Financial topics

[aedens]

http://www.atimes.com/atimes/Middle_East/NB17Ak04.html
Anyone betting on clueless European politicians and their sherpas understanding this is hardly guaranteed to hit a jackpot.

Understanding how someone operates allows you to calibrate their responses.

The Dunning–Kruger effect is a cognitive bias in which an unskilled person makes poor decisions and reaches erroneous conclusions, but their incompetence denies them the metacognitive ability to realize their mistakes. The unskilled therefore suffer from illusory superiority, rating their own ability as above average, much higher than it actually is, while the highly skilled underrate their abilities, suffering from illusory inferiority. This leads to the perverse situation in which less competent people rate their own ability higher than more competent people. It also explains why actual competence may weaken self-confidence: because competent individuals falsely assume that others have an equivalent understanding. “Thus, the miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others.”

I had been reminded with two ears and two eyes that speaking at times is more than it can be worth. Oh well....

[John]

It's really breathtaking, but it appears that some kind of deal on the
Greek bailout is going to come together on Monday.

Almost every politician involved has changed his position 180 degrees
in some way. It just goes to show what can happen when politicians
are desperate.

Now all we have to do is watch for the unintended consequences.

John

[aedens]

I wish them well as we all do. Ideologues can be severe. I caught an article some time back on the second
http://en.wikipedia.org/wiki/9_Thermidor go round of political strife as Egypt is going through currently.
Is it just another illusion of choice...

[Trevor]

Yeah, they'll be overjoyed because they finally came up with a plan to save the euro. It'll last for a few days until they realize that the deal hasn't really solved anything.

BTW, the cost of the Credit Default Swaps for Portugal are where Greece was just 5-6 months ago.

[John]

BTW, the cost of the Credit Default Swaps for Portugal are where
Greece was just 5-6 months ago.

So why have Portugal's bond yields fallen so sharply in the
last three weeks?



Is it just the LTRO, or what?

John

[Trevor]

Somehow, I don't think that's going to be a permanent condition. I've looked at how much bonds have changed over the past year, sometimes just within a couple of days.

File:Sovereign credit default swaps.png

[aedens]

Here’s an excerpt from a Forbes earnings preview story about Barnes & Noble, written by the computer program:
http://www.mediabistro.com/galleycat/fo ... ers_b47243
Seeking Alpha article:
Even the ridiculous Barron's headline this weekend calling for DOW 15,000 (the story hypes all the way to 17,000) should not drive an investor to get bearish. Barron's uncanny and notorious ability to call the tops of markets in this manner, while tempting, cannot be used as a entry point for shorts. Other data must be compiled if a bearish approach is to be implemented and so the 'Stalking of the Bear' will commence. Below are a series of charts depicting a deleterious decay in the belly of the current bull.

[aedens]

Wed Dec 31, 2008
The economic system deals with the hard and soft outputs of the economy—that is, goods and services. The financial system deals with money and credit. In the modern financial system these can be very complicated. Bank credit, money transfers, stocks, bonds, and derivatives are the “stuff” of the financial system. It is a system built on confidence. There is trust that loans will be paid, that money transferred to an account will actually get there, and that money once placed in an account will not suddenly “disappear.”
We are "in GD context snapshot"

[Higgenbotham]

I'm still 200% short the stock market and have lost almost 7% of my money. WIth this week's gains in the market, I've only been able to contain 42% of losses with short term adjustments, down from 55% last week. I'm continuing to work 24 hours per day durimg the week with very little rest and this has been ongoing for 4 weeks.

Today was an interesting day.

I know a Boomer with vast experience in the stock market. He has been unwaveringly bullish since around the turn of the year. I had noted awhile back the large returns he has made and someone appropriately commented that when a person is bullish in a bull market they make money. True. On Wednesday morning I asked him about some deteriorating market data and he said, you're right, but that will be transient; the buyers will come back in. He was right. This morning he said, while the market may not do much today, the stage is being set for more advance next week. This afternoon, he suddenly turned on a dime and I got a message saying the market had markedly deteriorated and he was selling half his stocks and may sell the rest next week. This really surprised me, as he had given no indication he was going to change his mind.

The next thing that happened was late afternoon I got an e-mail from a well known analyst who appears on CNBC, etc., and also has vast experience in the stock market. In fact, both of these guys worked for big firms on Wall Street before becoming independent. This seemed to be some sort of bulk e-mail and while I have corresponded with this analyst once 2 years ago, never heard from him again. The message said sell all stocks and go short over the weekend and this is going to be much bigger than we anticipated.

For my part, I'm noticing deterioration in the data like the VIX, etc., but like I had said earlier, I had expected a GD catalyst event would occur before the data deteriorated and take everyone by surprise, but that did not happen. What's happening now is no different from what happened at the highs in 2010 and 2011.

Having reported all that, the market can always go higher. But this week is the first direct evidence I've seen that it may go lower soon.

[aedens]

Feb 8, 2012, Primary Dealer Treasury holdings of Dealers surged to $102 billion.
significant change in the nature of conflict

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