Bill Cara’s Blog for Dec 30, 2011
  • December 30, 2011 12:00 am
  • by admin

CTA Trading Desk Morning Report

[9:00am ET] Good morning, Geoff here.

Yesterday


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NYUGrad
Member

watching the longwave presentation. thx!

kaimu
Member
ALOHA!! “So – we turn again to Japan. They’re really the only recent example of a credit bubble pop followed by deflation under a fiat monetary system.” Dave-When I hear people throwing out ideas about how gold performs under deflationary events I search around for “actual” real time examples instead of mythical charts and formulas or jumping on the band wagon of the correction dujour. Hey, Japan works for the deflationists to prove all things “deflation”! I only refer to Japan since it is one of the only major economies to experience long term low rates and a collapse of… Read more »
davefairtex
Member
So – we turn again to Japan. They’re really the only recent example of a credit bubble pop followed by deflation under a fiat monetary system. I’m thinking Japan had 20 years of mild deflation because they engaged in government stimulus and debt monetization every year to try and make up for the private sector deleveraging. I can’t find any charts to back this up, but their debt moving from about 70% of GDP in 1990 to 225% of GDP today says their deficit ran about 7% of GDP each year – for 20 years!! Japan didn’t have that wave… Read more »
jack black
Member

The USD chart looks bullish indeed. The only problem is dollar sentiments are as high as at the peaks in 2008, 2009, and 2010. This rally is running out of steam.

jack black
Member

I’m glad you liked the charts. This guy is a true genius. He earlier modeled gold price based and inflation rate and fed interest rate. Assuming ZIRP policy for couple of years, his model is showing gold price target of $4,380:

http://www.resourceinvestor.com/News/2011/12/Pages

NYUGrad
Member

WOW. that sounds like CAT stock will soar! 50% cut in overhead, now that is share holder value.

Vadym Graifer
Member
MoKat
Member
With wages nearly flat over the last years, workers aren’t sharing in any of the large profits by multinationals. Let’s destroy some more of the middle class… this time in Canada. Caterpillar Inc. said Sunday it had locked union workers out of a train locomotive plant in London, Ontario, in a sign that the world’s largest maker of construction and mining equipment is prepared to get tough with workers despite a big recovery in earnings over the past two years. Caterpillar said in a statement that workers would be barred from the Electro-Motive Canada plant until “a ratified contract is… Read more »
NYUGrad
Member

Forget what the chart is of. just look at the prices and the levels. its telling me it wants to go higher.

http://bit.ly/rqYZrp

If 81.44 is taken out, path of least resistance is 83+

MoKat
Member

Dave

It’s a tough comparison with deflationary Japan as most of their debt is internally financed, the Yen has grown stronger, they’ve had nearly full employment and the country had trade surpluses until recent.

We find none of those elements in the current US economy.

I believe deflation in America will paint a much different picture than in Japan.

NYUGrad
Member

Just in time for New Years day

http://on.wsj.com/sVh2Gv
Europe at the Brink – A WSJ Documentary 12/30/2011 8:58:55 PM
In this documentary, Wall Street Journal editors and reporters examine the origins of Europe’s debt crisis and why it spread with such ferocity to engulf much of the continent and threaten the entire world.

Sounds like a hollywood drama preview. “Aliens invade”

4ever
Member

The story title & cartoon/picture appear pessimistic. Six different economists present their views. Might be worth a glance if the Cowboys-Giants game gets boring tonight…

http://tiny.cc/m79ft

Dr. Strangelove
Member

davefairtex –

“Great point [kaimu] regarding deflation and gold in Yen. Of course I’d like to see all 20 years of deflation in Japan to if the first 10 years worked out as well as the second 10 years, especially since we’re on year #2, not year #11 in our own deflationary period. But certainly during the second 10 year stretch gold looks pretty good.”

Price of gold in Japanese Yen since 1970: 11th chart down under ‘Foreign Forex Gold’

http://www.sharelynx.com/gw/GoldWatcher.php

Kaimu’s point holds water.

Got gold?!

Bill Cara
Member

The WIR will be delayed a day because, well, one thing led to another. After being bed-ridden for several days, eating dried toast, the result was a tooth crown was pulled out by the toast, which in turn led to an abscessed gum because I was too weak or busy to get to a dentist. I slept for most of the day!

loannetter
Member
Kaimu, RE: Your assertion: “Its a sad day when the 10yr and 30yr bonds are in the top ten performers for the year when those investments do nothing but indebt us and our kids further and further and produce nothing but the funds necessary for a corrupt government to malinvest into more corruption…” Certainly indebtedness is the bain of the overly indebted. Who put our kids there? Who believed they could afford $100,000 in college loans or buy a $300,000 home on a $2,000 per month income? Who signed the promissory note they didn’t even read that stated the terms… Read more »
NYUGrad
Member

Not a bullish indicator
AAPL: 25%
MCD: 30% (and paid a dividend)

http://bit.ly/tgtJeU

NYUGrad
Member
Here you go for the dow industrials. I dont look at this as much as IBM, MCD made up quite a bit of the 5% gain for the yr. http://bit.ly/sXPB6s More importantly Nasdaq: http://bit.ly/vM3QDe Yes I realize moving averages are lagging indicators. but when you apply longer time frames, they are also great big picture signals. And a 200 day ma cannot be easily manipulated to go another direction on a dime. For a rally to take hold in either Nasdaq or S&P, we will need a 1995 like burst in new money. the money is there in cash at… Read more »
Les
Member

excellent charts, for both the bullish and bearish camp. I suspect with central bank balance sheet expansion we might get some lift now followed by further downside in 2H2012. Either way, a great find, thanks.

jack black
Member

I have been talking about contrarian signals for PM and miners for weeks.
I came across this website that sums it all. Great reading and great chartporn.
One caveat, the author doesn’t rule out a crash.

http://www.resourceinvestor.com/News/2011/12/Pages

Les
Member

Damn Dave, valid question on Japan’s 20 years and it doesn’t stack up so well. Take a look at the attached chart. Still, the 20 year deflation period for Japan hasn’t been that bad. You can see the first ten years shaking out the majority before the bull market began again. What was the peak in 1980 about? Was that Hunt Bros. mischief or the period leading up to Volcker’s 20% rate hike? Or maybe just too much hot money flowing through Japanese markets at the time? Not sure what to make of it.

http://www.24hgold.com/english/gold_price_in_yens….

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