Live War Room Briefing Next Wednesday

I have heard some people say that the US authorities no longer have the ability to stimulate the US economy. -since stimulus money doesn’t circulate properly,and necessitates higher taxes.What if the Federal Reserve were to buy back a large proportion of US Government debt,and the Government were to cut taxes to match the reduction in interest payments on that debt ? Would that not stimulate the US economy,since taxes act as a drag upon it ?

hi, Claus,
i am still wondering on my investment with your program , when are we entering double or triple inverse etfs if everything you say looks so bad? ,
regarding the new comments of mr helicopter , is that our only way out of preventing the double dip recession ? by accomodative printing and printing and printing ….,
should we not be invested in other commodities like wheat, corn ,gold , silver , platinum oil, copper etc ?
regards oscar

Claus,
The bond market seems to indicate that deflation is coming.
1) Do you agree with that? If so, what stage are we at (comparing to Japan lost decade)? What strategy do you have to prepare ourselves for it?

http://finance.yahoo.com/q/bc?s=%5EN225&t=my

2) Can Fed reverses deflation by printing money? If it can, what strategy do you have to prepare ourselves for it? If it cannot, why?

Thanks.

Since the beginning, I have been pleased with both your decisions and explanations. Thank you. Bill

Just a simple yet incredulous observation that finds me amazed to read that there are member(s) who are “pleased” with a subscription plan that at the close of business August 31, 2010 has produced a NET LOSS of -4.15% in a market during the same time frame as the MDCP has been operational and has produced a NET GAIN of +31.51% in the S&P 500.
Just out of morbid curiosity how can anyone be pleased having spent $1,400 to $1,500 for the first year’s subscription and another $1,000 for the second year’s subscription, about $2,500 in total to UNDERPERFORM THE MARKET BY -35.66%?
I can’t believe all the time I wasted being displeased with the portfolio’s performance when I should have been as happy as a clam. I guess it’s time to visit the Doctor for a prescription of anti-depressants. Crazy me thought that making money, not loosing money, was the correct way to invest and thusly producing pleasurations from said profiteering through investing in winning equity selections; Who knew, apparently not me?
Most respectfully submitted,
Kevin M.

What happens to gold in a serious inflation? Does it keep its value or will that decrease also?

Ditto Will and Kevin…..would the crew thank Helmsman Sulu for getting lost ? Good news on Jinff (China Gold)…we’re on our way.

MJ

Will,
He [Claus] also said he was “going to turn the ship around”, he just never told us it was going to be a 360 degree turn!. How the that old reliable “the ability to make money under any market condition” or the latest paperback “How to Break 11 Laws In 10 Days”?

MJ,
Are you ‘pleased’ with your ride?
Picked up additional shares of JINFF, CGC, GGN [recently] and PSQ [today]

Could someone please clarify Claus’ market call for me……. up or down? I’m getting dizzy sitting on the great fence of opaqueness.
Thanks

Kevin M. 08.26.10 at 3:30 am / I wrote the following statement in a blog that started out with: “Greetings All”. In that blog I made this observation in a remark to MJ:

“MJ, these are just the tip of the iceberg’s truthful stories. I don’t believe we are going to have a double dip recession simply because I don’t believe we ever came out of the first one. $787 billion dollars in stimulus money plus Federal Reserve shenanigans bought the temporary appearance of a recovery.”

As you will please note the date of my blog statement, 08-26-2010 because I’m going to make a point of that date and my statement.

In an MDCP email dated 09-03-2010 or nine (9) days later [than my blog entry] entitled: ‘Transcript to Our Recent War Room is Now Available’ Claus made the following remark to Tom’s questioning:

Claus: Not really because I wouldn’t call it a “double-dip.” I really think the recession never ended. Of course we had a stimulus-driven rebound, but if you look at the necessary stimulus we used you will see it was at historically unprecedented proportions. Taking this into account, this rebound was puny. I think, later, historians will look back and talk about this whole episode as just an interruption of an ongoing recession and not a double dip.”.

A coincidence or just another example of late timing…… you decide?

Actually if you read my previous three blogs prior to the latest episode of ‘War Room Theater’ one might suspect that Claus either experienced a Vulcan mind meld with me or I just might be an unpaid and un-cited ‘talking points’ author for our fearless Teutonic leader.

SEPTEMBER 1′ST: ‘SIGNS WE’RE ON THE ROAD TO FINANCIAL COLLAPSE

The Financial Crisis Inquiry Commission on Sept. 1 held hearings with former Lehman Brothers Chairman Dick Fuld. They are trying to figure out why Lehman Brothers was allowed to collapse, with the belief that the failure of Lehman Brothers caused the financial crisis of 2008. The truth is, the failure of Lehman Brothers was a result of the crisis and allowing them to fail was the only correct decision the government made during the crisis.

The pain that was felt after the collapse of Lehman Brothers is nothing compared to the pain that will come when we begin to feel the effects of bailing out the rest of Wall Street. U.S. second quarter GDP growth was revised down on Friday from 2.4% to 1.6%. In order to get this 1.6% GDP growth, the U.S. government had to spend $3.7 trillion on bailouts, stimulus bills, the buying of mortgage backed securities, and other commitments.

General Motors reported Sept. 1 that their August deliveries fell 25% from one year ago to 185,176 vehicles. The U.S. government used “cash for clunkers” to buy GDP growth in 2009, but that growth stole from future automobile sales. GM’s sales decline is a sign that the U.S. will likely see a sharp contraction in GDP beginning in the third-quarter, which will lead to the Federal Reserve implementing the mother of all quantitative easing and cause a massive sell off in the U.S. dollar.

Christina Romer, outgoing Chairwoman of Obama’s Council of Economic Advisers on Sept 1 called for more government spending and less taxes as a way to bring down unemployment. The combination of more government spending and less taxes equals massive inflation, but this represents the state of mind in Washington today. Inflation is still the last thing on their minds because they don’t see it yet.

Even though we might not see massive across the board price inflation at this time, gold and silver prices have been surging ever since the National Inflation Association released its article “Gold and Silver Capitulation is Near” on July 28′th. Gold is very close to breaking its all time nominal high of $1,264.90 per ounce set during June and silver is getting ready to test the critical $20-$21 per ounce resistance level.

Rising gold and silver prices indicate that the U.S. is headed for an explosion in budget deficits that will rise far beyond what it can pay for through borrowing. Leading Chinese economists are now calling Japanese debt less risky than U.S. debt and with the Japanese savings rate in decline, the U.S. will soon have nobody left to borrow from. The only option will be monetization and already the Federal Reserve is getting ready to buy $10 billion to $30 billion per month in U.S. treasuries to keep its balance sheet at inflated levels.

There are now 50 million Americans on Medicaid, with annual Medicaid costs rising 36% over the past two years to $273 billion. The recently enacted health care bill will add 16 million more Americans to Medicaid beginning in 2014, but the U.S. government will likely go bust by then. It is impossible to have an economic recovery when jobless benefits are encouraging Americans to stay unemployed. U.S. unemployment insurance spending has nearly quadrupled since 2007 to $160 billion annually. Even food stamp costs have surged 80% over the past two years to $70 billion annually.

Once Americans get used to receiving and relying on government entitlement programs, it is hard to wean them off of them. The association recently reported that it has been hearing reports from members with friends who say they will only “come out of retirement” if they can find a job that pays $25 per hour or more, because with anything less it wouldn’t be worth losing their jobless and food stamp benefits. Americans expect to receive their jobless benefits forever and we are sure Obama will continue to extend them leading up to the 2012 election.

There are now countless warning signs all around us on a daily basis that the U.S. is headed for a complete societal collapse.
Just some ‘real’ facts to measure the results of what the Administration is calling “The summer of recovery” or what I would more accurately call “The summer of wreckovery”.

Hi Kevin,
When I listened to the latest war room briefing last week, I also noticed the comment that Claus made about the double-dip recession to Tom Essaye. I thought of you, because the comment was almost exactly word for word to what you had said in one of your blogs. Coincidence?……maybe. If not, it goes to show you that Claus does read the blogs. I would venture to say that he probably has a little respect for you and your thinking.

Hi Kevin,
You indicate that you’re expecting the market to rally in the near to intermediate term. How high do you expect the S&P 500 to go? Do you think that we will see 1200 or higher before the end of the year? It seems that the market is in a trading range between 1040 and 1130. Do you agree with this?
Thanks,

Will

Hi again Kevin,
Please give us your thoughts on the Gold charts. It is currently in a rising wedge pattern, which is usually a bearish pattern. Many experts are predicting a healthy correction, if gold breaks below the lower line of the rising wedge. See Carl Swenlin’s latest report at the website “decisionpoint.com”.
The funny thing is Larry Edelson is very bullish on gold…..short-term and long-term. I listen to his video reports every week. I don’t know who to believe…….but I think gold could use a healthy correction.
What’s your thoughts and analysis on the chart pattern of gold.
Thanks in advance,

Will

Good Morning Will & MJ,
I read both of your blog entries and as usual they were insightful, informative and interesting. Will, unlike many analysts and ‘equity experts’ I don’t pretend to have a crystal ball and my opinions explaining as to why I expect the markets to directionally move in a particular direction almost always never come with the usual boatload of accompanying caveats.
I agree with your observation that the S&P appears range bound within the 1040 – 1130 level. However, as I wrote in an earlier blog, I expect that the S&P almost certainly will make an strong effort to hit the 1200 level. The impetus for the push, I believe, will be the naive belief by many investors that the mid-term elections will result in some sort of reversal of the current financial and economic disaster the United States finds itself in the midst of. Investors actually believe that a Republican victory in November will somehow miraculously undo the economic damage decades of irresponsible overspending by both parties has wrought upon the American people. The market will rally up to the election, perhaps somewhat longer, but not too much after the election the reality of our economic situation will again come to the forefront of investors’ minds. When the realization that the economy is still worsening again takes hold by most investors, then and only then will the market move decisively lower. Fear will grip most investors who will panic and sell ‘en mass’ driving the market to significantly lower. Perhaps a Dow Theory retest of the March 9, 2009 lows of 6665 on the Dow. This disaster can happen in only minutes, not hours, days or weeks but minutes.
“Absurd”, “impossible” or “just crazy talk” you may say to yourself of my analysis. You might be right but I would in turn respond to those of you that think my scenario somewhat incredulous with the following fact:

“Look at what happened to the market on May 6, 2010″. That was the day of what now is infamously referred to as the ‘Flash Crash’. Markets don’t operate in a vacuum and we have never gotten any reason as to how and why this ominous event occurred. Surely there has to be someone out there in investor-land that has some knowledge of what happened on May 6′th as well as who was responsible.
Yet, like the two men who were arrested by Italian law enforcement officers trying to sneak over $30 billion dollars of US bonds into Switzerland nearly two years ago the ‘flash crash’ story has been intentionally swept under the rug. Why?

Why have we stopped hearing about how poorly capitalized our banks are? Surprised to here that question about the strength of our financial institutions being raised again? Unfortunately far too many Americans have partaken of the Kool Aid the government and the Wall Street banks have been passing out to all those who would happily accept the feeling that our banks are strong and sound. Just look at the amazing profits they’re generating just a year after they were on the verge of collapse! It’s unbelievable isn’t it?
What we non Kool Aid drinkers definitely know for certain is that the 10 largest US banks (includes Wall Street ‘banks’, you know the ones like Goldman Sachs and Morgan Stanley who to this very day still get to borrow tens of millions of US taxpayer dollars at ZERO (0%) PERCENT INTEREST from the Federal Reserve Bank). Goldman and Morgan issued press releases to thank the suckers (that’s us) for all our involuntary help. Our selflessness allowed them in turn to be very generous in passing out record bonuses to their employees.
Fact: The balance sheet of the 10 largest American financial institutions literally contains trillions of dollars of ‘off balance sheet entries’ of worthless derivatives. Reliable estimates place the total of these worthless derivatives at between $12 -$15 trillion dollars. That the entire US gross domestic product for a year! In 2009 the FASB rules [backed by the Federal Reserve and the US Treasury] re-allowed the banks to go back to valuing these worthless assets using a method termed ‘Mark to Model’ which basically allows the banks to carry loans that are worthless for 100 cents on the dollar.
What’s even more appalling is that the Fed. allows these banks to put up these worthless derivatives at the Fed. window to exchange them for fresh hard cash at 100% of face value. Even better, if the banks leave this worthless collateral on deposit at the Fed. the Fed. will pay them interest as if the were really worth 100 cents on the dollar! Oh, before I forget to mention it…… the Fed. is using your money not theirs for these shenanigans.
Speaking of ‘things’ being swept under the rug what ever happened to the Congressional movement that we were initially led to believe had garnered great support to audit the Fed? Heard or read anything of consequence from anyone of consequence on this matter? Why not?
Heard or read anything of any importance from anyone of importance as to what’s happening in the Bernard Madoff investigation of missing billions? We know how his poor wife Ruth is struggling being a peasant and having to live like the rest of us but precious little in the way of where the money disappeared to. Why?
Why aren’t we hearing about an actual unemployment rate of nearly 20%? Even using the Dept. of Labor’s U6 unemployment rate, which is highly manipulated itself, the government claims the total of unemployed and under-employed is about 18.50% of the workforce.
Why does our government call the last 90 days the “Summer of Recovery” when their own Dept. of Labor states that we have lost over 2.2 million jobs since January 2009? The only thing getting bigger there is the number of people that aren’t working and the lies they keep telling.

MJ, interesting piece on gold. If I were to venture a guess the price of gold will rise dramatically in spite of hypocrites like George Soros who is talking down gold by calling it a bubble waiting to happen while his two sons who run Soros Management are buying ‘GLD’ and other gold assets like they’re going to run out of the stuff.
These people are looking to get your gold on the cheap by trying to talk and scare the price down so you’ll panic and sell. Just like Roosevelt who gave the American people $25 for their gold and then turned around and valued it at $35. Nothing has changed but the dates and faces. The greed is still the same. Don’t become a victim.

Will,
I can see gold gong up to around $1300 – $1,325 /.oz before a major price pullback possibly occurs. Like Larry Edelson I look at pullbacks in gold’s price as a buying opportunity. Although it’s impossible for anyone to know at what price and point in time gold’s price will undergo a major correction.
The indicators I use to predict gold’s near and mid term outlook suggest to me that gold’s correction price could go as low as $1045/.oz during a moderately strong pullback.
I had blogged my expectation for gold’s price several months ago when I wrote that at the time Claus was calling for a correction in gold’s price that at the time my feeling was gold would pull back to $1,145 to $1,175 an ounce before resuming its upward march to the $1,500 an ounce level by the end of Q4 beginning of Q1/2011. Gold I believe got down to around $1,165 in late July/ early August [I'm writing from memory so the figures may be slightly off]. I remember purchasing additional shares of EGO when it had pulled back to around $15.64 at the end of July. I believe Claus was expecting more of a correction in the price so the MDCP never purchased additional shares of any gold equities. The addition of GDX to the portfolio in March 2010 was the last ‘gold’ addition to the portfolio. Of all things gold the most incredulous golden factoid is that with the price of gold hitting record highs almost daily, KGC is still in the red!
What does KGC’s portfolio loss, despite gold’s record high price portend for another MDCP portfolio all-star holding (PSQ) with it nearly -33% loss?
Again I ask, who has done the math? Would a theoretical loss of 33% in the market mean that the current portfolio loss of 33% in PSQ be erased? Claus, if the market underwent a severe correction and lost 34% of its’ value, would that mean we [MDCP members] would have a 1% profit in PSQ? On the same note, if the market fell 12.50% then would our position in RWM become a break even position? Who’s doing the mathematical calculations on the inverse ETFs held in the fund.
Our biggest price gainer is EGO with a very nice 120% gain and our biggest looser (currently) is PSQ with a 33% loss which on the surface looks pretty good until you do the math here and discover that EGO’s 120% gain represents only 4.5% of the entire MDCP portfolio, while PSQ with its 33% loss represents a whopping 26.5% of the MDCP portfolio by weighting. When you add RWM’s loss of 12.50% and its’ portfolio weighting of 13% we are sitting on a significant loss in only two positions which represent nearly 40% of the portfolio’s weighted holdings.
Maybe we shouldn’t look at the math all too closely because just my last points portend that this portfolio may not perform as ‘expected’ even if the market underwent a major correction [20%] and especially troublesome would be a significant price correction in gold. Who’s doing the math? It appears to me that even Stephen Hawking would have some difficulty calculating a scenario, using the current portfolio, in which we can turn twenty months of losses into a reasonable profit in the near or mid term.
Thanks

Let us hope the speed at which the proverbial MDCP ship is turned around is faster than the speed at which the proverbial MDCP blog entry [however few] is posted.

Hi Kevin,
Thanks for your thoughts on gold.
What’s the chance of the S&P 500 breaking the 1130 level? I would think that since the market is overbought, there would have to be a pull-back first. Then it could possibly break up through that resistance zone. According to Claus Vogt’s latest weekly update, market exuberance is as high as it was in Oct. 2007 and April, 2010. That almost seems hard to believe. He also indicates that the Bull/Bear ratio is 2:1, after having an extremely bearish sentiment at the end of August. This turn around also seems hard to believe, in just a matter of 2-1/2 weeks. The Friday report on investor sentiment was actually negative. What gives? It doesn’t make a whole lot of sense to me. Any thoughts on this?
Are you adding any additional funds to the inverse ETF’s?

Hi again Kevin,
I did read your blog above, but I think the odds of the S&P 500 going above the 1130-1135 level is probably slim. Today, it appears that it may close above that level, but it’s still too early to tell. The market could actually nosedive at the end of the trading session. I agree with your decision to add to leveraged ETF’s. I’ve actually been nibbling for the last 2 to 3 months. This market can be frustrating at times.
Thanks for blogging with your insights.

Kevin,
Looking at how the markets are trading at 3:10 PM, the S&P 500 has broke well above the 1130-1134 level. At this point, I’d have to say you could be right. The next resistance is at the 1150 range. It will have to break this level first. I still look for a pull-back here in the near-term. The market is extremely overbought.
There are still a lot of analysts saying that the market will do well in year 2011. You don’t agree with this….do you? I don’t know how it could do well. But it seems that good earnings reports keep coming out, especially in the technology sector and the multi-national companies. What’s your thoughts on this? How much longer can the good earnings keep coming?
Thanks,

Will

~~~~~~~~~~Americans Enjoying Final Days of Artificial Economy~~~~~~~~~

In recent days, Japan has intervened in the foreign currency market to artificially drive down the value of the yen. Japan’s actions to weaken the yen have driven it from 83 to 85.73 against the US dollar. Most analysts in the mainstream media are portraying this as Japan’s attempt to “head off a deflation spiral”. Almost everybody is applauding Japan’s move, saying it was needed in order to “shore up its export-driven economy”.

The truth is, although Japan claims to be helping Japanese citizens with this move, Japanese citizens are the ones who will actually suffer. Despite Japan’s economy entering into recession last year, the Japanese were able to maintain their same standard of living because prices were falling due to their strong currency. Some of the largest Japanese exporters like Toyota and Sony saw their revenues decline last year by 20.8% and 12.9% respectively, but this was only bad for shareholders of these companies. Despite rapidly declining revenues for Japanese exporters, Japan’s unemployment rate only reached a peak of 5.6% last year and is now down to 5.2%.

The Japanese should be happy and grateful for how strong their economy is compared to the US economy. When it comes to exporters in Japan, their problem is not the strong yen, but the weak US dollar. If Japanese exporters allow the US dollar to collapse, their revenues will continue to decline substantially, but that is a healthy part of a free market economy. Within a year or two, a strengthening yen would allow the Japanese to spend more on their own goods, and revenues for Toyota and Sony would come back strong.

Japan’s efforts to postpone a few Japanese corporations going through a brief but tough readjustment period are helping to artificially prop up the standard of living for Americans one last time. The Japanese better be careful what they wish for because never before in world history has nearly every developed country been in battle with each other to have the weakest currency. Asian producing countries want their currencies to be the weakest so that they can have the honor of shipping their products to Americans who can’t afford them.

Currencies are very fragile, especially when they are fiat and are backed by nothing but empty promises. Nearly every nation worldwide employing fiat currencies is currently making the grievous economic error of doing everything in their power to debase them. Even a five year old child, if you asked them if they want the money in their piggy bank to be worth more or less, would have the common sense to say more. The world’s politicians either don’t have this same common sense or they are being paid off by the management of export giants.

Although China recently made the wise decision to allow the yuan to strengthen, they haven’t allowed the yuan to strengthen fast enough. China is now facing a price inflation crisis that will soon spread to the US Consumer prices in China rose by 3.5% in August compared to one year ago, the largest increase in nearly two years. On a month-over-month basis (including seasonal adjustments), consumer prices in China rose by 4.8% in August over July.

Workers at a Honda plant in China recently went on strike over wages and work conditions. The Chinese have had enough of slaving in factories for $30 per week while Americans sit home on their couches, collect $400 per week in unemployment benefits, and consume the goods that the Chinese make. Chinese manufacturers are now being forced to increase the wages they pay to workers and these costs will be passed on to American importers of Chinese goods like Wal-Mart.

Wal-Mart recently eliminated their “rollbacks” on grocery items in the U.S. Grocery prices at Wal-Mart rose by a shocking 5.8% in July from June. In fact, some items in Wal-Mart like a 36-ounce bottle of Windex and a 12-ounce box of Quaker Oats rose in price by 51% and 66% respectively in July over June. Considering that in 29 states, Wal-Mart controls more than half the grocery market, almost all Americans are beginning to feel the effects of massive price inflation.

With 70% of the goods sold in Wal-Mart made in China, some believe that Wal-Mart’s massive price increases for grocery items will soon spread to all other items sold. It is crystal clear for us to see what is ahead for US prices of consumer goods, yet the mainstream media continues to talk about deflation. Cotton prices have surged 28% during the past two months to their highest level in 15 years. That alone guarantees higher clothing prices, but combined with the wage situation in China, Americans could see an unprecedented surge in clothing prices in the months to come.

A massive outbreak of price inflation is already taking place all around us, as Americans enjoy their final days of our artificial economy that is being propped up by China and Japan. Some people say China and Japan continue to buy and hold US treasuries because of our overpowering military presence, but if and when they start dumping our treasuries and the bond bubble bursts, the US military may encounter hereto for unknown resistance and perhaps appearingly insurmountable obstacles if ordered to move against their fellow Americans. Americans who are of the same ilk as they themselves come from. A US societal collapse may very well be coming followed by the a new even greater American rebirth a la 1776 and 1865.
To be forewarned is to be forearmed. The global financial crisis situation is worsening daily despite what your federal and local governments are telling you and what the media is not. We are told little to nothing of the coming worthless, marked to market valued, derivative laden pension funds that a huge group of of ‘coming to age’ recipients known as “baby boomers” are counting upon for their retirements. Money that isn’t there now and certainly won’t be there when the need for it comes.

Combine the ‘no show’ pension funds with a bankrupt Social Security Retirement Fund and throw in a relentless bout of hyper-inflation into the mix as a result of the mountain of Federal Reserve Notes [aka: IOUs] being printed and you now have just one piece of the global jig-saw puzzle of disaster that is currently being constructed at a furious pace. Make no mistake, this impending super crisis will adversely effect China, Japan and Asia equally as much as it negatively impacts upon the United States, Europe and the West.
Major events that alter the very course of humanity do not occur for short periods of time simply because they themselves are years in the making. Patience and knowledge of the true condition of the global and US banking, insurance and pension sectors will make for a successful investor.

S&P 500 Index = – 0.83% [1124.83 / $ -9.45] Today’s Performance = -0.83%
PSQ = + 0.04% [$39.24 / $ +0.02] PSQ Today’s Performance = +0.04%

The S&P 500 inverse ETF ‘PSQ/ProShares Trust QQQ underperformed its underlying index by a factor of 20.75 times today!

> 0.083%/o.o4% = 20.75

Claus, you reassured us that unleveraged ETFs didn’t suffer from the same sort of performance deterioration [loss of similar performance as its underlying index] as leveraged ETFs, even when held for extremely long durations of time. Despite the warnings from the SEC and even the sponsors of these inverse ETFs that over time the performance correlation between the inverse ETF and the underlying index breaks down.
Your implication was that unleveraged inverse ETFs like PSQ would always perform usually like the underlying index regardless of the amount of time they were held in a portfolio. There were former members like Cheech and Mike that expressed concern that the MDCP was holding these inverse ETFs far longer than they should prudently be held.

The portfolio has held PSQ for over 16 months and today’s performance of PSQ against its underlying index appears to prove that PSQ has lost most of its inverse performance correlation .

Simply put the Dow was down 0.72% today and the S&P 500 index was down 0.83% today so why was PSQ only up 0.04% today and not up 0.70% to 0.80% which is what the two major market indices were down today? After all, isn’t PSQ supposed to perform nearly opposite the market in percentage terms minus management fees? Could it be that the warnings issued by the SEC and the sponsors (creators) of these inverse ETFs we correct, that holding them for long periods of time subjects them to a loss of performance correlation with the underlying index it’s keyed to?
So I’ll ask again: Who’s doing the math?
With the market down almost 77 points and PSQ up only 2 cent does that mean that if the market fell 770 points, PSQ would only be up 20 cents? Even worse, if the market crashed and fell 7,700 points, would that mean PSQ would only be up $2.00? Who’s doing the math on PSQ? RWM has been in the portfolio for nearly a year and it too has suffered a sever breakdown in the correlation of this ETF’s own performance against the underlying index it’s performance is measured against. Who’s doing the math on RWM?

Will,
I really believe that the bond market is still not ready to short as there is still strong investor demand for bonds by people looking for yield. Just like the madness that drove investors to give there hard earned dollars to the US Treasury for T-bills that are yielding 0.17%, the ‘yield hungry’ investors are apparently still finding buys. I suspect this condition to last at least through the year-end holiday season. What looks especially tempting are these investment grade closed end bond funds selling at double digit discounts to NAV whose portfolios are composed of term specific government, US and foreign, as well as the bonds of top tier multinational corporations domiciled throughout the globe.
Regards
PS…… It seems that even Warren Buffet agrees with me. He stated today that he doesn’t believe that this recession, aka: Summer of Wreckovery, is really over either. Only the politicians in Washington, our elite ruling ‘Roman Class’ if you will, are foolish enough to believe that we the people actually do believe their lies and deceptions.

Where has the previous results for SH & SEF under ‘Closed Positions’ gone? Everything else is there but those two previous all-stars.

Great market retreat call Claus, glad I went with SPY (as per my previous blog entry) not SH for my 10% trading bit. Regardless of the light volume and triple Death Crosses.