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Eric Parnell, CFA

 
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  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Hello divinecomedy,

    Thanks for your comment and very good point. I know a good number of protective measures have been put in place since the flash crash a few years ago, but you are correct that the risks associated with these HFT programs looms ever larger, particularly given their size and influence today across the broader markets on a daily basis.

    Great point. Thanks again.
    Aug 9 10:15 PM | 2 Likes Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Hello granger,

    Thanks for your comment and for sharing these data points below. You hit on several key points. At some point we will arrive at a day of reckoning. And the longer stimulus is unsuccessfully applied to try and delay the inevitable, the more painful the final correction will ultimately be. By pumping seemingly endless amounts of stimulus into the markets, monetary policy makers are effectively promoting the same behavior of undue risk taking that the TBTF still remain so highly criticized for several years after the crisis. And all of this comes at the expense of the savers, retirees and future generations that you so wisely mention in your comment.

    Great points. Thanks again.
    Aug 9 10:13 PM | 3 Likes Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Thanks Vytautas. I appreciate it!
    Aug 9 10:09 PM | 1 Like Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Hello whidbey,

    Thanks for your comment and for raising this point. You are absolutely right - the fiscal cliff looms large as we move through the second half of 2012, and I believe it will be a risk that will become increasingly difficult for the markets to ignore knowing that no action will even start until after the November election. And with the potential for the U.S. economy to get 3.5% of GDP lopped off with the expiration of these fiscal stimulus programs, the downside risk is absolutely enormous. And even if the consensus builds that policy makers will simply extend things into 2013 to provide more time to resolve the situation, it only extends the regulatory uncertainty that is a primary factor holding the economy back.

    Great point. Thanks for raising it.
    Aug 9 10:09 PM | 2 Likes Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Hello Rich W,

    This is a great point and I'm interested in your thoughts on a follow up point. How much of any improvement in housing demand would you attribute to investors rather than homeowners seeking to live full time in the property?

    Thanks again for sharing your views.
    Aug 9 10:04 PM | 2 Likes Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Hello datadave,

    Thanks for your comment. You make good points and I completely agree, both Michael Gayed and Phil Davis are excellent writers on SA that are worth reading for their insights and perspectives.

    Thanks again.
    Aug 9 10:02 PM | 1 Like Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Hi Mercy,

    Thanks for your comment and your kind words. I appreciate it!

    You raise an outstanding point here that I actually just mentioned in my reply to Rich W's comment above. I absolutely think that the resumption of the Fed's regular repos is yet another influence that will have a stimulating impact on the markets. While the magnitude is fractional in size to the injections associated with past QE programs, these actions still effectively represent capital injections that are likely to find their way to risk assets including stocks, bonds and commodities. And I wouldn't be surprised if the Fed opts for these more discreet actions for the time being while continuing to just talk about a big headline QE program with the hope of holding up the markets for the time being while still keeping the QE3 bullet still in the chamber in the event that downside forces become overpowering along the way. It will be interesting to see, but I agree completely with your thinking in your question here.

    Thanks as always for raising this point and for sharing your perspectives.

    Aug 9 10:01 PM | 3 Likes Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Hello Rich W,

    Thanks as always for your comment and for sharing your perspective. You are absolutely right that the stock market certainly seems to have no down in it right now. And with light volume, limited news flow and cash now trickling in from the Fed's repo program, this may continue here in the near-term.

    You also make an excellent point about the dominant voices. From an anecdotal perspective, while I would have expected this posture more in April than now, bulls seem about as confident as they've been in a long time, while bears are notably quiet. It will be interesting to see if this amounts to anything in the coming days.

    Thanks again for your excellent perspective.
    Aug 9 09:48 PM | 2 Likes Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Hello kwm3,

    Thanks for your comment. It will be interesting to see whether stocks can break out above the top end of their recent trading channel. It is certainly making a good attempt at it at present, regardless of whether the fundamentals support it or not.

    Thanks again.
    Aug 9 09:43 PM | 2 Likes Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Hello nobby73,

    Great points. I agree with your perspectives here. The Fed has successfully dangled the QE carrot out in front of the markets with great success in recent months, and it is reasonable to expect that they will seek to feed on this anticipation for as long as possible until the market ceases to buy into the tease. And the situation is more complex for the ECB to carry out.

    Thanks for sharing your perspectives.
    Aug 9 09:39 PM | 3 Likes Like |Link to Comment
  • Fundamentals Do Not Support The Stock Market Rally [View article]
    Hello Dennis954,

    Thanks for your comment. In regards to your questions, we have seen a diminishing impact from each successive round of balance sheet expanding monetary stimulus. And while the impact will depend on the level of the markets at the time the stimulus is introduced (has the market sold off dramatically or is it holding steady) and the exact composition of the stimulus, history has shown that stocks will melt higher on an almost daily basis for the duration of the stimulus program. The one exception was QE2, where stocks peaked in February 2011 and grinded sideways for the final four months through the end of the program in June 2011. As for your second question, it is highly likely that the debate will return not long after any stimulus program were to conclude, as markets have shown the propensity to downdraft sharply once stimulus is removed, although I suspect central bankers will seek to manage expectations to prevent a similar outcome in the future. It all will be very interesting to see how it plays out in the coming months.

    Thanks again.
    Aug 9 09:36 PM | 3 Likes Like |Link to Comment
  • Survival Rules For A Zombie Stock Market [View article]
    Hello Tollsforthee,

    Thanks for your comment. This is a very interesting thought to consider that articles like mine may just be a contrarian indicator that the worst may soon be behind us. Although I'm inclined to agree with Bainjer that as long as central bankers maintain the inclination to intervene, this could stretch on much longer than imaginable.

    Thanks again.
    Jul 30 09:51 PM | 3 Likes Like |Link to Comment
  • Survival Rules For A Zombie Stock Market [View article]
    Hello DigDeep - Well said. And it will continue to drag on until global policy makers can finally step aside and allow the markets to clear once and for all. Hopefully they will get on with it sooner rather than later.

    Thanks again.
    Jul 30 09:48 PM | Likes Like |Link to Comment
  • Survival Rules For A Zombie Stock Market [View article]
    Hello jhooper,

    Thanks for sharing your perspectives. Brilliant comment as always. I look forward to reading more of your commentary. Some of the best reading on SA.

    Thanks again.
    Jul 30 09:46 PM | 1 Like Like |Link to Comment
  • Survival Rules For A Zombie Stock Market [View article]
    Hello aarc,

    Thanks for your comment and for sharing your perspectives as well as the variety of detailed data points. This is a lot of worthwhile information to explore.

    Thanks again.
    Jul 30 09:45 PM | 2 Likes Like |Link to Comment
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