Financial topics

[Higgenbotham]

Trading is my sole source of income.

Higgie,
As I said recently "you are a trader" The fact that you qualified as an engineer is not relevant.

Good engineers contribute more to the world and are more valuable to the world than good traders, but have not been paid accordingly in recent years. I can assure you that I am a better engineer than a trader. It's more a "We were still primarily Third Turning from 2002 to the present" type of comment. Values out of whack. When the Silents were in charge I much preferred engineering.

When the Fourth Turning hits full bore, the speculators are going to get clobbered from all angles. Most will lose money speculating, one way or the other, even those who have been successful to date. Many may find their accounts are frozen and they can't get their money out. FInally, the casino will get shut down. I do believe John is right that Maximum Ruin will operate. The only bull market will be in common sense. People who are productive will be valued once again.

[jdcpapa]

People who are productive will be valued once again.

I agree 100%.

[Higgenbotham]

People who are productive will be valued once again.

I agree 100%.

Funny we discussed this today as this New York Times article demonstrates there is a recognition that the US needs to get productive again. I linked to the page that discusses some of these themes most, which is in the middle of the article.

http://www.nytimes.com/2011/08/28/magaz ... gewanted=4

[richard5za]

People who are productive will be valued once again.

Yes, like jdcpapa, I also agree 100%

[Higgenbotham]

Back to trading.

A couple weeks ago, I posted a stock market correlation to the 1929 crash which would have brought in an initial low on September 1. I decided to wait and try to scale in short around that date instead. So far I only have 15% of a usual short position on. So one risk is the possibility that the market has topped and will never get back to yesterday's level. If that has happened, I can either ride a small position and forget about it, or look to add shorts on future bounces from lower levels (risky). If the market has indeed topped out, I will plan to take the first option unless an opportunity presents itself that seems too good to pass up.

Regarding silver, I did some scalping today and am out. Silver has been in a comparatively tight range the past couple days. It seems to me that it is ready to find a direction either up or down. The players seem optimistic the resolution will be up. I don't have an opinion as to whether this is correct of not. My tactic was to place a sell stop this afternoon at a strategic point below the lows of the past 2 trading sessions.

[jdcpapa]

Back to trading.

A couple weeks ago, I posted a stock market correlation to the 1929 crash which would have brought in an initial low on September 1. I decided to wait and try to scale in short around that date instead. So far I only have 15% of a usual short position on. So one risk is the possibility that the market has topped and will never get back to yesterday's level. If that has happened, I can either ride a small position and forget about it, or look to add shorts on future bounces from lower levels (risky). If the market has indeed topped out, I will plan to take the first option unless an opportunity presents itself that seems too good to pass up.

Regarding silver, I did some scalping today and am out. Silver has been in a comparatively tight range the past couple days. It seems to me that it is ready to find a direction either up or down. The players seem optimistic the resolution will be up. I don't have an opinion as to whether this is correct of not. My tactic was to place a sell stop this afternoon at a strategic point below the lows of the past 2 trading sessions.

I hope you make lots of money. I must admit I am intrigued. I traded a bit but not with your advanced leverage. It is rather interesting that you retreat into extreme risk tolerances. Your life would have changed had you invested your savings into gold? (just playin) I would say I decided to "get a life" but then I must admit I enjoy the rush of the alternative! (not) Regards,

[OLD1953]

Actual production of a physical article is not a popular business model in the USA now. We are supposed to only create "licenseable" ideas to sell to other countries, while chasing away all our best talent, or encouraging it to emigrate, sometimes overtly.

http://www.informationweek.com/news/glo ... /213000389

Rather astonishing to me, but I suppose this kind of breakdown happens as you approach the cusp of the crisis.

Ignorance seems to be the goal of the current system. Ignorance is currently honored and lauded in the press as better than "experience" - experience being corrupting and apparently a bad thing. This carries over into literally everything in society. (And that's the reason I can't get along with the Tea Party, because their underlying and recurrent theme (leifmotif!) is that no person with experience in governing should be trusted to make a decision.)

I could give unnumbered examples of projects doomed to failure by stupidity in recent years. Crap, AT&T should own broadband, do you realize that? They just didn't have anyone in place who gave a damn. The NMCI project was doomed to failure from the start, which I realized after a phone conversation with one of their "great expert technicians" early on, who DID NOT UNDERSTAND HOW TO LOG SOMEONE OFF A DESKTOP WHEN THEY'D LEFT IT RUNNING! This person wasn't fit to do anything, much less be the lead on a major upgrade project. Others didn't understand why administrators use share permissions to restrict access when moving files to different servers, they wanted (and got) every single file marked as "read only", which had to be undone after they failed to move the data, which failed because they didn't understand that you can't move huge quantities of nested data using GUI tools, it requires either backup/restore or use of command line tools, which they did not understand at all. After five failures at moving data, they flew someone in from another state who actually understood how to move data. But guess who was told to take orders from these idiots? Why, the people who understood how these things work, of course, they can't possibly be trusted to do the work, they UNDERSTAND IT. Ignorance is worshipped.

[aedens]

I see no hope at all for the Germans
http://www.nytimes.com/2011/09/01/world ... odayspaper

I was surprised by the vehicles sold for August. I did not expect that at all.
Old53 cargo cult has never left the building.

The surveys are corralled into three groups: end user, commander and network operator. While we would all like to believe that it is only the worker-bee, end users screaming about the crippling failures of NMCI, apparently the "commanders" and "network operators" groups were even less satisfied. These groups got a different set of questions.

Have been removing equity since they will kill what is left and this hinges on my estimation of the conditions you note also.
http://www.mackinac.org/archives/1998/SP1998-01.pdf <--------- what we already know....

[Higgenbotham]

Back to trading.

I hope you make lots of money. I must admit I am intrigued. I traded a bit but not with your advanced leverage. It is rather interesting that you retreat into extreme risk tolerances. Your life would have changed had you invested your savings into gold? (just playin) I would say I decided to "get a life" but then I must admit I enjoy the rush of the alternative! (not) Regards,

I'll just shoot for losing the least amount possible as we move through the crisis. Oh, I did invest in gold but that was in my past life. Real estate was the life before my gold life. Those were my real lives. Now I'm in US dollars and this is my virtual life. Being in t-bills risky? You bet your life it is!

[vincecate]

Now I'm in US dollars and this is my virtual life. Being in t-bills risky? You bet your life it is!

I have a question for anyone in dollars or t-bills. If my hyperinflation thesis is wrong, where do you think I went wrong? For example:
1) This time is different and the 40% deficit and 80% debt to GDP rule will not apply because the dollar is the reserve currency (mind you there is no force of nature keeping it the reserve currency).
2) The world can never stop buying Treasuries (though note foreigners dumped $17 billion last month)
3) Unlike all previous central banks, the Fed won't print money just because the government needs money. The Fed will force the rest of government to balance the budget even when lots of Treasuries are coming due and spending has been nearly double taxes (you really think Bernanke will stop printing? If interest rates go up the interest payments on the debt could be more than the total taxes.)
4) I should ignore the 100 hyperinflation cases and just compare the US to Japan (really?)
5) The deflation in the last generational crisis had nothing to do with unwinding the Fed's $2.50 in paper money for every $1.00 worth of gold and the hyperinflation in the previous two generational crisis (civil war and revolutionary war) were flukes and we should assume generational crisis have deflation (if gold had not been made illegal the unwinding would have meant Fed bankruptcy and paper money becoming worthless, which is hyperinflation. With basically 3 crisis out of 3 having or nearly having hyperinflation, why don't we think US crisis and hyperinflation go together?).


http://pair.offshore.ai/38yearcycle/#hyperinflation
http://www.treasury.gov/resource-center ... ts/mfh.txt
http://howfiatdies.blogspot.com/2010/11 ... ndard.html

One more question, interest rates have been going down since they hit 20% around 1980. As they have gone down the value of bonds has been going up. But interest rates are now near 0%. They can not go down any further. It seems reasonable that at some point interest rates will start going up. If they start going up then the value of bonds will be dropping. Does anyone believe in a "permanently high plateau" for bonds? The Fed has put trillions into bonds and you don't think they made a bubble? Who will want to hold bonds when the value is dropping?

PS Higgie, I am glad you are not still shorting silver. It is up 2% this morning.