Generational Dynamics Forum - New Site

I believe that after interest rates have gone up to some level that the stock market will crash. Partly I think this is because yields on stocks compete against yields on bonds. As bond prices drop stock prices have to also to keep comparable to bonds. Partly I think this is because people had thought the Fed set the interest rate and so could protect the stock market and when it becomes clear that "the Fed has lost control of interest rates" people will think that the "Bernanke Put" has failed and sell stocks.

Anyway, I propose a contest where we attempt to predict the peak interest rate for 10 year bonds before the stock market goes down by 30% or more from its peak.

The low on the 10 year was about 1.5%. My guess for peak interest on 10 year bonds before stock crash is 3.5%

Anyone else willing to play?

No but consider resources as the trigger pull and I consider it a hard wired linkage of the Middle East Hate Clubbers and will forward a few dates from my notes at home for a severe abstract view and I think we are few years closer than we wish on some thoughts Vin. Meanwhile, even my doctor is now advising not eating anything from the Pacific Ocean. Ask yours also, and see if he concurs, but your super market is just off your beach and I severly envy you Vin on that. Decades later we are trying to effect effective change on cleanup and desease cluster testing underway as I was told. Meanwhile these so called elected leader of the maniac class are on the death cult crusade other than the trillions already spent on nation building.

Japan is sending their catch to Thailand canneries for relabeling and shipping around the world, but not so much to their own people. Go ahead and google japan, thailand relabeling.

google it

aedens wrote: [...] "If I could tell you things like that I'd be sitting on a Caribbean beach sipping a drink, not working in this office."

Even though I don't remember his name, I think of that comment - and the common sense warning he implied - every time I see someone claiming to be able to time the market.

I am in the Caribbean sipping on a drink and I claim I can tell the Yen is going to go down alot. But the timing is another thing...

http://howfiatdies.blogspot.com/2013/05 ... ng-at.html

http://howfiatdies.blogspot.com/2012/10 ... ptics.html

I can convey a few others are in the same area of thought and will wait since they are simply not going to swim in this environment

aedens wrote:No but consider resources as the trigger pull [...]

The price of oil in Yen seems to have an upward trend. At some point it could trigger a crisis.

http://www.zerohedge.com/news/2013-07-2 ... ces-cancer

http://www.huffingtonpost.com/2011/03/3 ... e=Michigan_

I will forward our contact. meredith@miunited.org

http://upton.house.gov/uploadedfiles/05 ... _admin.pdf
Cleanup is of the utmost importance and it is imperative that the EPA gets this material out of town.
My staff and I will continue to work with city officials and city residents to see that their wishes are heard by the EPA and that the best, most comprehensive solution is found and followed. Thank you for your interest in this important matter and please do not hesitate to contact my office if I can be of further assistance.

I happened to stumble across a video that I had put on my web site in
2008. It's the song "Let the Sunshine In" from the 1979 movie Hair,
based on the 1968 play, written at the height of the Vietnam anti-war
movement.

Listening to this and watching it is almost a mystical experience,
because you can see that today's society bears almost no resemblance
whatsoever to American society in the 1960s. It's almost as if you're
watching something from another planet.



Hair - Let the Sunshine In

We starve-look at one another
Short of breath
Walking proudly in our winter coats
Wearing smells from laboratories
Facing a dying nation
Of moving paper fantasy
Listening for the new told lies
With supreme visions of lonely tunes

Somewhere
Inside something there is a rush of greatness
Who knows what stands in front of our lives
I fashion my future on films in space
Silence tells me secretly
Everything
Everything

Manchester England England
Manchester England England
(Eyes look your last)
Across the Atlantic Sea
(Arms take your last embrace)
And I'm a genius genius
(And lips oh you the doors of breath)
I believe in God
(Seal with a righteous kiss)
And I believe that God believes in Claude
(Seal with a righteous kiss)
That's me, that's me, that's me
The rest is silence
The rest is silence
The rest is silence

We starve-look at one another
Short of breath
Walking proudly in our winter coats
Wearing smells from laboratories
Facing a dying nation
Of moving paper fantasy
Listening for the new told lies
With supreme visions of lonely tunes

Singing
Our space songs on a spider web sitar
Life is around you and in you
Answer for Timothy Leary, deary

Let the sunshine
Let the sunshine in
The sunshine in
Let the sunshine
Let the sunshine in
The sunshine in
Let the sunshine
Let the sunshine in
The sun shine in...

In short, shadow banking is nothing more than the characteristic institutional form of the present stage of financial development. From this vantage point, the question of appropriate oversight and regulation requires us to abstract from traditional banking, and to start instead from a world in which shadow banking is the only banking system.

About time some of these bright sparks see what we have been trying to convey.
http://www.zerohedge.com/news/2013-07-2 ... en-promise
Meanwhile the unable to see it still do not understand what is trying to be stabilzed. I can give a date on that observation but it does not change the effect going forward as we note the recent dislocation from marked to market fallacys. Let me walk that back to price discovery was marked to market on some recent contracts. Currently as we noted here also the travail in the offsheet reinsurance industry capital I would consider from actual issues in the past from covenent violations since acounts in other sectors had generated profits from shell corps fundings from constructs of interest carry. Not my cup of tea noted before to burn your neighbors down for profit and watching your capital used to do it on a scale of negligence and posturing a culture arrogated intent from asset so called marked to market intent. The Judge had no issue on the contract definition when it got that far so all good in the end. To clear that up call it that account was not part of that sweep process since you are stupid and the contract will stand as written. That must still be the fundamental fact they are looking at again since some already went through this before. It was currently noted those assets cannot have a duel claim process since we seen the lighter fluid set off on the LME assets from that very type of sweep. It is wrong and it is violation of property rights when encompassed into margin calls. Some of these products are not complicated when drawn out in the context they are written in but mismanged from simple intent.

vincecate wrote:The low on the 10 year was about 1.5%. My guess for peak interest on 10 year bonds before stock crash is 3.5%

This week new home prices were reported down while Ryland and DR Horton said their order books are collapsing due to cancellations. Housing stocks in general are well off their May peaks. In the last cycle housing stocks peaked in late July 2005, two years ahead of the general stock market but new home prices didn't start dropping until a year later. Things seem to be moving quickly.

Meanwhile, no major world stock market has exceeded either its May high or its previous week's high, except the US. Back in 2007 the rest of the world had momentum that perhaps helped hold the US stock market up despite the early weakness in housing.

It seems to me that the US stock market is totally absorbed with the words that one man will utter next week. The words he utters and more particularly how participants feel about those words seems to be what will determine the fate of the US stock market. Other than the hope that those words will offer something encouraging to a "greater fool", the US stock market would already be falling at these interest rates. At least that's what it did in May when it didn't feel good about the words he uttered. And at that time, rates were lower and the economic data seemed better overall.

Maybe I am missing something here but it seems that short term and maybe longer term the level of the US stock market is being influenced almost entirely by the words one man has or will utter. That's a certain recipe for a crash at some point because it's only a matter of time before those words will not satisfy. Absent those soothing words and promises, the market would have already crashed. That's what Bernanke discovered in May and June. I'm remembering this weekend what Greenspan said in June, that it's time to get off the QE fix and reduce the balance sheet regardless. We know Bernanke won't do that but it must be that Greenspan sees severe longer term consequences for Bernanke's failure to do so.

So I think that the level of interest rates that coincide with a stock market top will be arbitrary.

“In America, the criminally insane rule and the rest of us, or the vast majority of the rest of us, either do not care, do not know, or are distracted and properly brainwashed into acquiescence.” – Kurt Nimmo

“A lot has happened. And yet, given the provocation, it’s amazing how little has happened. No one on Wall Street has been shot, or even jailed – and the existing social order has not been seriously challenged. There’s a reason for this, too. The anger arising from the financial crisis finds no natural channel. In another era – an era before catastrophic experiments with radical socialism and nationalism – we would be watching market capitalism being displaced by something far uglier. But today there is no natural place for anger to flow, and so the anger flows haphazardly, like raindrops down a windowpane. The only political ideology that anger benefits these days is anarchy. From the point of view of those who enjoy political stability, it’s a stroke of luck that anarchists have no natural talent for organizing themselves. But how long will it take them to learn?” – Michael Lewis – Boomerang

"The immense forces of normalcy bias and social inertia have led millions to refuse to understand the mathematical certainty of the coming collapse. The worldwide banking system is like a great white shark that needs to keep moving or it dies. Exponential growth and continuous credit expansion have been the essential ingredients to expanding the American empire, but the growth has stopped, while the debt keeps growing. Infinite growth on a finite planet is impossible. As natural resources deplete and become more expensive to obtain, while the planet’s population continues to grow, the fractional reserve banking system and the nation states who continue to pile up trillions in debt will suddenly suffer a catastrophic collapse. We are in the end stages of a confidence game."

http://www.theburningplatform.com/?p=57636

These are some reasons to think that the timing as measured against any rational yardstick is arbitrary at this point. Rationality and correlation left the building a long time ago. The collapse can happen any time and the stock market may have already peaked last week. There was no rational reason for it to be higher last week except for misplaced confidence.

Higgenbotham wrote: These are some reasons to think that the timing as measured against any rational yardstick is arbitrary at this point. Rationality and correlation left the building a long time ago. The collapse can happen any time and the stock market may have already peaked last week. There was no rational reason for it to be higher last week except for misplaced confidence.

I think the main misplaced confidence is that people think the Fed can control interest rates longer than they will really be able to. They have been low for the last 5 years, so people project this out well into the future. I think this is the core flaw in people's beliefs. If interest rates could stay this low, then it would be rational for assets to have very high prices. But when interest rates go up and this myth is shattered then assets will crash.

Bernanke's words seem to first impact interest rates, or more on interest rates, and then later stocks.

Crazy times for sure.