OOOPS!!! Late this AM, (had to fight w/ termites) STOCKS ARE CRASHING! Metals are so so. Happened all at once --more news as we find out....
Posted on 01/25/2015 10:11:11 AM PST by expat_panama
Because the rational and the prudent expect prices to behave, all the bailing out punishes the prudent and the rational.
If the credit crises were allowed to play its course with FedGov and the Fed just guaranteeing the system, but not individual institutions, investments, or sectors, we’d be in a boom.
There is no such thing as a nongovernmental deflationary spiral. Historical US deflations end naturally, unless government gets involved.
I agree 100%.
IMHO, the deflationary spiral is/was a foregone conclusion since 2008.
The Government, the FED, has attempted to overcome this as are central bankers around the world and for the most part they have been successful in only deferring the natural process. The same thing happened after the 1929 crash.
While the FEDS involvement hasn’t allowed this cycle to play out on its own, the de-leveraging among certain components that drive our economy have occurred.
I’d like to see an “Honest” chart of consumer debt from say 1980 to present.
Most Wall Street analysts were surprised by the weak retail sales in the 4th quarter. There was an expectation of “pent-up demand” and with lower fuel costs they thought retail sales would come in higher.
I believe that there is “pent-up demand”, however since the labor participation rate is as low as it has been I’m not completely surprised.
On balance, people don’t take on new or additional debt unless they have a reasonable expectation that they will be able to pay it back.
Optimism or the lack of optimism still rules the day.
Make no mistake, we are in a deflationary cycle.
The US Dollar will go a lot higher.
Back in 2008, I suggested, as did others, that the Euro currency will break apart, I still think that that is a real possibility.
At some point the German sense of “Nationalism” will gain enough political traction that they will tell the rest of the Eurozone to go pound sand, as they should.
It must happen because it will eventually dawn on them that it’s the only solution.
OOOPS!!! Late this AM, (had to fight w/ termites) STOCKS ARE CRASHING! Metals are so so. Happened all at once --more news as we find out....
Durable goods sucked. Down 3.4% MOM verses .5+ expectations.
s888
YIKES!
NYSE looking to apply rule 48 on expected volatile trading
“Just being reported on the wires
•Rule 48 will be in force on market opening
•Mandatory opening indicators are not required
The rule is: Exemptive Relief in an extreme market volatility condition.
(a) In the event that extremely high market volatility is likely to have a Floor-wide impact on the ability of [Designated Market Makers] to arrange for the fair and orderly opening, reopening following a market-wide halt of trading at the Exchange, or closing of trading at the Exchange and that absent relief, the operation of the Exchange is likely to be impaired, a qualified Exchange officer may declare an extreme market volatility condition with respect to trading on or through the facilities of the Exchange.
(b) In the event that an extreme market volatility condition is declared with respect to trading on or through the facilities of the Exchange, a qualified Exchange officer shall be empowered to temporarily suspend at the opening of trading or reopening of trading following a market-wide trading halt: (i) the need for prior Floor Official or prior NYSE Floor operations approval to open or reopen a security at the Exchange (Rules 123D(1) and 79A.30); and/or (ii) applicable requirements to make pre-opening indications in a security (Rules 15 and 123D(1)).
I’m assuming it’s due to the weather and the added effect of durables goods stinking”
http://www.forexlive.com/blog/2015/01/27/nyse-looking-to-apply-rule-48-on-expected-volatile-trading/
Huh. Folks may be overreacting here. Right now stocks are down less than a couple percent and those stop trading rules were set up after the '87 one-day drop of 20%. Today's dip may be irritating but right now it's looking like small potatoes...
Agreed and thanks for your thoughts.
While governments can't run an economy we still use 'em to maintain order so we ourselves can run the economy. Leftwingers look to the Fed for econ growth but the only thing the Fed's good for is keeping a lid on inflation. Sure, congress passed some dumb law decades ago saying the Fed was supposed to make jobs (oh yeah, and eliminate the 'trade-deficit' too) but we all know that's a crock.
The big surprise to me is how much the Fed has actually managed to do for inflation with just a few tweaks to interest rates now and then. 'Tweaks' is all they got; it's not hard to see how the vast majority of interest rates are market driven.
--but hey, everything we don't like will eventually end naturally if we wait long enough. The idea is to have that 'natural end' happen as soon as possible, or better still to not have start in the first place.
An article about the possibility of another “lost decade” in the stock market:
http://jessefelder.tumblr.com/post/109242478660/heres-why-investors-are-now-facing-another-lost
tx, interesting. Doesn’t get enough in to trading specifics (do I buy today or sell?) but it’s more info to keep on hand though.
Translation: companies have more cash on hand to do whatever with? Invest, pay out as dividends, whatever?
If that be so, one caveat that Peter Lynch used to note: The Bladder Theory of Corporate Finance - “… as propounded by Hugh Liedtke of Pennzoil: the more cash that builds up in the treasury, the greater the pressure to piss it away.”
Right. This Friday is GDP day and this is pretty much what I'm expecting, tho sometimes I'm wrong...
What I’m seeing there is that low interest rates bode well for the econ. That either means things are going to be looking up for us eventually, or it means that this is as good as it gets and when rates go back up we’re SOL...
For my company we have paid down a lot of the debt we were saddled with after an acquisition and subsequent spin IPO. Now all investors ask is “what are you going to do with all of your excess cash”? Buybucks being the 31 request...
Depends on the pace of rising rates. I expect the fed to raise rates in the fall if for no other reason than to show that they will raise rates. (As an aside with all of the easing going on worldwide the US maintaining rates is tantamount to raising :-). But that won’t stop the flood of money into treasuries as the rest of the world slows down. Thus you have a flattened yield curve. the long rates are still going to be good for the economy particularly if it’s a slow ascent back up to “normal”. We just can’t take a “shock”.
AAPL +5% After hours
74+ million iphones sold. Wow.
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