The "up-to-the-minute Market Data" thread

Originally posted by fromunclexcommunicate

.by delaying the inevitable the next crash is likely to be our currency

Seems more and more likely, but since investors are buying stocks as a safe haven against the collapsing dollar and the eventual resulting inflation GBM's 1974 graph is kind of appropriate. My more conservative bearish nature thinks Bernanke might head off the skyrocketing inflation with a preemptive strike. If that doesn't happen till inflation is running double digits 11,000 on the DOW is almost a given.

I honestly believe the biggest surprise will be that there won't be skyrocketing inflation. The extreme wealth destruction that was and is to come as well as the savings rate will keep a lid of enormous inflation.

Originally posted by GreenBicMan

Im just saying, if you take out lagging indicators which everyone loves to use for some reason, it looks pretty legit.

If there wasn't all this government involvement via printing and stimulating, I would agree that a recovery is underway. But you have to ask yourself if the economy would be doing well without the manipulation going on? I would have to disagree. If you want to see what the free market does to oversupply and craziness in economic "good times", look no further than natural gas. Natural gas is what our economy and commodities would look like if there was no manipulation.

reply to post by RetinoidReceptor


I have to wonder why natural gas is performing like that? Perhaps because of the large money influence that we have put into oil over the past decade?

I think that is manipulation as well, but on a much grandiose scheme

Originally posted by GreenBicMan
reply to post by RetinoidReceptor

 

I have to wonder why natural gas is performing like that? Perhaps because of the large money influence that we have put into oil over the past decade?

I think that is manipulation as well, but on a much grandiose scheme

1) Natural gas isn't as universally used as crude oil is.
2) No government stimulus is using natural gas (unlike copper, oil, steel, etc.)
3) There is no organization/cartel to attempt to control supply.
4) Natural gas is in calm political climates (such as the U.S. as opposed to Nigeria).
5) Producers continue to produce in order to keep bills paid since cutting their output at these lower prices would decrease their revenue and they cannot trust the others to cut (prisoner's dilema)
6) There have been no weather problems for a very long time which interrupts supply.
7) Obama's alternative energy initiatives left out the cleaner fuel efficient natural gas.
8) Huge short positions on natural gas.

Those are just some of the reasons

But that doesn't mean I don't like trading it on inventory report days.

Buying natural gas companies is hazardous imo because investors are pricing in a much higher natural gas price (around 6-7 dollars). The best thing to happen is that producers need to begin going out of business. But you could see a temp. small bump up in price sometime this year due to the winter season coming, rig count decreasing and last inventory report the supply is indeed tightening somewhat but then you get some sh*t hold like Cheaspeake (CHK) who says that they are going to begin producing more. Cheveron though said that they are going to STOP producing due to less demand. But natural gas, unlike oil, just needs to have a switch turned on.

Hmmm...more "good" news... :shk:

U.S. Recession Worst Since Great Depression, Revised Data Show
www.bloomberg.com...

Aug. 1 (Bloomberg) -- The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world’s largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said yesterday in Washington. Gross domestic product has shrunk 3.9 percent in the past year, the report said, indicating the worst slump since the Great Depression.

Updated statistics also showed that Americans earned more over the last 10 years and socked away a larger share of that cash in savings. The report signals the process of repairing tattered balance sheets following the biggest drop in household wealth on record may be further along than anticipated.

“The current downturn beginning in 2008 is more pronounced,” Steven Landefeld, director of the Commerce Department’s Bureau of Economic Analysis, said in a press briefing this week. The revisions were in line with past experience in which initial figures tended to underestimate the severity of contractions during their early stages, he said.

reply to post by RetinoidReceptor


All commodities go through price swings at one time or another. While it isn't heavily traded globally, that doesnt mean the demand may spike at a later time (technology)

Historically, I am guessing that is this time for NG and anything you can find at historical lows you must be bullish on I suppose.

Also, if we didn't rob countries for oil, perhaps NG would be featured in other ways. That is impossible to know, but that is a pretty good guess IMO.

reply to post by RetinoidReceptor


Well wouldn't you say it is a good idea to reflate the economy if we needed (in the case of deflation?). Isn't that the correct thing to do? And the key is to know when to raise interest rates again and reduce money supply?

Like I have been saying, I really don't know too much about all that because to me it really doesn't matter - so that is just "what I know" or assume to I suppose

Originally posted by GreenBicMan

All commodities go through price swings at one time or another. While it isn't heavily traded globally, that doesnt mean the demand may spike at a later time (technology)

I always look at stocks and stuff as "if it will make me money eventually". If you buy natural gas now, you are for sure going to make money eventually...I would advise someone if they were going to buy and hold for a while, to have some natural gas in their portfolio. But the question is, WHAT to buy. I think NG will probably remain in a range of around 3-5 for a while, so that means it can still go down roughly 15-20% more but can go up like 50-60% from here in a blink of an eye. You cannot hold UNG or any other etf that follows commodities. They decay over time due to when they roll over the futures contracts, contango and etf costs. They are O.K. to trade. You could buy some natural gas companies, but like I have said, I think many of these companies are getting too expensive and some with inevitably fail if NG goes down more and stays down. So right now, NG is a good trade on inventory days either using UNG, options on UNG or futures. That is my opinion on natural gas.

Originally posted by GreenBicMan

Well wouldn't you say it is a good idea to reflate the economy if we needed (in the case of deflation?). Isn't that the correct thing to do? And the key is to know when to raise interest rates again and reduce money supply?

Like I have been saying, I really don't know too much about all that because to me it really doesn't matter - so that is just "what I know" or assume to I suppose

Well it is a good idea to reflate the economy, when there is demand for the reflation. I mean, in all honesty, the only thing that the "reflation" is succeeding in is higher commodity costs and equity levels and a weaker dollar. Home prices are still decreasing and jobs are still being lost and after trillions of dollars, the credit markets are still pretty much frozen. There is a problem when commercial banks are making most of their money from trading...

Call unemployment a lagging indicator all you want but a recovery cannot occur when unemployment is rising to 10..11% and savings are going up and housing prices are still decreasing (which caused the problem in the first place). And a housing recovery is bound to be very slow, probably even slower than the rate of inflation every year, with unemployment continuing to rise.

Also you have to keep in mind, reflation and inflation and extreme leverage is what caused these crashes to begin with. The Federal Reserve is doing all it knows how to do. We'll have to see if they are successful this time, but the system has been wounded. And this stuff does matter to the stock markets.

[edit on 1-8-2009 by RetinoidReceptor]

:shk:

Will China keep buying U.S. bonds?
Sat, 2009-08-01 02:47
www.gata.org...

online.wsj.com...

Shaky auctions of Treasury notes this week reignited concerns about whether the government can attract buyers from China and elsewhere to soak up trillions in new debt.

A fuse was lit this week when traders noted China's apparent absence from direct participation in two Treasury bond auctions. While China may have bought Treasurys just before the auctions, market participants read the country's actions as a worrying sign that China and other foreign investors may be ratcheting back purchases at a time when the U.S. is seeking to fund a $1.8 trillion budget deficit.

This week alone, the U.S. deluged the bond market with more than $200 billion in record-size sales. The U.S. has had little trouble finding buyers in recent months. But that demand is fading, and the Treasury market has become volatile. Many are selling in favor of riskier assets such as corporate bonds, stocks or even higher-yielding debt of other countries. This portends higher interest rates for the Treasury, and it may need to find alternative sources of cash like issuing more inflation protected Treasury bonds.

Tension on Wall Street trading desks began building late last week when the Treasury surprised the market with plans for a record week of sales. A Monday sale of $90 billion in Treasury bills with maturities of as much as a year went well. But China appeared absent from the following two sales, which totaled $81 billion of debt, traders say.

More at Link...

reply to post by RetinoidReceptor


I think if it mattered and people were worried about it there would be a reflection of that in the market..

I dont see it that way right now

Originally posted by GreenBicMan
reply to post by RetinoidReceptor

 

I think if it mattered and people were worried about it there would be a reflection of that in the market..

I dont see it that way right now

Haha GBM you have way too much faith in the markets.

reply to post by RetinoidReceptor



So I think RR is saying the economy is still too deeply wounded to reflate as much as investors are hedging for at this point, and GBM's dad is under the impression that we will be under a relatively loose money policy for a long time so perhaps inflation is a possibility down the road.

I can't remember a deep recession/depression that did not eventually end with inflation due to over stimulation. The 1974 stock market scenario would not have occurred were it not for the 12% inflation rate that year.

History may not repeat itself but if the dollar keeps falling inflation is going to be felt on basic commodities like oil that are directly tied to the value of the dollar. In that case the gold bugs should have a field day and imported goods are going to get expensive. Although the housing market may not improve very rapidly the stock market bubble should continue to grow.

There may be some scenario where the stock market decouples from the falling value of the dollar that I am missing. For example if the US bond rating gets dropped from AAA or we end up in some other Redhatty type crisis.

Originally posted by fromunclexcommunicate
reply to
img196.imageshack.us...

If you were to simply extrapolate the pattern we could see Dow 10,000 before the end of October. Its hard to guess the size and timing of the pullbacks but we should see another temporary capstone before then.

Something is going to need to be done about reversing out stimulus or else the dollar is going to make new lows and oil is going to start driving inflation numbers over the top before October though. That is why I am having trouble seeing the Dow much above 10,000 in 2009.

The long-term curve is not about straight lines -- it's a mixture of logarithmic and power functions that fit the curve on month-to-month bases. There is always a chance that the Dow could hit 10k before the end of October, but that would be very likely an opportunistic climb that wouldn't last long -- things would go back to 9k quickly.

If the conditions are most favorable, the "firm" 10k could be reached as early as in the middle of December. If the economy will keep recovering in a slow pace, the 10k could be delayed till the beginning of February. There is a way to project the Dow this way based on the 5, 4, 3, 2, and 1 months development. The one month development is tricky, coz you always get a linear function. You need to apply the weighing factors carefuly when making the projection.

[edit on 8/1/2009 by stander]

Originally posted by RetinoidReceptor
Call unemployment a lagging indicator all you want but a recovery cannot occur when unemployment is rising to 10..11% and savings are going up and housing prices are still decreasing (which caused the problem in the first place). And a housing recovery is bound to be very slow, probably even slower than the rate of inflation every year, with unemployment continuing to rise.

Some people have argued that unemployment is a lagging indicator in most recessions, but that it becomes a leading indicator in financial crises. The idea is that, due to the unique nature of debt deflation, you wind up with a feedback loop, where more layoffs lead to more defaults, which in turn causes a greater shock to the economy and continued layoffs. It's intuitive, but it's hard to analyze from a quantitative standpoint, because "unemployment" is culturally defined and financial crises are so rare, that there are no two situations where the data is even remotely similar. Even comparing the three major US financial crises that I have data on, the definition of "unemployment" and the composition of the economies is so different that you wind up with a lot of noise. If you want to bring Argentina, Japan, and Switzerland into the equation, then good luck drawing any sort of reliable conclusion.

I think that if we were omniscient, and we knew if this "unemployment becomes a leading indicator" hypothesis were true, then that would be one of the deciding factors in whether or not to be bullish or bearish.

I also think that the notion of market efficiency, in this case, hinges on the idea that economists and financial analysts are looking at things from an accurate theoretical paradigm. The Neo-Keynesians are dominating the scene right now, and they're fairly bullish. The Austrian School of Economics is far more bearish; and even though I HATE their methodological approach, they do have -- hands down -- the best track record when it comes to predictive ability.

[edit on 1-8-2009 by theWCH]

Guys, you gotta see it to believe it. For some reason, I took a snapshot of the monthly highest and lowest points on the DJI curve since the last March

[atsimg]http://files.abovetopsecret.com/images/member/b6ba3ffdbfb0.jpg[/atsimg]

So I ran a linear regression on it, and it turned out that the line that connects the lowest monthly points (red) had a higher slope than the regression line that connects the highest montly points (green). That means both lines cross each other in the future. So I got curious for some reason and it turned out that both lines cross each other on August 4, 2010, which happens to be Obama's birthday!!!

That holds true only when you take the data from March to July, or from the 3rd month to the 7th month. As it happens, the only US prez who resigned from his job was Richard Nixon -- the 37th prez of the USA!!!



[ The Fall of Man ] Now the serpent was more crafty than any of the wild animals the LORD God had made . . .

Very crafty fella, yes indeedy.


[edit on 8/1/2009 by stander]

reply to post by stander


Yes, but what are the R and R^2 values of that regression?

Originally posted by theWCH
reply to post by stander

 

Yes, but what are the R and R^2 values of that regression?

They are irrelevant, coz the intersection doesn't have any practical meaning -- at least I don't think it has. The correlation is not statistically significant; it's only r = 0.8 for for f(g), and the logarithmic regression has a better fit. But it just turned out that the intersection of f(x) and f(g) as linear functions took place on Obama's birthday.

Here are the data if you want to take a look at at it:

GREEN points
x-values: 3/26, 4/17, 5/8, 6/12, 7/31
y-values: 7925, 8131, 8575, 8799, 9172

RED points
x-values: 3/9, 4/7, 5/15, 6/24, 7/10.
y-values: 6547, 7790, 8267, 8230, 8147.



[edit on 8/2/2009 by stander]

Originally posted by GreenBicMan
reply to post by RetinoidReceptor

 

I think if it mattered and people were worried about it there would be a reflection of that in the market..

I dont see it that way right now

Sheep don't worry about anything until the Wolf is on their neck. Run up your credit card and don't make payments, what happens? Sure you might feel good about it while you're wasting money, but when the Credit Co. (CHINA) cuts it off you'll be standing there with your pants down and the whole world will be reacting. America has become so myopic in its selfishness that it does not see it own demise and your statement is a microcosm of that.

They are simply projecting inflation into the DOW.

So people are safe