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Dr. Duru  

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  • Hard To Blame The Weather For The Drop In Home Builder Sentiment [View article]
    When I first started writing about it, I noted the HMI seems to only be meaningful in that trends seem to have staying power and that trending lines up with momentum in the housing market. I still watch it in case some anomaly in the components signals something... but I hear you.
    Feb 17, 2015. 08:31 PM | Likes Like |Link to Comment
  • Yet Another Reason To Like CORN: A Low Valuation Relative To Gold [View article]
    The reasons for gold's up and downs are definitely complex. I have covered some of the mechanics in posts over the past year or so. I was only willing to believe there MIGHT be a relationship here after seeing that corn indeed bounced after that 40-year low in valuation. I will be watching how this develops over time. I hope to have time to look at the ratios with other agricultural commodities. In the meantime, just consider this measure another supporting indicator that suggests corn is selling at historically low levels.

    The ETF CORN has of course only recently bottomed, so it will take patience to wait out the next rally...(churn in futures positions notwithstanding).

    Thanks for reading!
    Feb 17, 2015. 11:49 AM | Likes Like |Link to Comment
  • The Australian Dollar Holds Recent Bottom Despite Surge In Rate Cut Expectations [View article]
    Thanks for throwing Scotland in the mix on that. I have been trying to find time to dig into the data on the impact of oil's plunge on Scotland/UK. I know Scotland was counting on those revenues to make them a prosperous country on their own. Independence probably does not feel as good with $40-50 oil versus $100+

    I am surprised at how hard it has been to find the specifics....
    Feb 15, 2015. 06:28 PM | Likes Like |Link to Comment
  • KB Home: Waiting On Margin News Despite Strong Preliminary Report [View article]
    We will see on first-timers. I think it was three earnings reports ago KBH noted that it thought it saw first-time homebuying picking up. I was excited about it because I have been looking for first-timers to spring to life to really push the bullish thesis on home builders to the next level. KBH had nothing to say about it on the next call. I am assuming it was a false signal and the macro numbers still show first-timers are still under-represented relative to past housing recoveries.
    Feb 15, 2015. 06:26 PM | Likes Like |Link to Comment
  • KB Home: Waiting On Margin News Despite Strong Preliminary Report [View article]
    Any specifics? I am assuming you have a similar critique as the other comments?
    Feb 15, 2015. 06:24 PM | Likes Like |Link to Comment
  • KB Home: Waiting On Margin News Despite Strong Preliminary Report [View article]
    The way I look at is this: if my orders go from 100 to 125 and my order value goes from $100 to $126, then I have gone from $1 per order to $1.008 per order. I am assuming any margin improvement is coming from that $.008. KBH's release did not say anything about cost reductions or that these communities that have sold like hot cakes are part of the communities built on lower cost than previous communities. I am just more skeptical than Prati is on this score. If margins are looking better, I would have expected a direct mention of it in the preliminary financial release.
    Feb 15, 2015. 06:23 PM | Likes Like |Link to Comment
  • KB Home: Waiting On Margin News Despite Strong Preliminary Report [View article]
    Looking at the record, short interest tends to soar at local bottoms for KBH. Good catch. I wish though I had your confidence in more orders = higher margins. I am fine waiting on the actual numbers given I am already overweight homebuilders right now.

    And thanks for pointing out the valuation. I had missed noting KBH is already well under 1.0 in price/book. That gives a decent amount of buffer.
    Feb 15, 2015. 06:18 PM | Likes Like |Link to Comment
  • Australia's Heating Housing Market Pressures Monetary Policy [View article]
    It is an awful dichotomy to have a worsening labor market alongside soaring housing prices. Not sustainable...!
    Feb 12, 2015. 10:32 AM | Likes Like |Link to Comment
  • Still A Good Time To Avoid Shorting The Euro [View article]
    I am leaning toward upside as well given history. Now even Chambers from Cisco is talking about a good outlook for Europe. But I am definitely not willing to bet on it until the market does first!
    Feb 12, 2015. 10:25 AM | Likes Like |Link to Comment
  • The High Stakes Ahead For Tightening Monetary Policy [View article]
    If Greenspan's rate hikes were behind the inflation curve, it means that the decline in long-term rates was even more confounding. The market should have penalized the Fed for increasing inflation risks by sending long-term rates higher, not lower, right?
    Feb 10, 2015. 09:53 AM | Likes Like |Link to Comment
  • The High Stakes Ahead For Tightening Monetary Policy [View article]
    Glad to hear someone agrees. :)
    Feb 10, 2015. 09:51 AM | Likes Like |Link to Comment
  • Oil And Solar Attempt To Bottom Together - The Relationship Ends There [View article]
    I think bouncing back and forth is the most likely path for this year. And, yes, traders would love to have well-defined ranges to trade long and short.

    Note that Citi just reached for the award of most bearish analyst around: predicting market dynamics could send oil to $20 before a bottom hits.
    Feb 9, 2015. 10:44 PM | Likes Like |Link to Comment
  • The Swiss Franc Shock Increases Uncertainty And Reduces Confidence In Switzerland [View article]
    Agreed. Forecasts are already predicting a potential recession this year partly as a result of the over-valued currency.
    Feb 9, 2015. 10:51 AM | Likes Like |Link to Comment
  • The Swiss Franc Shock Increases Uncertainty And Reduces Confidence In Switzerland [View article]
    The SNB does not want that safe haven status and given its apparent on-going tinkering in the currency market, I am willing to bet for now that the franc has seen its peak. Just a matter of picking the currency. I am avoiding EUR/CHF....
    Feb 9, 2015. 10:51 AM | Likes Like |Link to Comment
  • The Swiss Franc Shock Increases Uncertainty And Reduces Confidence In Switzerland [View article]
    On confidence, I am reporting out the data rather than my opinion. I am willing to accept this is a blip in confidence if the data demonstrate that in coming months.

    The SNB perhaps had no choice but to let go of the peg. SNB head Jordan said as much recently. Maintaining the peg in the face of ECB QE was going to get too expensive. In an earlier piece I argued that given the SNB had a scenario where it would unceremoniously and unexpectedly drop the peg, perhaps establishing the peg in the first place was the real mistake. It is of course easy to say all this with hindsight. Regardless, my read is that the SNB did not think the markets would react as violently as they did. Seeing the Swiss franc gradually weaken since that initial shock makes me think the market was too surprised to react in an "orderly" fashion. It will be interesting to see how the SNB's reserves change going forward assuming folks like the Reserve Bank of australia are correct that the SNB is back to intervening on behalf of weakening the franc.
    Feb 9, 2015. 10:49 AM | Likes Like |Link to Comment
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