drmalaka

Will a Drop in Oil Trigger a Market Recovery?

I found the talking head television comments on this hilarous. Morons like those guys will cause the market to go up short term if oil drops but the real question is why? I do not recall the market dropping much between March and June when oil went from 100 to 135. These perma bulls are a joke, oil going up never effected their bullishness but if oil drops it will be bullish for stocks.

This is a moot argument. Who cares if oil drops back to $100, how will that make things better? Right now stock prices do not reflect the reality on the ground based on $130 oil. Companies that have higher input prices and shipping prices have not been killed becuase of the oil rise. To see them go up becuase oil drops would not make sense. So if I get this correct, when oil rises it has no negative effect on stocks but when it drops it is positive for stocks.

Bottom line is that the perma bulls and talking heads need to grasp at anything to keep their thesis alive that things are good. Well they are not. Our rediculous American consumer has gotten himself in a horrible position, he can't afford his house payments, his SUV payments, the gas to put in his gas guzzler, the food to put on his table but yet he is still going to Best Buy and buying new laptops and flat screens. Who is a bigger joke, the talking heads or the American consumer?

John Hussman: Do Worse Credit Problems Lie Ahead?

I saw Dick Bove today talking about the banks and the first thing I thought about was this article. He said that if you back out loan loss reserves the banks had great numbers. I am not sure how you could back that out, why not just back out salaries too while you are at it.

The one thing I do not get is how can a supposed expert like Dick not realize that the loan loss reserves are there for a reason, DUH! But in relation to this article, his hypothesis totally neglects the fact that the higher real reserves are actually a lower percentage of problem loans.

Better To Be Lucky Than Smart: The Bear Market is Over

PE contractions? Oh please? S&P earning are still way too high and no one wants to believe it. Mr. Market wants to be forward looking and stick with the second half recovery. No chance.

Profit margins are near an all time high and input costs are increasing. This means one of two things, either smaller margins or lower sales if they pass the increase on. Rising inventories in the Q1 also point to a weaker consumer (Duh) who will not only cut back on spending becuase of higher oil and food prices but less credit.

Furthermore, Mr. Market believes housing will come back towards the end of this year or early next year. Dream on. There are no buyers out there anymore and more houses available every money.

Mr. Market is a genius, he is forward looking, lets keep repeating the same thing. I especially like how forward looking Mr. Market was in Oct '07 or March '00 he was spot on right?

The world is growing if you want to stay long make sure you are in those companies. As for US companies that focus on the US good luck. Anyone who thinks Mr. Market and his forward looking crack pipe is correct about retail US sellers doing well towards the end of the year is sharing the crack pipe with Mr. Market.

This market is perfectly irrational now. FNM reported perhaps the worst quarter and guidance in US history yesterday and went up almost 10%. What a joke. If they had declared bankruptcy they would have gone up 50%, that is how retarded the market is right now.

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.

Walking Away: The Next Mortgage Crisis

Good information, thanks.

Bluesmoke, the people who walk from their homes can go and rent homes for one third the price of their mortgage payment.

If the government wants to do something about the mortgage mess instead of stealing my money to give to deadbeats who bought houses they could not afford they should not issue any building permits for the next six months.