The End of the World (Maybe)

[onlooker]

JDH quote:

A few months ago the Forum was beginning to degenerate into a bunch of nonsense, political commentary, and generally useless information.

I think that people here, have not transformed the Forum into an internet place for excessive political mud-slinging or for advancing their preferred political party beliefs.  Instead, when giving their views on political actions taken by governing parties in America, Britain, China, Kazakhstan, Japan, Australia, Canada, Russia and other countries; people here, have diligently linked their comments to how the markets have been or may be affected. 

On nonsense political commentary or useless information.  What may be nonsense political commentary or useless information to one person, may be a nugget of good information or trigger an epiphany to another.     

Here is an author explaining how politics affects the markets.  That investors increasingly need to know about political events and how the events have impacted or may affect a country, or a market sector. 

See:  http://www.mckinseyquarterly.com/Risk/Corporate_Risk/Beyond_economics_Factoring_politics_into_investment_strategies_2337?gp=1

He believes that investors are in a better position to protect their investments from getting adversely hit by analyzing political actions. 

[Uboat]

“The market hits the top of the channel, goes back to the bottom, and then continues upward again to a new interim high, and then it goes back down again. The symmetry is almost perfect, almost as though someone was doing it deliberately. The green lines show that as the RSI gets” (JDH).

The market’s movements and the low volume have been unusual for this time period. The bulls appear to hesitate because of the impeding threat of a crashing market, while the bears suspect market interference of the government PP team, (also look at the upswings in the last half hour of trading) to keep the markets in positive territory and thus make the public believe that all is well again with the economy.
 
The recent increase in the price of gold could indicate that the interference is blocked through a reversal of central banks attitude towards gold reserves (e.g. India’s purchase).

In this environment the risks of staying or going long appear lower than shorting the market.

[jjj000]

JDH - I have that channel drawn out on my daily chart as well.  It corresponds with fib arcs too.  Thing is though with those channels... by the time you recognize them they are usually ready to break   I've had this experience countless times.  If you are lucky you get one or two inflection points you can play and then it breaks out one way or the other, so don't expect it to keep doing that for months longer.

And, as you can see, more importantly the tops and bottoms are not exactly clean cut there... so what you are doing is asking someone to trade short term on the highs and lows... but not SO short term that you worry about it going up and down 200 points one day to the next (in the case of the DOW).

This is a fine line.  Look at it every 10 days, but not every other day.  Hard practice to follow when dealing with a small trading range.

[yellowcaked]

I'm with onlooker.

I might add that politics is am integral part of fundamental analysis outside of the realm of just the fundamentals about the internals of a company and the market(s) in which they participate.

I do not think the forum degenerated, although there were moments of personal opinions that differed and appeared angry in instances.  But we all have a healthy respect for each other and what we have seen in the political realm come to pass in the last year+ has shown us all that everything political affects everything financial.

If we differ politically, and we do, it is good to have a heated discussion in order to come to a more realistic view of what is really happening on the country and world scene that will necessarily affect the financial markets.

I for one never got upset about taking so much heat on the forum for my pre-election views and never took it personally.  That might surprise some.  I think we all have gone through a very good learning experience in the last 16 months.  I will, however, admit that I was more focused on social agenda of the left.  To me, that social agenda necessarily affects the markets, the national debt, etc.  And those affects translate into fears, and fears is definitely well defined in Dine's Mass Psychology.  That is how we define where the herd will go next.

All of the mega bills that have and are going through Congress were based on fear and social agendas.  But they are all being "paid" for by fake, unsound, printed money and that has a PRICE.  Politics is the only way to see into the future.  It alone determines the availability of markets and demand and supply.

Take the rare earth discussion.  China will close the door slamming shut availability driving up the price on what is left in supply.  This has HUGE financial investment implications.

Take health care.  People do not need more health care.  What they need is good HEALTH.  But what we have hear is socialism driven at giving to many that are not working for it and to those who will be forced into paying for it (the young) who determine they cannot afford it at that time.

This will only serve to hurt the free market health care system when the reason so many do not have health care is the economy and the problem of tens of millions living unhealty lifestyles thereby driving up the price of health care because they consume the majority of health care dollars making it unaffordable for the lower classes.

This so-called health care junk going through Congress does not address the real underlying causes of the situation it only treats the symptoms.  The causes are huge malpractice insurance fees that Doctors pay causing unnecessary tests, unlimited pain and suffering damages instead of realistic awards based on real life expectations of earning of the individual harmed, and insurance companies that cannot underwrite individual insurance costs related to their lifestyle and future expectations of their prospects for consumption of those health care dollars (i.e. a 300 pound, 5-4 man or woman who will costs the health care system hundreds of thousands of dollars because of their lifestyle thereby necessarily cheating poorer healthy men women and children out of their basic heath care needs).

This is all politically based and necessary to determining financial investing for the future, if one can look into the future for companies and that will thrive in this "unhealthy" climate.

Elementary, dear Watson....

JDH quote:

A few months ago the Forum was beginning to degenerate into a bunch of nonsense, political commentary, and generally useless information.

I think that people here, have not transformed the Forum into an internet place for excessive political mud-slinging or for advancing their preferred political party beliefs.  Instead, when giving their views on political actions taken by governing parties in America, Britain, China, Kazakhstan, Japan, Australia, Canada, Russia and other countries; people here, have diligently linked their comments to how the markets have been or may be affected. 

On nonsense political commentary or useless information.  What may be nonsense political commentary or useless information to one person, may be a nugget of good information or trigger an epiphany to another.     

Here is an author explaining how politics affects the markets.  That investors increasingly need to know about political events and how the events have impacted or may affect a country, or a market sector. 

See:  http://www.mckinseyquarterly.com/Risk/Corporate_Risk/Beyond_economics_Factoring_politics_into_investment_strategies_2337?gp=1

He believes that investors are in a better position to protect their investments from getting adversely hit by analyzing political actions. 

[sidewinder]

People can only invest what they have.  One must have created some wealth on his own in order to even consider participating in the market place.  To the investor or speculator whatever you wish to call him, the fact that he has $5,000 to work with or $5 Million changes nothing as to the role government and politics play in his ability to participate.  Every person has to meet the requirements to sustain life and keep fit for the work he does in order to keep a flow of income.  When government is satisfied they let him keep a portion of his earnings.  The reason I expressed it that way is sort of like the glass half full thing.  I could say that each pay a certain percentage of his earnings to the government but that would imply a voluntary act. If taxes were voluntary how many do you suppose would pay?  So government plays the largest role in a person’s life outside his family. It and it alone determine how much of the fruits of a man’s labor he may keep.  Politics, the maneuvering of certain individuals to control the government is a deciding factor as to how much one has to invest or speculate in the markets.  That involves the regulation and further taxation on the gains made in this endeavor.  To say politics play no part in the investor or speculators lives would be an error.

People that play a role in the markets keep the country’s economy running.  This is how each one of us earns any money at all.  It is how our food is distributed, how materials for homes are supplied and on and on.  It is the life’s blood of the country. And in order to participate we again participate by working and saving in order to further invest in our country.   So an employed person whether working for a large corporation or just running a small business contribute to the wealth of the nation.  These people I consider the “productive” citizen.  The wealth of a nation as described by Smith is the sum total of its gross domestic product.  This should be taught to 5th graders.  I have just described the productive citizen.  The rest are non-productive citizens.  Those that do not work do not contribute to the nation’s well being economically and drain the rest.  Those that do work, but work for Government of any kind are also in this category because they are a drain on the productive citizen.   This is OK to some degree because we need some form of government and that is going to involve people doing government jobs.  Any one is entitled to the value of his labor and we have placed a very high value for government employees.  How can you measure the value of a government job when it falls into the category of non-productive?  Any company can likely tell you to the penny the worth to the entity of each employee.  It is based on the productivity of the operation.  What can we make it for and what can we sell it for.  But in the case of the government worker it becomes more difficult to define because they produce nothing.

It is the politician that decides on behalf productive citizen what these workers get paid.  These politicians are also in a position to help supporters and relatives acquire these jobs and the padding begins.
 
If a person chooses not to work that’s his business but he should be prepared to suffer the need to beggar thy neighbor for subsistence.  This is the place for charity not government.  From Plato’s Republic; “there is the greatest pleasure in doing a kindness or service to friends or guests or companions, which can only be rendered when a man has private property.  These advantages are lost by excessive unification of the state.” 

I submit that today solely due to government actions we are losing jobs and desire for jobs which, gives us fewer productive citizens and more non productive citizens.  This cannot sustain itself.  Something will give.  How long?  I have no clue but mark my words if we continue along the path we are on this will end up bad.  It may take another 100 years or it could fall apart in a short time.  Everybody wants to get something from the government and to me that means they want me to pay for some shit I have no interest in and no desire to support.

 You can come to America hang around long enough to become a citizen (nowadays it seems one need not even make that effort) work ten quarters at some job and then go lay on your ass for the rest of your life and let the rest of us pay for it.   The two parties in politics will seek you out thrusting money at you for no other reason than to secure a vote in order to perpetuate the fleecing of the productive American. 

I know, I know,  it’s always been that way.  Yes, but not to the degree we have today.  The sheer numbers involved as our country has grown has created a monster of benefits and entitlements that stagger the imagination.  There are likely more on the receiving end of this deal than there are productive contributors.  This government need to get back to its intended purpose and that is not cradle to grave, womb to tomb care giving and vote buying.  Social engineering through government intervention sounds like every “ism” out there except that that is not the American way. 

Politics is a legitimate subject for any investor. 

[sunseeker]

I have had this post in me for a while and after reading Sidewinders two excellent posts now seems as good a time as any.
 
Does all this ring any bells on that side of the pond?

I will relate to you some of my first hand experiences.
I worked on the (nationalised) railways for a while. We spent about a year upgrading the track, signalling, and points a line leading to a certain station. When we had finished the government closed that section, and station down. So we had to upgrade another nearby station, and track system to the same standard. When the sensible decision would have been to close down that station instead. Every year they used to do maintenance work, and paint all the facilities on long time redundant stretches of railway.
Why? Because each area was given a budget and if they didn’t use it all up the government would cut down their funding. If they overspent there was a real possibility that they would get an increased budget next time around.

I worked on contracts in government buildings where people did absolutely nothing (that’s not an exaggeration believe me). They would even be asked to do overtime at night, and come in at weekends. Consider this you have a department of say 20 or 30 people, out of which maybe only 4 or 5 people do any real work. How could a department head justify their own position with the right number of staff working the right number of hours?

The company that I worked at the time had people working all weekend until late because staff working for the UK Home Office (http://en.wikipedia.org/wiki/Home_Office) refused us permission to move a locker in their cloakroom by about 6inches in order to fit a building management system. So it had to be situated in another part of the building. All at the taxpayers expense.

If central government cuts funding, local government screams cut backs, and increases local taxes to cover the short falls. The tax payer looses out yet again.

Self interest takes over when you trust government with tax payer’s money, because they aren’t really accountable to anyone. Over time the practices get more and more out of hand. As has been proved with the recent scandals around Members of Parliament, and some members of The House of Lords (Fiddling their expenses, and taking bribes.

I was brought up in what would have been considered a poor area, but almost everybody had a job (two were too disabled to work). When my father was very ill my mother worked and we didn’t claim a penny from the state. Today in that same area almost no one works. It’s full of single mothers (and their unruly children who are responsible for no amount of vandalism and other crime) and the lazy. I know of people who live together unofficially but officially they don’t. Why because by living apart (officially) they have two separate homes, and two sets of benefits and allowances. Their children have everything that an honest working man would struggle to give them. It could have very easily happened to me if I had not worked hard and had lady luck on my side. I see people I grew up with still working hard, and I see others that haven’t worked in many years and they are better off. What sort of a message does all that send out?
A number of people I know have been made redundant over the last year. A number of them have been steered straight onto disability benefits. Not only does it make it easier for the “Department of Employment” they never will appear on the unemployment statistics. One of them is a diabetic. A serious condition but is it a disability? One needs an operation and is on a twelve months waiting list. They where willing and able to work before why are they suddenly classed as disabled?

As Sidewinder has pointed out, welfare and state assistance should be only for those in need. Not for the lazy who deliberately avoid work (even when there where plenty of jobs to be had). 

ATB 

[sunseeker]

The history of the world is marked by the rise and fall of hundreds of civilizations, led by men and women of great power and vision. All too many of these leaders have been motivated by personal interest, or at the very least, ignored the needs of the majority of their citizens.

About Ramses II, pharaoh of the 19th Dynasty, the poem Ozymandias by Shelley is about the inevitable decline of all men, and the empires they build, however mighty in their own time.

Ozymandias
by Percy Bysshe Shelley

I met a traveller from an antique land
Who said: "Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shattered visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
`My name is Ozymandias, King of Kings:
Look on my works, ye mighty, and despair!'
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away".

ATB 

[sidewinder]

Enjoyed the prose SS.

 It's Saturday, I lift my glass to the productive man, shake my head in disbelief and prepare for tomorrow.

I am extremely close to refusing to participate in further madness. Timothy Leary's mantra of the 60's was  "Turn on, tune in, drop out".  I am turned on to life and may or may not be tuned in, but getting really close to just dropping out.  If every working family said We have had enough already and took next week off it may get someone’s attention.  If that won't work take off next week and the week after until someone gets the point.

[sunseeker]

Enjoyed the prose SS.

 It's Saturday, I lift my glass to the productive man, shake my head in disbelief and prepare for tomorrow.

I am extremely close to refusing to participate in further madness. Timothy Leary's mantra of the 60's was  "Turn on, tune in, drop out".  I am turned on to life and may or may not be tuned in, but getting really close to just dropping out.  If every working family said We have had enough already and took next week off it may get someone’s attention.  If that won't work take off next week and the week after until someone gets the point.

Hi SW
That’s funny I had those very same thoughts myself.

It will all unwind in time. The longer a situation is allowed to go on unchecked the worse the fallout will eventually be though.

For our part we can only do our utmost to make sure that we come out of all this unscathed.
Have a good one. 

ATB 

http://www.gold-eagle.com/editorials_08/ing112709.html

On that day, Senator Obama voted against raising the national debt limit.
Increasing America's debt weakens us domestically and internationally. Leadership means that the buck stops here" (Senator Barack Obama on March 16, 2006).
Today the current limit at $12.1 trillion must be increased due to President Obama's spending policies that increased the debt of the United States to the same size of its gross domestic product. The buck stops where?

http://www.brasschecktv.com/page/739.html


Someone has to pay the price eventually

ATB