Seeking Alpha

The Other Street

View as an RSS Feed
View The Other Street's Comments BY TICKER:
Latest  |  Highest rated
  • Pending Home Sales: May 2013 [View article]
    Hi Pancho (?), interesting chart but what's your take? Are we topping? Personally, I think not, for a couple of years. The spike is obviously rate driven, and we will have to wait to see how much pent up demand there is out there, waiting for prices to decline further. This rate increase took them by surprise, and you don't buy a house like you buy stocks - it will take a while for this sub-cycle to complete. We should have a continued spike, and I wouldn't worry if it were to reverse in a few months. Builders are aware of this and are opting for price increases rather than supply increase. In the process, their earnings are going to surge. Once the mortgage driven leg is over, buyers will be confronted with stable rates, and home prices driven by structural demand. This will give you the second leg.
    Jun 28 09:20 AM | Likes Like |Link to Comment
  • Why The Housing Market Is An Accident Waiting To Happen: Part 2 [View article]
    Dave, I completely agree with Interleaf. see my own article http://seekingalpha.co... . It goes back to July 2011, but the analysis still stands.

    A couple of questions on your chart (Zerohedge that is) about New Home Sales Prices vs. Real DPI. First, Real DPI stands at $32,875, flat with 2011. Yet, the ratio goes from 6.5x to 8.0x, which implies an increase in Prices of 23%: (a) this seems very high to me; (b) is the number in real or nominal terms?

    Second, Nominal DPI is now at $38,319, vs. $36,000 in 2011. Do you have a chart that plots the ratio in nominal terms?

    Very interesting analysis, thanks.
    Jun 28 09:10 AM | Likes Like |Link to Comment
  • Why The Housing Market Is An Accident Waiting To Happen: Part 2 [View article]
    Excellent comment Interleaf, to which I completely subscribe - see my own http://seekingalpha.co... . It goes back to July 2011, but the analysis still holds.
    Jun 28 09:03 AM | 1 Like Like |Link to Comment
  • NYSE Margin Debt Posts First Monthly Decline In A Year [View article]
    Cullen, thanks for the chart, I have been looking for it. One question though. You infer that Margin Interest is a leading indicator. However, as the truism go, the Retail Investor is a contrarian indicator. This would suggest that Margin Interest, which is mostly retail, is a lagging indicator instead. Your thoughts? It wouldn't detract from the fact that Margin Interest is too high for comfort, but.
    Jun 28 08:44 AM | 1 Like Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    Freddy, Amouna, this is why we need to organize.
    Jun 21 08:47 AM | Likes Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    yes, I meant right :).
    Jun 20 03:04 PM | Likes Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    Riddle:
    The only sector that is moving the needle of the US Economy and Employment is Housing.
    Housing Stocks are decimated today as if the recovery is over because of the end of QE.
    But, if the needle is moving back, how could QE end?

    Answer:
    QE and Housing are inversely correlated. If QE is to end, Housing has to improve, and then some.

    Note: This is now. During the first QE phases, from the end of 2008 to September 2011, Housing stocks continued to plummet while the market was rallying: PHM went from $12 to $4, TOL went from $20 to $14. Many reasons for that, to include the death of “little m”, but that’s for another time. It’s called a lag.

    So, one of two things. Either the market has an acute schizophrenia attack, or it's scared of something else. QED.
    Jun 20 03:02 PM | Likes Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    Jim, excellent write-up, thank you.
    Jun 20 02:59 PM | Likes Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    prateek, that's exactly tight. The question is, do we need to get to 1400?
    Jun 20 12:14 PM | Likes Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    prateek, sorry: (b) should read 1580 for the 2011 Regression Line.
    Jun 20 10:26 AM | Likes Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    I agree, plan for the worse. I did not put this in my article, but I had sent a similar one to my email group at large, in which I suggested we organize a petition to support Dr. Ben. Let's see if Apathy rules The Land of the Braves.
    Jun 20 10:22 AM | Likes Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    prateek, this is why we always say "everything else being equal", right.... When I felt the air pocket was over last Monday at 1643, I couldn't anticipate Obama would change yet another variable and pull the rug from under the rally. I was not surprised by anything the Chairman said, to the contrary: I like to hear that the economy and the financial system may have recovered by 2014. But I do believe that Bernanke out puts the risk premium back into QE, and its many potential misuses. So to answer your question, the supports are:

    (a) 1608: from the November 2012 lows, the bottom of the Regression Channel as defined by a parallel at one standard deviation (sounds complex, but it's fairly classic) is at 1608; this is where we stopped today, so far (9:54 am as of this writing); there must be another reason for support at this level, since this where we stopped at on 6/13;

    (b) 1600: this is the 25% Fibonacci retracement from the November 2012 - May 2013 move. It also is the Regression Line support from the October 2011 lows.

    (c) 1555: next Fibonacci retracement, at 38.2%.

    (d) the 1515-1540 area: 1540 is the Regression Line from the March 2009 lows, 1520 is the bottom of the Regression Channel from the October 2011 lows, and 1515 is the 50% Fibo retracement.

    (e) for reference, the bottom of the Regression Channel from the March 2009 lows is 1400.

    I picked these three Regression Channels because, simply enough, their top band all converge at 1660 on 5/24 or so, pretty close to the consolidation area of the recent high.

    Since we are hovering around 1608, I am going to take half of my shorts out, and the rest at 1600 if we get there. An AD line of 1/28 is pretty close to panic selling.
    Jun 20 10:11 AM | 1 Like Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    Thanks Gary. Can you point to a specific link so that I don't have to search?
    Jun 20 09:26 AM | Likes Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    Seth, thanks for chipping in. Interesting enough, none of the posted comments address my question: should Bernanke stay? To me, stock selection comes after wave selection. I posit Bernanke out is a game changer. Say you?
    Jun 19 07:39 PM | Likes Like |Link to Comment
  • President Obama: Don't Kill The Golden Goose [View article]
    Change, this is a game changer, in my opinion. Bernanke repeatedly emphasizes that what people take for absolute is in fact relative - prices, "substantial", risk , etc. I concur, you pointed out as an example the $1.8 trillion Excess Reserves - what should the real number be?

    Now, as usual, you ask the right question: who would replace him? Rewind. Volcker is credited with wringing the hyper inflation of the early 80's, while Miller, his predecessor, is still chastised for being an easy money guy. Guess what, when Miller took office in 1878, rates were at 6%. When he left it to Volcker in 1979, they were at 12%. Sure, Volcker had to face the 1980 recession and brought rates down to 10%, then upped the ante to 20% in 1981. While this required cojones, Miller had done a good chunk of the job. Yet, when Volcker left under praise - after all the S&P had gone from 100 to 250 under his tenure -, who knew Greenspan?

    This happened in August 1987, and I guess the answer was "not enough people". While the 1987 is widely attributed to James Baker's remarks on the dollar, the fact is, the market didn't know who was driving the plane. This is when Mr. G. made his mark, dropping rates so that bonds would offset stocks in terms of wealth effect.

    Same thing in 2006, when Greenspan left it to Bernanke. Rightfully so: under Mr. G's tenure the S&P went from $250 to $1250. Who knew Bernanke then, and what could he do for an encore? BTW, notice the pattern here: every time the potato gets too hot, it's passed on to the new guy - inflation in 1978, stock market bubble in 1987, real estate bubble in 2006...

    Well, when you look at it in those terms - market up 150% under Volcker, up 400% under Greenspan, and up "only" 30% under Bernanke - I could see why he gets a lower rating. However, none of his predecessors had to face a 1929-like scenario, so I think we need to compare his 30% to a potential disaster of historical proportions.

    So, back to your question, who is the unknown who could replace him "under the circumstances"? And what would this do to the markets? I don't know, and I don't pretend to know. What I know is this: if it works, don't fix it, especially when you're playing with nitroglycerin. What I also know is I do not trust any of the latest round of Obama's appointees - Kerry, Rice, Power, etc. What I also know is that the Administration had Jon Corzine as a potential Treasury chief, now a dismissed thought, and still has Tim Geithner as potential Fed chief. Wait a second. Wasn't Geithner NY President from 2003 to 2009? Wasn't he Treasury chief from 2009 to 2013? Isn't the IRS a Treasury Bureau? I don't need to connect the dots, this is simple Braille.

    Now, to be clear, there are two issues here. One, who is going to be the pilot? Two, chances are that the new pilot keeps the bird flying. Then, tell me, what would derail a consolidation of Dems power in 2016? Not that I have a personal problem against Dems, but I do have a problem with spending et al.
    Jun 19 07:35 PM | 1 Like Like |Link to Comment
COMMENTS STATS
677 Comments
323 Likes