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Old 01-14-2015, 09:57 AM
 
17,612 posts, read 12,197,156 times
Reputation: 12836

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Quote:
Originally Posted by Troyfan View Post
That would imply earnings growing 50%+ in three years from a pretty high starting point. Not likely. The current expansion would be 9 - 10 years old, kind of long in the tooth. The earnings cycle may already have peaked.

If the economy keeps expanding 3% - 3.5% a year, the Dow could be at 22,000 - 24,000 in 3 years. And that assumes things go mostly right. Oil stabilizes, Ukraine is quiet, ILIS is contained, China keeps chugging, Europe doesn't become PIGS land, the $ doesn't rocket or collapse, interest rates only rise 1% - 1.5%..a lot of sunshine needs to happen to keep things on track.


Where is the formula for gdp to market movement? It would be an interesting one since the gdp figures are released well after they've occurred and the market is forward looking
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Old 01-14-2015, 10:10 AM
 
8,278 posts, read 3,452,461 times
Reputation: 1584
Quote:
Originally Posted by InterestedOne View Post
I am not going to bored the informed with all the ongoings however,

Consider:

- inflation may materialize - labor cost increase might crimp corporate earnings.
- unemployment to be ~5% this summer, ahead for Fed's EOY 2016 projection?
- lastly, does January 28, 2015 mean anything to anyone. Could be bad...

Not so sure the godd times are here again.

Inviting comments...
I remain optimistic for the USA short/medium, with the oil miracle kicker helping out significantly the next year or two. But a longer and major push of general stocks upwards requires the participation of a large chunk of the rest of the world. And I don't see China, the EU or Japan moving as significantly upward as we might possibly have the capability here.

So IMO in several years I would expect the DOW to be nominally higher than today. 20 something we might see. But I doubt 30, or 10.
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Old 01-14-2015, 10:47 AM
 
Location: San Diego California
6,797 posts, read 6,118,692 times
Reputation: 5171
Quote:
Originally Posted by Lowexpectations View Post
Can you post the chart you are looking at when you say the market stalled when QE ended? I'd love too see what it is exactly you are talking about. As I see it the market has been making higher highs even post the stop of QE. I would like to remind you also when QE "stopped" it went from 10 billion a month to zero not 85 billion a month to zero as they wound down QE over time. Hey but don't let facts get in the way of your fear mongering


Again comical that 21%+ appreciation a year for three years is fantasy but -43%+ depreciation a year for three years is more likely.
The market is at the same level as Sept/Oct 2014. Even a simpleton can see that. Personalty, I do not care what anyone else does with their money, if you are bullish then sink your last dime in the market, I don't care, but there are people out there who deserve to hear both sides because they stand to loose a lot when this market corrects.

I began posting on this forum in 2006 to warn people about what was happening in the real estate market at that time, so I have heard all the insults from people who were a lot better at it than you. Some even threatened me for what I was saying, but I felt people deserved to at least be warned that the scam know as the housing bubble was headed off a cliff.

What is really comical is that people can believe that an economy where people have lost both a large percentage of their net wealth since, and have lower net income than 2007, is doing well and justifies a market level that was created by central bankers by artificial means.

Everyone loves the bubble as it is inflating, but for those not savvy enough to understand that cycles have a pattern and what the warning signs of a correction are, the correction that inevitably comes at the end of a bubble can be financially devastating.

A little research in this area can save a world of hurt later.
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Old 01-14-2015, 10:53 AM
 
Location: Central Atlantic Region, though consults worldwide
266 posts, read 284,990 times
Reputation: 95
Least we not forget the DOW is representitive of purchase power of the dollar. The market difference relative to a devaluing dollar is market confidence vs Fed dread. Which, of course, channels money from tangible/physical/PM holdings to stocks.

Thoughts...
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Old 01-14-2015, 11:11 AM
 
17,612 posts, read 12,197,156 times
Reputation: 12836
Quote:
Originally Posted by jimhcom View Post
The market is at the same level as Sept/Oct 2014. Even a simpleton can see that. Personalty, I do not care what anyone else does with their money, if you are bullish then sink your last dime in the market, I don't care, but there are people out there who deserve to hear both sides because they stand to loose a lot when this market corrects.

I began posting on this forum in 2006 to warn people about what was happening in the real estate market at that time, so I have heard all the insults from people who were a lot better at it than you. Some even threatened me for what I was saying, but I felt people deserved to at least be warned that the scam know as the housing bubble was headed off a cliff.

What is really comical is that people can believe that an economy where people have lost both a large percentage of their net wealth since, and have lower net income than 2007, is doing well and justifies a market level that was created by central bankers by artificial means.

Everyone loves the bubble as it is inflating, but for those not savvy enough to understand that cycles have a pattern and what the warning signs of a correction are, the correction that inevitably comes at the end of a bubble can be financially devastating.

A little research in this area can save a world of hurt later.


QE has been coming to an end much longer than sept/oct and the spy is up almost 10% from its October lows, other than that dip it's relatively flat but that certainly not because of a 10 billion per month cut in spending is it? I mean the cuts have been occurring for some time and in larger amounts than 10 billion a month and the s&p is up 15%+ since feb lows. Interesting in most places is say real estate is he same or higher now than in 2006 so how's that doom and gloom story actually look?
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Old 01-14-2015, 11:14 AM
 
17,612 posts, read 12,197,156 times
Reputation: 12836
Quote:
Originally Posted by InterestedOne View Post
Least we not forget the DOW is representitive of purchase power of the dollar. The market difference relative to a devaluing dollar is market confidence vs Fed dread. Which, of course, channels money from tangible/physical/PM holdings to stocks.

Thoughts...


The devaluing of the dollar? How have those euros treated you lately or oil in your backyard or that gold? Or silver?

Burn
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Old 01-14-2015, 11:15 AM
 
8,278 posts, read 3,452,461 times
Reputation: 1584
Quote:
Originally Posted by jimhcom View Post
The market is at the same level as Sept/Oct 2014. Even a simpleton can see that. Personalty, I do not care what anyone else does with their money, if you are bullish then sink your last dime in the market, I don't care, but there are people out there who deserve to hear both sides because they stand to loose a lot when this market corrects.

I began posting on this forum in 2006 to warn people about what was happening in the real estate market at that time, so I have heard all the insults from people who were a lot better at it than you. Some even threatened me for what I was saying, but I felt people deserved to at least be warned that the scam know as the housing bubble was headed off a cliff.

What is really comical is that people can believe that an economy where people have lost both a large percentage of their net wealth since, and have lower net income than 2007, is doing well and justifies a market level that was created by central bankers by artificial means.

Everyone loves the bubble as it is inflating, but for those not savvy enough to understand that cycles have a pattern and what the warning signs of a correction are, the correction that inevitably comes at the end of a bubble can be financially devastating.

A little research in this area can save a world of hurt later.
I was with you proclaiming the imminent falling sky in 2006, and personally developed my most defensive financial position of my life at that time. Subsequently times have changed. And IMO we are NOT on another verge of the abyss today.

Sure the overextended investments in expensive US oil will have a very hard time short/medium term. But that is nothing like 2006, where everyone and their brother from Maine to Oslo were overextended personally with RE. So sure part of our big energy sector will do poorly, and the rest of the world is not very healthy. But the bulk of the US should stand firm enough IMO moving forward for some time, and some what out of sync with the rest of the world. All this encouraged by cheap energy. Cheap energy in 2008 was an ominous sign of general demise. Today it is a substantial blessing for us, and other net oil/energy importers.
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Old 01-14-2015, 12:55 PM
 
Location: San Diego California
6,797 posts, read 6,118,692 times
Reputation: 5171
Quote:
Originally Posted by Hoonose View Post
I was with you proclaiming the imminent falling sky in 2006, and personally developed my most defensive financial position of my life at that time. Subsequently times have changed. And IMO we are NOT on another verge of the abyss today.

Sure the overextended investments in expensive US oil will have a very hard time short/medium term. But that is nothing like 2006, where everyone and their brother from Maine to Oslo were overextended personally with RE. So sure part of our big energy sector will do poorly, and the rest of the world is not very healthy. But the bulk of the US should stand firm enough IMO moving forward for some time, and some what out of sync with the rest of the world. All this encouraged by cheap energy. Cheap energy in 2008 was an ominous sign of general demise. Today it is a substantial blessing for us, and other net oil/energy importers.
When you say times have changed, you need to justify that. In 2006 we had a real estate market which had been artificially inflated by the Fed policy of easy money and lax lending standards which led to inflated markets.

Since 2008 the Fed had done nothing but increase the problem by the largest mass injection of liquidity ever, much of which has driven speculative markets and derivatives worldwide.

The result has been a virtual explosion in derivatives, higher margin levels than 2007, a lending market that has substituted sub prime home loans with sub prime auto loans.

The moral hazards of bailing out the irresponsibility of the banking institutions has been to make them even bolder because they were in fact rewarded for creating the entire fiasco to begin with.

That atmosphere of moral indolence has permeated the corporate world and their bookkeeping as well and market values are now based on Non GAAP figures which are fabricated based on incalculable metrics that diverge greatly from actual GAAP figures.

In the end, everything boils down to debt levels and the ability to at least service those debts, if not actually pay them. When money is borrowed at inflated valuations, that ability to service debt is compromised.

Today we see commodities markets falling due to decreased demands as a result of a slowing economy's. That in turn begins a cycle of defaults on loans, which creates the need to sell assets.

So long as the Fed was creating the liquidity to purchase those assets, everything was fine, but now that liquidity must come from a private sector that does not have the money to purchase those assets.

That means asset prices will trend lower, and as that happens it affects any loans for which those assets have been used for collateral.
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Old 01-14-2015, 01:09 PM
 
17,612 posts, read 12,197,156 times
Reputation: 12836
Quote:
Originally Posted by jimhcom View Post
When you say times have changed, you need to justify that. In 2006 we had a real estate market which had been artificially inflated by the Fed policy of easy money and lax lending standards which led to inflated markets.

Since 2008 the Fed had done nothing but increase the problem by the largest mass injection of liquidity ever, much of which has driven speculative markets and derivatives worldwide.

The result has been a virtual explosion in derivatives, higher margin levels than 2007, a lending market that has substituted sub prime home loans with sub prime auto loans.

The moral hazards of bailing out the irresponsibility of the banking institutions has been to make them even bolder because they were in fact rewarded for creating the entire fiasco to begin with.

That atmosphere of moral indolence has permeated the corporate world and their bookkeeping as well and market values are now based on Non GAAP figures which are fabricated based on incalculable metrics that diverge greatly from actual GAAP figures.

In the end, everything boils down to debt levels and the ability to at least service those debts, if not actually pay them. When money is borrowed at inflated valuations, that ability to service debt is compromised.

Today we see commodities markets falling due to decreased demands as a result of a slowing economy's. That in turn begins a cycle of defaults on loans, which creates the need to sell assets.

So long as the Fed was creating the liquidity to purchase those assets, everything was fine, but now that liquidity must come from a private sector that does not have the money to purchase those assets.

That means asset prices will trend lower, and as that happens it affects any loans for which those assets have been used for collateral.



Margin balances may be higher but is the leverage? You brought this up before and couldn't answer the question. Don't just parrot what you've heard you should understand it

If 2007 margin balances were 1 trillion on 2 trillion in assets and now it's 2 trillion in debt on 5 trillion in assets the equity percentages went up

You obviously don't understand the winddown of QE
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Old 01-14-2015, 01:27 PM
 
8,278 posts, read 3,452,461 times
Reputation: 1584
Quote:
Originally Posted by jimhcom View Post
When you say times have changed, you need to justify that. In 2006 we had a real estate market which had been artificially inflated by the Fed policy of easy money and lax lending standards which led to inflated markets.

Since 2008 the Fed had done nothing but increase the problem by the largest mass injection of liquidity ever, much of which has driven speculative markets and derivatives worldwide.

The result has been a virtual explosion in derivatives, higher margin levels than 2007, a lending market that has substituted sub prime home loans with sub prime auto loans.

The moral hazards of bailing out the irresponsibility of the banking institutions has been to make them even bolder because they were in fact rewarded for creating the entire fiasco to begin with.

That atmosphere of moral indolence has permeated the corporate world and their bookkeeping as well and market values are now based on Non GAAP figures which are fabricated based on incalculable metrics that diverge greatly from actual GAAP figures.

In the end, everything boils down to debt levels and the ability to at least service those debts, if not actually pay them. When money is borrowed at inflated valuations, that ability to service debt is compromised.

Today we see commodities markets falling due to decreased demands as a result of a slowing economy's. That in turn begins a cycle of defaults on loans, which creates the need to sell assets.

So long as the Fed was creating the liquidity to purchase those assets, everything was fine, but now that liquidity must come from a private sector that does not have the money to purchase those assets.

That means asset prices will trend lower, and as that happens it affects any loans for which those assets have been used for collateral.
In 2008 so many millions in our middle class were over leveraged with RE. When RE crashed it affected most all neighborhoods in the US, and then their respective economies.

Today we have mostly an over leveraged energy sector on the brink. That is serious enough, but will mostly effect about 5 of our states in any grand manner, and mostly secondarily vs 2008 which affected so many primarily. All the while the other states will get that nice boost from the low energy costs.
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