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 Heads Up - The Economy is Stalling

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Diseasel



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PostSubject: Heads Up - The Economy is Stalling   July 11th 2013, 2:52 am

I got a bad feeling the economy will tank in the next few months. Interest rates are climbing. It won't be long before the bottom hits. Bonds are tanking, home sales will decline, home loan refi's will slow, unemployment will worsen, the stock market will correct, and we're in another great recession.

I got out of bonds in May. I'm about 40% in cash.
I'm shorting the 20 year treasury via TBT (2x inverse).
Oil is at least 10% overpriced, short via SCO (2x inverse).
Housing might be a good short via SRS (2x inverse).
Utilities are a short via SDP (2x inverse).
REITs are a short...
Don't forget the market index shorting ETFs...
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pup

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PostSubject: Re: Heads Up - The Economy is Stalling   July 11th 2013, 9:54 am

And then, ObamaCare will come and smother out the remnants of what few embers of the economy remain. Not to mention Immigration Reform, that will be the end of employment for all young Americans and all construction, service and other non-union jobs that are left.

Congress has abandoned America, Obama has abandoned America. It is the sad reality that we live in.
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erude



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PostSubject: Re: Heads Up - The Economy is Stalling   July 11th 2013, 11:51 am

I am actually scared about my future of having a home and having a place to live out old age, not that I won't be working till the day that idea. I am starting to wonder about keeping my retirement money going there.
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joemac

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PostSubject: Re: Heads Up - The Economy is Stalling   July 11th 2013, 12:16 pm

Our country is based off a big lie, steal, and cheat.  Sounds like a solid foundation to toss a bunch of investment dollars into.  I'm not a buy and hold person, inter-day is my liking.  Trying to limit the downside with this freaky bunch running the show.

If it wasn't for our reserve currency status I would fee more ept to short some stuff.  Some verticals are potentially ripe for it, though timing is everything and since I don't possess the inside information the hedge funds and real power brokers do I try to not compete with them or try to tag along for whatever manipulation they're performing.  Though I don't under estimate they're ability at the Fed and Treasury to keep the printing presses churning.

Just when you try to outsmart them they come in for the big heist.  Here in the US, MF Global and New Jersey's fantastic former governor and GS GEO John Corzine took $1.2 billion from customer accounts.  Money can't be accounted for just vanished.

When that scheme can't be played anymore they'll craft a new one using Cyprus as the template.  

It's known as Open Banking Resolution or OBR.

The Federal Deposit Insurance Corporation (FDIC) and the Bank of England—together with the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, and the Financial Services Authority— have been working to develop resolution strategies for the failure of globally active, systemically important, financial institutions (SIFIs or G-SIFIs) with significant operations on both sides of the Atlantic.

The goal is to produce resolution strategies that could be implemented for the failure of one or more of the largest financial institutions with extensive activities in our respective jurisdictions. These resolution strategies should maintain systemically important operations and contain threats to financial stability. They should also assign losses to shareholders and unsecured creditors in the group, thereby avoiding the need for a bailout by taxpayers.

In the end, its not your tax dollars that will be used to bailout the financial institutions, it's your actual cash, investments, or financial assets you have stored with these lovely institutions they will simply sieze.  Therefore the taxpayer avoids the bailout.  HAHAHAHAHA

The media certainly didn't broadcast that the FDIC took a major role in creating the OBR template.

Cyprus test run, check.  New Zealand has it in place now check. http://www.rbnz.govt.nz/regulation_and_supervision/banks/policy/4430900.html UK is close to getting this finalized and the US is next.  Some pieces already exist in the Frank-Dodd act.  

There is a lot of money tied up in retirement savings and the crooks running the show just can't control their temptation to get a piece of it before another crook does.

Everything we have is based on lie, steal, and cheat.  

As long as American's have their iPod's and reality TV they're okay with it.  Smile  Whadda country.  I know we're all so proud.  I know my kids are proud of the way we've handled this and what we're giving them.


Last edited by joemac on July 11th 2013, 5:12 pm; edited 1 time in total
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pup

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PostSubject: Re: Heads Up - The Economy is Stalling   July 11th 2013, 4:49 pm

There is absolutely nothing more terrifying or of more danger to our politicians than a middle class American. That's why we have been under unrelenting assault for decades.

We have 2 classes now, the rich and powerful, and the "entitled". We, my friend, have been singled out as enemies of the state and will be dealt with accordingly, if not now, they WILL steal our retirement in any way they can.

We have to be under the grinding boot heel, its the only way they survive.
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Ulmus
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PostSubject: Re: Heads Up - The Economy is Stalling   July 11th 2013, 8:02 pm

Don't forget the "unnoticed move of many 401K plans into U.S. Bonds.

____________________________________
Why not?
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Diseasel



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PostSubject: Re: Heads Up - The Economy is Stalling   July 11th 2013, 9:15 pm

And baby boomers, with all the retirement savings, are getting more conservative with their money. Younger folks aren't playing the retirement savings game. Soon Wall Street will only have the government's money to play with. That can't last very long.
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Diesel Dan

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PostSubject: Re: Heads Up - The Economy is Stalling   July 13th 2013, 10:00 am

I have to wonder when the next market correction will be as well. Seems to have climbed to fast too soon for is really happening with the economy.
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joemac

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PostSubject: Re: Heads Up - The Economy is Stalling   July 13th 2013, 7:28 pm

Yep, I think many of us feel its coming. The climb doesn't seem like its based on any fundamental. The climb on wall street never has seen more disconnected from the reality on the ground in the middle class.
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Diesel Dan

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PostSubject: Re: Heads Up - The Economy is Stalling   July 13th 2013, 7:47 pm

I've moved most of my assets in my 401k into its income/bond fund lately.
Happy with the 18.5% for the year return and fully expect it to slow down in the fall.
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joemac

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PostSubject: Re: Heads Up - The Economy is Stalling   July 15th 2013, 10:36 am

That's a nice gain. I've never made crap from bonds. Wonder what the scam is on the bond market. You know there is one where the big boys can make cash and leave us with crap.
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Diseasel



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PostSubject: Re: Heads Up - The Economy is Stalling   July 15th 2013, 10:54 am

Looks like China finally admits they are slowing down. Chinese exports are down. And they've built enough fake cities and empty buildings for now. They're limiting auto sales to citizens. Gotta wonder how it will impact GM/Ford's sales and growth.
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Diesel Dan

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PostSubject: Re: Heads Up - The Economy is Stalling   July 15th 2013, 2:38 pm

I don't plan on making any real returns from the bond fund. Trying to preserve the gains I made this year as I don't usually do this good.

Diseasel, even though you have a good portion in cash what good is that in the long term if the value of our dollar tanks? My concern that I've been saying for years now is a potential collapse of some sort in the Fidelity/401Ks as the "boomers" retire. For decades the 401Ks have done nothing but get a constant infusion of currency and that is going to change drastically as the boomers start with-drawing at their max rates and the new employees have less to contribute because of lower wages. Fund balances will have to go down, imo.

But I don't have a good alternative at this point.

joemac, I meant to say I moved most of my assets INTO the income fund and out of mutual funds.
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Diseasel



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PostSubject: Re: Heads Up - The Economy is Stalling   July 15th 2013, 5:16 pm

You will lose money in bonds as interest rates rise. Longer duration bonds lose even more. There's been record outflows from bonds in the last several weeks.

Quote :
The combined outflow of $47.2 billion is the highest in any month on record, handily eclipsing the previous record of $41.8 billion in October 2008," said TrimTabs CEO David Santschi, in a report released on Monday.

http://www.cnbc.com/id/100837812


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Diseasel



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PostSubject: Re: Heads Up - The Economy is Stalling   July 15th 2013, 5:25 pm

Diesel Dan wrote:


Diseasel, even though you have a good portion in cash what good is that in the long term if the value of our dollar tanks?

That's true but there's no comparative loss if the market is moving sideways and it's a gain if the market is on it's way down. I watch the market daily and put the money to work when it makes sense.

Diesel Dan wrote:

My concern that I've been saying for years now is a potential collapse of some sort in the Fidelity/401Ks as the "boomers" retire. For decades the 401Ks have done nothing but get a constant infusion of currency and that is going to change drastically as the boomers start with-drawing at their max rates and the new employees have less to contribute because of lower wages. Fund balances will have to go down, imo.

But I don't have a good alternative at this point.


No doubt it's a tough choice these days. Something has to give and without a doubt it will always be our retirement accounts. I don't trust financial institutions anymore. I need to use them for my employment 401k but otherwise I rolled over previous employer accounts that I self manage. One advantage of changing employers is rolling over the 401k otherwise you have to wait until you're 60 years of age.
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Diseasel



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PostSubject: Re: Heads Up - The Economy is Stalling   July 15th 2013, 5:54 pm

Here's a rule of thumb for a 1% interest rate rise:

A 2yr duration bond loses 2%.
A 4yr duration bond loses 4%.
A 10yr duration bond loses 10%.

Sometimes retirement plans give no option and your stuck with a bad bond fund. Retirees can't tolerate these losses but many are positioned to do just that.

You have to hope you're in short duration bonds but even then why bother when the interest rates are so low and the risks so high?

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Diesel Dan

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PostSubject: Re: Heads Up - The Economy is Stalling   July 15th 2013, 9:05 pm

While I know I'm rolling the dice I expect the market to correct a few percent down and then I'll get back into my regular funds. I just can't see it climbing like this much longer, could be wrong. Even if the market keeps going up when I jump in I still have a decent return for the year. Some guys and myself at work keep wondering when the market would tank back in '08 but never did anything. We aren't market sharks or anything but the market can not always go up.
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PostSubject: Re: Heads Up - The Economy is Stalling   July 15th 2013, 10:24 pm

It certainly feels artificial. I just want to protect what I have and not lose my shirt. I really don't want to be required to work when I'm 80.

This country is hard on people.
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Diseasel



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PostSubject: Re: Heads Up - The Economy is Stalling   July 15th 2013, 11:28 pm

Yep, it chews 'em up and spits 'em out. It use to be good but we all know how that went.
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