Generational Dynamics Forum - New Site

Higgenbotham wrote:

John wrote:As you can see, the anxiety level of investors has plummeted to the
lowest level in over a year, and actually a lot longer.

This corresponds to what Higgie said: "The bullish sentiment that was
out there on Friday seemed surreal."

John

Part of my thinking is that it's the disparity between:

(1) the complacency (low level of anxiety) as measured by the graph (excellent concept), and
(2) the stock market level paired with real economic conditions (PE being a decent proxy)

that allows for the crash potential.

There is a complete disconnect between the stock market (technical signals) and the economy.

My thinking (strictly intuitive) is that the big boys have been holding this market up and profiting by doing so, but:

1. They have to know that they cannot do it forever.
2. Therefore, they will position themselves,
3. And then allow the crash to happen.

When is the question.

Bill

My theory is that the "big boys" are stockpiling (pun intended?) all the borrowed shares which somehow are "not available" to the little guys trying to short the markets on their own. Once the big boys accumulate enough so that a small scale [controlled] crash [maybe to DOW around 5000 or 4000] allows them to show 'trading profits' for Q3, they will let the crash happen. Yes, horribly cynical. But I don't think I'm being any more cynical than the folks at Goldman Sachs and the Fed [? are they different].

The bubble in Shanghai is still growing as of Monday morning July 27.

http://finance.yahoo.com/q/bc?s=000001. ... z=m&q=b&c=

Higgenbotham wrote:The bubble in Shanghai is still growing as of Monday morning July 27.

http://finance.yahoo.com/q/bc?s=000001. ... z=m&q=b&c=

Does that mean that the July 27 prediction was wrong? Or are we still waiting to see?

John

Since may think we are heading for some interesting times. I would like to throw a question out to the readers of this forum.
If a person wanted to only MAINTAIN the buying power of his net worth over the next four years, in what way should he be positioned?

John wrote:

Higgenbotham wrote:The bubble in Shanghai is still growing as of Monday morning July 27.

http://finance.yahoo.com/q/bc?s=000001. ... z=m&q=b&c=

Does that mean that the July 27 prediction was wrong? Or are we still waiting to see?

John

I suppose it could turn around and go down today in China, but it's making new highs at the moment.

Sornette had July 17-27 for the top of the bubble and I have July 29 (in the US) if it follows the Tulip Mania.

I'm guessing that Sornette may be giving a 2 standard deviation time window or something like that.

As for me, I'm still short and waiting. I don't believe the Central Bankers or anybody else can stop what is coming at this point, but we are going to find out soon enough.

gerald wrote:Since may think we are heading for some interesting times. I would like to throw a question out to the readers of this forum.
If a person wanted to only MAINTAIN the buying power of his net worth over the next four years, in what way should he be positioned?

Cash.

John

Dear Higgie,

Higgenbotham wrote: > As for me, I'm still short and waiting. I don't believe the
> Central Bankers or anybody else can stop what is coming at this
> point, but we are going to find out soon enough.

Could you give me an idea why you're so certain?

What's different today from six months ago, or even a month ago?

John

John wrote:Dear Higgie,

Higgenbotham wrote: > As for me, I'm still short and waiting. I don't believe the
> Central Bankers or anybody else can stop what is coming at this
> point, but we are going to find out soon enough.

Could you give me an idea why you're so certain?

What's different today from six months ago, or even a month ago?

John

I think we had gone over a report by the Treasury Department a few weeks ago that stated borrowing capacity has reached a limit. At that point (and contrary to my prediction) the Fed did some quantitative easing, but not a lot. The BRIC response was to meet and make some public pronouncements to the effect that they would not tolerate any further debasement of their reserves.

Subsequently, CA asked for a Federal bailout and didn't receive one. CIT also asked for a Federal bailout and didn't receive one.

The Ron Paul effort to audit and take control of the Fed is gaining steam.

School is just around the corner and there are concerns about flu coming to the fore.

Finally, I am starting to see some recent evidence that deflation is taking hold on Main Street. For example, Mexican owned muffler shops are springing up and putting exhaust systems on for less than half the going rate. Repair shops staffed by mechanics who previously worked for dealerships are doing the same.

Hi everyone,

Many of you will find this post on Zero Hedge interesting. I've only listened to the first 3 parts of Warren's presentation, but I think it has relevance to Generational Dynamics. I'm currently listening to part 3A and he makes a reference to the collapse of the Soviet Union (possible start of Russia's crisis era) and comparing it to our own situation. http://www.zerohedge.com/article/great-reset

Maybe this should be posted in another thread because the subject isn't strictly financial.

Joe