Luxury goods do not do well in economic depressions. Too many sellers not enough buyers.

And cars depreciate anyway.


What you should do is save money and wait for the crash. Then buy the porsche. Cash is king in a depression.

8/23/2011 9:40:40 PM

Quote :

"Well, let me clear this up for you. I was not able to predict the economic downturn in 2007 because I was using flawed assumptions and listening to people who didn't know what they were talking about."

I would argue that's what you're doing right now. It's a much safer bet to say you can't predict it and simply have a diversified portfolio that is ready for anything.

Quote :

"I was able to predict THIS downturn correctly because I am using correct assumptions and I am listening to people that know what they are talking about. In fact, by studying them so diligently I am slowly becoming someone who can say that I know what I am talking about."

That's probably about the same thing you would have said a few months ago when you had a completely different view.

Quote :

"He advocates foreign equities"

Yes, that's what he preached, foreign equities and avoidance of US debt. Unfortunately that turned out to be spectacularly wrong. People rushed to US debt and the downturn hurt everyone internationally. Your best bet would have been US debt, but he preached against it.

Quote :

"precious metals"

He says that now, never really before.

Quote :

"just as it spared no one in 2008"

It saved anyone who took that approach. Do you really need me to show you how a diversified portfolio would have played out in 2008?

Quote :

"How should they diversify this risk away?"

This is an extremely easy question and any number of financial sites on the web can show you how to hedge your investments and balance and diversify your portfolio.

Quote :

"What you should do is save money and wait for the crash."

But I thought the dollar was going to go to bunk and the only items for trade would be guns and bullets?

8/23/2011 10:14:33 PM

I have neither the time nor inclination to find where it was stated but looks like Bill Gross is "crying in his beer" over betting so heavily against us debt..

Also his professed reasoning had little to do with the quality of debt and more to do with a seemingly idealistic view of economic growth and the market..

[Edited on August 30, 2011 at 8:59 AM. Reason : Total return]

8/30/2011 8:56:50 AM

^ I wouldn't feel too bad for Gross, the PIMCO total return fund still has quite the record. You can't have all trades be winners. When SHTF people still run to treasuries, till they don't. Europe present dosent give money much choice.

8/30/2011 8:14:29 PM

^ treasury price have little to do with the quality of the debt but lack of other choices.

8/30/2011 8:16:00 PM

Quote :

"It's a much safer bet to say you can't predict it and simply have a diversified portfolio that is ready for anything."

If you know what's coming then you will not want to be in bonds and cash, that I can assure you.

Quote :

"Yes, that's what he preached, foreign equities and avoidance of US debt. Unfortunately that turned out to be spectacularly wrong."

No it did not. Emerging equities have actually done great over the past decade. Treasuries have done well so far, but that will not be the case over the next few years. If you follow him he was recommending buying the everliving shit out of foreign equities in late 2008 when they were down because it was an incredible buying opportunity.

Quote :

"He says that now, never really before."

Completely fallacious, he's been one of the strongest advocators of precious metals for the past ten years and particularly the last 3-4 years.

Quote :

"It saved anyone who took that approach. Do you really need me to show you how a diversified portfolio would have played out in 2008?"

Dude, I know modern portfolio theory and I know exactly how it did in 2008. It sucked a fat dick. Nearly every asset class went down in lockstep. The liquidity crisis took out gold, equities, bonds, commodities, etc.

Quote :

"This is an extremely easy question and any number of financial sites on the web can show you how to hedge your investments and balance and diversify your portfolio."

This just shows what a novice you are to financial markets. The correlation between assets was unbelievable in 2008. Modern portfolio theory did NOT work. You clearly work for a sell side firm and you've bought all the crappy literature they've thrown in your face. It's called sell side for a reason. When's the last time you saw McDonald's advertise a lukewarm burger or a mediocre Mcflurry.

Quote :

"But I thought the dollar was going to go to bunk and the only items for trade would be guns and bullets?"

It will. Are you not paying attention? You don't save in dollars you save in hard assets. Particularly ones that are accepted worldwide and are not too economically dependent.




As far as Bill Gross, he may have gotten the timing slightly wrong in this most recent flight to "quality" by the lemmings.

Remember, when Mt. Vesuvius erupted the citizens flocked to their underground shelters just as they had done in past events. This time, the shelters became their tomb. The US Treasury will be no different.

Safety is safe until... it isn't.

8/30/2011 10:24:16 PM

off topic but im curious, face and kris who do you work for? sorry if its in here somewhere.

8/30/2011 11:36:44 PM

at the moment working in corporate cash. Repos, money markets, treasuries, commercial paper, mbs, equities from m&a activity, etc

9/1/2011 9:15:49 PM

Wait I thought I was just a troll when I said Europe will be collapsing this year or next???

Quote :

" From Page 1 "Do you not see Europe going down?" - rally Not presently, no. - chance "

Where is your god of econ Kris, et al? Where is he now during their darkest days?

You can deny the collapse all you want. But it's coming baby. It's fucking coming!!!



[Edited on September 10, 2011 at 9:36 AM. Reason : PAIN PAIN PAIN PAIN PAIN]

9/10/2011 9:34:02 AM

Which will begin first? The European collapse or the Chinese implosion?

It's really hard to tell, but it is shaping up to be quite the race.

Embrace the recession. Fighting it will only harm you further. Be safe, focus on what you can control, and find internal peace.

9/21/2011 7:51:18 PM

Post

10/27/2011 12:26:53 PM

omfg

dow twelve thou

10/27/2011 4:06:33 PM

aww man, back down below again

10/31/2011 5:04:49 PM

post

11/3/2011 1:19:58 PM

The Dows all



and I'm all


[Edited on March 5, 2013 at 12:56 PM. Reason : .]

3/5/2013 12:53:40 PM

Thanks Obama

3/5/2013 2:09:26 PM

My response is twofold:

If you are a Republican: "Hats off to Lord Obama!"
All others: "Cool fact, the bottom 50% of American's own 0.5% of stocks, bonds, and mutual funds. Meanwhile the top 1% own 50% of stocks, bonds, and mutual funds."

3/5/2013 2:58:13 PM

Is the market brimming with confidence, spurred on by the impressive fundamentals of American Megacorps?



or have the big players finally got a handle on the post-recession playing field, and put their trading algorithms into hyperdrive?

3/5/2013 4:34:57 PM

dat b da biggest gif i eva seen

3/5/2013 5:58:26 PM

Quote :

"off topic but im curious, face and kris who do you work for? sorry if its in here somewhere."

Can't say specifically because what I say doesn't reflect blah blah blah, but it's one of the largest brokerage firms in the US.

Quote :

"You can deny the collapse all you want. But it's coming baby. It's fucking coming!!!"

Says someone two years ago.

3/5/2013 8:52:31 PM

And im correct

3/9/2013 8:51:00 PM

I am really thinking of switching professions. I would just kill it in a number crunching job.

carry on

3/10/2013 12:36:03 AM

Ugly ass jobs report this morning. I'm thinking we've finally seen the hit from the payroll tax hike. Retail numbers were especially awful, both sales figures in Feb. and March and the jobs report today, we actually lost retail sector jobs for the first time this year (24k down). Labor participation rate is at it's lowest rate since 1979.

Don't worry though, "unemployment" is at 7.6%. I really hate that number, it really doesn't do much to tell the story of what actual employment statistics look like.

On a positive note though, there were significant upward revisions to both January and February numbers so as bad as March looks, it's not as bad a report as it could have been.

[Edited on April 5, 2013 at 9:37 AM. Reason : sdfsdf]

4/5/2013 9:33:12 AM

Quote :

"Don't worry though, "unemployment" is at 7.6%. I really hate that number, it really doesn't do much to tell the story of what actual employment statistics look like."

Then cite the U6.

The 7.6% number is still useful as a relative measure since its calculated the same way as always. I've seen this argued over and over from the right for some reason, implying that somehow Obama is being disingenuous.

4/5/2013 10:07:48 AM

It has nothing to do with Obama, it's just not a very good statistic. It's like FT defense, sure it's measurable and presented in a consistent fashion, but it doesn't really carry much value.

I guess the problem I have with it is that it's constantly trotted out as an indicator of how healthy the economy is when it really isn't a very good indicator for that let alone for actual unemployment.

4/5/2013 10:10:38 AM

Like I said it has its value as a relative indicator.

And while the headline may only show the bottom line number every article about it clearly outlines the reason it goes up or down and how positive or negative it actually is.

I get your point but the only ones who cite the pure number as good or bad are probably ideological hacks.

4/5/2013 10:13:25 AM

I personally think the bigger story here is the labor force participation rate. That's a big driver of the unemployment rate drop. We're losing workers to age pretty rapidly now in addition to discouragement and it takes fewer jobs created to hold unemployment rates steady.

If the participation rate is dropping because people choose not to work because they don't need to, that's good, but it doesn't look like that's the case here.

4/5/2013 10:23:00 AM

THE UNEMPLOYMENT MEASURE THE GOVERNMENT DOESNT WANT YOU TO KNOW ABOUT (source:bls.gov)

4/5/2013 11:32:39 AM

what is interesting is this is the 4th year we've suffered from a "spring swoon." It came later in the preceding years (usually April - May) but still kinda an interesting pattern if it holds true.

http://www.plantservices.com/industrynews/2012/NACM-CMI-report-may-2012.html

Quote :

"n 2010, this was provoked by a premature recovery that made the first quarter look stronger than it really was, and the 2011 culprits seemed to be the supply chain disruption from the earthquake in Japan, as well as the Arab Spring’s impact on oil prices. What seems to be the problem in 2012? One explanation holds that the European crisis has become this year’s “black swan” as it has affected everything from banks to exports. A second opinion contends there is nothing really wrong with the economic recovery, but that industry is just taking a breather. A third holds that the consumer is hibernating again as they react to everything from high jobless numbers to inflation."

4/5/2013 1:42:29 PM

The sequester fux0red consumer confidence which hurts retail and energy prices are still stubbornly high in spite of the natural gas revolution that is occurring in this country. High energy prices cause crippling damage to the entire world economy. Right now they're somewhere in between moderate and high and it's causing the slowdown.

4/5/2013 5:05:57 PM

the biggest problem with the unemployment rate is that it doesn't measure underemployment / part time workers as unemployed at all.

U-6 is a good statistic as is participation rate. Unemployment rate is okay when used in conjuction with avg workweek hours and personal income

4/8/2013 12:36:01 AM

Strong earnings numbers from JP Morgan and Wells Fargo. Both beat estimates, but some weakness shown on net revenue numbers, loans, and other factors.

Should be an interesting day.

[Edited on April 12, 2013 at 8:17 AM. Reason : sdfsfd]

4/12/2013 8:09:35 AM

The jp morgan earnings were pretty bad actually.

Missed revenues huge. Declining YOY numbers in their main business channels. And post crash low NIM .

It was all loan loss reserve writeoffs but those arent sustainable nor definitively legitimate. Some weird VAR reporting again too.

Traditional banking model is breaking down and investment bank model is cracking too.

4/12/2013 8:22:40 PM

Well, the earnings themselves were very good, but the underlying stuff behind it is somewhat worrisome, yes. Net revenue being down is never good, but I can't say that's any worse than seeing retailers with same store sales being down but better earnings because of cost cuts, better worker efficiency, etc.

I'm not expecting a to see a lot of places with great numbers vs. LY this quarter, but I don't know that we'll see a lot of earnings misses just because so many places have continued to get more efficient and have done a really nice job with cost cutting measures.

4/14/2013 9:42:10 AM

It is definitely worse.

Efficiency gains can be sustainable. Loan loss reserves are not and we can certainly question the quality of their earnings and reporting.

[Edited on April 14, 2013 at 11:31 PM. Reason : a]

4/14/2013 11:31:02 PM

Gold is taking an epic beating as are a lot of commodities. If you're a believer in an impending stock market collapse or that the dollar is going to tank there's almost never been a better time to get into gold.

4/15/2013 11:52:17 AM

Gold is collapsing...


Time to buy gold.

4/15/2013 2:39:28 PM

Give it another 100-300 points, if you're really interested, but honestly it's not a terrible time to buy now.

I think precious metals are kind of a stupid investment vehicle honestly, but there's always money to be made somewhere.

4/15/2013 2:42:26 PM

Bought $7k myself today.

Probably buy another $5k if its still this low next payday

4/15/2013 6:13:15 PM

Anyone that's long physical isn't panicking today, they're trying to figure out how much gold and silver bullion they can afford to buy.

4/15/2013 6:38:47 PM

People who are long will buy on dips? Jesus dude, how do you figure this stuff out?

4/15/2013 6:47:42 PM

Years upon years of technical analysis, of course.

4/15/2013 7:06:44 PM

Quote :

"What you should do is save money and wait for the crash. Then buy the porsche. Cash is king in a depression."

True statement. I absolutely robbed some sellers of motorcycles, sports cars, and a jet ski back around '08-'10.

[Edited on April 15, 2013 at 8:40 PM. Reason : ]

4/15/2013 8:39:47 PM

Hyperinflation is just around the corner!!!!1

Hey, remember when Peter Schiff predicted that the price of an ounce of gold would eclipse the Dow? Oh, what a jokester, that Schiff!

4/15/2013 9:02:23 PM

Quote :

"Hey, remember when Peter Schiff predicted that the price of an ounce of gold would eclipse the Dow? Oh, what a jokester, that Schiff!"

Which time? When he predicted the dollar would crash in 2010, 2011, 2012 or 2013? Has he predicted for the dollar to crash in 2014 yet or does he have to wait for gold to be +.01 for a day?

4/16/2013 12:49:31 AM

so how bout that recent twitter flash crash fiasco? Our current system of electronic trading is so mind-boggling shitty. This is at least the second instance of algorithms creating huge drops in the market for no legitimate reason.
Its being investigated to make sure all the trading during that period was just honest mistakes, or computers doing there thing and no one was hacking twitters and profiting from it (not that the SEC is capable or willing to do anything even if they did find something)
http://bits.blogs.nytimes.com/2013/04/24/investigations-expand-in-hacking-of-a-p-twitter-feed/

4/26/2013 10:23:22 AM

It's like a fucking roulette wheel and the banks are the casino. Lets deregulate.

4/26/2013 3:13:30 PM

Wall Street Journal apparently reporting they have evidence of front-running (or at least a form of front-running) at the Chicago Mercantile Exchange by Big-time High Frequency Traders. From K. Drum:

Quote :

"I've read enough about high-speed trading that I can't even get too worked up about this. The rich get richer, regular traders pay the price, etc. etc. What really makes this story worthwhile is hearing the high-speed traders try to justify what they do: Officials with Virtu Financial LLC, a high-speed trading firm in New York, view a slight head start as good for the overall market, according to a person familiar with their thinking. The person said the data helps traders who buy and sell futures contracts throughout the day manage risk and post more quotes that benefit other buyers and sellers. The person said Virtu doesn't use the information to amplify its profits by anticipating moves elsewhere in the market. Proponents say eliminating the ability of parties in a trade to get information slightly in advance could lead to less-liquid markets because some firms would be inclined to trade less due to the greater risks. Yep, you read this right. Giving a few select traders an unfair advantage over everyone else is actually good for everyone else! Why? Because if these lucky traders didn't have an unfair advantage they wouldn't make lots of extra sure-thing trades, and these sure-thing trades benefit the entire market because..... Um, liquidity! It's the last refuge of the scoundrel and the first refuge of the high-speed trader. They create liquidity, baby, and without that, the entire commodities market, which is famously liquid and always has been, might just seize up and die. Seriously. That's their story. I don't even have the energy to mock this lame nonsense right now. Maybe Felix Salmon will do in the morning. In the meantime, I'll just leave you with a further fascinating little nugget. It turns out that the time advantage for high-speed traders is different for different commodities: 2.4 milliseconds for silver futures, 4.1 milliseconds in soybean futures and 1.1 milliseconds for gold futures."

http://www.motherjones.com/kevin-drum/2013/04/high-speed-trading-fairy-tales-come-chicago


Can we go ahead and kill this economic meme now? "Guyzz, if we aren't allowed to cheat then the market won't be liquid enough, we're doing you a favor by cheating, guyzz"

5/1/2013 8:57:30 AM

OMFG DOW 15,000

5/3/2013 10:42:54 AM

That's pretty nice, but I'm even more pumped about the 1600+ S&P.

5/3/2013 6:53:48 PM