DavyJ

Wall Street Breakfast: Must-Know News

Gonna spend it and pay interest for ever and ever. That's what.


On Dec 17 11:40 AM TBill wrote:

> Left over TARP money??? Like there is a safe full of it and it's
> just collecting dust??
> There's no such thing. If they spend more money, they have to go
> out and borrow it.
> That's like planning to borrow and buy a $200k house, finding one
> for $150 and saying 'gee, we got $50K left over, what are we going
> to do with it?'

The S&P 500 PE Ratio: Looking Ahead to 2010-2011

Re: "After earnings for the S&P 500 companies fell off a cliff, investors anticipated the market would recover, leading to the record high PE ratio for the S&P 500."

Actually they did not fall off a cliff. A few financial companies had tremendous losses and that pulled down the sum of the earnings, but the vast majority of companies reported acceptable earnings considering the state of the economy.

A prudent investor would, or should, dig a litter deeper.

Wall Street Breakfast: Must-Know News

"With the financial industry stabilized, and many banks having or about to repay the government's aid with interest, the government is in talks with lawmakers to use unspent TARP money to offset jobs spending and aid the long-term unemployed."

Yep, once the money is out there, there is no getting it back. $200 billion at 3.5% (~ten year bond rate) interest is $70 billion over ten years that is automatically added to the deficit with no accountability.

Why I'm (Cautiously) Optimistic About the Future

Isaac Watts?

You're not confusing him with James Newton are you?

New York Manufacturing Stalls, Retail Sales Rise (Somewhat)

Re: "Retail sales were expected to grow 0.9% over the prior month, but actually grew a better 1.4%, which started fueling the market before the open."

But the report also said: "The government also revised the September results down to a 2.3 percent decline, from the 1.5 percent drop initially reported."

Subtract the 0.8 percent revision and sales were actually 0.2 percent less than expected!

But nevermind. Just minor details of a fraction of a percent.

Stocks Bounce, But Big-Name Investors Aren't Convinced

Re: "Retail sales were expected to grow 0.9% over the prior month, but actually grew a better 1.4%, which started fueling the market before the open."

But the report also said: "The government also revised the September results down to a 2.3 percent decline, from the 1.5 percent drop initially reported."

Subtract the 0.8 percent revision and sales were actually 0.2 percent less than expected!

But nevermind. Just minor details of a fraction of a percent.

Economic Data Showing Signs of Negative Trends

Why is it that we need two negative quarters to declare a recession has begun and only one positive quarter to declare a recession has ended?

Wall Street Breakfast: Must-Know News

$787,000,000,000 stimulus created 650,000 jobs so far. That $1,210,769 per job.

But it's on track for 3,500,000 jobs created by the end of the year so that will only be $224,857 per job.

Well, we'll see.

What Crash? Greenspan’s ‘Black Monday’ Blooper

Greenspan records the same conversation on page 105 of his book "The Age of Turbulence"

Why Eliminating Earnings Guidance Is a Bad Idea

Re: "Research studies show that ending guidance not only reduces the amount of information disseminated to shareholders, it also increases uncertainty and the disparity between actual earnings and the consensus estimate.
"In addition, it results in a statistically significant loss in shareholder wealth..."

Exactly how does it do that?

Manufacturing, Exported Goods Sharply Up: So What's the Problem?

I think you missed something very subtle in Tom's comment.


On Oct 04 10:52 AM Ricard wrote:
...
> Tom Armistead wrote:
...

Is Another October Surprise in the Works?

Re: "The interesting thing about the 1987 event was the recovery time. On a percentage basis, the loss was massive – 31% in five days for the DJIA. Yet it took just a tad under two years for the index to fully recover in nominal terms."

Another interesting thing about 1987 is that it was an up year. The DJIA finished 1986 at 1896.00 and finished 1987 at 1938.80 a 2.26% increase. Same for the S&P 500.

Is the Jobs Data a Concern?

Re: "First, don't panic. It's just normal market fluctuations. Stocks have risen for 7 consecutive months, so we're overdue for a pullback. Even the strongest of bull markets incur periodic bad days (and weeks)."

On the other hand, when there is panic, he who panics first gets the best price.

How Inflation Concealed the DJIA's Precipitous Decline over the Last Decade

Considering that GM wasn't taken out until after the damage was done, I'd say it's an accurate reflection.

And if you're using the DJIA as a benchmark against your own portfolio, surely you are making adjustments there.

Also, don't forget to add in the dividends for the DJIA as you do for the dividends you receive.


On Sep 30 08:19 AM Tony Petroski wrote:

> Mr. Hyperinflation: I think you have written an article that many
> will agree with.
>
> What language do you speak? I take it you're not an English major.
>
>
> I would add, in addition to the theme that the real value of the
> Dow is less than appears, that whenever a company, for example, GM,
> is headed to oblivion, another company heading up is substituted
> in its place. Hence, comparing the Dow of the '30's or the '70's
> to the present Dow is comparing apples to oranges.

How Much Sidelined Money Remains?

Re: "A broader measure of reserves that includes cash, bank deposits and money-market funds has climbed to $9.55 trillion this month, based on data compiled by the Fed. That’s enough to buy all of the companies in the S&P 500, which have a combined market value of $9.37 trillion, Bloomberg data show."

So suppose all of that $9.55 trillion changed hands and the old cash holders now own all of the S&P 500 and the old owners of the total S&P 500 now hold all of the cash. What has changed. Nothing! Just an exchange of assets. That's why the NYSE is called an exchange. Or the NASDAQ, AMEX, whatever.

Well yes, something will have changed. Those holding stock who wanted to get rid of it did. Now they hold the cash and will no longer be shouting that there's all this cash on the sidelines.

Think about it.