The end of the Obama Trump Great Bull Market

[DarterBlue]

1 hour ago, 15yds4gibberish said:

And to my conservative friends, make sure you vote Nov. 7.

😁! LOL. Maybe we can set their electronic devices back a day!

[DarterBlue]

23 hours ago, DarterBlue said:

Today's Action: The averages closed up with solid gains. However, there are some concerns. Unlike Tuesday, breadth was missing Wednesday and despite the big gains, only a little more than 3 stocks gained for every two down. Perhaps, the rally is running out of steam? I don't know. But I do know it was not as good as it looks.

On the day, I added 5 new SPY contracts at 15 and 5 new QQQ Put contracts at 13.25. I accounted for all the volume in that series of QQQ Puts as only five traded. The new purchases were actually mildly profitable as the purchases took place near market highs close to 10 am. However, on the day I lost $2,513 as the existing contracts got smacked. If this rally continues unabated over the next three days, I may close the positions out depending on the overall strength of the action. With that said, I don't think it will. However, I have defined my uncle point and will abide by it. 

 

The rally continued unabated Thursday. And, to be honest, this was probably the best up day of the three we have had in a row. Why? 1. The averages closed at or near day highs depending on the index. 2. Broad participation, all the indices were up and in gear with each other. 3. Tied in with the broad participation, was good breadth, even when stocks threatened to go lower early in the trading day, breadth was still strong which signaled to me I was going to get burned being short. 4. With 78 new highs to 155 new lows on the day, while still bad, at least it was only 2-1 negative. Given how badly the market was beaten up in October, that is actually pretty good. 

There was one negative on the trading day and another after the close that could temper, if not halt, the advance. First, the good price action was not joined by volume which was less than Wednesday's by a solid margin. That means that large, institutional investors were not jumping in with wild abandon. That could change, though. After the close, Apple beat earnings estimates, but gave forward guidance though the very important Christmas quarter that was below expectations. As a result, the stock traded down about 7% in the after market. This will put pressure on: The Dow, S&P and NASDAQ indices (AAPL is a large component of each) tomorrow at the open unless there is some really great news to offset it in the morning. 

As for me, I got bruised and battered but hung on till the bell. On the day, I was down $3,864 and on the week to date I am down about $7k. This is not surprising since I am effectively short the market. As I type this, it looks like I may get some relief tomorrow. To the extent I am right, I will carry the position over the weekend. However, I will have to evaluate the entire week on Sunday to confirm my degree of confidence that we have truly peaked for this bull market cycle. 

[ohio]

On 10/31/2018 at 7:17 PM, DarterBlue said:

I remember those double shift days. The additional shift was uncompensated, though; oh the privilege of white collar work. Sometimes, depending on the profitability of the project, in addition to a really nice dinner at a steakhouse like Smith & Wollensky, we would get a bonus check for our dedication at the successful conclusion of the job. 

I saw both good and bad in today's action. The good is that many of the former leaders bounced mightily. The bad is that participation was not very broad and toward the end, the rally seemed to run out of steam. Needless to say,  I got beat up today, but am guardedly optimistic that this rally peters out and at the very least retest the lows of this sell off. But, if proven wrong, I will not fight the tape. 

Yesterday's doube shift took a lot out of me, I'm getting too old for it.  The guy whose shift I took yesterday is probably in his late seventies or early eighties.  He usually ends up in the hostpital, so someone has to cover it, so it was my turn to cover for him.  I didn't get home till about 1:15 am because the young lady that relieved me decided to come in late. 

So, this morning I set my clock for 8:00 am, wathched the market, and bought another 500 shares of UVXY for 55.72 and 500 more TVIX for 44.08.  Saw them starting to go up so I went back to sleep.  Needless to say, I feel much better now.

[World Citizen]

22 hours ago, 15yds4gibberish said:

Ha!  I shall remind my brother @World Citizen that he is the kind of man that inspires the affection of many old friends.  I know because I have seen this myself first hand.  I'm quite pleased to join their ranks -- Especially when we can all get together to mock you while standing in the long concession line waiting so you can buy hot tamales...

Like you, I too have a great deal of respect for @DarterBlue.  I admire his intelligence, the way he expresses his opinions, and how he always comports himself with dignity.  I should like to meet him one day, talk it over, discussing the issues of the day and some of our common influences like "Your Money or Your Life."  As it happens, I will be in Florida tomorrow, and if I wasn't otherwise committed, I'd vector off to Orlando to go shake the man's hand...One of these days I hope to make that happen in my travels.

As for me, politics was kinda getting to me, so I decided I wasn't going to look backward on this election and say to myself I wish I had done something.  So for the first time in my life I volunteered for a campaign, including going way out of my comfort zone, canvassing door to door.  Great experience.

So to my libtard friends, this last weekend is the most important.  Get out and vote, bring a friend, encourage those you know who have never voted to get out and give democracy a shot while there still is one,  host a ballot and BBQ party, volunteer to make calls, drive someone to the polls...

And to my conservative friends, make sure you vote Nov. 7.

Talk more next week my brother.

 

 

But they are soooo gooooood.   It wasn't the first time I've been mocked and it won't be the last I'm sure.  I think those Hot Tamales made us miss the 1st score of 2nd half.  That sucked but they are soooo goooood.

That is great you are hitting the pavement without regrets.  I wish I could say the same.  If you run for office I will walk every neighborhood and knock on every door I can.  Btw, what has your experience been like knocking on doors?  I always appreciated the effort people who knock on doors give.  I usually just politely tell them that I've already voted (which I have) or that I will consider who they are supporting.  But, I have more fun talking to the religious people who come to the door and hopefully they do too.  Some get mad but most are curious and try to answer or respond to my questions.  My wife just shakes her head when I do this.  Pretty amusing all the way around. 

Later brother

#longlivehottomales

 

[ohio]

On 11/2/2018 at 4:37 PM, World Citizen said:

But they are soooo gooooood.   It wasn't the first time I've been mocked and it won't be the last I'm sure.  I think those Hot Tamales made us miss the 1st score of 2nd half.  That sucked but they are soooo goooood.

That is great you are hitting the pavement without regrets.  I wish I could say the same.  If you run for office I will walk every neighborhood and knock on every door I can.  Btw, what has your experience been like knocking on doors?  I always appreciated the effort people who knock on doors give.  I usually just politely tell them that I've already voted (which I have) or that I will consider who they are supporting.  But, I have more fun talking to the religious people who come to the door and hopefully they do too.  Some get mad but most are curious and try to answer or respond to my questions.  My wife just shakes her head when I do this.  Pretty amusing all the way around. 

Later brother

#longlivehottomales

 

You're not a true American or a male if you hate hot tamales. Especially the female ones.  Lol

[GrecoRoman]

On 10/8/2018 at 7:20 PM, DarterBlue said:

Ecclesiastes 3:1-8

To every thing there is a season, and a time to every purpose under the heaven:

A time to be born, a time to die; a time to plant, and a time to pluck up that which is planted; A time to kill, and a time to heal; a time to break down, and a time to build up; A time to weep, and a time to laugh; a time to mourn, and a time to dance; A time to cast away stones, and a time to gather stones together; a time to embrace, and a time to refrain from embracing; A time to get, and a time to lose; a time to keep, and a time to cast away; A time to rend, and a time to sew; a time to keep silence, and a time to speak; A time to love, and a time to hate; A time of war, and a time of peace.

 

Where do we stand? I firmly believe we have now seen the end of one of the greatest bull markets in American history. Since the end of August, the leading NASDAQ and Russell indices have lagged. While the DOW and S&P registered several new all time highs in September, both NASDAQ indices and the Russell failed to do so. In fact, the Russell lost over 5% from its late August all time high. When leading indices get into trouble, it does not bode well for the market. On the day today, we were down another $2,958 as CRM and GRUB got badly beat up. The time has come to recognize this for what it is: the market has probably made its second major top for 2018.

The first top was registered back in late January and I was one day off in calling it. This top was probably put in, for all practical purposes, at the end of August despite the lagging S&P and DOW recording all time highs in September. Given the age of this bull market and its obvious overvaluation, the odds favor a substantial, nasty pullback from here. With that said, unless there is strong, positive action at the open tomorrow, I will liquidate all of my positions (GRUB, CRM and FND) with the exception of MPX. Why not MPX, too? Because it is largely uncorrelated with the market. In other words, it has a Beta very close to zero and will probably rise or fall based on its own merits. Given its recent action, I believe that it will rise.

Obviously, things are not playing out the way I would have liked since I have been long this aged bull. But I am a realist and the odds do not favor being long currently. Should I prove right, I will be looking for good shorting opportunities (indices or individual issues) over the next several days and weeks.

I would say there hasnt been a bull markey that has simul caused so much damage to the fundamentals of the US economy ......but no doubt in nominal terms we had/have bull market.  

I think a good short position is ths XNB index.  I'm in the money on Oct 40 puts that I bought in June & I think this thing had much farther to fall.  I'm hesitant to short the indexes because the fundamentals have been saying to do that for a few years and if you did (as I) you lost so it's one of those "the market market can stay irrational longer than you can stay solvent).  I like the XHB because housing is finished even with the ever so tiny rise in rates we've had.  I think the market will continue to tread water until the 10 year hits 3.5 than it's goodbye.  Plus, I think when the markey does move into bear territory the Fed will surprise everyone and intervene by reversing course ......of course if they do this the dumping of the dollar in trade will pick up dramatically so their in a terrible box of which there are only two ways out market crash or dollar crash .   I say they'll take the latter because the average American won't understand the causes of an inflationary breakdown so that's the route politicians always choose  (hence whyfan we continually dig into deeper holes financially as a nation

[GrecoRoman]

Just now, GrecoRoman said:

I would say there hasnt been a bull markey that has simul caused so much damage to the fundamentals of the US economy ......but no doubt in nominal terms we had/have bull market.  

I think a good short position is ths XNB index.  I'm in the money on Oct 40 puts that I bought in June & I think this thing had much farther to fall.  I'm hesitant to short the indexes because the fundamentals have been saying to do that for a few years and if you did (as I) you lost so it's one of those "the market market can stay irrational longer than you can stay solvent).  I like the XHB because housing is finished even with the ever so tiny rise in rates we've had.  I think the market will continue to tread water until the 10 year hits 3.5 than it's goodbye.  Plus, I think when the markey does move into bear territory the Fed will surprise everyone and intervene by reversing course ......of course if they do this the dumping of the dollar in trade will pick up dramatically so their in a terrible box of which there are only two ways out market crash or dollar crash .   I say they'll take the latter because the average American won't understand the causes of an inflationary breakdown so that's the route politicians always choose  (hence whyfan we continually dig into deeper holes financially as a nation

Sorry - typo above.  It's the "XHB" .  I usually type from my phone so I am always making type errors

[World Citizen]

5 hours ago, ohio said:

You're not a true American or a male if you hate hot tamales. Especially the female ones.  Lol

Lol.

There should be a law to make sure that any hot tomales of the female persuasion coming to the border be allowed into the country immediately...and flown to my house.  

Better believe that if I was Lord over all living things, that would be happening.  

 

[ohio]

3 hours ago, World Citizen said:

Lol.

There should be a law to make sure that any hot tomales of the female persuasion coming to the border be allowed into the country immediately...and flown to my house.  

Better believe that if I was Lord over all living things, that would be happening.  

 

'Here's one of the migrant Caravan tomales crossing the Rio Grande.  Now, which red blood American male wouldn't allow her to cross our border?

[DarterBlue]

5 hours ago, GrecoRoman said:

Sorry - typo above.  It's the "XHB" .  I usually type from my phone so I am always making type errors

Housing stocks have been weak this cycle despite the recovery of home prices. With rates rising and the Fed currently not showing any sign of reversing course, XHB will probably magnify any downside move in stocks. So I don't disagree with you.  

[DarterBlue]

Where I think the Market Stands: Stocks closed mostly down on Friday even though secondary issues were positive as both the MID Cap S& P index and the Russell closed up. However, the rest of the market, particularly technology stocks were weak. The malaise was probably due to the following four factors:

• Dissatisfaction with Apple's earnings and guidance.
• The ongoing confusion over our trade negotiations (if we want to call them that) with China
• The fact the market had three solid up days in a row and unlike February when we got 8 off the bottom, it does not have that level of momentum this time.
• A degree of uncertainty over the mid term elections.

Of the above, I feel the two biggest wildcards are the second and fourth items. While some may feel that Trump is using his on again, maybe not on again strategy with China as a negotiating technique, I feel it is quite possible there is more to it than that. I feel his view of China may be closer to the Bannonite view than most think. If so, then the tariffs will be on, be damned what effect it has on the economy. 

Regarding the mid terms, the prevailing view is we get a split congress, with the Democrats unable to recapture the Senate, but taking the House. However, it is unclear to me given the massive turnout that we seem to be heading for, if this will in fact hold. I could easily see the Democrats taking both houses or the Republicans hanging on to both. This is a referendum on DJT pure and simple. And I am not sure which side will end up with the most intensity. So, if we get either of the two "unexpected" outcomes, I could see the market moving more than 2-3% either way. A big Democratic victory, at least in the short run, will probably be greeted with selling by Wall Street, while unexpected Republican strength will probably have the opposite short term effect. 

With the above said, I expect the market to tread water on Monday unless there is some totally unanticipated, market moving news. Regardless, I don't anticipate covering my existing PUT Option positions either Monday, Tuesday or Wednesday. 

Despite the market's rebound last week, I am still confident we have seen bull market highs for this cycle. Powell at the Fed has, in his brief tenure, shown more independence than either Yellen or her predecessor, Ben B. I feel that he wants to nip potential inflation from what looks like an overheating economy in the bud and that he is also concerned about having an asset bubble attached to his name. So, I think his goal is try and let some of the air out of both the economy and the stock market. Thus, I think for now he continues raising interest rates at least for the next two quarters. 

[GrecoRoman]

30 minutes ago, DarterBlue said:

Housing stocks have been weak this cycle despite the recovery of home prices. With rates rising and the Fed currently not showing any sign of reversing course, XHB will probably magnify any downside move in stocks. So I don't disagree with you.  

Yep the homebuilders are well into a bear (like autos).  I think the market is just looking ahead to the drop in housing thats right around the corner (existing and new hole sales reports have been making 2007 type prints).  Of course now I think the problems in the real estate market (and equity/bond markets) are much worse than 2008.

While home prices and stocks can obviously inflated with cheap money, real estate can't stay afloat from share buybacks and the masses buying based on forward earnings projections rather than gaap adjusted trailing.  I only look at PE's for individual stock - I think they're  terrible gauge of the overall market (though I consider the CAPE)  Far better predictors of the market in my opionion are mcap to gdp, price to sales (removed the manipulation of earnings) and corporate debt to gdp.  Looking at a chart these metrics call just every top back to the 20's and right now they are all worse than any time in US history thanks to the Fed and their irresponsible (in my opionio immoral) tampering with asset prices

[ohio]

20 minutes ago, DarterBlue said:

Where I think the Market Stands: Stocks closed mostly down on Friday even though secondary issues were positive as both the MID Cap S& P index and the Russell closed up. However, the rest of the market, particularly technology stocks were weak. The malaise was probably due to the following four factors:

• Dissatisfaction with Apple's earnings and guidance.
• The ongoing confusion over our trade negotiations (if we want to call them that) with China
• The fact the market had three solid up days in a row and unlike February when we got 8 off the bottom, it does not have that level of momentum this time.
• A degree of uncertainty over the mid term elections.

Of the above, I feel the two biggest wildcards are the second and fourth items. While some may feel that Trump is using his on again, maybe not on again strategy with China as a negotiating technique, I feel it is quite possible there is more to it than that. I feel his view of China may be closer to the Bannonite view than most think. If so, then the tariffs will be on, be damned what effect it has on the economy. 

Regarding the mid terms, the prevailing view is we get a split congress, with the Democrats unable to recapture the Senate, but taking the House. However, it is unclear to me given the massive turnout that we seem to be heading for, if this will in fact hold. I could easily see the Democrats taking both houses or the Republicans hanging on to both. This is a referendum on DJT pure and simple. And I am not sure which side will end up with the most intensity. So, if we get either of the two "unexpected" outcomes, I could see the market moving more than 2-3% either way. A big Democratic victory, at least in the short run, will probably be greeted with selling by Wall Street, while unexpected Republican strength will probably have the opposite short term effect. 

With the above said, I expect the market to tread water on Monday unless there is some totally unanticipated, market moving news. Regardless, I don't anticipate covering my existing PUT Option positions either Monday, Tuesday or Wednesday. 

Despite the market's rebound last week, I am still confident we have seen bull market highs for this cycle. Powell at the Fed has, in his brief tenure, shown more independence than either Yellen or her predecessor, Ben B. I feel that he wants to nip potential inflation from what looks like an overheating economy in the bud and that he is also concerned about having an asset bubble attached to his name. So, I think his goal is try and let some of the air out of both the economy and the stock market. Thus, I think for now he continues raising interest rates at least for the next two quarters. 

Sound writeup. You're right about the four factors that will lower the markets, but be leary of good earnings reports which could make for a bumpy ride this week.  But overall, the sentiment should be negative for the week.  We'll soon find out.

On Friday, even the bump in the Asian and European markets couldn't keep the Dow, NASDAQ, and the S&P 500 in the black. 

Also, as we speak the futures are down, as are the Asian markets.

[DarterBlue]

23 minutes ago, GrecoRoman said:

I only look at PE's for individual stock - I think they're  terrible gauge of the overall market (though I consider the CAPE)  Far better predictors of the market in my opionion are mcap to gdp, price to sales (removed the manipulation of earnings) and corporate debt to gdp.  Looking at a chart these metrics call just every top back to the 20's and right now they are all worse than any time in US history thanks to the Fed and their irresponsible (in my opionio immoral) tampering with asset prices

I am in just about 100% agreement with the above paragraph! The only quibble I have is with valuation. I think the Dotcom bubble valuations may have been worse, at least with respect to the technology sector. But 

[GrecoRoman]

26 minutes ago, DarterBlue said:

I am in just about 100% agreement with the above paragraph! The only quibble I have is with valuation. I think the Dotcom bubble valuations may have been worse, at least with respect to the technology sector. But 

I hear you but those three measures are higher now (market cap to gdp just passed the 1999 high a couple months ago)  .....to your point though being that so many companies at that time had zero earnings P/E's are at least better now (of course the FANG's have driven most of the rally and their multiples are ridiculouslike in the dot com)

I just think we're in much worse shape because we needed so much debt and much lower interest rates for a longer period of time to give us this market.  In the dot com we had a 6-8%fed funds and 10 year in line with historical averages, minimal national debt etc  (the Fed's balance sheet was around 2-300 bil compared the 4.2 trillion its amassed over the last 10 years) so it was just a stock fad opposed to something that looks like their could realistcially be an unparalled crisis

[DarterBlue]

5 hours ago, GrecoRoman said:

I hear you but those three measures are higher now (market cap to gdp just passed the 1999 high a couple months ago)  .....to your point though being that so many companies at that time had zero earnings P/E's are at least better now (of course the FANG's have driven most of the rally and their multiples are ridiculouslike in the dot com)

I just think we're in much worse shape because we needed so much debt and much lower interest rates for a longer period of time to give us this market.  In the dot com we had a 6-8%fed funds and 10 year in line with historical averages, minimal national debt etc  (the Fed's balance sheet was around 2-300 bil compared the 4.2 trillion its amassed over the last 10 years) so it was just a stock fad opposed to something that looks like their could realistcially be an unparalled crisis

Yes, this whole bull market was born out of artificially created, monetary policies. Unlike the 1929 crash, when fiscal policies were the principal driver, along with serious structural reforms (creation of the SEC, etc.), the 2008 fiasco was mostly addressed with monetary policy. Okay, I get it, it worked. But to prevent things from getting to this point, the punch bowl should have been taken away from the drunks a long time ago and Yellen did not do it. 

At this stage we are between a rock and a hard place as Powell, IMHO, is trying to do something that should have been done back in 2012/2013. Now that would have meant much lower market values, but it would have ensured we did not have the conditions we do today. It may have also led to a little more introspection into the malaise we are currently in, and may have led to policies to address it. 

And for these reasons, I feel we are on the cusp of another really bad bear market. Out of respect for a previous post you made, I chose LEAP Puts (long term puts), should my timing be off a bit. 

[GrecoRoman]

8 hours ago, DarterBlue said:

Yes, this whole bull market was born out of artificially created, monetary policies. Unlike the 1929 crash, when fiscal policies were the principal driver, along with serious structural reforms (creation of the SEC, etc.), the 2008 fiasco was mostly addressed with monetary policy. Okay, I get it, it worked. But to prevent things from getting to this point, the punch bowl should have been taken away from the drunks a long time ago and Yellen did not do it. 

At this stage we are between a rock and a hard place as Powell, IMHO, is trying to do something that should have been done back in 2012/2013. Now that would have meant much lower market values, but it would have ensured we did not have the conditions we do today. It may have also led to a little more introspection into the malaise we are currently in, and may have led to policies to address it. 

And for these reasons, I feel we are on the cusp of another really bad bear market. Out of respect for a previous post you made, I chose LEAP Puts (long term puts), should my timing be off a bit. 

Great stuff here.  Only point I might question is that Bernanke's response to 2008 worked.  Lowering rates to zero for 8 years and doing 3 rounds of QE could be done by an infant - the difficult part is unwinding that trade.  Oct was the forst month of significant unwinding of the balance sheer was supposed to take place and we can all see how October played out.   The Bernanke analogy I like (I think it was from Jeff Gundlach)  is that "he's like  a captain  who gets the plane in the air then throws a celebratory party".  All of a suddent the crew and passengers realize ' "wait a minute, we haven't landed and the captain has no cue how to land this thing"  

Lol its funny but he couldnt be more spot on.  Live by cheap money, die by cheap money.  In my opionion, we never had a recovery just an asset bubble fueled by debt and the system is way more unstable than 2008.  The interesting thing is that foreigners are now net sellers of US sovereigns(hasnt happened since the 70's) we have record deficits & the Fed unwinding > wtf is going to buy the new issues?  

[GrecoRoman]

8 hours ago, DarterBlue said:

Yes, this whole bull market was born out of artificially created, monetary policies. Unlike the 1929 crash, when fiscal policies were the principal driver, along with serious structural reforms (creation of the SEC, etc.), the 2008 fiasco was mostly addressed with monetary policy. Okay, I get it, it worked. But to prevent things from getting to this point, the punch bowl should have been taken away from the drunks a long time ago and Yellen did not do it. 

At this stage we are between a rock and a hard place as Powell, IMHO, is trying to do something that should have been done back in 2012/2013. Now that would have meant much lower market values, but it would have ensured we did not have the conditions we do today. It may have also led to a little more introspection into the malaise we are currently in, and may have led to policies to address it. 

And for these reasons, I feel we are on the cusp of another really bad bear market. Out of respect for a previous post you made, I chose LEAP Puts (long term puts), should my timing be off a bit. 

A great thing my friend told me once his  former manager said (Goldman IB)  is that there is not one single asset valuation metric that does  not use the risk free rate as its base thus in essence all assets are intrisically worth nothing more than a spread over the risk free rate.  (not saying you cant go through periods where you can't sell it to some more moron under the greater fool theory of course you can - his point is everything ultimately returns to intrinsic).  Thus if you interfere with the setting of the risk free rate (ala the Fed) it's a foregone conclusion you interfere with the price setting mechanism of the free market.  It's simple concept as money is on one side of transaction so the price of money determined by interest rates is the most important price we have.

This particuar guy passed away in 2010 but was a heavy duty wall streeter since the 70's - he told my friend that most of the newer age wall street types don't grasp this enough because they come from a post gold standard era of free credit and a 35 year declining interest environment - translation they simply rode the wave.  When hve interest rates gone up in that time 97-99, 03-07, (wonder what happened at the end of these periods) and of course now.  Each successive attempt to raise rates gets to a lower and lower point.  They got to 5% on the fed funds in 2007 - I say there is no way we can get to 3% this time ......translation - we're f'd yet everyone thinks everything is great!

[DarterBlue]

13 minutes ago, GrecoRoman said:

A great thing my friend told me once his  former manager said (Goldman IB)  is that there is not one single asset valuation metric that does  not use the risk free rate as its base thus in essence all assets are intrisically worth nothing more than a spread over the risk free rate.  (not saying you cant go through periods where you can't sell it to some more moron under the greater fool theory of course you can - his point is everything ultimately returns to intrinsic).  Thus if you interfere with the setting of the risk free rate (ala the Fed) it's a foregone conclusion you interfere with the price setting mechanism of the free market.  It's simple concept as money is on one side of transaction so the price of money determined by interest rates is the most important price we have.

This particuar guy passed away in 2010 but was a heavy duty wall streeter since the 70's - he told my friend that most of the newer age wall street types don't grasp this enough because they come from a post gold standard era of free credit and a 35 year declining interest environment - translation they simply rode the wave.  When hve interest rates gone up in that time 97-99, 03-07, (wonder what happened at the end of these periods) and of course now.  Each successive attempt to raise rates gets to a lower and lower point.  They got to 5% on the fed funds in 2007 - I say there is no way we can get to 3% this time ......translation - we're f'd yet everyone thinks everything is great!

If I were in another place or time looking back at this, it would be hilarious. Unfortunately, I am not. So, I am not sure if I should laugh or cry.

But, I am trying to make money out of the predicament. There is one potential problem, however. If the whole house of cards collapses, even if I make money on paper I may not get paid if most of the major institutions collapse. It is one serious conundrum!

[GrecoRoman]

Just now, DarterBlue said:

If I were in another place or time looking back at this, it would be hilarious. Unfortunately, I am not. So, I am not sure if I should laugh or cry.

But, I am trying to make money out of the predicament. There is one potential problem, however. If the whole house of cards collapses, even if I make money on paper I may not get paid if most of the major institutions collapse. It is one serious conundrum!

Lol I'm with ya.  I wear two hats - 1) as a father who cares about the economic future of the country 2) as a trader who understands the market is far disconnected from the actual economy but hey who cares let's just try to make money on it!

I don't think we ever have to worry about not being paid back - we'll get paid in nominal terms but not in real terms though an honest default is what we need (opposed to a dishonest default from money printing and inflation)     Inflation is obiously the secret partner of the US gov't - they tell you we have 2% inflation yet anyone who exists knows it is is much higher.  Hell, they've changed the CPI calculations to their favor so many times it's a joke.  My friend at GS says they have a prop model that uses the basket of goods used pre 1995 and they come up with 6% inflation (which seems more accurate to me)  Of course, if that is true we've had negative real economic growth for a long time.  Funny thing is he said - Goldman will trot out guys on tv who say we have low inflation lmao.....think there were some backdoor deals made to speak nice nice & happy about the ecomony when they were bailed out in 2008?  Of course, asset prices  and the gov't benefit from inflation so the last people you shoud ask about it are bankers and politcians!   (of course I am a banker lol)

[ohio]

On 11/2/2018 at 12:58 PM, ohio said:

Yesterday's doube shift took a lot out of me, I'm getting too old for it.  The guy whose shift I took yesterday is probably in his late seventies or early eighties.  He usually ends up in the hostpital, so someone has to cover it, so it was my turn to cover for him.  I didn't get home till about 1:15 am because the young lady that relieved me decided to come in late. 

So, this morning I set my clock for 8:00 am, wathched the market, and bought another 500 shares of UVXY for 55.72 and 500 more TVIX for 44.08.  Saw them starting to go up so I went back to sleep.  Needless to say, I feel much better now.

'Bought 1000 shares of ETSY at 41.24 this morning.  Still have 2000 shares of TVIX at 47.54 and 1500 shares of UVXY at 58.62. 

ETSY will report earnings tomorrow after market hours.  They should beat.  I hope. 

TVIX is currently trading at 45.45 so I am down 2.09 a share for a total of $4180

UVXY is currently trading at 57.15 so I am down 1.47 a share for a total of $2205, Currently I am down about $6385 on my shorts.

We'll see if the elections bring the market down.

[ohio]

5 hours ago, GrecoRoman said:

Lol I'm with ya.  I wear two hats - 1) as a father who cares about the economic future of the country 2) as a trader who understands the market is far disconnected from the actual economy but hey who cares let's just try to make money on it!

I don't think we ever have to worry about not being paid back - we'll get paid in nominal terms but not in real terms though an honest default is what we need (opposed to a dishonest default from money printing and inflation)     Inflation is obiously the secret partner of the US gov't - they tell you we have 2% inflation yet anyone who exists knows it is is much higher.  Hell, they've changed the CPI calculations to their favor so many times it's a joke.  My friend at GS says they have a prop model that uses the basket of goods used pre 1995 and they come up with 6% inflation (which seems more accurate to me)  Of course, if that is true we've had negative real economic growth for a long time.  Funny thing is he said - Goldman will trot out guys on tv who say we have low inflation lmao.....think there were some backdoor deals made to speak nice nice & happy about the ecomony when they were bailed out in 2008?  Of course, asset prices  and the gov't benefit from inflation so the last people you shoud ask about it are bankers and politcians!   (of course I am a banker lol)

Nice write-up.  I can't believe that inflation is at 2% either, however; 6% sounds reasonable.  Pretty much everything is more expensive now than it was a year ago.

I remember when Greenspan was suggesting that Bernanke was dropping rates too low.  I believe Greenspan didn't want the FED to go below 2%, but Bernanke didn't listen.

Question for you.  How much higher can the FED go or should go next year? Any guesstimate will do.

[ohio]

6 hours ago, GrecoRoman said:

Lol I'm with ya.  I wear two hats - 1) as a father who cares about the economic future of the country 2) as a trader who understands the market is far disconnected from the actual economy but hey who cares let's just try to make money on it!

I don't think we ever have to worry about not being paid back - we'll get paid in nominal terms but not in real terms though an honest default is what we need (opposed to a dishonest default from money printing and inflation)     Inflation is obiously the secret partner of the US gov't - they tell you we have 2% inflation yet anyone who exists knows it is is much higher.  Hell, they've changed the CPI calculations to their favor so many times it's a joke.  My friend at GS says they have a prop model that uses the basket of goods used pre 1995 and they come up with 6% inflation (which seems more accurate to me)  Of course, if that is true we've had negative real economic growth for a long time.  Funny thing is he said - Goldman will trot out guys on tv who say we have low inflation lmao.....think there were some backdoor deals made to speak nice nice & happy about the ecomony when they were bailed out in 2008?  Of course, asset prices  and the gov't benefit from inflation so the last people you shoud ask about it are bankers and politcians!   (of course I am a banker lol)

You probably heard this.  But I have to get it out of my system.

 

Q.   Why do bankers make the best lovers?

 

A.   Because they know there is a harsh penalty for early withdrawal.

[GrecoRoman]

1 hour ago, ohio said:

Nice write-up.  I can't believe that inflation is at 2% either, however; 6% sounds reasonable.  Pretty much everything is more expensive now than it was a year ago.

I remember when Greenspan was suggesting that Bernanke was dropping rates too low.  I believe Greenspan didn't want the FED to go below 2%, but Bernanke didn't listen.

Question for you.  How much higher can the FED go or should go next year? Any guesstimate will do.

Yea just think - the Feds mandate has always been price "stability" yet in 2012 after 3 rounds of QE they adopted a 2% inflation target.  I always thought stable meant "remaining the same" which would make sense > Stable or falling prices raise living standards and are the signs of a productive economy.  Well now "stable" somehow means rising by 2%?!?  Obviously they're trying to get us comfortable with inflation and sell it as a good thing because they need it for asset prices and to repay gov't debt.  Problem is this worsens the wealth divide because inflation can''t stay parked in asset prices it trickles to consumer prices so those without assets who are dependent on wages/ fixed income are screwed. 

Question for you.  How much higher can the FED go or should go next year? Any guesstimate will do

Well in my opinion the mistake was lowering rates to begin with but that's a whole separate discussion. They should raise rates way above the inflation rate as we need to encourage savings and discourage debt.  This of course would cause a terrible market and real estate crash but it would simply be bringing the prices of those things more in line with actual economic production and median wages which would heal us over the long term. (short term pain for long term gain)  Personally, I dont think they'll be able to get rates more than 50bps higher without starting the crash.  The wildcard here is do they invert the yield curve with the next couple hikes  or do the cause yields to spike pushing the 10 year north of 3.5% which I know we cant handle - either way it will be a deflationary or inflationary crash but one is happening within Trump's term.   My bet - they'll back away from further rate hikes and should be able to prop the market up as a result but the dollar will tank. (I think this is already being set up by Trump putting presure on them.  Most people won't even know what is happening or why - they'll think things are still ok because the market is going back up and will think prices are so high because we have a "booming economy"

[GrecoRoman]

1 hour ago, ohio said:

You probably heard this.  But I have to get it out of my system.

 

Q.   Why do bankers make the best lovers?

 

A.   Because they know there is a harsh penalty for early withdrawal.

That's great - maybe why I'm not a good banker and why my wife left me!