My thought too. If Republications would have held their promise 10 years or so ago about term limits maybe we would not have have the pork barrel situation that we have now. I am red neckish but think that BHO is doing a great job so far, losing my tail on gold mine stocks but that could change in a day. >>
That last sentence is so dangerous I'll stop right here.
I can't. Wake up and smell the Constitution. >>
No offense meant to anyone. I like that he put the TV fiasco on hold, capping the bonuses of people losing money and the new energy bill is a real winner.
7182...hummmmmm. Doesn't seem like they can knock the yellow metal down but you have to wonder if they are even trying. PPT out of bullets? Banksters don't have time to mess with it? Physical demand is off the charts because no one wants to spin the market wheel? Are the funds so weak that they are going cash because they can't take the 20% loss this year on top of the 40% loss last; are they standing at the gold window? So many USD floating around out side of the borders that they have to do something with them so they are buying the metal? Is it going sub 7? Lots of action, gotta pay attention, got to be ready to play, got to keep building a position in something. Got food?
<< <i>Did I just hear this correctly.....$4,000,000,000,000.00 budget for 2010!?
The Porkulus alone was more than we spent on the cost of Katrina, Iraq and Afghanistan wars. >>
Apples and Oranges here. I'm so silly, sorry.
1. Stimulus: around 850 billion dollars and that is more than cost of Katrina, Iraq and Afghanistan.
2. 2010 budget: only 3.6 trillion dollars, not 4.0 trillion dollars. a. Universal Healthcare-$650 billion on a down payment(?) Wait, a down payment on Universal Healthcare that has not be discussed, debated or approved.
Again, no one has asked me about any of this.
Worst part of all, I DON'T SEE ANYTHING IN THE 4.4 TRILLION DOLLARS THAT IS REMOTELY EARMARKED FOR ME. ZERO. BUT I KNOW I WILL HELP PAY FOR IT.
This government closely resembles excerpts I read in last years' "Liberal Fascism."
<< <i>Did I just hear this correctly.....$4,000,000,000,000.00 budget for 2010!?
The Porkulus alone was more than we spent on the cost of Katrina, Iraq and Afghanistan wars. >>
Apples and Oranges here. I'm so silly, sorry.
1. Stimulus: around 850 billion dollars and that is more than cost of Katrina, Iraq and Afghanistan.
2. 2010 budget: only 3.6 trillion dollars, not 4.0 trillion dollars. a. Universal Healthcare-$650 billion on a down payment(?) Wait, a down payment on Universal Healthcare that has not be discussed, debated or approved.
Again, no one has asked me about any of this.
Worst part of all, I DON'T SEE ANYTHING IN THE 4.4 TRILLION DOLLARS THAT IS REMOTELY EARMARKED FOR ME. ZERO. BUT I KNOW I WILL HELP PAY FOR IT.
This government closely resembles excerpts I read in last years' "Liberal Fascism."
COMRADE RENSKI >>
I saw this one earlier: Norman Mattoon Thomas (November 20,1884 - December 19,1968 Mr. Thomas was a leading American socialist, pacifist, and six-time presidential candidate for the Socialist Party of America . As the Socialist Party candidate for President of the US , Norman Thomas, said this in a 1944 speech: "The American people will never knowingly adopt socialism. But, under the name of "liberalism," they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened." He went on to say: "I no longer need to run as a Presidential Candidate for the Socialist Party. The Democrat Party has adopted our platform."
Sorry but there's no difference between the republicans and democrats.
Looks like today we could see the 6,000's on the Dow. The "slope of hope" continues.
I don't think Dear Leader has any inkling of solving the recession. Don't listen to what he has to say but watch what he does. And the market has voted.
I wish there was an ETF on a basket of "guns, gold, grub" or "beans, bullets and bullion." Ticker could be ggg or bbb.
Comrade Renski, don't forget to include TARP 2 at around $750 BILL which is already being bantered about. Expect TARP 3 coming to your theatres in the fall. TARP 4, 5, and possibly 6 are now on the design drawing boards.
When it becomes "Trillions" of dollars, everything is negotiable. There's simply no good way to estimate which companies, or concepts, or commodities will be the winners and losers when the govmint is re-writing all of the definitions so thoroughly.
It looks more like Weimar all the time. We all know how well that worked out.
Q: Are You Printing Money? Bernanke: Not Literally
Notice how many companies are cutting dividends to nearly nothing.
Cramer, I like his craziness and obscure references, but I take his advice with a grain of salt. Look, he gives out a ton of info 5 times a week....some investments are just going to be wrong. What I'm leading up to is that one of his stratee-gery's is to buy high dividends stocks. This game may end soon. Frankly, I don't know why anyone would put money in these stocks and lose 20, 30, 40% in principle just to get some paltry return.
I was listening to some Mutual Fund show on my drive back from the Nuggets-Lakers game. Just for giggles to see what was being recommended. I was surprised by the picks. Their picks were funds that were down 25% last year and already down 12-15%. I heard the usual BS of "dollar cost average", "the market will come back", "buy the dips" and my favorite "buy and hold." I also heard Alexis Glick give advice...which she needs to stop doing. Even she conceded that the market may still go down but just dollar cost average into it. You know the market is down 50% and it can't get much lower, she said. Well, the Prez is saying this is the worst since the GD (what a fear monger he has become) and stocks went down 95%. So Alexis, there is still room to the downside. Besides, where we are now, it would take NINE years to get back to where we were in late 2007. And that is assuming an 8% return for nine years. Our economy is not going to be growing to give us those returns. And she's Fox's financial chief? I think the reason that these business channels put these info-goddesses in there is to distract us from the misery. You know we're in a financial Armageddon when they start doing the news topless!
Regarding the "BS" stated above...those are good rules when we are in a bull market where most stocks are living above their 200 dma like the run from 1982-1987, 1988-2001, 2003-2007. Now that the stocks live below the 200 dma, buy and hold, buy the dips, is financial suicide if you don't have more than 10 years to work with. We could at best be seeing a sideways movement like 1966-1982. If you are a boomer you may be SOL.
Back to the companies cutting dividends, isn't that just to save money. What happens when all these companies stop all of their dividends and yet keep losing money? More failures, more layoffs and more the government will be in there to pick up the pieces and solve the problems.
I see this government, who his declaring war on the investor, (scary article rg!) not wanting to get us out of recession but want us to feel the pain until 2011 and then engineer a recovery for election year.
Mogambo's Feb. 27th piece notes that the earnings of the S&P 500 has dropped to $28.75, down from $45.95 last week, down from $78.80 last year.
The S&P's P/E is at 27, compared to 17 last year. That's what deteriorating earnings do, which is a clear-cut indicator that the stock market is running on fumes. As I recall, historic P/E ratios aren't sustainable much over 14, depending on the time in the business cycle and depending on the specific industry.
I don't see earnings going up anytime soon, so the way I see it, there is nothing on the horizon to support such high stock P/Es.
So, either earnings are going to skyrocket soon and the market will have a major bull run, or the market is going to drop another 30%, for starters. Generally, market moves tend to overshoot. With the current fiscal mismanagement of historic proportions just getting started, and with the attack on business via a mass of aggressive tax disincentives on the horizon - it doesn't look too good for the stock market, in my opinion.
Anyone here a contrarian? You have to ask yourself, "do I feel lucky?" Well, do ya?
Q: Are You Printing Money? Bernanke: Not Literally
I'm sort of surprised at the public's general reaction to current stock market levels. In the early months of this thread the discussions of gold vs Dow were numerous. My take back then was that you don't "correct" a 20-25 year bull market in stocks with a quick 1-2 year recession. In the same vein, you don't continue on with a 20 year bear market in commodities with another 10-20 years added on. There was Dave Ramsey in 2004 calling for a new Dow record of 16,000-20,000 by 2007/2008. Well he sort of got it half right with a 14,100 new "high" in October 2007, but at the expense of a 25% weaker dollar. So inflation adjusted to <10,500, that new high wasn't close to beating the previous high. Smoke and mirrors. Current P/E's only support the theory of more corrections to come.
In any event, the 2003-2008 market "recovery" (ie weakening dollar) seems to be just a small part of the 15-20 year corrections previously seen. This current one started no earlier than 2000.
If you use PE's as your sole investment criteria, you will have very mediocre returns.
We had this discussion several months ago and in most cases PE's will be highest at the bottom. This is because companies have very little in the way of earnings. Last summer everyone was saying to buy the oils cuz PE's were single digits. Many companies have low PE's for a reason. Mostly that they have little prospect for growth. Is this the kind of company you want to own?
In 2002, INTC, MSFT, CSCO, AAPL, RIMM had very high PE's. In 2002 the PE of the SP-500 was in the 30's. You may have shunned them. That would have been a mistake.
I will agree that after a long and protracted bear market--5+years-- then PE could be very low as apathy grips the equity markets.
In 2002, INTC, MSFT, CSCO, AAPL, RIMM had very high PE's. In 2002 the PE of the SP-500 was in the 30's. You may have shunned them. That would have been a mistake.
The real mistake would have been buying them in 2002 and hanging on to them until today.......at least the older large cap companies (401k, IRA, etc.). Had Greenspan (AG) allowed the 2002 correction to continue and work out the excesses, we would have seen the PE's eventually fall to where they would bottom due to technicals and fundamentals. By juicing the economy all AG did was extend the day of capitulation and make it more severe.
Not investing in PM's in 2002, now that was a mistake.
<< <i>If you use PE's as your sole investment criteria, you will have very mediocre returns.
We had this discussion several months ago and in most cases PE's will be highest at the bottom. This is because companies have very little in the way of earnings. Last summer everyone was saying to buy the oils cuz PE's were single digits. Many companies have low PE's for a reason. Mostly that they have little prospect for growth. Is this the kind of company you want to own?
In 2002, INTC, MSFT, CSCO, AAPL, RIMM had very high PE's. In 2002 the PE of the SP-500 was in the 30's. You may have shunned them. That would have been a mistake.
I will agree that after a long and protracted bear market--5+years-- then PE could be very low as apathy grips the equity markets. >>
They are not my sole investment criteria. I take many considerations on personal purchases.
I try to look at the big picture. When anticipating the markets future move I look at the indexes and use, among many other things, P/E's, charts, forecasts of earnings.... During the 1981-82 recession, the P/E of the -500 ranged from 6 to 10 and that info came recently from a Barrons article. I'm a big proponent of charts. It's like a road map for me. I like knowing where I've been and where the "bus" may go. I try not to complicate the process. Simpler the better. For me charts have been great because it takes out the emotion. The most difficult part is actually making a decision to get out or in. I just want to figure out the big brush strokes of the economy. I let the day traders do their magic. I don't have the cajones for that, but I do dabble at times.
Also, I do think they we are in a long and protracted bear market....for years. We will not see the highs of November 2007 during this four-year regime. There will be tradable periods for the nimble at best.
Yep, I like the Casey article and I agree with much of it. I agree that mining is going to suffer in the US, I agree that most of the easy gold/silver has been found, I agree that buying oil at $40 bbl is a steal, I agree that this badness is going to happen for a good while. My take is that it has to go for at least the 4 years we are looking at now and the two or three it will take to get over it assuming that things change from blue to red. I agree that a second passport is a good thing, I agree that South America is an excellent choice for the reasons he mentioned plus the fact that what local enforcement they do have can easily be bought for a pittance and it is reachable by land and by car if worse comes to worse.
News from the front: So, my dad left me three little stripper wells. Last Oct. I got a royalty check for almost 2K and I was shocked, that was the most it had ever been. I get two or three of those a year and they are usually about 1.2K. It's not enough to change anybodys life but it's a nice little bonus every now and then. Then I got the one last month and it was $750, the lowest it has ever been. So I'm thinkin' that there are more people in the world and there will be more and they need electricity and they still need to drive cars and they still need oil and they will need more; maybe not in the US but in other places forsure. I agree with Mr. Buffett that the price of oil has to go up, even from $150. I thought that when it was there and I think that now. But, we are at a fortunate low ebb for POO as we are in the beginning of a massive global economic reorganization.
When you think about it, a reorganization in our financial system has to happen. Our current system has reached it's logical endpoint...game over. Reorganization must occur and will occur. The govts. efforts to date are little more than yelling into the wind in terms of being able to do a magic act on the trillions of bad paper and "assets" out there, at least in my thinking. That money is as lost as the 1950's are gone. The pittance that the govt. is committing is little more than a lame attempt at social engineering but it will come to nothing but a bunch of hard feelilngs and class warfare...that money is gone.
But, people will still need oil. They will need more and more of it. Solar is easily 5 years out before anything significant comes of it and even that is suspect. I agree with Casey; oil producers, explorers, service companies, refiners and distributors are all in play. They are also very hammered at the moment. I look at gold and say...yeah, maybe there is $1200 in it this year and maybe I've got enough for now. I look at oil and say it's cheap and the difference between $40 and $150 is about 4X. I agree with Casey.
<< <i>If you use PE's as your sole investment criteria, you will have very mediocre returns.
We had this discussion several months ago and in most cases PE's will be highest at the bottom. This is because companies have very little in the way of earnings. Last summer everyone was saying to buy the oils cuz PE's were single digits. Many companies have low PE's for a reason. Mostly that they have little prospect for growth. Is this the kind of company you want to own?
In 2002, INTC, MSFT, CSCO, AAPL, RIMM had very high PE's. In 2002 the PE of the SP-500 was in the 30's. You may have shunned them. That would have been a mistake.
I will agree that after a long and protracted bear market--5+years-- then PE could be very low as apathy grips the equity markets. >>
They are not my sole investment criteria. I take many considerations on personal purchases.
I try to look at the big picture. When anticipating the markets future move I look at the indexes and use, among many other things, P/E's, charts, forecasts of earnings.... During the 1981-82 recession, the P/E of the -500 ranged from 6 to 10 and that info came recently from a Barrons article. I'm a big proponent of charts. It's like a road map for me. I like knowing where I've been and where the "bus" may go. I try not to complicate the process. Simpler the better. For me charts have been great because it takes out the emotion. The most difficult part is actually making a decision to get out or in. I just want to figure out the big brush strokes of the economy. I let the day traders do their magic. I don't have the cajones for that, but I do dabble at times.
Also, I do think they we are in a long and protracted bear market....for years. We will not see the highs of November 2007 during this four-year regime. There will be tradable periods for the nimble at best.
Ren >>
Brian, as you know I believe ALL asset classes are good for trading only. So holding any asset for too long is a mistake be it PM, equities, real estate, bonds, ect.
Ren, the 81-82 bear market is a classic example of low PE's in a protracted recession as I believe that recession actually started in the 1968 and continued for 14 years. It was briefly interupted by inventory readjustments that looked like growth. This recession will be very similiar. You may also want to look at the book value of the market relative to price during that time. Then look at today's book value.
As far as trading, I believe a good trader will be able to make more in the market over the next 5 years than the buy and hold guy could have done if he bought at the 1982 low and sold at the 2007 high. I believe this just as I stated back in August--that a good trader would be able to make more trading gold than the buy and hold guy did over the last 5 years.
If one does not know how to trade, it would encourage anyone reading to learn. The land of opportunity is open for business.
I believe we will see oil in the 20's within the next 12-18 months. Increases in energy prices will hinder economic growth which in turn will hinder energy price growth. Sustained oil prices in excess of $100 in the near term may result in irreversible economic and social breakdown.
I believe we will see oil in the 20's within the next 12-18 months. Increases in energy prices will hinder economic growth which in turn will hinder energy price growth. >>
Joe Petrowski of Gulf Oil is saying the same thing. Actually, he's been saying that gas could retail for a buck a gallon late this year. That's about 25¢ a gallon wholesale for RBOB. If it gets there, i would think that's a very bad sign for the world economy. The guy has a knack for predicting oil markets fairly accurately.
<< <i>Sustained oil prices in excess of $100 in the near term may result in irreversible economic and social breakdown. >>
The planned tax increases will snuff out any meaningful recovery for us. We probably will not see sustained GDP growth above 2% for along time.
Yepper, I can believe sub $30 oil in '09 but I don't think anyone is going to see $20 oil, ever again. So it's a good thing to watch because once it goes sub $30, it would be nice to be in position.
<< <i>Yepper, I can believe sub $30 oil in '09 but I don't think anyone is going to see $20 oil, ever again. So it's a good thing to watch because once it goes sub $30, it would be nice to be in position. >>
Is there really a difference between $28 oil and $20 oil?
Has anyone ever seen a massive bubble pop, only to see it reinflate?
<< <i>Has anyone ever seen a massive bubble pop, only to see it reinflate?
I can think of a couple:
-Gem coins 1980 and then 1989. And in some respects many of those gems in 1989 are up another 2X or 3X.
-Stocks in 1929.....and in 1987....and in 2000...and finally in 2007. All bubbles expanded by easy money.
-Gold in the 1970's to 1980 and then from 2001-2008. Next reinflation act will be from 2008-????.
-Tulips in 1635........just kiddin'.
roadrunner >>
I classify a bubble as a market that has an impact on a large population or have a large following. Coins, artwork, ect do not fit this criteria, athough they could be in a bubble, thier bursting would have very little impact on society. The cause of thier bursting would have a greater affect.
No one involved in stocks in a real way was alive in 1987, let alone 2000 or 2007. A typical 45 yr old investor in 1929 would be 103 in 1987. The NASDAQ was a bubble in 2000 but it still has not reinflated to bubble status.
Gold was in a bubble in 1980 and has still not reflated. Again, we are more than a generation from the previous bubble. Perhaps the next few years will prove otherwise.
Tulips?....well, you havent seen my wife's flower garden.
that a good trader would be able to make more trading gold than the buy and hold guy did over the last 5 years.
Yeah and I can make good money at the races if I Know which horses are going to win. So if you think you can outguess the market good luck. For my money I'll keep the PMs and save the gambling for Vegas time.
<< <i>that a good trader would be able to make more trading gold than the buy and hold guy did over the last 5 years.
Yeah and I can make good money at the races if I Know which horses are going to win. So if you think you can outguess the market good luck. For my money I'll keep the PMs and save the gambling for Vegas time. >>
And that is why you will not be a good trader as you view it as gambling. No offense meant.
Very few can consistantly trade the market. Most fail due to emotion. You just have to know when to hold 'em and when to fold 'em. You need to learn humility. You need to look at the big picture, you need to know psychology. I have been successful for over 20 years in both bear and bull markets. I am certainly not the brightest and I am sure many more could do it if they tried. If you dont want to try then that is up to you. If you want to try then the world is your oyster right now.
It is not about knowing a winner, but rather knowing the losers.
In 2002, INTC, MSFT, CSCO, AAPL, RIMM had very high PE's. In 2002 the PE of the SP-500 was in the 30's. You may have shunned them. That would have been a mistake.
Tech stocks have historically sported higher P/E ratios than most other stock categories, based on expected earnings and hoped-for growth. That doesn't mean it's right, or smart to believe that the earnings streams will continue to be so strong indefinitely. Yes, I did shun them during that time period. I don't think that was a mistake.
Q: Are You Printing Money? Bernanke: Not Literally
Ok. Just trying to show and explain opportunity. Good luck.
On the deflationary front my wife was grocery shopping today. A dozen eggs and a gallon of whole milk were $1.15 and $1.69 respectively. Both are down at least 30% in the last 6 months. These were not "specials" and no coupons were involved.
Also heard from 2 different sources, one a painter and another an electrician that they are having to lower prices by 30% to remain competitive. They are still losing jobs to others willing to work for 40% less.
The velocity of money is coming to a grinding halt.
"The velocity of money is coming to a grinding halt."
It sure feels like that is the case. The negative wealth effect related to both housing and defined contribution type pension plans must be enormous. Virtually everyone I know is cutting back -- even people with stable jobs, low debt, and great liquidity. There is tremendous excess capacity globally. To add to your shopping anecdotes -- our local supermarket is offering 20 % off on all items to anyone with the initiative to print a coupon from the internet.
At some point, inflationary pressures will certainly return -- but I wish I could see that point! As long as our government can borrow to finance the deficit, we will not be seeing inflationary pressure.
It's unfathomable that borrowing money to invest in the stock market became the norm (or at least very common practice) at pension plans. How stupid are we?
I and 4,800 of my highly skilled and trained contemparies have taken a 36% cut. I know families that will not last long in there houses. Is there a bailout for these responsible people in the stimulus? No, it's only for what Santelli calls "loseres".
Our company looks to park about 40 airplanes shortly. They are acting as if they are losing $1.4 billion...which is what they made. The company has never furlouged. Because of that all share a hefty pain. Tough spot for both sides.
I need cash. Please make an offer to my #2 item on my sigline.
Edited: sorry, having difficulty with my iphone and the auto speller doing it's own thingy.
<< <i>It's unfathomable that borrowing money to invest in the stock market became the norm (or at least very common practice) at pension plans. How stupid are we? >>
Public and private pension plans are also the largest timberland owners in the USA. Maybe a bunch of land will soon hit the market?
Pretty shortly, CALPERS will be reporting just how far things have shrunk for them. Going to be an interesting shock to the market, me thinks. They leveraged into land deals and guaranteed the underlying debt structures for those INVESTORS...er....speculators.--those deals which have now gone south. WOWEE ZOWEE. Hang on to your toupees.
For every John Mauldin and Mish prediction there are equally capable analysts who predict a different outcome. No doubt Europe has many problems, but the primary course of action by our legislatures and regulators is to divert our attention away from the real problem, as always. Hence the cries are to look at Eastern Europe, look at the US "deflation" (ie deflating asset bubble), look at what the Great Depression did, etc., etc. Meanwhile they have carte blanche to print, print, and print to their hearts content, with no real negative feedback from the populous...essentially a continued transference of wealth from J6P to the Bilderbergs. Our debt is now being monetized at an increasing rate. In essence the stock of the USA is being diluted and the major shareholders (China, Japan, Indian, UK, etc) won't be approving.
This was where AG mentioned that Central Banks stand ready to lease gold in reaction to a rising gold price (see last sentence in 3rd paragraph). AG's testimony basically stated that there was no need to regulate financial OTC derivatives because the "big boys" would make wise-choices and that the public did not need protection from this type of trading. The financial markets were "too large" to require OTC D's regulation because no one could manipulate them due to their "unlimited" size vs. the more manipulable commodity markets where supplies were limited. Any losses could be settled up quickly in "cash" and that any such losses would be a tiny fraction of the original contracts......and other such baloney. I guess ending up with $600 TRILL+ of these things was chump change to AG (10X world GDP). What AG and many others failed to realize was that when the counter-party went bankrupt and could not pay the winner off, the loss was 100% of the contract (ie 100% notional value). This is why the AIG bleeding won't stop. All the OTC derivative's that Bear Stearns dumped into AIG will continue to work towards the surface. The couple hundred billion that has been paid out so far is still chump change.
AG's testimony is also interesting in that he mentions the manipulation of the silver price in the late 1970's by a private US citizen (Bunker Hunt) as the type of market that does need up front regulation to "protect" the public, and to ensure proper price discovery. What he doesn't mention was that Hunt was following the rules and taking legal delivery of what he fairly bought. What is clearly more manipulative in today's silver market is that 2 US banks carry 80% of the entire Comex short position. The CFTC seems to have no problem with that arrangement. Nor do they have a problem with 3 US banks holding 60% of the short gold position on the Comex. The CFTC also sees no problem with JPM carrying $100 BILL in OTC short gold derivative's contracts. And the SEC has no issues with JPM and 3 other banks carrying 98% of the $177 TRILL in US interest rate derivatives. Just what do we need $177 TRILL in bets on for a $13 TRILL economy? But, none of this is manipulative or intended to be....just sound banking practices, right? Yet Hunt trying to get his purchased Comex silver delivered was a "problem."
Comments
The Porkulus alone was more than we spent on Katrina, Iraq and Afghanistan.
the summary tables near the end of all the "great and wonderful things that will happen" (my summary) will make you run for the hills.
Knowledge is the enemy of fear
<< <i>roadrunner >>
My thought too. If Republications would have held their promise 10 years or so ago about term limits maybe we would not have have the pork barrel situation that we have now. I am red neckish but think that BHO is doing a great job so far, losing my tail on gold mine stocks but that could change in a day. >>
That last sentence is so dangerous I'll stop right here.
I can't. Wake up and smell the Constitution. >>
No offense meant to anyone. I like that he put the TV fiasco on hold, capping the bonuses of people losing money and the new energy bill is a real winner.
Chance favors the prepared mind.
<< <i>take a peek at the new "budget blueprint" from the office of management and budget
the summary tables near the end of all the "great and wonderful things that will happen" (my summary) will make you run for the hills.
>>
<< <i>Did I just hear this correctly.....$4,000,000,000,000.00 budget for 2010!?
The Porkulus alone was more than we spent on the cost of Katrina, Iraq and Afghanistan wars. >>
Apples and Oranges here. I'm so silly, sorry.
1. Stimulus: around 850 billion dollars and that is more than cost of Katrina, Iraq and Afghanistan.
2. 2010 budget: only 3.6 trillion dollars, not 4.0 trillion dollars.
a. Universal Healthcare-$650 billion on a down payment(?) Wait, a down payment on Universal Healthcare that has not be discussed, debated or approved.
Again, no one has asked me about any of this.
Worst part of all, I DON'T SEE ANYTHING IN THE 4.4 TRILLION DOLLARS THAT IS REMOTELY EARMARKED FOR ME. ZERO. BUT I KNOW I WILL HELP PAY FOR IT.
This government closely resembles excerpts I read in last years' "Liberal Fascism."
COMRADE RENSKI
<< <i>
<< <i>Did I just hear this correctly.....$4,000,000,000,000.00 budget for 2010!?
The Porkulus alone was more than we spent on the cost of Katrina, Iraq and Afghanistan wars. >>
Apples and Oranges here. I'm so silly, sorry.
1. Stimulus: around 850 billion dollars and that is more than cost of Katrina, Iraq and Afghanistan.
2. 2010 budget: only 3.6 trillion dollars, not 4.0 trillion dollars.
a. Universal Healthcare-$650 billion on a down payment(?) Wait, a down payment on Universal Healthcare that has not be discussed, debated or approved.
Again, no one has asked me about any of this.
Worst part of all, I DON'T SEE ANYTHING IN THE 4.4 TRILLION DOLLARS THAT IS REMOTELY EARMARKED FOR ME. ZERO. BUT I KNOW I WILL HELP PAY FOR IT.
This government closely resembles excerpts I read in last years' "Liberal Fascism."
COMRADE RENSKI >>
I saw this one earlier:
Norman Mattoon Thomas (November 20,1884 - December 19,1968 Mr. Thomas was a leading American socialist, pacifist, and six-time presidential candidate for the Socialist Party of America . As the Socialist Party candidate for President of the US , Norman Thomas, said this in a 1944 speech: "The American people will never knowingly adopt socialism. But, under the name of "liberalism," they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened." He went on to say: "I no longer need to run as a Presidential Candidate for the Socialist Party. The Democrat Party has adopted our platform."
Sorry but there's no difference between the republicans and democrats.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
How long will this affect the price of gold for? My guess is it will only be up 2 or 3 days until the
next piece of news comes out.
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I don't think Dear Leader has any inkling of solving the recession. Don't listen to what he has to say but watch what he does. And the market has voted.
I wish there was an ETF on a basket of "guns, gold, grub" or "beans, bullets and bullion." Ticker could be ggg or bbb.
Comrade Renski
roadrunner
Posted by Anthony Gregory at February 26, 2009 11:29 AM
Ten years later, that's the size of the deficit.
News
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
It looks more like Weimar all the time. We all know how well that worked out.
I knew it would happen.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Cramer, I like his craziness and obscure references, but I take his advice with a grain of salt. Look, he gives out a ton of info 5 times a week....some investments are just going to be wrong. What I'm leading up to is that one of his stratee-gery's is to buy high dividends stocks. This game may end soon. Frankly, I don't know why anyone would put money in these stocks and lose 20, 30, 40% in principle just to get some paltry return.
I was listening to some Mutual Fund show on my drive back from the Nuggets-Lakers game. Just for giggles to see what was being recommended. I was surprised by the picks. Their picks were funds that were down 25% last year and already down 12-15%. I heard the usual BS of "dollar cost average", "the market will come back", "buy the dips" and my favorite "buy and hold." I also heard Alexis Glick give advice...which she needs to stop doing. Even she conceded that the market may still go down but just dollar cost average into it. You know the market is down 50% and it can't get much lower, she said. Well, the Prez is saying this is the worst since the GD (what a fear monger he has become) and stocks went down 95%. So Alexis, there is still room to the downside. Besides, where we are now, it would take NINE years to get back to where we were in late 2007. And that is assuming an 8% return for nine years. Our economy is not going to be growing to give us those returns. And she's Fox's financial chief? I think the reason that these business channels put these info-goddesses in there is to distract us from the misery. You know we're in a financial Armageddon when they start doing the news topless!
Regarding the "BS" stated above...those are good rules when we are in a bull market where most stocks are living above their 200 dma like the run from 1982-1987, 1988-2001, 2003-2007. Now that the stocks live below the 200 dma, buy and hold, buy the dips, is financial suicide if you don't have more than 10 years to work with. We could at best be seeing a sideways movement like 1966-1982. If you are a boomer you may be SOL.
Back to the companies cutting dividends, isn't that just to save money. What happens when all these companies stop all of their dividends and yet keep losing money? More failures, more layoffs and more the government will be in there to pick up the pieces and solve the problems.
I see this government, who his declaring war on the investor, (scary article rg!) not wanting to get us out of recession but want us to feel the pain until 2011 and then engineer a recovery for election year.
Comrade Renski
The S&P's P/E is at 27, compared to 17 last year. That's what deteriorating earnings do, which is a clear-cut indicator that the stock market is running on fumes. As I recall, historic P/E ratios aren't sustainable much over 14, depending on the time in the business cycle and depending on the specific industry.
I don't see earnings going up anytime soon, so the way I see it, there is nothing on the horizon to support such high stock P/Es.
So, either earnings are going to skyrocket soon and the market will have a major bull run, or the market is going to drop another 30%, for starters. Generally, market moves tend to overshoot. With the current fiscal mismanagement of historic proportions just getting started, and with the attack on business via a mass of aggressive tax disincentives on the horizon - it doesn't look too good for the stock market, in my opinion.
Anyone here a contrarian? You have to ask yourself, "do I feel lucky?" Well, do ya?
I knew it would happen.
I shutter at applying the last recession P/E's to that number.
"Who could've predicted this?" Mayor of Whoville.
Well, we did here...right here in "Economic Predictionsville."
Comrade Renski
Yes, I do believe that we've entered the realm of imaginary numbers as they relate to earnings.
I knew it would happen.
In any event, the 2003-2008 market "recovery" (ie weakening dollar) seems to be just a small part of the 15-20 year corrections previously seen. This current one started no earlier than 2000.
roadrunner
We had this discussion several months ago and in most cases PE's will be highest at the bottom. This is because companies have very little in the way of earnings. Last summer everyone was saying to buy the oils cuz PE's were single digits. Many companies have low PE's for a reason. Mostly that they have little prospect for growth. Is this the kind of company you want to own?
In 2002, INTC, MSFT, CSCO, AAPL, RIMM had very high PE's. In 2002 the PE of the SP-500 was in the 30's. You may have shunned them. That would have been a mistake.
I will agree that after a long and protracted bear market--5+years-- then PE could be very low as apathy grips the equity markets.
Knowledge is the enemy of fear
Casey's predictions
The real mistake would have been buying them in 2002 and hanging on to them until today.......at least the older large cap companies (401k, IRA, etc.). Had Greenspan (AG) allowed the 2002 correction to continue and work out the excesses, we would have seen the PE's eventually fall to where they would bottom due to technicals and fundamentals. By juicing the economy all AG did was extend the day of capitulation and make it more severe.
Not investing in PM's in 2002, now that was a mistake.
How the Butcher, Baker, and Candlestick maker survive in 2009-2011
How the banksters got control of the system....and now won't let the gray train go
roadrunner
<< <i>If you use PE's as your sole investment criteria, you will have very mediocre returns.
We had this discussion several months ago and in most cases PE's will be highest at the bottom. This is because companies have very little in the way of earnings. Last summer everyone was saying to buy the oils cuz PE's were single digits. Many companies have low PE's for a reason. Mostly that they have little prospect for growth. Is this the kind of company you want to own?
In 2002, INTC, MSFT, CSCO, AAPL, RIMM had very high PE's. In 2002 the PE of the SP-500 was in the 30's. You may have shunned them. That would have been a mistake.
I will agree that after a long and protracted bear market--5+years-- then PE could be very low as apathy grips the equity markets. >>
They are not my sole investment criteria. I take many considerations on personal purchases.
I try to look at the big picture. When anticipating the markets future move I look at the indexes and use, among many other things, P/E's, charts, forecasts of earnings.... During the 1981-82 recession, the P/E of the -500 ranged from 6 to 10 and that info came recently from a Barrons article. I'm a big proponent of charts. It's like a road map for me. I like knowing where I've been and where the "bus" may go. I try not to complicate the process. Simpler the better. For me charts have been great because it takes out the emotion. The most difficult part is actually making a decision to get out or in. I just want to figure out the big brush strokes of the economy. I let the day traders do their magic. I don't have the cajones for that, but I do dabble at times.
Also, I do think they we are in a long and protracted bear market....for years. We will not see the highs of November 2007 during this four-year regime. There will be tradable periods for the nimble at best.
Ren
News from the front: So, my dad left me three little stripper wells. Last Oct. I got a royalty check for almost 2K and I was shocked, that was the most it had ever been. I get two or three of those a year and they are usually about 1.2K. It's not enough to change anybodys life but it's a nice little bonus every now and then. Then I got the one last month and it was $750, the lowest it has ever been. So I'm thinkin' that there are more people in the world and there will be more and they need electricity and they still need to drive cars and they still need oil and they will need more; maybe not in the US but in other places forsure. I agree with Mr. Buffett that the price of oil has to go up, even from $150. I thought that when it was there and I think that now. But, we are at a fortunate low ebb for POO as we are in the beginning of a massive global economic reorganization.
When you think about it, a reorganization in our financial system has to happen. Our current system has reached it's logical endpoint...game over. Reorganization must occur and will occur. The govts. efforts to date are little more than yelling into the wind in terms of being able to do a magic act on the trillions of bad paper and "assets" out there, at least in my thinking. That money is as lost as the 1950's are gone. The pittance that the govt. is committing is little more than a lame attempt at social engineering but it will come to nothing but a bunch of hard feelilngs and class warfare...that money is gone.
But, people will still need oil. They will need more and more of it. Solar is easily 5 years out before anything significant comes of it and even that is suspect. I agree with Casey; oil producers, explorers, service companies, refiners and distributors are all in play. They are also very hammered at the moment. I look at gold and say...yeah, maybe there is $1200 in it this year and maybe I've got enough for now. I look at oil and say it's cheap and the difference between $40 and $150 is about 4X. I agree with Casey.
<< <i>
<< <i>If you use PE's as your sole investment criteria, you will have very mediocre returns.
We had this discussion several months ago and in most cases PE's will be highest at the bottom. This is because companies have very little in the way of earnings. Last summer everyone was saying to buy the oils cuz PE's were single digits. Many companies have low PE's for a reason. Mostly that they have little prospect for growth. Is this the kind of company you want to own?
In 2002, INTC, MSFT, CSCO, AAPL, RIMM had very high PE's. In 2002 the PE of the SP-500 was in the 30's. You may have shunned them. That would have been a mistake.
I will agree that after a long and protracted bear market--5+years-- then PE could be very low as apathy grips the equity markets. >>
They are not my sole investment criteria. I take many considerations on personal purchases.
I try to look at the big picture. When anticipating the markets future move I look at the indexes and use, among many other things, P/E's, charts, forecasts of earnings.... During the 1981-82 recession, the P/E of the -500 ranged from 6 to 10 and that info came recently from a Barrons article. I'm a big proponent of charts. It's like a road map for me. I like knowing where I've been and where the "bus" may go. I try not to complicate the process. Simpler the better. For me charts have been great because it takes out the emotion. The most difficult part is actually making a decision to get out or in. I just want to figure out the big brush strokes of the economy. I let the day traders do their magic. I don't have the cajones for that, but I do dabble at times.
Also, I do think they we are in a long and protracted bear market....for years. We will not see the highs of November 2007 during this four-year regime. There will be tradable periods for the nimble at best.
Ren >>
Brian, as you know I believe ALL asset classes are good for trading only. So holding any asset for too long is a mistake be it PM, equities, real estate, bonds, ect.
Ren, the 81-82 bear market is a classic example of low PE's in a protracted recession as I believe that recession actually started in the 1968 and continued for 14 years. It was briefly interupted by inventory readjustments that looked like growth. This recession will be very similiar. You may also want to look at the book value of the market relative to price during that time. Then look at today's book value.
As far as trading, I believe a good trader will be able to make more in the market over the next 5 years than the buy and hold guy could have done if he bought at the 1982 low and sold at the 2007 high. I believe this just as I stated back in August--that a good trader would be able to make more trading gold than the buy and hold guy did over the last 5 years.
If one does not know how to trade, it would encourage anyone reading to learn. The land of opportunity is open for business.
Knowledge is the enemy of fear
I believe we will see oil in the 20's within the next 12-18 months. Increases in energy prices will hinder economic growth which in turn will hinder energy price growth. Sustained oil prices in excess of $100 in the near term may result in irreversible economic and social breakdown.
Knowledge is the enemy of fear
<< <i>For the oil bulls Click here.
I believe we will see oil in the 20's within the next 12-18 months. Increases in energy prices will hinder economic growth which in turn will hinder energy price growth. >>
Joe Petrowski of Gulf Oil is saying the same thing. Actually, he's been saying that gas could retail for a buck a gallon late this year. That's about 25¢ a gallon wholesale for RBOB. If it gets there, i would think that's a very bad sign for the world economy. The guy has a knack for predicting oil markets fairly accurately.
<< <i>Sustained oil prices in excess of $100 in the near term may result in irreversible economic and social breakdown. >>
The planned tax increases will snuff out any meaningful recovery for us. We probably will not see sustained GDP growth above 2% for along time.
For the rest of the world? Ummm, I dunno.
<< <i>Yepper, I can believe sub $30 oil in '09 but I don't think anyone is going to see $20 oil, ever again. So it's a good thing to watch because once it goes sub $30, it would be nice to be in position. >>
Is there really a difference between $28 oil and $20 oil?
Has anyone ever seen a massive bubble pop, only to see it reinflate?
Knowledge is the enemy of fear
Not really. It's more of looking for a bottom, that's what we're looking for but I think we are feeling around at about 30.
I can think of a couple:
-Gem coins 1980 and then 1989. And in some respects many of those gems in 1989 are up another 2X or 3X.
-Stocks in 1929.....and in 1987....and in 2000...and finally in 2007. All bubbles expanded by easy money.
-Gold in the 1970's to 1980 and then from 2001-2008. Next reinflation act will be from 2008-????.
-Tulips in 1635........just kiddin'.
roadrunner
<< <i>Has anyone ever seen a massive bubble pop, only to see it reinflate?
I can think of a couple:
-Gem coins 1980 and then 1989. And in some respects many of those gems in 1989 are up another 2X or 3X.
-Stocks in 1929.....and in 1987....and in 2000...and finally in 2007. All bubbles expanded by easy money.
-Gold in the 1970's to 1980 and then from 2001-2008. Next reinflation act will be from 2008-????.
-Tulips in 1635........just kiddin'.
roadrunner >>
I classify a bubble as a market that has an impact on a large population or have a large following. Coins, artwork, ect do not fit this criteria, athough they could be in a bubble, thier bursting would have very little impact on society. The cause of thier bursting would have a greater affect.
No one involved in stocks in a real way was alive in 1987, let alone 2000 or 2007. A typical 45 yr old investor in 1929 would be 103 in 1987. The NASDAQ was a bubble in 2000 but it still has not reinflated to bubble status.
Gold was in a bubble in 1980 and has still not reflated. Again, we are more than a generation from the previous bubble. Perhaps the next few years will prove otherwise.
Tulips?....well, you havent seen my wife's flower garden.
Knowledge is the enemy of fear
Yeah and I can make good money at the races if I Know which horses are going to win. So if you think you can outguess the market good luck. For my money I'll keep the PMs and save the gambling for Vegas time.
<< <i>that a good trader would be able to make more trading gold than the buy and hold guy did over the last 5 years.
Yeah and I can make good money at the races if I Know which horses are going to win. So if you think you can outguess the market good luck. For my money I'll keep the PMs and save the gambling for Vegas time. >>
And that is why you will not be a good trader as you view it as gambling. No offense meant.
Very few can consistantly trade the market. Most fail due to emotion. You just have to know when to hold 'em and when to fold 'em. You need to learn humility. You need to look at the big picture, you need to know psychology. I have been successful for over 20 years in both bear and bull markets. I am certainly not the brightest and I am sure many more could do it if they tried. If you dont want to try then that is up to you. If you want to try then the world is your oyster right now.
It is not about knowing a winner, but rather knowing the losers.
Knowledge is the enemy of fear
Tech stocks have historically sported higher P/E ratios than most other stock categories, based on expected earnings and hoped-for growth. That doesn't mean it's right, or smart to believe that the earnings streams will continue to be so strong indefinitely. Yes, I did shun them during that time period. I don't think that was a mistake.
I knew it would happen.
On the deflationary front my wife was grocery shopping today. A dozen eggs and a gallon of whole milk were $1.15 and $1.69 respectively. Both are down at least 30% in the last 6 months. These were not "specials" and no coupons were involved.
Also heard from 2 different sources, one a painter and another an electrician that they are having to lower prices by 30% to remain competitive. They are still losing jobs to others willing to work for 40% less.
The velocity of money is coming to a grinding halt.
Knowledge is the enemy of fear
It sure feels like that is the case. The negative wealth effect related to both housing and defined contribution type pension plans must be enormous. Virtually everyone I know is cutting back -- even people with stable jobs, low debt, and great liquidity. There is tremendous excess capacity globally. To add to your shopping anecdotes -- our local supermarket is offering 20 % off on all items to anyone with the initiative to print a coupon from the internet.
At some point, inflationary pressures will certainly return -- but I wish I could see that point! As long as our government can borrow to finance the deficit, we will not be seeing inflationary pressure.
i am waiting for oil companies to sell "futures" in refined gas available at the retail level, ie pump.
i agree with you cohodk 100% on this one, for sort term of 6-9 months. maybe longer.
PM is still my hedge, but like you said velocity is halting.
if one gave me $100k no strings...today, i'd just stick it in the safe at home with some "damp-rid"
Knowledge is the enemy of fear
Our company looks to park about 40 airplanes shortly. They are acting as if they are losing $1.4 billion...which is what they made. The company has never furlouged. Because of that all share a hefty pain. Tough spot for both sides.
I need cash. Please make an offer to my #2 item on my sigline.
Edited: sorry, having difficulty with my iphone and the auto speller doing it's own thingy.
<< <i>It's unfathomable that borrowing money to invest in the stock market became the norm (or at least very common practice) at pension plans. How stupid are we? >>
Public and private pension plans are also the largest timberland owners in the USA. Maybe a bunch of land will soon hit the market?
Here is a report from 2003. Text
Knowledge is the enemy of fear
Knowledge is the enemy of fear
They leveraged into land deals and guaranteed the underlying debt structures for those INVESTORS...er....speculators.--those deals which have now gone south. WOWEE ZOWEE. Hang on to your toupees.
Greenspan's 1998 testimony to congress on no need to regulate financial OTC derivatives
This was where AG mentioned that Central Banks stand ready to lease gold in reaction to a rising gold price (see last sentence in 3rd paragraph). AG's testimony basically stated that there was no need to regulate financial OTC derivatives because the "big boys" would make wise-choices and that the public did not need protection from this type of trading. The financial markets were "too large" to require OTC D's regulation because no one could manipulate them due to their "unlimited" size vs. the more manipulable commodity markets where supplies were limited. Any losses could be settled up quickly in "cash" and that any such losses would be a tiny fraction of the original contracts......and other such baloney. I guess ending up with $600 TRILL+ of these things was chump change to AG (10X world GDP). What AG and many others failed to realize was that when the counter-party went bankrupt and could not pay the winner off, the loss was 100% of the contract (ie 100% notional value). This is why the AIG bleeding won't stop. All the OTC derivative's that Bear Stearns dumped into AIG will continue to work towards the surface. The couple hundred billion that has been paid out so far is still chump change.
AG's testimony is also interesting in that he mentions the manipulation of the silver price in the late 1970's by a private US citizen (Bunker Hunt) as the type of market that does need up front regulation to "protect" the public, and to ensure proper price discovery. What he doesn't mention was that Hunt was following the rules and taking legal delivery of what he fairly bought. What is clearly more manipulative in today's silver market is that 2 US banks carry 80% of the entire Comex short position. The CFTC seems to have no problem with that arrangement. Nor do they have a problem with 3 US banks holding 60% of the short gold position on the Comex. The CFTC also sees no problem with JPM carrying $100 BILL in OTC short gold derivative's contracts. And the SEC has no issues with JPM and 3 other banks carrying 98% of the $177 TRILL in US interest rate derivatives. Just what do we need $177 TRILL in bets on for a $13 TRILL economy? But, none of this is manipulative or intended to be....just sound banking practices, right? Yet Hunt trying to get his purchased Comex silver delivered was a "problem."
roadrunner