Dow continues to climb; housing recovery is real

Hey chief, remember the part about how I said this deleveraging episode would take 7-10 years to play out? Why do you think the Fed is doing what it's doing on such an unorthodox and unprecedented scale? Do you think the Fed thinks things have been so peachy that they can just "get out?" Quite the opposite.

I really didn't think the Fed would go to such lengths, which is why I haven't been bullish the general market at all times (I have been this year and pretty much after Peeps nailed it when he talked about the unleashing of global central bank profligacy, as well as after the initial Golden cross), but you must ask yourself, just why are they going to such lengths? If organic, real growth has sprouted ("greenshoots" were what, like three years ago?), what is the problem exactly?

The US equity market is benefiting from a flight out of the Eurozone as it unravels, and the yen, which is bullish for the dollar, as well as the Fed forcing everyone into risky assets, and it's entirely possible that this can continue, even as the market is looking frothy). The same thing happened during the Great Depression, when equities shot up 300+%. If organic growth was so much stronger, the bond market would be reflecting it. Moreover, austerity is not the cause of anything as has been proposed here. It is the symptom. Remember that.

Over the longer haul, I tend to side with agip. We could really prime the pump if we would go after our natural resources and not just on private land.

The Obama administration's economic policy was completely contrary to the failing policies in Europe.

agip wrote:

holy crapola this is a massive rally - SP 500 up 25% since october. Can you believe that? 25% in 7 months.

My strategy is to hold until indices fall below their 200 day moving average. That way I don't have to be a brilliant macro economist - I just have to execute on a simple strategy.

But, cap gun to my head, I'm with FP - technology and cheap natural gas and low interest rates should fuel a burst of economic activity.

For rich people anyway - high school dropouts in the uS without a serious skill will live barely better than their third world brethren.

So finish school, kids.

Kids today should either finish school OR just learn to program...if you like math and computers, programming right now is just getting bigger and bigger...they can hardly find enough people to fill the jobs. A 4-year degree is no longer necessary for good-paying programming jobs. Prove you can do it, and get hired.

Sagarin wrote:

We could really prime the pump if we would go after our natural resources and not just on private land.

Producible well bores on federal land have increased each of the past three years and are now at their highest level ever.

Flagpole wrote:

Kids today should either finish school OR just learn to program...if you like math and computers, programming right now is just getting bigger and bigger...they can hardly find enough people to fill the jobs. A 4-year degree is no longer necessary for good-paying programming jobs. Prove you can do it, and get hired.

Kids today should go wherever their hearts and their individual talents lead them.

That's always the best route.

Why'd you change the subject?

Were things just too positive?

I didn't change the subject. I responded to coach D and agreed with him in part. It was too much to handle for some people apparently. I also agreed with agip, in case you didn't notice.

Sagarin wrote:

http://www.realclearenergy.org/articles/2013/05/16/north_dakota_proves_obama_doesnt_get_energy_107020.html

The Peaceful Atom wrote:

The deficit is also falling quickly.

Does Obama get credit for any of this?

How about TARP and ARRA now guys?

Not a peep about this joyous news from the Republicans.

Just squealing about scandals, and about anything that distracts Americans from the fact the recovery is very real, and Obama was right all along.

Flagpole wrote:

Dow today as of NOW is up 86 to 15,422.23.

Housing recovery is real -

http://buzz.money.cnn.com/2013/05/21/housing-recovery/?iid=HP_LN

Here's hoping you have money in the market.

Cheers!

You are truly living in a fantasy. In the end the markets rule the day over all manipulation of money, markets and official reports. People only believe recent history or the fact that they can't see something happening tomorrow as proof that long term forecasters and economic historians. Short termers will be right, until they are wrong and vice versa.

Randy Oldman wrote:

The Obama administration's economic policy was completely contrary to the failing policies in Europe.

this is misleading - the federal government is just part of the question. While the feds were spending mucho dinero, the states were cutting back like mad. And that cutting back like mad is what has caused the high jobless rate.

So the US 'united states' structure succeeded - the flexible structure of semi autonomous states + a federal gov't is a pretty good one.

ignorance is bliss wrote:

You are truly living in a fantasy. In the end the markets rule the day over all manipulation of money, markets and official reports. People only believe recent history or the fact that they can't see something happening tomorrow as proof that long term forecasters and economic historians. Short termers will be right, until they are wrong and vice versa.

Umm...what?

Market dropping today. Probably a mini bubble

Here's an interesting read on the situation from a former peer:

http://contrarianedge.com/2013/05/29/are-we-there-yet/

depends on what you mean by real. there really is a recovery but the fundamentals lag behind the improvements in sales and prices and foreclosures. My retirement fund, one of the big funds, mostly in stocks, some in real estate, is doing well now but over the last five years it had increased a grand total of 0.64%. That is not atypical.

Bubble!

this bond market is killing me Sagarin - getting skinned alive. Is it the end of the bond bull market or just a temporary dip? Dunno.

read most of the article -

he uses a couple of the false assumptions that frustrate me.

We are not in a sideways market for most stocks. We are in a sideways market for large cap US, Euro and Japanese stocks. Virtually every other kind of stock has hit new highs many times. I think it is data mining and unfair to judge the whole stock market by just one class of stock, measuring from the to of a bubble.

Although I understand that 70% of the market cap of the US in big caps.

Interesting part about normalizing the 2008 earnings catastrophe. Not sure what to think about it. Siegel normalizes at a 25% profit fall, not 50%.

I recently heard that changes in accounting over the century make earnings much harder to come by -so stocks are in essence cheaper than they look by comparing PEs from 1920 to 2013.

back to 2008 - so when 2008 rolls out of the 10 yr average are stocks going to suddenly get massively cheap? no - they will be the same as the day before 2008 rolls out. that metric just doesn't work right now.

Maybe a 10 year price to sales would be interesting.

but he makes good points on margins and QE infinity - those may not resolve themselves well.

agip wrote:

this bond market is killing me Sagarin - getting skinned alive. Is it the end of the bond bull market or just a temporary dip? Dunno.

Bonds have been bad to me this year too. I am actually below what the Dow has returned, and that is not something that has happened to be in a calendar year ever since I began investing in 1989. I was considering upping my bond percentage as I get closer to retirement, but I might just keep it where it is at 13%. Maybe I'll just make sure to have 2 years of expenses in cash when I retire to help get through a bad stock market time.

There is a very real bond bubble right now. Yields are so low, then can only go up. When they do, bond prices will fall. The only question is when.