alertmeipp Posted February 18, 2011 Share Posted February 18, 2011 I keep thinking with the recent 100% rise from bottom, we are due for a serious pullback. On the plus side, corp profit seems to be very positive and the demand from middle class in developing countries is a very positive force. However, inflation, high commodities and still fairly high unemployment, on-going QE, soaring gov debt in Fed and State level make me think something is going to burst. I am still fully invested. Hedged with SPY put, VIX future and long USD. I am selling out some and roll options into shares - obviously, with the market soaring, all those moves cost me money. Any thoughts to share? Link to comment Share on other sites More sharing options...
Smazz Posted February 18, 2011 Share Posted February 18, 2011 All I will say is there are probably some pretty good salesmen out there pulling out some really well made graphic charts showing a line from about 2008/2009 till now. In addition to the many points you highlighted, I cannot for a second believe we are not going to see personal debt level rising radically again. Link to comment Share on other sites More sharing options...
Myth465 Posted February 18, 2011 Share Posted February 18, 2011 This is quite easy to predict. Yes. The key though is tell me when? I think we are overvalued and will stay that way until we dont. I agree with Jim Rogers. When the market is due for a pull back it finds a reason to pullback. I predict the next thing (Euro Debt, Our Debt, Exchange Rates, Inflation, Muni Bonds) will be blown out of proportion sparking a pullback. When is the key. I havent sold much and dont have much cash. Currently looking around for things to sell. Link to comment Share on other sites More sharing options...
alertmeipp Posted February 18, 2011 Author Share Posted February 18, 2011 debt level going back up is interesting pt - when interest rate goes back up - people will allocate more income to pay interests which will slow down economy. The other side if we stuck with slow growth - big banks will be very profitable when spread (CD rate vs loan rate) widen. Bull market usually ends with a spike - did we see it yet? And with gov flooding the market with cash and cash earns nothing and devalue everyday - where can the money go? And soaring market does make ppl feel better and spend more. Link to comment Share on other sites More sharing options...
Guest Bronco Posted February 18, 2011 Share Posted February 18, 2011 I think we are in a 2 - 3 year bull market but there will be hell to pay. US debt is uncontrollable and when we roll over some of this stuff at higher rates - look out. The only potential savior is my state governor, Christie, who has the charm of a Suprano but the willingness to get things done. Link to comment Share on other sites More sharing options...
alertmeipp Posted February 18, 2011 Author Share Posted February 18, 2011 I will feel more comfortable if QE is off and economy can stand on its own. Then what will the employment # will be when gov cut spending. Compensation in gov. is just way too high. Christie - he will be good for US long term but it will be very painful short-term. Link to comment Share on other sites More sharing options...
Myth465 Posted February 18, 2011 Share Posted February 18, 2011 I was with you guys for a bit but have switched sides, I now think what these guys are doing is nuts. I dont think blaming state workers is the solution. Some of them are overpaid, and a few have rediculous pensions but the core part of the problem is Americans want things but dont want to pay for them. The pension mess could be fixed by one GASB change. Bring pension costs onto the budgets and account for them fairly and accurately. Also mandate full funding with conservative market return projects which adjust based on market valuation. Then states and unions are free to do what they want but it ends the backroom deals and shooty accounting. Its time America got its priorities straight and put up (pay for what they want) or shut up (cut services honestly without trampling over teachers). One again the right is all talk but no substance and the left has no balls. Whats written below gives me hope though. Some 30,000 students and public sector workers rallied at the Wisconsin State House in Madison Thursday to oppose Republican Gov. Scott Walker’s bid to eliminate almost all their collective bargaining rights and slash pay and benefits. Public schools in Madison are closed for a third day in a row today as teachers continue to protest. A vote on the measure was delayed after Democratic senators refused to show up and fled the state—leaving the Republican-controlled State Senate without quorum. We speak to John Nichols of The Nation magazine, Madison teacher Susan Stern, and Wisconsin Democratic State Senator Chris Larson.[includes rush transcript- partial] Thats my political rant for the day. Link to comment Share on other sites More sharing options...
bargainman Posted February 18, 2011 Share Posted February 18, 2011 Well with equity fund flows taking the cake of course the stock market is going up: http://news.morningstar.com/articlenet/article.aspx?id=370495 Does anyone know where to get this source data? I would love to be able to see where the money is moving, although it's probably a lagging indicator since by the time you see the money move it's already moved the market... Or maybe not... Link to comment Share on other sites More sharing options...
Guest Bronco Posted February 18, 2011 Share Posted February 18, 2011 Myth - I feel the opposite - I pay a ton of taxes and get no services. I could several personal assistants and get a better return on my money. But that is rhetoric. I would agree with you that all politicians are all talk and no action. This has to change. To your point on public employees - there is no reason why they can't switch from pensions to 401k plans. Most large corporations have made this move. Also, cops retiring at 40 with 70% or whatever of pay can't continue. I am sure they are underpaid and buy that argument, but the retirement benefits don't make sense. Tenure for teachers is a joke. If they want full year pay than work full year periods - run a day care or something. Or keep teaching year round. So many things could be done. Medicare is a disaster. Social security is in better shape but what a waste of my money. So there will be a pullback - massive one IMO - just not now. And not next year. But soon enough. Link to comment Share on other sites More sharing options...
zarley Posted February 18, 2011 Share Posted February 18, 2011 . . . the core part of the problem is Americans want things but dont want to pay for them. This is the root problem. R's and D's are equally at fault here, they just want different things and want different people to pay for them. All the partisan handwaving is just bullshit -- Tocqueville saw it coming a couple hundred years ago. Link to comment Share on other sites More sharing options...
Guest misterstockwell Posted February 18, 2011 Share Posted February 18, 2011 To your point on public employees - there is no reason why they can't switch from pensions to 401k plans. Most large corporations have made this move. Also, cops retiring at 40 with 70% or whatever of pay can't continue. I am sure they are underpaid and buy that argument, but the retirement benefits don't make sense. Tenure for teachers is a joke. If they want full year pay than work full year periods - run a day care or something. Or keep teaching year round. . Agreed. I paid $743 last year for others pensions via my real estate taxes. Ridiculous. Pay for your own retirment like everyone else. Teachers around here milk the system horribly. Work part time forever, work three years full time, retire with full salary and benefits forever. That HAS to stop. There is nothing special about teachers, cops, firemen, politicians, etc. We all have jobs to do, and we all choose our career. I should not have to pay for their future as well as my own. Link to comment Share on other sites More sharing options...
Myth465 Posted February 18, 2011 Share Posted February 18, 2011 You guys are falling for the okedock. This has nothing to do with budgets and is just an attack on left leaning unions. The solutions proposed by politicians wont address any of the problems. I agree with Zarley. Bronco you are too focused on yourself ;). When I say Americans, I dont mean Bronco. You are not Americans, you are some rich / upper middle class guy who kinda gets the short end of the stick. Not rich enough to say screw it, I dont care, but not poor enough to pay no taxes. I suggest getting into that top 2%, or scaling back. I hope to join you one of these years on my way to that top 2%. --- Hell we agree on the solutions (they are obvious) but I wont give a man credit for lip service and screwing over teachers. Teachers dont make squat and deal with brats all day. They have earned their keep and deserve a full pension and crappy pay inmo or higher pay with a 401k. Cops and Firefighters deserve a full pension, but only after working till 55 or 60 or if injured in duty. That pension should be a rational amount and shouldnt have much to do with the last year of salary (no gaming). Link to comment Share on other sites More sharing options...
alertmeipp Posted February 18, 2011 Author Share Posted February 18, 2011 guys, open a new thread to argue about pension and how the gov should be run. ;D The point is something has to be done. We real Change. Or if we print more money and thus, devalue it. the problem will just go away. Link to comment Share on other sites More sharing options...
Myth465 Posted February 18, 2011 Share Posted February 18, 2011 guys, open a new thread to argue about pension and how the gov should be run. ;D The point is something has to be done. We real Change. Or if we print more money and thus, devalue it. the problem will just go away. Lol sorry about that Alert. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted February 18, 2011 Share Posted February 18, 2011 What, EXACTLY, has the U.S. Government done to address the ROOT CAUSES of the crisis that started in late 2007 and culminated with the fall of Lehman Bros.? Until I hear a reasoned, convincing argument that debt addiction has been cured at the Federal, state and local level I will continue to embrace cash, commodities and precious metals. Equities are getting more dangerous to hold every day that passes without a correction. (Not the individual blue chips...but the S&P 500 and (especially) the Russell 2000 indices). IMO :P Link to comment Share on other sites More sharing options...
Guest Bronco Posted February 18, 2011 Share Posted February 18, 2011 What were the root causes of the crash? 1 buying too big a house (overleveraging) 2 government housing subsidies (mortgage interest deduction, FNMA's buying securitized mortgage pools) 3 shady loan practices 4 poor lending standards by banks 5 artifically low rates 6 Barney Frank 7 banks overleveraging IMO - all of the above (you have to throw that loser Frank in there). What have we cured? Probably #3 and 4 and 7. So I agree, not all the problems have been addressed. Would love to see FNMA in run-off. Link to comment Share on other sites More sharing options...
Uccmal Posted February 18, 2011 Share Posted February 18, 2011 Alert, Are you so sure things are going to burst? It seems to me it is entirely possible that we go up 20-30-40% from here. Then we burst and go down 30% which puts us slightly below where we are right now. To my mind things are only beginning to heat up. There are several business cycle factors in play, and I dont think the cycle has been repealed. If anything the excessive stimulus will make the cycle more pronounced. Off the top of my head: bonds rally (done), then commodities rally (we are in the midst of the biggest commodity rally in a long time), then stocks rally (started, midway?). What if we get a stock rally as strong as the bond and commodity rallies have been. Coupled with that is that there has never been a down market in the 3rd year of a 1st presidential term. On the main street side business spending has just started to pick up which will get the jobs machine rolling just fine in time for the next US election. The rise in jobs should reverse the housing slide and create a virtuous circle. My guess is that federal deficits in the US will be much less than expected due to a stock market rally and increased spending. I think you wait for the election to see a significant bear market. BTW - I dont invest macro in a general sense but I do protect myself from macro events. As value dries up I have been reducing positions. Link to comment Share on other sites More sharing options...
augustabound Posted February 18, 2011 Share Posted February 18, 2011 Well with equity fund flows taking the cake of course the stock market is going up: http://news.morningstar.com/articlenet/article.aspx?id=370495 Does anyone know where to get this source data? I would love to be able to see where the money is moving, although it's probably a lagging indicator since by the time you see the money move it's already moved the market... Or maybe not... I'm not sure if this answers your question. http://www.federalreserve.gov/releases/z1/ Link to comment Share on other sites More sharing options...
Myth465 Posted February 18, 2011 Share Posted February 18, 2011 Lets put down our valuation calculations and pick up our economics 101 calculations. Supply and demand hasnt been repealed. We have the dumb money rushing in, which increases the demand for the stocks. When does that end? What scares them out? Link to comment Share on other sites More sharing options...
alertmeipp Posted February 18, 2011 Author Share Posted February 18, 2011 Alert, Are you so sure things are going to burst? It seems to me it is entirely possible that we go up 20-30-40% from here. Then we burst and go down 30% which puts us slightly below where we are right now. To my mind things are only beginning to heat up. There are several business cycle factors in play, and I dont think the cycle has been repealed. If anything the excessive stimulus will make the cycle more pronounced. Off the top of my head: bonds rally (done), then commodities rally (we are in the midst of the biggest commodity rally in a long time), then stocks rally (started, midway?). What if we get a stock rally as strong as the bond and commodity rallies have been. Coupled with that is that there has never been a down market in the 3rd year of a 1st presidential term. On the main street side business spending has just started to pick up which will get the jobs machine rolling just fine in time for the next US election. The rise in jobs should reverse the housing slide and create a virtuous circle. My guess is that federal deficits in the US will be much less than expected due to a stock market rally and increased spending. I think you wait for the election to see a significant bear market. BTW - I dont invest macro in a general sense but I do protect myself from macro events. As value dries up I have been reducing positions. No, I am not sure and I can see the market continue to go up - liquidity is a huge factor in the market and we can't under-estimate the money that is still on the side earning next to nothing. High interest bond and term deposit continue to roll off and one can't get much even with 3 year term deposit now. Main street sees the inflation and they know money in bank collecting 0.x% is losing values. Mutual fund is selling well, ppl are moving back in. When money goes in mutual fund, they need to allocate to something. And I won't even mention the middle-class theory in developing countries. So, the market can go up more from here. But u and I know - there is still right too much debt and QE was there to inject money to banking system for a reason... but with the low interest rate, some of those can get repaired. hummm....I know some of u are not macro focus, but I keep thinking what will the econ do without QE and stimulus. Link to comment Share on other sites More sharing options...
alertmeipp Posted February 18, 2011 Author Share Posted February 18, 2011 Lets put down our valuation calculations and pick up our economics 101 calculations. Supply and demand hasnt been repealed. We have the dumb money rushing in, which increases the demand for the stocks. When does that end? What scares them out? when the market corrects 20% and the media yells 1929. Link to comment Share on other sites More sharing options...
Guest Bronco Posted February 18, 2011 Share Posted February 18, 2011 I agree with Myth - we have about 2 more years of the good times before this baby bursts. As one poster put it, we haven't addressed all the issues. And what happens to housing when rates rise again? Or maybe they don't rise, and we have inflation issues. Or just plain bubble issues. I don't see long-term problems with the soft commodities - we can grow cotton and corn and wheat. But oil and coal and copper - that is where I see demand > supply (relative). I said this before but we all know the US will "ease" and "print" there way out of fiscal problems. It will cause some disruptions, some time. Just not now. Have a great weekend. -Bronco Link to comment Share on other sites More sharing options...
rmitz Posted February 18, 2011 Share Posted February 18, 2011 Hell we agree on the solutions (they are obvious) but I wont give a man credit for lip service and screwing over teachers. Teachers dont make squat and deal with brats all day. They have earned their keep and deserve a full pension and crappy pay inmo or higher pay with a 401k. Cops and Firefighters deserve a full pension, but only after working till 55 or 60 or if injured in duty. That pension should be a rational amount and shouldnt have much to do with the last year of salary (no gaming). Good teachers are worth way, way more than they get paid. The only change I would make is that crappy ones should not be protected by their unions. I'd like to see a more merit-based pay scheme but it's pretty hard to do in an objective, equitable fashion. Link to comment Share on other sites More sharing options...
Parsad Posted February 18, 2011 Share Posted February 18, 2011 Will you guys shut up with your predictions and macro-views! ;D It's driving me bonkers. - Buy when things are cheap, sell when they are dear. - Look for things that are distressed and that no one else is buying. - Don't try and predict the future. - Always keep some dry powder lying around. Other than that, go read some 10-Q's, 10-K's or a good book! Cheers! Link to comment Share on other sites More sharing options...
alertmeipp Posted February 18, 2011 Author Share Posted February 18, 2011 hey.. Prem predicts macro too. :-X Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now