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Up, Down and Sideways

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113 Comments

Global markets look to be in roller coaster mode – as of Sunday afternoon there’s lots of red in the market futures, the recent downgrading of US credit probably doesn’t help things. Are we heading into a 2008 replay?

When markets collapsed in 2008 they took real estate markets with them, both locally and in other nations. Canada pumped lots of money into housing via the CMHC and dropped interest rates to their current bargain basement levels which managed to not only restore house prices locally, but pushed them to new record highs.

What happens if we get another global economy crash and don’t have the same tools to fight it?

I can’t tell if we’re looking ahead to big inflation, Japan style mega deflation or a hither-to-unseen market plateau but these sure are interesting times. Are you cashing out of equity markets, playing with shorts or seizing a buying opportunity right now?

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Anonymous

@Simpatico:

amen

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Anonymous

@Best place on meth: well lucky for him, when the market does the 1 day big rebound from its extreme oversold position, he will proudly claim his right, that's his portfolio strategy is generate extraordinary returns, etc, etc. Wonder what if the stock market went into a repeat of 1930 to 1933 drop or the 2001 to 2003 (rough time frame) drop where it went down 50%+? His bonds and preferred are not going to be bailing him out in that case.

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Anonymous

@vangrl: so true. Yes buying things for yield as a strategy is valid when executely properly but never blindly. The purchase price you buy at can really come back and bite you if you bought too high. If interest rate and risk goes up and the preferred drops 25% and stay there until maturity, then it could be a long time of subpar returns.

As well, preferred shares are actually very complex with a lot of custom features such as early call date, cumulative vs non-cumulatives, etc. You can't just buy any preferred or even ETFs blindly without researching it first. Obviously I think he wants you to not bother and leave the research and asset mgmt to him.

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Simpatico

@bubba: Bubba, you don't have to go the Fox News bs re: Obama's credentials–just let that sh*t go–it's stupid and disingenuous. It's okay to mistrust Obama on his merits…I'm a proud liberal and I think the guy is bought and sold, just like any Republican. That's the real issue, we have a captive U.S. government, captive on both sides of the aisle to Wall Street corporate influence, whose aims are not at all supportive of Main Street or middle class people.

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Anonymous

The next property bubble is here in Canada. If I owned property in Vancouver I would hit the bit…(3 minutes in)

Doug Casey

http://talkdigitalnetwork.com/2011/08/gold-dollar…

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stagnate

midnight toker says: I think my mistake was thinking things would get better , or at least get back to normal after the us debt ceiling debacle was sorted. How naive!

deflationary and inflationary pressures have been on the slow boil for years and for the most part oscillating in dysfunctional manner. not the kind of stability that favours stocks. other than some dividend, metal and some specific timed plays the stock pain shouldn't be a huge suprise.

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bourgeoisie meat bea

haha, nice haircut. should have sold your stocks an bought RE

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Li Kai Shing

Invest in brass….it is # 257 in periodic table.

Brass is used in projectile firing devices…( it will help protect your gold and silver, nachos and porn)…. unless you registered them …dumb round eyes.

PS samtherecordman…you went tits up…why would anyone take your advice…..especially with Bre X shares still tacked to your shitter wall.

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Samtherecordman

Bought today and trades set for tomorrow

Fully admit the selloff worse than expected

Wow, hopefully things calm down a bit

Ouch

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Garth Turner's

Ok….we have patriotz.

Any more slagging of Garth and we release him in Surrey…

It could be you VCI losers next.

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Best place on meth

I don't know where you saw that number, Paul was away last week and I hadn't seen a total inventory figure between the end of July and today.

Check here: http://vancouvercondo.info/forum/topic/july-2011-…

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midnite toker

I think my mistake was thinking things would get better , or at least get back to normal after the us debt ceiling debacle was sorted. How naive!

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DaMann

So@Best place on meth:

Sorry that last post was mine.

Yah but a few days ago we were at 16350. I thought about end of month expiry but that was 8 days ago now. That's why I'm a bit perplexed about the non rise in inventory.

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Best place on meth

@Anonymous: #98

End of month expired listings always knock inventory down a few hundred but we're about 250 higher than we were this time last month.

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vangrl

"Anyways, I don’t have any RY, but I did stock up on income (preferred and income trusts) back in mid- late-2009, so the yield on my cost basis is quite high. Capital gains are still nice, and I did reduce my position a little bit, but I’m still holding on to those for as long as low rates in the bond market prevail."

I'm hanging on to all my dividend stocks as well, mostly purchased in 2009 and early 2010. Big companies that will hopefully not have to cut their dividend in these crazy times……fingers crossed.

I can only hope that 5 years from now I'll be happy I didn't panic.

Unlike real Estate I don't believe the companies I own are overvalued right now, they've all reported stellar earning and many have increased dividends in the last year.

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Anonymous

@paulb.:

Thanks as always for the numbers Paul, hope you had a good vacation!

What is with the inventory number? It's either stagnant or dropping, yet the numbers show a net gain of 100-150 listings a day. Is there a stat out there for de-lists by chance?

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midnite toker

Well this is funny because I took the plunge last month and opened a trading account .. bought my first Etf in July. Yes once again my timing is impeccable! Actually would be in good shape if o hadn't sold TVIX last Wednesday at $23 .. it has doubled since then ! Not gonna do anything this week but will be buying more corporate bonds and cheap oil companies soon

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fixie guy

"When markets collapsed in 2008 they took real estate markets with them…"

Housing collapsed when the flow of cheap credit shut off abruptly. The flow of credit ended when it became obvious the assets backing the credit markets – bundled mortgages – were over-rated and over-valued. It can't be repeated enough: the markets collapsed when the curtains were effectively pulled back on the housing/mortgage market, not the other way around.

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Devore

@Best place on meth: I don't know about angry. Needlessly colorful, yes. Maybe it is you who is taking his missives too literally at face value? He's been writing the same blog entry for two years, he's gotta keep spinning it to keep people coming back.

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Devore

@vangrl: woops, my apologies, I pulled up the common shares chart That would explain it 😉 Today was a mixed bag for financials preferreds. Some were up a bit, some were down sharply, to various degrees ("sharply" being very relative). Even within the same company, some preferred series were down much less than others, like RY.PR.A vs RY.PR.C. With such drops, you now have to ask yourself why they dropped? Why those, and not others? What will happen next? Holding what you have if you like the income is certainly an option. Some people just need income from their investments, they're not interested in liquidating their capital base to put food on the table. Anyways, I don't have any RY, but I did stock up on income (preferred and income trusts) back in mid- late-2009, so the yield on my… Read more »

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N

@paulb.:

Good to see you back Paul. We need you for what could be an eventful fall (both meanings).

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Best place on meth

@Devore:

You seem to be missing his angry tone when he speaks of "a posse of bond vigilantes, greedy shorts and glassy-eyed retail investor", in other words all the people who are ruining his business.

His new entry is out, another pathetic "you're all a bunch of damned fools for selling, how can you be so stupid" rant.

What a sad, cranky old salesman he's become. Oh well, let him twist in the wind.

Oh well, let him twist in the wind

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pricedoutfornow

http://globaleconomicanalysis.blogspot.com/2011/0…

Sadly, this sounds like some people I know. Secretly broke is right (line of credit is about to run out…)

Canada's next!

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Devore

@Best place on meth: I don't see any change in his position between those two excerpts. In the first one he's saying it ain't right what they're doing, the second one simply says they will do it again (right or wrong). As an investor, you need to keep an eye on what is probable to happen, not what you think should happen. If in the first case you bet on the "right thing" being done, you got taken to the cleaners. Hopefully you also learned a lesson.

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Li Kai Shing

Al Gore…internet inventor..will soon cut off access to basement suites.

Knock out 75% of VCI bitchers.

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