Friday, October 10, 2014
Friday, October 3, 2014
Where is US stocks going next?
It seems like there's some sort of correction going on. I've been watching the small caps and their junk bonds. The Russell 2000 has fallen 10% since March this year. DJIA and S&P500 fell today too.
Since 2009, I have been maintaining the position that stocks may well rise due to the Fed's money printing. But I am more than willing to sit out the potential gains because there is no economic fundamentals behind them. Stocks are simply going up because of the cheap money sloshing around the world. That is also the reason why I did not short any stocks at all. Going forward, my thesis remains the same. As the economic weakness becomes more apparent to the Fed and the market, the Fed will come in with a new round of QE, or whatever they call it. Stocks may then rise again and have their final hurrah. Till then, it's entertainment for me as I watch the events unfolding.
Since 2009, I have been maintaining the position that stocks may well rise due to the Fed's money printing. But I am more than willing to sit out the potential gains because there is no economic fundamentals behind them. Stocks are simply going up because of the cheap money sloshing around the world. That is also the reason why I did not short any stocks at all. Going forward, my thesis remains the same. As the economic weakness becomes more apparent to the Fed and the market, the Fed will come in with a new round of QE, or whatever they call it. Stocks may then rise again and have their final hurrah. Till then, it's entertainment for me as I watch the events unfolding.
Monday, September 22, 2014
Greenspan Says Construction Dead in the Water
http://www.bloomberg.com/news/2014-09-09/greenspan-says-rebound-hindered-as-construction-dead-in-water.html
greenspan: U.S. economic rebound has been hindered by a slump in the construction industry.
reality: The construction rebound has been hindered by a slump in the economy.
And greenspan was the one who started it all, back in the 1990s and 2000s.
greenspan: U.S. economic rebound has been hindered by a slump in the construction industry.
reality: The construction rebound has been hindered by a slump in the economy.
And greenspan was the one who started it all, back in the 1990s and 2000s.
Alan Greenspan's Nine Reasons "Why The Economy Stinks"
http://www.zerohedge.com/print/494123
Hey Greenspan, why aren't you on that list?
Here's one sentence from him that is right though:
“The whole structure of the industry is the mechanism by which you’re converting consumption into savings, and the only way the economy can grow is to SAVE (emphasis mine).”
Hey Greenspan, why aren't you on that list?
Here's one sentence from him that is right though:
“The whole structure of the industry is the mechanism by which you’re converting consumption into savings, and the only way the economy can grow is to SAVE (emphasis mine).”
Wars help the economy??
Didn't economists say that wars help grow the economy? Jokers!
C.Bank chief says Ukraine 2014 GDP may shrink by up to 10 pct - agency
http://mobile.reuters.com/article/idUSL5N0RE06Y20140913?irpc=932
C.Bank chief says Ukraine 2014 GDP may shrink by up to 10 pct - agency
http://mobile.reuters.com/article/idUSL5N0RE06Y20140913?irpc=932
Failure of Japanese keynesian experiment
Why are the failures of keynesian-style spending programs in Japan ignored? No idea.
Imf sources:
“Between 1992 and 1995, Japan tried six spending programs totaling 65.5 trillion yen. In April 1998, the government unveiled a fiscal stimulus package worth more than 16.7 trillion yen, almost half of which was for public works. Again, in November 1998, another fiscal stimulus package worth 23.9 trillion yen was announced. A year later (November 1999), yet another fiscal stimulus package of 18 trillion yen was tried. Finally, in October 2000, Japan announced yet another fiscal stimulus package of 11 trillion yen. Overall during the 1990s, Japan tried 10 fiscal stimulus packages totaling more than 100 trillion yen, and each failed to cure the recession. What the spending programs have done, however, is put Japan’s government in poor fiscal shape.”
Imf sources:
“Between 1992 and 1995, Japan tried six spending programs totaling 65.5 trillion yen. In April 1998, the government unveiled a fiscal stimulus package worth more than 16.7 trillion yen, almost half of which was for public works. Again, in November 1998, another fiscal stimulus package worth 23.9 trillion yen was announced. A year later (November 1999), yet another fiscal stimulus package of 18 trillion yen was tried. Finally, in October 2000, Japan announced yet another fiscal stimulus package of 11 trillion yen. Overall during the 1990s, Japan tried 10 fiscal stimulus packages totaling more than 100 trillion yen, and each failed to cure the recession. What the spending programs have done, however, is put Japan’s government in poor fiscal shape.”
Yellen caught lying
http://www.theepochtimes.com/n3/962444-fed-balance-sheet-to-take-years-to-shrink-says-yellen/
"Federal Reserve Chair Janet Yellen says “it could take until the end of the decade” to shrink the Fed’s record investment portfolio to more normal levels."
Aww come on... somebody ought to have asked her during the conference... to shrink the balance sheet to normal levels within 5 years means that the Fed has to sell $700b worth of bonds per year. Who is going to buy?
"Federal Reserve Chair Janet Yellen says “it could take until the end of the decade” to shrink the Fed’s record investment portfolio to more normal levels."
Aww come on... somebody ought to have asked her during the conference... to shrink the balance sheet to normal levels within 5 years means that the Fed has to sell $700b worth of bonds per year. Who is going to buy?
Subscribe to:
Posts (Atom)
