Down goes the Dow

Yep, markets up again nicely today.

Hey Racket I bought the Tesla options, already looking good.

Ridiculous times?

Maserati wrote:

Yep, markets up again nicely today.

Hey Racket I bought the Tesla options, already looking good.

Ridiculous times?

“I was thinking of calling today’s note “Dawn of the Fed” because the Fed is 100% responsible for the zombie market which has kept rates extremely low and pushing money into risky assets. The sudden U-turn from last year by the Fed is rather unprecedented and in so many ways the continued massive amount of money now being thrown out by the Fed since September with Repo and “not QE” should be of more concern to the markets since it is similar to when the Fed added stimulus ahead of the “Y2K” worry. What happened after that stimulus was taken away? The bubble burst.

Companies that are not profitable that continue to tap the credit markets are zombie companies. Think Tesla. Many people think of it as a start-up (it’s 16 years old and has never had a full-year profit) or perhaps it’s a cult of a small group of fund managers who believe in a mission? They now have a market cap of $73 billion vs Ford at $37 billion and GM at $53 billion. Tesla will sell 350,000 cars in 2019 (don’t forget Elon Musk tweeting they would sell 500k which was retracted). Ford and GM will sell over 5.5 million cars. I’m short Tesla and after having a run of 12/16 profitable trades in the past few years with an average gain of 15%, I am underwater with the stock lifting like an internet stock in 1999 with the backdrop of more people leaving the company and a mysterious $1 billion in accounts receivables each of the last 4 quarters (no other car companies have AR’s like this). I am not covering my short since my size remains inline with a small percentage of my portfolio. I am adding a new put idea buy the Feb 360-300 put spread for $11.10 and sell the Feb 480 (20% up) call for $9.30 for a total cost of $ 2.00. If this is under 300 at expiration the total gain is 30x. If this rises above 480 you have unlimited risk. Keep in mind Tesla stock makes no sense so keep your size reasonable if you do this trade. It may not work.”

—Thomas Thornton, Hedge Fund Telemetry

ten years of economic expansion, wildly profitable companies, stock valuations barely over their 25 year averages, incomes rising steadily, very low inflation, very low interest rates around the globe, no wars, and "the Fed is 100% responsible for the zombie market."

^Here we go:

1. 25 year average stock valuations include two over -50% market drops

2. incomes of most Americans stagnant and have to borrow to maintain standard of living

3. inflation of stocks, bonds, residential real estate, commercial real estate

4. wars continue in Ukraine, Libya, Syria, Yemen, and Central Africa; the United States is involved in all of them

5. Fed is the enabler of a do nothing Congress and poor Executive Branch policies

Ghost of Igloi wrote:

^Here we go:

1. 25 year average stock valuations include two over -50% market drops

2. incomes of most Americans stagnant and have to borrow to maintain standard of living

3. inflation of stocks, bonds, residential real estate, commercial real estate

4. wars continue in Ukraine, Libya, Syria, Yemen, and Central Africa; the United States is involved in all of them

5. Fed is the enabler of a do nothing Congress and poor Executive Branch policies

1. True enough, but during the first, valuations were far higher than now, and in the second there was a clear housing bubble.

2. False that incomes of most Americans are stagnant. Yes, they borrow a carpload of money top maintain a higher standard of living. As they have for several generations.

3. Uh, well yes, asset prices are up. As they should be, given a rising population and a growing economy.

4. Tiny, tiny, tiny wars. Immaterial to the world economy.

5. Inflation is very low and shows no signs of rising. What is the fed supposed to do? Raise rates to slow the economy and drive us into deflation? Is that what you want? Why?

Ghost of Igloi wrote:

2. incomes of most Americans stagnant and have to borrow to maintain standard of living

Oh, the irony!

Irony Mann wrote:

Ghost of Igloi wrote:

2. incomes of most Americans stagnant and have to borrow to maintain standard of living

Oh, the irony!

^so says the sub-prime and pay day loan borrower, but hey he bought UBER at $33.00

Ghost of Igloi wrote:

Irony Mann wrote:

Oh, the irony!

^so says the sub-prime and pay day loan borrower, but hey he bought UBER at $33.00

Not me. Try your lies elsewhere.

Irony Mann wrote:

Ghost of Igloi wrote:

^so says the sub-prime and pay day loan borrower, but hey he bought UBER at $33.00

Not me. Try your lies elsewhere.

So sorry. Did Igy make you mad? Ask Mommy for some warm milk.

Just wanted to mention that today the Dow went UP again, and now with the USMCA in the bag it's gonna keep going up for a while. Mods please fix the title.

Over time, the Dow tends to go up. It's an up-going thing, mostly.

Bad Wigins wrote:

Just wanted to mention that today the Dow went UP again, and now with the USMCA in the bag it's gonna keep going up for a while. Mods please fix the title.

Over time, the Dow tends to go up. It's an up-going thing, mostly.

agip,

An an addendum to the above article is the question if everything is so rosy as you say, why do we have a homeless explosion in some of our biggest cities?

Igy

Ghost of Igloi wrote:

Irony Mann wrote:

Not me. Try your lies elsewhere.

So sorry. Did Igy make you mad? Ask Mommy for some warm milk.

Not mad. I rather enjoy pushing your buttons.

OK, and me as well.

Mommy is calling, the milk has been warmed.

Ghost of Igloi wrote:

OK, and me as well.

Mommy is calling, the milk has been warmed.

Enjoy your milk. Don’t forget to kiss Mommy.

You ran out of original material years ago.

The idiot wrote:

Ghost of Igloi wrote:You got it.

Cool, it's a bet! I'll come looking to collect this time next year. :-)

One month further along, the index continues upward, making the chances of seeing 1500 by end November next year just that much more minuscule.