Markets Face "Floptober" Says Reality Ratio

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This will take a bit of discussion to fully understand.  But off in the background, I use a series of indicators and one of these relates to bond pricing as a function of stock prices.  It typically will show a peak (and / or passing) well before the stock market follows suit.

Which, says the indicator now, should result in a mighty painful “Floptober” to come.

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14 thoughts on “Markets Face "Floptober" Says Reality Ratio”

      • I don’t believe you on that, George – while there has been problems with healthcare for decades – Donald Trump generally acts like (at least in the public eye) like he has unlimited access to monies where in fact he is tightly constrained because he really doesn’t have the funds . . .

        Being a good businessman is not all about ‘cutting corners’ and not following through on contracts legally signed. Sometimes you may not get ‘top dollar’ on a project – the end product may not be the best nor gotten at the most fantastic price. My dad was a businessman in a market that does not have a good reputation – used car dealer.

        But he had contacts and friends who knew he was reliable and someone who you could trust and he was well known as ‘good guy’ who was getting calls from friends even after he passed from cancer. (He told me once that you always honor a contract – even when you don’t ‘really have to’ – say ‘made in jest’.)

        When I think of Donald Trump, I am reminded of the scene in ‘A Christmas Carol’ where the rag-pickers discuss about ‘disposing’ of Scrooge’s bed linens – I bet no one will really mourn when ‘old Donnie’ kicks off . . .

        No, he is a really bad businessman!

    • One thing about credit unions: they’re member owned. And local CU’s don’t usually play in the bond and derivative markets. My CU has a cash reserve of 12% (as of 12/31/15). Compare that to under 2% for a TBTF bank. So a CU is relatively strong and less susceptible to a failure. It happens, but it’s rare.

      Having said that, if a TBTF bank failed and had a bail-in, this likely would cause a run on ALL banks, CU’s included. Expect a bank holiday and capital controls.

      I personally am working to liquidate my savings balances to cash and metals. Just to get it out of the bank. It’s not earning any interest anyway.

      • You are sadly mistaken about what CU’s invest in – your particular Credit Union – may be different – Of those I do business with ( and this is no way a solicitation – I have to make that especially clear since I’m in the business) not one that I am familiar with deals in derivatives but they are all in the bond market across a number of asset classes in one way or another if they are not active lenders – generally I know of NO portfolio manager sitting on 12% cash – there job is to invest not make market calls. You may want to ask for a copy of their investment portfolio if it is not readily available which I am guessing it may not be……

  2. Thanks for fixing me up this morning G. First read of the report almost had me stuck in my chair but following your sage wisdom weekends are made for doing things not sitting so I will spend more time with it this evening after some projects.

    Money has gotten so diluted better get ready for some really lean times.

    Lock and load.

  4. Government bond rates fall as government debt increases; long term trend. What would be interesting is if government bond rates suddenly started falling very fast. If all government bonds went to zero or negative, what would the large banks do.

  5. This article has an aspect about it that should raise lots of alarms. “Researchers want to know if social media can predict hate crimes”.

    I realize that much of the gang violence plaguing the Black community starts in social media, but this program has the potential to become very Orwellian, and be a part of the thought police network, especially in today’s world of phony political correctness.

    What happens if you don’t hold the correct position on the hot button subjects of the day? Do you come under suspicion as being a hate monger and a promoter of hate speech, just because you don’t see the world as you’re suppose to? We see that now, with the new style of journalism, that is political affiliation oriented.

    Do you become a target for further scrutiny if someone tells the authorities you don’t have the correct thoughts and positions on events and you scare them? I see lots of red flags here. Anybody else?

    http://www.oregonlive.com/today/index.ssf/2016/09/researchers_turn_to_social_med.html#comments

  7. Don’t be a boob Ure, you excoriate a guy for using a report out of one rag then use two separate articles out of two other rags to buttress your position. Who said that Trump has delivered under budget and on time? He may well complete under budget but only because he has a history of withholding full payment to his many vendors. I know this personally and it’s certainly available should you ever decide to push past your feelings and investigate opposing facts.
    You ought to look up the word society in that book holding your dog house level. You may find that your street, traffic lights, sewer, water (before you say it, I get it, you live where there is no sewer and water service) air traffic control system, FBI and a few hundred other services that provide for our common defense and promote our general welfare cost money to run, tax money.
    We’re in this collective up to our eyeballs and have been for a hundred years. That you suddenly woke up and found that the corporations and the wealthy have shaped an economy that only works for the few has you now wanting to break your social contract with your fellow American is shameful. Where’s that chest thumping and flag waving now? Always seems to stop around April 15th with you folks.

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