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Thomas Sobon

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  • Where Did All The Keynesians Go? [View article]

    Monetary policy only works well when credit is restrictive. Such was not the case during the past five years. The only way to get sustainable economic growth is through spending on capital goods or infrastructure programs. QE is just smoke and mirrors.
    Jul 3 09:22 AM | 3 Likes Like |Link to Comment
  • Less Than Zero: The Case For Cash [View article]

    History has valuable lessons to teach. If you want to understand politics, study the revolutionary period from 1776 to 1848. For economics, study 1929 to the present. If you want to fully understand the inadequacies (stupidity?) of Bernanke's QE policies, wait a few years and see what historians conclude.

    The prudent man rule states that an investment operation is one which promises (1) safety of principal and (2) a satisfactory return. Of the two, safety of principal is usually more important. So your reference to cash makes a lot of sense.
    Jun 29 09:31 AM | 6 Likes Like |Link to Comment
  • The Benefits Were Supposed To Seriously Outweigh These Costs [View article]
    Monetary easing only works when credit has been restrictive. Such was never the case in the U. S. during the past five years. Bernanke and the Fed gave the idea of QE respectability and it was adopted by central bankers in other countries. The problems that Joseph expounded upon are similar in those countries. It could be that we now have an international house of cards....
    Jun 29 08:45 AM | 1 Like Like |Link to Comment
  • The Way Of The Bull And The Bear [View article]

    Your Rip Van Winkle approach to investing would be fine as long as secular growth trends are favorable. Right now, their favorability status is questionable. With central banks doing what they are doing to prop up economies in major countries around the world, it is possible that secular growth trends are weak or maybe non-existent. A Rip Van Winkle had better not be betting on a house made out of cards.
    Jun 28 12:18 PM | 1 Like Like |Link to Comment
  • A Second Quarter GDP Bounce-Back May Not Be Bullish [View article]
    Sy, very cogently stated.
    Jun 28 08:40 AM | Likes Like |Link to Comment
  • The Way Of The Bull And The Bear [View article]
    Eric, Philosophical and very well stated. Life is a mystery to be lived and not a riddle to be solved. You reminded readers of that. So if each of us enjoys the adventure of participating in the mystery and avoids seeking an answer to the riddle we ought not fare too badly.
    Jun 27 06:44 PM | 4 Likes Like |Link to Comment
  • Are Bond Vigilantes About To Kick Stock Bulls In The Gut? [View article]
    Those speaking engagements at $250K a pop are part of the payola process for individuals who serve the establishment. Nobody in his right mind would consider such to be payment for wisdom imparted during the speech.
    Jun 27 04:48 PM | 2 Likes Like |Link to Comment
  • Are Bond Vigilantes About To Kick Stock Bulls In The Gut? [View article]
    Conflicting statements by various members of the Fed are part of the dog and pony act that they put on for public consumption. Bernanke, Yellen, Bullard and Dudley are the major culprits. Any news item involving them should be disregarded because it is intended to confuse and not enlighten.
    Jun 27 10:11 AM | Likes Like |Link to Comment
  • Is Stage Set For Markets To Again Be Smarter Than The Fed? [View article]

    "in each cycle, the Fed eventually winds up 'behind the curve', still providing positive guidance even after economic conditions have turned sour."

    This is the way that it will always be. Because if the Fed could anticipate the top they would wreck havoc by blowing the whistle and thereby cause a stampede out of stocks. OR, it would have to do something to address the problem that would cause the top and thereby prevent the top from happening. Martin and Volcker were Fed Chairmen who had the courage to do what had to be done even though such actions were unpopular. Bernanke and Yellen are not in the same league as they were.
    Jun 21 12:50 PM | 1 Like Like |Link to Comment
  • Don't Worry, Be Bullish [View article]

    If that's the case and the current crop is not corrupt, then why did you write, "But enough about politics; the subject bores, upsets and angers me and everyone I know." The right wingers are hell bent on doing nothing when there is much that they can do to be helpful.
    Jun 20 07:58 AM | Likes Like |Link to Comment
  • Welcome To The Machine [View article]


    This is one of your best articles. "In short, remain true to your convictions but also take what the market is giving you."

    To do that well - and be a macro analyst - one would have to have the wisdom of Solomon. Or he can just be an average guy and rely mostly on technical analysis. Take your chart on the TLT and add a 20 day MA and you will see that it could be topping out (at least on a short term trading basis). Construct the same kind of chart on NGD (or other of the gold mining stocks) instead of GLD and you will see that a good trading buy signal occurred a few days ago. It is easy for me to draw such conclusions because I am a bottom up analyst while you (along with other very good macro analysts who contribute here on SA) are top down. Therefore, many of the macro concerns that you and others express are not all that important to me.

    I know that when I accept good advice I increase my own ability. So I really do look forward to reading about macro matters because that keeps me well informed and hopefully prevents me from getting careless when doing what I do. In a perfect world where virtue would always be rewarded, macro would be the only way to go. But in the world in which we live it's survival of the fittest.
    Jun 19 09:28 AM | 2 Likes Like |Link to Comment
  • Don't Worry, Be Bullish [View article]
    "But enough about politics; the subject bores, upsets and angers me and everyone I know."

    Joseph, We have the best politicians that money can buy. And the ways that they are bought should anger everybody.
    Jun 17 09:08 AM | 1 Like Like |Link to Comment
  • RAIT Financial Trust Merits Consideration [View article]
    Larry, That makes it 8th dividend increases in a row. With another profitable securitization planned for Q3, there is a very good chance that the rate will be boosted again 3 months from now.
    Jun 13 09:06 AM | 1 Like Like |Link to Comment
  • I Shall Return [View article]

    Comprehensive and sobering. Can there be any doubt that the game of musical chairs in being played on a world-wide scale?
    Jun 9 01:06 PM | Likes Like |Link to Comment
  • RAIT Financial Trust Merits Consideration [View article]

    The price action currently shows that a positive technical reversal is underway. I added some shares on Friday. With the high dividend yield the stock should have little downside vulnerability. The profitability of the bridge loans is in the high double digits when computed on the capital used for that purpose due to the leverage involved. But that on the conduit loans has dropped sharply to about 10%. They are going after the bridges. With the securitization done in Q2 and that planned for Q3, I think there is a 50% chance of a dividend increase to make it 8 in a row.
    Jun 9 09:49 AM | Likes Like |Link to Comment