@Tony – Cheers for your thoughts. As I understand it, conventional indices are constructed to take into account the compounding of their underlying holdings, so that this sort of error does not emerge. Regarding my friend, yes, the theory was (and seems quite common, from a quick Google) that the short ETF would go up in value as his portfolio fell over a few weeks. The trouble is the daily compounding means a different kind of bet is being undertaken. I agree that a plunge protection fund makes far more sense if you’re a dabbler, but most people who are draw to active strategies, even semi-responsible semi-active ones like me, find it hard to sit in cash and wait, especially at today’s rates. (Doesn’t mean it’s not right to do that, just saying I think people feel the need to ‘do something’ and feel the Short ETF is something).

At first he was called Hotfoot Teddy, but he was later renamed Smokey, after the icon. New Mexico Department of Game and Fish Ranger Ray Bell heard about the cub and took him to Santa Fe, where he, his wife Ruth, and their children Don and Judy cared for the little bear with the help of local veterinarian Dr Edwin J. Smith.[29] The story was picked up by the national news services and Smokey became a celebrity. Many people wrote and called asking about the cub's recovery. The state game warden wrote to the chief of the Forest Service, offering to present the cub to the agency as long as the cub would be dedicated to a conservation and wildfire prevention publicity program. According to the New York Times obituary for Homer C. Pickens, then assistant director of the New Mexico Department of Game and Fish, he kept the cub on his property for a while, as Pickens would be flying with the bear to D.C.[30][11] Soon after, Smokey was flown in a Piper PA-12 Super Cruiser airplane to the National Zoo in Washington, D.C.[11] A special room was prepared for him at the St. Louis zoo for an overnight fuel stop during the trip, and when he arrived at the National Zoo, several hundred spectators, including members of the Boy Scouts, Girl Scouts, photographers, and media, were there to welcome him.[31]
The poll of 30 finance professionals on four continents showed a lack of consensus on the asset judged as most vulnerable now, with answers ranging from European high yield to local-currency emerging-market debt, though they were mostly in the bond world. Among 25 responding to a question on the next US recession, the median answer was the first half of 2019.
By the end of June 2011, the Fed had only reached its half-way mark in money printing. It was shortly thereafter that the Fed had implemented its “operation twist.” Operation twist consisted of selling the Fed’s short term holdings and using the proceeds plus extra printed money to buy Treasuries at the long-end of the curve – primarily 10-yr bonds. Read More
And it isn't just expectations of future inflation that are changing - current inflation is picking up as well. In the U.S., annual core inflation (less food and energy) currently sits at 1.8 percent - up from 1.6 percent in the 12 months through January - and wages are rising. Even if oil prices remain flat over the next 12 months, year-over-year inflation comparisons in the Eurozone will turn positive in the fourth quarter, with expectations of annual inflation of 1.6 percent. As has happened in the U.S., Credit Suisse also thinks that investors may soon start questioning just when the ECB will taper quantitative easing. That, too, would be bad for bonds. Without the ECB as a big-time buyer, the supply of bonds will increase, pushing down prices.
James Grant, financial journalist and historian, is the founder and editor of Grant’s Interest Rate Observer, a twice-monthly journal of the investment markets. His new book, The Forgotten Depression, 1921: the Crash that Cured Itself, a history of America’s last governmentally unmedicated business-cycle downturn, won the 2015 Hayek Prize of the Manhattan Institute for Policy Research.
Warren Buffett’s favorite indicator is telling us that stocks are more overvalued right now than they have ever been before in American history.  That doesn’t mean that a stock market crash is imminent.  In fact, this indicator has been in the “danger zone” for quite some time.  But what it does tell us is that stock valuations are more bloated than we have ever seen and that a stock market crash would make perfect sense.  So precisely what is the “Buffett Indicator”?  Well, it is actually very simple to calculate.  You just take the total market value of all stocks and divide it by the gross domestic product. Read More
As the blame game over the alleged chemical attack in Syria escalates ahead of what is expected to be an imminent, if contained, air strike campaign by the US, UK and/or France against Syria, on Friday morning, Russia’s foreign minister Sergey Lavrov said Moscow had “irrefutable evidence” that the attack – which allegedly killed more than 40 people in an April 7 chemical weapons strike on the former rebel outpost of Douma  -was staged with the help of a foreign secret service.
In the days ahead, markets are awaiting potential announcements on the Trump administration's plan to curb Chinese investments in U.S. technology, although messaging on those measures from the White House has proven conflicting. The U.S. is also set to impose an additional 25 percent tariff on $34 billion in Chinese imports on July 6, with duties on a further $16 billion in Chinese goods in the works.

The Outsider Club is a group of people ready to take our finances into our own hands; to manage our own investments; to not give into a system that skims off the top until it's time for you to retire. We offer expert opinion and guidance on saving, retirement and financial planning, taxes, investments, and generally how to financially thrive on your own, independent of the banking system and government. We'll also help you shield your civil liberties and freedoms. We pledge allegiance to no political party.

Our modeling systems are suggesting that Gold and Silver will begin a new upside rally very quickly.  We wrote about how our modeling systems are suggesting this upside move could be a tremendous opportunity for investors over 2 weeks ago.  Our initial target is near the $1245 level and our second target is near the $1309 level.  Recent lows help to confirm this upside projection as the most recent low prices created a price rotation that supports further upside price action.  What is needed right now is a push above $1220 before we begin to see the real acceleration higher.

Water in faults vaporizes during an earthquake, depositing gold, according to a model published in the March 17 issue of the journal Nature Geoscience. The model provides a quantitative mechanism for the link between gold and quartz seen in many of the world's gold deposits, said Dion Weatherley, a geophysicist at the University of Queensland in Australia and lead author of the study. Read More


In his book, “1984”, George Orwell envisioned a future crushed by the iron grip of a collectivist oligarchy. The narrative told of the INGSOC Party which maintained power through a system of surveillance and brutality designed to monitor and control every aspect of society.  From the time of the book’s release in 1949, any ensuing vision of a dark dystopia depicting variations of jackboots stomping on human faces, forever, has been referenced as being “Orwellian”.  This is because Orwell’s narrative illustrated various disturbing and unjust conceptualizations of control, crime, and punishment. Read More
A lot of people are shocked by how rapidly things are beginning to move.  The U.S. economy is slowing down at a pace that we haven’t seen since the last recession, and this is something that I have been tracking extensively.  But now the slowdown is so obvious that even some of the biggest names in the mainstream media are talking about it.  For example, just take a look at what Jim Cramer of CNBC is saying.  For a long time, he was touting how well the U.S. economy was doing, but now his tune has completely changed.  According to Cramer, a lot of corporate executives have “told me about how quickly things have cooled”, and he says that many of them are shocked because this “wasn’t supposed to occur so soon”… Read More
The content on Dr. Housing Bubble Blog is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) who may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

He is, in addition, the author of a pair of political biographies: John Adams: Party of One, a life of the second president of the United States (Farrar, Straus, 2005) and Mr. Speaker! The Life and Times of Thomas B. Reed, the Man Who Broke the Filibuster (Simon & Schuster, 2011). His new biography of Walter Bagehot, the Victorian man of letters and financial journalist, will be published in 2018.

Our modeling systems are suggesting that Gold and Silver will begin a new upside rally very quickly.  We wrote about how our modeling systems are suggesting this upside move could be a tremendous opportunity for investors over 2 weeks ago.  Our initial target is near the $1245 level and our second target is near the $1309 level.  Recent lows help to confirm this upside projection as the most recent low prices created a price rotation that supports further upside price action.  What is needed right now is a push above $1220 before we begin to see the real acceleration higher.
After only a month and a half in office, in a media blitz including press conferences, interviews and public appearances, President Obama, Federal Reserve chair Ben Bernanke,[35][36] Federal Deposit Insurance Corporation chair Sheila Bair[37][38] and Treasury Secretary Tim Geithner[39] rolled out the details of numerous plans to tackle various elements of the economy, and began putting those plans into action. Mortgage rates for homeowners dropped, limits on executive compensation were enacted, regulatory changes were proposed, and the Treasury announced its intention to purchase $1 trillion of troubled bank assets, such as the aforementioned derivatives, and enticing private investors to join them in making similar investments.[40]
It is human nature to allow emotions such as fear, greed and egotism get in the way. Overconfidence is one of the biggest killers of portfolios. Barber and Odean in a 2000 paper show that “after accounting for trading costs, individual investors underperform relevant benchmarks. Those who trade the most realize, by far, the worst performance. This is what the models of overconfident investors predict” (http://faculty.haas.berkeley.edu...)

Swiss-born Marc Faber, now a resident in Thailand, holds a PhD in economics and is an investment advisor and fund manager through his firm, Marc Faber Ltd. He also writes a monthly investment newsletter, "The Gloom, Boom and Doom Report." As Money notes, Faber is consistently bearish, and frequently is called "Dr. Doom." He sees two big red flags right now.
Economists’ forecasts today, with very few exceptions, are a waste of time and downright misleading. In 2016, we saw this spectacularly illustrated with Brexit, when the IMF, OECD, the Bank of England and the UK Treasury all forecast a slump in the British economy in the event the referendum voted to leave the EU. While there are reasonable suspicions there was an element of disinformation in the forecasts, the fact they were so wrong is the important point. Yet, we still persist in paying economists to fail us. Read More
At first the effect on the broader economy is minimal, so consumers, companies and governments don’t let a slight uptick in financing costs interfere with their borrowing and spending. But eventually rising rates begin to bite and borrowers get skittish, throwing the leverage machine into reverse and producing an equities bear market and Main Street recession. Read More
Or, passively intentional inflation through government policy, taxes and market skewing favorable tax structures, government subsidies, etc. will artificially pin housing prices to a new norm, screwing all those who saved and were responsible and all those who saved for retirement. Oh, and it will screw all the young people who will have to pay higher Social Security and Medicare and Medicaid taxes because Baby-boomers are going to be damned if they are going to have to pay the consequences of their failure.
The Pecora hearings, as they became known (after their lead counsel, Ferdinand Pecora), revealed the seamier side of Wall Street during the bull market: the involvement of leading firms and bankers in the manipulation of share prices, the dumping of unseasoned securities on an innocent public, the fleecing of the firms’ own clients, the preferential distribution of shares to favored friends, and so on.
In short, don’t imagine that the era of managing interest rates is over. It isn’t, not by a long chalk. And in fact, I suspect that if anything could give us the “melt-up” outcome, it’s central banks making it clear that they are going to ignore above-target inflation. The idea that they’re not only not taking the punchbowl away, but spiking it with rocket fuel, would be just the ticket for a final blowout.
2019 is shaping up to be the year in which all the policies that worked in the past will no longer work. As we all know, the Global Financial Meltdown / recession of 2008-09 was halted by the coordinated policies of the major central banks, which lowered interest rates to near-zero, bought trillions of dollars of bonds and iffy assets such as mortgage-backed securities, and issued unlimited lines of credit to insolvent banks, i.e. unlimited liquidity.

All day today the presstitute scum at NPR went on and on about President Trump, using every kind of guest and issue to set him up for more criticism as an unfit occupant of the Oval Office, because, and only because, he threatens the massive budget of the military/security complex by attempting to normalize relations with Russia. The NPR scum even got an ambassador from Montenegro on the telephone and made every effort to goad the ambassador into denouncing Trump for saying that Montenegro had strong and aggressive people capable of defending themselves and were not in need of sending the sons of American families to defend them. Somehow this respectful compliment about the Monenegro people was supposed to be an insult. The ambassador refused to be put into opposition to Trump. NPR kept trying, but got nowhere. Read More


Smokey's debut poster was released on August 9, 1944, which is considered the character's birthday.[2][19][20] Overseen by the Cooperative Forest Fire Prevention Campaign (CFFP), the first poster was illustrated by Albert Staehle. In it Smokey was depicted wearing jeans and a campaign hat,[6][21] pouring a bucket of water on a campfire. The message underneath reads, "Smokey says – Care will prevent 9 out of 10 forest fires!" Knickerbocker Bears gained the license to produce Smokey Bear dolls in 1944.[22] Also in 1949, Forest Service worker Rudy Wendelin became the full-time campaign artist and he was considered Smokey Bear's "manager" until Wendelin retired in 1973.[2]


Dick Meyer of NPR believes that "the idea of blaming one person for the downfall of the economy with a gross domestic product of about $14 trillion, powered by 300 million people and engaged in complex global commerce is nuts — whether that person is Bush, Obama, Alan Greenspan, Bernard Madoff, Osama bin Laden or the editors of opinions at The Wall Street Journal."[14]

Presidential Tweets Express Anger at the FedThe catalyst today was more tweets from President Trump where he is expressing anger, not only at the Federal Reserve, and at the ECB and at the Bank of China, because he is accusing both Europe and China of being currency manipulators; taking advantage of us by weakening their currencies. He's saying ...…
The noose appears to be tightening further around the law-less behaviors of the Obama administration in their frantic efforts to protect former Secretary of State Hillary Clinton from lawsuits seeking information about former Secretary of State Hillary Clinton's private email server and her handling of the 2012 terrorist attack on the U.S. Consulate in Benghazi, Libya.
Forester is the founder and chief investment officer of the firm that bears his name. He finds nearly every S&P industry sector to be overvalued, and points out that the last two market crashes were sparked by the bottom falling out of a single sector. In the year 2000 it was technology, and in 2008 it was financials. In 2008, he radically reduced his exposure to bank stocks to 5 percent of his portfolio ahead of the crash at a time when financial stocks made up 20% of the S&P 500 index. His prescient move allowed his fund to become "the sole long-only mutual fund in the U.S. to gain in 2008," per Institutional Investor as quoted by Money.

And it isn't just expectations of future inflation that are changing - current inflation is picking up as well. In the U.S., annual core inflation (less food and energy) currently sits at 1.8 percent - up from 1.6 percent in the 12 months through January - and wages are rising. Even if oil prices remain flat over the next 12 months, year-over-year inflation comparisons in the Eurozone will turn positive in the fourth quarter, with expectations of annual inflation of 1.6 percent. As has happened in the U.S., Credit Suisse also thinks that investors may soon start questioning just when the ECB will taper quantitative easing. That, too, would be bad for bonds. Without the ECB as a big-time buyer, the supply of bonds will increase, pushing down prices.
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