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Trading The "Normal State"

  • #101
  • Oct 31, 2007 10:51am Oct 31, 2007 10:51am
take your medicine phil!! LOL
Relax and be happy.
  • #102
  • Nov 11, 2007 12:53pm Nov 11, 2007 12:53pm
The normal state no longer exists. The Bear is Back.
  • #103
  • Nov 11, 2007 1:15pm Nov 11, 2007 1:15pm
Quoting NewstraderFX
The normal state no longer exists. The Bear is Back.

Waitaminit...you can't change the rules in the middle of the game!
Wasn't this supposed to be a multi-decade long long long term condition to be exploited?


Aren't you bailing on your own idea if you let this little retrace scare you out of the never ending ever-trend normal state thesis?
Trust price. Know yourself.
  • #104
  • Nov 12, 2007 5:57am Nov 12, 2007 5:57am
Never said that. I said that the normal state of the economy is expansion. Besides, what's happening now is temporary. Things will turn and the norman state will exist again.

Things look bad now, but they are not staying that way. The normal state is still expansion. That doesn't mean the economy can't exist in an "abnormal state'-it does occasionally.

The bottom will be hit when house prices fall and demand picks up. The inventory overhang will work down-that will be the place to buy again and it will happen before the economy comes out of the malaise because housing leads the economy into and out of recession.
  • #105
  • Nov 14, 2007 5:49am Nov 14, 2007 5:49am
Quoting NewstraderFX
Never said that. I said that the normal state of the economy is expansion. Besides, what's happening now is temporary. Things will turn and the norman state will exist again.

Things look bad now, but they are not staying that way. The normal state is still expansion. That doesn't mean the economy can't exist in an "abnormal state'-it does occasionally.

The bottom will be hit when house prices fall and demand picks up. The inventory overhang will work down-that will be the place to buy again and it will happen before the economy comes out of the malaise because housing leads the economy into and out of recession.
Newstrader, yes you are correct, the "normal state of the economy is expansion". There is only one small problem that we are dealing with now. We are entering a Grand SuperCycle Bear stage, no one alive had seen it, yes the one that runs for centuries, yes there will be periods when the carry would work, but those are going to be rallies in the overall down market. I may be a pessimist, but mark my words this is not 2000, or 1987, or 1929, US became an overinflated bubble. It is not going to happen overnight, we will get a solution to this credit crunch problem, it will work, calm the markets, untill another event hits the wires. I hope that I'm wrong, but just to show you how strongly I believe in this, I moved to Russia, after living in LA, sunny Cal for 20 years, sold houses, investment properties, my ranch, bussiness, everything... These convictions are not based on a figment of my imagination but on hard facts.
  • #106
  • Nov 14, 2007 3:08pm Nov 14, 2007 3:08pm
Quoting gene22
Newstrader, yes you are correct, the "normal state of the economy is expansion". There is only one small problem that we are dealing with now. We are entering a Grand SuperCycle Bear stage, no one alive had seen it, yes the one that runs for centuries, yes there will be periods when the carry would work, but those are going to be rallies in the overall down market. .... I hope that I'm wrong, but just to show you how strongly I believe in this, I moved to Russia, after living in LA, sunny Cal for 20 years, sold houses, investment properties, my ranch, bussiness, everything... These convictions are not based on a figment of my imagination but on hard facts.
I assume you have moved to Russia because you perceive that part of the world to be relatively immune to, or maybe just less likely to suffer from, the effects of the GSCB stage? Are there warm and sunny parts in Russia?


Quoting NewstraderFX
Never said that. I said that the normal state of the economy is expansion. Besides, what's happening now is temporary. Things will turn and the norman state will exist again.

Things look bad now, but they are not staying that way. The normal state is still expansion. That doesn't mean the economy can't exist in an "abnormal state'-it does occasionally.

The bottom will be hit when house prices fall and demand picks up. The inventory overhang will work down-that will be the place to buy again and it will happen before the economy comes out of the malaise because housing leads the economy into and out of recession.
IMHaCO economic expansion on its own does nothing for forex rates. The Yen is suffering even though the Japanese economy is expanding, the problem is that other economies are expanding a lot faster. Until this year the US economy has blitzed ahead, but Cable is around 2 and has been around 2 for a long time, heck it was only 2.4 back in my teens (whenever that was).

Inflation is the curse of the 'Haves'. The 'Have-nots' love inflation even if they don't realise it because it erodes their debts. Inflation also erodes the value of money and hence the Haves don't like it and neither do central governments. However a little inflation is a good thing because it weeds-out the poor performers and leaves the better businesses to really shine, and that drives the stock markets and any leveraged or derived growth instruments.

There comes a point when the glittering mega-economies become way too pricey for their ordinary citizens to be able to afford to live comfortably and a decline sets in. A smart person such as gene22 (I hope so for his sake anyway) can step sideways into the up-coming or left-behind economic zones that will flourish whilst the rest of us struggle.

Think this is all vapour-ware? The last economic and vibrant colossus (apart from the British that is ) to bite the dust and not recover even today was the Roman Empire. The only civilization that I am aware of which appears to have come full-circle is the Chinese, and that has taken a goodly few years.
Minesweeper target: 284
  • #107
  • Nov 15, 2007 2:53am Nov 15, 2007 2:53am
Quoting Primate
I assume you have moved to Russia because you perceive that part of the world to be relatively immune to, or maybe just less likely to suffer from, the effects of the GSCB stage? Are there warm and sunny parts in Russia?




IMHaCO economic expansion on its own does nothing for forex rates. The Yen is suffering even though the Japanese economy is expanding, the problem is that other economies are expanding a lot faster. Until this year the US economy has blitzed ahead, but Cable is around 2 and has been around 2 for a long time, heck it was only 2.4 back in my teens (whenever that was).

Inflation is the curse of the 'Haves'. The 'Have-nots' love inflation even if they don't realise it because it erodes their debts. Inflation also erodes the value of money and hence the Haves don't like it and neither do central governments. However a little inflation is a good thing because it weeds-out the poor performers and leaves the better businesses to really shine, and that drives the stock markets and any leveraged or derived growth instruments.

There comes a point when the glittering mega-economies become way too pricey for their ordinary citizens to be able to afford to live comfortably and a decline sets in. A smart person such as gene22 (I hope so for his sake anyway) can step sideways into the up-coming or left-behind economic zones that will flourish whilst the rest of us struggle.

Think this is all vapour-ware? The last economic and vibrant colossus (apart from the British that is ) to bite the dust and not recover even today was the Roman Empire. The only civilization that I am aware of which appears to have come full-circle is the Chinese, and that has taken a goodly few years.
Hi Primate, well there are sunny parts in Russia, but i currently live in Sankt-Petersburg, that's where i came from 20 years ago. There were several factors, I started seeing the bubble back in 2004, sold everythinh off in the middle of 2006 on the last spike up, got married to a girl from Sankt-Petersburg, was intoduced to enormous opportunities here through "family ties", and witnessing everyday the shenanigans in the econ reports, fraud in the financial sector, etc... just got discusted with all of it and weighted my options. Moved here, the trading hours are great its GMT+3, I have a lot of free time, perfect schedule, great food. The only part that sucks is the weather,especially now. Not a big deal for a few years, and then somewhere in the tropics.
  • #108
  • Nov 15, 2007 7:11am Nov 15, 2007 7:11am
Repent, repent - and move to Russia BTW.

How about.... build an Ark ???
  • #109
  • Nov 15, 2007 9:20am Nov 15, 2007 9:20am
IMHaCO economic expansion on its own does nothing for forex rates. The Yen is suffering even though the Japanese economy is expanding, the problem is that other economies are expanding a lot faster.

I think you're looking at the Yen the wrong way. First, the Japanese economy is really not doing all that well. They're still very dependent on exports and are especially vunerable now.

The Yen, because of the carry trade, is a proxy for expansion and investor confidence but the relationship is inverse. The reason is because as traders buy into equity markets, they buy into carry trades. That forces the Yen DOWN vs. the high yielding currencies.

As a matter of fact, Yen strength is an excellent indicator of overall investor anxiety. The Yen will RISE as traders become more risk averse and that means they see economic expansion slowing.
  • #110
  • Edited 10:03am Nov 15, 2007 9:51am | Edited 10:03am
Quoting NewstraderFX
The Yen, because of the carry trade, is a proxy for expansion and investor confidence but the relationship is inverse. The reason is because as traders buy into equity markets, they buy into carry trades. That forces the Yen DOWN vs. the high yielding currencies.
As much as I try, I can not understand how buying equities affects the carry trade. What do you mean that buying equities is also buying into the carry?

Below is a chart of the VIX which is considered a good measure of fear and risk appetite and the Yen as traded on the CME. I don't know if this proves or disproves your point but I'm hoping that it is a good starting point.
Attached Image (click to enlarge)
Click to Enlarge Name: 1junk.jpg Size: 61 KB
  • #111
  • Nov 17, 2007 2:43pm Nov 17, 2007 2:43pm
Quoting gene22
Hi Primate, well there are sunny parts in Russia, but i currently live in Sankt-Petersburg, that's where i came from 20 years ago. There were several factors, I started seeing the bubble back in 2004, sold everythinh off in the middle of 2006 on the last spike up, got married to a girl from Sankt-Petersburg, was intoduced to enormous opportunities here through "family ties", and witnessing everyday the shenanigans in the econ reports, fraud in the financial sector, etc... just got discusted with all of it and weighted my options. Moved here, the trading hours are great its GMT+3, I have a lot of free time, perfect schedule, great food. The only part that sucks is the weather,especially now. Not a big deal for a few years, and then somewhere in the tropics.
You are fortunate to have the opportunity.
Best of luck for the future.
Minesweeper target: 284
  • #112
  • Nov 18, 2007 8:57am Nov 18, 2007 8:57am
Just to reiterate a point here-the "normal state" does not exist at this time.
  • #113
  • Nov 19, 2007 7:27am Nov 19, 2007 7:27am
Quoting SunTrader
Repent, repent - and move to Russia BTW.

How about.... build an Ark ???
Actually, I'm looking in to some yacht designs now, it takes 2-4 years to have a custom yacht designed and built, perfect time to start now.
  • #114
  • Last Post: Nov 19, 2007 7:42am Nov 19, 2007 7:42am
Quoting gene22
Actually, I'm looking in to some yacht designs now, it takes 2-4 years to have a custom yacht designed and built, perfect time to start now.
Nice. I live in the boating capital of the world - South Florida and was just looking over a few myself 3 weeks ago at the 2nd largest boat show in the world in Fort Lauderdale. The biggest show is in Miami - next one being Feburary, 08.
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