Pretty Charts

Related to my comments about the markets making tops, here is some pretty charts to look at.

http://tradertim.blogspot.com/2006/09/case-for-double-top.html

Economic diary 9/15/06

This will be an ongoing series of posts (assuming laziness doesn't take over) that will probably be boring to most of you. I want to document my thoughts about what I am observing for future reference. It is quite easy to let thoughts that were somewhat fleeting but correct in the past to become your "opinion at the time". Consider this a way to see how correct I actually am.

Macro:

1. Inflation- I think inflation will be contained in its growth going forward somewhat. A lot of it has already been baked in and the numbers will only slowly reflect it. I do think a lot of the inflation we have seen has been of the demand pull type. If the global economy slows, one would expect inflation to ease downward. Some are even arguing that we are in a deflation trap with easy money and all that (think Japan 1989). That may be the case though it is hard to say. I think any deflationary forces will be muted because of the long term policies I believe will be used (see more below).
   



2. Commodities/Oil- the entire segment has been in a steady downdraft in recent weeks. Oil has dropped but so has everything else. The Gold bug types will say this is a signal that the market doesn't anticipate inflation (see deflation trap). The problem is that if inflation is demand pull, it isn't deflation we are seeing but a global slowdown. The current Oil futures correction has occurred simultaneously with excess supply. I have long thought that Oil was merely responding to increased demand (due to China and India joining everybody else) with some currency effects thrown in.
   


3. Dollar- the dollar has basically treaded water for some time. So what gives? I think it is basically a case of least ugly. Our rates are decent so it is keeping investment flows strong.



4. Housing- Simply put, it is going to get ugly. Though not bubble collapsing ugly.
   

Given all this, what happens? I think we are in a situation where we will have a recession lead by housing (who lead us out of the last one). Inflation will tame somewhat because of reduced demand. Commodities and Oil will stabilize at a lower level. But the choice The Fed has is try to reinflate by dumping even more money and killing the dollar but possibly stopping housing from going downhill too fast OR hang on and hope that deflation doesn't take hold and housing somehow just merely slumps and the economy grows fast enough to prop everything up and give things time to heal (i.e. malaise scenario).

My bet? The Fed tries to straddle the two. They will toss the dollar overboard fairly quickly and without remorse. But they dont want to try to reinflate any asset/credit bubbles - I think they are smart enough to realize they can't play the same game as in 2001. So the best case scenario is a bearable malaise - the softest of soft landings. Maybe a quarter of negative GDP but a long period of no growth. If that sounds familar, it should. It is called 2001-2003. Can we repeat that? I don't think so. What replaces the growth supplied by housing in the previous period? The consumer can not do it. Debt levels are too high for that much heavy lifting. CapEx is floated around a lot as well. It may come to pass but some recent signs are towards less business investment not more.

I think we will have a hard landing. Fed will toss the dollar in an attempt not to crash. Housing will take a 10-20% correction and stay level after (for years) that due to the Fed's action. Similarly, we won't have huge negative GDP but it will be stretched out over the course of years (i.e. instead of a yr of -4% GDP, a decade of -.2% GDP). Again, the Japan scenario looms large. The question is do we experience deflation like they did? I think no. Our debt is too high, our culture too different, banking system much more ruthless. By the numbers, it will seem better but on the personal level, it will be far worse. The Japanese system caused pain but due to its long time frame many suffered long but not so harshly. Our system is far worse. A good fraction will suffer harshly ( see Bankrupcy reform bill).

Stock Market:

The Dow is about 100 points from meeting the last top. If it fails to break through, it looks like a really clean double top. The Nasdaq is about 120 points from a top. The last top was tested several times. Definitely a harder ceiling than the Dow. The SP500 has reached the level of the last top. So what happens from here? I think we get a short term rally. The Sp500 might even break its top. I think that is mainly because the street will read the inflation and commodity numbers and think that inflation is under control, the fed won't boost rates, and we will have a soft landing. I think the first two aren't horrible reads but the last one is totally off. So the market will rally before they realize how bad things are getting and will begin a leg down. I think of the scenarios you put up (bearable malaise, malaise, reinflation of the credit bubble), only a reinflation is positive for the market at all. But the reinflation can't last forever. I just see as best case that the long overdue correction will merely be delayed. Still think there is a good chance of a 15%+ drop before the end of the year- on the low side.

random

Was going through some archive and ran across this. I amuse myself way too much sometimes. Looks over. Hmm table has relatively few papers but a bunch of cd's. Well, that is atleast closer to happiness.

Uncertainity

I don't know if I should be encouraged by progress and minimal sucess or disappointed that the success isnt more in line with what is "normal". Well hopefully it is exponential growth like it has been so far. I should catch up to my real age by what? 40? then.

My confidence work-wise was shaken recently. I dont know if I should move up. Choices...

And now I think I am getting a bald patch on the side of my head. Jesus. Just fall out entirely already. I hate shaving it but it is forcing me more and more to that choice. It is easy when it is the only fucking choice.

Weekend has been bad so far. Tomorrow should hopefully be better. Monday night have dinner with Pete. Been far too long. Should be fun.

Consumer whorism

I purchased some stuff recently and I figured I share some thoughts.

I bought some new pillows. At 15 for 2, they seem to be a great buy. Real fluffy and if they have any kind of lifespan, well worth the cash.

I also bought a new stereo. It has its quirks (it seems far too easy to tip over for instance but a little weight solves that). The sound is very good though and the system can get quite loud. I am running it at level4 or 5. I think it goes up to 20. And it has the thinnest remote you ever seen.

Finally, I got a new toaster. I previously bought the same model in white for my parents. They love it and now that I have one, I do too. It toasts well and has a nice stay warm feature. The cool touch feature is handy in ways you wouldnt realize it. Are their nicer toasters? Sure but this one is cheap and works better than most that I have used.

The conundrum of the Kantian Nihilist

The recent stupidity of Muir's comic (no I won't link you- it has to be the only web comic that is so retarded I won't read. And I read ghastly religiously for crissakes) has created a bit of a buzz. But it has me thinking about a bigger issue- that of intellectual fakery.

It is easy enough to appear as an "Expert" with a little bit of knowledge and some strong opinions. We see that all the time in media with "pundits". Get something right one time and be willing to make reckless statements (i.e. good tv)? Welcome to a career as a talkign head. Make up facts to support your position? All the better!

But real intellectualism? That is of no use in the generic sense. I don't pretend that this is in any way new. Richard Hofstadter wrote about this in 1963. But it makes one wonder about the sustainability of such an organizational structure. In a world where true knowledge is more and more valuable, there is more chaff to sift through. And increasingly, that is what we as a species spend our time doing. Why do you think things like google and wikipedia are so popular? Why do we spend so much time creating and optimizing databases? Do we hit a point where the system breaks down?

I don't know but I have a sense we will find out sooner rather than later.



I ponder, as a mere side thought, if this is in a way related to trend of the arm's length attack. By that I mean the use of other's to attack positions or people (e.g. swift boat liars for truth - though that isn't what prompted this paragraph). An attack without sullying one's hands if you will. This isn't new but it seems to be more and more prevelant. In a society where the image of one's intellect is prevalent for creditability, it presents an interesting opportunity to damage another person's creditibilty by mere allegations without the potential for blowback.

Links and such.

This will be a work in progress. Think of it as a blogroll in primative form but for sites that I think more people would benefit by reading.

Personal Blogs

Milo's blog bungojungo also see ty eats cheese.

Martin's blog Ghostlands

Financial/Economic

Big Picture

Angry Bear

Shopping Stuff

Porto Rico Coffee See my previous reviews.

Fatwallet forums This is a great to find deals and reviews on things to buy.

Amazon Refund tracker

Package Mapper - appears dead.

Sports

Hardball Times

Comic

BoxJam

Coffee Review- Cafe Blend from Porto Rico Importers

The company: Porto Rico Importers based in NYC. Been in business a long time. Offer wide variety of beans cheaply. Also sells a wide selection of tea. Has weekly specials on coffee. Has internet, phone, and fax ordering options. Not a huge operation with an amazon type polish to it. Internet ordering is basically a secured email, not a cart system. Ordering was easy enough, no acknowledgement. Email sent back with final order total within 36 hours.

The coffee: Beans are dark in color and have a good sheen to them. Almost as dark as a French roast. Strong Aroma, balanced flavor. Not as strong as French Mocha but Stronger than Peter's Blend. Definitely would order again.

Price of coffee: They have weekly specials. Cafe Blend runs $3.99/pound on sale. Regular price varies but is often 5.99/lb.

Shipping: $7.28 to ship 3 pounds. $7.58 to ship 5 pounds. Uses UPS ground. Took 5 Business days - ordered during their Spring sale and they warn that it can take up to 2 weeks.

Packaging: Shipped in a box with biodegradable packing peanuts (no chemical fumes which is a plus). Bagged in plastic lined paper bags- not vacuum packed.

See previous review of Peter's Blend here.

See previous review of Northeast Blend here.

See previous review of Columbian Supremo here.

See previous review of French Mocha here.

Coffee Review- French (Roast) Mocha from Porto Rico Importers

The company: Porto Rico Importers based in NYC. Been in business a long time. Offer wide variety of beans cheaply. Also sells a wide selection of tea. Has weekly specials on coffee. Has internet, phone, and fax ordering options. Not a huge operation with an amazon type polish to it. Internet ordering is basically a secured email, not a cart system. Ordering was easy enough, no acknowledgement. Email sent back with final order total within 36 hours.

The coffee: Traditional French roast. Not much else to say. Beans are very oily and have a nice sheen to them. Dark color but not as dark as some french roasts which can look like coal at times. Strong Aroma. Nice strong balanced brew. Would definitely order again.

Price of coffee: They have weekly specials. French Mocha runs $3.99/pound on sale. Regular price varies but is often 5.99/lb.

Shipping: $7.28 to ship 3 pounds. $7.58 to ship 5 pounds. Uses UPS ground. Took 5 Business days - ordered during their Spring sale and they warn that it can take up to 2 weeks.

Packaging: Shipped in a box with biodegradable packing peanuts (no chemical fumes which is a plus). Bagged in plastic lined paper bags- not vacuum packed.

See previous review of Peter's Blend here.

See previous review of Northeast Blend here.

See previous review of Columbian Supremo here.

What am I, a clown?

Apparently, I am here to amuse you. Or entertain you in some way.

Being an engineer, I have a love for numbers. So when I started this blog over a year ago, I signed up for a hit counter. I didn't think anybody would ever read it. I mean I am just a random person. But surprisingly, random people will read what other random people have to say. It is an interesting thing.

So what does that have to do with anything? Well my hit counter recently went through the roof. (The stats are publicly available if you want to see. Just click on the little icon and it should lead you to the page.) Anyway, one or several people have been spending a lot of time reading my entire blog. And supposedly, the hits are local (the tracker isn't 100% accurate). I will admit to being curious (I mean really who wouldn't?) but no I don't want to know who you are. I just wanted to say welcome and I'm glad you are entertained enough to read that many pages (and really that is what caused me to write this post. 87 pages? just wow.). So, I hope you continue to read, laugh, cry, get pissed, mock me behind my back, whatever. I just hope your aren't bored.