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stockstradr
ParticipantHere’s my spin on the deflation vs. inflation debate. I suggest you read Rich (as in our mighty Piggington.com leader) and Roubini on this topic and its effect long and short term on commodities (very enlightening).
We have strong deflationary forces that will likely dominate short-term. Agreed.
However, the Fed has opened its lending window to investment firms, commercial banks and insurance giants. In some weeks this exceeded 100 billion.
That fiscal stimulus is clearly inflationary…but rate spread data proves those financial institutions are still NOT lending out that money to other financial institutions. In other words, the traditional process of the fed pumping money into the larger financial system via lending to front row firms isn’t really functioning, even though that lending is now going to a much broader range of front row financial institutions.
Plus we got consumers hoarding cash, dramatically reducing spending, pulling money out of financial markets, and even maxing out equity lines of credit (pulling money out of banks). Even corporations are maxing out their revolving credit lines with banks, hoarding cash. Also, no more money coming into consumer pockets from equity re-financing.
So one might conclude that short-term the deflationary pressures are DOMINANT; yet, there is tremendous latent (and excessive?) fiscal stimulus (fed lending) that is held in check by the locked up financial markets not lending to each other. Plus we got those multiple other inflationary pressures held TEMPORARILY in check by the global recession. Plus you can expect the fed will cut rates again, soon.
Finally, we have the BIG QUESTION: when will the world start dumping dollars and trading into something else (gold? Euros? RMB?), as the dollar is unseated as the world’s de-facto reserve currency. That effect will be extremely inflationary for the dollar (more dollars released and less parties holding them or using them in financial transactions)
So let’s integrate all these factors.
CONCLUSION: short-term during this nasty global recession (12 to 18 months) we may well see CPI figures drop to zero or even go slightly into deflation territory….but watch out, because the inflationary pressures are bottled up, and when they explode all hell’s gonna break loose against the dollar.
So either mid-recession, or as the recession ends, we could move into rapidly accelerating decline of the dollar, and that will likely continue for YEARS AND YEARS.
This is why I cut gold back to 25% of portfolio, awaiting some potential better pricing on gold as this recession gets really ugly and deflationary pressures heat up. At the bottom of the recession buy gold and buy oil and dump dollars. That’s a winning strategy.
ParticipantHere’s my spin on the deflation vs. inflation debate. I suggest you read Rich (as in our mighty Piggington.com leader) and Roubini on this topic and its effect long and short term on commodities (very enlightening).
We have strong deflationary forces that will likely dominate short-term. Agreed.
However, the Fed has opened its lending window to investment firms, commercial banks and insurance giants. In some weeks this exceeded 100 billion.
That fiscal stimulus is clearly inflationary…but rate spread data proves those financial institutions are still NOT lending out that money to other financial institutions. In other words, the traditional process of the fed pumping money into the larger financial system via lending to front row firms isn’t really functioning, even though that lending is now going to a much broader range of front row financial institutions.
Plus we got consumers hoarding cash, dramatically reducing spending, pulling money out of financial markets, and even maxing out equity lines of credit (pulling money out of banks). Even corporations are maxing out their revolving credit lines with banks, hoarding cash. Also, no more money coming into consumer pockets from equity re-financing.
So one might conclude that short-term the deflationary pressures are DOMINANT; yet, there is tremendous latent (and excessive?) fiscal stimulus (fed lending) that is held in check by the locked up financial markets not lending to each other. Plus we got those multiple other inflationary pressures held TEMPORARILY in check by the global recession. Plus you can expect the fed will cut rates again, soon.
Finally, we have the BIG QUESTION: when will the world start dumping dollars and trading into something else (gold? Euros? RMB?), as the dollar is unseated as the world’s de-facto reserve currency. That effect will be extremely inflationary for the dollar (more dollars released and less parties holding them or using them in financial transactions)
So let’s integrate all these factors.
CONCLUSION: short-term during this nasty global recession (12 to 18 months) we may well see CPI figures drop to zero or even go slightly into deflation territory….but watch out, because the inflationary pressures are bottled up, and when they explode all hell’s gonna break loose against the dollar.
So either mid-recession, or as the recession ends, we could move into rapidly accelerating decline of the dollar, and that will likely continue for YEARS AND YEARS.
This is why I cut gold back to 25% of portfolio, awaiting some potential better pricing on gold as this recession gets really ugly and deflationary pressures heat up. At the bottom of the recession buy gold and buy oil and dump dollars. That’s a winning strategy.
ParticipantWhen I hear a voice like Palin’s I often think to myself…
“IMAGINE being married to a woman with such an annoying voice like that. *ewwwww* EVERY morning the first thing in your ears is THAT annoying voice. Good grief, pure torture for the ears. Like nails scratching a chalkboard”
ParticipantWhen I hear a voice like Palin’s I often think to myself…
“IMAGINE being married to a woman with such an annoying voice like that. *ewwwww* EVERY morning the first thing in your ears is THAT annoying voice. Good grief, pure torture for the ears. Like nails scratching a chalkboard”
ParticipantWhen I hear a voice like Palin’s I often think to myself…
“IMAGINE being married to a woman with such an annoying voice like that. *ewwwww* EVERY morning the first thing in your ears is THAT annoying voice. Good grief, pure torture for the ears. Like nails scratching a chalkboard”
ParticipantWhen I hear a voice like Palin’s I often think to myself…
“IMAGINE being married to a woman with such an annoying voice like that. *ewwwww* EVERY morning the first thing in your ears is THAT annoying voice. Good grief, pure torture for the ears. Like nails scratching a chalkboard”
ParticipantWhen I hear a voice like Palin’s I often think to myself…
“IMAGINE being married to a woman with such an annoying voice like that. *ewwwww* EVERY morning the first thing in your ears is THAT annoying voice. Good grief, pure torture for the ears. Like nails scratching a chalkboard”
ParticipantAssuming your 2X s&p position was taken before open of business today, you’re up almost 9%! Not a bad return for a whole year. Spectacular for just one day! How long to plan to let it ride? When do you take profits?
Honest answer? I only bought SSO with 10% of my portfolio yesterday, and the markets fell another few percent after I bought. So today I’m “only” up 4.4% on that particular position, which you must divide by ten to estimate contribution to overall porfolio. (A big 0.44%)
However, early this morning I also bought another 10% of my portfolio position 2X long the NASDAQ (ProShares QLD) after I saw markets moving a direction I liked. I’m also up about 5% in one day on that particular QLD position.
When gambling and this is gambling, I first take a nibble. Then if the market moves in direction confirming my initial prediction, then I take another nibble. (Pigs do get slaughtered, after all)
However, 25% of my portfolio remains gold “GLD”, and today’s paper losses in “GLD” are about equal to my paper profit in those other two long positions described above! So today is a wash.
So far, I’m thankful I sold half my gold yesterday, taking profits. So far, my hunch was right that gold will fall as stock markets now go into Fool’s Rally mode
As soon as this Fool’s Rally is near completing a total up move of 10%, I’ll dump my long positions on the S&P500 and NASDAQ. Markets are very nervous so less likely to reward with a big Fool’s Rally. We’ll be lucky to see 10%…unless the congress comes through by passing a gratuitous bail out package. And we are already HALFway towards completing that 10% Fool’s Rally, aren’t we?
ParticipantAssuming your 2X s&p position was taken before open of business today, you’re up almost 9%! Not a bad return for a whole year. Spectacular for just one day! How long to plan to let it ride? When do you take profits?
Honest answer? I only bought SSO with 10% of my portfolio yesterday, and the markets fell another few percent after I bought. So today I’m “only” up 4.4% on that particular position, which you must divide by ten to estimate contribution to overall porfolio. (A big 0.44%)
However, early this morning I also bought another 10% of my portfolio position 2X long the NASDAQ (ProShares QLD) after I saw markets moving a direction I liked. I’m also up about 5% in one day on that particular QLD position.
When gambling and this is gambling, I first take a nibble. Then if the market moves in direction confirming my initial prediction, then I take another nibble. (Pigs do get slaughtered, after all)
However, 25% of my portfolio remains gold “GLD”, and today’s paper losses in “GLD” are about equal to my paper profit in those other two long positions described above! So today is a wash.
So far, I’m thankful I sold half my gold yesterday, taking profits. So far, my hunch was right that gold will fall as stock markets now go into Fool’s Rally mode
As soon as this Fool’s Rally is near completing a total up move of 10%, I’ll dump my long positions on the S&P500 and NASDAQ. Markets are very nervous so less likely to reward with a big Fool’s Rally. We’ll be lucky to see 10%…unless the congress comes through by passing a gratuitous bail out package. And we are already HALFway towards completing that 10% Fool’s Rally, aren’t we?
ParticipantAssuming your 2X s&p position was taken before open of business today, you’re up almost 9%! Not a bad return for a whole year. Spectacular for just one day! How long to plan to let it ride? When do you take profits?
Honest answer? I only bought SSO with 10% of my portfolio yesterday, and the markets fell another few percent after I bought. So today I’m “only” up 4.4% on that particular position, which you must divide by ten to estimate contribution to overall porfolio. (A big 0.44%)
However, early this morning I also bought another 10% of my portfolio position 2X long the NASDAQ (ProShares QLD) after I saw markets moving a direction I liked. I’m also up about 5% in one day on that particular QLD position.
When gambling and this is gambling, I first take a nibble. Then if the market moves in direction confirming my initial prediction, then I take another nibble. (Pigs do get slaughtered, after all)
However, 25% of my portfolio remains gold “GLD”, and today’s paper losses in “GLD” are about equal to my paper profit in those other two long positions described above! So today is a wash.
So far, I’m thankful I sold half my gold yesterday, taking profits. So far, my hunch was right that gold will fall as stock markets now go into Fool’s Rally mode
As soon as this Fool’s Rally is near completing a total up move of 10%, I’ll dump my long positions on the S&P500 and NASDAQ. Markets are very nervous so less likely to reward with a big Fool’s Rally. We’ll be lucky to see 10%…unless the congress comes through by passing a gratuitous bail out package. And we are already HALFway towards completing that 10% Fool’s Rally, aren’t we?
ParticipantAssuming your 2X s&p position was taken before open of business today, you’re up almost 9%! Not a bad return for a whole year. Spectacular for just one day! How long to plan to let it ride? When do you take profits?
Honest answer? I only bought SSO with 10% of my portfolio yesterday, and the markets fell another few percent after I bought. So today I’m “only” up 4.4% on that particular position, which you must divide by ten to estimate contribution to overall porfolio. (A big 0.44%)
However, early this morning I also bought another 10% of my portfolio position 2X long the NASDAQ (ProShares QLD) after I saw markets moving a direction I liked. I’m also up about 5% in one day on that particular QLD position.
When gambling and this is gambling, I first take a nibble. Then if the market moves in direction confirming my initial prediction, then I take another nibble. (Pigs do get slaughtered, after all)
However, 25% of my portfolio remains gold “GLD”, and today’s paper losses in “GLD” are about equal to my paper profit in those other two long positions described above! So today is a wash.
So far, I’m thankful I sold half my gold yesterday, taking profits. So far, my hunch was right that gold will fall as stock markets now go into Fool’s Rally mode
As soon as this Fool’s Rally is near completing a total up move of 10%, I’ll dump my long positions on the S&P500 and NASDAQ. Markets are very nervous so less likely to reward with a big Fool’s Rally. We’ll be lucky to see 10%…unless the congress comes through by passing a gratuitous bail out package. And we are already HALFway towards completing that 10% Fool’s Rally, aren’t we?
ParticipantAssuming your 2X s&p position was taken before open of business today, you’re up almost 9%! Not a bad return for a whole year. Spectacular for just one day! How long to plan to let it ride? When do you take profits?
Honest answer? I only bought SSO with 10% of my portfolio yesterday, and the markets fell another few percent after I bought. So today I’m “only” up 4.4% on that particular position, which you must divide by ten to estimate contribution to overall porfolio. (A big 0.44%)
However, early this morning I also bought another 10% of my portfolio position 2X long the NASDAQ (ProShares QLD) after I saw markets moving a direction I liked. I’m also up about 5% in one day on that particular QLD position.
When gambling and this is gambling, I first take a nibble. Then if the market moves in direction confirming my initial prediction, then I take another nibble. (Pigs do get slaughtered, after all)
However, 25% of my portfolio remains gold “GLD”, and today’s paper losses in “GLD” are about equal to my paper profit in those other two long positions described above! So today is a wash.
So far, I’m thankful I sold half my gold yesterday, taking profits. So far, my hunch was right that gold will fall as stock markets now go into Fool’s Rally mode
As soon as this Fool’s Rally is near completing a total up move of 10%, I’ll dump my long positions on the S&P500 and NASDAQ. Markets are very nervous so less likely to reward with a big Fool’s Rally. We’ll be lucky to see 10%…unless the congress comes through by passing a gratuitous bail out package. And we are already HALFway towards completing that 10% Fool’s Rally, aren’t we?
ParticipantAnother funny video out there are excerpts of David Letterman on his Late Night show ripping McCain for “bailing out” (at the last minute) on his expected appearance on Late Night with David Letterman. That was on/around the Sept 24th show.
It was brutal. Letterman kept up the McCain bashing throughout the entire show, and even includes remarks in following night shows.
Letterman also on that show ripped McCain for not sending Sarah Palin in his place, implying McCain was AFRAID to allow her out in public.
This Palin choice is starting to backfire for McCain
ParticipantAnother funny video out there are excerpts of David Letterman on his Late Night show ripping McCain for “bailing out” (at the last minute) on his expected appearance on Late Night with David Letterman. That was on/around the Sept 24th show.
It was brutal. Letterman kept up the McCain bashing throughout the entire show, and even includes remarks in following night shows.
Letterman also on that show ripped McCain for not sending Sarah Palin in his place, implying McCain was AFRAID to allow her out in public.
This Palin choice is starting to backfire for McCain
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