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Jeff Miller

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  • Weighing The Week Ahead: Will Q3 Earnings Disappoint? [View article]
    Freddy -- If you look at the start of this article, you will be reminded that this was exactly my prediction.

    Meanwhile, the reported data show little support for your GDP forecast.

    We must be driven by data, and willing to adjust.

    Jeff
    Oct 17 09:07 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Will Q3 Earnings Disappoint? [View article]
    Cliff -- Actually I did not say anything about causation, so it is really not correct to call me confused -- at least not about that!

    I agree with the general thrust of your comment. It is a theme that I have frequently written about myself, most recently on the effects of QE.

    Nearly every market or economic indicator has a host of correlations with other indicators. Finding an appropriate causal model is a challenge, and we often lack the right statistical controls.

    I think that the best interpretation of the source I cited is a simple trend-following indicator.

    Since you have raised the interesting question of causality, I recommend this post: http://bit.ly/QJ9mKH

    I specifically take up a challenge to explain currency manipulation to the average person. I am sorry that I have not yet read your book, but I am interested in how you would explain the question from this cited post.

    The key problem? You say that a falling USD does as much or more harm than a rising. one. The problem is that the groups affected are quite different. Exports arouse passion because the effects are clumped into major impacts on businesses and jobs. Imports have much smaller effects on a larger number of people.

    No one votes based upon higher import prices. It is part of the reason that economists all favor free trade while the average person does not.

    Good topic, and thanks for the suggested readings.

    Jeff
    Oct 15 02:32 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Will Q3 Earnings Disappoint? [View article]
    dancing diva -- Consumer confidence is not back to the old highs, and the economy is operating significantly below trend growth -- so I agree with that observation.

    In the weekly series I try to focus on what is changing. Several weeks ago my theme was a crisis of confidence that was threatening the economy. I suggested that it was something to monitor. I am surprised by the improvement in the confidence indicators for the reasons I gave. My employment model used the Michigan series as one way to estimate job creation, and it worked rather well. The relationship broke down with high gas prices and last year's debt ceiling debate. For me, this is some confirmation of improving employment.

    I don't think that technical analysis can be used on this type of data. Support and resistance work based upon the psychology of past trades at those levels, among other things.

    Interesting observations, as usual...

    Jeff
    Oct 14 10:16 AM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Robert -- I'll look some more, but I am not going to analyze it further in the comments. It is not that I lack interest, but it is not an effective way for me to analyze and present ideas.

    I think that I am explaining a widely accepted and obvious concept, supported by some history of past bond sell offs. I think we are about to see it again. So the problem (from my perspective) is not the facts, but how to explain them.

    Thanks for your interest and your question. In the next article, I'll try to come up with some better illustrations.

    Thanks again --

    Jeff
    Oct 7 11:34 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Joseph -- Your comment is an excellent illustration of the approach of traders (really smart, and very good at what they do) versus economists.

    Your definition of fundamentals relates to headlines. Mine is based on data. I have written hundreds of articles on these themes, so I am not going to try to reproduce in this comment.

    I suggest that if you really want an answer to your question, you check out the suggested links on the blog.

    Best I can do, and good luck!

    Jeff
    Oct 7 11:22 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    GaltMachine -- I try to change around the sources and charts a bit. I have encouraged people to watch Doug's frequent updates, and I certainly do.

    The industrial production decline is the only worrisome series. I have written that business has (at the margins) cut back on expansion while waiting for the resolution of the fiscal cliff issues and the election outcome.

    I will talk about earnings more in the next week or so, as the season ramps up. At the moment, I think that expectations are pretty negative, but we shall see. Usually the bar gets lowered enough so that the "beat rate" is OK.

    Good questions:)

    Jeff
    Oct 7 02:00 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    daro -- I want to be clear that those are the current positions in trading accounts. I offer six different programs. Two of them are (more or less) fully invested unless we have a big recession fear, high risk on the SLFSI, or extreme over-valuation. None of these are true at the moment.

    Time frame matters:)

    Jeff
    Oct 7 12:52 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Entering A Season Of Fear? [View article]
    Hi Robert,

    If it does not make sense to you, then I need to do a better job of explaining! I'll take another look. For the purposes of discussion in the comments, I suggest that we focus on how you exit from the position. The holder of individual bonds can simply wait until maturity. The holder of a mutual fund does not have that choice.

    Here is one effort at explaining, including the possibility of panic selling if rates rise: http://bit.ly/RJFPCE

    And here is another piece with a pretty good explanation. http://bit.ly/SUPTFY

    So what would you do if your bond fund's price started to decline, something that will happen in a higher rate environment even in well-managed funds? You can keep collecting the yield, but eventually you may want to get out.

    Jeff
    Oct 7 10:54 AM | 1 Like Like |Link to Comment
  • Interpreting The Employment Report -- Some Trading Tips [View article]
    muoio -- My fellow Badger friend -- the data get revised but are not manipulated.

    This is why I am suggesting that we look at several different estimates -- the point of this article.

    Jeff
    Oct 5 10:13 AM | 1 Like Like |Link to Comment
  • Interpreting The Employment Report -- Some Trading Tips [View article]
    OilFinder - The entire point of QE3 is to convince us that this will not happen. They are going to remain aggressive until the employment situation is a lot better -- probably unemployment at 6% or below. They will even accept inflation above their target of 2%.

    They are trying to change our expectations --that the policy approach will not be adjusted for each new number.

    Great question -- and I'm not saying you are wrong. We have to see if the Fed follows through on the announced policy.

    Jeff
    Oct 5 10:11 AM | 1 Like Like |Link to Comment
  • Profiting From QE3: Spotting The Mistakes [View article]
    GaltMachine -- Thanks and that's right. I knew the InTrade odds were higher. The 538, which was extremely accurate last time, has the odds at 86%. http://nyti.ms/S2UVA8

    Nate Silver goes state by state, which gives a different result from simply looking at the spread in a nationwide poll.

    That said, there is a lot that can happen in the next month. My personal plan is to follow my normal policy of political agnosticism, planning to profit no matter who is elected.

    Thanks again --

    Jeff
    Oct 4 07:20 PM | 1 Like Like |Link to Comment
  • Profiting From QE3: Spotting The Mistakes [View article]
    Ray -- The effects cited just show the impact of QE versus what would otherwise have happened. It is not an overall forecast for what will happen. The big potential for the S&P relates more to skepticism about earnings. If the P/E multiple went up a little, stocks would trade much higher..

    Turning to the "rip up the bonds" question -- This came up more than a year ago. This purely hypothetical notion is not going to happen for a variety of legal, political, and credibility reasons.

    But let's play along. The best explanation that I saw came from Harvard economist Greg Mankiw: http://bit.ly/SxUgdA

    I hope this is helpful.

    Jeff
    Oct 3 10:11 AM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: The Debate About Jobs [View article]
    mitchad1 - I don't have any special information on your first two points, although I have seen the same assertions. The jobs question is a good one to monitor.

    You are correct in noting the rather vague timing of the start of QE effects on stocks, something that most people simply adjust freely to make whatever point they want!

    The real QE effect comes through the impact on the economy and on corporate earnings, so there is a delay of months. They psychology of traders and the pontification of pundits are different matters!

    Felix agrees with your short-term caution. I think it depends upon earnings. We shall see.

    Good comment!

    Jeff
    Sep 30 12:12 PM | 1 Like Like |Link to Comment
  • Chicago Fed's Charles Evans fires back at QE3 critics, warning of a U.S. "lost decade" if the Fed limits itself to modest policy actions. There's no surprise here, as the hard-core dove Evans finds it “essential" to do as much as possible now to prop up the economy; his most noteworthy comment is that 3% inflation "not an unreasonable cap" on policy. [View news story]
    Evans is neither a bureaucrat nor a regulator. He is chosen as CEO by the Board of Directors of the Federal Reserve Bank of Chicago.

    The regional Bank presidents rotate in service on the FOMC.

    http://1.usa.gov/PGSODp

    He has outstanding credentials: http://1.usa.gov/Rjasyt

    It is fine to disagree with someone's conclusions, but .....
    Sep 26 08:17 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: High Hopes For Housing [View article]
    mitch -- I congratulate you for your disciplined focus on data!

    Thanks for sharing your story and concerns with all of us.

    Jeff
    Sep 19 08:47 PM | 1 Like Like |Link to Comment
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