The Fat Lady Sings

[Andreuccio]

Re: The Fat Lady Sings

I won't say you didn't warn me. I'll just say you didn't tell me where to put my money. I believe that stocks are due for a (continuing) crash. I have seen the proverbial iTulip light. I just don't know where the safest places to have my savings are for the time being.

Are we perhaps seeing PMs rising (decoupling) due to shorts covering, and/or are burned investors seeking shelter there? Or are PMs headed down, too? Will the Fed try to inflate our way out of this (making cash a less attractive place to be and pushing up nominal asset prices)? What about inflation-indexed T-bills? Seems like a good shelter to me, even with the rigged CPI.

Answers? Guidance? EJ? Fred?

THANKS!

Jimmy

Read the book EJ co-authored: America's Bubble Economy. It has a suggested allocation. I don't have it in front of me, and I don't remember the details, but it was something like 30% gold, 40% Euros, and the rest cash in dollars. Maybe somebody else can provide the correct assets and percentages.

[Guest]

Re: The Fat Lady Sings

(Comment: Growing public doubts about the rationality of "safe haven bonds" - a perception shift which iTulip has suggested could be an early warning signal of an approaching significant bid on Gold, are generally expected to appear only at the far side of KA, or otherwise years from now, and this past two weeks market events are thought to be the just the start of a significant deflationary interlude.

According to Jim Sinclair, who is clearly partial to metal as hard money rather than the senior currencies, the earliest hints of that public doubt regarding the viability of bonds as "safe" from the inevitable CB liquidity response may in fact already already be here:

_______________________

Posted On: Thursday, August 09, 2007, 1:39:00 PM EST at the Jim Sinclair website :

Dear CIGAs,

I mentioned on my gold chart that there is a supposed flight to the safety of bonds that is taking place today amidst the general turmoil in the markets and that is supposedly giving the dollar a boost. The problem with that analysis that I keep hearing today is that the bond market has barely moved in price this morning and for all practical purposes is trading nearly unchanged as I write this. Previous drops of this magnitude in the equity indices have seen bond and note prices move sharply higher.

We might be seeing some folks putting two and two together and realizing that massive injections of liquidity are not exactly conducive to the health of bonds as such sets the stage for rampant inflation as Monty has detailed for us earlier today?

_______________________

(Comment: "Massive injections of liquidity" by the same token are not exactly conducive to the health of the Euro or Dollar either).

[jimmygu3]

Re: The Fat Lady Sings

Read the book EJ co-authored: America's Bubble Economy. It has a suggested allocation. I don't have it in front of me, and I don't remember the details, but it was something like 30% gold, 40% Euros, and the rest cash in dollars. Maybe somebody else can provide the correct assets and percentages.

Thanks, Andreuccio. I have the book at home and I'll brush up on it this weekend.

Jimmy,
Obviously the only thing to do would be to send me your money and I'll make you richer than Howard Hughes a week from next Thursday, I guarantee it and you won't find a better guarantee anywhere else. PM me and we'll work out the details. Thanks.

Tet, that's wonderful news! FYI, I am a jailed Nigerian Prince. I will happily send you certified funds of $1M as soon as you pay the transfer fee of $23,000. ;)

I am not asking for a crystal ball or a detailed analysis of my personal investments. I hardly think that seeking "safety" means I expect to be Howard Hughes in a week. However, when someone of great knowledge and insight like EJ says, "Don't say we didn't warn you", but neglects to give even a general action plan, I think it leaves questions to be answered.

Jimmy

[Finster]

Re: The Fat Lady Sings

(Comment: Growing public doubts about the rationality of "safe haven bonds" - a perception shift which iTulip has suggested could be an early warning signal of an approaching significant bid on Gold, are generally expected to appear only at the far side of KA, or otherwise years from now, and this past two weeks market events are thought to be the just the start of a significant deflationary interlude.

According to Jim Sinclair, who is clearly partial to metal as hard money rather than the senior currencies, the earliest hints of that public doubt regarding the viability of bonds as "safe" from the inevitable CB liquidity response may in fact already already be here:

_______________________

Posted On: Thursday, August 09, 2007, 1:39:00 PM EST at the Jim Sinclair website :

Dear CIGAs,

I mentioned on my gold chart that there is a supposed flight to the safety of bonds that is taking place today amidst the general turmoil in the markets and that is supposedly giving the dollar a boost. The problem with that analysis that I keep hearing today is that the bond market has barely moved in price this morning and for all practical purposes is trading nearly unchanged as I write this. Previous drops of this magnitude in the equity indices have seen bond and note prices move sharply higher.

We might be seeing some folks putting two and two together and realizing that massive injections of liquidity are not exactly conducive to the health of bonds as such sets the stage for rampant inflation as Monty has detailed for us earlier today?

Sinclair is usually best ignored, but he's firing on all cylinders here. UST's *should* have rallied more than they did, and after several months of punk performance gold is acting a little spunky. Which is as it should be; when it looks like the CBs are panicking and starting to throw money around (after months of tough talk about inflation), gold should outperform.

[EJ]

Re: The Fat Lady Sings

I won't say you didn't warn me. I'll just say you didn't tell me where to put my money. I believe that stocks are due for a (continuing) crash. I have seen the proverbial iTulip light. I just don't know where the safest places to have my savings are for the time being.

Are we perhaps seeing PMs rising (decoupling) due to shorts covering, and/or are burned investors seeking shelter there? Or are PMs headed down, too? Will the Fed try to inflate our way out of this (making cash a less attractive place to be and pushing up nominal asset prices)? What about inflation-indexed T-bills? Seems like a good shelter to me, even with the rigged CPI.

Answers? Guidance? EJ? Fred?

THANKS!

Jimmy

Unfortunately, there is no such thing as a one-size-fits portfolio. You circumstances are not DemonD's or Jim's, for example.

What we do at iTulip is tell our members what we think is going to happen. We put a lot of work into figuring that out. We talk to and interview hundreds of people that we have unique access to. (For example, got a call this AM from a friend a major investment bank suggesting that I warn iTulip readers to check the health of their money market accounts. Some are down 20% in Europe. At times like these, don't assume $1 is in your MM account is like $1 in the bank.) We do a lot of analysis and write frequently on our findings. We don't follow anyone but what our research and analysis tells us. Our track record speaks for itself.

After we explain what we think is going on and believe is going to happen, we provide a unique place–this forum–where an unusually smart group of folks in the community work together to figure out what to do with the information. What each member does with the information is individual depending on factors such as age, risk tolerance, assets, cash flow, etc. There is not such thing as a portfolio response that fits everyone.

When iTulip says housing is a top in 2005, you probably want to sell your house if you have a big ARM and are not in a position to weather a major price drop and higher rates. But iTulip is not going to say, "It's a top! Sell your house!" because that doesn't make sense for everyone. I didn't sell my house at the top. I live in it, own it, and don't view it as an investment. If I'd owned any investment properties I'd certainly have sold them in 2005.

If iTulip says that the stock market is likely to crash soon, then maybe the stock market is not the place to be for a while. Cash seems like a logical alternative. With some money market funds backed by junk, maybe money market funds are not the place to be but in CDs and U.S. Treasuries. You may have noticed that we offered a lot of info on CDs in the subscriber section over the past few months. But we're not going to say, "Sell your stocks! Buy these CDs!"

Our philosophy is that smart adults armed with uniquely valuable information about the direction and dynamics of markets do not need to be infantilized with "buy this sell that" information that may not apply to them. Some of our readers choose to pick up nickels from in front of the steam roller along with the hedge fund boys. Power to you. Some of you will even get away before you're run over. Nothing wrong with that.

I have said repeatedly that I am mostly in CDs and U.S. Treasuries, with a 15% gold position, have no debt, and have 5% speculative positions–see my portfolio on Top Investors above for that and note I'm not much of a short term speculator. All this means is that if you were in my shoes, had my risk tolerance, are my age, have my debt position, and so on, that might be right for you, too. Or maybe not.

[Andreuccio]

Re: The Fat Lady Sings

Tet, that's wonderful news! FYI, I am a jailed Nigerian Prince. I will happily send you certified funds of $1M as soon as you pay the transfer fee of $23,000. ;)

Jimmy

You might enjoy this conference: http://j-walk.com/other/conf/

[Guest]

Re: The Fat Lady Sings

Finster -

30-year Treasury auction was 'poor and sloppy'
By Wanfeng Zhou MarketWatch
8/9/2007 01:13:58 PM


You think Jim Sinclair, and those of us who regard him as astute, are gazing in the right general direction? It's very heartening to hear that you agree.

[Ed]

I was struck by this:

A day or two ago Pres. Bush volunteered to the effect:

Another thing that is important is that there is enough liquidity in the system for markets to correct. ... I have been told that there is enough liquidity in the system for markets to correct.

He appeared to maybe be reading the first sentence.
The plural, "markets", was used both times.

I was struck by all that, from a U.S. President, maybe reading the first sentence ...

[Finster]

Re: The Fat Lady Sings

I won't say you didn't warn me. I'll just say you didn't tell me where to put my money. I believe that stocks are due for a (continuing) crash. I have seen the proverbial iTulip light. I just don't know where the safest places to have my savings are for the time being.

Are we perhaps seeing PMs rising (decoupling) due to shorts covering, and/or are burned investors seeking shelter there? Or are PMs headed down, too? Will the Fed try to inflate our way out of this (making cash a less attractive place to be and pushing up nominal asset prices)? What about inflation-indexed T-bills? Seems like a good shelter to me, even with the rigged CPI.

Answers? Guidance? EJ? Fred?

THANKS!

Jimmy

The point EJ made above about the importance of individual considerations in your investment policy hardly needs amplification, but is hard to overstate. If the outlook for is for stocks to fall, the best one can honestly recommend is to hold less stock than you otherwise would.

We can make informed guesses about what markets will do, but they are always probablistic. What you know about you own circumstances and goals, however, is not. If you bought a home in 2005, paid cash for it, and did so because you wanted to live in it - and not with the intention of someday selling it and using the proceeds for something other than a home - you did something entirely different than someone who took out a big mortgage and figured on selling the house a year later to fund his kid's college education. Or suppose you were a US government employee who is entitled to a civil service pension. That's a lot like having a big slug of UST bonds in your portfolio. Advising you to load up your discretionary portfolio with UST bonds without taking that into account would be irresponsible. And when will you need the money? A portfolio for liquidation ten years from now would look very different than one earmarked for next month. Not to mention that you could never be sure even in the ten-year case that some emergency might not arise requiring partial liquidation next month anyway. These are only some examples of factors that impinge on your investment strategy.

[Finster]

Re: The Fat Lady Sings

Finster -

30-year Treasury auction was 'poor and sloppy'
By Wanfeng Zhou MarketWatch
8/9/2007 01:13:58 PM


You think Jim Sinclair, and those of us who regard him as astute, are gazing in the right general direction? It's very heartening to hear that you agree.

Sure do, Lukester. Especially since this is in the larger context of what may be a generalized decline in financial assets. Remember that the late great bull market of the eighties and nineties was shared by both stocks and bonds. They didn't advance at the same time by the amount - more or less taking turns going two steps forward and one step back - but the broad sweep was upward while gold and other commodities went downward. If that general pattern has truly reversed, we would expect the opposite - bonds may advance when stocks decline, but less so, and vice versa.

[Ed]

Re: I was struck by this:

Re. the preceding post's words of Pres. Bush, I found:

After meeting with Treasury Secretary Henry Paulson, President Bush went before the cameras for a second day running to say that the U.S. economy was strong and that credit was plentiful.
Asked about recent market volatility, Bush replied, "I am told there is enough liquidity in the system to enable markets to correct," a clear indication that the government wants to see the markets solve their own troubles, analysts said.

[Finster]

Re: I was struck by this:

Re. the preceding post's words of Pres. Bush, I found:

After meeting with Treasury Secretary Henry Paulson, President Bush went before the cameras for a second day running to say that the U.S. economy was strong and that credit was plentiful.
Asked about recent market volatility, Bush replied, "I am told there is enough liquidity in the system to enable markets to correct," a clear indication that the government wants to see the markets solve their own troubles, analysts said.

If so, a refreshing departure from established policy ...

[jimmygu3]

Re: The Fat Lady Sings

Thanks for the response, EJ. I really appreciate all that you and the iTulip community do.

Jimmy

[Rajiv]

The Reason whyThe Fat Lady Sings

I hope EJ is prescient, or rather has gathered enough insight to seem prescient.

Look at my post in Sapien's thread "Banks are bankrupt, Lenders of last resort act!"

Here is the graph from the post

[FRED]

Re: The Fat Lady Sings

Tomorrow, the fat lady screams.