Announcement

Collapse
No announcement yet.

"Poom" happening?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • "Poom" happening?

    Looks like it the "Ka" in "Ka-Poom" is starting.
    Last edited by EJ; 06-16-06, 01:57 PM.

  • #2
    Also, anyone else buy USPIX?

    http://www.itulip.com/cgi-bin/bbs//n...pg=2&sc=20&x=0

    Comment


    • #3
      Hi Eric,

      I discovered iTulip.com in 2002 or 2003 (can't remember now) and checked back every few months. I found it (and prudentbear.com) when I drew the connection in my head between rising housing prices and the innumerable credit card offers in the mail. At the time it felt like I was the only one who had that light bulb go off in my head. I'm only an ordinary person, engineer by training, not an economist!

      Delighted to see you're back, with new stuff on Housing and the Ka-Poom theory. Particularly the Ka-Poom theory. Inflation has been on my mind for the last three or four years, so the idea of precious metals and energy has been an easy sell for me. I think we can expect a shake-out in both commodities this year but plan to hang on tight. Keep posting, you are doing a great service. Wondering how long the first "Poom" will run before we get the second "Ka" (aka Dollar's Last Stand?) Worried how it might drag down the canadian dollar (yeah, we're Canadian, that alone has saved us a lot of grief already but we need to think how a dollar devaluation/crash impacts us too).

      comments welcome.


      Comment


      • #4
        Yeah I'd like to know how a US dollar devaluation affects Canada. I'm a Canadian too.



        Comment


        • #5
          Yes, I bought it along with the other two. Percetages are positions in my portfolios. The last two days were good days.

          9.93% URPIX
          15.62% UCPIX
          17.67% USPIX

          Jim
          Jim 69 y/o

          "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

          Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

          Good judgement comes from experience; experience comes from bad judgement. Unknown.

          Comment


          • #6
            I've been thinking for a while that we're headed, eventually, for another deflation scare, but my thoughts were not articulated as well as your revised ka-poom theory. I do have a question about your scenario.

            It appears that a deflation scare results as each bubble pops. An Asian bubble popped in 1998, triggering more extreme liquidity injections and the last acceleration of the internet/tech bubble. That bubble popped, leading to extreme interest rate cuts which inflated the credit-sensitive housing bubble.

            It appears we are in the last days of the real estate bubble, but as you have pointed out, a real estate bubble deflates in slow motion as that market becomes illiquid as inventory rises but prices fall very slowly [at least at first].

            You seem to imply that the next "ka" of deflation will come from the Fed raising rates to defend the dollar. Do I understand you correctly on this? If so, I must disagree. Given a choice between defending the dollar and avoiding recession, it appears clear that the Fed will choose the latter, and devil take the dollar. So what triggers a sharp "ka," as opposed to the slow, softer "ka" of air coming out of real estate?

            Question 2: you write of dollars coming home as foreign dollar holders attempt to get rid of them before their value shrinks still further. The only way they can do that is to buy U.S. real assets - U.S. owned real estate at home or abroad, U.S. companies, U.S. owned commodities, U.S. owned foreign assets. They have to find an entity that does its accounting in dollars and buy something real [i.e. not a dollar denominated bond] from that entity.

            The commodities spike we've been experiencing certainly fits this model of diversifying out of dollars. In the '80's Japanese investors bought U.S. trophy real estate at the top, selling it back later for cents on the dollar. Are we going to see a repeat of that? IS IT POSSIBLE THAT WE WILL HAVE ANOTHER STOCK MARKET BUBBLE fueled by foreign buying? As the dollar declines, U.S. denominated assets look cheaper to foreign entities, including U.S. denominated stock. As our equity market declines, this effect is amplified. If I were a foreign dollar holder, buying the highest quality U.S. companies would be on my list of possible things to do with my dollars. So, what companies are going to look good to foreign buyers? Are we back to the usual suspects of resource companies or are there others? How about Gavekal's "platform" companies? Are there buyout targets that will look especially attractive to foreign, as opposed to domestic, corporate raiders? Any nominations? Or, if you can't imagine foreign dollar holders deciding to buy stock [as an acquisition/buyout] then what U.S. dollar denominated assets will they buy?

            Comment


            • #7
              Question 3: I just re-read the piece, and see you talk of dollars flooding home by foreign holders purchasing their own currency [[on the open market?]. So if, say, a French holder of dollars wants to purchase Euros, who is the seller? If from another non-US holder, the dollars haven't come home. I suppose U.S. companies hold Euros, and there must be some at the Fed, but the whole imbalance is based on the fact that there are SO MANY DOLLARS floating around the world. Also, as you point out, we are in a regime of cooperative devaluation, and the central bank of China for example [just to pick a random dollar holder] is not close to ready to shut Chinese producers out of the U.S. consumer market.

              I don't think we are in a dollar crisis, exactly. This feels more like 1985 after the Plaza accord. The IMF and the G7 recently announced that it's time for the dollar to depreciate and, surprise surprise, the dollar is going down. After 1985 we had about a 25% devaluation, if I recall correctly. So far the dollar index has dropped from about 92 to about 84, down not quite 9%.

              So I think the Fed will flinch, if it hasn't already, pause briefly and then start cutting again as the U.S. consumer is squeezed by high commodity, especially energy, costs and the shutting-off of the housing ATM. The dollar continues to descend, with an extra push from the emergence of non-dollar denominated petroleum markets in Russia and Iran and who-knows-where-else. The U.S. dollar gradually is giving up its reserve status, but I don't see a replacement. The only currencies big enough to consider are the Euro, a currency without a country based in a region of high social costs, low productivity and increasing national tensions trying to pull economic policy in different directions. Or the Yen, with Japan just barely out of deflation and dependent on exporting capital goods to China, which uses them in the factories aimed at American consumers. Maybe, someday, after a prolonged period of near-chaos, the Yuan, but not yet.

              Capital is a coward. In time of turmoil it seeks safety. Where's the safety?

              And where's the next bubble? Is it really just in commodities?

              Comment


              • #8
                check out john mauldin's column dated 5/12, "do trade deficits matter?" it is very much on topic for this discussion.

                2000wave.com

                Comment


                • #9
                  from doug noland's credit bubble bulletin: [is this about a "ka" or a "poom"?]

                  Let there be no doubt. There is a great deal riding on an "orderly” dollar decline. The Reason? Well, if we are, as I suspect, entering a period of more disorderly currency markets, the risk profile of shorting the yen, the Swiss franc, the Euro or other low-yielding currencies (as a source of funds for leveraged positions in higher-yielding securities or assets) becomes immediately much less attractive. What this might mean for the proliferation of global “carry trades” is this evening not at all clear, but it can’t be good. To what extent “carry trades” have fueled global liquidity overabundance – and, in the process, the “conundrum” and the “global savings glut” - is unknown but clearly substantial.

                  With the yen, the swissy and Euro surging against the dollar concurrently with sinking global bond prices, some speculators have been hurt and are being forced to retrench, which often leads to more selling, losses, further retrenchment and liquidity issues. Unwinding leveraged trades always poses the risk of getting out of hand, and this is especially the case currently for lots of Reasons.

                  Comment


                  • #10
                    Yes, I bought it along with the other two. Percetages are positions in my portfolios. The last two days were good days.

                    9.93% URPIX
                    15.62% UCPIX
                    17.67% USPIX

                    Jim
                    Well done! My advice* is to not hold onto it for long. It's great for catching the downdrafts on panicy markets, generating 2x returns to the extent of the decline... you must have done quite well the past few days. But your can gains dissapear just as fast on the dead cat bounces and recoveries.


                    * Free, and worth ever penny


                    Comment


                    • #11
                      The NASDAQ-100 McClellan summation broke down through the zero line with wide intervals. Look for continued down draft this coming few days before a dead cat bounce.

                      Comment


                      • #12
                        The NASDAQ-100 McClellan summation broke down through the zero line with wide intervals. Look for continued down draft this coming few days before a dead cat bounce.
                        Where do you access such as the Mac summation on something like the NDX?

                        Jim
                        Jim 69 y/o

                        "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

                        Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

                        Good judgement comes from experience; experience comes from bad judgement. Unknown.

                        Comment


                        • #13
                          Looks like it the Poom in K-Poom is starting.
                          EJ:

                          This is trivial, but is Ka-Poom meant to be phonetic for the sound an explosion makes? Being a Southerner, I would say Ka-Boom! Though use of boom would convey something positive going up in the markets and might confuse.

                          In your post of revised and extended Ka-Poom Theory yesterday, there is a hyperlink not so random at the bulleted Poom that doesn't seem to work, all the other hyperlinks I clicked on did work, so perhaps it isn't my browser.

                          In your 1999 Ka-Poom you speculated a parabolic rise in interest rates to levels that I suppose qualify as hyperinflation in about three years from what I figure was mid-2002.

                          Yesterday, in revised Ka-Boom Theory you extended the peak out to 2014 with a zag before it gets there. If it is not too complicated to answer, what sort of thinking leads to your notion of it lasting relatively longer?

                          I appreciate your work and site.

                          Jim
                          Jim 69 y/o

                          "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

                          Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

                          Good judgement comes from experience; experience comes from bad judgement. Unknown.

                          Comment


                          • #14

                            Where do you access such as the Mac summation on something like the NDX?

                            Jim
                            http://www.stockcharts.com/charts/in...McSumNASD.html

                            http://www.NowAndTheFuture.com

                            Comment


                            • #15
                              bart, jeffolie above referenced a mac oscillator for the NDX, not the nasdaq.

                              I just wonder if there is any public site at which the one he mentioned can be accessed.

                              thanks.

                              Jim
                              Jim 69 y/o

                              "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

                              Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

                              Good judgement comes from experience; experience comes from bad judgement. Unknown.

                              Comment

                              Working...
                              X