Worth reading: latest from Robert Prechter

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“One question, is your statement regarding etfs, extending to the negative correlated ones. ”

Truth is, I don’t have all the answers or in-depth understanding of the various areas of risk for ETF’s. I do know that multiple brilliant market analysts with great track records have in recent years have emphasized the risks they are seeing with certain categories of securities, such as ETF’s. They know something. They understand the risks of ETF’s and it has them scared.

1) ETF’s prospectus reveal multiple levels of counterparty risk, and most importantly most ETF’s don’t actually hold much or all of the underlying asset they are intended to have a correlation with. Usually, they hold some basket of derivatives of that asset that are intended to create the intended (-200%,-100%, +100%, +200%, etc) correlation with the primary asset AND MOST IMPORTANTLY the prospectus allows the ETF add to their profits via additional market actions (puts, write calls/puts, whatever) on those derivatives), meaning at any point in time there is considerable counterparty risk for much of assets in an ETF.

For example, the gold ETF’s prospectus allows them to hold complex gold futures contracts or other derivatives INSTEAD of physical gold PLUS they can write derivatives (or loan out) against any physical gold they own, plus they have ZERO liability of the ETF fails to maintain the correlation to the asset

2) There are weird pricing instability issues with ETF’s that were confirmed with the recent “flash cash” where the investigation has already confirmed about 60% or 70% of the securities that had value crash temporarily in the flash crash were ETF’s.

So certainly these factors also mean same risks for SQQQ.

[nct]

In my above reply, I meant to agree with the following statement:
RP: (continuing) It can’t print Fed notes; it can only print bonds.

Fed can only print notes to exchange for bonds/debts. But they cannot make the debt go away unless they can send a big sum of dollar bills (like 1 million?) to most of those in debt. Giving dollar bills to creditor in exchange of the bond/mortage does not make the debt go away.

[nct]

In my above reply, I meant to agree with the following statement:
RP: (continuing) It can’t print Fed notes; it can only print bonds.

Fed can only print notes to exchange for bonds/debts. But they cannot make the debt go away unless they can send a big sum of dollar bills (like 1 million?) to most of those in debt. Giving dollar bills to creditor in exchange of the bond/mortage does not make the debt go away.

[nct]

In my above reply, I meant to agree with the following statement:
RP: (continuing) It can’t print Fed notes; it can only print bonds.

Fed can only print notes to exchange for bonds/debts. But they cannot make the debt go away unless they can send a big sum of dollar bills (like 1 million?) to most of those in debt. Giving dollar bills to creditor in exchange of the bond/mortage does not make the debt go away.

[nct]

In my above reply, I meant to agree with the following statement:
RP: (continuing) It can’t print Fed notes; it can only print bonds.

Fed can only print notes to exchange for bonds/debts. But they cannot make the debt go away unless they can send a big sum of dollar bills (like 1 million?) to most of those in debt. Giving dollar bills to creditor in exchange of the bond/mortage does not make the debt go away.

[nct]

In my above reply, I meant to agree with the following statement:
RP: (continuing) It can’t print Fed notes; it can only print bonds.

Fed can only print notes to exchange for bonds/debts. But they cannot make the debt go away unless they can send a big sum of dollar bills (like 1 million?) to most of those in debt. Giving dollar bills to creditor in exchange of the bond/mortage does not make the debt go away.

[cyphire]

Thank you so much for posting this article… I’ve been only recently reading about RP and didn’t know he existed until 2 weeks ago. This interview actually helped me understand the difference between TBills and TBonds ( I think the first is sort of a cashiers check for dollars and the other is debt! ) and also his views of the future express the path I think we are heading for as well.

As to the comment by someone that his market timing has been bad, I disagree from what I’ve seen so far. Our markets are so volatile that all the gains he didn’t see have been and can be wiped out in a week. He missed some big runs up, which are somewhat already wiped out, we are back at 2002 levels now (I believe from what I’ve seen). I’m amazed at the volatility of everything, and I’m not getting enough return (even in my bond funds) for the interest to be worth the risk…

I’m going cash and cash equivalents and I’m taking a 10-15% position (maybe more, but I’m going to be safe and not risk the volatility) by being in the double shorts… I own GLD and am going to sell it immediately, I broke even on it (only have owned it for a few weeks) – I don’t think my hedge against a catastrophe in the markets will hold up if they don’t own every ounce of the actual gold.

Also – my guess on your disagreements with RP about printing presses and inflation are somewhat more on his side – I don’t think we can print enough money to fix anything or cause inflation, because when you let the steam out of all the assets in the world (1.5M dollar houses in middle class neighborhoods which are now 1.1, but really .9 and will be .3M!!!!) you can’t replace the debt that these assets carry and they get written off…. Imagine that all mortgages are worth 1/5th of their actual value, not only don’t they get paid on but that part of the money supply gets removed (effectively), you can’t print enough to keep it stable and we are already seeing these signs… (just my opinion and I’m no expert)…

Anyway – I’ll tighten the belt a bit, create safe harbors for my cash, ride it out and be in an incredibly good position 2-10 years from now, unfortunately though in opposition to my friends and neighbors (but not at their expense thanks goodness)…

[cyphire]

Thank you so much for posting this article… I’ve been only recently reading about RP and didn’t know he existed until 2 weeks ago. This interview actually helped me understand the difference between TBills and TBonds ( I think the first is sort of a cashiers check for dollars and the other is debt! ) and also his views of the future express the path I think we are heading for as well.

As to the comment by someone that his market timing has been bad, I disagree from what I’ve seen so far. Our markets are so volatile that all the gains he didn’t see have been and can be wiped out in a week. He missed some big runs up, which are somewhat already wiped out, we are back at 2002 levels now (I believe from what I’ve seen). I’m amazed at the volatility of everything, and I’m not getting enough return (even in my bond funds) for the interest to be worth the risk…

I’m going cash and cash equivalents and I’m taking a 10-15% position (maybe more, but I’m going to be safe and not risk the volatility) by being in the double shorts… I own GLD and am going to sell it immediately, I broke even on it (only have owned it for a few weeks) – I don’t think my hedge against a catastrophe in the markets will hold up if they don’t own every ounce of the actual gold.

Also – my guess on your disagreements with RP about printing presses and inflation are somewhat more on his side – I don’t think we can print enough money to fix anything or cause inflation, because when you let the steam out of all the assets in the world (1.5M dollar houses in middle class neighborhoods which are now 1.1, but really .9 and will be .3M!!!!) you can’t replace the debt that these assets carry and they get written off…. Imagine that all mortgages are worth 1/5th of their actual value, not only don’t they get paid on but that part of the money supply gets removed (effectively), you can’t print enough to keep it stable and we are already seeing these signs… (just my opinion and I’m no expert)…

Anyway – I’ll tighten the belt a bit, create safe harbors for my cash, ride it out and be in an incredibly good position 2-10 years from now, unfortunately though in opposition to my friends and neighbors (but not at their expense thanks goodness)…

[cyphire]

Thank you so much for posting this article… I’ve been only recently reading about RP and didn’t know he existed until 2 weeks ago. This interview actually helped me understand the difference between TBills and TBonds ( I think the first is sort of a cashiers check for dollars and the other is debt! ) and also his views of the future express the path I think we are heading for as well.

As to the comment by someone that his market timing has been bad, I disagree from what I’ve seen so far. Our markets are so volatile that all the gains he didn’t see have been and can be wiped out in a week. He missed some big runs up, which are somewhat already wiped out, we are back at 2002 levels now (I believe from what I’ve seen). I’m amazed at the volatility of everything, and I’m not getting enough return (even in my bond funds) for the interest to be worth the risk…

I’m going cash and cash equivalents and I’m taking a 10-15% position (maybe more, but I’m going to be safe and not risk the volatility) by being in the double shorts… I own GLD and am going to sell it immediately, I broke even on it (only have owned it for a few weeks) – I don’t think my hedge against a catastrophe in the markets will hold up if they don’t own every ounce of the actual gold.

Also – my guess on your disagreements with RP about printing presses and inflation are somewhat more on his side – I don’t think we can print enough money to fix anything or cause inflation, because when you let the steam out of all the assets in the world (1.5M dollar houses in middle class neighborhoods which are now 1.1, but really .9 and will be .3M!!!!) you can’t replace the debt that these assets carry and they get written off…. Imagine that all mortgages are worth 1/5th of their actual value, not only don’t they get paid on but that part of the money supply gets removed (effectively), you can’t print enough to keep it stable and we are already seeing these signs… (just my opinion and I’m no expert)…

Anyway – I’ll tighten the belt a bit, create safe harbors for my cash, ride it out and be in an incredibly good position 2-10 years from now, unfortunately though in opposition to my friends and neighbors (but not at their expense thanks goodness)…

[cyphire]

Thank you so much for posting this article… I’ve been only recently reading about RP and didn’t know he existed until 2 weeks ago. This interview actually helped me understand the difference between TBills and TBonds ( I think the first is sort of a cashiers check for dollars and the other is debt! ) and also his views of the future express the path I think we are heading for as well.

As to the comment by someone that his market timing has been bad, I disagree from what I’ve seen so far. Our markets are so volatile that all the gains he didn’t see have been and can be wiped out in a week. He missed some big runs up, which are somewhat already wiped out, we are back at 2002 levels now (I believe from what I’ve seen). I’m amazed at the volatility of everything, and I’m not getting enough return (even in my bond funds) for the interest to be worth the risk…

I’m going cash and cash equivalents and I’m taking a 10-15% position (maybe more, but I’m going to be safe and not risk the volatility) by being in the double shorts… I own GLD and am going to sell it immediately, I broke even on it (only have owned it for a few weeks) – I don’t think my hedge against a catastrophe in the markets will hold up if they don’t own every ounce of the actual gold.

Also – my guess on your disagreements with RP about printing presses and inflation are somewhat more on his side – I don’t think we can print enough money to fix anything or cause inflation, because when you let the steam out of all the assets in the world (1.5M dollar houses in middle class neighborhoods which are now 1.1, but really .9 and will be .3M!!!!) you can’t replace the debt that these assets carry and they get written off…. Imagine that all mortgages are worth 1/5th of their actual value, not only don’t they get paid on but that part of the money supply gets removed (effectively), you can’t print enough to keep it stable and we are already seeing these signs… (just my opinion and I’m no expert)…

Anyway – I’ll tighten the belt a bit, create safe harbors for my cash, ride it out and be in an incredibly good position 2-10 years from now, unfortunately though in opposition to my friends and neighbors (but not at their expense thanks goodness)…

[cyphire]

Thank you so much for posting this article… I’ve been only recently reading about RP and didn’t know he existed until 2 weeks ago. This interview actually helped me understand the difference between TBills and TBonds ( I think the first is sort of a cashiers check for dollars and the other is debt! ) and also his views of the future express the path I think we are heading for as well.

As to the comment by someone that his market timing has been bad, I disagree from what I’ve seen so far. Our markets are so volatile that all the gains he didn’t see have been and can be wiped out in a week. He missed some big runs up, which are somewhat already wiped out, we are back at 2002 levels now (I believe from what I’ve seen). I’m amazed at the volatility of everything, and I’m not getting enough return (even in my bond funds) for the interest to be worth the risk…

I’m going cash and cash equivalents and I’m taking a 10-15% position (maybe more, but I’m going to be safe and not risk the volatility) by being in the double shorts… I own GLD and am going to sell it immediately, I broke even on it (only have owned it for a few weeks) – I don’t think my hedge against a catastrophe in the markets will hold up if they don’t own every ounce of the actual gold.

Also – my guess on your disagreements with RP about printing presses and inflation are somewhat more on his side – I don’t think we can print enough money to fix anything or cause inflation, because when you let the steam out of all the assets in the world (1.5M dollar houses in middle class neighborhoods which are now 1.1, but really .9 and will be .3M!!!!) you can’t replace the debt that these assets carry and they get written off…. Imagine that all mortgages are worth 1/5th of their actual value, not only don’t they get paid on but that part of the money supply gets removed (effectively), you can’t print enough to keep it stable and we are already seeing these signs… (just my opinion and I’m no expert)…

Anyway – I’ll tighten the belt a bit, create safe harbors for my cash, ride it out and be in an incredibly good position 2-10 years from now, unfortunately though in opposition to my friends and neighbors (but not at their expense thanks goodness)…

[stockstradr]

New York Times: A Market Forecast That Says ‘Take Cover’

Prechter gets some coverage in the New York Times

[stockstradr]

New York Times: A Market Forecast That Says ‘Take Cover’

Prechter gets some coverage in the New York Times

[stockstradr]

New York Times: A Market Forecast That Says ‘Take Cover’

Prechter gets some coverage in the New York Times

[stockstradr]

New York Times: A Market Forecast That Says ‘Take Cover’

Prechter gets some coverage in the New York Times

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