The end of the Obama Trump Great Bull Market

[DarterBlue]

49 minutes ago, noonereal said:

LOL, oh come on. The DOW climbed back to where it had been in January. That equally FLAT. 

 

The rules are the rules. It made three all time highs in September and one the first trading day of October before it topped. That makes this the longest bull market in recorded US market history bar none. 

[noonereal]

1 minute ago, DarterBlue said:

The rules are the rules. It made three all time highs in September and one the first trading day of October before it topped. That makes this the longest bull market in recorded US market history bar none. 

 

Ok, fair enough. It's just silly to call this year anything but flat. 

and i suppose both are true although both statements appear to conflict. . 

[DarterBlue]

Just now, noonereal said:

 

Ok, fair enough. It's just silly to call this year anything but flat. 

and i suppose both are true although both statements appear to conflict. . 

Yes.

The NASDAQ at its highs at the end of August was actually up nicely (mid teens, percent wise) this year. I believe that's over, too. But we shall see. 

[GrecoRoman]

2 hours ago, noonereal said:

That is what I said. 

The rise was not from expanded profits from toil but by anticipation of a profit increase by politician. Not a healthy way to increase profits hence corrections and collapses always follow. 

Both of you guys are spot on.  However in my opionion neither Trump nor Obama deserve any credit - they both deserve blame and I believe history will prove  this.    They deserve blame because they both have sacrificed the real ecomomy and future generations to perpetuate asset bubbles and preserve legacies.   The mistake all of the bulls made on the tax cuts is assuming they would cause a sustained increase in profits.  I said all along that while I am not even in favor of an income tax (if there has to be one then a flat tax with zero loopholes & writeoffs is all I could ever support) Trump deserves zero credit for cutting taxes.  

A tax cut without spending cuts causes the problems noonereal describes correctly.  It simply causes inflation from the  increased deficits - what are all the companies saying now who missed earnings "cost inputs rose"> I said this would happen when the tax cuts were announced but I didnt think it woud rear it's head until 2019.  Not to mention, other countries see our reckless deficit soending ways and have picked up pace on dumping treasuries (check out recent auction data its scary) which causes rising interest rates that further eat into those temp excess profits form the tax cuts.   And worse - should we lose the reserve currency and petrodollar status (which we can only enforce at this point through our military because the world is sick of it) we will have an all on hyperinflationary collapse > this is why all recent presidents (repub or dem) end up being aggressive militarily when they learn that we will collapse if these dollars come home.      In my opionion modern day republicans are worse then dems because they cut taxes and keep or even worse increase the size of government.  You don't cut taxes - you cut goverment and that allows you to tax less.  If I was in office, I would announce a tax rate of 90% and when people complained I would reply "If you want all of this goverment than pay for it now but I will not allow it to be recklessly placed on a credit card for our children to pay so we can live like pigs now" > this is actually how our country functioned for most of its history and we were the most propserous nation ever known.  (bear in mind I dont agree wth an income tax but this idea tax cuts pay for themselves is bogus when you already have ton of debt ........tax cuts will no doubt promote more economic  growth assuming the economy has no debt/minimal debt.

Whether it's Obama who artifically juiced things with zero rates and QE (the most damaging thing you can do) or Trump who did it wih unfunded tax cuts; it amounts the same thing > more debt, more inflation, bigger wealth gap & worse living standards for the masses.  These lowlifes don't care about the long term - they care about their own legacy and don't want the collapse to happen on their watch even though the collapse is where the healing takes place.  In a credit based economy the irony is that the boom is where the mistakes and problems are happening and the bust is where the benefits would come from should it be allowed to play out  (the market seeks to lower prices in line with actual production and real median wages thus allowing affordability to rise for the masses) but of course the gov't has to dive in and stop the bust that they creatwd through monetary policy thus blowing a bigger a wealth divide and then blame it on the wealthy.    

Until people understand this we have no chance to turn this thing around but very few people get it (including many supposed "financial professionals"  and many of those who do simply don't care because they benefit from these policies).   

[DarterBlue]

16 minutes ago, GrecoRoman said:

I said all along that while I am not even in favor of an income tax (if there has to be one then a flat tax with zero loopholes is all I could ever support) Trump deserves zero credit for cutting taxes.  

A tax cut without spending cuts causes the problems noonereal describes correctly.  It simply causes inflation from the  increased deficits - what are all the companies saying now who missed earnings "cost inputs rose"> I said this would happen when the tax cuts were announced.  And worse - should we lose the reserve currency and petrodollar status (whihc we enforce through our military) we will have an all on hyperinflationary collapse > this is why all recent presidents (repub or dem) end up being aggressive militarily when they learn that we will collapse if these dollars come home.      In my opionion modern day republicans are worse then dems because they cut taxes and keep or even worse increase the size of government.  You don't cut taxes - you cut goverment and that allows you to tax less.  If I was in office, I would announce a tax rate of 90% and when people complained I would reply "If you want all of thos goverment than pay for it now but I will not allow it to be reclklessly placed on a credit card for our children to pay so we can live like pigs now" > this is actually how our country functioned for most of its history and we were the most propserous nation ever known.  (bear in mind I dont agree wth an income tax but the idea tax cuts pay for themselves if bogus when you already have ton of debt ........tax cuts will no doubt promote more econ growth assuming the economy has no debt/minimal debt. 

While our views may differ on the role of government in a modern day, capitalist economy, we are in total agreement on the wrongheadedness of recent fiscal and monetary policy. Both the Obama and Trump administrations have pursued policies that will eventually end up debasing the USA's currency unless such policies are quickly reversed. To be honest, probably all of our administrations since at least Clinton, if not before, have pursued wrongheaded policies. However, the effects of these have exploded since Bush II continuing to the present. 

The above, coupled with our transformation from a manufacturing economy to one based on services, has gone a far way in transforming the nature of society here and both have largely contributed to the exacerbation of disparities in wealth and income. Barring a complete 180 degree turnaround, which I don't see on the horizon, I agree with you that we may end up with an hyper-inflationary collapse. 

Neither party wants to address any of the above. In a sense, they would rather subscribe to: "King Hezekiah's prayer." For those that have children and grandchildren, it is a scathing indictment of their lack of concern, their very morality, as they exhibit a total disregard for their descendants.  

[GrecoRoman]

18 minutes ago, DarterBlue said:

While our views may differ on the role of government in a modern day, capitalist economy, we are in total agreement on the wrongheadedness of recent fiscal and monetary policy. Both the Obama and Trump administrations have pursued policies that will eventually end up debasing the USA's currency unless such policies are quickly reversed. To be honest, probably all of our administrations since at least Clinton, if not before, have pursued wrongheaded policies. However, the effects of these have exploded since Bush II continuing to the present. 

The above, coupled with our transformation from a manufacturing economy to one based on services, has gone a far way in transforming the nature of society here and both have largely contributed to the exacerbation of disparities in wealth and income. Barring a complete 180 degree turnaround, which I don't see on the horizon, I agree with you that we may end up with an hyper-inflationary collapse. 

Neither party wants to address any of the above. In a sense, they would rather subscribe to: "King Hezekiah's prayer." For those that have children and grandchildren, it is a scathing indictment of their lack of concern, their very morality, as they exhibit a total disregard for their descendants.  

Great stuff here.  Sadly I dont even think it's an open  disregard for future generations but rather complete ignornance/lack of undertsanding  of  economics and history.  Ray Dalio made the point that you would probably have to ask around a million or so americans how the currency they have gets in their hands before you found one who could explain.  He elaborates that even the most prestigous universities only teach Keynsianism and no longer discuss Austrian doctrine allowing students to think and choose for themselves (very similar to what happend in Britain in the early to mid 1900's prior to them losing the reserve (his point is Keynsianism can always work provided your the reserve but if you lose that priveldge your f'd big time)  I think it's a great point Dalio makes and would further say that if you don't understand money/currency it's very questionable if you should be able to vote.  Most amercians seem to sludge into the ballot box with their vote based on gay marriage or pro life/pro choice ir some other stupid ass s***  smh those things don't even enter my mind (nor does anything social for that matter)

[ohio]

17 hours ago, ohio said:

'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.

Bought 500 TVIX at 43.47 and  500 QID at 40.84.

We'll see if the elections results jolt the markets tomorrow. 

[DarterBlue]

5 minutes ago, ohio said:

Bought 500 TVIX at 43.47 and  500 QID at 40.84.

We'll see if the elections results jolt the markets tomorrow. 

Sounds like you are betting on a blue wave given that those are bearish plays. Personally, I think the most likely outcome is a split congress. However, it is possible that the polls are inaccurate due to: massive turnout and massive early voting which may not be properly captured in the forecast models. 

[ohio]

3 hours ago, DarterBlue said:

Sounds like you are betting on a blue wave given that those are bearish plays. Personally, I think the most likely outcome is a split congress. However, it is possible that the polls are inaccurate due to: massive turnout and massive early voting which may not be properly captured in the forecast models. 

Hope so.  Or else I'll be dumping my positions early in the morning.

If this doesn't work out, I'll stick to the ganja stocks in the future.  They're much more fun, plus I get to test the product.

Got to head of to work.  Go out and vote, if you haven't already.

[DarterBlue]

12 minutes ago, ohio said:

Hope so.  Or else I'll be dumping my positions early in the morning.

If this doesn't work out, I'll stick to the ganja stocks in the future.  They're much more fun, plus I get to test the product.

Got to head of to work.  Go out and vote, if you haven't already.

I am short, too. So, I will keep my fingers crossed. We will know before the night is over. 

[HSFBfan]

Market is up 340

[ohio]

21 hours ago, DarterBlue said:

I am short, too. So, I will keep my fingers crossed. We will know before the night is over. 

No blue wave win in the Senate.  Lucky that ETSY beat estimates plus I jumped into TWLO in the premarket since they beat estimates and went up nicely today.  Should have sold my shorts yesterday and I ended up taking a hit on them this morning.  Currently I am no positions.

Might jump back into TVIX, UVXY, and/or QID if the market starts to fall in the afternoon or before market close.  However, if I do jump in I risk the chance of getting a RegT and will have to hold those positions for at least 3 business days.  

 

I bought 1000 shares of TWLO in the premarket for 82.34 and just sold it for 96.12 for a nice gain of  $13, 763

Sold ETSY at 51.28 for a profit of $10,027

Sold QID at 39.91.  For a loss of  $471. 

Sold all UVXY at 50.88 for a loss of  $7771

Sold all TVIX at 39.12 for a loss of $19074

[ohio]

23 minutes ago, ohio said:

No blue wave win in the Senate.  Lucky that ETSY beat estimates plus I jumped into TWLO in the premarket since they beat estimates and went up nicely today.  Should have sold my shorts yesterday and I ended up taking a hit on them this morning.  Currently I am no positions.

Might jump back into TVIX, UVXY, and/or QID if the market starts to fall in the afternoon or before market close.  However, if I do jump in I risk the chance of getting a RegT and will have to hold those positions for at least 3 business days.  

 

I bought 1000 shares of TWLO in the premarket for 82.34 and just sold it for 96.12 for a nice gain of  $13, 763

Sold ETSY at 51.28 for a profit of $10,027

Sold QID at 39.91.  For a loss of  $471. 

Sold all UVXY at 50.88 for a loss of  $7771

Sold all TVIX at 39.12 for a loss of $19074

Bought back into TVIX and UVXY.

2000 shares of TVIX at 37.54 and 2000 UVXY at 49.51.  Hope I don't get RegT''d  since I have to hold them till Friday.

Going to for a walk since it's nice and sunny outside, then to work.  Talk to you tomorrow since I finally will get a day off.

[DarterBlue]

2 hours ago, ohio said:

Bought back into TVIX and UVXY.

2000 shares of TVIX at 37.54 and 2000 UVXY at 49.51.  Hope I don't get RegT''d  since I have to hold them till Friday.

Going to for a walk since it's nice and sunny outside, then to work.  Talk to you tomorrow since I finally will get a day off.

I rode out the hit and ended up buying another 8 PUT Contracts at 10.75 on the QQQs and 11.45 on the SPYs I now have a total of twenty of each (forty contracts in all). Glad you made money on TWLO and ESTY. Sorry about the size of the TVIX loss. 

I am now sitting on a loss on the options. I bought the additional 8 contracts as the SPY and QQQ are just above and almost at their respective, 50 day moving averages. Either the market hurtles through them, in which case I need to cover the positions or we get some resistance at these levels. This should manifest itself over the next two trading days. 

[15yds4gibberish]

On 11/2/2018 at 1:37 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

 

😃

#hottomalesforpresident2020!

[World Citizen]

On ‎11‎/‎6‎/‎2018 at 7:25 AM, GrecoRoman said:

Both of you guys are spot on.  However in my opionion neither Trump nor Obama deserve any credit - they both deserve blame and I believe history will prove  this.    They deserve blame because they both have sacrificed the real ecomomy and future generations to perpetuate asset bubbles and preserve legacies.   The mistake all of the bulls made on the tax cuts is assuming they would cause a sustained increase in profits.  I said all along that while I am not even in favor of an income tax (if there has to be one then a flat tax with zero loopholes & writeoffs is all I could ever support) Trump deserves zero credit for cutting taxes.  

A tax cut without spending cuts causes the problems noonereal describes correctly.  It simply causes inflation from the  increased deficits - what are all the companies saying now who missed earnings "cost inputs rose"> I said this would happen when the tax cuts were announced but I didnt think it woud rear it's head until 2019.  Not to mention, other countries see our reckless deficit soending ways and have picked up pace on dumping treasuries (check out recent auction data its scary) which causes rising interest rates that further eat into those temp excess profits form the tax cuts.   And worse - should we lose the reserve currency and petrodollar status (which we can only enforce at this point through our military because the world is sick of it) we will have an all on hyperinflationary collapse > this is why all recent presidents (repub or dem) end up being aggressive militarily when they learn that we will collapse if these dollars come home.      In my opionion modern day republicans are worse then dems because they cut taxes and keep or even worse increase the size of government.  You don't cut taxes - you cut goverment and that allows you to tax less.  If I was in office, I would announce a tax rate of 90% and when people complained I would reply "If you want all of this goverment than pay for it now but I will not allow it to be recklessly placed on a credit card for our children to pay so we can live like pigs now" > this is actually how our country functioned for most of its history and we were the most propserous nation ever known.  (bear in mind I dont agree wth an income tax but this idea tax cuts pay for themselves is bogus when you already have ton of debt ........tax cuts will no doubt promote more economic  growth assuming the economy has no debt/minimal debt.

Whether it's Obama who artifically juiced things with zero rates and QE (the most damaging thing you can do) or Trump who did it wih unfunded tax cuts; it amounts the same thing > more debt, more inflation, bigger wealth gap & worse living standards for the masses.  These lowlifes don't care about the long term - they care about their own legacy and don't want the collapse to happen on their watch even though the collapse is where the healing takes place.  In a credit based economy the irony is that the boom is where the mistakes and problems are happening and the bust is where the benefits would come from should it be allowed to play out  (the market seeks to lower prices in line with actual production and real median wages thus allowing affordability to rise for the masses) but of course the gov't has to dive in and stop the bust that they creatwd through monetary policy thus blowing a bigger a wealth divide and then blame it on the wealthy.    

Until people understand this we have no chance to turn this thing around but very few people get it (including many supposed "financial professionals"  and many of those who do simply don't care because they benefit from these policies).   

I have a question but really not sure how to ask it.  Or what the exact question I am asking really is but here it goes anyway. 

Starting with Obama - What could he have actually done or changed that would have put us on the correct financial path?  Given that we were already in a major recession and for most of his 8 years were he was met with obstruction, what was he supposed to do?  I'm not trying to defend Obama because I disagree with how he handled Wall Street with their bonuses and bail out among other things but I don't know what he could have done. 

It seems there are a lot of interests against this country righting the ship as it were and as you said we the populace does not have even the basic understanding of our current financial situation.  It just has the feeling of "everybody get theirs before it's all over, and the super rich are just squeezing the rest of the blood from the turnip (which is us) before the end of our run as the wealthiest country on Earth." 

I say all this as someone who is ignorant of how our finance and markets really work so be kind in your reply and keep it simple.  Lol

As for Trump...he is looking out for Trump and that is the end of that story. 

Your posts, along with Darter and Ohio, are great reading and are very much appreciated.

[ohio]

On 11/7/2018 at 4:09 PM, DarterBlue said:

I rode out the hit and ended up buying another 8 PUT Contracts at 10.75 on the QQQs and 11.45 on the SPYs I now have a total of twenty of each (forty contracts in all). Glad you made money on TWLO and ESTY. Sorry about the size of the TVIX loss. 

I am now sitting on a loss on the options. I bought the additional 8 contracts as the SPY and QQQ are just above and almost at their respective, 50 day moving averages. Either the market hurtles through them, in which case I need to cover the positions or we get some resistance at these levels. This should manifest itself over the next two trading days. 

I couldn't do anything today.  Will wait till Monday to trade when cash opens up.  ETF shorts, can bleed you dry in the long run even if the markets stay flat in that period.  The main reason being, that traders actually short the ETF shorts causing them to fall unlike LEAPs options.  One of the easiest ways to make money is to short ETFs like UVXY and TVIX during a bull market. It's like trying to hit a 50 foot by 50 foot wall from a foot away.  Almost a 100 percent success rate.

[ohio]

On 11/7/2018 at 4:09 PM, DarterBlue said:

I rode out the hit and ended up buying another 8 PUT Contracts at 10.75 on the QQQs and 11.45 on the SPYs I now have a total of twenty of each (forty contracts in all). Glad you made money on TWLO and ESTY. Sorry about the size of the TVIX loss. 

I am now sitting on a loss on the options. I bought the additional 8 contracts as the SPY and QQQ are just above and almost at their respective, 50 day moving averages. Either the market hurtles through them, in which case I need to cover the positions or we get some resistance at these levels. This should manifest itself over the next two trading days. 

Looks like the markets are topping out.  Hopefully, we can start making some  money on our short positions in the future.  

[DarterBlue]

51 minutes ago, ohio said:

Looks like the markets are topping out.  Hopefully, we can start making some  money on our short positions in the future.  

They stalled. Not sure if they are topping out. But at least they did not continue going higher. So, there probably is some resistance at these levels. I refuse to believe that we don't at least retest the lows given the amount of damage that was done in October. But stranger things have happened so, I need to be careful and not let my preconceived notions cost me $$.

[DarterBlue]

2 hours ago, World Citizen said:

I have a question but really not sure how to ask it.  Or what the exact question I am asking really is but here it goes anyway. 

Starting with Obama - What could he have actually done or changed that would have put us on the correct financial path?  Given that we were already in a major recession and for most of his 8 years were he was met with obstruction, what was he supposed to do?  I'm not trying to defend Obama because I disagree with how he handled Wall Street with their bonuses and bail out among other things but I don't know what he could have done. 

It seems there are a lot of interests against this country righting the ship as it were and as you said we the populace does not have even the basic understanding of our current financial situation.  It just has the feeling of "everybody get theirs before it's all over, and the super rich are just squeezing the rest of the blood from the turnip (which is us) before the end of our run as the wealthiest country on Earth." 

I say all this as someone who is ignorant of how our finance and markets really work so be kind in your reply and keep it simple.  Lol

As for Trump...he is looking out for Trump and that is the end of that story. 

Your posts, along with Darter and Ohio, are great reading and are very much appreciated.

I know you did not direct this at me, but I will lend my ten cents. My response will probably differ somewhat from GrecoRoman's as while we see many of the same problems, I think there are philosophical differences between us. Anyway here goes.

Starting with Obama. He did the right thing bailing out the auto industry. Had he not done so, we would have been looking at a depression in the real economy. With respect to Wall Street, I am conflicted. Without bailing the financial system out, there could also have been complete collapse leading to a depression. For multiple, national/international financial institutions would have failed, which would not only have resulted in collapse of Wall Street itself, but of main street, too, as the FDIC and FSLIC would not have had the resources to make depositors whole leading to not only the titans of finance, but the little man too losing most of their savings. So, on that basis, the bailout of the banking system was probably necessary. 

But here is where I fault the Obama administration. If you were going to bail out the banking system, the following should have been done, also. First, the most egregious bad actors, individuals like Mozilla at Countrywide Financial, or the heads of Lehman Brothers and AIG should have been charged with crimes and been prosecuted to the full extent of the law. It is interesting that Bernie Madoff is in prison for the rest of his life, but these individuals are not only free, but walked away with their ill gotten gains. Second, Glass Steagall should have been reinstated. It had worked fine since the 1930s. There was a reason Investment Banking and main street Commercial Banking were separated. Third, the largest banks should have been broken up. Too big to jail means you can't have too big to fail. Fourth, more aggressive fiscal policies, as opposed to monetary policies, should have been employed to reignite the economy. All we have done with the monetary policies employed is to inflate the next asset bubble, which we are currently still in or which has now started to deflate under its own weight. Fifth, the Obama Administration should have encouraged the Fed, to start the unwinding of the lax monetary policies from at least 2013, before things got totally out of hand. It is not surprising that 10 years after the last financial crisis we are pretty much back to square one. Unpunished bad behavior typically leads to continued bad behavior. 

A big part of the problem with modern, American Capitalism, is that it is not the dynamic capitalism geared toward production that existed in the 19th and through the mid 20th centuries. Today, Capitalism in America is financial capitalism and the extraction of "rents" from the economy. As a consequence the "middle class" which politicians to this day pay lip service to, has been largely decimated. What we have here today, is more akin to the Third World from which I come. We have a small very, very affluent class which controls obscene amounts of the nation's wealth, a relatively small technocratic class (Silicon Valley, pundits at the large media houses, etc.), that are able to live comfortably off the system, and the rest of us, which comprise a very large segment of the population that is literally struggling to get by, despite us being at full employment. 

I don't believe this is sustainable. But the reforms needed won't be initiated from the top. Unless we return to the kind of working class militancy that was characteristic  of the US's labor force from the late 19th century through the Roosevelt Presidency, things will continue to get worse. 

I myself am confronted with a stark choice. Do I stay and fight for what I think is right or do I flee, say a pox on all their houses, it is not the country of my birth, so why should I give a damn?

As I type this,  am deeply conflicted, as for the last 35.5 years the USA has been my home and despite its faults, there is much I love about America. 

  

[ohio]

29 minutes ago, DarterBlue said:

I know you did not direct this at me, but I will lend my ten cents. My response will probably differ somewhat from GrecoRoman's as while we see many of the same problems, I think there are philosophical differences between us. Anyway here goes.

Starting with Obama. He did the right thing bailing out the auto industry. Had he not done so, we would have been looking at a depression in the real economy. With respect to Wall Street, I am conflicted. Without bailing the financial system out, there could also have been complete collapse leading to a depression. For multiple, national/international financial institutions would have failed, which would not only have resulted in collapse of Wall Street itself, but of main street, too, as the FDIC and FSLIC would not have had the resources to make depositors whole leading to not only the titans of finance, but the little man too losing most of their savings. So, on that basis, the bailout of the banking system was probably necessary. 

But here is where I fault the Obama administration. If you were going to bail out the banking system, the following should have been done, also. First, the most egregious bad actors, individuals like Mozilla at Countrywide Financial, or the heads of Lehman Brothers and AIG should have been charged with crimes and been prosecuted to the full extent of the law. It is interesting that Bernie Madoff is in prison for the rest of his life, but these individuals are not only free, but walked away with their ill gotten gains. Second, Glass Steagall should have been reinstated. It had worked fine since the 1930s. There was a reason Investment Banking and main street Commercial Banking were separated. Third, the largest banks should have been broken up. Too big to jail means you can't have too big to fail. Fourth, more aggressive fiscal policies, as opposed to monetary policies, should have been employed to reignite the economy. All we have done with the monetary policies employed is to inflate the next asset bubble, which we are currently still in or which has now started to deflate under its own weight. Fifth, the Obama Administration should have encouraged the Fed, to start the unwinding of the lax monetary policies from at least 2013, before things got totally out of hand. It is not surprising that 10 years after the last financial crisis we are pretty much back to square one. Unpunished bad behavior typically leads to continued bad behavior. 

A big part of the problem with modern, American Capitalism, is that it is not the dynamic capitalism geared toward production that existed in the 19th and through the mid 20th centuries. Today, Capitalism in America is financial capitalism and the extraction of "rents" from the economy. As a consequence the "middle class" which politicians to this day pay lip service to, has been largely decimated. What we have here today, is more akin to the Third World from which I come. We have a small very, very affluent class which controls obscene amounts of the nation's wealth, a relatively small technocratic class (Silicon Valley, pundits at the large media houses, etc.), that are able to live comfortably off the system, and the rest of us, which comprise a very large segment of the population that is literally struggling to get by, despite us being at full employment. 

I don't believe this is sustainable. But the reforms needed won't be initiated from the top. Unless we return to the kind of working class militancy that was characteristic  of the US's labor force from the late 19th century through the Roosevelt Presidency, things will continue to get worse. 

I myself am confronted with a stark choice. Do I stay and fight for what I think is right or do I flee, say a pox on all their houses, it is not the country of my birth, so why should I give a damn?

As I type this,  am deeply conflicted, as for the last 35.5 years the USA has been my home and despite its faults, there is much I love about America. 

  

Don't know if the President has any influence on the FED or not, but maybe President Obama should have talked with Bernanke about not lowering the interest rate too low relative to inflation.  In hindsight, this move artificially inflated the markets and investors went away from cash.  Don't know enough about this subjet but this could come back to haunt our economy in the future.

 

 

 

[GrecoRoman]

On 11/8/2018 at 4:30 PM, World Citizen said:

I have a question but really not sure how to ask it.  Or what the exact question I am asking really is but here it goes anyway. 

Starting with Obama - What could he have actually done or changed that would have put us on the correct financial path?  Given that we were already in a major recession and for most of his 8 years were he was met with obstruction, what was he supposed to do?  I'm not trying to defend Obama because I disagree with how he handled Wall Street with their bonuses and bail out among other things but I don't know what he could have done. 

It seems there are a lot of interests against this country righting the ship as it were and as you said we the populace does not have even the basic understanding of our current financial situation.  It just has the feeling of "everybody get theirs before it's all over, and the super rich are just squeezing the rest of the blood from the turnip (which is us) before the end of our run as the wealthiest country on Earth." 

I say all this as someone who is ignorant of how our finance and markets really work so be kind in your reply and keep it simple.  Lol

As for Trump...he is looking out for Trump and that is the end of that story. 

Your posts, along with Darter and Ohio, are great reading and are very much appreciated.

Good questions buddy,  This discussion could get deep and with good guys like Darter and Ohio we should have quality discourse.  

-I would start by asking you what in your opinion defines wealth in a society/nation?  My answer would be to gauge the percentage of the poulation that enjoys a rising a standard of living which could best be analyzed by the purchasing power they enjoy.  In other words, the amount of "stuff" the average man/family can afford with their currency.  If you give me your opionion on what defines wealth we can then get to the next step.  (dont think of this as a nations wealth i.e balance of trade, current accounts etc - think of it from the perspective of an individual in this case the collection of citizens)

-Something else  to understand is that the intrinsic value an asset is noting more than a premium over the prevailing risk free rate (the risk free rate being the prevailing treasury maturity for the term of your investment  i.e. a 10 year investment horizon corresponds to a 10 year treasury).  You create a risk spread over the treasury depending on the risk of the asset class, project out cash flows over the investment term (earnings, interest, NOI in real estate etc), then finally "discount" it back to a present value.  Thus the higher the risk free rate = higher the discount rate = lower present value/lower offer price.  In other words, if you could go to the bank and get a 5% guaranteed fixed rate return for a year, why would you ever buy stock (or another risky asset) if you can get that return risk free.  You would need a much higher return to justify the risk therfore that higher return would be your required discount.  There are dozens of fancy formulas with creative names i.e. DCF, CAPM, Sharpe, Black Scholes, Gordond Div Discount Model, RE Cap rates, hurdle rates blah blah blah .....at the root they all amount to what I just explained.  Your takeaway from this should be > lower interest rates increase asset prices, higher interest rates decrease asset prices.  You seem more liberal leaning (not knocking this just observing) so next ask who owns the assets - answer the top 5% of people that conrol the huge majority of the wealth (most of the wealth disparity in due to capital assets and has gotten progressively worse each decade)

 

If you can give me your opinion on the first question and if the second paragraph on asset val makes sense we can chip away more.  I'm in and out this weekend but like I said this stuff  makes for good discussion and I'm terrifed of where the country is headed so to the extent a football board gets these type of discussions going its a great thing

[GrecoRoman]

20 hours ago, ohio said:

Don't know if the President has any influence on the FED or not, but maybe President Obama should have talked with Bernanke about not lowering the interest rate too low relative to inflation.  In hindsight, this move artificially inflated the markets and investors went away from cash.  Don't know enough about this subjet but this could come back to haunt our economy in the future.

 

 

 

Kind of funny that the Feds historical mandate was price stability aka no inflation.  As of January 2012, they adopted a 2% target.  Wait - doesnt stable mean - not changing?  Well now they tell is 2% inflation is good.  Oh, ok - so if my cost of living goes up 2% percent per year boy thats a great thing.  More like, they new damn well the QE and ZIRP would cause inflation so they want to get the sheople accustomed to it - well that and the Treasury has to default on its obigations unless it prints to repay.

I actually had a discussion with a  Fed governor a couple years after he spoke at an event im NYC and my position was well received by people listening in terms of me crushing him in the debate.    I made the point that I'm consistent - here's my logic:

Falling prices are good (comes from more production of goods then money supply thus raising living standards - i.e. the average person can afford more and sales volume for companies will rise) - see the United States for the first half of its history.  Those coming at in the 19th century were replete with "we hear prices fall in America" as most were coming from commie states 

Current Fed Logic:  Falling prices are bad.  Stable prices are bad, but not as bad as falling.  Prices going up by 1% are good, but not optimal.  Prices going up by 2% is perfect.  Prices going up by 2.2% is bad smh

As if the Fed (Or anyone) could directly control inflation  or should have any involvement whatsoever - all they do is muck up signals and price discovery  the free market is trying to give us.

Lastly - remember.....if you dont get a raise at work but youre cost of living falls 2% you're in a better place by 2%.  Whats thr problem here > the goverment has nothing to tax

If you do get a 2% raise at work but your cost of living goes up 2% you get no net gain.  Oh by the way you have a net loss because the gov't will tax you on your 2% raise so you'll really have a 1.3% raise against your 2% increased cost of living.       As Keynes said, inflation is the goverments secret partner because only 1 man in a million will uderstand the wealth confiscation taking place right under his nose.  

Ever wonder why neither party speaks to this? And dont expect the financial world to - they love inflation because it juices asset prices

[GrecoRoman]

10 minutes ago, GrecoRoman said:

Kind of funny that the Feds historical mandate was price stability aka no inflation.  As of January 2012, they adopted a 2% target.  Wait - doesnt stable mean - not changing?  Well now they tell is 2% inflation is good.  Oh, ok - so if my cost of living goes up 2% percent per year boy thats a great thing.  More like, they new damn well the QE and ZIRP would cause inflation so they want to get the sheople accustomed to it - well that and the Treasury has to default on its obigations unless it prints to repay.

I actually had a discussion with a  Fed governor a couple years after he spoke at an event im NYC and my position was well received by people listening in terms of me crushing him in the debate.    I made the point that I'm consistent - here's my logic:

Falling prices are good (comes from more production of goods then money supply thus raising living standards - i.e. the average person can afford more and sales volume for companies will rise) - see the United States for the first half of its history.  Those coming at in the 19th century were replete with "we hear prices fall in America" as most were coming from commie states 

Current Fed Logic:  Falling prices are bad.  Stable prices are bad, but not as bad as falling.  Prices going up by 1% are good, but not optimal.  Prices going up by 2% is perfect.  Prices going up by 2.2% is bad smh

As if the Fed (Or anyone) could directly control inflation  or should have any involvement whatsoever - all they do is muck up signals and price discovery  the free market is trying to give us.

Lastly - remember.....if you dont get a raise at work but youre cost of living falls 2% you're in a better place by 2%.  Whats thr problem here > the goverment has nothing to tax

If you do get a 2% raise at work but your cost of living goes up 2% you get no net gain.  Oh by the way you have a net loss because the gov't will tax you on your 2% raise so you'll really have a 1.3% raise against your 2% increased cost of living.       As Keynes said, inflation is the goverments secret partner because only 1 man in a million will uderstand the wealth confiscation taking place right under his nose.  

Ever wonder why neither party speaks to this? And dont expect the financial world to - they love inflation because it juices asset prices

Not to mention the numerous changes to the CPI - if we use the same basket of goods from 1994 we're at 6% meaning we have huge negative growth as nomical GDP is reduced by the GDP deflator which is simply the CPI.  Thus the economy looks better, people are told there is minimal inflation even through right in front of their eyes prices are rising dramatically thus living standards falling and lastly the govt gets out of their true cost of living adjustments on all the promises they made.

The free market has its own inflation barmoter in gold and its outrperforming any asset class big time since 2000 (including div reinvestment, compounding etc)   Why do I use 2000 - that is widely accepted as the last point where many thought the US could pay off its national debt and gold is mainly a  function of the monetary base / national debt outstanding 

Contrary to most of our history, we now have an extremely dumb country (I hate to say that believe me)  I'm in what you would call the higher level financial world and so many people here are oblivioius let alone people outside the financial world. 

[ohio]

On 11/7/2018 at 1:57 PM, ohio said:

Bought back into TVIX and UVXY.

2000 shares of TVIX at 37.54 and 2000 UVXY at 49.51.  Hope I don't get RegT''d  since I have to hold them till Friday.

Going to for a walk since it's nice and sunny outside, then to work.  Talk to you tomorrow since I finally will get a day off.

Money from ETSY and TLRY sales opened up today.  So I was able to sell  all of TVIX at 39.40 and all of UVXY at 51.26. Was behind on both stocks by quite a bit yesterday.  Over $12,000.  Was hoping the market would have fallen further towards the end of the day, but it started to rebound so, I panicked a little and decided to sell.  May have left money on the table if the market opens up lower on Monday.

Glad that the market went down today, or else I would have been down by quite a bit more.  The weekend would have really sucked and I would have had to light up a joint or two and wash it down with extra strength Mylanta.  And speaking of pot....

Also bought 600 TLRY at 107.33 on a hard dip and sold all at 116.02 in the morning for a quick pick me up.  Would have liked to have held TLRY longer, but I don't trust the pot stocks that much right now.  Glad that I didn't hold on as it fell in the afternoon.  Might buy it again next week if it takes another steep dip.  It could be a while before the dope stocks start buzzing again, though.

I'm currently in all cash again and don't have to go to work, so at least I can enjoy a worry free weekend if nothing else.