16 replies to this topic

[pdx5]

<<<How is then we can have virtually full employment in the United States based on a large percentage of "service jobs"?>>> Could it be because employment is a lagging indicator? Is it true that unemployed people vanish from the statistics once their 6 month benefits run out? How are those people accounted for?

[fib_1618]

Could it be because employment is a lagging indicator?
Is it true that unemployed people vanish from the statistics once their
6 month benefits run out? How are those people accounted for?

Yes; partially; and the Government is slow to adjust their data to current conditions.

Think of history...what is the common link between what was and what is?

Hint: It's one word...starts with a "T".

Fib

[arbman]

The cyclical stuff is from Airedale, I am not using the same principles, bu I do see a low in the summer...

How is then we can have virtually full employment in the United States based on a large percentage of "service jobs"?

Well, how else is it going to get a peak?

The depreciating currency and rising stocks is usually an inflationnary blow off...

All this fundamentalism is starting to give me a headache.

Come on now, we are just getting started...

- kisa

[fib_1618]

Maybe you're missing the point of what would cause the Dollar to decline while seeing US equities advance.

Answer: Excess Liquidity (which softens the value of paper currency).

How is then we can have virtually full employment in the United States based on a large percentage of "service jobs"?

Answer: Technology (which reduces the work force but keeps productivity at the same levels)

Fib

[arbman]

Excess liquidity + high rates = inflationnary blow off, we agree. Although these must be the last phases since the small caps and the commodities are not participating as much. I didn't understand what you meant by increased efficiency by technology = the full employment though. US job market has been under attack since the 2000 top. I thought many tech and manuf jobs went to overseas. It is mostly the finance, legal and some basic service jobs that were growing in US with the debt boom. However, RUT totally lagged the initial phase of the IT rally last summer, so I would say the mergers of the previous bull market and the high rates are probably signaling a saturation in jobs for the first half of 2007 at least as well... The best case scenario for this bull market is the strength in the USD and a correction into the March FOMC such that a change in the policy can take place. I think if the stocks rally further despite a decline in the USD, they will eventually crash by the middle of this year. Otherwise, if the USD rallies and the stocks stubbornly refuses to correct, it will be a steeper correction too. But I believe if the USD gains strength, the Fed can do a lot to prevent a severe correction. But the end result would be the same as soon as the USD nose dives again... The world needs to inflate with the Fed in order to save this bull market, not that they are not doing it, it is just the US is inflating so much that they can not keep up with it. No sane central bank will also buy the US Treasuries once the USD falls below 75 and that means a severe debt crisis, primarily in the housing. The foreigners already stopped increasing their proportion in the treasuries at 47.1%, two years in a row now... I am sure you will be kind enough to explain me why I am wrong again! - kisa

[fib_1618]

I am sure you will be kind enough to explain me why I am wrong again!

It's not a matter of being wrong or right, its a matter of being consistent.

There are several flaws in your analysis here, but it would take another lengthy post to address them all...and I just don't have the time to do so (and it probably would only be an interesting read to just a handful of folks).

I will say this though: I have never seen a fundamentally based economist right about anything. Never. I put many fundamentalists in the same category as that of scientists in as far as telling all of us, in their infinite wisdom (and piece of paper), why this or that is a given in life, but as it later turns out, is nothing more than hypothesis within the context of political rhetoric.

I believe Ronald Reagan said it best:

"An economist (or scientist) is someone who sees something happen, and then wonders if it would work in theory".

All that you have presented is just theory, nothing more. And to be quite candid, has very little to do with making money in the financial markets, and only with the passing of time will you be able to understand this.

Time for me to get ready for today's chat session...talk to you soon.

Fib

[arbman]

Fair enough, but this is how I determined the intermediate term direction so far by finding the balance in between how the money flow gets initiated in the bonds and how the currencies respond and where the money is going in terms of the market cap and sector leadership, I must add determining the excesses is a different form of art though... There is nothing so fundamental about my methods if you are suggesting, but all relative changes, all cyclical, all momentum and all statistical. At the end, I might gain more broader perspective and reasoning about the economic trends, if I could rightly or wrongly, but that reasoning will not alter my trading since it is just my interpretation of what I am seeing in the markets... I do not give much importance to the labor market or anything else in terms of the fundamentals in my trading, it was or appeared to be just the discussion here. True, your explanation would be more educational than the market forecasting, so let's stop right here... Thanks anyway... - kisa

Edited by kisacik, 14 February 2007 - 07:17 PM.