Financial topics

[scared_sh+tless]

Hi,

Just thought you should know about a type in your "Budget Deficit Triples" entry. You typed in "more than tripling the record 2008 deficit of $459 trillion" which should be have ended with 'million'.

Haven't read much in this forum for a while because the over whelming sentiment where I live is that the recession is over and every is going to be all right. Much easier to believe in the good news than thinking about the bad all the time.

[freddyv]

A quote from Richard Russell today,

Great events, earth-shaking events, often begin just as hints. World War II started when a crazed German corporal named Adolph Shiklegruber wrote a book in prison. The corporal gained a following. A few years later, he and his followers took over Germany. Later the mustached corporal changed his name to Adolph Hitler, but few took him seriously. Around 1937 to 1939 with the rise of the German war machine the world started taking Hitler seriously, but by then it was too late. The great tides of history moved on and as it moved on 60 million people died.

I really like RR because he's been through it all and he is an independent thinker and an independent voice on Wall Street.

I also follow Gene Inger and like the two of them because they contrast so well; Inger is an old-time Wall Street Insider. He thought that Gold would not break out while Russell thought it would. Luckily I took Russell's advice a while back.

What impresses me about this era we're in is how it seems to have a distinct purpose that fits right in with the term, "crisis era". In order to create fear, greed is used. In order to create ruin, hope is used. I have nothing against Barack Obama but I think he will end up in the history books right alongside Neville Chamberlin as a person responsible for allowing great ruin to come to many.

BTW, my best guess for the stock market is that we have a dip in November and then continue to rise and fill the gap towards 11,000 on the Dow until we begin the decline anew in February or March. After that I fully expect the DJIA to decline towards and possibly beyond the 2,000 level as it fills the big gap left from the rise that began in 1982.

But be forewarned: I am wrong about as often as I am right and I always have an exit and worst-case strategy.

Good luck!

--Fred
http://www.acclaiminvesting.com/

[aedens]

A quote from Richard Russell today,

Great events, earth-shaking events, often begin just as hints. World War II started when a crazed German corporal named Adolph Shiklegruber wrote a book in prison. The corporal gained a following. A few years later, he and his followers took over Germany. Later the mustached corporal changed his name to Adolph Hitler, but few took him seriously. Around 1937 to 1939 with the rise of the German war machine the world started taking Hitler seriously, but by then it was too late. The great tides of history moved on and as it moved on 60 million people died.

I really like RR because he's been through it all and he is an independent thinker and an independent voice on Wall Street.

I also follow Gene Inger and like the two of them because they contrast so well; Inger is an old-time Wall Street Insider. He thought that Gold would not break out while Russell thought it would. Luckily I took Russell's advice a while back.

What impresses me about this era we're in is how it seems to have a distinct purpose that fits right in with the term, "crisis era". In order to create fear, greed is used. In order to create ruin, hope is used. I have nothing against Barack Obama but I think he will end up in the history books right alongside Neville Chamberlin as a person responsible for allowing great ruin to come to many.

BTW, my best guess for the stock market is that we have a dip in November and then continue to rise and fill the gap towards 11,000 on the Dow until we begin the decline anew in February or March. After that I fully expect the DJIA to decline towards and possibly beyond the 2,000 level as it fills the big gap left from the rise that began in 1982.

But be forewarned: I am wrong about as often as I am right and I always have an exit and worst-case strategy.

Good luck!

--Fred
http://www.acclaiminvesting.com/

I value your input to affairs so thank you for any information for discernment and as always all who contribute. We are seeing a new carry trade rise and we seen a dollar uptick as predicted and continued market consolidation "trade protectionism smoke" and internal organic growth since there is no relavance yet to the float on global peg movement to currency but only SDR payments parity I noted earlier. Lately, spirited on earning since who is looking to topline growth in the States yet since it has been punished "dollar rightly so" to the extent why bother with it "animal spirits" and some time ago I talked to a few who assumed this would benefit exports, but I did remind them the tire is still flat to positive movement and no solution. Mentioned in forums was Global leveling and it' s hard to monitor money stock as we know but the world will move on since it has to given internal policy. Top money is focused as always to movement not stagnation they already seen and acounted for. What I mean is the action is where it is and organic growth is not here yet for a long time given all policy attributes domestic since really they where caught flat footed and arrogated to there model. http://mises.org/markets.asp
The average person does not affect a carry trade but I feel more may continue, because the average person cannot borrower at near zero. But, if you currently hold to many dollars in a bank account that is earning zero and you convert those dollars into, say, AUD, http://www.exchange-rates.org/currentRates/AUD
and put them into an instrument that earns a return, you are effectively performing the same trade and this may be the net effect we have noted i feel. Kinda of reflects last month 's market in gain. The developing east is that, and central banks may wish coordinating policies but this is ringing true as we see that they will not wait for some one to get there act togeather since why should they stay linked to a slow horse who was pulling for growth but devised its own illness. You cut the damn beast loose and move on as they must. China is talking about a security system for its citizens as a quasi national movement to develope the citizen safety net "develope consumers" to carry internal balancing needs as policy to stabilze. I think most are wise enough to understand you do not go to war with the baker if you are the blacksmith and futher dialog can be made to balance trade in the new predicated business cycle if that eases our reality and if the keynesians bloviate about themselves they should read further to his prescription to warrant balances of acount. I agree with your assement but I may of been early on my October call made many month's ago in the forums of record, but the trend is noted and it may have moved quicker than I assumed in the states on nominal value of current currency pressure. October may still be a surprise but enough dialog has spurred thought that it may be true.

http://www.bloomberg.com/apps/news?pid= ... rc5DeFufyA
Thomson is proving a test case for swap settlements under new protocols aimed at standardizing contracts and curbing risk in the market blamed for aggravating the financial crisis. Investors are concerned creditors that are hedged in the swaps markets won’t participate in reorganizations, which may increase in Europe as Moody’s Investors Service forecasts the corporate default rate will peak at 10.9 percent before year-end.

October later may be uglier than we wish sooner than later as we conveyed already. Yes in reality nothing really has been done in the market has it to order and this monster has yet to be caged. I agree with the premise that it may be a colder winter than the so called masters of the universe want to envision. Political minds are barren of resolve it appears since they wish to be control and clearly they only sent a message and no staff of correction.
This CDO market is financial nerve gas and TBTF is taxpayers being sucked dry as we already seen. Given there 10.9 percent assumed failure numbers are accurate it would be delusional if we have this conversation this July given the rate of who buys what.
The data will tell so we can watch this and assume the EU can sort it out. Yea I thought the same thing when can Government run a market.

By Kevin Brown in Singapore, and Peter Garnham and Chris Giles in London
Published: October 8 2009 15:09 | Last updated: October 8 2009 20:43
Asian central banks intervened heavily in the currency markets on Thursday to stem the appreciation of their currencies against the US dollar amid fears that their exports could be losing ground against China.
The mainly south-east Asian countries have been spurred to defend the competitiveness of their currencies by China’s decision to in effect re-peg the renminbi to the dollar since July last year.
Lex: Markets - Oct-09Summers stresses US support for dollar - Oct-09S Korea leaves benchmark rates unchanged - Oct-09Asia steps in to slow dollar’s fall - Oct-08Growth optimism hits US dollar - Oct-08Bank of England holds rates at 0.5% - Oct-08

[aedens]

http://www.wilmott.com/blogs/satyajitdas/ Reality from he who knows.

[John]

Hi,

Just thought you should know about a type in your "Budget Deficit Triples" entry. You typed in "more than tripling the record 2008 deficit of $459 trillion" which should be have ended with 'million'.

Haven't read much in this forum for a while because the over whelming sentiment where I live is that the recession is over and every is going to be all right. Much easier to believe in the good news than thinking about the bad all the time.

Thanks for the correction!

The level of complacency about what's going on is astounding.

John

[aedens]

http://www.pbs.org/moyers/journal/10092009/watch.html

The taxpayer needs to think, act, Vote wisely.
Wake up America.

http://www.wilmott.com/blogs/satyajitdas/ Reality from he who knows.

You just can't make this stuff up how far behind the SEC is.
http://economicedge.blogspot.com/2009/1 ... pires.html Listen carefully
The only cost is the destruction of its own society

Andy Xie: Why One Bubble Burst Deserves another
Financial markets are still maximum bearish on the dollar. Liquidity is being channeled out of dollar into all other assets. This is why there is such a high correlation between the dollar and other assets. I think this is the most crowded trade in the world. When the dollar reverses, the short squeeze could cause a global crisis.
http://english.caijing.com.cn/2009-09-28/110267252.html

get some off the table. sp500 1090 http://www.finviz.com/
J.P. Morgan Chase kicks off the bank-reporting season on Wednesday.

[aedens]

Warren Harding and the Forgotten Depression of 1920
Thomas E. Woods, Jr. - 10/08/09
The following piece comes from the brand-new Fall 2009 issue of The Intercollegiate Review
http://www.firstprinciplesjournal.com/a ... home&loc=b

In light of this description of the post boom economy, we can see how unhelpful, even irrelevant, are efforts at fiscal stimulus. The government’s mere act of spending money on arbitrarily chosen projects does nothing to rectify the imbalances that led to the crisis. It is not a decline in “spending” per se that has caused the problem. It is the mismatch between the kind of production the capital structure has been misled into undertaking on the one hand, and the pattern of consumer demand, which cannot sustain the structure of production as it is, on the other.

Monetary stimulus merely encourages entrepreneurs to continue along their unsustainable production trajectories; it is as if, instead of alerting the master builder to his error, we merely intoxicated him in order to delay his discovery of the truth. But such measures make the eventual bust no less inevitable— merely more painful.
http://www.detnews.com/article/20091011 ... -president?

This recipe of government austerity is precisely what Harding called for in his 1921 inaugural address:

We must face the grim necessity, with full knowledge that the task is to be solved, and we must proceed with a full realization that no statute enacted by man can repeal the inexorable laws of nature. Our most dangerous tendency is to expect too much of government, and at the same time do for it too little. We contemplate the immediate task of putting our public household in order. We need a rigid and yet sane economy, combined with fiscal justice, and it must be attended by individual prudence and thrift, which are so essential to this trying hour and reassuring for the future. . . .

We have created a class which satisfy's itself until capital is depleted and this happened long enough ago that they do not even remember when it happened
anymore. A generational refinement in the ability of economists and central bankers to manage our affairs which will ensue and has to our ruin.

From the point of view of a cynical world the American who entered two world wars and survived them both, when his own interest was not paramount, was either an inscrutable hypocrite or an unbelievable character, and in either case a dangerous possessor of the world's ultimate power. And afterward, unconsciously perhaps, the only symptom of a unifying thought in the world was distrust of that American power uncontrolled longer then the Senate ability to fiscal sanity and resolve to let the common man decide. This citizen will disconnect, but vote if independant minds exist anymore.

http://www.financialsense.com/stormwatc ... /1009.html

http://www.ritholtz.com/blog/2009/10/to ... ributions/

http://jessescrossroadscafe.blogspot.com/ Sentiment Indicator

Only when the last tree has been felled,
The last river poisoned,
The last fish caught,
Will you recognize that you can't eat money.
-Cree-

[aedens]

http://news.goldseek.com/GoldSeek/1255111200.php

Earlier this week, no less than two Central Banks became involved in effecting the physical settlement of this situation. One of these Central Banks was British [that would be the Bank of England] – and reportedly, even they were only capable of providing less than pure, non-compliant gold bars that did not meet good delivery standards stipulated by the LBMA. Like it or not, this is a testament to lack of physical gold available, folks.

"The supreme excellence is to subdue the armies of your enemies without even having to fight them."
–Sun Tzu
If you lost money during your last three market entries, stay away from this one – as far as you can.
Andy Xie, guest economist to Caijing and a board member of Rosetta Stone Advisors Ltd.

[Jason]

Ha Ha ... The global housing bubble started way before 1990's.

My neighbor, aged mid 90's, bought his house in late 1930's for $1000. Now its worth over $3 million.

In 1854 you could buy up to 320 acres at $1.25 per acre in Oregon. Similar situations applied to land in Australia, Canada, New Zealand etc.

In Rome land price inflation and currency debasement have been recorded for a 2500 year period.

"... During the fifty-year interval ending with the rule of Claudius Victorinus in A.D. 268, the silver content of the Roman coin fell to one five-thousandth of its original level."

"... by A.D. 305 the process of currency debasement had begun again. By the turn of the century, this process had produced a two-thousand-percent increase in the price of gold in terms of denarii"

http://mises.org/story/3498

The long-term trend is inflation and prices in Rome are still rising.
.

[aedens]

Economic Calendar
10/14/2009 U.S. Business Inventories - Aug
U.S. Export Prices (ex. Ag) - Sept
U.S. Import Prices (ex. Oil) - Sept
U.S. Retail Sales - Sept
10/15/2009 U.S. Continuing Claims - 10/3
U.S. CPI - Sept
U.S. Crude Inventories - 10/9
U.S. Initial Jobless Claims - 10/10
U.S. Philadelphia Fed - Oct
10/16/2009 U.S. Capacity Utilization - Sept
U.S. Industrial Production - Sept
U.S. Michigan Sentiment (Prel) - Oct

Market Summary:
The dollar continues to trade with an overall softer bias at the start of the new week. The greenback is down against most of the G10 currencies, particularly the Canadian currency which is still receiving a boost from firm jobs figures released last Friday. The euro is up as is the Swiss franc, as European equity markets are broadly stronger, but the British pound is lower, extending its underperforming trend. The Mexican peso is enjoying a good day against the dollar, although other Latin currencies are mixed. As a group, the region that is showing the most notable underperformance today is Asia, where fear of FX intervention by regional central banks is outweighing generally good economic news. With little news on the U.S. agenda today, it will be a case of watching equities, and with global bourses generally higher the dollar could remain under some pressure. In fact with most market participants still inclined to sell the greenback, it would probably take renewed market volatility or corrective equity declines to stem the dollar’s slide this week.

Since Jan. 1, 61 of 82 country equity indexes tracked by Bloomberg have outperformed the Standard & Poor’s 500 Index of U.S. stocks, which has gained 18.6 percent. That compares with 70.6 percent for Brazil’s Bovespa Stock Index and 49.4 percent for Hong Kong’s Hang Seng Index.

Bill Gross, who runs the $186 billion Pimco Total Return Fund, the world’s largest bond fund, said in June that dollar investors should diversify before central banks do the same on concern that the U.S.’s budget deficit will deepen.

Australia raised interest rates. This could accelerate current currency moves, as investors go after the yield advantage. We have seen this cycle before, and for now it looks as if it will repeat.

The best advice is to watch announcements on currency policy carefully. And that's not just the U.S. policy on the dollar, but any hint from mainland Chinese officials of what they plan for the yuan and the Hong Kong dollar

http://www.bloomberg.com/markets/stocks/futures.html