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Old 04-18-2010, 10:53 PM
 
2,024 posts, read 4,596,051 times
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Quote:
Originally Posted by newonecoming View Post
Tell that to LoardBalfor.
But we have had a debt bubble like we haven't ever had before. http://www.urbandigs.com/total-credi...entage-gdp.jpg
Some people believe everything Jim Cramer, Larry Kudlow, Bob Pisani or Steve Liesman or even Tim Geithner says. Or they believe since a different party is in power that their party is cleaning up the mess left behind by the last party which I think the person you mentioned believes. There is no need to argue with someone like that, its just a waste of time. At the very least it should be interesting to watch this all play out going forward. The current administration is simply trying to cover up all that has went wrong and keep people from getting the facts and sweep all the problems under the rug since so many people would be angered to see how much fraud their politican was/is involved in and the politicans would be embarassed if people found the truth out too. This is a big mess.
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Old 04-19-2010, 08:08 AM
 
Location: SE Arizona - FINALLY! :D
19,868 posts, read 22,727,547 times
Reputation: 7167
Quote:
Originally Posted by 73-79 ford fan View Post
Some people believe everything Jim Cramer, Larry Kudlow, Bob Pisani or Steve Liesman or even Tim Geithner says. Or they believe since a different party is in power that their party is cleaning up the mess left behind by the last party which I think the person you mentioned believes. There is no need to argue with someone like that, its just a waste of time. At the very least it should be interesting to watch this all play out going forward. The current administration is simply trying to cover up all that has went wrong and keep people from getting the facts and sweep all the problems under the rug since so many people would be angered to see how much fraud their politican was/is involved in and the politicans would be embarassed if people found the truth out too. This is a big mess.

No.
I look at the Leading Economic Indicators - which point the way that the economy goes in the following months. Since March of last year (2009) the Index of Leading Economic Indicators has been pointing UP - hence my optimism. And sure enough the economy started turning around.

It's interesting to note, that just TODAY the new numbers came out and the index is not only UP - but UP by a record amount.

A gauge of the U.S. economy's prospects rose more strongly than expected to a record high in March, pointing to a steady economic recovery, a private research group said Monday.

The Conference Board said its index of leading economic indicators increased 1.4 percent, rising for the 12th straight month, after an upwardly revised 0.4 percent gain in February.


News Headlines (http://www.cnbc.com/id/36641385 - broken link)

If/when I see it going DOWN - THEN I will worry, but the fact is, there is NO indication of that WHATSOEVER.



Ken
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Old 04-19-2010, 09:26 AM
 
Location: Texas
2,847 posts, read 1,949,934 times
Reputation: 1747
Quote:
Originally Posted by LordBalfor View Post
No.
I look at the Leading Economic Indicators - which point the way that the economy goes in the following months. Since March of last year (2009) the Index of Leading Economic Indicators has been pointing UP - hence my optimism. And sure enough the economy started turning around.

It's interesting to note, that just TODAY the new numbers came out and the index is not only UP - but UP by a record amount.

A gauge of the U.S. economy's prospects rose more strongly than expected to a record high in March, pointing to a steady economic recovery, a private research group said Monday.

The Conference Board said its index of leading economic indicators increased 1.4 percent, rising for the 12th straight month, after an upwardly revised 0.4 percent gain in February.


News Headlines (http://www.cnbc.com/id/36641385 - broken link)

If/when I see it going DOWN - THEN I will worry, but the fact is, there is NO indication of that WHATSOEVER.



Ken
take a look at the VIX
http://finance.yahoo.com/q/bc?s=^VIX
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Old 04-19-2010, 09:31 AM
 
Location: SE Arizona - FINALLY! :D
19,868 posts, read 22,727,547 times
Reputation: 7167
Quote:
Originally Posted by aliveandwellinSA View Post
take a look at the VIX
http://finance.yahoo.com/q/bc?s=^VIX
What about it?

Ken
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Old 04-19-2010, 09:42 AM
 
Location: Texas
2,847 posts, read 1,949,934 times
Reputation: 1747
Quote:
Originally Posted by LordBalfor View Post
What about it?

Ken
why are you so defensive, simply posted as an indicator to watch as you have, chill out

Few really know what the Volatility Index is or how it is calculated. Here's a brief explanation ...
The Volatility Index (or VIX) is a weighted measure of the implied volatility for real time $SPX put and call options. The puts and calls are weighted according to time remaining and the degree to which they are in or out of the money. From this is created a hypothetical at-the-money option with a 30 day expiration time period. In this way, they are trying to set a value that is equal to the equivalent value of the $SPX's current price. (When a stock's option strike price is "at the money", it is theoretically the same as the price the stock is trading for at that moment.)
So what does that mean? It means that the VIX really represents the "implied volatility" for the hypothetical $SPX put/call options on an "at the money" option value.
Still confused?
It all has to do with perceived risks. The greater the perceived risks that are in stocks, the higher the "implied volatility". Implied volatility is about the perceived risk in the stock market at a given point in time, and NOT about the size of price swings in the market.
In layman's terms ... how does this work?
It is actually quite simple. When the stock market falls, there is an increased demand for put options. Increased demand for puts means higher put prices and that generates higher implied volatilities. (Lower demand for puts means lower put prices and that generates lower implied volatilities.)
What else do you need to know?
Only that the VIX moves in an inverse relationship to the stock market. When the VIX moves up, the market moves down. When the VIX moves down, the market moves up.
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Old 04-19-2010, 09:50 AM
 
69,372 posts, read 55,357,998 times
Reputation: 9358
Quote:
Originally Posted by aliveandwellinSA View Post
Few really know what the Volatility Index is or how it is calculated.
You'll find that most here are only capable of following the DJIA and believe its god. They falsly believe that if the DJIA is up, the economy is good, the DJIA is down, the economy is bad. This is about as far as they comprehend..
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Old 04-19-2010, 09:50 AM
 
Location: SE Arizona - FINALLY! :D
19,868 posts, read 22,727,547 times
Reputation: 7167
Quote:
Originally Posted by aliveandwellinSA View Post
why are you so defensive, simply posted as an indicator to watch as you have, chill out

Few really know what the Volatility Index is or how it is calculated. Here's a brief explanation ...
The Volatility Index (or VIX) is a weighted measure of the implied volatility for real time $SPX put and call options. The puts and calls are weighted according to time remaining and the degree to which they are in or out of the money. From this is created a hypothetical at-the-money option with a 30 day expiration time period. In this way, they are trying to set a value that is equal to the equivalent value of the $SPX's current price. (When a stock's option strike price is "at the money", it is theoretically the same as the price the stock is trading for at that moment.)
So what does that mean? It means that the VIX really represents the "implied volatility" for the hypothetical $SPX put/call options on an "at the money" option value.
Still confused?
It all has to do with perceived risks. The greater the perceived risks that are in stocks, the higher the "implied volatility". Implied volatility is about the perceived risk in the stock market at a given point in time, and NOT about the size of price swings in the market.
In layman's terms ... how does this work?
It is actually quite simple. When the stock market falls, there is an increased demand for put options. Increased demand for puts means higher put prices and that generates higher implied volatilities. (Lower demand for puts means lower put prices and that generates lower implied volatilities.)
What else do you need to know?
Only that the VIX moves in an inverse relationship to the stock market. When the VIX moves up, the market moves down. When the VIX moves down, the market moves up.
What's "defensive" about "What about it?"?
It's just a question.
And yeah I do know about the VIX and do keep an eye on it. However, it's really a just a short term indicator - moving up and down MUCH more frequently than the LEI. The LEI is a long term (or at least longer term) indicator - looking 6 months or more out.

Ken
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Old 04-19-2010, 09:52 AM
 
Location: Texas
2,847 posts, read 1,949,934 times
Reputation: 1747
Quote:
Originally Posted by LordBalfor View Post
What's "defensive" about "What about it?"?
It's just a question.
And yeah I do know about the VIX and do keep an eye on it. However, it's really a just a short term indicator - moving up and down MUCH more frequently than the LEI. The LEI is a long term (or at least longer term) indicator - looking 6 months or more out.

Ken
and it works great for market players, worked fine for me, have done quite well, and probably better than most
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Old 04-19-2010, 09:54 AM
 
Location: SE Arizona - FINALLY! :D
19,868 posts, read 22,727,547 times
Reputation: 7167
Quote:
Originally Posted by aliveandwellinSA View Post
and it works great for market players, worked fine for me, have done quite well, and probably better than most
I'd agree with that.

Ken
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Old 04-19-2010, 04:35 PM
 
1,842 posts, read 1,495,265 times
Reputation: 169
[LEFT]
Quote:
Originally Posted by LordBalfor View Post
No.
Quote:
Originally Posted by LordBalfor View Post
[/LEFT]
I look at the Leading Economic Indicators - which point the way that the economy goes in the following months. Since March of last year (2009) the Index of Leading Economic Indicators has been pointing UP - hence my optimism. And sure enough the economy started turning around.

It's interesting to note, that just TODAY the new numbers came out and the index is not only UP - but UP by a record amount.

A gauge of the U.S. economy's prospects rose more strongly than expected to a record high in March, pointing to a steady economic recovery, a private research group said Monday.

The Conference Board said its index of leading economic indicators increased 1.4 percent, rising for the 12th straight month, after an upwardly revised 0.4 percent gain in February.


News Headlines

If/when I see it going DOWN - THEN I will worry, but the fact is, there is NO indication of that WHATSOEVER.



Ken
[LEFT]





Quote:
Originally Posted by newonecoming View Post
“LEADING INDICATORS. Seven of the ten indicators that make up The Conference
Quote:
Originally Posted by newonecoming View Post
[/LEFT]
Board LEI for the U.S. increased in March. The positive contributors – beginning with the largest positive contributor – were the interest rate spread, average weekly manufacturing hours, the
index of supplier deliveries (vendor performance), stock prices, building permits, average weekly
initial claims for unemployment insurance (inverted), and manufacturers’ new orders for
consumer goods and materials*. The negative contributors – beginning with the largest negative
contributor – were real money supply*, manufacturers’ new orders for nondefense capital goods*
and the index of consumer expectations." From here http://www.conference-board.org/pdf_free/economics/bci/onetooth.pdf


The interest rate spread.


This is interpenetrated as, if the economy is bad now but going the be good later then the interest rates are low for short term and high for long term T bills. Alternative explanation. We are in a deflationary economic environment and we expect inflation down the road. Cash rules in deflation. Safest investment you can make is to have cash in a safe place. This is because you get a positive return on cash and very little chance that it will go bad. Longer term we are going to have inflation. Ben will see to that. This will likely be stagflation not the job producing inflation that we need.


Average weekly manufacturing hours.
This is good news but that part of our economy has suffered permanent contraction and so does not have the same kick that it would've 30 years ago.


index of supplier deliveries
I don't have enough info to comment on this one.


Stock prices
http://www.financialsense.com/Experts/ewave/2010/images/0108_clip_image002.jpg Printing money causes inflation. The fed has been printing money like crazy. Where has it gone? Well the dow is headed up. But priced in gold not so much. Inflation. Will it be the job producing friendly inflation or the stagflation from the '70's. This is all happening in a deflationary environment. The collapsing debt bubble. http://www.urbandigs.com/total-credit-debt-percentage-gdp.jpg
It is on the edge of collapsing. The only thing driving it up is the feds spending spree. Personal and corporate debt are both dropping.



Building permits.
We are overbuilt and we are overbuilding some more? This is not a good thing. The housing bubble needs to be deflated not re-inflated.



Average weekly initial claims for unemployment insurance (inverted)


They have been playing with the numbers. http://boombustblog.com/reggie-middleton/2010/01/14/are-the-effects-of-unemployment-about-to-shoot-through-the-roof/ There is a significant divergence between what they are saying the unemployment rate is and the amount they are paying out. So I don't trust these numbers.


Manufacturers’ new orders for consumer goods and materials.
I don't have enough information to comment on this one.



So this is what I see when I look at the leading economic indicators.
This is what I have to say about the leading economic indicators.
[LEFT]

[/LEFT]
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