Deflation-stealth in '08 shows face in '10

Quote from Ed Breen:

Deadbroke...why do you bother to write this thread...why don't you just email your comments to yourself and then just re-read them?
More...


Ed, I could do exactly that, but this is sooooo far superior as there is possibility of public humiliation if wrong, critique, harsh or good, pointing out by others of important points I might have missed, but most importantly ...

this is a 2-terminal universe ... therefore discourse discharges charge and frees the mind for more productive work. If you take a look at the long thread in Feedback where I wrote about TUTORIALS you would understand why this method is way superior.

Back in engineering school, we used to study individually but then just before the exams, we would get together as a group and hammer out concepts. The concommitant release of mental charge would free up the mind's tiredness to such a degree that one would enter the exam hall light as a feather with no baggage, yet all the concepts were THERE and ready to be applied at the drop of a hat.

That's why. I know it works and I told Baron so. But this is his house, he's a nice guy, so I adapt as a guest. That's the best I can do.

:) :)
 
Quote from ralph00:

In case anybody hasn't noticed, the USD has gone down every day against just about every currency on the planet for about the last 4 weeks.
More...


All normal TREND behaviour. In wave 2, the public and pubic sentiment matches that of the low, in this case that of the Nov'09 low in the dollar where if I may remind you, EVERY MOTHER's SON AT ET was caught asleep at the wheel calling for $ death. Same-o, same-o now. That's just the way it is.

:)

Creative chef without utensils can still find ways to stir soup
:)
 
Quote from mostlysilent:

Seeing is believing. I see less lending, true. And wage increases have been crap for 2 years. But lower prices? I'm still waiting.

I see some increase in obfuscated membership reward schemes. But oops, those points are far less valuable than originally promised by the time I can redeem them for anything of tangible value. All I see everywhere else is price hikes and/or downsizing in quantity/quality. On billed items (for example) the price increases are sometimes in the form of new "fees".

Less money chasing same number of produced goods? I see the first part, but not the second. Yes, laying off deadwood or overpaid workers is good for companies' bottom lines, and allows them to lower prices because they are now operating more efficiently. But what if they didn't stop there? What if they additionally laid off a ton of good workers too? Then productivity is down. How fast is it declining compared to credit and money supply contractions?

Since 08, I sold off a bunch coins, liquidated most stocks, and have been sitting on cash. But I'm getting really skeptical about the whole cash-is-king idea. The buying power of that money appears to be less than ever. :(
More...



Good stuff, all valid points. But note that my premise is that we are in the very early stages of Deflation. Heck, even the topping process (IF MY OVERALL PREMISE IS CORRECT) of equity markets is a huge one, having started in January 2000. Heck, that's 10 years already.

More general points in next post that will pinpoint some of your points, but I defo cannot state that DEFLATION is pouring just yet, but can say that the trickle is increasing.

:)
 
Lenders don't want to lend and borrowers don't want to borrow. Is that in itself a giant fiasco or what?


But wait, there are more signs of Deflation everywhere ...

(1) Banks are heavily invested in mortgages (95%). The point is that, unlike Treasuries, IOUs with homes as collateral can fall in dollar value, and such IOUs are pretty much the only paper backing U.S. bank deposits. The potential for deflation here is tremendous.

(2) More Mortgages Are Going Under. Commercial real estate dropping like a stone, 30-50% drop from the peak. The debt paper has lost 50% in value (Bloomberg, 11/11) = deflationary

(3) People Are Walking away from Their Homes and Mortgages

Refusal to pay interest on a loan is DEFLATIONARY. Also, the value of the loan contract falls to the marketable value of the collateral, and a contraction in the value of debt is deflation.

Some people who walk away from their mortgages purposely damage the homes when they leave. New businesses have sprung up to take on the job of cleaning up the houses that former occupants trashed as they left. Angry defaulters are stripping coils out of stoves, pulling electrical wiring out of walls, ripping fixtures out of bathrooms, yanking seats off of toilets, punching holes in walls and leaving rotting food in the fridge. (AP, 8/9) Such actions, and the threat of more such actions, lower the value of the collateral behind mortgage debts, thereby lowering the value of mortgages, which is deflationary

(4) Bank Lending Standards Have Stayed Restrictive

over the past year various banks have either left their new, tighter standards in place or continued to tighten their standards further. Across the board, it is harder to get a loan, and it’s staying that way. Lending restrictions reduce the credit supply. This condition is deflationary.

(5) Banks Are Cashing Out of the Credit-Card Business

The credit-card business was another formerly humming engine of credit that is sputtering = deflationary



Uploaded with ImageShack.us
 
Just print tons more money and that will stave off Deflation? This is what the HERD believes? ET believes this like its the Bible.

:) :D :D


Bernanke and company can drop all the money they want from their "helicopters," but "getting people to spend is beyond the Fed's control." Essentially, the stimulators have tossed trillions and trillions of dollars at an iron curtain of the public's newly-emerged fiscal conservatism.

Economy will go up and down when country is run by yo-yo's

:D
 
"When social mood trend changes from optimism to pessimism, creditors, debtors, producers, and consumers change their primary orientation from expansion to conservatism. As creditors become more conservative, they slow their lending. When debtors become more conservative, they borrow less or not at all. As consumers become more conservative, they save more and spend less....

and dig this, baby :) The Personal Savings Rate

who would have ever believed that Americans don't want to buy NO MORE!!!!! :D :D




Uploaded with ImageShack.us
 
Don't think that Japan style Deflation is inevitable in the US?

Look at the 20-yr magnificent correlation between Japan's Nikkei Index and Japanese government long bond yield.

Don't think or believe that bond yields could be telling the story of what's going to happen stateside?




Uploaded with ImageShack.us
 
Keeping an eye on the Nikkei vs Jap govt. long bond yield in prev. post, now look at S&P500 vs Treasury 10-yr bond yield. See the correlation box showing strong correlation since 1998?

There is alot of debate on where yields are going? I need a week of clear head i.e. no bozze or pussy to give this more thought. This is most defo one area where a technician does not want to be flippant.

the monthly bond yield trendlines are clearcut. There is no breakout, so the trend remains down on MONTHLY!

My belief is that the 18-yr of non-correlation from 1980 to 1998 tells me, in the light of the recent 12-yr +ve correlation that the deflationary force was aborning thru' the 18 yrs. but it was not really visible due to the equity and other bubbles. Just MO.

So, will yields continue down, stay down or skyrocket north? I'll know more in 2 weeks as I need to really dig into the charts and give it some thunking. :) :D

A visitor from Holland was chatting with his American friend and was jokingly explaining about the red, white and blue in the Netherlands flag. “Our flag symbolizes our taxes,” he said. “We get red when we talk about them, white when we get our tax bill, and blue after we pay them.” “That’s the same with us,” the American said, “only we see stars, too.” :)





Uploaded with ImageShack.us
 
Guys, I'm sick of all these useless economists. They don't know doodly. :) :D :D

I'm going to take Technical Analysis (or Anal-ysis) skills into the Economics Arena and hammer these mothers real good. If the chart data is accurate, then why can't economic data be treated as other market data and analyzed in similar fashion?

So if any of you aspire to do things on your own and never have to listen to another expert ever again, just go to the US gov. site FRED and download all the economic stuff you need and then analyze in your own software as you would usually do.

Unemployment Rate

Monthly chart .... current value as of June 2010 = 9.5%

The sheer vertical power of the leg up from late 2006 strongly suggests a 3rd wave. This is also verified by Macd.

We gots a long way to go to my target of 38% unemployment rate, but 3rd waves are generally long and just taking a look at Wave A, most likely wave C will be at least = to it if not 161.8%x A :) :D

See the move down called A-B? That's a 3-legged move; therefore the larger or primary trend is UP.

Its going to get mean, guys. Just hide and watch!! :)




Uploaded with ImageShack.us
 
You must log in or register to reply here.
Back
Top