eternitus

Doug Kass Bearish on Equities

What happens when you adjust trailing 10-year earnings for inflation and normalize for interest rates? Looking at the non-financial sector, I bet that you'll find that the market's current valuation multiple does not require much earnings growth at all.

Gets a little dicey with the financials...

Manufacturing: Will This Be a V-Shaped Recovery After All?

Looks like a lot of people missed the big rally and are desperately wishing for a second chance...

Very good post and things do seem to be turning a corner. The Fed has put the pedal to the metal and are determined not to let things fall apart, even if they have to allow for high inflation. A key issue will be to keep the banks from collapsing. Lots of bad loans (not securities, which are marked to market) festering on their books to absorb. I think that can and will be done.

Why Did Bernanke Say What He Said?

Runaway inflation doesn't let you know its coming. We won't see any "evidence" in the bond markets beforehand. It just hits and crushes everything in its path.

Bernanke knows that if politicians are left to their own designs, they will spend right up until the point the system implodes (just as they looked the other way with the housing market). Having to raise taxes or cut spending are not good for reelection... rising asset prices and government handouts are.

Bernanke knows that the politicians will run us into the ground, and the fact that our destination in "cutting the deficit" is to reduce it to $500 billion in a couple of years speaks volumes.

Since we won't get our house in order, we will be faced with inflation and currency devaluation. Bernanke knows this is the endgame, and he must feel his duty is to do what he can to prevent this. I hope he succeeds but am not optimistic.

How Today’s 2.46% Dividend Yield Could Destroy Your Wealth

You have to look at PE... payout ratios have changed over time. Stripping out financial companies, the market was at a PE of less than 10 in March... that's very very low historically.

The Roubini Portfolio

Yes, the "younger generation" has got to learn about hard work... just like their parents who got drunk on asset bubbles, stole the younger generation's money through enormous deficit spending and will continue to steal in retirement. if only we youths could have such virtue.

Hypocrites.

The Rally, When It Comes, Will Be a Doozy

Dow PE is 8 trailing and 10 forward with a 4.4% dividend... I'll take it. Levels like this don't last long.

Should Google Be Paying a Dividend?

Stock that never pay dividends are simply pieces of paper (or bits of data)... especially large caps than can't be acquired.

ISM Index Suggests an Important Inflection Point

The 6.2% number assumes a constant decline over 4 quarters (why it says annualized). From quarter to quarter, the economy actually shrank 1.8% in Q4. If the economy declines at a 4% pace in Q1, the total decline would be 2.8% from Q3. Economic activity was not 6% lower in Q4 than Q3.

Don't Worry About Consumer Debt

3% of income is a sizable percentage change (though not alarming) at any rate and I think you would get a very different result if you excluded the top 10% (or even better 20%) of income earning households. Income in these cohorts expanded the most on percentage terms over the timeframe shown and these households tend to hold less debt.

So, this chart excluding the top 10% or top 20% of earners is what I would like to see... probably somewhat more alarming.

For Insurance Companies, Is a Crisis Looming?

Jegan,
Do some research and see how different it is for the younger generations (x and especially Y). The system you helped build forced them into enormous amounts of debt (college is much more expensive than it has ever been when adjusted for incomes.... impossible for them to buy affordable homes, which bebefited boomers at the expense of first time buyers, etc.). That is the "support" that the younger generation has received. Now, look at the difference between social security 20 years ago and now... used to be something like 10+ workers for every retiree and now, when the boomers retire there will be 3. that means younger generations will have to shell out much more on a relative basis than the boomers did. Do I even need to mention the debt boomers are leaving behind? Boomers have damaged this country... good thing America is too good to ruin.

Don't worry... when you are old and out of power, we'll get you back.

Obama's 'Bad Bank' Plan Is a Turning Point

So the Obama administration is using Henry Paulson's plan after all. I thought it was the right call back in October and I still do today.

The Lending Lunacy Continues as GMAC Gives Out More Bad Loans

Lots of people with credit scores in the 600s want loans. Most of that group (unfortunately) is not exceptionally good at paying the loans back.

GMAC: Three Key Questions

Just say it... GMAC is a subprime lender. Is there now going to be a movement to "keep people in their cars" when they default and the repo men come? Is Barney Frank going to stand up for the little guys who were tricked? They thought the money was a gift and only found out later that it was a "loan" and the money had to be "paid back" with "interest."

As a culture, we have gone totally insane. Who are we? What have we become?

Government's Best Move in 2008? Letting Lehman Fail

Agreed. It is inconceivable to me that we could extend a lifeline to a company (GM) that has lost 72 billion over the last 5 or so years and not demand any sort of change. Drives me crazy.

Free Lunch for Bernanke and Paulson

Question... if we can simply create money out of thin air, then does it really have any value at all? This is the question that has undermined every fiat monetary system ever devised.

Sadly, I'm beginning to doubt that there is any recourse. Even sadder... why as a bank would I care about underwriting standards if the government can print money at any time and bail me out when loans turn sour?