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Market Talk
- Thread starter Spaf
- Start date
imported post
oldschool wrote:
Welcome oldschool -
Sell Roshashana and buy Yom Kippur
oldschool wrote:
Many professionals away from the Street for regligious holiday yesterday/today - may mean full Street reaction to Refco and full info on Refco exposures won't register w overall markets until Monday. Mondays in October... oh boy, this should be fun. If TSP had options I'd bet on volitility, just not sure which way
Welcome oldschool -
Sell Roshashana and buy Yom Kippur
bkrownd
Member
imported post
Rolo wrote:
Companies do have real $$$ values, which have hard links to variables in the economy. Interest rates, inflation, sales, taxes, etc have real $$$ effects on those values, which should be the basis of analyzing the real fluctuations in the economy, under the noise of the speculation. I am very interested in understanding those mechanisms quantitatively, and applying them to my investment allocations.
Rolo wrote:
Companies do have real $$$ values, which have hard links to variables in the economy. Interest rates, inflation, sales, taxes, etc have real $$$ effects on those values, which should be the basis of analyzing the real fluctuations in the economy, under the noise of the speculation. I am very interested in understanding those mechanisms quantitatively, and applying them to my investment allocations.
G
Greg
Guest
imported post
bkrownd wrote:
YearG Fund%
1988 8.81
1989 8.81
1990 8.90 <- higher than year before
1991 8.15
1992 7.23
1993 6.14
1994 7.22 <- higher than year before
19957.03
19966.76
19976.77 <- higher than year before
19985.74
19995.99 <- higher than year before
20006.42 <- higher than year before
20015.39
20025.00
20034.11
20044.30 <- higher than year before
G-fund is closely tied to the discount rate
2004
December 14 2.25
November 10 2.00
September 21 1.75
August 10 1.50
June 30 1.25
2003
June 25 1.00
2002
November 6 1.25
2001
December 11 1.75
November 6 2.00
October 2 2.50
September 17 3.00
August 21 3.50
June 27 3.75
May 15 4.00
April 18 4.50
March 20 5.00
January 31 5.50
January 3 6.00
2000
May 16 6.50
March 21 6.00
February 2 5.75
1999
November 16 5.50
August 24 5.25
June 30 5.00
1998
November 17 4.75
October 15 5.00
September 29 5.25
1997
March 25 5.50
1996
January 31 5.25
1995
December 19 5.50
July 6 5.75
February 1 6.00
1994
November 15 5.50
August 16 4.75
May 17 50 4.25
April 18 3.75
March 22 3.50
February 4 3.25
1992
September 4 3.00
July 2 3.25
April 9 3.75
1991
December 20 4.00
December 6 4.50
November 6 4.75
October 31 5.00
September 13 5.25
August 6 5.50
April 30 5.75
March 8 6.00
February 1 6.25
January 9 6.75
1990
December 18 7.00
December 7 7.25
November 13 7.50
October 29 7.75
July 13 8.00
bkrownd wrote:
Your statement appears to be incorrect.
YearG Fund%
1988 8.81
1989 8.81
1990 8.90 <- higher than year before
1991 8.15
1992 7.23
1993 6.14
1994 7.22 <- higher than year before
19957.03
19966.76
19976.77 <- higher than year before
19985.74
19995.99 <- higher than year before
20006.42 <- higher than year before
20015.39
20025.00
20034.11
20044.30 <- higher than year before
G-fund is closely tied to the discount rate
2004
December 14 2.25
November 10 2.00
September 21 1.75
August 10 1.50
June 30 1.25
2003
June 25 1.00
2002
November 6 1.25
2001
December 11 1.75
November 6 2.00
October 2 2.50
September 17 3.00
August 21 3.50
June 27 3.75
May 15 4.00
April 18 4.50
March 20 5.00
January 31 5.50
January 3 6.00
2000
May 16 6.50
March 21 6.00
February 2 5.75
1999
November 16 5.50
August 24 5.25
June 30 5.00
1998
November 17 4.75
October 15 5.00
September 29 5.25
1997
March 25 5.50
1996
January 31 5.25
1995
December 19 5.50
July 6 5.75
February 1 6.00
1994
November 15 5.50
August 16 4.75
May 17 50 4.25
April 18 3.75
March 22 3.50
February 4 3.25
1992
September 4 3.00
July 2 3.25
April 9 3.75
1991
December 20 4.00
December 6 4.50
November 6 4.75
October 31 5.00
September 13 5.25
August 6 5.50
April 30 5.75
March 8 6.00
February 1 6.25
January 9 6.75
1990
December 18 7.00
December 7 7.25
November 13 7.50
October 29 7.75
July 13 8.00
imported post
bkrownd wrote:
bkrownd wrote:
No. I think the Fed raising the Fed funds rate will finally start to perk up the G fund. 2004's returnwas higher than 2003 so it looks as if it started. Remember the days when we used to make 7 or 8% in the G fund... and complained? That was when the C fund was up 20 to 35% a year.
Wimpy
Member
imported post
Does anybody have a good explanation of why the G Fund % returns have been steadily dropping year after year since as far back as I can see the historical data? Is this going to continue in the future?
tia, bkr
---
You ask a great question. The roaring nineties in the stock market were accommodated by low interest rates and today’s high rate of American consumption, largely funded by debt, is also a by-product of low interest rates. Those that got burned in the 2000 stock bubble mania are either trying to recoup their losses or have moved into real estate which appears to be reaching a bubble mania phase, of its own, in some parts of the country, again thanks to low interest rates. I think the days of low interest rates are behind us for the next 8 years or so. The trend in interest rates has reversed my opinion.
Back to your question. What is the explanation for how these interest rates have trended down and remained low over the years? Historically, if our own Federal Reserve provided this type of liquidity by artificially attempting to keep rates low it would have created a highly inflationary environment. So, how has long-term liquidity (low interest rates) been maintained without spurring inflation reflected by the CPI numbers? We need look no further than Japan (commonly referred to as the U.S. Federal Reserve of the East).
Japan, coming out of their own financial crisis, desperately needed to export their products to the U.S. to salvage their economy. In order to export their products they had to be priced attractively to U.S. consumers. The only way that could be arranged was by Japan’s Central Bank buying up U.S. treasuries with their Yen. That helped to keep the Yen low and the dollar high and our stock market soaring even our as manufacturing base was going up in smoke.
If any currency is highly sought after or in high demand the interest rate remains low because that currencies purchasing power is strong. Interest rates traditionally reflect risk. As demand falls for a currency because of perceived risk the rates naturally rise to provide investors an incentive to buy. The Japanese chose to sacrifice the purchasing power of its currency to keep its people employed in the manufacturing sector which they were counting on to help their economy rise from the ashes. It was a marriage made in heaven for the two central banks. The cheap imports, especially electronics, helped to keep inflation in check in the U.S. and the low interest rates in our country, subsidized by the Japanese central bank, buoyed our debt funded consumerism, the stock market and funded our wars.
Those in the U.S. hurting the most with this arrangement between the two central banks were retired people on fixed incomes heavily reliant upon interest income. It takes a lot of dollar deposits to meet the necessities of life when interest rates are hovering around 2-3 per cent or less. Making matters worse for those retirees was the fact the difference between short term and long-term CDs was not significant enough to take the risk of locking in the slightly better longer term rate in the event interests started rapidly rising. If they laddered in their deposits with 90 day maturities, they could easily transition to longer term maturities as interest rates rose. Unfortunately, they’ve waited a very long time while enduring painfully low interest on their CDs while holding out for the higher rates. The collusion between the two central banks was not that apparent at the time and therefore the prudence exercised by these retirees was only a mistake in hindsight. To my knowledge, this type of collusion between central banks has never occurred before, at least to this magnitude.
Another factor in keeping people in the dark about true inflation is the Consumer Price Index. The components of that index can be changed by the powers that be to reflect whatever they desire. Currently, the index doesn’t count fuel, food, and housing. You can bet your sweet bippee that cheap Japanese and Chinese products exported to this country are in the index. Again, who is hurt the most by this arrangement excluding those U.S. employees who lost their jobs to Asian countries? The retirees who have their COLAS tied to the CPI. If the CPI stays low, guess what…Social Security and other corporate retirement schemes, currently bankrupt, remain solvent a little longer.
Anyway, that is probably a little more information than you wanted, but I couldn’t figure out how to keep it short and still answer your question adequately. Hope it helps.
Does anybody have a good explanation of why the G Fund % returns have been steadily dropping year after year since as far back as I can see the historical data? Is this going to continue in the future?
tia, bkr
---
You ask a great question. The roaring nineties in the stock market were accommodated by low interest rates and today’s high rate of American consumption, largely funded by debt, is also a by-product of low interest rates. Those that got burned in the 2000 stock bubble mania are either trying to recoup their losses or have moved into real estate which appears to be reaching a bubble mania phase, of its own, in some parts of the country, again thanks to low interest rates. I think the days of low interest rates are behind us for the next 8 years or so. The trend in interest rates has reversed my opinion.
Back to your question. What is the explanation for how these interest rates have trended down and remained low over the years? Historically, if our own Federal Reserve provided this type of liquidity by artificially attempting to keep rates low it would have created a highly inflationary environment. So, how has long-term liquidity (low interest rates) been maintained without spurring inflation reflected by the CPI numbers? We need look no further than Japan (commonly referred to as the U.S. Federal Reserve of the East).
Japan, coming out of their own financial crisis, desperately needed to export their products to the U.S. to salvage their economy. In order to export their products they had to be priced attractively to U.S. consumers. The only way that could be arranged was by Japan’s Central Bank buying up U.S. treasuries with their Yen. That helped to keep the Yen low and the dollar high and our stock market soaring even our as manufacturing base was going up in smoke.
If any currency is highly sought after or in high demand the interest rate remains low because that currencies purchasing power is strong. Interest rates traditionally reflect risk. As demand falls for a currency because of perceived risk the rates naturally rise to provide investors an incentive to buy. The Japanese chose to sacrifice the purchasing power of its currency to keep its people employed in the manufacturing sector which they were counting on to help their economy rise from the ashes. It was a marriage made in heaven for the two central banks. The cheap imports, especially electronics, helped to keep inflation in check in the U.S. and the low interest rates in our country, subsidized by the Japanese central bank, buoyed our debt funded consumerism, the stock market and funded our wars.
Those in the U.S. hurting the most with this arrangement between the two central banks were retired people on fixed incomes heavily reliant upon interest income. It takes a lot of dollar deposits to meet the necessities of life when interest rates are hovering around 2-3 per cent or less. Making matters worse for those retirees was the fact the difference between short term and long-term CDs was not significant enough to take the risk of locking in the slightly better longer term rate in the event interests started rapidly rising. If they laddered in their deposits with 90 day maturities, they could easily transition to longer term maturities as interest rates rose. Unfortunately, they’ve waited a very long time while enduring painfully low interest on their CDs while holding out for the higher rates. The collusion between the two central banks was not that apparent at the time and therefore the prudence exercised by these retirees was only a mistake in hindsight. To my knowledge, this type of collusion between central banks has never occurred before, at least to this magnitude.
Another factor in keeping people in the dark about true inflation is the Consumer Price Index. The components of that index can be changed by the powers that be to reflect whatever they desire. Currently, the index doesn’t count fuel, food, and housing. You can bet your sweet bippee that cheap Japanese and Chinese products exported to this country are in the index. Again, who is hurt the most by this arrangement excluding those U.S. employees who lost their jobs to Asian countries? The retirees who have their COLAS tied to the CPI. If the CPI stays low, guess what…Social Security and other corporate retirement schemes, currently bankrupt, remain solvent a little longer.
Anyway, that is probably a little more information than you wanted, but I couldn’t figure out how to keep it short and still answer your question adequately. Hope it helps.
robo
Well-known member
imported post
October 16, 2005
He Who Hesitates - Are You Listening?
by Greg Miller
Opening Whisper
From "The New Dictionary of Cultural Literacy, Third Edition" 2002
He who hesitates is lost. A person who spends too much time deliberating about what to do loses the chance to act altogether.
The equity market is giving each of us a final chance to make our investment goal numbers for the calendar year. To hesitate at this point may be to lose out on what might be a great opportunity at year end. Give the charts a final look and place your trades my friends. There are many forces at work on stock prices as we start the final quarter of 2005. Corporate profits are good. Fourth quarters in recent years have been periods in which stocks have rallied sharply. The worst part of the reductions in oil and gas production and distribution through our Gulf Coast may be behind us. GDP numbers look good. But maybe we should hesitate in our bullish fervor....
The Market Listener Weekly report is now available on SafeHaven.com
Click the link;
[url]http://www.safehaven.com/article-3947.htm[/url]
October 16, 2005
He Who Hesitates - Are You Listening?
by Greg Miller
Opening Whisper
From "The New Dictionary of Cultural Literacy, Third Edition" 2002
He who hesitates is lost. A person who spends too much time deliberating about what to do loses the chance to act altogether.
The equity market is giving each of us a final chance to make our investment goal numbers for the calendar year. To hesitate at this point may be to lose out on what might be a great opportunity at year end. Give the charts a final look and place your trades my friends. There are many forces at work on stock prices as we start the final quarter of 2005. Corporate profits are good. Fourth quarters in recent years have been periods in which stocks have rallied sharply. The worst part of the reductions in oil and gas production and distribution through our Gulf Coast may be behind us. GDP numbers look good. But maybe we should hesitate in our bullish fervor....
The Market Listener Weekly report is now available on SafeHaven.com
Click the link;
[url]http://www.safehaven.com/article-3947.htm[/url]
Birchtree
Well-known member
imported post
Will this current bottom if it is a bottom turn out to be a V or W? We did have a nice intraday W bottom on Thursday before the last 30 minute turnaround. Does that count - who knows - only the Shadow knows for sure. As I've noted previously, under the Dow Theory, the bull market is not confirmed until the DJIA and the DTA surpass their March 2005 highs at 10,997 and 3872 resprcyively.
The DTA so far has held its April'05 low of 3379.78 and the DJIA has held its April'05 low of 10,012.36. For a bear market signal to initiate both averages must fall below their respective lows set in the initial correction. I think the DTA will surpass its pre-correction high off the low set in the current correction and thus nullify any bear signal. That's if you believe in Dow Theory.
On a short term basis the DJIA has violated the most recent support levels, while the DJTA has thus far held above its corresponding low. On a slightly longer-term basis, the industrials have also violated the short-term low that was made in early July. The corresponding low for the transports occurred in late June. The fact that the transports have also held above this level presents a divergence which I think is positive. This non-confirmation that we are now seeing with the averages not confirming each other on this short-term level could then be either a sign of a bottom, or it could simply mean that the industrials are leading the decline. It would be most pleasant to see the DJIA lead finally off this bottom and breach the previous all time high of 11,722.98. The DJTA and the DJUA would be there to confirm for a bullish move into 2006 - doing a 1995 repeat. All three component indexes confirming each other would be a classic Dow Theory Confirmation for a continuation of the primary trends moving to even more new highs.
Will this current bottom if it is a bottom turn out to be a V or W? We did have a nice intraday W bottom on Thursday before the last 30 minute turnaround. Does that count - who knows - only the Shadow knows for sure. As I've noted previously, under the Dow Theory, the bull market is not confirmed until the DJIA and the DTA surpass their March 2005 highs at 10,997 and 3872 resprcyively.
The DTA so far has held its April'05 low of 3379.78 and the DJIA has held its April'05 low of 10,012.36. For a bear market signal to initiate both averages must fall below their respective lows set in the initial correction. I think the DTA will surpass its pre-correction high off the low set in the current correction and thus nullify any bear signal. That's if you believe in Dow Theory.
On a short term basis the DJIA has violated the most recent support levels, while the DJTA has thus far held above its corresponding low. On a slightly longer-term basis, the industrials have also violated the short-term low that was made in early July. The corresponding low for the transports occurred in late June. The fact that the transports have also held above this level presents a divergence which I think is positive. This non-confirmation that we are now seeing with the averages not confirming each other on this short-term level could then be either a sign of a bottom, or it could simply mean that the industrials are leading the decline. It would be most pleasant to see the DJIA lead finally off this bottom and breach the previous all time high of 11,722.98. The DJTA and the DJUA would be there to confirm for a bullish move into 2006 - doing a 1995 repeat. All three component indexes confirming each other would be a classic Dow Theory Confirmation for a continuation of the primary trends moving to even more new highs.
robo
Well-known member
imported post
Birchtree wrote:
The Tech below thinks W, but as you pointed out only the Shadow knows for sure. This Tech has a very good track record, but In my opinion we are not going that low. I will admit I thought the same thing last April and It cost me some.
I enjoyedthe Shadow,Cool Movie!
Birchtree wrote:
The Tech below thinks W, but as you pointed out only the Shadow knows for sure. This Tech has a very good track record, but In my opinion we are not going that low. I will admit I thought the same thing last April and It cost me some.
I enjoyedthe Shadow,Cool Movie!
I also think we'll see a close below 1137.50 before we see a close above 1245.04.
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