Can one ignore the possibility of corruption?
MGLICKER
Posts: 7,995 ✭✭✭
The vote of the Japan Fed governors was 5 to 4 in favor of new stimulus.
Nikkei popped 5% on the news. Europe and US jumps were more muted but still 1% plus.
Are we to believe that these insiders are immune to the lure of fat profits or maybe, just maybe, they pick up a little pocket money for their trouble?
Equity prices used to react to the results from corporate boardrooms. Now a government meeting half a world away creates a market jump larger than any triggered by a group of earning reports.
Nikkei popped 5% on the news. Europe and US jumps were more muted but still 1% plus.
Are we to believe that these insiders are immune to the lure of fat profits or maybe, just maybe, they pick up a little pocket money for their trouble?
Equity prices used to react to the results from corporate boardrooms. Now a government meeting half a world away creates a market jump larger than any triggered by a group of earning reports.
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Comments
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Japanese and International stock markets will be the beneficiary. >>
But OPA, how far can you go with free money. The rewards seem endless but we all know that there is no free lunch.
Or is there?
<< <i>
<< <i>Japanese and International stock markets will be the beneficiary. >>
But OPA, how far can you go with free money. The rewards seem endless but we all know that there is no free lunch.
Or is there? >>
I suppose we'll find out at some point in the future. BTW, Insiders are not immune to quick profits, it they think they can get away with it. However, their success is mooted by numerous Insider Trading convictions.
<< <i>I suppose we'll find out at some point in the future >>
Though logical, we often like to think that the future will be likes the past. Many an investor has gone broke shorting Japanese debt.
With monthly stimulus at 3 times per capita what it was in the US at its peak, the Yen has to collapse.
Just hasn't yet.
<< <i>I suppose Japan deciding to increase their retirement fund portfolio investments, which has several hundred billions of dollars available, from 25% to 50% in stock funds, had nothing to do with it? Japanese and International stock markets will be the beneficiary. >>
In a way, who really cares? My stocks are up too and gold is going down. Sounds like a win/win to me.
Knowledge is the enemy of fear
<< <i>Equities are also a great inflation hedge. >>
In the perfect storm of 7% inflation and zero percent short term money they are.
Things can get rather turbulent though when interest rates properly adjust upward.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>It was brilliant.
Mark >>
Perhaps, but can you envision a successful end game?
Japan is still the worlds third largest economy and our largest debt holder. They are doubling their money supply every two years as the population ages and the birthrate is 1 child per couple. How does it get fixed?
<< <i>
<< <i>It was brilliant.
Mark >>
Perhaps, but can you envision a successful end game?
Japan is still the worlds third largest economy and our largest debt holder. They are doubling their money supply every two years as the population ages and the birthrate is 1 child per couple. How does it get fixed? >>
War, either internal or external should do the job.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Because Japan holds an extraordinary level of overseas assets (net about US$ 3 trillion), they have a lot of time to get their house in order.
(By the way, if anyone on the board is planning a trip to Japan, I'd be happy to take you on a walking tour of Tokyo -- that will convince you, at least, that urban Japan is doing rather well!)
Do you find prices in general to be rising in your country, staying the same or dropping?
For the period 1990 - 2000, real estate prices (and rents) dropped dramatically. Gas prices vary somewhat with the price of oil. But for the past 10 -15 years, almost all prices have been stable. I'm biased of course, but I think there is a lot to be said for zero inflation (rather than 2 or 3 or 5).
How about a 6 volt system in an old Chevy. Who doubled it and why go from a generator to a voltage regulator ? I'd say the corruption isn't with the banks. It's more on the dipstick or in a barrel.
I knew it would happen.
<< <i>I figured that Japan was in trouble, but maybe not so. >>
Japan's economy is in serious trouble. Their GDP and money printing tell us so.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I'm biased of course, but I think there is a lot to be said for zero inflation (rather than 2 or 3 or 5). >>
Agree 100%
<< <i>
<< <i>Equities are also a great inflation hedge. >>
In the perfect storm of 7% inflation and zero percent short term money they are.
Things can get rather turbulent though when interest rates properly adjust upward. >>
Stock markets go up appreciably when interest rates begin to climb.
Knowledge is the enemy of fear
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>
<< <i>
<< <i>Equities are also a great inflation hedge. >>
In the perfect storm of 7% inflation and zero percent short term money they are.
Things can get rather turbulent though when interest rates properly adjust upward. >>
Stock markets go up appreciably when interest rates begin to climb. >>
In free and efficient markets - yes, they do. We've had anything but free and efficient markets for many years now.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>Equities are also a great inflation hedge. >>
In the perfect storm of 7% inflation and zero percent short term money they are.
Things can get rather turbulent though when interest rates properly adjust upward. >>
Stock markets go up appreciably when interest rates begin to climb. >>
I know this is a commonly held opinion but I think it goes the other way around this time.
Interest rates go up appreciably when the stock market begins to climb leading to a decrease in stock prices. The reason I think prices will fall with higher inflation and interest rates is two fold. 1. Business growth and expansion will slow as rates rise which in turn will slow the economy and the stock market. 2. As interest rates rise, the present value of all future dividends go down. This in turn leads to lower stock prices for anyone that uses the dividend valuation method for pricing stocks.
In my opinion, the whole reason the FED would allow rates to rise is to slow the economy and/or the stock market. The problem is that monetary policy is not a very reliable or predictive method of timing the stock market. It is much more the machine gun approach rather than the sharpshooter approach when it comes to controlling the economy and especially so when it comes to influencing the stock market. We know what will happen to markets with rising rates most of the time, but we just don't know when it will happen or how much. That is the beauty and also the insanity of investing in any market. Throw in a little inside manipulation and you have a recipe for complete controlled chaos.
So I don't necessarily disagree with your statement, it's more like what came first, the chicken or the egg?
<< <i>I think the market is behaving quite efficiently and freely. I know you think differently and is why you are biased towards PMs. There is nothing I could say to persuade you so I will not try but having a deep and broad knowledge of markets and investor psychology would help. >>
5% of my total assets are in PMs. Maybe $10k tops.
The best minds know what is happening and don't ignore reality, that's not to say they haven't made a ton of money in the markets that have been given every break, every prop, every twist, every extra, every time for 6 straight years. They have made plenty. They own the markets, The Fed, D.C. They will wring each dollar they can from the system until it is unable to sustain any more. It will 20 years tops.
It is clear to see. Very clear. Good luck to your kids and grandkids who will inherit the mess.
<< <i>
<< <i>
<< <i>
<< <i>Equities are also a great inflation hedge. >>
In the perfect storm of 7% inflation and zero percent short term money they are.
Things can get rather turbulent though when interest rates properly adjust upward. >>
Stock markets go up appreciably when interest rates begin to climb. >>
I know this is a commonly held opinion but I think it goes the other way around this time.
Interest rates go up appreciably when the stock market begins to climb leading to a decrease in stock prices. The reason I think prices will fall with higher inflation and interest rates is two fold. 1. Business growth and expansion will slow as rates rise which in turn will slow the economy and the stock market. 2. As interest rates rise, the present value of all future dividends go down. This in turn leads to lower stock prices for anyone that uses the dividend valuation method for pricing stocks.
In my opinion, the whole reason the FED would allow rates to rise is to slow the economy and/or the stock market. The problem is that monetary policy is not a very reliable or predictive method of timing the stock market. It is much more the machine gun approach rather than the sharpshooter approach when it comes to controlling the economy and especially so when it comes to influencing the stock market. We know what will happen to markets with rising rates most of the time, but we just don't know when it will happen or how much. That is the beauty and also the insanity of investing in any market. Throw in a little inside manipulation and you have a recipe for complete controlled chaos.
So I don't necessarily disagree with your statement, it's more like what came first, the chicken or the egg? >>
I agree when the DOW is at 25,000.
Knowledge is the enemy of fear
<< <i>
<< <i>
<< <i>
<< <i>
<< <i>Equities are also a great inflation hedge. >>
In the perfect storm of 7% inflation and zero percent short term money they are.
Things can get rather turbulent though when interest rates properly adjust upward. >>
Stock markets go up appreciably when interest rates begin to climb. >>
I know this is a commonly held opinion but I think it goes the other way around this time.
Interest rates go up appreciably when the stock market begins to climb leading to a decrease in stock prices. The reason I think prices will fall with higher inflation and interest rates is two fold. 1. Business growth and expansion will slow as rates rise which in turn will slow the economy and the stock market. 2. As interest rates rise, the present value of all future dividends go down. This in turn leads to lower stock prices for anyone that uses the dividend valuation method for pricing stocks.
In my opinion, the whole reason the FED would allow rates to rise is to slow the economy and/or the stock market. The problem is that monetary policy is not a very reliable or predictive method of timing the stock market. It is much more the machine gun approach rather than the sharpshooter approach when it comes to controlling the economy and especially so when it comes to influencing the stock market. We know what will happen to markets with rising rates most of the time, but we just don't know when it will happen or how much. That is the beauty and also the insanity of investing in any market. Throw in a little inside manipulation and you have a recipe for complete controlled chaos.
So I don't necessarily disagree with your statement, it's more like what came first, the chicken or the egg? >>
I agree when the DOW is at 25,000. >>