Boom !!!

KnightWhoSaysNit

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Jul 19, 2010
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Several days over the past week we have seen crash-like behavior -- a steady trend of selling that lasts for hours.

Eventually the dip-buyers are going to fade away, then the leveraged money.

When inflation comes down (if the government ever comes back to sanity) there should be some good investment opportunities.
 

NJPSU

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May 29, 2001
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With NJ reworking his strategy to come out positive today I will have to keep us up to date.

Not one DOW stock green at this hour.
I was short heading into today in my option strategy but not short enough.

I told bgdan yesterday I wish I was home yesterday afternoon because I wanted to get more short.

I questioned you yesterday how you interpreted the Powell’s comments as super dovish. I didn’t see it and it looks like I was right.
 

m.knox

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I was short heading into today in my option strategy but not short enough.

I told bgdan yesterday I wish I was home yesterday afternoon because I wanted to get more short.

I questioned you yesterday how you interpreted the Powell’s comments as super dovish. I didn’t see it and it looks like I was right.

LOL.... Once again, NJ declares himself right to validate himself.... Funny shit.
 

NJPSU

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Yes…

Stock market up? Great news according to NJ!
Stock market down? Great news according to NJ!

He/she (I don’t want to presume) is a miracle of inconsistency and boorish hypocrisy.

NJPSU said:
I gotta tell you though if I was home I would have gotten more short heading into tomorrow. After a 900 point up day I’m thinking sell off tomorrow.
 

KnightWhoSaysNit

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I was short heading into today in my option strategy but not short enough.

I told bgdan yesterday I wish I was home yesterday afternoon because I wanted to get more short.

I questioned you yesterday how you interpreted the Powell’s comments as super dovish. I didn’t see it and it looks like I was right.

Actually, Powell's comments were super dovish. The market moved on his remarks. That is proof.

What are we seeing today? Profit-taking, but also a move higher in bond yields as people realize that the Fed will not be controlling inflation to a satisfactory degree. That pushes stocks down based on valuation.

There is now more than a trillion back in money markets in the span of a couple of hours. Does that make sense? Why would it not move back into long bonds if the Fed was truly hawkish?
 

NJPSU

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May 29, 2001
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Actually, Powell's comments were super dovish. The market moved on his remarks. That is proof.

What are we seeing today? Profit-taking, but also a move higher in bond yields as people realize that the Fed will not be controlling inflation to a satisfactory degree. That pushes stocks down based on valuation.

There is now more than a trillion back in money markets in the span of a couple of hours. Does that make sense? Why would it not move back into long bonds if the Fed was truly hawkish?
This wild volatility is likely the result of the algo’s at the big banks. This is computer trading piling on top of computer trading both yesterday and today.
 

KnightWhoSaysNit

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Boom! Dow breaks through 1000 down.

IMHO this cements a bear market mentality. People will be selling into rallies. I don't think it ends until the Fed is ready to reverse course. That could be years away if Congress and the Fed do not get their acts together.

I heard an analyst say last week that he expects the market to move sideways .... for a decade.
 

LioninHouston

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Boom! Dow breaks through 1000 down.

IMHO this cements a bear market mentality. People will be selling into rallies. I don't think it ends until the Fed is ready to reverse course. That could be years away if Congress and the Fed do not get their acts together.

I heard an analyst say last week that he expects the market to move sideways .... for a decade.
MSNBC hasn’t noticed. January 6!!!!
 
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KnightWhoSaysNit

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Charles Payne on Cavuto just lamented what I've been saying here for a long time, that the Fed's actions do not match its rhetoric. That is the fundamental problem. Way too much lag in their policies when history has shown that lead is required.

Powell has no understanding of dynamics. Either that or he is just a puppet of this government. Say that we care about you but do what hurts you.
 

LionDeNittany

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Charles Payne on Cavuto just lamented what I've been saying here for a long time, that the Fed's actions do not match its rhetoric. That is the fundamental problem. Way too much lag in their policies when history has shown that lead is required.

Powell has no understanding of dynamics. Either that or he is just a puppet of this government. Say that we care about you but do what hurts you.

Powell understands.
 
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jjw165

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Charles Payne on Cavuto just lamented what I've been saying here for a long time, that the Fed's actions do not match its rhetoric. That is the fundamental problem. Way too much lag in their policies when history has shown that lead is required.

Powell has no understanding of dynamics. Either that or he is just a puppet of this government. Say that we care about you but do what hurts you.
Yesterday, Powell said that he did not believe we are headed towards a recession. He’s a joke.
 
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KnightWhoSaysNit

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To put this into perspective for a young retiree, you spend one year of your savings and lose two more.

And this could go on for years, even get worse. The "medicine" is to take the loss in your investments instead of your spending budget.
 

LafayetteBear

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I think the Fed needs to consult Cheeto Hitler on what it should do to address inflation. And any other problem the Fed must deal with. After all, only Cheeto can solve it. He's the smartest guy walking the face of the planet. And the most humble. Perfect for the role of Mar a Lago's unofficial poolside greeter. :cool:
 
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m.knox

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I think the Fed needs to consult Cheeto Hitler on what it should do to address inflation. And any other problem the Fed must deal with. After all, only Cheeto can solve it. He's the smartest guy walking the face of the planet. And the most humble. Perfect for the role of Mar a Lago's unofficial poolside greeter. :cool:

LOL.... Trump very well may be the solution to cleaning up the mess Biden made.

TRUMP!!!!
 
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NJPSU

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To put this into perspective for a young retiree, you spend one year of your savings and lose two more.

And this could go on for years, even get worse. The "medicine" is to take the loss in your investments instead of your spending budget.
Sounds like you are panicking again. You will be ok, I promise.
 

KnightWhoSaysNit

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Sounds like you are panicking again. You will be ok, I promise.

I may be up this year, but certainly way down after taxes and inflation.

I've written here many times that it is the people expecting to retire on 7% returns each year after inflation that are going to get burned, and that means a lot of people in my neighborhood that I care about. My expectations have been very low for some time, because I know wealth isn't something you can print.

Yes, I am pissed that this government decided to take money from people holding CDs, bonds, and pensions and hand that over to shareholders, only to then have those shareholders sell off and concentrate wealth even worse than it was, leaving those same vulnerable people -- forced out of "conservative" investments -- into poorly performing risk assets. It is theft, worse than what happened after 2008.

This is your Democratic Party, the party people still think represents the average retiree and working man. They are all being fooled big time. People in my family -- fooled big time.
 

LionDeNittany

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Yep Powell is not a puppet of the government he’s a puppet of the banks and big money.

I don't think he is a puppet.
I think he knows raising rates will destroy finance as we know it.

The carry game has become so massive it will become an explosion of epic proportions if it ends.
 

NJPSU

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I may be up this year, but certainly way down after taxes and inflation.

I've written here many times that it is the people expecting to retire on 7% returns each year after inflation that are going to get burned, and that means a lot of people in my neighborhood that I care about. My expectations have been very low for some time, because I know wealth isn't something you can print.

Yes, I am pissed that this government decided to take money from people holding CDs, bonds, and pensions and hand that over to shareholders, only to then have those shareholders sell off and concentrate wealth even worse than it was, leaving those same vulnerable people -- forced out of "conservative" investments -- into poorly performing risk assets. It is theft, worse than what happened after 2008.

This is your Democratic Party, the party people still think represents the average retiree and working man. They are all being fooled big time. People in my family -- fooled big time.
The 4% rule is the general rule of thumb for retirees. That means a 4% withdrawal rate per adjusted for inflation should survive a 30 year retirement. Now I’ve heard many since recommend that a 3.5% withdrawal rate might be more appropriate given todays environment.

If your retirees can’t live on 3.5% to 4% of their nest egg then they shouldn’t have retired.

Your notion that what has occurred over the last 30 years with the Fed and government spending is somehow a Democrat only initiative is laughable. I can’t believe you are still going with that. It’s absurd considering anyone can look up what Republicans have done with the deficit when they were in power.
 

KnightWhoSaysNit

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The 4% rule is the general rule of thumb for retirees. That means a 4% withdrawal rate per adjusted for inflation should survive a 30 year retirement. Now I’ve heard many since recommend that a 3.5% withdrawal rate might be more appropriate given todays environment.

If your retirees can’t live on 3.5% to 4% of their nest egg then they shouldn’t have retired.

Your notion that what has occurred over the last 30 years with the Fed and government spending is somehow a Democrat only initiative is laughable. I can’t believe you are still going with that. It’s absurd considering anyone can look up what Republicans have done with the deficit when they were in power.

I will write it again. The Dems are spending when there is nothing left in the bank.

This is different. You don't add to the money supply as productivity is going down.

Think back to your drinking analogy. The Dems don't know when they've had too much. They keep drinking even when they are in a colossal state of intoxication.
 
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KnightWhoSaysNit

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The 4% rule is the general rule of thumb for retirees. That means a 4% withdrawal rate per adjusted for inflation should survive a 30 year retirement. Now I’ve heard many since recommend that a 3.5% withdrawal rate might be more appropriate given todays environment.

If your retirees can’t live on 3.5% to 4% of their nest egg then they shouldn’t have retired.

Your notion that what has occurred over the last 30 years with the Fed and government spending is somehow a Democrat only initiative is laughable. I can’t believe you are still going with that. It’s absurd considering anyone can look up what Republicans have done with the deficit when they were in power.

I don't think those rules of thumb would have worked for a person retiring in the 1960s. That person would not have known that the 1970s were coming -- that bonds values would fall, and stocks would not keep pace with a money-market fund.

I see this being worse than then. The reason is simple. The government is broke. Any new spending to induce economic growth doesn't produce real growth, just inflation.

Retirees require real growth. That's the bottom line. The Left doesn't care. What they care about is funneling money to their special interests and growing the Deep State. Nancy Pelosi is the queen of this stuff. Biden is too far gone to stand up to the extremists in the party who do not care about the viability of the currency.
 

NJPSU

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I don't think those rules of thumb would have worked for a person retiring in the 1960s. That person would not have known that the 1970s were coming -- that bonds values would fall, and stocks would not keep pace with a money-market fund.

I see this being worse than then. The reason is simple. The government is broke. Any new spending to induce economic growth doesn't produce real growth, just inflation.

Retirees require real growth. That's the bottom line. The Left doesn't care. What they care about is funneling money to their special interests and growing the Deep State. Nancy Pelosi is the queen of this stuff. Biden is too far gone to stand up to the extremists in the party who do not care about the viability of the currency.
Yes the Trinity study looked at the period of 1925 to 1995 so your 1960’s scenario was considered.

The 4% Rule" refers to one of the scenarios examined by the authors. The context is one of annual withdrawals from a retirement portfolio containing a mix of stocks and bonds. The 4% refers to the portion of the portfolio withdrawn during the first year; it is assumed that the portion withdrawn in subsequent years will increase with the consumer price index (CPI) to keep pace with the cost of living. The withdrawals may exceed the income earned by the portfolio, and the total value of the portfolio may well shrink during periods when the stock market performs poorly. It is assumed that the portfolio needs to last thirty years. The withdrawal regime is deemed to have failed if the portfolio is exhausted in less than thirty years and to have succeeded if there are unspent assets at the end of the period.

The authors backtested a number of stock/bond mixes and withdrawal rates against market data compiled by Ibbotson Associates covering the period from 1925 to 1995. They examined payout periods from 15 to 30 years, and withdrawals that stayed level or increased with inflation. For level payouts, they stated that "If history is any guide for the future, then withdrawal rates of 3% and 4% are extremely unlikely to exhaust any portfolio of stocks and bonds during any of the payout periods shown in Table 1. In those cases, portfolio success seems close to being assured." For payouts increasing to keep pace with inflation, they stated that "withdrawal rates of 3% to 4% continue to produce high portfolio success rates for stock-dominated portfolios."


https://en.wikipedia.org/wiki/Trinity_study
 

KnightWhoSaysNit

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Yes the Trinity study looked at the period of 1925 to 1995 so your 1960’s scenario was considered.

The 4% Rule" refers to one of the scenarios examined by the authors. The context is one of annual withdrawals from a retirement portfolio containing a mix of stocks and bonds. The 4% refers to the portion of the portfolio withdrawn during the first year; it is assumed that the portion withdrawn in subsequent years will increase with the consumer price index (CPI) to keep pace with the cost of living. The withdrawals may exceed the income earned by the portfolio, and the total value of the portfolio may well shrink during periods when the stock market performs poorly. It is assumed that the portfolio needs to last thirty years. The withdrawal regime is deemed to have failed if the portfolio is exhausted in less than thirty years and to have succeeded if there are unspent assets at the end of the period.

The authors backtested a number of stock/bond mixes and withdrawal rates against market data compiled by Ibbotson Associates covering the period from 1925 to 1995. They examined payout periods from 15 to 30 years, and withdrawals that stayed level or increased with inflation. For level payouts, they stated that "If history is any guide for the future, then withdrawal rates of 3% and 4% are extremely unlikely to exhaust any portfolio of stocks and bonds during any of the payout periods shown in Table 1. In those cases, portfolio success seems close to being assured." For payouts increasing to keep pace with inflation, they stated that "withdrawal rates of 3% to 4% continue to produce high portfolio success rates for stock-dominated portfolios."


https://en.wikipedia.org/wiki/Trinity_study

Here is a better reference to the Trinity Study.

The problem with this study is that it dilutes the really bad periods by using an extremely broad period and then assuming that the probability [today] is the same as a random sample for the entire study period.

I don't think there is any period in that study where there was simultaneous debt and inflation to the degree that we have today. In fact we could take 130% debt/GDP and say that is optimistic because it does not include unfunded liabilities. We did not have inflation like this after WW2, and we certainly did not have massive liabilities associated with socialized retirement and healthcare for the old and poor. Further, we were not at a competitive disadvantage in manufacturing. We were in fact world leaders. Not at all true today. Our workforce today is lacking pertinent skills. Data released today is showing a significant decline in productivity, i.e., we are getting less work at a higher cost.
 
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