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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (67765)	8/9/2006 9:27:30 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 110194

After they finally sink, they come back in a few weeks. That is also a new phenomenon. It is as if investors not only do not anticipate, but they have a short memory as well.

To: orkrious who wrote (67765)	8/9/2006 10:52:22 AM
From: John Vosilla	Respond to of 110194

'It's amazing how stocks are no longer anticipatory. They have to be beaten over the head with the bad news before they finally sink.' You must be referring to subprime lenders today or the zombie like action in builders back in the spring. My screen of stocks in other areas like tech shows bloodbaths on a constant basis. Even builder CHCI was down 25% the other day is now down 85% off its all time high set a little over a year ago. Discounting a very serious RE downturn finally?

To: orkrious who wrote (67765)	8/9/2006 4:42:18 PM
From: ild	Respond to of 110194

Hambone -- trotsky, 16:20:25 08/09/06 Wed true, our views aren't really far apart. i still give the pm's the short term benefit of the doubt though, based on the sentiment indicators that i often highlight here. i also think the stock market at large may have one more chance to put in a short term rally before it goes on to fall into the 4-yr. cycle low - mainly because many sentiment indicators on the broader market ALSO show an unusual amount of pessimism - especially in view of the fact that there has been little technical damage thus far. @DROOY -- trotsky, 16:04:23 08/09/06 Wed it never rallies much, but it also never seems to decline much of late. it's doing nothing - in keeping with the fact that news from its Austral-Asian operations have been exceedingly bad of late, while the performance of the SA operations has reportedly been very good. well, i like stocks that do nothing and put everybody asleep (i've mentioned before that DROOY is trading at a vast discount to its peers in terms of reserves and production per share valuation)...that is often the prelude to an unexpectedly big move. one of Gann's major rules was: never become impatient with a stock. mozel@quotes -- trotsky, 15:57:38 08/09/06 Wed most economists of today pretend to be able to measure inherently immeasurable things (such as e.g. 'aggregate price levels'). that's why i have a tendency to put the word in quotes almost automatically. anyway, don't let that deter you from reading Shostak's excellent explanation. Hambone@pm's and the stock market -- trotsky, 15:53:47 08/09/06 Wed well, at the beginning stages of the 2000-2002 recession, pm's were ALSO dragged down wih the broader stock market initially - that changed the very second the yield curve began to steepen. there is however a major difference between then and now - the decline in 2000 was the last leg down in a multi-year bear market, whereas the sector has been in a bull market ever since. the major problem as i see it is that gold and pm shares have been part of the global excess liqudity play since late 2005 - and are thus susceptible to weakness in the face of this liquidity binge ending. however, over the long term, gold actually performs BEST when liquidity is CONTRACTING (thus the correlation with the yield curve). especially gold's REAL price, or purchasing power, tends to improve in periods of contracting liquidity. this is therefore also the time when gold mining margins expand at a much faster pace than the PoG itself. the question is only if there will be a lead or lag this time around (w.r.t. the yield curve correlation) - unfortunately this is unknowable in advance. it all depends on how much of the 'excess liquidity premium' has been wrung out in the recent correction i guess. mozel@the pool of real funding -- trotsky, 15:41:29 08/09/06 Wed err....neither, nor. all we know is that the pool exists - it is the sum of all saved production (a.k.a. 'real wealth'). it can not possibly be 'measured'. however, one can infer from how the economy reacts to monetary pumping whether the pool is still growing or has begun to stagnate or decline. the concept of the pool of real funding, elegantly explained by Frank Shostak (this is required reading for anyone in need of basic economic insight): Shostak explains what the subsistence fund, or pool of real funding, is mises.org @stock market -- trotsky, 15:27:12 08/09/06 Wed too bad that the weakening stock market drags gold related stuff down with it once again. noteworthy today: BOTH homebuilders AND mortgage peddlers are getting spanked for a change. the mortgage lenders have thus far been spared, as if they lived in a different universe. well, they don't. when demand for houses is on a sharp downswing, so is demand for mortgages. CFC reported a 19% plunge in originations for July today. this is BAAAD. one of the tricks the industry employs is to keep outrunning souring loans via creation of many more new ones (they also have odd ways of booking income resulting from loan growth - especially in the creative sub prime categories such as negative amortization loans. an astounding percentage of reported 'net income' consists of deferred interest - i.e. money that hasn't been collected yet, just as long as the borrowers seem compliant. a case of accounting conventions vs. the real thing). when credit growth slows, such as is now the case, deficiencies in their loan portfolios will soon be unmasked...and a lot of fictitious earnings growth will likely disappear.