Financial topics

[OLD1953]

For energy data and graphs, the EIA has data but the graphs don't do totals.

http://205.254.135.24/totalenergy/data/ ... #resources

Safety is a relative term. And habitual safety is often found. A horse runs into a burning building because it's habitually safe there, not because of actual safety.

Do I consider the US a "safe" place to invest right now? Absolutely not, or I'd be investing. However, if you are going to invest, there are few places that offer equal or more safety. And just how much of this perception of relative safety is due to habit, I don't know.

[Trevor]

Compared to Europe, we look like a safe place to invest. However, i don't see that lasting forever. Our debt continues to skyrocket, our credit has already been downgraded, and the idiots in charge can't get anything constructive done. If I was an investor, I'd be wary about investing here.

[Higgenbotham]

You know, I worry about you Higgie. Does this mean that if the market
goes up, then you lose all your money, and end up in debt for an equal
amount?

John

From where it is now, if I hold this same size position and do nothing to reduce losses as the market rises, I will be wiped out if the S&P 500 goes to 1713. I would have no money but not owe anybody anything either.

Back to this. Last week I gained 1%, the week before I lost 5%, and the week before that I gained 1%. I've reduced my losses 55% by short term trading as the market rose over the past 3 weeks (compared to if I had just held 200% short and done nothing). That also implies I've lost a lot of sleep and the past 3 weeks have been very grueling. Still 200% short.

Another thing to note. As this battle continues, health problems may begin to crop up - irregular heartbeats, hair loss, jaw problems, early morning trips to the bathroom, or what have you that results from acute stress. So far in this go-round, none of that has happened - yet (I am beginning to develop an intermittent jaw problem though). But all of it happened back at the 2007/8 top when I was short and it took a few months to a couple years for my health to return to normal and for all of those conditions to clear.

[shoshin]

Confusion: if p/e ratios have returned to lower levels, why are market averages still at highs?

[Higgenbotham]

Confusion: if p/e ratios have returned to lower levels, why are market averages still at highs?

Earnings are at a record high.

http://www.decisionpoint.com/tac/Swenlin.html

[aedens]

http://www.ekathimerini.com/4dcgi/_w_ar ... 012_427197

[OLD1953]

Wait long enough, real world catches up. Though we aren't in a good position right now.

One of the traps of the market is that when things look down, everything is bad news, and when things look up, everything is good news. The reality of course is there is always bad news and good news. The main thing is to not get carried away by up and down attitudes, but look at the facts. However, the general attitudes of investors make up a major fact in their own right, and it can take more than a generation for depressed attitudes to recover and believe there might actually be good news about anything, just as it can take a generation to convince investors that bad news actually exists and can't be spun into nonexistence.

[Higgenbotham]

Former Delaware Sen. Ted Kaufman, a Democrat, likens the boom in high-frequency trading, with its novelty, complexity and opacity, to the bubble in mortgage bonds a few years ago. We know how that turned out.

"We had a lot of change, we had a lot of money, we had no transparency, and it almost destroyed the financial system of the world," Kaufman said in a telephone interview. "I cannot stress enough how worried I am, how concerned I am about what's happening to our markets."

That's true, as confirmed by Brooks. But all high-frequency trades are symptomatic of a larger, corrosive bug that infects much of the U.S. economy and politics as well. It's about short-term gain at the expense of long-term prosperity. Investors see it, and they're getting fed up.

Williams talks about listening to phone calls from customers at T. Rowe Price's complex in Owings Mills: "These guys have been 10 years in the market. But they've not really got much return. But they've had huge volatility. 'Enough! Enough!' [they say] — 'I'll just take the money and put it under the bed.'"

http://articles.baltimoresun.com/2012-0 ... tabb-group

http://moneymorning.com/2012/02/01/high ... ash-crash/

It may all collapse in "about an hour".

[OLD1953]

Given that I thought the bottom would have dropped out five years ago, I just don't know. It may fall like a stone or it may just drift downwards in a never ending spiral as one company after another loses out and pulls down everything associated with them.

What happens when people just GIVE UP and new car sales for a decade reflect the reality of real wages in the US as compared to 15 years earlier? What happens when people just don't use credit any more, because the bankruptcy laws make everything secured with your future forever? Or you can even look towards the Prohibition era, and ask yourself, what happens if a morality oriented group takes power and passes laws against usury and loans for terms longer than seven years?

For me to think we are out of the woods, total debt vs GDP has to drop a lot by some means. And the balance of trade has to swing back in our direction. We are moving that way, but it going to be a while yet before we are in a place of relative safety.

Hmm, Higgs, does reported volume on the NYSE actually add in all those withdrawn trades? If it's correct that so many are being executed, then real trades are only about 25% of the market, and volume compared to the past before flash trading is not accurate unless you adjust for all the withdrawn trades.

[Trevor]

Yeah, I keep waiting for the stock market to crash, although it seems to be holding steady and some are now predicting a fresh new high. Never ceases to amaze me by now. Things are collapsing, just more slowly than we thought. We'll see what happens when the defaults begin, if the effect will be minor or if that will be the catalyst.