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Court, you are DEAD on target with that article on CDS's.
When a bad bet is made at the track, the gambler goes home with empty pockets. If it breaks him & he can't hold up his obligations financially, he suffers the consequences which,in a capital society, are brutal.
When a good bet is made at the track, the gambler leaves with full pockets & enjoys the fruits of capitalism. Our society will seek him out in order that he will transact with him. He's the "god".
The fruits of CDS activity, much heralded by Greenspan, made godlike institutions that bordered on financial genius.
But, when genus fails and the bets go bad, our government decided to make those bets good... not knowing the extent or size of the bets. If all this bailout is merely to keep the gambler at the racetrack and keep his pockets from being empty, then we are merely FUNDING our godlike perception of those institutions and pushing the very core of capitalistic values to the wayside.
The size of the bets are too big. The attempt to fund the bets will chisel down our economy for an extended period of time. It will reach through all four or five generations now alive, and then will extend to those yet unborn.
If every bank that participates with the government KNOWS that any profits it makes will go back to the government, where is the incentive to prosper? This is what happened to Japan... their businesses understood that all prosperity went to repay the government for old bad loans. And, with that understanding, what progress has been made for over a decade?
That lesson was NOT learned.
Actually, you're wrong.
Barrack O'Bama can do more damage. Anyone with the initials "B.O." lays down the tea-leaves of our future press!
"When BO entered the room, silence came upon the crowd"
"Deoderant commercials pulled from television when executives were accused of political smearing by endorsing the eradication of BO "
"Popularity of BO takes a nosedive"...
I cast my little ballot today... and since I have spent a LIFETIME making SURE that BO was NOT part of my daily life, I cast my vote accordingly....
My take?
The Fed can (and "does") intervene in the markets. This is just four days before the election and, though I'm not sure, it reaks of political intervention for that "feel good about the world" vote on Tuesday. If I had the tools that Mike & Nick have, I would have a stronger opinion. But, if I'm reading both of their posts correctly, they are highly suspicious of this rally.
On top of that, the markets usually rally in November (regardless of reason; regardless of bad news). It could be that, once again, we can say "if you're not in the market by Thanksgiving, you missed the biggest part of the move". It makes for no logic other than traders anticipating it, trading it, & then, by shear anticipation & trading, the market moves up. No other reason that I have ever been able to figure.
Then, again, the Jan-Feb time period has proven brutal when news such as we are digesting is out & about. I fully anticipate that brutal market revisiting us in Jan/Feb.
You called THAT 'hammer' right! Early this morning, Bloomberg was all over the anniliation of Volkswagons share price in Europe. Of course, I remembered you posting this.
Good tea leaves, Nick!
AA is now at 9.22; GE @ 18.00.....
My eyes are watering soooooooooo bad, I almost can't type! This us HYSTERICAL !!!
Gaaaaaads, I'm choking! LOL!
LOL!!
We spend the better part of the day writing to our diamond toothed pimp???
Gaaaaadss! MY SIDES HURT!! This is just tooooooo funny!!
LOL!
As of July (at the Vancouver Symposium), Rogers stated very clearly that he was in Swiss, Canadanian, & other currencies (about 4). His girls have Swiss bank accounts. He did mention that the Singapore currency was strong, but did not indicate whether he invested in it.
Unless you know otherwise, that's the last I heard.
How the heck are you??? !!! And, my guess is that as excited as we all were yesterday morning, my answer would have to be the "lot of us!". Richard was the most "keyboard vocal", but the atmosphere here (the minute I hit the office door "totally exhilarated") became charged with excitement in just a few minutes. I was sooooooo excited! I could have kissed every one of my employees & never turned red with embarrassment!
When it didn't happen, I sunk in my chair. Then, Bill (with great timing) posted "The end of the world was rescheduled to a later date".
Not only was that funny, but it gave me the Scarlett O'Hara hope that "tomorrow is another day!". Dannnng... tomorrow must be Monday cuz my calendar says it's Saturday. The wait begins....
I just sent Nick an email asking him if I could trade alongside him starting in the near future. I saw that he got AA @ 9.50 yesterday afternoon & I about died. Who would EVER think AA would get to 9.50????
Will you be back? Are you still trading but not posting???
How's the family??? Gaaaaaaaads, Alan, I can't tell you how many times I thought about you as the oil market went sky high. I realize that I've asked a bunch of questions, but we sure do miss those "tell it like it is" posts.
Soooooo glad to hear from you!
Actually, that wasn't fair. Rogers made a killing shorting the market. Where he may have gone wrong was to pull down the shade on America.
He moved his family overseas, is deeply invested in Asian business, has taught his child Chinese (fluently), and recommended that all Americans learn Chinese as a second language. This advice is not really bad because China is such a profound manufacturing base. But, in a recession for the manufacturing base, I don't think I would want to live among billions (not millions) of disgruntled folks. That could get scarey to say the least. I actually think it would be safer to live here.
The key is "Jim". Cramer... Rogers... when all is said & done, their advice is "Jim's Junk"... "JJ" for short . OR is that 'short whatever JJ says'??
Gaaaaaaads! I can see you dancin' !!!!
And, if anyone has those two things, I wonder who (on this board) it might be? :)
Thus the truth of Bill's post. Monday & Tuesday will tell all.
Actually, it's National City.
We had our farm account there & moved it 7 months ago.
Glad about that.
Very true!
If today is what we think it might be, it's going to break all records for time periods/market percentages, for monthly Market Activity, for volatility.
If nothing else, I can watch this occur with a blast from the past "nerves of steel".
Thank you Court.
From a Slate article (Oct'03): "The Baltic Dry Index (BDI) is a good leading indicator for economic growth and production. After all, it doesn't deal with container ships carrying finished goods. It deals with the precursors to production: bulk carriers carrying building materials, cement, grain, coal, and iron. Unlike stock and bond markets, the BDI "is totally devoid of speculative content", says Howard Simons, an economist and columnist. People don't book freighters unless thay have cargo to move".
With that said, check out these BDI charts. I especially honed into these:
BDI/CRB
BDI/Copper
BDI/ 10-year
In each of these charts, the BDI is at the lowest level in years and, to boot, is behaving at a chart extreme. And, if this behavior is a precursor to economic activity, it certainly looks like it is hitting and in some cases 'overshot' bottom.
What are your thoughts?
http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm
I have to think about this. On the surface, it looks good.
If you were to put a ridiculously low buy limit on a stock, then if it hit that level your trade would execute.
If you were to sell a put at that ridiculously low price, then you would get the payment for the 'put'. If the stock hit that level (& the sold put was exercised) then you would get your stock & be paid for buying it. Is that right?
And, isn't that the naked 'put' that is so discouraged? Do I have that right?
They entice the cardholder into a cycle of "over the limit" fees, "late payment fees", "no payment fees" and a high interest rate on top of that.
If they succeed in keeping the cardholder running that cycle, they make a bundle. If this game is played on low-risk cardholders, then the principle almost always gets paid... but they get the fees & interest in the meantime. It is the windfall that they can 'entice' to happen (as in the carrot extended to Richard). It's a betting game that has made them rich. Why? Cuz "life" gets in the way for cardholders.
Even in good times, credit card companies were hard to deal with. I was shocked that they would give you your LOC at zero percent. That carrot was extended exactly for the reason you said: they are betting that you fail and you, if you took the money, you would have been betting that you succeed. What a game. Glad you can see right through it. Just "life" puts the odds on the CC side. They would make a bundle.
If I'm right (that Jan/Feb will be brutal in the market), we will see carnage on many fronts. More concerning would be the failed Christmas which, given low consumer spending, would put many businesses out to pasture. The job market will suffer to a deep degree.
This morning on Bloomberg, I caught the last half of a tidbit whereby they stated that sources estimated that less than 2% of the college graduating class will get jobs after graduating. You know that this "unemployed" sector (should it play out like that) will never be counted as they do not qualify for unemployment benefits in the first place.
You got that horizon right!! You gotta eat for the next 35 years & (trust me) food won't be cheap!
That's why I am sooooooooo excited about the indexes re-visiting the late 90's level. Hmmmmmm.... if we roll back time, that means that George is 56... with 45 years ahead of him... poundin' the table to go to Africa again. Now then, given those 10 years back with all the investing experience and knowledge you've learned since then, you have the advantage... and you can view the landscape from a higher knowledge level.
That is, in my opinion, an opportunity not to be ignored!
I was reading Eric's link on shipping & read the comment section below the article. That's usually a waste of time, but I came across the following post. I was curious as to what you might think of this tactic.
[All writing below is from a different writer... NOT from me...]:
"A more conservative approach is to sell SHORT TERM well out of the money puts (preferably below strong support levels) on stocks you're interested in owning anyway. Then if the market continues lower and you get assigned the shares, you have them at a steep discount.
On the other hand, if the options expire, you keep the premium. In other words, you're getting paid to wait to get a great deal!
I personally am doing this exact strategy with major gold stocks. With the massive amount of new $$$ introduced into the system (highly inflationary in the long run), I will be glad to own Gold Shares at a steep discount and I'm getting paid handsomely in the meantime. "
Actually George, I may have been unclear.
The reporting covered "general trade" versus "consumables". Oil & coal have necessary societal consumption for electricity & fuel... traffic continues in those consumables, but with a large reduction of traffic. On the 'general trade' front, it was reported that it had almost come to a standstill (due to inability to get banks to issue letters of credit).
What my father confirmed to me was that 1) there is a big reduction in oil tankers and 2) the 'general trade' tankers just were NOT out in the waters.
I don't know what this means for trade deficits as we are only looking at two area harbors, each on opposite sides of the Pacific. In other ports/harbors, it may be better (I just don't know). But, in general, I think that the concept of a 'rapid decline in trade' came through loud & clear.
Ooooooops...
JW is always on me for those adjectives. When he sends flowers or surprises me, I would blurt out that "Ohhh, that's soooo sweet!". He has an immediate reply, always in a low voice, always with an emphatic tone "I'm NOT sweet. Guys are NOT sweet".
This is to say that if you wanted to say "I'm NOT a jewel. Guys are NOT jewels", you do NOT have to say it! I already hear it in my head.
LOL! Someday, I'll learn.....
What a jewel! THANK YOU!
Yes, and I saw you took her for a 5% + dance...
That's an "instant rebate" on faith, no? She likes you, she's a-l-w-a-y-s liked you.
Doggone, Nick. I wasn't born it the 40's! Neither was Richard... so, I guess "it has never happened to us before", no?
Also wanted to discuss something...
Toggling through three financial networks last night, I came upon an interview with a very articulate gentleman giving solid perspective on the global shipping situation.
He candidly described Asian harbor traffic as coming to a standstill... harbor traffic limited to consumables such as coal & oil... and spoke of interviews with those Asian's tied to that business activity. The problem? No one can get a letter of credit to move a ship. Money is frozen.
On the flip side, my father has a bird's eye view of the Los Angeles harbor... all the way from San Pedro to Huntington Beach. He says that there are usually 10-25 tankers anchored outside the harbor awaiting entry. This includes oil tankers.
Presently, there are NO tankers anchored outside the port and deliveries by oil tankers are reduced.
That's a bird's eye from both sides of the Pacific. I have no idea what the situation is along the Atlantic or elsewhere.
Back to the point: the commentator said that once the credit freeze lifts and the ships begin to move again, the investing opportunity of a lifetime will be before us.
Because he was in shipping, I can only assume he was either speaking of shipping company's, ship builders, steel, and the like. This would be very interesting to follow.
Richard, your posts today are sooooooo refreshing.
What absolutely pounds my head is the myriad of books, movies, television series whereby folks just "wish they could turn back time". It never happens... times marches on. But, oddly, in the financial world "time" really IS turning back with a bigger business base, far more population, fewer natural resources, and far more opportunities than in the past.
To recognize the opportunity to apply everything we have come to learn about the pitfalls and successes over the past ten years to a financial world with indexes brought down to levels not seen for 10+ years, is truly "turning back time".
That's never happened to us, has it? And, since it IS happening, what to do about it??!!
I certainly have some ideas... and I intend to "DO" something about it. It's not what people "say", it's what they "do".
So have I. I moved another 10% into the market Tuesday. So far, that's one day early... but I'm not concerned.
The overriding truth for anyone 40+ years old (and that includes late 50's & early 60's) is the opportunity to turn back time.
If you roll back 10 or 11 years in your life (completely knowing what developed thereafter), what would you have done with your investments? All the woulda, coulda, shoulda's of each investor live within that investor.... and now, with the indexes flashing late 1990's, the opportunity to re-address all the "woulda, coulda, shoulda's" is starring us in the face. I'm excited about the opportunity because I believe in our country & it's ability to be resilient.
Damned the politics, I'm betting on the populace.
I'm very excited about our future as a country because Americans need a hit in the forehead and knocked down every once in a while to correct the imbalances. Once knocked down, watch out when they get back up.
Just ranting. And, from all I've read elsewhere, DOW 7200 has great, great support. This is NOT from me, but rather from chartists I've followed for more than a decade.
And, from the Agora Five Minute Forecast:
"French President Sarkozy suggested today that European nations create their own sovereign wealth funds. Sarkozy noted that many blue chip European companies are selling for pennies on the dollar, and that it would be best if European nations buy them up before the oil-rich Middle East swoops in."
"I wouldn't want to see European citizens wake up in a few months and discover that a European company is owned by non-European investors who bought at a rock-bottom price," Sarkozy, current holder of the 27-nation European Union's presidency, said. "The opportunity might be there to create our own sovereign wealth funds". "
From Perma Bear Bill Bonner (who believes, and makes good argument, that the dollar and ultimately Treasuries will be toast):
"Stocks will probably do better than cash over the next 10 years," opines Bill Bonner, "but mostly because cash will probably do very badly. Our guess is that everything will do better than cash. Except bonds -- which represent cash deferred into the future.
"When Mr. Market goes into a sulk, he takes a long time to come out of it. Real bear markets last 10... 15... 20 years. Judging by the meltdown in the financial sector and the rapid losses we've seen over the last three weeks... we have a real bear market on our hands…
"With no more easy credit available to them, consumers are doing what they have to do -- they're cutting back. How much? For how long? No one knows the answers to those questions, but our guess is this: more and longer than you thought."
LOL!!! That was r-e-a-l-l-y prophetic! Good goin' Nick!!!
Hey, I wrote a request to the master chartists to update their 145 year (1850 to 1995) chart on the price of copper. Of course, copper has always been and excellent economic indicator for the economy. The chart is shaded vertically with the periods of recession/depression and certainly reflects recessionary periods after the price of copper peaks.
Having a one-on-one experience with the latest round of 'peak', history should repeat itself in short order.
If they update it, I will do my best to learn how to post it as it would be very interesting to study.
In the meantime, do you remember Cindy's white leather couches? Hruummmphhh... "we gots the brown version"... took a few years, but tractors & equipment come first. Cindy would be proud of me ! And, boy, am I happy camper!
Well, she's dancin' with a 5.09% increase today moving into the earnings announcement. Wonder if this will be a sell the news once earnings come out...
Ohhhhhh, danggggg. Another woulda, coulda, shoulda.
Who'da thunk it?? !!!
Check out the Adjusted Monetary Base...
Arghhhhhhh...
http://research.stlouisfed.org/publications/mt/page3.pdf
You don't view the lows in Ms Lilly as a buying opportunity? I would think she was the r-e-a-l 'babe' thrown out with the bathwater. She's solid, but trading far lower than where we came to love her in in the early 2000's. If memory serves me, I made some of my most solid gains on her. I don't understand why that 'solid' performance wouldn't repeat.
I obviously am honed in on the share price, but don't want to be misguided. You hold it in your core portfolios with price recovery hopes, no? That sends a strong signal to me ( smile ) that the price appreciation is bound to happen. If you were in the position to establish a new holding (having none already), then what would be your price point? I can certainly trade around a new holding with good success (fingers crossed).
On JNJ, I like your response!
Nick, in general, what is your feel for longterm appreciation in Merck, PFE, Ms Lilly, and JNJ? I noticed that Ms Lilly is out of favor with you.. did I understand that right?
And, if you get time this volatile day, do you have some good entry points on these four?
He knows me. So does every other person on this board... some for more than nine years.
They also know that I am neither a character assassin nor a medler and, if I said that I was trying to find out what point you were coming from, then that's EXACTLY why I bothered to look at prior posts. What was unclear was your age and, as you have cited here more than once, experience gives weight to the words. The older you are, the more weight your words carry because they combine with experience.
This progression of postings is NOT anything that I would ever wish to befall Nick's thread. I do not intend to address it again.
Gaaaads Elroy,
Member Since: 2002
Age: (@ 2002) 54
2002 less 54 is 1948.
Just quit it.
Here's your post.
If you had put proper quotation marks, then ANY READER reading this post would NOT have attributed it to you. I, however, read the post at a random click & (due to lack of quotation marks) thought your narrative was from you.
The bottom line is that I can add. The problem was your manner of posting. And (yesterday), the problem was that you didn't read close enough.
Your sharp needled responses are unfortunate. Never fear, I have a bolt cutter.
Go ahead & read the post, but I'll bet money you don't apologize. It's your post# 33721.