The upcoming week is fairly light in terms of econ data (retail sales, IP, & Philly Fed)... Ireland is waiting on a bailout... and the POMO schedule begins in earnest...
Add to that mix the fact that it is opex week (which is a frontrunner to a holiday shortened week next week)...
That ought to be enough to scare up a little volatility... If it's not, the "lame duck" session of CONgress begins... Let's see how much Earth they can scorch in the next two months... Buy stocks! (of catfood)...
(ht - karen)
171 comments:
CV,
nice pick w/ the Pats ..
also, seems like our ol' friend, yon' Paperback, is catching a bid~
US Dollar
78.500
+0.451 +0.58%
http://www.ino.com/
as an aside, anyone have a feel for the long-end of the USTreas complex?
been looking mighty soft here, of recent..
AAIP
@AAIP
Thanks... Pats got me out of a jam (cause the Texans cost me 5 units on a crazy play)...
LB has been out for a week... I'm sure he has some good thots on the LE...
There is a "flattening" article in the spool on ZH at the moment... It may be on page 2 by now...
Hussman:
"Municipal bond investors are clearly re-evaluating the prospects for additional fiscal stimulus from the federal government. Indeed, many state and local governments (as well as health and disability service providers that benefited from stimulus dollars), are beginning to talk about "the cliff" - an abrupt reduction in revenues due to the loss of current stimulus funding which has been used to bridge existing budget shortfalls. My impression is that equity investors face a similar "cliff" which they may not have adequately recognized yet.
The essential point is that stocks are much more richly valued than simplistic P/E multiples would suggest. Investors may pay a heavy price if they fail to adjust valuations for the level of profit margins. The only proper way to value stocks is in relation to measures of sustainable, long-run, full-cycle financial performance."
My brother and his wife moved in this weekend! He's already got his consulting jobs lined up and they go house hunting later this week. He pulled a computer the size of a D-9 out of the car, and it turns out we have enough strings at the Ponderosa to make that tin can work satisfactorily. I suppose I'll have to take up tennis again, as I've heard rumblings about "used to kick your little a.." Ah, brothers...
Out all day...ACLS.
CV,
that deflection game-winner by Jax was something fierce..
if that doesn't get marked down under the 'home field'-advantage column, I'd be at a loss to understand which column it'd belong under..
AAIP
He does seem to think that Pelosi was the devil herself..
He keeps quoting Dr. King...something about "Free at last"...
http://money.cnn.com/2010/11/10/news/economy/g20_austerity/index.htm
The great global belt-tightening
http://www.latimes.com/business/la-fi-1113-petruno-20101113,0,3401917.column?page=2&utm_medium=feed&track=rss&utm_campaign=Feed%3A%20latimes%2Fbusiness%20%28L.A.%20Times%20-%20Business%29&utm_source=feedburner
California's a fiscal mess, but debt isn't the problem
"Even so, every dollar that goes to repay debt is one less dollar available to fund the state's current operating expenses.
In his annual debt-affordability report, issued in October, Lockyer noted that bond interest and principal payments ate up 6.7% of the state's general-fund revenue in the last fiscal year, a figure set to rise to 7.2% in the current year.
The state "needs to pay serious attention to its growing debt service," he said."
Ah, journalists. I suppose you could say debt isn't the problem, debt service is...but where does that get you? Even California journalists are lost in the forest..
And if the US debt service and California debt service is going up by almost 10% a year, what happens when ZIRP finally ends.....
.........(crickets...............).....
"...And if the US debt service and California debt service is going up by almost 10% a year, what happens when ZIRP finally ends....."
Bruce,
as I'm sure you know, that type of change, in expectations, c-/w-ould lead to, such, a positive feedback loop, of such negative circumstance, it would be akin to a Neutron Bomb detonating...
all the more Reason why the Movie: "Rollover" should be 'dug up and viewed' ...
AAIP
Empite State -11.1 (down from 15.1). Dollar higher, Euro lower, futures higher. One thing does not belong.
Hey all.
We've got a big Texan fan in our small office. He's still pretty dejected over that loss.
To reiterate Hoffer's comment--nice bet on the Patriots.
@Ra 8:32
One of these things is not like the other...
My thoughts exactly.
Denninger's take on retail sales. A little different than MSM - surprise!
Open letter to BB.
Ben
LMAO. I haven't seen that in years.
TNX will be at 3.00% or better before the week is over. TYX will be 4.5% or better. Sorry BB.
Futures only around $3 above FV. Not as bullish as the MSM makes it out to be. The dollar, euro, 10yr and 30yr tell me more about what's in store for the market. They are saying "Katherine".
AAIP
Banished from the land of milk and honey?
AmenRa,
5-Year Treasury 1.45 +0.102 +7.57%
10-Year Treasury 2.858 +0.102 +3.70%
30-Year Treasury 4.314 +0.046 +1.08%
http://finviz.com
looking like a safe bet..
AAIP
AR,
no, some things do get, rather, old, after awhile..
I'm, very much, not keen on 'excessive moderating'/'Censorship'
and, I'm in no way referring to TBP..
AAIP
good morning! mark, nice to see you.. thanks for links, bruce.. don't you feel like a kid again! you are going to have the best holidays and gatherings this year.. your brother needs an ipad! (I'm not kidding..) i'll post the wash post app ad that is the best ipad ad ever.. unintended consequences : )
gold hit 1356 in the overnight trade, i believe.. whatever..
here it is.. fantastic accidental ad for ipad.. washington post app for ipad:
http://www.youtube.com/watch?v=KCUFxFoaloE
Karen
Nice ad. Yeah gold hit 1356.50 overnight also.
finviz had dow down 39 pts around 3AM my time.. gold and oil were down then too.. everything was down except euro.. hours later it's all the opposite.. dollar up/euro down.. correlation to stocks breaking? probably not.. probably the spx resumes fall shortly.. as in the next hour.
howdy Karen~
to Bruce's point: "Cliff"
here's a different facet of it..
"BOSTON - Growing water scarcity in many parts of the United States is a hidden financial risk for investors who buy the water and electric utility bonds that finance much of the country's vast water and power infrastructure, according to a first-ever report on the issue released today by Ceres and Water Asset Management.
The report, The Ripple Effect: Water Risk in the Municipal Bond Market, evaluates and ranks water scarcity risks for public water and power utilities in some of the country's most water-stressed regions, including Los Angeles, Phoenix, Dallas and Atlanta. The report shows that some of the nation's largest public utilities may face moderate to severe water supply shortfalls in the coming years, yet these risks are not reflected in the pricing or disclosure of bonds that public utilities rely on to finance their infrastructure projects. There are about 50,000 public water utilities in this country serving an estimated 258 million Americans. The electric power sector is enormously water-intensive – it accounts for 41 percent of the nation’s freshwater withdrawals.
"Water scarcity is a growing risk to many public utilities across the country and investors owning utility bonds don't even know it," said Mindy Lubber, president of Ceres, which authored the report. "Utilities rely on water to repay their bond debts. If water supplies run short, utility revenues potentially fall, which means less money to pay off their bonds. Our report makes clear that this risk scenario is a distinct possibility for utilities in water-stressed regions and bond investors should be aware of it."..."
http://www.ceres.org/Page.aspx?pid=1291
y otro..
http://www.ceres.org/Document.Doc?id=625
AAIP
http://finance.yahoo.com/news/Reasons-to-sit-out-GMs-apf-226184931.html?x=0&sec=topStories&pos=5&asset=&ccode=
"This stock offering will only reduce the government's stake in GM from 61 percent to 43 percent. It will take more stock offerings, staggered over the next few years, before the U.S. government is out of the car business."
also, this woman is a great aggregator..
http://www.bespacific.com/
Sabrina Pacifici - Recipient of the Special Libraries Association Innovations in Technology Award 2008
AAIP
I know it was just one week, but the Patriots looked like a Superbowl team. The O-line was holding off one of the best defenses in football. Brady was throwing pretty well (albeit, he should have had another touchdown if he were at the top of his game).The defense was penetrating and hitting hard. That was impressive. But, it was one game. They need to prove that Dr. Jekyll is the only one left in that body.
The Cowboys also surprised and looked like a playoff team. But, it's one game. They still have a lot to prove.
The most amusing game was Lions v. Bills. I couldn't tell which team was worse (I guess the one that lost, but still, it was a fierce competition to prove just how shitty they are).
Nov. 15 (Bloomberg) -- Loehmann’s Holdings Inc., the Bronx, New York-based seller of discounted designer goods, filed for Chapter 11 bankruptcy after it failed to exchange $110 million of senior notes.
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aRE6svFu3UG4
Irish bailout will cause domino effect:
http://www.youtube.com/watch?v=wm3AY1UeFKg
check IQI today..
>> The most amusing game was Lions v. Bills.
Detroit vs. Buffalo. I feel a little sorry for those towns.
Wait till oil becomes more expensive (regardless of QEn). Winter heating will drive the yungin's south.
Ever see pics of Russian cities -- now ghost towns -- abandoned after the USSR declined? I imagine Detroit to suffer similarly.
"LOL" on the journalism, Bruce. Yeah, the only way "debt" won't be a problem is if it doesn't have to be repaid.
No matter what the SPX is doing, the DXY, the EURUSD, TNX, TYX tell the truth. My guess is that POMO failed on Friday and the Fed put the word out to not let it happen again.
Haven't even been lurking much lately. Busy at work. Later, folks.
Even EURJPY is down.
TNX already sniffed out 2.904%.
AR, i daresay today's pomo was a failure as well.. at least as far is the market is concerned.. there is another tomorrow, maybe that one will prop up amazon and reverse the rising yields..
I'm back... (but just getting my bearings)...
Monday mornings until almost noon I'm out of pocket these days...
Good thing we have a FRB that has our backs on everything and won't let stocks ever go down...
you should see what iqi did..
McCulley: Price stability that promotes bubbles in asset prices and debt creation is a prescription for a debt-deflation bust.
Karen
There's a POMO almost everyday until 12/9. If this trend continues the Fed may give up....yeah right.
@Matthew
The Patriots, I think, took a cue from watching the MNF game between the Steelers - Bengals...
Although the Bengals lost, they were ripping off chunks of rushing yards by going "no-huddle" and keeping the Steelers 5DB sets on the field...
And if there is anyone who can go up tempo like that, it's the Patriots...
Also... the Steelers are going to be hurt with Starks & Kemoeatu out of the lineup...
Colts play the Patriots this weekend... The Patriots still have bone to pick with the Colts from that controversial 4th down call from last year... Colts are still banged up, and I'm guessing the Patriots will win rather easily...
If that happens, they'll automatically be looking like everyones SUPER BOWL FAVORITE candidate...
Karen,
I would highly rec. seeing Wicked if you are interested. It was really, really good.
As for POMO, it appears to "work" when the trend is up, and when the trend isn't up, like now because we are in wave 4 of C, then it appears to not work, just like in August. this count still looks good, confidence is high, I repeat confidence is high (American Pie 1)
I thought I already explained all this over the last four months....8-)
CV,
PSU looked 1/2 good in the first half this weekend, not so much the whole game.
@AAIP
This wast the thread I was referring to in my (7:13)...
http://www.zerohedge.com/article/more-preplexing-record-steep-10s30s-curve-it-finally-time-flattening
@McF
I was bummed because I really thought I had that one in the bag...
Luckily... I had the Cal Bears pull my nuts out of the fire...
I'm 0-3 with PSU in the past 3 weeks...
I faded them against Michigan & Northwestern (they win)... So I back them here... They don't shpw up for the 2nd half kickoff... Grrrrrrrr!
Ben, hope it was an exceptional weekend.. will try to see Wicked eventually : (
$vix is making this total conviction environment very clear..
i guess fxe can get to low 132s now.. even overnight!
I saw the movie "The Box" this weekend (on HBO or Showtime or something)...
It's about the dumbest movie I've ever seen...
DXY above 78.51 (fibo .0557 from low) and heading for 80.95 (fibo .09 from low). Still ahas to get above 78.88 (the 55SMA). After a daily 3LB reversal up on 11/11/10 it's making a confirming high today (so far).
@karen
If FXE drops under 133.30... (I said this on Friday)... I might say 'watch out"...
I'm using that price level more as a MARKER (because that's wher it was on April 26th)...
It's interesting to look at the above & below action on that (in the context of time, QE, European defaults, and such)...
what just rallied the market from it's standstill?
Karen
Who knows? Indices are trying to keep traders from seeing the real picture which is the dollar is up, euro is down. 10yr & 30yr yields are up, muni bond prices are falling, etc.
Bruce
My favorite part from Hussman:
"The proper way to deal with a major debt crisis - indeed, the only way nations have ever successfully dealt with major debt crises - is through debt-equity swaps, restructuring and writedowns. There are numerous ways to achieve this with mortgages. My preference would be swaps of principal for pooled property appreciation rights (administered, but not subsidized by the Treasury). In any event, until our policy makers wake up to the need to restructure debt, so that the obligation is modified for both the debtor and the creditor, our financial system will increasingly tend toward a giant Ponzi scheme. We are racing toward the financial equivalent of a mathematical singularity, where the quantities become so large and outcomes become so sensitive to small changes that the whole system becomes unstable."
http://singerprofitcharts.blogspot.com/
Two new charts up -- I like the story they tell.
I'd like to see BAC on this list!...
Failed Banks
"There are numerous ways to achieve this with mortgages. My preference would be swaps of principal for pooled property appreciation rights (administered, but not subsidized by the Treasury)."
---
In what way do they handle property tax obligations?
- insurance?
- maintenance?
Everyone is so wrapped up in these so called "equity" valuations, they neglect these other things (that won't be resolved, probably, until there is a full fledged job market)...
I'm afraid that the "American Dream" of owning a home... Isn't so much of a dream...
shareholder equity statistics as reporte by e*trade continue to change crazily.. now it is showhing 110% institutional ownership and a 27% short interest..
it had just turned its trend up but i wonder if that is in question now.. earnings nov 22
@CV
Invest in a trailer park... don't laff! ...many more peeps will be forced into a lower standard of living. You'll see more 2 or 3 families living in the same house/apartment also.
So many unoccupied homes - - so many unemployed
what to do, what to do
hilarious.. Todd Harrison, professional bachelor, has just entered his first cohabitation !! two adults, two children, two dogs, two cats, and a baby on the way! I wish him well : )
mrtopstep
$ES_F #futures really bad here whole floor is quiet 30 locals in the S&P pit 7k SPZs and 1.3mil minis trade SPz/H -520@-510 500 up
@living in my car
I'm not laughing... I agree with that 100%
US Unemployment. Surely no surprise to anyone here.
http://mrtopstep.com/2010/11/15/equities-report-1115/
Hoffer.
:)
Greece lied?? http://market-ticker.org/post=172292
@karen (12:53)
I saw that... Did you see the little video too? (kinda like the one you linked on Friday)?
which vid, cv?
Living in my car (12:26) - I doubt Cvienne is laughing at what you said and if he is laughing it is at a whole lot of people who are still trying to hold onto what they "gained" during the 90's and 2000's.
He has been preaching a version of your statement for over the past year, maybe he is wrong, but I do not think so. (Although I do not hold his extream view)
Over a year ago I moved, I sold the house I was living in for (About) 10% under current market value, is it currently below that, but the taxes have gone up.
I choose to buy a house that was "less" then what we were used to, but got a screaming deal on it. It still holds the value we paid.
My bet was this house would hold it's value (It has) and that it will increase in value quicker, sooner and sharper then the houses that were bought in the 2000's
FWIW: All that is too say, I think you are on to something.
Mangy Mutt
http://www.youtube.com/user/Bloomberg#p/u/0/ZgNqjxOB964
Feldstein Agrees With Sentiment of Letter to Bernanke
http://money.cnn.com/2010/11/15/news/economy/fed_attack/index.htm
@mcH
re Mish: In Search of 1.1 Million Jobs Claimed by Obama; Where the Hell are They?
seasonal adjustments, (bogus twist)
Birth/Death model, (more bogus crap)
Household Survey (stupid way to calculate employment)
California weekly claims don't show this (Look at the chart - 2nd page
Mish explains things well
GOOG
Under $600 here... Look at that huge gap from April (that was skipped also on this Q's earnings...
I wrote here (on that day), that GOOG doesn't have a good track record of staying above $600 for very long...
@karen
this vid...
http://market-ticker.org/akcs-www?post=172282
thanks, cv.. hadn't seen that.. it's quite an upset..
@karen
The one you linked on Friday (that's in todays thread), I thought, was very funny...
It's nothing NEW to anybody... But the crazy monotone voices make it funny...
I'm sending all these videos to friends whose eyes glaze over when you start to talk about the economy...
It does a pretty good job of explaining the situation to them...
CV..
did you watch the Gov of TX video in this link? this guy gets it!
http://money.cnn.com/2010/11/15/news/economy/fed_attack/index.htm
Ya know, I'm not much of a fan of the Fed, or their policies, insecurities, et al...
I am so <3ing that governor from TX!! My husband says Austin is booming.. diverse economy.. thriving.. Maybe TX will be the new CA..
RE: http://market-ticker.org/akcs-www?post=172282
"bankers would be hanging from lamp posts"
"curse you! you need to shut-up. we just need to kick this thing down the road a little long enough for the home values to come back, and the banks to get back the money they have lost from their stupidity and greed."
...this says it all
for some reason my friends will watch and understand these cartoon vid's but they don't like/understand when a real person is stating the same thing in a vid.
Nov. 15 (Bloomberg) -- Former Bank of England policy maker David Blanchflower said a letter to Federal Reserve Chairman Ben S. Bernanke urging him to halt an expansion of monetary stimulus is “dangerous politics” and displays “very little understanding” of the economy.
The letter-writers are “playing with an economy that’s fragile,” Blanchflower, a professor at Dartmouth College, said in an interview with Bloomberg Television today. “Thank goodness” the Fed hasn’t “listened to these folks who would drive us back into recession and probably a depression.”
http://www.businessweek.com/news/2010-11-15/blanchflower-says-letter-to-bernanke-is-dangerous-.html
Tho it's green... The DAILY candle today is still and "inside" candle...
April 28th and May 3rd were both "inside" green DAILY candles as well...(the May 3rd candle being pretty much the price level we're at now)...
Just saying...
@karen (1:31)
See that's the thing...
It's all these "academics" that want to agree with Bernanke...
Why?
Because the only reason the academic has his job is because of all this bloated infrastructure that needs to be propped up with asset prices...
DEFLATE, and the "skill set" of the academic switches to flipping burgers...
The f411's of the world see that as a step backward... I see it as a step FORWARD...
$spx.. candle staying inside friday's is what i'm watching too.. last 5 30 min candles can't take out 1207.43 and it looks like a turn is at hand this 30 min.. that stated, it's government motors week and op ex..
funny how everyone including me is totally convicted market cannot fall this week, just sayn'
Whoooaaaa Dude, watch out what you say about my little bro, he may be a dither head, but he still needs his job.
Cuz what would he do without a job man?
Mom's basement is mine and if he looses his job he will have to move back in and then where would I put the grow room?
Piece Out man.
Minyanville - Has profit-taking run its course? Defense of key levels, S&P1200 and its 20 day moving average remain strong
http://bit.ly/ck6uve
"funny how everyone including me is totally convicted market cannot fall this week, just sayn'"...
---
I'm not convinced of that at all [that it cannot fall]...
We're midway thru the month and heading to a short week next week...
The 1186 MONTHLY 3lb is looming in the not too far off horizon...
We're about to see what the "unspoken forces" really think about QE2 sending the DOW to 36,000
spx on ten is even scarier than spx on 30.. people on twitter think it is about to break out.. whatever.
ps.. i hate it when my internet goes down..
Karen
Profit taking hasn't even started yet....
But it won't be profit taking. It'll be GTFO now!!!
this reminds me of that shape we were talking about some months back with regard to ben's space post..
alaidi
here's a gold chart from someone who disagress w/ 1320. feel free to debate http://yfrog.com/f/2tgoldh4mondayg/
that was a gap lower on at exactly 2pm
AR, LOL.. i know, right?!
mrtopstep
In case you missed this earlier... Huge List Of Investors And Economists Pen Open Letter To Ben Bernanke Slamming QE http://read.bi/aoGeLl
get this.. greenspan of all people:
http://finance.yahoo.com/news/Greenspan-High-deficits-could-rb-2594090186.html
@karen (2:02)
Yeah... Even Dick Bove was one of those - lol
I get the feeling that some folks with too much money, and who should know way better, were buying this morning...
Right according to The Hand's plan...
TLT is at an interesting neckline...
It's the same level that was breached during the flash crash... That later became the support line for the summer rally...
Take the hourly chart. Draw a line off the lows around August 30 to the low on November third.
What was once support is now resistence.
Maybe?
There's that pesky 1206 again.
1296
1278
1260
1242
1224 <--- 52 WK high
1206 <--- you are here
1188
1170
1152
1134
1116
1098 <--- 52 WK most volume
1080
1062
1044
1026
1008 <--- 52 WK low
although I said last week anything under 1206 is a buy, I changed my mind now... I'm neutral
Muni bond check:
TFI -2.6%
BBK -3.7%
IQI -3.4%
PCK -4.6%
Happy days are here again. (snark)
Go ahead... Balance the budget...
http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html
18, thank you for that listing!
@18
1062 would be where I buy.
Sorry, I meant 1152-1170.
the case against citi http://finance.yahoo.com/video/marketnews-19148628/23036623
I've been wrong plenty, but this thing looks like its going down. SPX is fighting the 20, 50, and 200 on the 5 min...gonna take a lot to break through. Of course, that's what POMO's for.
BB to PDs: Throw everything at it to keep it up!!!
PDs: We're trying but the currency crosses and the bond market keep putting the truth out there.
BB: Get those yields down now!!!
PDs: Yields go up on inflation expectations but they also go up when the market doesn't believe in your solvency. IOW you'll have to pay out a higher rate just to convince them to buy your debt.
BB: But I control the world's reserve currency.
PDs: That means nothing when you debase the hell out of the currency.
Ya know, the truth is out there...
Nov. 15 (Bloomberg) -- Legg Mason Inc.’s Bill Miller said U.S. stocks may rise 15 percent in the next 12 months as the Federal Reserve continues efforts to inflate asset prices and boost the economy.
“The Fed wants the stock market to go up, and they will do what’s necessary to get it to whatever level it takes for the wealth effect of higher stock prices to stimulate growth,” Miller wrote in a letter to shareholders released today.
http://www.businessweek.com/news/2010-11-15/miller-sees-u-s-stocks-up-15-in-next-12-months.html
How there isn't a revolt to this is beyond me!! purposely and artificially inflated asset prices?! accepted as OKAY!! ???
YW Karen
mcHAPPY, good support @ 1181 and again @ 1159 from what I'm seeing. Again, look at the SPX daily 13/21 MA, everytime we trade between them, it goes up. This time is the same? I'm neutral because it just doesn't seem like it has the strength to go above the 13 MA...maybe tomorrow.
Um hmmm...
TNX close 2.911 +5.62%
TYX close 4.373 +2.46%
Up, up and away in my beautiful, my beautiful balloon...
well, at least, and finally, the bond market isn't taking this sitting down.
AR.. had just checked that myself! (hence my 3:03, before seeing your 3:02)
http://www.housingwire.com/2010/11/15/sp-predicts-more-home-price-declines-through-2011
"no sh*t, sherlock" as an old, old, old boyfriend used to say.. and no, this isn't one of those expressions i am fond of.. it just seemed appropriate considering my surliness.
New Charts: Mr. TopStep Intra~day Charts 11/15 "Distribution Days & The #1191's GAP FILL" http://MrTopste.com/?p=1218
Obama had a 'really bad' day. http://bit.ly/czwIlF #cnn CNN Senior Analyst David Gergen reviews President Obama
@18
My pick of those 2 numbers ties in with GN's count who has been nothing short of a rockstar of late.
Irish PM: talking with EU to underpin euro area stability
http://www.reuters.com/article/idUSWLA809020101115
"The Fed wants the stock market to go up, and they will do what’s necessary to get it to whatever level it takes for the wealth effect of higher stock prices to stimulate growth,” Miller wrote in a letter to shareholders released today.
This guy was considered "one of the best" over the last 20 years......????
pathetic
brains or a bull market?
bull effing market.. and you can stick WB in there too, as well as my neighbor across the street.. bull market and luck.. and you know the expression, "it's better to be lucky than smart."
Ruh roh...
@ mcHAPPY
another thing I'm seeing, SPX hourly chart from the 5th or 8th of Nov to today, is this the makings of a bull flag?
bullflag
If I was an aggressive trader, I might buy a few SPX long calls today or tomorrow.
Karen
re: IQI
Last weeks close started the weekly 3LB trending down (3rd lower weekly close). It also closed below the monthly 3LB reversal price of 12.65 (aka it's now reversing down if it closes the month under that price).
totally got this idea from EWI but today is as good a day as any to show it, think of what every single one of these MM's is saying now, the same they were saying then, the same things they've ALWAYS said,.... well here's how they did when it truly counted:
10/12/07-3/6/09:
Leuthold Core Investments -37%
Berkshire Hathaway -42%
Fidelity Contrafund -49%
The Pioneer Fund -53%
Federated Kaufman Fund -54%
S&P 500 -56%
The Oakmark Fund -56%
Columbia Acorn Fund -56%
Weitz Funds -59%
CGM Focus Values -60%
Fidelity Magellen -60%
Calamos Growth -60%
Third Avenue Value -62%
Clipper Fund -65%
Baron's Parterns Fund -65%
Dreman High Return Equity -66%
Legg Mason Value Trust -71% (way to go Bill!)
Hancock Classic Value -72%
Gabelli Equity Trust -77%
Many of these same people were highlighted for "big gains" in 2009 while they played the "beat the market" fallacy game on tv and in print, we often get to hear their "expert opinion" if we get up early enough on cool shows like Squawk Box, if you are really lucky Becky flies on one of their jets.
Oddly enough, the person that lost the most money, being absolutely blindsided by this, was not even a portfolio manager!, he just happened to be the Fed Res pres....many of the money managers above remind us today that he'll do "whatever it takes to make equities go up"....hope they don't fool you twice, you'll have earned it if they do.
http://www.businessinsider.com/how-larry-summers-killed-the-volcker-rule-2010-11
I don't understand why the academics are riding this "wealth effect of stocks creates economic growth" idea so hard. When we do regression analysis, we don't just say, "Hey, this regression has a high coefficient of determination. X explains Y."
When I first studied statistical methods, the text explained that there is a fairly strong correlation between height and the ability to spell words well. Of course, we know that AGE is the actual variable that explains the ability to spell (but people do get taller as they age). Spurious correlation is a huge problem in this assumption that stock wealth creates economic growth.
Stock prices are supposed to reflect economic strength. Economic strength is NOT the result of strong stock prices.
How does anyone take these academics seriously? Why do they have the President's ear?
Matthew.. excellent..
Ben, that list says it all.
Yes, Matthew!
Brilliant analogy my friend.
you have got to be effing kidding me, DougKass: At a proposed IPO price of between $26 and $29, General Motors shares are very attractive http://bit.ly/9ZJQ0w
With all of that said, I think that the "beta grazers" are going to have a solid year in 2011. In fact, the only people in the United States who may do well in 2011 are those who
1. Have jobs with incomes related to equity market volume/strength
2. People who have a lot of financial assets
@karen
"The Fed wants the stock market to go up, and they will do what’s necessary to get it to whatever level it takes for the wealth effect of higher stock prices to stimulate growth"...
Naturally, the flaw in Bill Millers argument is this...
If it's as simple as that... Why not just make QE2 $600 TRILLION?...
You might say the Fed is making an ERROR by this "incremental" approach...
It's pretty sad to think, also, that according to Bill Miller, "monetizing the federal defecit" by $600 billion only buys you a 15% rise in equities...
What ever happened to the logic that says... If things were REALLY strong... You wouldn't have to monetize anything...
"Stock prices are supposed to reflect economic strength. Economic strength is NOT the result of strong stock prices."
This is such common sense that I know, know, know that what BB is doing is so out there, so ludicrous, so insane.. that i am in shock.. his WaPo oped was akin to Obama on the view..
What must the other world powers think of our government?! Talk about a country that shouldn't have nukes!!
The GM IPO is another scam. No one at a discount broker is going to get those shares and they are probably going to double on the first day. Basically, a bunch of cronies involved with the lead underwriters are going to get the shares at half price and then dump them after 30 days for a major profit.
Matthew,
3. people who have not been short this market, especially CRE and Financials : )
Matthew,
great post man, great post. But here's the thing, you have to realize that most market participants embrace the academic's ideas, they fully believe in ideas such as:
Feedback loops
Exogenous Cause Models
Belief that the stock market is just like physics (see comments like "don't fight the Fed")
and I could go on and on and on, 99% of all "forecasts" given by money managers and pundits are based on these ideas, really what they are offering are predictions of the past, which is much different than a forecast.
@Matthew
"How does anyone take these academics seriously? Why do they have the President's ear?
You don't really want me to answer that do you... It starts with something like... "But he's so smart"...
ROR Ben. I always said that people spend two years in MBA programs to learn how to do straight line projects.
@Matthew
"With all of that said, I think that the "beta grazers" are going to have a solid year in 2011. In fact, the only people in the United States who may do well in 2011 are those who
1. Have jobs with incomes related to equity market volume/strength
2. People who have a lot of financial assets"
There's one glaring omission to your theses...
#3 People who LIKE the taste of catfood...
*projects = projections
ben, did the day go fast enuf for ya? wish i could get just 3 hours back.. not to trade anything.. but to do household chores!
Well, it was nice making money off dipshits ineptitude while it lasted.
Catch yall tomorrow, and maybe later for a little drunken braggadocio if the Redskins get a touchdown tonight.
I know thats wishful thinking, and the fact that the Vols actually won an SEC game on Saturday, makes it seem even more hopeless.
Obama doesn't see the problem with eating catfood. He is so in touch with America that feeds his cats T-bone steaks. Why wouldn't people be happy eating catfood?
@McF
"really what they are offering are predictions of the past"
Yeah... After yesterdays "hail mary" in the Jax-Hou game, how many coaches are now going to teach the "bat the ball to the ground" model...
Because, you know, that always works...
On YM the afternoon high - low swing was 70 ticks, I-Man bagged 60 of em...
Gettin a little bit better every day...
Now, if I could only just stop digging holes in the morning...
That's an amazing looking peak on the SLV chart...
Looks like somebody bit off the top of an astro pop (above $25)...
mmmm...astro pop.
"Stock prices are supposed to reflect economic strength."
Are they?
or, should I ask....is that what they do?
Stocks rose 1930% from 1974-2000 and 971% from 1942-1966 yet by every single meaningful economic measure (GDP, Industrial Production, Capacity Utilization, Unemployment, Household Liquid Assets, Federal Debt, Consumer Debt, etc) the economy was FAR WEAKER from 1974-2000, even if you start the second bull market in 1982 to give it the best possible data it still looks worse and even then it doesn't capture how much worse because the govt changed the way we calculate much of the above. The "data" everyone is drawing their predictions of the past from.
This, of course, all played out before:
from 1872-1880 annual inflation adjusted GNP of the US rose 68%, from 1898-1906 real GNP rose 56% and from 1921-1929 it rose only 48%....a time that was referred to as a "new era", "the roaring 20's"
of course, from 21-29 the stock market enjoyed a greater percentage rise than it had done in any equivalent time in US history, to bad the economy was getting worse with each passing year.....sound familiar?
Stocks rise and fall with changes in social mood.
McHappy - I see the bull flag. If there is another touch to the channel bottom though we have at least another 10 SPX points from here.
Karen,
you know you take a half day off and it seems like you've been out for two weeks, I could start today over and not be caught up.
but, I still have a job so I should be happy to be busy.
@I-Man
CV hates siding with public money... But I'm going to have to go with the Eagles tonight against the Skins...
I do want to see what the Eagles do in the Red Zone though...
Mike Vick is getting a lot of press for flashy plays, but the Iggles keep bogging down where it counts...
Frankly, I don't consider him a winner (until he starts beating some teams of value)...
I argue that last weeks win over the Colts was not a VALUE win... The Colts were on the road, decimated with injuries, lost Austin Collie in the middle of the game, and STILL covered the pointspread...
The Eagles almost let them off the hook for a win...
Just saying...
http://www.thereformedbroker.com/2010/11/15/gm-ipo-as-climax-for-the-reflation-trade/
Yeah, I know...
It will be a shocker if the Skins pull this off tonight.
ben -
"supposed" =
1. assumed as true, regardless of fact; hypothetical: a supposed case.
2. accepted or believed as true, without positive knowledge: the supposed site of an ancient temple.
3. merely thought to be such; imagined
exactly
Dammit, why'd they have to go and make a new low after I'd hung up the saddle?
ben, speaking of work.. today was my son's first day! it was such a throw back for me.. I felt as tho it was his first day of school!! and other than the first six months of this year.. he hasn't lived with me in years.. he's either been away at school traveling in europe, or living in nyc..
he got a job with quest software in their finance/M&A department.. i am unaware of his title or exact duties..
i bot a bunch of stuff from gilt.com today.. they were selling my go smile toothpaste.. and i bot some food treaties for the holidays.. some scallops, salmon, and shrimp (from Ming Tsai).. and cap for each of my sons.
Karen,
that's great about your son, I've got a mtg. now, be back later tonight.
Vick will be throwing against fellow ex-hokie DeAngelo Hall...
Tell him to hang on to the security of that cubicle until he just cant possibly take it anymore...
I'm pretty sure thats the right time to bail for freedom.
But jokes aside, thats awesome, glad he could get a job down there. :)
CV's gotta go too...
Let's make official...
I'll take the Eagles (lay the 3 points)... for (1 unit)...
Back for C'MON MAN (aka "Amen's Corner")... jk ;-)
ben, LOL.. based on my mood.. we should be at 666..
actually, i am amazingly good at separating my financial mood from my euphoria at feeling the sun on my face or getting exercise outside.. if ditch digging paid i'd be the happiest girl on the planet : )
I-Man.. when he was in high school, he did a summer stint for quest and vowed he'd never work in a cubicle again.. i do feel bad in that regard.. also, he left his girlfriend in nyc.. and is quite sad about that.
Oh it pays... just like $10/hr, cash.
Ditchdigging, that is. (laughing)
mrtopstep
New Video: Brian Shepard and George Cavaligos Market Reports Monday 11/15/10 http://mrtopstep.com/?p=1221
I'd probably dig for $10/hr, cash before I'd work in a cubicle again.
somehow.. i failed to note the drv leap in the last hour of trading ; )
yeah, if you can't sail for a living.. or surf for a living, ditch digging is the next best thing! and it's productive, presumably : )
Karen - Ditch digging can presumably be productive, but it does depend on what and where the ditch is being dug.
Across your neighbors front lawn - Not so productive.
Through a forest service road - Not so productive.
In the parking lot of Safeway - Not productive.
Come to think of it, they don't pay you to dig those things up either.
Mangy Mutt
30yr Bond 126.21875 -1.71875 -1.35
10yr Note 124.765625 -1.171875 -0.93
http://www.ino.com/
USTs getting Sold..
US Dollar
78.632
+0.583 +0.75%
Paperback being bid..
AAIP
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