<p>So today, extreme fear rules and a month ago, extreme greed rules? Has that much even changed?</p>
<p>yes - the market was at an all time high a month ago - 1687 with many holding the view that helicopter Ben was going to be continuing qe3 forever. The market has sold off 5.9% with bond yields going crazy, commodities dropping like a rock, dividend stocks getting hit worse than most of the rest of the market.</p>
<p>IBD says - yes, you guessed it - Market in Correction.</p>
<p>I was listening to Carter Worth on cnbc. He pointed out that the mean correction was 12% after a move of 5% down and the median was 8.2% I believe. There have been 205 5% or more corrections since 1929.</p>
<p>“Based upon the recent experience of my children and their friends, it appears to me that except for the most highly accomplished applicants, connections have become even more crucial to landing that critical first job. This does not bode well for economic/social mobility.”</p>
<p>Yeah… That bugs me. </p>
<p>Most of post #8113 bugs me. </p>
<p>“One of my sisters has been out of work for about two or three years. She’s looking for work and doing a little retraining. Good thing that she and her husband are independently wealthy.”</p>
<p>That is a long time to be out of work. Imagine if your sister needed money.</p>
<p>I know people that are having trouble getting or changing jobs. There have been articles that state that technology is taking away jobs.</p>
<p>[Can</a> smart machines take your job?*Middle class jobs increasingly being replaced by technology - NY Daily News](<a href=“http://m.nydailynews.com/1.1246522#bmb=1]Can”>http://m.nydailynews.com/1.1246522#bmb=1)</p>
<p>[The</a> Perfection Paradox: Will Technology Take Our Jobs Away?](<a href=“http://www.perfectionparadox.org/2012/04/will-technology-take-our-jobs-away.html?m=1]The”>http://www.perfectionparadox.org/2012/04/will-technology-take-our-jobs-away.html?m=1)</p>
<p>I heard another talking head say how low inflation is and how the fed may be concerned about deflation. Then I go to the grocery story and am amazed at how much more I spend on food than even a year ago. My standard of living is being diminished by grocery stores.</p>
<p>I don’t think that we’re spending more on food but our son is living with us, I’ve cut back on the amount of food that I eat though I feel that it’s higher quality. I don’t feel that food prices are crazy overall - there are always substitutes for things that go up in price a lot. My local grocery store will sell you a dozen small doughnuts for $0.99. That’s 1,200 calories. They aren’t the best of calories but there are some people that live off that little daily. I think that everyone could live off 2,400 calories per day.</p>
<p>“The Fed would like inflation to average 2% over time, but the inflation rate is 0.74% over the past 12 months and is slowing rapidly, as measured by the personal consumption expenditure price index. Outside of recessionary periods, that’s the lowest rate in more than 50 years. The core inflation rate (excluding volatile food and energy prices) is up just 1.05% over the past year — the lowest rate on record.”</p>
<p>[Bernanke</a> doesn?t fear deflation ? but should - Rex Nutting - MarketWatch](<a href=“Bernanke doesn’t fear deflation — but should - MarketWatch”>Bernanke doesn’t fear deflation — but should - MarketWatch)</p>
<p>This is a pretty interesting article and points out that the Fed is looking for lower unemployment and 2% inflation as triggers for tapering. Bernanke seems to think that we’ll get there by the end of the year even though there’s a lot of existing evidence that disinflation is a bigger problem than inflation. He was asked if the current level of inflation argues for MORE QE instead of less. And he had trouble answering that.</p>
<p>The fed inflation numbers dont hold for many people. Adding up Healthcare costs, rent, And those with education costs are going to see the cost of living rise more than 2 percent. </p>
<p>A large part of the investing public, the elderly demograhic anyway, are not going to like their brokerage statements next month if bond prices dont rally. Bonds are one place where prices are falling. I guess stock prices have dropped also but at least stock prices are up
quite a bit for the year. </p>
<p>I cant be the only person long munis. Mub, a muni etf, is a pretty good indicator of what is happening in the muni market. Tlt is another indicator of what is happening in the bond market. </p>
<p>I have mixed feedlings about the bond drop. My account balance has dropped with the bond selloff. But if I want to buy more bonds I can get better returns now.
I am not unique. I am sure others that invest in the fixed income market feel similarly. </p>
<p>Who is going to want to buy long term debt if interest rates are going to rise over time? This hasnt been an issue for over 30 years.</p>
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<p>Healthcare costs are an issue and I think that those are going to go up moderately for a while. For young adults without company insurance, they could go up a lot (like 100s of percent). The cost of education for physical universities is going up but what about the effect of Coursera and other similar startups? Could we see cheap education and certification greatly dropping education costs?</p>
<p>Rent is going up in some areas but I think that it’s still pretty weak overall. Same thing with Real Estate.</p>
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<p>If they have investments only for income, will the asset prices matter?</p>
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<p>My mother has been looking at munis. I don’t know whether she bought them or not but she asked my sister to ask me about them so I know that she’s interested.</p>
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<p>I bought more PBA on the dip yesterday. Today it’s Ex-Div.</p>
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<p>The company my mom worked for as an engineer for about 10 years folded two years back. It took her well over a year to find a new job. Luckily my dad’s a teacher now, and his income has been pretty stable. Since she’s had new job she’s gotten a number of calls from recruiters to get her to interview. It’s really a shame how the “out of work” stigma makes finding a job hardest for those that need the position most.</p>
<p>If psec dropped a buck would it matter? </p>
<p>You would want out, right? Really you would want to be out before the stock price dropped a buck, right? If you thought psec’s stock had a good chance of dropping a buck, you would not buy the stock in the first place, right?</p>
<p>The drop in bond prices is going to affect people differently. Overall, if bonds continued to get hit, it would have a big effect on the economy. </p>
<p>The drop in bond prices matter. Maybe very little for some people. Maybe a lot.
If rates rise and people need to sell some of their bonds or bond funds, it is going to matter.</p>
<p>If inflation picks up and an investor is locked in at lower rates, it is going to matter.</p>
<p>If I am 90, maybe an increase in rates wont matter. But at 90, not much does matter.</p>
<p>There are people that are hoping for higher rates and dont care if their portfolio takes a hit.</p>
<p>“It’s really a shame how the “out of work” stigma makes finding a job hardest for those that need the position most.”</p>
<p>That is a good point.</p>
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<p>Yup. Once you find a job and list a resume, you get pestered regularly by recruiters. Getting that first job or the first job after not being employed for a while is tough.</p>
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<p>At the moment, it probably wouldn’t matter. I’d get the buck back in less than a year. The friend that pointed me towards the stock has held through the ups and downs since last year. If the market does stink for a while, then I may well hide out in big-dividend paying stocks for some time. My thesis is that the Fed will not taper this year. The Fed has been overly optimistic for at least the last year. I was thinking about this on the way in and was thinking that maybe the Fed Chair has to be a cheerleader for the economy. If he said that things were going to stink for a year, then that could cause businesses to curtail hiring and consumers to cut back on spending. If he says that we’ll have a strong employment boost at the end of 2013, maybe consumers will feel more comfortable spending and businesses will feel more comfortable hiring.</p>
<p>I think that the ACA and its implementation issues are going to cause unexpected problems and expenses for small businesses which may keep them reluctant (or just too busy) to hire strongly for 2014 and 2015. I’d like to see some kind of resolution on the corporate overseas tax issue but I don’t expect any action here until after the 2014 elections.</p>
<p>On a different note, Samsung announced the Ativ 9 (Haswell) which is a really slick machine. 3200x1800 resolution and 12 hours of battery life. It looks like Haswell has really delivered on improving battery life.</p>
<p>If interest rates dont rise then interest dependent stocks are going to have less risk.
I dont think the economy is that strong. I think we are seeing some of the leveraged traders panic. </p>
<p>There are going to be problems administering ACA.</p>
<p>Aapl broke 410?</p>
<p>Everything I want to buy is up or has not dropped big yet today. Go figure. PSEC, HCLP, PBA.</p>
<p>I am thinking of writing some naked puts on ORCL. Not sure what strike but I might follow the three day rule before doing so.</p>
<p>In an interesting technology note, Samsung is going to retire the S3 and cut production of the S4. It looks like the luxury phone market is tapering or getting saturated.</p>
<p>My wife just bought an iphone5 yesterday. Just a meaningless anecdote. </p>
<p>I dont think that news is good for aapl.</p>
<p>There are articles that a problem with the pc market is pcs are already good enough for most people so there is little need to upgrade.</p>
<p>If that happens to smartphones…</p>
<p>I got out of Japan with a small loss.</p>
<p>Purchased SPY 1/18 131 calls = 28.65, 158 - 148 put spread for 3.55. Also rolled out the 6/22 iwm 95 puts to 6/28 93 puts = +.33.</p>
<p>I’ve heard that some companies have a policy that they won’t even consider unemployed people for an opening. They are afraid these people are damaged goods or something.</p>
<p>I took me 5 months to find a job last fall, and I took a pretty good cut in pay.</p>
<p>DS, who just graduated with a 3.9 in Chemical Engineering, has had a few interviews but no offers yet. It’s stressful.</p>