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I am the first to love all the analysis threads. However I do that as a game
only, to keep my cells occupied, and so as not to jump into trades that don't
exist out of a need for action.
All this tells me there is no way to a get clear fundamental picture without
hindsight, and even then... Just go with the flow. It's a bull, period. Just
look at a DJ chart from 5 meters away.
If we get a bear, I will miss the first leg, but then I'll know. Don't worry,
be happy, enjoy the ride while it lasts. There will always be trends, trying to
pick them at their start is a waste of money. Any success in this area is a
pure coincidence. I learnt that the hard way, for I was stupid enough to pick
to the day several historic and intermediate turning points early in my career.
I concluded this is how great trading is done and proceeded to apply that
further. Although I had further great calls I also got into real bad trouble,
and that ended up screwing ten years of trading.
Trade what you see, not what you fear in the markets, but fear the opinions,
especially your own.
Gwenn
| -----Ursprungliche Nachricht-----
| Von: BruceB [SMTP:bruceb@xxxxxxxxxxxxx]
| Gesendet am: Wednesday, October 06, 1999 3:55 AM
| An: realtraders@xxxxxxxxxxxx; James Taylor
| Betreff: Re: AW: FOMC meeting?
|
|
| > Just because the market is at extremes and folks (including myself)
| > recognize it, should not reassure you that it will continue. Folks like
| > myself who take a hell of a lot of time to research and try to understand
| > the nature of the beast, have spent equally as much time in careful entry
| > and stops when short-selling this bubble. Back in 1929, there were more
| > than there share of people who warned of the bubble. The difference
| > between 1929 and today is, things are MUCH, MUCH WORSE.
|
| James, you've got a lot more studying to do. :) See below.
|
| >
| > Specifically:
| >
| > Comparing the 1980-90s to the 1920s
| >
| > Evidence that the US is now a declining power rather than a rising power,
| > and hints that the next depression will be much worse than the Great
| > Depression of the 1930s.
| >
| > 1. In the twenties, the US was the world's leading creditor. In 1998, the
| > US is the world's largest debtor.
|
| The US was one of the world's largest debtors for most of the 1800's (large
| foreign investment in a vibrant new economy), and that century went pretty
| well. Being the largest net creditor in the 20's also didn't stop the
| Depression, now did it? Conclusion: the statistic is meaningless.
|
| >
| > 2. The fed govt. had a budget surplus each year from 1920 through 1930.
| > >From 1980 through present, the US has ran massive deficits. The national
| > debt was reduced by more than 33 percent during the 20s.
| > It increased by 342 percent during the eighties alone !
| >
|
| As a percentage of GDP, the debt was as high as 50% after WWII. Today it's
| a fraction of that, and falling fast. Don't let the fact that we're now
| running a surplus (even after social security receipts) get in the way of
| your thinking either...
|
| > In the twenties, the debt was mostly of long maturity. In the eighties,
| the
| > average maturity of the marketable debt was just six years, and most of it
| > was in short-term instruments that had to be rolled over frequently.
| >
|
| An incredibly shrewd move in hindsight. By using shorter term maturities,
| the government kept the interest rate on the debt lower (rates on 30yr bonds
| are higher than rates on 5 yr notes). Now, as a large chunk of those bonds
| are set to expire, the government can roll them over into bonds at even
| lower rates (look at where rates were 5-20 years ago as compared to today
| James and tell me what you see).
|
| > 3. In the 20s, the US was on the gold standard. The US had the lion's
| share
| > of the world's gold reserves. Currently, the dollar is a pure fiat
| > currency, and American monetary reserves have dwindled to less than 9
| > percent of the world total, down from 50 percent in 1952.
| >
|
| What good did all that gold do during the Depression? As for monetary
| reserves, in absolute terms the figure has grown dramatically. The only
| reason the US / world percentage is down since the 50's is because of the
| global economic recovery since WWII. Of course, if the low percentage rate
| concerns you, we could always nuke the world and drive it up to 100 ...
|
| > 4. In the 20s, the US govt. had almost no unfunded liabilities outside of
| > meager veterans' benefits and pensions. Today, unfunded liabilities,
| > off-budget borrowing, loan and deposit guarantees, govt. pensions, and
| > unfunded Social Security obligations amount to approx 14 TRILLION DOLLARS
| > (that figure was
| > from 1992! -- it is much higher today)
| >
|
| It is higher today, but is now heading lower. The year 1992 reminds me of
| something- oh yes, I think it's the year the book "Bankruptcy 1995" was
| published...
|
| > 5. In the 20s, the US ran a significant trade surplus, today, it runs
| > thelargest deficit of any trading nation in the history of the world.
| >
|
| You just repeated item number 1. But just for the record, the trade deficit
| figures released by the BEA are completely bogus.
|
| > 6. The 20s were a decade of high savings and high gross domestic
| investment
| > in the American economy. The last decade has seen RECORD low savings and
| > low investment.
| >
|
| More bogus numbers, see my and Steve Poser's message on the topic.
|
| > 7. In 1929, the unemployment rate in the US was 3.2 percent. Present day
| > the unemployment rate is 4.6%. During the Great Depression, the
| > unemployment rate was recorded as 18% (was questioned to be much higher at
| > 25%). At just this rate (18% x 270 Million), that means an unemployed work
| > force of
| > approximately 50 MILLION PEOPLE. I believe this figure will actually be
| > much higher.
| >
|
| Actually, the unemployment rate is calculated using the number of
| "employable" people as its base (no kids or retirees, etc.), so don't worry,
| the proper extrapolation is only 25 million! Don't you feel better?
|
| > 8. Only 51 percent of the American population lived in communities of more
| > than twenty-five hundred persons in 1920. Almost 22% of the work force was
| > on the farm. By 1980, the US was overwhelmingly urban, and only 2.6% of
| the
| > workforce was employed in agriculture. There is therefore far fewer people
| > who are likely to be self sufficient in food.
| >
|
| Sounds like we're heading toward a Y2K survivalist thread here!!!
|
| > 9. Govt. spent just 3.2% of the GNP in 1929. Less than 10% of the civilian
| > work force was employed by govts at all levels. The only nonemployees
| > receiving checks from the Fed govt were military pensioners and a few
| > retirees. Total federal payments were just $700 million. There was no
| > Social Security. There was no dole for the unemployed. There was no aid to
| > families with dependant children nor were ther food stamps. Total public
| > welfare expenditures in the US in 1927, a recession year, were just $151
| > million in a population of 121.9 million. In the 80s, by contrast, the
| govt
| > employed 21.2% of the workforce, and many millions were dependent on govt
| > transfer programs. In 1989, these totaled
| > $539.5 BILLION.
| >
|
| I hate to break my streak, but these numbers are accurate and I don't like
| them either!
|
| > 10. In the 20s, total fed, state, and local tax collections equaled only
| > 13% pf personal income. By 1989, tax collections had swollen to 36.8% of
| > personal income. This figure is higher for most Americans today.
| >
|
| Agreed. Too much taxation. I'll end on that one.
|
| Bruce
|