11 replies to this topic

[Russ]

was interviewed on www.cknw.com at 9am pst august 18,2007, can be heard in audio vault. Record high short interest now...just like 1929 before the crash. He has been correctly bearish for several months and warned back then that the markets were in a dangerous parabolic. 1/2 of stocks down at peak in 1929 same as in July 2007 - his says more selling is coming. Caveat: Granville and Precter said its 1929 in 1982 but Granville has been right about the housing problem, he shorted New Century (second largest sub-prime lender in US) last winter at $52...company went bankrupt shares went to $0.

Edited by Russ, 18 August 2007 - 12:51 PM.

[Trend-Signals]

was interviewed on www.cknw.com at 9am pst august 18,2007, can be heard in audio vault.

Record high short interest now...just like 1929 before the crash. He has been correctly bearish for several months and warned back then that the markets were in a dangerous parabolic.

1/2 of stocks down at peak in 1929 same as in July 2007 - his says more selling is coming.

Caveat: Granville and Precter said its 1929 in 1982 but Granville has been right about the housing problem, he shorted New Century (second largest sub-prime lender in US) last winter at $52...company went bankrupt shares went to $0.

Isn't many others claiming 1929 case with very high level of shorts and "Squeeze" on Friday. The short squeeze is just started, I think.


Now, I commented that housing market topped in 2005, yes, I called "Housing market top" in 2005 and commented extensively on RE/ARM/loan problems such as "subprime drama" during Jan-Mar 2006 comments.

As commented during Jun-Jul 2006 bottom call with VIX breakout pattern in 1995... now we have the 1997 pattern.

Well, will see, Squeezes will go on since we have many are already shorted.... nothing unexpected since the 1929 case is already an old news.


What's not old news is that it is 1997 case with the Fed intervention.....


http://stockcharts.com/c-sc/sc?s=$HGX:$COPPER&p=W&st=2002-10-01&i=p68744487897&a=78355880&r=256.png


Note) No need for further debating since it is a waste of time at this point and we understand our positions.

[zedor]

We had THE GOLD STANDART in 1929. Now we have IN-GOD-WE-TRUST STANDART. I don't understand the meaning of "liquidity crisis". Are we out of paper and green paint supply? Please somebody explain....

They can print all they want but that printed money has to get into the system somehow and only by people borrowing does that money or liquidity get into the system.

In a credit crunch borrowers no longer are willing able to or allowed to borrow and lenders are scared to lend.

Lenders tighten rules and requirements.

Thus you have a visous cycle in reverse.

Also the liquidity crisis is in part engineered to support the dollar as without a strong dollar the US can't be an empire. Have you ever heard of an empire with worthless currency? 80 on the DXY was the line in the sand and once that was in danger liquidity dried up ---->>>> to support the dollar.

Edited by zedor, 18 August 2007 - 01:21 PM.

[Caduceus]

Thanks Russ, I will try to check out the interview. (I do not agree with him) Just posting this chart for laughs... [attachment=5879:attachment]

[MaryAM]

Ever heard of "not worth a Continental". Rome fell when no one would accept their worthless currency in trade. By the way, the Roman fiat currency lasted the longest in history. The average for advanced countries is 30 years. I think Nixon took us off of the silver standard in 1971. We are over due. Mary Anne

[pdx5]

I hate to admit it, but Zedor is correct in his post above This is the part that MOST people don't understand. The Fed can only create liquidity when Banks are willing and able to buy the loans. And banks must have customers willing and able to borrow from them. Otherwise the liquidity created by Fed goes nowhere. And regardless of his reputation, Bernanke does NOT throw dollar bills out of a helicopter. The ONLY mechanism the gov't has to FORCE liquidity into the system is by deficit spending with money borrowed by selling US Treasuries which still have willing customers. And this is where the US$ needs to be strong because a huge percentage of tresuries buyers are foreigners and they won't buy if dollar is dropping and the rates of return (interest paid on treasuries) are low. As for the "gold standard", the main problem is that it restricts growth of the economy since gold supply is limited. Why restrict economic growth by tieing it to an ancient metal with little industrial value and very limited supply? Gold standard was OK in the old days when economic growth was small in comparison to available gold supply.

Edited by pdx5, 18 August 2007 - 01:55 PM.

[SemiBizz]

The biggest problem is our paper is "tainted"... Those CDO's were the computer equivalent of a fund virus. Wall Street got them approved as AAA rated and there were standing orders on the desk to buy all the AAA rated... and now those instruments have infected funds all over the World. That's why money market and normally liquid exchange funds are all liquidating assets... to meet the demand of their depositors. They bought what they thought were "safe" instruments to chase a little higher yield and now there are massive losses. It's not just sub-prime either. Do you really think they are going to trust the guys that sold them this toxic waste and buy some other potential nuclear material? If so, I have a slightly used bridge up in Minnesota I'd like to sell you.

[youmast]

Also the liquidity crisis is in part engineered to support the dollar as without a strong dollar the US can't be an empire. Have you ever heard of an empire with worthless currency?

First of all... it's already an empire. The second... falling dollar is only way for empire to survive. If an empire falls, the world falls. There's no 3rd choice - Hyperinflation or Death?

http://www.shadowsta.../article/id=596

[dasein]

I think Nixon took us off of the silver standard in 1971. We are over due.
Mary Anne

Happy Anniversary!

August 15, 1971, Nixon took us off the gold standard, closed the gold window and refused to pay out any of our remaining 280 million ounces of gold.

klh

[Caduceus]

Also the liquidity crisis is in part engineered to support the dollar as without a strong dollar the US can't be an empire. Have you ever heard of an empire with worthless currency?

First of all... it's already an empire. The second... falling dollar is only way for empire to survive. If an empire falls, the world falls. There's no 3rd choice - Hyperinflation or Death?

http://www.shadowsta.../article/id=596

Some very good points and omnious statistics in that article.

Excerpt:

If the Administration and Congress were willing to address the unfolding fiscal Armageddon, only two very unpleasant general solutions are available:

* The first solution is draconian spending cuts, particularly in Social Security and Medicare, accompanied by massive tax increases. The needed spending cuts and tax increases are so large as to be political impossibilities.

* In the absence of political action, the second solution is tacit bankruptcy, with the U.S. government facing some form of insolvency within the next decade or so. Shy of Uncle Sam defaulting on debt, the most likely eventual outcome is the Fed massively monetizing the U.S. debt, triggering a hyperinflation. U.S. obligations then would be paid off in a significantly debased and devalued dollar at literally pennies on the hundred dollars.

These alternatives are politically unthinkable and unspeakable for the Administration and Congress, hence the silence. Yet, these same political bodies are responsible for the current circumstance, along with the acquiescence of the financial community and an uninformed or disinterested voting public.


-As a trader I have to remind myself that these issues have been present for some time and we have managed to rally somehow in the face of those same issues. The TIMING of the above coming home to roost is EVERYTHING.



A quote from Granville:

One of the key mistakes to avoid - call it the peril of predictions -- is to never marry a forecast, especially your own. People wrap up too much ego in what is essentially educated guesswork. If you start with the assumption that your prediction is going to be wrong, its real easy to reverse yourself when necessary . . .