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B4 The Bell October 20


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#301 Hiding Bear

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Posted 20 October 2004 - 09:30 PM

Pistolpapa-

I don't think we will know when deflation will hit until after the fact. At worse, the economy is sinking only slowly at this time. With supercomputers and fast communications the Fed could pull off a lot in a short time.

GWB doesn't care much about the effect of deficits, so if necessary, they will make another helicopter drop of money to all taxpayers (special tax rebates that is).

It is not impossible we could experinence deflation, just unlikely - which is the same thing I have said for three years on this and other bear boards.

However I do admit that we are probably less than five years away from an important peak in the credit bubble, and with some bad luck or war the end could come much sooner.

Yes I'm worried about how things will end up, just like the bad scenarios yobob laid out. The next bear market may have no winners. Let's hope for the best. Thanks for your comments. ;)

Edited by Hiding Bear, 20 October 2004 - 10:00 PM.


#302 traderfromhell

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Posted 20 October 2004 - 09:31 PM

LOS ANGELES (CBS.MW) -- Shares of Electronic Arts fell Wednesday after the video-games maker overnight lowered the bar for its fiscal third quarter, which encompasses the important holiday selling season, due to the delay of several games.


ERTS got hammered at the close today, looks like it may retest the Dec 03 low @ 40.60. I got a tip yesterday but did not pull the trigger DOH!

FWIW ESPN games are cleaning EA's clock. They offer their entire sports game line at 20 bucks while EA gets 50 bucks a copy. In some cases EA's games are inferior. Who's gonna pay 50 bucks for Madden when the ESPN game is better for 20 bucks? Hey is that deflation? :D :D
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Posted 20 October 2004 - 09:33 PM

Bumper Crop of Corporate Probes

This year's ''fall harvest'' provides a reminder of the value of legislation like the Sarbanes-Oxley Act.

Stephen Taub, CFO.com
October 20, 2004

http://www.cfo.com/a..._todayinfinance

#304 Madame Wrecked Him

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Posted 20 October 2004 - 09:37 PM

Just watched the Global national news

Did you happen to catch the cosmetic surgery interview with WH? He was on our 5.30 Global News - I don't know if you catch the same stuff, though others in Ontario may have seen the piece. If you watched, you'll know what I'm talking about.

#305 RockLedge

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Posted 20 October 2004 - 09:38 PM

Anybody have any thoughts that if the curse is reversed, the market will crash.

B4,.. I like the 3 pillars thought. Right now.. it's as if there's not a single person worried or concerned about any of it.

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Posted 20 October 2004 - 09:43 PM

Just watched the Global national news and here is Paul Celucci a Bush neo-Con nut who is U.S. Ambassador to Canada saying at a News Conference in Ottawa that Canada should give the U.S. flu vaccine cuz they need it. A reporter says BUT why?? should we?? you are putting an illegal duty on our Hogs and our Lumber and on Lumber you have lost 5 straight appeals and are now mounting an extraordinary last ditch challenge you know you will lose. On Beef we now test more Cattle than you do for BSE and still you lock us out of your market and Canadian Companies and farmers are going broke...Cellucci says this is different ..lives are at stake... a different reporter says ...But all your Politicians and Convicts are getting vaccinations and Cellucci says ...the Pols are our leaders and the Cons need it cuz they are in close proximity to one another...What is wrong with this picture...Canada will probably do the right thing..but do NOT underestimate how pissed we are getting..should Shrub be re-elected and maintain the same policies look out.. Paul martin has already promised a free Parliament vote among all Parties on the proposed Missile Shield so i can tell you THAT is dead on arrival! ;)

Thanks for the info Brian.

#307 K Wave Rider

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Posted 20 October 2004 - 09:52 PM

Anyone care to comment on the Oct 22  turn date?

If they keep MSFT ramped up until the close manana, it could very well turn out to a top..perhaps a major one..


NAZ 180 min about as wound up as they come..and this SWUP is lookin' too pooped to putt much further..we're gonna get some big action real soon methinks..

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#308 pistolpapa

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Posted 20 October 2004 - 09:52 PM

Pistolpapa, Thank you for responding!  Perhaps part of the problem is trying to understand what might happen, price wise, by using the limiting terms of deflation and inflation. The term inflation, particularly, should be retired  as you've shown that there can be no inflation (as it is traditonally defined) without rising wages.

There is  definitely an oversupply of everything right now, so a future where there are inadequate supplies is counterintuitive. Part of the problem with the prices up or prices down debate is people are extrapolating from the  history of their own economy,when  they should be looking at what happens in banana republics in other parts of the world, for fresher more appropriate examples.

The closest present analogy may be the currency meltdowns of the nineties in Asia and the reactions of prices (not wages) in Venezuela, when their currency was depegged from the dollar.  Though these are very rough comparisons, what struck me is that the price of housing went down while most everything else went up.

Take for example a gallon of milk. Say it's 5.00 today and realistically can't go lower, as so much of the cost is delivery, servicing the dairy's debt, etc..etc... No pricing power. Say, all the other dairies are in roughly the same spot. What's to keep it from doubling in price? The average person will just drink less milk and pay the 10.00 per gallon. They may drink half the usual amount, if their income remains somewhat stable and they may drink one third to one quarter their former consumption if they experience dropping wages. I don't mean to sound pedagogic. It's not that I think anyone on the board is retarded, I'm just trying to clarify this for myself.  :wink2:

We're all trying to clarify it for ourselves. We have to take it slow looking at one thing at a time and try not to use economic lessons of the past. It is different now.


Any more price inflation in the items we need is deflationary in that it will send the system into recession.

The consumer will have less money to spend on things he does not need.

The service sector economy is mainly based on things we do not need. (car washes, fast food, pedicures etc.)

As he quits spending money on those things, service businesses fail.

When this happens, our service sector economy implodes.

Hate to beat a constipated elephant here, but...

As MH has mentioned previously, the inevitable recession that you are referring to in the form of a service economy slowdown does not necessarily mean that deflation will follow. Prices do not have to go down.

Deflation is a combination of the following factors:

The supply of money goes down.
The supply of goods goes up.
Demand for money goes up.
Demand for goods goes down.

So even if the supply of goods increases and the demand for those goods decreases, the govt. can increase the supply of money to offset the other two.

Stagflation, by definition. Yes, a return to the 70's seems more and more likely.

Sorry, if this explanation is too academic and tired for some of you. But I hope some will appreciate it. :)

The supply of money (credit) has been increasing exponentially for a few years now, especially through the GSE's.

A stock market bubble, a bond market bubble, a real estate bubble and the beginning of a commodity market bubble are the result of the massive increases in the money supply.

The money now, is not going where it is needed most -- to support the real economy.

The government is made up of politicians. Except in rare cases, they only care about retaining their positions or moving up the ladder. To do this, they need to please only their contributors.

Hate to pop your bubble, Bud, but the government never gives a damn about the real economy until it is too late.

It is already too late.

Pistol been meaning to ask you. Do you fall in the $200 Gold Camp or the $1000+ Camp?

200 very valuable dollars.

But when this collapse occurs, there will be total chaos -- very unreal.

The hard part for most people will be trying to remain sane and stable in the midst of all the confusion.

That's what I'm workin' on.

#309 K Wave Rider

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Posted 20 October 2004 - 10:00 PM

A shorter term look at NAZ..

Any move below 1925 area in the next day or so should start a rolling cascade of time frames to the downside..this is for all the marbles over the next couple o dayz..bears have a golden opportunity to get somthing goin' here..they must seize it..

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#310 BudFox

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Posted 20 October 2004 - 10:08 PM

Pistolpapa, Thank you for responding!  Perhaps part of the problem is trying to understand what might happen, price wise, by using the limiting terms of deflation and inflation. The term inflation, particularly, should be retired  as you've shown that there can be no inflation (as it is traditonally defined) without rising wages.

There is  definitely an oversupply of everything right now, so a future where there are inadequate supplies is counterintuitive. Part of the problem with the prices up or prices down debate is people are extrapolating from the  history of their own economy,when  they should be looking at what happens in banana republics in other parts of the world, for fresher more appropriate examples.

The closest present analogy may be the currency meltdowns of the nineties in Asia and the reactions of prices (not wages) in Venezuela, when their currency was depegged from the dollar.  Though these are very rough comparisons, what struck me is that the price of housing went down while most everything else went up.

Take for example a gallon of milk. Say it's 5.00 today and realistically can't go lower, as so much of the cost is delivery, servicing the dairy's debt, etc..etc... No pricing power. Say, all the other dairies are in roughly the same spot. What's to keep it from doubling in price? The average person will just drink less milk and pay the 10.00 per gallon. They may drink half the usual amount, if their income remains somewhat stable and they may drink one third to one quarter their former consumption if they experience dropping wages. I don't mean to sound pedagogic. It's not that I think anyone on the board is retarded, I'm just trying to clarify this for myself.  :wink2:

We're all trying to clarify it for ourselves. We have to take it slow looking at one thing at a time and try not to use economic lessons of the past. It is different now.


Any more price inflation in the items we need is deflationary in that it will send the system into recession.

The consumer will have less money to spend on things he does not need.

The service sector economy is mainly based on things we do not need. (car washes, fast food, pedicures etc.)

As he quits spending money on those things, service businesses fail.

When this happens, our service sector economy implodes.

Hate to beat a constipated elephant here, but...

As MH has mentioned previously, the inevitable recession that you are referring to in the form of a service economy slowdown does not necessarily mean that deflation will follow. Prices do not have to go down.

Deflation is a combination of the following factors:

The supply of money goes down.
The supply of goods goes up.
Demand for money goes up.
Demand for goods goes down.

So even if the supply of goods increases and the demand for those goods decreases, the govt. can increase the supply of money to offset the other two.

Stagflation, by definition. Yes, a return to the 70's seems more and more likely.

Sorry, if this explanation is too academic and tired for some of you. But I hope some will appreciate it. :)

The supply of money (credit) has been increasing exponentially for a few years now, especially through the GSE's.

A stock market bubble, a bond market bubble, a real estate bubble and the beginning of a commodity market bubble are the result of the massive increases in the money supply.

The money now, is not going where it is needed most -- to support the real economy.

The government is made up of politicians. Except in rare cases, they only care about retaining their positions or moving up the ladder. To do this, they need to please only their contributors.

Hate to pop your bubble, Bud, but the government never gives a damn about the real economy until it is too late.

It is already too late.

Just to be clear, I'm only taking the inflation side of the argument for the time being. I agree with your, and Hypertiger's, belief that an inflationary system must eventually fail.
But I'm postulating that the coming economic downturn will not be the end of the line for this bubble machine. The real economy might get a much needed round of "creative destruction", as Schumpeter might say, to blow out some of the zombie corpses floating around.
But since there is not a private industry rising out of the muck to take the place of these loses, my guess is that the uber-zombie, Uncle Sam, will be the source of future employment growth.
I started my career designing buildings for private corporations, then I moved to designing buildings for private airlines, followed by projects for public airports. Now everything I do is for the local govt. municipalities. So I'm already working for the govt. And if you're not in some way already, my theory says you most likely will in the near future. :o

Uncharted waters......
"Greed captures the essence of the evolutionary spirit." - Gordon Gecco

#311 K Wave Rider

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Posted 20 October 2004 - 10:09 PM

Speakin' o' Mr Softie..look where he is..this is a major resistance area..he needs to be turned back right here..if keeps goin' up and takes out "Dividend Island", that would not be bearish..so, a bit of churning tomorrow, followed by a huge dump would be ideal.. :lol:

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#312 brian4

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Posted 20 October 2004 - 10:15 PM

Mi-God MWH I saw himself in the flesh and he was wearing a tie the harbinger of bacteria-don't spare the rolling pin MWH-these Boob merchants can be dangerous! ;)

#313 ShitEatingGrinner

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Posted 20 October 2004 - 10:17 PM

"Never got to see the D.K.'s, though .."


Rent "Urgh! The Music Wars." Very cool live footage from early eighties punk. Early Police. Oingo Boingo. Gary Numan. The Cramps. XTC. Dead Kennedys doing "Bleed." Lots of unheard of bands.

#314 pistolpapa

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Posted 20 October 2004 - 10:24 PM

Pistolpapa, Thank you for responding!  Perhaps part of the problem is trying to understand what might happen, price wise, by using the limiting terms of deflation and inflation. The term inflation, particularly, should be retired  as you've shown that there can be no inflation (as it is traditonally defined) without rising wages.

There is  definitely an oversupply of everything right now, so a future where there are inadequate supplies is counterintuitive. Part of the problem with the prices up or prices down debate is people are extrapolating from the  history of their own economy,when  they should be looking at what happens in banana republics in other parts of the world, for fresher more appropriate examples.

The closest present analogy may be the currency meltdowns of the nineties in Asia and the reactions of prices (not wages) in Venezuela, when their currency was depegged from the dollar.  Though these are very rough comparisons, what struck me is that the price of housing went down while most everything else went up.

Take for example a gallon of milk. Say it's 5.00 today and realistically can't go lower, as so much of the cost is delivery, servicing the dairy's debt, etc..etc... No pricing power. Say, all the other dairies are in roughly the same spot. What's to keep it from doubling in price? The average person will just drink less milk and pay the 10.00 per gallon. They may drink half the usual amount, if their income remains somewhat stable and they may drink one third to one quarter their former consumption if they experience dropping wages. I don't mean to sound pedagogic. It's not that I think anyone on the board is retarded, I'm just trying to clarify this for myself.  :wink2:

We're all trying to clarify it for ourselves. We have to take it slow looking at one thing at a time and try not to use economic lessons of the past. It is different now.


Any more price inflation in the items we need is deflationary in that it will send the system into recession.

The consumer will have less money to spend on things he does not need.

The service sector economy is mainly based on things we do not need. (car washes, fast food, pedicures etc.)

As he quits spending money on those things, service businesses fail.

When this happens, our service sector economy implodes.

Hate to beat a constipated elephant here, but...

As MH has mentioned previously, the inevitable recession that you are referring to in the form of a service economy slowdown does not necessarily mean that deflation will follow. Prices do not have to go down.

Deflation is a combination of the following factors:

The supply of money goes down.
The supply of goods goes up.
Demand for money goes up.
Demand for goods goes down.

So even if the supply of goods increases and the demand for those goods decreases, the govt. can increase the supply of money to offset the other two.

Stagflation, by definition. Yes, a return to the 70's seems more and more likely.

Sorry, if this explanation is too academic and tired for some of you. But I hope some will appreciate it. :)

The supply of money (credit) has been increasing exponentially for a few years now, especially through the GSE's.

A stock market bubble, a bond market bubble, a real estate bubble and the beginning of a commodity market bubble are the result of the massive increases in the money supply.

The money now, is not going where it is needed most -- to support the real economy.

The government is made up of politicians. Except in rare cases, they only care about retaining their positions or moving up the ladder. To do this, they need to please only their contributors.

Hate to pop your bubble, Bud, but the government never gives a damn about the real economy until it is too late.

It is already too late.

Just to be clear, I'm only taking the inflation side of the argument for the time being. I agree with your, and Hypertiger's, belief that an inflationary system must eventually fail.
But I'm postulating that the coming economic downturn will not be the end of the line for this bubble machine. The real economy might get a much needed round of "creative destruction", as Schumpeter might say, to blow out some of the zombie corpses floating around.
But since there is not a private industry rising out of the muck to take the place of these loses, my guess is that the uber-zombie, Uncle Sam, will be the source of future employment growth.
I started my career designing buildings for private corporations, then I moved to designing buildings for private airlines, followed by projects for public airports. Now everything I do is for the local govt. municipalities. So I'm already working for the govt. And if you're not in some way already, my theory says you most likely will in the near future. :o

Uncharted waters......

The US is not a sovereign economy.

The world supports us like the dead guy at "Weekend at Bernie's".

Only sovereign economies would be able to do what you propose.

#315 brian4

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Posted 20 October 2004 - 10:31 PM

This morning as self proclaimed Board Historian -Machine was extolling the virtues of George Washington as Prezy-Dent. But MH you failed to address the most important question of his Presidencey which was "how many times did Martha get slivers from George's wooden teeth" Scholars and Historians await your answer with baited breath! :lol: :lol: :lol:





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