unemployment drops to 7.8%

[gwb72tii]

no come on, tell us why the 3.1% GDP print is encouraging.
disect it for us you econ major.

[rwh11385]

i am paid to be biased
you may say i'm wrong, which i am not. you're stuck in the s&p index land when silly old treasuries have trounced stocks 3,5,7 and 10 years running, with 1/3 the risk.
and treasuries aren't even the best category. and thru the end on novemnber they were ahead of the s&p yeart to date.
what am i missing rwh?
how can i be a perma bear when there happens to be better investments than stocks.
you like to take risk? even when you don't have to?

So you aren't paid to be correct and protect people's money? I certainly wouldn't want someone so unfamiliar with reality handling money for my parents because of his skewed worldview.

You're a perma bear because you promised a recession in Q1 and didn't ever let up on your assumption, regardless of facts. Just like Achuthan. What matters? Reality and what actually occurs or just what you assume will??

Were bonds a better investment than stocks this year?

I'm not 58 and want my 401k+IRA to grow. Your focus on wealth management doesn't actually change reality, even if you only think about your narrow vision. But you are too close-minded to realize that.

no come on, tell us why the 3.1% GDP print is encouraging.
disect it for us you econ major.

Maybe tell us why it was damning. But quit moving the goalposts - once a number defies your expectations, you then go to attacking it. Just like you want to ignore every number because of the chance it'll be revised and you assume it'll be redone lower?

Last time you went on and on about the 5 year average PCE being down, and freaking out that it went from 1.5% Q2 to 1.4% in Q3's second revision. Now it is up from Q2 at 1.6%. So shouldn't you be equally positive as your were negative previously? Durable goods increased 8.9% versus 0.2% decline in Q2. And as you've mentioned, personal consumption is 70% of the economy.

Even if you ignored the change in inventories, real final sales of domestic product increased 2.4 percent in the third quarter, compared with an increase of 1.7 percent in the second.

Defense spending contributed to the increase, but uncertainty about the fiscal cliff curbed business investment. The market today obviously celebrated Congress's after-the-deadline tax resolution, and hopefully we don't see them continue this shit 2 months from now when spending and debt ceiling talks are to take place.

Even as businesses were unsure about investing, consumers were more confident and continued spending. They may have been fearful of the future with every media outlet telling them to worry about the fiscal cliff, but positive about the now.

http://www.gallup.com/poll/159560/consumer-spending-surges-during-pre-christmas-weekend.aspx

More broadly, the surge in Americans' spending during the pre-Christmas weekend marks a return to spending levels not seen since 2008, when Americans regularly reported daily spending well into the triple digits.

The real concern is really if government can provide businesses, people, and the market with a stable, predictable environment to engage in... or just more of the same moronic jerks not being able to come to resolution in a reasonable amount of time when necessary. And guess who has been the thorn in the side of Congress for that??!

http://online.wsj.com/article/SB10001424127887323635504578211970166499436.html

Oh well. Some day government may get out of the way of the economy and let it do its thing. And maybe replace some of the taxes which discourage working more with one that promotes investment and economic growth, while also removing deductions that reward debt.

Until then,

http://www.gallup.com/poll/159437/unemployment-ticks-down-mid-december.aspx

U.S. Unemployment Ticks Down to 7.6% in Mid-December [Unadjusted, adjusted rate is 7.8%]


A lot is up in the air with a complex economic environment (fiscal cliff was looming, Hurricane Sandy) but Gallup's poll does not show significant change in unemployment rate. It could tick up due to either of those mentioned factors though, or that the seasonal adjustment might not have missed the early Thanksgiving and more than BLS expected seasonal workers were already hired. Tomorrow's ADP report should help give insight into Friday's numbers.



But wait, who actually cares about reading the numbers - like ISM's Manufacturing ROB this month at 50.7 over 50.3 expected. . . let's just all base opinion on bias! Because that's what financial advisors do. Listen to economists that are saying you want to hear and then make fun of all others because they practice "black science".

Well, enjoy your Hussman Funds...

[gwb72tii]

lol we don't use that fund
and now you are judging based on short term performance ha ha
fyi, bonds did in fact outperform stocks this year, as they have for the last 1,3,5,7 and 10yr time periods. and not by just a little, but by a statistically significant margin (unlike AGW).
the trick my economist friend, is to know what type of bonds did it this year.
BTW, I haven't seen the year end data yet, but good old fashioned treasuries outperformed stocks, by a wide wide margin, for the last 3,5,7 and 10yr time periods

there is no such thing as buy and hold any longer in this economic environment

oh yes, back to Q3 GDP
no capex
very very discouraging consumer spending stats
almost 50% of GDP was inventory build (no sell thru), and government spending (its first positive in years)
so yes, 3.1% annualized may look good, but beneath the hood, not so good
and as i recall christmas spending was up <1% this year from last when the street and economists like you were believing 3 to 4% was in the cards

you need to step back and laugh at yourself once in a while

oh, and ask your folks if they'd like most of their accounts in stocks and the resulting whipsawing of their account values, and you'll get some insight as to what our team does

BTW - you are correct in saying what the economy needs is certainty in the budget so long term plans can be formalized. i'm not sure this bastard of an agreement will do the trick though.

[rwh11385]

lol we don't use that fund
and now you are judging based on short term performance ha ha
fyi, bonds did in fact outperform stocks this year, as they have for the last 1,3,5,7 and 10yr time periods. and not by just a little, but by a statistically significant margin (unlike AGW).
the trick my economist friend, is to know what type of bonds did it this year.
BTW, I haven't seen the year end data yet, but good old fashioned treasuries outperformed stocks, by a wide wide margin, for the last 3,5,7 and 10yr time periods

there is no such thing as buy and hold any longer in this economic environment

You just use his advice even though his choices and thinking proved to be wrong? Why base your opinion on his when he turned out doing so poorly?

Huh? You just judged performance up to "Novemnber" and look at 1 year all the time, including just now. And was shitting on the concept of putting money in the S&P500 all year. Yet you don't want to look back on how your source did vs. it?

And what are these bonds that topped 16% this year by a statistically significant amount? You keep making claims with absolutely nothing to back it up besides your questionable word. [sarcasm]'I earned 20% this year on magic beans'[/sarcasm] And it's easy to find an outlier fund after the fact that did well, but what's your average performance? The entire bond market didn't return that. Investment-grade was ~4%.

http://www.bloomberg.com/news/2013-01-01/stocks-beat-bonds-commodities-by-most-since-2009-on-stimulus.html

Unprecedented central bank stimulus sent global stocks to the biggest annual rally in three years, beating bonds, commodities and the dollar by the most since 2009 as shares surged from America to Germany and Venezuela.

The MSCI All-Country World Index of equities increased 16.9 percent in 2012 including dividends
Bonds of all types returned 5.73 percent, on average, according to Bank of America Merrill Lynch’s Global Broad Market Index.

http://blogs.barrons.com/incomeinvesting/2013/01/02/final-2012-bond-scorecard-junk-leads-way-with-15-58-return/

Junk bonds 15.58%

So are you trying to claim that your chosen bond funds have collectively done better than 16%, even if junk bonds alone average lower than that? All in emerging market bonds?

And where are your numbers to back up your... well, anything?

http://online.wsj.com/article/SB10001424127887324407504578185753526156948.html?mod=googlenews_wsj

While the average U.S. stock fund has returned 9% annually during the past three years, according to research firm Morningstar, the average taxable bond fund has returned 7%, including coupons and price appreciation.

VTI has a total return 3 year annualized of 11.32%. How are you saying Treasuries outperformed? With respect to risk, or what? If so, keep hanging in the old folks home but don't say that it's outperformed. Some of us aren't actually 58 so bonds won't get us where we'll want to be.

I'm not your friend. I'm just someone who thinks people who discuss topics should use facts and reality to back their claims instead of endless banter with poor grammar.

What are you views for the future? WSJ doesn't think it is time for staying the course in bonds.

That means most investors will have to turn to stocks in 2013—whether they like it or not. Pension investors, meanwhile, also may have little choice but to start putting cash back into stocks, according to RBS Securities, because they need to earn about 7% a year to meet their targets, a level they will be unable to reach with bonds alone. That could provide further support to the stock market, a view shared by Bank of America, Merrill Lynch, among others.

That isn't necessarily a bad thing. The Standard & Poor's 500-stock index looks at least reasonably priced, if not cheap. It trades at a price/earnings ratio of about 14, below the 10-year average of 16. Flip that around and you have what is known as the "earnings yield," which now stands at more than 7%, above Treasurys, corporate and even high-yield bonds.

Regardless of your basing your entire ideology of investing on the risk-adverse desires of your ancient clients, I enjoyed the returns my investments have provided. I'm glad I wasn't too scared to own stock. Even if you like Treasuries because old people are all about maintenance instead of growth, it doesn't suit me.

[rwh11385]

oh yes, back to Q3 GDP
no capex
very very discouraging consumer spending stats
almost 50% of GDP was inventory build (no sell thru), and government spending (its first positive in years)
so yes, 3.1% annualized may look good, but beneath the hood, not so good
and as i recall christmas spending was up <1% this year from last when the street and economists like you were believing 3 to 4% was in the cards

you need to step back and laugh at yourself once in a while

oh, and ask your folks if they'd like most of their accounts in stocks and the resulting whipsawing of their account values, and you'll get some insight as to what our team does

BTW - you are correct in saying what the economy needs is certainty in the budget so long term plans can be formalized. i'm not sure this bastard of an agreement will do the trick though.

Inventories grew more than they shrank in Q2 but they also shrank a great deal in Q2... and businesses didn't invest because of the fiscal cliff. Or did you not read any WSJ for the last 6 months?

You should too. Everyone else is laughing at you (AGW thread chiefly)

They are old. Why would they be heavily in stocks? But on the other hand, I'll take "whipsawing" and investing where people may be scared too instead of jumping on the bond bandwagon, for returns. DO YOU NOT UNDERSTAND THAT MORE PEOPLE EXIST AND INVEST OUTSIDE OF YOUR ELDERLY CLIENTS?


It won't. Two months until debt ceiling problems again and then more debates about spending cuts. And I don't think that'll go smoothly at all. Too many close-minded old men.

[rwh11385]

http://www.nasdaq.com/article/update-adp-reports-strong-december-hiring-as-claims-jump-last-week-20130103-00676#.UOXHaG_nUfU

ADP report was expected to be at 150,000
Actual figure = 215,000
November's revised up to 148,000 from 118,000

Might mean Friday's numbers will be better than expected before today... but we'll see.

Interesting as well:

In other job-related news Thursday, the number of job cuts announced in December dropped 43% to 32,556, the second lowest monthly tally in 2012, according to outplacement firm Challenger, Gray & Christmas.

The firm also said layoff announcements totaled 523,362 for all of 2012, the lowest 12-month job-cut total since 1997.

Since I expect you to come back and tell me to judge performance by risk. George, can you only think about investing in regards to your clients? Would you expect your son to be mostly in bonds this year??? Think outside your little box and go beyond the reports you are handed that are only focused on the narrow view of old geezers protecting their wealth.

When making comparisons a month or so ago, you were gaming your comparison between your returns and the assumption that the S&P500 would end at 1200. But what if it was clear that your biased nature ignored reality and I wanted to bet that you were wrong? Thanks to you and figuring you were wrong in the spring, I doubled my contributions to my 401k which because of my lifecycle position was heavy stocks and benefited greatly.

Do you seriously think that someone under 40 would feel like safe Treasuries "outperformed" the stock market over the last three years?? Like I said, whipsawing of the market and riding that doesn't disturb some people like it does granny.

I'm young and want growth, not defensive and worried about maintenance. Having all you fanatics thinking that Obama is ruining the country when really the economy should be left alone anyway and that's the effect of having the Republicans controlling the House anyway... kinda makes the market biased and room for me to benefit. Just like when the election results came and the market shit itself. Every extreme righter I talked to was freaking out about the brief downturn and you were gloating if only the bet had ended at that particular moment - but I was thinking how much I wish I wasn't renovating the house so I could profit from everyone's skew. I ran in when everyone was running out in late 2008 and made good returns on AZO and then used that to help buy my house. And then made awesome returns July 2009 - Feb 2011 when I invested part of my FTHBC. A lot of people were busy hiding cash in the mattress or buying "Aftershock". Was it the safe or low-risk thing to do? No. But was it banking on people being scared and the market being cheap? Yes. Did a bunch of scared people run to bonds and drive up their price? Yes. That benefited you but what about when people come back around to stocks? Like when 5 year return window starts after the biggest decline of the crisis at the end of 2013? Then you will just be cherry picking 7 and 10 year numbers... but the same sheep grow up to the ones that listen to you will see good 5 year returns and not choose bonds like they may this past have year. Don't you realize that you ought to realize what most prospectus say ~"past performance does not indicate future performance" should be understood by you most of all? That 5 year returns including the financial crisis that was built around people like you selling mortgage-backed securities does not indicate that the same performance should be expected in the next 5 years? Even though that is true, people will be misled like they are by you after the worst of the recession is out of the 5 year window and buy stocks again. It'll be a slow process to get back anywhere close to the comfort or investment level prior to 2008 maybe, but that just means the shy will miss out and there'll be more returns for those who are comfortable with risk.

You are paid to be safe and choose low risk based on the work of people who largely do your job for you, and then walk through it with clients who are uninterested in doing it themselves. But that doesn't mean that everyone in every stage of life will invest like what you are focused on or are willing to miss out on the stock market's run this year. Particularly people won't want to miss out based on some fear mongering sources like the ECRI who only gets attention if people fear recession and them being honest about their own metric's implications would lead them to be less important or all those book writers about DOOM who best interest is to promote fear so people buy their book.

Ultimately, you must *get* that just because you are defensive and obsessed with being risk-adverse, it does not mean that the market must perform in order to justify your choices.

Thanks for inspiring me to bet against your assertions and claims - it was a good year.

[gwb72tii]

here's a few numbers for you to chew on, and no i'm not going to link you. you say your a smart guy so if you doubt the numbers, they are easy peasy to find

compounding rates of return;
barclay's 20+ year us treasury
3yr 14.80
5yr 9.72
7yr 12.07
10yr 7.85

s&p500
3yr 10.87
5yr 1.66
7yr 5.81
10yr 7.10

2012
s&p 500 16.00
jp morgan emerging market bond 18.53
plus this is the single best category for the last 1,3,5,7,and 10yr time periods

so rwh, open your eyes and throw aside your biases. you might make some money along the way.

here's another tidbit
learn from history
it would tell you that the period of time we are in today, the afterglow of a finanacial meltdown, in a secular bear market, fed policies that will prolong the bear market and their influence on growth (lower) would tell this. the normalized PE of the s&p500 today is close to 20. historically, in times like today, the normalized pe has been closer to 10.
and then ask yourself, how much do you trust
1. helicopter ben bernanke, who couldn't see a wall if were painted red
2. greece to abide by its 3rd bailout
3. spain to get back to growth and not need a bailout
4. france to not need a bailout by 2016
5. our messiah, the annointed one who's election heralded a time a global healing and receding ocean levels, barry hussein obama, doing anything that is pro-growth and anything that heads us towards less spending

[nando]

does your S&P include dividends?

I made way, way more than 10% the last 3 years.

[rwh11385]

here's a few numbers for you to chew on, and no i'm not going to link you. you say your a smart guy so if you doubt the numbers, they are easy peasy to find

coumpounding rates of return;
barclay's 20+ year us treasury
3yr 14.80
5yr 9.72
7yr 12.07
10yr 7.85

s&p500
3yr 10.87
5yr 1.66
7yr 5.81
10yr 7.10

So you're saying that because you cherry pick past performance of the S&P500 to be handicapped by the recession caused by people like you selling "safe" and low-risk MBS, then that fund would have been a good one to buy vs. S&P500. HAHAHAHA. And just so happen compare it to a fund that saw a 30+% rise in 2011 as a justification of it being a good investment now?

Hmmm. Should I ignore that phrase on the prospectus and invest based on fear to get 1% returns for 2012 or would it have been better to have netted the 16%? That fund would have been good for 2011, but not 2012. Do you always invest with your eyes on the rear-view mirror?

[gwb72tii]

gee and i thought we were arguing bonds versus stocks
cherry pick exactly how? i provided multiple time periods for each. the only time period the s&p beat treasuries was 1year (2012).
if anything you, as an econ major should know this, including a recession in 08/09 should improve performance for the 3yr number, because you're starting from a lower price than you would have without the recession.

and including recessions is ENTIRELY appropriate anyways. shit happens, like recessions. they fuck up stock performance. ROFL

and the purpose of this wasn't to make you look small minded, myopic, ignorant, uneducated, foolish, can't read or other terms from your playbook

it was to simply point out there are multiple paths to wealth creation, wealth preservation etc.

i am VERY VERY biased. i like to make money without setting my hair on fire.

you're funny. you get bent out of shape when you're wrong and backed into a corner. why not man-up and just admit it?

[gwb72tii]

does your S&P include dividends?

I made way, way more than 10% the last 3 years.

yes, it is a total return number, growth and dividends
and it is a compounding ROR, not simple

[rwh11385]

gee and i thought we were arguing bonds versus stocks
cherry pick exactly how? i provided multiple time periods for each. the only time period the s&p beat treasuries was 1year (2012)

and the purpose of this wasn't to make you look small minded, myopic, ignorant, uneducated, foolish, can't read or other terms from your playbook

it was to simply point out there are multiple paths to wealth creation, wealth preservation etc.

i am VERY VERY biased. i like to make money without setting my hair on fire.

Well, don't you think it matters to be choosing correctly during that one year? The year you were so opposed to stocks and expected them to be down 3%. Clearly you were wrong. Until the last moment, you assumed the sky would fall because that's what the people you read hoped.

Arguing the past which included the downturn of the stock market and that one year of good times for the fund is like looking ahead at 2008 based upon the 1 year, 3 year, 5 year, or 7 year returns. Did that indicate how the S&P500 was going to do that year? Should you invest solely on past performance?

Enjoy your 1% with that fund. I know the retirement home that just wants to keep their money and might accept that, but doesn't mean I would be happy about it. The real question is did they actually lose money or not in 2012 with that fund after your % of account managed fees?

Duh you are biased. And close-minded. You only seem to think of your one path and focus of wealth preservation to the extreme of being blind to reality.

for the edits:

if anything you, as an econ major should know this, including a recession in 08/09 should improve performance for the 3yr number, because you're starting from a lower price than you would have without the recession.

and including recessions is ENTIRELY appropriate anyways. shit happens, like recessions. they fuck up stock performance. ROFL

you're funny. you get bent out of shape when you're wrong and backed into a corner. why not man-up and just admit it?

Nah, definitely not sad about 3 year returns, but 5 year and 7 year are low because of the recession. Just like when you try to focus on 5 year PCE averages.

But did you base your 2010 investments on 2008 performances? Or did you take into account the fact that past performance through a recession and financial crisis due to MBS was not likely to predict what would happen when poor folks didn't get any mortgage they couldn't pay anymore?

LOL. You're one to talk. Sorry I chose better returning investments than you this year by looking at the now and forward instead of focusing on the past.

[gwb72tii]

what fund are you referring to?
we aren't even debating products. we were arguing stocks/bonds.

[rwh11385]

what fund are you referring to?
we aren't even debating products. we were arguing stocks/bonds.

barclay's 20+ year us treasury

You brag about its previous returns but those meant shit this year.


Do you actually operate like this in real life, or are you changing the argument from this year because you were wrong and looking at past years to make yourself feel better?

[gwb72tii]

its an index fool, just like the s&p500
and look who's cherry picking time periods. you're a piece of work.

pull up those pants