Financial topics

[richard5za]

Dangerous event - panic selling

I am a part-time chartist of stock markets and I have never seen the technicals so poised for a crash, more so than October 2007. There must surely be a dangerous event coming up soon that will cause panic selling?

In this situation cash is king beacuse you can buy back in a few years at bargain basement prices

Any other chartists who read this blog please comment. Other comments too.
Richard

[MarshAviator]

http://www.telegraph.co.uk/finance/econ ... lters.html

Federal Reserve chairman Ben Bernanke is waging an epochal battle behind the scenes for control of US monetary policy, struggling to overcome resistance from regional Fed hawks for further possible stimulus to prevent a deflationary spiral.

John,
Looks like once again these guys really are trying to go to infinity.
According to Ambrose Evans-Pritchard, BSB is going to propose a 5T QE program.

Of course there will be inflation vs deflation discussions again, but it appears that the notion of "Green Shoots" is utter B.S.

This has passed into the surreal, like a nightmare you can't wake up from.

Lastly it won't work either with the law of diminishing returns playing a bigger a bigger role.

I wish we could all get a piece of the franchise; shame only JPMC , GS get a taste.

It does also seem strange that we haven't heard a single idea that would benefit the middle class like a payroll tax holiday et cetera.

[gerald]

Could this be a trigger?

If the following has any truth and a worst case scenario occurs, there could be large scale evacuations /abandonment in the Southeast of the US leading to extensive economic and political ramifications.

http://peakoil.com/enviroment/the-well-from-hell/

It is interesting to note that in the 5/25/2010 report released by" Half Past Human, --- The Shape of Things to Come" ( they data mine the Internet using a proprietary asymmetric trend analysis for making projections ---[ it should also be noted they claim NO accuracy due to the faulty structure of the system, their inability to interpret data and that the Universe likes surprises to keep us on edge.] Some of their projections have had merit but you can't bank on them. One of their projections is that the oil Volcano in the Gulf of Mexico will erupt for a total of 19 months and will be sealed by an earthquake. This oil volcano will cause extensive damage to the Southeast and cause a diaspora.

I guess we shall see.

[OLD1953]

This court decision is just disgusting.

http://www.businessweek.com/news/2010-0 ... uling.html

Apparently, providing false information to pump up stocks is not denial of an honest service.

[aedens]

This court decision is just disgusting.

http://www.businessweek.com/news/2010-0 ... uling.html

Apparently, providing false information to pump up stocks is not denial of an honest service.

Caveat emptor was first laid down as a principle in United States law in 1817, in a decision written by Chief Justice John Marshall for Laidlaw v. Organ.

Many have conveyed when you do not hold banks in down right contempt and suspicion in any age you will see the result. My immersion was first set when reading Thucydides on the formation and total waste of Capital in his Society. There are countless others as we know but I did take some time to follow the officers of the crooked E. Basically there trail was from so called public service. Another good source I found was Howard Zinn. Not that I agreed or disagreed with his politics but the countless sources in his writings. I feel your pain but we are also reminded they Vote what you deserve. I respect the Office of the President overall but even they have Imposed limitation if you follow the so called Money in history's march overall. I enjoy your links and balanced views. Take care...

Meanwhile get ready as the back wall is coming from the finanacial storm to hit:
Even so, Rick Sharga, head of operations and management at RealtyTrac, predicts foreclosures among the rich will continue to rise.

"This is probably the first foreclosure cycle that crept into the more affluent corner of the market," he said. "This cycle triggered a downturn which triggered job losses and a second wave of foreclosures. I don't think we've peaked yet."

[aedens]

A key reason why costs tend to increase as action is delayed is that economic agents operate under distorted incentives.
They thus have an incentive to “double their bets” and take on risk that is excessive from a social perspective: “heads” they win; “tails” outsiders lose. Similarly, there may be a tendency to privilege distressed borrowers over the rest – by “evergreening” loans, extending new ones to cover up the borrowers’ inability to pay. As the misallocation of resources grows over time, so does the cost to taxpayers, who must eventually finance the rescue operations. In effect, this is a hidden contingent government liability. Importantly, the costs in terms of output loss will grow too.

http://www.bis.org/publ/work311.pdf?noframes=1

Taxpayers are Gamed. Sooner then later as we are reminded the consequences in the distortion of the natural interest rate.
Given that the budget will never meet reality on energy policy.

http://suddendebt.blogspot.com/2010/06/ ... -eden.html

In thus altering the configuration of income distribution in favor of taxpayers and to the disadvantage of political tax consumers, the rabattage effect of fiscal deflation results in a new structure of consumer demands and pattern of resource pricing and allocation that more accurately reflect the preferences of those who earn income from the production and exchange of goods on the market. From the standpoint of Austrian welfare economics this result represents an improvement in social welfare and economic efficiency because, even if the precise pre-tax pattern of income and wealth distribution is not restored, fewer resources are siphoned off from producers in the social division of labor mitigating the distortion of economic calculation inherent in all government activities.

The grinding halt will be sudden as classes go extinct as we are seeing at a rate they never can see or wish to see until its them.

[shoshin]

On the subject of the law of mean reversion...if a value (say the S&P 500) has to fall below the long-term average, and stay there for as long as it was ABOVE the average, couldn't you reformulate that law in terms of the area-under-the-curve? That is, if the value stayed above the average at an increasing level over a period of time, there would be an integral defining the level and length of time. Then, it seems to me, when the value falls below the average, it could fall FARTHER than it was ABOVE the average, and stay there for a shorter time, and still be consistent with the reversion law, if the area under the curve became equal.

I probably haven't stated this very clearly, and it's a minor point, but in a precipitous fall, the time spent in the doldrums may be shorter than we spent in our bubble.

[MarshAviator]

http://www.telegraph.co.uk/finance/comm ... serve.html

Entitled "Deflation: Making Sure It Doesn’t Happen Here", it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy.

Looks like the 5T QE is being prepared now.
Don't think BSB (or the FED) will give up until there is an infinite amount of money available to the banksters.

[MarshAviator]

http://www.zerohedge.com/article/bill-f ... pure-nonse

Bill Fleckenstein Says You Can't Trust S&P PE Multiples As All The Financials' Earnings "Are Pure Nonsense"

As was mentioned by John last year, PE numbers are a con job.
Now more and more are catching on.

Can't be long now until reality sets in.

[John]

http://www.zerohedge.com/article/bill-f ... pure-nonse

Bill Fleckenstein Says You Can't Trust S&P PE Multiples As All The Financials' Earnings "Are Pure Nonsense"

As was mentioned by John last year, PE numbers are a con job.
Now more and more are catching on.

Can't be long now until reality sets in.

Here's the video:



John