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Confounded

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Everything posted by Confounded

  1. Also another way of valuing stocks and for all those who say stocks are not in a bubble. The only time they have been more expensive than now is 2000 and 1929!
  2. Yes http://www.bloomberg.com/apps/quote?ticker=BDIY:IND And an interesting bit on it on Zero hedge today. http://www.zerohedge.com/article/presenting-baltic-fat-finger-index
  3. Another interesting chart. If the US markets are finally allowed to correct they will bring all Western Markets down with them as in 08. http://www.zerohedge.com/article/smithers-co-finds-sp-now-over-70-overpriced-based-cape-and-q
  4. There are other ways to manage the debt burden than inflating it away. Debt can and is likely to be defaulted. As an optimistic I favour a managed deflation where periods of money printing counteract periods of the required deleveraging and financial stress associated with them. The problems the central banks and government face is that the old finacial system could be inflated/grown at the same rate the oil production could be expanded. Printing in the face of peak oil and zirp will lead to extreme inflation. Read when monry dies or listen to the interview with the author here http://www.netcastdaily.com/broadcast/fsn2011-0101-3.asx IMHO we are at the end of a massive debt bubble created off the back of the greatest financial bubble in history aided and abetted by abundant cheap energy. The monetary system was able to cope with previous recessions and even depressions by lowering interest rates and stimulating growth that could be accommodated by ever rising oil supply (the real wealth). I must admit I accept my views are not conventional but they can be best explained by another great interview by Nicole Foss http://www.netcastdaily.com/broadcast/fsn2011-0101-1.asx
  5. Exactly my stance also, we are seeing a deliberate reinflation attempt and their is a reason why we face deflation, it is a necessary part of the recovery from the excesses of the last century's binge on oil. The best way to recover from a depression is to have one. Trying to reinflate in the face of resource shortages would be suicidal for governments, I am sitting out giving them the benefit of doubt but I am acutely aware of the inflationists arguments if they are indeed suicidal.
  6. I suspect most people fall into your category, just depend on how well you/they arrange your/their finances over the coming decades. Most people are not very good with their finances and different financial strategies could be effected in significant ways as the central banks battle the crisis.
  7. Yes, your parents choice is what many do and a perfectly acceptable way to do things. My brother bought a massive house at the 09 "bottom", he is in his late thirties and doing the same. Will probably have to/be able to do it for the rest of his time in that house. The point is there are many in your parent/my brothers position but without their youth/family support to keep them living their it may be dawning on them there is a more sensible approach if they can cash in at these bubble prices. A friends Dad I know bought a farm house and land in the mid 80's for 80K. The farm has not made a profit for 15 years, it has been a lifestyle. The farmhouse is in need of modernisation as do the outbuildings, it is cold and drinks heating oil. The plan is to sell up this spring for £1.5m. It would make a great buy for a city folk looking to protect their swag from the imminent inflation... If you re read my post I am not predicting the market to be flooded by these types of sales but just the first wave of things to come.
  8. Reread the original post. This thread is about the running cost of large family houses finally pushing out the single or elderly couples that until now with rising house prices and low running cost have very sensibly stayed put. My assertion, was with house prices looking like declining for the next decade and with heating cost rocketing, is we will see the first wave of sales this spring?
  9. We have had decades of under occupancy in our housing stock for that reason, choice. The whole purpose of this thread is 2011 could be (as per my prediction) the first years where hands are forced.
  10. What effect will the cold weather have on house sales in the spring? As has been discussed on these boards many times the property pyramid is aged biased and this is also combined with a current demographic weighting of an ageing population only sated by an open boarders policy to encourage young economic migrants. Regardless of what policy makers do over the coming 10-15 years a lot of homes need to be exchanged between the younger generation and their current older owners and in significant numbers. Could this spring herald the first wave of this transition? A very cold winter highlighting the maintenance and heating issues associated with owning a large family home when you are in your later years and only using 1/3 of the space, I believe will be the trigger for this first wave. Coupled with the fact we are in the fear phase which will only build momentum over the coming years. Will the shrewder owners try and get out while the going is good?
  11. The governments initiated feed in tariff for solar PV with a payment of 41.3p for each kWh produced suggests otherwise. They pay you 3 p on top of that for every kWh exported to the grid. I have just started a renewable energy company installing solar PV and with this tariff in place it is selling itself. I think it is an exciting time for the industry but we are some way of it being viable in this country with out government assistance. The problem with a majority of renewable energy technology is the need to oil to produce them. If they continue to print which will push energy prices up so will they push up the cost of equipment. My uncle is in the nuclear industry and thinks oil is significantly undervalued and that it should be priced at $200/barrel. At this price it makes Nuclear attractive, however the trouble with this argument is that at oil $200 it would pretty much double the cost of building a nuclear power station. Investing in energy technology requires a significant amount of beating the markets and the inherent fact of that is that not very many people/countries can do this before the market prices it in.
  12. Which tracks the DOW/S&P which is nothing but a monetary tool played with by the big banks and the FED that provides the backing.
  13. http://www.zerohedge.com/article/difference-between-aaii-bullish-and-bearish-sentiment-highest-2004 Difference Between AAII Bullish And Bearish Sentiment Highest Since 2004 Pure euphoria has officially set in. According to the December 23 AAII sentiment survey, the bullish mood soared from 50.23% to 63.28%, the highest reading since November 18, 2004. Bearish sentiment plunges from 27.15% to 16.41%, the lowest since November 24, 2005. The difference between bullish and bearish sentiment is 46.87%: the highest since April 15, 2004. There is no point in commenting on these results. There is a point in highlighting, though, that retail continues to refuse to be suckered in and becoming the hot potato buyer of last resort: 33 consecutive weeks of outflows from mutual funds indicates that the social split between bankers and everyone else, is now translating into the stock market, as only professionals, and robots, "trade" now.
  14. http://www.zerohedge.com/article/james-montier-defense-mean-reversion-and-why-economist-predictions-are-fools
  15. They are still being manipulated down from the biggest bubble in history. As I have said before I think you are right with much of what you say just 5-10 years too early. You have the FED on your side but does everyone really know for sure that they will hyperinflate to infinity in the face of resource shortages. It would be an incredibly silly thing for them to do and I have positioned myself to give those in charge the benefit of doubt. I too am looking for when people hate stocks, the retail investor deserted the shambles of the current market when the flash crash exposed it frailties. We are nearly at that point of disdain for stocks but we need one or two more major sell offs and we also need stock to become historically cheap before we will have a true bottom in place. They briefly got to fair value in 2009 but never got to cheap.
  16. Not really, the FTSE as with most Western Markets are tracking the DOW/S&P. The DOW/S&P is targeted by the FED to raise inflation expectations in the hope that the top 10% of the population feel wealthy and go out and spend and the rest look at the market and think the clever people in the city think things are improving so the recovery must arrive soon. The markets ceased being true markets years ago and as this crisis has developed it has become more and more of a monetary tool. 0% interest rate means that cheap money needs a reason to be put to work, if it expects asset prices to fall then the pushing string scenario comes into play. A rising stock market encourages people to invest, if the markets had been left to their own devices we would be well into a deflationary debt spiral, and to be honest I agree this is worth fighting to avoid using these methods. Since March 09 the market has only fallen (and they were some falls!) in the months where the FED was not been intervening. April 2010 until July 2010 the gap between QE1 and QE Lite. QElite had to be implemented (know as POMO's) to tide the market over until the FED confirmed more easy money would be pumped into the market via QE2. So in summary you can infer nothing from the modern market, it is a manipulated mess, between the bankers and the FED they could achieve DOW 20,000 but meanwhile the real economy could have 15-20% unemployment with riots on the street. The trouble with the FED's policies is the rich will become richer as commodities/real assets rise, it is just a question how long it takes the masses to wake up to this....
  17. Meanwhile real money flows out of the markets http://www.zerohedge.com/article/no-end-sight-equity-outflows-stock-boycott-persists-despite-largest-bond-outflow-lehman-fail "For the second week in a row, those claiming that flows will any.minute.now. shift away from bonds and go to equities are proven dead wrong. ICI has just reported that in the week ended December 15, not only was there another massive outflow, the 33rd in a row, from domestic equity mutual funds to the tune of $2.4 billion, but taxable and municipal bonds saw a stunning $8.6 billion in outflows, including another record $4.9 billion in muni outflows. At this point absent another major pull back in bond prices, we anticipate that bond inflows will once again resume, even as stock outflows persist indefinitely. "
  18. Cause of current crisis debt and leverage, way out of crisis more debt and leverage. http://www.zerohedge.com/sites/default/files/images/user5/imageroot/havenstein/NYSE%20Margin%20October.jpg
  19. http://www.greenenergyinvestors.com/index.php?showtopic=12753&view=findpost&p=198059
  20. 200 years of exponential growth and you are confidence this can be maintained indefinitely? I am assuming maths is not one of your core strengths
  21. You know that we are in the sh!t when members of the FED use a fairy tale to describe the economic conditions during the extend and pretend from 01...
  22. How do you balance your view for the requirement for infinite economic growth with the ability of us to find cheap resources to support that growth? The 2000 post dot com bubble stimulus created global malinvestment on a grand scale can we really afford to take that to the next level required to meet a requirement for continued growth. Take China as one example, how many more cities can they build and leave empty. This uses precious resources and now they are just lying empty. Can we encourage further "growth" in the face of growing resource scarcity? Those homes need to pass from the investors to the normal Chinese citizen and the only way this can be achieved is through a huge crash of the current Chinese miracle economy. Sadly a global depression is needed to resolves the massive imbalances that are building. Continuing to hide from this fact will just make things worse. The rich will take a greater share of the wealth if they do try and stimulate us to new "growth" and since 09 we have seen the richest wealth explode, can society take this grotesque imbalance? http://www.dailymail.co.uk/news/article-1339536/Ghost-towns-China-Satellite-images-cities-lying-completely-deserted.html
  23. The talk of austerity is designed to manage/temper inflation expectations in the face of excessive money printing. No more or less than that, there is no need to overcomplicate things.
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