Short Interest

[boneil]

I have seen people talking about the rising short interest in the market. It being the highest in 7 years or so and read an article that puts it about 1 trillion dollars short. A trillion dollars of short stock can put a floor in the market. I still have a bearish view on the market, but apparently so does a trillion other dollars. This makes me think about GMCR and Einhorn. I think it was the begining of 2014 when Einhorn made a short bet on GMCR. Price was around 120. He laid out a reason for being short and it made complete sense. But unfortunately, everyone became short and it created a floor after a modest sell off. It wasn't until GMCR capitulated the shorts, price went to 158, every short got squeezed and then the real sell off began. KO was buying some stock but the short thesis was correct. But because everyone was short, the stock went on to make new highs.

I am begining to wonder if our own market won't do the same thing.

[NitroZ7]

This whole market is so fickle it doesn't seem like there is anything that is dependable. Views on oil and interest rates change day to day, govt. regulations with inversions are unpredictable, currencies are all over the place. There seem to be so many variables that change at the drop of a hat it just seems like there is no clear trend in anything. I've been selling some long term holdings over the past 2 years and building up cash. In some accounts I'm about 60% cash because I feel like there will be a big drop at some point. Problem is I will never be able to tell if its a bottom or the beginning of a bigger drop.

[boneil]

I don't understand the whole inventory data numbers that come out, never really looked into them, but I keep seeing GDP forecast estimates being revised down. And they are continually being revised lower. I'm seeing estimates of 0.5 percent for GDP. That looks to me like we are on the verge of a recession. But then we see other good data points and everything looks good. The FED has muddied the waters and it's not good. Jamie Dimon, in his annual share holder letter talked about a lack of liquidity and volatility in different markets. The lack of liquidity is what will cause the next big market drop. There's just no way to know when that will happen and what will be the catalyst.

[NitroZ7]

I don't understand the whole inventory data numbers that come out, never really looked into them, but I keep seeing GDP forecast estimates being revised down. And they are continually being revised lower. I'm seeing estimates of 0.5 percent for GDP. That looks to me like we are on the verge of a recession. But then we see other good data points and everything looks good. The FED has muddied the waters and it's not good. Jamie Dimon, in his annual share holder letter talked about a lack of liquidity and volatility in different markets. The lack of liquidity is what will cause the next big market drop. There's just no way to know when that will happen and what will be the catalyst.

There was an article in the Wall Street Journal about a month ago talking about how there was severe dysfunction in the Commercial Mortgage Backed Securities Market and how a lot of loans that will be coming due will not be able to be refinanced. I've seen quite a few big transactions fall through because of financing in South Florida and Miami-Dade is headed for another condo crash according to three other articles that were published in the past few weeks. Something is happening and it isn't good but like you said it is hard to know when it will come unglued.

[tdt91]

My finance guy thinks the only way to get us out of this funk is for the government to put us in recession. He said Reagan did it when he first got in and after a couple years things started coming back strong. I feel like we never left the recession when it started in 08/09. Growing at less than 2% don't seem like we are not in recession. Inflation is around 1.4 so I guess we are no in recession but it sure feels like it. Last time the market crashed I just held on and have recouped plus some of course. My wife went to all cash and she is behind really when you think about it. Whatever is going on it ain't good. I know this, leaving money in a bank is a slow bleed but what else do you do if you need access for something that comes up. I guess I could buy mutual funds but I already have that covered with IRAs and 401Ks.

[NitroZ7]

I read an article today where a couple in Denmark got a $38.00 check from the Bank. It was the interest the bank owed the borrower for the Borrowers interest on their mortgage. We live in strange times.

[tdt91]

We got interest payed back to us this past year from our mortgage company and had to pay taxes on it.