Thursday, November 4, 2010

[SgtWs]

Today I am changing my asset allocation to 100% S Fund. This will probably only be a short term move, and if you believe in curses, could actually cause the market to fall. Yes, I just said that. I have the power to move markets. My being bullish can cause huge sell offs. Watch and see.

The move yesterday for further QE by the Fed will push the dollar lower, causing the market to go higher. Watch for strength in the dollar, because any strength here will cause weakness in the market, and the dollar will only fall so far.

The Fed’s plans to begin buying Treasuries is unleashing a tidal wave of liquidity on the markets that has blindly lifted most asset classes already and will continue to do so for the foreseeable future.

Under QE2, the Fed will buy Treasury bonds to try to lower the interest rate even more, the theory being that it would spark both spending and lending and ultimately help create jobs.

We shall see. I just hope the medicine here doesn’t do more harm than good.

The Republican-controlled House of Representatives will keep the hopes of extending the Bush Tax cuts alive for all taxpayers in 2011. The fact that two Senators will be seated right away makes some sort of compromise by Christmas a near certainty. The liberal media is trying to spin gridlock in DC as a bad thing, but I hate the social direction we seem to be spiraling down, so I welcome the change. Keep em fighting each other so they leave us alone!

Things I’m watching today and tomorrow:

Chain Store Sales, Employment Index, Jobless Claims, Productivity and Costs, Pending Home Sales Index, Employment Situation, Consumer Credit

I’ve got a lot of stuff to share I will get posted by Sunday night.

Does anyone out there have the skinny on the H.R. 4646: Debt Free America Act? Too much disinformation out there on the web.

Thanks for reading! – Rodney

[crondanet5]

Why are you going 100% S when the coming boom will be in the I Fund due to the deteriorating dollar? Don't you normally go 50/50 S/I? That's where I am. Still time to change your IFT......

[SgtWs]

The yield of debt in Europe is starting to sky rocket. I'm not convinced the austerity measures are working as well as some in the media have been reporting.

Ireland's sovereign debt is coming under stress today. The yield on the country's 10-year sovereign debt has risen to 7.6% this morning.

The combination of things hammering Ireland right now is as follows:

Worried over the country's budget, the sincerity of cuts, and its ability to grow tax revenue
Concerns over the banking sector bailout, which is seeing its costs continue to rise
And the European Union's new plan for crises, in which investors in bonds will take a hit
As a result, CDS is also spiking, now up to 512 bps.

Look at the other PIIGS too...........they are making similar moves. I just don't feel comfortable in the I Fund right now.

[SgtWs]

Austerity Has Failed

Joe Weisenthal

When Europe went into crisis earlier this summer, it had a few choices. One was generous transfers from the rich countries to the poorer ones.

The other choice was austerity -- budget cutting in hopes of easing debt burdens.

They tried the latter, but as the CDS market shows, that's failed.

Irish CDS hit an all-time record spread today, according to MarkIt. Portugal is right behind.

[RangerDave]

Welcome aboard !!!

[SgtWs]

RangerDave, you are currently kicking butt.........

[crondanet5]

Reset.

[catn_ip]

Re: SgtWs ("the power to move markets") LOL, if only that were true, I'd be willing to pay a percentage of my returns if you could kindly time them just so... just so I could actually MAKE some real money... BTW, my Fantasy TSP does not mirror my actual TSP, I am using it as an objective view of the often contrary impulses I have just to see how it all works out in the end... Sadly, my fantasy life is coming out on top right now, my gut keeps telling me we're in for a major correction so I've not been able to take advantage of recent gains in real life...

[SgtWs]

"my gut keeps telling me we're in for a major correction so I've not been able to take advantage of recent gains in real life..."

Concur.....I think we will see a 4-5% pull back sometime in the near future...............which is usually triggered by my buying...........and if I sell, the market will take off higher.........

[TSPTrader]

If all there was to this whole economic/stock market thing was to print money... well then hell... why not do it all day, every day, forever? Wouldn't that be perfect? We could rally every day like 1999, no one would need jobs, because rising assets would make them rich, and we could all buy Bentley's and sport new platinum Rolex's. Sheesh, why didn't we think of this sooner?

[TSPTrader]

Look...we are witness to a Casino with no rules. It's every man for himself, and get all you can while you can. If it blows up, no one cares, the Fed is there to print trillions more and make it all better. Having not lived through the other empires that did the same thing in the past, I am not able to know for sure, but I'd guess that in the end times of those empires things went along pretty much as they are now. Forget tomorrow, party for today.

[SgtWs]

President Obama just came out and said he is open to extending the Bush Tax Cuts for all income levels!

This is huge!

TSP Trader - what you are saying is what I was alluding to when I said I wonder if the medicine here is going to do more harm than good long-term. Ol Ben is a student of the Great Depression and has said numerous time he will not be the Fed that oversaw another one. But in fighting this like he is he is taking our monetary policy into uncharted territory.........and no one knows what the results will be.

[crondanet5]

If SgtWs and RangerDave reset their Fanrtasy accounts they will gain $5,000 today. Anybody going to do better than that?

[flight23]

If you do that you just do not learn. You cannot reset your real TSP. If you lose 50% in your real TSP then you hopefully learn by realizing it will take a 100% gain to get that back, and by experiencing how long and hard it is to get a 100% return. Resetting does nothing except make it a game in which you have a safety net, which is not the real world.

[SgtWs]

I concur with Flight23. I will wear my bad decisions on my sleeve........Besides, it will all work out in the long run.