I told my wife this morning before market open that I expected a dead cat bounce that would last a day or two. Seems I was wrong. It lasted 1 hour so far. Oh well. I'm just a human being like anyone else. After all, if someone could make such estimates and be exactly right 100% of the time then they would be a billionaire by their mid 20's. I'm not a billionaire.
What it appears we have here is evidence of the people who buy on dips thinking that they are getting a good deal. I would say that buying on dips is better than buying on peaks. However one must realize that dips can take a while before they bottom out. It is usually not a daylong event. Weeks or months are not uncommon. And in the case of a recession a year. But I don't see us entering a recession.
It seems a lot of people who thought they were smart investors doubled down in the emerging markets sector and got a crew cut. I guess the rational they used was that they were beaten down enough. Oh well, I guess it would have behooved them to look a little deeper into what were the underlying fundamentals causing the EM rout in the first place. It seems that emerging markets are freaking out over the fact that the US is tapering QE and we have just started with that. What were they thinking? Or should I say, what were they not thinking?
Now comes the hard part which is predicting the bottom. I must admit. I am bad at this. I aways wait too long to pull the trigger and buy back in. I need to work on that. It is hard to determine how over sold these corrections get. It is never the same. Of course this all assumes that we are in a correction and not just a week long glitch that will be forgotten a month from now. You never know. I just keep telling myself that what ever it is that being out at this time is better than being in. That I feel pretty good about. I had a good nights sleep.
Actually I don't know what will happen for sure. How can I? I just look at several things and it has caused me to become concerned enough to take a break from the market. They are:
1) The current valuations of many stocks has become lofty. Not all stocks but enough of them that a culling of them would not be unwarranted.
2) The market indexes have leveled off which indicates to me a reluctance of some to add new money to the markets because they are finding it harder to find stocks that meet their valuations standards.
3) Volatility has increased which means there is more fear in the markets. What this means is that people are losing confidence in their commitment to hold onto what they have and thus one might reason that future negative news events will cause more sells than before and positive news events cause less buys than before.
4) Recent sell offs are causing more people to become aware that their may be rougher times ahead and this will make it easier for bears to win over converts and harder full bulls to prevent defections.
5) Investors who use technical investing techniques, though I am not a big fan of them myself, will use current market conditions to predict a turn in the market trend from up to down. Technicians are not always right but the additional selling will have a negative effect on prices for a while. If they are right then they will help kick off a correction. If they are not right then they will contribute to the current market volatility until they run out of stocks to sell. Either way they do not help the cause of the bull.
My concern is that we are due for a 10% to 20% correction after which the market will continue to rise. But my concerns may not be warranted. However from what I am seeing that there is no loss in opportunity in being out of the market for now because not that many stocks are going up at the current time so there is no harm in sitting on the fence now.
None of these concerns apply to AGNC.
Next week the fed is expected to announce its commitment to continue reducing the stimulus. This is great news for bears. I have to admire thd courage of the people that are willing to hold through all this carnage. You are true heros. Don't let us weak hands cause you to lose heart. Besides, making money isn't all that great. There is a lot to be said for being poor. This reminds me of the bible story about the eye of a needle. Think of it as an investment on getting to heaven.
It went from 14 to 18 for a 31% increase in just one day.
The overall market was down nicely today. A great day for the bears. And good news for those of us who exited the market in preparation for this carnage. I can't remember the last time the DOW declined by more than 318 points in a day. That's almost 2%. It must have been a while. I know that in March of 2009 there was a 487 point decline but the DOW was down to 7775 so the percent change was 7%. So that makes 2% look a lot less severe by comparison. But for someone who has a few million in the market its gotta hurt, even at 2%.
The good news for AGNC owners is that 10 year treasuries declined from 2.86% to 2.74% in two days.
The ^VIX increased by 16% so far today. The VIX is the fear indicator, Things change when people are afraid. People do things and it usually does not turn out for the best. At least not for longs it doesn't. Shorts on the other hand love fear.
That said, it would seem that AGNC is acting like a defensive play. The over all market goes down and AGNC goes up. My guess is that AGNC longs have nothing to fear with respect with the over all market down turn unless they are invested in it. If you are 100% mREITs I would say you are better off at this instant in time. It can't always be bad. I would call this the eye of the storm for mREITs. The only real issue of contention is how long it will last. 3 months, 6 months, a year? Who knows. It is like swimming up stream from a water fall with a blind fold on.
Pass the pop corn please and don't turn the channel.
I know. They act as if someone buys that there wasn't someone selling. The only thing that matters if whether they price was increasing or decreasing during the trade because there are always buyers and sellers.
But you are correct. There is no cure for dumb. You have it for life. You cannot penetrate the cloud of confusion because the neurons are not properly connected. They are cross wired. And you cannot fix that. This is why indoctrination seems to be so permanent because once you manage to wire someone's brain so it draws the wrong conclusions it is near impossible to undo the illogical wiring. That is why one has to be careful to never assume things to be true that aren't true because you can really mess up your mental capability for the rest of you life if you do. What I observe around me all the time are people who have crossed their own wires or have had them crossed for them by someone else. If it wasn't so sad the negative impact they have on the rest of us it would be funny.
Actually, when I was younger I knew a lot of people that smoked pot. Now I don't know anyone who smokes pot and my son and daughter don't know anyone either. Zero. I was of the impression that it was basically being smoked by the low life's now days and everyone else has lost interest in it.
Someone in Europe asked me if very many people in the US still smoked pot and I told them that as far as I could tell that in the Los Angeles area that it had gone out of fashion among people in the middle class and above and it is pretty much being consumed by low income people. That was my guess because I haven't seen anyone light a joint at a party in over 20 years.
You used to hear about actors and the like doing drugs and you never do anymore. I think most people in my area associate pot smoking with low class people. In other words no one wants to be associated with the kind of people that smoke pot. If you were to light a joint among the people I know everyone would be shocked and wonder what the cat had drug in. And most likely they would be asked to put it out. That goes for cigarettes as well. Nobody wants to breathe the smoke. People are just too health conscious now days. And certainly smoking anything is not good for your health.
Now maybe this is the trend in larger cities but in small towns people are still getting high like they used to here. I would not know about that. I only know what people who need to be able to make a enough money to afford the more expensive real estate where I live are doing. These people don't smoke pot and are usually so busy that they don't have enough time to set aside to go to zombie land.
I personally spend some of my time at home on the computer doing work which requires a clear head. I mean really, when you get older who has the time for it.
I was once invited to a party by some friends in the 1980s which was at a house of one of their coworkers and we didn’t know anyone there except the few of us that came together. Everyone except us were smoking pot and basically everyone except us was sitting around listening to music and saying nothing. I was never so bored out of my mind. It was like zombie land. We were there for about 30 minutes and I commented to my friends that that we would do better to leave and let the dead heads vegetate amongst themselves. It was one of the weirdest experiences I have ever witnessed. It was really a low class affair ... real bottom dweller stuff. You had to see it to believe it. But I’m assuming that this is what pot heads do. Maybe it’s an excuse to act dumb but not feel like you’re acting dumb because everyone is acting dumb. Who knows. I will never understand it and don’t even want to. But again, if they want to go to zombie land then it is their choice to make. Let them. Why should I care?
so it seems because more people are deciding to pay the penalty than sign up and insurance companies say that because of this the program will fail. Duh, as if any simpleton could not have figured this out 3 years ago. Wasn't this obvious? I think it is time for Obama to get down on his knees and apologize to the Republicans for making them irrelevant in 2010 or they will never help him fix this and all the insurance companies will withdraw.
This is why they should have cooperated with the Republicans because passing a bad bill didn't accomplish anything and passing in a way that guarantees that the opposition will never agree to a fix was just plain dumb because everything needs fixes.
Your analogy has nothing in common with the concept of those who achieve success on their own or expect others to do it for them. They Germans actually had more advanced weapons but they were overwhelmed by sheer numbers. That is why they called WWII a war of attrition. The allies did not have the most advanced weapons; we just had more of them and more people to use them and never ran out of them. Few people would try to argue that 1 person is more likely to make more money than 10 people even if the 10 were disadvantaged financially like I was. The fact is that this is not true. Most of the new billionaire like bill Gates did not come from old money. And most of the old money never lead to new billionaires being created.
A closer analogy might have been for me to go to my college professors and whine to them that I had to work 32 hours a week and had less time to study so they should handicap my grades accordingly. The fact is that no one in my school even knew that I was working evenings after my classes. It never even occurred to me to tell this to anyone. Why would they care to know? Because your grades are an indication of the knowledge that you obtained and if I had less time to study then so be it. It is what it is.
To tell you the truth I have always had a total disdain for whiners. They really get on my nerves. If they had a gene that could be identified with people who whine constantly then they should abort children with it.
You should be glad that no such gene exists. But it is too bad for us that the test did not exist before you were born.
Anyone could have done what I did. All they had to do was go out and do it. And that is what I have done. I just did it. I never whined about the lack of opportunities I had dealt to me. I have just looked at my current situation and made the best of it. Anyone can do that. I don't call that special at all. I just call that not having an entitlement state of mind. In my mind that is not special. It is normal. I'm not better than normal. The comparison comes when you take the dregs of society and compare them to normal. I didn't put them there. They did that to themselves.
My father was so tight with his money that I may as well been poor. He did not pay for my college education because he was too cheap to do it. All that money I was making from age 12 on was going into my own personal college savings. And then I worked 32 hours a week when in college. Anyone can do this. You just have to do it. And if you didn't do it then you cannot blame that on anyone one else because these are your own life decision that you make. No one makes them for you.
All my life experiences have done for me is for me to realize with complete clarity that most of what some people want from others is justified with BS rationales because I was never given the things that some think that others should be giving to them and I was just fine. In fact, I didn't even feel like I was missing it. I actually felt like I was better off but only because I earned it on my own.
I know of some others in my field who had to do it all on their own without the help of others and it has been my observations that these are the most motivated and productive people in the company. The people who show up at the door after having the silver spoon treatment seem to be less proactive in executing their job related responsibilities. The fact is that having it hard is often an asset latter on in life.
Rich people should force their kids to work their way through school.
I started a lawn mowing business when I was 12. My father lent me $75 so I could buy a lawn mower after I got 10 customers who wanted their lawns mowed once a week for $3 dollars each time. It took me 45 minutes to mow a lawn and pick up the clippings. At the time minimum wage was $1.65 an hour. When I turned 14 and I was legal to work and I started to bag groceries which was a tips only job and I averaged about $3 to $4 an hour. I kept the lawn business going while I bagged groceries. I bagged groceries after school every day, all day Saturday, and I mowed 10 lawns on Sunday.
I did work as a life guard for minimum wage during the summers because all I had to do was hang out at the pool in a swim suit and blow my whistle occasionally at kids who were breaking the safety rules. In the morning I would hose down the bath rooms with fire hose after pouring disinfectant on everything but that only took a half hour. I also got to talk to the girls in bikinis for much of the day. I really did not consider this to be work as I never broke a sweat, unlike when I was in the hot sun pushing a heavy lawn mower at a rapid enough pace so that I could get 10 lawns mowed in one day. A person on minimum wage got $13.20 a day and I was making $30 a day.
When I was working as a life guard I would do that Monday through Friday, I bagged groceries all day Saturday, and I mowed 10 lawns on Sunday. When school started I would go back to bagging groceries Monday through Friday and on Saturdays. Lawns did not need to be mowed in the winter.
As a teen ager I was making more than many adults but I have always made more. Money has never been an issue for me. I always had enough of it but I have had to spend a lot of time doing work as I did not get anything for free.
Before I started working my father used to give me $1 a week allowance and once I started to work I told him I didn’t need it anymore. He didn't mind. It saved him a $1. My father was a tight wad.
Also if it were a humanitarian issue there would not be so much passion about wealthy people leaving the country to go to countries with lower taxes. In many of these lower tax countries the humanitarian need is actually much greater than it is in the US so a true humanitarian would welcome such moves as a way to help aid those with a greater need. But they don't welcome it, but rather they get upset because it isn't about humanism at all. They truly do not want to see the money go to where the need is the greatest. They don't want that at all. They want the money to stay here at home were people have relative little need for it by comparison to those people in these more impoverished countries.
The fact is that if a humanitarian argument was used to judge where the money would go it would all leave the country and go elsewhere. And this is one example of how people who want to redistribute the wealth in the US have high jacked higher minded philosophical concepts as a way to get people to accept what they are actually doing with a kinder point of view when in reality their intensions are clearly selfish.
I don’t blame people for being selfish. Everyone is selfish. But I do blame them for trying to warp people’s perceptions by making their selfish goals seem selfless when they are not. It’s a deception and it is wrong.
Why don’t liberals admit to what they are really up to? Because no one would buy into it if they did because people don’t buy into selfish causes knowingly.
Helping people who cannot help themselves like the disabled is something that just about anyone would support. And as you can imagine no reframing of this concept is required. We all accept that the disable are in need. Very few have an issue with this.
The intense conflict between Obama and the Republicans is basically seated in the way Obama got the ACA bill to pass by treating the Republicans as if they were irrelevant to the process. For that Obama will never be forgiven unless he were to publically state that the way they exclude Republicans from bill drafting meetings was wrong and the way they did not send the bill back to the senate for approval after changes were made was wrong. But Obama will never do that and thus the impasse. You cannot allow either of the two parties to act in such a fashion without allowing them to experience consequences of such behavior that causes everyone to realize that the consequences of such undemocratic behavior is not worth the after math that follows. The fact is that if the Republicans had been allowed to contribute to the bill it would have had fewer issues because many of the things they are having problems with the Republicans were warning them about in 2010. Obama gave the Republicans the finger and the Republican responded by saying “OK, if that is the way you want it then so be it.”
The ball is now in Obama’s court and I am sure he won't play ball. He knows what he has to do and he is unwilling to do it.
There is nothing wrong with humanism. But it should not be forced upon people with a totalitarian like authority. I think you will find that most of the largest contributors to humanitarian causes are conservatives simply because more of them have the money to contribute in the first place.
If it was only about humanism then most people would not be as passionate as they are about it if they could not get what they wanted. This is clearly demonstrated by the much lesser degree that people are passionate about people in other countries as they are about people here in the US. That is because here in the US the passions are about how local recipients are impacted, not by others many 1000’s of miles away. If it was truly an issue of humanism alone then it would not make a difference who the recipients were obviously since the need is even greater outside the US. So if you said that all the money for social programs had to go to others outside the country then you would find that the passionate support of people here in the US would die down to almost nothing. Thus the humanism argument has little merit. It is not about humanism at all. It is about the redistribution of wealth. That’s all. And the recipients of those redistributions would not want to share any portion of their take with others outside the country I can assure you of that. Because they aren’t thinking of helping others, they are thinking about themselves.
You can try to frame it in a way that makes it look more palatable for people to give into the ideology but the fact is that none of these analogies are actually true once you put them to a logical test. They fail every time.
The real issue is how far does it go. At what point do you break the economy by creating a financial cost that makes it so hard to compete with other countries that we start on a downward spiral like Greece.
If the fed raises rates quickly then you are right about the bankruptcies. But if they raise them slowly then mREITs may be able to weather it by paying no dividends for a year or two while they deleverage and buy higher interest loans. The issue is whether the Fed will say to themselves. "Let’s not raise rates quickly because we don't want all those mREIT investors to lose their money." Or whether they will raise them more quickly because there is some other political pressure being placed on them in which case they will bow to that pressure and ignore what happens to mREIT investors because I really don't think they care very much what happens to them anyway.
I find it interesting that you pick the Revolutionary War as an example because it was the issue of taxation by the British Government that broke the camel’s back.
No one says that government serves no purpose at all which is what you seem to imply. The US needs government for laws. What we don't need is government to give away our money to a minority of people whose poverty is due in most cases to the life choices they have made on their own with disabled people being an exception in which case government aid is not unreasonable.
My daughter was getting paid to grad school papers for her boy friend’s mother who teaches high school and she was astonished at how illiterate these kids were. My comment to her was that they have been given an opportunity to acquire an education at no cost to them and they have squandered it and will probably live in poverty as a result and I can guarantee that they will blame others for the life choices they have made. It is not the fault of others that these people choose to squander the opportunities that have been offered to them.