FireWeatherMet Account Talk

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FireWeatherMet said:
So from a tactical perspective, what is the purpose of this tax plan?

Currently, regarding jobs, we've been at "full employment" statistically (5% or lower) for over 2 years. We now have a "Labor Shortage" in most sectors.
https://www.marketplace.org/2015/09/04/economy/does-51-percent-full-employment

Currently, regarding corporations...they have never been more flush with cash than now.
052016-US-cash-holdings.jpg


So basically, there are no significant amount of new jobs that are needed by our economy. (We need more workers from somewhere else actually).

And corporations have more than twice the amount of cash than they did at the end of the last boom cycle that ended in 2007. Yet now we are going to give them even more cash to hoard (keeping it out of the economy)???

So what is the purpose of this tax change again...that is going to add 1.5 Trillion to the National Debt?
Click to expand...

Wasn't the whole thing behind the tax cuts was to give money back to business and create jobs?

The labor shortage as I see it is two fold; unqualified workers and wages are to low to attract the worker (benefits, etc.)

We need to see apprentice programs started to get the skilled labor back in the market and increase wages and benefits.
 
nasa1974 said:
Wasn't the whole thing behind the tax cuts was to give money back to business and create jobs?

The labor shortage as I see it is two fold; unqualified workers and wages are to low to attract the worker (benefits, etc.)

We need to see apprentice programs started to get the skilled labor back in the market and increase wages and benefits.
Click to expand...

Yes I like the apprentice programs, but if corporations already have tons more cash than they've ever had...before the proposed tax cuts...and haven't used much of it to create jobs, then whats the point of giving them even more cash at the expense of the added deficit/debt????

Its probably true that we've truly entered the "Labor Shortage" phase of the 8 year recovery, where we can't create more jobs because there just simply aren't enough workers to fill them at a 4.2% unemployment rate.

Labor shortage in the United States becoming an increasingly dire issue

Labor shortage in the United States becoming an increasingly dire issue | Global Risk Insights
 
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Its been an interesting time, waiting in the F fund for 7 weeks now, for the 3% (or more) drop that we are historically overdue, given being at a record time period since the last one.

The charts seem to be at a crossroads, maybe a top, yielding to a brief downturn, then the next leg up, or maybe an inverted shoulder forming in the next few days, in the form of another leg up.

SP.png

Given the statistical record of gains during the Thanksgiving Holiday period, on low volume (and news low volume) below, from Tom's commentary, I'm thinking of doing a quick "in and out" possibly buying in Tuesday morning...and selling Friday morning. Will wait and see how the markets open early Tuesday.
This move would not be part of my system which says to stay put in G or F. Will have to look at more things and ponder this one a bit.

112017x.gif
 
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IFT into 50% C and 50% S effective COB today.

Don't like buying in during a big up day, but likely to at least "melt" upwards with momentum for the next few days.
Don't foresee staying in this position thru the rest of November....but we'll see.
 
Kinda made a slight profit last week going into stocks, but might lose all of it today.
Planning to go back to my original plan, 100% F fund...as nothing falls forever (chart below) shows it might be breaking out of a "double bottom".

The point is always to "buy low"....whether its stocks or bonds.

F-fund.png
 
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Using 1st IFT of Dec to leave -F- and go all into equities (50/50 S and C).
Strong seasonality period and 2nd slight down day today (so far), and my system requires me to stay in stocks in a bull market 90% of the time, and I've been out for almost a month and much of the last 2 months.

Thinking the Gov't shutdown won't be significant enough to dampen markets BUT don't like the charts nor the overly bullish sentiment of the past few weeks, so this might just be for the next 5-10 business days...we'll see.
 
After 3 good up days in a row (after getting back fully into C and S funds the last week of Dec) will roll the dice and try to time a brief downturn.

Lots of "irrational exuberance" on CNBC right now. VIX at super low levels.

Went 100% G effective COB today.
Could be jumping back in 1-3 trading days from now...we'll see.
 
Stayed out of stocks too long after leaving in early January.
Re-positioning back into stocks (50/50 C and S) on back of 2 huge down days (and maybe a slightly down to even day today).
 
Things are structurally unstable in the markets right now...after nearly a decade of easy money, the "threat" of rapidly rising rates is upon us.
Mind you, rates are still very low historically, but the brief recent rise along with the massive cash and tax stimulus the US is putting in (at the worst possible time of the business cycle), is raising the "prospect of rapid inflation" and rapidly rising rates.
Since the market is a forward looking indicator, people are already trading on what they think will be occurring by the middle to latter part of the year.
The other catalyst, which we have no control over is Europe. Draghi has hinted at more rate increases, and just today, an analyst said that he expects the Bank of England to start raising rates faster than expected.
https://finance.yahoo.com/m/cb7e0ebd-b8ef-3992-991f-2a415af7755e/bank-of-england-set-to-hike.html

With that, I don't anticipate this "situation" to be rectified in the next few days. Yes we will have some dead cat bounces to the upside, and I've been planning to use that textbook scenario to briefly exit into G.
But, as yesterday showed, there are too many late day reversals happening now to try to time it by our IFT deadline.
So today with the market down early, I decided that the earlier I exit, regardless of daily action, the better I'll feel if we hit new lows (which we are not too far away from).
Actually, I wouldn't be surprised if some bargain hunters come in with late day action, not making me take too much of a hit today upon exiting.

As for when to re-enter...I think its when everyone accepts higher rates, and sees strong economic data (the 3-4% GDP growth we've been promised) coming in at the same time. Or statements from Central Banks that they may not raise as much as expected.
I promised myself I would not get caught in another 2000-2001, or a 2008-2009. Hmmm, add that 8-9 year time length to 2008-2009 and that would make it...???

Exited to 100% G effective COB today.
 
Greenspan (no stranger to bubbles who correctly predicted that "irrational exuberance" would lead to the 2000 crash) has been talking about this for the past 6 months.
Interesting timeline of this new bubble he has been harping about since at least last summer.

Greenspan Sees Return of Stagflation Unseen Since 1970s - July 31, 2017

https://www.bloomberg.com/news/arti...sees-return-of-stagflation-unseen-since-1970s


Alan Greenspan says there are two bubbles, in stocks and bonds - Feb 1, 2018

https://www.marketwatch.com/story/a...re-two-bubbles-in-stocks-and-bonds-2018-01-31

And in the midst of this longer term picture, which drove the VIX way up sharply in the first place, is this short-term "fuel on the fire"..."morons" having huge shorts on the VIX. How many times have I said that "shorting" is not investing and should be banned to the casino's.

Cramer blames this week's crazy market on a 'group of complete morons' out speculating
https://www.cnbc.com/2018/02/08/cramer-blames-this-weeks-crazy-market-on-a-group-of-morons.html

 
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tsptalk said:
His timing wasn't great so I wouldn't trade off of what he says.
Click to expand...

I know, and he also had a role in keeping rates low for a little too long in the 2000's, but he was right in terms of the drop.
Instead of attacking the messenger, I was wondering if anyone agreed with what he was saying in the past 6 months is happening today? If not,, then what is? Scariest part unlike most other drops, is that most on CNBC or FBN don't seem to know, nor seem to agree on.
 
The 0% interest rates went on way too long, for whatever reason, and the bond market seems to be a bubble bursting. Stocks had a 10% correction. They were way overdue for one. After that, I don't know if it was a bubble. John Hussman suggests the valuations are such that we could see very poor returns over the next 10-12 years (if I remember correctly).
 
Greenspan merely stated that there was irrational exuberance (circa the 90's). He did not issue a sell signal. That said:

Markets can be irrationally exuberant for a long time. Clearly. That said:

You can still make money in an irrationally exuberant market. Doing so doesn't mean it wasn't irrational and that emotions weren't exuberant.
 
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userque said:
What's really troubling is that Cramer is still on the air.
Click to expand...

I know I've said it before on this site, but I'm old and I to repeat myself...

Cramer came out a few days before the total collapse of Bear Sterns and said everything was fine, all good, nothing to see here. If they do a sequel to The Greatest Showman, it could be about him.
 
I don't know about questioning Cramer's statement. I heard that the Eagles won the Super Bowl and the market is extremely excited so his show and his web site are doing great so from his point of view he is right. :-)
 
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