11 replies to this topic

[U.F.O.]

A couple of months ago someone posted a thesis here about the M1 Multiplier dropping below 1.00 and the damning effect this lack of monetary velocity would have on the economy and markets. We've been looking for months for any sign of traction gained from the incredible amounts of liquidity that have, and are, being injected into the financial system. Chief posted a link a couple of posts down showing that M2/capita is now at an all-time high, which ducktails well with the chart I post below. Here comes velocity folks. The game is about to change. (1 chart)

U.F.O.

[Iblayz]

Another piece? Before the trading world found out about it.....some called it the greatest leading indicator that nobody knew about.....

[attachment=9925:Baltic0209.gif]

http://www.investmenttools.com/

Edited by Iblayz, 23 February 2009 - 10:42 PM.

[U.F.O.]

Bad comparison Iblayz, IMHO. Monetary velocity and liquidity are causal agents, BDI is an effect...as are car sales, etc. U.F.O.

[Iblayz]

Well I was about to also mention the Fed's monetary policies since POMO's used to get people excited because of the multiplier effect. We used to go months without POMO's. There have been ten since 12/19/08 that total 22.46 billion. But since you dissed my post I won't mention it. And by the way....I didn't even know I intended to make a comparison.

[U.F.O.]

I was trying to go back and edit and got timed out. Wasn't meant to this you, sorry that I came off that way. The Baltic bounce is a powerful early sign of at least an IT correction on the horizon. U.F.O. (You ever hit "Add Reply" and looked at what you've typed and thought $hit....what was I thinking?)

[Iblayz]

No problem. I've apologized more than once on various boards. Sample below...

AJ

I have been bothered all night by the tone of my response to you. Your post reminded me of Jeff a little bit and I'm sure you understand that. But I have way more respect for you than that. I publicly apologize for the terse nature of my response. It was unnecessary and uncalled for and I am embarrassed by it.

http://investorshub....sage_id=7315651

[humble1]

i had no idea that "V" had fallen that far! that must be historic in itself over such a short time period.

Edited by humble1, 24 February 2009 - 03:48 AM.

[kavaron]

Don't forget that the market crashed BEFORE the BDI. The BDI's highest price was in Summer 2008 when the bear had already shown us its teeth.

[OEXCHAOS]

Another piece? Before the trading world found out about it.....some called it the greatest leading indicator that nobody knew about.....

[attachment=9925:Baltic0209.gif]

http://www.investmenttools.com/

Is there a relationship between this index and the price of oil?

My first instinct is to say, "No". but I wonder if the super frothy oil speculation might have affected Baltic Dry...

M

[Iblayz]

http://en.wikipedia....altic_Dry_Index

I think that is a pretty good read on it. I used to watch it every few days but, after discovering a couple of years ago that there were speculators behind it.....because some bozos decided to introduce derivative contracts and the like based on it.....I knew it could no longer be trusted in the short term.

And, in edit, the price of oil had to affect it to some degree. They simply had to charge more to carry the stuff to cover costs. That is why it stayed as high as it did as the cost of oil soared. But it has turned up now with oil flattish over a few months.

Edited by Iblayz, 24 February 2009 - 08:26 AM.