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Michael Allen  

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  • PIIGS Update: The Problem of Public Sector Obesity [View article]
    Suggesting that the source of the world's problems is obese public sector debt is like suggesting that the source of a trauma patient's problems are too many band-aids. Rip the band-aids off and you will see that the patient is bleeding to death. The real problem is inefficient allocation of capital and this problem is just as pervasive in the private sector as in the public. Markets are crashing because we finally see that the doctor in the house is really going to rip off those band-aids and he doesn't have any idea what he is doing.
    Aug 21, 2011. 11:07 AM | 1 Like Like |Link to Comment
  • Equity Market Sell-Off Has Nothing to Do With Credit Downgrade [View article]
    Incidentally, bear markets don't bounce because intelligent guys like yourself come in and buy up value. I agree, there is no value. But the fast-money shorts can't believe how much money they've made and are glad to take profits at this point. This will drive the slower-money shorts to panic and cover as well. Then, if you are really unlucky, the Fed will step in and make some meaningless gesture that will be mis-interpreted by panicky, but genuine buyers. Bear-market rallies have nothing to do with value, but you had better respect them.
    Aug 9, 2011. 10:33 AM | 6 Likes Like |Link to Comment
  • Equity Market Sell-Off Has Nothing to Do With Credit Downgrade [View article]
    If the market were a discounting mechanism, it would have already discounted the S&P's outlook. The S&P is irrelevant to anyone who does their own analysis.
    Aug 9, 2011. 10:27 AM | 2 Likes Like |Link to Comment
  • Equity Market Sell-Off Has Nothing to Do With Credit Downgrade [View article]
    When TIPS yield 0.15, there is nothing to do but trade. The risk-adjusted real-return on everything....... sucks.
    Aug 9, 2011. 10:17 AM | 2 Likes Like |Link to Comment
  • Why Loading Up on Precious Metals May Not Be Such a Good Idea [View article]
    Actually, you can make a very rational estimate of when irrational behavior will end: NEVER!
    Aug 9, 2011. 09:57 AM | 1 Like Like |Link to Comment
  • How to Find Opportunities After a Flood of 20% Decliners Last Week: Part 1 [View article]
    If the market is inefficient, why would you use price action as your main selection tool? If the market is wrong to sell off now, what makes you think it was right to bid these particular stocks higher from the beginning. This makes no sense.
    Aug 9, 2011. 09:32 AM | Likes Like |Link to Comment
  • Market Pricing In Armageddon: Positioning Ourselves for Returns [View article]
    Equity markets need to drop about another 30% in order to discount armageddon. Bond markets are already there, so we could get the opposite of stagflation: falling prices and rising bond yields.
    Aug 4, 2011. 07:00 PM | 1 Like Like |Link to Comment
  • Why the Market Doesn't Care About the Debt Ceiling - So Far [View article]
    Since real bond yields are negative, the bond market is telling you that it is more concerned about the solution than it is about the problem. Both parties base their aguments on campaign slogans rather than facts, and no compromise they may come to has any probability of doing anything good. The bond market knows this. Does the equity market? I doubt it.
    Jul 27, 2011. 09:30 PM | Likes Like |Link to Comment
  • Netflix (NFLX) +3.2% premarket after confirming that it will begin offering its Web video service in Mexico and 42 other countries in Latin America and the Caribbean later this year. Netflix did not announce a launch date for the move or pricing for the service, which goes for $7.99/month in the U.S. (PR)  [View news story]
    NFLX has been talking about Mexico for some time now. They have moved the date forward a couple of months. Even if they had never said a word, a rational market would have assumed that this move is on the way, since they already moved into Canada. How can you possibly not short the stock here?
    Jul 5, 2011. 10:45 AM | Likes Like |Link to Comment
  • Screening for Short Selling Opportunities [View article]
    What's the point of screening for criteria that you haven't backtested?
    Jul 1, 2011. 06:56 AM | Likes Like |Link to Comment
  • Nouriel Roubini Is All Wrong About China [View article]
    Never count customers on a one-time visit and pretend that you are doing analysis. Volume can change by 80 or 90% in an hour and every day is different. Whether you are running a rail line or a supermarket, capacity has to be set to the peak hours because it is not possible to roll the facilities up and make them disappear when no one is using them.
    Jun 26, 2011. 11:45 AM | 2 Likes Like |Link to Comment
  • More on Why Government Deficits Are Healthy [View article]
    Whoa! "...its savings are being funded by some other country's government spending or private sector debt"????? Savings fund spending. Spending does not fund saving.
    Jun 9, 2011. 11:22 AM | 2 Likes Like |Link to Comment
  • Bernanke Surprises Markets With the Truth [View article]
    About 99% of consumer spending is based on income, and about 1% is based on changes in confidence. Ben has to talk about confidence because its the only thing he has any ability to influence.
    Jun 9, 2011. 11:15 AM | Likes Like |Link to Comment
  • Here's Why QE2 Isn't Really Ending [View article]
    While it is true that QEII has not had the intended effect of increasing bank lending, our Alice in Wonderland market has discounted QEII as if it had succeeded. The question is, has the market discounted only an eventual success of QEII, or has it already gone completely mad and discounted QEIII. Valuations certainly suggest that the market is calling Bernanke's bluff. If so, the end of QE could come as a shock. Even if QEIII is not discounted, and even if QEII does eventually work, clearly at least that much is already discounted, so there would be nothing silly about the market going into correction mode at that point. Nor would there be anything surprising if the consensus were to conclude that, "You know what, this QE stuff never worked anyway." There seems to be no upside to me.
    Jun 2, 2011. 10:10 AM | 5 Likes Like |Link to Comment
  • 5 ETF Basic Asset Class Portfolio [View article]
    Using only 5 years of data renders this type of anlalysis useless.
    May 25, 2011. 08:19 AM | Likes Like |Link to Comment