Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Young FrankenMarket Lives

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Excerpted from Notes From the Rabbit Hole #237:

Young FrankenMarket Lives

In failing to take a “healthy” correction to the equivalent of SPX 1350 to 1450 from the upside target zone of 1550 to 1590, the market is now running on policy and momentum. Hence we now dub thee Young FrankenMarket; Ben Bernanke’s creation, sustained by government and legacy MBA debt, following Alan Greenspan’s monster that was stitched together with artificially low interest rates that ultimately manifested in a huge commercial credit bubble. (more…)

One Chart and One Thought

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Well, the whole FOMC thing turned out to be pretty anti-climatic. There’s still an hour left in the trading day as I’m typing this, so who knows how we’ll end up, but so far, the tug-of-war seems pretty even between bulls and bears.

For myself, I covered my GLD short early today, but I left most other shorts intact. I am 75% committed; I intended to get aggressive if things really started breaking down, but they haven’t, so I’m standing still for now.  (more…)

Welcome To Keynesian Shangri-La

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Welcome to your new destination. A place once believed only to exist in the imaginations of dreamers, and Keynesian’s the world over. A place where market fundamentals, free markets, and more seem to no longer have relevancy in the world. However, make no mistake about it – we have now arrived.

The Keynesian argument has been made for decades. I wonder if the man (John Maynard Keynes) would be impressed with just how much his ideology is so vehemently held in the halls of academia and political circles. Many religious devotees pale in comparison. (more…)

A Thoughtful Response

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Early on Friday morning, I did a stamp-my-little-feet post about how the government really has done nothing to help me, and on Friday afternoon, a long-time Sloper wrote me a thought-provoking email; here it is in its entirety (which I have reprinted with his permission), leaving out only his name at the end:

I have been following your blog since 2009 and I have to admit that the contrarian tone of your blog has helped me to score quite a few profitable trades. However in the recent past, it seems that the blog (articles as well as comments) is fomenting a lot of anti-government sentiment.


I understand that the sentiment among your followers is primarily stemming from the relentless rise in stock prices due to the interventionist policy of the central banks across the world. I had hoped that amid all the mindless bashing of the government and the feds (especially Ben Bernanke), you might step in and make your followers understand the rationale behind the policies. That real GDP is calculated by the formula


real GDP = C + I + G + Xn


where C = consumption

             I = investments

            G= goverment spending

            Xn = net exports


The financial collapse of 2007-2008 led to a severe reduction in real GDP and Bernanke (being a student of great depression and proponent of Keynesian economics) decided to increase the G component in the above equation which in turn would increase the other variables in the equation due to multiplier effect thus bringing the economy to potential output and restore long run equilibriums. Even the devaluation of dollar has been done in order to increase Xn component in the above equation.


One might argue that Bernanke could have opted for Adam Smith's "invisible hand" policy and let the economy fix itself. That would have worked as well but it would have been a excruciatingly painful process where the economy might have encountered an unemployment rate > 25% (just like great depression) before achieving equilibriums in the long run charts.


In Slope I did not find a single article or comment  which can be considered constructive criticism of the Fed's policies. Now the Fed bashing is being accompanied by anti government rhetoric (your article). Please ask  yourself how would you have fared if you did not have roads ( state highways/ interstates) ? How would you have fared if there was no military protecting our country from forces hell bent on destroying the american way of life? How would you have fared if your town was ruled by gun toting warlords?


Enough of ranting… I know you are a smart chap and I hope that you will be able to get over your frustrations and work towards creating an environment in your blog that promotesobjective thinking.


Good Luck and God Bless

I still am inclined to stamp my little feet, but I think the above information is an erudite expression of the other side of the coin. Thank you!

Hedging GLD As The Herd Shakes Out

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Shaking Out The Herd

In a Slope post on Tuesday ("30.2 Yield Curve And Gold"), Gary Tanashian noted that, "over the last 1.5+ years gold has shaken out the herd". Our host Tim, not one to follow herds, reminded us on Tuesday that he's currently long gold via GLD ("Target on GLD Long Approaching"); nevertheless, according to Reuters, more GLD herd members did get shaken out last month, with the gold ETF seeing a billion dollars in outflows in January. In this post, we'll look at a couple of updated hedges for GLD. First, though, a note about Bernanke's testimony yesterday, and an interesting gold chart Bespoke Investment Group posted in response to it.


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