Down goes the Dow

Once again, Igy plays the race card.

Erudite Bovine wrote:

Ghost of Igloi wrote:

"Speculators often prosper through ignorance; it is a cliché that in a roaring bull market knowledge is superfluous and experience is a handicap. But the typical experience of the speculator is one of temporary profit and ultimate loss."

Benjamin Graham

Given your oft displayed lack of intelligence, I'm going to assume that you don't see the irony in this post.

Oh the irony.

You seem to have issues. Perhaps an enema will help?

Wow. Just wow. Looks like someone had too much Chardonnay last night.

29,

lol talk about multiple forces, I remember in 1984 I thought I might solve the 3-body problem (n-body problem, more generally).

Yes, a big issue with economic or social prediction is that people are adaptable, both as individuals and as groups--in their behavior, attitudes, even morals. In my experience few economists are ever "right" about more than one thing, for more than a rather brief window of time, even "greats" like Friedman. Look at how Greenspan has been changing his tune.

To the immediate discussion, reasons for the current bull market--money moving in because return is favorable compared to fed-rate-suppressed gov't bonds, and "new" long-term money moving into index funds. Reasonable suggestions, for sure.

But I think they don't tell the whole story, and that there are other factors driving the equity markets, factors that I have talked about--algo's, international money, wealth preservation, and unfunded public liabilities. Yes everything is relative, but I don't see any of those changing any time soon. Unfunded public liabilities are always rising, and quickly. Wealth disparity, especially internationally, grew tremendously under Obama, and there is now a very, very large wealth preservation class who are secure. International capital flows have proved to have been very resilient in the face of efforts to curb them, and all indications are that their rate will increase over the coming year. Finally, it is incontrovertible that the use of algos and other automation shows no signs of abating, in fact quite the contrary.

The only real wrench is the fed rate, which has held very steady for a long time. Inflation, even by their own measure, is exceeding their target, suggesting a rate hike soon, but when and how much is anyone's guess--maybe a slight bump in March or April? We had a slight bump at the end of 2015, and the markets are now significantly higher without any significant increase in economic activity. 2 hikes in the past 10 years and 3 predicted for this year? The ones that are coming are already overdue, and in my mind, already somewhat priced into the market.

Yes TIPS are a well-worn wealth preservation device, but they come with a certain set of risks. Any wealth preserver hedging risk will want other vehicles with decoupled risk. On that point, look for EM equities to now take off, for that very reason--because there is more decoupling from US Treasury risks than there is for the US equity markets. As long as foreign jurisdictions make it relativity easy to invest, and maintain a rule of law sufficient to relatively fairly adjudicate disputes and have a modicum of political stability, they will feel the benefit. I have already bought some in anticipation of this effect.

Get your glasses out, article written by Satyajit Das.

...and posted on the blog of an inside trader.

Oh, that is relevant, posted on an accused but never prosecuted "inside trader"

....why is he in prison.....

I suppose he would be in prison for insider trading. Isn't that obvious?

But he is not in prison smart one. The article came from August of 2009, real recent.....brilliant as usual......

You're the one who said he's in prison. Make up your mind.

SP500 50 days without a 1% change at close

record gain streaks in certain sectors, including today

Combine all of that with Kashkari's recent statement to the effect that the Fed has not a double but an effectively triple mandate, the third being "financial stability", and what do you get?

DJIA 20,743 close.

We can debate all we want about market freedom, and the merits/demerits of social engineering, but the fact is that not only is the fix in, it has now been expressly articulated by one who would know, and one who actually votes to implement it.

Trump really IS the greatest threat to the markets, because he brings uncertainty--more to the point, he is unable to completely control the response of other critical global participants to his actions, which responses are uncertain. It's a good thing for him, and for us, that the US markets are right now the only game in town, and that everybody, and I mean everybody, is in.

The only thing left to consider now is an exit strategy. Usually I don't get in unless I already have it, but this time is different--yet another reason that I feel that, overall, this time really IS different.

It must be different this time since a President and two Federal Reserve Chairmen of the past were very wrong and awful on timing:

“No Congress of the United States ever assembled, on surveying the State of the Union, has met with a more pleasant prospect than that which appears at the present time.”

- Calvin Coolidge, December 4, 1928

“There can be little argument that the American economy as it stands at the beginning of a new century has never exhibited so remarkable a prosperity for at least the majority of Americans.”

- Alan Greenspan, January 30, 2000

“We believe the effect of the troubles in the subprime sector on the broader housing market will be limited and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”

- Ben Bernanke, May 17, 2007

🍒

F.P. = Fool Picking

Learn to read, idiot.