Some to ponder, some to laugh -- financial links in this thread. I create another for the links I use every single day to see what's going on. These are just today's wrap and flow, and probably won't work after awhile.
A relatively reasoned look at the effect of QE:
http://www.minyanville.com/businessmark ... 1/id/33844
This obviously has various important implications. What happens when they stop? And realizing the markets are usually forward looking for about 6 months, and that QE is supposed to end in June, if not sooner? What's wrong with this picture? Even some of the fed have issues with this. Commodities are hot as anything right now, but you've been warned! Ben's in a real bind here. Bill Gross of PIMCO, the worlds largest bond firm, has dropped our debt from his portfolio. With the Fed buying 70% of our debt with fake money, who will step up and buy it once they stop? Expect a real rush to the exits on treasuries when they stop, or a little sooner. All that money will have to go somewhere, so I expect a kind of impulse, overshoot and ringing in that and various other markets if and when.
Anything Todd Harrison writes is worth reading -- do read his book online, or buy a copy. His daily stuff often requires some context, as he doesn't repeat himself that much, and tends to refer to his previous writings. No, I don't always agree with him -- but he's smart and honest and worth paying attention to. Usually, those who know don't talk. Todd's an exception. Todd thinks we're headed for the real crash, and predictions he's made over the last 3 or so years are all coming true -- even in the order he's made them. That's pretty doggone impressive. He's usually a bit too early for the normal attention span...
He believes we are in the eye of a huge financial storm, that has been temporarily papered over with fiat paper money. I tend to agree, it's just a matter of when. The approach our Fed is taking is very similar to what caused the Roman Empire to finally utterly fail -- and a lot of others. One thing he mentions that isn't common knowledge, is how much "bad paper" is out there, off books -- you have to be "in" to know about things like that. He indicates it as a multiple of the world GDP -- which is pretty scary. Also, all our main banks are one FASB rule away from insolvency - the only reason they aren't is a relaxation of the rule that they must mark to market. So right now their statements ignore all the bad loans and all their profits are fake, despite the ongoing bailouts they get, borrowing money free at the Fed, then buying treasuries (one hand washes the other) and commodities -- see above.
This one's a hoot:
http://www.bloomberg.com/news/2011-04-0 ... -baum.html
What if they shut down the government and no one noticed? Or things actually got better. Do you just suppose that might be their main fear?
Mark Hulbert sometimes has something worthwhile to say -- he's kind of a professional back tester. And he's dead wrong too, often enough, as driving with the rear view mirror can be. But it's also worth a glance even if you're moving forward, for context if nothing else. This is NOT one of the boards I post on -- it's a place I go when bored to waste a little time and be entertained.
Note, in the news game -- all articles that have a number in the title (7 reasons for blah) or that say things like "3 ETF's to play the trend in ...." are 100% bullshit. ETFs are the newest scam by people in the financial industry who can't trade well, so they just create these and skim off a nice, risk free profit. Is that who you want to trust your money with? Assuming actions speak louder than words, I think that tells a tale. ETFs make it easy to "de-worsify" not diversify. And some appear to be scams, like REMX, a rare earth metals ETF that when all it's holdings have a 5% up day (or more) doesn't go up!
It's much better to just do your homework and only trade the best in sector individual stocks -- it's not that much more work and the payoff is a factor of several. ETFs are only good for things you otherwise can't trade, and often stink even then. Further, since an ETF in say, coal, buys all the coal outfits -- it messes up the markets. Because when money flows in, all the coal outfits go up due to the ETF having to buy them, whether they deserve it or not. On the other side, when money flows out of an ETF, they have to sell even the best in sector stocks, and they go down for no other reason. It's a disease on the markets, smearing the good with the bad.
The comparison feature of google finance is your friend at homework time. See picture and weep. I rest my case on ETF's, at least for now.