# 666



## ehanes7612 (Feb 2, 2018)

Anyone notice that the dow lost 666 points today?...if that ain't an omen..I don't know what is......in other news...my cat is sleeping more these days


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## Linus_Cello (Feb 2, 2018)

No. But i was recently informed the last government shutdown was for 69 hours.


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## ehanes7612 (Feb 2, 2018)

Lol


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## Ozpaph (Feb 3, 2018)

that sucks...............


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## ehanes7612 (Feb 3, 2018)

Ozpaph said:


> that sucks...............



Not really,...it;'s winter time here...and seattle..extra dark and dreary...he essentially hibernates ...but in the summertime I rarely see him


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## Tom-DE (Feb 3, 2018)

It is only about 2.5% drop(Edit--FYI, I am only talking about this past Friday, Dow dropped 666 points for the day). I am afraid market correction is coming.... We lost a bunch on Friday and I hope we don't lose another big one back to back next Monday.


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## ehanes7612 (Feb 3, 2018)

Tom-DE said:


> It is only about 2.5% drop. I am afraid market correction is coming....



it was a 4 % drop for the week..and you're right, the market is in a bubble and people are afraid of the Feds really making good on their promise to raise rates (to stem inflation) after the report on wage growth...they have been falsely riding high for the past year..no more...the chicken has come home to roost

but Cocoa finally woke up


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## Linus_Cello (Feb 3, 2018)

Ozpaph said:


> that sucks...............



Directed to 666 or 69 lol


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## ehanes7612 (Feb 3, 2018)

Linus_Cello said:


> Directed to 666 or 69 lol



the world is going to end in one big orgy and sooner than we think


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## Ozpaph (Feb 4, 2018)

Linus_Cello said:


> Directed to 666 or 69 lol



yep, he missed it. the later play on numbers................


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## ehanes7612 (Feb 4, 2018)

Ozpaph said:


> yep, he missed it. the later play on numbers................



what am I missing?


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## Ozpaph (Feb 4, 2018)

the inappropriate euphemism involving the number 69 and 'sucks'


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## ehanes7612 (Feb 4, 2018)

Ozpaph said:


> the inappropriate euphemism involving the number 69 and 'sucks'



oh yeah, ...duh


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## Linus_Cello (Feb 4, 2018)

Ozpaph said:


> yep, he missed it. the later play on numbers................



Wasn't sure if your original response was intentional. Now clear- touché!


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## Tom-DE (Feb 5, 2018)

Historic drop today! My big fantasy dream for the year is over.........


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## ehanes7612 (Feb 5, 2018)

yeah crazy.. 1100 points

I think Greenspan is correct..Market is a bubble


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## Tom-DE (Feb 5, 2018)

It(Dow) was nearly 1200 points drop when the market closed. The entire month of Jan. 2018 gain has been erased in two trading sections plus some....


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## TyroneGenade (Feb 5, 2018)

Buy Gold (and silver): https://www.bullionvault.com/ 

I bought last year. The writing was on the wall for a long time. But I think this is just a blip, the short-term outcome of the more than $260 billion wiped out in the collapse of the faux (crypto) currencies amplified by the robots mindlessly following trends (which in this case are negative). The big one will come when rates are raised and suddenly servicing debt goes up 33% when the Fed raises the rate from 1.5 to 2%.

So, buy gold (and silver)!


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## orchid527 (Feb 6, 2018)

I hope the people who wrote the trading programs aren't the same ones who did the auto correct features on my devices. Mike


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## Berthold (Feb 6, 2018)

We are approaching time to buy.
Buffett lost 5 billion yesterday. I envy him for that.


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## Linus_Cello (Feb 6, 2018)

TyroneGenade said:


> Buy Gold (and silver): https://www.bullionvault.com/
> 
> I bought last year. The writing was on the wall for a long time. But I think this is just a blip, the short-term outcome of the more than $260 billion wiped out in the collapse of the faux (crypto) currencies amplified by the robots mindlessly following trends (which in this case are negative). The big one will come when rates are raised and suddenly servicing debt goes up 33% when the Fed raises the rate from 1.5 to 2%.
> 
> So, buy gold (and silver)!



If I move my money out of stocks, where else might I invest it? (Real estate. Park in CDs. Buy gold? Bonds?)

You can buy real estate, but real estate crashes just like stock markets and it’s iliquid. You can park it in certificates of deposit, but you will be lucky if your interest rate keeps up with inflation. Gold doesn’t pay dividends. It is looked at as a safe place to put your money to store value, but consider that on an inflation-adjusted basis gold hit an all-time high of $2,8000 in 1980. Today it’s selling for less than half that. 

https://www.washingtonpost.com/news...h-140pm:homepage/story&utm_term=.0303c9f88db5


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## Tom-DE (Feb 6, 2018)

I remember the gold market crash in the early/mid? 80s.... and I lost on bonds once before....No matter what or where you invest, there is always risk involved....My strategy is "be patient and diversify your investments".


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## Tom Reddick (Feb 7, 2018)

What I find most meaningful is that in the past year trading volumes, after being astonishingly low since late 2010/early 2011- are in the past year back at the levels we saw through the 2000s when program trading was a high flying business. 

I was on Wall Street for quite a while, but I am a few years removed from that- so I do not feel like I can offer an expert commentary here, but I will say that kind of volume is meaningful- especially looking at the fact it came during a period when the indices moved forward with significant speed over fundamentals that are not necessarily healthy for a consumer-driven economy, nor indeed for most Americans. 

We are in one of those strange times when bad days on Wall Street can be driven by good news for the average man in the street.


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## Berthold (Feb 7, 2018)

Tom Reddick said:


> We are in one of those strange times when bad days on Wall Street can be driven by good news for the average man in the street.





Tom-DE said:


> ..My strategy is "be patient and diversify your investments".



Yes I see it in the same way. There are too much chaotic processes involved for a serious forecast of stock exchange movements, similar to problems we discuss in other threads here in the forum.

And that is very good, otherwise a guy with the best computer software would become the richest man in the world.


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## Tom-DE (Feb 9, 2018)

Are you guys puking yet? Another great day, isn't it?


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## Tom Reddick (Feb 9, 2018)

Tom-DE said:


> Are you guys puking yet? Another great day, isn't it?



I do not think it is over. I agree with many experts chiming in that this will not lead to another recession. In fact I think it will be healthy for the economy overall, and it portends better days for retirees on fixed incomes and the average man in the street who is not an investor.

In the grand scheme of things, it will be a day of reckoning for a great many upper class investors and market players who have had it coming since the bailouts. Unfortunately it will hit almost everyone to some extend via their retirement or pension vehicles.

I could write pages, but I will leave it at that.


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## Berthold (Feb 10, 2018)

Tom Reddick said:


> it portends better days for retirees on fixed incomes and the average man in the street who is not an investor.
> .
> .
> Unfortunately it will hit almost everyone to some extend via their retirement or pension vehicles.



You are wrong.
.
.
You are right, unfortunately


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## Tom Reddick (Feb 10, 2018)

Berthold said:


> You are wrong.
> .
> .
> You are right, unfortunately



Berthold,

I have spent nearly 10 years of my career on Wall Street- equities, bonds, high yield investments, options, market-making, private placements and underwritings.

And if I am wrong- then you will be able to add my guess to a LONG list of other guesses I was wrong about 

I would be happy to discuss specific examples of what I am seeing, but only if there is interest in an exchange of ideas and concepts.


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## Berthold (Feb 11, 2018)

Sorry, Tom, I understood a contradiction in Your 2 statements. Maybe it is a misunderstanding. 

1. "it (the stock market brake down) portends better days for retirees on fixed incomes and the average man in the street."

2. "it will hit almost everyone to some extend via their retirement or pension vehicles." 

I fully agree with Your 2. statement.


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## Tom Reddick (Feb 12, 2018)

Berthold said:


> Sorry, Tom, I understood a contradiction in Your 2 statements. Maybe it is a misunderstanding.
> 
> 1. "it (the stock market brake down) portends better days for retirees on fixed incomes and the average man in the street."
> 
> ...



No worries,

Apologies if I misread you.

It is difficult for me to really predict like I used to because I have been away from the really high powered trading side of things for a few years and much has changed. A lot fewer companies are public now, plus you have absurdly low interest rates, a further flight of jobs overseas- and now reaching into accounting, legal and other professional jobs, and trading volumes have been very low until last year. Also the firm landscape has changed- there are LOT fewer registered broker-dealers actively in the equities markets. This alone creates a certain disconnect for me.

Now as to specific examples in brief,

1. Amazon- great results (or relative to the past), CEO richest man in the world, and yet I personally have received a number of items in the mail that are obviously bootlegged, authors are fighting over royalties and there are growing numbers of articles about all of the Amazon workers who are making substandard wages and traveling to meet local demand. Also look at how they have handled their USPS and UPS contracts. Shameful.

2. Apple- the whole point of technological advances (not just tech- but generally) is to create an improved product at a lower price. This is the natural standard. They are turning out products with great frequency, and at a higher cost, and the quality of the hardware is going downhill. I have an iPhone Classic (came out 2 years ago.) The case on the new iPhone I have for work does not even fit together properly and it rattles. It is junk.

3. Real estate- NYC, notably the Upper East Side, investors are buying up property and renewal rates on long term commercial leases are unsustainable. It is not just bad stores going out of business, but also long time grocery stores and restaurants that do a good business but cannot survive when the rent goes up 200% or more. If you go to NYC right now, you will see an astonishing number of vacant commercial spaces. It is worse than 2008 and 2009. Given how leveraged many real estate investment vehicles are, many do not even have the ability to reduce rents to market levels and sustain their debt. For now they are holding out and waiting for a stronger market- but in the mean time stores go out of business.

4. As you many have seen in the news, it is a very bad time for large retail stores- especially in the garment business. But a lot of the smaller boutiques are doing incredibly well. If you watch Kickstarter, a number of companies making $200+ jeans in the US have been able to crowd-fund six figures +. I am seeing this in other industries too- where startups and smaller companies are doing well. The 2008 bailouts disrupted the classic business cycle- but they did not delay its impact.

5. Residential rental real estate- this market has become very unstable. Here in Texas- and notably in Austin and Dallas- I have seen a few upscale complexes change hands many times in recent years. And in some cases, residents find themselves in a real mess- at one place I used to live in Austin they all got eviction notices the DAY the new company took over with the claim they were late on their utilities. It was untrue- the new company had changed utility management firms and there was a dispute over whether the old or new company was supposed to collect the prior month's utilities. They also let the place fall into disrepair- badly. A year later, new owner and things are better. But for now, you never know when someone like Trump's son-in-law is going to take over your apartment complex and treat you like garbage, no matter how fancy a place you rent.

6. Interest rates- many retirees, wisely based on history, shift their entire savings- or most of it- into CDs and other highly secure interest bearing instruments at retirement. Low interest rates have devastated their estimated income streams.

7. Higher wages and higher demand- which we need right now- will spur inflation and thus by default have an enormous downward impact on stock valuations. In 2012 I did a turnaround operation for a high yield bond firm that was in trouble because interest rates were so low that investors were willing to accept yields of 5-6% on junk bonds. That is how bad things have gotten here.

I will stop there- so many more examples I can give, but I hope this paints a picture. What we have are a number of extraordinary phenomena that need to correct themselves, and depending on where you are- you will be helped or hurt.

In 2008 with the bailouts and interest rate drops, many good people who did the right thing and saved their money or did not overdo it on mortgages got hurt. Many who did the wrong thing got bailed out- and those who are living on credit got bailed out in the sense that interest rates, and thus the cost of refinancing of debt opportunities, got reduced.

With what I am predicting, someone who is heavily in the markets will lose out. Someone who is in a home with an exotic mortgage is going to lose out (and those mortgages- no down payment, ARMs etc are all back now and being aggressively marketed).

Someone who is not in the markets, who is renting, or who took out a sensible mortgage is likely to gain. Low income workers are likely to gain- and quite a bit.

And many of us will feel some good and some bad. But fundamentally with the 2008 crash a situation was created that allowed for a massive increase in the divide of wealth in this country, and Presidential Administrations reaching back to the Reagan years have been far too much in bed with large business at the expense of a balance of all interests.

That has to change. We will all pay for it- but I think the bubbles that are about to burst are going to most greatly hurt the wealthy investing class, as well as those who are increasingly relying on labor and tax benefits outside the US.

The latter will come in the next election is my expectation. I think Hillary lost because she was seen as a Wall Street groupie. A good friend of mine said it best when he said Hillary Clinton doesn't care if the janitor at Goldman Sachs is earning a living wage- she cares about whether Goldman Sachs has enough female partners. Whether or not that is true, that was the general perception that I think hurt her most.

Unfortunately for Hillary, there are a lot more janitors in this country than there are Goldman Sachs partners.

It won't take long (and hasn't already in some cases) for Trump supporters to see that he neither grasps or cares about the plight of working class America (well, some of them- as long as they think there is a chance Roe v. Wade will get overturned, many will support him or anyone else no matter what else that person believes or does.)

And in 2020 that leaves us back where we started on the political scene- which party is going to finally stop bedding with big business every night? In the mean time, the free market will have its due. I am just sorry that so many working class Americans who do not have time to wait will have to wait until it happens.

Sorry for the long post- this has all been driving me nuts for a while now.


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## Ozpaph (Feb 13, 2018)

Interesting insights, Tom.


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## Berthold (Feb 13, 2018)

Tom Reddick said:


> 2. Apple- the whole point of technological advances (not just tech- but generally) is to create an improved product at a lower price. This is the natural standard. They are turning out products with great frequency, and at a higher cost, and the quality of the hardware is going downhill. I have an iPhone Classic (came out 2 years ago.) The case on the new iPhone I have for work does not even fit together properly and it rattles. It is junk.



I watched Apple since founding. Twice the company stood at economic abyss.
The economic success of Apple was always oscillating between advantage and disadvantage of closed systems, Apple build and brings to the market. 

In between Apple earned a lot of money. But that is not enough for the technical fight against the rest of the world. Samsung reaches Apple already concerning profit.
So I expect the next economic slump in short future. 
If stock holders have much luck Apple again finds a new super product as a new cash cow at the right time. But I am skeptical. The Apple watch wasn't it. Trump would say it must be a big thing.


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## Tom Reddick (Feb 15, 2018)

Berthold said:


> I watched Apple since founding. Twice the company stood at economic abyss.
> The economic success of Apple was always oscillating between advantage and disadvantage of closed systems, Apple build and brings to the market.
> 
> In between Apple earned a lot of money. But that is not enough for the technical fight against the rest of the world. Samsung reaches Apple already concerning profit.
> ...



Very true. It is an interesting company to watch.

I just wonder where they go from here. As you said, the watch did not do all that well. And a $1,000 phone? Especially given the cheaper construction- just does not work for me, or a lot of other people. And it certainly cannot be a viable mass product in emerging markets where a lot of large companies are currently making their greatest financial gains. For example, last I checked it was China where Wal-Mart is really doing well. In the US, not so great. Many stores closing (though I think that is a good thing in the long run.)

Time will tell what comes for Apple. But I am not long in the stock


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## Berthold (Feb 15, 2018)

Tom Reddick said:


> I just wonder where they go from here. As you said, the watch did not do all that well. And a $1,000 phone? Especially given the cheaper construction- just does not work for me, or a lot of other people. And it certainly cannot be a viable mass product in emerging markets where a lot of large companies are currently making their greatest financial gains.



Yes and if Apple now offers a cheap $250 mass phone it could damage the good exclusive image of Apple and nobody will buy the expensive Apple products anymore. 

Another problem with product image from the past:
Daimler Benz bought Chrysler and Mr. Schremp (CEO) thought we install some high performance Mercedes components in the Chrysler cars. That will rise the general image of Chrysler, we can rise the prices a little bit and we will have great success on the American mass market.
But that didn't work because customers didn't recognize an essential quality improvement by Mercedes components and the image didn't rise.


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