally, albeit a powerful one, but the bear is still in charge for the foreseeable future. Look for a powerful rally till fall then look for a fall.

[Supercilious]

Re: Why Only Fools Think the Bottom Is In

No matter how elaborate a rouse; at some point fantasy hits a brick wall called reality; and reality always wins.....

Correct. The question is at what point are we going to meet the brick wall. Fantasies can last for an awful long time. Communism lasted for some 80 years and it was a relatively short one on the scale of history. If the current market fantasy last another 10-15 years ...;)

The true question is not if the recovery is real or not, but how much longer the current illusion can last?.... because the brick wall is there waiting.

[aaron]

Re: Why Only Fools Think the Bottom Is In

It is almost time to go short. People at work are talking about how great the stock market is going right now. Bah, bah, bah. The sheep are lining up. It will not be pretty.

I can't help think that there is a conspiracy to manipulate the markets for the greatest fleecing possible. It is an addictive game, and they have the sheers. God I want to bet!

I broke down today and bought an industrial metal: platinum. It proceeded to drop 10 dollars an ounce. At least I can say I participated in the "recovery" if things balloon up from here.

I am warning you bulls... I may buy stocks soon!

[metalman]

Re: Why Only Fools Think the Bottom Is In

Yup, bull market. Never underestimate the propensity of people to be fooled over and over again by corporate-government manipulation.



and your point is ...?


I don't know about timmy, He doesn't strikes me as a genius with a bright future, but as long as he is obedient he will be ok ;)
So ben and timmy (or who is going to replace timmy) can turn all these around (by screwing China and others, because the losses have to go somewhere). Remember "can" is not equal to "will", but for time being I don't see any sign that the new bait-and-switch is going to fail.



I know. That is a valid criticism. Maybe I should start answering to those questions one by one, but each time when I started to answer a question in depth you got upset.

On the other hand, it would more exciting if we let Mr Market to show us the way.... I wanted to say the "shrooms way".

actually, my question was posted in the wrong place... was directed at nero... our newest hand waving repeater of nonsensical theories without basis. i've seen you and c1ue go at it and don't have nearly his patience for your diversionary tactics.

all arguments end with... 'they' can make anything they want happen'!

bullshit, as if they meant to crash the friggin economy. they're morons not omnipotent market masters. if they're masters of anything it's of unintended consequences.