Picked up some more FLR (Fluor) today. I can't imagine us staying this low for long and at worse I don't see it going much lower so it should be a fairly low-risk buy. Made a little money on short term gains earlier this year (after missing one other opportunity) in a similar situation with us. The ~-6% today has to be a knee-jerk to the rest of the economy as our overall outlook is looking very good. I'm thinking it will be back up about 10-15% from today's lows sometime this fall.

8/4/2011 1:16:39 PM

Wow this market drop is totally out of nowhere. It's almost as if people think the economic numbers will somehow influence stock prices

8/4/2011 1:51:02 PM

Monthly chart says a pause here and a retest of 12000 before heading to 11000.

8/4/2011 2:00:05 PM

this is getting ridiculous

8/4/2011 2:36:38 PM

i would have to agree. i bought in on Monday thinking that the debt deal would give us a nice little bump and then I could drop it towards the end of this week. Unfortunately, i've been had.

8/4/2011 3:20:07 PM

I'm in cash to a greater extent than I've been lately, but still...

Fuuuuuuuuuuuuuuuuuuiuuuuuuuuuuuuuuuuuuuuck.

8/4/2011 3:21:33 PM

^, ^^

Yep...

yep.

8/4/2011 3:26:24 PM

Somehow, I'm sure Goldman Sachs made a shitload of money today.

8/4/2011 3:28:18 PM

Come on now it's just getting fun, they are gonna settle em on the lows. All setting up for an extra shitty NFP #. Welcome to the new economy

8/4/2011 3:29:23 PM

thank goodness for trailing stops

8/4/2011 3:32:03 PM

We need QE3, damn it.

8/4/2011 3:34:21 PM

while i get the impression that you're being sarcastic, the reason why we entered a depression in the 30s is because there wasn't enough QE. It would do us good to see some more and doing so shouldn't cause any inflation either. win-win.

8/4/2011 3:37:45 PM

The reason we entered a depression in the 30s is because of the artificial boom in 20s. Awful policies (eerily similar to today) kept us in a depression until the late 30s.

Yes, we've heard it all before. We just didn't print enough. At some unknown point, if we just create enough money, aggregate demand will be covered and legitimate growth will start again. Unfortunately, no civilization in the history man has ever managed to reach this fabled point without triggering hyperinflation.

8/4/2011 3:40:40 PM

Yeah its a win for everyone except the people who buy stuff like food and gas

8/4/2011 3:40:58 PM

Get those grad school apps in now! The double dip hath arrived.

8/4/2011 3:43:40 PM

we entered a recession because of a boom and it turned into a depression because of the lack of QE. Monetary policy and fiscal policy are different. Fiscal policy did contribute to the length of the depression, I can give you that but monetary policy allowed us to enter it. I really don't see your comparison between then and now. Furthermore, QE merely provides a source of money when demand is needed and doesn't falsely stimulate demand the same way fiscal stimulus does.

Quote :

"Yeah its a win for everyone except the people who buy stuff like food and gas"

what do you mean by this? if the currency isn't worth less or if there isn't any inflation then how are those purchases affected?

8/4/2011 3:46:17 PM

You sound like you've been fed to much keynesian nonsense by a liberal professor.

Inflation is always a monetary phenomenon.

Arguing that printing money isn't inflation is wrong whether prices rise or not.

8/4/2011 3:54:29 PM

This thread reminds me of the Yahoo! finance comments section on a bad day...

8/4/2011 3:57:14 PM

WWWW gained about 20% today

probably the only stock that gained that much

8/4/2011 4:21:49 PM

Quote :

"while i get the impression that you're being sarcastic, the reason why we entered a depression in the 30s is because there wasn't enough QE. It would do us good to see some more and doing so shouldn't cause any inflation either. win-win."

Did you learn econ off the back of a cereal box or something? Or do you just watch CNBC all day? So it was just magical coincidence that QE2 sent commodities to record highs, among them wheat, which it turns out is rather useful because people like to eat. This in turn triggered riots all over the world, and played a large role in the Arab Spring uprisings.

Monetary policy is necessary when the economy is suffering from a liquidity crisis, unfortunately we are suffering from a solvency crisis. Consumers' debt burdens are still too high.

Quote :

"Yeah its a win for everyone except the people who buy stuff like food and gas"

Exactly.

If the Fed is determined to do something then I would prefer them to try some unorthodox measures, such as purchasing MBS instead (like they were doing in 09).

8/4/2011 4:41:29 PM

8/4/2011 4:52:30 PM

Quote :

"Inflation is always a monetary phenomenon. Arguing that printing money isn't inflation is wrong whether prices rise or not."

^2 & ^5

hardly keynesian, really just basic classical econ.

Inflation is a monetary phenomenon, yes. But you're mistaken if you think that quantitative easing automatically means inflation. If the FED does an open market purchase of securities it puts more money into the banks reserve system. This money in the reserve system only causes inflation if the money is released. Since the FED now has the ability to pay interest on the reserves this prevents the money supply from increasing. Inflation only occurs as a result of increase in the money supply.

Currently, the money multiplier is down. Since we operate on a fractional reserve system the money supply remains constant when there is a steady supply of loans and subsequent deposits. When banks hold more and distribute less the multiplier decreases and in order to equalize it there most be an increase in the monetary base. QE is increasing the monetary base at the moment and is not affecting our money supply. Therefore, since money supply is not increasing, we are not under inflationary pressure as a result of the QE.

I hope that I've help guide your understanding.

[Edited on August 4, 2011 at 5:32 PM. Reason : classical ]

8/4/2011 5:23:40 PM

Quote :

"Therefore, since money supply is not increasing, we are not under inflationary pressure as a result of the QE."

Ah yes. The money supply clearly isn't increasing. Silly me.

8/4/2011 5:44:20 PM

The graph misrepresents the situation. M1 includes what is held as reserves, if I am not mistaken. So while the reserves technically count as part of the money supply they are not released and therefore the [available] supply of money does not surpass the demand for money. When [available] supply of money surpasses demand that is when we reach inflation because you can either lower interest rates (can't any more) or increase prices to correct things back to equilibrium (inflation).

Clearly lower interest rates generate more money demand and raising prices (inflation) reduces the real money supply, all bringing us to equilibrium.

I do understand why my explanation earlier may have been unclear, though.

8/4/2011 6:09:44 PM

Quote :

"Somehow, I'm sure Goldman Sachs made a shitload of money today."

If you can't beat 'em, buy shares in 'em.


I'm fortunately about 85% cash in my IRA at the moment, as I moved it to another company and was waiting for a good opportunity to start buying back in with it. I did buy $5k worth of SSO (I think it was right at $51) the other day at the opening bell, trying to get in on a potential bounce due to the debt deal...but then it started falling before I could get out of it.


The bad part is that I'm pretty close to balls deep in the stock market in my "hookers 'n' blow" account (i.e., money that I'm not investing for the long hall...just money I haven't spent on cars, motorcycles, airplanes, travel, etc...yet) A good bit of that is in pretty conservative dividend players, but another good portion is in much more volatile stuff (including about $20k in SSO and another few thousand in the equivalent double-leveraged tracker for the DJIA).

8/4/2011 7:38:54 PM

Lol I'm a CFA candidate with an econ degree and this guy apparently has taken EC 205 and thinks he can explain things to me.

M3 has EXPLODED in the last few years to the point where they stopped publishing the data.

We've been lucky enough to export our inflation around the globe so we havent felt the full brunt yet.

But don't worry that's all coming to an end soon as the dollar loses its global reserve status and we return to the gold standard.

If you really want to pursue economic knowledge I'd suggest changing your course of study. You are headed down the path of government shills and educators. Their biased opinions cloud their grip on reality which is why they are always wrong and will continue to be.

8/4/2011 8:45:54 PM

Quote :

"while i get the impression that you're being sarcastic, the reason why we entered a depression in the 30s is because there wasn't enough QE."

Liberals/Keynesians say it is because the government stopped spending
Austrians/Libertarians say it is because government intervention
Group X/says it is because of group Y


If we can't even come to a damn agreement on the causes of something so important in our history as the Depression with a plethora of data on the subject...how about we err on the side of getting the government the fuck out of our lives and prosecuting fraud and let the creative destruction work?

I'm blown the fuck away by you stimulus needs to be bigger assholes when its pretty god damn clear the massive injections and support we've thrown at the current problem hasn't done a fucking thing.

8/4/2011 10:21:46 PM

Anyone do daily trading of leveraged ETFs? Thoughts on them?

8/4/2011 10:27:39 PM

Yeah, I've made many thousands of dollars doing that, primarily with SSO. I've both day traded it and sat on it for weeks or months, selling calls on it.

[Edited on August 4, 2011 at 10:56 PM. Reason : ]

8/4/2011 10:55:27 PM

According to the internet, you are not supposed to hold them for more than a day.

8/4/2011 10:58:58 PM

Quote :

"Liberals/Keynesians say it is because the government stopped spending"

Government spending is different than QE, which is FED spending. I only advocated one, not the other or both.

Also, which action is erring on caution is largely determined by which bias you hold.

8/4/2011 11:00:57 PM

^^ Because of the decay inherent to them. They are designed and intended for short-term trading--the intent is to provide double the daily movement of whatever index they are modeled on. They do NOT provide double the return over time.

That said, the decay isn't so severe that you're just screwed if you hold one overnight or even for a week...it's nothing like that. You shouldn't be doing LTBH-type investing with them, though.

8/4/2011 11:05:24 PM

Tomorrow's Plan, go and find a bottom, hope we stay above the 1150 area if not it's free fall time. It's liquidation type environment lots of levered money out there.

8/5/2011 1:53:25 AM

Quote :

"Government spending is different than QE, which is FED spending. I only advocated one, not the other or both."

They both (should) result in more dollars in the economy to help level off demand...in theory.

Quote :

"Also, which action is erring on caution is largely determined by which bias you hold. "

Oh absolutely. Those that, despite all evidence to the contrary, think a group of fucking idiots can determine policy to control an economy as large as ours with equitable outcomes for most/all and those that don't think it can be controlled.

[Edited on August 5, 2011 at 7:48 AM. Reason : .]

8/5/2011 7:47:43 AM

^ my sentiments exactly.

So who fails first, Europe or bank of America ?

8/5/2011 11:06:26 AM

face has been right recently, no doubt.

i will likely do some buying between S&P 1150 & 1180.

i've been calling for a September-October selloff/correction, but i guess it got here a bit faster. there still is a chance to hold or even close silghtly higher this month. my feeling is you can probably selll the rips through August, and then buy the dips in October.

biggest lesson learned in '08 which has saved my ass this time around: trailing stops

8/5/2011 12:44:49 PM

i don't use trailing stops because i'm working on long term assets. i really don't mind it going low because i have plenty of time to earn it all back.

8/5/2011 1:08:44 PM

lol

8/5/2011 1:09:36 PM

Why not just sell the stocks before they go down and buy them back when they are lower? You know that way you don't have to wait a decade to breakeven...

8/5/2011 1:25:21 PM

How do you know when to sell off? How do you know when to buy back in?

8/5/2011 3:40:52 PM

It's quite obvious. With no stimulus the market will crater.

With stimulus the market will crater less, breakeven, or go up depending on how badly the dollar is debased.

But there is almost no scenario where gold doesn't outperform equities as a whole in an inflationary, zero interest rate environment so why take the risk with stocks?

8/5/2011 4:11:52 PM

Because I can buy up stocks cheaply for when the market returns from an inflationary, zero interest rate environment.

8/5/2011 4:17:48 PM

Don't hold your breath, this is the terminal stage we are entering

8/5/2011 4:52:17 PM

Where are we gonna open up? Circuit breakers on the Dow are 1200 before 2 I think. The downgrade just means people will now have to sell bonds, having to get things done makes price get real volatile. There are margin calls everywhere, we are gonna see some forced selling. I think the news of Germany balking at bailing out Italy is the scary news. Do PM's get crushed if china can't save euro and the dollar is all that is left, or is their a third choice of a new currency? I know what china and Russia want.

8/6/2011 8:41:44 PM

Also why the fuck now, as far as the day after a 500 point plunge and the day of a 420 range day, couldn't be next week? Looks like they did a real shitty job of not leaking this. How do you get on that email list.

8/6/2011 8:48:16 PM

Market will be flat to marginally higher. Guys, this is already priced in. Haven't you ever heard the old adage "Buy on the rumor, sell on the news" Well the reverse is true for bad news. Don't think most traders were surprised by this, they knew it was coming, hence the 500 pt drop Thursday.

8/7/2011 10:32:45 AM

Wrong the s&p thing is whatever the end of the euro is not priced in, things are freezing up.

8/7/2011 12:35:54 PM

This is so frustrating because people are all going to sell because they think everyone else is going to sell. This is isn't THAT big of a real economic deal, this is 99% physchological. Yea it'll have implications but this is the same #@$%ing for profit company that rated sub prime mortgage backed securities AAA.

Honestly, I think Obama should come out on TV and chastise the CEO and the company, tell the world we are fine, that rates will not go up regardless of the S&P report and business as usual. One guy will take trillions of wealth from people, put his ass in guantanamo.

8/7/2011 5:53:32 PM

so buy instead?

8/7/2011 6:10:38 PM

Quote :

"This is so frustrating because people are all going to sell because they think everyone else is going to sell. This is isn't THAT big of a real economic deal, this is 99% physchological. Yea it'll have implications but this is the same #@$%ing for profit company that rated sub prime mortgage backed securities AAA. "

This is so silly. You always hear this from the cheerleaders: "if everyone just believes that the economy is fundamentally sound in the face of mounting evidence to the contrary, it'll be fine." The whole point is that creditors are start realizing that this is a fucked situation and they're getting scared. There's every reason to sell on Monday...it's not gonna be pretty.

8/7/2011 6:49:06 PM