Financial history doesn't repeat itself, but it often rhymes. You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.

J. P. Morgan

"Sell down to your sleeping point"

Saturday, August 30, 2008

I saw this, This guy is a good read for amature Meteorologists

http://www.wunderground.com/blog/JeffMasters/

However, Gustav should regain its lost strength and more once it enters the Gulf of Mexico. A region of exceptionally high oceanic heat content, associated with the warm Loop Current, lies just north of Cuba along Gustav's track (Figure 3). Gustav will encounter a cool eddy in ocean after this, and will miss passing over the warm Loop Current Eddy that broke off in July. As Gustav approaches landfall, the total heat in the ocean will continue to decrease, and wind shear is expected to increase to 15-20 knots, as forecast by the SHIPS model. Thus, some modest weakening is to be expected as Gustav approaches Louisiana. Still, Gustav will likely be a Category 3 or 4 hurricane at landfall in Louisiana, as forecast by the HWRF and GFDL models.

20 comments:

tradewell said...

"The New York Mercantile Exchange on Saturday moved up Sunday's start time for electronic trading of energy contracts to 2:30 p.m. EDT from 6 p.m. EDT."

So that the Wall st. buddies can cover the shorts?

Eric said...

Ya, but it will be lucky to be a 3 by the time it hits.

"Gustav weakened to a Category 3 storm after passage over the island, and is still weakening, according to the latest Hurricane Hunter reports. At 9:48 am EDT, the Hurricane Hunters reported a pressure of 962 mb, up 2 mb from their previous pass through the eye at 7 am. Surface and flight level winds measured by the Hurricane Hunters suggest that Gustav may only be at Category 2 strength."

tradewell said...

Lucky it's weaker :)

By tuesday any effect on the markets will probably wear out, no matter what happens.

Barbecuing anything today?

Eric said...

I should try some pork, that sounds good. My garden is ridiculous with vegies, right now...

I'll be curious what will happen in electronic trading, even though it has nothing to do with me.... I just have to watch. I also want to watch the weather radar stations as it hits Louisiana

What was the link you had for oil...

I forgot to try it.

Eric said...

I'm sorry,

What do you have going?

tradewell said...

Not much, just tanning and being lazy. Have to catch up on work, but I've been staring at charts. Working on a 'big bucks' strategy, so I'm seeing lots of eye-rolling today :)

I wish I had a garden. Do you take care of it yourself? do you spray it or is it organic?

http://www.post1.net/lowem/page/livequotes

It's not showing any activity right now.

Eric said...

I commit the sin of Miracle grow. I do a ton of composting, but the soil here is grim, as to neutrians. So, I figure when I'm 60 the soil will be great, and I won't have to.

http://nymexdatardc.cme.com/

that chart shows a 118 trade, but back down to 116.50, good news is it shouldn't hit N.O. bad news is that is the highest concentration of oil rigs.

http://www.usagold.com/live.html

that chart can get you a live chart of Brent, and the USD.

tradewell said...

Huh, so there's no panic.

I'm going to drop SPY on Tuesday no matter what it does. It's so boring and locked up so much money in it.

"Strapped for cash, some in New Orleans stay and hope"

"If I left, I'll probably lose my job," said Jeremiah O'Farrell, another dishwasher who is staying put.

What??? Is it really so bad in the States that a dishwasher won't be able to find another job?

Eric said...

As optimistic as I try to be, things are awefull here. But they have been for 7 years. It's not a new thing. Tons of people barely making a living. Most the middle class trying to get by on "Call center" jobs.

The median wage is $18 per hour, and health care is $10 of it. So most people are making less than $320 per week. or go without insurance.

One can talk about how bad things are getting, problem is the discussion should be, how bad things have been.


I have people call me regularly for work, and I turn them down, and laugh in their face. "You want to pay what?" "you are Crazy!, That won't even pay my bills."

Then they get pissed because they can't find qualified workers. Wage inflation.... it's coming.

tradewell said...

Coming from you, that's pretty alarming.

I hope you're right about wage inflation, but think it may take awhile longer.

Outsourcing abroad is still a lot cheaper, and easier than ever.

When their (Indian, Chinese etc) wages go up some more, that's when people may think: "I'm not saving as much now, and there are all these other problems to deal with. It may be more cost-effective to just hire people here".

I think this is the major difference between now and the 70's.

Eric said...

Things rhyme and don't repeat. When comparing this cycle with the 70's.... You have to remember, We aren't coming off the gold standard.

Nixon isn't intimidating the Reserve.

Though a "Grey Swan"(I'm talking about some geopolitical event that is caused by the unstable economics), Like the Opec embargo, Isn't as likely. Though Russia is trying. But the middle east understands economics better than The Russians. So, It's very unlikely.

But, Stocks are inflation adjusted,(which is why we have had Positive growth in them since 2004.) As opposed to how they in "Real Dollars" have stagnated.

Most the issues are political, The world needs Balance. We have had too many years of "Supply side" economics. So there are so many cheep goods, Problem is, there is no Demand side for those goods. Without good jobs, people can't afford Goods.

With a supply side economy, without expanding credit, the economy is doomed. Even with expanding Credit, you lose 20% of your buying power. We have to rebalanced the supply demand equation. Problem is we will go too far the other way..... Bla bla bla, we elect Reagan.

This isn't a secret, the fed knows all this, and is doing what they can to dig us out. They knew as they tightened that this was happening. Overall I am impressed with how they are walking the tightrope.

I suspect what they will do is Start tightening every 6 months or so... once the economy has... sort of recovered. But we have to tighten Credit, and still can't expand it in any way.

and again, the only way credit is going to be expanded is for "Home Purchases", any excess liquidity will be pushed in that direction.

People keep talking about M&A, especially in the banking sector... Problem is the only way to do it is for a stock swap.. and who wants 1 share of crappy JPM stock, for 1 share of crappy BBT stock. It's a worthless trade for shareholders.

I saw an IPO, and in order to have enough cash for it, it took City, GS, and JPM to pull it off. and it was like a 500Mill IPO. That is where credit is.

I don't suffer the Hubris to think that the Reserve is filled with morons. But I do think they got caught up in doing the easiest thing in the world... "give out free money." Till they realized the music was going to stop.

Eric said...

there is way too little space for that rant.

Just to let you know, I was bearish before anyone else. And some hope... well...

When everyone else loses their head, it's best to keep mine.

tradewell said...

I remember that in 95-96 everyone was pretty happy in the U.S. In 98, when I left, it was a little different, but still not dramatic. What I'm reading now, is just sad.

I don't agree with you on Russia, but that's a separate topic.

Most of what you say in that long comment is way above my level of competence. I don't understand credit markets. Well, I have glimpes, lol, but it's not a complete picture.

Are you bearish now or not as much anymore?

Eric said...

I agree with Buffet (that sounds so, egocentric). There is select value present.

Not enough value in tech or retail.... but I have some bias, I probably will never feel like there is much value in tech, The P/E's are way too high.... but probably will be eternally.

Eric said...

I'm bearish on 90% of the market.

But the dow 6K Club, I'm not in.

Credit markets are easy.... "would you loan someone your money at 4%? and 8-13% inflation?

Eric said...

You know, if you get me going.

I think that stocks are worthless, I think this is the biggest shellgame/conjob ever devised.

See, I got over "Where I think the market should go." many years ago. For me it's all about where I think all the lemmings are going to go. and trying to be faster than them.

Eric said...

Your going to give me a tumor on my weekend. I've said this before.

Somebody said, "if the bear ends here" it will be one of the lightest bear markets ever.

then when you talk to other bears, they say "we have been in a secular bear since 2000.

But, if it's possible that this Supercycle will be shorter than the 1970's one, because of the gold standard, and the fed being smarter, and less intimidated by the president.
Well the 1970's one started in 1973 and ended in 83(roughly) that is 10 years.

If you say that this one started Secularly in 2000.... and it's 2008.

that makes this cycle 8 years old.

And if you inflation rate the indexes, this market has been a joke for 8 years.

But also remember that when the fed got inflation under control in 1983.... Well the greatest Bull market started Right there.

If you place the 1973 cycle and Juxtipose it in this model as the 2000 recession through 2003(seems the same length as the 73-75 cycle).... Well Then we are in the repeat of the 1983 bull.... Well except that there were 2 recessions from 1980-82.

But that was caused by how volker had been forced into raising rates to obscene levels... Like 18%.

As the reserve, if they stay on hold, as the economy contracts, will do the same thing as "Raising rates to 18%"

but don't take me as an economist, and there are many a slip between cup and a lip.

but I'm Prepped for the market to go lower, or for the bull to start.

Either way, I'm game. I can't stand these people who invest based on some Freakish "Valuation argument".....

There is 1 truth about markets, things are only worth what someone will pay you for them. Valuations be Damned.

But that moment that "everyone is a seller" you want to be a buyer, and visa versa

tradewell said...

"I think that stocks are worthless, I think this is the biggest shellgame/conjob ever devised."

That's exactly what I think. Not to mention all the accounting games they play.

I don't trust the so called fundamentals at all, and after some sad investing experiences, afraid to put the money into the market for any meaningful amount of time. I won't be one of the people who put the money into stocks and wait for a decade for their 8-10% annualized. Too much risk for little reward.

If you had, say 10mil dollars (I'm only assuming you don't), where would you put the money?

Eric said...

Put it in bonds, and stay drunk and stoned in Thailand.

Build an electric motorcycle, for mass consumption.

I'd actually figure out how to rotate from like Italy, to Spain, to some Island, maybe south America....

there would just be a lot of me and a beach.... and My biggest worry would be how to spend more time sober, and stay fit.... but I think I could manage.

None of that is true, I'm sure I'd Just keep trying to build it up, but diversify my investments. Start a few good businesses.

What is the farmer joke... What would I do if I won the lotto? I'd probably just farm till it was gone.

tradewell said...

lol
sounds like a plan, good luck.

I'm off for tonight. Another day well wasted :)

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