Comments on: MYTHS OF ASSET REFLATION EXPLAINED http://pragcap.com/myths-explained Sat, 11 Feb 2012 22:06:55 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Anon http://pragcap.com/myths-explained/comment-page-1#comment-9257 Anon Fri, 20 Nov 2009 21:30:29 +0000 http://pragcap.com/?p=13121#comment-9257 V frustrating markets for longs and shorts now. V frustrating markets for longs and shorts now.

]]> By: JeffT http://pragcap.com/myths-explained/comment-page-1#comment-9255 JeffT Fri, 20 Nov 2009 19:52:06 +0000 http://pragcap.com/?p=13121#comment-9255 "Our central economic scenario assumes a slow recovery for the global economy, but with government debt at all-time highs, in this report we spend some time taking a hard look at the downside risks. Using debt as the key variable we also draw up two alternative economic scenarios (bull and bear) and consider the implications for strategic asset recommendations. In particular we focus on strategies for those who believe we may be set for a Japanese-style (non) recovery." Societe Generale reviews 3 scenarios: Bear, Central, Bull http://www.scribd.com/doc/22782805/Soc-Gen-Worst-Case-Scenario “Our central economic scenario assumes a slow recovery for the global economy, but with government debt at all-time highs, in this report we spend some time taking a hard look at the downside risks. Using debt as the key variable we also draw up two alternative economic scenarios (bull and bear) and consider the implications for strategic asset recommendations. In particular we focus on strategies for those who believe we may be set for a Japanese-style (non) recovery.”

Societe Generale reviews 3 scenarios: Bear, Central, Bull
http://www.scribd.com/doc/22782805/Soc-Gen-Worst-Case-Scenario

]]> By: Anon http://pragcap.com/myths-explained/comment-page-1#comment-9254 Anon Fri, 20 Nov 2009 17:43:57 +0000 http://pragcap.com/?p=13121#comment-9254 Oh yes. They raise their SPX year end target to 1160 from 1100. Hmmm. Why today? And why does the year end time matter at all. To funds maybe .. but for the individual investor? Looks like they are long and they need mkts to hold here. Oh yes. They raise their SPX year end target to 1160 from 1100. Hmmm. Why today? And why does the year end time matter at all. To funds maybe .. but for the individual investor? Looks like they are long and they need mkts to hold here.

]]> By: don http://pragcap.com/myths-explained/comment-page-1#comment-9253 don Fri, 20 Nov 2009 17:09:08 +0000 http://pragcap.com/?p=13121#comment-9253 By implication JPM seems to be suggesting that it is not fundamentals (supply/demand) that is fueling the risk trade - since the primary force behind it is that borrowing is cheap, thus spurring on speculation, due to very low major country CB interest rates. The question not dealt here is what might be the catalyst for a reversal of the risk/inflation trade. Seems to me that while the arguments made here are perfectly sound, they are also entirely of the rear view mirror kind: since credit/finance risk has been arrested, then lets get on with the reflation/risk trade, regardless of what is taking place in the real world of global economies of work/consumption. Is it possible that the feedback loop of real economy stagnation/decline back to credit/debt/finance takes hold, pressuring speculators to call in their chips. In other words, is it not the case that the real issue open to debate is whether the global economy is truly on the mend and trending towards rebounding -an analysis based on past business cycle dynamics - or might it be that this time it really is different, and the anticipated rebound isn't/doesn't take place? By implication JPM seems to be suggesting that it is not fundamentals (supply/demand) that is fueling the risk trade – since the primary force behind it is that borrowing is cheap, thus spurring on speculation, due to very low major country CB interest rates.

The question not dealt here is what might be the catalyst for a reversal of the risk/inflation trade.

Seems to me that while the arguments made here are perfectly sound, they are also entirely of the rear view mirror kind: since credit/finance risk has been arrested, then lets get on with the reflation/risk trade, regardless of what is taking place in the real world of global economies of work/consumption.

Is it possible that the feedback loop of real economy stagnation/decline back to credit/debt/finance takes hold, pressuring speculators to call in their chips.

In other words, is it not the case that the real issue open to debate is whether the global economy is truly on the mend and trending towards rebounding -an analysis based on past business cycle dynamics – or might it be that this time it really is different, and the anticipated rebound isn’t/doesn’t take place?

]]> By: JeffT http://pragcap.com/myths-explained/comment-page-1#comment-9252 JeffT Fri, 20 Nov 2009 16:41:25 +0000 http://pragcap.com/?p=13121#comment-9252 Other thing to note, I was looking at a volume indicator (VFI - Volume Flow Indicator by Markos Katsanos). For SPY and DIA, this money flow indicator was following the price uptrend from March till about mid-sept. From Oct to now, the money flow has been declining while the prices have continued up - new highs in price have not been confirmed with new highs in money flow. Just another thing to think about. Other thing to note, I was looking at a volume indicator (VFI – Volume Flow Indicator by Markos Katsanos). For SPY and DIA, this money flow indicator was following the price uptrend from March till about mid-sept. From Oct to now, the money flow has been declining while the prices have continued up – new highs in price have not been confirmed with new highs in money flow.

Just another thing to think about.

]]> By: James http://pragcap.com/myths-explained/comment-page-1#comment-9251 James Fri, 20 Nov 2009 16:19:40 +0000 http://pragcap.com/?p=13121#comment-9251 This is a scary chart of the DJIA, head and shoulders over decades: http://finance.yahoo.com/q/bc?s=^DJI&t=my&l=off&z=l&q=l&c= . If this chart is right we should see a 20% increase in markets over the next few years and then a crash that makes march look tame. This is a scary chart of the DJIA, head and shoulders over decades: http://finance.yahoo.com/q/bc?s=^DJI&t=my&l=off&z=l&q=l&c= . If this chart is right we should see a 20% increase in markets over the next few years and then a crash that makes march look tame.

]]> By: JeffT http://pragcap.com/myths-explained/comment-page-1#comment-9250 JeffT Fri, 20 Nov 2009 16:04:14 +0000 http://pragcap.com/?p=13121#comment-9250 I can either put 10K in my mattress or put 10K on red - just seems like there are so many potential risks. I can either put 10K in my mattress or put 10K on red – just seems like there are so many potential risks.

]]> By: Skateman http://pragcap.com/myths-explained/comment-page-1#comment-9249 Skateman Fri, 20 Nov 2009 15:32:27 +0000 http://pragcap.com/?p=13121#comment-9249 I don't think they realize how big a risk this is to their trade: "What will upset it? Uncertainty from...renewed downside risks on the economy." The U.S. alone will continue to have all kinds of problems from commercial real estate, a new wave of ARM resets, and no further increase on the margin from the stimulus spending. But all kinds of other things could go wrong globally. Japan looks like it'll blow pretty soon, Europe has swept all its problems under the rug for now, and farther out, China looks like an enormous potential black swan, though if we're all talking about it, perhaps a grey swan. As Taleb would say, this trade is like picking up pennies in front of a steamroller. I don’t think they realize how big a risk this is to their trade: “What will upset it? Uncertainty from…renewed downside risks on the economy.” The U.S. alone will continue to have all kinds of problems from commercial real estate, a new wave of ARM resets, and no further increase on the margin from the stimulus spending. But all kinds of other things could go wrong globally. Japan looks like it’ll blow pretty soon, Europe has swept all its problems under the rug for now, and farther out, China looks like an enormous potential black swan, though if we’re all talking about it, perhaps a grey swan. As Taleb would say, this trade is like picking up pennies in front of a steamroller.

]]> By: xxxxxL http://pragcap.com/myths-explained/comment-page-1#comment-9248 xxxxxL Fri, 20 Nov 2009 14:15:17 +0000 http://pragcap.com/?p=13121#comment-9248 An other detractor of the liquidity as a support to assets reflation ? http://www.bloomberg.com/apps/news?pid=20601087&sid=a.xZnID3aAQk&pos=2 An other detractor of the liquidity as a support to assets reflation ?

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.xZnID3aAQk&pos=2

]]> By: ES http://pragcap.com/myths-explained/comment-page-1#comment-9247 ES Fri, 20 Nov 2009 13:57:37 +0000 http://pragcap.com/?p=13121#comment-9247 They sound too smug for thier own good. It seems like first they picked they answers they wanted and then built an argument to support it. Their point about intrest rates only having an effect, but not the amount of money seems to be the weakest of all. The stocks started rising right when the FED started QE, not when the reates where slashed to 0%. They sound too smug for thier own good. It seems like first they picked they answers they wanted and then built an argument to support it.

Their point about intrest rates only having an effect, but not the amount of money seems to be the weakest of all. The stocks started rising right when the FED started QE, not when the reates where slashed to 0%.

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