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2009
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April
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- The Judgment of Value
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The above is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the author alone on the current and future status of the markets and various economies. It is subject to error and change without notice. The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.
20 comments:
Here is a good article by Trace Mayer to start things off...
Global Quantitative Easing
SNIP:
The world already has a world reserve currency of last resort: gold. Gold has a definition under the periodic table and is not the same as paper gold, derivative gold, problematic ETF GLD gold, or other forms of fools gold. Unlike SDRs and other illusions like the FRN$, Euro, Pound, Yen, etc. gold is a tangible asset, no-one’s liability and not subject to counter-party risk.
Sincerely,
FOFOA
Now are those eggs shown Fiat eggs or Solid Gold and Silver as they seem?
I heard the Easter bunny was unhappy with the demand and was planning stimulate it by creating a few out of thin air.
The Easter Bunny can create trillions of fancy multi-colored Easter eggs out of thin air with just the push of a button.
But the goose that lays the golden egg labors over each one.
(Did you notice they are Fractal eggs?)
LOL..That was priceless..
Hi FOFOA,
Here is an interesting post.
The Top 10 Signs You Are Living in a Banana Republic and My Favorite $100 Billon Omelet
http://thebarricadeblog.com/2009/04/11/the-top-10-signs-you-are-living-in-a-banana-republic-and-my-favorite-100-billon-omelet/
Three weeks ago I made a post at T minus one month to Martin Armstrong's Economic Confidence cycle date. Today we are one week away. This is not a major cycle date, meaning a lower probability of accuracy "to the very date", so it is "give or take a week" (according to Martin). That puts us "in the zone" as of today.
Martin explains that these dates are about TIME, and not about a specific event. What this mean is that it is the TIMING that matters most. SOMETHING will happen, simply because "It's Just Time".
Since we are now "in the zone", I am looking around to see what it could be. According to Martin, we should be looking at a two week window beginning today for an event that will change public confidence in a significant way.
If I were to place odds, I would say that it will be the stock market.
CNBC has announced the start of the new bull market. Jim Cramer has announced "the worst is over". And in response, the sheep go wild.
Karl Denninger gives us a scenario that could make this happen soon. Check out his post... Do Not Be Stupid
I wonder if some of those "overnight gaps" Denninger describes are being funded by the Easter Bunny??
Anyway, keep your eye on that Dow. Here's a guy that thinks it is going to 1,000!
Happy Easter everyone!
Anon, thanks for the $100B Omelet blog, that was awesome!
Mad, this is for you!
Sincerely,
FOFOA
FOFOA,
I ran across this interesting post about a possible black swan. Could this be the catalyst for Martin Armstrong's cycle date?
http://zerohedge.blogspot.com/2009/04/incredibly-shrinking-market-liquidity.html
FOFOA,
Wow..you beat me to the punch with the last post. You are fast!
Thanks for that FOFOA,
Now I have a new fav bunny ahead of the playboy and the Easter ones,
I will give you my take on the stock market.
If you look at the valuations achieved at the low they look quite compelling if you strip out the financial earnings.
Also by Price/Sales measures stocks were cheaper than they have been in about 20 years.
By price to tangible book stocks were cheaper than they were in 20 years.
In March 2003 50 Large Cap global stocks traded below tangible book,
Recently we had more than 500 Large cap global stocks trade below tangible book.
So while I doubt that we will have a new bull market, from the march lows we should see at least 7% per year total returns in stocks, which will beat bonds by a long margin and also stocks have better built in protection for high inflation and hyperinflation which makes them more appealing to cash and bonds.
I am also seeing a lot of anecdotal evidence that the 2-3 employment reports down the line will be hugely positive (i.e less than 300,000 jobs lost).
In conclusion I think for the time being the market will disappoint both the Prechters and the permabulls.
And BTW why do we listen to that guy , he has had so many many many wrong calls on Gold oil and Dow that Cramer looks like a genius compared to him.
Check out this screencap of people who found this blog from a Google search of Martin Armstrong, April 19th. This is from the last 7 days.
More on Martin Armstrong:
http://www.moneyweek.com/news-and-charts/economics/why-the-us-rate-cut-is-good-news-for-gold.aspx
The mother of all market calls
I was planning to make this next item the main feature of today’s piece, but it got upstaged by yesterday’s rate cut.
Some of you will remember the brutal sell-off in the stock markets on February 27th last year, at the time the worst day in the markets since the terrorist attacks of September 11th. Others will also remember that the sell-off had been predicted some eight years previously in 1999 by one Martin Armstrong, who we wrote about a year or so ago. See: The strange case of the jailed market genius.
It was just one of many of the now-imprisoned financial analyst’s spectacular stock market predictions; among them the 1987 stock market crash, the 1989 high in the Nikkei, the July 20th high in US equities (nailed to the day) and the current boom in gold and oil.
His predictions are based on a model he developed in the 1970s. There is an intense turning point in financial markets every 51.6 years, he believes, with investor confidence churning on a smaller 8.6-year cycle. This 8.6-year cycle was related to pi – 8.6 years is equal to 3,141 days.
However, critics will point out rightly that the stock markets did not peak on Feb 26th, 2007, they merely corrected. The peak came in July. That’s fair enough – but now look at this chart of the Dow Jones Financials.
right-click here to download pictures. to help protect your privacy, outlook prevented automatic download of this picture from the internet.
Amazing, isn’t it? That peak was predicted in 1999!
Here we see a copy of his economic cycle:
right-click here to download pictures. to help protect your privacy, outlook prevented automatic download of this picture from the internet.
You should note that an intermediate turn date (in other words, a short-term rally in a longer-term downtrend) is scheduled for 2008.225 – or March 22nd, 2008, this Saturday.
Now a Saturday bang in the middle of Easter would be an odd day for the stock market to rally, so perhaps Armstrong was wrong. Perhaps that bear market rally in the financials began yesterday – or perhaps we’ll see a turning point in a different market altogether. We’ll soon find out – I’ll keep an eye out and get back to you with my thoughts next week.
Unrelated, but maybe still somehow connected.
Sinclair's company (Tanzanian Royalty), of which I posess a very modest amount of shares - the only ones I have BTW, has been very negatively reviewed by an industry news publication: Barron's.
Tanzanian Royalty: No gold, where's the value? -Barron's
Sinclair argues that the shorts, both legal and illegal, are using dirty tricks such as the above to be able to cover after the reinstatement of the uptick tule in some months from now.
So, although I think that what Barron's write is not completely unsubstantiated, we may expect some interesting stuff from Mr. Sinclair shortly.
And a very appropiate verification word: stspin. I am starting to believe that FOFOA's verification software is beginning to show signs of emergence.
Something related to the ZeroHedge posts. This is from last Thursday.
Big liquidation triggers hedge-fund turmoil
Some compare upheaval to LTCM collapse; market-neutral funds are hit hard
Black Mesa Capital, a hedge-fund firm that uses computer models to track down investment ideas, said that at least one large hedge fund or investment bank is liquidating "massive" trading portfolios, according to a letter the Santa Fe, N.M.-based firm sent to investors Wednesday.
The warning is causing disruptions and triggering big losses among other so-called market-neutral hedge funds, Black Mesa said in its letter, a copy of which was obtained Thursday by MarketWatch.
"Clearly, something is amiss in the markets that few in our strategy, if anyone, have experienced before," Black Mesa's managers, Dave DeMers and Jonathan Spring, wrote. DeMers declined to comment Thursday.
The firm's hedge fund, which has about $1.9 billion in long positions and $1.9 billion in short positions, was down roughly 7.5% this month through Aug. 7. Those losses could grow to as much as 10% for August so far, Black Mesa noted.
A $700 million hedge fund run by Goldman Sachs (GS:124.33, +9.58,
+8.4%), the North American Equity Opportunities fund, has sold some of its positions recently after losses, a person familiar with the matter said on Thursday. Goldman's biggest hedge fund, the Global Alpha fund, has suffered losses and may also be selling positions, but the person stressed that this fund is not shutting down.
Does anyone remember my comment a week or so ago, where I propose that the stock market is a "virtual reality" world where trading in issues larger than a certain size is dominated by alghoritms? That ZeroHedge post is in my favour, although there seems to be a mistake that I make: black boxes are there to supply liqudity and many quant (Quantitaive Analyst - a position in a hedge fund usually filled by a graduate from a technical school, by far the best salaries paid for such a profession, check PhD.org for job postings) hedge funds are earning money by simply offering a service to the market by speeding the price discovery mechanism (i.e. offering high frequency liquidity in the jargon).
ZeroHedge claims something is amiss. You know what scares me? Have you seen Terminator 3? Ok, maybe I read to much sci-fi.
BTW, the link I posted is from 1.5 years ago and not last Thursday.
But the meaning stays.
Alek,
Hehe... I had already written this when you posted...
That article you quoted "from last Thursday" is actually from Aug. 9, 2007, just five days after Jim Cramer screamed for a rate cut live on TV. That was the opening round of the subprime crisis.
But it shows that this "quant liquidity" issue is real. Your Thoughts about virtual reality are taking shape. Perhaps "it's just time" for a good Terminator to save the day and kill off the bad Terminators.
FOFOA
alek_a,
Dear Comrades In Golden Arms,
Many of you have wrote in asking about the Barron's Financial Weekly article that mentioned me over the weekend. My official reply has been posted on the Chairman's Corner section of the appropriate corporate site.
While many of you do not have any particular relationship to my corporate interests, comparing the Barron's article to the readily available facts of the situation will prove to be an eye opener on the shortfalls of this well known publication's fact checking abilities. I invite you all to compare the article with the facts of the situation and make your own conclusion.
Your friend,
Jim
Hi FOFOA and others,
Its a loong weekend, today here it is a holiday as well. Didnt have too much time to post and I didnt have much to say anyway...
Sinclair sent a statement as a reply to the Barron's article earlier today (prolly sent over the weekend).
Tanzanian Royalty CEO Provides Clarification On Recent Article in Barron's
and Barron's today puts a second article on Sinclair's company!
A Gold Stock Loses Shine
My, oh my, oh my. TRE (Sinclair's company) fell about 15% on the news from the first Barron article today (larger drops have occured when gold was beaten down in the deleveraging scare few months ago) and it is not enough so they felt the need to have a second article?! The same company mentioned twice by a reputed publisher in a couple of days while there has hardly been any mention of this particular stock issue in the media for more than 3-4 years? Well, maybe they felt hurt by Sinclair's reply (and pretty much anything he says about the industry at his webpage) and it seems that a feud is starting.
But I have a question: Do you know of a good recent book that looks at the crisis from a more integral approach, including Keynesianism etc.? Something more philosophical and scholarly, if I may say so.
The following are some older comments on Martin Armstrong from Contrahour that I thought were interesting:
July 12, 2006
The model was first published a couple of decades ago but was used to forecast the 1980-81 peak in inflation in the late 1970's. It is known as the Princeton Economic's 'Economic Confidence Model' and was a part of Armstrong's 32,000 variable artificial intelligence super-computer model, which Armstrong said had "perhaps the largest economic database in the world, some of which he got from the london museum, including record from ancient Babylon, so I believe him when he says that he backtested the cycles into the ancient world. The CIA and Chinese government tried to aquire the model in 1998 after it forecast the crash of 1998 to the day on July 20. He had forecast the the dow would hit 6000 by 1996 and 10,000 by 1998 in the early 1990's. He also forecast in 1996, that oil would hit minimum $65 and that inflation would heat up after late 2002 going into 2007 and possibly extending into 2012. Armstrong said no to the CIA and Chinese and a few months later ended up in prison where he has now been for 6.5 years on contempt of court.
Armstrong was managing 3-4 billion dollars for the Japanese after he predicted the nikkei would peak in late 1989 and then lose 20,000 points within 10 months. Equity Magazine in Vancouver Canada named Armstrong 'North America's Top Economist' in 1990. All of this research has been around for quite some time, it did not just appear in 1999.
http://princetoneconomics.blogspot.com/
Feb. 1, 2007
I heard Marty interviewed on the radio back in 1998 he was a guest on a stock market radioshow, He was fascinating and I heard him predict a turning point of july 20th 1998, which was a few days away, I thought OH SURE!! I was sceptical, but sure enough the turn down came and I watched it slide for a week, then I was convinced he was right on. I went to cash like he advised and didnt buy back in until Oct 1998 where he predicted a low turning point. It was like having an ace up your sleeve, and to witness it myself and profit was truely awesome.
Then again I eagerly listened to him again as a guest on the radio program and took notes on his prediction for the 2000 high and the 2002 low, and I took notes thinking this is crazy how am I going to buy stocks if their all going down for two years, I had never shorted, well let me tell you when the top in 2000 came and stocks just kept sliding, I learned how to short real fast and didnt cover till Martys 2002 Oct/Nov low, it was like poetry in motion. He in my mind became my stock Guru hahaa! He's a phenominal genius. I will never second guess him again, I heard him in live on radio and witnessed it for myself. He had all kinds of turning points weekly, monthly, it was very cool! I wish we had him back, ...and now we face the 2007 Feb.27 top turning point to the downside
Feb. 27, 2007
Anybody notice the market on 2/26-7. Amazing coincidence?
Feb. 27, 2007
How long will the market continue this downtrend considering the next move is 04/23/09? Not sure what date in 2008? I wish to add that this information is/was incredibly accurate. Kinda scary. But with it I hope we all can prosper from.
Feb. 27, 2007
The next date in the model (+1.075 yrs.) is 2008.225 which is 3/22/08 (there are 29 days in February next year). However, the date correlation is most accurate at the "major" tops and bottoms.
NOTE: On 3/17/08, five days before 2008.225, gold reached its all time high against the US dollar and then reversed.
FOFOA
Hi Alek,
Ivo Cerckel is very studied on Keynesianism. Check out his blog. He footnotes everything and there are some good works in there. Also see his comments. They are mostly his own comments expanding on the posts. Here is a sample of his footnotes on Keynesianism:
(4)
Bradley W. Bateman, art. cit., p. 275
(5)
Henry Hazlitt, “Economics in One Lesson”, New York: Arlington House Publishers, 1978, 2nd ed. (first ed. published 1946 by Harper and Brothers), p. 17
http://jim.com/econ/chap01p1.html
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Friedrich A. von Hayek, “The Keynes Centenary – The Austrian Critique”, in Hayek, (Chiaki Nishiyama and Kurt Leube, eds.), “The Essence of Hayek”, Hoover Institution Press, 1984, 43,, p. 44-45
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Robert Skidelsky, “Hayek versus Keynes; the road to reconciliation” in: Edward Feser, ed.,“The Cambridge Companion to Hayek”, Cambridge University Press, 2006, 82, p. 108
(8)
George Reisman, “Capitalism – A Treatise on Economics”, Ottawa, Illinois: Jameson books, 1998. 3rd ed., p. 864
(9)
Milton and Rose Friedman, “Free to Choose – A Personal Statement”, New York and London, Harcourt Brace Jovanovich, 1980, p. 70-71
(10)
Reisman, op. cit., p. 864
(11)
Friedman, op. cit., loc. cit.
(12)
Benjamin M. Anderson, “Economics and the Public Welfare – A Financial and Economic History of the United States, 1914-46”, Indianapolis, Liberty Press, 1979, 2nd ed., (first ed. published in 1949 by D. Van Nostrand Company), p. 384
(13)
Hayek, art. cit., p. 43
(14)
Murray N. Rothbard, “Man, Economy, and State – A Treatise on Economics”, Auburn, Alabama: Ludwig von Mises Institute 2001, (originally published 1962)., p. 685
(15)
Rothbard, op. cit., p. 691
(16)
Reisman, op. cit., p. 863
(17)
Rothbard, op. cit., p. 691
(18)
Hayek, art. cit., p. 44
I also recommend this debate on monetary policy between Milton Friedman and Robert Mundell from 2001. It is very enlightening.
Sincerely,
FOFOA
Thanks for the Friedman Mundell debate. I will certainly read that.
Yes, Cerckel uses a lot of referencing in his writings. Very scholarly. It is not necessary for blog posts (links to articles maybe) actually, but what he does is proper for a peer-review paper. It would normally tell you that he is used to publish in professional journals, but I couldnt find anything published by him on philosophy/economics via the search resources that I normally use at work. Maybe I dont know where do the humanities scholars do their literature searches, if they do that at all (kidding!). All I came up are biology/medicine citations from a few Cerckels and books on Afrika (The Congo) from a centary ago.
But, what do all those have in common? Belgium. Yes, it seems many of his last-name sakes are Belgian. Just like Another and a few others that I find on the internet forums. And BTW, Congo used to be a Belgian colony until things went very bad some time ago.
Coincidence?
Search Cerckel on Google Scholar and see for yourself.
And additioonally, he is referencing a lot about thalyomide (sp?). That is a medical drug. Many of the returned citations on Cerckel are in the bio-medical area.
This is starting to creep me out. First the verification software, then the ZeroHedge stuff and now Cerckel. Maybe it is all just a conincidence or maybe you are going to have unexpectedly strong results from our little experiment FOFOA.
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