hmorgan

Why I'm Bullish on Homebuilders

Sean,
I have to agree with you on this one. Nice post. Another beaten down inflation sensitive play is REITS (ICF). Obviously there is serious fundamental issues but those seem more than fully reflected in this ETF's price. What are your thoughts there?

Herb Morgan
Efficient Market Advisors, LLC

How to End the Credit Crisis

I subscribe more to Milton Friedman's philosophy on the trade deficit. A trade deficit is balanced by the investment surplus. In this case we are selling bonds at 2%. I don't see any hard evidence either that the US is not competitive at manufacturing.


On Mar 30 11:45 AM Responsibility wrote:

> Don't forget the trade deficit. The challenges in re-building and
> reinforcing industries should be on high priorities. Incentives are
> needed for other industries on scales as high as, if not more than,
> those for the financial industry.

We're in Danger of Being Blinded by Market Bottom Predictions

Hmm, this one is good, very good. My view is that bottoms are made at the peak of pessimism. Conversely tops are made at the height of optimism. It's difficult though not impossible to imagine pessimism being greater than that of October 10, 2008. (The internal bottom). The fear that day was of financial system collapse. A severe recession is certainly less pessimistic than a financial system collapse leading to depression. Of course, political unrest would again raise the level of pessimism to a measure that perhaps aproach that of October 10.
Herb

Today's Data: Are Economists Too Bearish?

Good post, thanks. I'd be interested for you to expand on your biotech thesis, perhaps in another post.
Herb

'Painting the Tape' - Wednesday's Suspicious Trading Pattern

I'm thinking manipulating the price of one of the five most actively traded securities would be a bit of a challenge. We are talking about the SPY after all, not some podunk startup biotech with an early stage drug that has not a hint of chance to make it to market. Whether or not we retest the lows (October 10, Nov 21, March 6) is anybody's guess, but I don't think it has anything to do with trading in SPY.
Cordially,
Herb

Time to Buy the Homebuilders

Thank you all for your comments. I'm honored somebody reads my posts. I find buying when fundamentals are poor based on conviction they will ultimately improve has rewarded investors over and over again. In fact, the only way things get really cheap is for fundamentals to get very bad. I expect the homebuilders to rise substantially well in advance of significant improvement in their fortunes. Two to three years from now when business is booming, I will recommend exit from this trade. Finally, my skin is thick but still this site's value would impove if more participants would express their opposiving viewpoints in a more civil tone.

The NAR's Latest Housing Numbers: Cutting Through the Bull

Mr. Lee,

Interesting interpretation of the data. I'm happy to take the other side of that trade. You may want to look deeper at the inventory data. The inventory rose 5.1% from January to February, however inventory is down 17% from its high of 4.575mm units in July.

Herb W. Morgan
Efficient Market Advisors, LLC

Geithner's Plan May Not Be So Bad

Thanks for a good post. I agree, that Krugman seems too bias and rigid ideaologically to be taken seriously here. There is no doubt the man is bright academically, but I'm unconvinced of his street credentials in this matter. The PPIF looks sound to me, but I have yet to talk one on one with folks in that space.

Bowling Ball Bounce for Markets

Never too pedantic, thanks for the fine tuning!

Herb


On Mar 20 01:01 PM THofler wrote:

> Mr. Morgan,
> Loved the article. But allowed me to be pedantic about one point.
>
>
> Any good physical scientist will tell you that "negative feedback"
> leads to stability, whereas "positive feedback" causes instability
> and oscillations. The serious economists use the terms "procyclical"
> and "countercyclical." The dumb procyclical effects we have built
> into our financial system will generate both the booms and the busts.
>
>
> The term you meant to use in the above piece is "procyclical feedback"
> or maybe "adverse feedback." Thanks again for providing some wheat
> to SA and not more chaff.

Bowling Ball Bounce for Markets

Thanks, I don't know what happened to the format but the article was submitted with tables. I'll check with SA editorial to see if there is a better way to keep the formatting next time.

Herb


On Mar 20 06:17 PM betweenthenumbers wrote:

> I greatly appreciate the tone of this article, that of a humble commentator
> trying to present facts, regardless of the actual content. I'm not
> so keen myself on the Fed's actions - they are literally the most
> powerful organization in the world now, completely on tilt, trying
> to make drastic interventionism the solution to all problems, and
> growing their balance sheet to the size of France's GDP ($2.5T) in
> 6 weeks...but I digress. I can respect his points, and like the way
> they are presented (maybe some tables instead of data points in a
> list).
>
> I really liked the statement "...getting tired of the financial news
> media selecting guests based on their ability to spew extreme and
> absolute clairvoyance about the direction of markets." That shrill
> screaming does nothing but prevent the measured discussion that is
> necessary given the current circumstances. I would even end my months
> long MSNBC boycott to watch a show if they would bring Mr. Morgan
> on.

Why This Downturn Won't Be Like 1929

I really enjoyed this article! I am wondering your source on the following data: (I'd like to do some follow up work)

"Because of that, even though we're seeing rising unemployment, foreclosures in these four states rose 46% over the past year while foreclosures in the remaining 46 states fell, in the aggregate, by 2%.

(These statistics reflect foreclosure filings, default notices, auction sale notices, and bank repossessions."


Herb Morgan

Shadow Banking System: Death from Nowhere

This is a well reasoned article. What is your opinion on the viability of TALF and its likely impact on restarting the issuance of ABS?

John Hussman: Lower Valuations Imply Higher Long-Term Returns

Very good post. Thank you.

Five Opportunities To Consider Amidst This Selloff

In structured finance, the word tranche (sometimes traunche) refers to......

I Believe in ETFs. Do You?

I rarely get such a good laugh this early in the morning. Your opening paragraph was great!
Thanks for making my day.

Herb Morgan
Efficient Market Advisors, LLC