I have not derived a number yet, but I expect a sell off, a rally, then another sell off from the current levels. I'd like to hear anyone's best guess...
Additionally, I feel that the basic question facing every investor in this market is, will the crisis end up as deflationary or inflationary.Any votes on that question would also be very welcome.
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To remove first post, remove entire topic.
I have not derived a number yet, but I expect a sell off, a rally, then another sell off from the current levels. I'd like to hear anyone's best guess...
Additionally, I feel that the basic question facing every investor in this market is, will the crisis end up as deflationary or inflationary.Any votes on that question would also be very welcome.
I have not derived a number yet, but I expect a sell off, a rally, then another sell off from the current levels. I'd like to hear anyone's best guess...
Additionally, I feel that the basic question facing every investor in this market is, will the crisis end up as deflationary or inflationary.Any votes on that question would also be very welcome.
Given the mass-exhaustion of credit and mass de-leveraging occurring, I think the likelihood of this becoming inflationary is greatly lessened. Most significantly, as consequence of the mass-exhaustion of credit, demand still has correcting to do because of how pulled-forward it was. A car market of 16mm SAAR was pulled forward beyond belief. And while Obama claims there's pent-up demand, this figure relies on the concept that you need a car every 2 years.
Despite the massive liquidity that's been pumped into the system, demand won't be recovering any time soon to inflate prices higher. Add to this the constraints posed by the crowding out of governmetn and the future's inevitably higher taxes, the prospects of a recovery in demand seem far-fetched at best.
I think when we look back on this we'll see five to seven--not the prolonged ten that many are suggesting--years of stagnant growth. I think we'll look back and be thankful for how Bernake and Co. averted an uber-Depression. I say this because there's been so much criticsm for how they've handled everything. I don't really know what people expect in the context of what's viable for making sure we get through this while preserving a functioning society. Don't put me in the CNBC crowd as being positively giddy about their contributions. But, I think Geithner and Bernake's efforts have been well-intentioned and focused on one goal and one goal only: averting complete and total system failure. Given how well the system has been held together (even if it has been through market manipulation), then so be it. These aren't the first market manipulations and they won't be the last. In many ways, you can say Greenspan was indirectly responsible for heavy-doses of market manipulations.
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Quote Originally Posted by Vermeer:
I have not derived a number yet, but I expect a sell off, a rally, then another sell off from the current levels. I'd like to hear anyone's best guess...
Additionally, I feel that the basic question facing every investor in this market is, will the crisis end up as deflationary or inflationary.Any votes on that question would also be very welcome.
Given the mass-exhaustion of credit and mass de-leveraging occurring, I think the likelihood of this becoming inflationary is greatly lessened. Most significantly, as consequence of the mass-exhaustion of credit, demand still has correcting to do because of how pulled-forward it was. A car market of 16mm SAAR was pulled forward beyond belief. And while Obama claims there's pent-up demand, this figure relies on the concept that you need a car every 2 years.
Despite the massive liquidity that's been pumped into the system, demand won't be recovering any time soon to inflate prices higher. Add to this the constraints posed by the crowding out of governmetn and the future's inevitably higher taxes, the prospects of a recovery in demand seem far-fetched at best.
I think when we look back on this we'll see five to seven--not the prolonged ten that many are suggesting--years of stagnant growth. I think we'll look back and be thankful for how Bernake and Co. averted an uber-Depression. I say this because there's been so much criticsm for how they've handled everything. I don't really know what people expect in the context of what's viable for making sure we get through this while preserving a functioning society. Don't put me in the CNBC crowd as being positively giddy about their contributions. But, I think Geithner and Bernake's efforts have been well-intentioned and focused on one goal and one goal only: averting complete and total system failure. Given how well the system has been held together (even if it has been through market manipulation), then so be it. These aren't the first market manipulations and they won't be the last. In many ways, you can say Greenspan was indirectly responsible for heavy-doses of market manipulations.
just look at housing. things are "affordable" but people still are not buying. they know it will get cheaper and cheaper
we will be at the 09 lows or lower. the bluffs and money printing by the fed/treasury will be called at some point this year
towards the end of the summer i will start to get shorter than i am (mostly cash with a few dollar hedging positions)
I don't buy this--that the bluffs will be called. Investors and private capital are just now realizing that market fucker has been in play? I think what's important here is that the U.S. avoids full-blown state-capitalism for an extended period of time. Other countries, namely BRIC, are embracing the new global reality of state capitalism. Countries like China, to be sure, are indulging in times like these when extensive government intervention is necessary.
Speaking with a longer-term investment time frame, the U.S. must resist the degrees of state intervention that will no doubt be highly prevalent in these markets, so that it can retain its status as preeminent economic power and be the haven for recovery. Higher taxes are before us, this much is inevitable. But if we can limit our interventions to this, we should be fine.
The trend of globalization is coming to a screeching halt right now. Investors will adjust accordingly. So, if they're forced to concentrate all their investments and capital in one place, where are they going to do it? Not to be too simplistic and ignorant of the serious issues we face, but I think longer-term the U.S. is going to be ok.
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Quote Originally Posted by KOAJ:
deflationary
just look at housing. things are "affordable" but people still are not buying. they know it will get cheaper and cheaper
we will be at the 09 lows or lower. the bluffs and money printing by the fed/treasury will be called at some point this year
towards the end of the summer i will start to get shorter than i am (mostly cash with a few dollar hedging positions)
I don't buy this--that the bluffs will be called. Investors and private capital are just now realizing that market fucker has been in play? I think what's important here is that the U.S. avoids full-blown state-capitalism for an extended period of time. Other countries, namely BRIC, are embracing the new global reality of state capitalism. Countries like China, to be sure, are indulging in times like these when extensive government intervention is necessary.
Speaking with a longer-term investment time frame, the U.S. must resist the degrees of state intervention that will no doubt be highly prevalent in these markets, so that it can retain its status as preeminent economic power and be the haven for recovery. Higher taxes are before us, this much is inevitable. But if we can limit our interventions to this, we should be fine.
The trend of globalization is coming to a screeching halt right now. Investors will adjust accordingly. So, if they're forced to concentrate all their investments and capital in one place, where are they going to do it? Not to be too simplistic and ignorant of the serious issues we face, but I think longer-term the U.S. is going to be ok.
Countries like China, to be sure, are indulging in times like these when extensive government intervention is necessary. -------- its never necessary and if we didnt have this intervention in the first place i doubt we'd be where we are
that being said, China is in a much better spot than we are. they have cash savings, government surplus, and they make things. we have no cash savings, an insane deficit, and we make nothing but CDOs in this country
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Countries like China, to be sure, are indulging in times like these when extensive government intervention is necessary. -------- its never necessary and if we didnt have this intervention in the first place i doubt we'd be where we are
that being said, China is in a much better spot than we are. they have cash savings, government surplus, and they make things. we have no cash savings, an insane deficit, and we make nothing but CDOs in this country
its never necessary and if we didnt have this intervention in the first place i doubt we'd be where we are
Koaj, you honestly think this is true? You think we'd be better off right now had there never been any government intervention? I can understand arguing how well off we'd be given the extent of government intervention (government guarantees, stimulus, etc). But, sans some sort of intervention, we'd be in a state of full-on anarchy right now. Riots/pillaging in big cities. These are still serious risks, as one could argue that the government has only prolonged these realities for a later date.
----- Re Denninger, watch this and tell me this doesn't scream "Self-absorbed tool":
its never necessary and if we didnt have this intervention in the first place i doubt we'd be where we are
Koaj, you honestly think this is true? You think we'd be better off right now had there never been any government intervention? I can understand arguing how well off we'd be given the extent of government intervention (government guarantees, stimulus, etc). But, sans some sort of intervention, we'd be in a state of full-on anarchy right now. Riots/pillaging in big cities. These are still serious risks, as one could argue that the government has only prolonged these realities for a later date.
----- Re Denninger, watch this and tell me this doesn't scream "Self-absorbed tool":
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