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  • 5 Reasons to Expect a Near-Term Selloff [View article]
    The mortgage reset is an issue which has received little attention thus far, but will become a headline issue as the ever expanding U.S. Fed balance sheet has no where to go but bigger amidst nationalized GSE mortgage trusts. No one ever talks about the difference between Fed "policy", as released through the rhetoric of the minutes, and actual Fed balance sheet fluctuations but the data shows a Fed financing more and more of the mortgage industry. The credit markets won't ignore the shift of non-performing debt from private to public balance sheets forever.
    Nov 30 08:45 AM | 13 Likes Like |Link to Comment
  • 'We're on the Path for Fireworks in 2010' [View article]
    Great job catching this piece! Truly startling stats if the numbers are true...

    Gold has a long way to climb over the next 2 to 5 years, but we're going to see a short term unraveling of the carry trade and an initial flight away from commodities and assets of all kinds as the threat of a higher dollar and low demand drags down prices.
    Dec 29 09:11 AM | 10 Likes Like |Link to Comment
  • Economy Will Recover With Inflation, Not Deflation, Likely to Follow [View article]
    The good 'ol "double dip"... "Will we get it?" "Will we not?"

    Can we all assume for five seconds that we're adults, who are intelligent, and who don't need to use the kind of lingo one would expect to hear at the employee water cooler of a Scott Trade office?

    No I guess we can't, because all we want to talk about is the double dip. But who the heck really cares? What we care about is whether the S&P 500 is going recede. Not the economy.

    YES, the S&P is going to go down, and whether it takes the economy with it is of no real concern to my investment portfolio. Few that are reading this are still in the positions they held in 2007, so we know that the whole "long term outlook" thing is complete BS.

    Look at the charts and tell me why the market recovered last Friday when an economy signals that it is maintaining 9.5% unemployment with 1.5 million workers exiting the labor force in the past 3 months. Tell me why the market is trading higher on days where the street is anxiously anticipating more QE and Stimulus.

    We are a nation of junkies and it's time to go to rehab. It's like that show intervention... They can't force them to go, but they can follow them around with a camera as they drink 2 liters of Johny Red and then shoot heroin between their toes... The QE and Stimulus will continue because it would be political suicide to say "we were wrong" and without it we will hit the bottom quicker. Like the addict, we'll only seek help when we're out of options and afraid for our lives.

    Get a reality check...
    Aug 10 05:13 AM | 9 Likes Like |Link to Comment
  • Wednesday Outlook: The Fake Rally Follies [View article]
    It's no surprise that Phil has 6300 followers when his stuff is just so good. Am I the only one baffled by this guy's ability to pump out 1200 long winded spot on pieces? He must have a team of writers just as quick as him to get this stuff out there...

    Flattery aside, it's been apparently obvious to the majority of SA contributors and many members that this "smart money" rally pumping phenomenon is in effect. When the music stops is the question?

    Get an objective slice of where we stand and what chances there are for a recovery in the U.S. at
    Jan 6 11:53 AM | 8 Likes Like |Link to Comment
  • 11 Predictions for 2010 [View article]
    I think the point we are all missing is that most people really don't know how this things going to go down, but the "buy because history says we should buy camp" is most disenchanted. The vast majority agree that the Fed Funds and Treasury rates will go up in the near future and that these events will cause the dollar to appreciate. However, there is a divide over economic growth forecasts. Most would also agree that any recovery in 2010 would be moderate and it's the effects of a moderate recovery absent of meaningful job growth that will effect financial valuations. Stocks have priced in a recovery while bonds are pricing in higher rates and decreased demand. Growth driven input commodities like Crude Oil have had a run fueled by the weak U.S. dollar and a recovery, but they must now fight a strengthening dollar and most traders aren't going to get out in front of that train.

    The dollar shift is a major theme in the short term that many traders have profited from on the way down and most will respect it's effects on assets as the greenback appreciates.

    Take your 2009 profits if you got a piece of the rally and rethink your risk/reward thresholds. That's what prudent investors are doing with their portfolios and it's going to hurt the market when tough to swallow news comes down the pipe.

    For in depth analysis on the "Bernanke molded" economy, see TraderRob's Articles or visit Diamond Slice at :
    Dec 30 09:53 AM | 8 Likes Like |Link to Comment
  • Shorting the Double Dip [View article]
    JPM shows the true strength of the best retail lending book in the U.S., and it's weak. Loan loss reserves climbing and fees keeping profits up as equities are reaching for the clouds. Doesn't leave much room for future growth unless stocks go up at this rate forever. Sounds similar to something I heard back in 2006 about home prices.... hmmm never mind.
    Jan 15 10:20 AM | 7 Likes Like |Link to Comment
  • Obama's Plan A Failed, But Plan B Looks Promising [View article]
    Firstly, balances to trade between the United States and it's trading partners absolutely CAN NOT be changed by a simple few words from the Treasury Secretary. The trade deficit in the U.S. is not the result of tariffs, quotas or subsidies. It is the direct result of comparative advantages between countries. America has a comparative advantage in capital while our trade partners have comparative advantages in labor and natural resources, causing the over consuming U.S. economy to run a trade deficit.

    Second, it should be noted that the Doha round of the World Trade Organization, specifically aimed at reducing barriers to trade between developed western nations and their underdeveloped trading partners, has been in gridlock since 2001 because neither side of the negotiations are willing to level the playing field of trade. Western nations won't quit subsidies on their farmed goods while underdeveloped nations won't honor intellectual property.

    It seems that this article suggests that the answer to our problems is for China to reduce it's trade barriers, when it's been the Obama administration who started the feather fluffing early with the Chinese tire tariffs announced in past months. The idea that America is this free trade savior is an illusion and doesn't honor all the facts, since the U.S. has subsidized it's Airplane, Automobile, Agricultural and Financial industries.

    There will always be trade imbalances throughout the world between developed consumer nations and developing producer counterparts, but the trick is for the consumer nations to pursue responsible government spending during good times while reinvesting their accumulated capital in new industry growth where there are still comparative advantages. This progression towards savings in good times to spend in bad combined with innovative paths to prosperity is the only viable solution for the United States.

    The only answer is to turn and face our fears rather than running from them. The true Obama plan B has been announced as extending benefits and tax cuts, while implementing further stimulus (e.g. spending more). This will only exacerbate our problems and should be discouraged by constituents and politicians who truly value the future of our country.
    Nov 6 08:47 PM | 7 Likes Like |Link to Comment
  • Insiders Still Not Buying the Recovery Talk [View article]
    Well if I were you and I were truly retired, as your name insinuates, I'd be very concerned about the music stopping.
    Apr 26 08:03 AM | 6 Likes Like |Link to Comment
  • Jobs Report: An Actual Green Shoot [View article]
    I'm just as negative as the lot of you, and I don't see how the rest of the world is ignoring such blatant imbalances and brutally eased quantitative measures by central banks. But it does send a chill up the spine when you think of how many of us SA "Illuminati" are calling for the same abysmal failure of the entire system compared to the bulls who voice their opinion in this forum. Are we the bears roaring towards the cliff, or is this forum simply the conference zone for the few best brains in the nation to congregate and postulate?

    Your thoughts fellow SA advocates...
    Dec 4 12:00 PM | 6 Likes Like |Link to Comment
  • Making Sense of Low Bond Yields [View article]
    If you didn't read the article and skipped to this comment, good for you, you've saved yourself some time.

    Bond yields are lower because the fed put a floor on the securities held portion of it's balance sheet at $2 trillion USD. They are planning to use revenues from performing MBS they had bought of Fan and fred to purchase 10+yr Treasury debt.

    That's how you make sense of low bond yields...

    Will they stay low? Of course not. Does anyone seem to care? Of course not.

    See you in the bread line with our wheelbarrows full of cash...
    Aug 11 12:09 PM | 5 Likes Like |Link to Comment
  • Greek Bailout Plan Increased by a Factor of Five [View article]
    Indeed it is near $1 Trillion. Don't feel bad that you can't keep up with the re-raises Mark, I know the feeling. CDS vs EU are now going head to head at the finals table of the Planet Earth Financial Solvency Championships. This all in move by the EU is definitely looking like a bluff from where I'm sitting. Uhhh ohhh and the pocket cam confirms it is indeed a bluff. Ace two off suit... ouch, I hope CDS takes the bait, or things are going to get messy.

    Wrap your head around the developments in the UK and German elections, EU Debt Purchase Plan (TARP 2.0), and U.S. Econ data with the WEEKLY SPECTRUM @
    May 10 03:59 AM | 5 Likes Like |Link to Comment
  • Probability of a Crisis Will Build in 2010 [View article]
    Don't be angry that the richest most profitable banks aren't releasing their own detailed plans for cashing in on events in 2010. Barclay's among a few others have actually profited from the current recession in many ways, making the the right calls at the right times. Simply put, they got out of the way when things went sour and got in near the bottom.

    Yet, these guys shouldn't be ignored, regardless of how vague their predictions may be. A 90% chance that financial markets will gain less than 12% and equal chances that U.S. GDP growth won't hit 2.5% is pretty bold in this trader's opinion. Median forecasts for GDP growth in 2010 are reaching for 3.5% and analysts become more optimistic, yet there are more than several headwinds facing the global economy.

    Mainly, the interest rate pickle in the U.S. coupled with $2 trillion of treasury debt to roll over in the next two years. Rates must rise. As a result the short to medium term outcome will be an increasing USD and a flight from risk trades.

    For a detailed look at the effects of a devalued dollar and high energy prices on manufacturer Alcoa's (AA) income statement, see:
    Jan 13 07:49 AM | 5 Likes Like |Link to Comment
  • Today in Commodities: Crouching Tiger Hidden Commodity [View article]
    Just so everyone knows all of the links to the financeopinions.blogspot site that appear on every single article with no added value to the content are made by a guy who is the most annoying member of SA and who has made alternate accounts to lead people to his personal site. You may have known him before as "cretin", which was his orignial name. His site is all links and his behavior devalues the SA we all respect.
    Dec 10 07:44 PM | 5 Likes Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    With earnings finishing up for Q3 we can see the S&P 500 p/e clocking in right above 20 yet again. Does the potential return on investment really warrant valuations any where near these levels? Is growth potential really that great, just because we have loads of capital investment sitting around waiting for the consumer on the other end of the line?

    Check out a good recap of where p/e's have been over the past 10 years and how GDP and housing has played a role below:
    Dec 2 07:41 AM | 5 Likes Like |Link to Comment
  • Will Dubai's Standstill Spark a Reversal in the Dollar? [View article]
    Breaking down the situation and looking at the recently unfolded events from an analytical standpoint, we must admit that the Dubai World debt extension is effectively a default. As described in an FT opinion piece on the matter, Dubai is a "vacuum"-like atmosphere of "top down" decision making, offering little more than government level talk to the strengths of the Arab developers such as Nakheel (firm responsible for the ostentatious man-made palm island real estate venture) when investors had requested reassurance.

    The default is essentially a default by the Dubai government, since they have guaranteed all debts of the fund, and implies weakness throughout the Arab economies and perhaps the world. Implicit repercussions will be felt by all Middle East business, not the least of which include major risk taking firms such as Emirates airline, which has made broad plans to expand their fleet of new jets.

    The situation completely discredits Middle East borrowers and calls in to question the ability of nations throughout the world who have rushed to the table to borrow on recently lower rates.

    Perhaps this will be just the event necessary for credit and equity markets to snap out of the stimulus illusion and into reality.

    For more global analysis see:
    Nov 27 06:44 AM | 5 Likes Like |Link to Comment