Financial topics

[aedens]

Aedens, be careful reading anything by Gary North. The man is a great rationalizer, great at communication, and frankly he is a few cards short of a full deck. He is a very subtle cult leader, and I mean exactly that. I had a disagreement with some of his followers years back, and wound up with death threats and other interesting bits to remember them by. Among other things he doesn't mention in a good bit of his writing is that he's the Christian Dominionist to end all Christian Dominionists, his father in law is (was? don't really track the guy) R.J. Rushdoony, and his big disagreement with him was that Rushdoony doesn't go far enough in his ideas that all govt officials must take an oath of allegience to Christ, etc. If you were going to search for people who were most responsible for the strange movements in the US Christian Churches over the last 30 years, they'd be on the top of the list.

Both position's are posted. If you see the right and the left in there element it is a wonder how things work at all. <----- as we trend here.
http://www.alternet.org/story/151960/mi?page=1
"The mindset is not that hard to follow. Poisoned Well" was my first line.
The alternet author is clueless also in context to compare islam and christians.
Have not seen Nuns packing bombs lately and as the press reads today in Pakistan.
I have read both sides from the Mufti to Redactionist as Rushdoony for a very long time
and the difference is null. Follow the money...
Also, thank you for your regard.
On to another http://mises.org/books/leftism_kuehnelt_leddihn.pdf
http://www.americancivicliteracy.org/20 ... ofile.html

[JonLaw]

It looks like we have a temporary bear market bottom here.

The crash window would seem to be closed until the next down leg starts, then it's back onto crashwatch.

I don't have any timeframe or price targets; I just presume that it's going to go up and roll over and I will know it when I see it.

The downgrade of the U.S. from AAA didn't do anything except cause the market to gyrate wildly, so now we are heading back to where we were *before* the downgrade.

So far, it's a picture perfect bear market with an impressively violent first leg.

The financial institutions in Europe are standing by to provide whatever liquidity is necessary to temporarily stabilize the markets.

[vincecate]

The crash window would seem to be closed until the next down leg starts, then it's back onto crashwatch.

After just 2 hours without a 4% swing you are ready to ring the all clear bell? Seems a bit early.

[JonLaw]

The crash window would seem to be closed until the next down leg starts, then it's back onto crashwatch.

After just 2 hours without a 4% swing you are ready to ring the all clear bell? Seems a bit early.

A temporary all clear bell only because we didn't crash this week.

When you are oversold, you either crash or rally.

We rallied.

Don't worry; the severe systemic instability is still there and will continue to cause new chaos.

[aedens]

http://blogs.telegraph.co.uk/news/peter ... he-bottom/

Europa this week upcoming, 2 weeks buffer sort to out the obvious. Naked short exist why?
As mentioned the right and left have a issue which fits the GD scope. The right seeks sound money and the left
seeks turbulence. Numerous stripes on both segments will effect macro story well into
October. I may look going somewhat long from there pressing longer investments after 2013
macro story inertia. Stay fluid.

[vincecate]

Last weekend my prediction was that Monday would be a down day for the stock market. It was. I am going to make the same prediction again this weekend. Part of my thinking is that things have recently gotten worse and there are investors who only take time to think about investments on weekend. Also, it just means that everyone has an extra two days to understand how bad things are.

I think Mondays historically are not so good. Here is a quote from one paper:

"The day of the week effect refers to the existence of a pattern on the part
of stock returns, whereby these returns are linked to the particular day of the
week. Such relationship has been verified mainly in the USA. The last
trading days of the week, particularly Friday, are characterised by the positive
and substantially positive returns, while Monday, the first trading day of the
week, differs from other days, even producing negative returns (Cross, 1973;
Lakonishok and Levi, 1982; Rogalski 1984; Keim and Stambaugh, 1984;
Harris, 1986)."
http://www.iif.edu/data/fi/journal/Fi103/FI103Art3.PDF

Also, most of the extreme market swing days are during bear markets. Paper below says:

* 58% (55%) of extreme up (down) days with returns more than two standard deviations from the mean fall in the bear regime.
* 81% (71%) of extreme up (down) days with returns more than five standard deviations from the mean fall in the bear regime.
http://www.cxoadvisory.com/15189/volati ... ar-regime/

I think the big swings we had this week are well into the "five standard deviations from the mean" range. So odds are we are in a bear market.

Anyway, I predict market down on Monday.

-- Vince

[aedens]

An exhaustion gap comes at the end of an impulsive move. The exhaustion gap has an abnormal pickup in volume and then reverses sharply. An exhaustion gap will occur after an earnings announcement or news release. This final blow off brings enormous public attention and increased trading activity. This event provides professional traders and institutions the opportunity to close out large positions.

I agree Vin on the papers premise but reference it to gap and null. Null as in chasing Alpha in beta bear markets events. I will wait since beta players are in play. Regulators can instill discipline over conviction. Let the organized property rights quest of puts and calls sort it out. The standard deviation event I will concede since we are looking at the same coin heads or tails. I would think to say the pressure points are out of our pay scale as we already know. We still need x amount day to day so as we note it is a demographic balance to serve the Customer. Assume to stay long minded but never stop looking for quality trends in contracts and innovation. We know pent demand exists but policy and over all ethics are the divide.

I feel the Fed basically conveyed bullet points to our onservation.
http://generationaldynamics.com/forum/v ... sion#p9163
It will sum up to calculating the “financial repression tax,” more specifically, the annual “liquidation rate”

http://en.wikipedia.org/wiki/Financial_repression

The drag also is the unfunded liability the Court gave and head slapped Health Care Legislation.

11th Circuit U.S. Court of Appeals in Atlanta on Friday found that the law's "individual mandate" section -- requiring nearly all Americans to purchase health insurance by 2014 or face financial penalties -- was an improper exercise of federal authority.

Torte is still out of control and ignored.

[Higgenbotham]

Heard a funny one today: "I'm expecting a new bull market - a bull market in common sense." That would be different.

General forum sentiment is bearish now. The most common call seems to be for a correction to 1200-1250. The second most common call is for a crash. I'm expecting the possibility that neither happens as a consequence of most expecting one or the other. Call that Internet Age Contrarianism. Three possibilities to consider:

One, a seemingly endless drift under the 1200 level until the bulls and bears get worn out. This could go on for weeks. Then the market goes down from there. Bulls can't get out and bears can't get short.

Two, a variation of One would be the drift under 1200 for awhile, then a sudden spike into the 1200-1250 area which causes the bulls to hope for higher prices and the bears to cover. Then, just as suddenly, the rug gets pulled out and the market falls back under 1200, never to return.

Three, The market rallies to over 1250. Bears cover, bulls get long, CNBS trumpets the "fact" that dividend paying blue chip stocks are the "New Triple A". Even ma and pa with some money on the sidelines decide that's right and US bonds really are crap, after all, so they buy more stocks. New York sharks unload all they can. This goes on for weeks, even months, as the crisis once again goes dormant. Then the market suddenly and violently crashes. As one scenario, say the Dow opens one morning down 2000 points as European banks collapse.

I'm not predicting anything, but laying out scenarios that I've not seen considered elsewhere.

[aedens]

Monday we have survived four decades of fiat money and the chaos in markets in recent weeks.
On 15 August 1971 Richard Nixon finally cut the link between the US dollar and gold.
Until then, the US Treasury was duty bound to exchange an ounce of gold with central banks willing to pay them $35.
Decade inference we noted.

[Higgenbotham]

Why America is Not a New Rome (Book Review)
Review by Bill Gates

http://www.thegatesnotes.com/Books/Deve ... cient-Rome

The key point of the book is that more than 1,500 years separate our current era from Roman times, and life has changed so much that any sense of similarity is illusory. In Roman times, people had barely enough food to sustain them. Human and animal muscle power comprised virtually the entire kinetic energy source. Life expectancy was between 20 and 30 years. Income levels were a fraction of what we have today. So the dynamics of “surviving” were completely different then.

Smil makes an important point regarding scientific and technical advances. Whereas U.S. innovation has played a central role in creating a modern global civilization in less than 150 years, “the Roman Empire had an unremarkable…record in advancing scientific understanding, and its overall contributions to technical and engineering innovations were…fairly limited.”

I hope this book will help us focus on fixing these trends without thinking that analogies from the Roman Empire will help us find the right approach.

Bill Gates is undeniably a very smart guy, but a word of caution to him would be to never use hope as a basis for cursory analysis. His analysis doesn't touch on the core concepts of why the inherent characteristics of human nature create the waves universally across all time scales and all societal arrangements. The details don't support this thesis either - to say that going from a hunter gatherer arrangement to an agricultural arrangement to an industrial arrangement confers some kind of innoculation against breakdown is erroneous. The nature of the Roman agricultural arrangement was not one where technological innovation was the dynamic as it is in an industrial arrangement. To say that in Roman times people barely had enough food to sustain them tells you something about where they were going. To say that in these times there is no "green" energy source that can efficiently compete with fossil fuels, as Bill Gates does recently in other venues, is saying the same thing as applied to our civilization. That dearth of technological advancement will lead in reverse to exactly the same situation the Romans found themselves in.

http://www.thegatesnotes.com/Topics/Ene ... rgy-Crisis

But the economics are so, so far from making sense. And yet that’s where subsidies are going now. We’re putting 90 percent of the subsidies in deployment—this is true in Europe and the United States—not in R&D. And so unfortunately you get technologies that, no matter how much of them you buy, there’s no path to being economical. You need fundamental breakthroughs, which come more out of basic research.

Developing futuristic industrial age water wheels and basic theoretical steam engines as the Romans were while neglecting the core agricultural component of the civilization seems analogous to developing futuristic computing, robotic and communications equipment while neglecting the core industrial component (energy) of the civilization.

The sumptuous feasts of Roman times before the peasants starved are the Hummers and solar panels on Bill Gates' roof. VMT is falling.