In December of 1989 the Japanese Nikkei (stock market) hit an all-time high of 40,000; a level many believed was just a stopping-off point for much greater things to come. Unfortunately, for those who bought with that expectation, they were sadly disappointed. The same could be said for the NASDAQ, which closed at an all-time high of 5,048 in March of 2000. In October of 2007, the Dow Jones Industrial Average closed at a record of 14,164. So, have we seen the Dow hit its all time peak?
A case can be made that the Nikkei, the NASDAQ, the Dow, housing, the Beanie Baby, and the tulip bulb, will never reach the heights they once attained. In fact, we may be entering an era where 5-digit Dow Averages are a thing of the past. Could we even conceive of a 3-digit Dow?
Anything is possible when deflation rules the roost.
Till next time,
Bill
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A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Wednesday, August 25, 2010
Monday, August 16, 2010
Getting on Board
Sometimes, it gets a little too comfortable when others start agreeing with you. That’s the position I now find myself in since I've been saying that economics always wins out in the end. Each day that passes another nail has been driven into the coffin of not only the domestic economy, but the global economy as well. House prices are plummeting again, unemployment is accelerating, Israel and Iran appear to be headed for a showdown, and Nero fiddles (vacation in Martha’s Vineyard) as Rome burns.
Goldman Sachs has just released their trading desk analysis which says in part: “In conclusion, as discussed in recent client meetings, while the timing is difficult, we remain concerned for the larger topping structure that is still being formed on the S& P 500 Index which will eventually lead to another meaningful decline.”
Richard Russell, Dennis Slothower, Peter Eliades, Robert Prechter, and Arch Crawford, are all calling for an historic stock market top that will not be seen again for many years, and a downside that will at least rival 1930 to 1932, and maybe worse.
Suddenly, that simple little boat I've been rowing alone has started to get very crowded.
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Goldman Sachs has just released their trading desk analysis which says in part: “In conclusion, as discussed in recent client meetings, while the timing is difficult, we remain concerned for the larger topping structure that is still being formed on the S& P 500 Index which will eventually lead to another meaningful decline.”
Richard Russell, Dennis Slothower, Peter Eliades, Robert Prechter, and Arch Crawford, are all calling for an historic stock market top that will not be seen again for many years, and a downside that will at least rival 1930 to 1932, and maybe worse.
Suddenly, that simple little boat I've been rowing alone has started to get very crowded.
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Tuesday, August 10, 2010
Deflation - Ben Bernanke: "Unusually Uncertain" Bill Tatro: "Very Certain"
Ben Bernanke recently called the economy “unusually uncertain.” KKR cancelled their $500 million IPO, saying market conditions were not favorable. Tim Geithner said raising taxes on the wealthy is justified for the economy. Each of these three items could be discussed for hours, and probably will be. However, collectively, they are indicators which point to an economic environment that has not been seen for many years. It’s called classic deflation, characterized by soaring unemployment, excessive bankruptcies, high taxes, and most important, complete lack of confidence in the system. It is this last item which could be the worst. When people give up on the system, strange things happen. The unemployed stop looking for work and drop out. The employers give up because they’re taxed to death. The consumer stops consuming for lack of money, and those that do have money to spend expect prices to be lower in the future, and likewise stop consuming.
And the stock market you ask? Well, after the dust finally settles, many will ask: “Why didn’t I see it coming?”
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
And the stock market you ask? Well, after the dust finally settles, many will ask: “Why didn’t I see it coming?”
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Friday, August 6, 2010
Jobs, Jobs, Jobs??? (Why Rats are Leaving a Sinking Ship)
The nonfarm payrolls dropped by 131,000 in July. However, the greater untold story is the June jobs number was revised downward from a loss of 125,000 jobs, to a loss of 221,000 jobs. Like it or not, there is no way to spin this into good news. As we have been continually telling you, the worst could be ahead, not behind. Each day, new data comes forth to reconfirm our position. Since the mainstream media will not give you the necessary information to formulate your own (informed) opinion, we will take up the slack.
The Federal Reserve’s jobs strategy, inspired by the Whitehouse, or vice-versa, has obviously failed and most people, including the Fed officials, recognize it. Thus, the Fed must take some action next week which more than likely is to announce quantitative easing # 2. Specifically, buying more treasuries and possibly buying more mortgage backed securities. Should they do that, it is possible the same action could occur as happened last time. “In March 2009, the Fed surprised investors by announcing it would purchase treasuries and more mortgage related debt that it had already stated. That precipitated 10-year yields plunging 47 basis points, the biggest single-day drop since the 1987 stock market crash.” – (CBS Marketwatch)
INTEREST RATES GO DOWN, AND BOND PRICES GO UP!!!
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
The Federal Reserve’s jobs strategy, inspired by the Whitehouse, or vice-versa, has obviously failed and most people, including the Fed officials, recognize it. Thus, the Fed must take some action next week which more than likely is to announce quantitative easing # 2. Specifically, buying more treasuries and possibly buying more mortgage backed securities. Should they do that, it is possible the same action could occur as happened last time. “In March 2009, the Fed surprised investors by announcing it would purchase treasuries and more mortgage related debt that it had already stated. That precipitated 10-year yields plunging 47 basis points, the biggest single-day drop since the 1987 stock market crash.” – (CBS Marketwatch)
INTEREST RATES GO DOWN, AND BOND PRICES GO UP!!!
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Tuesday, July 20, 2010
"Facts are Stubborn Things" - John Adams
It seems this economy takes one-step forward with a new government program, and two-steps back with the expiration of the same program. Case in point, housing. For several months, the government granted an $8,000 credit for home buyers as an incentive. Contrary to expectations, this housing program cannibalized future purchases, much the same way as cash-for-clunkers. Now, in the most recent announcements, we see homebuilder’s attitudes approaching historic lows and homebuyers nowhere to be seen.
Housing and jobs are the linchpins which are necessary to create a strong economy. As both of them continue to erode, the strength of our economy will continue to be drained. This makes a dramatically lower stock market no surprise.
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Housing and jobs are the linchpins which are necessary to create a strong economy. As both of them continue to erode, the strength of our economy will continue to be drained. This makes a dramatically lower stock market no surprise.
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Tuesday, June 22, 2010
On the Bubble
When all is said and done, barrels of oil spilled in the Gulf of Mexico could possibly be in the billions, not millions. Watching the oil continuing to gush would lead even the most unsophisticated observer to the conclusion that trouble continues to brew.
Listening to Standard & Poor’s officials discuss ratings of European countries, including the UK, would lead even the most unsophisticated observer to the conclusion that trouble continues to brew. (Did I just repeat myself?) The UK has just announced an emergency budget, Spain needs additional measures to met fiscal targets, France has announced high deficits, and Greece continues to melt like the Wicked Witch of the West.
However, keep in mind, that while the aforementioned events are headline news, little notice is being taken of the increasing expansion in spreads between investment-grade bonds and junk-bonds. In April, the height of the bear market rally and when complacency was at its greatest, the difference between yields of investment-grade bonds and junk-bonds was the lowest in many years. In other words, there was no reward for taking risk, and the market bubble in junk-bonds had reached historic proportions. Like all bubbles, such as dot-com, housing, oil, and tulip bulbs, few recognize the environment they’re in until it’s too late. (Although, I might add that very quietly, a few smart money types are in fact leaving the bond risk-trade and re-entering the safe haven of U.S. Treasuries.) Unfortunately, the general public, just like in all other bubble situations, will recognize their mistake after the fact. Once again, too late.
Alas, if only on careful examination, even the most unsophisticated observer will be left with the conclusion that trouble continues to brew.
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Listening to Standard & Poor’s officials discuss ratings of European countries, including the UK, would lead even the most unsophisticated observer to the conclusion that trouble continues to brew. (Did I just repeat myself?) The UK has just announced an emergency budget, Spain needs additional measures to met fiscal targets, France has announced high deficits, and Greece continues to melt like the Wicked Witch of the West.
However, keep in mind, that while the aforementioned events are headline news, little notice is being taken of the increasing expansion in spreads between investment-grade bonds and junk-bonds. In April, the height of the bear market rally and when complacency was at its greatest, the difference between yields of investment-grade bonds and junk-bonds was the lowest in many years. In other words, there was no reward for taking risk, and the market bubble in junk-bonds had reached historic proportions. Like all bubbles, such as dot-com, housing, oil, and tulip bulbs, few recognize the environment they’re in until it’s too late. (Although, I might add that very quietly, a few smart money types are in fact leaving the bond risk-trade and re-entering the safe haven of U.S. Treasuries.) Unfortunately, the general public, just like in all other bubble situations, will recognize their mistake after the fact. Once again, too late.
Alas, if only on careful examination, even the most unsophisticated observer will be left with the conclusion that trouble continues to brew.
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Friday, June 4, 2010
Vice-President Joe Biden Touts the Success of the Stimulus Program!
The U.S. economy added 431,000 jobs in May. However, don’t forget to subtract the 411,000 census workers, 31,000 temporary health-services employees, and 215,000 jobs due to the birth-death adjustment. That equals a negative 226,000 jobs. In addition, the unemployment rate declined from 9.9% to 9.7% because 322,000 people dropped out of the labor pool. Finally, those unemployed longer than 27-weeks hit a new record of 46%.
Hey Joe, how’s that for success!
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
Hey Joe, how’s that for success!
Till next time,
Bill
>>>>>>>>>>>>>>>>>>>>>
A disclaimer: None of the content published on billtatro.com constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the content published as part of BillTatro.com may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
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