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DOW 6800, S&P 720, NASDAQ 1310 - Page 75

post #1481 of 1894

Japan Nuclear Crisis Worsens Stock Market Crashes on the Opening Bell 

 

 

 

post #1482 of 1894
Thread Starter 

Good videos Dr. Papuffnik, thanks for sharing
 

As outlined below, cycle #1 has been corrective in nature. I do not expect the correction (or cycle #1) to end until mid-April. However, this does not mean markets have not corrected fully in price. Since the current trend is 'trendless', we have to monitor upcoming activity, especially today with the S&P gapping higher by 20 points, to able to discern the trend and arrive to any conclusions (i.e. before deciding that yesterday was the bottom. My modeling could be off by a few days, again we will have to wait and see what trend comes out of this rubble). I still uphold the other espoused below.

Quote:
Originally Posted by bigbull View Post

tlee418,

 

That is why we are all hear for. To learn from one another. Since I operate a stock trading website, I cannot share in detail what I think will happen in 2011 because it would be a disservice to my subscribers. However, in a few words, here are my thoughts of what will happen in 2011.

 

2011 will be characterized as a year were not much will happen in the way of returns. That is, the stock market will spend the entire year trading between S&P 1090 and S&P 1360. You will get cycles (such as the current one), were you will see market gyrate greatly, but other than that, I am expecting the S&P to end flat to slightly up for the year. To help you spot these market cycles, I am looking for the market to establish three major waves (i.e.cycles). The first cycle will take place between late February and mid April; the second cycle will take place between early June to mid August and the third and final wave/cycle will take place between mid October to early December. In cycles #1 + #2 you will see markets correct, while in cycle #3 you will see the market appreciate. As far as the DXY, I think the DXY will be range bound between 75 - 82 for the year, although I think the DXY will finish around 81 - 82 for the year. As far as bonds, I have the 30- year yield topping out at 4.75%, the 5-year note at 2.30% and the 2-year note at 0.8%.

 

It won't be until late 2012 that markets will correct dramatically. What exactly will drive this correction is still murky. Persistently high oil prices, a currency war or crisis, or rising yields are some of the factors that could potential serve as the catalyst to that correction.

 

I hope this helped somewhat.

 

Posted this in the last page, but thought I bumped up for wandering eyes. I hope this helps all of you measure the market's (i.e. the investor sentiment) risk profile. After all, this will tell you how much variation there is in price at these lower levels, which is part of deciding if we have hit bottom or not. More importantly, it will tell you what how much more risk market participants expect to price in the market, should the Japanese fallout worsten or improve.

 

*** My heart goes out to all who suffered from this cataclysmic event. You are on our minds***
 

Quote:
Originally Posted by bigbull View Post

I came across an interesting correlation (new to me) that I hope helps some of you with your trading.

Most people associate a high VIX level with fear. However what most people do not realize is that institutions hedge their holdings while the VIX is rising. As a result, there is a distinct dichotomy between the correlation of the number of new lows in the NYSE and the VIX itself; that is, if institutional investors are hedged, then a rising VIX does not represent them with a higher risk, because they already have some level of protection. This perhaps explain why markets haven't corrected by the magnitude most has expected. Essentially because there isn't enough plausible fear(s) ($100 is not a plausible fear? oh boy),  that has conduced institutional investors to sell.

 

Notice that every time 28 or more new lows are registered, institutions begin to panic but the actual sellign does not take place once the 50 threshold is met. I cannot share with you exactly were markets will head (taking this into account), but hopefully this helps clear some of the recent fuss.

 

Here is a chart that shows the correlation between the # of new lows and the S&P 500 (it is a bit outdated, but the point of the graph is to show this relationship).

 

nyse-new-lows-july08.png


 

 

post #1483 of 1894

Just came across some very valuable reading.  The below link is to an article from July 2009.  It is a very good analysis of the rally underway since March 2009, with good prognostications.  Of course the author could not anticipate the incredible power of QE - or, should we say the incredible suicidal recklessness of the Fed.  However, all of this is well put together and worth a close study.

 

http://groups.google.com/group/aiii/msg/695579ad4c6ee87b?pli=1

 

You may be wondering after reading this ... well, where exactly is inflation anyway?  CPI is low, Fed says there isn't any meaningful inflation, and yet many sources are claiming that inflation is already running at 4-5% annually, will be at 8% by the end of 2011, or some combination/variation thereof.  To wit, look at CPI upticking since QE2 started:

 

031811-01.jpg

Source: http://www.businessinsider.com/mauldin-inflation-accelerating-2011-3

 

This Business Insider article is also fantastic, but it's such a long read, I would just encourage you to click through to the article, find the chart I posted, and start reading two paragraphs up, stopping when you've had your fill.

 

ALL of this is very troubling... signs of the endgame being here are what I've worried about for a while.

 
post #1484 of 1894

From your link:

 

Solid Ground-How The Rally Ends

Russell Napier

 

Unfortunately India, Indonesia and Philippines will be the only Asian economies under CLSA coverage which would report inflation in excess of 4 per cent by early 2010.
 
We are in another rally in the long bear market that began in 2000. It is not a new bull market: Valuations did not reach rock bottom in March and interest in equities remains too high. The last rally lasted from 2002-2007 and this current one should also last for a few years. One cannot call the end by using valuations or magnitude of returns.
 
Instead we must wait for inflation to claw it’s way back to around 4 per cent. Although forecasting inflation is incredibly difficult in a period of quantitative easing, we cannot see it approaching that level anytime soon. We are thus in for a prolonged equity market rally, accompanied by economic and earnings recovery.
 
A rally in a long bear market
-Long Term valuations suggest this long bear market will not be over until the S&P index nears 400.
-There was no revulsion against equities in March 2009 needed for a great bottom.
-Creative destruction was once again halted by the government, so the creative destruction of government credit will be the catalyst for the great bottom.
 
Why 4 per cent inflation caps the rally
-Equities benefit when deflation ends and inflation returns.
-In 1968, 1973, 1987, 2000 and 2007, inflation rising through 4 per cent resulted in material corrections in equity prices.
-As 4 per cent inflation is unlikely until atleast 2H2010, a considerable further rally in equity prices is likely.
 
10 Year Bond yields need to beat 5 per cent, to be of concern
-In periods when inflation has risen from low levels, it has taken a 5 to 6.5 per cent rise in Bond yields to end Equity rallies.
-A re-acceleration of foreign central bank support is likely to slow the sell-off in Treasuries.
 
A decade long bear market in Treasuries
-In a best case scenario, the US gross public debt to GDP level is only going back to WWII records.
-Levels of public debt at WWII levels were only supported by government direction of commercial banks, unrestricted Fed liquidity and price controls.
-One final rearguard action against inflation by the Fed will trigger the final leg of the Equity Bear market.
 
By the end of 2010 people will start heralding a new bull market. But such talk will be dangerous, as the rise in Treasury yields will still be in its infancy. Perhaps only slowly will it dawn upon investors that the US Government is headed for the form of polite bankruptcy that democratically elected governments prefer. The last bear market in Treasuries lasted 1946-1981 and there is every reason to believe that the one now just beginning could take decades to play out.
 
History shows that equities are unspooked by the early stages of such bear markets in Treasuries, but it also suggests that a very material rise in Treasury yields is exactly the sort of catalyst that could reduce equity valuations to the lows seen in 1921, 1932, 1949 and 1982.
 If this is correct, when the current wonderful rally ends, sometime in late 2010 to early 2011, we will see a decline in the S&P  500 to around the 400 level.

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
 
Nothing in this article is, or should be construed as, investment advice.

post #1485 of 1894
Thread Starter 

Very good post Rando. Thanks for sharingthumbup.gif

 

Here are a few graphs I stumbled upon (courtesy of Jas Jain). The commentary however, is my own.

 

Figure 1 compares nominal GDP growth to the 10-year Treasury Note. As you can see, nominal U.S GDP growth dipped below the absolute mark (i.e. below 0) in late 2008, early 2009 for the first time since the late 50's. This of course meant that the economy was contracting, since the output gap (the difference between aggregate demand and aggregate supply) continued to widen.   Now, what is important to note here is not the contraction in growth, but the pattern that ensued. Back in the 40's and 50's when the economy entered shallow recessions, the 10-year yield continued to trend upwards, as expectations that the U.S economy would recover from the recessions and continue to grow, intensified . It wasn't until the early 80's that we saw see this dichotomy breakdown, and began to see the 10-year note trend downwards, regardless of whether nominal GDP growth accelerated (i.e. grew) or contracted. What cause this you ask? I argue it was a product of the end of the manufacturing sector here in the U.S (after WWII, the manufacturing sector here in the U.S dwindled in both size and importance, but it wasn't until the early 80's that the manufacturing sector was a non factor (or become obsolete) and the new era of deregulation, easy credit (i.e. increasing debt) and low taxes (i.e. increasing debt), ushered by Reagen and his supply-side approach. In my opinion, the effect of these two events was what ended the U.S supremacy as the world leader (economically), and it is the reason why we have seen the 10-year note slope downwards ever since the early 80's; essentially because people do not expect the U.S economy to grow in size,  but in fact, people continue to expect the economy to shrink in size.   OF course they are other factors to take into consideration when interpreting these two variables, but by in large, the end of the manufacturing sector in the U.S coupled with 30 years of deregulation and easy credit (i.e. take on debt today to help service growth all while postponing the costs associated with it), was what paved the way to our current dilemma.

 

Now, you may be asking yourself, but didn't we know thsi already? Yes we did, but part of solving the U.S mess is to look back and see were things went wrong. If people in this country truly want to people want solutions to the problem, the U.S has got to re-build its manufacturing base. I am not insinuating that the U.S return back to its glory days when it was the engine of the world economy, but it does need to specialize on certain goods that it can export for a relative cheap cost (i.e. were it has a comparative AND absolute advantage). Medicine could be a possibility. New technology could be another. Something other than paper and worthless debt.

 

Will this solve all the problems? Not by a long shot, but it's a beginning that is needed, if officials want the internal bleeding to stop.

 

20418_a.gif

 

20418_b.gif

post #1486 of 1894
Thread Starter 

In lieu of yesterday's post, here is another good article that shows why an economy that has a strong manufacturing base, almost always recover strong from period of extreme demand shocks (i.e. recessions). Although the author is overly optimistic on the state of the German economy and overly exaggerates the the true state of the German economy (by highlighting only on the good side), his general premise is what I agree with.

 

Germany's new boom: making money by making stuff

While the UK and US increasingly relied on the financial sector, Germany concentrated on manufacturing

http://www.guardian.co.uk/world/2011/mar/14/germany-new-boom-making-stuff

 

post #1487 of 1894
Thread Starter 

I'd keep an eye on breadth relative to price and volume. Both price and volume have diverged from market breadth (i.e. the a/d line) and from VOLD (i.e. volume difference of breadth). This does not necessarily mean a declining up a head, but it is something to pay attention as we linger around this pivotal point (i.e. 1328) on the S&P 500.

 

5568435464_71bf5c543d_o.png

 

post #1488 of 1894

Lots of signals coming together all pointing to that 1330 area being pivotal.

 

Lets see if the big boys decide to troll the technical analysts out there by blasting us higher, or whether they will respect the chart patterns here.

post #1489 of 1894
Thread Starter 

The S&P 500 is still hovering around the 1330 level. I'm looking for a strong break come late Tuesday/Wednesday. Directional move by institutions so that they can already strike most of their calls or puts ITM. 
 

Quote:
Originally Posted by StockJock-e View Post

Lots of signals coming together all pointing to that 1330 area being pivotal.

 

Lets see if the big boys decide to troll the technical analysts out there by blasting us higher, or whether they will respect the chart patterns here.


Here is a good technical overview of the markets. Don't quite fully agree with it all, but it is still a fair take.

 

http://seekingalpha.com/article/261521-what-the-monthly-charts-are-telling-us-now

 

post #1490 of 1894
Thread Starter 

Silver Prices Bullied by Goldman Sachs

http://finance.yahoo.com/video/marketnews-19148628/silver-prices-bullied-by-goldman-sachs-trader-24888999

 

- A 'trader' made a bet that silver would fall 37% by July (playing it via the SLV).

- Short interest on the COMEX has risen 20% since the beginning of the year.

- Goldman Sachs recommending investors sell ALL commodities.

 

Will silver necessarily fall 37% by July? I highly doubt it; simply because the Fed needs higher input costs to attract demand, so any abrupt change in the price of silver would mean that the higher input costs, which are reflected in the form of higher prices, will  longer present companies with you guessed it, higher margins - the reason your are told why markets are rising. 

 

Just like JPM bought copper and have since short it on the paper market, GS is most likely buying the physical metal and storing it while actively shorting silver in the paper market, to help buoy the price higher. The question going forward is, at what point will this self-fulfilling prophecy end and what will be the repercussions?

 

Does anybody have any doubts that market makers are in fact market manipulators? Forget that line of crap that says market makers are there to fill both sides of the trade and provide market with liquidity. MM are there to price fix prices, period. 

 

*** Market overview: Internals improving a bit, but sell side participation continues to grow!***

post #1491 of 1894
Quote:
Originally Posted by bigbull View Post
 GS is most likely buying the physical metal and storing it while actively shorting silver in the paper market, to help buoy the price higher. The question going forward is, at what point will this self-fulfilling prophecy end and what will be the repercussions?


The best way to get the best prices is to tell everybody the opposite of what you are doing.

 

Want to go long? Knock it down cheaper and load up, then at the top tell everybody its time to buy. biggrin.gif

post #1492 of 1894
Thread Starter 

That is certainly their game. Looks like the results of the '08 debacle are cut and clear (for those still aimlessly wondering) - the 4 biggest banks were able to amass more power and money than before, at the expense of public rancor. In their eyes, it's a win, but in a greater context, this is a lose for all; it shows how perverse American culture, and for that matter, the human race has become. Here are three compelling reads for all you to read over the weekend.

 

(1) 4 Wall Street Banks Still Dominate Derivatives Trade

A few select titans of Wall Street continue to dominate the banking industry’s role in derivatives trading, according to a report issued by the Office of the Comptroller of the Currency.

The nation’s four largest banks — JPMorgan Chase, Citigroup, Bank of America and Goldman Sachs — hold nearly 95 percent of the industry’s total exposure to derivatives contracts, the report found. JPMorgan, topping all commercial banks, holds nearly $78 trillion of the industry’s $231 trillion in derivatives, according to the report by the comptroller, the federal agency that regulates national banks. Citi is next on the list, with more than $50 trillion in the insurancelike contracts.

 

*** In other words, banks have made trillions of dollars off of artificial instruments (money) that serve no public good. Now that's the new America for you - screwing your neighbor for the sake of your benefit. This just proves the point I made in my above post - these firms that act as so called market makers and not market makers at all; they are market manipulators that price fix prices with SIZE, period (they are the market)***

 

(2) The Real Housewives of Wall Street

Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?

http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411?print=true

 

(3) Job creation by the wealthy is mostly a myth

http://www.minnpost.com/community_voices/2011/04/12/27387/job_creation_by_the_wealthy_is_mostly_a_myth?utm_source=MinnPost-RSS&utm_medium=feed&utm_campaign=Feed%3A+minnpost+%28MinnPost.com+-+Minnesota+News+and+Analysis%29&utm_content=Netvibes#5-27387

 

We hear it continually; it is the mantra of conservatives: "We must give tax breaks to the wealthy so they can create more jobs … and higher taxes will stifle economic growth … because the rich are the job creators. … " It is the basis of all the tax breaks given the top income groups in recent years, including the contentious extension of the Bush tax cuts to top brackets, last year. It is the common subject of conservatives on the talk shows.

Just last weekend, Paul Ryan, now the architect of the new Republican budget, reaffirmed his proposal to cut the top tax rate to 25 percent, claiming in his plan: … advancing pro-growth tax reforms, this budget is a jobs budget. It sends signals to investors, entrepreneurs, and job creators that a brighter future is still possible.

There is only one thing wrong with this premise and theory: It is not true! There is absolutely no empirical evidence to support such a claim. None! Yet, those who purport it continue to glibly make the claim as though it were fact. And for good reason: It gives them cover for avoiding the charge that they are merely attempting to make the rich richer; it also permits them to focus on deficit reduction through smaller government rather than having to address the revenue side of the equation as well.

Indeed, there is actually evidence that there is not only no correlation between granting the wealthy tax relief to "grow the economy," there is even some evidence that the contrary is frequently true.

 

*** Every time it's the same ending, just different a ploy, I mean plot***

 

Quote:

Originally Posted by StockJock-e View Post





The best way to get the best prices is to tell everybody the opposite of what you are doing.

 

Want to go long? Knock it down cheaper and load up, then at the top tell everybody its time to buy. biggrin.gif


 

 

post #1493 of 1894

With all the recent rallies in the commodity market, I have been thinking about the whole hyperinflation scenario again. After a little research on Wikipedia (please don't flunk me professors for using wiki as a source), I think, while hyperinflation running rampant on our nation is possible, it is probably unlikely with due to the present circumstances. I know a lot of  reputable economists are calling for hyperinflation sometime in the future, but to me it seems it is too early to tell. The arguments for hyperinflation falls into the following factor:

 

  • The first and most significant reason is the amount of debt our nation has accrued. Debt is fine as long as we can pay it back but at this level we are nowhere close to being able to do so. That is the reason why the Fed has been monetizing debt (ex: QE1 and QE2). One speculation involves investors dumping the US Treasuries as they lose faith in our nations ability to pay back the debt and default, and the only way we can survive the massive dump is if the Fed cranks up the printing press and again, monetize all the debt. Monetizing all those debt can definitely spell rampant inflation and possibly hyperinflation. Government likes inflation. It gives them a chance to pay back debt at a cheaper value. Another way the government can pay back debt is to raise tax revenue, but that presents quite a problem for the politicians for if they propose a tax hike they will lose support. The solution? A hidden taxation via inflation. It is not improbably that the government will force the economy into hyperinflation just to cover their back at the expense of the citizen (we will get back on this later).    

 

Now that we know why our nation may be heading into hyperinflation, let us take a look at hyperinflations that have occurred throughout history and see if there are any correlations. There have been many cases of hyperinflation in nations throughout history and one of the most renowned is Germany. The reason for its hyperinflation can pretty much be summed up as the debt incurred from the cost of war (WWI). The government of Germany resorted to borrowing to fund its war (sounds familiar right?) and at the end of the war faced a major crisis as the victorious nations of WWI demanded reparations. The result of it was a devaluation of the Mark and hyperinflation sets in. Basically in Germany's case, a war backed by debt and spending in a period of instability led the nation to eventual hyperinflation.

 

A recent case of hyperinflation occurred in Zimbabwe not too long ago. Again, in a period of instability (damages left behind by the civil war) where high spending occurred, inflation ran out of control. The story for Zimbabwe is a socialistic reform where the dictator, Robert Mugabe, pretty much eliminated white farmers and distributed their land to members of his party. The result is a decrease in export revenue and food production. To combat this, Mugabe fired up the printing press and it all went down hill. Once again, there are common denominators with Zimbabwe and Germany: war, instability (such as social unrest), and spending.

 

If you browse through all the nations that have experienced hyperinflation, you will find that the reason is nearly always because of spending during a period of instability (such as emerging from devastating wars and/or political/social reformations). What I realize also is the cause of the hyperinflation is always a political one (not so much economical). This brings us back to whether or not we will have hyperinflation. It is true we are at war but in my opinion it is not on a scale that is comparable to a civil war or World War I. We are borrowing to fund for these wars under a fiat currency like many of the other nations that have gone through hyperinflation but one thing is different aside from the scale of the war (I will get into it shortly). So if we are not recovering from a devastating war and we aren't going through massive political reformation, then that leaves us with social unrest and upheaval against politicians. Short of a few riots here and there, we aren't really seeing major governmental control and seizure of our wealth and freedom (not discretely anyway...) at the scale of Zimbabwe. We are, without a doubt, spending though. I guess my point is in our case, we aren't as bad as other nations with hyperinflation yet in terms of the catalysts that sets off hyperinflation.

 

The one thing that can truly set off hyperinflation in our nation is the massive sell off in the bond market by investors. Now let's see why they would want to do that. As of now, our nation is still one of the leading nation in the entire world. We still hold major power and despite our economic problems, we are still better off than the rest of the world. In other words, investors still feel relatively safe with us because they know we won't default on them. If the investors were to quickly dump the bonds due to fear and panic, then one of these things will probably have to occur:

 

  • massive war
  • nationwide instability caused by either social or political reformation
  • uncontrolled spending like the case of Mugabe in Zimbabwe

 

Until we see something like that, I believe we are pretty safe from hyperinflation. Can our nation be creeping (or better yet already possess some of factors above but not revealed publicly) towards one of the factors above? Yes, but until then I believe hyperinflation on a grand scale as theorized by many people probably won't occur. I think what we will see is inflation/stagflation for a while. The only thing that can offset everything above is if the government truly decided to hyperinflate the nation to rid itself of the debt (French and English economist suspected Germany to purposely ruin their economy to dodge the reparations) or to, as we all know, transfer a massive amount of wealth into an elite high class (borderline NWO/conspiracy theory here smile.gif).

 

 

post #1494 of 1894
post #1495 of 1894

Interesting video on the Broken Window Fallacy:

 

post #1496 of 1894
Thread Starter 

Thank you for sharing the articles and video JLC. Found the ZH particularly interestingthumbup.gif

 

About a week ago or so, Poopy Harlow (don't know if I misspelled her name, but you get my drift (just kidding)), a CNN correspondent, said that speculators are not the reason why oil is trading at $110. Her claim/reasoning (or lack thereof) - the government only found a single firm of price manipulating (or price fixing) the price of oil. She said that the firm was found guilty of price fixing the price of oil with get this, $1M. Wait, what? No offense, but you have got to be born yesterday not to know that this is a flat out lie. In order to price fix a commodity such as oil, it requires at least a few million dollars ($50 min) to do so, and even with a few million dollars, you’ll only be able to maintain that price fix for a few days (if not hours); so how in the world can anyone price fix the price of oil with just $1M? Obviously they can’t; this is yet another miserable attempt by the media to cover the truth behind the price increase in oil, and let’s face it, other commodities. Now, part of the price increase does have to do with increase demand from China and other emerging markets, don’t get me wrong, but to say that the government was only able to find just one firm guilty of price fixing the price of oil (especially with a $1M), tells the lie itself.  

 

You want to know why the price of oil is trading this high? Price fixing (at the corporate (i.e. refiners and explorers) and institutional level (i.e. trading firms)) and the cartel that is OPEC.  Obviously it has nothing to do with fundamentals. Back in 2007, when disposable income formed a bigger part of total spending (consumption), consumption for oil was much higher than it is now (almost two fold). China, although growing precipitously, has not grown to the point where it can pick up for the for the slack (i.e. fall in demand) here in the states, so to argue fundamentals is the reason why oil is trading at $110 is a complete farce, period. Now, before I end, let me say this; It’s fine for a firm to go out to the paper market and hedge their production a month, year or 5 years out; but what is not right and what is really just loathsome, is the fact that these companies (or institutions or organizations, call then what you want) are not using the paper market to hedge (i.e. reduce risk), but their using it to speculate (i.e. price fix) oil to make more money on both ends (i.e. on the production end and in the paper market). Having that said, since the market is a zero sum game, there has to be some losing, right? Yeah, you guessed it, all of us consumers are losing. In a sense, they are making money off of the American’s ineptitude (no disrespect). This is an issue that must be addressed NOW. I’m afraid that if it is not,  it could lead to the destruction of this country (it is that serious).  

 

Here is a very good article that explains how a firm, Koch Industries, manipulates the price of oil.

http://thinkprogress.org/2011/04/13/koch-industries-price-gouging/

 

Excerpts:

 

Currently, the public knows very little about the oil speculation industry because a conservative majority on the CFTC has refused to implement a mandate from the Dodd-Frank Wall Street reform bill to curb abuses. Meanwhile, Republicans are pushing steep cuts to the CFTC, hampering any new rules on oil speculation that may be released later this summer. Fortunately, both the Securities and Exchange Commission and the CFTC have so far survived the latest round of budget cuts. While much of the attention on oil speculators has rested on the backs of investors and commodity traders, the petrochemical conglomerate Koch Industries occupies a unique role in manipulating the oil market. Koch has little business in the extraction process. Instead, Koch focuses on shipping crude oil, refining it, distributing it to retailers — then speculating on the future price. With control of every part of the market, Koch is able to bet on future prices with superior information. As Yasha Levine notes, Koch along with Enron pioneered a number of complex financial products to leverage its privileged position in the energy industry.

 

In 2008, Koch called attention to itself for “contango” oil market manipulation. A commodity market is said to be in contango when future prices are expected to rise, that is, when demand is expected to outstrip supply. Big banks and companies like Koch employ a contango strategy by buying up oil and storing it in massive containers both on land and offshore to lock in the oil for sale later at a set price.

 

 

 

post #1497 of 1894
Thread Starter 

Very interesting article (worth the read). The premise of the article lies around the point that there is an increasingly growing number of young people (graduates) that are starting their own businesses, rather than assuming those highly lucrative but shady jobs offered by Wall St (if you recall, everyone majoring business aspired to work in Wall St a few years back; that has changed for good now). The important point here is that although these business are being set up here in the United States, these businesses are not targeting U.S consumers (as before), but they are targeting the emerging market consumer (i.e. the money is being generated and most likely spent (at least the majority) from abroad). Talk about a shift of market power in the last decade; moreover, the dynamism of today's market has changed dramatically. Do not be surprised to see this evolving trend persist well in 2020 and beyond.

 

Yes, America is and will remain the innovation hot spot of the world, but that does not mean entrepreneurs are subject to solely operate within U.S borders. The ideas of these entrepreneurs are being exported abroad; this spells trouble for the U.S economy (as far as growth is concerned), but it serves well to the global economy.

 

Rejecting Wall Street, Graduates Turn Entrepreneurs Instead

http://dealbook.nytimes.com/2011/05/02/rejecting-wall-street-graduates-turn-to-entrepreneurship/?ref=evelynmrusli

 

 

post #1498 of 1894

Not to mention the complete lack of interest in science and math in the school system... Its all going to catch up with us eventually.

post #1499 of 1894
Thread Starter 

Very true; the U.S school system has to be modified, or else the U.S risks losing its edge as the innovation hot spot of the world. It is already bad enough for people to start up companies here, yet operate (or generate) the lion share of their revenue from abroad. If this trend persists, the U.S will not longer by the the country were innovators blossom (market competition will drive costs lower in these emerging markets, making it highly luring for people to start business in those countries rather than here. In a broader sense, that is what has ultimately has defined and carried this economy in the last 60 years.
 

The thing that is so attractive about emerging markets, is that the cost of living is relatively low, yet people who start a business are able to live more comfortably in those countries than if there were to live and operate their business here in the states. Let's face it.; at some point all economies peak. We are in that transition stage here in the U.S. Whether people like or not has nothing to do with the reality of it.

 

Quote:
Originally Posted by StockJock-e View Post

Not to mention the complete lack of interest in science and math in the school system... Its all going to catch up with us eventually.


 

 

post #1500 of 1894
Quote:
Originally Posted by bigbull View Post

Very interesting article (worth the read). The premise of the article lies around the point that there is an increasingly growing number of young people (graduates) that are starting their own businesses, rather than assuming those highly lucrative but shady jobs offered by Wall St (if you recall, everyone majoring business aspired to work in Wall St a few years back; that has changed for good now). The important point here is that although these business are being set up here in the United States, these businesses are not targeting U.S consumers (as before), but they are targeting the emerging market consumer (i.e. the money is being generated and most likely spent (at least the majority) from abroad). Talk about a shift of market power in the last decade; moreover, the dynamism of today's market has changed dramatically. Do not be surprised to see this evolving trend persist well in 2020 and beyond.

 

Yes, America is and will remain the innovation hot spot of the world, but that does not mean entrepreneurs are subject to solely operate within U.S borders. The ideas of these entrepreneurs are being exported abroad; this spells trouble for the U.S economy (as far as growth is concerned), but it serves well to the global economy.

 

Rejecting Wall Street, Graduates Turn Entrepreneurs Instead

http://dealbook.nytimes.com/2011/05/02/rejecting-wall-street-graduates-turn-to-entrepreneurship/?ref=evelynmrusli

 

 

 

That's something I haven't seen before. Thanks BB. It makes sense that entrepreneurs would want to shift their businesses to emerging markets though. Especially with the fear of massive devaluation of the American currency.

 

You guys are right on about the school system too. I came out from college and I don't feel like I'm in anyway smarter (in a practical sense) banana.gif
 

 

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