EJ's next bubble

[metalman]

Re: EJ's next bubble

i think you need to chart the SPREAD between the tips and the straight bond yields. if ALL interest rates were going down, so will tips yields, without telling you much about longer term inflation expectations in the absence of info on the SPREAD.

you mean like this?

still, what does it mean? deflation for the next 20 years? i don't think so.

to me it says that 10 yr tips are in a shitstorm less liquid than 10 yr bonds, nothing more.

[Andreuccio]

Re: EJ's next bubble

For them it's a win-win game while for the bulk of their gullible investors is a loose-loose game

Ouch!

Within the last couple of months I've seen many people use the word "loose" when I assume they meant "lose". I can even pinpoint the first time I saw it to when I read that "surviving in Argentina" blog. I figured that guy made the mistake because Spanish is probably his native language. But I keep seeing it. Everywhere.

Now, when I see someone who's obviously well-educated like $#* use "loose" instead of "lose", I wonder if maybe I'm wrong. Maybe there was an announcement that we changed over, daylight savings time style, to the new spelling, and I missed it. Oh well. At least I got my clock set right.

Sorry for the off-topic Spelling Police rant.

[Down Under]

Re: EJ's next bubble

That is not true metalman.
There were quite a few instances when I agreed with EJ and Fred, for example in the case of future Russia collapse, future industrialization (the one unrelated to the Alt-E bubble) etc. And I have acknowledged in public my support of those calls.

So, what do you call this thread that you've started. I have no problem with someone disagreeing with EJ/iTulip.

However, I do have a problem with someone posting crap. I put your post of this thread in the crap category.

[Supercilious]

Re: EJ's next bubble

What is your explanation for rising TIPS yields falling when inflation expectations were falling 2001 to 2004 and rising TIPS yields rising when inflation expectations were rising 2004 until the credit crisis hit in early 2007? Then from 2007 to 2008 TIPS yields behaved differently; they fell when inflation expectations were falling, then spiked when the were falling even more, then went ballistic when they fell even more. Obviously TIPS yields have not been reacting to inflation expectations during the credit crisis as before. We have a theory as to why. What's yours? You go first.

Fred according to wikipedia:
http://en.wikipedia.org/wiki/Troll_(Internet)

An Internet troll, or simply troll in Internet slang, is someone who posts controversial, inflammatory, irrelevant or off-topic messages in an online community, such as an online discussion forum or chat room, with the intention of provoking other users into an emotional response^[1] or to generally disrupt normal on-topic discussion.

Since this thread was focused on the Alt-E bubble, pushing with insistence the discussion towards TIPS spreads may be considered as an attempt to "disrupt normal on-topic discussion", but this time I'll try to humor the disruption and hopefully it will not persist.

I believe that Finster has already explained to you why the recent evolution of TIPS yields signal deflation not inflation:
http://www.itulip.com/forums/showthr...8112#post58112

I have sometimes minor disagreements with Finster (only on fine detail issues), but on this subject (of Bonds 101) I have to completely agree with him. It's basic general stuff.

Basically, the explanation is the same where ever you look. For example:
Roubini in Forbes:
http://www.forbes.com/opinions/2008/...30roubini.html

Finally, and more important, yields on Treasury Inflation-Protected Securities (TIPS) due in five years or less have now become higher than yields on conventional Treasuries of similar maturity. The difference between yields on five-year Treasuries and five-year TIPS, known as the break-even rate, fell to minus 0.43 percentage points.
This is a record. Since the difference between the conventional Treasuries and TIPS is a proxy for expected inflation, the TIPS market is now signaling that investors expect inflation to be negative over the next five years, as a severe recession is ahead of us.
So goods, labor, commodity, financial and bond markets are all sending the same message: Stagnation/recession and deflation (or stag-deflation) is ahead of us.

Or a more plain level explanation in Wall Street Journal:
http://online.wsj.com/article/SB1225...googlenews_wsj

Over the next five to six years, investors are expecting deflation, as the five-year TIPS now yield more than nominal five-year Treasury notes, a rare phenomenon. Yields on TIPS normally are below those on nominal Treasurys because their principal is adjusted regularly to compensate for inflation changes. Tuesday, the five-year TIPS yielded 3.23%, more than 2.729% on the five-year nominal Treasurys. Bond yields rise when prices fall.

Again the differential between TIPS and nominals indicate the inflation expectation. An inversion (negative differential) indicates deflation expectation as Finster tried to explain to you.

The same explanation in slightly different (but still simple) terms can be found in a recent Barron's article:
http://online.barrons.com/article/SB...lenews_barrons

There is some logic that TIPS would underperform regular T-notes. TIPS pay a fixed-coupon but their principal is adjusted annually according to the rise in the consumer price index. Normally, a 10-year TIP might yield 2% versus 4% for a 10-year Treasury note.
The difference -- the so-called TIPS spread -- would represent the expected inflation adjustment. Implicitly, the market is expecting the CPI to rise 2% per annum in this hypothetical case. If inflation expectations rise, the yield on the Treasury note would rise while the TIP yield would remain the same or decline (all else being equal.)
[...]
According to Rob Arnott, the head of Research Affiliates, the TIPS market is priced for deflation of 1% per annum for the next five years, deflation of 0.6% per year for seven years, ramping up to inflation of 0.8% for 10 years and 1.4% for 20 years

Here is an interesting chart about what the Clevland Fed believes about the recent TIPS "phenomenon":
http://seekingalpha.com/article/1029...-and-inflation

To get an idea of what the market thinks inflation will be we can look at the difference between the 10 year nominal treasury bonds and TIPS (Treasury Inflation-Protected Securities) which pay a real rate of interest. The difference between them is the forward implied inflation:

For most of 2008 it estimated inflation at 3% but suddenly at the beginning of this month, it went into free fall. As of October 28th, 2008 it stood at -0.2945%. The bond market is clearly expecting the deflationary pressures to win over and win big.

Look, maybe Finster, Roubini and the people writing in WSJ, Forbes and Barron's, plus the Cleveland Fed are all wrong and you are right, .... I'm ready to listen and learn more on this subject

[metalman]

Re: EJ's next bubble

you're a smart fella. people might even listen to you if you could answer a question without the bullshit and stop trolling.

[Wild Style]

Re: EJ's next bubble

the reason symbols can't see the forest is he hasn't figured out that the break between the free and pay areas of itulip is that the editorial that talks about what's going on now (news) is in the free area but actionable analysis that tells you what is going to happen and what to do about it is in the pay area. phirang has a reading comprehension problem... he reads 'don't buy mining stocks' as 'buy mining stocks' and 'bear market in stocks with 40% decline coming in 2008' as 'back up the truck and buy stocks'.

I completely understand what you are saying. but come on, it doesn't take subscribing to itulip to understand what a cycle is and that during the bust phase your not going to have a "bubble" boom. Also, if you read the harpers magazine article he did and many other things EJ has said, you can clearly get the idea that this will take many events unfolding for all this stuff to happen. But I guess it does go back to what you said about subscribing. Maybe those articles in that section lays out in depth EJ's thoughts on how this will all play out. I notice a lot of the free stuff has a lot of gaps and innuendos in it. If you don't understand economics fully or how these things work, I can see how one can get confused. I think the analogy he laid out once about the car flying off the side of a highway and the driver giddy that he "made it" after all the turmoil pretty much sums it up. Couple that with the bubble thesis he has laid out and its pretty clear how it will work.

My having a economics background (by education) and Telecommunications/Info Tech background, I understand fully what EJ is saying. The ground work was laid back in the telecomm/tech boom days for a lot of what he is saying to come to fruition. i have even posted a article or two that helps support his thesis. Like the Verizon Fios fiber to every home deal in NYC. A lot of what he says hingins on inflation happening (which a lot of people are trying to dismiss at this stage). Once that happens, its go time.

[metalman]

Re: EJ's next bubble

I completely understand what you are saying. but come on, it doesn't take subscribing to itulip to understand what a cycle is and that during the bust phase your not going to have a "bubble" boom. Also, if you read the harpers magazine article he did and many other things EJ has said, you can clearly get the idea that this will take many events unfolding for all this stuff to happen. But I guess it does go back to what you said about subscribing. Maybe those articles in that section lays out in depth EJ's thoughts on how this will all play out. I notice a lot of the free stuff has a lot of gaps and innuendos in it. If you don't understand economics fully or how these things work, I can see how one can get confused. I think the analogy he laid out once about the car flying off the side of a highway and the driver giddy that he "made it" after all the turmoil pretty much sums it up. Couple that with the bubble thesis he has laid out and its pretty clear how it will work.

My having a economics background (by education) and Telecommunications/Info Tech background, I understand fully what EJ is saying. The ground work was laid back in the telecomm/tech boom days for a lot of what he is saying to come to fruition. i have even posted a article or two that helps support his thesis. Like the Verizon Fios fiber to every home deal in NYC. A lot of what he says hingins on inflation happening (which a lot of people are trying to dismiss at this stage). Once that happens, its go time.

i don't trust sites where the 'guru' doesn't 'show the work'... the interviews, the analysis, but pulls the forecast 'out of the air'.

if they don't show the work, they're fakes. they are only as insightful as the stuff they can rip off and reformulate, and only as prophetic as the guys they copy. imho.

[Supercilious]

Re: EJ's next bubble

So, what do you call this thread that you've started. I have no problem with someone disagreeing with EJ/iTulip.

However, I do have a problem with someone posting crap. I put your post of this thread in the crap category.

This is getting surreal pfife. Let's go back to the facts and the original post that started this thread.

My first post included a snippet of news about the bankruptcy of VeraSun. I don't see how that quote could be considered as crap. It's reality. The company went belly up. Hard to argue with that.

Next it was my comment : "Good call ... "

Ok I admit that was sarcastic. I should have said "That was a very bad call"

But where is the crap? Let's think a little bit.

The management of VeraSun not only did not realize that the high price of oil (which made their business to look very profitable) was just one piece in the Great Index Investment Bubble which created a commodity bubble, but they also "hedged" their main raw material (corn) price at a high bubbly price. IMHO that was a double whammy .... and it drove their company into the ground.

Now, pfife, how would you consider the call of VerSun management to lock the price of their raw material at $8/bushel at the top of the bubble when the profitability of their company was artificially pumped up by another component of the same commodity bubble (oil price)? I call that delusion^2

Do you really believe the management of VeraSun made a good call??? :eek:

[FRED]

Re: EJ's next bubble

Ok I admit that was sarcastic. I should have said "That was a very bad call"

The call as everyone here but you seems to understand was "First recession, then alternative energy boom. Go to cash. We'll let you know when we think the coast is clear." That was in February following a Dec. 2007 call to get out of the stock market generally due to the start of the Debt Deflation Bear Market.

Congratulations! You've just earned yourself a very special avatar and title reserved only for the very few.

[Slimprofits]

Re: EJ's next bubble

This is getting surreal pfife. Let's go back to the facts and the original post that started this thread.

My first post included a snippet of news about the bankruptcy of VeraSun. I don't see how that quote could be considered as crap. It's reality. The company went belly up. Hard to argue with that.

Next it was my comment : "Good call ... "

Ok I admit that was sarcastic. I should have said "That was a very bad call"

But where is the crap? Let's think a little bit.

Your first post comes across like this: You call out EJ's next bubble thesis in the thread title and than sarcastically refer to it as a "Good call..." based on the problems at VeraSun.

Now, pfife, how would you consider the call of VerSun management to lock the price of their raw material at $8/bushel at the top of the bubble when the profitability of their company was artificially pumped up by another component of the same commodity bubble (oil price)? I call that delusion^2

Do you really believe the management of VeraSun made a good call??? :eek:

With this, you come off as disingenuous. It goes back to the thread title.

C'mon, I really had to explain this? Maybe it is time to drop the pretense.

[Supercilious]

Re: EJ's next bubble

Your first post comes across like this: You call out EJ's next bubble thesis in the thread title and than sarcastically refer to it as a "Good call..." based on the problems at VeraSun.

babbittd, I believe you are wrong. I'm opening a thread on the Alt-E struggles this days with a showcase example of bad business decision (that hedging at $8) and everybody jumps into the discussion EJ being right-wrong .

If the sarcasm was directed at EJ why to bring in discussion such a clear case of a bad company management decision? Is EJ on the board of VeraSun? ... .I don't thinks so.

Plus let's not forget that I have never said that EJ view on the Alt_E bubble is wrong. By the contrary. I've said before that when we hit Peak (Cheap) Oil, the Alt-E bubble will follow. Did EJ said in the Harper's article, the Alt-E bubble is going to happen this summer???

My second reply on this thread was clarely directed at the oil bubble issue. If you believe that the price of oil is now below $70/bbl only due to pure supply and demand issues ... well... be my guest.

With this, you come off as disingenuous. It goes back to the thread title.

Well... with this you come as biased. But everybody is entitled to his/her own opinion.

C'mon, I really had to explain this? Maybe it is time to drop the pretense.

C'mon, do I really have to explain that not every discussion has to be centered on the issue of EJ and Fred being right or wrong about everything? That an opinion that does not fit exactly the official iTulip line should not be considered an act of blasphemy against EJ, and therefore fiercely condemned?

Maybe I should have put a tittle like: "Alt-E bubble" or "Alt-E struggle" or "Smart Alt_E management", although after reading your comment, pfilfe's, Fred's, I doubt the result would have been very different....:rolleyes:

[Slimprofits]

Re: EJ's next bubble

although after reading your comment, pfilfe's, Fred's, I doubt the result would have been very different....:rolleyes:

Nice use of smiley faces!

What I've said here has nothing to do with the content, only the language used.

And I guarantee if you were to put up a poll, the vast majority of Itulip.com readers are going to agree that whatever is in the title of this thread, was being called out by the subject of the thread.

Is English not your first language (a serious question)?

[metalman]

Re: EJ's next bubble

babbittd, I believe you are wrong. I'm opening a thread on the Alt-E struggles this days with a showcase example of bad business decision (that hedging at $8) and everybody jumps into the discussion EJ being right-wrong .

If the sarcasm was directed at EJ why to bring in discussion such a clear case of a bad company management decision? Is EJ on the board of VeraSun? ... .I don't thinks so.

Plus let's not forget that I have never said that EJ view on the Alt_E bubble is wrong. By the contrary. I've said before that when we hit Peak (Cheap) Oil, the Alt-E bubble will follow. Did EJ said in the Harper's article, the Alt-E bubble is going to happen this summer???

My second reply on this thread was clarely directed at the oil bubble issue. If you believe that the price of oil is now below $70/bbl only due to pure supply and demand issues ... well... be my guest.


Well... with this you come as biased. But everybody is entitled to his/her own opinion.


C'mon, do I really have to explain that not every discussion has to be centered on the issue of EJ and Fred being right or wrong about everything? That an opinion that does not fit exactly the official iTulip line should not be considered an act of blasphemy against EJ, and therefore fiercely condemned?

Maybe I should have put a tittle like: "Alt-E bubble" or "Alt-E struggle" or "Smart Alt_E management", although after reading your comment, pfilfe's, Fred's, I doubt the result would have been very different....:rolleyes:

this thread is a misrepresentation of fact. even if what you said was true it's purile and disrespectful.

you are a guest of the owners of any site you are on. there are 100 other sites that bash ej. mish, etc. go there. we're trying to get some work done and maybe have a little fun while we're at it. if i were ej i'd ban you. if he does i'll miss you for about 10 seconds.

nice new title by the way. well earned.

[Supercilious]

Re: EJ's next bubble

this thread is a misrepresentation of fact. even if what you said was true it's purile and disrespectful.

This is you personal opinion metalman. This thread became mangled because of your trolling intervention and it was intended to be a discussion of the current Alt_E evolution in the context of the Alt_E bubble which was predicted by EJ (hence the title).

Your whole point was to try to pit me against Fred and EJ and after that complain to them I'm a troll that is mocking them and should be "terminated". I have to acknowledge you had some partial success there.

you are a guest of the owners of any site you are on. there are 100 other sites that bash ej. mish, etc. go there.

I believe it's clear now what it the crux of the problem. Sarcasm and cynicism is good as long you are not on the receiving end of it. Since, you have been on the receiving end quite a few times, in exchanges with me, pathetic lady doth evolved into grudge.

we're trying to get some work done and maybe have a little fun while we're at it.

I believe that your idea of having fun is to use cheap and abusive shots at newbies, from the protected cover of the self-styled ultimate defender of EJ and Fred. Probably it helps to nourish an over sized ego with a delusion of importance.

But, do you think EJ and Fred need others to defend their ideas? Do you really believe that they need you as a self-appointed enforcer of thought? I doubt that.

To my knowledge, whenever EJ and Fred have a point to make, in order to support their views, they make that point themselves. I don't think they need self-important chihuahua-style volunteer security guards.

if i were ej i'd ban you. if he does i'll miss you for about 10 seconds.

First, wake up. You are not EJ.

I'm sure you will not miss me and your over sized ego will be partially healed by a petty victory. Meatlman, you are too obsessed with Oscar Wilde and what you are doing now is strikingly similar to an ego struggle of A woman of no importance

nice new title by the way. well earned.

No problem. I could care less what title I get from the administrators as long as it's not something really offensive such as ... Hank Paulson

Anyway, since, in private messages from Fred I have been warned to stop questioning the iTulip positions (even suggested I should get my own internet site ) and the honorary title was received after the TIPS exchange with Fred, I think it's obvious I should refrain from now on to exercise any criticism (with or without sarcasm) of the official iTulip positions.

Since this is a commercial site, I believe it's fair to accept the owners of such site should have the right to decide what views are expressed here and to have a monopoly of exercising sarcasm is they so desire.

[phirang]

Re: EJ's next bubble

This is you personal opinion metalman. This thread became mangled because of your trolling intervention and it was intended to be a discussion of the current Alt_E evolution in the context of the Alt_E bubble which was predicted by EJ (hence the title).

Your whole point was to try to pit me against Fred and EJ and after that complain to them I'm a troll that is mocking them and should be "terminated". I have to acknowledge you had some partial success there.


I believe it's clear now what it the crux of the problem. Sarcasm and cynicism is good as long you are not on the receiving end of it. Since, you have been on the receiving end quite a few times, in exchanges with me, pathetic lady doth evolved into grudge.



I believe that your idea of having fun is to use cheap and abusive shots at newbies, from the protected cover of the self-styled ultimate defender of EJ and Fred. Probably it helps to nourish an over sized ego with a delusion of importance.

But, do you think EJ and Fred need others to defend their ideas? Do you really believe that they need you as a self-appointed enforcer of thought? I doubt that.

To my knowledge, whenever EJ and Fred have a point to make, in order to support their views, they make that point themselves. I don't think they need self-important chihuahua-style volunteer security guards.


First, wake up. You are not EJ.

I'm sure you will not miss me and your over sized ego will be partially healed by a petty victory. Meatlman, you are too obsessed with Oscar Wilde and what you are doing now is strikingly similar to an ego struggle of A woman of no importance


No problem. I could care less what title I get from the administrators as long as it's not something really offensive such as ... Hank Paulson

Anyway, since, in private messages from Fred I have been warned to stop questioning the iTulip positions (even suggested I should get my own internet site ) and the honorary title was received after the TIPS exchange with Fred, I think it's obvious I should refrain from now on to exercise any criticism (with or without sarcasm) of the official iTulip positions.

Since this is a commercial site, I believe it's fair to accept the owners of such site should have the right to decide what views are expressed here and to have a monopoly of exercising sarcasm is they so desire.

The real men go to tickerforum to brawl it out... none of this whiny crap.