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Tom Guttenberger  

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  • Home Price Increases: Not An Illusion [View article]
    I bought in the Detroit area just a few months ago and still browse on zillow regularly. I think the zillow method relies heavily on the few recent sales in the neighborhood, then re-anchors all of the prices correcting for whatever easily measureable factors there are such as last sale price, beds, baths, etc. I say this because my house's z-estimate actually dropped after I made my purchase despite the asking prices in the area gradually rising.

    I read Shiller's take on the recent developments yesterday, not sure I agree with his assessment. He has been saying for quite a while that stocks "aren't cheap", so it begs the question, what is? Certainly not interest bearing savings accounts, and M2 still displaying strong grow. Something that often goes unappreciated is that house prices are as much a function of the cost of credit as they are the sticker price.
    Jan 30, 2013. 02:05 PM | Likes Like |Link to Comment
  • Seeking Alpha Trading Survivor Contest [View instapost]
    Fair enough. I will keep my fingers crossed over the next couple days.
    Jan 29, 2013. 09:11 PM | Likes Like |Link to Comment
  • Seeking Alpha Trading Survivor Contest [View instapost]
    I am asking because it seems my fate in this contest could rely on one good/bad tick on the last day...

    Shouldn't returns be measured from the last day of the previous month's close? XIN gapped higher to 3.65 at the open on January 2nd...
    Jan 29, 2013. 07:12 PM | Likes Like |Link to Comment
  • Notable earnings after Monday’s close: BMC, CE, IDTI, ILMN, MSPD, OLN, SANM, STLD, STX, VMW, YHOO, ZION [View news story]
    YHOO numbers should be interesting...
    Jan 27, 2013. 05:52 PM | 2 Likes Like |Link to Comment
  • Ned Davis Research strategists John LaForge and Warren Pies argue oil will hit record highs in 2013, even as many see oil’s price bobbing around more or less where it is today at $90-$100. What the U.S. is gaining in production, the rest of the developed world is losing, they say. But prices already aren’t far off on an inflation-adjusted basis, and not when considering pricier Brent crude. [View news story]
    "But prices already aren’t far off on an inflation-adjusted basis"

    Uhhhh...what? WTI futures curve is in EXTREME inflation-adjusted backwardation.
    Jan 25, 2013. 12:08 PM | Likes Like |Link to Comment
  • Today's Icarus [View article]
    Well put Michael. In order to rationalize AAPL as an investment you need to suppose that it will not only remain the world's largest company but also it will put space in between itself and the nearest competitor in terms of size. Never made a bit of sense to me. I could imagine that being possible for, let's say, XOM where they may have a fixed, asset-based competitive advantage. But for tech, so much is dependent on innovation, that to suppose that AAPL will always have a persistent advantage within that realm is just incredibly unrealistic in my opinion. They do however have that mountain of cash, so the downside is definitely muted, but they need to make wise acquistions and then execute on the businesses and technology they purchase, a perennially daunting task. Or they could really waste the money and start buyingback shares or paying a huge dividend. Either way, the world's summit is (or classicly should be) a lonely place.
    Jan 24, 2013. 09:14 AM | 2 Likes Like |Link to Comment
  • Pity The Chinese - Update [View article]
    He must mean capital account deficit. I normally like CBP's writing and views on most things, but I suspect that other things are tangled in this article as well. China continues to report a huge trade surplus, and Pettis even supposes it may be larger than reported after considering laundered money flows and the sort.

    This is obviously a really interesting topic and of pivotal importance to deciphering capital flows and therefore market direction. I intend to write on this topic soon, but only once I can solidify my own hypotheses. I am inclined to believe that the stagnated currency reserves probably indicate that China is accumulating commodities with their dollars even more rapidly. I also think that rather than necessarily converting the dollars received on one end of the trade back into Treasury bonds, perhaps those assets are being repatrioted as yuan-based assets, which I guess is the same thing as what Scott is saying, and then a stronger yuan will help their purchasing power. Although if they are executing external trades through a USD capital account, that only makes the USD weaker, I think, and leaves the Chinese in a strong position. They can ease capital controls as they please, and allow their people to live a more western lifestyle with their improved domestic purchasing power. Whether the people will ever be encouraged enough to invest/spend is another story. We are all creatures of habit, so balancing and rebalancing has historically been impossible to acheive without event shock stimulus. I think it is probably the job of the modern monetarist to gently prod behavior and avert such conflicts.

    I'm just not sure that the yuan appreciation period is, or even possibly could be, over. I mean, Europe's external balance is essentially 0, Japan has turned to deficit, and we all know how 'efficiently' the US trades. I doubt that other emerging economies are going to step in to fill the "China appeciation gap" in low cost, but decent quality manfacturing. Just like we say China must move up the value stream to challenge a Ford or a Toyota or an Apple, these emerging and frontier economies aren't going to move from FDI-sponsored mining projects to efficiently mass-producing even relatively simple products overnight.
    Jan 24, 2013. 08:34 AM | Likes Like |Link to Comment
  • 3 Companies More Innovative Than Apple [View article]
    Interesting metrics indeed. I feel more knowledgeable having read this article. All things considered, it seems like AAPL is showing up pretty favorably in these stats, more than I might have guessed.
    Jan 15, 2013. 10:19 AM | Likes Like |Link to Comment
  • Inflation And Yields: Gold And Equity Yields [View article]
    From the last paragraph, actionable advice is a minimum of two articles away. Until then, all of the readers have plenty of random and serially correlated numbers to chew on.

    Or, like me, you could have skipped the first read, only to later re-read the article multiple times and (amazingly) come up with the exact same conclusion - nothing to gain but a headache.
    Dec 30, 2012. 04:57 PM | Likes Like |Link to Comment
  • Inflation And Yields: Gold And Equity Yields [View article]
    What an overwhelming amount of random series.
    Dec 29, 2012. 03:28 AM | 1 Like Like |Link to Comment
  • From Positive, To Zero, To Negative-Sum Capitalism [View article]
    The writing on this very topic is Shareholder's Unite at his/her/their very best!

    The biggest problem is that it is impossible to wind down the leverage and risk without necessitatively slashing economic growth, that is, using the current toolkit of liquidly traded derivatives. I agree in some regards that the financial sector is a sum-negative industry. Think about all of the salaries and administrative costs. I really had no idea that that many people were capable of generating real economic growth from a thought-space. (sarcasm intended)

    The motivation of debt is (usually) a powerful tool however; it is sad to say, but I believe it is true. Finance's expanse may have this underlying behavioral element driving it to sum-positive. But an equation with positive drift still has variance, and correlations within pools of loans (loans being the driver of true growth) make bank insolvency a virtual certainty over a long enough time period. Assymetric information invariably leads to adverse selection in loan pools, but hey, what does it matter when the security is overcollateralized 7 ways to Sunday? Proper risk sharing mechanisms in mainstream financial engineering have a long long way to evolve.
    Dec 18, 2012. 08:43 AM | 2 Likes Like |Link to Comment
  • U.S. coal consumption will drop 14% from 2011-2017, the International Energy Agency forecasts, due to the shale gas revolution prompting power companies to abandon coal. Overseas, the picture is totally different, with coal demand booming in China, India and other emerging markets. The problem for U.S. producers is that international prices are low. The IEA predicts restructuring for the sector and possible job losses. [View news story]
    If you had polled a random group of Wall St. observers, I guarantee they would have projected a greater decline than 14% over the course of 6 years. Practically flat, especially compared to international demand.
    Dec 18, 2012. 07:24 AM | Likes Like |Link to Comment
  • Lucas Energy Announces Status of Note Payable [View article]
    Safe to say that this is not a good news item.
    Dec 17, 2012. 08:36 PM | Likes Like |Link to Comment
  • The Weather Is Not Smiling [View article]
    You've got a bunch of mining giants sniffing around this sector too. Most of the coal miners would be great long-term acquisitions at today's prices.
    Dec 15, 2012. 04:17 PM | 1 Like Like |Link to Comment
  • The Weather Is Not Smiling [View article]
    Thank you for the clarification on the figure. Looking through the data now, that is a pretty bad number. Still, it isn't as if these slight increases haven't happened post-injection peak in years past, and this year's peak was in-line or even a little sooner than the average since '94.
    Dec 15, 2012. 03:58 PM | 1 Like Like |Link to Comment