Matt Blackman

http://TradeSystemGuru.com
Total Rating:
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172 Comments

    • Thu Aug 21st 15:21 PM | Rating: 0 0
      Commented on:
      Home Prices Have Stopped Falling: The Statistics Are Skewed
      An interesting analysis but calling a bottom given the size and scope of the real estate/credit bubble is risky at best. Median prices are a poor indicator given the many factors and dynamics at work. For example, near the end of an uptrend, first time buyers are usually the first to drop out while more expensive homes continue to sell (as a result of a delayed trickle-up effect). In other words, median homes prices are skewed upward in the early stages of a correction.
      As you can see from Chart 2 at
      tradesystemguru.com/co... median existing home prices increased from January through June 2007 but those who used this rise as an excuse to buy were deceived. The rise was not supported by the S&P Case-Shiller home price index that has continued to show paired home prices falling (see tradesystemguru.com/co... ). In fact, the rate of decline has continued to accelerate.

      It is important to remember that the average real estate cycle is 18.5 years long with drops lasting at least 1/3 the number of years that it took for the increase. It is also important to realize that every bear market is punctuated by violent bear market rallies that tempt investors to say the worst is over. Just look at the Japanese Nikkei225 that experienced at least three strong bear market rallies in which the index gained more than 50% only to drop each time to a lower low.
      View article »
    • Thu Aug 21st 14:54 PM | Rating: 0 0
      Commented on:
      Of Housing Supply and Housing Bubbles
      Just skimmed this piece of vociferous fluff. Don't know why I bothered...
      View article »
    • Thu Aug 21st 14:35 PM | Rating: 0 0
      Commented on:
      Obama's Economic Policy and Reagonomics
      Mark, so how much are the Democrats, Obama or some democrat-driven interest group paying you to ply us with this spin-doctor garbage? You are a highly-biased political shill which should be as plain as the nose on your face to anyone with any sense and understanding of free market economics, qualities that you quite obviously lack.

      It is unfortunate that the editors of SeekingAlpha.com have chosen to allow you spew your cheap discussion group-type propaganda on this site.
      View article »
    • Thu Aug 14th 15:37 PM | Rating: 0 0
      Commented on:
      Two Types of Speculation: One Harmful, One Not
      Mark, you clearly demonstrate that you don't have a clue how markets really work. What you call "bandwagon behavior" is what occurs in every parabolic blowoff in markets everywhere. If you're not sure what a parabolic blowoff is, look it up in a basic technical analysis book. It is a result of momentum traders and later the crowd followers, those who are jumping on a trend in the hopes the trend will continue.

      Momentum investing and trading are principle drivers of markets. So are you and your DDE (Democrat Driven Economists) buddies proposing that Obama add yet another myopic law counter-market law that would prohibit this practice?

      Maybe you should take a lesson from fellow Democratic supporter, George Soros who is more experienced in markets than you. Here is what he said a few years ago that clearly demonstrates that he understands how markets work.

      “Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited.”

      It is clear from what you have written that you are a believer in the efficient market myth and not a trader or investor.

      Oh and one more thing. You say above, "Tire gauges and regular tune-ups can do more to help with the energy problem than drilling."

      You really are living in a dream aren't you? The US now imports more than 70% of its oil and ships $700 billion overseas each year. There is an estimated 72 billion barrels of oil off the east and west coast of the US but you think regular tuneups and checking tire pressure is a better solution? I'm all for finding alternative energy solutions but it will take time. Currently alternative energy vehicles represent 1% of automobiles on the road today. It will take time to get this figure up significantly so we can either continue importing foreign oil or look for solutions here at home.

      You have demonstrated that to me that you have zero credibility when it comes to an understanding of both markets and the energy challenge.
      View article »
    • Thu Aug 14th 14:49 PM | Rating: 0 0
      Commented on:
      Obama's Tax Plan - And Basic Honesty
      You conveniently neglect to include two key facts.

      1) Obama would put the top marginal tax rate back to 39.6% which would make US corporations the most heavily taxed in the OECD.

      2) He would remove the "tax breaks" that US corporations now enjoy, tax breaks (like the Foreign Sales Corporation rules and subsequently Jobs Creation Act) that were enacted to try to balance the fact that the US is the only industrialized nation that taxes both citizens and corporations based on citizenship, not domicile (like every other OECD nation), which will make them even less competitive globally.

      Two of the most destructive actions a political leader can take in a declining economy is to a) increase taxes and b) increase tariffs, both of which Obama has promised.

      He is obviously not a student of economic history because if he were, he'd realize just how misguided these action are. Herbert Hoover did exactly that in 1930 and 1931 by raising tariffs (Smoot-Hawley) then raising taxes which were greatly exacerbated the impact and severity of the Great Depression.

      What is that line from Forest Gump? Stupid is as stupid does...
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    • Wed Aug 6th 15:15 PM | Rating: 0 0
      Commented on:
      Timing the Recession
      So tell me again exactly what use final GDP growth figures have from any practical trading point of view? The NBER just revised GDP growth figures downward for 2005-07 and we also just learned that Q4-07 GDP was negative. If the fact that GDP revisions can occur anywhere from 1 to 3 years later doesn't make it a useless recession or trading indicator, I can't imagine what does...
      View article »
    • Sat Aug 2nd 19:11 PM | Rating: 0 0
      Commented on:
      Rant Anniversary - Cramer's Mad Money (8/1/08)
      He is also the guy who would rather the Fed try inflate its way out of the breaking of the multitude of asset bubbles now popping. Can you imagine what commodity (and oil) prices would be doing now if the Fed had cut rates to 2% when Cramer wanted them to?

      So the best way to prevent bubbles from breaking is to create more of them? Thought he would have learned his lesson from the Fed dropping rates to 1% and keeping them there for too long from 2001 - 2004 but I guess not.
      View article »
    • Sat Aug 2nd 19:05 PM | Rating: 0 0
      Commented on:
      What Was Last Quarter's GDP and Inflation Rate?
      Here is the reason. The government reverse engineers CPI and PCE data to give the desired result. After all this is an election year and the incumbent party whether Republican or Democrat, have shown a remarkable ability to juice the economy leading up to each election. Statistics are a big part of this task. History has shown that a party heading into an election with an unhappy or unemployed voter have a snow-ball's chance in hell of getting re-elected. As a result the NBER (and Commerce Department) won't confirm we are in an election till after the election since this would make the chances of a Republican win even slimmer.

      This explains why 93% of all Dow gains have occurred in the 26 months leading up to elections compared to just 7% in the 22 months after.

      CPI and PCE show little basis in reality.

      Conclusion? Investors relying upon CPI or PCE to make investment decisions do so at their peril.
      View article »
    • Thu Jul 24th 15:38 PM | Rating: 0 0
      Commented on:
      This Can't Be Helping Real Estate
      With US Treasury Income Flows (net changes in money invested in Treasuries) on a steady decline with the trendline now below the amount needed just to finance the US budget deficit (more than $30 billion every month - see chart at tradesystemguru.com/co... ), what foreign bank or investor will want to continue to invest in a money losing asset? The real rate of inflation in the US now runs somewhere between 6% and 8% with 10-year Treasuries yields back around 4% (and dropping) and a weak dollar (possibly getting weaker?).

      So who in their right mind would buy an asset class with a real rate of return (not including dollar changes) around -2 to -3% especially as their economies cool as well? Let's face it, we've been living beyond our means for years thanks to the willingness of exporters (mostly Chinese and Japanese) to subsidize our wild and woolly spending ways by buying Treasuries with little consideration for real returns.

      But as some point as this trend continues, it is only logical to expect to see interest rates move continually higher until they are at least above the real inflation rate... and real inflation is rising.
      View article »
    • Sun Jul 20th 16:04 PM | Rating: 0 0
      Commented on:
      Earnings Season: Fundamentally Flawed
      Mike;
      Very good article! I too gave up on following S&P500 earnings, surprises and disappointments etc as I was unable to garner any way to accurately interpret them to make money. I instead follow earning changes reported weekly for the 4000+ companies tracked by WSJ and have found it a little more reliable.

      As you can see from the chart as Q1-08 reporting season was ending, earnings broke down hard in Q3-07 (which we began to see a few weeks into Q4-07 - tradesystemguru.com/co... ).

      As of the latest data as I write this (July 20/08) Q2-08 earnings dropped again falling 30% from Q2-07 after the second week of reporting season with 631 companies having reported so far. Earnings have shown a bearish tendency to continue to worsen as reporting season progresses...

      It is harder to fudge results for the majority of companies reporting as a group than it is the cherry picked companies of an index like the SPX or DJIA... but I didn't realize just how bad it was till I read your article.

      Cheers,
      Matt Blackman
      Host TradeSystemGuru.com
      View article »
    • Thu Jul 3rd 12:44 PM | Rating: 0 0
      Commented on:
      Dow in Secular Bear Market When Priced in Ounces of Gold
      Costing the Dow in gold gives us a measure of what the Dow has done in real terms i.e. when it is measured against the most reliable long-term standard of value. It is tells us how stocks have performed when you remove the dollar effect. By my calculations (similar to the chart above) the Dow has declined 72% since its 1999 peak with similar declines for the S&P500 over the same period. We've been hit by the double whammy of a depreciating dollar and lackluster stock performance in the last nine years. In other words, the investor who simply bought gold and held it in 1999 now has more than three times more money than the investor who bought and held the Dow or S&P - a sobering thought...

      Matt Blackman
      Host TradeSystemGuru.com
      View article »
    • Thu May 1st 00:43 AM | Rating: 0 0
      Commented on:
      Let's Think Long and Hard About Extending Those Bush Tax Cuts
      Skjellifetti clearly shows that he, she or it is not capable of critical thought. Think about it for a minute. There are many studies that show the impact of raising tax rates on government revenues. Perhaps you are not aware of history but in Britain in the late 1960 the Labour Government raised the top marginal tax rate to 98%. What happened? The Beatles wrote a song called tax man, the rich people left and Britain accelerated its economic decline as entrepreneurs and their money left the country. Have you ever heard the term capital is mobile? Why would anyone is his or her right mind work to give the government 98% of what they earn? Only a government bureaucrat could come up with such a concept. That wouldn't describe you by any chance would it Skjellifetti and explain why you post anonymously?

      It wasn't until Maggie Thatcher came to power in Britain and reduced taxes that the economy really recovered. A similar situation occurred in the US with Ronald Reagan in the early 1980s, that began the 20 year bull market but that is another story.

      Not only have I studies lots of research on the subject, I have done a little myself some of which may be found at www.investopedia.com/a...

      Here is another question for you. Why is it that the US is one of only three countries in the world that taxes based on citizenship, not residency? The other two are the Philippines and Eritrea (in Africa). The reason? It takes a system that taxes citizens no matter where in the world they live to be able to maintain the second highest corporate tax rate and one of the more expensive income tax rates in the world. Without it, more with money (and know how) would simply leave.
      View article »
    • Mon Apr 28th 13:52 PM | Rating: 0 0
      Commented on:
      New Home Sales, Inventory Chart: You're Going the Wrong Way!
      Yes it is fascinating that homebuilders are picking up steam. It isn't the first time investors jumped the gun (look at the last big rally in $HGX (Philadelphia Housing Index) when the index jumped from 187 in July 06 to 257 in February 2007 only to plummet again).

      Is this one different or just another bull trap rally? You be the judge but take a look at the difference between housing starts and the annual sales rate of new homes as a guide...
      View article »
    • Mon Apr 28th 13:36 PM | Rating: 0 0
      Commented on:
      Market Bulls: Everything's Coming Up Roses?
      Excellent point Herb. More recently we have the example set by the Nikkei 225 that between 1990 and 2008 experienced six major bull trap rallies, the latest being the 100%+ rally between 2003 and 2007 that ended October 31 (see tradesystemguru.com/co... ) and each time, the index fell to a new low.

      Eighteen years later, the Nikkei is worth roughly 20% of what it was in 1990! As I mentioned in my article, each of the six bull trap rallies in the Nikkei was no doubt driven by bullish speculation by stock pundits talking their books...
      View article »
    • Mon Apr 28th 13:27 PM | Rating: 0 0
      Commented on:
      Legg Mason's Bill Miller Is Optimistic
      Bill Miller, as are all money managers who would have us believe that we are at a "once in a generation opportunity to buy stocks," is doing nothing more than talking his book. Pretty hard for these guys to sell stocks to the public that holds the belief that prices will go lower hence the concerted campaign to 'talk up' the market...
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