01/21/2015 Live Update

[seemore]

Anyone sees impact of Canadian Bank's decision to cut the interest rate? Do you think other developed nations will follow the suit to come out of so called deflation??

Personally, I put Canada's cut in the same place as Norway's cut (last week?) & the Swiss cut last week (yes they also cut interest rates, but everyone is just mostly talking about the 1.20 EUR/CHF floor removal). It looks like India also did last week & Turkey did something but I don't think they cut. All this to say, there's a lot of cutting going on. People/Westpac say Australia will cut soon also. The impact? It seems these surprise cuts make an immediate currency devaluation, which will increase inflation in those countries if they import enough and the currency devaluation holds. Central banks seem very scared of deflation, so any others that haven't cut already will likely be cutting soon, imo, but for the US, so far. I think the cuts that have happened are all b/c Europe is going to start QE and Europe exports so much that a big fall in the euro would really add to the oil price dent to inflation.

and no, Japan didn't do much last night, but I read they DID add $10 trillion of QE, but apparently that was just to replace some expiring QE...not enough to affect the market in a positive way as the Nikkei went down.

[DellGriffith]

Junior Buffet

Cutting rates to fight deflation has worked wonderfully for the Japanese, in fact we learned a couple of weeks ago that Paul Krugman had been personally advising them. I sure hope they follow through because I would love to have a summer place in the Gulf Islands, or at least one of those glass condos in Vancouver, for about 35% of the current price.

Sarcasm aside yes other central banks will be joining the race to the bottom as they play beggar thy neighbor with currency devaluation. They really have no choice in the matter.

oh they have a choice. they could cut regulations on businesses to create a genuine economic boom. politicians are too busy attacking businesses to win elections. so we cannot have any REAL growth. so we prop up markets and kill currencies instead.

[ALdaytrade]

Junior Buffet

Cutting rates to fight deflation has worked wonderfully for the Japanese, in fact we learned a couple of weeks ago that Paul Krugman had been personally advising them. I sure hope they follow through because I would love to have a summer place in the Gulf Islands, or at least one of those glass condos in Vancouver, for about 35% of the current price.

Sarcasm aside yes other central banks will be joining the race to the bottom as they play beggar thy neighbor with currency devaluation. They really have no choice in the matter.

oh they have a choice. they could cut regulations on businesses to create a genuine economic boom. politicians are too busy attacking businesses to win elections. so we cannot have any REAL growth. so we prop up markets and kill currencies instead.

Cut regulations on businesses? On what business would you like to cut regulations? The food industry, so that we do not have enough inspections? The housing industry, so that we do not have enough inspections? The oil industry, so we do not have enough inspections?

[seemore]

Junior Buffet

Cutting rates to fight deflation has worked wonderfully for the Japanese, in fact we learned a couple of weeks ago that Paul Krugman had been personally advising them. I sure hope they follow through because I would love to have a summer place in the Gulf Islands, or at least one of those glass condos in Vancouver, for about 35% of the current price.

Sarcasm aside yes other central banks will be joining the race to the bottom as they play beggar thy neighbor with currency devaluation. They really have no choice in the matter.

oh they have a choice. they could cut regulations on businesses to create a genuine economic boom. politicians are too busy attacking businesses to win elections. so we cannot have any REAL growth. so we prop up markets and kill currencies instead.

Cut regulations on businesses? On what business would you like to cut regulations? The food industry, so that we do not have enough inspections? The housing industry, so that we do not have enough inspections? The oil industry, so we do not have enough inspections?

I'd vote to cut the regulations involved with Obamacare. Personally, it's quite a large economic price I hate paying. It is a large drag on business to force them to pay the now-even-higher health insurance rates, which gives us lots of part timers who are supposed to be paying themselves.

[Xian]

Junior Buffet

Cutting rates to fight deflation has worked wonderfully for the Japanese, in fact we learned a couple of weeks ago that Paul Krugman had been personally advising them. I sure hope they follow through because I would love to have a summer place in the Gulf Islands, or at least one of those glass condos in Vancouver, for about 35% of the current price.

Sarcasm aside yes other central banks will be joining the race to the bottom as they play beggar thy neighbor with currency devaluation. They really have no choice in the matter.

oh they have a choice. they could cut regulations on businesses to create a genuine economic boom. politicians are too busy attacking businesses to win elections. so we cannot have any REAL growth. so we prop up markets and kill currencies instead.

Cut regulations on businesses? On what business would you like to cut regulations? The food industry, so that we do not have enough inspections? The housing industry, so that we do not have enough inspections? The oil industry, so we do not have enough inspections?

I'd vote to cut the regulations involved with Obamacare. Personally, it's quite a large economic price I hate paying. It is a large drag on business to force them to pay the now-even-higher health insurance rates, which gives us lots of part timers who are supposed to be paying themselves.

WTF is this? See, this is why I don't post here no more.

OK, so first, "large economic price"? Stats please.

Here's my stats:
GDP at 5% (that's no typo, 5%!)
Deficit cut in half
58 straight months of employment growth— that's right 58-effing months!— A RECORD.

If 5% GDP, halved deficit, and 58 months of employment growth is a "high price to pay", I'll pay that shit everyday of the damn week.

NEXT, "drag on businesses". Stats please.

Here's my stats:
Record corporate profits
Low interest rates
Stock market doubled! (that's right doubled!).

If cheap money, record profits, low inflation and a 100% gain in the stock market is "a drag" on business, WTF is a tailwind?

I didn't really like O Care that much until I just found out what a "drag" it's been on the economy and businesses, now I'm thinking that shit's pretty good. You turned me around. They need to come up with some more "drags", man. I got kids to feed.


STOCKS, homeboy, STOCKS (and cute pictures of cats and bears and shit). I could care less what you'd vote for.

Damn. Every time.

[DellGriffith]

this is why were distorting the economy with QE and ZIRP and a lack of high paying jobs. any talk of cutting business regulations is met with heavy flak from people who immediately jump to some end-of-world scenario where cutting regulations will kill us all. weve tried everything else and it aint working.

Junior Buffet

Cutting rates to fight deflation has worked wonderfully for the Japanese, in fact we learned a couple of weeks ago that Paul Krugman had been personally advising them. I sure hope they follow through because I would love to have a summer place in the Gulf Islands, or at least one of those glass condos in Vancouver, for about 35% of the current price.

Sarcasm aside yes other central banks will be joining the race to the bottom as they play beggar thy neighbor with currency devaluation. They really have no choice in the matter.

oh they have a choice. they could cut regulations on businesses to create a genuine economic boom. politicians are too busy attacking businesses to win elections. so we cannot have any REAL growth. so we prop up markets and kill currencies instead.

Cut regulations on businesses? On what business would you like to cut regulations? The food industry, so that we do not have enough inspections? The housing industry, so that we do not have enough inspections? The oil industry, so we do not have enough inspections?

[daytradingES]

SPY
1:37 AM 1/22/2015
http://screencast.com/t/qgG3TmqFMCv

[1der]

Well, just to add to the thread:

I feel anyone in the middle class (all 1,000,000 of us left? ) pretty much getting decimated.

The past nearly ten years has been a boom time for all of my friends who were well positioned to get loans at near 2%, leveraged and bought property and stocks because they were upper tier and the banks threw $$ at them. They are up unimaginably HUGE. I mean obscenely huge. $1 million is absolutely chump change, , it is a rounding error. The best have made fortunes and already diversified with 1031's into 8% triple net properties with name brand stable companies for the next 15 to 20 years. The less savy, imho, have stayed in stocks, but hey over the past five years have enjoyed one hell of a ride. The "kids" around the San Francisco Bay are paying $1500/mo for a room and taking turns parking their 5 series Beemers in the two car garage. Go to a nice restaurant and the average age is 27. Things are very, very different for these young folks and many older have been left out. There is little awareness amongst many of the younger as to what else is happening outside their world. They have not been taught to see that they are part of the bigger picture, not the picture itself.

In the middle: of what is left of the middle class, some are starting-to-drop-out, mid 50's group. Why work, or work so hard? They are starting to see the benefits available to them if they choose to make less than $60k per year as a couple Higher income areas) and getting substantially subsidized health care ($12k after tax per year subsidy),cash out, downsize the house and expenses, pay less taxes. Start and grow a business? That is f' g crazy with the laws that are in place. Fine if you want to do a husband wife thing via EBay, Etsy, etc. but as soon as wanting/needing to add an employee, the liabilities and regulations becoming seriously burdensome / costly. Best you are doing with two people in that scenario is around average $130K gross profit then write off all you can to get below $60k. Forget about going out, look for other affordable ways to make life fun and accept the lifestyle which once included trips, toys, etc. is no longer achievable no matter how hard one works or saves.

So leave the corporate craziness, create a small home based business making only enough $$ to stay below the thresholds to qualify for health subsidy and life starts to look better since the effort to get to the next level is so great and far away and requires so much more risk. Best yet, go to work for a mind numbing public entity for about ten years and qualify for a pension for the rest of one's life. 20/20 hindsight says I should have gone public sector beginning of my career as now I would have $250K/year in 2015 $ direct deposited / protected by law, plus inflation adjustments and bennies for the rest of my life which based on family DNA would be ~ 40+ years. Equivalent needed to accomplish that in private sector w/o risk adjustment? Oh, about $5 million clear in the bank at age 58. Adjust for the risk of being in the private sector and it should have been about twice that, imho. This middle class drop-out group has just been taught that the "dole" is closer than one thinks and they would be fools to not join in. Heck, they have paid for this for a lifetime of doing the "right" thing, right? Drop out/ Ease-out, the safety net is right there now. Dang, I can collect unemployment for at least 6 months......, let's see what else is on the social services menu we can start to enjoy.

At the lower class level, pretty much have to be just a bit smart on how to work the system along with those that are providing services that are raping the system. Find the doctor, lawyer, company that has created a tap into the ridiculously mismanaged benefits systems that give away $$ for doing nearly nothing, or nothing and life seems okay. Not great but heck, better than having to go out and bust butt to get a check. The system creates these incentives to do nearly nothing, there are no disincentives / consequences. Not so smart? Plenty of ways to work the system and survive pretty well, nonetheless, just ask some friends.

Just one example: The thought of requiring even 20 hours of community work for $400 week of unemployment compensation ($20/hr pay) is met with howls of unfairness. Yet, I see litter on the streets, pot holes in the road ways, unkempt medians, everyday. If I take public transit, I see filthy bathrooms and fare jumpers. Seems there are plenty, PLENTY of socially beneficial efforts which people could contribute in exchange for an unemployment check. The system could even be setup to provide productive retraining skills. Seems fair? I am dreaming. Better to handout $$ and diminish the sense of self worth.

On the corporate front: Xian nails it. Regulations, fairly conceived and administered,this is the only way to keep the USA alive. It will never be perfect, but as long as it oscillates within reasonable deviations around "close to perfect", we survive. Make the oscillations to0 extreme, on too many fronts and we self destruct. Corps will go for the throat without regulations to keep them in check, it is just the nature of the beast. What is the downside? Fold the corporation, almost no human being is jailed for wrong doing, rinse, repeat. I saw first hand, early on, what was happening in the mortgage arena. It became vertically corrupted from the real estate agent, to the mortgage agent, to the appraiser, the banker, to the investor, to the blind regulators, to the investment rating agencies, to the greedy home buyer. All checks and balances were obliterated/corrupted. Absolutely, perfect storm that, finally, blew up big time. The answer was a bailout of those with the deepest fiduciary responsibility, the big banks. Of the Too Big To Fails, pretty much only Wells Fargo (until just before the very end) maintained a higher degree of vigilance of their mortgage lending throughout much of the lead-up to the debacle. The rest were acting like it was the wild west. WFB came through relatively unscathed because of this but I am not sure WFB feels properly rewarded for their conservative approach looking at the others who were bailed out. Ford would be the same looking at GM.

The problem is deeper and I do not think we have bottomed yet. This past weekend, I was waiting for a parking space and a 30 something y.o. comes around me and takes the spot a few spaces up from where I am since I want to let the person pulling out have some room. I approach him and the response is "you were too far back". Zero awareness of others and his impact as he moves through life. Worse, he had his 7 year old and four year old with him and was creating the example of what is "acceptable" behavior. His world revolves around him, and all others are not to be respected unless he can gain from the interaction from them. That is the way it is now for many and the generation they are raising. It is a sad situation. It is another example of the divisiveness that exists in so many aspects of our life, but here, here!, at such a fundamental level between two people who have absolutely no knowledge of the other, literally, outside of the space they are occupying. This tells me that the very basic levels of societal relationships are being eroded. That is not good with the divides which exist at so many higher and varied levels.

I am beginning to think the greater economic cycles such as the one we have passed through are just necessary pendulum swings. Give the incentives to the wealthy, they earn/create. Next raise taxes to redistribute (and keep some order of societal peace) by allowing others to "feel" like they have also bettered their living conditions or at least have restored hope (level of believability) in their minds. It is really important for the American model to have a substantial middle class "arena" to which people in it can feel a sense of security and comfort, those below can feel a sense of achieving entry, and the entrepreneurs can feel a sense they can achieve a reward for risk life. It has to maintain some sense of balance and proportion. It works so long as the boundaries between the levels remain blurry. Create clear divides or a vastly smaller middle section ( read huge divide) and the seeds for social discord have been sown.

We are in an interesting time, similarities exist in the past (1920's as a recent example). Will we be wise enough to avoid the outcomes of those prior experiences to make this time markedly different and better. The Matrix trilogy is a fine example of this!! Some pretty darn deep messages in that storyline!

Each day I trade, being in Cobra's room with so many really wonderful, giving, motivated, very smart people, I appreciate there is always hope. We choose to ply a trade in a cesspool of manipulation, misinformation, and deceptiveness. Yet, this group finds a way to be here nearly everyday with commitment, enthusiasm, respect, compassion (most of the time ) for each other. A very, very special place no doubt. Thank you Cobra, for your tremendous sharing, and keeping such a place alive and comfortabel. It really is an oasis.

GLTA

[DellGriffith]

I was gonna post more but I'll get back to charts.

We haven't had a upper bb breach on daily SPY since 9/19/14. Over 4 months now. That's about as long as it gets. We had a 5 month gap between 12/26/13 to 5/27/14. This rally should at least challenge the upper bb before its done, and wouldn't be surprised if it breaches again.

[DellGriffith]

[DellGriffith]

Wow. I think SPY just broke thru!

[CaStorm]

My heart stops beating.

[seemore]

Junior Buffet

Cutting rates to fight deflation has worked wonderfully for the Japanese, in fact we learned a couple of weeks ago that Paul Krugman had been personally advising them. I sure hope they follow through because I would love to have a summer place in the Gulf Islands, or at least one of those glass condos in Vancouver, for about 35% of the current price.

Sarcasm aside yes other central banks will be joining the race to the bottom as they play beggar thy neighbor with currency devaluation. They really have no choice in the matter.

oh they have a choice. they could cut regulations on businesses to create a genuine economic boom. politicians are too busy attacking businesses to win elections. so we cannot have any REAL growth. so we prop up markets and kill currencies instead.

Cut regulations on businesses? On what business would you like to cut regulations? The food industry, so that we do not have enough inspections? The housing industry, so that we do not have enough inspections? The oil industry, so we do not have enough inspections?

I'd vote to cut the regulations involved with Obamacare. Personally, it's quite a large economic price I hate paying. It is a large drag on business to force them to pay the now-even-higher health insurance rates, which gives us lots of part timers who are supposed to be paying themselves.

WTF is this? See, this is why I don't post here no more.

OK, so first, "large economic price"? Stats please.

Here's my stats:
GDP at 5% (that's no typo, 5%!)
Deficit cut in half
58 straight months of employment growth— that's right 58-effing months!— A RECORD.

If 5% GDP, halved deficit, and 58 months of employment growth is a "high price to pay", I'll pay that shit everyday of the damn week.

NEXT, "drag on businesses". Stats please.

Here's my stats:
Record corporate profits
Low interest rates
Stock market doubled! (that's right doubled!).

If cheap money, record profits, low inflation and a 100% gain in the stock market is "a drag" on business, WTF is a tailwind?

I didn't really like O Care that much until I just found out what a "drag" it's been on the economy and businesses, now I'm thinking that shit's pretty good. You turned me around. They need to come up with some more "drags", man. I got kids to feed.


STOCKS, homeboy, STOCKS (and cute pictures of cats and bears and shit). I could care less what you'd vote for.

Damn. Every time.

Sorry to offend. My large economic price is an increase of 92% on my health insurance---and I now have the cheapest one I'm legally allowed to get that has a $6300 deductible before they pay anything (but for the mandated "freebie" visits for each of us).

Here are my stats:
participation rate 62.7% --virtually unchanged since April 2014, which is directly contrary to the non-farm payroll numbers and can be explained by a larger workforce that is not finding employment at the same rate as in past economic recoveries. http://www.bls.gov/news.release/empsit.nr0.htm

Here's the participation rate chart since 2004 -- down from 66%. http://data.bls.gov/timeseries/LNS11300000

US federal government debt is up substantially since 2009. http://www.usgovernmentspending.com/fed ... chart.html Note that the "debt" is the amount owed, whereas the "deficit" I assume you refer to is the amount spent more than collected in taxes, which is responsible for the yearly increase in national debt.

The 'vote' I referred to was just a figure of speech. I'll work on the pics.