Tom Guttenberger
Tom Guttenberger
Send Message
Tom Guttenberger
Stop FollowingTom Guttenberger
View as an RSS Feed
COMMENTS STATS
693 Comments
401 Likes

Exxon's (XOM -0.4%) arrival as a tentative partner gives InterOil's (IOC +6.9%) Elk/Antelope resource a blue chip "stamp of approval," Raymond James writes, but "the market's enthusiasm will be tempered by the fact that a deal has yet to be finalized." Still unknown: how much of the resource will be monetized; the timing of a final deal; and "most importantly," the purchase price. [View news story]
Serious overcapacity in China's steel industry is unlikely to ease in 2013, which could continue to hamper steel prices (SLX), analysts say at Platts Steel Market Europe conference. China is set to produce ~750M metric tons of crude steel in 2013 while capacity will rise to 950M, putting heavy pressure on steel prices in Europe and in the world steel industry as a whole. [View news story]
Yawn.
Agency MBS fail to bounce from the "massive liquidation" following Bernanke's testimony yesterday, according to CIBC's Tom Tucci. Suggestions of a tapering of Fed purchases sent Fannie Mae MBS with 3% coupons to their lowest levels of the year. "Right now it seems the only source of demand is the Fed," says BAML's Brad Scott. Unsurprisingly, pure agency mREITs like AGNC and ARR hit 52-week lows today. Annaly (NLY) - now diversified into the commercial space with the CXS purchase - outperforms. [View news story]
Agency MBS fail to bounce from the "massive liquidation" following Bernanke's testimony yesterday, according to CIBC's Tom Tucci. Suggestions of a tapering of Fed purchases sent Fannie Mae MBS with 3% coupons to their lowest levels of the year. "Right now it seems the only source of demand is the Fed," says BAML's Brad Scott. Unsurprisingly, pure agency mREITs like AGNC and ARR hit 52-week lows today. Annaly (NLY) - now diversified into the commercial space with the CXS purchase - outperforms. [View news story]
The rise in yields is not particularly surprising to me, in that I noted these distortions in one of my 3 articles in the last 8 months. The amazing part, I think, is that this is all cocurrent to the circumstances, in which Europe faced a mini meltdown and Japan a veritable one increasing the favoritism for US denominated assets. Where even though external biases are aiding money flow into the US, you see the fed still acting, and interest rates STILL rising. To me this speaks to a risk preference shift to equities and blunt xenophobia of other credit and currency markets in general. I don't know. This has certainly been quite a rally.
Central Bankers' Day [View article]
Consumer prices rise 2.4% in China during April, up from 2.1% in March and slightly above economists' estimates. Producer prices fell 2.6% during the month, a steeper decline than expected. [View news story]
I'm sure some official just picked this number out of the air, you think?
Green Mountain Coffee Roasters (GMCR): FQ2 EPS of $0.93 beats by $0.20. Revenue of $1.00B (+14% Y/Y) in-line. Shares halted AH on news of a 5-year agreement with Starbucks. (PR) [View news story]
Magic Trees: The Performance Of Equities Vs. Commodities [View article]
It doesn't make any sense, Brendan. Why would you engineer a cash flow when you can (in)directly impact its price with your own actions???
Further, it doesn't even happen to much of an extent -- just look at how tepid the volume and open interest is in these contracts. This is an illustration of market maker and HFT interests -- concentrating volumes to near-dated deliveries.
Magic Trees: The Performance Of Equities Vs. Commodities [View article]
Then again, when (as an example) the airlines go bust at the hands of "evil speculators" option/warrant holders will be glad they repaid that money as (investor-friendly) dividends rather than insurance for their future. Compensation is time sensitive after all.
Hedging demand even at these prices is non-existent; seems like no one has forgotten about looming government put options.
Why A Stock Market Bubble Is Forming Right Now [View article]
I think spending among the tiers of the population remains about the same, in all likelihood. You just see an "asset-purpose" switch, where more money is counted in a particular category. Obvious when money is put forth as a housing down-payment it still was an asset, but just not counted into the velocity measure.
Or if the person is invested in a fixed-income product, this doesn't count as M2 either. So when the risk/return on bonds is razor sharp (I mean that in all senses), the attractiveness of cash increases as well.
Then you also have an increase in dividend yields which I hypothesize also slow velocity. Rather than re-investing into jobs, R&D, etc., companies pay back shareholders. The shareholders love it, but even if the money is re-invested, this type of churn can't act positively on a companies bottom line, without increasing credit that is.
This all on top of the aforementioned. Keep an eye on M2, and just realize the economy seems pretty well engineered to post 2-3% growth FOR NOW.
Why A Stock Market Bubble Is Forming Right Now [View article]
Why A Stock Market Bubble Is Forming Right Now [View article]
Mid-90s an abberation caused by securization and credit-based transaction affecting GDP positively and disproportionately to whatever sort of base or liquidity measure. How this metric has grown to the status that it has is a little bit baffling, but consider:
1. Securitization has shrunk since peaking in ~08.
2. Passive, slow-velocity money (deposits) have grown at a great rate.
3. The US has a perfectly and hugely systemic trade deficit and that perennially eats at the denominator in your metric.
4. The greatest consumer credit growth category (student loans) is easily manifested into liquidity, and this expansion at rates as market-disadvantageous as they are, actually might have a drag on real GDP at a certain point, disregarding the non-findings of Reinhoff-Roheim or whoever that over-simplified and apparently miscalculated study was authored by. My point - rates matter more than confluence of variables.
Is it all about China? General Motors (GM +3.6%) trades higher after the impact of China on the automaker's Q1 results starts to get fully digested. Barclays notes China accounted for $0.40 of the $0.58 profit GM put in during Q1, while Detroit Free Press reporter Nathan Bomey tabuluated GM sold more cars in China than Europe, South America, India, Canada, and Mexico combined. [View news story]
Carhops, Coneys, And Healthcare: Why I'm Short Sonic Drive-Ins, Part I [View article]
Carhops, Coneys, And Healthcare: Why I'm Short Sonic Drive-Ins, Part I [View article]