Tag Archives: Economy

Home Depot

Like any other red blooded American male, I spend a lot of time at Home Depot. Now that spring is here, my local Home Depot is packed with men, women, and kids in tow. Feels good to see that people are still beautifying and upgrading their properties.

Still, if you looked at the HD chart, you’ll notice that it’s nearing a death cross (50DMA below 200DMA) on the daily chart. Is this the classic “sell in May and go away” syndrome or the first parts of “Taper” finally working its way through the system?

HD_2014_05_14

Links for May 29th through June 5th

These are my links for May 29th through June 5th:

  • Spain Warns Market Access Being Shut – WSJ.com – In making this dramatic admission, Mr. Montoro joined recent calls by the Spanish government for direct aid from European Union institutions for Spanish banks as the government hopes to avoid a full-blown bailout package. – TIP OF THE ICEBERG FOR SPAIN
  • Retreat From Stock Market Continues – NYTimes.com – “I’m just extremely skeptical about the ability of a retail purchaser to be able to play on a level field in the market,” said Mr. Tsesis, who is 45 and lives in Chicago. “I’m just trying to get out of stocks.” – CONTRARIAN INDICATOR?

Links for May 22nd through May 25th

These are my links for May 22nd through May 25th:

Could The Market Be Turning?

After having 8 of my 12 open stock and ETF positions stopped out this week, I'd say the market is starting to roll over.  It could be because of Obama's bank tax or something else.  Who knows and who cares!

All I know is that my trend system took me out as it was designed to do.  Of course it was sooner than I expected but I guess that's the way the cookie crumbles.

Links for January 11th

These are my links for January 11th:

  • LaHood: Auto bailouts were a good investment – MarketWatch – U.S. Transportation Secretary Ray LaHood kicked off the Detroit auto show on Monday by telling reporters that the government's commitment to the car industry was "a good investment of taxpayer dollars." – UM, YEAH, RIGHT.
  • Geithner Has Support of Obama, Democratic Lawmakers, Aides Say – Bloomberg.com – Asked yesterday for comment, White House Press Secretary Robert Gibbs said he stood by his earlier statements that the president had full confidence in Geithner. Jim Manley, a spokesman for Senate Majority Leader Harry Reid of Nevada, said “Secretary Geithner enjoys the strong support of the Senate Democratic caucus.” – ATROCIOUS!
  • Stocks, Commodities Advance as China Imports Soar; Dollar Falls – Bloomberg.com – “The market doesn’t actually care if more or less Americans have jobs, it’s watching for rate hike signals,” Bill Blain, the joint head of fixed income at Matrix Corporate Capital in London, wrote in a research note. “Other aspects, such as U.S. retail sales or this morning’s dramatic growth in China’s exports, are equally valid indicators of just how strongly the global economy is recovering.” – YES, THE MARKETS DON'T CARE ABOUT THE USA, IT JUST CARES ABOUT $$$$, LIKE IT SHOULD!
  • Chavez Devalues Bolivar 50%, First Time Since 2005 (Update1) – Bloomberg.com – Chavez said the bolivar will be devalued to 4.3 per dollar from 2.15 per dollar for most imports. A second, subsidized peg of 2.60 bolivars per dollar will be used for importing food, medicine and machinery intended to boost the economy’s competitiveness. – HA! SOCIALISM = SUCKS.
  • New York Seeks National Effort to Curb Salt in Food – NYTimes.com – The plan, for which the city claims support from health agencies in other cities and states, sets a goal of reducing the amount of salt in packaged and restaurant food by 25 percent over the next five years. – FOR A PALEO TYPE PERSON, TOO MUCH SALT IS DEADLY. I'M SURPRISED BY HOW MUCH SALT IS IN PROCESSED FOODS>
  • Pimco move to sell gilts raises spectre of a UK sovereign debt crisis – Telegraph – The American investment group said it will be a net seller of UK Government bonds this year, at the very point when the Bank of England brings its £200bn programme of purchases to and end and the Treasury attempts to raise unprecedented sums through the capital markets. – I THINK WE'LL SEE EITHER A DEFAULT IN THE POUND STERLING OR THE USD.

Links for January 7th through January 8th

These are my links for January 7th through January 8th:

  • As Goldman Thrives, Some Say an Ethos Has Faded – NYTimes.com – Even so, many Goldman employees are stunned by the public resentment directed at the bank in general and Mr. Blankfein in particular, who, after first steadfastly defending Goldman’s profits and pay, recently offered a vague apology for “mistakes” that led to the financial crisis. – LET THEM EAT CAKE!
  • Countdown to January 18: Goldman’s Bonus Day « The Baseline Scenario – Goldman’s management should come to its senses and pay no bonuses of any kind to anyone; no good people would leave. Fortunately, while the executives who run Goldman are smart, they are not that smart. The bonuses they announce on January 18 and pay in early February will become the rallying point for real reform.
  • Contrarian Investor Predicts Economic Crash in China – NYTimes.com – He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent. – OF COURSE THEY ARE. CHINA WANTS TO MAINTAIN THE HARMONIOUS SOCIETY.
  • Fed Advice to A.I.G. Scrutinized – NYTimes.com – The e-mail messages dealt with one of the most controversial aspects of A.I.G.’s bailout: that the Fed was paying the insurer’s trading partners 100 cents on the dollar for their soured investments. A.I.G. cited this fact, but the lawyer crossed the reference out. The Fed also struck a paragraph about other investments that could not be unwound. – GOLDMAN SACHS AND SOCIETE GENERAL. SCUMBAGS TO THE BONE>
  • In New York Commercial Real Estate, News Is Bad (or Worse) – NYTimes.com – “We’re projecting the biggest value losses in the nation,” said Aaron Jodka, a senior real estate economist at Property and Portfolio Research, a Boston-based independent real estate research and advisory firm. He predicts that by 2011, the value of New York metropolitan area office buildings will decline by 58 percent from its late 2007 peak. It is already down 40 percent. – CONFIRMED BY THE MARKETDOCTOR OVER BEERS LAST NIGHT.
  • Contrarian Investor Predicts Economic Crash in China – NYTimes.com – He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent. – OF COURSE THEY ARE. CHINA WANTS TO MAINTAIN THE HARMONIOUS SOCIETY.
  • Fed Advice to A.I.G. Scrutinized – NYTimes.com – The e-mail messages dealt with one of the most controversial aspects of A.I.G.’s bailout: that the Fed was paying the insurer’s trading partners 100 cents on the dollar for their soured investments. A.I.G. cited this fact, but the lawyer crossed the reference out. The Fed also struck a paragraph about other investments that could not be unwound. – GOLDMAN SACHS AND SOCIETE GENERAL. SCUMBAGS TO THE BONE>
  • In New York Commercial Real Estate, News Is Bad (or Worse) – NYTimes.com – “We’re projecting the biggest value losses in the nation,” said Aaron Jodka, a senior real estate economist at Property and Portfolio Research, a Boston-based independent real estate research and advisory firm. He predicts that by 2011, the value of New York metropolitan area office buildings will decline by 58 percent from its late 2007 peak. It is already down 40 percent. – CONFIRMED BY THE MARKETDOCTOR OVER BEERS LAST NIGHT.
  • Maybe You’re the Reason Your Job Is Boring – Wake yourself up by renewing your leadership agenda. Re-engage by mentally firing yourself and spending the next few weeks acting as if you just joined the company. This entails assessing the current situation anew with the help of key stakeholders. Make it a disciplined process. – LOL. YES AND CORPORATE LOYALTY IS STILL IN EFFECT. SUCKERS. CEO'S LIVE IN A WORLD DIVORCED FROM REALITY.
  • SFO Magazine Article – Lately, when a stock makes an important new high, it will inch even higher until a seller finally refuses to lift for higher ground. Immediately, the sell-the-new-high program will sell much lower than you bought. The longs are trapped and squeezed out of their positions. – I'VE NOTICED THIS ON MY POSITION IN V. MUST ADAPT TO HFT AND ADJUST RISK.
  • HFT Market Making Will Lead to a Crash – Computerized algorithmic market making works in any type of oscillating market, as the computer can keep flipping out of it’s longs, and covering it’s shorts. It works in a trending market, as long as there is some type of choppy trade. The problem lies, when the computer system can’t flip out of the position. Most algorithmic systems are programmed with some type of risk parameter. If this risk parameter is breached, the computer will dump it’s position and cut it’s losses. This is what may have happened in RMBS today. An algorithmic system making markets on the long side, got too long, and was unable to wiggle out of the position because of the follow-through in selling pressure. Once it was down so much in the position (the risk parameter was breached), it dumped. This simply added fuel to the fire. That is why the sudden plunge to $16 happened. – OK FINE, ITS DANGEROUS BUT HOW DO I MAKE MONEY FROM IT?
  • NJ Airport Video Shows Guard Leaving Post – NYTimes.com – The video shows the guard leaving his podium for several seconds. The woman then comes from inside a secure, passengers-only area and motions to the man, who ducks under a rope. The couple embraces and walks arm-in-arm past the vacant podium. – DUMBASSES
  • Jamie Gritton’s MI Backtester – This is a tool for backtesting stock screens, as defined and used by the Mechanical Investing (MI) message board at The Motley Fool. While it's quite handy (if I do say so myself), it is by no means an introduction to (or even a description of) mechanical investing. – VERY INTERESTING SITE, MUST SPEND SOME TIME HERE DIGGING ABOUT!
  • Chinese Decision on Rates Seen as ‘Turning Point’ – NYTimes.com – “It is a turning point,” said Ben Simpfendorfer, an economist in the Hong Kong offices of Royal Bank of Scotland. “There is a convergence of events that will lead to higher rates.” – MAYBE
  • The Way We Live Now – Walk Away From Your Mortgage! – NYTimes.com – Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible? – NO, ITS SMART BUSINESS SAVVY. ITS PLAYING BY THE RULES THAT PLAY BY.
  • Chinese Decision on Rates Seen as ‘Turning Point’ – NYTimes.com – “It is a turning point,” said Ben Simpfendorfer, an economist in the Hong Kong offices of Royal Bank of Scotland. “There is a convergence of events that will lead to higher rates.” – MAYBE
  • The Way We Live Now – Walk Away From Your Mortgage! – NYTimes.com – Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible? – NO, ITS SMART BUSINESS SAVVY. ITS PLAYING BY THE RULES THAT PLAY BY.
  • Retail Stores Report Modest Gains in December – NYTimes.com – Retailing groups calculated in recent days that sales for the combined months of November and December rose 1 to 2 percent from a year ago. Industry professionals were pleased Thursday that the results were at the high end of estimates and that retailers were not forced to discount as dramatically as they did in 2008. – LAUGH, 1% ABOVE SHIT SALES IS STILL SHITTY SALES

Links for January 6th through January 7th

These are my links for January 6th through January 7th:

  • Geithner’s New York Fed Told AIG to Limit Swaps Disclosure – Bloomberg.com – “It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.” President Barack Obama selected Geithner as Treasury secretary, a post he took last year. – GOES TO SHOW YOU, THEY'RE ALL SNEAKY
  • Geithner’s New York Fed Told AIG to Limit Swaps Disclosure – Bloomberg.com – “It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.” President Barack Obama selected Geithner as Treasury secretary, a post he took last year. – GOES TO SHOW YOU, THEY'RE ALL SNEAKY
  • Deflation in Japan: To lose one decade may be misfortune… | The Economist – What effect has this steady erosion of value had on the psychology of Japanese people? The bust did not lay waste to Japan, after all, as the Depression did to America in the 1930s. Homelessness and suicide have risen, and life has got much harder for young people seeking good jobs. But Japan still has ¥1,500 trillion ($16.3 trillion) of savings, its exporters are world-class, and many of its citizens dress, shop and eat lavishly. As a senior civil servant puts it: “Japanese people have never really felt that they are in crisis, even though the economy is slowly withering away.” – WELL WE JUST HAD A LOST DECADE OF OUR OWN.
  • Off the Charts – For Stocks in the Developed World, It Was a Decade of Zeros – NYTimes.com – The United States stock market lagged even that modest return. According to the MSCI indexes, which measure virtually all stock markets using consistent criteria, an investor in the American market who reinvested all dividends — and who somehow avoided all taxes and transaction costs for the decade — would have ended 2009 with 12 percent fewer dollars than when the decade began. That is an annual return of negative 1.3 percent. – NOT IF YOU'VE BEEN TREND FOLLOWING.
  • Gold Outshines All Other Assets For Past Decade – Knowing about the 18 year cycle between commodities and equities, this isn’t surprising. In fact, thanks to this long term historical pattern, we can look forward to almost another decade of the same type of outperformance. – I WONDER FOR HOW LONG REALLY?

Marketing Bottoming – Really?

stocksEveryone is so hoping that the market is bottoming because they all want to recoup their losses from last year, especially us 401k holders.  For some strange reason, corporate profits appear to be beating expectations and everyone is hoping (wishing) that the market has bottomed and turned the corner.

“Corporate profits are beating expectations by their widest margins in a year, pushing most equity markets within a whisker of new year-to-date highs and the dollar toward its 2009 lows,” John Normand, head of global currency strategy at JPMorgan Chase & Co. in London, wrote in a research note. [via Bloomberg]

What everyone forgets is that these corporate earnings, especially if you are a bank, are based on the backs of the American taxpayer and bailouts. Sure some corporate earnings are legitimate but most of these earnings defy common sense and logic.  That’s why the US Dollar is heading lower, we’re going to destroy our greenback at the expense of trying to stabilize the markets with phony earnings.

Call me an old cranky fart but we’ll be in for one more decent run in the S&P500 before it takes another big dump.  Things are lining up for a classic short squeeze where we’ll see the S&P500 run up between the 1131 and 1210 levels. This time I’ll be dumping before that and rotating some of my recent 401k profits into cash, waiting for the capitulation in the markets (which hasn’t happened BTW) to go on a buying spree.

 

Do You Feel Stimulated?

I was, and still am, against any governmental stimulus plan.  The plain and simple answer as to why is because they don’t work and usually create noise in the economy.  The only way things will get better is when the mal-investment is worked out of the system and assets flow from the weak hands to strong hands. 

Now with talks of another stimulus plan floating around, on the heels of this year’s $787 Billion stimulation, I can’t help but wonder if we would make the same mistake twice?

The stimulus plan passed in February “is executing pretty much as expected,” yet it “won’t affect the economy’s primary problems, which are falling values of assets like homes and stocks,” said Doug Holtz-Eakin, who was director of the Congressional Budget Office from 2003 to 2006 and is now president at DHE Consulting LLC in Washington. [via Bloomberg]

Executing pretty much as expected? Wait, and it won’t affect the economy’s primary problems?  Why the hell should we dream of stimulating a second time? 

Want to know how to really help the situation and truly firm up the economy FAST.  Have the government bailout all middle to lower class residential property owners by forgiving their second mortgages.  A large chunk of foreclosures will go away immediately, people will have debt relief and the ability to spend again, and all those subprime portfolios will start to perform again.

 

Derivatives and Stimulus Money to Create Another Crisis?

I agree with fund manager Mobius that derivatives are a bad thing but banks love them because they make a lot of money from them.  The problem I see is that all the recent acqusitions of failing derivative portfolios (Bear Stearns, Lehman Bros) by other firms, such as JP Morgan, allows fewer and fewer firms to have more and more derivatives.  All you need now is one large financial institution to go down and you’ll drag the entire system down.

Here’s what Mobius has to say about derivatives:

“Banks make so much money with these things that they don’t want transparency because the spreads are so generous when there’s no transparency,” he said.

Remember, too big to fail is very dangerous because large complex systems have to fight really hard to remain organized in the face of some large negative events.  In Nature, the more complex and organism is, the quicker it can destabilize.

Regarding the stimulus money.  First off I love the stimulus money because my engineering industry is benefiting greatly from it and its preventing a lot of my friends from being laid off.  However, the long term danger I see is that we’re either going to create another inflation boom or spend ourselves broke, maybe both.

Here’s what Mobius as to say about being stimulated:

A “very bad” crisis may emerge within five to seven years as stimulus money adds to financial volatility, Mobius said. Governments have pledged about $2 trillion in stimulus spending.[via Bloomberg]

Most likely he’s right but I’m not too sure about the timing of it.  I guess we’ll have to wait and see.

 

Low Volatility – Happy Days Again?

Call me an old cranky fart but I’m not buying the recent drop off in $VIX as a return to the happy days of market madness, its just too manipulated for me. 

Vix-071009

Ben and the Fed have dumped trillions of dollars into the markets and that’s bound to smooth things over for a while, but ask yourself this: is it sustainable? With unemployment rising and the markets seemingly to have hit a brick wall lately, the answer is NO!