VP of Common Sense

Global Markets in Review: Share Prices Too Far Ahead of Economic Reality

I haven't looked, but isn't this the 3rd or 4th time Pierre has written some version of this article?

Employment Lags the Stock Market

The leading statement was that unemployment lags the stock market, the quote you cited discusses the link between unemployment and the end of the recession (ie. GDP).

That would be apples to oranges my friends.


On Nov 08 10:02 AM logicalthought wrote:

> >>There is really no debate about the point that unemployment levels
> lag the stock market.<<
>
> I refer you to last week's Wall Street Journal:
>
> "The time-worn Wall Street gospel is that employment is a lagging
> indicator, but that isn't always so. It has only lagged significantly
> in the recoveries that followed the past two recessions. In the eight
> recessions between World War II and 1982, payrolls bottomed and unemployment
> peaked, on average, less than one and two months, respectively, after
> the recessions ended. Assuming, as most economists do, that the latest
> recession technically ended in June 2009, this recovery already is
> looking jobless."
>
> online.wsj.com/article...

Trading Week Outlook: November 8 - 13, 2009

There doesn't appear to be a whole lot of news/earnings this week in the USA. So the market will continue to trade on sentiment, meaning I think it will go up a bit more...

Dollar's Decline Has Contributed to Market's Recent 'Rise'

My opinion is that we are right on the threshold of equities being overpriced. So we may go up another 10%, or not, in the short term, but we will go either sideways or down over the next 3-6 months.

Are Markets Hitting the Ceiling?

I prefer to keep an eye on P/E, specifically in terms of valuation. Right now I see a moderate to strong P with a very weak E, aka 21 or so on the S&P. In plain english, I think valuations have been bid up to an unsustainable level.


On Oct 25 02:16 PM TradingHelpDesk wrote:

> Earnings don’t drive stock prices nearly as much as sentiment does
> so I am paying less attention to Q3 earnings and lot more attention
> to the sentiment on this site, which is as good a proxy as any for
> shifting sentiment.
>
> But that’s not to say earnings don’t matter. When earnings give investors
> a rising sense of confidence, they can be a powerful indicator of
> a sharp drop in market 1-2 quarters later. This was certainly true
> in 2000. Peak earnings coincided with the stock market’s all-time
> high and stayed strong right through the third quarter before finally
> succumbing to the bear market in stock prices. Investors who bought
> stocks based on strong earnings (and the trend of higher earnings)
> got killed.
>
> elliottwave.com/r....

Bullish Biggs: The Market Has Plenty of Room to Run

The VP of Common Sense handle is based on thoughts like I've posted. That supply and demand is the end-all-be-all most of the time, that Joe six-pack from (you choose the state) probably thinks we get all our oil from the middle east, and that most Americans couldn't find Alberta on a map.

I think it's great that you're concerned about the environment, but consider just a year ago Americans were awash in drill-baby-drill enthusiasm, mostly in terms of right off our own coastlines and in our own protected habitats. You really think we care about boreal forests in Alberta?

If you really love Alberta, and want to protect your local environment, take it up with your (sold out) government. We Americans will gladly continue to buy whatever Canada is willing to sell. If that makes you want to slam me on an esoteric internet message board, so be it.

Bullish Biggs: The Market Has Plenty of Room to Run

Frankly I am ok with destroying 2% of Alberta if the Canadian government is. Once oil hits $200 a barrell we'll probably be willing to extract it from Yosemite, the Grand Canyon and Bald Eagles. If we're really lucky that might actually be a price point that actually impacts demand.


On Oct 10 09:16 PM Albertarocks wrote:

> On Oct 10 08:28 PM VP of Common Sense wrote:

Bullish Biggs: The Market Has Plenty of Room to Run

Minimize the damage to what? It's not like there was a rainforest there before. Oh no! We "destroyed" a grassy plain that was frozen eight months out of every twelve.


On Oct 10 06:09 PM Tom Armistead wrote:

> I apologize for jumping to the conclusion that your questioning of
> global warming made you an enemy of the environment. I have owned
> Suncor from time to time, specifically because I like the plentiful
> supply of energy provided by the tar sands, although I can imagine
> what it does to the environment. As you say, an effort is made to
> put things back the way they were and minimize the damage.
>

Nothing Fuels a Market Rally Like Free Money

Here's a guess: The rally ends when the easy comps end. Specifically, Q1-2010. My guess is earnings in that quarter will be marginally better than Q4-2009 as well as marginally better than the yoy comp of Q1-2009. That is when the lack of improvement in the real economy will impact the equity markets.

Boom or Bust Cycle: Where Are We Now?

There will be a retracement. It will start within the next 10 days.

What Will Be the Catalyst for Markets' Next Moves?

Interesting theory Macroman. I've been thinking for a while that high commodity prices could do in the rally by stifiling the consumer, never really considering the alternative.

No State Prosperity = No National Prosperity

Why so bullish? *Sheesh*


On Jun 22 09:54 AM conceptwizard wrote:

> The cost of daily living, from buying food to getting medical care,
> will become difficult for all but a few as the dollar plunges. States
> and cities will see their pension funds drained and finally shut
> down. The government will be forced to sell off infrastructure, including
> roads and transport, to private corporations. We will be increasingly
> charged by privatized utilities—think Enron—for what was once regulated
> and subsidized. Commercial and private real estate will be worth
> less than half its current value. The negative equity that already
> plagues 25 percent of American homes will expand to include nearly
> all property owners. It will be difficult to borrow and impossible
> to sell real estate unless we accept massive losses. There will be
> block after block of empty stores and boarded-up houses. Foreclosures
> will be epidemic. There will be long lines at soup kitchens and many,
> many homeless. Our corporate-controlled media, already banal and
> trivial, will work overtime to anesthetize us with useless gossip,
> spectacles, sex, gratuitous violence, fear and tawdry junk politics.
> America will be composed of a large dispossessed underclass and a
> tiny empowered oligarchy that will run a ruthless and brutal system
> of neo-feudalism from secure compounds. Those who resist will be
> silenced, many by force. We will pay a terrible price, and we will
> pay this price soon, for the gross malfeasance of our power elite.
>

Insiders Selling Heavily: What's Up?

One of my smaller tip-offs was multiple CNBC "people" called the market toppy two weeks ago. Ironically one of them immediately ate his words after a pregnant pause, almost as if his producer tasered him for not being bullish at all times. High comedy.

20 Considerations to Determine Market's Movements

How about #21: once the market shows moderate weakness (oxymoron?) the bears, shorts, and naysayers will pile on making darn sure our 5-10% retracement is at least the full 10%.

Was Monday a Turning Point for the Markets?

"New Normal" reeks of the 1990's dot-com "New Economy". I say it's the new bullsh*t...