The Ground Gives Way - Eric Janszen

[ThePythonicCow]

Re: The Ground Gives Way - Eric Janszen

I leave you with this from his Capitalism, Socialism and Democracy, and a view of the future that strikes us as unfortunately prophetic.

... it will be replaced by socialism in some form

Spot on. This Schumpeter guy is good.

Thanks, EJ, for the delightful quotes.

[GRG55]

Re: The Ground Gives Way - Eric Janszen

JK, I have the utmost respect, especially for you and EJ, but my worst investing experience was with Canadian energy trusts. A while back the Canadian government changed the rules on trusts and tanked the market. I took my lumps and walked away, taking away the lesson that what the governments create, they can take away.

So, as long as the political risk, and exchange rate fluctuations are taken into consideration, yes, consider Canadian energy trusts.

Once again, oil is the most political of commodities. One needs to be careful how one plays it, no matter which jurisdiction, or method [commodity or equities]. Political risk is inseparable from investing in oil.

[ThePythonicCow]

Re: The Ground Gives Way - Eric Janszen

I must remark on the docility with which this assertion is met by apparently everyone here (no-one voices dissent, while one or two reiterate it's "self-evident truth"). Sorry guys.

Joseph A. Schumpeter, in his "History of Economic Analysis: With a New Introduction" dissents, if I read him correctly. See the first few pages of Chapter 1, which are online for all to view at Amazon: http://www.amazon.com/History-Econom.../dp/0195105591 In Chapter 1 "Introduction and Plan," Section 2 "Why do we study the history of economics?", he recommends we do not arbitrarily exclude various alternative methods.

[ThePythonicCow]

Re: The Ground Gives Way - Eric Janszen

Which Schumpeter book(s) would you (EJ, metalman, ...) recommend for my modest economics library?

I started a search to purchase "Business Cycles", but the few copies available on Amazon cost between $132 and $600+, which is a bit rich for me, especially the $600+ copy.

Several other Schumpeter books were available however, at more ordinary prices, such as "The Theory of Economic Development", "History of Economic Analysis", "Capitalism, Socialism, and Democracy", and "Ten Great Economists".

[P.S. - Lordy, lordy. Half.com has "Business Cycles" for $1,950.00 at http://product.half.ebay.com/_W0QQpr...QQcpidZ1044822.]

[GRG55]

Re: The Ground Gives Way - Eric Janszen

Agree. The US will weather the storm, better than others. No ox drawn Mercedes. No digging for cans of tuna under the rubble.

Yes. But I for one would have no objection to catfood in the executive cafeterias of the bailed out banks. ;)

Re: The Ground Gives Way - Eric Janszen

We _are_toast -

Of course, iTulip offers peerless analysis, and a very robust analytic method, but if you find the two "scathing indictments" of "the mumbo jumbo that is called technical analysis" in it's many forms below (from Fred and EJ) to be akin to scalpels applied deftly to the debunking of any value in this field, I would respectfully suggest these indictments are more akin to a blunt butter knife, as the field of technical analysis is vast and highly varied, and contains in it's midst some of the foremost investors of the past century. We are not talking about theorists but one or two members of a tiny elite of the most successful investors and speculators in history. Take Mr. William Delbert Gann for example - he was not only a technician, but an extremely esoteric one at that, venturing eclectically into all kinds of theories as a framework for his trading. This guy could give Jesse Livermore a run for his money. I'd like to see EJ and Fred ever have addressed Mr. Gann as a fraud to his person, as this guy quite demonstrably has out-guessed even the redoubtable iTulip in the course of a very well documented career. There must have been a very shrewd method tucked away in what iTulip would consider to be his technician's nuttiness. Here's the bio of one of the most outlandishly esoteric "technicians" in the history of the markets.

I've posted this before somewhere but it bears reminding that delegating an entire class of market participants (technically inclined market analysts) of which WD Gann is a prime example to the dustbin is open to question. I must remark on the docility with which this assertion is met by apparently everyone here (no-one voices dissent, while one or two reiterate it's "self-evident truth"). Sorry guys. The assertion runs into a few awkward standouts such as Gann, so inquiring minds might wonder whether it can be quite that universal. WD Gann is only one example - although he was quintessentially the technician, his performance in the top 1% of market players in history leaves one wondering whether his extraordinary acuity on market direction functioned in spite of the great effort he put into the technical aspects, or because of them. To suggest he owes his succes in spite of his technician's inclinations and work becomes a strained point. Schumpeter, Martin Mayer, et. al are of course brilliant economists and venture into much broader views than WD Gann was ever interested to study, but neither of them went out and extracted fifty million USD from the treacherous markets like this guy. Presumably if we find a summary assertion here untenable by such a glaring example to the contrary, we are allowed and even encouraged to point it out.

WD Gann casts a rather imposing shadow onto market history. I'd say he's a good candidate for "mere technicians" having a few actionable tricks up their sleeves.

And to pique Fred's profoundly anti-esoteric bent, take note of the distinctly esoteric aspects of Gann's life and work. ;) This guy according to Fred had to have been a little out to lunch, yet he managed to out-trade 99% of everyone else in 200 years? Hmm.

Here - the stuff at this link will have the great majority of iTuliper's guffawing. I personally have no opinion on it (I'm agnostic), although it does seem pretty far out in left field! What we are left with subsequently is the real point - that this guy's trading acuity and towering track record, leaves the rest of us in our entire collectivity amounting to not much more than one candle-power in comparison. Who else here has had the astuteness to take 50 million dollars out of the stock and commodity markets, eh? http://www.traderslog.com/gannsquare.htm

You wrote: "Even here on iTulip there are some who reject reasonable argument and factual data in favor of political rants and mysticism.". This assessment contains such a degree of uninquiring stereotype (presumably it's a definition of "technical indicators" being equivalent to "mysticism" which you've swallowed whole as issued by iTulip) as to obviate the genuine inquiry it purports to champion.

Otherwise think all your posting is great! So please accept this critique in a sporting way.

WD Gann

Considered by some to be the greatest trader of all time, William Delbert Gann was born on a farm outside of Lufkin, Texas on June 6, 1878. The firstborn of 11 children, Gann never graduated from grammar school or attended high school, having the obligation of working his family's farm. His was raised as a Baptist and kept his faith throughout his life. Gann began his trading career working in a brokerage in Texarkana while attending business school at night. He married Rena May Smith, and had two daughters. He moved to New York City in 1903 at the age of 25 and opened his own brokerage firm, W.D. Gann & Co. In 1919 at the age of 41 he began publishing a daily market letter, the Supply and Demand Letter. The letter covered both stocks and commodities and made annual forecasts. In 1924 Gann's published his first book, Truth of the Stock Tape. His market forecasts during the twenties have been said to be 85 percent accurate. Gann also made forecasts outside the world of investing: he is said to have predicted the elections of Wilson and Harding among others. In his 1927 book, the Tunnel Through the Air, he predicted the attack on the United States by Japan. In his forecast for 1929, he predicted the market would hit new highs until early April, then experience a sharp break, then resume with new highs until September 3. Then it would top and afterward would come the biggest market crash in its history. Gann prospered during the Depression, which he predicted would end in 1932. He acquired seats on various commodities exchanges, traded for his own account, wrote Wall Street Stock Selector in 1930 and New Stock Trend Detector in 1936. He bought a plane in 1932 so he could fly over crop areas making observations to use in his forecasts. He later moved to Miami, Florida where he continued his writings and studies up until his death from stomach cancer in 1955 at the age of 77. W.D. Gann is said to have taken more than 50 million dollars in profits out of the markets. He was buried with his second wife in Green-Wood Cemetery in Brooklyn at a location that looks toward Wall Street.

Even here on iTulip there are some who reject reasonable argument and factual data in favor of political rants and mysticism.

Quote:

EJ For these readers I will continue to share the manufactured rumors, grand fantasies, desperate wishes, and gnawing fears that pass for investment advice in these peculiar times under the title “Playing in Traffic” with my usual warning that all short term market price movement predictions should be regarded with grave suspicion, particularly those with charts attached with lines on them showing support levels, double tops, head and shoulders formations, and other assorted mumbo jumbo bullshit.

Quote:

FRED: This clearly expressed explanation of Astrology, PHI, Fibonacci and other fraudulent magical thinking based "systems" of market prediction is the final word on the topic. All future references to these will be linked here and the threads closed. We have serious issues to discuss in 2009. This is a waste of iTulip community brain power. I'm closing this thread.

The current best user of Gann's methodology - Gann Global (technical analyst prattling "mumbojumboese") has logged this market collapse in time and price decline in commodities / equities and compared it to the handful of other largest declines in history. Out of a detailed database of hundreds of other logged declines, in all markets spanning three centuries, the time compression vs. magnitude decline of the current event is without comparables. Not hyperbole. That conclusion, supported by one of the largest market databases in the world (detailed market historian for 30 years) is already enough to nail this simple but eye popping fact to the floor. Now that is what you might call **interesting**. His documented point is A) nothing in 300+ years comes close to this decline in ferocity of time compression, and B) no comparable decline in history concluded in a single leg down, which is all that this event has completed. Not entirely useless input from a hack technician.

Here's more useless input from the same hack technician (I checked - these bulletins were indeed released and dated as claimed). Besides, this guy is well above trying to be cute on points like this. This humble "hack technician" has really got a handy bag of tricks, eh? Meanwhile at iTulip we solemnly proclaim that "no-one can predict short term market moves". People ought to check around. More likely than not one or two other experienced technical analysts were reading this imminent break as well. Follow this one's eminently sensible comparative methodology and there is not much too mysterious about how he discerns parabolic blow-offs - their extent, or their windows for probable conclusion. I know of at least one other who got his clients out a month or two before Gann Global did, also with 30 years in the markets. Big deal. Skeptical iTulipers need to rediscover the value of agnosticism. Then these notions get handily demystified.

WHAT SUBSCRIBERS WERE TOLD IN 2008 (GANN GLOBAL)

On July 3, 2008, prior to the financial meltdown I issued an all-out sell signal in the stock market. 2 ½ weeks later on July 22, 2008 I issued an all-out sell signal in all investments tied to natural resource, energy and precious metals prices. I held a webinar for subscribers only and at that time I used the analogy of a theater in which every seat had been filled by investors and speculators. The 7-year commodity bull market off the 2001 low was one of the greatest wealth building moves in history. As of July 2008, it was our perception that the last of the late-comers had bought into the bullish argument and that one of the greatest deflationary moves in history would take place. At that webinar, I said that once someone screamed "fire" in this financial theater, subscribers would need to hit the exits before the inevitable stampede. Not only did we implore them to get out, but we made specific recommendations to enter short positions - specifically in the crude oil.

[ThePythonicCow]

Re: The Ground Gives Way - Eric Janszen

The last thing I want to see right now is Joe the Plumber, with a pitchfork in one hand and a bible in the other, down at the entrance of the local university calling for the heads of the "intellectual" socialists.

With Sarah 'Barracuda' Palin by his side ... I kinda like that image myself .

conspiracy theories are anti-intellectual.

... not if they're out to get you .

[Chief Tomahawk]

Re: The Ground Gives Way - Eric Janszen

Meanwhile, in Vancouver, BC:

http://futronomics.blogspot.com/2009...n-hitting.html

[raja]

Re: The Ground Gives Way - Eric Janszen

JK, I have the utmost respect, especially for you and EJ, but my worst investing experience was with Canadian energy trusts. A while back the Canadian government changed the rules on trusts and tanked the market. I took my lumps and walked away, taking away the lesson that what the governments create, they can take away.

So, as long as the political risk, and exchange rate fluctuations are taken into consideration, yes, consider Canadian energy trusts.

I would love to be in Canadian energy trusts with their juicy dividends, and the slow but inevitable effect of dwindling oil supplies making their product ever more valuable . . . and I'm guessing that the political stuff has already been priced in.
But . . . visions of half the stores closed in the US and 20% unemployment quickly dispells any urge to invest there :eek:

[Drifter]

Re: The Ground Gives Way - Eric Janszen

you might want to look into canadian energy-based income trusts. these are smaller companies devoted to production more than exploration, and paying big dividends. i conceptualize them as storing oil for me, underground, and then pumping a barrel or two for sale each year, sending me the proceeds.

JK, I have the utmost respect, especially for you and EJ, but my worst investing experience was with Canadian energy trusts. A while back the Canadian government changed the rules on trusts and tanked the market. I took my lumps and walked away, taking away the lesson that what the governments create, they can take away.

So, as long as the political risk, and exchange rate fluctuations are taken into consideration, yes, consider Canadian energy trusts.

[metalman]

Re: The Ground Gives Way - Eric Janszen

although THAT quote is from orwell's animal farm, there IS one quote from animal house that is germane: after returning from their road trip having thoroughly trashed the car that freshman pledge "flounder" borrowed from his older brother, one of the frat guys says: "flounder, you made a big mistake; you trusted us!"

ha ha! meant animal farm not house! but... yes... they both apply to current circumstances

[metalman]

Re: The Ground Gives Way - Eric Janszen

Just HOW BAD are things going to get?
Mike

been reading this guy ej's stuff for 10 yrs. including this quotation of schumpeter... july 1999. it all keeps playing out like a grade b horror flick.

how bad will it get? watching this all play out over the years, re-reading this and other old stuff here... i can't help it but figure that if we did a + b + c and got x + y + z as a result in the 1930s that we do a + b again but do d instead of c (pump shitloads of $$$ into the banks) we will get a different result x + y + n. as to better or worse, dunno. but can't you just feel it, as schumpeter said? the whole friggin thing is just coming apart. what a set-up...

Poll finds high hopes for Obama, economic plans
The Associated Press - 18 hours ago
With the US facing the gravest economic crisis since the Great Depression, the poll found broad optimism that Obama could help turn things around.

[jk]

Re: The Ground Gives Way - Eric Janszen

'four legs good, two legs bad' ala the book animal house.

although THAT quote is from orwell's animal farm, there IS one quote from animal house that is germane: after returning from their road trip having thoroughly trashed the car that freshman pledge "flounder" borrowed from his older brother, one of the frat guys says: "flounder, you made a big mistake; you trusted us!"

[metalman]

Re: The Ground Gives Way - Eric Janszen

I am a bit concerned with this paragraph. This implication that the end of capitalism and the beginning of socialism may come about due to the "intellectuals", could very easily add fuel to a fire that we may not want to be stoking right now.

One could argue that there has been an anti-intellectual trend in this country since 1980 when "intellectualism" was related to "elitism" in many political campaigns. The culmination of this trend resulted in the past 8 years which led to a purging of governmental expertise for political and religious loyalists. Factual data and reasoning skills were not only ignored, but discouraged, contributing vastly to the enormous problems we currently face. The more repressive form of government we currently have, due to the latest wave against "intellectuals" is more totalitarian than socialistic.

he's very clear on this point... "The term "intellectuals" denotes a class of persons in a position to develop critiques of societal matters for which they are not directly responsible".

he's talking about lack of accountability and it is a HUGE problem with our political system... as you can see everywhere... such as when the fed gov't pols force states to spend money they don't have. this is socialism in one sentence... setting rules that the rule makers don't suffer the consequences of and don't have to live by.

Even here on iTulip there are some who reject reasonable argument and factual data in favor of political rants and mysticism.

astrology is anti-intellectual. magical thinking is anti-intellectual. conspiracy theories are anti-intellectual. thank god itulip can tell the difference. if i wanted to go to prisonplanet.com's forum i would.

History has shown that in times of great economic stress, the anti-intellectual/elitist fervor can lead to very unpleasant and violent consequences. No matter how you may try to clearly define "intellectual" the anti-intellectual crowd will redefine it to meet their own emotional needs.

that's right. they start to... as ej has said before... frame arguments as 'four legs good, two legs bad' ala the book animal farm.

I would hope that the class warfare speech will be cautiously approached. The last thing I want to see right now is Joe the Plumber, with a pitchfork in one hand and a bible in the other, down at the entrance of the local university calling for the heads of the "intellectual" socialists.

that's not what he's saying. he's saying those who are accountable for their decisions are the ones who should be making the decisions. it's not about class. it's about accountability and the corruption that results when there isn't enough of it.

[jk]

Re: The Ground Gives Way - Eric Janszen

With your other assertion, about oil, I also agree, buy there is a "little" practical problem, how do you store oil?
How safe are oil based ETF´s, noting that there´s always some kind of counterparty risk in futures transactions?

Comments are welcome.

you might want to look into canadian energy-based income trusts. these are smaller companies devoted to production more than exploration, and paying big dividends. i conceptualize them as storing oil for me, underground, and then pumping a barrel or two for sale each year, sending me the proceeds.