Thread: Corepuncher's Account Talk

Originally Posted by Corepuncher

Bonds SOARING today.
Stocks faltering with continued low volume.
Gold up to new high.
Dollar getting killed, yet OIL is down.
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SUM = Lame macroeconomic backdrop, flat to down equities long term.

Staying long 100% F fund. The FED will likely buy more bonds.

My hope is to refinance my 30 year mortgage at < 4.00% within the next year.

Ol'e Karl agrees with me.

http://market-ticker.org/akcs-www?post=167162

Originally Posted by Corepuncher

Ol'e Karl agrees with me.

http://market-ticker.org/akcs-www?post=167162

good article. Thanks.
You saw this from Uptrend, yes?
http://www.tsptalk.com/mb/showthread.php?p=284284

http://www.zerohedge.com/article/mmm...r-2008-feeling

I've spent much time thinking lately about the direction we are going. The conclusion: We better stop spending more money than we make ASAP, or we are toast.

If not for federal spending, our current GDP is -10%, which is the definition of a depression. I'll borrow this graph from Denninger:



The S&P would have been trading at 200 if they had not stepped in. Ok, can't blame em for that...but the unfortunate part of it is this...we're gonna have to pay the piper AT SOME POINT, and the longer it is delayed, the worse it will be!

I've been trying to figure out when we will be FORCED to stop this B.S. spending. It's something like 60% of our income we spend on entitlements, and the other 40%...BORROWED! That is a PROBLEM! 100% of our income is used to pay out entitlements...all else is funded BY OUR DEBT HOLDERS! We'll keep issuing a trillion dollars of debt a year to maintain our spending rate AS LONG AS THE WORLD LETS US. It's already baked into the cake...take a look at this:



These estimates are ALWAYS UNDERDONE! But you can see how much more "debt" we need to issue. 8 trillion through 2019? 8 trillion is about 67% of GDP! So...imagine you make 100K and you approach a friend.

"Will you lend me 10,000 dollars a year...I will pay you 1% interest if you do".

Friend thinks. "Hmm, is the "1%" interest enough to hedge against your possible default?"

Friend: "If you need to borrow this money just to live, how will you pay it back the principal to me, let alone any interest?".

You: "Well, when it comes time to pay you back, I'll just take out another loan from someone else, and you'll get your money".

Friend: "That sounds like a Ponzi scheme".

You: "Yep!"

OK...CHOOSE YOUR OWN ADVENTURE TIME! The first road, is that we keep spending and issuing bonds to fund it. At some point, we have a failed bond auction...nobody left to buy the bonds. Bonds collapse 1930's style and rates skyrocket. Lending (which is ALREADY slow) collapses to NOTHING. Housing (AGAIN, WHICH ALREADY IS IN THE DUMPS), implodes. Bank's balance sheets are decimated...and they are "Officially" Nationalized. Stock market multiples suddenly appear astronomically high, and "adjust"...probably down 70% or more...and they STAY THERE. Oh, and your nice little F fund is down about as much. This will also result in increased unemployment as corporate profits dwindle. We are in a very bad place!

The second road is that we keep doing "Quantitative Easing" in which we buy our OWN debt with money we print. This will eventually DESTROY the value of the dollar and do two things. 1) Inflate all imports dramatically as well as commodities and 2) Crash the bond market because who wants to "earn" 3% on a long bond and get paid back in dollars that are CHEAPER than the ones you bought the bond with! Margins will get squeezed as companies WILL NOT be able to raise prices of good, although oil is killing them. Stock valuations too rich, market adjusts violently.

One caveat...what if EVERYONE in the world devalues their currencies to keep ours at a level of relative strength? Well, things like food and energy, and gold, will rocket in price. Margins still squeezed...consumers now buy only what they NEED to survive. Since stocks are dropping, there COULD be a flood of money going into the Bond market and the dollar, but as you know dollar up, stocks down in today's economy. That would be temporary until just like in the 30's, bonds collapse, rates skyrocket, lending ceases.

Either way we are screwed. Will it be 1 year? 5 years? I do not know...but can you not feel the ground shaking?

Finally, here's a brilliant article I came across. We can all turn our heads and pretend those graphs don't matter, but unfortunately, they are REAL.

http://acrossthestreetnet.wordpress....treet-edition/

Excellent Post ! Thanks, I already had the outlook and general feeling!

Corepuncher,

You know I like to hold you close when you talk like that. Would you mind if I usurp your #26 tracker spot? Just sit there in that 100 F fund and don't move. An 11.23% gain on the year is enough to be proud. I'm on my way to hug you.

Originally Posted by Birchtree

Corepuncher,

You know I like to hold you close when you talk like that. Would you mind if I usurp your #26 tracker spot? Just sit there in that 100 F fund and don't move. An 11.23% gain on the year is enough to be proud. I'm on my way to hug you.

Birch, I think it's time for you to take your medication!

Attachment 10167 Happy Birthday! super.gif

Happy Birthday CP, have a GOOD ONE!! birthdaycake.gif

CP, HAPPY BIRTHDAY!!!

Happy BDay CP!