I don't think the fed will leave rates low, they will hike by june, maybe sooner. the are going into defense mode now to show they didn't leave rates to low to cause all this wild speculation. ps - expect a massive market crash over the next 12 mos, really huge. this may make 2009 look like a mild downturn before it is all over.
I agree with bill gross, but by 1/4 point more, 1/2 point is what they will raise the fed fund rate.
I will tell you whats next, Deflating Hope, Deflating Excuses, and Deflating Morality everywhere. We need a good old fashion Asset Crash to clean all the sickness and toxins out of this distorted debt slave trade we are in throughout the world. For once, the masses will work less, buy more with less money and improve their standard of living, hopefully for a decade, while the next generation gets ready to take over from the Baby Boomers.
OK, you say we are in an INFLATIONARY PERIOD. I am saying we are in a DEFLATIONARY PERIOD. Is that correct ?
Isn't this the loony bin......there is ample room at the table of plenty for new folk. Welcome Friend.....sit down an spell and share at the message board of plenty.
You can get 500 gallons of gas for $1.00 US dollar, today in Venezuela, a new high in dollar purchasing power. They only take cash, everything else the exchange rate is much lower, especially common stocks are going for a penny on $1,000 face value.
Cash is King, in Venezuela, 0.2 cents buys a gallon of gasoline, or $1.00 buys almost 500 gallons.
This is no joke, this is the truth. Fill up in Venezuela, use US dollars and buy 25 gallons of gasoline for 5 cents right now, today, no car wash required, no club membership, this is pump price US cash deal in Venezuela today.... for 50 us cents you get 250 gallons of gas, and for a cool $1.00 US you get 500 gallons of gasoline. Thank the lord, deflation is finally here. Watch for the 95-99% off sales coming to a retailer near you.
In the interim, a string of currency devaluations has pushed down the cost in dollar terms to levels that would seem implausible to consumers in other parts of the world, even after the recent oil tumble cut prices at the pump.
The CHART OF THE DAY shows it now costs about 0.2 U.S. cent (that’s right; one-fifth of a penny) to buy a gallon of gasoline in Venezuela, based on black-market currency rates. Expressed another way, you can get 482 gallons with just one dollar. That’s enough to drive a Chevrolet Silverado pickup truck from one end of Venezuela’s 1,740-mile-long Caribbean coast to the other six times.
It’s a perk the government may no longer be able to keep doling out to its citizens as the collapse in oil exports pushes the country to the brink of default.
“They are basically bankrupt” and “cannot afford” these kinds of subsidies anymore, Siobhan Morden, head of Latin America strategy at Jefferies LLC, said in a Jan. 23 interview.
It isn't clear what will happen shortly. We know the financial markets are pushed to extremes by FED induced speculation. With speculators massively short the now deeply distressed euro and yen, with equity margin debt still near record levels in a market valued at more than double it pre-bubble norms and with several major Euro banks running at gross leverage ratios comparable to Bear Stearns and Lehman before the 2008 crisis, we are seeing an abundance of "leveraged mismatches" (one-way bets) using borrowed money, that permeates the entire colon of the financial system. With market internals and credit spreads very negative, while Treasury Yields and oil and industrial commodity prices sliding in a manner consistent with abrupt weakening in global economic activity..........IS THE SHOE READY TO DROP.....?????
I got a $2 loss right now, still holding. I did buy some BP at $37 to hedge this which is at $40. All in all, I am flat to slightly ahead, almost like holding my money in a MMA at 1%. I still thing a TBT purchase at $40 will tick up to $45 when FED speak comes out with rates going up. I could be wrong also, there is risk.
More than 150 years, after the last shot was fired in that terrible conflict called the Civil War, we appear on the Abyss of a terrible conflict to end the "peculiar institution" of enslaving human beings to decades of enslavement to the banks, creditors and the central banks. But now, Global World Currency War has been declared, and it looks like everyone is involved. Americans of all ethnic groups are being enslaved again, this time by something that most have not seen coming, but with some enlightenment from the enlightened one, will see that 80% of the world has been enslaved to debt. Central Banks have been able to enslave the masses by promoting QE, Zero Percent Interest Rates, and Money Printing in order to saddle them with debt and an existence owned by others - throughout the world. Every single person is enslaved by debt, even the 20%, because the governments of the people and by the people have allowed their elected leaders to sign and promote an expansion of the national debt beyond the ability of anyone to pay it back, and this includes future generations. The only way out of this is a total collapse of prices, where wealth is returned to the indebted through lower prices and deflation. I pray for more deflation and gas prices to $1.00 by July 4, 2015. .
Sorry, I left you out of the story, my next version, I will add jtwir38. Please accept my deepest apologies, sympathies and verbeologies.
You are looking at this statically. There are predominantly two types of investment pros. The professional that looks at a future stream of cash flows to determine the current value and investment potential of an asset.
The other less sophisticated very amateur method is those who look statically with a very narrow focused point of view to arrive at a value of an asset.
The current value is less than book value because the professionals are valuing the stock as if the FED FUND rate is .50% higher than it is today. They are looking at a smooth average from a few months ago, around 2.3% - 2.4% yield and the yield rising to 2.8 - 2.9% by year end. They are filtering out the noise that we recently had with the flight to safety by foreign money. Utilities, 10 year treasuries, 5 yr. and 3 yr. treasuries reflect the flight to safety, along with health care stocks, which is only temporary. As soon as these professionals see something drop in value, like oil related stocks, Euro. stocks, Russian stocks, or currencies of any country that looks promising, the money will leave the 10 yr. and yields will normalize. Hence, a good pro discounts a drop in rates and knows you DON'T FIGHT THE FED. FED said rates will rise and everything is on schedule, in fact the economic numbers are better and they are ahead of schedule. Hence, rates will rise, the probability is very high, thus reflected in the weakness of m-REIT's. The market internals of m-REIT's are very negative, several have cut dividends and the spread between 10 yr. and 3 yr. has flattened dramatically, which is very negative for M-REIT's. 10-yr. treasury bond over short period of time means very little to valuation, unless there is strong fundamentals that support a trend.
Too bad, because the story here is intriguing. Dr. Klumps recycles the premises of "Quantitative Easing" and "Zero Interest Rates," turns up the heat and the volume, and borrows the gravity-defying insight of leading economists into a message of 100% total reality. It's fun and educating.
The plot involves Dr. Klumps, a mild-mannered retired professor and economics genius by day, a misunderstood message boarder by night. He was drawn to the AGNC message board several years ago for the 20%+ yield, referred by a cell of yield-seekers, led by the profound “Zee_Flame” and the befuddled warriors Mmichaelr and general-miltz. Working as a rag tag team, They've made a fundamental discovery about the real world: It doesn't exist. It's actually a form of Virtual Reality, with mind altering programs like Q.E., Zero Percent Interest Rates, Bond Buying, Helicopter Money Printing, “This Time its Different”, “Everything is still Positive”, “That won't affect the bull market” and "ECB QE"designed to lull us into lives of blind obedience to the "debt slavery". We obediently go to our crummy jobs every day or computer screens at home living on federal subsistance, little realizing, as Dr. Klumps tells MMichaelr, that the "FED” has pulled the wool over your eyes--that you are a slave to the illusion that “The USA is fine, the rest of the World isn't."
The message board rebels want to crack the framework that holds the illusion in place, and free mankind. The Flame believes Dr. Klumps is the Messianic "One" who can lead this rebellion, which requires mind power as much as physical strength. Arrayed against them are the Agents, who look like righteous, indignant complainers on this message board who try to promote the notion that it is one person with multiple identities designed to deceive the others, when in reality, there is no truth whatsoever to their proposition a poignant dilemma of adaptation and survival.
They are proposing higher taxes on capital gains, to 28% plus a users tax on bank accounts and brokerage accounts. That may start serious selling before those new taxes take effect.
Since Nov. 26.....a classic descending triangle, lower highs, lower lows.......AGNC has experienced this and continues to make lower highs and lower lows. I believe we have peaked and we are entering the beginning of a major downward decline. 25-35% off the peaks is common.