J. Bruun

Is Too Much or Too Little Money Being Created?

Bob,

I agree - good point!

This has been true for a long time and I expect continue to be. Meanwhile I'm curious to learn how you intend to play this view in the market? They are not exactly responding according to above currently.

You may enjoy viewing this presentation from March as it in my view remains spot on.

www.zerohedge.com/arti...

I hope to hear your view on how to play the market with your view of things.

Jan

Natural Gas Stocks Could Have Banner Year in 2010

This is excellent news. So it is finally happening. Low prices and loan covenants/cash flow constraints lead to less investments/drilling which is finally showing up as lower output. Even though I'm bearish on GDP growth I think the decline in nat. gas consumption will be lower than the decline in output described above.

Plenty of Upside Remaining for Microsoft

I'm with you on this one. I'd add to that a steady big amount of share buy backs.

Global Ship Lease: A Fairly Valued Stock

Looks like we missed a great trading opportunity. This article is from September 29 but GSL only started tumbling late October:

joc.com/node/413663

It is worth keeping track on what will happen in the next two weeks as CMA CGM intends to reach an agreement with their lenders by mid November:

www.bloomberg.com/apps...

For your information container ship chartering rates are marginally down since the writing of this article.

Jan

Cramer Does It Again with CIT Call

I think (and hope) that these people like Cramer and those you see being hyper active on pages like this are in fact just faces to a minor organization who publish in the name of one person.

That being said when Cramer talks with his usual strength of conviction it is very tempting to think he can't always have the specific knowledge to back it up.

Jan


On Nov 02 07:51 AM logicalthought wrote:

> Cramer is a smart (and often funny) guy who is horrendously irresponsible
> for making buy and sell recommendations on thousands of stocks on
> which he can't possibly have time to do his homework. The world changes
> very quickly these days, and thus there's no way ANYONE can follow
> more than, say, 20 or 30 stocks closely enough to make informed buy
> or sell recommendations about them, and yet Cramer-- whose time is
> stretched unbelievably thinly with all of his various projects--
> has the nerve to try to do this for THOUSANDS of companies? This
> is grossly irresponsible, and he should give serious thought to admitting
> this and reformatting his show accordingly.

Institutions Doubling Down on MGM

Alexander, I think you are getting a two things wrong in this article.

1. MGM is the least exposed to Macau of the three US operators so if you want to play the Macau story play it on the other two.
2. There are only 6 gaming concessions in Macau and it has been like that for many years. 6 I think. This has not changed lately.

Jan

Wells Fargo: An Example of Why I'm Bearish on Banks

If I understand this correctly it means that the way you account for MSR is by modelling borrower behaviour with regards to refinancing. I can think of the following list of parameters that should influence this as well in excess of short and long term interest rate movements:

1. Outstanding principal per loans as refinancing is not for free
2. Past behaviour at similar interest rate levels
3. Value of house vs loan. If you are deep under water I'm not certain you can refinance. If you are going to default anyway then why spend money on refinancing
4. Borrower expectations on future interest rate developments
5. How eager the market place is at offering refinancing
Future expected default rates
6. How likely it is that people will sell their house within the nearest future as that means refinancing will not payback
7. Split between professional and non-professional borrowers.

While it seems possible that the value of MSR net of hedges should have increased over the past quarter I don't see any reason to expect this will continue to be the case and this part of the current quarters earnings report should not be automatically be thrown into the future quarters.

Jan

Dollar Update: A Contrarian View

It is easy to agree that the dollar should be weak on its own and perhaps even increasingly so. However FX is about relative strength. So the question is are things developing better or worse in US compared to e.g. JP, EU and GB? That is by no means a clear cut yes to me. On a valuation perspective I also think it by no means clear cut that the USD i expensive. Google anything you like such as hotel rooms, restaurants, gasoline in Europe and that will provide some perspective.

One scenario put forward (I don't remember where) is that stronger dollar drivers equities and commodities down which in turn drives risk appetite down which then leads to a flight to USD and all of a sudden USD is much higher.

Further to the authors credit some of the current news is just a little on its head when it comes to normal argumentation. Take this one I saw today: European equity markets up on weaker USD...

Is Gold's Price Rise a Speculative Bubble or Fundamentally Supported?

I think if you go long gold now on inflation fears then you have to ask yourself if you are willing to wait say 2-3 years to potentially be proven right. Or alternatively if you will loose faith and move on to something different in the meantime and if you will do that before or after the herd.

Bearish on Banks - Why Now Is the Time to Sell

I think you make a good case. If you additionally take valuation into perspective then it becomes even more compelling. E.g. JPM trades at almost 2007 market valuations. To the list of headwinds I'd add:

Continuing deteriorating of prime and alt-a loans.
Increasingly limited ability to apply lets say alternative accounting practices.
Limited ability in the future for the mega banks to grow through acquisitions.
Less aggressive trading profits.

I further find it interesting that HSBC's CEO Michael Geoghegan has come out over the weekend stating that he thinks a W is more likely than a V.

Ten Reasons for an Imminent Stock Market Crash

Assuming that most people are in doubt now as to where we are heading this is my reasoning.

Most people with either have gone in long or short into the last week of market action.

The longs:
For those that have been long for a while I suspect they will be very happy and perhaps even feeling that while they have been skillful they have perhaps even been more lucky. The sensible decision is to take profits and clear your head (and count your money) while observing NFP and the upcoming earnings season.

The shorts:
While rather exhausted they will hold on to their positions regardless of what NFP tells them tomorrow. After all why take your losses now?

The sum of this is further downwards pressure. I expect the true test to be what happens after the knee jerk reaction of NFP once the market opens.

MGM: Why It's Time to Take Profits

Jonesy,

Did you hold on to your short? What will you do if it returns to 10.50?

Jan


On Sep 23 01:10 PM jonesy869 wrote:

> i am short at 10.50 need a pullback...never seen a stock perform
> so well on such negative news......most say risky and most say bail
> out....I Hope....

Are We Poised for Another Great Bull Market?

Savoldi,

This is a very bold call. The market action of today and yesterday does that support what your model predicts or are the declines not violent enough?

Jan

On Sep 30 08:33 AM JG Savoldi wrote:

> Our model says that we're about to get the answer to the question
> very soon. We're expecting a 22% crash into October 13th as the
> SPX kicks-off a larger degree decline toward 529 later this year/early
> 2010.
>
> The BAM Model is not based on Elliott Wave Theory, but I'm also seeing
> a potential structure that would fit very nicely with our forecast.
>
>
> I'll elaborate more on this thought on our blog later this week and
> post a few charts etc. but if you look at the SPX 11-21-08 low as
> a point of origin, and observe the 1.38 Fibonacci relationship between
> what could be interpreted as an A.B,C structure into the recent highs,
> that potential large 4th wave expanding triangle pattern would project
> down to SPX 521 in a "D" wave.
>
> My interest in this pattern is that my model is calling for a 50%
> crash over the next 2-5 months (target 529 as I said) but it's then
> predicting what appears to be a melt-up to SPX 1132 before a further
> collapse into 2012-2014.
>
> That would fit very, very nicely with this idea of a large degree
> Elliott wave expanding triangle 4th.
>
> Regardless of structure, we're short here and expecting the crash
> to start accelerating to the downside later today as we enter the
> first of three crash zones contained in October.
>
> 9/30--10/2
>
> 10/13--10/14
>
> Follow us on Twitter for the rest of the details!
>
> bit.ly/l3hv8

The Rising Yen

I think this article is spot on and I think you will be proven right very soon. The equity market is ripe for a reversal and when the third quarter GDP numbers come out the FED talk will change.

From a Japanese perspective what would you do if you were the new governing party for almost the first time in decades. Stand by your potentially correct policy of stimulating domestic consumption to see results 2-5 years down the line and go through an extremely painful period in the meantime and risk losing your voters support or play just a little dirty in the meantime meaning FX intervention/talk?

How many voters really understand the link between a strong JPY and domestic consumption?

Secondly does anyone really think Japan will raise interests rates before USA?

Big Losses Are Hidden on China's Bank Balance Sheets

Very interesting article! I have never bothered to look into Chinese banks as I have always expected that the numbers can not be trusted. While this article deals with past bad loans I'm rather confident that they are currently creating the same problem once again and perhaps even larger.

How can you expect a bank to give sound loans if there is heavy government involvement?

Take a trip to China and look at some of the newly constructed housing high rises at night and ask yourself these questions.

Why are there so few lights on?
How were they financed? How much of it was bank loans?
Who is the smart guy here? The bank or the developer?
How are those loans accounted for?