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#1 Guest_yobob1_*

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Posted 30 October 2004 - 07:14 AM

I'm breaking my silence for one post here.

Now as they say in the airline biz, sit down, buckle up, place your head between your knees and kiss your ass buh bye.

Let us pray. Oops that's Shrubcos decision process. Sorry no devine intervention forth coming here. I hold out hope for a Kerry victory. I think the pollsters are really having a hard time pinning people down. For one thing they cannot access the millions of Americans that have foresaken land lines for a totally cellular life. How that group might vote is open to debate, but in generall they will tend to be a younger group. I also think there is more anger directed at Shrubco than the pollsters are picking up. That anger could be manifested in a refusal to participate in polls. I don't believe half of America has gone evangelical nutzoid. Sorry Doc, I don't go in for the facists will steal the election crap any more than I would go for the liberals will steal the election crap. I think the effect is neutral. Wasn't it you decrying the abundance of conspiracy theories? I am not a Kerry fan but given only the choice between four more years of neocons or enduring four years of neolibs, I'll tolerate the libs. If we're real damn lucky we'll retain a Repuker House and Senate and we can get four years of gridlock wherein the government does nothing which is the best possible thing one could ask for. At any rate in less than a hundred hours we'll all know which way the wind blows, which will at least remove that bit of uncertainty. I doubt the the OBL tape will have any lasting effect given the sheeples nanosecond attention span.


To wrap this up, I’ll return briefly to theory. System Liquidity is today predominantly created through the process of financial leveraging. Speculative financial market returns are the driving force for monetary expansion, as opposed to financing investment in pursuit of true economic returns in the real economy. The great risk in this mechanism is that gross (“blow-off”) market excess can completely corrupt the market pricing mechanism with little hope for adjustment or self-regulation. Left to its own devices, such a maligned and dysfunctional system will self-destruct. The Fed has abandoned its responsibility for regulating an increasingly unwieldy Credit system, seemingly leaving the burden to our foreign Creditors. All the while, economic distortions and imbalances run deeper, financial fragility more acute, and unmanageable foreign liabilities more unmanageable. And as magical as today’s Ongoing Easy Liquidity appears to most market professionals, there is no avoiding the reality that it must end – one way or the other – to forestall a dollar collapse.

When you look around the planet and check under the rugs at the world's CBs and other large financials, the majority of the assets are dollar denominated. Everyone's playing in the same sandbox. No one big player can take their bucket and go home without destroying their own bucket, their shovel and the sand box itself. Self preservation says the dollar won't collapse - just yet. At some point down the road it will and it's death will herald the end of the global fiat system.

While gold, and to a lesser extent silver, are lossely tied to the dollar, over time that relationship is breaking down. Gold has it's own agenda and I think it will gradually strengthen against all currencies. Silver is on slightly different path and I still hold it will outperform gold for quite a while. At some point it may be advantageous to take a majority of the silver gain and roll it to gold. The gold/silver ratio is what I watch. If and when it reaches the 20:1 level I'd be on my toes and ready to move. If it blows past that and goes beyond 15:1 you'll probably be looking at either a mania or a squeeze - likely a little of both. Think top. Gold IMO is what one owns for wealth preservation - not for gain.


While the important "leading" median new home sales price index peaked in April, the "lagging" median existing home sales price index peaked in June, so that our composite of them, weighted by their sales volume, also peaked in June.....

Contrary to others who agree there is an American housing bubble in prices and mortgage debt, we have never expected rising mortgage interest will cause, or even trigger, the price peak resulting from a combination of over supply that we've expected from typical trend-following over-building following a natural peak in demand resulting from "over ownership." We believe both bearish price conditions have now occurred.

We expect the resulting multi-year house price decline, even if gradual and in sharp contrast to stock market price declines, will create a cause-and-effect negative wealth feedback. This vicious cycle, or downward spiral, with consumer spending will exacerbate the incipient business cycle slowdown into a severe recession, which we continue to expect to start next year, as we also reasoned and explained previously:

The housing market is simply running out of steam due to exhaustion which is what I've contended would happen all along. Rental vacancies are not improving and will not improve. You need better credit to rent than to own and when you go belly up and lose your house your credit is pretty much shot. Multi-generational households will become a new fad leaving a humongous glut of vacant housing. That should do wonders for prices. It will be a global bust as the same easy credit, loose lending practices have been a global phenom.

In the US when the construction bust begins to manifest the downward spiral effect on the economy will be very rapid and deep cutting. The only question in my mind is whether China will beat us to the punch.

Vacant space in China's commercial real estate sector was up 5.3 per cent year-on-year during the first quarter of this year to 90.08 million square metres, the National Bureau of Statistics said yesterday.

"Although the growth rate slowed from the same period last year, it was still much faster than the average growth rate of 2.2 per cent for 2003," the bureau said in a statement.

The amount of floor space which went unsold for more than three years stood at 11.38 million square metres, accounting for 12.6 per cent of the total, it said.

Economists attributed increasing vacant space to real estate investment growing too fast, as well as high prices.

During the January-March period, total investment in commercial real estate reached 182 billion yuan (US$21.9 billion), an increase of 41.4 per cent compared with a year ago.

Investment in residential homes rose 35.9 per cent to 120.3 billion yuan (US$14.5 billion), while investment in office space rose 68 per cent to 9.4 billion yuan (US$1.1 billion).

A total of 36.81 million square metres of commercial real estate were built during the period, an increase of 45.8 per cent.

Housing prices on the rise

This isn't the only thing I've read on China that is raising red flags. I can't locate the link, but I read an article that spelled out shiny new high rises in some lesser known cities, that were not only vacant but had never been finished off in the interior. The developers skipped and now the buildings are occupied by squatters with stairwells being filled two stories high with trash. What you see in China's major cities has apparently been repeated in a 100 or more lesser know cities as local officials attempt to boost their prestige and power by outbuilding their neighboring cities. Of course the fact that China can't even provide enough power to operate their factories without shutting down something else is a problem also.

Peak oil will kill China's burgeoning economy. They will never be able to duplicate what the West did over the last 150 years simply because they won't have the virtually free energy sources we did. The West squandered hundereds of millions of years of stored solar energy ( dead dinos and what not) in an orgy of consumption. The Chinese, nor anyone else, will have that luxury.

The typical boom-bust cycle demands that prior excesses be matched with a like period of retrenchement. In our case that boom went on too long to begin with and then to add gasoline to the fire, it was artificially extended and run to extremes unknown before in human history as insane officials attempted to outrun the hangman. Unlike any previous boom cycle this one is truly global in scope. The excesses have invaded every continent and virtually every nation. The coming depression will be global, prolonged and unthinkably deep. You can thank the information/electronic age for that.

Speaking of IT, anyone need some chips? Anyone?

"I think the fabs in China will price their products to gain market share, not necessarily to make a profit, and that's going to hurt the pricing structure of the industry."

"(M)any refurbished 6 in. and 8 in. lines are moving to China." (Unique to this build cycle, "old" fab equipment is not staying off-line after it is replaced by upgraded gear.) ....

Conclusion: Inventory is the canary in the coal mine. It tells us current global capacity is already exceeds demand. On top of this, there is an avalanche of new semiconductor wafer capacity coming on-stream in the immediate future. You tell me where semiconductor ASPs and profits are headed in the next few quarters. And what this means for Silicon Valley...

View from Silicon Valley- Building inventory and building fabs

The story above is but one illustration of excess capacity and production in an environment where factory utilization is already very low. This is why most prices can't rise at the consumption level. Just too much stuff around and too many suppliers willing to sell at a loss if need be just in order to survive a bit longer. Couple that with an energy tax and falling real incomes on top of a historic debt burden and all of a sudden it's "Houston we have a problem."

There is no free lunch. When the credit system goes to any length necessary to keep growing, it inevitably ends up lending to far too much to far too many unqualified borrowers at far too low of rates. It will, as it always has, end in tears. No amount of engineering, charting, or manipulation will stop the inevitable swelling of defaults which results in credit contraction as lenders are forced to constrain lending while the defaults rise. We are past the crest and the little snowball you see beginning to roll down the slope will be a full blown avalanche within a year.

I still see the POR as occurring anytime between now and the end of Q1 05' and subsequently the TEOTWAWKI (financially speaking) within the following 12 months. Let's hope I'm terribly wrong, because the ramifications on a global basis are really too horrifying to consider.

#2 Butterfield 8

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Posted 30 October 2004 - 07:27 AM


From today's NY Times. "GOP to the Poor: 'Don't Vote'"

QUOTE (GregFokker @ Oct 29 2004, 11:54 PM)
I think that the Kerry landslide is going to shock and awe, and discredit the pollsters in the process.

You are forgetting a key point. The Republicans control the voting machines in every decisive state. Do you think it was happenstance that Diebold built machines without a paper trail, while other companies in non-key states built machines with a receipt ? The CEO spent a nice four day weekend at Crawford shortly before Bush announced support for new machines. Please see the 2002 elections in Georgia and Minnesota where Diebold succeeded in stealing Senate seats, thus giving the Senate a Republican majority - without which most of this destructive legislation would not have passed. These were labeled "upset" elections where polls gave the Dem up to a 5 point lead on the morning of the election. Then there was Missouri. If they will not stop at murder, where will they stop? Kerry may very well win in a landslide. But we will never know it. And never be able to prove it. These bogus polls calling it a tied race are essential to the White House. It is the only plausible way they can claim to have won when they will have stolen it. Again.

The only way that the top 20% of the population can outvote the bottom 80% is if the votes of the 80% are not counted. get it?


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Posted 30 October 2004 - 08:57 AM

Thank you Yobob! Excellent!

It occurred to me as I was reading it (as I'm sure it has to you) that the inventory and capacity issues in the semi industry rhyme perfectly with those same issues in the auto industry. Remember when Japan made a conscious effort to capture the US auto market, choosing to price products at or below cost to capture market share through their state sponsored Keiretsu system? Now here we are all these years later, and other companies have followed the Japanse example, and cars are made everywhere...all chasing too few consumers for the sheer number of brands and nameplates created. It's a race to zerobound.

Look at the airline industry. As long as there exists loose risk capital and ego, there will be new upstart airlines to step into the breach with a bold new strategy (Virgin, People's Express, Jet Blue, etc.) - capturing a quick wildfall in the public markets prior to flaming out and declaring bankruptcy.

The orgy of excess and the signs of bubble mania tops are everywhere. Here in Lauderdale, developers began to build modern residential towers, both downtown along the river and along the waterfront. Within the past two years, at least twenty have been erected. Same with Miami. Whenever you see a dynamic whereby someone identifies an opportunity and exploits it, the herd mentality quickly leads to bubble dynamics, where oversupply leads to pricing pressures which leads to stagnation which leads to collapse.

The global economy is quite simply "overbought."

Over-carred, over-toyed, over-housed, over-fed, over-medicated and over-spent.

Now then...enough of the brutal silence. We need you here.

#4 depends


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Posted 30 October 2004 - 09:09 AM

This little chart is still on the buy side.
Now that does not mean you should (or should not)
look for sticks to buy. The best time to buy was before the
last turn up. It's too late now, in my opine. Now I am looking
for topping formations - and I have found lots of them.

Took profits on most hedge longs fryday.

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#5 PeakOil


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Posted 30 October 2004 - 09:12 AM

Nice post Yobob! Thanks for breaking your silence - I always love to read your posts. You too Butters! What a great start to the weekend and the PreErection thread. B)

For Gold history buffs there is an interesting article at Gold-Eagle.
What Happened to the American $20 Double Eagle?

What happened to the $20 Gold Double Eagle is a question you will never hear asked by any "responsible" main stream financial media analysis on TV or in print. Too bad, as why the US $20 Double Eagle is no longer money is a good question that deserves an answer. The US Government stopped using gold as money when it defaulted on its obligations, both foreign and domestic, in the first years of Franklin Delano Roosevelt's administration...

What was to stop the Federal Reserve from creating more and more paper money or American politicians from spending it? Not the American voters who were getting low interest rate mortgages on homes whose valuations only seemed to ever rise upwards in dollar terms. Our world with its cheap credit for the masses, and quarter million dollar mortgages for homes that were made for $25,000 thirty years ago, was made possible with the removal of gold from our money. It may have been good up to now, but the history of currency inflation strongly suggests this is a situation that will end, and end badly.

    "So far as I can discover, paper money systems have always wound up with collapse and economic chaos."
    - Congressman Howard Buffett.

#6 DrStool


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Posted 30 October 2004 - 09:16 AM

Welcome Back yobob! This place is not the same without you.

My view is that there is no "conspiracy" behind the Repugnicant election "victory." The Bush junta controls the election machinery in the key battleground states which they need to win. That is not a conspiracy theory, it is a fact. The loss of 60,000 absentee ballots in the most heavily Democratic county in Florida is not a conspiracy, it is a fact. Somehow the US Postal service just didn't deliver them. The videotaping of black voters at early voting stations is not conspiracy theory, it is fact. The Repugnicant plans to challenge huge numbers of voters in heavily black precincts is not conspiracy theory. It is fact.

Nothing would please me more than seeing this regime defeated. Based on these facts, I would be surprised if it is. However, what gives me some hope is that the media is beginning to shine the cold hard light of publicity on these activities. If the swell of public outrage was enough to turn Eastern Europe on its head, then it can happen here. I just don't know if there's enough economic hardship here for that to happen. The sight of Michael Moore stumping on street corners on the 11:00 local news gives me some hope, that if things are not changing now, they may in the future. One other thing that surprised me is the endorsement of Kerry and Betty Castor for Senate, by the otherwise conservative Ft. Lauderdale Sun Sentinel. The media is not entirely in the regime's pocket.

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#7 DrStool


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Posted 30 October 2004 - 09:19 AM

I saw a post the other day about the Treasury's TTL program, wherein the Treasury lends its temporary excess balances to the banks for a few days, from time to time. Then this morning I got an email about it from a concerned subscriber.


Could you please comment on the Treasury Repo Activities.



It appears the Treasury has a back door into the financial markets to manipulate.


A subscriber.

Money is created when the Fed lends new money to the Treasury, not when the Treasury lends to the banks. How does lending back tax receipts which the Treasury just took in, affect the system? These are direct loans collateralized against tax receipts. No new securities are created. No new money is created. They are not repos issued by the Fed which create new money temporarily. When banks lend to each other, or the Treasury lends to the banks, NO MONEY IS CREATED. IT IS A WASH. It has no effect on the system.

Think about it. Since this money is money which already existed, how can it affect the system? It represents only a temporary transfer within the system, to any participating bank, not a net add to the system, such as when the Fed buys notes and bills, or does a temporary repurchase agreement directly with the Gang of 23, who immediately purchase securities.

In actuality, this program reduces the need for the Fed to issue repos, because when tax receipts are transferred from the banking system to the Treasury, quarterly, banking system reserve balances are temporarily reduced. The TTL program temporarily restores that portion of the balances which the Treasury isn't going to spend immediately. Treasury spending takes care of the rest. If the Treasury were to hold the all the tax receipts, the Fed would need to issue temporary repos, which would reflate the system to the level which existed before the drawdown. The TTL program replaces that.

If you want to think that this program is some secret means to jam the markets, that's your prerogative. But it would be wrong, just like 99% of all the other conspiracy theories.

The market is being manipulated. Of that, I think there is no question. But technical analysis, via the mechanism of price movments, encompasses everything that is going on in the markets, including the machinations of the mutual fund complex, and the possible activities of the Exchange Stabilization Fund. There is no need to worry about the actions of "secret slush funds" or a "back door to manipulate the financial markets" if you simply read the price action. There are ALWAYS clues about what is going to happen next. We might not always catch all of them in time to do something about it. We may disregard them, or see what we want to see, but they are always there. When we are able to suspend our biases and preconceived notions, we see them most clearly.

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#8 Knucklehead Smith

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Posted 30 October 2004 - 09:26 AM

Let us pray. Oops that's Shrubcos decision process.  Sorry no devine intervention forth coming here.  I hold out hope for a Kerry victory.  I think the pollsters are really having a hard time pinning people down.  For one thing they cannot access the millions of Americans that have foresaken land lines for a totally cellular life.  How that  group might vote is open to debate, but in generall they will tend to be a younger group. I also think there is more anger directed at Shrubco than the pollsters are picking up.

We can do more than pray: PARTICIPATE. The United States of America is OUR COUNTRY dammit!

I'm no big Kerry fan either, but I feel it's worth fighting for a regime change. I don't want to see more countries invaded, or more young Americans and innocent foreign civilians dying. I'm going to Nevada (a swing state) tomorrow to spend the last few days of the campaign working with America Coming Together to get out the anti-Bush vote. From what I've seen, the energy and numbers of people working all over the country for this effort is being vastly underestimated and I doubt it is being matched by the neocons. Huge #'s of new Democratic voters have been registered - youth, Hispanic, poor, etc. - and volunteers like me are going to do everything in our power to get them to the polls and see their votes are properly counted Tuesday.

If you feel like it, many organizations such as your local Democratic office, A.C.T. and moveon.org would welcome your assistance.


Well, now young faces grow sad and old
And hearts of fire grow cold
We swore blood brothers against the wind
Now I'm ready to grow young again
And hear your sister's voice calling us home
Across the open yards
Well maybe we'll cut someplace of our own
With these drums and these guitars

'Cause we made a promise we swore we'd always remember
No retreat, baby, no surrender
Blood brothers in the stormy night
With a vow to defend
No retreat, baby, no surrender

Now on the street tonight the lights grow dim
The walls of my room are closing in
There's a war outside still raging
You say it ain't ours anymore to win
I want to sleep beneath
Peaceful skies in my lover's bed
With a wide open country in my eyes
And these romantic dreams in my head

Once we made a promise we swore we'd always remember
No retreat, baby, no surrender
Blood brothers in a stormy night
With a vow to defend
No retreat, baby, no surrender

..... No Surrender, Bruce Springsteen


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Posted 30 October 2004 - 09:28 AM

Full Bin Laden Transcript:


There is no threat of a strike in this...and it appears more to be a "carrot" to the American people - having already delivered the "stick."

#10 TURK


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Posted 30 October 2004 - 09:29 AM

[quote name='depends' date='Oct 30 2004, 08:09 AM']This little chart is still on the buy side.
Now that does not mean you should (or should not)
look for sticks to buy. The best time to buy was before the
last turn up. It's too late now, in my opine. Now I am looking
for topping formations - and I have found lots of them.

Took profits on most hedge longs fryday.[/quote]

I always watch mr. market meter when I trade. It is one of the coolest indicators :D
Thanks for you valued opinions.


P.S. Regarding mr. market meter - I my not like what he says butt I respect him :grin:
"Damn, the price of this stuff jumps around alot!"
Hokahay October, 2008

"Analyzing the spot price of gold is akin to analyzing the output from a randon number gereator." -ancient chinese proverb

#11 DrStool


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Posted 30 October 2004 - 09:41 AM

God bless you Knuclehead Smith! You are one of my true heroes!

Any more letters to Joe Kernel and Buttaroma lately. :lol:

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Posted 30 October 2004 - 09:47 AM

Consider the strategic significance of this! Now if we attack/invade Iran, we are attacking China's oil supply!!!

China can say to the US:

"We are going to buy up all of the world's resources with your Petrodollars, and if you attack any of our suppliers, we will sell your paper and collapse your housing bubble and turn your economy and your dollar into dust. Cash is King, and we have the cash. We will spend it all now to buy everything we need, and then threaten to pull the floor out from underneath you. We own your ass!"

China & Iran sign valuable oil & gas contract
10/30/2004 11:15:00 AM GMT

China's oil giant Sinopec Group has signed a $70 billion worth oil and natural gas deal with Iran; China's biggest energy deal with the No. 2 OPEC producer.

Under a memorandum of understanding signed on Thursday, Iran agreed to sell Sinopec Group 250 million tons of liquefied natural gas over 30 years.

Iran also agreed on selling 150,000 barrels per day of crude oil to China for 25 years at market prices after commissioning of the field.

In his two-day visit to Beijing, Iran's oil Minister Bijan Zanganeh said that Iran is China's biggest oil supplier and wants to be its long-term business partner.


#13 DrStool


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Posted 30 October 2004 - 10:06 AM

Hey! It's the weak end! Time to talk real estate! Remember, there's a permanent link to RealEstateBubbleWatch.com above this forum block.

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Posted 30 October 2004 - 10:19 AM

Taking Bush at His Word

• Oct. 11, 2000: "If we're an arrogant nation, [foreigners] will resent us. If we're a humble nation but strong, they'll welcome us. ... We've got to be humble."

• Feb. 27, 2001: "I hope you will join me to pay down $2 trillion in debt during the next 10 years. ... We should approach our nation's budget as any prudent family would."

• Sept. 25, 2000: "It is clear our nation is reliant upon big foreign oil. More and more of our imports come from overseas."

• June 11, 2001: "My administration is committed to a leadership role on the issue of climate change."

• June 26, 2003: "Notorious human rights abusers, including, among others, Burma, Cuba, North Korea, Iran and Zimbabwe, have long sought to shield their abuses from the eyes of the world by staging elaborate deceptions and denying access to international human rights monitors."

• May 25, 2004: "One of the challenges we face is to make sure the health care system responds to the needs of the citizens."

• May 24, 2003: "We will not tolerate nuclear weapons in North Korea."


#15 Guest_bullseatshitndie_*

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Posted 30 October 2004 - 10:23 AM

here's my take on both videotapes released this week. both produced by bush and co as a strategic ploy. they know damn well they are trailing and are despearate to retain power. by having terrorists stating disdain for bush, there is a subliminal message to vote bush. as bush says, you are either with us or against us. there is a psychological factor that could make people do the opposite of what terrorists say.
personally, don't think it works and kerry wins big.

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