Time to short Stocks!

[KissMy]

This has absolutely all the makings of a bubble, just like real estate and stocks. The radio ads touting gold, the buyers advertising for it. The new highs weekly.
When interest rates rise (and they are already going up) this will fall like a gold balloon.

I agree with you. One day this will become a bubble. And one day it will collapse violently. But we're not even close to that IMHO, nor to where the tech and housing bubbles were.

I also agree that rising rates is what will kill the precious metals bubble. However, gold and silver both rose from 2003 through 2007 when the Fed funds rate rose from 1% to 5.25%. Also, if you look at when gold last peaked in 1980, it quadrupled even though the long bond yield rose from 8% to 11%.

So IMHO there is still some ways to go.

Exactly - Interest will have to rise above the true nonrenewable commodity inflation rates before confidence in the dollar can be restored. Over the past 40 years farm land, fertilizer, crude oil, coal, copper, silver, water, energy, etc have risen 8% annually. Try living without any of those. Anyone who buys bonds for less than 8% is a fool. Pension funds were promising 8% returns so governments & business underfunded them by at least that much for all this time. Just wait when people start cashing in on them.

 

[KissMy]

OPEC Members Seek $100 Oil to Counter Dollar Weakness

The 13 percent decline in the Dollar Index since June has led some OPEC members to call for oil to rise to $100 a barrel.

The U.S. currency’s weakness means the “real price” of oil is about $20 less than current levels, Venezuelan Energy and Oil Minister Rafael Ramirez said after yesterday’s meeting of the Organization of Petroleum Exporting Countries in Vienna. The group, which accounts for 40 percent of global crude output, left targets unchanged and called for greater adherence to quotas, which are being exceeded by a supertanker load a day.

“OPEC is not interested in compliance right now,” Nordine Ait-Laoussine, the former Algerian oil minister who now runs Geneva-based consultant Nalcosa SA, said in an interview in Vienna. “They’re concerned about the dollar because as the dollar weakens, prices go up. They’re not paying any attention to production discipline.”

 

[The Rabbi]

That is funny. Do you really think Bernanke will ever let the interest rate rise? He has already signaled QE3 to drive them down further to drive employment yet employment is still in decline along with housing.

The total amount of gold in the world that is above ground is 4,501,104,720ozt. To visualize this imagine a single solid gold cube with edges of about 19 meters (about three meters short of the length of a tennis court). That's all that has ever been produced. Divided among the population of the world there are about 0.61658ozt per person, about 1.2 cubic centimeters each. At $1,400 per ozt this equates to about $863.23 worth per person on Earth.

The size of the US debt is $13.86 Trillion. Divide that by the world gold supply equals $3,079.24 per ozt. Now how much world debt is there? How many $Trillion of bonds are in the world. How much world paper currency is there? The US alone has over $111 Trillion in unfunded mandates. How many $Trillion worth of unfunded pensions are there? There are also over $600 Trillion worth of derivatives out there. About 20% of the world's gold was held by central banks before the crisis at which time over 80% of the worlds gold was in private hands. Of that 20% previously held by central banks of the world, only a small percent was held by the US central bank/Federal Reserve. Even with all the ads out that promise cash for gold, people still are not willing to part with their gold.

Bernanke has no power over long term rates, which have been rising both here and abroad.
Most of the rest of what you write is crap, mainly repeating things hawked by gold sellers.

You are the one repeating crap you hear on CNBC. For 2 years now their old bald head experts have been saying interest rates will rise & the Fed will let them rise. They were wrong & rates have been going down. You do realize the Fed has 2 policy goals for which it was created. They are in conflict, one is to print money & lower rates until we get unemployment to 5% which is full employment. The other is to keep the dollar strong. Over the past 40 years since the dollar came off the gold standard, necessary nonrenewable commodities have risen 8% per year against the US dollar. I see no reason for Fed to not at least maintain that level of inflation. I believe they will increase the inflation going foreword to split the difference in their 2 goals. They will create just enough inflation to keep unemployment heading down & keep the dollar in slow decline. That mean above 8% per year in nonrenewable commodities likely 12% annual inflation until 2013.

You are the one who is repeating crap & have been repeating crap all year. The only bubble is the US dollar. Google define market bubble. You will see that it describes US dollar, unfunded mandates & bonds exactly. You are a victim of group think. We just witnessed Republicans & Democrats extend entitlement spending & tax cuts. The increased US government bond sales has driven up bonds, not the lack of the Feds bond purchases. The fed will step up bond purchases to meet the increased demand shortly.

Newsflash: Rates have already started rising.

 

[KissMy]

Bernanke has no power over long term rates, which have been rising both here and abroad.
Most of the rest of what you write is crap, mainly repeating things hawked by gold sellers.

You are the one repeating crap you hear on CNBC. For 2 years now their old bald head experts have been saying interest rates will rise & the Fed will let them rise. They were wrong & rates have been going down. You do realize the Fed has 2 policy goals for which it was created. They are in conflict, one is to print money & lower rates until we get unemployment to 5% which is full employment. The other is to keep the dollar strong. Over the past 40 years since the dollar came off the gold standard, necessary nonrenewable commodities have risen 8% per year against the US dollar. I see no reason for Fed to not at least maintain that level of inflation. I believe they will increase the inflation going foreword to split the difference in their 2 goals. They will create just enough inflation to keep unemployment heading down & keep the dollar in slow decline. That mean above 8% per year in nonrenewable commodities likely 12% annual inflation until 2013.

You are the one who is repeating crap & have been repeating crap all year. The only bubble is the US dollar. Google define market bubble. You will see that it describes US dollar, unfunded mandates & bonds exactly. You are a victim of group think. We just witnessed Republicans & Democrats extend entitlement spending & tax cuts. The increased US government bond sales has driven up bonds, not the lack of the Feds bond purchases. The fed will step up bond purchases to meet the increased demand shortly.

Newsflash: Rates have already started rising.

Wake me up when they go above 8%. As I said the massive government deficit spending spree has increased US government bond sales which has driven up bonds yields, not the lack of the Feds bond purchases. The fed will step up bond purchases to meet the increased demand shortly & drive them back down. The government can't afford the interest on the debt if rates go to 8%. The Fed will never let that happen.

 

[The Rabbi]

Of course they don't have more money than the world-wide market.
But what-evah. Go ahead. Buy gold. Buy all of it.

 

[william the wie]

Just a slight excursion back to the thread topic with the bond bear starting to growl it may be time to buy index puts and start shorting.

 

[Toro]

Just a slight excursion back to the thread topic with the bond bear starting to growl it may be time to buy index puts and start shorting.

Maybe.

I think, however, that we get a mild pullback then move higher into the end of the year.

Interest rates usually rise at the beginning of an expansion, as do stocks. This is beginning to look like typical behavior at the beginning of an economic expansion.

 

[william the wie]

Just a slight excursion back to the thread topic with the bond bear starting to growl it may be time to buy index puts and start shorting.

Maybe.

I think, however, that we get a mild pullback then move higher into the end of the year.

Interest rates usually rise at the beginning of an expansion, as do stocks. This is beginning to look like typical behavior at the beginning of an economic expansion.

With straddles I'm covered both ways.

 

[KissMy]

Newsflash: Rates have already started rising.

Credit Default Swap Spreads…..5 U.S. States Make The Top Ten List

This tells us that the rise in bond prices is not due to an expanding economy but due to fear of default on bonds.

 

[The Rabbi]

Newsflash: Rates have already started rising.

Credit Default Swap Spreads…..5 U.S. States Make The Top Ten List

This tells us that the rise in bond prices is not due to an expanding economy but due to fear of default on bonds.

Go buy more gold. Sink your life savings in it. Better hurray. It's all coming down!

 

[Terral]

Hi Zander:

I have been in cash for the last year with no regrets. Now I think the topping process is done and we are set for a major decline in stock prices.

Today I bought shares of ProShares UltraShort S&P 500 ETF at $28.08.

Best of luck!

You could buy one share of the entire S&P stock market for five ounces of gold in 2000, but today the same stocks are valued at LESS than a single ounce of gold! And only 'now' you want to short the stock markets?

Anyone playing the stock market ponzi scheme is an idiot. Your money should have been in gold at $300.00 in 2000 and you would be miles ahead today ...

GL,

Terral

 

[FireFly]

Newsflash: Rates have already started rising.

Credit Default Swap Spreads…..5 U.S. States Make The Top Ten List

This tells us that the rise in bond prices is not due to an expanding economy but due to fear of default on bonds.

You are correct as usual KissMy. "The most recently available data from the Investment Company Institute shows that investors withdrew over $1 billion from municipal bond mutual funds for the week of December 8—a trend that has persisted for over a month." Thanks to research by Meredith Whitney on muni, city, state & fed bonds that was aired on 60 minutes 12-19-2012.

Bond rates have climbed every since Meredith Whitney released her report titled "Tragedy of the Commons" a couple of months ago. The talking heads & government have been trying to spin the rise in rates as a sign of an improving market economy. Nothing could be further from the truth.

 

[william the wie]

Yeah IL is definitely toast and there is a long list of probables

 

[FireFly]

Yeah IL is definitely toast and there is a long list of probables

The Obama administration is trashing the USA the same way they did in IL.

We need to get rid of government funded or backed pension funds before they destroy the country.

 

[Toro]

Market is in melt-up mode.

Lots of worrisome indicators though.

 

[william the wie]

Market is in melt-up mode.

Lots of worrisome indicators though.

well if I can lock in a straddle at 135 12/11 xsp or better yet 145 I will be happy.

 

[Zander]

John Hussman says....

“In recent weeks, the U.S. stock market has been characterized by an overvalued, overbought, overbullish, rising-yields syndrome that has historically been hostile to stocks. Last week, the situation became much more pointed. Past instances have been associated with such uniformly negative outcomes that the current situation has to be accompanied by the word ‘warning.’

“The following set of conditions is one way to capture the basic ‘overvalued, overbought, overbullish, rising-yields’ syndrome:

1) S&P 500 more than 8% above its 52 week (exponential) average
2) S&P 500 more than 50% above its 4-year low
3) Shiller P/E greater than 18
4) 10-year Treasury yield higher than 6 months earlier
5) Advisory bullishness > 47%, with bearishness < 27% ( Investor's Intelligence)

Balance of article here

 

[Toro]

I read Hussman weekly. I like this graph here.

But that doesn't necessarily mean its a good time to go short.

 

[Zander]

I read Hussman weekly. I like this graph here.

But that doesn't necessarily mean its a good time to go short.

Market timing is tough. We both know that the market can remain irrational far longer than we can remain liquid...


I am thinking of buying a coin operated laundry......

 

[william the wie]

I read Hussman weekly. I like this graph here.

But that doesn't necessarily mean its a good time to go short.

Market timing is tough. We both know that the market can remain irrational far longer than we can remain liquid...


I am thinking of buying a coin operated laundry......

I understand that that is a real pain in the butt. Too much competition and too much expensive capital being rented out to idiots by the hour.