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- Financials Have Bottomed? Readers Say We're Nuts [view article]
- On Oil, Gold and Flying Pigs [view article]
- Economic Upswing? Check Back Next Year [view article]
- Financials: How - And When - We Reached the Bottom [view article]
- Market Likely to Continue to Head Lower [view article]
- 10 Notes on the Current Market Fracas [view article]
- Headwinds Index: How Long Can Financials Outperform Energy? [view article]
- Wachovia's Rally & Oil's Decline: Rotation from Energy to Financials? [view article]
- The Oil Bubble Will Meet the Same Fate as Tech, Housing [view article]
- Financials Future Still Uncertain [view article]
- Things You Would Never Have Said Eight Days Ago [view article]
- Historic Financial Collapse Underway? [view article]
loading ...Recent XLF Articles
- News Flash: Major Market Turns Aren't Announced In Advance
- Economic Upswing? Check Back Next Year
- Financials Have Bottomed? Readers Say We're Nuts
- S&P 500 Financial Sector Posts Best 6-Day Stretch Since at Least '62
- On Oil, Gold and Flying Pigs
- Thursday Outlook: Overbought!
- Dollar Back? - Fast Money Recap (7/23/08)
- Headwinds Index: How Long Can Financials Outperform Energy?
- Things You Would Never Have Said Eight Days Ago
- Wednesday Outlook: No Rhyme or Reason
- Full List of Articles »
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Financials Have Bottomed? Readers Say We're Nuts [view article]
We are here to talk money. And you guys who've made 50% in UYG over the course of a week had best sell quickly. ReplyStromeyer Jr
Financials Have Bottomed? Readers Say We're Nuts [view article]
Tom, I appreciate that you are willing to defend your case, but could you or someone else please help me to understand this question:Many CDOs and other crap are still tied to home prices, so how can the financials make a long term bottom before there is some more compelling evidence that home prices have started to bottom? Thanks. Reply
Lathrop
Financials Have Bottomed? Readers Say We're Nuts [view article]
The main problem with your argument is that is does not address how financial institutions will continue to make profit moving forward. No one has suggested what will substitute the triple crown of easy money supply, rising home prices and lower lending standards. Mortgage rates are increasing which means even with a low Fed rate there is still a lot of unrest in the market. Your main thesis states that the market has priced in the downside of up to 30 years in rotten mortgages and illiquid investments.The banks have an extremely limited window to attempt to catch a breath before the other Governors on the Fed Board pitch a fit and force rates higher to fight inflation. At that point, the water wings are going to be taken off the banks and there is going to be some sinking.
If investors don't trust CBOs,CMOs and other securitized instruments, and banks need to return to a portfolio based model of lending, the profit margin is going to be low. Speculative trades in the market using the Fed's money isn't going to win the beauty contest. It's when they strip down to the swimsuit that they lose. What business model is going to replace the 2002-2006 model? Reply
On Oil, Gold and Flying Pigs [view article]
Interesting --as more and more people decide its gold, the fundementals say no. The dollar has stopped going down and inflation is nowhere. When housing is dropping like a rock (25% of a workers expenses are housing). We are in deflationary times (like Japan in the 1990s).Im buying financials because I believe the downside is overdone and commodities are over priced. If we are approaching a recession, growth will slow. Commodities are grossly over priced for a slow economy.
What makes a market is disagreement. If we agreed there would be no market. Reply
Economic Upswing? Check Back Next Year [view article]
One of the changes of the past 20 yrs or so has been our concept of money, few people carry currency around with them any more . Money has become digital it no longer has the same ,feel , to it .When we lose digital money it does,nt produce the same response as it used to Frugality is almost ridiculed in our society. We are now a nation of consumers only and no longer produce much of what we consume . The US economy is a house of cards ,credit cards . The big bad bear is at the door ReplyFinancials Have Bottomed? Readers Say We're Nuts [view article]
Credit Suisse published a chart last winter that says it all. "Subprime" mortgage resets all Spring "08. High (compared to 'normal') rough intermission this Summer. Fall '08 (Sept 01 through Dec) mortgage resets go back up to the levels of the Spring; the name changes to "Alt-A" added to "Agency Resets." The Fall drop will be as much as the Spring drop. How about chuck holes in Aug and Oct similar to the ones back in Jan and March?Market bottom best guess as a Chinese New Year gift but there will not be any real Bull Recovery for two or three years. Target Summer of 2012 for the beginning of really better times.
Game plan is to do what presents itself in short time frames and also look at dividend accumulation. Reply
Financials Have Bottomed? Readers Say We're Nuts [view article]
I think what one of your bloggers said is an excellent representation of what is wrong with this market and our society in a more macro view: “Are we here to make money or argue about things that no one can know?”This trader mentality and the need to show a short-term profit, both on the personal and corporate levels will be the death of us all. It promotes the short-seller and short-term gain’s scenarios that cause the volatility and do NOT add to societies greater good.
What is it building? What product is it making?
We all need to step back and see what we are trying to create here, or in the current case, what we are trying to destroy. The stock market was meant for building a business and therefore the American economy. It was become an extension of Vegas and needs to get back to its roots. I have a fix posted on my site under the 3/22 blog that most everyone will hate. You should check it out. In the meantime just think of the TV show ‘FastMoney’ as the poster child for poor trading behavior and just an example of the real reasons behind the current ills.
Reply
Financials Have Bottomed? Readers Say We're Nuts [view article]
I'm with CLH on this one - I'm long UYG too. Keep the stops tight. ReplyTiedeman
Economic Upswing? Check Back Next Year [view article]
We will se virtually no growth in the US until 2011. The housing mess is so far from over it is not even funny. Valuation will continue to fall in 2009 and 2010. ReplyTiedeman
On Oil, Gold and Flying Pigs [view article]
When people see the inflation of the next several years gold will go up. ReplyFinancials Have Bottomed? Readers Say We're Nuts [view article]
I dont know if this is the bottom and it isnt important. Im up 54% in six days with UYG. Are we here to make money or or argue about things that no one can know? ReplyFinancials Have Bottomed? Readers Say We're Nuts [view article]
To me the biggest problem seems to be that those entities are leveraged to the eyeballs just as the 'consumer' who either way is pumping their profits. Do you expect that to be remedied soon since the 'consumer' is suffering real wage declines and further sinks into debt? Add to this that helicopter Ben prints money like a loose maniac. It will 'support' the prices of troubled assets but everyone will be much poorer to get the wheel spinning in the same old way. Oh, don't you read that BofA, Wachovia are out of the wholesale mortgage business? And there are many other banks that simply can't lend due to the lack of funds. And who is going to buy the MBSs that will be coming forward in the markets knowing that the currency will be debased once 20% haircut is taken. Doesn't this make all foreign buyers (30%) of U.S. mortgages just scared of this crap? It's sounds like bankruptcy for the government is the quicker way out of this mess. ReplyOn Oil, Gold and Flying Pigs [view article]
interesting way to connect the dots. in any event, i am sure the next six months will be an E ticket ride.i cannot see how the financials are really undervalued to spark this rally. if i do jump in my finger will be on the sell button. Reply
Financials Have Bottomed? Readers Say We're Nuts [view article]
Hi Tom, appreciate your follow-up on the surely controversial piece. However, if JPM's Dimmon said that pain froma recession will be far worse than the pain suffered so far from subprime and CDOs, SIVs etc- i wonder how the market could have really figured this coming pain out? And how can you be so certain? 70 percent book may sound like a decent margin of safety. but given the high leverage and the L3-assets and lots of loans that have not been written down but may well start to default i wonder whether books will not be further impaired soon. and that current 70% may soon turn into 150%?I also disagree on your L3-notion and accountants , regulators and (new) CEOs. I think regulators and ceos have every incentiv NOT to tell the truth if it is too devastating. rather hide it as long as possible, adjust those valuations step by step over many years. if they did otherwise, they might well be required to raise billions of fresh capital instantly - which may be next to impossible or extremely dilutive right now.
for me, these banks are way too high risk because i have no way to find out if they tell or told me the truth until after the bomb exploded. i will gladly skip a reward of 300% or 400% if the downside is that i could easily lose 80-100% pretty much overnight (remember bear stearns? it sure was a high reward-high risk play at $30-$40 - only to get killed over a weekend) Reply
On Oil, Gold and Flying Pigs [view article]
It is a head-fake rally. We are in a BEAR mkt. Paulson & Bernanke have jawboned this fuddy-duudy rally. When it ends, and it will end soon, GOLD will again be the preferred place to be because the 2 boys above have just again started the printing presses for more US Dollars, which in the end is always inflation, inflation, and more INFLATION. Bottom line - BUY GOLD ON DIPS AND FORGET THIS FUDDY-DUDDY RALLY!!!! Reply