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Dow 11,000!

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Not wanting to be a hypocrite I thought I'd report this milestone. I think the whole market structure at the moment is based on expectation of stimulus by the Federal Reserve buying up Government debt. and all this extra money "landing" in the Stock Market, like it did last time. Does anyone think this will work? The Federal Reserve must do otherwise they wouldn't be considering it:

(RTTNews) - Stocks showed a notable move to the upside over the course of the trading day on Friday, as a continued decrease in employment added to optimism about additional quantitative easing measures from the Federal Reserve. The strength in the markets lifted the Dow above 11,000 for the first time since May.

The major averages pulled back off their best levels going into the close but remained firmly positive. The Dow rose 57.90 points or 0.5 percent to 11,006.48, the Nasdaq jumped 18.24 points or 0.8 percent to 2,401.91, and the S&P 500 climbed 7.09 points or 0.6 percent to 1,165.15.

With the gains on the day, the major averages all closed higher for the week after breaking a four-week winning streak last week. The Dow and the S&P 500 both rose by 1.6 percent for the week, while the Nasdaq posted a 1.3 percent weekly gain.

The strength in the markets came following the release of a report from the Labor Department showing that U.S. employment saw a notable decrease in the month of September, with another significant decrease in government employment offsetting continued job growth in the private sector.

The report showed that non-farm payroll employment fell by 95,000 jobs in September following a revised decrease of 57,000 jobs in August. Economists had expected employment to come in flat compared to the loss of 54,000 jobs originally reported for the previous month.

At the same time, the Labor Department said that the unemployment rate was unchanged from the previous month at 9.6 percent. The unemployment rate had been expected to edge up to 9.7 percent.

The data raised some concerns about the economic outlook but was seen as increasing the likelihood that the Federal Reserve would enact additional quantitative easing measures.

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Irrational exuberance.

They think another round of puny stimulus ($2 Trillion) will fix a black hole many times that size. We are all in it together as deflation beckons.

We will have to print soon as our national debt is forecast to exceed £1.1TR in 2011 and growth just halved according to NIESR.

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Irrational exuberance.

They think another round of puny stimulus ($2 Trillion) will fix a black hole many times that size. We are all in it together as deflation beckons.

We will have to print soon as our national debt is forecast to exceed £1.1TR in 2011 and growth just halved according to NIESR.

They'll get the inflation they so dearly want and it will ****** the economy, again.

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There is a case to be made for the If you can't beat them join them argument for investing in stocks.

The various governments have made it perfectly clear that any amount of taxpayer money will be used whether directly in bailouts or indirectly through inflation to prop up the largest corporations in the world.

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They'll get the inflation they so dearly want and it will ****** the economy, again.

The most recent interview with Ron Paul on this very subject:

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Irrational exuberance.

They think another round of puny stimulus ($2 Trillion) will fix a black hole many times that size. We are all in it together as deflation beckons.

We will have to print soon as our national debt is forecast to exceed £1.1TR in 2011 and growth just halved according to NIESR.

I'm hedged. F**k the printers. We will get mass inflation before deflation.

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They'll get the inflation they so dearly want and it will ****** the economy, again.

They're aiming for a reset. A 70s like inflation burst over a few years that will reduce relative debt loads. There will be lots of losers and winners, and hopefully it won't get out of control (I am not hopeful).

IMO deflation is completely and utterly impossible: politically unacceptable.

Ben is following his 2002 script to the letter and markets are adjusting prices to reflect the coming currency debasement.

Doesn't mean house prices will start going up again mind you. I think just about everything else will.

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Who knows, i've heard that a fair few people think the market is currently undervalued due to fairly okish yields on the market compared to bonds, so it could continue going up!

I wouldn't bet eitherway, but we have to rememeber that the FTSE has major companies who are only listed here, they do naff all else in the UK. These companies are likly to be reporting bigger sterling profits due to the weak pound, this is likely to increase their share price.

If the pound had been at this level in 2007, what level would the FTSE be at, 7500-8000?

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They're aiming for a reset. A 70s like inflation burst over a few years that will reduce relative debt loads. There will be lots of losers and winners, and hopefully it won't get out of control (I am not hopeful).

IMO deflation is completely and utterly impossible: politically unacceptable.

Ben is following his 2002 script to the letter and markets are adjusting prices to reflect the coming currency debasement.

Doesn't mean house prices will start going up again mind you. I think just about everything else will.

If, and you could be right, hyper inflation is next there is really only one VIABLE assett class for millions of people to invest in. B & M.

The window may open wide for a while and then shut fast.

OTOH, if the blackhole continues to suck in the puny sums offered to it to try to revive a deflating bubble the worst thing the millions with cash to do is to buy into hard assetts or commodities as bonds and cash will rule the earth for a generation as in Japan.

What to do? Wait until next year and buy a very small, cheap pile of B & M and put the rest into deflation hedges.

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If, and you could be right, hyper inflation is next there is really only one VIABLE assett class for millions of people to invest in. B & M.

The window may open wide for a while and then shut fast.

OTOH, if the blackhole continues to suck in the puny sums offered to it to try to revive a deflating bubble the worst thing the millions with cash to do is to buy into hard assetts or commodities as bonds and cash will rule the earth for a generation as in Japan.

What to do? Wait until next year and buy a very small, cheap pile of B & M and put the rest into deflation hedges.

What's B & M?

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If, and you could be right, hyper inflation is next there is really only one VIABLE assett class for millions of people to invest in. B & M.

The window may open wide for a while and then shut fast.

OTOH, if the blackhole continues to suck in the puny sums offered to it to try to revive a deflating bubble the worst thing the millions with cash to do is to buy into hard assetts or commodities as bonds and cash will rule the earth for a generation as in Japan.

What to do? Wait until next year and buy a very small, cheap pile of B & M and put the rest into deflation hedges.

You say that because you want to belive that as you wil be buying in the new year, You are suffering from confirmation syndrome :)

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Surely QE2 is fully riced in to the US stock markets?

They announce they are doing more QE and the markets will go up another few %. They announce they are not doing any and the markets will lose 40%.

I'm stopping on the sidelines thank you.

Edited by headrow

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Grow a pair.

I sold up the first week of September. To buy back in when they are now about 10% higher makes no sense. I'm out until the next big correction , probably next spring.

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As this is a prime stupid time to buy a house, and saving accounts are paying 3/5th of sod-all, it suggests to me that a good few people will be buying into the stock market.

Mind you, I know nothing.

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Houses, my son. Houses.

:D

Aaahhh!

Well, saying this is like saying that investing in dot coms was a good idea in March 2000. Back then they had discounted about 1000 years of positive cash flows and the only way it could go was down.

Today, every Tom Dick and Harry, their neighbours, siblings and blind dogs have known for ever that we live in an inflationary world and that property is the best/only investment worthy of consideration. I reckon they have discounted about 30 years of inflation. Whatever inflation comes our way 'is in the price' and more. So from an investment perspective property is probably the worst investment you can make as prices will at the very best stay flat while the price of everything else goes up. The poor sods with capital stuck in property will watch every other investment deliver amazing 'inflation pumped' returns while their real (inflation adjusted) 'wealth' simply evaporates.

From an investment perspective, one should look at anything that has not yet fully discounted past present and future inflation whatever that may be. But as for houses, you could safely say that property is 'dead money'. For the foreseeable future, property's only value will be that of providing shelter for people.

Edited by _w_

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They're aiming for a reset. A 70s like inflation burst over a few years that will reduce relative debt loads. There will be lots of losers and winners, and hopefully it won't get out of control (I am not hopeful).

IMO deflation is completely and utterly impossible: politically unacceptable.

Ben is following his 2002 script to the letter and markets are adjusting prices to reflect the coming currency debasement.

Doesn't mean house prices will start going up again mind you. I think just about everything else will.

It would appear that they are going to try and print enough, however in history no one has managed to print enough. Question is will they be able to stop once they've started and there's a minor issue of moral hazard.

Deflation maybe politically unacceptable but it's part of the natural economic cycle, trying to avoid it will ultimately bring systemic failure.

They are taking a huge risk, luckily it's all contained.

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It would appear that they are going to try and print enough, however in history no one has managed to print enough.

Enough as in just the right amount. If I am not wrong the rule in the past is that too much was printed. Now I read about the foreclosure mess in the US and I have doubts about Ben's ability to inflate. But the truth is, deflation is unacceptable no matter its scale, and the difference between US$ 1 trillion and 10 trillion is one 0 on a computer screen: no problem.

Question is will they be able to stop once they've started and there's a minor issue of moral hazard.

:) This is a bit like 'pension deficit'. 'Moral hazard' implies that there is a baseline somewhere from which we might stray. I don't believe there is any moral sense left in today's political class; none. So that is no impediment.

Deflation maybe politically unacceptable but it's part of the natural economic cycle, trying to avoid it will ultimately bring systemic failure.

The thing is that this natural economic cycle is a human construct based on rules devised by people. What when people in power can and do change the rules willy nilly? The answer takes us back to 'moral hazard' which I think is fairly addressed above.

They are taking a huge risk, luckily it's all contained.

You know for a minute here, I was worried. But you're right, it's all contained.

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From an investment perspective, one should look at anything that has not yet fully discounted past present and future inflation whatever that may be.

Japanese equities. Going to go ballistic as they become the first nation where people move out of worthless confetti government bonds.

Edited by ringledman

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Japanese equities. Going to go ballistic as they become the first nation where people move out of worthless confetti government bonds.

Yes, I'm keeping an eye on these. But so many have had their fingers burnt trying to buy equities or short bonds I'm waiting for some definite confirmation from the markets.

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Yes, I'm keeping an eye on these. But so many have had their fingers burnt trying to buy equities or short bonds I'm waiting for some definite confirmation from the markets.

I would say Japanese stocks are the cheapest asset class on the planet. 20 year bear market, price to book below 1.

Universally hated as an asset. Lovely...

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  • 146 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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