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#11 SemiBizz

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Posted 20 December 2006 - 05:46 PM

I still don't see any direct line to the housing bubble. What I do see is baby-boomers reaching retirement and funds being transferred from corporate pension plans to individuals accounts. Boomers cashing out of McMansions and moving into smaller quarters, 2nd and vacation homes being sold, along with unneeded automobiles, airplanes, boats etc.... As far as the tax revenue flow and equity flow that makes perfect sense, as the great liquidation continues. But as far as the notion that somehow these are forced sales due to inevitable poverty approaching, that's crazy.

Keep this in mind, those assets, in most cases we'rent bought here during the big runup. So the basis of them might be having bought that asset at 25% - 50% of it's present valuation. I will give you an example in 1991 I bought an airplane, in 2002 I sold that plane for more than 100% gain.

So, makes sense to me, it's just J6P Baby Boomer retirement trend going on here... The reason for so much liquidity is there's a liquidation going on....

Edited by SemiBizz, 20 December 2006 - 05:47 PM.

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#12 OEXCHAOS

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Posted 20 December 2006 - 05:59 PM

I think that the take away is that these AREN'T forced sale, but rather increased real income and savings rates. Additionally there have been considerable conversions (according to TrimTabs) of expensive short-term debt into cheap, tax deductible, long-term debt. You realize, of course, that the GOOD news that will inevitably hit the broad tape on the economy is what will kill this market, right? Mark
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#13 jawndissedi

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Posted 20 December 2006 - 06:03 PM

The point is, the consumer apparently isn't as levered as many fear...

"American consumers are generating prodigious amounts of cash. As Madeline Schnapp reported in today's issue of TrimTabs Personal Income and Consumer Cash Flow Analysis, the twelve-month running total of TrimTabs Savings and Investment Flow reached an all-time high of $696.5 billion in November. This indicator tracks inflows into savings vehicles (bank savings, small-denomination CDs, half of large-denomination CDs, and retail money market funds) as well as all long-term stock, bond, and hybrid mutual funds. "

Too bad your ardently expressed opinions don't square with the data released in the Fed's quarterly flow-of-funds report released earlier this month.

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About a month ago, Mark, you devoted a lot of energy to dismissing the importance of fundamentals. Now, you act as though you have definitive fundamental information about what is happening in the economy. If you were just another errant poster on this board, that wouldn't be so problematic. But because you are both a "moderator" and someone who is trying to sell financial advisory services, I find it quite troubling.
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#14 snorkels4

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Posted 20 December 2006 - 06:58 PM

just print more :unsure:


The Fed did a massive $11.34 billion net add to the liquidity pool on Wednesday bringing the 5 day net add to a stunning $15.67.

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#15 dcengr

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Posted 20 December 2006 - 07:12 PM

The point is, the consumer apparently isn't as levered as many fear...

"American consumers are generating prodigious amounts of cash. As Madeline Schnapp reported in today's issue of TrimTabs Personal Income and Consumer Cash Flow Analysis, the twelve-month running total of TrimTabs Savings and Investment Flow reached an all-time high of $696.5 billion in November. This indicator tracks inflows into savings vehicles (bank savings, small-denomination CDs, half of large-denomination CDs, and retail money market funds) as well as all long-term stock, bond, and hybrid mutual funds. "


Mark,

Do a simple experiment. Go ask people you know who have real jobs. Ask them how much of a raise they got.

If they average out to 7%, then he's probably right. My guess... NOT.

People that I know are barely getting cost of living adjustments, not above. Why do you think the american people have been complaining that wages have been falling behind? You think its because they're getting only 7% raises a year?
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#16 greenie

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Posted 20 December 2006 - 07:47 PM

Things are far better than you think, Greenie. In fact, they are so good it's about to get tough for the stock market, strangely enough (I suspect).


Mark, we are trying to forecast the future, not past and not even the present. "Is" is a different verb than "will be" and for good reason.
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It's the illiquidity, stupid !

#17 ...

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Posted 20 December 2006 - 08:37 PM

income and employment taxes withheld from the paychecks of everyone subject to withholding are up 7.8% year-over-year


Total non-farm employment is up 1.8 million y-o-y, so that accounts for about 1.3% of the 7.8%, leaving 6.5%.

Backing out inflation at about 2% y-o-y leaves about 4.5% y-o-y as the increase in real wages/salaries, which roughly agrees with all of the numbers I've seen, for instance, 4.0% for average hourly earnings of production and non-supervisory workers, which is about 80% of total non-farm employment.

All of that tells me that the 7.8% number is merely a reflection of widely known facts about employment, inflation and real wage growth and not an indication of some unknown strength or overheating in the economy that would cause the Fed to hike rates.

#18 jawndissedi

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Posted 20 December 2006 - 09:14 PM

income and employment taxes withheld from the paychecks of everyone subject to withholding are up 7.8% year-over-year


Total non-farm employment is up 1.8 million y-o-y, so that accounts for about 1.3% of the 7.8%, leaving 6.5%.

Backing out inflation at about 2% y-o-y leaves about 4.5% y-o-y as the increase in real wages/salaries, which roughly agrees with all of the numbers I've seen, for instance, 4.0% for average hourly earnings of production and non-supervisory workers, which is about 80% of total non-farm employment.

All of that tells me that the 7.8% number is merely a reflection of widely known facts about employment, inflation and real wage growth and not an indication of some unknown strength or overheating in the economy that would cause the Fed to hike rates.

Woohooooo! Look, Ma, a 2% raise! That's really gonna make a difference when the mortgage jumps 50% next year, ain't it?

For the first time in four years, wages are significantly outpacing inflation. A separate Labor Department report yesterday showed that while wage gains have slowed slightly in the last month, workers are still enjoying the strongest buying power in years. When adjusted for inflation, the average hourly wage of a worker in a position below management level rose 2.3 percent. November was the third consecutive month that wages rose at more than 2 percent when inflation is factored in, the first time that has happened in five years. -- NYTimes, 16 DEC06

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#19 OEXCHAOS

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Posted 21 December 2006 - 09:05 AM

The point is, the consumer apparently isn't as levered as many fear...

"American consumers are generating prodigious amounts of cash. As Madeline Schnapp reported in today's issue of TrimTabs Personal Income and Consumer Cash Flow Analysis, the twelve-month running total of TrimTabs Savings and Investment Flow reached an all-time high of $696.5 billion in November. This indicator tracks inflows into savings vehicles (bank savings, small-denomination CDs, half of large-denomination CDs, and retail money market funds) as well as all long-term stock, bond, and hybrid mutual funds. "

Too bad your ardently expressed opinions don't square with the data released in the Fed's quarterly flow-of-funds report released earlier this month.

Posted Image

Posted Image
About a month ago, Mark, you devoted a lot of energy to dismissing the importance of fundamentals. Now, you act as though you have definitive fundamental information about what is happening in the economy. If you were just another errant poster on this board, that wouldn't be so problematic. But because you are both a "moderator" and someone who is trying to sell financial advisory services, I find it quite troubling.



Well, personally, I'd be a lot more troubled by the face that a highly respected analytical firm is telling you that the government data--that you seem to be relying on, is dead wrong. Why aren't you disturbed by THAT? Who had more reason to lie to you, the gummint or TrimTabs?

More to the point and in the interest of your wealth, you need to stop worrying about this fundamental stuff, or at least grasp how it's going to most likely play out and how the technicals will lead it. The point in my posting the TT stuff is to show you how unlikely it is that you're going to get a clear read on the economy ahead of the market. NOBODY has definative stuff. And when they do, it's still a moving target. You're trying to understand running water by catching it in a bucket, and even then you think you've got a 1 gal. bucket but in fact it's mislabled.

Will you be right some day? I dunno--probably in some general terms, but the odds strongly favor it not making you any money on a net basis.

More importantly, based upon my theory, this report from TrimTabs creates considerable worry for me, longer term. If this keeps up, it's going to make it into the type of great news that makes market tops.

I'm worried about GOOD news killing the market not the debacle-geddon scenario that you "debacle-gaengers" are fixated on (married to?).

That's my theory, and I've only been at this 25 years--so I could very well be wrong. The take away is that with good technical work, it won't matter. Without it, you're going to either miss some huge opportunities or you're going to lose your behind betting on a crash. THAT I can say with a high degree of expert confidence.

Best,

Mark



The point is, the consumer apparently isn't as levered as many fear...

"American consumers are generating prodigious amounts of cash. As Madeline Schnapp reported in today's issue of TrimTabs Personal Income and Consumer Cash Flow Analysis, the twelve-month running total of TrimTabs Savings and Investment Flow reached an all-time high of $696.5 billion in November. This indicator tracks inflows into savings vehicles (bank savings, small-denomination CDs, half of large-denomination CDs, and retail money market funds) as well as all long-term stock, bond, and hybrid mutual funds. "


Mark,
Do a simple experiment. Go ask people you know who have real jobs. Ask them how much of a raise they got.
If they average out to 7%, then he's probably right. My guess... NOT.
People that I know are barely getting cost of living adjustments, not above. Why do you think the american people have been complaining that wages have been falling behind? You think its because they're getting only 7% raises a year?


Real jobs? Like all the entrenpreneurs who have spouted up over the past 10 years? I mean what's a real job? Union guys and girls are getting some nice raises here, even though their pensions are at major risk. I know that my BiL's business (gift-type and designer type items manufacturing and design) is dramatically ahead of projections. Sister's retail store, up 20% yoy last I checked.

But as I said, if you've got an Ed Hyman type to dig up better survey numbers, I'm all ears. But take it up with TT if you disagree now. I don't care about the data, unless it gets too good.



Mark



Things are far better than you think, Greenie. In fact, they are so good it's about to get tough for the stock market, strangely enough (I suspect).


Mark, we are trying to forecast the future, not past and not even the present. "Is" is a different verb than "will be" and for good reason.





That's an indisputable truth, greenie. But the trend, it appears, is going in the opposite direction as your prediction. It's fun to talk about this stuff, but getting an accurate bead on it is nearly impossible, as I think I've proven.



Focus on technicals and especially sentiment. You'll be positioned right when/if they kill this thing. Focus on fundy projections and you'll likely miss a lot of profit or worse be leaning the wrong way.



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