Financial topics

[Trevor]

“There was nowhere for the market to go but
up.”

That sounds exactly like what economists were saying in 1930. Things had slipped badly, but the market couldn't possibly go any lower than it was. As it turns out, that wasn't true, just as it isn't this time around. The only thing we haven't done yet is pass something like the Smoot-Hawley tariff, and based on some polls I've seen, something like that would be popular among democrats and republicans alike.

btw, I know this might be a little off topic, but I had a thought as to why it's been 91 years since Mexico's last crisis war: immigration to the United States. We've got over 10 million who have arrived to this country over the past decade or so and that's just counting the illegal immigration. If you count legal ones, it's probably a few million more.

I was thinking that moving to this country could be serving as something of a safety valve for Mexico. If they come here, they have more opportunity instead of being stuck in poverty in Mexico, helping to lessen the pressures.

[John]

> btw, I know this might be a little off topic, but I had a thought
> as to why it's been 91 years since Mexico's last crisis war:
> immigration to the United States. We've got over 10 million who
> have arrived to this country over the past decade or so and that's
> just counting the illegal immigration. If you count legal ones,
> it's probably a few million more.

> I was thinking that moving to this country could be serving as
> something of a safety valve for Mexico. If they come here, they
> have more opportunity instead of being stuck in poverty in Mexico,
> helping to lessen the pressures.

I think that's true, also because of the remittances that Mexican
workers in the U.S. send back to their families.

Another possible safety valve is the income from oil. Two other
countries with very long inter-crisis periods, Saudi Arabia and
Morocco, also have almost 90 year inter-crisis periods, and also
have a lot of income from oil.

However, Turkey also has a long inter-crisis period, and there's
no oil there.

John

[Trevor]

At least at one time, where Mexico also received a lot of its money was tourism primarily from the United States. However, since the drug wars started, that has all but disappeared. In 2011, about 16,500 people were killed in them, indicating that things down there are falling apart at an accelerating rate.

I've heard estimates as high as 17 million Mexicans coming to the United States over the past decade, most of whom sending at least some money back home.

Course, the length between our crisis wars seems to be considerably higher than the average as well. The three mid cycle periods are 97, 79, and 76. Perhaps the lack of a major threat or fault line can be a factor in longer lengths as well.

[aedens]

http://www.piratemyfilm.com/projects/311
http://www.youtube.com/johnu78

[Higgenbotham]

There are real time tracking services that automatically keep track of trades. A few months ago, I noticed a little known advisor who was growing his pot of money consistenty at a fast rate - about 50% per year. I took a subscription to his service. His method is technical, but he watches news too. He's very smart and has been in the business for a long time.

Early in January, he said the trend was changing to bull and to get long. On his service, he gives all the trades in real time, then the tracking service gives the return. He's done quite well this past month.

That's the background. So tonight he said the stock market looks absolutely perfect today. He said all his indicators are positive. Everything looks to confirm buy mode. Then he said he wondered if things might be too perfect.

[OLD1953]

Just read in the news a few days ago about an 87 year old lady who retired from the state dept. While it's not that many, there are still some people from that WWII era that are working and influencing decisions in the modern world. This is a part of the reasons for extended time frames, IMHO, as people in their 70's and after that were still working and influencing events were a much smaller percentage of the population 80 years ago. In 1930 persons over 65 were about 5.4% of the population, now it's over 10%.

http://transgenerational.org/aging/demographics.htm

Higgs, I know exactly how that advisor feels. I've missed out on some major money by sitting on the sidelines, but frankly I'm afraid of losing the lot. The markets were getting very scary in 2006, because they'd decided to ignore all long term problems and fundamentals and just focus on indicators and projected forwards earnings. This looks much the same to me. I think we will get that second dip relatively soon, and nobody knows what will trigger it.

[John]

I just heard Kramer on CNBC say that people are stopping him
on the street saying, "How do I get some Facebook?"

He said he's never seen anything like it.

Then he said, "It's just like 1999."

John

[vincecate]

Once again Bernanke opens his mouth and silver is up about 2%.

My theory is that nearly every time Bernanke talks in public silver will be up till well after hyperinflation has clearly started.

http://money.cnn.com/2012/02/02/news/ec ... ?hpt=hp_t2

http://www.silverseek.com/quotes/fivedaysilver.php

[Higgenbotham]

Higgs, I know exactly how that advisor feels. I've missed out on some major money by sitting on the sidelines, but frankly I'm afraid of losing the lot. The markets were getting very scary in 2006, because they'd decided to ignore all long term problems and fundamentals and just focus on indicators and projected forwards earnings. This looks much the same to me. I think we will get that second dip relatively soon, and nobody knows what will trigger it.

If they're using technical indicators, that in a nutshell means they want to buy because someone else is buying. There's no sound basis in that unless prices are low. If someone had some indicators back when gold was at $300 and those indicators somehow indicated that knowledgeable people were accumulating gold, that would be meaningful. I don't think indicators that may be saying people are high frequency trading stocks are indicative that those participants should necessarily be followed. Nonetheless the fact remains that for whatever reason they have been buying and are buying and what happened yesterday is likely to continue tomorrow until it doesn't.

The "golden cross" says that prices were higher on average for the last 50 days than they were for the last 200 days. As I think about that and ponder that, it might have been meaningful when this economy was in a real cyclical recovery to think that once the 50 crosses up there was real sustainable cyclical economic expansion going on that would likely continue. But in this environment it doesn't mean that to me - I think it means investors were more excited in the past 50 days than they were in the past 200, on average. In fact, it might be a reason to sell.

[aedens]

The fed released reality last year.
http://wheatatlas.cimmyt.org/