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Ironman at Political Calculations

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  • Aftershocks In The S&P 500 [View article]
    We're happy to be wrong. Really.
    Apr 14 06:10 PM | Likes Like |Link to Comment
  • Real GDP Forecasts And QE [View article]
    And then there were three....
    Mar 29 01:55 PM | Likes Like |Link to Comment
  • The S&P 500 Behaving As Expected In The First Week Of 2014 [View article]
    May we refer to you the internet search engine "Google", which you might use to search for the term, the results of which will take you to our previous discussion of the event.

    Hope this helps!
    Mar 28 01:36 AM | Likes Like |Link to Comment
  • A Rational And Inefficient Noise Event [View article]
    Don't be silly. We can most certainly test our model - the main limitation is the expense involved to obtain statistically significant results. In fact, we began running a $200+ million test on Wednesday, 26 March 2014 (around midday - you should be able to look at a chart of the S&P to see approximately when the test began). So far, the results of the test are consistent with what theory would predict for the particular scenario involved, in which we've sought to deliberately split the forward-looking of attention of investors between 2014-Q3 (where they had been focused) and 2014-Q2.
    Mar 28 01:32 AM | Likes Like |Link to Comment
  • The Other Alternative Futures For The S&P 500 In February 2014 [View article]
    With commentary like that, we're disappointed that you stopped not following us.
    Mar 28 01:17 AM | Likes Like |Link to Comment
  • Slowing Inflation For The Second U.S. Housing Bubble [View article]
    Yes, although it's been a while since we've featured those charts. Updating them is in our development queue.
    Mar 28 01:15 AM | Likes Like |Link to Comment
  • Real GDP Forecasts And QE [View article]
    Previous versions of the chart went back much further. Clearly, you haven't been paying attention.
    Mar 28 01:12 AM | Likes Like |Link to Comment
  • Dividends: A Time For Increased Concern [View article]
    No - the two are driven by different factors.

    In digging into the issue, we've found that the increase in buybacks are almost invariably related to corporate tax considerations, while changes in dividend policies are frequently related to personal income tax considerations (especially for those who have the ability to choose between taking income in the form of salary or dividends).

    What we've seen in the past year is that most companies that have increased buybacks during the past year have also increased their dividends, which is done to minimize the overall tax hits to corporate income and personal compensation.

    With that basic motivation, it's unlikely that dividends are being cut to support buybacks. Instead, we find that dividends are being cut because of some economic distress. At this point, the companies most affected are those that are highly interest-rate sensitive, where rising rates cuts into earnings (thanks to the Fed's QE tapering), or are involved in mining or other commodity production, which is being negatively affected by China's economic slowdown.
    Mar 28 01:09 AM | Likes Like |Link to Comment
  • The S&P 500 And Wile E Coyote's Law Of Gravity [View article]
    It's a little more complicated - the market is both forward-looking (through fundamentals) and curiously affected by the present (through noise). The latter characteristic makes the market a really good real-time indicator of the perceived state of the economy.
    Mar 28 12:56 AM | Likes Like |Link to Comment
  • Are New Jobless Claims Signaling A New Recession? [View article]
    It's really only a problem for our less savvy readers. Plus, our regular readers are more than capable of developing their own graphics to present with their own articles.
    Mar 28 12:52 AM | Likes Like |Link to Comment
  • Are New Jobless Claims Signaling A New Recession? [View article]
    Since we're using a statistical based approach, we use the Western Electric Rules for identifying breaks in established trends. It would simply be pointless to select arbitrary dates, unless we were starting entirely from scratch or wanted to ignore an established trend.
    Mar 28 12:50 AM | Likes Like |Link to Comment
  • Did The World's Economy Decelerate Sharply? [View article]
    It's not the new year itself - it's the changing timing of the lunar new year. Year-over-year growth rates are affected when the month in which the new year starts is different from what it was in the previous year (which has been the case for the last two years.)
    Mar 28 12:44 AM | Likes Like |Link to Comment
  • How Do Stock Buybacks Affect Market Indices? [View article]
    There's also the matter of weighting as well for Shiller's CAPE - for a market cap-weighted index like the S&P, it doesn't make much sense to use the raw reported EPS as the basis. (It's not like it can't be done - it most certainly is for dividends per share.)
    Mar 28 12:41 AM | Likes Like |Link to Comment
  • Playing With Bubbles [View article]
    We have previously posted it.
    Mar 28 12:38 AM | Likes Like |Link to Comment
  • Revisualizing The Second U.S. Housing Bubble [View article]
    Our favorite example of similarly screwed up economic thinking is from the Columbia School of Journalism, where a, ahem, "learned journalist" wrote that housing prices couldn't possibly be in a bubble because they were still lower than the level they peaked at during the last bubble.
    Mar 27 09:34 AM | 4 Likes Like |Link to Comment