Financial topics

[Higgenbotham]

I think the high is this session and has probably already happened. I think the crash will start Monday and it will last the rest of the month with a low for this month below 2200 and possibly as low as 1500-1800.

But I've been wrong about this so many times in the past 11 years that nobody should listen to me. One day I will be right if I survive that long. Of course, if the crash is this month and does what I say it will, I will do well as I have puts out the ears bought yesterday and today. 165 puts as of now.

It just keeps on gathering more and more madness, Higg, as I write S&P 500 is at 3528!! Say it drops to half this level can you imagine the global economic devastation? And the debt crisis that will follow. I think 700 is more like it. "Goodness me", is about all I can say. Its the lack of arithmetic that I don't understand. My eldest son has taught in a local university now for a little over 20 years, and I was explaining how to adequately practice as a (local) tax practitioner you needed to be fluent in arithmetic including percentages and ratios, and understand what they mean. He then said to me : "Dad, do you know how few people have that ability?" But I would assume that investment advisers are math fluent, but perhaps not.

I think most investment advisors are math fluent, but the US has a different culture than the rest of the world (I think because the US has the world reserve currency so sloppy thinking can be covered with money printing). The US culture would dictate that investment advisors who work for a large firm should keep clients fully invested in products that pay the firm high commissions. So I heard about one advisor putting clients into First Trust so he could get an initial fee of something like 3% and a rollover fee every time it rolls. So the math that's clearly understood is how much assets they have under management and their fee revenue.

A few years ago I said the stock market had gone from being a casino to being a carnival. That was about the time Buffett said you can't time the market and you can't pick individual stocks because he proved hedge funds couldn't beat the S&P 500, so the average person should just buy an S&P index fund with minimal fees. In that case, you wonder what is the root cause of the S&P index fund being able to outperform well thought out individual stock selections - is it the fact that most investors can't do the math, so stocks that really are good value and should outperform get overlooked while most investors chase momentum stocks? Probably so.

As far as general math skills, I was standing in a grocery store express line with a maximum of 15 items. The woman in front of me said maybe she had more than 15 items. I said something like, if you have 16 and I have 12, that averages to 14, so on average we're under 15. She said that she is a teacher and most of her students could not take an average in their head as I had just done. I hadn't realized it's gotten that bad in the US.

[Higgenbotham]

As far as the stock market goes, I recall that Trump said something in the debate to the effect that a high stock market goes hand in hand with more jobs. That seems like an odd statement unless we think about what the Fed is doing and what they say they will do. The Fed wants to run the printing press hot to get back to low unemployment like they had at the beginning of the year. Powell said in his last press conference that the stock market is not a bubble. I think I quoted that. If Powell can use employment as an excuse to pump the stock market up to 4200, he will. That way he can say he's satisfying the congressional mandate of full employment while he doles out lots of goodies to his "friends". That's how I think investors are thinking about the numbers, not the way we think about them. They think of it like covid was actually a gift to them because now the Fed has to push the pedal harder to meet their mandate. But there's a lot that could go wrong with that. Like an unexpected crash. That's why I read Flash Boys again over the weekend to get my mind oriented to how things could go wrong.

Michael McKee: (48:03)
… In other words, are you risking a bubble on Wall Street?

Jerome Powell: (48:13)
So, of course, we monitor financial conditions very carefully. These are not new questions; these were questions that were very much in the air a decade ago and more, when the Fed first started doing QE. And I would say, if you look at the long experience of the 10-year, 8-month expansion, the longest in our recorded history, it included an awful lot of quantitative easing and low rates for seven years. And I would say it was notable for the lack of the emergence of some sort of a financial bubble, a housing bubble or some kind of a bubble, the popping of which could threaten the expansion. That didn’t happen. And frankly, it hasn’t really happened around the world since then. That doesn’t mean that it won’t happen, and so, of course, it’s something that we monitor carefully.

https://www.rev.com/blog/transcripts/je ... ptember-16

Obviously, it's a bubble and Powell can do the math. I interpret that to mean he'll blow an even bigger bubble if he can get away with it.

I hope Michael McKee doesn't get himself into trouble for asking a tough question.

[Higgenbotham]

The US culture would dictate that investment advisors who work for a large firm should keep clients fully invested in products that pay the firm high commissions. So I heard about one advisor putting clients into First Trust so he could get an initial fee of something like 3% and a rollover fee every time it rolls. So the math that's clearly understood is how much assets they have under management and their fee revenue.

This is what they make on these things.

https://www.edwardjones.com/images/UIT- ... losure.pdf

It's interesting to contemplate how much income can be made in a bubble where an advisor gets about 3% up front and the client doesn't care because the bubble is giving the client really high returns too, besides what the unit trust company is making. What happens when it all unravels?

I heard one of the trust companies being promoted by an investment advisor as they were wonderful people, good Christians, he knew them personally, etc.

[Higgenbotham]

The S&P spent the entire day above the bollinger band. The typical interpretation of that is the market is overbought and should come down, at least temporarily. But there's another way to look at it. With the market getting more and more volatile of late and uptrends and downtrends being steeper, overshoots of the bollinger band become more normal occurrences. My guess would be that this overshoot will still result in at least some movement back down toward the band.

[John]

** 12-Oct-2020 World View: Math skills

> As far as general math skills, I was standing in a grocery store
> express line with a maximum of 15 items. The woman in front of me
> said maybe she had more than 15 items. I said something like, if
> you have 16 and I have 12, that averages to 14, so on average
> we're under 15. She said that she is a teacher and most of her
> students could not take an average in their head as I had just
> done. I hadn't realized it's gotten that bad in the US.

I complain about this all the time. Simple percentages are far beyond
the skills of almost everyone these days. Percentages are fourth
grade level math. The example you gave is 2nd grade level math. But
it isn't just school students. Most college graduates are at AOC
level stupidity. And with SAT scores falling for decades, and most
colleges teaching little more than women's studies or sociology, it's
gotten much worse.

However, to be fair, this isn't entirely a new problem. Back in the
70s, I've noted in the past that the far left newsman Walter Conkrite
couldn't do percentages either. I have two examples.

In 1975, someone told Cronkite that the government's share of the
economy had increased by 25% in the preceding few years. Cronkite
responded (I'm paraphrasing from memory): "That's not true. The
government used to control 19% of the economy, and now it's only 24%.
That's only a 5% increase." (For those who can't do percentages, an
increase from 19% of the economy to 24% is a 26% increase.)

The second example came when Cronkite was excoriating huge oil company
profits. As I recall, Mobil was making about 1.5 cents per gallon
profit in 1977, and 1 cent per gallon in 1978. Then in 1979 it went
up to 1.60 cents per gallon. So Cronkite made it appear that Mobil
was making 60% profit. I don't know whether he was stupid or lying,
though I suspect both.

[aeden]

march of the penguins

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[aeden]

https://www.youtube.com/watch?v=pX1uYBMe8lM

trimmed some f
calls in already

will it traction to 36xx
dont care

https://zh-prod-1cc738ca-7d3b-4a72-b792 ... k=MboSyFQ8

1. What the author refers to is not money, it's a debt coupon issued by a non-elected and privately owned cartel that is systematically stripping wealth out of the United States (and other nations). We commonly refer to this as currency.
2. Only gold is money. It is a historical store of value and represents the combined and concentrated efforts of extraction of a rare and difficult metal from a limited supply, thus giving it intrinsic value as an exchange medium, ie. money.

[aeden]

Fink: Market Could Go Higher As "Fear Of The Future" Draws Flood Of Retail Money

Good luck the penguins are marching.

https://www.zerohedge.com/markets/which ... ance-sheet

[aeden]

https://www.zerohedge.com/s3/files/inli ... k=TQulOwGa

https://www.youtube.com/watch?v=nlcIKh6sBtc

Criminal omission cult still pondering salvation.

One at cnn was found worthy only.

[aeden]

President Trump was elected, he contacted Kennedy and asked him to run his Vaccine Safety Commission. Unfortunately, the Safety Commission never got off the ground:

“I agreed to do it, but immediately after that, Pfizer wrote a $1 million check to his inauguration committee. He then appointed a Pfizer lobbyist, Alex Azar, to run the HHS, and he handpicked a Pfizer insider, Scott Gottlieb, to run the U.S. Food and Drug Administration. As soon as they got in there, they shut down the Vaccine Safety Commission and any other questioning of vaccines,” Kennedy says.

Those experiments were going on in the United States until 2014. They were Dr. Anthony Fauci’s projects. President Obama ordered that to stop because they had a lot of lab escape problems in 2014 from three different labs …

Instead of stopping as he was ordered, Fauci moved those operations to the Wuhan lab in China.

Some Foreigh guys sort of nails it - there has been zero accountability in your ranks. You clowns have left western civilization undefended and the corrupt agents you elect to lead you have betrayed the American people at every turn.

Unsurprisingly, House Speaker Nancy Pelosi (D-CA) continues to hold out for a comprehensive deal which includes bailouts
for terribly run Democratic cities and states.

Criminals for Xiden the 47th and the Sea Hags criminals. Senate can grow a sack any day now.