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  • Differentiating an Inflation Induced Rally From a Normal Retracement [View article]
    The question posed in the title to this post has compelled me to add something of my own to your consensus of the market. The raging deflationists have morphed into a dying cult of market society outcasts, only whispering to themselves in dark corners where no one will trade from their lunacies.

    However, the reality which will spit in the face of the inflationists, who are nearly indistinguishable from the multi-national free government money funded speculating banks, is the global deleveraging story which has only just begun.

    Sure deleveraging is the opposite of quantitative easing, as far as the effects of money velocity in the economy are concerned. But it is more likely in my opinion that asset prices are high, not due to higher velocity of money in the economy, but a bulging of cheap money which has been trapped within the ivory towers of the Global Financial Industry.

    When the music stops and the trend of prices reverts to the mean of fundamental data, speculative commodity prices will be found grossly too high.

    If you don't believe me take it from Bill Gross in his April 2010 Investment Outlook: www.pimco.com/LeftNav/...
    Apr 20, 2010. 05:50 AM | 2 Likes Like |Link to Comment
  • IBM and Dell: Why Now Could Be a Good Time to Buy [View article]
    IBM is a gangbusters firm that offers amazing IT services to institutions and clients. It's paid off well as they've sold their hardware businesses, but the growth of the past 5-10 years has been favorable as a result of some of those sales, where profits were reinvested in innovation. It could be some time out until U.S. firms really start to invest heavily in top dollar IT redesigns. Tread lightly on this name and all tech after the recovery we've seen in the NASDAQ..
    Apr 20, 2010. 03:56 AM | 1 Like Like |Link to Comment
  • Spain ETF Sinks After Portugal Downgrade [View article]
    The lesson which should have been learned in Greece, but wasn't, is that it has nothing to do with what governments, Papandreou, Sarkozy, Merkel, Trichet, or even Kahn "say". Conversely, it has everything to do with what the Credit Default Swap (CDS) markets say. The same way that pundits argued against short selling as the "cause" for financial markets' collapse in Fall 2008, more are beginning to understand the role of the CDS markets in the larger scale soverign debt crises. CDS are essentially the insurance on bonds defaulting, and recently there has been a rush to purchase these contracts by actual bond holders and speculators alike. In Greece these securities foreshadowed and nearly forced action as the insurance on the debt lead to higher yields.

    Greece has a GDP equivalent of $325 billion, while Portugal's GDP is only $250 billion. Thus the debt market is also proportionally smaller and the ability of speculators to rough up debt markets becomes higher, as the momentum of this EU CDS rally is gaining. The CDS players are now in control, since they were victorious in forcing action in Greece and the premiums still continue to rise even with the EU and IMF behind them.

    These are extremely troubling realities facing Portugal, Spain, Ireland, even the UK as nations are in a race against time, where economic growth MUST rebound fast enough to outpace the interest on those country's soverign debt.

    Check out www.diamondslice.com/?... for a great piece that compares the EU sovereign debt crisis to the global financial crisis, and draws attention to the limited buyout capacity of the IMF in the current situation.
    Apr 20, 2010. 03:46 AM | Likes Like |Link to Comment
  • Earnings Will Drive, Or Halt, This Bull Market [View article]
    Whoa there Buzz daddy, read before you post. I'm with you...

    Markets are due for a steep correction. Take a look at my site at www.diamondslice.com/?... or read my recent article to see for yourself.

    Technicals have been screaming "overbought" for two weeks!
    Apr 19, 2010. 05:30 AM | Likes Like |Link to Comment
  • Concerns About Sustainability of China's GDP Growth [View article]
    The issue in China is deeper than most realize. Public finance in the Aisan giant is tarnished beyond recognition, where basic social services (i.e. education, roads, utilities) have been financed for the past 10 year using "off balance sheet" methods, where government land is used as collateral for private fianancing in an effort to meet payments. Government offices also invest, under the table, in private interprise in an effort to boost finances. Local governments are the level where this type of activity is rampant, and thus least regulated, yet the practice is commonplace and accepted in a "hush hush" manner.

    Check out the full story at www.diamondslice.com/?...
    Apr 18, 2010. 10:41 PM | Likes Like |Link to Comment
  • 4 Reasons Why the Goldman Sachs Fraud Scandal Is So Dangerous [View article]
    The lesson which should have been learned in Greece, but wasn't, is that it has nothing to do with what governments, Papandreou, Sarkozy, Merkel, Trichet, or even Kahn "say". Conversely, it has everything to do with what the Credit Default Swap (CDS) markets say. The same way that pundits argued against short selling as the "cause" for financial markets' collapse in Fall 2008, more are beginning to understand the role of the CDS markets in the larger scale soverign debt crises. CDS are essentially the insurance on bonds defaulting, and recently there has been a rush to purchase these contracts by actual bond holders and speculators alike. In Greece these securities foreshadowed and nearly forced action as the insurance on the debt lead to higher yields.

    Greece has a GDP equivalent of $325 billion, while Portugal's GDP is only $250 billion. Thus the debt market is also proportionally smaller and the ability of speculators to rough up debt markets becomes higher, as the momentum of this EU CDS rally is gaining. The CDS players are now in control, since they were victorious in forcing action in Greece and the premiums still continue to rise even with the EU and IMF behind them.

    These are extremely troubling realities facing Portugal, Spain, Ireland, even the UK as nations are in a race against time, where economic growth MUST rebound fast enough to outpace the interest on those country's soverign debt.

    Check out The lesson which should have been learned in Greece, but wasn't, is that it has nothing to do with what governments, Papandreou, Sarkozy, Merkel, Trichet, or even Kahn "say". Conversely, it has everything to do with what the Credit Default Swap (seekingalpha.com/symbo...) markets say. The same way that pundits argued against short selling as the "cause" for financial markets' collapse in Fall 2008, more are beginning to understand the role of the CDS markets in the larger scale soverign debt crises. CDS are essentially the insurance on bonds defaulting, and recently there has been a rush to purchase these contracts by actual bond holders and speculators alike. In Greece these securities foreshadowed and nearly forced action as the insurance on the debt lead to higher yields.

    Greece has a GDP equivalent of $325 billion, while Portugal's GDP is only $250 billion. Thus the debt market is also proportionally smaller and the ability of speculators to rough up debt markets becomes higher, as the momentum of this EU CDS rally is gaining. The CDS players are now in control, since they were victorious in forcing action in Greece and the premiums still continue to rise even with the EU and IMF behind them.

    These are extremely troubling realities facing Portugal, Spain, Ireland, even the UK as nations are in a race against time, where economic growth MUST rebound fast enough to outpace the interest on those country's soverign debt.

    Check out www.diamondslice.com/?... for a great piece that compares the EU sovereign debt crisis to the global financial crisis, and draws attention to the limited buyout capacity of the IMF in the current situation.
    Apr 18, 2010. 10:35 PM | 1 Like Like |Link to Comment
  • Earnings Will Drive, Or Halt, This Bull Market [View article]
    I'd like to point out the gap between earnings growth and equity price growth. There's no comparable chart where past recoveries can be compared, and I don't have one, so I can't be certain, but it would seem that price growth is outpacing earnings growth by a great deal. In order for the prices to oscilate around the earnings trend, as it were in more normal market movements prior to the crash, there must be a substantial stagnation or pullback in the equities themselves. If your article is citing evidence that earnings will eventually rise, you've made your point. However, I find little comfort in this analysis as we look to the potential risks in the next 6mo to 1yr.
    Apr 18, 2010. 08:52 PM | Likes Like |Link to Comment
  • Google Earnings Solid, Company Signals Investment Ahead [View article]
    GOOG is a perfect example of the unsustainable saturation of equities. Good news is no longer enough to shove the SPX up another 1%. We're going to see a correction in the next few sessions. Check out technical analysis to support this at www.diamondslice.com/?...
    Apr 15, 2010. 11:48 PM | Likes Like |Link to Comment
  • Today in Commodities: Tax Day [View article]
    Hey Matt, It's been a bit since I've been current on your stance, but I remember not too long ago you were looking for a bearish trend towards the mid 70's for crude. I think the inflation story is little more than fear mongering by bulls trying to make a case for why Oil keeps rising with equities. Have you read any of these reports about how cheap it is to rent an oil tanker vessel for a day? The demand for Oil is overstated at this point and many of the previous TARP banks are paying for tankers to sit off the coast in the hopes that price hike speculation pays off. I generally play the WTI continuous spot using ETF exposure, and those prices seem to care about fundamentals on Wednesdays for the EIA report, but otherwise trend parallel to equities.

    I know you're a technical guy, but do you put any weight on these shadow supply rumors and large bank speculative forces on demand? Every asset market on the planet has followed this 45 degree trajectory for the past 6 weeks and I see plenty of technical evidence for a sell off in equities in the immediate future. Check out my post on the overbought nature of the S&P 500 if you are interested... www.diamondslice.com/?...

    Keep up the good work
    Apr 15, 2010. 11:42 PM | Likes Like |Link to Comment
  • 20 Signs That Could Mark a Top [View article]
    Mark I see the technicals screaming for a pullback at THIS moment. The VIX has hit long term lows as the S&P yearns for 1200, yet the leading index of the recent viagra trajectory rally, the Dow Transport Index, has gone limp. The MACD for both the Trans and SPX is showing a bearish convergence, while the RSI was tied for several yearly highs. For the bears, you'll think this is sweet, and the bulls, take it as an insurance pitch... either way, playing the short and long-term VIX with VXX and VXZ ETNs makes for an enduring strategy.

    Check out www.diamondslice.com/d... for the full strategy with annotated charts.
    Mar 26, 2010. 03:19 PM | 1 Like Like |Link to Comment
  • Housing Data Ignored as Wall Street Bubble Grows [View article]
    Gary I have been waiting for the black swan for some time now, and it recently occurred to me that the effectiveness of the swan to drown a market has more to do with the position of the market than the size of the bird. That said, there are plenty of issues which are staring us in the face, which can and should cause a great deal of uncertainty as the details surface. The first that immediately comes to mind is the new tax on consumers in the form of higher insurance premiums, as 35 million Americans are added to insurance pools and insurance risk models hemorrhage at the thought. Secondly, is the potential for a continental currency crisis when the credit ratings of EU members go down the tubes in the event of a looming IMF intervention in Greece.

    The VIX is showing smooth waters down well below 20, while the RSI and MACD are showing an extremely overbought S&P 500. The swans are here, it's just going to take everyone looking at the same time to realize the risks the bear.

    For some VIX plays with ETNs, check out www.diamondslice.com/d....
    Mar 24, 2010. 05:01 AM | 4 Likes Like |Link to Comment
  • Don't Take Chinese Growth for Granted [View article]
    Thanks for the props Alex. This is a nice piece with some very well founded new points.
    Mar 24, 2010. 12:49 AM | 1 Like Like |Link to Comment
  • Bob Doll: This Is No Time to Get Bearish [View article]
    This market is indeed overbought. See how you can make some quick profits on an S&P 500 pullback at:

    www.diamondslice.com/d...
    Mar 23, 2010. 09:18 AM | Likes Like |Link to Comment
  • High Conviction: An Attractive Residential Mortgage REIT (Yes, You Read That Right) [View article]
    Dividends are very beneficial if the payments are still coming in. My argument would focus more on the real risk to a REIT play, which would be concerned with long-depressed labor markets and further defaults. Higher interest rates aren't going to make it any easier for owners to make payments, regardless of a higher dividend.
    Mar 18, 2010. 09:55 AM | 1 Like Like |Link to Comment
  • High Conviction: An Attractive Residential Mortgage REIT (Yes, You Read That Right) [View article]
    We're talking about incentives to buy and a starting point on consumers' mortgage financing costs. The fed funds only changes the overnight lending rate among banks and doesn't change the willingness of a bank to hand out chunks of cash with five zeros in the figure for 7 to 10 years.

    All mortgages are conventionally tied to the price that the government is lending for 30 years, where the difference in yield concerns the risk of default by the borrower. However, macro effects on 30 year money including inflation expectations, general macro uncertainty, etc., are accurately measured in the 30 year bond.

    Clearly I've commented on the wrong piece, seeing the rest of the comments, but please before you go dumping wads of recently earned dollars back into 401ks do your homework and look at balance sheets. The U.S. market is overbought in every way and you're betting on a loser for the next 3 to 5 years.
    Mar 17, 2010. 11:02 AM | 1 Like Like |Link to Comment
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