You know those Ameritrade commercials where the guy says he hates finding out he paid more than the quote price? Well unless something has changed, if you actually paid more than the quote price (which is very difficult to know to the millisecond) you are entitled to a price adjustment.I made a point during the selloff of saying that fast declines usually result in fast moves up, which is what has happened. This is pretty much how it always works.
Its what comes next that is tougher to figure out. What ever is really the magnitude of subprime, it is not now better than it was two weeks ago.
The problems I outlined this morning, or more correctly my perception of them, are still there and their probability of mattering should be no different to you but for now I remain concerned that things are not healthy. I only sold one stock and will replace it with something else next week if the market stays above its 200 DMA. Some are calling this an oversold bounce, we'll see.
Chuck Schumer is a buffoon.
"I'm gonna let the Bush Tax cuts expire." Is that the sound of Hillary's campaign flushing? I don't see how anyone can win on letting the tax cuts expire.
Barry broke the record last night. I remember when Hank Aaron broke the record in 1974 too. I seemed to care more when I was eight. Maybe I'll care more about A-Rod when he breaks the record?
16 comments:
Roger:
Good insights, as always.
To your point about letting the tax cuts expire: What's scary is that I've got a super-liberal friend who explicitly says she *wants* to pay more taxes...she doesn't feel like she pays her fair share, and that we could fix a lot of problems "if people just paid a little more." If that's the mindset of a significant portion of the population, it gives me pause.
Maybe someone at the IRS should propose an MMT (Maximum Alternative Tax) for people who want to pay more...
Sigh.
jakep,
thanks. you know if taxing the "rich" had some good economics behind it, well that might be a different story.
If the notion of "tax the millionaires a couple more percent and all the problems would be fixed" were actually true it would have appeal but I just don't think it can work.
The Dems always say that they want to tax the rich, but they always raise taxes across the whole income spectrum.
I read a blog on ESPN that a guy said that if he caught Barry's record ball he would get out a Sharpie and put a big asterisk on it and give it back to him. LOL.
jakep,
Your friend is most likely lying. If she wanted to pay more taxes, she could do that now. Ask her if she takes deductions and exemptions on her tax return. The Clintons and others who want to pay their fair share should put their money where their mouths are.
The media is missing the real reason for the recent market meltdowns (their phrase, not mine). It is the protectionist legislation that Chucky Buffoon and his ilk are pushing that is spooking the markets.
First thanks so much for stopping postings about the tour. I know there were problems but we loved it. Only 31 seconds between the first 3 guys.
Second, I know people complained about the tour scandal, but Major league baseball is much worse than bicycling on handling drug issues in the sport.
Roger,
I continue to be confused by your "trading" strategy.
You "only sold one stock" in this downturn and bought nothing?
Aren't you supposed to be buying on the dips, and selling on the highs?
Seems you do just to opposite. Duh.
There is a piece of Keynesian theory, ie, "priming the pump" that has validity in a discussion of tax cuts.
Other than that tax cuts should not be a relevant discussion. The relevant piece is GOVERNMENT SPENDING. On that score, the debate is between the "tax and spend" democrats and the "borrow and spend" republicans. Under the Reagan administration more money was spent by the government than all previous administrations. Under the current administration, more money has/will be spent than all previous administrations including the Reagan's.
Remember: all debts are always paid. Either the borrow or the lender pays them.
The charts are telling me that housing may have bottomed, but I am having a tough time buying it from a logical perspective. I'm starting to think that a rate cut is in the works and people are starting to bet on the housing market.
REW:
Ha, I wish! Nope, she's young, the daughter of Seattle hippies (one of whom is a trial lawyer, go figure), and 100% sincere. Since she's a low-paid college teaching assistant, it's easy for her to say she'd like to pay "more"--but based on her politics, I also doubt she'll change her tune as she becomes a higher-paid professor.
Treasury debts are NOT paid back. I know there are occasionally surpluses but they are the rare exception and amount to nothing in the grand scheme of things.
If you look at US debt from 1949 (pre WWII) to today in total dollars and also best viewed as % of GDP you will see enormous debt for WWII. We paid almost none of it back. Governments simply out grow there debts.
You see there is a need for treasuries just like there is a need for dollars in a complex society like ours. Insurance companies, retirees, India, etc all need dollars to stay liquid. Due to inflation they all need INCREASING amounts of treasuries every year.
Thus, the US can increase our national debt EVERY year 2 to 3% on average. If we increase it 4 to 5% for a few years we need to follow that with 1% to 2% for several years. You see GDP is always increasing and so does our ability to borrow. You and I eventually die governments go on and on.
It is stupid to have a balanced budget when as I said Insurance companies, banks, retirees, etc. need treasuries as much as they need dollars in INCREASING amounts every year. What you need to focus on is our total indebtedness as a % of GDP and stop listening to the bubble headed bleached blond reading the news to you.
Currency and treasuries always need to increase. Take a few economics courses. Read Milton Friedman. Stop this insanity about balancing the budget because its what families should do.
Yes I am a conservative with no debt including my mortgage for a number of years now. But I want to retire some day. When do countries retire???
This is one thing Europeans do get. Even if they are not probusiness. The EU requires countries to keep their deficits to below 3% a year – not balanced. Why tax ourselves an extra 2 to 3 % a year when it will hurt us, and hurt commerce?
If you've never seen this video please watch it. Very long but gives an interesting perspective on banking and how our country is going to the birds.
http://tinyurl.com/34ucba
Am I alone of the opinion that the longer one pontificates on an issue, and/or the number of props (videos, charts, etc.) referenced to justify the premise, the weaker I think the position stated really is?
A note to Andy:
This is a great time to buy appropriate real estate on the cheap. Get to work, do your diligence and find some rental property to include in your portfolio.
Example, I consulted in a deal with a Gaithersburg, MD couple who just purchased a 24 unit apartment complex in Akron,OH for $468,000. You do the math.
Anon 1:53.
Roger and a lot of other people are not buying on these dips because we are figuring on a further down-turn in the market. A correction being defined as a 10% or more drop in the market.
Anon 2:10
You failed to mention that the Clinton administration spent more than Regan as well. And guess what; if the Dems win the White House in '08 the federal government will spend more than the current administration did.
jakep.
Tell your friend that if she and her parents will save up just half the money they spend on B.C. bud and mail it in to the IRS, affordable health care could be right around the corner for all of us.
There are some great posts here. "the debt is always paid-either the borrower or lender pays it". That is true. And, that is what happens. Government debt is paid partly by the borrower, via a return and partly by the lender via inflation. That is not going to change. what changes is the percentage allocation at the moment of execution.
You can see from this discussion that hard assets have a place in anyone's portfolio. You should also realize that long term instruments are dicey at best.
Say, Roger I read your article on short ETF's (SDS, etc.) and thought the reasoning was pretty sound. I have bought short MF's in the past and nearly always got burned. But...in what appeared last week to be the beginning of a housing/liquidity induced bear crash,
I bought some SDS and TWM to "buffer" my portfolio.
Great timing, huh....Russell has one or two of the best days in years, I get whipsawed on boths shorts and got stopped out at my 8%. Granted I still came out ahead net, but it still hurts.
Maybe the short hedging philosophy should be rethought in light of the large (5-6% for the double inverse funds) swings we are witnessing in the past several months. Scoot
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