drmalaka

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    • Mon May 5th 16:44 PM | Rating: 0 0
      Commented on:
      High Gas Prices May Help Harley-Davidson: More Evidence
      I was at the Harley dealer near me recently and was asking about sales and he said the same thing, gas prices were helping sales. Don't know if this is proof positive, it might be part of a company talking points memo, but he did echo this post.
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    • Mon May 5th 11:26 AM | Rating: 0 0
      Commented on:
      Rep. Kanjorski's Unreasonable, Unconscionably Ridiculous Idea
      I can not come close to expressing how depressing it is that the vast majority of our elected officials have absolutely no concept of how economics works. Some of these lame excuses for leaders go so far as to give they impression that they do not even have the means to balance their checkbooks.

      How retarded is this gas tax moratorium for the summer? McCain says it will help the poor the most becuase they drive older cars and drive more. What? Hmm, let me see, if we lower gas prices these users are going to consumer more than they would right now, driving demand up. Economics 101 says if demand goes up something else does as well. What could that be? Maybe prices?

      Plus a tax cut will induce fewer people to switch cars to more fuel efficient vehicles.

      As for windfall taxes, what idiocy. Only complete morons don't understand these simple concepts. We want to tax Exxon because they are big, not extremely profitable. Google has windfall profits, 50%.

      How funny, Obama is actually right on this one. And lets be serious, there is a guy who has had great schooling and I would put major money on the fact that in all his years at Ivy League universities the man never took an economics course. I can't even tell you how many of these progressive/socialist/... I met in college and law school that never even knew there was an economics department in these schools.
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    • Fri May 2nd 16:56 PM | Rating: 0 0
      Commented on:
      Employment vs. Earnings vs. Analysts
      This is fantastic information to know.

      I am of the belief that we do not have terrible inflation, as defined. We are confusing rising prices in certain sectors with inflation. This is not correct. Yes energy and commodoties are rising in price, but is this leading to higher prices all around? The answer is no and has to be. Now stay with me for the reason here.

      Yes the Fed is increasing money supply, so one could think that more money equals inflation, but not so fast. Money is not moving through the economy as fast. This is because of the deleveraging going on. If a bank has $1 and lends it out twice then money supply is $2. Now if the bank has $2 and lends it out once money supply is still $2. We increased actual dollars but did not increase the supply. You can read more about this Velocity Of Money in John Mauldin's latest newsletter. www.investorsinsight.c...

      Now back to why this matters and how the article makes some sense of this theory. Noting that we have anemic growth in wages and underemployment for those who would like to work more, this is very important.

      Without an increase in money supply all prices totaled must be equal. If we pay $1 more for X then we must pay $1 less for Y (or a combination of X, Y & Z). If we have "inflation" in energy and commodities then we must have "deflation" in other goods without more money in the economy.

      If we are spending more on energy and commodities and we do not have actual inflation then what would we expect. I expect to see declines in consumer spending. Since we are a service based economy, if consumers stop spending they will most likely slow spending on services. Go to the hairdresser once every five weeks instead of three. Have a cleaning lady once every two weeks instead of every week. Fewer new cars sold so auto employees are not working overtime. Less home improvement work. You get the picture.

      My guess is that it will take several months, but as consumers have no choice but to reign in their spending in non energy and food products, the numbers we see are going to keep declining. This will lead to declining wages and declining corporate profits. I can not see how we can possibly get away from this.

      Also, note that there is strength in multi-nationals and this will make the case less clear cut as we are exporting more. That is why it is probably much safer to stick with US based revenue companies. Look at Google's numbers, the US numbers were absolutely horrible, barely any growth. Their strong earnings are all overseas.
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    • Fri May 2nd 13:14 PM | Rating: 0 0
      Commented on:
      Argentina to Default?
      How nice, an Argentine commentor speaks in Spanish to us all. The answer to his question is probably that the reason the writer thinks that Argentina faces a risk of default is that they elected a moron as President that has absolutely no economic experience or understanding. She is a Peronist and believes that taxing things fixes the economy. Gartman wrote today about Argentina and their brown outs because of government energy taxes and policy and now the agriculture problem. The only thing Argentina does right is grow food and now the idiot in charge is raising taxes on their one important export.

      The problem with Argentina is not the country, it is the Argentinians.
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    • Fri May 2nd 13:00 PM | Rating: 0 0
      Commented on:
      Thursday's Market 'Melt-Up'
      I agree that for now the market wants to go higher but wanting something will not make it right in the long run. For those who say that the market is a discounting mechanism, that is correct many times, but I ask you how correct was it in 2000 when the NASDAQ was at 5000? How correct was it in Sep/Oct last year when we rallied 10% to new highs?

      The forward looking idea of the market is forward looking when the market is correct. We must ask if we are correct here? Is housing near a bottom? Will banks lend the homebuilders money in the comming months to help their balance sheets or will credit stay tight forcing several homebuilders into bankruptcy?

      As for inflation, what we are seeing is not inflation, it is rising commodity prices. They are not one in the same. If money remains constant and gas and food prices go up then that means prices of other goods MUST decrease, as there is less money left over to spend on these items after food and gas. Inflation would dictate that all prices rise.

      With that thought in mind, if those other prices go down what happens to the economy? Prices will have to go down in service industries (go to the hairdresser once ever three weeks instead of two), housing prices drop....this will hurt our economy which would make sense with the article premis that we will have a boring economy for a while.
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    • Fri May 2nd 12:45 PM | Rating: 0 0
      Commented on:
      Exxon's Record $9.32 Billion Q1 Income Taxes: Update
      Mildly Distured, I think you are more than mildly disturbed and deranges. How is Bush responsible for oil prices. Is it his fault that China and India and the Middle East have increased their demand for oil tremendously? Is it Bush's fault that we don't drill in ANWAR? Is it Bush's fault that Russia and Mexico are producing less oil? Is it Bush's fault that we are not firmer with tyrant thugs in Iran and Venzuela?

      The only thing you can be sure of in your deranged mind is that Bush was absolutely responsible for Hurricane Katrina.

      Yes Bush is to blame for a screwed up economy that was brought about by low interest rates and a real estate bubble created by greedy Wall Street bankers in NYC where the Democratic party raises half their money.

      You were probably one of those simple minded people who said Iraq was a war for their oil. That was a smart proposition, so are you saying this was a war so that we could double the price of oil. Sort of flies in the face of your theory. Then again those same idiots were telling us we needed 10,000 body bags for the invasion and are now crying that five years later 4,000 have died.

      The problem with people like you is that you just say whatever comes to your heart, becuase clearly your mind does not work very well, and then you never have to account for the fact that you are always wrong. You just move to your next gratuitous jab at the President and forget your horrible track record.
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    • Tue Apr 29th 17:52 PM | Rating: 0 0
      Commented on:
      Are Homebuilders a Buy?
      I will say it again, the homebuilders are cornering the real estate market like the Duke Brothers did in Trading Places. They are geniuses.

      By building twice the supply needed, and adding that on top of the already large supply of new homes sitting vacant, the homebuilders are going to have all the new homes available. Plus, since none of these homes are selling it will actually appear as if the homebuilders are holding out for higher prices based on demand. Before you know it if anyone in this country wants a new house they will have to go to these homebuilders to get a house.

      This will give the homebuilders tremendous pricing power. Within several months they will be charging twice what they are charging for new homes now. That is what happens when you corner the market.

      Moreover, sales are going to skyrocket. Since there are absolutely no sales now, when ten people buy these new homes at twice the price the homebuilders will announce tremendous profit margins on each sale. This will lead the banks to not only call a bottom but to call a new housing boom starting no later than September.

      Now as long as Eddie Murphy and Dan Ackroyd don't show up and start giving us false information we are off to the races.
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    • Tue Apr 29th 17:39 PM | Rating: 0 0
      Commented on:
      Those Who Know and Those Who Don't
      Being an equity trader or broker is far removed from being an economist. These guys work on trading trends and manipulation in the market, not reality. They all keep referring to a bottom in prices and sales later this year, which helps their book tremendously and probably helps them make money trading over a short period.

      Reality of course is different, as told directly by the homebuilders themselves. The concept that housing will bottom towards the end of next year is as rational as blowing yourself up and getting 47 or 57 or whatever virgins as a reward.

      The homebuilders have all dropped dramatically from their highs in 2005/6 so it is true the market is a forward looking mechanism. While the market was running in 06-07 these stocks were already collapsing. So you have to dive these guys some props. However, the thought that some of these companies are not facing a serious risk of bankruptcy is rediculous.

      Furthermore, real estate has such a long cycle, to think these stocks will find a bottom and go up in the near term is psychotic. If this is actually the bottom it would not be crazy to think that the homebuilders will trade in this range for years to come. This year alone they will add 500,000 net new homes to the supply at the rate they are going. When are they every going to make a profit. YEARS!!!!
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    • Tue Apr 29th 13:51 PM | Rating: 0 0
      Commented on:
      Far from Dead: The Case for 3 Newspaper Stocks
      NYT is one of the most inflated stocks around. Paying attention to anything that Sulzberger says is pointless. This is still a fat company with too many over paid employees and unioninze labor. Sulzberger is flat out as incompetent as they come, without nepotism this guy would not be qualified to shine my shoes.

      Furthermore, investing in NYT is like investing in communist Russia. Sulzberger is an avowed socialist/progressive and when you invest in his company understand that you are not investing in a capitalist company that will do whatever it needs to do in order to make money. Sulzberger puts his politics ahead of business, he will take this company down to zero before he would accepted a $50 takeover offer from someone like Murdoch. He is using shareholder money to advance his socialist agenda, watching the value of the company decline while he tries to get Obama elected.

      This is the same moron that decided the best way to cut costs and increase profits was to reduce the actual paper width, not the payroll.

      This is a dead industry and what everyone needs to understand is that you can not take it digital in the same way. Digital revenues are at best 10% of what paper revenues are per user. This also shows the complete rip off that advertising in these papers has always been, with beefed up circulation numbers just to increase ad revenues. Well that business model is gone.
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    • Mon Apr 28th 21:36 PM | Rating: 0 0
      Commented on:
      Legg Mason's Bill Miller Is Optimistic
      Using Miller as a basis for optimism is like quoting Paul Krugman on economics.
      View article »
    • Mon Apr 28th 21:09 PM | Rating: 0 0
      Commented on:
      New Home Sales, Inventory Chart: You're Going the Wrong Way!
      What an amazing chart. These stocks should all be buys. If they keep building new homes and sales continue at this horrible pace then the home builders are going to corner the market, just like the Hunts did in silver and those Duke dudes tried to do in Trading Places. So long as Eddie Murphy does not show up and ruin everthing these home builders are going to make trillions.
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    • Sun Apr 27th 21:48 PM | Rating: 0 0
      Commented on:
      Tech Will Not Escape Unscathed - Barron's
      I agree that this cycle will be different for tech. Orders are going to decrease as the economy slows down becuase this is a consumer recession not a corporate one. When we had a corporate led recession orders from corporations slowed early leading to the tech down turn earlier than this time.

      I find this entire run up strange. The market only wants to focus on the positive news and anything that can be considered positive is read that way. IBM showed strength in a lot of service contracts that are multi year deals, while Google showed great overseas growth but their US growth was horrible. Then we have good news from RIMM and Apple, two of the best companies around. How did AMD do?

      All signs point to a very weak consumer, maybe the rebate checks make a slight difference, but to think that we will have a nice recovery in the second half is just wishful thinking.
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    • Thu Apr 24th 12:42 PM | Rating: 0 0
      Commented on:
      Condos With Embedded Puts
      I believe that LEH will book this as a $4.5 billion write up against another $5 billion of write downs they will take next quarter that they said they would not have becuase all the bad news was behind them. They will also book another $.5 billion in profits on their outstanding debt which has gone down in value. Pretty funny, since your company sucks and people think there is a greater chance that you will default then your debt is worth less, which is a profit for a bank.
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    • Thu Apr 24th 12:32 PM | Rating: 0 0
      Commented on:
      Ambac Does It Again
      How does a company trading at $4 lose almost $12 a share? How funny is that? And then guys like appro think it is Reggie sending these stocks down because he is nagative. Hard to believe some guy who writes occassional articles had anything to do with a $12 a share loss.

      I was laughing with some friends the other day that I bought some MBI puts becuase the sector had been quite for several weeks so when the chatter started again it would be more bad news.

      Remember the first ABK bailout rumor in Feb where the stock ran from $9 to $12 in the last half hour of trading? Wonder how those permabulls like apppro did if they bought on that great news?
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    • Tue Apr 22nd 17:44 PM | Rating: 0 0
      Commented on:
      Why Bloomberg Won't Buy the New York Times
      The only people who would buy the NY Times are those who need to put paper at the bottom of their bird cage.

      A horrible industry. A horrible company. Terrible Managment. Overpaid and too many employees. Declining advertising. Declining circulation. Declining relevance.

      Every day that goes buy the goodwill of the Times goes down even further. How much longer will they be the paper of record? Large portions of this country could care less what the Times writes about, eventually they will only appeal to the 10% lunatic progressives. Not a good plan.
      View article »
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