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House Price Crash Forum


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Everything posted by carseller

  1. I agree and in my opinion gold is close to breaking out, and up.
  2. So far this market have been driven by printing of money, but no real espansion of the money supply through the money multiplier factor, as happens when the dollar really weakens and the liquidity bubble sort of pumps up, but I think we are on the verge of that now.
  3. Maybe it is in a bear, up again today. I think it's so early to tell.
  4. In my opinion the dollar will somewhere in the next 1-2 months have really gone to the downside. I think that will be coupled with not raising rates, and you really get some inflation mess going.
  5. I suspect it's so compounding, a ketchup bottle effect that makes it's very difficult to predict, especially with the force that's needed given the deflationary pressures today. It's so easy to overshoot, and get an effect like in 1946 when inflation peaked at around 20 %.
  6. In on sense the market is quite similar to mid 2002, before it went down again to march 2003, however, now there is much more stimulus in the system, and therefore I think it will just move up from here. I have played with a thought and it is as follows. For each recession, the debt load have increased since the 1980-s, and it's more difficult to jump start the economies. Maybe this one is so big that the only way to get things going will bring the economies on a path to hyperinflation, that means interest rates have to be hiked like crazy in a few years time. In 1977 when carter took over, gold rose from around september that same year. Then it just rose and rose to 1980. I suspect that's what's going to happen.
  7. Cohen, their permabull analyst. Everytime they are dumping, they send her on CNBC and Bloomberg talking bullish. Anyhow, I feel the Chinese Market have went down as far as it can, if this is to be a correction. Therefore I think it's very close to bouncing back, unless the Chinese market goes much past the 20 % it's already down. I feel it's the Chinese market that's driving it now.
  8. I think the most likely is that there will be inflation taking hold in around two months time, probably even quite bad inflation somewhere around mid 2011, and that the dollar will weaken as money flow into risky assets again. The inflation will probably begin to show itself in two months time. I also think junk stocks might have a similar era ahead as junk bond of the eighties, as inflation revive those stocks. However, The CRB have had a run from 2003, similar to what it did in the seventies. That is a 350 % return. As we know, capitalism is about exploitation. The money tends to move where there is most potential for exploiting profits. If a strong dollar at this stage will bring surprising profits to the US, and US companies, perhaps bigger profits than what currently can be found anywhere else, then that's what the market will do (and the strong dollar 0 % boom is born) http://finance.yahoo.com/echarts?s=BTI#cha...ource=undefined notice these different courses these stocks have had. BTI benefit from a weak dollar, WFC from a strong dollar. Eighter there is 1 more cycle where BTI will outperform WFC, or the trend will reverse again, with WFC outperforming BTI. I also added monsanto to the comparison. Cramer is negative on that company now. I think that is a good reason to be bullish. I think this might be like 1995, for those companies that have had strong growth since 2003, and that there now will be a blow off phase, for these stocks. Similar to 1995-2000 for the nasdaq. if monsanto is in a bullmarket with agricultural commodities ahead, that company is going to milk farmers like crazy.
  9. all the money in the money supply also goes somewhere, obviously, we have just had a cycle of hard assets and commodities, so maybe stocks can be it now, unless the trend from 2003-2008 is still intact. I think it moves in cycles. Money into soft assets, they become overvalued, commodities undervalued, trend shift, commodities become overvalued, soft assets undervalued, etc, money generated through the increase in the money supply seems to go where it have the potential to exploit, and that's in soft assets after a long hard asset cycle. Right now, of course many companies, have been hurt by the commodities bubble and recession, 2 things. Therefore as the economy recover, in the US, I think maybe the dollar will get stronger, and they can have the double benefit of increasing profit margins from lower commodity prices, and increased revenue as the recession fades. I think that gives an uppside to earnings that's not priced into the market.
  10. What I suspect: US stock market 1982-2000, big boom, deflationary trend. Inflationary correction, housing bubble etc 2000-2008, recession, 2009-??? deflationary trend, further advance on the 1982-2000 boom in the stock market. The good thing about deflation is that it increases profit margins IF it comes after an inflationary trend, where consumers, companies, etc have been squeezed by inflation... deflation after deflation, like in 1929, is problematic, not deflation after inflation, that gives boom conditions. the 1950's and 80's had huge government deficients in the US. Low inflation, deflation in commodities, booming stock markets.
  11. Here is a comparison: LAD, a car retailer in the US (they benefit from a strong dollar). There is also BNI (a railroad company), they also benefit from a strong dollar. I spot bullish trends. Then there is OSEBX, my local exchange. The trend seems a bit bearish, there is problems to break upwards. There is also COP, and oil company that buffet have been dumping a lot of, it's also have problems breaking upwards. http://finance.yahoo.com/echarts?s=BNI#cha...ource=undefined One of the most fascinating things is how a oil stock like PBR, is showing a bullish trend, while COP, an oil company is showing a very bearish trend. It COULD be, that this is like a market where certain emerging market's will still do well with lower commodity prices. Sort of like 1982 for emerging market's. At least, the divergence between PBR and COP is in my opinion a sign that there is a bear market in commodites and perhaps a bull in certain emerging market's at the same time now. I don't know. But the divergence in trend between these types of stocks I started with here, the horrible trend in natural gas, all that, makes me sort of believe that commodities is in a bear market. There is also that tendency in the market to go after the old horse, not find a new one. This could be a secular shift. Let's see what happens.
  12. And: Gold, Chinese shares, emerging market's, commodities, all that is a bubble. I suspect there might be some years before those currencies and stock market will blow up. Probably when real interest rates in the US becomes positive. However if this is like 1981-1982, then I think it's right around the corner.
  13. I have analyzed the rise of the dow, just the steepness of the curve. Every time in the past it's hard this shape, it have actually been the start of a new secular bull-market. (like 1950 or 1982) I'm beginning to suspect that the commodities rally is over. That the smart move is 1. US equities, and 2 those companies that benefit from increasing profit margins due to lower commodity prices, while not being dependent on the US consumer, and also have a low debt base. I think once you have a huge debt load in the economy as in the US, and that debt is trending lower as now, that's deflationary. The government can then leverage up, and you can get a push in the economy, together with weak commodity prices, low inflation, and therefore maybe even a strong dollar, thus increasing profit margins for those companies that are not hurt by what's likely to be an increasing savings rate. I have noticed the rise in sugar. Last time sugar moved like that was towards the second dip in the double dip recession in 81-82. Before that, sugar moved in the Later phase of the Jimmy Carter boom. In a way the Obama boom could be like that, because of all the inflation created, but it could just as well go into the US stock market, into the dollar and drive up profit margins. All the money printed can move in ways that just not seem logical now. AS a group health care stocks have really been able to pass on the increasing inflation to their clients, since 2003, and that's also reflected in the stock prices. I suspect, that these stocks will be some of the biggest beneficiaries of a trend of low commodity prices as profit margins are likely to widen. It's counter intuitive to go for the non commodity plays now, but I think that might be the way ahead. Cost cutting, high savings rates, output gaps, government stimulation, and the minted money going into stocks again as after 82, not commodities.
  14. I think there is some time before gold starts to break loose, to the upside. When silver and railroad is up there with gold again, I think it will start to advance. I suspect that will be maybe 4-6 month from now. I think a possible bet is to buy silver or railroad, and switch to gold, once the chart lines cross. http://finance.yahoo.com/echarts?s=SLV#cha...ource=undefined
  15. The baltic dry and the chinese market is really just an inverse relationship of the treasury market. The debt monetization in the US bring down yields, in the sense that there are no takers for the 10 % deficits in the US, and yields the US can live with. The result is possibly an unhinging of inflation that already have started in commodities such as sugar, that seems to be hitting the highest levels since the early 80-s, once they stop buying treasuries, and the economy get's going, it's possibly yields rise to levels much higher than they otherwise would. This crack up boom like creation of the federal reserve could create a strong demand for dry bulk shippers, as the chinese market is totally inverse of treasuries. http://finance.yahoo.com/echarts?s=IEF#cha...ource=undefined So, there can always be debated. Where is the bubble? In China or in the market for treasuries. It can't be both. Anyway, I see it as a distinct possibility, that the Chinese market will burst, whenever in the future, the US does a Paul Volcker like tightening. However, it might go much further as the japanse market did, in the eighties, after having been a bubble through the seventies. After the US joined the War in 1941, and started buying their own debt with the printing press, as the US is doing now it took around 4 years for US inflation hit into the 20 % range (from having been around 0 %).
  16. In my opinion the dollar will come back. The trick is not to buy some overpriced commodity company, but to buy a good company with a competitive advantage that will last when commodity prices tank. Hertz car rental, and other companies in the sector is just one that comes to mind, and then buy a company that will survive this weak dollar era, come thought to the other side, and then reap in the bonus from a bull-market in stocks and a strong dollar that will come sooner or later. That's value investing. Dollars cheap.companies hurt by cheap dollar is cheap. Anyway, I don't believe in a correction. Guys like Cramer are calling for one, but I think we are into the overdrive phase, where everything will just keep surprising on the upside, and build momentum as the economies recover. There could be a wave down, and more money printing before things get going, but I kind of doubt it. Compare the chart of wells fargo, and then look at the 1990-s, look at berkshire hathaway, and compare june 2000, with june 2009, same pattern, then it was dotcom that had held down berkshire, this time the treasury bubble, perhaps the fed will monetize as the bubble burst. I think it's going up for quality stocks, while people are moving out of things like cash and treasuries. Notice that berkshire down and nasdaq up then, while now it's the dollar and treasuries up, while berkshire dow. Here is the complete pattern for you. This what drive the market: http://finance.yahoo.com/echarts?s=BRK-A#c...ource=undefined Note that I think it is a bit unpredictable, because I think something, perhaps treasuries will suffer a similar decline as the nasdaq, over the next years. That can't be good for all stocks. But I doubt a stock like Warren Buffet's will suffer a decline, that's the best company that's out there.
  17. If you want a tip, here it is: The car related business have suffered from 1. the commodity bubble, and 2 the global recession. That was the criteria I used when I searched for this stock when I bought it. unfortunately I did not buy a lot. Just for around 400 pounds, but still a nice little profit. Had I been smart I had leveraged up, plus went in with a lot of cash, when it started to move. Anyway, I just treated it like a lottery ticket.
  18. It is possible, but it also possible that US stocks still are in a bull, like the one from 1982, with the era from 2000 as a inflationary correction phase, before a final blow off phase that resemble the 1990-s. It's really difficult..
  19. I think you are making a good analysis here. However, I like to clarify that my best position now, at around 15 x so far, did not suffer any correction, as the market have done, I think the good stuff is the things that does not move so much in these corrections. Things was very different then. but to the 1938 scenario. if that plays out, you will get an inflationary boom, to inflation becomes a problem, and then a boom like the one from the 1950's. Right now, the big play seems to be stocks that suffered from 1. the commodity bubble, and 2. the recession .
  20. I think cyclical myself, but the cash levels, seen in the latest gloomboomdoom report (that you will find on the net), is screaming secular. In this computer age I think it's also possible we can sort of start half in a 16-18 year cycle, that is, like instead of going from the mid seventies, to 82, to the 90-s, suddenly jump over from 75- to 91, and just move on to that clinton era phase once again. I think it's all possible, that instead of clearing all the excesses of the 80-s and 90-s, only half of them are cleared, and you go to the last boom phase the 90-s was, once again, that's why I would watch out. even I think it's an unlikely outcome. http://finance.yahoo.com/echarts?s=WFC#cha...ource=undefined If bank stocks start to resemble the 90's, then it could be a secular bull, however, if they go more in a straight line ahead, as from 2000 to now, it's clear we still are in a secular bear. The stocks was like they are now in the early 90-s, and in the mid 70's, the difference is that they in the seventies, went on flat, while they in the 90's took off.
  21. One of the interesting things is the cash levels to the total market cap of US stocks (was over 100 %, now in the 80-85 % range). It have not been like this since the early 80s. I don't have the levels of the seventies. But I think that given the current conditions of low interest rates and weakening dollar it seems the money is going out of the US, even I'm not sure. Whenever those money "comes home" and gets spent in the US stock market, the secular bull will be on.
  22. I think the dollar is going to go down, atleast to around late 2010 it will stay weak I think. What is coming now, I suspect is not hyperinflation, but something that ultimately will cause the fed to hike rates to an unpleasant level a few years down the road.
  23. I think the market have passed so many tests. It's already past that 1930-1932 repeat scenario. China is clearly in a solid bull-market, how else could a the biggest chinese homebuilder triple on it's IPO day. That would never happen in a bear-market. The US market, have passed the 200 day tests that have indicated a bull, back to 1921. Where it will end I don't know, but first there will be a recovery, taking things back to normal, then I think inflation will kind of break loose, and stocks will go flat, while because of all the inflation, reaching a low P/E ratio, without the kind of correction we had in this bear market, then the FED will tighten, and then you have the new secular bull. In 2014-2016. However, back in 2000 when it peaked out could be like 1896, when the dow went flat all the way to 1921, however, I think with todays money printing, this devaluation through inflation era, takes a shorter amount of time than 25 years. It's also a remote possibility that this is like 1950, or 1921 or 1982 for China and emerging markets, but I doubt it. It kinds of resonate with the 1938 or 1975 experience. From the late 1960-s -1972 there was a huge bull in homebuilders and housing in the US, then a 3 year correction, then came 1975, after that housing bubble, there was then emerging market's that became the "next big thing" and "subprime of the era", average loans to emerging market's rose at around 20 % a year between 1975-1982. That growth really drove demand from those countries, and commodity prices, then came the hikes in the dollar rates, and those countries went bust, thus giving way to the low inflation era. It's kind of the same thing going on with emerging market's now. Cheap money in those countries, lack of the "inhibitions" we have gotten towards leverage, and an increasing demand from raw materials, is really the repeat for stagflation and a repeat of the late seventies for developed economies (however with less of a wage price spiral, and more of a decline in living standards). Always when latin american countries and other countries have hyperinflation, the stock market booms when inflation comes under control, and those who had quality stocks when the hyperinflation began ,will get back their purchasing power. It's the same thing going on in the west, only we are in the inflation phase, and it's kind of going slow motion like. Buying stocks now to hold, is smart I think, however, it might look more elegant to buy the correct inflation hedge, like silver (or emerging market stocks), then sell it at the right time, then get into developed market stocks, I think it is just much easier to buy quality stocks and hold them so long as you catch the next secular bull, and perhaps enjoy the dividends. I am also sure that the US recession have ended. I think it ended early this month, or in June.
  24. I don't think the market is overbought. I think it's setting up for a V shaped recovery and a completion of an inverse head and shoulder formation. I think we could be right around a big and sustained move to the upside. I think the technical indicators will kind of say the market is overbought in the whole time that move is lasting, but I think it will be more a return to the normal (as the libor spread goes down to 25 bps). I think this is the time to make a gamble on high beta stocks, that have that inverse head and shoulder pattern.
  25. I think gold will break out of the range when stocks starts to stagnate. I don't think shorting stocks against gold is likely to be any success at all. In comparison the likely infection point for gold will be when this stock, starts breaking above the price of gold. Then gold will start to rise. http://finance.yahoo.com/echarts?s=GLD#cha...ource=undefined Anytime before, like before 1950, and before 1982, the stock market was very stable before the secular bull began. That stocks have been so unstable I think is a sign that a secular bull is many years away, similar to in 1975, or 1938.
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