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  • This sure smells like a sucker's rally, Andy Kessler says. While the government's no-more-failures policy has taken armageddon off the table, there simply "aren't sustainable, fundamental reasons for the market's continued rise."  [View news story]

    The numbers, link, and charts are here...

    There is no other way to spin the consumer and investor sentiment numbers. No matter what index you use, they are up significantly...
    May 13, 2009. 09:09 AM | Likes Like |Link to Comment
  • This sure smells like a sucker's rally, Andy Kessler says. While the government's no-more-failures policy has taken armageddon off the table, there simply "aren't sustainable, fundamental reasons for the market's continued rise."  [View news story]
    The largest fundamental reason is that consumer and investment sentiment has bounced up significantly. With huge cash reserves on the sidelines as confidence continues to increase, so will equity valuations. Now that stress tests uncertainty has passed and Q1 earnings have shown more strength than anyone expected, there is little on the horizon now that will turn sentiment south for some time to come...

    Enjoy the
    May 13, 2009. 01:29 AM | 1 Like Like |Link to Comment
  • Week in Review: U.S. Economy's Green Shoots Now Growing Leaves [View article]

    I am not sure how one can be unhappy with a 35% run up! Sorry, but that is "no dead cat bounce!"

    I am quite comfortable with my long positions in stock funds and have been since the 70s... my long term successes in investing and the business world are not indicative of a lazy non-thinker.

    With huge new investments in infrastructure (read Intel, Cisco, and many others), US innovations will continue to drive a thriving world economic engine.

    I am not sorry to proclaim that hope in the future always ultimately prevails over fear of the present. And this time is no different.

    Good luck my friend,

    May 10, 2009. 09:32 PM | 2 Likes Like |Link to Comment
  • Jeremy Grantham Predicts A Tough Road [View article]
    And the rally continues. Now up close to 35%. Those who continue to predict the next downturn will get it right... eventually. But as Grantham now concedes it will not be this week...
    and probably not next year...
    May 10, 2009. 10:00 AM | 1 Like Like |Link to Comment
  • The 'Bull or Bear' Debate Will Be Resolved Soon [View article]

    It is not surprising that the author and many, many other individuals and managers have so much cash on the sidelines. Indeed the rally has only just begun and as investor and consumer sentiment continues to turn, the influx of that sideline liquidity will continue to leave many in the dust as this rally continues...

    Good luck,
    May 10, 2009. 09:49 AM | 4 Likes Like |Link to Comment
  • Why This Rally Is Unsustainable [View article]
    >So where is the breaking point? A look into the
    >why instead of how of this rally can offer some
    >insight. This whole rally is essentially a scam to
    >pass off asset depreciation in struggling financials
    >to the taxpayer.

    Do we really believe this conspiracy theory? The reality is that the market has figured out long before us that in fact recovery is here. Like every recovery before it, depressed equities turn up and do not look back. We are now approaching a 35% uptick. That in and of itself represents the fact that indeed this rally IS SUSTAINED. With history as our guide, if we keep saying the rally is not sustainable long, indeed we will get it right... but not this week...
    and probably not this year...

    May 10, 2009. 09:40 AM | 1 Like Like |Link to Comment
  • ISM Manufacturing Data Signals Likely Return to Growth by July 4 [View article]

    Thanks for the suggestion. Branding a website or blog is an interesting challenge. The goal really is to create a GNE web presence that is beyond just me. So while I am currently the editor of the GNE website, I don't claim to be THE good news economist.

    May 5, 2009. 12:55 AM | Likes Like |Link to Comment
  • Mr. Roubini, Please Take a Seat [View article]
    Oh yes, and HardwareFlooring, I really enjoyed the Y2K analogy...

    Apr 27, 2009. 05:34 PM | 2 Likes Like |Link to Comment
  • Mr. Roubini, Please Take a Seat [View article]
    >This guy's schtick, as "The Good New Economist," is
    >to put a positive spin on everything
    >by his own admission.
    You got it. That's the goal.

    >You are clearly a broken clock.
    You are right on. The GNE clock always looks for the silver lining.

    >The point is the economic conditions
    >are changing and Roubini is not seeing it.
    Change indeed is constant.

    >First quarter GDP to be reported later this week
    This will be fun to see. I'm betting we come in at negative 2-3%, but clearly will try to find the silver lining if it's lower... ;-)

    >I am an optimist yet at the same time a realist.
    Although many think I am a pollyanna, most would be surprised by how pragmatic I really am. (You might not find it at the GNE website... but have a look at some of the other sites on my blog list that I read... including SA... ;-)

    Thanks for bringing us back to the points of the article for real consideration and debate.
    1. Whether or not Robini has used the term "negative feedback loop" or not, he is clearly using calculus terms like "second derivatives" to support a mathematical function that motivates his gloomy outlooks even lower. I reject pure mathematics to describe the market, believing that intangible human factors have much more influence than most pure math models can prognosticate.
    2. Yes, there are a significant number of reasons to believe that credit markets have thawed significantly. Number 1 among others:
    This year’s record bond issuance so far. That was nearly halted in Oct/Nov... but now continues at a record clip...
    3. I believe that the 0 to 6% spread will be in place for as long as necessary. Earnings will continue to improve and as Wells Fargo puts it, if we can keep earning at that rate, capital [on the books] will take care of itself.

    @Artful and Larry,
    You guys no doubt "get it".

    Thanks all for the comments and debate.

    Apr 27, 2009. 05:20 PM | 2 Likes Like |Link to Comment
  • 3 More Banks Who Beat the Street Monday [View article]
    Thanks Artful,

    More to come...

    Apr 21, 2009. 07:02 PM | Likes Like |Link to Comment
  • Banks No Longer in Crisis Mode [View article]

    I don't disagree that the top banks decreased lending. (I have consistently not been an elite(top) bank fan and believe they should be split up and parceled out to the more responsible second tier solid conservative banks)

    What I continue to maintain is this...
    "overall business lending by *all US banks* was up 12 percent in 2008." The data is very clear on this.


    Apr 20, 2009. 11:55 AM | Likes Like |Link to Comment
  • Banks No Longer in Crisis Mode [View article]
    As the opening sentence suggests, I am not implying that all is back to normal. I agree that the Fed's job is still difficult, but that doesn't mean they will not be successful.

    @ paradigm1974,
    Indeed almost all PR firms will concur that appropriate deliberation prior to release of good news is just as important as when then news is negative. One wrong sentence can provoke negativity even when not merited.

    I too would like to see many of those top teams squirm a bit more. In fact, I'd like to see the mid tier bank execs be given the top jobs... better yet, break up the big banks and divide them up among the top banking teams that have proven the public trust.

    @Gary A,
    A liquid business is more likely to be solvent than a non-liquid business. However, not all businesses with liquid assets are solvent, and not all solvent businesses have strong liquidity.

    @Default 1,
    Even Arianna gets it right sometimes. Her quote is right on the mark whether she knows it or not. You may want to have a look at how big residential real estate market is compared to that of commercial.

    @Prudent Man,
    I disagree with your memory of history. Have a look at this article:
    I too was around in the seventies. I really don't see this dip as any different... in fact as that article suggests there is fairly substantial evidence that our current "crisis" has much in common with other historical finance downturns in the past 800 years. (not just 30 years ago)

    Thanks for reading. A closer look at my profile will reveal my name, my website and my rational for only choosing to cover the good news: the negativity is covered quite well elsewhere...

    Thanks: one of my favorite quotes is "most economists make astrologers look respectable."

    I agree that bank problems still exist. IMHO, your disagreement is a matter of degree. One of the necessary outcomes of the stress tests will be some amount of objectivity in the midst of our subjective terms like "crisis"

    Yes, I still "ignorantly" maintain that there really was never a "credit crisis" at *most* banks. Of the over 8000 chartered US banks the crisis was concentrated in the top 20. (A quarter of one percent)... And the total number of banks that have failed since Oct... 37 (not even one half of one percent)

    Apr 19, 2009. 10:51 PM | 1 Like Like |Link to Comment
  • Fed Beige Book Gives Markets Reason to Cheer [View article]

    Yes indeed. Before growth can occur, contraction needs to slow. These are early indications (similar to those of past recessions) that economic contraction is bottoming.

    @Mr Frain,
    It is not my goal to have an effect on others' beliefs. Should it be?

    Good luck,
    Apr 16, 2009. 07:14 PM | Likes Like |Link to Comment
  • Thoughts on a 'Recovery' Following Surprisingly Good Earnings Reports [View article]
    Perhaps. But then again perhaps not. If you read the theories and works of Malcolm Galdwell (The Tipping Point, Blink, and Outliers), you will note that answering the question "How could things have gone from so bad to so good in a heartbeat?" becomes elementary.

    Also check the past big bull runs that follow a prolonged bear, volume obviously takes time...and as volume and confidence builds, the rise simply becomes steeper.

    6 weeks from now your miss can easily be 60%+ from the low 6 weeks ago.

    For Gladwell if we reached "The Tipping Point" last month, the rally will be in full swing before we can "Blink."

    Good Luck

    Apr 14, 2009. 04:46 AM | Likes Like |Link to Comment
  • Analyzing Consumer Sentiment: Chicago Fed Has 'Proven' Nothing [View article]
    Good Day Steve,

    What about investor sentiment? You may have seen that I've been following both Daily Rasmussen Consumer AND Investor Indexes quite closely in the past six weeks.


    I can understand your point on decoupling spending and consumer sentiment, but I'm not sure I can completely disassociate the mood of investors whose collective optimism is continuing to rise by the day...

    As of today the Investor Index is now only 3 pts below last year at this time. It's trend line in the past 6 weeks continues to much higher.

    Apr 13, 2009. 09:32 AM | 1 Like Like |Link to Comment