tsptalk's Market Talk

[tsptalk]

Today's deterioration of the early gains is disheartening, but it could also be an attempt to fill this morning's open gap. It will be important for the market to close with at least half of today's top gains (Dow +55 or more).

 

[Show-me]

Doom and Gloom, anyone notice the 5 year TIPS auction? Can you say a $10B bet on inflation with a -0.55% yield and 1.55% or better break even. This is like crazy writing on the wall stuff and they laughed at Peter Schiff.

 

[Show-me]

If my math is right, $10B in 5 year TIPS cost a minimum of $10,055,000,000 to own them. And, don't forget the interest cost too. Crazy!

 

[Show-me]

Oil, gold, and silver are bouncing of and the dollar is going to tank. I fund might be where the inflation protection is for us TSPers.

 

[tsptalk]

Oil, gold, and silver are bouncing of and the dollar is going to tank. I fund might be where the inflation protection is for us TSPers.

True. It will not help the F, C, and S funds, but we could see a double digit return from the G-fund if things get out of hand.

 

[Bullitt]

Whoa, whoa.... Let's not get carried away. Much of this move has taken place in TIPS in the past month as this talk of QE2 gained traction. The Fed is also purchasing TIPS in their open market purchases so a good amount of the buying is institutional front running. We're right up around the levels last seen when gasoline was $4 a gallon and a barrel of oil was $150. Where's the confirmation from the long bond market?

I think the time to talk of a dollar tanking was a few months ago. When the dollar bounces, everything will get flushed down the drain as leveraged trades (especially in the commodity markets) get unwound.

If the breakouts are to be for real, I'd like to see Carl's PMO making a higher high, which it hasn't done in the S&P or DJTA.

 

[Scout333]

Fellow TSP'rs, Any thoughts on impact of QE2 on the F Fund? Assuming there is a positive impact on the equity funds. Should we expect a negative effect on the F?

 

[tsptalk]

Fellow TSP'rs, Any thoughts on impact of QE2 on the F Fund? Assuming there is a positive impact on the equity funds. Should we expect a negative effect on the F?

Just talking in theory, if QE 2 is implemented, it is on the assumption that the economy needs stimulating. Interest rates are less likely to rise in that kind of environment so bonds should be OK.

 

[Scout333]

Just talking in theory, if QE 2 is implemented, it is on the assumption that the economy needs stimulating. Interest rates are less likely to rise in that kind of environment so bonds should be OK.

Thanks Tom,

 

[Boghie]

Fellow TSP'rs, Any thoughts on impact of QE2 on the F Fund? Assuming there is a positive impact on the equity funds. Should we expect a negative effect on the F?

Scout,

This will be an odd opinion. I think QE2 will be mostly talk and little/no action. I think the 2009 Stimulus bill moved the assets QE2 is talking about. All the Gubmint has is talk now. They have borrowed and monetized what they could.

My guess is that the bond vigilantes will be the deciding factor.

Thus, I don’t want a large G/F Fund holding.

Actually, I don’t know.

Not Good.

 

[Birchtree]

I don't care what they do - all I want is my equity asset bubble and if QE2 will create it then well and good.

 

[Scout333]

I don't care what they do - all I want is my equity asset bubble and if QE2 will create it then well and good.

QE2 appears to be already built in to expectations for a bull market. What happens if it doesn't happen or happens on a much smaller scale than anticipated? Deflation not inflation? Hmmm. Could be ugly. Bubble could be a very accurate descriptor.

 

[Boghie]

QE2 appears to be already built in to expectations for a bull market. What happens if it doesn't happen or happens on a much smaller scale than anticipated? Deflation not inflation? Hmmm. Could be ugly. Bubble could be a very accurate descriptor.

Scout,

We are in a serious bout of deflation. Bernanke is simply buying time by trying to inflate to 0. I have confidence in him and his team - not so much with our nations 'Black Swan Event' president.

The Administration should have saved their 'stimulus' for right about now. They should have waited to see if QE1 revived things and, if not, initiated a bout of stimulus spending (if you believe in Keynesian economics - but even that is problematic. Where was the Keynesian saving when things were good ). Then, if QE1 and Porkulus didn't resolve deflation initiate QE2. Instead our nations elected economic 'Black Swan' took flight in the middle of QE1 (when we were starting to perk up) and initiate piece meal projects with no real bang for the buck.

Where are my power producing hydroelectric dams?
Where are my new freeways?
Where are my nukes?

The Libs thought we were in a short duration downturn. They thought we would be out of it by now. They thought that $3 Trillion in debt over two years would be forgiven in an environment of 4% unemployment and rising wages.

Oh contraire. The private sector is more worried about paying back that $3 Trillion in debt than grubbing a point more in sales from a debasing currency. We great unwashed masses - and the companies that employ us - are waiting with bated breath for the joy of 2011's first pay day!

A blast from the past illustrates the current market outlook - as well as the political outlook:

'Quintillius Varus, give me back my legions!', screamed Augustus Ceaser as he banged his head against the walls.​

 

[Bullitt]

Boghie.


Japan.

 

[tsptalk]

Mondays are starting to get predictable.

 

[fedgolfer]

Mondays are starting to get predictable.

Hey, you just jinxed next Monday!

 

[tsptalk]

As soon as I notice a trend, it never happens again, so maybe it will break the cycle of up open, down close.

 

[JTH]

Of the major indexes I follow, the Russel 2000 is the only one which hasn't broken above the previous 2007-2009 trendline.

Monthly Chart:

View attachment 10153

 

[Bullitt]

Yet the fact that small caps don't matter to the blind bulls because it's different this time now that the Fed is monetizing debt.

Nice divergence JTH. Amazing how we can have so many divergences in an alleged bull market.

 

[JTH]

Take it for what it is, ideally you want UDN to trade along-side stocks, but clearly on this 1 month price performance chart, UDN has started to diverge. It could be a glitch, it could be a trend change, and/or it could be a relationship change with stocks. Any thoughts?

View attachment 10180