The Contrarian's View s published 11 times per year on a mostly-irregular schedule, and the views expressed are those of the author and editor, Nick Chase. Because nobody can predict the future, results of past suggestions or recommendations are no guarantee of future results. My own material in this publication may be freely quoted provided proper attribution is given to its source; quotes from other people are subject to fair-use copyright restrictions. Subscription rate: Free on the Internet. Using your favorite Web-browsing program, open URL http://onashi.org. Former paid subscribers to the printed version are now receiving LIFETIME subscriptions, and subscriptions to the printed version are no longer being accepted. Unsolicited material sent to us by UPS or by courier other than the postal service is refused and returned to sender! ISSN 1536-4429 Phone: (508) 757-2881
The last prior time was in July 1989, a few months before the Asian currency crisis (a systemic failure). I recognized a top in 1999/2000, but did not run the headline as I felt that top was synchronous with Y2K.
Now it's time to again declare that the stock market has reached.... and likely passed.... a major top. Of course, the main reason is the rash of systemic mini failures, followed by the major systemic failure in the subprime-mortgage CDO markets.
But the stock market itself has been sending signals that a major top is at hand, and that the tide has turned. Last month I mentioned the eight "Hindenburg omens" (a sentiment indicator of a future decline in demand for securities) which occurred during June and July. Also notable has been the weakness in the advance/decline lines (on which "Timer's Trend" is based), and recent market highs being achieved with fewer and fewer stocks participating.
Another worthwhile technical indicator is the "Coppock guide", tracked by InvesTech Research. It is now in the process of completing a "Killer Top", which in all prior occurrences (1929, 1946, 1969, 1973, 1987, 2000) signalled that bear markets lay directly ahead, two of which (1929 and 1987) were crashes.
Technical indicators aside, it is also clear that fundamentals are shifting negative. Foremost is the subprime and adjustable-rate mortgage rot, as shown in the preceding table (which I have seen in several places, but apparently originated with John Mauldin). As you can see (in red, if you're viewing this in color), the peak of adjustable-rate-mortgage resets is in the months of the first half of 2008, with the average reset resulting in a mortgage payment that's about one-third higher.
Just as subprime-mortgage homeowners will need to refinance their ARMs as conventional mortgages, the lending window has closed. For the most part they simply don't have the equity to refinance, nor the income to continue with the ARM. They will default. Those who think this won't depress the overall economy have rocks for brains.
Also coming in 2008 is the leading edge of baby-boomer retirements, a demographic bulge which will last about a decade. As I have commented before, the boomers can't eat stocks. And the great majority are unlikely to pursue the strategy I've followed in my "Inheritance" portfolio, which is to invest for high current yield together with portfolio growth which keeps pace with the money-printing presses. Most have their money tied up in company retirement plans where the investment choices are various flavors of equity mutual funds. As the boomers begin their monthly withdrawals, the mutual-fund shares must be redeemed for cash (and the underlying shares sold).
In sum, we clearly have the long-expected asset
deflation now underway, and despite what you may
hear in the popular press, and despite efforts by the
Fed to provide "liquidity", the asset deflation is not
contained; it is far from over. Stock-market technical
indicators, leverage going into reverse, and demographics tell us that the bear market directly ahead
may be particularly severe, and (as in Japan in the
1990s) may persist for many years.
Now, I am aware that there are a number of well-respected economists and analysts out there who are forecasting the end of the world due to the ongoing problems in the credit markets. I tend to agree with their assessment that the US economy is in a bad shape but I do not expect a deflationary collapse in global asset prices due to the sub-prime mess for the following reasons: Firstly, it is worth noting that the size of the US economy is roughly US$13.5 trillion, global exports are over US$13 trillion, global non-gold foreign exchange reserves are above US$5 trillion and under the worst-case scenario, sub-prime mortgage losses could amount to US$300-400 billion. No doubt, these losses would be a total disaster for the affected households, but they are not big enough to cause a major recession, at least in nominal terms. Secondly, I believe that with its ability to print an unlimited quantity of dollars, the Federal Reserve will come to the "rescue" at the cost of the American currency. - Puru Saxena
This process is playing out everywhere, and the government isn't going to bail out these hedge funds. The good news is that it will happen fast. The money will come out, the losses will be big, but these hedge funds will all be closed by year-end. Trillions will vanish. But then we will start all over again. Once this whole process is understood, the casualties, including some banks and some homebuilders and almost all mortgage companies.... will be taken. By November, this will be over. - Jim Cramer [Nick's comment: I don't quote Jim Cramer very often because he is (usually) a permabull and always a TV-entertainment shill; but he is knowledgeable about the ways of the Street, and I find it interesting that his timetable about matches mine. I might add, I also find it hard to believe that "trillions will vanish" without impacting the overall economy.]
The flaw, so it seems, is that the originators of CMO theory believed that under almost all conditions they could think of (in more predictable times - pre-9/11) was that people would always pay their mortgages ahead of everything else. That assumption seemed to be valid...at least until the Housing Bubble began to deflate. Suddenly, there were people stuck with over-priced homes who ended up owing more on the home than it was worth, and the CMO business didn't incorporate a mechanism, short of foreclosure, to deal with the "upside down mortgage". The results are just beginning to take their toll.... The technical problem which is facing the stock market, and I've been writing about since 1996, is that we are about to encounter a once in many generations financial storm of incredible proportions that government and 98% of humans have no idea how to survive.... We have a housing bubble meltdown occurring.... at about the same time that demographics (early Boomers retiring) starts to suck lots of investment back out of the mutual funds.... these things take a lot longer than a month or two to work out - a couple of years minimum. There's still plenty of time to panic. - George Ure
The Fed altering their banking regulations has to give you a hint that the problem is not the advertised problem, BUT MUCH LARGER. The financial difficulty going global has to give you a hint that the problem is not the advertised problem, BUT MUCH LARGER. When you see bank after bank needing liquidity in substantial amounts, this has to give you a hint that the problem is not the advertised problem, BUT MUCH LARGER. The hope for every central bank is that the real problem can be kept from public view. The truth is the public, even professionals in Wall Street, have no clue what the problem is. They know it has something to do with derivatives, but none realizes it is a more than $20 trillion dollar mountain of unfunded, unregulated paper that has just been discovered to not have a market and therefore any real value. This is why I have suggested you plan for the worst and hope for the best. Taking cautionary action before a problem occurs only requires some of your time. If you wait and try to clean up the mess after a problem happens usually there is no action that can be taken. - Jim Sinclair
Indeed, it is a compelling testimony to our capacity for pseudo-rational self-delusion that so many could still cling to the idea that something as intensely self-reinforcing as the financial markets - institutions in which those highly non-linear and inherently unquantifiable actors known as 'human beings' are at play (and largely with Other People's Money, at that) - can ever yield to the same statistical calculus as a laboratory vessel full of inanimate gas particles.... did no-one stop to think that if their model was supposed to be so hot, then so, in all likelihood, was everyone else's? Had they done so, they would have realised that not only must buying assumptions have become claustrophobically crowded (i.e. very efficiently irrational!), but that - far worse in its implications - once the market turned, all these blessed computers would be revealed to be disastrously mispriced in one horrible unison. - Sean Corrigan [Nick's comment: Computer power.... and technology generally.... has the effect of "amplifying" the mistakes of the herd to the level of truly horrific.]
Having imported mathematicians, and recognized that if they were going to take on these huge risks they needed to be able to manage them, bank managements then asked the mathematicians to produce a risk management metric. Unfortunately bank managements did not suspect mathematics' most closely guarded guilty secret: only a tiny minority of possible equations are solvable using currently existing mathematical techniques. Rather than confessing failure and losing their jobs, which were paid beyond the wildest dreams of mathematical academia, the mathematicians therefore bent the reality to fit the equations they could solve, and came up with the "Value at Risk" methodology. By assuming that securities prices move continuously with no jumps, that they are random and normally distributed, and that market trends don't exist, mathematicians were able to produce a risk management model that was convincing to top management and worked most of the time. The occasions on which the models didn't work were dismissed as market anomalies, although in reality it was the models, not the markets, that were anomalous. - Martin Hutchinson
Sometimes, I believe, economists and analysts get lost in the complexity and forget the simplicity. For example, the top ratings analysts at S&P's and Moody's have developed complex forecasting models to rate hundreds of billions of dollars in CDOs, which are a derivative of mortgage loans. These ratings agencies have used decades of historical data to guide their complex models. All very impressive stuff, until you realize that the lending that has been occurring over the last 5 years is non-historical in nature. Now these brainy analysts are scratching their heads and expressing shock that their models are turning out so wrong. They never asked the simple and practical question: Are loans that drive the data for our models being made in the same way as our historical data? - Charles Zentay
Our sense is with the credit markets where they are today, there's not enough money to go around. Companies that either need more money or may need a refinancing may find out that the window is either not open or it's only partially open. Some companies that are deemed riskier borrowers won't make the cut, and they'll have no alternative but to file for bankruptcy. - Al Koch [vice chairman, AlixPartners]
Every major financial crisis this century has peaked with the major money-center banks really getting whacked. Each time, they stepped squarely into whatever mess was emerging. They managed to hide the damage for a while before succumbing. Finally, the Federal Reserve has stepped in to save them, drawing criticism but ultimately settling the market. - Roger Conrad
As to the issue of the balance sheets of the banks and brokers? Many are too big to fail. They will be quietly BAILED out by the financial authorities. 300 billion dollars of money printing is PEANUTS to the fraudsters in Washington DC. 600 billion you say? They will print the money! How about a Trillion dollars? They will print the money! NOTHING WILL GET IN THEIR WAY. These paltry sums would never be allowed to jeopardize the financial system or the REELECTION plans of PUBLIC SERVANTS. - Ty Andros
On any further severe market weakness the Fed and the Treasury will come up with some hyper-inflating tricks. - Marc Faber
Most of the money going into private equity today will be a total loss. - Jeremy Grantham [chairman, Grantham, Mayo, Van Otterloo & Co. LLC]
We have just seen $197 billion of mortgage resets so far this year. That is less than we will see in two months (February and March) of next year. The first six months of next year will see more than the total for 2007 or $521 billion. This suggests to me that the number of foreclosures is due to rise dramatically from the already high current levels, putting more homes into a weak housing environment. These homes that are going to see reset prices are for the most part not going to be able to be rolled over into a traditional 30-year mortgage because there is not going to be enough equity to get a traditional mortgage. While the total increase in payments is an estimated $42 billion, which is not all that large in the grand scheme of things, to the individuals who are paying the increase it is a large increase in their housing costs. - John Mauldin
In our view the liquidity alarm bells have only started to ring and there is much more to come. The subprime problem has spread to all mortgages and to risky investments of any kind. Globally there are hundreds of billions of dollars or more of securities that have suffered major declines in value, but have not been yet marked to market. When the margin clerks call for more money the good stuff gets dumped on the market since the bad stuff can't be sold. We will be seeing a lot more of this in the period ahead. There has never been a period of wild speculation that didn't end badly, and we don't think that this time will be an exception. - Minter & Weiner
It's a mortgage problem. Subprime is like a little leak where the underlying problem is the integrity of the dam itself. Most of the mortgages taken out during the past few years will fail.... The economy is a basket case. - Peter Schiff [president, Euro Pacific Capital Inc.]
Many institutions that publicly report precise market values for their holdings of CDOs and CMOs are in truth reporting fiction. They are marking to model rather than marking to market. The recent meltdown in much of the debt market, moreover, has transformed this process into marking to myth. - Warren Buffett
The Federal Reserve was not founded to bail out Bear Stearns or a few hedge funds. It was founded to keep a stable currency and maintain its value. - Jim Rogers
The problem is we don't know how bad the hole is. And by "the hole," I mean not only what the bad credit is but also the accounting of it. I think we're seeing that a lot of financial institutions probably weren't as profitable as we thought they were. That is, they showed big profits and everyone got big bonuses on the way up, and there are going to be big write-offs on the way down. - Jim Chanos
The current financial crisis is a wake-up call for modern-day central banking. The world can't afford to lurch from one bubble to another. The cost of neglect is an ever-mounting systemic risk that could pose a grave threat to an increasingly integrated global economy. It could also spur the imprudent intervention of politicians, undermining the all-important political independence of central banks. The art and science of central banking is in desperate need of a major overhaul--before it's too late. - Stephen S. Roach
The oversupply of leveraged loans will take a few months to go through the system. The subprime issues will continue to be problematic through 2008. But these are healthy corrections for the long term. We don't see broad signs of weakness in the economy, and that's what matters most. Global economic growth is expected to remain strong. The U.S. economy continues to be sound. One of the most important indicators is low unemployment, at 4.6%. We're seeing steady gains in personal income. There's a continued acceleration in exports. And corporate balance sheets are strong. - Amy Brinkley [Chief risk officer, Bank of America. Nick's comment: Unemployment rate and increases in personal income are bogus, politicized government statistics]
I think this is the very early stages of repricing risk, particularly in the stock market. It may be rapidly entering the middle stages in the fixed income market, although I think it will go quite a lot further in the next couple of years. But the equity markets have barely started to address this issue.... In five years, I expect that at least one major bank (broadly defined) will have failed and that up to half the hedge funds and a substantial percentage of the private equity firms in existence today will have simply ceased to exist. - Jeremy Grantham
The upcoming weeks should be pregnant with indications of more trouble throughout the whole financial engineering world. More than a few outfits may discover that the triple-A pieces of paper they thought were worth 100 cents on the dollar are worth only, say, something in the 70s. That will make for a lot of heartache. - Bill Fleckenstein
Yesterday I went to a small dinner party with my high school friend, and after a few drinks and appetizers the conversation quickly turned to subprime mortgages and the turmoil in stocks. I wouldn't even bring this up - because who doesn't talk about the "credit crunch" these days -- but did I mention my friend is Russian and that the dinner party was in his home in suburban Moscow? The credit contraction that reportedly started because of the troubles with the U.S. subprime mortgages, the "junk bonds" of the real estate world, is marching around the globe. Even in far-away places like Russia -- which seems insulated against cash flow problems by its vast oil and gas proceeds -- the liquidity crunch is the talk of the town. People are worried. - Vadim Pochlebkin
In the case of an equity bubble, in general, the owner realizes capital gains simply through selling a part of his stock holdings. No bank and no debt are involved...In this respect, a property bubble is a totally different animal. Since homeowners normally want to stay in their houses, "wealth effects" have to be extracted through additional borrowing against the inflating property value; that is, through mortgage refinancing. In essence, twofold borrowing is needed: FIRST, to boost housing prices; and SECOND, to withdraw equity. Yet, there is a second, even more dangerous, aspect to housing bubbles: they heavily entangle banks and the whole financial system as lenders. For this reason, as a matter of fact, property bubbles have historically been the regular main causes of major financial crises. During its bubble years in the late 1980s, Japan had rampant bubbles in both stocks and property. While the focus is always on the more spectacular equity bubble, hindsight leaves no doubt that the following economic disaster was mainly rooted in the property bubble. Both bubbles burst in the end, but the property deflation has continued for 13 years now, with calamitous effects on the banking system... - Kurt Richebächer
With a few months of hindsight, it's now clear that debt-as-money was not one of humanity's better ideas. When the U.S. housing market -- the source of all that mortgage-backed pseudo money -- began to tank, hedge funds found out that an asset-backed bond wasn't exactly the same thing as a stack of hundred dollar bills. The global economy then started taking inventory of what it was using as money. And it began crossing things off the list. Subprime ABS? Nope, that's not money. BBB corporate bonds? Nope. High-grade corporates? Alas, no. Credit default swaps? Are you kidding me? No longer able to function as money, these instruments are being "repriced" (a slick little euphemism for "dumped for whatever anyone will pay"), which is causing a cascade failure of the many business models that depended on infinite liquidity. The effective global money supply is contracting at a double-digit rate, reversing out much of the past decade's growth. - John Rubino
Sentinel [Management Group Inc.] froze assets then went bankrupt in a matter of days. Poof, just like that, with no time to react. I do not like to lecture but I am going to do it anyway. Please read this paragraph over and over and over until you understand the broad implications: There are duration mismatches all over the place... in mortgages as well as investments, and especially for those people in 401Ks hoping to retire in 1-5 years. What happens if we have another crash like we had in 2000? There are going to be ripple effects from this, perhaps lots of them.... this is just the beginning of disasters like these. When total disaster strikes (and it will), the battle cry will undoubtedly be "No one could possibly have seen this coming. It's too late to sell now." - Mike Shedlock
For the first time in over a year the Fed is now implicitly admitting that they underestimated the downside growth risk: Until now the official Fed view was that the housing recession was contained and bottoming out and not spilling over to other sectors of the economy; and that the sub-prime problems were also a niche and contained problem. The sudden shift to a strong easing bias suggests that the Fed miscalculated until now the damage to the economy and to financial markets of the housing recession and its real and financial spillovers. - Nouriel Roubini
Consumers deserve as much of the blame for this mess as anyone. Sure, there were unethical lenders, agents, appraisers and banks. But the consumers are the ones who signed on the dotted line. There is no excuse for getting duped when making the single most important (and often largest) decision of one's financial life. If the government rushes in and sweeps this fusillade of poor decisions under the rug with a batch of funny money, what lessons will be learned? It will teach consumers that responsibility and due diligence are no longer required, and that government will always be there to make it right. Our currency and economy have already suffered enough because of bailouts of various types. Now is the time for a dose of tough love. - Andy Sutton [Nick's comment: Won't happen. The world-meddlers will keep meddling (and bailing out bad choices) for as long as they have the clout to do so - at our expense, of course.]
I was at a party this weekend, and struck up a conversation with a local money manager whom I've known for a number of years. He is convinced the Fed will be "rescuing" the markets with a cut in rates either tomorrow [August 7] or at the next FOMC meeting. When I disagreed and gave inflation as my reason, he countered with, "What inflation?" I brought up the obvious answers of food and energy, to which he pointed out "food makes up just 12% of GDP, and energy prices are falling again." I then brought up the growth of M3, to which he said "nobody looks at M3 anymore, it's the core inflation data which drives the markets." This illustrates just how powerful the Fed can be without even touching interest rates. Here is a smart guy (he is a fellow CFA) who is in charge of a substantial amount of money and has bought into the Fed's rhetoric hook line and sinker. - Chris Gaffney
For sure, this fantasy "fix" through even more inflation and a further debasement of the US Dollar cannot continue ad infinitum. However, as long as the public remains oblivious to the inflation menace and keeps buying into the low-inflation propaganda, our current "monopoly-money" system could easily continue for several more years. - Puru Saxena
I get a kick out of all these central bank governors, both here and overseas, constantly warning us about the "terrible danger of inflation." What a bunch of snake-oil salesmen these guys are. It's the central banks themselves that are pumping out all that extra fiat money that is creating the inflation. It's like an AIDS carrier indulging in all the sex he can handle while simultaneously warning about the spread of the disease. So what's it all about with these central bankers? Simple, they like their cushy jobs along with the perks, and the only thing they're worried about is that the world will get wise to the central bank/fiat money racket, and maybe kill the beast. In other words, the central banks are afraid that voters will finally get rid of the whole private money business along with its nonstop production of intrinsically worthless fiat money. - Richard Russell
Although the recent Sturm und Drang in financial markets stems largely from upheavals in the private sector, the U.S. government continues to do its part in ensuring that we will eventually see similar violent spasms emanating from the public sector. With government spending out of control, corruption almost endemic, and interest rates poised to move sharply higher in the future, it's only a matter of time before we suffer the consequences of having the world's most highly-rated paper join the ranks of the world's most lowly-rated junk. - Michael Panzner
Former Federal Reserve Chairman Alan Greenspan once said that "the clearest evidence of the perceived benefits that derivatives have provided is their continued spectacular growth." Based on the carnage that a huge build-up of unsalable derivatives has helped to create in global financial markets, it seems that's one more thing "the maestro" has gotten wrong. - Michael Panzner
Much has been made of the American Stock Markets as "economic indicators." What rubbish! Any resemblance between the American Stock Markets and the actual American Economy are pure delusion. For instance, the fiat Federal "dollar" has been collapsing at a steady rate the last five years. It would be logical the stock markets would be declining since the sacrosanct "corporate profits" they worship are actually going down. Nope. Or perhaps the stock markets would judge the Federal Government as actually bankrupt? Nope. The markets just gleefully crash through the 14,000 barrier based upon the delusion of the moment. Well, the delusions are ending. And the hangover is going to be savage. - Doug McIntosh
I think there's a line where central bank intervention crosses the line and becomes price-fixing - and I think we've crossed it. Somewhere along the line, government has confused its obligation to provide honest money with a bankster/corpgov policy called "economic stability" - which is a buzz term for "stacking the deck for the insiders" which in turn leads to successive bubbles in the economy, which then serve up fat profits for the Powers That Be. In case you haven't noticed though, the purchasing power of your money continues to be hollowed out, however, and if you believe the simplistic mantra "prices are going up", you need to learn things like "No, the purchasing power of your money is going down" and those that control the money, own your liberty. - George Ure
Investors seem more concerned about missing the next rally than avoiding.... the train wreck. - Marc Faber
For many months now I've been giving high odds for a major systemic failure of some sort. I would say that when the entire market for mortgages which do not meet government (Fannie Mae and Freddie Mac) standards freezes up and essentially shuts down, we have had a major systemic failure. Certainly the world's fascist central banks must think so, as they threw about a half trillion dollars of electronically-created "money" into the system over the next few days to stabilize it.
Condition satisfied..... from now on I will be giving odds for continuing systemic failures (which are big enough to possibly collapse the entire financial system).
The conventional wisdom is that the Fed (and the world's other central banks) provided a timely rescue; it's back to business as usual.
This view is wrong. The Fed's half-percent cut in the discount rate may have bought two or three weeks' breathing space; but most of the subprime and alt-A mortgage toxic waste has yet to be marked to market. As the weeks go by we are likely to see more institutions take hits as their portfolio values collapse. The issue is whether these will come in a rush, triggering a severe bear market and/or crash, or whether they will occur gradually enough for the central banks' repeated rescues to continue to be successful. As we are now entering the time of year when the stock market tends to be bearish if there is any valid reason for it to be so, I think this autumn is likely to be quite bearish for stocks.... with the Dow possibly dipping below 10,000. I assess the odds for a very bearish September/October at about 85%, with the odds for a market crash (per Hindenburg omen) at about 1 in 4.
The odds for continuing systemic failures during the
next two months are about 95%. These are dangerous
times, financially, and there is a possibility the
consequences could be life-changing.... that is, a new
Great Depression could be suddenly thrust upon us.
A. "Inheritance" - real (normalized) "dividend and interest distribution" portfolio:
SUMMARY - "Inheritance":
Original cost: $100,000.00 (normalized)
Present value: $112,436.71 (see below)
Increase: $12,436.71 [+12.44%]
COMMENT on "Inheritance": During a sharp selloff of energy stocks on August 8, I decided to "swap" 200 shares of PrimeWest into 200 shares of Provident Energy. This is a tax-loss-motivated pair of transactions.... share your losses with Uncle Sam, keep your profits for yourself.... not any kind of statement on the relative merits of the two energy trusts, both of which (I think) are valued holdings.
The QQQ ultrashort position seems to be working reasonably well in stabilizing the portfolio value, but it may not be quite enough.... and it is not a perfect offset, as shorting technology is not highly correlated with holding energy stocks long. Before the big autumn selloff gets underway I may commit more of the cash to a different ProShares Ultrashort ETF, such as financials or real estate. I am leaning toward financials because the problems in real estate are already well known, while the banks' problems are not. On the other hand, the Fed bails out banks but not homebuilders. So, I am still undecided....
The portfolio cost (normalized) is $108,819,48 with $25,572.82 currently in cash or near-cash.
B. "Professors' Investment Group (PIG)" - investment club portfolio.
SUMMARY - "PIG":
Original cost: $10,699.00
Present value: $21,961.84
Increase: $11,262.84 [+105.27%]
COMMENT on "PIG": I continue to "roll over" 3-monthT-bills, one per month (except when I forget).
C. Roth IRAs - real portfolio:
SUMMARY - Roth IRAs:
Original cost: $30,046.19
Present value: $36,912.43
Increase: $ 6,866.24 [+22.85%]
COMMENT on Roth IRAs: Having completed my acquisition of the appropriate amount of Canetic Resources for this portfolio, I am now purchasing shares of Harvest Energy Trust as the T-bills mature. HTE is somewhat different from other Canadian energy trusts because it is an integrated producer, with refining and distribution operations. Since the liquidity crisis has driven T-bill yields sharply lower, I will continue to look for higher yielding alternatives (maybe, even, outside the energy area) as they mature.
D. TIAA/CREF 403(b) and (non-Roth) IRA retirement plans: My TIAA-CREF and Fidelity non-individual-stocks retirement investments, both the part from which I am making monthly withdrawals and the parts that are "resting", are invested as follows: TIAA traditional, 75.75%; T-bills and money-markets, 2.43%; TIAA-CREF inflation-indexed bonds (retirement), 15.13%; TIAA real estate, 3.09%; MLPs, 3.56%; TIAA CREF High-Yield II, 0.04%. A new MLP for the traditional IRA is Enbridge Energy Partners.
TIAA-CREF values, 27Aug2007: stock, 255.41; equity-index, 99.04; MM, 24.50; bond, 81.35; inflation-indexed bond, 48.41; real estate, 302.10; TIAA current yield in SRA, about 4.81%. COMMENT on NYSE "Timer's Trend": We are currently on a SELL signal of July 20, 2007.
COMMENT on NASDAQ "Timer's Trend": We're on a SELL signal of July 16, 2007.
NEXT ISSUE - is scheduled to appear in September 2007.