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  • How bad is this earnings season? [View news story]
    Earnings GROWTH is the lowest in six years. ABSOLUTE earnings have boomed over the last six years, and are way higher than their pre-recession peak.
    Nov 5, 2015. 09:01 AM | 3 Likes Like |Link to Comment
  • Our Precarious World Economy And Its Prospects [View article]
    Given your assessment in August 2011 that Rome is burning while Nero is fiddling, and the fact we've had a stock market boom since then, you'll have to excuse me if I don't give much credence to your current doom and gloom assessment.
    Nov 21, 2014. 07:51 AM | 2 Likes Like |Link to Comment
  • Rally underway on central bank hopes [View news story]
    Through QE, the Fed isn't buying bonds directly from the US Treasury, they're buying them in the open market, from banks who already own them, with money the Fed created out of thin air. Now banks have money on their balance sheets where they used to have bonds - thus increasing their excess reserves - and the Fed has bonds on their balance sheets where they used to have nothing.

    It's possible banks eventually create tons of new loans against these excess reserves, which will likely lead to very high inflation. But if so, there's going to be an economic boom between now and then. However, it's also possible banks simply remain over-captalized for a very long time.

    When the bonds the Fed purchased mature, the US Treasury gives the money (original face value) back to the Fed, and they effectively destroy it. This is how the Fed's $4 trillion balance sheet can be reduced back down to nothing, gradually over time, without the Fed doing anything to make it happen.

    I don't think QE was a good idea (well, the first one was, but not 2, 3, operation twist, etc.), but it also wasn't the conspiratorial, manipulative propping up of the economy and stock market many people have made it out to be. We're not headed for the massive crash Peter Schiff and many commenters on this site say we are. Again, QE has been one of the most misunderstood economic concepts of all time.
    Oct 18, 2014. 08:26 AM | Likes Like |Link to Comment
  • Rally underway on central bank hopes [View news story]
    QE is not money printing . . . it's monetary base printing. It's only translated into money when banks create loans. And though bank lending has been increasing, it's not done do to the order of $4 trillion or anywhere near this amount. Therefore, much of the monetary base created via QE remains on banks' balance sheets in the form of excess reserves, and this is why QE hasn't resulted in the massive inflation many have been predicting over the last 4 years. When you fast forward a few hundred years, QE will end up being one of the most widely misunderstood economic concepts of all time.
    Oct 17, 2014. 08:51 AM | 8 Likes Like |Link to Comment
  • Perspectives On Friday's Sell Off [View article]
    After a 3% pullback you say it's too early to tell if this is the start of a deeper decline or just a minor pullback. If it becomes a 5% pullback you will likely say the same thing - too early to tell if this is going to become a full fledged 10% correction. If it does, you will likely say it's too early to tell if this will become a 15% to 20% correction. If it does, you'll say the same thing about whether it's going to become an all out bear market.

    Frankly, I don't see what value articles like this have. All you're doing is stating the obvious: maybe it will go down more but then again maybe it won't. I would prefer you actually take a stand and make a prediction. If you end up being right, THEN your words will have value.

    By the way, you disclose you're now long low volatility stocks, but in October you wrote an article entitled "Stocks and the Fed: Why I'm Staying in Cash". Seems you're missing an article, "Why I Was Wrong to Go to Cash Last October".
    Jan 26, 2014. 11:11 PM | 1 Like Like |Link to Comment
  • If we keep moving up like this, stocks could go "parabolic," says Art Cashin. The stocks that have the heaviest short positions have already raced ahead of the indices, and they are going to crumble if we keep going. (Video). [View news story]
    The S&P 500 is up since late January, what's your point?
    May 19, 2013. 09:12 AM | Likes Like |Link to Comment
  • American Industry Collapsing Into Q2 [View article]
    QE has only oversupplied POTENTIAL credit to the economy: it's over-capitalized banks' balance sheets - most of the increase in the monetary base from QE is either parked back at the Fed earning 25 basis points a year or sitting in banks' vaults not being lent out and thus increasing their excess reserves.

    And regarding your comment that the state of employment is showing a slowing economy . . . what did employment say about the economy a year ago, 2 years ago, 3 years ago, and 4 years ago? Economic growth creates jobs, not the other way around. The last 4 years is clear evidence of this.
    May 18, 2013. 10:09 AM | 3 Likes Like |Link to Comment
  • 'No One Could Have Seen It Coming' [View article]
    "Actually, I think bearishness has been justified since 2009."

    There's so much I can say about this statement, but I'll just let it speak for itself.
    May 9, 2013. 10:19 PM | Likes Like |Link to Comment
  • 'No One Could Have Seen It Coming' [View article]
    Peter, did you see the market rally of the last few years coming? I've glanced through the headlines of all your SA articles going back to 2010 and I see a lot of bearishness. This one in particular from March, 2011 turned out to be amazingly wrong: 10 Reasons Why Real Estate Won't Recover for Years. So I'm sorry if I don't give your current pessimism much credence. You want to see a good gauge of overall investor sentiment? Look at all the hyper-bearish commenters on SA who agree with you.
    May 7, 2013. 11:42 PM | 1 Like Like |Link to Comment
  • S&P Target 2000: Sold To The Gentleman With The Beard - Part III [View article]
    Uh, no. A $100 TV is a depreciating asset. Once day it will be an $80 used TV, then a $50 used TV, and eventually you will give it away for nothing or it will stop working and not be worth fixing. Corporations grow their businesses, and their profits over time. This is why you have to pay some multiple of their current profits to own the business, or some piece of it. And whoever decided it's either 10X, 15X, or 20X? The market decides, and it's not a pyramid scheme, it's the world we live in, where long term growth is the natural order of things. If you don't want to participate, that's up to you. It's a free country.
    May 7, 2013. 11:24 PM | Likes Like |Link to Comment
  • S&P 500 Target 2000: Going Once, Going Twice ... Part II [View article]
    Good luck with that. By the way, how did this call work out for you last year?

    "I however would not be a buyer at these high prices. Above 1300 strongly favors sellers than buyers. Investors should sell the rally."
    Apr 23, 2013. 10:46 PM | Likes Like |Link to Comment
  • U.S. Dollar Down 99% Against Gold Since Great Depression [View article]
    Mr. Brett,

    Your argument assumes someone would have held on to cash since 1933. Unlikely! As others here point out, that $20 invested in stocks, or even a mix of stocks and bonds since 1933 would have far exceeded the returns of holding gold. But what if someone would have just put the $20 in the bank? The compounded interest since 1933 (let's assume 5%) would have turned that $20 into more than $1,000 today. Your "US dollar has lost 99%" contention is extremely disingenuous. Nice try though.
    Apr 20, 2013. 10:45 AM | 2 Likes Like |Link to Comment
  • 3 Moves To Make On The Verge Of Market Panic [View article]
    Bull markets don't die from old age, they die because they become overextended. Usually this is accompanied by bank lending becoming too loose, the velocity of money expands a lot, inflation rises materially, and central banks tighten to combat this, choking off the economy. Investor sentiment tends to become euphoric while all this is happening, driving markets to over-valued levels.

    None of this has happened over the last year or two. Instead, we've had widespread fear over Europe, too much debt, China's economy, QE, etc. No material inflationary pressures, central banks have not tightened, the S&P 500 is trading at 15 X earnings, the housing market has the wind at its back now, and a US energy boom is underway. Good luck shorting the market sir. Let's reconvene in a few years and see how it went.
    Apr 16, 2013. 10:06 PM | 4 Likes Like |Link to Comment
  • A Quick Look Under The Hood Of The U.S. Economy [View article]
    (1) QE has not been propping up the market. This is the most widely misperceived notion regarding the market in my lifetime. Banks have parked much of their increased monetary base back on the Fed's balance sheet to earn a guaranteed 0.25% / year instead of taking the risk of loaning the money out. As a result, the velocity of money has not increased in concert with the increase in the monetary base. That the economy and market have bounced back to the extent they have since March, 2009 is testament to the power of capitalism.

    (2) Retail sales (PCE) have indeed increased a lot since mid 2009 (and surpassed its previous peak as you point out), but NOT because people are spending money they don't have as you say. The evidence is that consumers have been de-leveraging. True, unemployment has risen since the recession began and has remained at elevated levels since. But if it's gone from 5% to 8% (or whatever number you want to believe in), 90%+ (or whatever number you want to use) are still employed and their spending behavior has a greater impact on the economy than the spending behavior of the marginally unemployed.

    (3) Besides, although consumer spending represents 71% of the economy, most of it is non-discretionary spending. (rent, food, transportation expenses, utilities, phone bill, insurance, etc.) Yes, some of it is discretionary, but overall it doesn't vary all that much. Consumer spending dropped by only 1.8% during the "Great" recession. It's much of the other 29% that's highly variable (business investment) which drives economic cycles. This metric dropped by over 30% during the recession! And it's been increasing nicely ever since.

    So, it's simply not true the US economy has all its dash board warning lights on.
    Apr 14, 2013. 10:11 AM | 2 Likes Like |Link to Comment
  • It Is Not Different This Time - It Is Worse [View article]
    Mr. Jensen,

    The market may or may not pull back 5% - 10% from here, but poor job growth will very likely not be the reason. If it were, then how has the stock market (and total economic output) come all the way back from the March 9, 2009 lows while unemployment has remained elevated? Economic growth creates jobs, not the other way around.
    Apr 7, 2013. 05:39 PM | 2 Likes Like |Link to Comment