Market Talk / April 30 - May 6

[Wizard]

30 yr 5.25%. Up another .87% today.

On 10 May the yield spread will only be .25%.

Not a sign of economic growth.

 

[Dave M]

Tech, now you're talking sense. There are good reasons for trepidation but there always are. In the end, what a person fears the most seems never to happen.

Classical theory would say the dollar will fall until the dollar-value of our imports equals the value of our exports. Yes? These do not have to be tangible; they can be invisible things like insurance and property rights, money sent home or received from abroad, etc. The balance is equilibrated by government payments and subsidies, taxes on profits, etc.

On that basis, because our balance of trade as measured is so lopsided, the dollar ought to be weak. Our government is already so broke they probably cannot redress the balance. So we are going to need some kind of sweetheart deal with our larger creditors, which would be China and who else? Japan? That and an increase in invisible earnings, like tuition at our world-class graduate schools and medical schools.

We'll probably get it because remember, the U.S. is the economic engine that powers the world. Everyone is counting on us to pull them through, too.

Dave

 

[Wizard]

Confidence in the U.S. dollar has slumped to a new low, as a series of political and economic statements last month questioned Russia's reliance on the world's most convertible currency.

http://www.themoscowtimes.com/stories/2006/05/03/045.html

For the last 10 years, U.S. budget and trade deficits have created an imbalance that negatively affects the dollar's value worldwide. "A resolution of this means a major adjustment in the interest rates, which means a weakening of the dollar," Howell said.

 

[Wizard]

NEW YORK, May 3 (Reuters) - The dollar spiked up against the yen on Wednesday after Japanese finance minister Sadakazu Tanigaki said last month's Group of Seven statement on currencies wasn't a call for a weaker dollar.

http://today.reuters.co.uk/investin...0_RTRIDST_0_MARKETS-FOREX-UPDATE-9-URGENT.XML

More spin control? :blink: Yes, we said it but you "misunderstood" what we said and it took a month to tell you what we really meant. This is called sending up a "trial ballon". If you do not like the results then you shoot the ballon out of the air. Should of sent Maria B there so she could report it breathlessly at the last trading hour of the day. Because this is when this story came out.

The Japanese do not want a weak USD - that means they sell last cars here. :nuts: Funny how that works.

 

[Pilgrim]

The Japanese do not want a weak USD - that means they sell last cars here. :nuts: Funny how that works.

Maybe if it gets weak enough, they'll build all of their cars here instead of just some of them. Always a silver lining.

 

[Wizard]

Maybe if it gets weak enough, they'll build all of their cars here instead of just some of them. Always a silver lining.

You can buy a new car in Japan for around 7K. Most live in the large cities so they do not buy them because of the traffic and you can not find a place to park. It is easier to use the mass transit system.

This is what the U.S. needs to do. Next time you are on the highway during rush hour count and see how many cars only have the driver.

All and all U.S. has the worse mass transit system in the world. That is what needs to be fixed. No matter what we switch over too as an alternate fuel we are going to have the same problem. We switch to a car that runs on sugar and the price of sugar will go through the roof. We switch to a car that runs on corn cobs then corn cobs will go through the roof. This is like putting a bandaid on a amputation. We need to invest in mass transit systems.

Only reason Japan builds cars here is so they can sell those cars without having to pay the import tariffs. If we drop the tariffs then Japan will close their U.S. factories extremely quickly.

 

[Spaf]

Daily Yak

The Kingdom of TSP
Daily Edition
May 3, 2006 Closing​

Yak, Doodles, Tea Leaves & The Tin Box

Kingdom Yak:
Market Yak..............................Socks down! The days of the Horsemen return (Rats;rates, Krude;energy and Earnie;earnings).
Other Yak................................Lube dips near $72 a bucket. Supplies at 8 yr high. However, pain continues.
Jester Yak...............................Past 10 trading days, 6 show bearish reversals.

Doodles:
Socks [$SPX] Closed at..............1307.85, dn -5.36
Volume (CMF) (money flow).........+0.054, decreasing.
Averages (MACD) (trend)............+3.737, decreasing.
Momentum (S-STO) (signal).........74.85, decreasing.
Strength (RSI) Overbought/sold....[70] 53.96 [30]

Lube (NYM) Closed at..................72.28, dn -2.33
Oil Markers................................<70= ok, 70-75= worry, >75= panic.

Tea Leaves:
Charts & Stuff............................Red.

Tin Box:
Position.....................................0% Socks
Stops [$SPX].............................Alert: 1306. Trail: 1294.

 

[Fivetears]

Only reason Japan builds cars here is so they can sell those cars without having to pay the import tariffs.

...and to get into NASCAR. :nuts:

You are absolutely correct though, Wizard. If only we could get American cars to run on $&!+. There's an endless supply of it, ready to spew.

 

[Spaf]

TOM,

RE: TSP Talk Market & Fund Commentary - Updated 05/04/06 "You are here...."

Is this not the same chart ? : ......

 

[The_Technician]

A morning thought

One thing needs to happen here for this market to continue to grow... the unofficial inflation (you know, the real cost of living-right Benny....) needs to stop and let peoples income grow and catch up.....if the opportunity isn't given then consumers will lock their pocketbooks so tight even the I fund will drop like a brick....remember the I fund is very dependent on the American consumer.....(large trade deficit).....

else.....remember the early 30's......all this money printing has already made a major impact ...........even govt loans are easier to pay off......:embarrest:

Its one or the other or somewhere inbetween.....:blink:

 

[FundSurfer]

Re: A morning thought

...then consumers will lock their pocketbooks so tight even the I fund will drop like a brick....remember the I fund is very dependent on the American consumer.....(large trade deficit)..... ...

Techy.... do you ever feel bullish? Do you ever feel good about the market? If you do, do you go lie down till you feel better? I'm just curious, I think I can only remember you being bullish about the F-fund.

Don't get me wrong I like reading what you've got to say, I just take whatever you say knowing that you are a "glass is half empty" kind of guy. One of these days, you are going to say something bullish and shock this whole board.

 

[The_Technician]

Re: A morning thought

Techy.... do you ever feel bullish? Do you ever feel good about the market? If you do, do you go lie down till you feel better? I'm just curious, I think I can only remember you being bullish about the F-fund.

Don't get me wrong I like reading what you've got to say, I just take whatever you say knowing that you are a "glass is half empty" kind of guy. One of these days, you are going to say something bullish and shock this whole board.

Of course I do....but you gotta admit, the market isn't at a bottom and the economics isn't prime...there are factors getting in the way for the economics to continue to be bullish........this is a very risky situation we're in and I give it a slight chance to work its way out of it so that Birchy can have his forever climbing C fund....!!!

Maybe I know some things that you don't about markets.......and thats the reason why I'm so cautious at this time.....I would really love to see it go the other way.....butttttt......

I'm a realist......I'm not wishing.....

To let you know something else, I have made some knowledge gains that showed my bearish errors over the last year....and that is a self improving fact....this past bearishness of the last year won't get me next time.....and I think you are going to see me do some very daring trading in the near future when things are going down......

The F fund will make this drop and then we will see what happens....it is in flux......

 

[Show-me]

Rats Rates

Lot of rate news on the web. Sound like everyone in the Eurozone have their fingers on the rate button.



Eurozone interest rates remain at 2.5%
Financial Times - 45 minutes ago
By Steve Johnson. The European Central Bank held its main refinancing rate at 2.5 per cent on Thursday, but the move is likely to prove a mere stay of execution for borrowers, with the Frankfurt-based bank ...


Bank holds rates at 4.5 percent
Reuters.uk - 1 hour ago
By Ross Finley. LONDON (Reuters) - The Bank of England kept interest rates steady for the ninth month running on Thursday and a growing number of economists are now wondering whether the next move will be up.

 

[Wizard]

Yields are flying.

Looks like another bad day for bond prices.

 

[vectorman]

Has anyone noticed the DJTA.


http://bigcharts.marketwatch.com/intchart/frames/frames.asp?symb=DJTA

 

[Birchtree]

Vectorman,

I have and do I need to catch a train. Transports are currently at 4896.12 up a whopping 146.39 for another new all-time high.

Ferdinand,

Watch out for the dip - simply jump over it like a good bull.

I own several rail oriented stocks as well as manufacturing and repair - the problem is the train is moving to fast to jump off.

 

[roguewave]

"remember the I fund is very dependent on the American consumer.....(large trade deficit)..... "


Tech, bone up on the I fund. Our major and primary trade deficit is with China, and the last time I checked, the Chinese Yuan was not a part of the Dollar Index nor a part of the I fund.

I have a question for anyone that might have the answer, is there any accessible data reflecting what the overall current distribution of the TSP is as of late? Thanks in advance (TIA).

 

[Spaf]

I have a question for anyone that might have the answer, is there any accessible data reflecting what the overall current distribution of the TSP is as of late? Thanks in advance (TIA).

Roguewave,

If you go over to the TSP site, look up the fundsheet for the individual funds and it will list the net assets. However, this information is current as of the end of 2005. Thats as close as I can get you, unless someone has some more current data!

Spaf

 

[James48843]

"
I have a question for anyone that might have the answer, is there any accessible data reflecting what the overall current distribution of the TSP is as of late? Thanks in advance (TIA).

You can see how much was invested in each of the funds, in the annual report and fund description at:
http://www.tsp.gov/rates/fundsheetpkg.pdf
which has data current as of Dec 31, 2005,


and also the "financial statement" which has data from the close of 2004, at:

http://www.tsp.gov/forms/financial-stmt.pdf



A quick look at the december, 2005 data showed:

G Fund: 66.6 billion
F Fund: 10.6 billion
C Fund: 68.9 billion
S Fund: 14.1 billion
I Fund: 13.1 billion.

Again, that was as of December 31, 2005. I would presume more people have moved more into I fund in the last couple months- a lot of the folks in my office have done so.

I don't know where to find anything more current that the end of Dec 2005 data.

 

[Spaf]

Thats about says the average participant has an allocation of:
38%-G
06%-F
40%-C
08%-S
08%-I