Market Thoughts

[david austin]

I wonder if people really get that market/asset inflation is fairly useless against a massively devalued dollar.

So YTD the market is up some 15-16% while YTD dollar value is down nearly 20%.


GREEN SHOOTS!!!

Also... just for kicks... Over the past 7 years how has your participation in the market performed? Just wondering cause the dollar is down 36%.

[PETA]

what cuurency has gained value?

[david austin]

Originally Posted by PETA

what curency has gained value?

GBP - Flat
EUR - UP >10%
JPY Carry - UP <10%
AUD - UP > 10%

Most foreign is up >10% against USD

All commodities are up >10% against USD

You can look at any chart priced to USD and it would be a soft to 45* slope downward

[J. Fees]

Doomsday DA is the 2012 of the stock game.

[david austin]

Lol. Its funny. I understand.

But really. The Fed keeps printing money which is pushing down the dollar and pushing assets up.

Its a double edged sword because at some point the asset inflation cant outgain the purchasing power of your money.

If everyones 401k tripled in the next year we would all think we are well off and back to normal but we havent actually gotten ahead more than a few pennies.

Thats not even taking into account the willingness for foreign investors to sit idle while their investments in our debt tank. (Hence the Oil post). How long do you think China will sit idle while their 2 Trillion dollar investment sinks to the tune of 15% a year?

I always come across as doomsday but the math is all right there. We really are living in bizarro world right now.

[J. Fees]

makes ya wanna believe in a world wide banking conspiracy? or is a more resilient market than we thinK?

[Hey Bubu]

Originally Posted by J. Fees

makes ya wanna believe in a world wide banking conspiracy? or is a more resilient market than we thinK?

I blame the Medici family, kings that wanted to stay relevant, serfs and the renaissance...

[david austin]

Well... for starters...

The second half of this spring rally has been little more than high frequency trading.

Think of it like this. You have two computers on separate sides of the building. They are trading the same 100 shares back and forth with one another bidding a penny higher and then a penny lower. As momentum investors hop in the bids get tagged higher and higher. Thats why volume as been very anemic over the past few months. There is very little actual investing... just prop desks passing the same junk back and forth. Volume is incredibly important. Its the real indicator of sentiment. You wouldnt take a poll of 10 people when getting an accurate view of a topic would you? So when volume is 50% off of its normals but the market is ripping higher what does that really say?

Now you have what appears to be active and higher trading. So now add retail investors and fund managers into the equation.

For fund managers... their sole purpose is to 'beat the index'. Funds sell themselves off of the ability to outpace the standard market indexes. The quick rally off of the March lows caught a lot of funds with their pants down. As managers thought the double dip was going to happen during the summer they stayed out of the market. When that didnt materialize they were stuck chasing momentum so they could print a good 3rd quarter gain. Nobody wanted to print a measly gain (or even a loss) while the market did a 50+% moon shot.

Now the retail investor is another story. They are always last to get to the party... and always last to leave. Retail investors are affectionately known as 'bag holders'. When markets are close to peaking the big boys rotate out of stocks. Those stocks are passed to weak hands (retail) who think they are going to ring another 25-50% out of stocks that have gone up some 75-150% (in some cases upwards of 1000%). The second the big boys are done rotating they pull the plug because they know the market is massively overvalued... and now they arent caught holding the paper.

I know this is a really simplistic way of looking at it but these are two general ideas to remember when thinking about the past (like the bubble of the tech boom/bust) and when thinking about the true underlying fundamentals of our situation.

[PETA]

Originally Posted by david austin

GBP - Flat
EUR - UP >10%
JPY Carry - UP <10%
AUD - UP > 10%

Most foreign is up >10% against USD

All commodities are up >10% against USD

You can look at any chart priced to USD and it would be a soft to 45* slope downward

where's the damn yuan David?

Originally Posted by Hey Bubu

I blame the Medici family, kings that wanted to stay relevant, serfs and the renaissance...

they were Dukes not Kings... and city states had few serf... they were traders and bankersd not agrarian feudal lords..... geesh

[david austin]

Yuan not accurate over that period

Not enough transparency

[PETA]

Originally Posted by david austin

Yuan not accurate over that period

Not enough transparency

Lol....

[david austin]

It has just been the past few years that the yuan has been more openly discussed by China.

Therefor I left it out as to not skew results.

[PETA]

I'm just referring to my attempts to get you to commit to the dollar or yuan


my latest version I'll repeat for you here



If I put a gun to your head and told you to pick a currency for a reserve currency and I further told you I'd pull the trigger if the next word out of your mouth was anything other than yuan or dollar. Which would you pick? Now answer the damn question claire!

[david austin]

If I had a choice it would still be the dollar... but that choice is much close to 50/50 than most would think.

Bottom line is right now they have the backing... all we have anymore is ink.

Until we get called out (which is likely sooner rather than later) we will stay king dollar.

[PETA]

Originally Posted by david austin

if

bang!!!!!!!!!