[stockstradr]

Now, a final item that has been bugging the hell out of me in the last week also:

QUESTION: What is China going to do after its banks lose about 50 billion dollars on subprime mortgage backed securities that American financial institutions sold them by “putting lipstick on the pig”?

I think Chinese leaders will view it as conspiracy by corporate America (and American government) to defraud the Chinese. They will want revenge, and will have it. The question is how?

This is about running economic simulations in my mind, and figuring out how I can make money buy anticipating China’s revenge. Maybe China will disconnect the RMB$$ exchange rate, and dump that estimate trillion US dollars they are holding in reserves, which will destabilize the dollar. But I need to think more on this. Keep in mind I don’t see onset of this for another several years, at the earliest.

How will this revenge scenario play out, that is the question.

[stockstradr]

My wife and I are long-time COSTCO shoppers, at least twice a week.

In our area, all the COSTCO’s are so JAM-PACKED it is unfortunately like being at a standing-room-only rock concert, only without the benefit of hearing good music and being stoned.

[stockstradr]

My wife and I are long-time COSTCO shoppers, at least twice a week.

In our area, all the COSTCO’s are so JAM-PACKED it is unfortunately like being at a standing-room-only rock concert, only without the benefit of hearing good music and being stoned.

[stockstradr]

My wife and I are long-time COSTCO shoppers, at least twice a week.

In our area, all the COSTCO’s are so JAM-PACKED it is unfortunately like being at a standing-room-only rock concert, only without the benefit of hearing good music and being stoned.

[stockstradr]

I’m replying to kick this very helpful (but old) thread, onto the piggington.com Active Forum Topics. I see a lot of great info on bear mutual funds and bear ETF’s in this thread, which have certainly revealed their value since mid-July, after which the markets fell ~10% to the Aug 15th low. My portfolio was 100% short the market on that ride down.

On Aug 15th, I figured the -340 point intraday put the DOW into a (temporarily) oversold position. I closed all my shorts that day, going to cash.

We have seen about a 5% up tick since then. I got lucky again.

Now my instincts are that it is again time to put chips back onto the table in short positions. However, I’m only going to put 25% of my portfolio back into short positions, because a nagging feeling says this market may have a wee bit more up tick before the chronic bear market resumes.

I’m going to throw that 25% at the PROSHARES TR ULTRASHT SP500 (Ticker: SDS), trying that ETF for the first time, based on some of your good advice. Here is why I’m not going back into the RYTPX (Rydex 2X Inverse Fund) I previously held:

I couldn’t sell RYTPX intraday on Aug 15th and take advantage of the minus 340 point intraday swing. RYTPX is a mutual fund so it sold at the end-of-day price. That cost me many thousands of dollars.

I believe ETF’s can be sold intraday, correct?

Anyway, so now you know my new bets on the market: I’m 75% cash, and I’m putting 25% into 2X inverse ETF tomorrow. If the next few business days show this up tick has run out of steam, I’m putting lots more chips onto the table in short positions again, but in positions less risky than a 2X inverse fund.

A recession is coming and this market is headed down another 10% to 20%. I’m certain of it.

[stockstradr]

I’m replying to kick this very helpful (but old) thread, onto the piggington.com Active Forum Topics. I see a lot of great info on bear mutual funds and bear ETF’s in this thread, which have certainly revealed their value since mid-July, after which the markets fell ~10% to the Aug 15th low. My portfolio was 100% short the market on that ride down.

On Aug 15th, I figured the -340 point intraday put the DOW into a (temporarily) oversold position. I closed all my shorts that day, going to cash.

We have seen about a 5% up tick since then. I got lucky again.

Now my instincts are that it is again time to put chips back onto the table in short positions. However, I’m only going to put 25% of my portfolio back into short positions, because a nagging feeling says this market may have a wee bit more up tick before the chronic bear market resumes.

I’m going to throw that 25% at the PROSHARES TR ULTRASHT SP500 (Ticker: SDS), trying that ETF for the first time, based on some of your good advice. Here is why I’m not going back into the RYTPX (Rydex 2X Inverse Fund) I previously held:

I couldn’t sell RYTPX intraday on Aug 15th and take advantage of the minus 340 point intraday swing. RYTPX is a mutual fund so it sold at the end-of-day price. That cost me many thousands of dollars.

I believe ETF’s can be sold intraday, correct?

Anyway, so now you know my new bets on the market: I’m 75% cash, and I’m putting 25% into 2X inverse ETF tomorrow. If the next few business days show this up tick has run out of steam, I’m putting lots more chips onto the table in short positions again, but in positions less risky than a 2X inverse fund.

A recession is coming and this market is headed down another 10% to 20%. I’m certain of it.

[stockstradr]

I’m replying to kick this very helpful (but old) thread, onto the piggington.com Active Forum Topics. I see a lot of great info on bear mutual funds and bear ETF’s in this thread, which have certainly revealed their value since mid-July, after which the markets fell ~10% to the Aug 15th low. My portfolio was 100% short the market on that ride down.

On Aug 15th, I figured the -340 point intraday put the DOW into a (temporarily) oversold position. I closed all my shorts that day, going to cash.

We have seen about a 5% up tick since then. I got lucky again.

Now my instincts are that it is again time to put chips back onto the table in short positions. However, I’m only going to put 25% of my portfolio back into short positions, because a nagging feeling says this market may have a wee bit more up tick before the chronic bear market resumes.

I’m going to throw that 25% at the PROSHARES TR ULTRASHT SP500 (Ticker: SDS), trying that ETF for the first time, based on some of your good advice. Here is why I’m not going back into the RYTPX (Rydex 2X Inverse Fund) I previously held:

I couldn’t sell RYTPX intraday on Aug 15th and take advantage of the minus 340 point intraday swing. RYTPX is a mutual fund so it sold at the end-of-day price. That cost me many thousands of dollars.

I believe ETF’s can be sold intraday, correct?

Anyway, so now you know my new bets on the market: I’m 75% cash, and I’m putting 25% into 2X inverse ETF tomorrow. If the next few business days show this up tick has run out of steam, I’m putting lots more chips onto the table in short positions again, but in positions less risky than a 2X inverse fund.

A recession is coming and this market is headed down another 10% to 20%. I’m certain of it.

[stockstradr]

“the duration will be shorter-this may hold true even for a housing market”

I have given this question considerable (previous) thought as my investing strategy is to anticipate economic (micro and macro) trends and inflection points, positioning investments ahead of those changes.

I agree with half your argument: Minsky Moments unfold at faster rates.

I believe Minsky Moments now involve more extreme economic swings away from steady-state, with more rapid onset, and may occur more frequently, but I figure markets take just as long (or longer) to be driven back to a safe equilibrium . The theory obviously is that technology has increased the transaction “speed” of money and information and vastly increased interconnection (interdependency) of global financial markets.

Obviously, volumes have been written on this very subject (comparing market instability vs. efficient markets theory) by quite intelligent and well-respected authors, such as Soros.

Also, many have argued that technology has brought certain new complex financial instruments and activity outside of the control of the Fed that inadvertently act to expand or constrict the money supply, or create instability. So the Fed’s toolbox is now relatively weaker to reign in these extreme swings.

Let’s revisit this say three years from now and see if your theory has held true for the mortgage meltdown crisis (and associated recession) being short-lived!

It seems the “Minsky Moment” economic theory of instability is gaining supporters, at least according to the WSJ:

In Time of Tumult, Obscure Economist Gains Currency

[stockstradr]

“the duration will be shorter-this may hold true even for a housing market”

I have given this question considerable (previous) thought as my investing strategy is to anticipate economic (micro and macro) trends and inflection points, positioning investments ahead of those changes.

I agree with half your argument: Minsky Moments unfold at faster rates.

I believe Minsky Moments now involve more extreme economic swings away from steady-state, with more rapid onset, and may occur more frequently, but I figure markets take just as long (or longer) to be driven back to a safe equilibrium . The theory obviously is that technology has increased the transaction “speed” of money and information and vastly increased interconnection (interdependency) of global financial markets.

Obviously, volumes have been written on this very subject (comparing market instability vs. efficient markets theory) by quite intelligent and well-respected authors, such as Soros.

Also, many have argued that technology has brought certain new complex financial instruments and activity outside of the control of the Fed that inadvertently act to expand or constrict the money supply, or create instability. So the Fed’s toolbox is now relatively weaker to reign in these extreme swings.

Let’s revisit this say three years from now and see if your theory has held true for the mortgage meltdown crisis (and associated recession) being short-lived!

It seems the “Minsky Moment” economic theory of instability is gaining supporters, at least according to the WSJ:

In Time of Tumult, Obscure Economist Gains Currency

[stockstradr]

“the duration will be shorter-this may hold true even for a housing market”

I have given this question considerable (previous) thought as my investing strategy is to anticipate economic (micro and macro) trends and inflection points, positioning investments ahead of those changes.

I agree with half your argument: Minsky Moments unfold at faster rates.

I believe Minsky Moments now involve more extreme economic swings away from steady-state, with more rapid onset, and may occur more frequently, but I figure markets take just as long (or longer) to be driven back to a safe equilibrium . The theory obviously is that technology has increased the transaction “speed” of money and information and vastly increased interconnection (interdependency) of global financial markets.

Obviously, volumes have been written on this very subject (comparing market instability vs. efficient markets theory) by quite intelligent and well-respected authors, such as Soros.

Also, many have argued that technology has brought certain new complex financial instruments and activity outside of the control of the Fed that inadvertently act to expand or constrict the money supply, or create instability. So the Fed’s toolbox is now relatively weaker to reign in these extreme swings.

Let’s revisit this say three years from now and see if your theory has held true for the mortgage meltdown crisis (and associated recession) being short-lived!

It seems the “Minsky Moment” economic theory of instability is gaining supporters, at least according to the WSJ:

In Time of Tumult, Obscure Economist Gains Currency

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