Post by: wingnutx on February 27, 2007, 10:57:06 AM
Quote
NEW YORK (Reuters) -- U.S. gold futures sank nearly 3 percent in electronic trade after the end of open-outcry trading on Tuesday, as the stock markets tumbled and the benchmark Standard & Poor's 500 index dropped about 3 percent.
PANIC!!!
Post by: The Rabbi on February 27, 2007, 11:29:13 AM
www.thehousingbubbleblog.com/
Almost all asset classes have become terribly over-valued. I think we are starting to see the beginning of a serious correction to the mean.
Cash is king.
Post by: 280plus on February 27, 2007, 11:29:36 AM
[Mr Crabs voice] Me beautiful money, gone,,,all gone... [/Mr Crabs voice] 
Actually silver hung in there pretty good given what the rest of the market is looking like. Too bad it's so late, mighta been a good day to do some buying. We'll see how it goes tomorrow.
YEa Rabbi, nobody has to tell me the housing market is sucking wind, my empty wallet is a pretty good indicator. ~ 4 years ago I had 11 open permits on heat and A/C for new houses. Today I have one and it's almost finished.
Post by: CAnnoneer on February 27, 2007, 11:31:34 AM
Post by: The Rabbi on February 27, 2007, 11:39:51 AM
Post by: 280plus on February 27, 2007, 11:54:48 AM
Given last year's 16+ % gains we all kinda knew a correction was coming, didn't we?
Post by: Headless Thompson Gunner on February 27, 2007, 12:00:13 PM
Same goes for gold, although a 3% dip isn't anything to lose sleep over. It could just be an anomaly.
Post by: Manedwolf on February 27, 2007, 12:00:29 PM
Post by: Headless Thompson Gunner on February 27, 2007, 12:02:12 PM
Post by: The Rabbi on February 27, 2007, 12:08:26 PM
Ain't that the truth. When was the last time you found a new gun that cost less now than in years past?
By that logic cars ought to be a good investment.If things get bad enough people will be selling off stuff to keep afloat.
Post by: El Tejon on February 27, 2007, 12:11:50 PM
Never catch a falling knife say I. Let it fall and bounce.
Post by: 280plus on February 27, 2007, 12:16:17 PM
Post by: 280plus on February 27, 2007, 12:17:01 PM
Post by: Headless Thompson Gunner on February 27, 2007, 12:17:16 PM
If things get bad enough people will be selling off stuff to keep afloat.
Yup! Not so good for them, but great for me. It's a good time to buy a house, and getting better every day. This is good, because I might want to buy a house in the near future.
Post by: zahc on February 27, 2007, 12:24:04 PM
Post by: gunsmith on February 27, 2007, 12:31:50 PM
Post by: Stetson on February 27, 2007, 12:58:20 PM
If things get bad enough people will be selling off stuff to keep afloat.
Yup! Not so good for them, but great for me. It's a good time to buy a house, and getting better every day. This is good, because I might want to buy a house in the near future.
Good thing it is a good time since we just bought one. Signed the paper last wednesday
Post by: Manedwolf on February 27, 2007, 01:06:11 PM
If things get bad enough people will be selling off stuff to keep afloat.
Yup! Not so good for them, but great for me. It's a good time to buy a house, and getting better every day. This is good, because I might want to buy a house in the near future.
Good thing it is a good time since we just bought one. Signed the paper last wednesday
Not here. It's ridiculous. A tiny box of a 1200sq/ft "starter house" or a small condo are about $250k. A decent house is $350-400k and up, and that's of the McMansion quality new (as in, trip and you'll fall through the sheetrock) or "needs work" older variety. Still a lot of correction needed.
The only people I hear saying "buy, buy!" are realtors.
Post by: 280plus on February 27, 2007, 01:09:46 PM
Things that make you say hmmmm...
Post by: Manedwolf on February 27, 2007, 01:11:26 PM
Funny, why is it that if your the buyer the agent will tell you it's a "buyers market" and if you're a seller the agent will tell you it's a "sellers market".
Things that make you say hmmmm...
Things that make you say hmmmm...
It's a "realtors want to close, unload the house and get their commission" market, as it always has been.
Post by: 280plus on February 27, 2007, 01:14:29 PM
I HATE when that happens!
Post by: 280plus on February 27, 2007, 01:16:23 PM
Post by: 280plus on February 27, 2007, 02:00:05 PM
I'll tell you what else, if UTX outperforms the market tomorrow, buy some! NOT A LOT, but some.
Post by: RJMcElwain on February 27, 2007, 02:09:08 PM
This is a correction. Not a free fall. Start looking for stocks you'd like to own for a 2 or 3 years.
Bob
Post by: Waitone on February 27, 2007, 05:11:20 PM
Post by: Headless Thompson Gunner on February 27, 2007, 05:14:07 PM
... Corrections deflate bubble and wring out speculation.
Heh, nobody has been speculating in gold recently...
Post by: K Frame on February 27, 2007, 05:15:06 PM
Post by: Matthew Carberry on February 27, 2007, 05:33:19 PM
Post by: Art Eatman on February 28, 2007, 03:23:16 AM
Big deal. Anybody who expects some sort of straight-line increase is foolish. There are always gonna be profit-takers who at some point will sell and push the price down some.
Same for other commodities.
Even if there's a dip of a month or three, the five- to ten-year trend is generally up.
Art
Post by: 280plus on February 28, 2007, 03:29:40 AM
Post by: 280plus on February 28, 2007, 03:34:44 AM
Post by: K Frame on February 28, 2007, 04:55:28 AM
Post by: The Rabbi on February 28, 2007, 05:05:51 AM
If I had the money I would have bought gold yesterday afternoon and sold today.
If I had a crystal ball I'd be a millionaire.
Post by: K Frame on February 28, 2007, 06:29:37 AM
And buying precious metals is virtually always a safe bet.
Post by: Manedwolf on February 28, 2007, 06:33:09 AM
No crystal ball needed to figure out that gold was going to rebound.
And buying precious metals is virtually always a safe bet.
And buying precious metals is virtually always a safe bet.
At least they will never become worthless. And they're also immune to international currency fluctuations. The dollar could implode and be worth 1/5 of a Euro, and the gold/platinum/silver/etc would still be at its international level of value. It's a worldwide, universal commodity.
There's also something about it if you're holding it. For millenia, people have dreamed about, fought over, and fought for it. Holding a few gold coins or an ingot DOES sort of make you want more of it....
Post by: K Frame on February 28, 2007, 07:13:10 AM
I don't really get any warm fuzzies from it. I like the look, especially in jewelry (more so in stuff that I'm wearing given my skin tones) but it just doesn't get me all ramped up.
Post by: The Rabbi on February 28, 2007, 07:32:37 AM
I'm thinking of melting my Krugerrands and fashioning a grill so it's more portable.
Post by: Matthew Carberry on February 28, 2007, 07:34:04 AM
There's also something about it if you're holding it. For millenia, people have dreamed about, fought over, and fought for it. Holding a few gold coins or an ingot DOES sort of make you want more of it....
Look out boys, he's got goooooold fever!
Post by: Matthew Carberry on February 28, 2007, 07:35:32 AM
And if you had bought in 1979 you would still be underwater.
I'm thinking of melting my Krugerrands and fashioning a grill so it's more portable.
I'm thinking of melting my Krugerrands and fashioning a grill so it's more portable.
Just make them int chains and do a Mr. T. He had to be wearing 20-30 pounds of the stuff at the end.
Ooh, maybe a big torc, so folks will recognize your leadership.
Post by: K Frame on February 28, 2007, 08:02:14 AM
And if you had bought in 1979 you would still be underwater.
I'm thinking of melting my Krugerrands and fashioning a grill so it's more portable.
I'm thinking of melting my Krugerrands and fashioning a grill so it's more portable.
Yep. Exceptional market conditions at an exceptional point in history. But I think even you'll agree that it's far too simplistic to say that had you bought gold in 1979 (implying at any point in 1979) you would have lost money. Gold prices fluctuated up and down in 1979, just as they are doing these days. Unless you bought at the absolute peak, there was still moeny to be made if you didn't buy to hold long-term. I was in high school at the time, but as I remember, the amount of short-term holding and reselling of gold and silver was immense, driven mainly by people seeking short term profits.
That's part of the investing environment. Sometimes you make money, sometimes you lose money.
But the same kind of economic and market conditions that drove gold and silver to its peaks in 1979 don't exist today.
Post by: The Rabbi on February 28, 2007, 08:04:57 AM
You can lose money in anything.
And anyone who tells you you can't is either lying or foolish.
Post by: K Frame on February 28, 2007, 08:23:38 AM
I remember in 1987 when the market dropped 22.7% in one day that there were people predicting that the selloff had only just begin, and it was the open door to 1929 all over again.
Those predictions didn't come true, either.
There's no way to find truth in prognostication.
Only guidance.
Post by: 280plus on February 28, 2007, 09:33:33 AM
Should I buy more UTX today or not, what do you guys think?
Post by: K Frame on February 28, 2007, 10:00:13 AM
It's a common event in the US markets -- a big drop followed by caution for several days or even weeks to see where things are going to shake out.
Post by: 280plus on February 28, 2007, 10:29:07 AM
I'm just a happy little trader.
Post by: The Rabbi on February 28, 2007, 10:31:09 AM
Virtually all asset classes except cash have been horribly over-valued. Risk premiums are non-existent. I don't remember a time when everything was this richly valued, and I have been doing this more or less for 30 years.
Post by: 280plus on February 28, 2007, 10:58:31 AM
Post by: K Frame on February 28, 2007, 11:34:00 AM
It's going to cause some serious economic repercussions, but it's also going to make a lot of durables prices plummet as the demand for metals eases.
And, it would very likely REALLY bring down the price of oil.
While that would be good short term, that could also set off spiraling inflation, rapid increases in interest rates to compensate...
Damn. I'm going back to Double Eagles in the mattress...
Post by: The Rabbi on February 28, 2007, 12:46:40 PM
If the Chinese economy does a Japan (essentially stagnates) the effect on the entire world economy is going to be a Ying-Yang kind of thing.
It's going to cause some serious economic repercussions, but it's also going to make a lot of durables prices plummet as the demand for metals eases.
And, it would very likely REALLY bring down the price of oil.
While that would be good short term, that could also set off spiraling inflation, rapid increases in interest rates to compensate...
Damn. I'm going back to Double Eagles in the mattress...
It's going to cause some serious economic repercussions, but it's also going to make a lot of durables prices plummet as the demand for metals eases.
And, it would very likely REALLY bring down the price of oil.
While that would be good short term, that could also set off spiraling inflation, rapid increases in interest rates to compensate...
Damn. I'm going back to Double Eagles in the mattress...
Check copper prices for the last 6 months. They have been tanking badly.
If China cools (actually when is more like it) you will see a big slowdown. There wont be inflation but deflation as companies lay off workers and downsize operations. I don't predict catastrophe but we are due for some serious recession with much lower prices for assets all across the board.
Asset prices have been high in part because of too many dollars sloshing around the world looking for yield. This is a hangover from the Fed's attempt to forestall any Y2K problems and post 9/11 when they goosed the money supply.
Post by: Telperion on February 28, 2007, 12:48:01 PM
And how would falling commodity and durables prices cause inflation?
Post by: 280plus on February 28, 2007, 01:07:12 PM
Post by: K Frame on February 28, 2007, 01:26:59 PM
As consumer goods become less expensive (either realistically or perceptionally) it can lead to increased demand. Increased demand for goods can have a marked effect on inflation, normally it's a short term effect, but it can be enough to cause a bump in interest rates to make sure that it's a controlled effect.
Where I would expect concerns to rise about inflation is if gasoline prices really start to tank. With less worries about short term gasoline prices, people will be more willing to consider spending on other things. I know when gas prices started to jump I really cut back on my other spending. Then I got a job 2 miles from the house and now a tank of gas lasts a month.
As for copper prices, tanking badly is, I think, something of a relative term when you consider that they're still well above what they were when the latest rise cycle started in 2003. That's more of a reaction to the slowdown in the new housing market in the US than anything.
"China is not going to stagnate... their economy is growing at 10%."
Nothing is forever. I remember when people said the same thing about Japan. Now Japan is in its second decade of growth stagnation.
An economy that's super heating can be a dangerous thing.
Post by: The Rabbi on February 28, 2007, 01:35:59 PM
Inflation by definition occurs with rising prices. There is no way for prices to be falling AND have inflation. That is a contradiction in terms.
Prices rise or fall to meet demand. Inflation stems from either too much demand ("demand pull" or "too many dollars chasing too few goods") or from price hikes in some basic commodity, like oil ("cost push").
We have had very low inflation here for the last decade or so because of a number of factors. The technology revolution and the increased productivity associated is a major reason. Outsourcing, efficiences,etc have all contributed. But I strongly suspect there has been over-investment in production facilities all over the world, esp China and when things slow down we are in for a prolonged down period.
Post by: Telperion on February 28, 2007, 02:29:14 PM
As consumer goods become less expensive (either realistically or perceptionally) it can lead to increased demand. Increased demand for goods can have a marked effect on inflation, normally it's a short term effect, but it can be enough to cause a bump in interest rates to make sure that it's a controlled effect.
If a slowing economy causes lower prices for goods, it is because demand contracted. If demand then expands, prices will be bid up. What you are describing is simple supply and demand, not inflation. Inflation is the result of the money supply growing faster than the economy can absorb it via the production of new goods and services.
Quote
Where I would expect concerns to rise about inflation is if gasoline prices really start to tank. With less worries about short term gasoline prices, people will be more willing to consider spending on other things. I know when gas prices started to jump I really cut back on my other spending. Then I got a job 2 miles from the house and now a tank of gas lasts a month.
If lower gasoline prices allow people to spend and invest elsewhere, that is what most people would call economic growth.
Post by: BozemanMT on February 28, 2007, 02:47:22 PM
The market can go up long beyond rationality.
The yield curve is inverted and has been for some time.
Housing is in a typical bubble pattern, house prices don't move like stocks, they are sticky, you watch this year though.
Big time credit contraction coming (aka deflation), look at all the subprime lenders.
There are HUGE amounts of derivatives out there, there is always a winner and a loser to a derivatives contract, at some point, all these leveraged plays and someone won't be able to make good. Then it will crash.
Cash is king right now, there is only risk, no return in the market.
My guess is that yesterdays' is only a beginning.
Stay tuned
Post by: The Rabbi on February 28, 2007, 03:16:27 PM
"Markets can remain irrational a lot longer than you can remain solvent." -Keynes.
"Generally something that can't go on forever, won't." -M. Friedman.
I have never seen such risk taken for so little gain. Money is just bursting out there and people are taking crazy chances. This is totally unsustainable. In the tech-wreck the yield curve was inverted for a long time too. Then people blamed the gov't paying down long term debt (because "its different this time."). Lots can happen and it is very complex, but I think the trend will be down for the next 18 months. Unfortunately that will play into the Dems' hands for 2008.
Post by: 280plus on February 28, 2007, 03:32:41 PM
Post by: Art Eatman on February 28, 2007, 03:50:51 PM
It seems that the NYSE had a scare due to bad news from China. The Chinese stock market had a wave of selling, with a drop of nearly 10%.
Why did this happen, you ask? Well, Grasshopper, the rumor spread that the Chinese government was going to institute a capital gains tax. People were therefore selling ahead of the imposition of such a tax.
This morning, the Chinese government said that the rumor was false.
(Courtesy of Chris Gaffney, VP, EverBank.)
And so stocks started on their way back up.
For a while, anyway.
Art
Post by: 280plus on February 28, 2007, 03:54:35 PM
http://finance.yahoo.com/q?s=t
Post by: BozemanMT on February 28, 2007, 05:13:24 PM
Bozeman,
"Markets can remain irrational a lot longer than you can remain solvent." -Keynes.
"Generally something that can't go on forever, won't." -M. Friedman.
I have never seen such risk taken for so little gain. Money is just bursting out there and people are taking crazy chances. This is totally unsustainable. In the tech-wreck the yield curve was inverted for a long time too. Then people blamed the gov't paying down long term debt (because "its different this time."). Lots can happen and it is very complex, but I think the trend will be down for the next 18 months. Unfortunately that will play into the Dems' hands for 2008.
"Markets can remain irrational a lot longer than you can remain solvent." -Keynes.
"Generally something that can't go on forever, won't." -M. Friedman.
I have never seen such risk taken for so little gain. Money is just bursting out there and people are taking crazy chances. This is totally unsustainable. In the tech-wreck the yield curve was inverted for a long time too. Then people blamed the gov't paying down long term debt (because "its different this time."). Lots can happen and it is very complex, but I think the trend will be down for the next 18 months. Unfortunately that will play into the Dems' hands for 2008.
completely agree
And in case you were wondering, I agreed with you earlier too.
It's going down longer than that, housing prices take a LONG time to work out and this is a HUGE bubble.
When they say "it's different this time", it's time to get out
It's not different, it never is.
Post by: The Rabbi on February 28, 2007, 05:21:53 PM
Bozeman,
"Markets can remain irrational a lot longer than you can remain solvent." -Keynes.
"Generally something that can't go on forever, won't." -M. Friedman.
I have never seen such risk taken for so little gain. Money is just bursting out there and people are taking crazy chances. This is totally unsustainable. In the tech-wreck the yield curve was inverted for a long time too. Then people blamed the gov't paying down long term debt (because "its different this time."). Lots can happen and it is very complex, but I think the trend will be down for the next 18 months. Unfortunately that will play into the Dems' hands for 2008.
"Markets can remain irrational a lot longer than you can remain solvent." -Keynes.
"Generally something that can't go on forever, won't." -M. Friedman.
I have never seen such risk taken for so little gain. Money is just bursting out there and people are taking crazy chances. This is totally unsustainable. In the tech-wreck the yield curve was inverted for a long time too. Then people blamed the gov't paying down long term debt (because "its different this time."). Lots can happen and it is very complex, but I think the trend will be down for the next 18 months. Unfortunately that will play into the Dems' hands for 2008.
completely agree
And in case you were wondering, I agreed with you earlier too.
It's going down longer than that, housing prices take a LONG time to work out and this is a HUGE bubble.
When they say "it's different this time", it's time to get out
It's not different, it never is.
I wasn't disagreeing. Yours was the best post I've seen in months.