Morning Audibles 4.26.10 - Are We There Yet?

Continuing with the tradition here to let Andy T's Sunday Evening Post (Hey, have we found a new name there?), ride into the new week. I'm going to add little here except to ask:



A few things caught my eye this weekend (which we'll get to in the comments), but this was one of my favorites:


Greece Nears Getting Aid, Warns Against Default Bets


"April 26 (Bloomberg) -- Greece moved toward getting an emergency aid package before debt payments come due in mid-May as Finance Minister George Papaconstantinou warned investors they will “lose their shirts” if they bet the cash-strapped nation will default."


So that's it... Greece is warning US (you and me)... Don't bet against them, you'll lose your shirt! LMAO


Onto Andy T (before I get stupid here with other comments, or worse, bet against Greece and lose my shirt).


---


Andy T's Commentary (re-print from April 25) 

Good Sunday Evening Capitalists (provided it's still legal to be a capitalist),
It seems like we've been talking about this 61.8% retrace at 1229 for awhile now. Perhaps this is the week the market finally kisses that much anticipated level. There was nothing bearish about last week as the market fully recovered from the GS/SEC "gyration," proving once again that bullish markets will NEVER peak on bearish news. So it goes...

I'm geared quite bearish the S&P right now via June puts with a 1200 strike. The position is "in my face" right now*, but I'm loving every minute of it (Thank you sir, may have another!).

I've also included a one page update of the Sugar market here. Remember how were were going to run out of Sugar a few months ago? Um, not so much any more. That market has basically collapsed, but there does seem to be a little bit of light at the end of the tunnel for Sugar bulls.
S&P 500 Update 25 Apr 10
* The Jun 1200 e-mini Puts were bought for 28pts. The last trade was 24, so not bleeding too badly. "Tis but a scratch..."

207 comments:

«Oldest   ‹Older   1 – 200 of 207   Newer›   Newest»
CV said...

Greece Nears Getting Aid, Warns Against Default Bets

http://www.bloomberg.com/apps/news?pid=20601010&sid=aGolXro.B6TA

CV said...

I wonder if you'll lose your shirt if you bet against Portugal...

Maybe you'll lose your PANTS instead...

http://www.zerohedge.com/article/portugal-cds-record-bond-markets-refuse-undergo-ge-sponsored-lobotomy

CV said...

I guess these people here are SHIRTLESS this morning

http://www.zerohedge.com/article/greek-hdat-withdraws-official-bond-price-disclosure-greek-spreads-650-greek-stock-market-dow

mcHAPPY said...

Great comment at TBP from dsawy re: Fleck:

"Let’s call a spade a spade: The SEC is a failure. A complete failure on all fronts, in all divisions where they have statutory and regulatory power over Wall Street. Period, full stop. They had the authority to act, they had the means to act. They didn’t act. They were busying watching “Bambi Does DC,” and “Congressional Interns Gone Wild,” obviously."

No new legislation is needed. Use what was already there - and for good measure bring back Glass-Steagall. What a waste of time the ongoing debate for new legislation has been.

bob said...

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aqpASviGyLQc

Bond Traders Declare Inflation Dead After Yields Fall

CV said...

@McHappy

How can the SEC do it's job when they are busy watching PORN on the internet all day?

Sheesh - get your priorities straight...

Mannwich said...

My email updates filled with scores of new "52-week highs" this morning. Bubble is back with a vengeance.

Mannwich said...

Both TIF & COH and new 52-week highs. TIF at 51.99 closing in on ALL-TIME highs.

karen said...

Grantham's new quarterly is out and one person's comment struck me as over the top, literally:

Sounds like sour grapes to me.

Plus, his whole thesis, "stocks are overpriced" is puzzling. Stocks, of course, are not based on earnings. Analysts can raise estimates fast enough on most issues as corporations have become masters of doing more with less and dodging the U.S. tax system - the result record earnings and beats.

It's simply a great environment to be net long in stocks. Those that try to dip in and out, timing the gyrations would be better off simply holding an index.

Also, over the weekend: Mortgage Insurer PMI Posts $157m Q1 Loss as Revenue Falls
http://www.housingwire.com/2010/04/26/mortgage-insurer-pmi-posts-157m-q1-loss-as-revenue-falls/

karen said...
This comment has been removed by the author.
karen said...

So, as I was saying, today is not looking as magical as other mondays! the financials CONTINUE to lag.. When enough people buy into the 'valuations don't matter' precept, and I believe we have enough people now, BR included, guess what? they matter.

Leftback said...

Cluck cluck cluck cluck....

The Giant Game of Chicken Continues....

LB is busy today but will pop in at the close. Ta-ta for now.

Mannwich said...

Might this be an indicator of "something"? Literally got a cold, crisp 5-dollar bill in the mail from WSJ along with a survey on mutual funds. Has anyone ever had that happen before? At first, I thought the bill was a fake but then I realized it was real.........

mcHAPPY said...

I continue to be amazed at the stupidity of people. They are listening to the same analysts who had grossly over-estimated earnings and had to revise lower leading in to Q109, then when estimates were WAAAAAY to low (especially considering the accounting fraud, er, changes that took place) they raised them not enough quarter after quarter. I think Mannwich said it best about the earnings bar being a stick on the ground.

@Karen
"Stocks, of course, are not based on earnings."

With this point I would agree - social mood determines stock prices. That is proven as analysts predictions are consistently off target low or high depending on environment.

Leftback said...

"I continue to be amazed at the stupidity of people"

This is a mistake that can cost you money. It has cost me...

I-Man said...

Sun is shining,
weather is sweet.

Make me want to move,
my dancing feet.

To the rescue,
here I am.

Want you to know now if you can,
where I stand.

When the morning,
gathers the rainbow.

Want you to know,
I'm a rainbow too."

Nic said...

Morning all
Thanks for the crude link last night Karen :)
You must be chuckling today, GS down 2.8% (153.00)

McFearless said...

vaulations matter in the sense of what they reveal about the excessive optimism.

going into 2008, if we used real earnings, you know, like we did prior to 2002, I believe the p/e on the S&P was north of 120. Clearly that did matter.

I suppose though, the dividend getting paid on the DOW or the S&P doesn't matter either does it.....

McFearless said...

I'm looking at some CAT puts today...

Leftback said...

Yields don't matter in the NEW ECONOMY.

- until price distortion is replaced by price discovery.

Mannwich said...

@McHappy: To your point, my wife's company hasn't made a profit since around the dot.com days but is somehow still kicking. It's now a big "win" when the company loses "only" $3-$5MM a quarter instead of $17MM. We had a good chuckle about that yesterday. UFB indeed.

McFearless said...

who needs profits when you have



accounting

karen said...

Jim the Realtor for your entertainment this morning.. $10 million loan unpaid!!

McFearless said...

@AT,

On your slide 5, is that common for the e wave in a triangle to do that?

I've not seen a ton of examples of that.

Leftback said...

Buying of 2y Ts ahead of the auction tomorrow...?

Things that make you go... hmm.... assume this is temporary.
Magic Monday to resume this afternoon.

Leftback said...

"who needs profits when you have
accounting"

You have learned much in a short time, young man....

Mannwich said...

And keep in mind their stock has skyrocked over 1,000% since the March lows of last year. Dash for trash.

karen said...

From Doug Noland:

The bullish contingent is these days increasingly confident that there is much more to the recovery than a mere stimulus-induced "sugar high." The marketplace now comfortably disregards bearish developments - and becomes further emboldened by "market resiliency". The market this week brushed aside issues with Greece, China, Goldman and financial reform.
Complacency abounds, in true Bubble fashion. The U.S. stock market dismisses that there could be meaningful ramifications from the unfolding Greek debt crisis. Chinese authorities' recent determination to restrict mortgage Credit barely garners a headline. And while the Goldman allegations generate great interest and discussion, few believe they will have much general market impact. Financial reform, well, it's an afterthought when the market is open. Market participants are enamored with the notion that the securities markets and real economy are now conjoined in the initial phase of a big bull cycle.
Count me a subscriber of the "sugar high" thesis. The combination of double-digit (to GDP) deficits, protracted near-zero rates, and the Fed's unprecedented Trillion-plus monetization has worked wonders. Government stimulus stabilized the Credit system, asset prices, system incomes and economic output. The bulls today believe that a new expansionary cycle has commenced, and fundamentals and prospects couldn't be much more encouraging from their point of view. Surging stock prices have the optimists disregarding the possibility of a systemic addiction to massive government spending, ultra-low rates, and overabundant marketplace liquidity. Potential issues in the area of risk intermediation are not on the radar screen. (lots more to read..)
http://www.safehaven.com/article/16546/deficits-and-private-sector-credit

McFearless said...

re: CAT puts,

from KD today:

http://market-ticker.denninger.net/archives/2235-Here-Kitty-Kitty-CAT.html

McFearless said...

for the record, I'm still somewhat amazed by how bullish sentiment is 13 months from the bottom of one of the largest declines ever.

it took years for sentiment to get where it is today after the 87 crash......yearS.

Mannwich said...

@ben: We've been conditioned as a culture to mindlessly jump on the next bubble every time there's a hint of one, whether it makes any sense or not. Get rich quick or die (or go broke) trying. That's the only thing our culture has "learned".

karen said...

Great one on CAT, Ben.. UFB, LOL..

and TIF is the new NILE.. just did an overlay 5 year chart.. one of those stocks is discounting the future, the other one is.. UFB

karen said...

Ben, just read Grantham's latest quarterly..

Mannwich said...

Is this also an indicator of something? I don't throw money around freely but one thing I do indulge in every 6-7 weeks is a haircut at a nice salon. It's just a nice experience and the eye candy isn't bad either.

Well, I got my hair cut on Friday afternoon and found out the price had gone up over 20% since my last haircut. The place just had an expansion that it needs to pay for and resides in a wealthy area but I was a bit stunned, so much so that I had to ask the woman at the front desk if that was a mistake. She said that many of the stylists had raised their prices $5-$15.

Inflation in haircuts (and luxuries for the well off) but deflation for everything else?

Bruce in Tennessee said...

http://www.hussman.net/wmc/wmc100426.htm

"As of last week, our most comprehensive measure of market valuation reached a price-to-normalized earnings multiple of 19.1, exceeding the peaks of August 1987 (18.6) and December 1973 (18.3). Outside of the valuations achieved during the late 1990's bubble and the approach to the 2007 market peak, the only other historical observation exceeding the current level of valuation was the extreme of 20.1 reached just prior to the 1929 crash. The corollary to this level of rich valuation is that our projection for 10-year total returns for the S&P 500 is now just 5.3% annually."

STRELNIKOV!

...I mean, Hussman...sorry, got carried away with the Dr. Zhivago reference...

karen said...

Quote of the day: "Yep, It's Starting to get 1999ish Out There - Analyst Upgrades Mercadolibre (MELI) and Slaps 60x Forward PE Ratio"

http://www.fundmymutualfund.com/2010/04/yep-its-starting-to-get-1999ish-out.html

McFearless said...

Karen,

read it this morning, JG is one of the best. As for TIF, I'm not even going to go there.

Manny,

It's amazing. I listened to a guy on the radio this morning claiming tha the health care bill was great for the economy because it would enable people to "take more risks with business"

To your point, isn't it amazing to see that this is the positive some are hyping, not that it gets people coverage that can't otherwise get it, but that it "allows more risk to be taken"?

call me ahab said...

"It's a clear sign the bears are fighting a losing battle, Markman says. Contrary to popular sentiment, consumers are not deleveraging; "The consumer is releveraging," he says." Tech Ticker

wow- releveraging no less-

I guess that's good- lol

McFearless said...

See, that Hussman information is amazing given that we aren't at THE peak, we are still just retracing back what was lost in 2008.

RP noted in the last EWT for example that (and the DOW price was lower when he wrote this):

"The Dow's dividend yield is 2.5%. The only market tops of the past century at which this figure was lower are those of 2000 and 2007, when it was 1.4% and 2.1% respectively. At the 1929 high, it was 2.9%"

Bruce inTennessee said...

When Hussman posts one of his "the market is tooooooo damn overvalued for any sane investor" I see images of Strelnikov in his red train going through Wall Street pillaging and sacking..(or is it sacking and pillaging..?)

I also get images of my wife with Kool-Whip and...wait..............nevermind..

Mannwich said...

I think that's right, ahab. The Sheeple are apparently doing exactly what Banana Ben and Co. want them to do - releverage up and go big.

McFearless said...

@Manny,

That's a very Freakonomics type observation at 11:18 and I think you are spot on.

Ahab,

the people that said the consumer would not deleverage in 2008 have been emboldened by the rally to make those statements now. They are falling back on what happened for 30 years. It's that simple.

the problem is, anyone that's ever taken the time to understand will quickly realize you can't create debt forever because ultimately it isn't up to the debt creators, it's up to the borrowers.

McFearless said...

what data is it that shows the consumer is relevering? Further, how do you discount the data with all the incentives for debt such as the first time homebuyer tax credit, cash for clunkers, and the second homebuyer tax credit.

I highly doubt this was all explained on a Yahoo Tech Ticker interview. There is no model for this environment, anyone claiming they have one is a liar.

These are right up there with silly claims like:

If the Fed raises rates it will drive stocks down.

Earnings drive stock prices

Inflation makes gold go up.

etc etc etc

Mannwich said...

Good point, ben. I think it's assumed that is happening (in the face of some evidence to the contrary) or that those who have made out OK during this mess are spending again, and in some cases, spending more.......

But if the Feds decide to spend on our behalf when we are not, doesn't that goose things as well? It's just that the debt goes on sovereign balance sheets that we're all responsible for in the end, right?

Nic said...

??? C'mon people stocks are cheap cheap cheap:
http://www.bloomberg.com/apps/news?pid=20601010&sid=akyxb_dEUJuc

I look at what they are comparing it with and I want to lie in a dark room with a cold flannel on my head.

Nic said...

Even better, China cracking down on real estate will make stocks go up:
http://www.bloomberg.com/apps/news?pid=20601089&sid=a96Kv6ZKLivw

call me ahab said...

did anyone else catch my thread form Andy's Sunday night post-

Ironworker commented- anyone else have a chance to read it- the article about the "asset explosion"- due to money printing- pretty compelling-

http://www.zerohedge.com/article/aguest-post-brink-asset-explosion-ii

karen said...

Read the top 3 articles from The Fourteenth Banker..

Mannwich said...

@karen: I thought this one was great.

http://www.theglobeandmail.com/report-on-business/goldman-and-the-decline-of-integrity/article1545693/

McFearless said...

Manny,

That thesis holds no water. I understand you aren't saying that it can work that way, just playing DA and giving the argument that some make. If you increase spending and then also increase taxes you've got a problem if you are trying to pump things up. If you don't increase taxes and only spending, then you are simply doing wealth transfers from savers to spenders. That's not recovery. What it is, is short term gains and long term train wrecks. Japan is exhibit A.

Rather than debate it, because I'm not even sure we can because getting into this I've realized often involves someone on the other side making false arguments that while believed, can't be proven.

There are two ways we know we've got inflation (debt expansion), one is the dollar, but last I checked, the dollar was going UP of late, not down. I know the correlation with the S&P appears busted, but I'm just talking about how I'm looking for deflation/inflation trends. The other way I think you can find out is by watching gold and if that price starts to rise very quickly I think the market is telling us we will get inflation.

the gold comment may be puzzling since gold is way up from the 08 lows, but gold is not "soaring" as many claim, it's merely rising to the multiple from it's lows that most other commodities were able to achieve back in 2008 from their own respective lows. Gold chart looks like what right now since last Fall? To me, and maybe I'm going to be dead wrong on this, which is fine, but I don't think the drop in gold in 08, and now it's rise, signal that the big deflation has already passed.

Mannwich said...

Big shocker - home prices still declining.

http://www.calculatedriskblog.com/2010/04/first-american-corelogic-house-prices.html

Mannwich said...

@ben: You and I agree. As you said, just presenting one of the counterarguments.

Nic said...

I read it Ahab ... compelling stuff

mcHAPPY said...

@mann 12:03

Obviously the only sensible thing to do is not only extend the home buyer's credit but to increase it to about $35K. Afterall, the program has totally revived housing sales and the US economy.

Did anyone load up on Citi today? Buy those dips.

Nic said...

Zzzz
If we stay like this the S&P will have narrowest range day since 08March. Then fasten your seatbelts ...

call me ahab said...

Nic-

thx for commenting- I guess these "other' poster's find the article uninteresting- however- it is a bit long- so I will cut them some slack-

but I thought the article made a lot of sense- as it is indicating the path to "a true" new bubble based on worldwide abandonment of financial discipline- money printing and zero interest rates- policies that will become institutionalized and may last a generation

Mannwich said...

@ahab: I read it as well and believe it made a lot of sense also. It's all about bubbles now!

mcHAPPY said...

http://www.nakedcapitalism.com/2010/04/greece-dead-man-walking.html

"And in the UK, several savvy investors told me they expect a 20% pound depreciation once the election is over. Europe is clearly on a deflationary path."

A 20% decline in the pound would certainly cause a little noise around the world.

McFearless said...

ahab,

I had some issues with it and only went half way. There is not much to gain by trying to draw conclusion about a "blowoff phase" based on the idea that it will match up with moves in 06-07.

That's shortsighted as well as biased analysis which fits with the previous article he wrote where he predicted the past.

call me ahab said...

McHappy-

the pound- devalue against which currency? And how achieved?

or are you saying- market forces will drive the value down 20%

manny @ 1:02-

Yeah- I thought it made a lot of sense too

McFearless said...

that said, it is hard to disagree with his long term idea on gold.

CV said...

@McF

I can give you 100 reasons why the past SHOULD HAVE NEVER HAPPENED!

mcHAPPY said...

@ahab

I read it. I don't think it could happen but I am the mother of all contrarian indictators. If it did happen - a blow off - I would cut all tendons in my wrist so I could never use a computer again nor flick the tv to BNN/Bloomberg/CNBC/MSNBC. A 30% blow off from here would make 1929, 2000, 2007 appear like a pimple on a burn victims face. CV's experiment showed the current level of most stocks at all time highs, 2007 highs or pre-Lehman highs. Never say never, but come on. The reflation train is full and Johnny is running down the track to catch up.

mcHAPPY said...

@ahab,

This is wher I lifted the quote. Sorry I did not include link.

http://www.nakedcapitalism.com/2010/04/greece-dead-man-walking.html

call me ahab said...

b22-

I guess my take away was that the central banks will create money and ensure extremely low rates for as long as it takes-

so maybe there is some rationale that metals would respond accordingly-

call me ahab said...

mchappy-

I don't think the author was focusing on stocks- but commodities- and especially gold-

that is where the true upside is- in his opinion

McFearless said...

Let me just throw this out there, what example do we have in stocks that we would call it a "blow-off" top? I can see them in commodities but in stocks you can't say look at the 90's because the slope of that rise lasted for years, same thing in the 20's. Where are the examples? I have to question this idea of a blowoff in 06-07, looks more like double top or the expanded flat ewave to me on a big picture chart.

Optimism seems to fade at tops and its optimism that propels stocks higher, fear on the other hand is something that can cause spikes, so it makes sense, at least to me, that you see them in commodities instead.

How about that idea?

karen said...

ahab, it wasn't that it was uninteresting but just that we have covered it so many times..

Mannwich said...

TLT going red after a nice bump earlier.

Mannwich said...

Ukraine wants their piece of the "free" bailout cheese? Has the concept of money lost all supposed meaning? Can we just pretend that none of this debt exists and everything will be fine?

Mannwich said...

Here's the link.

http://www.zerohedge.com/article/next-ths-us-taxpayer-imf-bailout-trough-ukraine-which-wants-20-billion

McFearless said...

ahab,

well, there are my usual struggles with that idea of course, like:

1. the Fed will keep rates low, but only as long as the bond market allows them and

2. isn't that an EMH statement? That people are assessing the situation calmly and deciding that metals are just too low? If those sort of things were actually happening, rather than an emotional driver, then GLD would basically trade at 0 right now, not in relation to bullion prices, unless of course we buy the idea that people are able to take delivery on that. It appears though that they just want dollar profits.

Gold has me puzzled big time though, I readily admit it.

Mannwich said...

All this to keep the banks, their investors (and uber-elite) to have take any significant write-downs to their "wealth". Extend, extend and pretend.....

McFearless said...

and ahab,

i'm with karen, didn't comment before because I have to imagine people are sick of me saying the same things over and over again...but since you asked ;0)

call me ahab said...

b22-

I guess I am looking at the gold argument- without second guessing his other points

karen @ 1:17

true- but I am now starting to think of QE and ZIRP becoming institutionalized-

where a rate of 1% is seen as usurious- and money printing the norm-

and the subsequent upside for gold

call me ahab said...

"the Fed will keep rates low, but only as long as the bond market allows them'


b22- bingo!!!! exactly- where is the punishment by market forces for the Fed's actions and the action's of other central banks?

there is none- and how long before there is-
months? years? decades?

mcHAPPY said...

@ahab

The article talked about stocks initially - stand by my statements on that. Still room to go up but not 30%.

Re: metals and commodities. I could see a blow off if DXY is in or when it starts a correction. The jury is still out deliberating this one as wave 1 could be still going or we could be in a correction. However, given the currect economic condition $100 oil would most certainly have an effect similiar to $150. As for miners/metals costs associated with high oil prices would be painful for them and Treasury's/USD are still what people flock to in times of uncertainty. Once Europe/Euro gets worked through, then UK, then Japan, and finally, once the focus comes on the US - then you will see metals and commodities 'blow off' like tulips.

Until the US gets the attention Greece/Euro are getting, deflation followed by inflation is the name of the game - despite how ridiculous it sounds in this environment to anyone who soley relies on MSM or expect analysts for commentary.

McFearless said...

"where a rate of 1% is seen as usurious- and money printing the norm"

even the common man would question the "value" of something (paper) if this became the norm.

lets keep in mind that dollars (notes) in relation to dollar denominated credits are extremely scarce, this was the entire thesis of why the dollar would rise, which it has. I guess this is the hyperinflation idea in the end. What are the examples of governments that have done this:

Germany, France after WWII, and the Confederate States in the 1860's seem to be the notable ones. All of them ended in deflation, so then you must pick a top to run with this strategy. As all of us P3 holders on have demonstrated....that aint easy.

OT: got into the show Pawn Stars yesterday. Very cool, and you can learn a ton.

Leftback said...

Selling of Ts into the auction getting started, equities will gain..?

Back later..

mcHAPPY said...

Bove said C is going to $8.50. Sure glad Brian got me in last summer at $5.43. Dude got my back.

I-Man said...

"Nobody want to plant the corn,
everybody want to raid the barn."

McFearless said...

I thought he was saying $16 a few weeks ago?

If that's true, I'm going to go ahead and guess we won't see this headline:

"Bove cuts Citi target by 50%"

LOL!

karen said...

we knew this, The Housing Market Has Gone Mad

DL said...

Looks like Warren Buffet was trying to persuade Senate Democrats to refrain from requiring him to hold capital against his derivatives positions.


excerpt from today’s WSJ:

“Senate Democrats agreed Monday to kill a provision from their derivatives bill pushed by Berkshire Hathaway that would have allowed the company to avoid a significant financial hit, people familiar with the matter said.
Sen. Ben Nelson (D., Neb.) initially helped push the provision into a bill passed by the Senate Agriculture Committee last week. It would have prohibited the government from requiring companies to hold collateral against their existing derivatives trades. The change would have aided Berkshire, which has a $63 billion derivatives portfolio, according to Barclays Capital.
Berkshire Chief Executive Warren Buffett has been able to use the company's strong financial position to post little collateral against its big derivatives portfolio, freeing up capital for investing elsewhere”

http://online.wsj.com/article/SB10001424052748703465204575208030785525128.html?mod=WSJ_hps_LEFTTopStories

Leftback said...

The TURN will be interesting. The DELUGE will be tremendously enjoyable. LB felt sorry for peeps who lost money in CRASH ONE. When CRASH TWO comes it will be just so completely predictable that nobody can feel sorry for the JOHNNYs.

Not to mention the COGNOS crowd....

mcHAPPY said...

http://m.cnbc.com/us_news/36778342/1

There you go Ben. My favourite line:

"The issue in my view is not the specific transaction. The issue is why did they pick on Goldman?" said Bove, who pointed out that other institutions such as Bank of America [ BAC 18.2018 -0.2282 (-1.24%) ] and JPMorgan Chase [ JPM 43.95 -0.99 (-2.20%) ] were larger players in the collateralized debt obligation market that traded the lower-quality mortgages."

Mannwich said...

@lb: I think COGNOS = Dick Bove.

karen said...

ZH is doing an excellent job on CAT, picking up from Karl D.

call me ahab said...

"even the common man would question the "value" of something (paper) if this became the norm."

well- that remains to be seen- we could be having this very discussion 5 years from now for all we know- all the while money printing and zero rates still "official" policy-

also- dollar appreciation- makes sense- but I see it a shorter term phenomena

DL said...

McFearless @ 1:22

“I have to imagine people are sick of me saying the same things over and over again”

Perish the thought.

call me ahab said...

b22 @ 1:38-

no doubt- where is that headline?

Mannwich said...

Looks like prices in higher-end "luxuries" are creeping up. Haggling on prices big-time on the bathroom re-do. May just scrap the whole thing and save my greenbacks. I can't believe these folks have any pricing power in these times, but I guess folks at the higher end don't mind blowing coin and getting soaked on frivolous items and don't negotiate at all.

bob said...

bLovIATe-

Is there any side of an issue or idea that he is not on?

His writing would make for very good comedy if the delivery were changed just a little. Imagine Mr. T saying these things.

mcHAPPY said...

@mannwich

Remember, unemployment above $150K is 3.2%.

@bob

lol

karen said...

IMF sold 56 tons of gold in February..

http://economictimes.indiatimes.com/news/international-business/WGC-says-IMF-sold-56-T-of-gold-in-Feb/articleshow/5861194.cms

Bruce in Tennessee said...

All 10 stocks that I normally have on my "following" home page are red including BRKA, AMAT,GS, KR, SCHW...but the dow is still green.

Oh, well....

Mannwich said...

@McHappy: Exactly. Is it possible to have inflation in the higher end of the market and deflation in the middle to lower end? A bifurcated economic "recovery"?

karen said...

Who in the world would be the buyers of this debt?

Bank of Ireland seeking additional funding, not surprisingly, as that nation is facing difficulties in that group that includes Greece, Spain, Portugal, Iceland..

http://www.marksmarketanalysis.com/2010/04/bank-of-ireland-capital-raise.html

McFearless said...

DL,

Wow, interesting stuff on WB, never would have thought that nice old man would......

Bruce in Tennessee said...

Lefty!

How light did your wallet get on the golf course last week?

Mannwich said...

@karen: Former Madoff clients? Goldman clients?

karen said...

Remember on Friday I posted that the top two Dow actives were red? Ditto today: BAC and PFE

call me ahab said...

and speaking of recovery- it's been in all the headlines for over a year-

and my guess is we will be talking about the recovery for many many years-

of course stocks have come to the conclusion that we are to meet and beat all previous economic expansions-

it's already priced in- talk about optimism

McFearless said...

This Nelson guy from nebraska, was it him that also had some dealings early on in the health care debate?

DL said...

McF @ 1:58

Yeah, I think it was the same guy who did the
"cornhusker kickback".

Nic said...

House prices decline 2% in Feb:
http://www.calculatedriskblog.com/2010/04/first-american-corelogic-house-prices.html

That little graph they have looks like a lower high to me ... we have a trend!

McFearless said...

"Exactly. Is it possible to have inflation in the higher end of the market and deflation in the middle to lower end"

Rather than using prices, ask the question in a different way:

who's got the easiest access to credit?

McFearless said...

DL,

I'll look it up but I'm pretty sure that was nelson. Now I'll look up who will run against him and I will send money.

call me ahab said...

. . .and manny-

thanks for the shout out on the sister site- been pretty under the weather the last few days-

it appears that it was a musical about the "Great White Whale"?

I love musicals-

ok- that's a lie

DL said...

McFearless @ 2:04

I think that, come January, we'll see a whole new crop of wannabee crooks (who ran on a campaign to change Washington).

Mannwich said...

@DL & ben: It was indeed Nelson. Same guy.

@ben: Gotcha. There's my answer then.

McFearless said...

per Nic's link, I wonder how soon before another housing package comes out in an attempt to shore up prices. i would imagine without one the downward pressure on prices is at least somewhat amplified.

call me ahab said...

b22-

my guess regarding housing incentives- as soon as they see the late Spring numbers-

nothing like buying a depreciating asset to get $8000 from the USG-

very logical- lol

Nic said...

Do you really think another housing package McF? I mean those were the numbers and the existing stimulus doesn't end until the end of this month ...

karen said...

Fun stuff! <3ing Einhorn

McFearless said...

"who ran on a campaign to change Washington"

that change idea isn't just here anymore either, look what's going on in the UK right now.

The more things change....the more they stay the same.

McFearless said...

Nic,

hard to say, I'm not so sure that social mood is ready to disallow more money being thrown at the problem just yet. I keep reminding myself that the home is typically the largest household asset and then some.

bob said...

Nic, IMO, I think so.

The money would act as another backdoor bailout for the banks. The other 'advantage' would be to help local government get some property tax payers back.

Speaking as a very content renter.

Question for the RE world- If your property taxes are tied into your mortgage(escrow) and you stop paying your mortgage, how long until the taxes stop being paid? Is there a lag?

call me ahab said...

Nic-

look at it from just a consumer standpoint-

would you buy a house after the incentives expire- or wait until other incentives are offered?

a person will wait- and if the incentives don't come to fruition- what has he risked?

McFearless said...

depends on how much is left in the escrow account balance when you stop paying and also whether or not you pay HO insurance premiums out of there and when you get hit with that bill.

Ahab probably knows what happens to the escrow after it hits 0.

hypothetically though I'd think if you timed it right you'd have 12 months roughly before it was an issue.

DL said...

I heard that in Canada, the government can garnish your wages if you skip out on mortgage payments.

If they had done that here, we might never have had the housing bubble in the first place.

call me ahab said...

bob-

taxes are paid yearly or semi-annually- the monthly escrow goes to the bank to pay the bill- not to the county direclty

McFearless said...

at a minimum DL, most likely it would have never gotten as big.

DL said...

call me ahab

“a person will wait- and if the incentives don't come to fruition- what has he risked?”

* * * * * * *

Buy now or be priced out forever…
… or so the brokers will say

call me ahab said...

DL-

they can garnish your wages here- in a recourse state-

first you have to be foreclosed- then to court for a deficiency judgment-

then back to court for enforcement- such as garnishment-

a lot of work- mostly the judgment is not enforced but is required to be paid before they allowed extension of credit in the future

Leftback said...

LB is jealous of KAREN's "<3 throb" Einhorn ..

- for the 567th time....

bob said...

This probably varies, but is there a general rule-

Property taxes or mortgage? If a bank forecloses on a house with unpaid taxes, do they have to pay the tax bill with any proceeds?

Is it different if the municipality goes after the house?

Very curious because of the lack of any county or city auctions over the last year here.

Mannwich said...

@DL: But isn't Canada going through it's own housing bubble right now?

DL said...

Ahab @ 2:30

Normally I favor giving as much power to the states as possible. But in this country, the federal taxpayer is on the hook when large numbers of homeowners decide to walk away from their mortgage.

By far, the best thing would be to stop the bailouts. But if those can't be stopped, then the next best thing would be for the Federal government to extract money from people who don't pay their mortgages.

mcHAPPY said...

@Manny

Yes it is. Once rates rise things will change - quickly. Do not forget about our credit card debt either. Oh yeah, and the HELOC tied to variable interest rates. Things will get very interesting up here soon enough. Also, I believe all of our GDP growth since last year has been due to real estate. Dark days are a-comin' when oil/commodities go down and/or foreign demand wanes.

call me ahab said...

county taxes always have super priority lien status- regardless of when recorded-

they will always be the first to be paid

mcHAPPY said...

"Also, I believe all of our GDP growth since last year has been due to real estate."

i.e. take away real estate and we have no growth.

DL said...

Mannwich @ 2:34


You mean a new bubble, or the aftermath of the old?

I'm not an expert on this, but my impression is that the bubble was never really that bad in Canada. Also, their banks never really got into trouble (during the period 2007-2009).

call me ahab said...

DL @ 2:38-

wow- dude- we will have to agree to disagree on that thought

karen said...

LOL at this TBP post! A great one..

http://www.ritholtz.com/blog/2010/04/economic-data-beware-one-time-adjustments/

Mannwich said...

@DL: See McHappy's comment above. Their housing bubble (like Australia's and China's) is still in progress. There wasn't an aftermath because it hasn't popped yet. But it will.

There's simply too much debt everywhere globally. Who will come out of it the least bad? That's my question.

Mannwich said...

TESTING.....

DL said...

McHappy @ 2:39

I'm actually rather bullish on CAD/USD over the next 2 years or so.

Leftback said...

No worries McH, the "Asian buyers" will bail everyone out. You just KNOW they want to buy Capes in Hamilton and ranches in Guelph.

DL said...

ahab @ 2:43

The point is that people who take out mortgages should have "skin in the game". If not garnishing wages, then a big down payment.

You really want another housing bubble?

Mannwich said...

@DL: Agree on the big downpayment. Skin in the game is a MUST. It's so "simple" (as cognos would say it, although I agree with him here), 10-20% minumum, but here's the thing - MOST Americans don't have that with prices being propped up the way the are. If/When this is required, housing prices will seriously tank they way they should have when this crisis began. Delaying the inevitable.

McFearless said...

oh wow, I'm dying about karen's link. hilarious. Was that what the guy on the tech ticker video was talking about when he said consumers were relevering?

and btw, "they" have been changing the rules for a decade now as things continue to deteriorate. The extend and pretend phrase became common way after the fact.

Earnings...as just one example.

Leftback said...

"You really want another housing bubble?"

It will take years to digest the existing one. Pig/Python...

mcHAPPY said...

@DL

IF you are bullish on CAD/USD over next 2 years then you are 1) bullish on commodities (specifically oil and metals) and 2) expecting inflation to take hold.

Everyone up here is gaga over the CDN dollar and talking about buying some US dollars once 1.15 is reached again.

Once commodities start another leg down, AUD and CAD will go along for the ride.

Cash is king - specifically US cash.

My wife went to Miami last month. SHe brought back $60US (couldn't believe it!). I put it in the drawer as an experiment. I plan on converting it Dec. '10 or Jan. '11 for $75CDN.

McFearless said...

DL,

I'm no expert either, but as I'm to understand, Canada was easing lending standards while our bubble was exploding.

I'd suggest you play the Crack Shack or Mansion game as a quick look at what is going on in Canada at present. Much like here, it isn't hard to see the bubble.

http://globaleconomicanalysis.blogspot.com/2010/04/crack-shack-or-mansion-game.html

karen said...

Ben, that fellow at stocktiming.com had to throw away years and years of collected data on something he followed keenly when I was a subscriber.. i can't remember if it was Help Wanted or something else.. the government revised the numbers going back several years.. he knew because he had all the original data.

Bruce in Tennessee said...

hey, I thought it was a little humorous to find that GM paid off its TARP money with borrowed money....thank goodness states have to balance their books better than that! Er, wait a sec....

http://online.wsj.com/article/SB20001424052748703709804575202120725935334.html#mo

NEW YORK APRIL 26, 2010 State Weighs Emergency Borrowing

Scrambling to avoid running out of cash, state leaders are discussing whether to declare a fiscal emergency so they can lift a longstanding ban on short-term borrowing.

The state probably would need to sell more than $1 billion in notes that would be paid off with revenue expected to be collected later in the year, said people familiar with the discussions.

mcHAPPY said...

@DL

If you doubt our housing bubble, this was popular last week:

http://www.crackshackormansion.com/

This is based on Vancouver only which is by far the leader of the bubble in Canada. Toronto is second.

karen said...

here we go!

Industry News: U.S. Treasury Votes for Reverse Stock Split Citigroup (NYSE: C)
April 26th, 2010

DL said...

McHappy,

Looks like the grass is greener on the other side.

(I say, hang on to your currency. Crude oil will see $125 in the next few years).

BinT said...

Of course they could cut spending....nah....never mind.

Mannwich said...

@karen: So predictable. But, hey, anything to make C "look" attactive. Pump and dump.

McFearless said...

Karen,

I always get a kick out of people that talk about earnings but fail to clarify that we use a completely different measurement for them than we used to, they just slap p/e's on them and then make "historic" comparisons as if it were apples to apples.

I suppose we should assume that the more a data series deteriorates the higher likelihood of a rule/accounting/documenting change.

wonder if there is a way to buy some CDS on that?

@Bruce,

I saw about a 30 second spot with GM's CEO about them paying it back. It was a pretty fancy commercial. Was wondering how they/we paid for it.

Mannwich said...

I wonder how much of today's total market volume is in C alone?

McFearless said...

"Looks like the grass is greener on the other side."

Incorrect. The reason to have dollars is because it is in fact the sickest currency of them all.

Mannwich said...

Whither Mo-Mo Mondays?

Mannwich said...

TESTING.....

DL said...

McFearless @ 3:09

Regarding GM.

Between Bush and Obama, they spent something like $80B on GM and Chrysler.

They set it up so that something like $7B was a "loan", but the lions share was an equity infusion, and other goodies like money to GMAC. So the taxpayers have only gotten back a very small fraction of the money given to the auto sector.

McFearless said...

DL,

yes, I'm aware, I looked at my wife when it was over and I said two words:

Bull shit.

McFearless said...

does anyone here own a GM auto?

karen said...

And the US Government bailed these company out! cuz they got "stuck" !!

Citi CEO Pandit: Likely No Double-Dip RecessionFont size: A | A | A
3:16 PM ET 4/26/10 | Dow Jones
By Matthias Rieker

Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Citigroup Inc. (C) Chief Executive Vikram Pandit said the United States economy is unlikely to slip into a double-dip recession, but that sustained economic growth remains a global challenge.

In the future, credit is unlikely to grow faster than gross domestic product, Pandit said at the Global Financial Forum sponsored by Chatham House, BritishAmerican Business and the Foreign Policy Association at Citi's lower Manhattan investment banking headquarters.

Citi was among the banks hit earliest and hardest by the financial crisis caused by the implosion of the United States mortgage market. Citi got stuck with bad mortgages and other loans it had planned to package into securities and derivatives and sell off to other investors. In late 2008, it came close to collapse, and the U.S. Treasury Department still owns 27% of Citi's stock.

DL said...

McF @ 3:33

The first car I ever owned was a Grand Prix. Bought it used for $350 (long time ago).

For $350, it actually wasn't bad.

CV said...

Maybe LB or Nic ownned a "MG" (Midget) at some point?

karen said...

zh: Is the FTC investigating GM's fraudulent ads yet?

I-Man said...

@ DL, B22

Re: GM

(And their full page ad in the FT today, proclaiming that they have "repaid the loan in full, with interest!)

LIES! Babylon LIES...

McFearless said...

oh, I, I didn't know they did print ads too, I saw the one on TV.

propaganda much.

I-Man said...

Page 5, if you can stomach it.

I-Man cant.

DL said...

I-Man @ 3:45

The only thing I don't understand is why they are bothering to do this so far before the midterm election.

Mannwich said...

@DL: Maybe they need more government funding?

mcHAPPY said...

@DL 3:06

"(I say, hang on to your currency. Crude oil will see $125 in the next few years)."

I say, no shit. The only problem is before it goes to $125 it will hit $30-$40 range first due to the bubble mentality the world is currently in i.e. boom and bust, buy high/sell low.

karen said...

US Wholesale Mattress Sales Up 17.8% In March Vs Year Ago
By Mary Ellen Lloyd Of DOW JONES NEWSWIRES

U.S. wholesale sales of mattresses and foundations accelerated in March, posting 17.8% growth, the seventh straight month of increases from a year earlier as the industry continues to recover from its worst downturn in history.

The International Sleep Products Association said Monday its "Bedding Barometer" showed that the 21.4% increase in the number of units shipped during March was slightly offset by a 3% decline in the average unit price.

The figures are based on a survey of 20 manufacturers that represent 73% of the industry's wholesale mattress sales.

"It's safe to say that the demand recovery is well on its way," said Wall Street Strategies analyst Brian Sozzi.

Mannwich said...

Meaning, the justification for more funding/backing is, "see, we paid off our other gov't loan with interest, so we can do it again". More money, please.

DL said...

The "bedding barometer".

Where's Leftback?

mcHAPPY said...

"Citi got stuck with bad mortgages and other loans it had planned to package into securities and derivatives and sell off to other investors."

Ahhhh, so the problem with Citi was they were too slow to pawn off their shit assets fast enough, like say, I dunno, GS. I can't believe anyone questions removing TBTF from the US Federal Government Feed Bag so they can speculate in all sorts of financial products.

IF you are curious what a feed bag looks like, YUM! brands have been offering them for years. I was surprised the US gov't was so quick to jump on the feedbag bandwagon.

http://www.youtube.com/watch?v=sw_1CIwwEIA

mcHAPPY said...

"McHappy

You say $35 before $125...?

I'll take the other side. ($125 first, THEN maybe $35)."

DL, I assume you also share CAT's vision of improving economic conditions.

DL said...

McHappy,

In end, perhaps it'll all prove to be "smoke and mirrors".

But I do expect the economic statistics to show further improvement.

AmenRa said...

Sorry no wrap today. Been at the doctor all day dealing with a pinched sciatica.

Mannwich said...

Ouch Amen. Get well.

Leftback said...

Ra.

Best wishes.. Be well.

karen said...

Darn it! I so wanted your wrap today AR.. i have a pinched something, too. my outer thigh has been numb for a week.. i figure it is better than being bent over.. i mean, from back pain.

Anonymous said...

what does economic improvement have to do with the price of oil?

Was the economy getting better or worse in the spring and early summer 2008?

mcFearless.

Anonymous said...

how was the economy in the 70's when oil was up?

McFear.

Leftback said...

The Bond Report 4.26.10

The credit markets were too tedious for words today, like a late August Friday on the way to the beach tedious....

Corpies: LQD 0.05%; AGG -0.01%; JNK 0.05%; HYG 0.00%;
Govies: TLT 0.11%; IEI 0.08%; TIP 0.09%

We are hedged into tomorrow's auction of 2y.

DL said...

McFearless @ 4:20

I think the answer depends on where we are in the economic cycle. In early 2008, demand for commodities was strong... and a few other indicators were up.
At the same time, other indicators had turned down... certainly housing-related indicators begun to turn down as early as July of 2005.

karen said...

talk about creating your own reality!

http://www.ritholtz.com/blog/2010/04/the-consumer-is-re-leveraging/

DL said...

McF @ 4:21

During the '68 to '82 period, there were alternating cycles of growth and recession.

Leftback said...

See you all tomorrow, Chaps*.

* and the delightful Karen....

I-Man said...

Blessings, Ra.

karen said...

i know, AR, I do hope you aren't in a lot of pain.. and i hope it resolves quickly for the better.

Trendy said...

Gold model still neutral (with a negative bias) even with the one day run-up last week.

BinT said...

Karen:

You have pinched the lateral femoral cutaneous nerve of the thigh...Google it up...often from tight fitting clothes at the waistline....I think the term is meralgia paresthetica...

...No charge.

DL said...

"Tight-fitting clothes at the waistline".

Interesting.

Nic said...

So DL
You think that everyone who hands the keys to their underwater house to the bank should be chased by the Govt to make good all the losses by garnishing their income.
Are you also proposing to make the govt do the same to all the companies who do that? The JPM and others?
In Canada they can chase you for anything forever. Particularly taxes.

PS - I own a GM Yukon. I am British and didn't realise you Americans thought buying American was not the done thing.

AmenRa said...

It was taking me 10-15 min just getting out of bed. If I sit too long it's almost impossible to stand. &*%^@%$#

karen said...

must be some other cause.. half the time i'm not even wearing clothes.. let alone tight fitting at the waist., lol. but i will look it up!

karen said...

marketwatch has the most audacious headlines!

Texas Instruments' quarterly profit soars; chipmaker adding capacity
04/26/2010 04:44:28 PM

Mack said...

art cashin bullish and his buddy like europes. great news for johnny
http://www.cnbc.com/id/36779218

Mack said...

and i cant spell

DL said...

Nic @ 4:46

As I posted above, I want to require homebuyers to have "skin in the game". A significant downpayment is one option. Another option would be to garnish wages for those who refuse to pay, but in that case there should be a limit on the amount that the government can take.

(In the interest of full disclosure, I bought a house several years ago with just 3% down).

Mack said...

-AmenRa
My neighbor just had that. Got in his car and couldnt get out. called me crying. Dr. gave him valium and perks and told him give it a week. hope you can get a better answer then that.

«Oldest ‹Older   1 – 200 of 207   Newer› Newest»

Post a Comment

Disclosure/Warning

This blog should not be interpreted as investment advice of any kind. The authors are NOT representing themselves CTAs or CFAs or Investment/Trading Advisor of any kind. The authors may or may not trade in the markets discussed. The authors may hold positions opposite of what may by inferred by this blog.The information contained in this blog is taken from sources the authors believes to be reliable, but it is not guaranteed by the authors as to the accuracy or completeness thereof and is presented here for information purposes only. Commodity trading involves risk and is not for everyone.