Wednesday, October 29, 2008
Tuesday, October 28, 2008
EXPLANATION OF VIX
http://www.stocktiming.com/Tuesday-DailyMarketUpdate.htm
Like in 2002-2003 we want a FALLING VIX TREND, one sign risk is abating, IMHO
Duratek
Like in 2002-2003 we want a FALLING VIX TREND, one sign risk is abating, IMHO
Duratek
IN SEARCH OF TRUTH
http://www.frankroche.org/
People may forget that CLINTON was PRESIDENT when unanimous vote in lame duck session passed the bill that made this mess possible.
DURING CLINTON ADM
"In late 2000 Bill Clinton proudly signed legislation granting Permanent Normal Trade Relations (PNTR) with China. In 2000 our merchandise trade deficit with China was $84 billion, by 2004 it reached $162 billion, and by the end of 2007 our merchandise trade deficit with China was $256 billion. China, flush with USD reserves and needing a safe place to park all that cash became a big buyer of 10 yr US treasuries. This went a long way to help keep a cap on long term interest rates, thereby counteracting the efforts by the Fed on the short end of the interest rate curve. Sustained low long term interest rates allowed the housing bubble to continue to inflate reaching historic levels in terms of ownership rates and price appreciation.
And of course the repeal of GLASS STEAGALL ACT
The players were helped along in 1999 by Bill Clinton's repeal of the Glass-Steagall Act which had kept separate activities of commercial banks and investment banks. Again, under Clinton in 2000 the Securities and Exchange Commission (SEC) went along with the banks and investment banks exempting derivatives (CDO's, CDS's) from regulation and oversight. In 2004 the SEC under Bush exempted investment banks (at this time Hank Paulson was CEO of Goldman Sachs) from maintaining reserves to cover loses in derivatives. Which brings us back to Congress, and both the Clinton and Bush administrations and the tremendous failure of oversight. From the time the first seeds of our current financial difficulties were sown years ago to today, Congress and consecutive administrations have had all the oversight power they've wanted. Congress failed in it's oversight role. "
*And guess what.....NEITHER PARTY SAW THIS COMING OR IF THEY DID THE LOBBYISTS BOUGHT THEM OUT!
So when you cast your ballot, and you hear the word "CHANGE" being thrown around, don't get your hopes up. WE will continue to swing from tax cuts seen to help the rich, to redistribution of that wealth.
I don't know what exactly will bring about REAL CHANGE unless the masses take the time to understand what and who got us here, what system or persons or party can make everyone happy?
Only fair system rids us of the lobby groups, and their influence on COngress, a SMALLER GOV that is mandated to keep us safe at home and not be world policeman. A CONGRESS that follows the CONSTITUTION, that protects our rights......and create a FAIR MARKET SYSTEM that allows supply and demand to dictate prices and interest rates.
If the FALL OUT from the current crisis will not open eyes to the REAL ISSUES and the role the FEDERAL RESERVE played in all of this, I dont know what will.
Let's see if they can RE-INFLATE THIS MESS>
Duratek
People may forget that CLINTON was PRESIDENT when unanimous vote in lame duck session passed the bill that made this mess possible.
DURING CLINTON ADM
"In late 2000 Bill Clinton proudly signed legislation granting Permanent Normal Trade Relations (PNTR) with China. In 2000 our merchandise trade deficit with China was $84 billion, by 2004 it reached $162 billion, and by the end of 2007 our merchandise trade deficit with China was $256 billion. China, flush with USD reserves and needing a safe place to park all that cash became a big buyer of 10 yr US treasuries. This went a long way to help keep a cap on long term interest rates, thereby counteracting the efforts by the Fed on the short end of the interest rate curve. Sustained low long term interest rates allowed the housing bubble to continue to inflate reaching historic levels in terms of ownership rates and price appreciation.
And of course the repeal of GLASS STEAGALL ACT
The players were helped along in 1999 by Bill Clinton's repeal of the Glass-Steagall Act which had kept separate activities of commercial banks and investment banks. Again, under Clinton in 2000 the Securities and Exchange Commission (SEC) went along with the banks and investment banks exempting derivatives (CDO's, CDS's) from regulation and oversight. In 2004 the SEC under Bush exempted investment banks (at this time Hank Paulson was CEO of Goldman Sachs) from maintaining reserves to cover loses in derivatives. Which brings us back to Congress, and both the Clinton and Bush administrations and the tremendous failure of oversight. From the time the first seeds of our current financial difficulties were sown years ago to today, Congress and consecutive administrations have had all the oversight power they've wanted. Congress failed in it's oversight role. "
*And guess what.....NEITHER PARTY SAW THIS COMING OR IF THEY DID THE LOBBYISTS BOUGHT THEM OUT!
So when you cast your ballot, and you hear the word "CHANGE" being thrown around, don't get your hopes up. WE will continue to swing from tax cuts seen to help the rich, to redistribution of that wealth.
I don't know what exactly will bring about REAL CHANGE unless the masses take the time to understand what and who got us here, what system or persons or party can make everyone happy?
Only fair system rids us of the lobby groups, and their influence on COngress, a SMALLER GOV that is mandated to keep us safe at home and not be world policeman. A CONGRESS that follows the CONSTITUTION, that protects our rights......and create a FAIR MARKET SYSTEM that allows supply and demand to dictate prices and interest rates.
If the FALL OUT from the current crisis will not open eyes to the REAL ISSUES and the role the FEDERAL RESERVE played in all of this, I dont know what will.
Let's see if they can RE-INFLATE THIS MESS>
Duratek
Monday, October 27, 2008
IF EVEN HALF OF THIS IS TRUE
"So the Fed, rather than putting the purchasing and debt-paying power in the domestic economy loop where it would reach householders with mortgages they limited their purchasing power creation to their own elite circle attached to the Federal Reserve Bank of New York, the only Federal Reserve bank in the country which conducts these open-market purchases and sales. "
http://www.rense.com/general83/expose.htm
ALSO http://www.econbrowser.com/archives/2008/10/the_federal_res.html Professor James Hamilton's blog, above " Balance sheet of FED "
http://www.rense.com/general83/expose.htm
ALSO http://www.econbrowser.com/archives/2008/10/the_federal_res.html Professor James Hamilton's blog, above " Balance sheet of FED "
Saturday, October 25, 2008
FALLEN HERO
**Click to enlargeALL the way it looked good? try to pick the bottom? MY rule of thumb? don't bet against trend of the 20 EMA.....
D
ONCE IN A LIFETIME EVENT
Need to see consumer sector on the RISE, not this!
http://research.stlouisfed.org/publications/usfd/page3.pdf This is the steepest climb in the recorded history of this measurement of money....never before seen, and WHERE will all this fiat currency go?
Is the need to liquidate sending a false bear market alert for gold?
Seeking ALpha "The Fed and The Banking System"
READ DOUG NOLAND SUMMARY "HISTORY'S BIGGEST MARGIN CALL"
I cannot rely on my past TA to ascertain a market bottom as yet, it will come later on as some momentum indicators tunr up, they have NOT as yet even though I see some LOW readings of my proprietary index that are consistant with prior mkt bottoms, HOWEVER, even with VIX at 80 another monthly high I am not certain forced selling and capitulation have yet ocurred.
SO I remain cautious, may do some VERY selective nibbling, it will take ROBUST and committed buying to turn this thing around. I do not think the little guy has jumped ship, none of my employees to my knowledge have sold out their 401K's.
Theunwinding may not be over, forced selling, margin calls, hedge fund collapses, deflationary forces are STRONG....FED PUMPING IS ALSO....not showing up YET in US $ nor commodities.
Duratek
Friday, October 24, 2008
AM NOTES: FUTURES "LIMIT DOWN"
BOY...they jammed it up into the close (maybe stopping out some shorts)
OIL now $64? collapsed
what DAY hasn't been triple digit move?
layoffs at BIG companies just beginning....trickling into THE ECONOMY mid sized....already hit me (30-35 employees)
NO way to measure SPX profits going forward.
Greenspan "tsunami....never saw it coming..." IDIOT!
gold under $700
Copper under $1.70
Silver under $9
OMG!!!!!!!!!!!! US $$ (toiletto paper) UP 1.40 to $86.54 now that's UNWIDING!
RECORD BORROWING:
NEW YORK (CNNMoney.com) -- Commercial banks borrowed a record of $105.8 billion a day, on average, from the Federal Reserve's emergency lending window over the past week, according to Fed data released Thursday.
Uncharted territory:NEW YORK (CNNMoney.com) -- The Federal Reserve is widely expected to cut interest rates again next week. But could the Fed soon go where it has never gone before and bring them below 1%?
BUT US $$ TANKS AGAINST YEN KILLING JAPANESE EXPORTS NIKKI TANKS:
Dollar plumbs 13-year low versus yen
Greenback falls on speculation that Fed will slash rates again to shore up economy.ge -----
LONDON (CNNMoney.com) -- U.S. stock futures tanked early Friday as fears of recession deepened a global market rout.
No of course we're not already IN ONE!!
SEEING BARGAINS as baby out with bathwater....extreme VIX measurements...trying to PICK THIS Bottom has been hazordous for those doing so....and shows this is ONE....you leave ALONE and get it on the OTHER SIDE!
OIL now $64? collapsed
what DAY hasn't been triple digit move?
layoffs at BIG companies just beginning....trickling into THE ECONOMY mid sized....already hit me (30-35 employees)
NO way to measure SPX profits going forward.
Greenspan "tsunami....never saw it coming..." IDIOT!
gold under $700
Copper under $1.70
Silver under $9
OMG!!!!!!!!!!!! US $$ (toiletto paper) UP 1.40 to $86.54 now that's UNWIDING!
RECORD BORROWING:
NEW YORK (CNNMoney.com) -- Commercial banks borrowed a record of $105.8 billion a day, on average, from the Federal Reserve's emergency lending window over the past week, according to Fed data released Thursday.
Uncharted territory:NEW YORK (CNNMoney.com) -- The Federal Reserve is widely expected to cut interest rates again next week. But could the Fed soon go where it has never gone before and bring them below 1%?
BUT US $$ TANKS AGAINST YEN KILLING JAPANESE EXPORTS NIKKI TANKS:
Dollar plumbs 13-year low versus yen
Greenback falls on speculation that Fed will slash rates again to shore up economy.ge -----
LONDON (CNNMoney.com) -- U.S. stock futures tanked early Friday as fears of recession deepened a global market rout.
No of course we're not already IN ONE!!
SEEING BARGAINS as baby out with bathwater....extreme VIX measurements...trying to PICK THIS Bottom has been hazordous for those doing so....and shows this is ONE....you leave ALONE and get it on the OTHER SIDE!
Wednesday, October 22, 2008
THE ANSWER TO EVERYTHING
Looks like support line broken....finishes under the support I drew.
Report says NBC Universal plans $500 million in spending cuts amid economic downturn
LOS ANGELES (AP) _ A trade paper reports that NBC Universal plans to cut $500 million in spending next year to prepare for an expected continuation of the worldwide economic slowdown. Variety says President and CEO Jeff Zucker announced the cuts Friday...
LOS ANGELES (AP) _ A trade paper reports that NBC Universal plans to cut $500 million in spending next year to prepare for an expected continuation of the worldwide economic slowdown. Variety says President and CEO Jeff Zucker announced the cuts Friday...
MRK cuts 12% of workforce
YHOO cuts 10% of workforce
Micron Technology Inc. has announced that it will reduce its workforce by around 15 percent and will slash the output of its NAND flash joint venture with Intel Corp. as part of streamlining its IC memory operations.
Micron said the workforce downsizing will result in about 3,000 job cuts
NEW YORK (AP) _ Texas Instruments Inc., which makes chips for cell phones and other gadgets, warned Monday that orders are slowing down rapidly, and said it will cut jobs to save money. TI said it will reduce its work force by 650 people in six countries...
CUTTING JOBS IS ANSWER.........CUTTING SPENDING.......as economies SLOW.....job loses to COMPOUND PROBLEMS........
YHOO cuts 10% of workforce
Micron Technology Inc. has announced that it will reduce its workforce by around 15 percent and will slash the output of its NAND flash joint venture with Intel Corp. as part of streamlining its IC memory operations.
Micron said the workforce downsizing will result in about 3,000 job cuts
NEW YORK (AP) _ Texas Instruments Inc., which makes chips for cell phones and other gadgets, warned Monday that orders are slowing down rapidly, and said it will cut jobs to save money. TI said it will reduce its work force by 650 people in six countries...
CUTTING JOBS IS ANSWER.........CUTTING SPENDING.......as economies SLOW.....job loses to COMPOUND PROBLEMS........
HEAVY SELLING today another 90% down volume day....so what did that 90% up day mean?
The heavy selling means sellers NOT EXHAUSTED.....even though we may be....
We'll get through this, my hope was you would with your cash in hand....not sitting and waiting with huge losses.....they REALLY f'd things up folks...
D
GIVE ME THE GOOD NEWS FIRST
Good news? short post
http://news.yahoo.com/s/nm/20081022/bs_nm/us_usa_economy_mortgages Mortgage apps sink to 8 yr LOW!!!!
>>>Potential buyers are in many cases paralyzed by tumbling stocks, a two-year home price slump that has room to run, mortgage rates close to the year's peak and higher downpayments required by lenders making it harder to get a mortgage as foreclosures spike.
Job insecurity is also increasing as a recessionary economy means unemployment will rise from its five-year high, many analysts say.
"A lot of individuals are just not thinking about buying a house now," said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. "They're uncertain, their confidence isn't high, they're feeling that they might not qualify for a loan anyway so why even bother to apply."<<<>......I wasnt buying on margin....a 30% move alerts them.....very odd. PS worked out for me...I went back to charts and decided to leave it be....has fallen now under $10 !!! moral (dont try and pick a bottom..)
D
http://news.yahoo.com/s/nm/20081022/bs_nm/us_usa_economy_mortgages Mortgage apps sink to 8 yr LOW!!!!
>>>Potential buyers are in many cases paralyzed by tumbling stocks, a two-year home price slump that has room to run, mortgage rates close to the year's peak and higher downpayments required by lenders making it harder to get a mortgage as foreclosures spike.
Job insecurity is also increasing as a recessionary economy means unemployment will rise from its five-year high, many analysts say.
"A lot of individuals are just not thinking about buying a house now," said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. "They're uncertain, their confidence isn't high, they're feeling that they might not qualify for a loan anyway so why even bother to apply."<<<>......I wasnt buying on margin....a 30% move alerts them.....very odd. PS worked out for me...I went back to charts and decided to leave it be....has fallen now under $10 !!! moral (dont try and pick a bottom..)
D
Tuesday, October 21, 2008
STEEP DECLINE IN COMMODITIES VERY TELLING
http://www.nymex.com/index.aspx
OIL off $3 today near $71, 50% haircut too from highs, the ECONOMY happened.
IT STILL AINT GONNA WORK LINK
AS I am witnessing a once in lifetime event, a 10 SIGMA eboli crash of assets, excuse me if I err on side of caution.
You bet your ASS I WANT to go some stocks. and it is ALWAYS HARD to buy into a malestorm of negativity, there is too much at stake here not to let some fear in and pplay it safe, wait for PROPER SETUPS and less risk as this painful unwinding, etc continues to play out.
It will be HARD to change peoples perceptions of the current situation, will NEW LEADER bring the kind of HOPE that defeats the dispair? I hope so
D
OIL off $3 today near $71, 50% haircut too from highs, the ECONOMY happened.
IT STILL AINT GONNA WORK LINK
AS I am witnessing a once in lifetime event, a 10 SIGMA eboli crash of assets, excuse me if I err on side of caution.
You bet your ASS I WANT to go some stocks. and it is ALWAYS HARD to buy into a malestorm of negativity, there is too much at stake here not to let some fear in and pplay it safe, wait for PROPER SETUPS and less risk as this painful unwinding, etc continues to play out.
It will be HARD to change peoples perceptions of the current situation, will NEW LEADER bring the kind of HOPE that defeats the dispair? I hope so
D
Sunday, October 19, 2008
HAS ENOUGH BEEN DONE TO STEM WORLD FINANCIAL CRISIS?
Finished recent ROubini.....
We are in uncharted territory/ Mkt action/reaction as ROunbini points out to EACH ROUND OF MEASURES to stem the panic has been met with shorter and shorter rallies. I had run chart pinpointing price at EACH FED RATE CUT, showing mkt was ALWAYS LOWER after, and 2 other trends
Market FOLLOWS direction of OIL and RATE CUTS....reason? obvious oil rises as do rates (cept VOLKER!!!) when/because economy is gaining strength and demand increases, so will SPX profits especially from ENERGY SECTOR (TAKE OUT? THESE 2 FROM COMING EARINGS SEASON?) same fall in weakening environment which of course leads to LOWER and LOWER SPX PROFITS which DO NOT SUPPORT RISING EQUITY PRICES.
I am not ruling out trying to catch a few points in a rally effort, but my main acct is staying in cash right now. Is OCT crash 1929 in time frame? current environment may be unique and so will or have the market actions.....including volatility as UPTICK rule is gone when before present.....it MAY be impacting measurment of VIX compared to PAST when UPTICK rule was IN, making PAST observances not as accurate....or even valid.
MKT NEEDS CASH COMING IN TO LIQUIFY the deleveraging......without SOME LEVEL OF BUYING INTEREST (FED BACKSTOPPING BUFFET???????) picking up and SOON.......that parabolic move in OCT could continue and quickly.....as it continues to FEED ON ITSELF AS IT CANNOT FEED ON NEW MONEY
OBAMA is lesslikely to want to do RIGHT THING FOR THOSE WHO GOT US IN THIS MESS......some actions...head hunting, STRICTER oversight etc....repeal of div tax cuts could SNOWBALL this thing to its end game.... 50% retrace of ENTIRE 1980's-present bull would leave us under 7,000 so what will satisfy mkt g-ds.....retrace of 2002 or beyond?
Is action already taken ENOUGH? as ROubini also points out, we got our BUMP from G7 already...and that was MASSIVE WORLWIDE ATTACK
We are in uncharted territory/ Mkt action/reaction as ROunbini points out to EACH ROUND OF MEASURES to stem the panic has been met with shorter and shorter rallies. I had run chart pinpointing price at EACH FED RATE CUT, showing mkt was ALWAYS LOWER after, and 2 other trends
Market FOLLOWS direction of OIL and RATE CUTS....reason? obvious oil rises as do rates (cept VOLKER!!!) when/because economy is gaining strength and demand increases, so will SPX profits especially from ENERGY SECTOR (TAKE OUT? THESE 2 FROM COMING EARINGS SEASON?) same fall in weakening environment which of course leads to LOWER and LOWER SPX PROFITS which DO NOT SUPPORT RISING EQUITY PRICES.
I am not ruling out trying to catch a few points in a rally effort, but my main acct is staying in cash right now. Is OCT crash 1929 in time frame? current environment may be unique and so will or have the market actions.....including volatility as UPTICK rule is gone when before present.....it MAY be impacting measurment of VIX compared to PAST when UPTICK rule was IN, making PAST observances not as accurate....or even valid.
MKT NEEDS CASH COMING IN TO LIQUIFY the deleveraging......without SOME LEVEL OF BUYING INTEREST (FED BACKSTOPPING BUFFET???????) picking up and SOON.......that parabolic move in OCT could continue and quickly.....as it continues to FEED ON ITSELF AS IT CANNOT FEED ON NEW MONEY
OBAMA is lesslikely to want to do RIGHT THING FOR THOSE WHO GOT US IN THIS MESS......some actions...head hunting, STRICTER oversight etc....repeal of div tax cuts could SNOWBALL this thing to its end game.... 50% retrace of ENTIRE 1980's-present bull would leave us under 7,000 so what will satisfy mkt g-ds.....retrace of 2002 or beyond?
Is action already taken ENOUGH? as ROubini also points out, we got our BUMP from G7 already...and that was MASSIVE WORLWIDE ATTACK
Wednesday, October 15, 2008
THE END OF AMERICAN HEGONOMY
http://www.creators.com/opinion/paul-craig-roberts/the-end-of-american-hegemony.html
If you care about this country and are interested in FACTS, not BOOB TUBE PABLUM and are not afraid but empowered by the truth, read it
D
If you care about this country and are interested in FACTS, not BOOB TUBE PABLUM and are not afraid but empowered by the truth, read it
D
"DOES THE BAILOUT PASS THE SMELL TEST?"
http://www.creators.com/opinion/paul-craig-roberts/does-the-bailout-pass-the-smell-test.html
Today was another 90% down volume PLUS day closer to 98%. This trumps the 90% 900 point UP day we had Monday on what premise? The BALD MFER'S on the job , gonna fix her? (what language...it's Ok I'm bald too!)
Just as 911 was road for BUSH to push his new world order BS doctrum on the world and INVADE Iraq and involve us in another VIET NAM (" WE WILL LEAVE WITH VICTORY.....")
There is NO victory against a terorist aggresor, ONLY CONTAIGNMENT!
We HAD containgment, until the MILITARY INSIDERS created fear and pulled a fast one on us. we are SO SCREWED.
BUSH will go down as the WORST PRESIDENT in history, and he has maybe destroyed AMerica's status in the world, we cannot even function without BILLIONS of $$$ lira whatever coming in from outside to function.
IT IS TIME to take back AMERICA, and if it means a vote for anyone other than McCain so be it, who is an older slower BUSH.
WE need change SO BAD, we will elect someone with very little experience, but looks Presidential, call him a good actor, they're all good actors....there is no quick fixing our problems, and promising the American people MORE when we cant pay for what is on table now is wrong too.
BAILOUT IS BS, and you know what to do, vote out any who voted for it, if that's not what YOU wanted them to do. They are elected to do bidding of electorate not their own freaking agenda.
You jump in TOO soon this mkt you get hurt. I like some of the companies that seem sound paying large dividends, but they can get cut! and stock will fall lower.
There is a LARGE SCALE LIQUIDATION going on now folks, and I do not know what wont get thrown out with the bad.
Governments actions as described in article above does not address the real problem, the deliquent mortgages and as people lose jobs etc more will default compounding the problem.
WHAT IS DEFLATION? well we have asset deflation in declining stock markets worldwide, we have Housing deflation as homes lose value. We have business pressure to LOWER prices as costs rise just to close business. SPX profits falling, declining oil prices and most commodities.
Action by central banks and fED etc are inflating, but not in this environment...OIl now near $73 !!!! BDI has been collapsing as I showed earlier.
THEY may not want to look back, but WE SHOULD to spot the culprits and make sure it never happens again.
That SHILL KNUCKLEHEAD PAULSON is a studdering goof and was silent until even an idiot could see we were indeep shit, AKA BUSH and GHOST HOST BERNANKE.
Behind the scenes ghoul Cheney, puppit master....the many who helped mislead us into a bad war, costing precious lives and Trillions of dollars.
NO KNOWN TERRORISTS we in IRAQ at time of invasion, NO weapons of BS destruction...we can see a flea on a rhino teet from outer space, hear a monkey fart from same, and we got it wrong?
NO, it fit the profile of the BUSH doctrum, and the american people and congress were duped.
So here we are to pick up the pieces, pay the costs, suffer the consequences...think about what message you want to send to the IN CROWD when you pull the lever and NO there is no box to check NONE OF THE ABOVE.
Duratek
Today was another 90% down volume PLUS day closer to 98%. This trumps the 90% 900 point UP day we had Monday on what premise? The BALD MFER'S on the job , gonna fix her? (what language...it's Ok I'm bald too!)
Just as 911 was road for BUSH to push his new world order BS doctrum on the world and INVADE Iraq and involve us in another VIET NAM (" WE WILL LEAVE WITH VICTORY.....")
There is NO victory against a terorist aggresor, ONLY CONTAIGNMENT!
We HAD containgment, until the MILITARY INSIDERS created fear and pulled a fast one on us. we are SO SCREWED.
BUSH will go down as the WORST PRESIDENT in history, and he has maybe destroyed AMerica's status in the world, we cannot even function without BILLIONS of $$$ lira whatever coming in from outside to function.
IT IS TIME to take back AMERICA, and if it means a vote for anyone other than McCain so be it, who is an older slower BUSH.
WE need change SO BAD, we will elect someone with very little experience, but looks Presidential, call him a good actor, they're all good actors....there is no quick fixing our problems, and promising the American people MORE when we cant pay for what is on table now is wrong too.
BAILOUT IS BS, and you know what to do, vote out any who voted for it, if that's not what YOU wanted them to do. They are elected to do bidding of electorate not their own freaking agenda.
You jump in TOO soon this mkt you get hurt. I like some of the companies that seem sound paying large dividends, but they can get cut! and stock will fall lower.
There is a LARGE SCALE LIQUIDATION going on now folks, and I do not know what wont get thrown out with the bad.
Governments actions as described in article above does not address the real problem, the deliquent mortgages and as people lose jobs etc more will default compounding the problem.
WHAT IS DEFLATION? well we have asset deflation in declining stock markets worldwide, we have Housing deflation as homes lose value. We have business pressure to LOWER prices as costs rise just to close business. SPX profits falling, declining oil prices and most commodities.
Action by central banks and fED etc are inflating, but not in this environment...OIl now near $73 !!!! BDI has been collapsing as I showed earlier.
THEY may not want to look back, but WE SHOULD to spot the culprits and make sure it never happens again.
That SHILL KNUCKLEHEAD PAULSON is a studdering goof and was silent until even an idiot could see we were indeep shit, AKA BUSH and GHOST HOST BERNANKE.
Behind the scenes ghoul Cheney, puppit master....the many who helped mislead us into a bad war, costing precious lives and Trillions of dollars.
NO KNOWN TERRORISTS we in IRAQ at time of invasion, NO weapons of BS destruction...we can see a flea on a rhino teet from outer space, hear a monkey fart from same, and we got it wrong?
NO, it fit the profile of the BUSH doctrum, and the american people and congress were duped.
So here we are to pick up the pieces, pay the costs, suffer the consequences...think about what message you want to send to the IN CROWD when you pull the lever and NO there is no box to check NONE OF THE ABOVE.
Duratek
BDI IN FREEFALL !!!
DEFINITION BELOW OF BDI ****NOW ONLY CHARGING BARELY 10% OF RATE JUST 2 MONTHS AGOI!!The Baltic Dry Index is an index covering dry bulk shipping rates and managed by the Baltic Exchange in London. According to Baltic Exchange, the index provides:
“
…an assessment of the price of moving the major raw materials by sea. Taking in 26 shipping routes measured on a timecharter and voyage basis, the index covers Supramax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.
”
—The Baltic Exchange, in BalticExchange.Com
The index is made up of an average of the Baltic Supramax, Panamax, and Capesize indices. These indices are based on professional assessments made by a panel of international shipbroking companies. The index can be accessed on a subscription basis directly from the Baltic Exchange as well as from major financial information and news services such as Thomson Financial Datastream, Reuters and Bloomberg L.P..
Most directly, the index measures the demand for shipping capacity versus the supply of dry bulk carriers. However, since the demand for shipping varies with the amount of cargo that is being traded in the market (supply and demand) and the supply of ships is much less elastic than the demand for them, the index indirectly measures global supply and demand for the commodities shipped aboard dry bulk carriers, such as cement, coal, iron ore, and grain.
Because dry bulk primarily consists of materials that function as raw material inputs to the production of intermediate or finished goods, such as concrete, electricity, steel, and food, the index is also seen as a good economic indicator of future economic growth and production, termed a leading economic indicator because it predicts future economic activity.
NOT OUT OF WOODS YET?
AP report on retail sales this AM
>>>The government's report that retail sales plunged in September by 1.2 percent — almost double the 0.7 percent drop analysts had expected — made it clear that consumers are unlikely to reach for their wallets in the coming months as they worry about a shaky economy.
The Commerce Department report is sobering because consumer spending accounts for more than two-thirds of U.S. economic activity. The reading comes as Wall Street is beginning to refocus its attention on the faltering economy following stepped up government efforts to revive the stagnant credit markets.
"Even though the banking sector may be returning to normal, the economy still isn't. The economy continues to face a host of other problems," said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com. "We're in for a tough ride."<<<
So many running on CNBC calling for a bottom, even after all the selling and the STARK NEW REALITY smacking us in the face, Governments NEW and EXPANDED role, it is all rather troubling.
Even ROubini agrees the sellout I mean bailout was necessary because at this point not much else could be done, had they been listening to him back in 2006 many things would have been obvious and not a surprise.
Those trying to fix it are complicit in this situation and many have conflict of interest.
We are in for one rocky frustrating and painful road back to some kind of normalcy and I dont know what that is anymore.
We are moving to a resolution, and the voters are in the stock market.
Duratek
>>>The government's report that retail sales plunged in September by 1.2 percent — almost double the 0.7 percent drop analysts had expected — made it clear that consumers are unlikely to reach for their wallets in the coming months as they worry about a shaky economy.
The Commerce Department report is sobering because consumer spending accounts for more than two-thirds of U.S. economic activity. The reading comes as Wall Street is beginning to refocus its attention on the faltering economy following stepped up government efforts to revive the stagnant credit markets.
"Even though the banking sector may be returning to normal, the economy still isn't. The economy continues to face a host of other problems," said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com. "We're in for a tough ride."<<<
So many running on CNBC calling for a bottom, even after all the selling and the STARK NEW REALITY smacking us in the face, Governments NEW and EXPANDED role, it is all rather troubling.
Even ROubini agrees the sellout I mean bailout was necessary because at this point not much else could be done, had they been listening to him back in 2006 many things would have been obvious and not a surprise.
Those trying to fix it are complicit in this situation and many have conflict of interest.
We are in for one rocky frustrating and painful road back to some kind of normalcy and I dont know what that is anymore.
We are moving to a resolution, and the voters are in the stock market.
Duratek
Tuesday, October 14, 2008
Thursday, October 09, 2008
WATERFALL EVENT, LIFE CHANGING
FOLKS, (CAPS TONIGHT!!!) SOME OF YOU BEEN WITH ME LAST 4 1/2 YEARS, SOME NEW LURKERS, DON;T KNOW HOW MANY READY MY BLOG FOR SURE, BUT I AM HUMBLED AT THE POWER OF THE MARKET. (OK CAPS OFF)
I was off today for Yum Kippur, and saw the market tanking when I got home around 2 pm, with many away from trading desks, today's liquidation was a surprise, in its forocity, 3rd 90% down volume day in a row!!! (yes I do typos!)
I am feeling as before we are heralding in a new era, playing field is forever changed, Wall Street never the same, with more regulation oversight and things that will hinder growth. LIBOR rates staying elevated, nobdy trusts anyone, the market has said "whatever you idiots are doing it aint working" who can argue.
Because this is just a BLOG, and I have warning this is never investment advice, consult your financial advisor......I have tried to share what I have done for myself.....I can offer articles which help let you in on whats going on, I CAN WARN OF POTENTIAL DANGERS as I have from day one, its here on my blog....those following know.
It may be hard to follow one's own advice, but staying in Fed Treasury MM all this time avoiding horrible losses WAS the right thing to do.....and many times friends you only know in rear view mirror. That doing almost nothing ws better than seeing 40% losses psile up!!! in just one f'ing year!
If that is not a CRASH what is? not in one day but one year......I see parabolic moves.....well each of last 3 days I was itching to snoop in on a bargain, now cheaper!!! so how does one know when it is safe?
Problem is, PANIC can outrun common sense.....and SPX earnings projected for 2009 are TOO high and falling fast!!!!! so believe it or not stocks may be very pricey here!
Richard Russel says at bear bottoms SPX dividend yields will be near 6% or more.....I am not sure exactly maybe someone can post but near 3% my guess.
I am not unscathed as my business is at risk, business has been VERY quiet...not much I can do...cept cut costs.
REAL PEOPLE are hurting so I cant be glib here, I have done what I could, is why my blog exists....if just ONE PERSON sidestepped this by opening their minds to another truth, or possibility.
Markets in tough spot, until it knows who will be running things it will be tough sledding....will it be short marriage?
A NEW BULL MAY BE SOME WAY DOWN THE ROAD INDEED>
Duratek
I was off today for Yum Kippur, and saw the market tanking when I got home around 2 pm, with many away from trading desks, today's liquidation was a surprise, in its forocity, 3rd 90% down volume day in a row!!! (yes I do typos!)
I am feeling as before we are heralding in a new era, playing field is forever changed, Wall Street never the same, with more regulation oversight and things that will hinder growth. LIBOR rates staying elevated, nobdy trusts anyone, the market has said "whatever you idiots are doing it aint working" who can argue.
Because this is just a BLOG, and I have warning this is never investment advice, consult your financial advisor......I have tried to share what I have done for myself.....I can offer articles which help let you in on whats going on, I CAN WARN OF POTENTIAL DANGERS as I have from day one, its here on my blog....those following know.
It may be hard to follow one's own advice, but staying in Fed Treasury MM all this time avoiding horrible losses WAS the right thing to do.....and many times friends you only know in rear view mirror. That doing almost nothing ws better than seeing 40% losses psile up!!! in just one f'ing year!
If that is not a CRASH what is? not in one day but one year......I see parabolic moves.....well each of last 3 days I was itching to snoop in on a bargain, now cheaper!!! so how does one know when it is safe?
Problem is, PANIC can outrun common sense.....and SPX earnings projected for 2009 are TOO high and falling fast!!!!! so believe it or not stocks may be very pricey here!
Richard Russel says at bear bottoms SPX dividend yields will be near 6% or more.....I am not sure exactly maybe someone can post but near 3% my guess.
I am not unscathed as my business is at risk, business has been VERY quiet...not much I can do...cept cut costs.
REAL PEOPLE are hurting so I cant be glib here, I have done what I could, is why my blog exists....if just ONE PERSON sidestepped this by opening their minds to another truth, or possibility.
Markets in tough spot, until it knows who will be running things it will be tough sledding....will it be short marriage?
A NEW BULL MAY BE SOME WAY DOWN THE ROAD INDEED>
Duratek
Monday, October 06, 2008
CHART TO PONDER
I am concerned that .618 FIB was broken, in CRASH environment anything is possible, looking at 9300 level a few spots it could catch....I think the other blue lines are now RESISTANCE.D
PANIC AND DELEVERAGING IS SPREADING
Watching AM futures. In this case ONLY way to play short side was to be in SHORT type fund.....and leave it be, so many head fakes...hopes are now dashed.
VIX should skyrocket.....DOW PLUNGE AT OPEN.....DOW 10K challenged...no one will lend....bubble HAS to deflate....no amount of NEW CREDIT ($2T ?) would be capable....in a GOOD environment.....not happening....BAILOUT PLAN LATE TOO LATE AND INSUFFICIENT
I expect my readings on Bear Bottoms to be breached today, but friends, I don't trust it! Its not that buying here wouldn't be profitable in future, not knowing how long that is.........and knowing little guy, he hasn't panicked yet, ask to be taken out, this thing is spiraling downward like a parachute tangled up after deploying.....they are trying to cut 1st chute.....only to find no one packed reserve???
NOW you might land in a mud puddle and live.......money being herded into treasuries......and maximum amount of new money being needed.....higher rates for the RISK is usually what one might expect.
If bond yields soar killing bond mkt.......kiss our asses goodbye... MULTIPLE CAR BIZ closed, and all kinds of retail...I have NO idea what will sustain me personally.
We have once in a lifetime financial storm cocktail.
HERE IS THE INTELLIGENT JIM PUPLAVA SERIES THAT GOT ME STARTED READING AND UNDERSTANDING THE MESS FED AND GOVERNMENTS WERE CREATING
http://www.financialsense.com/series2/perspectives2.html
2. TSUNAMI
"A tsunami can flood breakwaters, tear into harbors and shorelines, and leave widespread destruction in their wake. Because earthquakes are the primary source of tsunamis, they can often go undetected until they erupt."
3. When plying the ocean, weather can turn any sail into a pleasant memory or a hazardous journey. Mariners approach weather with a spirit of resignation. It just happens. It is beyond human control and there is little we can do about it.
10-26-00 Part 5. ROGUE WAVE/ROGUE TRADER
There will come a day unlike any other day, an event unlike any other event and a crisis unlike any other crisis. It will emerge out of nowhere at a time no one expects. It will be an event that no one anticipates -- a crisis that experts didn’t foresee. It will be an exogenous event -- a rogue wave." Read More
08-16-01 Part 10. RIDERS ON THE STORM
The severity of a recession or bust is oftentimes determined by the boom that preceded it. In this case we’ve not only had a boom, but that boom that grew into a bubble has rippled throughout the financial system inflating financial assets and real estate prices. In this final installment, I hope to help you chart your course so that you will be able to ride that storm. Read More
BUT he also figured the FED could inflate its way out of this mess......even PUPLAVA maybe didnt see this ROGUE WAVE COMING
D
VIX should skyrocket.....DOW PLUNGE AT OPEN.....DOW 10K challenged...no one will lend....bubble HAS to deflate....no amount of NEW CREDIT ($2T ?) would be capable....in a GOOD environment.....not happening....BAILOUT PLAN LATE TOO LATE AND INSUFFICIENT
I expect my readings on Bear Bottoms to be breached today, but friends, I don't trust it! Its not that buying here wouldn't be profitable in future, not knowing how long that is.........and knowing little guy, he hasn't panicked yet, ask to be taken out, this thing is spiraling downward like a parachute tangled up after deploying.....they are trying to cut 1st chute.....only to find no one packed reserve???
NOW you might land in a mud puddle and live.......money being herded into treasuries......and maximum amount of new money being needed.....higher rates for the RISK is usually what one might expect.
If bond yields soar killing bond mkt.......kiss our asses goodbye... MULTIPLE CAR BIZ closed, and all kinds of retail...I have NO idea what will sustain me personally.
We have once in a lifetime financial storm cocktail.
HERE IS THE INTELLIGENT JIM PUPLAVA SERIES THAT GOT ME STARTED READING AND UNDERSTANDING THE MESS FED AND GOVERNMENTS WERE CREATING
http://www.financialsense.com/series2/perspectives2.html
2. TSUNAMI
"A tsunami can flood breakwaters, tear into harbors and shorelines, and leave widespread destruction in their wake. Because earthquakes are the primary source of tsunamis, they can often go undetected until they erupt."
3. When plying the ocean, weather can turn any sail into a pleasant memory or a hazardous journey. Mariners approach weather with a spirit of resignation. It just happens. It is beyond human control and there is little we can do about it.
10-26-00 Part 5. ROGUE WAVE/ROGUE TRADER
There will come a day unlike any other day, an event unlike any other event and a crisis unlike any other crisis. It will emerge out of nowhere at a time no one expects. It will be an event that no one anticipates -- a crisis that experts didn’t foresee. It will be an exogenous event -- a rogue wave." Read More
08-16-01 Part 10. RIDERS ON THE STORM
The severity of a recession or bust is oftentimes determined by the boom that preceded it. In this case we’ve not only had a boom, but that boom that grew into a bubble has rippled throughout the financial system inflating financial assets and real estate prices. In this final installment, I hope to help you chart your course so that you will be able to ride that storm. Read More
BUT he also figured the FED could inflate its way out of this mess......even PUPLAVA maybe didnt see this ROGUE WAVE COMING
D
Saturday, October 04, 2008
http://prudentbear.com/index.php/commentary/creditbubblebulletin?art_id=10125 DOUG NOLAND READ SHOWS WORLD WIDE CONTRACTION AND CONTAGION
commodities economic sensitive (from above)
Commodities Watch:
October 3 - Bloomberg (Glenys Sim): “Copper, corn and silver drove commodities toward their biggest weekly decline in more than 50 years on concern that the worst financial crisis since the Great Depression will push the U.S. into recession. Commodities, as measured by the Reuters/Jefferies CRB Index of 19 raw materials, have tumbled 9.9% this week…”
Gold dropped 4.7% to $837, and Silver sank 16.7% to $11.13. November Crude declined $13.97 to $92.92. November Gasoline fell 15.3% (down 10.6% y-t-d), and November Natural Gas declined 3.5% (down 1.6% y-t-d). December Copper sank 15%. December Wheat declined 10.6% and Corn fell 16.4%. The CRB index dropped 10.4% (down 9.0% y-t-d). The Goldman Sachs Commodities Index (GSCI) fell 11.2% (down 4.4% y-t-d).
BUBBLE DYNAMICS
Importantly, this historic Credit Inflation inflated asset prices, incomes, corporate cashflows/earnings, government revenues, and various types of spending throughout the U.S. and global economy. It was a self-sustaining Bubble bolstered by ongoing Credit excesses, asset inflation and resulting purchasing power gains. But NFD growth slowed sharply to an annualized $1.726 TN during this year’s first quarter and then sank to $1.127 TN annualized during the second quarter. Credit growth is now in the process of collapsing. At this point, there is clearly insufficient Credit expansion to support inflated asset markets; incomes and household spending; corporate cash flows and investment; and government receipts and expenditures. Lending markets are frozen, securitization markets broken, corporate and muni debt markets in disarray, derivatives markets in shambles, and the leveraged speculating community is engaged in panic de-leveraging. As a consequence, the over-indebted household, corporate and state & local sectors now face a devastating liquidity crisis.We are today witnessing the Acute Stage of Bursting Credit Bubble Dynamics.
*I suggest reading DOUG NOLAND'S MISSIVE EACH WEEK, NO ONE WRITES AS HE DOES!
*New market obs monthly read now available
http://contraryinvestor.com/mo.htm
*The TRUTH ALAN GREENSPAN WAS APUTZ and believed his own Bull SHIT!
http://www.ft.com/cms/s/0/32b85c72-859b-11dd-a1ac-0000779fd18c.html?nclick_check=1
The downward spiral is in full swing, and as workers get shed it will be even more difficult for economies to get traction
D
commodities economic sensitive (from above)
Commodities Watch:
October 3 - Bloomberg (Glenys Sim): “Copper, corn and silver drove commodities toward their biggest weekly decline in more than 50 years on concern that the worst financial crisis since the Great Depression will push the U.S. into recession. Commodities, as measured by the Reuters/Jefferies CRB Index of 19 raw materials, have tumbled 9.9% this week…”
Gold dropped 4.7% to $837, and Silver sank 16.7% to $11.13. November Crude declined $13.97 to $92.92. November Gasoline fell 15.3% (down 10.6% y-t-d), and November Natural Gas declined 3.5% (down 1.6% y-t-d). December Copper sank 15%. December Wheat declined 10.6% and Corn fell 16.4%. The CRB index dropped 10.4% (down 9.0% y-t-d). The Goldman Sachs Commodities Index (GSCI) fell 11.2% (down 4.4% y-t-d).
BUBBLE DYNAMICS
Importantly, this historic Credit Inflation inflated asset prices, incomes, corporate cashflows/earnings, government revenues, and various types of spending throughout the U.S. and global economy. It was a self-sustaining Bubble bolstered by ongoing Credit excesses, asset inflation and resulting purchasing power gains. But NFD growth slowed sharply to an annualized $1.726 TN during this year’s first quarter and then sank to $1.127 TN annualized during the second quarter. Credit growth is now in the process of collapsing. At this point, there is clearly insufficient Credit expansion to support inflated asset markets; incomes and household spending; corporate cash flows and investment; and government receipts and expenditures. Lending markets are frozen, securitization markets broken, corporate and muni debt markets in disarray, derivatives markets in shambles, and the leveraged speculating community is engaged in panic de-leveraging. As a consequence, the over-indebted household, corporate and state & local sectors now face a devastating liquidity crisis.We are today witnessing the Acute Stage of Bursting Credit Bubble Dynamics.
*I suggest reading DOUG NOLAND'S MISSIVE EACH WEEK, NO ONE WRITES AS HE DOES!
*New market obs monthly read now available
http://contraryinvestor.com/mo.htm
*The TRUTH ALAN GREENSPAN WAS APUTZ and believed his own Bull SHIT!
http://www.ft.com/cms/s/0/32b85c72-859b-11dd-a1ac-0000779fd18c.html?nclick_check=1
The downward spiral is in full swing, and as workers get shed it will be even more difficult for economies to get traction
D
Friday, October 03, 2008
DECLINE OF AMERICAN EMPIRE
That is what we are witnessing, it started with Greenspan, and BUSH has put nail in coffin with help of his henchman CHENNEY and shills Bernanke and Paulson AKA FRANKENSTEIN.
WITH money spent in IRaq we could have paid for healhtcare for all in this country with some to spare, we have $300B to $1T in for Fannie...We now have $700B (3X I bet) and the MF'ERS added another $140B of PORK, pig fat....CLASSIC "BIPARTISANSHIP"
So $700B was TOO much but $840 B was just right>>>????!!! triple that I BET..... and it wont stop there....$25B for big 2 auto's.....BIZ HAS SEIZED like crazy glue applied to your ass when you want to fart....looking for a customer in an auto showroom or furn store is like looking for NEmo or Sasquatch
They signed on that bill because they didnt like the markets reaction...how was reaction today?
REAL PEOPLE are being let go iN DROVES..>WAVES.......and it's happening all over the world.
MAYBE....some GEMS, GOOD CO'S get thrown out with the bathwater,,,,and you buy and hold them.
Some BEAR bottoms have shown SPX DIV yields near 6% or higher!!! I dont think we are even at 3%
People are very scared, but many have just watched.....should they rush for the exits........
D
WITH money spent in IRaq we could have paid for healhtcare for all in this country with some to spare, we have $300B to $1T in for Fannie...We now have $700B (3X I bet) and the MF'ERS added another $140B of PORK, pig fat....CLASSIC "BIPARTISANSHIP"
So $700B was TOO much but $840 B was just right>>>????!!! triple that I BET..... and it wont stop there....$25B for big 2 auto's.....BIZ HAS SEIZED like crazy glue applied to your ass when you want to fart....looking for a customer in an auto showroom or furn store is like looking for NEmo or Sasquatch
They signed on that bill because they didnt like the markets reaction...how was reaction today?
REAL PEOPLE are being let go iN DROVES..>WAVES.......and it's happening all over the world.
MAYBE....some GEMS, GOOD CO'S get thrown out with the bathwater,,,,and you buy and hold them.
Some BEAR bottoms have shown SPX DIV yields near 6% or higher!!! I dont think we are even at 3%
People are very scared, but many have just watched.....should they rush for the exits........
D
NEEDLE AND THE DAMAGE DONE
SHOWN IS "BROKEBACK MARKET" click to enlarge It is never good to break a previous years low, the chart is self explanatory with addt'l indexes added above main DOW CHART. This has potential IMHO to take us back to lower lines of support and maybe back to DOW 9,000 or even 2003 or 2002 lows because what got us here is SO much worse than 2000! And so far the elixir that worked before is not working now.
Right after vote for "rescue" bill the market began to TANK, it had been UP more than 250 pts earlier! But selling was not "intense" as it may have looked.
I am scratching my head as one of my TA Indiciators is VERY CLOSE to levels seen at 2002 Bear Bottom, but even if it was, was it not much more logical to get "2nd mouse" and BUY with both hands 2003 lows? IMHO yes....IMPORTANT LOWS USUALLY GET TESTED.
Today we made a new low in the Dow. Could mkt go up MONDAY>? sure and it could crash too.
http://research.stlouisfed.org/publications/usfd/page3.pdf here is latest efforts by FED
Business hasnt seized up, in a world where Toyota sales drop 30% its a whole new ball game!
>>>Toyota announced Friday that it will begin offering 0% financing for 11 models this month, some for up to 60 months. And it's not just on the company's big trucks and SUVs like the 4Runner, Tacoma and Tundra. The popular and fuel-efficient Camry and Corolla are being cleared out on the cheap, too.
"Sales coming in at the September rate would have been worse than stimulating them," says Burnham Securities auto analyst David Healey. Toyota suffered a 32% drop in vehicle sales last month from September 2007, similar to the declines at Chrysler, Ford and Nissan. Honda, with a 24% drop, fared just a little better. GM managed to limit its sales decline to 16%, though it needed an average incentive of almost $4,000 per vehicle to do it.
Unlike the domestic Big Three, Toyota at least has the balance sheet to absorb a clearance sale with little trouble. The company made $17 billion during its latest fiscal year, which ended March 30, and sits on over $17 billion in cash.
Still, it's a landmark move for Toyota, which hasn't offered these kinds of incentives since a limited flirtation with 0% financing shortly after the Sept. 11, 2001, terrorist attacks, according to Edmunds.com analyst Jessica Caldwell.<<<<<
"Sales coming in at the September rate would have been worse than stimulating them," says Burnham Securities auto analyst David Healey. Toyota suffered a 32% drop in vehicle sales last month from September 2007, similar to the declines at Chrysler, Ford and Nissan. Honda, with a 24% drop, fared just a little better. GM managed to limit its sales decline to 16%, though it needed an average incentive of almost $4,000 per vehicle to do it.
Unlike the domestic Big Three, Toyota at least has the balance sheet to absorb a clearance sale with little trouble. The company made $17 billion during its latest fiscal year, which ended March 30, and sits on over $17 billion in cash.
Still, it's a landmark move for Toyota, which hasn't offered these kinds of incentives since a limited flirtation with 0% financing shortly after the Sept. 11, 2001, terrorist attacks, according to Edmunds.com analyst Jessica Caldwell.<<<<<
You all see the carnage, so I wont keep going, only to say....I hope I helped a few of you...maybe more tomorrow after I read L's weekend.
D
Thursday, October 02, 2008
EDITORIAL BY RON SMITH
Of Black Swans and TurkeysThursday, October 02, 2008 - Ron Smith
In his masterful book, “The Black Swan,” Nassim Nicholas Taleb examines the impact of events that one would describe as highly improbable; things sprung upon us from out of the blue, unforeseen by “experts.” These events are called “Black Swans” because until they happen we humans think them impossible. All swans are white, it was believed in the civilized world, until the discovery of Australia and its resident Cygnus atratus, the Black Swan. A new reality is apprehended.
It’s important to understand, says Taleb that expected things not happening are also Black Swans, and that what we don’t know is far more relevant that what we do know. Consider the events of 9/11. What did we learn from them? We learned how to exert massive effort to avoid another attack by Islamic terrorists on tall buildings here. But we did not learn that “some events, owning to their dynamics, stand largely outside the realm of the predictable.” It’s as though, the author says, we have the wrong user’s manual for our minds.
The reason I bring this up is because what is described in detail in this book is very much at play in the current drama about the worldwide economic slump and credit meltdown. As the United States Senate gussies up a bill that can be passed in the lower chamber, the Wall Street bailout or rescue plan; we again see the inability of “experts” to predict the course of events. If you have a few minutes listen (here) as investor Jim Rogers patiently explains to a befuddled talking head on Bloomberg TV why we shouldn’t follow the advice of Treasury Secretary Dennis Paulson or Fed Chair Ben Bernanke on how to get out of a mess that they repeatedly swore under oath we were not in. Were they lying or were they just lacking the expertise people think they must possess?
Financial markets, like wars, are inherently unpredictable and to pretend otherwise gets us in a lot of trouble. Misunderstanding the links between policy and actions means, says Taleb, “We can easily trigger Black Swans thanks to aggressive ignorance – like a child playing with a chemistry kit.” My own thinking is that this pretty well describes the situation in which we find ourselves right now.
When asked which presidential candidate is best equipped to deal with this market meltdown, Rogers just snorted and explained that neither McCain nor Obama has expressed any coherent thought on this ongoing event, haven’t the slightest idea what’s going on and added that both of them were “turkeys.” Will he vote? Yes, but not for either of the “turkeys,” because to do so merely encourages the powers-that-be to send out more “turkeys.”
**anytime you can go to WBAL.COM 3-6 and listen to Ron's intelligent talk show.
WBAL Radio - Baltimorehttp://wbal.com/
In his masterful book, “The Black Swan,” Nassim Nicholas Taleb examines the impact of events that one would describe as highly improbable; things sprung upon us from out of the blue, unforeseen by “experts.” These events are called “Black Swans” because until they happen we humans think them impossible. All swans are white, it was believed in the civilized world, until the discovery of Australia and its resident Cygnus atratus, the Black Swan. A new reality is apprehended.
It’s important to understand, says Taleb that expected things not happening are also Black Swans, and that what we don’t know is far more relevant that what we do know. Consider the events of 9/11. What did we learn from them? We learned how to exert massive effort to avoid another attack by Islamic terrorists on tall buildings here. But we did not learn that “some events, owning to their dynamics, stand largely outside the realm of the predictable.” It’s as though, the author says, we have the wrong user’s manual for our minds.
The reason I bring this up is because what is described in detail in this book is very much at play in the current drama about the worldwide economic slump and credit meltdown. As the United States Senate gussies up a bill that can be passed in the lower chamber, the Wall Street bailout or rescue plan; we again see the inability of “experts” to predict the course of events. If you have a few minutes listen (here) as investor Jim Rogers patiently explains to a befuddled talking head on Bloomberg TV why we shouldn’t follow the advice of Treasury Secretary Dennis Paulson or Fed Chair Ben Bernanke on how to get out of a mess that they repeatedly swore under oath we were not in. Were they lying or were they just lacking the expertise people think they must possess?
Financial markets, like wars, are inherently unpredictable and to pretend otherwise gets us in a lot of trouble. Misunderstanding the links between policy and actions means, says Taleb, “We can easily trigger Black Swans thanks to aggressive ignorance – like a child playing with a chemistry kit.” My own thinking is that this pretty well describes the situation in which we find ourselves right now.
When asked which presidential candidate is best equipped to deal with this market meltdown, Rogers just snorted and explained that neither McCain nor Obama has expressed any coherent thought on this ongoing event, haven’t the slightest idea what’s going on and added that both of them were “turkeys.” Will he vote? Yes, but not for either of the “turkeys,” because to do so merely encourages the powers-that-be to send out more “turkeys.”
**anytime you can go to WBAL.COM 3-6 and listen to Ron's intelligent talk show.
WBAL Radio - Baltimorehttp://wbal.com/
Wednesday, October 01, 2008
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