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  • The Economy Is Quickly Headed South - QE4 To Follow [View article]
    Thanks Honus, didn't see that. I love industries that are priced for wholesale bankruptcy. I picked HL for lack of better knowledge, and the chart is impressive. Also Najarian picked up on this call volume a couple of weeks back. In addition to the stock, I was long the Jan15 $4 calls - I sold them at $0.50, a huge premium, and bought the Jan 14 $2.5 for $0.80. BTW, this is the first time in a long time that I own Metals - actually, I started with Diamonds a couple of months back, with NILE. Whether we like it or not, we're in for a bit of asset reflation.
    Jul 1, 2013. 11:35 AM | Likes Like |Link to Comment
  • Shadow Inventory Stats Show the Bottom May Be In for Housing [View article]
    Hey Russ, care to revisit...?
    Jul 1, 2013. 11:13 AM | Likes Like |Link to Comment
  • Why The Housing Market Is An Accident Waiting To Happen: Part 2 [View article]
    John, spot on and graciously said.
    Jul 1, 2013. 10:44 AM | Likes Like |Link to Comment
  • Shadow Inventory Stats Show the Bottom May Be In for Housing [View article]
    Zoomie, as you can tell by my answer to BP somewhere above, I completely agree with you. There are many good contributors on SA, but they are diluted by this garbage. Re Kanzler, he clearly has a bias since he manages a metals fund... But even there, I'd like to see the performance because his rationale doesn't work.

    I came across a couple more like that, but my grand mother always told me not to tattletale... One who had followers in the tens of thousands still boasts some 5000, is a permabear, and complained to the editor when I challenged the resume he posted on his profile. Believe it or not, I had to substantiate my argument... which I did of course. Another one kept referring to his funds until I questioned the performance. It took a while, now he adds the conventional disclaimer.

    What can I say? I did discuss this with the editors, to include the potential pitfall of the Alpha Rich strategy which will no doubt backfire. In the meantime, I am sure you understand that SA biz model is eyeball driven so you've got to sort the wheat from the chaff, as they say...:)
    Jul 1, 2013. 10:34 AM | Likes Like |Link to Comment
  • The Federal Reserve Loses Its Cool [View article]
    larocag, now that you think that Obama is fixing things up, I withdraw my second. Funny how we can come to the same conclusion from opposing premises. Rewind: Paulson and Bernanke are Bush Admin. Then comes Geithner - king of NY Fed, and an Obagoon. Dr. Ben stays the course, and now he would be an Obagoon too? Nope. He is a thorn in the side of your "guy", and tells hm and his crew what our side has always said: "reduce spending". Which is why your "guy" is pulling the rug from under him, as he thinks he no longer needs him. Empahisis on "thinks". If there is somebody to blame for scaring the markets last week, spell o b a m a.

    John, I now understand your bias. However, you may want to rethink your vote. To be clear, I also strongly opposed Romney and Ryan stance on Dr. Ben. Which leaves us with very few options - except for the Pilot.
    Jun 30, 2013. 03:47 PM | Likes Like |Link to Comment
  • The Federal Reserve Loses Its Cool [View article]
    John, I respectfully disagree 100%. See my post

    This is an attempt by the Administration to take over the Golden Goose, which will add to its Panem and Circenses policy. In 2012, Obama and Axelrod won the UNanny States Elections. In 2014 and who knows 2016, if they can keep it alive, they target the United Pocket Book Elections. If they succeed in replacing Dr. Ben, watch out for more QE, irrespective of inflation. In my opinion, this is why the markets tumbled - no institutional investor is afraid of the end of QE. What we are afraid of is collateral damage, and only Dr. Ben knows how to drive the Helicopter. Unless you bring back Hank Paulson, of course.

    The alternatives are simple: Geithner, who last I checked was President of the NY Fed when the s...t hit the fan, then Head of Treasury, supervising the IRS... Or Summers OMG. Why not Corzine, while we're at it?

    No, you do not break a working quartet like Dr. Ben/Super Mario/Abe-Kuroda unless there is a political motive. Remember, the Fat Lady won't sing as long as there is $1.7 trillion in Excess Reserves at the Fed, and the same at the ECB.
    Jun 29, 2013. 10:17 AM | 1 Like Like |Link to Comment
  • The Federal Reserve Loses Its Cool [View article]
    I second that larocag. See my own pitch

    In my opinion, Dr. Ben is the only pilot in the plane, and Obama's decision has nothing to do with QE. He wants to get the credit from Bernanke's achievements and put his own Obagoons in charge, objective 2014 and 2016.

    In particular, see table on Household Net Worth, and before you do, ask this question around: we made an all-time high in HNW in Q3, 2007 - where are we now? You'll be surprised...
    Jun 29, 2013. 10:05 AM | Likes Like |Link to Comment
  • The Economy Is Quickly Headed South - QE4 To Follow [View article]
    Dave, good try. After your article on Housing, I thought I would give you another chance. So despite the fact that it is Saturday morning, and that I am enjoying my wife's company without our four kids in camp, I did go through the GDP tables before a round of golf. I now feel reassured, we are not looking at the world with the same glasses.

    Actually, what prompted me to refresh my understanding of these numbers is your comment :

    "Imports declined more than expected (although for some reason this has a slight positive impact on GDP) [...]"

    Well, the reason why imports detract from GDP is the reverse of why Exports add to it. It's kind of 101. The fact is that imports were less than previously expected, which is a positive revision to GDP: Here is the quote from the release:

    "The downward revision to the percent change in real GDP primarily reflected downward revisions to personal consumption expenditures, to exports, and to nonresidential fixed investment that were partly offset by a downward revision to imports."

    The second point which you may have overlooked is the fact that in your writing momentum, you deduct inflation twice from the numbers. You start off with 1.8%. This is the Real GDP growth, Q to Q. So you cannot say:

    "More significantly, if you take the 1.2% ex-inventory build number and strip out the deflator used by the Government of 1.3%, on a real GDP basis the economy actually contracted in Q1".

    This would be double counting, right.

    Lastly, you worry about the inventory build-up. Fact is, it is mainly Farm Inventory, which swung from a drawdown of $15 billion in Q4 to a build of $8billion in Q!, for a swing of $23 billion out of the total $36 billion.

    And what you forget to mention is the decrease in government spending: $30 billion in Q1, on top of $50 billion in Q4, 2012.

    All in all, the way I look at the numbers, I prefer them that way. Actually, I am surprised to see you conclude that with an economy which you surmise will tank, one should be buying metals. If this economy tanks, led by your Housing scenario, it's deflation all over again. Not good for metals. I suggest you look a the other argument - a bit of inflation would do you wonders. Actually, I was a little early on HL at $3.50, but I went overweight on Thursday at $2.75.

    Good try, but you've got to look beyond the releases.
    Jun 29, 2013. 09:54 AM | 2 Likes Like |Link to Comment
  • S&P Target 2000 - No Need For A Nice Round Bottom - Part V [View article]
    JH, absolutely. The difference between France and Greece is this - absurd but real: when you ask people whether the sovereign debt bothers them, "most" people in the affluent and middle bourgeoisie classes will say "we are asset rich, we can afford it". What that really means is that they understand that debt is deferred taxes, and if push comes to shove, they believe they could sell assets to pay it back. Pipe dream, and I will believe it when they put the Eiffel Tower up for sale... This is why the Rooster is the French Mascot: even with its feet in dong, he keeps on singing.

    Europe is not done yet, which by my book is the main reason why the banking system overall is hoarding Excess Reserves - $1.7Trillion here, the same at the ECB. Europe has opened the kimono, but they kept their underwear. They will go naked at some point and for a very simple reason: here, Housing will bail us out, and the Demographics are inescapable. There, tell me what will bail them out, economically speaking. They are playing a back-game, and they will lose. However, I need to see a break in the Euro vs. Dollar, or a pick-up in CDS spread. As my friend Change says, it ain't gonna be a straight line.
    Jun 29, 2013. 09:02 AM | Likes Like |Link to Comment
  • Shadow Inventory Stats Show the Bottom May Be In for Housing [View article]
    Thanks Zoomie! Funny, I just wrote BP a similar comment - he is now lambasting poor Dave, which does not make much sense...
    Jun 29, 2013. 08:51 AM | Likes Like |Link to Comment
  • Why The Housing Market Is An Accident Waiting To Happen: Part 2 [View article]
    Hey Benny, you're back! Last we "exchanged", I was close to the bottom and a lone bull. I still am. However, I am not sure which side you stand on, aside from lashing out at the author. Are you still bearish, or do you think he is wrong?
    Jun 29, 2013. 08:47 AM | Likes Like |Link to Comment
  • Why The Housing Market Is An Accident Waiting To Happen: Part 2 [View article]
    Dave, I hate to say, but I never made the Dean's list from Columbia, and I have made a lot of money overweighting housing stocks since 2011. Among other things, and for a while longer...
    Jun 29, 2013. 08:45 AM | Likes Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    Prateek, from you viewpoint in India, what do you make of Gold? I just doubled my HL position (it's silver, but what the heck...).
    Jun 28, 2013. 11:06 AM | Likes Like |Link to Comment
  • S&P Target 2000 - No Need For A Nice Round Bottom - Part V [View article]
    Change, as usual, spot on. Yes, I do believe in liquidity slushing around, and yes there is over leverage - see my Margin comment to SilverD. I also believe the 10-Year could retrace somewhat, but to me, it's about where it should be, a slight premium to inflation expectations. By the same token I do not see it inching to 3% as long as Excess Reserves don't come down. There may be a pick-up in mortgage rates, but this is driven by pent-up demand from those who were speculating on lower home prices and low rates forever. Don't know how far they'll go, but as long as disposable income does not meaningfully improve, this may be short lived.

    And yes, it ain't gonna be a straight shot at 2000. A Wall of Worry is always best.
    Jun 28, 2013. 10:30 AM | Likes Like |Link to Comment
  • S&P Target 2000 - No Need For A Nice Round Bottom - Part V [View article]
    SilverD, yes I do recognize you and thanks for your comments, always helpful. Of course, thanks for the compliments :).

    I am not sure about Q2 Earnings. For example, I am willing to bet that homebuilders will blow through the estimates - higher prices, no change in costs. In itself, this should bring leadership back to this group which to me is essential to the economy, and probably the market. In addition, Consumer confidence, as published a few minutes ago, did not bulge despite the correction - it usually correlates pretty well to NASD. Lastly, I just looked at the latest AAII numbers: Bulls stand at 30.3%, down 7.2% from last week, down 5 consecutive weeks and 15 out of the last 18 weeks, below the historical average of 39%. Bears stand at 35.2%, up 5.2%, vs. the average of 30.5%. This tells me that the fluff is out. The only problem I have is the still too-high-for-comfort Margin Debt, but I have a question to Cullen Roche on this - is it a leading or lagging indicator?

    While I agree with you on the rare occurrence of V bottoms, I can't rule them out, especially when CNBC is all over the place with the need for a consolidation pattern, i.e. they echo the overall I-have-no-clue sentiment. We just retested 1608, we are now retesting 1600, let's see who wins. What intrigues me at this point is the relationship between the AD line and the percentage price move in SnP. I know there are plenty of studies out there so I am probably reinventing the wheel, but here is what I am looking for: right now, we are down 0.58% with 661/2134. Last week, we had a few days with 150/2650 - some had big SnP declines, some had relatively smaller declines. I am looking for a correlation between the percentage move in SnP and the Momentum in AD, i.e. the first derivative of the ratio. Does that make sense? See, despite the "experience" et al, there is always something new to learn...
    Jun 28, 2013. 10:21 AM | Likes Like |Link to Comment