Down goes the Dow

Maserati = Mohamed El-Erian ???????!!!!!!!!???????!!!!!!!!

http://www.bloomberg.com/news/articles/2015-04-06/the-simple-reason-mohamed-el-erian-has-most-of-his-money-in-cash

WTF ???!!!???!!!

[quote]agip wrote:

[let's say Iran nukes tel aviv and saudi -

Let's sat pigs flew out of your butt -- a more likely scenario than the one you lay out

No, I am not El-Erian, and yes, I do occasionally look at this thread.

You can hardly blame him for parroting many of my views--however, I part ways with him when it comes to his stated approval and apparent adoration of Barack Obama.

Agip's stupid wrote:

[quote]agip wrote:

[let's say Iran nukes tel aviv and saudi -

Let's sat pigs flew out of your butt -- a more likely scenario than the one you lay out

fair enough.

But you see the point - the government cannot hold markets up when markets want to go down. We've seen that again and again - I have no idea why you think it is rational to believe that the government can hold up a crashing market.

Pushing up a down and out market is a little easier because it is a longer, slower thing - gov't wouldn't be fighting against sheer terror of millions of people.

Maybe you don't remember 2008-9? 50% fall in the market? remember that?

It's not 2008 anymore, son.

Wake up and smell the coffee, things have changed.

Trading can be stopped or curtailed, money can be made cheaper, intervention can be done directly via buying, and indirectly by offering inducements for others to buy.

This all has happened, and is happening. Absolutely they can stop the market from going down "if it wants to", as though it were some completely autonomous entity, which it is not. We, who are able to discern it, have seen the interventions again and again. I have every idea why you think it is irrational to believe that the government can hold up a crashing market: because you are innocent if we are being polite, and ignorant if we are being strictly factual.

Crashes can be forestalled or prevented by a quick analysis of their earliest development, or of the development of crash precursors. This is now possible, as are quick and to some, subtle, early-stage interventions. There is a cascade of mechanisms in both magnitude, speed of effect, and collateral complication, which has only very rarely proceeded to even medium, let alone advanced, stages in some terms, but operates regularly on short- and medium-timeframes. Among various reasons for this, one is that they are still being researched and adjusted.

I tell you this FYI to get you thinking about things.

your vagueness is telling - you can make all the stuff up you want to make up, but it doesn't make it real.

Awesome. Thanks for the laughs.

Actually from a historical perspective high yield bonds fall in advance of the stock market. Think of it this way, weak companies are kept afloat thru borrowing, once the funding ability is cut-off, the company files for bankruptcy protection. Once the business cycle turns high yield bonds foretell the coming crisis. Be careful my friend.

Ghost of Igloi wrote:

Actually from a historical perspective high yield bonds fall in advance of the stock market. Think of it this way, weak companies are kept afloat thru borrowing, once the funding ability is cut-off, the company files for bankruptcy protection. Once the business cycle turns high yield bonds foretell the coming crisis. Be careful my friend.

Interesting. So, one could theoretically time the stock market by looking at the high yield bond market.

Do you have any proof of your claim so that I might follow this strategy with confidence?

Agip's stupid wrote:

[quote]agip wrote:

[let's say Iran nukes tel aviv and saudi -

Let's sat pigs flew out of your butt -- a more likely scenario than the one you lay out

Hi, K5! Welcome back. How much do you figure you lost by bailing before the big run up?

I do recall the stress in automobile bonds and private mortgage leders well in advance of the Great Recession. New Century Financial, GM, Ford, Delphi Automotive, Residential Capital bonds declined well in advance of the Crisis. There actually is information, what you would want to do is look at the credit spread between high yield and say the ten year Treasury. That is, when there is more yield seeking speculation the differential between high yield and the ten year Treasury is narrow. As investors seek more safety and less risk the differential between high quality and low quality bonds widdens. Also, one would also want to look at rising default rates relative to past data sets. If you Google 2014 Annual Report Office of Financial Reasearch (Department of Treasury) you will find some information on the topic. There is also website, whose title escapes me, that provides current data on high yield offerings an information. Rest assured the data is out there. It is next impossible to time these things, why? Well when things collapse the market for buyers collapse, and sellers keep waiting for a better time to liquidate. At that point the opportunity is lost.

Seems like if there is something more than minutes between the growing gap in interest rates between high quality and low quality bonds and a big drop in the stock market (I am assuming from your posts that you are talking about at least days if not weeks or months in the lag) then one could easily benefit from this knowledge. Until the stock market does indeed collapse there are plenty of willing buyers - pretty much by definition.

Agip wrote:

Maybe you don't remember 2008-9? 50% fall in the market? remember that?

Ah, but that wasn't government pushing up a falling market, that was government policies pushing DOWN a falling market. Much easier to do when momentum is at your back. You had:

(1) An obsessed anti-regulation nut named Phil Gramm and his wife who happened to chair the CFTC absolutely determined to have NO regulations at all about over-the-counter derivatives.

(2) Financial institutions betting the ranch on "scientific" risk management tools that had never been battle tested, which Buffett warned about in his 2003 Statement to Shareholders.

(3) Companies trading swaps with no money down, in effect placing bets on the survival of their competitors.

(4) Those same companies then selling their competitors' stock short.

(5) More unregulated derivative exposure than there was money in the entire world to cover it.

That's how Merrill-Lynch became a no longer independent company and GM came into Government receivership.

Remember? Now, of course, if you were short in 2008.....

Also, Bernanke using "Jedi Mind Tricks" (carefully chosen phrases in some of his statements, which he admitted to later) to convince investors "you don't want to sell stocks, you want to buy buy buy" has been somewhat successful.

It is impossible to put a time on a peak in the market. I would view it as more of a process where the the low point may be two years from now and we are living in the peak period. The market can certainly hit several new highs before rolling over.

No it's not, it just depends on how long a time one wishes to ascribe to a "peak".

I have done it well, but the smallest timeframe I have gotten it down to over 30 years of trying is 2 years--that is, I have predicted the major 2-year-long up periods (actually about 1.7 yrs long), within which a lasting all-time peak has been generated.

The key is not "putting a time on a peak", the key is figuring out what to do while you are waiting to get back in.

Ghost of Igloi wrote:

Actually from a historical perspective high yield bonds fall in advance of the stock market. Think of it this way, weak companies are kept afloat thru borrowing, once the funding ability is cut-off, the company files for bankruptcy protection. Once the business cycle turns high yield bonds foretell the coming crisis. Be careful my friend.

I see what you are saying. I'd have to see some quant research to believe it though.

My investment case for high yield bonds now is this:

I see big cap stocks having a rough next few quarters, with the dollar soaring, Europe weak and the US softening. Earnings 1Q15 will actually be down over 1Q14. I don't think people are focusing on this. Plus there is a kitchen sink opportunity - for companies to throw in a bunch of earnings problems and blame them on the dollar or the weather. So this earnings season could drive the market down a bit, I think.

but will a fall in earnings at big caps be relevant to high yield bonds? Well sure, but not a whole lot. I'm not seeing a serious weakening in the real economy that would drive up defaults. So I'm happy to get 5% in interest and not expect to make anything in capital gains.

Ghost of iolgi wrote:

No it's not, it just depends on how long a time one wishes to ascribe to a "peak".

I have done it well, but the smallest timeframe I have gotten it down to over 30 years of trying is 2 years--that is, I have predicted the major 2-year-long up periods (actually about 1.7 yrs long), within which a lasting all-time peak has been generated.

The key is not "putting a time on a peak", the key is figuring out what to do while you are waiting to get back in.

I wonder if you realize that you are considered the biggest douche bag on these boards, with your endless handle imitating and handle stealing.

Maybe, but I'm not some stupid ignorant wank like many of you, with your heads far up your AS5ES.