Here Comes the Economic Stimulus!

6-12 months from now you will look back at today’s market hysteria and ask: “What was I thinking? It was unreal buying opportunity but I was shorting/selling”

P.S. Do not delete this post and lets come back to it in 6-12 months

Barry – I’ve gotta wonder whether nosebleed oil prices are the requirement for the oil producing countries remaining with the dollar standard?? Yes, I know this sounds paranoid, but the dollar has little else going for it nowadays besides its ubiquity.

High oil prices do 3 things

As previously indicated, it keeps most of OPEC and Big Oil happy with the dollar.

Those countries who import oil, while not happy with the dollar, need the dollar to buy oil, so they accumulate them. This is weakened a bit by Russia, Venezuela and Iran selling oil in other currencies.

Those bankers who make money creating money (M3 is increasing at 16%) are happy, as they can create money for the oil consuming countries like China who need dollars, via consumer debt that allows us to buy their goods. The consumer is hurting though.

So whats up with the dollar? Might be that folks have lost confidence in the ability of the consumer to keep feeding the machine, and demand for dollars is weakening with more oil being sold off the dollar.

The fleas (bankers) have killed “Consumer” the dog, and so goes the dollar. May you RIP Consumer, you were loyal to the end, and you will be missed. Maybe if we can catch the fleas like we caught Spitzer there will be justice, but the fleas might have been responsible for Spitzer demise, so don’t count on it.

to Biggs credit, it makes a lot more sense to buy after a 20 – 25% correction in the S&P, Nasdaq then to buy after a 20% run up doesn’t it?

I mean, let’s face the facts. This won’t go on forever (bear markets NEVER do). However, for now I’m definitely staying defensive with SDS, QID, FXP, EFU and IAU. Hope to just tred water until at least the credit/bank crisis is behind us (probably in the 4th or 5th inning by now).

Anyone disagree?

Anyone disagree?

______

Yes. Me and Noriel Roubini.

Tell me where all of this new, stupid credit is going to come from?

4th or 5th inning? Hell, we’re not even in the ballpark yet. If we do have a big rally, you’d better get in and get out.

I follow matters like this with interest not because I care about the world of finance for its own sake (like many of the seeming bulls in this thread), but rather because my profession makes me one of the first dogs kicked when the economy starts to go south.

Putting aside for the moment that I am in the closing weeks of my worst quarter since the year of my mother’s death (and worse than several of my 2K-’02 quarters)…

The dollar is taking it in the pants, and my understanding of macroeconomics suggests that the strength of a currency is a primary indicator of the strength of the economy in which it was issued to circulate.

Long story short, we pay others to make what we consume, and as other states amp up their knowledge economies, the relative value of the U.S. knowledge economy – that is to say, the engine of the entire U.S. economy, apart from ag and natural resources – decreases. The amount of *stuff* we can buy as a result also decreases. Where does this trend take the United States (and for a while at least, the rest of the world with it)? I really don’t like the answer to that question.

I’m not trying to be Chicken Little here, and much to my chagrin, what I’m about to write makes me sound a great deal more against free trade than is actually the case…

I can’t help but think that the next three to five years are going to be a terrific argument against the way in which globalization has been implemented. The Train of Unintended Consequences is pulling up to the platform, all aboard.

And real estate? Symptom, not disease. When you dump a bunch of money into the economy (hello? interest rates?) and need to forestall inflation, where else is it going to go? Yep! It’ll be something with enough intrinsic value that people will be grateful to take possession at any remotely-reasonable price.

The good news (as such) is that if it goes far enough, the United States will actually be able to afford to fill in the gap that twenty years ago was a robust secondary economy, and do it on terms that will put the developing nations to shame. (Either that, or those productivity advances during the Nineties looked great on paper.)

Until then, well, the rest of us’ll be standing there, holding our proverbial p*****s in our hands and paying progressively higher prices for pretty much everything. Y’all have fun with that market.

Keep in mind that Biggs was a strategist not a trader so his timing (even IF he is right!!!) could be off by enough time to put you in the poorhouse. Wonder how his hedge fund is doing??? anyone know the performance numbers??? I am ready to be underwhelmed. He’s a good talker but so what? show me the money from his great calls….IF OIL and Gold correct and the dollar does a dead cat intervention bounce and the fed cuts and and and Barton backs up the truck we could get a little bounce next week. But will it hold? Hell if I or anyone in the world really knows…..will be educational to observe however.

Hello… is anyone out there……

Please tell this underground miner I’m full of shit …

Hey blam, your stuff is pretty funny, and makes a lot of sense as well. But your money must be somewhere, so where is it?

My money, my money

My money is like the wind – always and every where.

My money is at risk of being destroyed by the POS republicans. Unfortunately, I believe in America and have decided to stay with us.

Did I ever tell you that my wonderful father was shot in the face in WW2. Drove his tank from the front of the armored column of the 7th cavalry stopping to pick up wounded. Two silvers and a bronze. Very American micks.

There you have it. I have given up on the whole ideal of markets.

Ain’t amazing how blockheads like craig behnke can step on holistic moments and not even know it.

There were some mighty weighty questions being asked in that Restaurant at the End of the Universe.

But,

I don’t recall this question being asked:

“How much liability can the Fed manage?”

I noted that this morning’s front page NYT article by Landon Thomas concerning the new Bear Sterns welfare program did NOT mention the dreaded “I” word once.

This, ladies and gentleman, is what passes for “analysis” once snouts begin plunging into the public trough.

The rise in oil is just an obvious clear symbol to Americans. Our real problem is the falling USD. One of the only reasons oil is up this much is because the USD has fallen 40% since the Iraq war. Just keep printing the money guys and $5.00 a gallon gas will be here by next year.