Down goes the Dow

agip wrote:

globally we have retraced about half the loss from the September highs - some technicians will sell here automatically.

I have no view on whether that works as a strategy, but any downturn here will probably snowball a bit as stops are triggered.

Not today though.

Futures lower, DJIA will get a boost from Visa.

These Q3 GDP numbers that will be thrown out, remember that they are b.s., it is government doing all the spending. Not only was direct government spending up a whopping 4.6%, government spending is a big part of the "GDP" numbers. Nobody with a working mind believes the GDP numbers, which is why treasuries climbed on the news.

Of course, many people who matter in this game have no working mind.

Watching...

From the WSJ:

The report showed broad-based gains across the economy despite a drop in inventories. Trade boosted growth as imports fell, while government spending, which has been a drag on growth over the past three years, turned up during the quarter. Consumer spending and business investment held steady, though housing continues to underwhelm.

___

Mas - only now to say that the GDP #s were goosed by gov't spending is disingenuous. For the last 3 years quickly shrinking gov't spending at the local and state levels have been taking jobs and growth away from the economy. So now one quarter of some gov't spending increase at the gov't level is not a meaningful thing to highlight. Unless you also acknowledge the 3 years of drag leading to this point.

As for the believability of GDP #s...Everyone knows they are approximations subject to revision and that no reliable #s can possibly capture a gigantic economy like that of the US. But very few think like you - that bureaucrats manipulate the #s merely to please their bosses.

Maserati wrote:

Futures lower, DJIA will get a boost from Visa.

These Q3 GDP numbers that will be thrown out, remember that they are b.s., it is government doing all the spending. Not only was direct government spending up a whopping 4.6%, government spending is a big part of the "GDP" numbers. Nobody with a working mind believes the GDP numbers, which is why treasuries climbed on the news.

Of course, many people who matter in this game have no working mind.

Watching...

Regardless of whether GDP numbers are "BS", they are the numbers we use as one of the milestones, and it's all relative. We used those same numbers when Bush was president, and with some changes to how the GDP is reported over time, we have based the health of our economy partly on those numbers. So, it's not foolish in any way to give some weight to these numbers. Are the numbers EXACTLY what they are reported to be? No, but they NEVER have been. Again, it's all relative, and the GDP IS an important measuring stick even if you don't happen to like it.

These are the facts from your WSJ comment:

1) Housing underwhelms.

2) Exports only relatively better because imports decreased.

3) Consumer spending and business investment flat.

4) Government spending increased. A LOT.

Exactly what I said.

Quickly shrinking local and state government spending? What planet are you on? Taking jobs? The only reason jobs are being taken is because the fattest civil servants are making insane bank and leaving nothing for newer hires. They aren't spending less, they are just distributing increasingly unequally what they spend. Old hacks get everything, new hires get squat in comparison, and there are less of them because the old hacks they would replace aren't actually doing anything, they are just dead wood who cannot be fired because it is the local union steward who is controlling the show. It's LIFO as usual.

You can go here:

http://www.usgovernmentspending.com/state_chart_gallery

or anywhere to get a better picture. You can also go to the local chart gallery on that page.

The BEST that can be said is that the picture has looked a bit flat at the state and local levels for a while. Better watch out, your "rapidly shrinking" planet may soon ignite hydrogen burning.

Flag, it's not that simple. Longitudinal comparisons are not possible after large disjuncts like we recently had, with the substantive revisions. The published number today has a different meaning than when Bush was president.

Also, much of the so-called "product" isn't realized, it is speculative, like pension payouts. These were clearly added in to give a better-looking number.

That would be fine, if the extent of the speculation were knowable, it could be taken into account in deciding how to consider the GDP number...but the extent is not knowable, and therefore the only way to get an understandable GDP number is to remove things like that from the calculation. We do this, and the picture is not as rosy as the published number, or its trend, would suggest.

The one good thing that has happened has been the end of this round of QE--which, however, does not preclude the future announcement of another round.

The more that government activity is reflected in these metrics, and the greater its representation, the worse. Why? Because government sucks at doing good things efficiently. Like it or not, the system is chock full of WFA. That is a fact that must be dealt with. To have more and more of the reported "economy" rife with these failures and potential for manipulation is terrible for those market players who are not juiced in, like you and I. The ultimate example of the trajectory is the state where everything is government-controlled, and we know what kind of prosperity that leads to, although to be sure, the published USSR numbers always looked pretty great.

DJIA up around 80 so far in early trading.

With your strategy, I hope you bought handsomely during the recent turmoil, and have sold nothing. Good for you!

Maser,

if you look at the charts at the link you sent me (nice site by the way), you'll see that gov't spending has been flat to down since 2009/10. Which has been a drag on the economy.

I'm not sure if those numbers are adj for inflation - if they aren't, the picture is even a little better for my case - that a lack of gov't spending has been a drag.

What charts are you looking at to prove your case?

This data is old, but it shows that the biggest problem the economy had in hiring was at the local and state gov't level, not the private sector. Local and state gov't contracted like mad. Measuring by private sector job growth, the post crisis years were fine. Except for the millions of gov't workers let go.

http://www.theatlantic.com/business/print/2012/06/was-obamas-recovery-the-worst-in-modern-times-or-the-best-in-20-years/258503/

I'm probably overstating. I shouldn't say 'millions' of state and local workers let go - maybe a million or almost that.

Here's the key conclusion from the atlantic piece, in case you don't have time to read it:

The economy created more private sector jobs after the recession than we did in 1991 or 2011. Yes, this is like bragging about the heat coming off a warm ice cube. Yes, we fell further and had more room to catch up. But Obama's recovery doesn't look like either of the Bush recoveries because Obama oversaw total decline in government employment and Bush I and II oversaw a growing public sector.

Maserati wrote:

Flag, it's not that simple. Longitudinal comparisons are not possible after large disjuncts like we recently had, with the substantive revisions. The published number today has a different meaning than when Bush was president.

...but the extent is not knowable, and therefore the only way to get an understandable GDP number is to remove things like that from the calculation. We do this, and the picture is not as rosy as the published number, or its trend, would suggest.

Would these real GDP numbers be anything like your real inflation numbers?

LOL

Like I said, the best that could be said is that they were flat, not "rapidly declining", or whatever term you used.

The biggest problem the economy has is GOVERNMENT hiring. Government "workers" return nowhere near the value that is returned by private sector workers--and I'm talking REAL private sector, not universities, or those businesses working on government contracts.

"Lack of government spending" is not "a drag", it is the spending that is the drag, because it's not done efficiently, economically, or wisely. I'm not disparaging everybody in government, just almost everybody. Those with any integrity get out, because they can't stand the environment.

Ever wonder what happened to stamp machines? They were removed on the effective order of the union, because they were taking jobs away from the people who would otherwise sell them at the counter. I have seen the specific numbers on this, and it is a small example of the kind of thing I'm talking about.

W,F,A. Unavoidable, inescapable, the best you can hope for is to minimize them, and that means minimizing government to the essentials--the real essentials, not the political essentials.

The bottom line is that not every dollar in the GDP figure represents the same value to the economy. Government dollars represent much less, sometimes even negative. They need to be taken out to give a better measure of actual sustainable economic activity.

well sounds like we are agreeing more than disagreeing.

I exaggerated the decline in state/local govt employment, but I stand by the claim that a root of the employment problem was cutting loose hundreds of thousands of gov't workers.

and I don't agree with your hardcore 'gov't is a waste' line - I think the uS gov't should be shrunk, but I do think gov't spending has a positive effect on the economy. i'd rather the private sector produce wealth, but clearly, having a gov't running an orderly bureacracy and enforcing laws and (one would hope) regulating banks is a boon to the economy and necessary to prevent criminality taking over and preserving the rule of law.

one more point - I think using local and state 'spending' as a proxy for local and state 'employment' is wrong - for ex if a state shovels a billion dollars into its pension system it isn't the same as a new employee.

I'm with you on the unsustainability of state pensions - absurdities everywhere.

I know a family in CA - every one of them worked for the state from age 22 to 55 or something like that, then retired and will now live very nicely 30 years on the taxpayer dime.

CA is in big trouble, and NY and IL.

Maserati wrote:

Ever wonder what happened to stamp machines? They were removed on the effective order of the union, because they were taking jobs away from the people who would otherwise sell them at the counter. I have seen the specific numbers on this, and it is a small example of the kind of thing I'm talking about.

You line up for a counter to get stamps? Are you serious? Why do you use the machine instead?

There are dozens of ways to buy stamps

If you can have an internet connection you can print them yourselves or order them online from USPS or Amazon

You can also buy them at

- Wal*Mart

- Staples

- Banks

- Gas stations

- Supermarkets

- Office supply stores

- Grocery stores

- Pharmacies

- Independent mail/copier stores

See link for more..

!input.action

Thank-you, I know where and how to get stamps. In point of fact we have Pitney-Bowes.

All of which is totally irrelevant to the issue of the stand-alone stamp machines. It's difficult to believe that you didn't understand the point being made, but oh well.

DJIA now up over 200 on the day, thanks to...VISA!

I suppose, agip, you won't be too happy about that, seeing as how Visa dominates the bogus DJIA.

lol, good gain today. I could have made more than I did by holding out a few more days, but my key is that I'm not greedy. I know how much I need to make, and if I make it, I'm out. Good for others, though, who have different strategies.

I'm coming to believe that the coming US elections won't have any lasting effect on the markets one way or another, unless the Republicans win everything and the Tea Party somehow takes over. I think it was a good move to end QE, and that a new one should not be instituted, and that the markets should use current conditions as their new baseline, new assumptions on which to proceed.

With that said, I now have to consider getting back in, big-time. I now find myself asking whether the markets will hit 19k+ by the end of the calendar year. I'm not kidding.

I comment all the time about equities being overpriced and companies overvalued, but I will tell you, the world sucks, and the USA is looking decent in comparison. I have always said on this board that prices and values are all relative, and other places are having real trouble. Even though the US consumer is no great shakes, he/she is still better than anywhere else, except for the well-to-do in Asia. Many third-world/emerging economy initiatives from past years (at least ones I've heard about) really put themselves out there, unsustainably, and counted on continuing capital inflows. Now that that is in jeopardy, some are having very real problems. Add to that the huge black markets of Asia and the middle east, an overburdened Europe, and a fragmented and corrupt south america, and you are left with north america.

It reminds me of the run-up in prices in collector markets, for instance art, jewelry, cars, furniture, couture--there have been some insane increases in valuation, and the good stuff is now very expensive, and deals are incredibly few and far between...and fakes are everywhere. This same type of thing might happen with equities--there will be runs on the good ones, and people who have them, will tend to hold onto them, and the prices won't come down. For the good ones, that is.

Yes, I could now see the DJIA topping 18k by the end of the year, and reaching 19k in not too long, because these price increases don't take that long to happen, especially when buying is easy, and the supply is there.

I know this is far from a perfect analogy, but the near-universality of market participation at this point, combined with the sorting of equities by "quality", might set up the same basic dynamic as with collectibles. Not exactly, of course, because there are new issues, stock splits, and alternative investments having different characteristics.

Bottom line for me: what will be the next sustained high-water mark for equities, and where will they likely be by year-end?

Opinions?

"The heart of the matter is a lot of these machines are up to 20 years old," she said, meaning breakdowns are increasing and replacement parts are costly or impossible to get.

In the meantime there are lots of other options to buy stamps that fit into people's lifestyles better, Yoerger said, noting that people can get stamps by mail, through phone orders, at many convenience stores and from rural letter carriers.

Yoerger also noted that recent Treasury Department changes in currency designed to make it harder to counterfeit have required costly changes in vending machines so they can handle the new bills.

The removals are expected to begin next year with about 5,900 machines eliminated annually.

The vending machines aren't the only changes under way.

The post office is also removing many of those freestanding blue boxes where people can mail letters.

That's a result of a decline in first-class mail, Yoerger said, with fewer items being placed in the boxes.

The post office counts those boxes among "collection points," which also include the green relay boxes, where carriers store mail during delivery, and mail slots at post offices.

As of the end of last year the post office had 295,052 collection points, down from 337,230 at the end of 1999.

Vending machine removals will not target a specific area, she said. Broken machines and those that do little business will go first. If a machine still works well but makes few sales it will be moved to a busier area to replace broken or damaged machines.

Customers will still be able to buy stamps from postal clerks and the agency is increasing its use of automated postal centers which print postage on demand and also can sell some stamps.

The only person it's worth taking any investment advice from is Klondike 5

Klondike5 wrote in 8/13

- Down to 14,850 from a peak of 15,700 I believe. What's the bottom?

- I am betting sub 13,000

- [To Flagpole] The point (well, other than the one on your head) is that yes the markets fluctuate, sometimes losing over 50% of their value, and it feels like one of those times may be approaching.

- I got out at the end of June with the Dow at @ 15,000 and will stay out for some time. Months or even years.

- No plans to get back in any time soon. I will play it be feel.

- Boy do they have you guys turned upside down.

- Lemmings. The lot of you.

The heart of the matter wasn't that they were 20 years old, the heart of the matter was the union looking to get more jobs where it could, because of the financial difficulties faced by the USPO. The government understood that this type of thing, combined with accounting shifts, were the quid pro quo for limiting postal rate increases.

This is straight from the union's mouth to my ears, and unlike the PR comments you have cited, were certainly not chosen and shaped to convince me of anything in particular.

I can only believe that the sarcasm of your last post is also inherent in your second-last post.

off to the MF races!