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Does Trading Volume Differ on Up or Down Days? Does It Matter?

Actually, the market is downward skued. It has been for some time. That means over time the market is favored to fall on any given day. Usually the market is upwardly skewed, meaning normally the market rises.

Taking it a step farther, in a normal market when the market goes the other way the market is favored to fall on higher volatility than it rises with higher volume traded. So in this case it is normal that upswings are greater than downswings and on higher volume.

I hope this helps explain things for you. You may be saying, well that is weird, the market is clearly not healthy. My response would be, "Absolutely right on that point!"

VIX Drops 30% in Five Days; Eighth Time in 19 Years

Unfortunately, the market goes up or down over 1% every day nowadays. Who knows, maybe we'll get a 10% day this year.

The Yen Is Due for a Fall

Yen strength is similar to dollar strength. No one is holding either to make money. The dollar gives you oil access and let's you export (since most international contracts are dollar priced). The Yen is already a stagnant money pool and has been for years now. So what does it give you? Security the government is not going to start doing more dumb debt inducing things than it already has done. Basically, it has already experimented with the horrible results of policies the US is just now beginning to do (prop up bad companies, banks, start building cities for no one, and supporting bankrupt construction companies, as everyone puts all their money into government backed monopolies like the Japan Post Office).

Right now what is the Fed and treasury doing? The more they bail out the bigger the demand for treasuries. Why? Because they pretty much have caused panick and have confirmed that the only safe haven is in US treasuries which does the opposite of what they want. No one wants to buy anything else. And as they issue more treasuries to back bad debt that just means more people who want security can buy them. Soon no one will want or own anything but treasuries. How does that help? It doesn't. Wake up Fed and Treasury and read a economics book sometime. After all you are suppose to be professionals.

So far all I see is absolute incompetence. If the banks are safe, then why are you giving them all $. If they aren't, why aren't you forcibly making them transparent and cleaning them up rather than watch them hemorrhage CDS and CDO liability for 10 or 20 years as the economy declines to the stone age.

To the Treasury and Fed: Fix the mismanaged banks, insurance companies, and brokerages and stop trying to fix the consumer! That is, after all your job. Not finding out how to make the average US citizen borrow and then go bankrupt.

Is the Fed Taking a Step Toward Explicit Quantitative Easing?

Quantitative easing didn't help Japan. It just got it stuck holding up bad banks, construction companies, and the like. A situation it is unable and politically unwilling to fix for decades. A US foray into this will have us bailing out industries as they rot away into oblivion as well. As Duy points out, the Fed and Treasury are embarking on a course that leaves the US mired in more problems.

If they want a fix, increase transparency, let their bad buddy banks fail, and create some regulatory scheme to flush out the bad CDO and CDS contracts that are what's choking the entire economy. This is not just a cyclical decline. It's a structural problem that is causing more and more destruction every day. I would even suggest re-implementing Glass Stegal and nullifying any CDO or CDS contract that can not or will not be placed into a transparent tradable market format. No new CDS or CDO contractsshould be allowed to be written even to roll over the contracts.

From 2007 to 2008 CDO and CDS grew even though it was already $40+ trillion and everyone knew the problems they had. Now it appears a gambling game hoping to hold out closing the position long enough for the taxpayer to pay $10 or more trillion to bail them out. We should let them know that is not about to ever happen and purposefully making the situation worse in hopes of getting your paycheck and a bailout for your company will result in prosecution, not congratulations in the boardroom like AIG and Citibank got.

Like Duy mentioned, it is sad that the market is fixated on the government givaways and not on sussing out the gutter and clearing the rot so we don't end up drowning in red ink.

In Search of the Next Reserve Currency

For a currency to be the reserve currency the most fundamental commodities must be priced to it. Since oil is priced in dollars, I don't see any competitor asides from the Euro in the far future becoming it unless somehow the Middle East creates some joint currency or just stops accepting funny green paper printed without any consideration to long term economics. That being the dollar.

The Race to Zero Interest Rates

No country has been proven successful doing quantitative easing. Japan tried and failed miserably. Their decade plus failure should be a lesson to us all. Don't support zombie institutions, hide massive losses, engage in silly construction projects like building cities that house no one, and prop up an overvalued real estate market.

The Fundamental Value of Real Estate

Righto tinytim. You buy for livability and for amenities not as an investment or ATM. A house is nice as a home, not as a get rich scam.

BTW yes, a house gives you leverage ryanh. It also forces you to save. The first isn't necessarily good if you're under water, the second is good if you can't save. The big issue is, should you really be leveraging and why you are doing it. You can get 50% leverage on margin and 90%+ leverage buying raw options. Do I suggest you do it? Nope. Same with home buying.

The U.S. Economy: Slow Going

As far as I'm concerned it's a good thing people aren't wasting more money than they make and any government act to try to get them to their old bad habit is poor judgement. A weaker economy based on solid long lasting fundamentals is exactly what the doctor ordered.

Government and consumers should stop eating sugar and take real medicine for once.

What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup

CDS has been the crux of this whole market meltdown but its implications are so mind boggling no one even dares to speak, regulate, or solve it. Of all the people trusting Paulson, who was one of the main principals in the marketing and selling of bad CDS contracts to his clients to make money, is laughable at best and outright criminal at worst.

Deflation Is Worse Than the CPI Indicates

The Fed has ruined their own measuring system to appease politicians. Now they can't get real information. The fact that the market takes their statement as fact shows they are just too lazy to devise a real measuring system themselves. You can spend a few million dollars to fund a study more exhaustive than the Fed's. Split among the market participants this sum is irrelevant. A single exec gets paid more than that.

Clearly at least those in the commodity market knows deflation is worse than 1%.

Looking for a New Bottom Fishing 'Story'

Errol: Haha... despite all the hyperbole I still see almost 0% conservative economists and only about 10% of the articals are rooted in sound economic theory. But can I fault them? No.

Even Bernake of the Fed is a charlatan more than an economist. His belief that dumping unlimited money in the market shows no market sense. You can put as much money into the banking system but if no prudent person will borrow and only unqualified people need credit you do nothing to help the market. You could give everyone 10,000 then you just get inflation.

How about Paulson. Paulson was too stupid even to know that TARP won't work until he got congressional money. Then he switched to capitalizing banks but as economists told him before, the $ amount he went in with pays only for a couple quarters of their massive loss. Look at Citibank. $3.5 trillion dollars of liability on and off book. You could throw all TARP at them and still need more liquidity. And that's just one bank. Paulson is interested in funding his old Goldman cronies and about nothing else. And it's showing bailing out AIG to pay Goldman CDS and not Bear Stearns. So TARP = transactions approved for rich panderers (chiefly big banks, Goldman, and JP Morgan).

The US is choking on no CDS disclosure. Still no better regulation of CDS, CDO, regulating how to keep banks from over-leveraging through brokers and insurance companies, how to regulate insurance companies doing financial wizardry, and regulating financial companies from sucking bank money into risky gambling. Primarily I figure this is because few if anyone is competent to provide the foundation for this regulation. Of course Glass Stegal worked better than what we have now. Why not start with that.

So the US has the best economic minds but do we listen when the financial system is in crisis. No. I don't see a economist led solution. All I see is political pandering, big giveaway bailouts, a Fed that prints endless money to backstop everything to protect his ass, and a wishy washy Treasury with $700 billion to play with.

Great. And people wonder why the market is crashing. We don't have a market. We have a circus where everyone watches to see the next dumb government act.

Intelligent Government Action Is Key to a Market Turnaround

TARP = transactions approved for rich panderers (chiefly big banks, Goldman, Citibank, and JP Morgan). This is not a bailout.

Face the downturn, implement Glass Stegal, force disclosure of CDS liability, bankrupt bad banks, capitalize the remaining. That's the best remedy.

Another Mistake, Another Rally: Time to Switch to Cash

Big Money: How about Japanese Yen. Anyway, I think the Fed and Treasury can deflate the money supply pretty rapidly. They just can't really inflate the money supply to offset fundamental de-leveraging because even if they dump money into the financial system, there aren't any credit worthy people to lend it to.

If you are credit worthy, you would be saving money, not borrowing more right now. So what are we trying to do? Get people to spend more than they can afford once again? Silly Silly Silly.

The Fundamental Value of Real Estate

Um ask a financial advisor. Homes underperformed the stock market and bonds in return on asset for the past 100 years. It is a place to live not an investment asides from the fact in that it used to require you to do some forced savings (which isn't bad for an American who tends to have a - savings rate recently).

Unfortunately, with secondary mortgages, refinancing etc. it has become a ATM machine. So what is the value of a house? It is only what someone wants to buy it at or as a revenue stream based on rent. Considering you would be lucky to rent an average given house over 1,000 a month and it's estimated property tax on $150,000 house is about $2,500, 2.5% goes to maintenance -3,750, you make a revenue stream of about $5,750. Versus a 4% bond that makes $6,000. Let's wash capital gains and income tax. So after 20-30 years you are the proud owner of a pretty run down dingy house which you could have gotten better returns in a common long term bond or maybe even a bank CD.

So unless you can make more than $1,000 a month renting your house and the cost is under $150,000, I'd say you better not think of your house as an investment because it isn't. It's just for your own luxury.

Squanderville vs. Thriftville: Buffett Simplifies Trade Imbalance Problems

LOL trade deficits, government deficits, consumer credit. It all inflates the money supply. The fact that we have become more prudent is causing a headache because when we do the money supply shrinks causing a de-leveraging a and money supply contraction.

What is good for the individual and long term sustainability is bad for the short term and the wider economy. Funny isn't it. Welcome to economics. You will know the downturn is over when the government and officials stop trying to figure out how to get you start squandering your money like you used to or try to squander the government's money to make up for your recent fiscal prudence.

In the meantime, we should be figuring out what else the US can sell to the world besides overpriced Hollywood shows and movies, weapons that may be used against us, drugs that we sell cheaper overseas than we do at home, computers and electronics we manufacture overseas, Microsoft and Apple OS', Qualcomm phones (that's what the US embassy is for), and overpriced medical equipment that only the US will use because only in America does the medical practice try to figure out a way to weasel you out of everything you own or ever will own (providing you live) even though the medical establishment is rated below 42 other countries in longevity, infant mortality ratings, death from heart disease, surgical death under 40 years old, and other medical statistics (lower than Canada, France, UK, Taiwan, Japan, Sweden, Chile, S. Korea, Australia, S. Africa, Saudi Arabia, Kuwait, etc.) Last I knew of those countries only the US will let you die from treatable cancer because you don't have $50,000 (maybe that's why the US has such a bad average expected life span).