October 13, 2008

Well, I'd say Dow 30,000 by the end of the year is looking kinda like a longshot at this point, wouldn't you? But hey, snake oil sold great back then


Maybe he and Lereah hang out? Or maybe he was pricing in a massive US dollar devaluation?

And anytime you hear someone say "it's different this time" - just slap 'em. It's NEVER different this time. Silly humans.

But for fun, get your predictions in for the Dow's Friday close.

I'll jump in with both feet and say 10,000. I was gonna say 30,000, but thought that was a bit too optimistic.

38 comments:

Anonymous said...

Do you want a simple answer to "YEN CARRY TRADE" and it relate to the DOW.

USD to JPY is 99.83 ¥

http://www2.oanda.com/cgi-bin/
msgboard/ultimatebb.cgi?ubb=
get_topic;f=16;t=007487;p=78

QUESTION: I thought yen were borrowed cheap, bought dollars, dollars bought Dow.

So the carry trade and the Dow are linked, hence the "fundamental correlation".

Or does this not qualify as "fundamental"?

ANSWER: With respect allow me to explain the correlation.

I have been trading this currency pair for over one year now.

It has to do with the carry trade and we go back to August 2007.

The FED rate was 5.25% while the BOJ rate was 0.50%

Yen would be borrowed and US Dollars would be bought.

The investor would make a profit on the spread.

Then they usually put the money into the Dow or the other US exchanges.

No Risk. Dow Goes Up. Profits Made.

Then August 2007 and now October 2008.

The FED fund rate is 2% and has NEVER been raised since the cuts started. The Dow is under 10,000

The Carry Trade Has Unwound and continues to do so.

The Trillions in the USD/JPY Carry Trade went out as the Dow was sold.

US Dollars sold and the BORROWED Yen bought back.

Is It Clear To All ?

Anonymous said...

At the rate "Yen Carry Trade" is unwinding the DOW may be at 3,000 if the the YEN keep on strengthening.

http://www.bloomberg.com/apps/
news?pid=20601080&sid=aHCXY874Vj5A

Yen to Rise to 95 on Carry-Trade Unwind

The yen may advance to 95 per dollar should Japanese investment trusts, insurance companies and pension funds start selling foreign holdings, wrote Tohru Sasaki, chief strategist in Tokyo at JPMorgan and a former chief currency trader at the Bank of Japan, in a research note dated Oct. 10.

Retail traders held $24 billion of bets the yen will decline on Oct. 9, down 50 percent from last month, the bank said in a report.

``Minor changes in hedging strategy or smaller capital outflows from Japan could easily see the U.S. dollar-yen hit 95 near term,'' wrote Sasaki.

``The yen, which has now become the strongest currency in the world, looks set for further appreciation.''

Peahippo said...

The Amazon comments are true gems. Naturally, the first two comments are from 2002 and are pure shill comments early on in the Great American Housing Bubble.

http://www.amazon.com/review/product/1893958701/ref=cm_cr_dp_all_helpful?%5Fencoding=UTF8&coliid=&showViewpoints=1&colid=&sortBy=bySubmissionDateDescending
OR
http://tinyurl.com/452vl6

Anonymous said...

Dow 6190 at the close on Friday.

A low of 4860 for the week.

Anonymous said...

If BOJ can not cut rate at this point then why have a G7 meeting.

Was the G7 meeting nothing more then a "Dog and Pony" show.

http://www.theaustralian.news.com.
au/story/
0,25197,24477709-20142,00.html

Sub-prime tsunami finally swamps Asia as equities dive.

The Bank of Japan did not cut rates this week; with the official rate at 0.5 per cent it has very little leverage in that regard.

Tokyo's confidence problem suddenly got worse yesterday morning with news of the first Japanese financial institution to fail as a direct result of sub-prime related exposure.

Yamato Life Insurance, unable to service liabilities of Y269.5 billion, filed for bankruptcy protection, a development that caused surprise and dismay because last November the company claimed its total exposure to asset-backed securities was Y1.9 billion.

Anonymous said...

24,750

DOPES!

Anonymous said...

Dow 14000 if Cheney is arrested by FBI for tax evasion and money laundering...

chips and cheese said...

10,000??? Keith you've lost your mind! Get real!

Try around 6,400 max.

Tyrone said...

DOW close on Friday: 7100
.

Anonymous said...

The amazon "also bought" links are great. It would seem there was a such to write "DOW X" books in 1999/2000.

http://www.amazon.com/Dow-100-000-Fact-Fiction/dp/0735201374/ref=pd_sim_b_2

is the biggest X that turned up in my quick look...

But they are all from the old stock bubble that started bursting in 2000/2001 - but Greenspan saved the day then...

Robbie said...

DOW 7890 or thereabouts by Friday close with a suckers rally tuesday or wednesday

keith said...

The Madness Of Crowds
Don't Panic

Washington, D.C. -

It's been a bad week on Wall Street. The Dow has been avalanching downward, and the July to September summary of 401(k) statements in people's mailboxes look like black diamond ski slopes. It's a lousy time to be an investment banker, or a hedge fund manager, or planning a December retirement.

So Forbes.com asked some of the nation's foremost experts in financial crisis what people should do in a moment like this. Their message (and picture this in large, friendly letters): DON'T PANIC.


"Sit still," says Robert Aliber, a professor of international economics and finance at the University of Chicago. Aliber helped write the book on manias, panics and crashes. Literally. He co-authored the most recent edition of Charles Kindleberger's classic Manias, Panics and Crashes which chronicles and anatomizes crashes from tulip mania to the Great Depression to the dot-com bubble

http://www.forbes.com/home/2008/10/10/psycology-fear-biz-beltway-cx_jz_1010behavior.html

Anonymous said...

I like to slap him once just for being a damn fool!

jim said...

Can you block the yen carry trade guys IP?

Anonymous said...

Listen to Jim Roger

Crash Or Capitulation?

http://www.bloomberg.com/
tvradio/tv/tvtoday.html

Anonymous said...

about 3 weeks back there came up about 5 out of 20 houses distressed and for sale "affordable" today none out of 200 are affordable? anyone willing to pose opinion why?? i see must buys at 80 percent below normal askings....

aldo nova said...

Keith, I can see you havent been getting much sleep over these last several days...

But understandable. We've arrived at the worlds largest PANIC stage in history!

CHEERS!

PS: Cant wait to buy your new book. I hope it gets printed ASAP!

Anonymous said...

Ignoring the Yen-carry trade obsessing a-hole (Perhaps he got screwed in Japan - in the bad way, not the good way)....

Friday close.... 6840 +/- 60

jim said...

"DON'T PANIC."


Good advice. However, moving all your money into money markets, cash, rice and ammo as quickly as possible is an exelent idea. But do it calmly.

jim said...

I wouldn't mind yen guy obsessing, but the fucker needs to complete a sentence in a coherent way.

Anonymous said...

I anticipate the Dow hovering somewhere around 10,000 by the end of the week. I have a hunch that there will be some intense bargain hunting during the week, as evidenced by the 600 point spike this last Friday. Financials could go up, with the nationalization of some banks.

Again, I'm just following a hunch. I'm not into stocks; just watching to see what happens. If energy costs and commodities continue to drop, then I can see the economy improving because people will have more money to buy discretionary items.

I see no need to panic. There just won't be as much credit available and people will have to drive older cars. Also, you'll need 20% down and good credit to buy a house, with proven income. While it's more difficult to get a loan these days, it is NOT impossible.

Anonymous said...

The spike on friday was the PPT. look at the chart. Like batting a balloon up in the air that was about to hit the ground...TWICE.

Anonymous said...

3490

John said...

5650

krell

yoski said...

We will see some fireworks in the DOW 'cos of the G7 rescue package. I doubt the ammunition will last until the end of the week. By Wednesday it's back to gloomy fundamentals.
Just my 2 cents.

Anonymous said...

Fools......... I will betcha 5000 +/- 200

Don't believe it ..... we'll see.

DOPES 2 said...

ANON 5:39 AM

YOU FORGOT THE "1" BEFORE YOUR PREDICTED NUMBERS!!!!

16190 BY FRIDAY!!!!

INTEREST RATE GOING TO 0%!!!!

GOLD TO $250!!!!!!!!!

GET ANOTHER HELOC AND SPEND ON HUMMERS AND TVS!!!

TOOLS!

DOLTS!

DOPES!!!!

wc said...

Friday's far away. I'm guessing a roller coaster week with today climbing to 9,500 and a Friday end of 7,875.

castrate him said...

total bullshitter just to sell books.what a scumbag.

vanilla ice said...

Yay! Dow up 350pts in the first 3 mins! Comrade Ben has saved us!

vanilla ice said...

DOW

Wednesday 10,000
Friday 9,500
End of Month 7,200

The worst is not behind us.

area 51 said...

DOW 8000

Anonymous said...

Qweefie, could you do us all a favor and not publish those 900 word Yen Carry Trade posts?

Yours,

All of HP

Mammoth said...

How can confidence possibly miraculously turn upward and maintain that direction?

With everybody opening up their
401K statements this month, confidence in the markets will only drop lower. What we are seeing this morning is obviously a Sucker’s Rally.

On New Year’s Day Keith ran a thread about predictions for this year. One that I clearly remember is “Dow below 8,000 at the end of this year.”

Another prediction (by FMW) was that this year, global temperatures would be cooler. Bingo again! Sometimes this site scares me.

-Mammoth

Anonymous said...

I'm with anon 3:41pm. It gets old having to wade through the yen carry trade and "ted spread" crap. Not posting them up would be appreciated!

pwnd said...

the suckers are the ones who sell when everyone else is selling.

Be fearful with others are greedy, and greddy when others are fearful.

With 60% of Americans thinking we're headed for a depression I think it's pretty safe we're squarely in the fearful category.

SD said...

I don't know what the Dow will be Friday, but I don't think Roubini is off-base in suggesting that it should bottom around the 7,000 range next year. He has been spot-on to this point.

Putting money in the stock market right now is gambling - not investing. Volatility is at record highs.

Tokyo Boy said...

"http://www.amazon.com/Dow-100-000-Fact-Fiction/dp/0735201374/ref=pd_sim_b_2"

LOL! We used to see this book on the shelf for YEARS at a discount bookstore called "Buck a Book." It was there till the store closed, no one ever bought it!