patrick.net

Wasn't the housing recovery supposed to drive the economic recovery? http://blogs.wsj.com/economics/2014/07/15/yellen-fed-still-worried-about-slowdown-in-housing-recovery/

Seems its all on the stock market now...

how do you pronounce that

SMALL-geld?

The Original Bankster says

how do you pronounce that

SMALL-geld?

anyway you'd like

you could take the Smau and pronounce it to rhyme with Smaug from the Hobbit
and the gld to rhyme with the end of smuggled

and get Smauggled

or you could take the smaul as rhyming with haul or mall
and the gld as rhyming with old

and get Small Gold

or Smau Gold

or Smallggled

Only a significant black swan causes the market to swoon. Like a nuke going off in NYC, for example. Or Goldman Sachs going bankrupt.

Blurtman says

Only a significant black swan causes the market to swoon. Like a nuke going off in NYC, for example. Or Goldman Sachs going bankrupt.

Don't think it will necessarily require that.

As usual
Stock market recoups its morning losses
One day soon it wont

https://www.youtube.com/watch?v=h34sWVKJqKw

Just checked it- not a good sign
People are oblivious as to how weak the economy really is

My experience Mondays are not "generally" a good judgement day of market performance for things to come due to 50% +/- traders statistically don't even make trades on Mondays unless they are forced by circumstance.

However, I would actually take today as a over all good sign for the markets for "now". Money, and money flow is still very heavy in the stock markets and I anticipate new highs with new money from individual investors as the big boys do the old school slide of the hand as they add small amounts of the extreme profits they have made to keep this market breaking new highs so they keep all the blue sky they can as they exit and unfold their positions in earnest. What better time then on the dips.

Cash "USD" would be a good indicator as their hand is tipped and USD starts to recover it's crown as king because that's where most all that money has to go before it becomes some other investment of the day.

As, bad as everything seems due to the man behind the curtain if you actually filter the drama based media riddled with conflict of interest many use to make their trading and investment decisions you'll be able to see the current environment in perspective is just not that bad.

smaulgld says

Blurtman says

Only a significant black swan causes the market to swoon. Like a nuke going off in NYC, for example. Or Goldman Sachs going bankrupt.

Don't think it will necessarily require that.

OK, then, maybe when Kardashian and Beyonce reveal that they are transexuals and used to be men.

smaulgld says

As usual

Stock market recoups its morning losses

One day soon it wont

The end of day somehow never comes.

I think that this time around, we won't have much of a nominal crash, since the fed created so much liquidity, but we'll keep slowly sliding into a state of increasing economic stagnation as this cheap money creates increasing capital misallocation, robbing the productive economy of resources. Why work really hard at building a thinly profitable business when it's easier to speculate into the stock market or housing. Even if you try to start said business, your thin margins will be squeezed by increasing cost of goods, while you can't pass on the costs to your customers, all of whom are also financially squeezed unless they're in the top 0.1%

Blurtman says

OK, then, maybe when Kardashian and Beyonce reveal that they are transexuals and used to be men.

Not enough need the first lady to declare the same then all hell breaks loose!

The Professor says

myob says

I think that this time around, we won't have much of a nominal crash, since the fed created so much liquidity, but we'll keep slowly sliding into a state of increasing economic stagnation as this cheap money creates increasing capital misallocation, robbing the productive economy of resources.

Excellent Point!

The big crash of '29 was based on gold and silver backed money. Todays stock market is based on fiat based federal reserve notes. How can the stock market go down when the fed can keep creating money to buy up more shares!

Eventually the ones with the money will end up owning everything, assuming the peasants don't revolt.

I agree with that except that I think there will be a big sell off that goes on for a few days then a steady sideways and drift down
If the Fed keeps printing and decides to become the major player in the bond and stock market the dollar is toast

And then a carefully planned terror attack will destroy all records of dodgy derivatives held by the TBTF's prompting the USA to invade Malaysia.

smaulgld says

I agree with that except that I think there will be a big sell off that goes on for a few days then a steady sideways and drift down

If the Fed keeps printing and decides to become the major player in the bond and stock market the dollar is toast

Yeah, there is truth to that as well, it's so hard to say.

A rapid sell off is possible, and the Fed would be powerless to stop it, since it would be a massive deleveraging. However, the companies experiencing deleveraging wouldn't be forced to sell, due to the massive backstop of free money and cheap credit, so there may not be too much downside.

Inflation? Deflation? Who's to know. I think the Fed is amplifying bubbles, and I was convinced the last one would destroy the dollar, so I'm done trying to time things, but this counter-productive bubble blowing to avoid correction from previous bubbles will eventually destroy the dollar. That is the only end scenario that is possible. The alternative is to stop printing, explicitly cut government activity until it fits within tax receipts, and start paying down debt. This, of course, will never happen, so we will have a dollar collapse which we can blame on the greedy market profiteers.

smaulgld says

Is the Stock Market Ready to Collapse?

You know my answer.

Strategist says

smaulgld says

Is the Stock Market Ready to Collapse?

You know my answer.

Stock prices and home prices always go up?

smaulgld says

Strategist says

smaulgld says

Is the Stock Market Ready to Collapse?

You know my answer.

Stock prices and home prices always go up?

Bulls Eye!

smaulgld says

Strategist says

smaulgld says

Is the Stock Market Ready to Collapse?

You know my answer.

Stock prices and home prices always go up?

Well RE does. Why not stocks?

Blurtman says

smaulgld says

Strategist says

smaulgld says

Is the Stock Market Ready to Collapse?

You know my answer.

Stock prices and home prices always go up?

Well RE does. Why not stocks?

It's the way of the world!

smaulgld says

Blurtman says

smaulgld says

Strategist says

smaulgld says

Is the Stock Market Ready to Collapse?

You know my answer.

Stock prices and home prices always go up?

Well RE does. Why not stocks?

It's the way of the world!

American stocks are superior to Japanese stocks, which do lose value and stay down. It's the Techroline additive.

The market goes down " a little" on gaza and Ukraine
http://blogs.marketwatch.com/thetell/2014/07/21/stock-market-live-blog-pulling-back-on-ukraine-gaza-worries-allergan-climbs/

How about it should go down on stocks being massively over valued?

smaulgld says

The market goes down " a little" on gaza and Ukraine

http://blogs.marketwatch.com/thetell/2014/07/21/stock-market-live-blog-pulling-back-on-ukraine-gaza-worries-allergan-climbs/

How about it should go down on stocks being massively over valued?

Hater.

Blurtman says

smaulgld says

The market goes down " a little" on gaza and Ukraine

http://blogs.marketwatch.com/thetell/2014/07/21/stock-market-live-blog-pulling-back-on-ukraine-gaza-worries-allergan-climbs/

How about it should go down on stocks being massively over valued?

Hater.

It takes a village

smaulgld says

Is the Stock Market Ready to Collapse?

Yes... if historic money market fund ratios are a good (contrarian) indicator.

http://www.globaldeflationnews.com/retail-money-market-funds-signal-reversal-for-the-stock-marketlatest-video-report-from-elliott-wave-international/

The Stock Market Continues to Climb the Diving Board Steps.....

myob says

but we'll keep slowly sliding into a state of increasing economic stagnation as this cheap money creates increasing capital misallocation, robbing the productive economy of resources.

stagnation for all but...

myob says

the top 0.1%

The Professor says

How can the stock market go down when the fed can keep creating money to buy up more shares!

I think that once the 99% is sufficiently fleeced there will be no more tax money left with which to prop the economy. Then the top 0.1% will revolt!!

JH says

The Professor says

How can the stock market go down when the fed can keep creating money to buy up more shares!

I think that once the 99% is sufficiently fleeced there will be no more tax money left with which to prop the economy. Then the top 0.1% will revolt!!

That's the plan

smaulgld says

JH says

The Professor says

How can the stock market go down when the fed can keep creating money to buy up more shares!

I think that once the 99% is sufficiently fleeced there will be no more tax money left with which to prop the economy. Then the top 0.1% will revolt!!

That's the plan

This is discriminating a minority. We need special rights and protection for them.

Strategist says

This is discriminating a minority. We need special rights and protection for them.

Welfare for the rich! Oh, we have that already its called subsidies and the U.S. Tax Code

smaulgld says

Strategist says

This is discriminating a minority. We need special rights and protection for them.

Welfare for the rich! Oh, we have that already its called subsidies and the U.S. Tax Code

We don't want to get rid of them...that would be committing genocide.

Yes, the stock market is near collapse... my best Elliott Wave count as of last Friday.

http://www.globaldeflationnews.com/sp-500-indexinterim-elliott-wave-update-for-week-ending-8222014/

Interesting!

If you read any of my writings there is a consistent theme:
regarding Housing, the stock market and gold and silver:

Housing-macro economics make it easier to track the direction of prices because even if the Fed's monetary policy is geared towards boosting home prices there is a limit to what people can pay and how many people can pay higher prices.

With a weak job market and tepid wage growth, rising home prices are difficult to sustain in all but a few markets

My prediction last year, that year over year come this year, prices will stop rising was a prediction that I could make with confidence because you can't get water out of a stone.

Stock Market- my writings make clear that with companies buying back their own shares and sovereign funds buying you have the largest participants in the market and they can keep the market afloat even if the fundamentals don't support higher prices.

I have written that it's much easier to pump up (and keep up) a stock market bubble than a real estate bubble. Once people accept sky high valuations in stocks they can continue to rise. Rising stock prices attracts more buyers, but rising home prices repel many.

At some point stock market prices will collapse if they continue to rise with out revenue and earnings growth to justify them.

The anchor post above is not a prediction that the market will crash, but rather an observation that the market is well over priced and could crash. It's even more true today than it was a month ago.

Gold and Silver-these markets are small and the silver market expecially so and they can be subject to monetary policy, geo political events, large players in the market, such that predicting price moves in the gold and silver markets is harder and indeed the moves in these markets are often counter intuitive.

I have noted that in the past two years demand for physical silver has been at an all time high, while the price was dropping and home sales are 3X lower than the mid 2000's and are rising.

Call it Crazy says

The pussy loves to go back and pull other people's predictions and point them out (this thread being a perfect example) when they are wrong, but heaven forbid if someone pulls one of his and does the same thing..

BTW- the blog post above did not make a prediction- it asked a question.
THIS is a prediction http://patrick.net/?p=1227894&c=1121417#comment-1121417

and is what probably prompted someone to resurrect this post

The Fed's STATED purpose of QE was to lower interest rates. It worked. The 10 year was down to 1.6% -then they started talking about tapering in 2013 and the yield nearly reached 3% -an almost 100% increase.

When yields were rising the Fed and its apologists were claiming it was because the economy was accelerating!

Recovery was at hand, escape velocity had been reached we can now taper!

Then as the Fed started tapering something strange happened, yields started to drop not rise. Why was that? was the economy decelerating? Did another mystery buyer of treasury bonds appear out of Belgium and buy nearly to the dollar what the Fed stopped buying, thus keeping rates low.

As rates dropped again this year, home sales did too.

Seems to be a lot of distortions in the market created by Fed monetary policy

I am wondering which is it- are rates dropping because the economy is slowing or are they dropping because the Fed ISN"T buying Treasuries.

Neither squares with what we are being told- the economy is accelerating so rates should be rising not falling.

If the Fed doesn't buy treasuires when they were buying 65-90% of the newly issued treasuries at rock bottom interest rates, who would be the replacement buyer and accept an EVEN lower interest rate?

The Fed's stated purpose is to manipulate markets and the money supply to get the desired result.

My analysis isn't wrong- what is happening doesn't square with the stated purpose of what QE was and what it was supposed to do

If QE was required to lower rates, and we have lower rates without QE, why did they bother?

If rates are supposed to rise because the economy is accelerating, why are they falling?

Interesting that rates are lower yet home sales are down and prices have stopped rising

Diomedes777 says

Currently, the P/E of the S&P 500 is right around 20. The historical average is 15. So on the face of it, the S&P is overvalued by historical measures.

Now this can normalize if earnings rise to compensate. Which is possible.

The p/e's are no longer a proper reflection as many companies bought back massive amounts of their shares removing shares from the outstanding shares making the p/e's seem more reasonable.

Add back those shares and the pe's are not 20 but more like 30X

notice how revenue growth lags far behind "profit" growth.

The profits have been made by firing workers and reducing the share count not by driving higher revenues