Monday, October 31, 2011

The Sarcasm Report v.136

October 28, 2011
Week ahead: Doom-and-gloom camp tricked again

Stocks are clearly in a sustainable rally, as the charts show...

October 31, 2011
Sharp Drop for Stocks on Wall Street

Equities fell 2 percent or more, sending the broader market in the United States back into negative territory for the year.

Trading eve of the Hallows, as bulls would confess
Not a creature was bearish, not even the press.
The stock charts were staged by the pumpers with care,
In hopes that more buyers soon would be there.

Investors euphoric with thanks to the Fed,
While sweet dreams of candy in mountains were bred.
With the bears in their bunkers, as I locked the door
The free markets were spooked and they dropped through the floor.

As seen on Wall Street, lifeblood sprays such a splatter,
Was it a test to see which bull was fatter?
Traders out windows! They dropped and they crashed!
The weak hands in the red were vomiting cash.

"To the moon!" cried the bulls for they did not know
The market was drawn by debt down far, far below.
When, what to their greediest "Ayes!" I did sneer,
"It's a very bad day, with nothing but fear."


Who Struck John said...

It appears that equity markets are not nearly as smart as bond markets.

Anonymous said...

Who Struck John,

Indeed, and if investors would have been as smart as bond markets...

Bonds Beat Stocks: 1981-2011

"Since 1981, long-term government bonds have gained an average of 11.5% per year, handily besting equities. The S&P 500 index gained the 10.8% per year over the same period..."

Stagflationary Mark said...

Who Struck John,

October 31, 2011
Bonds Beat Stocks Over 30 Years for First Time Since 1861

Oct. 31 (Bloomberg) -- The biggest bond gains in almost a decade have pushed returns on Treasuries above stocks over the past 30 years, the first time that’s happened since before the Civil War.

Wake me when Jeremy Siegel writes a book about bond investing for the long-term, lol.

As economic growth recovers and real rates rise, the price of Tips will fall leaving Tips investors with large losses in the face of accelerating inflation. - Jeremy Siegel, February 2, 2011

Both nominal rates and real rates have plummeted since he said that.

July 26, 2011
The Real Math Behind Siegel's Mythical 3.5% Real Yields

How are we doing on that economic growth recovery theory of his? I would argue not so good. I would also point out that his rising real rate theory isn't doing so well either. 30-year TIPS rates have fallen 0.5% (from 2.1% to 1.6%) since he said that.

The 30-year TIPS is 0.85% today. His rising real rate theory continues to be one of the worst calls of the year (by anyone). The 30-year TIPS is up over 35% since I bought it in February (not that I ever plan to sell it, holding to maturity works fine for me). Go figure.

Meanwhile, his precious S&P 500 is actually down 4% since he said that.

Stagflationary Mark said...


You beat me to it! I was too long-winded as usual, lol.

Anonymous said...

Wikipedia:Quick cat index

Stagflationary Mark said...


For kicks and giggles, I clicked at random in your cat index and now know all I care to know about the Thaanumella cookei. ;)

I'm off.

Tomorrow the new I and EE savings bonds rates are announced. Should be an exciting day for whirlpool sucking theories, lol. Sigh.

fried said...

Christmas came early in my house...hit the bank on Saturday and bought ibonds for my nephews. They may not appreciate it much now, but in a few years they might be happier about it.
Glad you're back posting.

Stagflationary Mark said...


I-Bonds would seem to be a pretty good gift for nephews thanks to the Education Savings Bond Program.