Down goes the Dow

Try to keep up wrote:

There's no such thing as prices that are fictitious. Try to keep up.

No such thing as fictitious prices?

Are there any things that are fictitious?

As an aside, how can anyone keep up with someone who never even got to the starting line?

Perhaps Try to Keep Up is a follower of "Wrong Way Riegels."https://en.m.wikipedia.org/wiki/Roy_Riegels

Sammy Gompers wrote:

Try to keep up wrote:

There's no such thing as prices that are fictitious. Try to keep up.

No such thing as fictitious prices?

Are there any things that are fictitious?

As an aside, how can anyone keep up with someone who never even got to the starting line?

Try to keep up wrote:

There's no such thing as prices that are fictitious. Try to keep up.

He's been wrong for years now. He's got to be right at some point. Doesn't he?

U.S. stock futures on Tuesday inched higher as Wall Street attempted to shake off persistent worries about the health of Deutsche Bank.

Darden Restaurants Inc.'s stock gained premarket after the operator of Olive Garden reported earnings that beat expectations. Investors also were keeping an eye out for Brexit news, as the pound plunged to a 31-year low, helping U.K. stocks surge to a record.

Dow Jones Industrial Average futures inched up by 18 points, or 0.1%, to 18,173, while S&P 500 futures declined by 1.05 point, or less than 0.1%, to 2,154.25.

Nasdaq-100 futures tacked on 6.50 points, or 0.1%, at 4,872.25.

"It's a relatively quiet day in terms of economic data," said Jamieson Blake, retail sales manager at ADS Securities London, in a note. "Fears over Deutsche Bank continue to ebb, and although there's still some risk here, markets have rejected the fear we saw at the end of last week."

On Monday, the S&P 500 and Dow both closed 0.3% lower, with blame going to worries over Deutsche Bank (DBK.XE) (DBK.XE), as well as concerns about the U.K.'s plan for exiting the European Union.

Deutsche Bank's stock recently traded moderately higher in Frankfurt, where trading had been closed on Monday for a German holiday.

Last week, the German lender's stock had been dragged sharply lower on fears about the U.S. Justice Department seeking a $14 billion settlement its sale of mortgage-backed securities. Share have recovered somewhat amid reports that the actual penalty won't be as severe.

Other markets: The British pound dropped sharply to trade on Tuesday at its lowest levels against the dollar since 1985, as the aftermath of Brexit continued to take hold, pushing the currency lower. The U.K.'s FTSE 100 jumped as the multinational companies in the index look set to benefit from the weaker pound.

European stocks overall moved higher, after Asian markets finished with gains, with Japanese equities leading as Monday's solid U.S. manufacturing data helped weaken the yen. The ICE U.S. Dollar Index advanced, helped by the British currency's slump. Oil futures traded lower, while gold futures inched down.

Attention market pessimists! Gold us at a 3-month low. Buy now! Put your money where your mouth is.

Ghost of Igloi wrote:

Try to keep up wrote:

There's no such thing as prices that are fictitious. Try to keep up.

https://mobile.twitter.com/HussmanFunds/status/782919668499681280

An interesting read, especially given your history. Are we seeing a new Igy?

Econ 101 wrote:

Ghost of Igloi wrote:https://mobile.twitter.com/HussmanFunds/status/782919668499681280

An interesting read, especially given your history. Are we seeing a new Igy?

"I started this comment with a 126 year-old quote to emphasize that every cycle in history warns investors against relying on speculative extremes to be permanent. I recognize that some of you are going to insist on re-learning this the hard way. We’ve certainly learned our own lessons about the ability of zero interest rate policy to postpone the kind of market collapses that reliably followed overvalued, overbought, overbullish syndromes in other cycles across history (see the “Box” in The Next Big Short for the full narrative). But that temporary suspension of consequences entirely depends on investors remaining inclined toward risk-seeking (which we measure from the behavior of market internals). Following a brief post-Brexit strengthening in a few trend-following components, market internals have deteriorated again. The danger is that investors seem to believe that easy money supports overvalued financial markets regardless of market internals or the attitude of investors toward risk. The failure of investors to grasp this critical subtlety is likely to be the source of a great deal of pain over the completion of this market cycle."

John Hussman, Weekly Commentary, 10/3/2016

Econ 101 wrote:

Ghost of Igloi wrote:https://mobile.twitter.com/HussmanFunds/status/782919668499681280

An interesting read, especially given your history. Are we seeing a new Igy?

Econ 101,

Here is another interesting read, but probably not reflecting your philosophy.

Igy

Thanks, I'll take a look at it when I get some more time. Does thus one also trend away from earnings as the be-all?

Econ 101,

No, the article discusses central policies as financial repression and set-up for a bad ending.

Igy

You're right, I'm not buying it. Gross acknowledges that at least one form of gambling is not doomed to failure. He then incorrectly includes the Fed in with central banks lowering their rates. It's a flawed argument on at least two fronts.

I'm not saying there isn't a bubble. I just don't know. And I'm not saying we're not part of a global economy affected by the actions of these other central banks. We clearly are. But we're by far the top dog and in the best position of all the big economies. I'm not worried.

Econ,I guess you don't consider it strange that there are over $2 Trillion worth of bonds trading at a negative interest rate. That means that essentially the only way you get a positive return is selling to someone else. Similar to the stock market I suppose, especially when you consider the Suisse and Japanese central banks are now buying stocks. One should ponder that for over 2,000 years there have never been negative interest rates until recently. Central banks buying of equities is a new twist. As Ruchir Sharma noted in the Wall Street Journal bonds, stocks and real estate are at the highest collective valuation in 50 years. One can believe that traditional investment valuation metrics no longer matter.I am worried, for those that are not worried.Igy

Econ 101 wrote:

You're right, I'm not buying it. Gross acknowledges that at least one form of gambling is not doomed to failure. He then incorrectly includes the Fed in with central banks lowering their rates. It's a flawed argument on at least two fronts.

I'm not saying there isn't a bubble. I just don't know. And I'm not saying we're not part of a global economy affected by the actions of these other central banks. We clearly are. But we're by far the top dog and in the best position of all the big economies. I'm not worried.

I got out of Europe and emerging markets months ago. Money from those countries is pouring into US investments for good reason; we are not experiencing what you describe. So, I'm not worried.

Now if you're invested overseas, you should be worried.

Econ 101 wrote:

I got out of Europe and emerging markets months ago. Money from those countries is pouring into US investments for good reason; we are not experiencing what you describe. So, I'm not worried.

Now if you're invested overseas, you should be worried.

why are emerging markets up 18% this year?

Econ,I would say there are a significant number of money managers that find more value in emerging markets and Europe than the US. Reversion to the mean you know.Igy

Econ 101 wrote:

I got out of Europe and emerging markets months ago. Money from those countries is pouring into US investments for good reason; we are not experiencing what you describe. So, I'm not worried.

Now if you're invested overseas, you should be worried.

Sammy Gompers wrote:

Try to keep up wrote:

There's no such thing as prices that are fictitious. Try to keep up.

No such thing as fictitious prices?

Are there any things that are fictitious?

As an aside, how can anyone keep up with someone who never even got to the starting line?

Correct.

Yes.

You can't.

I just got off the phone of David Kelly's end 3Q call - JPM's chief strategist.

Fairly optimistic stuff.

If 3Q earnings come in as expected, they will be around 14% higher than 2Q earnings. There is now a positive push from the dollar and possibly the energy sector. So the earnings drought is over and the market was right to ignore it.

he sees people as unrealistically pessimistic - that if today's economic conditions were had in say the 1990s, then consumer confidence would be 10% higher. People are just dosed with angry juice.

A record amount of short term cash. sitting. waiting.

very tight labor markets = inflationary. he sees inflation up near 3% by 2Q next year.

Global economy picking up steam

emerging markets stocks vlauations cheap but not a lot of good news there yet.

agip,

Temper your enthusiasm.

1. At the close of the 2nd Quarter 2016 non-GAAP earnings were expected to be $28.32, S&P 500 reported non-GAAP $25.70 for the quarter.

2. A year ago Wall Street expected 3rd Quarter 2016 non-GAAP of $32.88, the current consensus expectation is $29.36. David Kelley is using the approximate consensus number ($25.70 x 1.14 = $29.30) The highest non-GAAP quarter ever was 3rd Quarter 2014 at $29.60.

3. Of the 17 companies that have reported GAAP numbers 9 have beat and 8 have missed. Earnie has reported better non-GAAP numbers thus far, if one is inclined to take them on face value.

4.The 3% inflation expectation has been there for years. If memory serves me well the Fed has lowered their inflation expectation for 2017 to 1.8%.

5. Cash on the sidelines is a meaningless phrase used by Wall Street. Stocks are held by someone at any given point in time until they are retired. It is a fiction that there is going to be some movement from cash into stocks.

6. The total amount of debt held by individuals and corporations have never been higher (do not compare to the value of inflated assets). Margin debt is at record levels. Corporations have levered the balance sheet to pay dividends, buy back stock, and acquire other companies.

7. The NYSE Composite Index is below where it was at the peak in May of 2015. The market capitalization weighted S&P 500 Index value has barely performed better at 7/10ths of 1% since May of 2015.

So, Dr. David Kelley I am afraid, is offering nothing other than usual Wall Street mantra on what is an ever increasing and overvalued stock and bond market.

I do hope your cross country race went well.

Igy