Financial topics
Re: Financial topics
The possibility of oil being in a bubble... I'm not sure about that, but I can't rule out the possibility. Even if our consumption is going down, the rate in other countries is increasing, at least as long as their bubble is continuing. With China's beginning to deflate, though, India can't be far behind.
Re: Financial topics
http://www.bbc.co.uk/news/uk-politics-17115165Since it's less than two years since Bailout 1 of 110bn euro and things in Greece have gone from bad to worse, you might wonder why this second one will do any better. And you'd not be the only one doing the wondering.
A "strictly confidential" report prepared for eurozone ministers' eyes only but helpfully leaked in this morning' s Financial Times shows that Brussels fears Bailout 3 could be necessary. It warns that Greece is now in a recession so deep that reducing its debt might prove impossible.
It seems like most people have woken up to the fact that Greece is finished. All these projections of recovery for Europe and the United States assumes far stronger economic growth than we're likely to see in the next few years.Make no mistake. The ongoing negotiations in which Greek debt holders are being asked to take losses estimated at around 70% of their original investment are tantamount to a default. Greece is acknowledging it can’t pay its debts, and that’s a default.
It’s the first phase of what all of Europe hopes is an orderly default.
The point has already been conceded by officials at two of the big three ratings firms. Last week a senior official at Standard & Poor’s told Bloomberg Television, “Greece will default very shortly.” And a Fitch official told Reuters, “It is going to happen. Greece is insolvent so it will default. So in that sense it shouldn’t be a surprise to anyone.”
Read more: http://www.foxbusiness.com/markets/2012 ... z1nY3F2Ldr
Re: Financial topics
We are in an interesting situation currently. From the 50's to the late 80's, about 2 billion people added themselves to the western lifestyle of enough food and some luxury goods, in Europe and the MidEast and SouthEast Asia. This did cause some strains in the system, but we managed. From the 1990's to now, we've had another 2 billion jump on board, the populations of India and China. This is again a strain to the system, nobody should be surprised that this is a strain, nor should they be surprised that this has caused prices to rise. (This is irrelevant to whether or not I think the prices of goods are being manipulated, I expect prices to rise under certain conditions, I don't expect them to skyrocket without an actual shortage somewhere in the supply chain. To think that futures markets somehow predict shortages is to grant them the powers of the Oracle of Apollo - and I don't believe that for a minute.)
The US and the FED, for various reasons, decided in 1971 to leave the Bretton Woods agreement and totally drop the gold standard in international trade. This had the results of beginning a period of rapid inflation of the US dollar, and for a time increasing wages to match the inflation. Due to this monetary and wage inflation, the US consumer became accustomed to energy and replacement costs for goods to take a smaller bite each time they bought something relative to their total wages. In short, despite inflation, we got used to prices that were effectively dropping for a wide range of stuffs.
The advent of Chinese goods in the US marketplace, the competition with the Chinese for gasoline (and we will note right here that gasoline is nearly the only item bought by US citizens that is not bought in a group of other items (food) or paid in a monthly bill (water or electric or communications)) and other goods have caused prices to rise. Plus, either smart or predatory pricing by China (depending on whom you ask) has caused China to become the sole source for some materials.
So the US consumer was trained over many years to expect a slow and constant drop in prices relative to wages. This ended about 1998, and we know the result of that, people mortgaged everything they had under the assumption that inflation would resume and they'd be back in the sweet spot again. This didn't happen, instead competition from China and India froze US wages and prices started to rise. So now we've got a mess of pissed off people because their future didn't meet expectations. And under those circumstances it gets very easy to sell doom. Think of it this way, it's much easier to think, "I never saved a million but it's not my fault, it's because we ran out of oil and I spent a million on gasoline", or "The Yellow Peril has sucked up everything, those commie rats have made me poor" than to blame your own bad decisions, especially in regards to living deeply in debt.
Yes, we do indeed live in a finite world. It is, however a very large world indeed. There are many usable and cheap sources of energy available, I have observed personally hundreds of instances where energy is being wasted instead of being used when it obviously could have been sold at a profit. It was wasted because it was not necessary to capture it for the primary purpose we were using it for, and so the remainder went to waste.
There is indeed an issue currently with the total supply of room tempature liquid fossil fuels. There is not as yet a shortage, but there is a rising cost reflective of the fact that geological structures supply such liquids at a fairly fixed rate, and there isn't much we can do to change those rates. Moreover, shortages will occur in the future as we continue to "drill baby drill" because we will eventually run out of places to drill.
To solve this problem we look at the basics: we find another supply of fuel for internal combustion engines or we can switch to another type of engine. Both are possible, both technologies have been developed. It would probably be cheaper to use the SAIC type green oil solution than to totally switch engines, but the green oil solution can't be implemented under current laws and regulations. We will have to wait for a real crisis situation to develop for people to be willing to actually give up on the idea that things will just suddenly return to the 60's without basic changes, and then we'll be able to work this out.
http://seekingalpha.com/article/118658- ... pa-funding
http://www.oilgae.com/
http://www.forbes.com/sites/eco-nomics/ ... port-says/
It helps to remember that fossil fuels are exactly that in most cases, fossils. Only a minute percentage of biological matter in a given year will become fossils, thank goodness or there would not be any left for us! We'd only need to replace that relative amount that we burn, and current figures show that this can be done without trying to turn all the corn in the world into corn whiskey or all the soybeans to diesel. We are still in the era of denial, denial that change must come. But it will come, and then we will see better times.
The US and the FED, for various reasons, decided in 1971 to leave the Bretton Woods agreement and totally drop the gold standard in international trade. This had the results of beginning a period of rapid inflation of the US dollar, and for a time increasing wages to match the inflation. Due to this monetary and wage inflation, the US consumer became accustomed to energy and replacement costs for goods to take a smaller bite each time they bought something relative to their total wages. In short, despite inflation, we got used to prices that were effectively dropping for a wide range of stuffs.
The advent of Chinese goods in the US marketplace, the competition with the Chinese for gasoline (and we will note right here that gasoline is nearly the only item bought by US citizens that is not bought in a group of other items (food) or paid in a monthly bill (water or electric or communications)) and other goods have caused prices to rise. Plus, either smart or predatory pricing by China (depending on whom you ask) has caused China to become the sole source for some materials.
So the US consumer was trained over many years to expect a slow and constant drop in prices relative to wages. This ended about 1998, and we know the result of that, people mortgaged everything they had under the assumption that inflation would resume and they'd be back in the sweet spot again. This didn't happen, instead competition from China and India froze US wages and prices started to rise. So now we've got a mess of pissed off people because their future didn't meet expectations. And under those circumstances it gets very easy to sell doom. Think of it this way, it's much easier to think, "I never saved a million but it's not my fault, it's because we ran out of oil and I spent a million on gasoline", or "The Yellow Peril has sucked up everything, those commie rats have made me poor" than to blame your own bad decisions, especially in regards to living deeply in debt.
Yes, we do indeed live in a finite world. It is, however a very large world indeed. There are many usable and cheap sources of energy available, I have observed personally hundreds of instances where energy is being wasted instead of being used when it obviously could have been sold at a profit. It was wasted because it was not necessary to capture it for the primary purpose we were using it for, and so the remainder went to waste.
There is indeed an issue currently with the total supply of room tempature liquid fossil fuels. There is not as yet a shortage, but there is a rising cost reflective of the fact that geological structures supply such liquids at a fairly fixed rate, and there isn't much we can do to change those rates. Moreover, shortages will occur in the future as we continue to "drill baby drill" because we will eventually run out of places to drill.
To solve this problem we look at the basics: we find another supply of fuel for internal combustion engines or we can switch to another type of engine. Both are possible, both technologies have been developed. It would probably be cheaper to use the SAIC type green oil solution than to totally switch engines, but the green oil solution can't be implemented under current laws and regulations. We will have to wait for a real crisis situation to develop for people to be willing to actually give up on the idea that things will just suddenly return to the 60's without basic changes, and then we'll be able to work this out.
http://seekingalpha.com/article/118658- ... pa-funding
http://www.oilgae.com/
http://www.forbes.com/sites/eco-nomics/ ... port-says/
It helps to remember that fossil fuels are exactly that in most cases, fossils. Only a minute percentage of biological matter in a given year will become fossils, thank goodness or there would not be any left for us! We'd only need to replace that relative amount that we burn, and current figures show that this can be done without trying to turn all the corn in the world into corn whiskey or all the soybeans to diesel. We are still in the era of denial, denial that change must come. But it will come, and then we will see better times.
Re: Financial topics
But more importantly, we would not even dream of regulating you, or anyone else for that matter, because frankly, unlike the collapsing and insolvent status quo, we believe in the myth of a fair market, one where a room full of academics does not believe it is smarter than the collective rational whole of countless unitary market actors.
What is most ironic in all of this, is that the second before you pull the plug on your algos for the last time, as the hollow market collapses under its own weight, you will wish that Zero Hedge had been regulating you...
It will be too late.
http://www.zerohedge.com/news/no-itg-ze ... you-either
If the footprint for high frequency traders gets too large, they become liquidity demanders themselves.
Americans are asleep in vast numbers. More are actively walking away. Taxpayer said no bailouts and we got alphabit soup
poured down our throat and now its tipping point.
Nearly $7 trillion pumped by global central banks into the world stock markets just in the past 4 years. As Sean Corrigan from Diapason notes, the aggregate global central bank balance sheet has doubled in four years, after doubling in the 5 years before that.
1st they increased the amount of Money you need to Day Trade.
2nd they introduced HFT Computer Trading. They made Money at first until the every day Trader caught on and stopped tradiing.
3rd now they have a new scheme. Weekly options. At least with Monthly options you would trade inbetween strikes because the Stock price only gravitated to the option price once a Month. But, with weekly options it cuts down on trading because in many cases they hold a stock between option prices sometimes for a week just to sell options and on Thrusday and Friday it usually trades close to the option price for 2 straight days in a flatline. Plus, buying or shorting a stock inbetween options only gives you a 50/50 chance it will go the way you want it to. So, you sit on your hands and do not trade until you can see a move in either direction.
So, the Market has become nothing but a controled market from HFT and weekly options. Options have become the Tail that wags the dog. If you want the Stock to move in a specific direction you load up on options at that price. If you want to sell a large order you set the HFT to play ping pong at that price for the whole day or week. If the stock starts to deviate from that price you tell the Computer to buy it back up to that price and hold it there.
Is it any wonder why no one Trades anymore? Yet, Wall Street misses scalping Money from the Retail bunch and cannot understand why no one is in the Market anymore. Now, the only people they have to scalp is themselves.
Steps along the way....crashed into you...
What is most ironic in all of this, is that the second before you pull the plug on your algos for the last time, as the hollow market collapses under its own weight, you will wish that Zero Hedge had been regulating you...
It will be too late.
http://www.zerohedge.com/news/no-itg-ze ... you-either
If the footprint for high frequency traders gets too large, they become liquidity demanders themselves.
Americans are asleep in vast numbers. More are actively walking away. Taxpayer said no bailouts and we got alphabit soup
poured down our throat and now its tipping point.
Nearly $7 trillion pumped by global central banks into the world stock markets just in the past 4 years. As Sean Corrigan from Diapason notes, the aggregate global central bank balance sheet has doubled in four years, after doubling in the 5 years before that.
1st they increased the amount of Money you need to Day Trade.
2nd they introduced HFT Computer Trading. They made Money at first until the every day Trader caught on and stopped tradiing.
3rd now they have a new scheme. Weekly options. At least with Monthly options you would trade inbetween strikes because the Stock price only gravitated to the option price once a Month. But, with weekly options it cuts down on trading because in many cases they hold a stock between option prices sometimes for a week just to sell options and on Thrusday and Friday it usually trades close to the option price for 2 straight days in a flatline. Plus, buying or shorting a stock inbetween options only gives you a 50/50 chance it will go the way you want it to. So, you sit on your hands and do not trade until you can see a move in either direction.
So, the Market has become nothing but a controled market from HFT and weekly options. Options have become the Tail that wags the dog. If you want the Stock to move in a specific direction you load up on options at that price. If you want to sell a large order you set the HFT to play ping pong at that price for the whole day or week. If the stock starts to deviate from that price you tell the Computer to buy it back up to that price and hold it there.
Is it any wonder why no one Trades anymore? Yet, Wall Street misses scalping Money from the Retail bunch and cannot understand why no one is in the Market anymore. Now, the only people they have to scalp is themselves.
Steps along the way....crashed into you...
Last edited by aedens on Tue Feb 28, 2012 2:13 am, edited 2 times in total.
Re: Financial topics
And really, that's when you get the new regulations, when the market has collapsed and the traders are screaming for regulations to protect them. The new paradigm for making money in the market is simple, figure out what the big guys are going to cheat on today, and ride their coat tails for a time, but be sure to pull out early.
It is as predictable as a clock that oil prices will not be allowed to fall below a certain point before the final crash of everything. If they start to drop, then Iran or Saudi Arabia or Venezuela or some other actor will take some action, make some pronouncement that will shoot the price back up. Extended price drops below 90$ per bbl cannot be allowed, because all the providing countries have now based their governments budget on the idea of 90$+ oil. Without those prices the governments collapse. So when oil drops, it will rise. You can't lose, unless that final crash happens before you get out - as I said, get out early.
I don't see how a regulator can regulate the statements of governments, and a statement that "XXXX is considering reductions in oil shipments" will cause a rise in price. And governments are the biggest of the big guys.
It is as predictable as a clock that oil prices will not be allowed to fall below a certain point before the final crash of everything. If they start to drop, then Iran or Saudi Arabia or Venezuela or some other actor will take some action, make some pronouncement that will shoot the price back up. Extended price drops below 90$ per bbl cannot be allowed, because all the providing countries have now based their governments budget on the idea of 90$+ oil. Without those prices the governments collapse. So when oil drops, it will rise. You can't lose, unless that final crash happens before you get out - as I said, get out early.
I don't see how a regulator can regulate the statements of governments, and a statement that "XXXX is considering reductions in oil shipments" will cause a rise in price. And governments are the biggest of the big guys.
Re: Financial topics
"'Do not use dishonest standards when measuring length, weight or quantity."
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Last edited by aedens on Tue Feb 28, 2012 4:31 am, edited 4 times in total.
Re: Financial topics
Saudi Arabia is deep into a Crisis Era and all the oil wealth is one of the main reason why they haven't had more rebellion. If they start losing that wealth, they'll be in the same position as virtually everyone else in the Middle East. It'll fall once nobody is able to afford it.
Re: Financial topics
Does Apple's price make any kind of sense? Stretch that out to ten years and take a look.
http://www.google.com/finance?q=aapl&hl=en#
And look at the volume. I'll wager when the big drop comes, Apple leads the way.
http://www.google.com/finance?q=aapl&hl=en#
And look at the volume. I'll wager when the big drop comes, Apple leads the way.
Re: Financial topics
They have a release next week http://www.businessinsider.com/the-ipad ... rts-2012-2OLD1953 wrote:Does Apple's price make any kind of sense? Stretch that out to ten years and take a look.
http://www.google.com/finance?q=aapl&hl=en#
And look at the volume. I'll wager when the big drop comes, Apple leads the way.
Re: Financial topics
In terms of the stock market, we're seeing the same thing that happened in 2007. Few of them have any idea of what's about to hit them, which is why I think the crash, when it comes, will be very quick, lasting around 12-18 months.
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