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Lawrence Fuller

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  • A Tale Of Two Economies And A Market That Doesn't Care [View article]
    Thank you for the correction sleek, you are correct!
    Mar 7 02:53 PM | Likes Like |Link to Comment
  • A Tale Of Two Economies And A Market That Doesn't Care [View article]
    That's my concern! Something just isn't on the up and up. How much longer can companies cut costs, lay-off workers, refinance interest expense, buy back shares to boost the bottom line above what are already paltry revenue growth figures? I don't know. I am entertained by Wall Street's assumption that margins can just continue climbing, because this is a new era of productivity. THAT sounds exactly like what was said in 2000.
    Mar 7 11:30 AM | 2 Likes Like |Link to Comment
  • A Tale Of Two Economies And A Market That Doesn't Care [View article]
    Hi mobyss,
    If you are talking about the liberal media vs. the right-leaning media, I agree with you. I don't watch the television networks for that reason. Its all BS to me. My point in bringing up Obama's low opinion polls is that it is clear that the wealth is more concentrated today than ever before. Period. I remember the boom market of 1999, and back then the parking garage attendant was making money in stocks along with the taxi cab driver, ect. Stock ownership was much broader based in the last 90s. Trickle down wealth tactics might have worked better back then, but you also had a steady rise in disposable income during that period.

    As for the wealth disparity, i'm not criticizing those that are doing well. I'm fortunate to be in the top 5-10%, no complaints here, but the make-up of our economy is such that it negatively impacts long-term growth potential. If Jamie Dimon gets another 20M bonus, he doesn't spend it. He puts it in his investment account. If 100,000 people get $200, they spend it on goods and services, and all of it.
    Mar 7 11:13 AM | 3 Likes Like |Link to Comment
  • A Tale Of Two Economies And A Market That Doesn't Care [View article]
    Hi Brian,
    I am assuming we continue to be a consumer-driven economy, currently 71% of GDP is personal consumption, which is driven by disposable income. So that's the connection between income and economic growth. Corporate revenue growth follows the trend in nominal GDP very closely over time. If you have 5% nominal GDP, you can assume a company can grow revenues 5-6%+ in that environment. Revenues, depending on margins, lead to profits. Long term stock price performance is a function of those profits. Please tell me you think I might be missing, thanks.
    Mar 7 10:51 AM | 1 Like Like |Link to Comment
  • A Tale Of Two Economies And A Market That Doesn't Care [View article]
    gggl, I agree completely.
    I do not think stock traders/ investors think this issue is of any relevance, because there are too many degrees of separation between the millions living on food stamps and the profits of our largest global companies. Fed and fiscal policy are all about short term remedies to make things look better now, but little is done to deal with our structural problems at their foundation.
    Mar 7 09:02 AM | 2 Likes Like |Link to Comment
  • A Tale Of Two Economies And A Market That Doesn't Care [View article]
    I agree that it is an apples to oranges comparison, and I could have spent a lot more time and ink trying to explain it. What I see as similar is the disconnect between home prices and the incomes that support the outstanding debt - a direct connection - when compared to corporate profits (that are supporting stocks prices) and the incomes that drive economic growth from which corporate profits are derived.

    There are more degrees of separation between income / stocks and income/ house prices, but they are still connected.

    I could also argue, based on the good points that you have made, that the Fed is throwing money at Wall Street banks to fuel equity market gains the same way in which Wall Street banks were throwing money at consumers to buy houses.

    As for foreign $, they can buy houses just as easily as they buy stocks. Look at what the Chinese are doing in Detroit.
    Mar 7 07:15 AM | 3 Likes Like |Link to Comment
  • Fed set to continue tapering despite disappointing jobs data [View news story]
    The Fed's purchases have simply tracked the current account deficit, which is shrinking, as are their has nothing to do with jobs, never did, never will. Just a smoke screen to finance the deficit.
    Feb 9 08:36 AM | 4 Likes Like |Link to Comment
  • Buying The Global Power Matrix [View article]
    Indeed, very good macro-article Emmet. I think maintaining a portfolio of what you want to own is as important as maintaining a portfolio of what you do own. Always updating the shopping list as the macro-environment changes, and adjusting entry points as valuations change. I agree that this is a time to be focused on specific sectors and companies, more so than broad market exposure, as the bull ages.
    Aug 19 10:51 PM | 1 Like Like |Link to Comment
  • Why Stocks Continue To Levitate In The Face Of Eroding Economic Metrics: Ask Elizabeth Warren [View article]
    Appreciate the research involved in writing this article- very informative. I think what we have seen since last November is the impact a lack of liquidity can have on the upside, but we have yet to see it on the downside. Total exchange volume is half what it was in 2007, while the high-frequency percentage has risen to 70% of that halved figure. BUT there are no market makers left, at least the kind that used to provide liquidity and bid or offer both sides of the market. They are all gone. Now we have some 40 electronic exchange that cater to their best customers- computer algos - and these are today's market makers, but they have no obligation to be on either side of the trade when bad news hits the markets.

    I see a strategy called "layering" giving the market a contrived and steady lift day after day. I think equity futures are also playing an every increasing role in lifting the broad indices, despite flows in the cash market. Structurally, things have changed so much, I have no idea how it ends, but not well.
    Jul 16 07:51 PM | 4 Likes Like |Link to Comment
  • Market Outlook: The Game Has Changed [View article]
    The Fed is buying new issues, indirectly from the primary dealers that are obligated to buy the new issues at offering, and not the existing float, so when institutions and individuals sell existing float, it has an impact on current Treasury yields. The Fed can continue to cover the required purchases to fund our deficit, which will end up being a lot larger than current OMB projections by year end, and it will have minimal impact on yields if investors (foreign and domestic) decide to sell. QE kept rates from rising more than they otherwise would have. Yet with GDP growth of 1% and the govt's version of inflation at 1.5%, the 10 yr yield should probably be no more than 2.5%. Either faster rates of economic growth and/or inflation will push yields higher, but we have neither at the moment.
    Jul 9 09:26 AM | 8 Likes Like |Link to Comment
  • The Fed's Money Mirage [View article]
    Hi Ted,
    I see a lot of value in individual preferred issues with 6%+ coupons at discounts to par.
    Jun 26 09:45 AM | Likes Like |Link to Comment
  • The Fed's Money Mirage [View article]
    It starts with a reduction in leverage... yes. The drivel you speak of, as in liquidity, will go where it is treated best - agreed - but that is more likely to be financial markets, rather than the real economy, until the Fed drains it from the system. Which markets? That's the real question. Perhaps it goes back to bonds or lower risk assets as they let the air out of equities. I'd love to see a 40-50% decline in equities, so I hope you are right. But it is more likely to play out on a rotational basis, rather than all assets/all markets decline. Wow, I thought I was a bear.
    Jun 25 08:50 PM | 3 Likes Like |Link to Comment
  • The Fed's Money Mirage [View article]
    They are losing control of the situation and are in the process of panicking, in public. Its embarrassing.
    Jun 24 09:43 PM | 1 Like Like |Link to Comment
  • The Fed Is Between A Bubble And A Hard Place [View article]
    The Fed can't buy issued directly from the Treasury, so they launder them thru the primary dealers, then buy them.
    Jun 19 01:58 PM | 3 Likes Like |Link to Comment
  • The Fed Is Between A Bubble And A Hard Place [View article]
    You are correct Covingtonium
    Remember the income pulled forward before year end to avoid the tax increase? That resulted in huge tax payments in April for last year, reducing deficit. Also one time payments from defunct Fannie/Freddie, another 80B. The deficit is far greater than currently advertised.
    Jun 19 01:56 PM | 3 Likes Like |Link to Comment