Posts Tagged ‘dotcom bubble’

We’re the Kids in America

We’re the Kids in America

397155 31: People scream as they ride on the Splash Mountain ride at Walt Disney World's Magic Kingdom November 11, 2001 in Orlando, Florida. (Photo by Joe Raedle/Getty Images)

Courtesy of Joshua M Brown, The Reformed Broker 

"Avoiding risk may feel sensible to a generation whose financial coming-of-age has been bookended by the dotcom bubble and the subprime-mortgage meltdown."

When you talk to a Gen-Yer or a Millennial about stocks, you sense a vague connection between the subject at hand and a ride on Disney’s Splash Mountain beginning to form in an almost-tangible, cartoon thought bubble above their head.

18 to 34 year olds (I’m one of them) have seen virtually nothing but Death and Dismemberment from the stock market overall, despite the new NASDAQ highs of 10 years ago and Dow 14,000 top of ’07.

Our psyches are collectively scarred by the devastating crashes that stocks are capable of.  The index highs of our generation’s recent memory barely seem to register at all compared with the ‘Nam Flashbacks of job losses and bankruptcy that stock sell-offs have meant to young adults so far.

Our connection to the stock market is as follows:

"Stocks go up, Mom and Dad buy a lot of stuff."

"Stocks get killed, college tuition has now disappeared, our house is on the market and there won’t be any job for me anyway."

In my discussions with people of my own age group and slightly younger, this feeling is fairly prevalent.  There’s a kind of irony in the fact that the young are now more cautious than their Baby Boomer parents when it comes to investments.

Stock market volatility has meant hard times in real life for young adults, not just lighter brokerage statements.  It has meant shock layoffs, career changes, and the dismantling of whole industries like mortgage, banking, real estate, media and advertising.

Several studies quantify this phenomenon (as collected by Newsweek):

In 2010, only 41 percent of 18- to 29-year-olds reported working full time, compared with 50 percent in 2006, according to the Pew Research Center. Millennials were more likely to report losing their jobs than workers over the age of 30, and many recent college graduates have had a hard time finding a toehold in a tight labor market, even as the national unemployment rate rose Friday to 9.6 percent. If the 18- to 34-year-olds feel more cautious about investing, it’s partly because they have less money to spend and little economic security.


continue reading


Tags: , , , , ,




Preserve and Protect: Mapping The Tipping Points

Preserve and Protect: Mapping The Tipping Points

Courtesy of Gordon T Long of Tipping Points

The economic news has turned decidedly negative globally and a sense of ‘quiet before the storm’ permeates the financial headlines. Arcane subjects such as a Hindenburg Omen now make mainline news. The retail investor continues to flee the equity markets and in concert with the institutional players relentlessly pile into the perceived safety of yield instruments, though they are outrageously expensive by any proven measure. Like trying to buy a pump during a storm flood, people are apparently willing to pay any price.  As a sailor, it feels like the ominous period where the crew is fastening down the hatches and preparing for the squall that is clearly on the horizon. Few crew mates are talgking as everyone is checking preparations for any eventuality. Are you prepared?

What if this is not a squall but a tropical storm, or even a hurricane? Unlike sailors, the financial markets do not have the forecasting technology for protection against such a possibility. Good sailors before today’s technology advancements avoided this possibility through the use of almanacs, shrewd observation of the climate and common sense. It appears to this old salt that all three are missing in today’s financial community.

Looking through the misty haze though, I can see the following clearly looming on the horizon.

Since President Nixon took the US off the Gold standard in 1971, the increase in global fiat currency has been nothing short of breath taking. It has grown unchecked and inevitably has become unhinged from world industrial production and the historical creators of real tangible wealth.

Do you believe trees grow to the sky?
Or, is it you believe you are smart enough to get out before this graph crashes?

Apparent synthetic wealth has artificially and temporarily been created through the production of paper. Whether Federal Reserve IOU notes (the dollar) or guaranteed certificates of confiscation (treasury notes & bonds), it needs to never be forgotten that these are paper. It is not wealth. It is someone else’s obligation to deliver that wealth to the holder of the paper based on what that paper is felt to be worth when the obligation is required to be surrendered. It must never be forgotten that fiat paper is only a counter party obligation to deliver. Will they?…
continue reading


Tags: , , , , , , , , , , , , , , , , ,




INNOVATION: What made America great is now Killing her!

INNOVATION: What made America great is now Killing her! 

"Creative Destruction is Secular not Cyclical"

Courtesy of Gordon T. Long   

What made America great was her unsurpassed ability to innovate.  Equally important was also her ability to rapidly adapt to the change that this innovation fostered. For decades the combination has been a self reinforcing growth dynamic with innovation offering a continuously improving standard of living and higher corporate productivity levels, which the US quickly embraced and adapted to.

This in turn financed further innovation. No country in the world could match the American culture that flourished on technology advancements in all areas of human endeavor. However, something serious and major has changed across America.  Daily, more and more are becoming acutely aware of this, but few grasp exactly what it is.  It is called Creative Destruction. 

It turns out that what made America great is now killing her!

Our political leaders are presently addressing what they perceive as an intractable cyclical recovery problem when in fact it is a structural problem that is secular in nature. Like generals fighting the last war with outdated perceptions, we face a new and daunting challenge. A challenge that needs to be addressed with the urgency and scope of a Marshall plan that saved Europe from the ravages of a different type of destruction. We need a modern US centric Marshall plan focused on growth, but orders of magnitude larger than the one in the 1940’s. A plan even more brash than Kennedy’s plan in the 60’s to put a man of the moon by the end of the decade. America needs to again think and act boldly. First however, we need to see the enemy. As the great philosopher Pogo said: “I saw the enemy and it was I”.

THE  PROBLEM IS NOT CYCLICAL, IT IS SECULAR.

The dotcom bubble ushered in a change in America that is still reverberating through the nation and around the globe. The Internet unleashed productivity opportunities of unprecedented proportions in addition to new business models, new ways of doing business and completely new and never before realized markets.  Ten years ago there was no such position as a Web Master; having a home PC was primarily for doing word processing and creating spreadsheets; Apple made MACs; and ordering on-line was a quaint experiment for…
continue reading


Tags: , , , , , , , , , , , , , , , , , , , , , , , , ,




Double Dip In Home Prices; Kohn Wins “Neanderthal Award”

No love lost here. 

Double Dip In Home Prices; Kohn Wins "Neanderthal Award"

Courtesy of Mish 

Caveman with an Empty Thought Cloud

Zillow claims Home Prices Have ‘Double Dip’ in 12 U.S. Cities

Twelve U.S. cities, including Boulder, Colorado, and Providence, Rhode Island, are showing extended declines in housing values, reversing signs of a sustained recovery last year, according to Zillow.com.

The number of markets in a “double dip” jumped in January from five in December, data released today by Seattle-based Zillow show. The real estate information provider defines a double dip as five consecutive price drops after at least five straight monthly increases. The gains must be preceded by a period where values fell in at least 10 of 12 months.

Home prices nationally dropped 0.6 percent in January from the prior month, the Federal Housing Finance Agency said yesterday. Government efforts to bolster the market spurred a 4.9 percent rise in home sales last year, the first annual gain since 2005, according to the National Association of Realtors.

The double dip through January also was seen in Colorado Springs and Greeley, Colorado; Augusta, Georgia; Columbus, Ohio; Harrisburg and Lancaster, Pennsylvania; Little Rock, Arkansas; Green Bay, Wisconsin; Greensboro, North Carolina; and Lincoln, Nebraska, according to Zillow.

Ten other markets, including Boston and Denver, “seem poised for a double dip,” the company said. Zillow still expects home values to bottom out by June, said Humphries.

Bottom Out In June? Why?

What possible reason can anyone have to think home prices will "bottom out in June? Perhaps a better question is "June of what year?"

There is a massive amount of shadow inventory, the job market sucks, we had a housing bounce because of $8,000 tax credits, that bounce is dead, and home prices are still way above rental prices and wages.

But hey, it could happen. Just don’t bet on it or even predict it.

Good Riddance to 40-Year Fed Veteran Donald Kohn

When it comes to housing bubbles, the Neanderthal Award must go to Donald Kohn for his statements on combating bubbles.

Federal Reserve policymakers should deepen their understanding about how to combat speculative bubbles to reduce the chances of another financial crisis, the central bank’s outgoing vice chairman said Wednesday.

Donald Kohn said the worst crisis to hit the country since the 1930s points to the need for more research on how higher interest rates can be used


continue reading


Tags: , , ,




 
 
 

Kimble Charting Solutions

Dow Megaphone Breakout Continues, As It Tests 77-Year Breakout Level

Courtesy of Chris Kimble

I’ve heard many times over the past 39-years I’ve been in the financial services business that charts have memories? Is it true they do? Is it possible that they have very long-term memories?

This theory looks to be put to a big test by the chart above, which looks at the Dow Jones Industrial Index since 1910.

The Dow has spent the majority of the past 77-years, inside of rising channel (1). While inside of this channel, it looks to have created two very long-term megaphone patterns.

It broke above the first megaphone pattern in the early 1980s, where ...



more from Kimble C.S.

Phil's Favorites

As Fed Pumps $3 Trillion into Repo Market, Morgan Stanley and Goldman Sachs Practice Borrowing from the Fed's Discount Window

Courtesy of Pam Martens

James Gorman (left) Chairman and CEO, Morgan Stanley; David Solomon (right) Chairman and CEO, Goldman Sachs

Last week, Jim Grant, the Editor of Grant’s Interest Rate Observer, was interviewed by CNBC’s Rick Santelli. Grant said that since September 17, the Fed has pumped “upwards of $3 trillion” in repo loans to Wall Street. Santelli asked if the Fed had effectively nationalized the repo market. Grant said “there is no more price discovery and we are dealing with administe...



more from Ilene

Zero Hedge

If Not-QE Is QE, Then Is Not-A-Blowoff-Top A Blowoff Top?

Courtesy of ZeroHedge View original post here.

Authored by Charles Hugh Smith via OfTwoMinds blog,

Can $300 billion, or $600 billion, or even $1 trillion continue to prop up an increasingly risk-riddled, fragile $330 trillion global bubble in overvalued assets?

When is "Not-QE" QE? When Federal Reserve Chairperson Jerome Powell declares QE is not QE. We can constructively recall the story that Abraham L...



more from Tyler

Lee's Free Thinking

NY Department of Welfare Announces Increased Subsidies for Primary Dealers, Thank God!

 

NY Department of Welfare Announces Increased Subsidies for Primary Dealers, Thank God!

Courtesy of , Wall Street Examiner

Here’s today’s press release (11/14/19) from the NY Fed verbatim. They’ve announced that they will be making special holiday welfare payments to the Primary Dealers this Christmas season. I have highlighted the relevant text.

The Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York has released the schedule of repurchase agreement (repo)...



more from Lee

The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



more from Tech. Traders

Insider Scoop

HP Rejects Xerox's Buyout Offer: Experts Debate What's Next

Courtesy of Benzinga

HP Inc. (NYSE: HPQ) rejected Xerox Holdings Corp (NYSE: XRX)'s $33-billion takeout offer Sunday, and experts are divided on what will occur next in the ongoing saga between two tech...



http://www.insidercow.com/ more from Insider

Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



more from Biotech

Chart School

Dow Jones cycle update and are we there yet?

Courtesy of Read the Ticker

Today the Dow and the SP500 are making new all time highs. However all long and strong bull markets end on a new all time high. Today no one knows how many new all time highs are to go, maybe 1 or 100+ more to go, who knows! So are we there yet?

readtheticker.com combine market tools from Richard Wyckoff, Jim Hurst and William Gann to understand and forecast price action. In concept terms (in order), demand and supply, market cycles, and time to price analysis. 

Cycle are excellent to understand the wider picture, after all markets do not move in a straight line and bear markets do follow bull markets. 



CHART 1: The Dow Jones Industrial average with the 900 period cycle.

A) Red Cycle:...

more from Chart School

Digital Currencies

Is Bitcoin a Macro Asset?

 

Is Bitcoin a Macro Asset?

Courtesy of 

As part of Coindesk’s popup podcast series centered around today’s Invest conference, I answered a few questions for Nolan Bauerly about Bitcoin from a wealth management perspective. I decided in December of 2017 that investing directly into crypto currencies was unnecessary and not a good use of a portfolio’s allocation slots. I remain in this posture today but I am openminded about how this may change in the future.

You can listen to this short exchange below:

...



more from Bitcoin

Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

more from M.T.M.

Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



more from Our Members

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>