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Bubblemania, Big Time


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"I just find it amazing that even as [Greasepan] sits here and predicts this whopping economic growth [3.75% to 4.75%] he sees greater risk of deflation in 2004 than in 2003,'' said Karl Haeling, head of fixed-income sales ..."

 

Bonds Crater Worldwide

 

So true, Karl, so true. One of those choices -- growth or deflation -- is an utter fantasy. The markets think it's the latter. We'll see what Mr. CPI has to say about that at 8:30 a.m.

 

If CPI comes in strong the day after Greensin was talking deflation on TV, his last shred of credibility would be destroyed. Surely he got a peek at the number before entering the Congressional jackal cage?

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Guest bullseatshitndie
The reason why I'm starting to just set stops and targets and walk away. Made me nutso yestiddy.

sometimes walking away best thing to do. those spikes either way are frustrating

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wtf was that in the es futures?

That is simply 1500 contracts changing hands. Do not be all-armed! :shocked It is only a test. :unsure: NO meltdown is possible,:huh: everything is under control. Go long and buy the future. :) You are safe now. Sir Greeny will protect you. :ph34r: He has unconventional methods to protect you. :o Buy now and buy lots. It is safe. :blink: :ph34r: :blink:

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From a July 15th commentary by Richard Russell:

 

"So, how am I celebrating 79 years on planet earth? One way is that I made a decision. Today (I've been thinking about this for weeks) I sold ALL my bonds, every last one.

?

"Why did I do it? I did it because the US is heading for maybe the greatest financial mess in world history. The US is far too extended financially, militarily and socially (socially in the way of entitlements that we can't afford and can't pay for)."

 

The whole commentary is published on a website (maybe without permission), but it's a site that can't be linked from Capitalstool.

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Good morning and Good Stool to all!

 

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machine- why not? Russell is saying exacly what I've been saying.

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The bottom line here, is that none of you are right. The market is right, Doc is not right, OY, SG or anyone. The problem is that when we follow one of them because they are right sometimes, we tend to overallocate based on their guesses and that is where we get hurt. Fib numbers, Gann, stars, moon, its all a joke when you lose and they are gods when you win.

I have traded with some of the "best" and it all comes down to one thing, ALLOCATION.

Over allocate and you WILL lose.

 

Set stops and create a system that eliminates discretion at the operating level. It has been fun reading this thread.

 

Have a good life.

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From Brian Reynolds in minyanville.com

 

 

Remember that Treasury yields had already moved to low levels in April before we got the rally in May from amateur bond speculators who piled into the market.

 

To me, that rally was like pouring gasoline on a smoldering fire, and refis surged to record levels because of it. Now, those amateurs are gone, chased out of the market yesterday when Greenspan dashed their hopes that the Fed would start buying Treasuries hand over fist, and bond yields have risen to where they were in May before that last rally began.

 

That rise in yields shuts off new fuel from being added to the fire, but it doesn't remove what was added. We've had two months of super-strong refi applications that are locked in and will close sometime between Labor Day and Thanksgiving, and refis will still continue at a well above normal pace with the 10-year at around 4%. I don't think that the Treasury market even begins to impinge on the economy until approaches the 4.50% area (and that is subject to change, and is a function of how quickly it moves).

 

As I've written numerous times in the past, I think the major driver in this type of environment is the corporate bond market, not the Treasury market. In order of importance, I'm looking at the tone of the market (can companies access it after being shut out last year?), spreads (how risk-averse are investors) and, in a distant third place, price. All three factors are much better than they were a year ago. The yield on a typical junk bond has gone from 14% in October to 9% now; a few basis points in yield on Treasuries one way or the other isn't going to make a big difference when compared to that kind of move.

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