Stock_trad3r, looking forward to hearing your thoughts on why the FED was so super aggressive in cutting rates recently as well as an emergency rate cut if the economy is so strong and there are no major problems. Thanks.
the forced liquidation of commodities and the related stocks has nothing to do with inflation going down. There is this thing going on called deleveraging, I know its a big word for you to understand, but next week when yet another hedge fund or God forbid IB gets crushed and the s&p closes down 30 handles or more this is the reason. Why didn't you post where is the bear market yesterday? I guess we can all get used to you posting the all clear sign every other day or so.
What stands in defense for Stck_Trd3r is what may now portend as a "shift" in the general market's trend. Although much of today's vastly higher volume was caused by options and futures expiration, we may have a "follow-through" as defined by William O'Neil and IBD. Perhaps managers have now begun "shifting" gains from commodities and commodity-related stocks back into what will become the "new market leaders". In coming weeks, fundamentally sound companies and industries likely may forge themselves to the front for substantial gains as institutions put large amounts of cash back to work. Yes, the market may be now seeing an end to the downcycle - some 6 months or more ahead (not that more bad news won't continue to unfold). Truth be told, the majority of retail investors are currently scared senseless and will not be able to capitalize on a powerful new uptrend. Best to all, paYsen$E
Then why did we hear from our resident ET macro economy PHDs that when commodities went parabolic it's a sign of 'rampant inflation' and now when they come crashing limit down it doesn't mean inflation is going down, it's just 'profit taking' and 'forced liquidation'? LMAO
dude, its called margin calls. when your levered at 25-1 what do you expect? Lets let these folks blow out there posistions and see where we lie in a month or so. If I hjad to predict, I would say the dollar will rally here for a few weeks, gold and crude sell off, and then kind of rollover again. Dollar starts to retreat and gold and crude start back up. If the fed would actually slowdown a bit, maybe things take a litttle longer, but these trends are not done quite yet. Are you seriously trying to say there is no inflation threat? Doesn't really matter who or how it started, the fed does not care to even attempt to fight it.
In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit. Mathematically, the marginal cost (MC) function is expressed as the derivative of the total cost (TC) function with respect to quantity (Q). Note that the marginal cost may change with volume, and so at each level of production, the marginal cost is the cost of the next unit produced. In general terms, marginal cost at each level of production includes any additional costs required to produce the next unit. If producing additional vehicles requires, for example, building a new factory, the marginal cost of those extra vehicles includes the cost of the new factory. In practice, the analysis is segregated into short and long-run cases, and over the longest run, all costs are marginal. At each level of production and time period being considered, marginal costs include all costs which vary with the level of production, and other costs are considered fixed costs. It is a general principle of economics that a (rational) producer should always produce (and sell) the last unit if the marginal cost is less than the market price. As the market price will be dictated by supply and demand, it leads to the conclusion that marginal cost equals marginal revenue. These general principles are subject to a number of other factors and exceptions, but marginal cost and marginal cost pricing play a central role in economic definitions of efficiency. Marginal cost pricing is the principle that the market will, over time, cause goods to be sold at their marginal cost of production. Whether goods are in fact sold at their marginal cost will depend on competition and other factors, as well as the time frame considered. In the most general criticism of the theory of marginal cost pricing, economists note that monopoly power may allow a producer to maintain prices above the marginal cost; more specifically, if a good has low elasticity of demand (consumers are insensitive to changes in price) and supply of the product is limited (or can be limited), prices may be considerably higher than marginal cost. Since this description applies to most products with established brands, marginal pricing may be relatively rare; an example would be in markets for commodities.
Isn't it about interest that was supposed to be earned on debt? The interest from all those morgages that were bought and sold (for a profit) but in the end a huge part of the interest that was to be derived from loans in reality doesn't exist. So all this money that is factored into the papaer out there really doesn't exist. The big institutions are on to this now so no one is buying this debt anymore. Some are stuck holding the bag. Bag holders need to meet margin...so they sell other things (commodities) to get cash.
These ' IMAGINARY' recession has never been proven with fact and figures. I have repeatedly challenged people to prove it to me. All they prove is their FEARS and self defeating behaviors. The market losses are a result of this negative sentiment, perpetual doom and gloom when none of it as bad as it seems. None.