The investment..speculation, out right gambling thread

Parent Cafe
2341

<p>Goodness, I hope not!</p>

2342

<p><a href=“Tiny Yields Pose Risks for Bond Funds - The New York Times”>Tiny Yields Pose Risks for Bond Funds - The New York Times;

<p>"The BlackRock Global Allocation fund provides a window into how professional managers are sizing up bonds today. The fund has the flexibility to invest in a mix of stocks and bonds, based on the investment team’s assessment of relative values. Currently, the fund has just 27 percent riding on bonds, well below its neutral target of 40 percent.</p>

<p>“We don’t think fixed-income instruments provide yield or price value at these levels. Period. Full stop,” says Dennis Stattman, a senior portfolio manager of the fund.</p>

<p>That’s in large part a function of what has happened to Treasury rates. Growing concerns about economic slowdowns in the United States, Europe and China set off a flight-to-quality rally in Treasuries during the spring. The yield on the 10-year Treasury note fell from 2.25 percent in early April to a low of 1.47 percent on June 1. At the end of the quarter, the Treasury note had inched up to 1.65 percent. When yields decline, bond prices rise. Total return is a combination of earned interest and the bond-price change. In the second quarter, the average return for funds focused on long-term government bonds was 10.2 percent. That would be a solid return for two years, let alone a quarter.</p>

<p>While Treasuries may seem to be a haven, today’s minuscule yields pack palpable risks for bond managers. Those low yields aren’t even keeping pace with the 2 percent inflation rate. And when interest rates rise, Treasuries will be hit hard. The current yield payouts will provide scant cushion against the falling prices.</p>

<p>Bill Gross, manager of the huge Pimco Total Return bond fund, says it’s becoming “harder and harder” to generate inflation-beating returns in a low-rate world, without exposing the fund to sharp price declines if rates rise.</p>

<p>“It’s a delicate walk, like Mr. Wallenda on the wire over Niagara Falls,” he said, referring to Nik Wallenda, who walked over the Niagara Gorge last month. “You have to be very careful and keep your eyes on the wire.”</p>

2343

<p>[LIBOR</a> Fraud May Be the Mother of All Bank Scandals - Economic Intelligence (usnews.com)](<a href=“http://www.usnews.com/opinion/blogs/economic-intelligence/2012/07/23/libor-fraud-may-be-the-mother-of-all-bank-scandals]LIBOR”>http://www.usnews.com/opinion/blogs/economic-intelligence/2012/07/23/libor-fraud-may-be-the-mother-of-all-bank-scandals)</p>

<p>"One might expect that the scandal will follow the familiar pattern of bogus bank contrition, slaps on the wrist, large but not life-threatening fines, and pious promises not to do it again soon to be ignored. In short, it’s just another scandal.</p>

<p>But this time it’s different and here’s why: The sheer volume of contracts based on LIBOR defies the imagination. Estimates vary, but $500 trillion seems reasonable. Even if the banks lied by as little as one-tenth of 1 percent, that percentage applied to $500 trillion multiplied by the six years of the fraud comes to $3 trillion stolen from customers. Cutting that amount in half to allow for the fact that some customers benefited from the fraud while others lost still gives implied damages of $1.5 trillion, greater than the combined capital of all of the too-big-too-fail banks in the United States. Taken to the full extent of the law, these damages are enough to render a large segment of the global banking system insolvent. These damages will be pursued not by regulators, but in private lawsuits by class action lawyers.</p>

<p>Bank defendants in cases like this typically ask a judge to dismiss the case because the claims are too vague. However, the facts in this case have already been made plain by Barclays, which is the one large bank to settle its case with the regulators. Once the plaintiffs get past the motion to dismiss, they begin discovery, which gives the class action lawyers access to internal E-mails, tape recordings, depositions, and other books and records of the perpetrator banks. Based on small glimpses of the doings at Barclays, the communications of the other major bank LIBOR trading desks could be shocking."</p>

2344

<p>[When</a> This Indicator Hits 19, Stocks Always Rally - Seeking Alpha](<a href=“When This Indicator Hits 19, Stocks Always Rally | Seeking Alpha”>When This Indicator Hits 19, Stocks Always Rally | Seeking Alpha)</p>

2345

<p>I don’t know.</p>

<p>I saw BCEagle91’s chart and the stock market is supposed to crash.</p>

2346

<p>Well there’s nothing to say there can’t be a crash or two before it rallies</p>

2347

<p>12,000 before 13,500</p>

2348

<p>Actually, I am very aware of what this guy wrote in post 2344.</p>

<p>I would never say the market is 100 percent certain to go in any direction.</p>

<p>I think what the guy wrote is something to look at, think about and maybe use.</p>

<p>There are so few Investors playing right now, maybe that means something.</p>

<p>Anyway, I liked BCEagle91’s chart because somebody drew big arrows
pointing downward on the chart, indicating the stock market is going to repeat the decline of 2008. Starting now, or was it starting last week or the week before? I can’t remember because the arrows were blinding.</p>

<p>Sentiment indicators are worth watching.</p>

2349

<p>Not enough chairs when the music stops, even considering low volume…</p>

2350

<p><a href=“http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/12_Citis_Fitzpatrick_-_Stocks_to_Plunge_Another_15_to_20_files/KWN%20Fitzpatrick%2049.jpg[/url]”>http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/12_Citis_Fitzpatrick_-_Stocks_to_Plunge_Another_15_to_20_files/KWN%20Fitzpatrick%2049.jpg&lt;/a&gt;&lt;/p&gt;

<p>I love this chart that BCEagle91 posted. Well, maybe love is too strong a word. I like it a lot.</p>

<p>Who is the dog and who is the tail?</p>

<p>Is Europe the dog and the United States the tail?</p>

<p>And what is China? The feet?</p>

<p>I wonder what sentiment was in 2008 and 2009? Can’t remember…couldn’t be high though.</p>

<p>Hmmmmm…</p>

<p>I can’t make heads or tails out of this.</p>

<p><a href=“AdvisorAnalyst.com – Insight and practice resources for advisors from financial thought leaders.”>http://advisoranalyst.com/glablog/2010/11/01/extreme-readings-in-bullish-investor-sentiment-as-insiders-bail-at-highest-rate-ever-tracked/&lt;/a&gt;&lt;/p&gt;

2351

<p>China is Pinocchio’s nose. ;)</p>

2352

<p>Lol.</p>

<p>Mauldin highlighted this newsletter.</p>

<p>This has been bugging me. This outcome is not great for the economy. It is also not great for me and many retirees. </p>

<p>After a financial hit like the one we took several years ago, it looks like historically society gets lower growth and low interest rates for 20 years or so or whatever it is. The article depresses me and it is hard to recall information when you are depressed. </p>

<p><a href=“http://www.hoisingtonmgt.com/pdf/HIM2012Q2NP.pdf[/url]”>http://www.hoisingtonmgt.com/pdf/HIM2012Q2NP.pdf&lt;/a&gt;&lt;/p&gt;

2353

<p>Still feels like crash to me.</p>

<p>The economic indicators still seem to be pointing that way and I don’t see a lot of things on the horizon to improve the outlook. We’re starting to see mass layoffs (Cisco is cutting 2%, the big banks are cutting). There was an article this morning on the Hong Kong property market. Highly paid bankers are losing their jobs and cutting back on housing expenses. Housing is typically $25K/month for a three-bedroom. Companies are giving housing money to employees instead of directly leasing housing. This gives the employee the choice as to whether they want to spend the allowance for housing or keep some of it back for themselves - and you can guess what they are doing.</p>

<p>There was a little good news out of China this morning - things aren’t declining quite as fast as originally planned.</p>

<p>Select companies are doing well. GOOG looks to be doing quite well in their core business; Motorola dragged them down a bit and GOOG has to figure out what to do with them. Intel - not as bad as expected. Microsoft, Yahoo - the same. Apple - we’ll see tonight. Oracle - pretty good. SAP reported earnings this morning which were very good - not bad for a European company. IBM was pretty good despite being light on revenue. In tech, Enterprise seems to be doing well while consumer seems to be dropping.</p>

<p>One benefit for consumers to the downturn - consumers are getting better and better tech at a pretty fast clip. Hardware, software, or services - the stuff that I see for sale or for free is pretty amazing and prices aren’t that bad. I read about Canon’s new mirror-less compact DSLR yesterday. I’m amazed that you can get an SLR into such a small package. It’s $799 which isn’t cheap but the technology packed into that thing is amazing. I expect that this sort of tech will filter down to cheaper cameras in a few years.</p>

<p>Oil is bouncing back up - Iran? Decreasing production by suppliers? I’m not sure but I think that demand is still weak.</p>

<p>So I’m bearish but I’m in a few select stocks.</p>

2354

<p>That reads like a research paper - very dry.</p>

<p>The thing about the last twenty years in the Greenspan/Bernanke era is that they know about the historical issues. Greenspan thought that he could overcome the historical problems in economic cycles - it appears that he could delay them but not overcome them. There will be winners even if things are slow for a long time. I recall things being slow for a long time when I was growing up - you got used to it. The boom periods were nice but those slow times linger in the back of your mind - like a guilty pleasure.</p>

2355

<p>I find your last two posts interesting, BCEagle91.</p>

<p>I don’t have anything to add right now.</p>

2356

<p>Biggest OI in AAPL Aug 18s - $650s and $550s.</p>

2357

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<p>Pension managers are also having a tough time. Their projections factor in a rate of return (often around 7%) and many aren’t hitting that number. It’s tough being a retiree depending on income producing (yet safe) investments…I’m not there yet, but it won’t be long.</p>

2358

<p>If low-risk income is falling (and that includes retirement income), then the rational choice is to downsize unless you’ve already downsized.</p>

2359

<p>[Tumbleweed</a> Tiny House Company](<a href=“http://www.tumbleweedhouses.com/]Tumbleweed”>http://www.tumbleweedhouses.com/)</p>

<p>Might be living in one of these someday…</p>

2360

<p>[New</a> York City micro apartments aim to be cosy, not cramped | Reuters](<a href=“http://www.reuters.com/article/2012/07/10/uk-usa-newyork-apartments-idUSLNE86900Z20120710]New”>http://www.reuters.com/article/2012/07/10/uk-usa-newyork-apartments-idUSLNE86900Z20120710)</p>

<p>I looked at one of these in Beacon Hill in February for our son. I don’t have a problem with the concept, particularly if you’re going to be working 18 hours a day but there were other factors that I didn’t like about the place. I should check to see if the place has been rented. It was going for about $1,600/month for about 250 sq ft.</p>