Seeking Alpha

cstauffer

cstauffer
Send Message
View as an RSS Feed
View cstauffer's Comments BY TICKER:
Latest  |  Highest rated
  • Krugman Laments the Coming Lost Decade [View article]
    Teresa, government spending (stimulus) is in essence increasing public sector leverage in order to transfer money back into the economy in order to offset the contraction effect which is occurring in aggregrate within the private sector. You will see this if you look at most any money supply measure over the last year which you would expect would show great increases in the money supply given the increase in the Fed's balance sheet and the massive fiscal spending. In fact, money supply has actually contracted over that time. This is because net private borrowing has evaporated as de-leveraging continues in the private sector. Had we not had the increase in the Fed's balance sheet and the fiscal spending money supply would have plunged.
    May 25 05:17 PM | 1 Like Like |Link to Comment
  • Who do you trust: Bernanke or the markets? Bernanke's rosy economic view conflicts with reality, Michael Pento says, and stocks and commodities are casting their votes. The Fed's failure to listen to the markets is the key reason for its "miserable record" of economic projections. "For the betterment of the nation, the next appointment to serve at the Fed should be someone from a trading pit and not from Princeton."  [View news story]
    I used to respect Pento's opinions whether I agreed or disagreed with them, however this comment eliminates that respect if he was at all serious in his suggestion. Markets are at best a mixed bag of accuracy in determining the direction of the economy. Markets are inherently driven by bids and asks and are very succeptable to human emotions, momentum and short-term trading strategies. All I have to say is a 30% weighting of the technology sector in late 1999 and 21% weighting of the financial sector in early 2008. How about investor capitulation which usually accompanies a market bottom?
    May 24 08:05 PM | 3 Likes Like |Link to Comment
  • Krugman Laments the Coming Lost Decade [View article]
    I think everyone interested in this debate over whether more government spending or less government spending is appropriate at this time should read the writings of Richard Foo of Nomura Securities. Mr. Foo coined the phrase "balance sheet recession" and is an expert on what has happened to Japan over the the last 20 years. If you read his analysis you will see that Krugman is more right than wrong if we are indeed fighting a balance sheet recession, which I really do not think is debatable. Mr. Foo's point is that you cannot fight a balance sheet recession the same as you fight a traditional over-capacity lead recession. He points out that the government cannot stop stimulating during a balance sheet recession until the private sector is successful in de-leveraging. He illustrates that each time over the last 20 years when Japan tried to cut spending to reduce their deficit, the result was that the recession worsened, tax revenue plunged and the deficit widened.
    May 24 08:38 AM | 1 Like Like |Link to Comment
  • Is Apple Overvalued? [View article]
    I believe that the author is trying to stimulate thought regarding business valuation versus stock valuation. For investors, which I define as people like Warren Buffet who analyze intrinsic value of a company and sustainability of the business model, cash flows and market share, the contrast the author makes is indeed striking. For traders none of these things matter. Traders are looking at the stock, not the company. Apple is certainly a very attractive stock and has been for a number of years, but one could argue that their success is unsustainable as evidenced by virtually every large cap tech stock. Microsoft, Intel, Texas Instruments, Lucent, Nortel, Sun Microsystems/Oracle, Yahoo, Cisco all have had periods of eye popping stock performance, but each one of them has been fleeting and was followed by a significant drop and then years of substandard performance. I seriously doubt that Apple will be the first technology stock to break that streak. On the other hand, I really do not see a replacement for copper or gold and the barriers to entry to become a market leader in either copper or gold mining are significant. Apple can quickly go from leader to loser, but it would be very hard for BHP, FCX or NEM to lose their leadership positions.
    May 21 08:43 AM | Likes Like |Link to Comment
  • Stocks Poised for Big Rally [View article]
    The reason we are having such a strong recovery hear in the U.S. and China had such a strong recovery from the financial crisis and recession is Keynesian stimulus in both countries. Europe was slower in providing monetary stimulus and their quantitative easy and direct investment in the economy was far less than China and the U.S. Keynesian theory works, but we have not had the political will to actually implement it throughout an entire economic cycle. We do the easy part and that is to cut taxes, cut interest rates and increase fiscal spending in a downturn, but we rarely, if ever reverse those actions as Keynesian theory suggests. It is the inconsistent application of Keynesian economics which dooms its failure in the U.S. We have become Keynesian during recessions and supply siders (in other words "keep the good times rolling") in good times.
    May 17 09:32 AM | Likes Like |Link to Comment
  • Generally Good News for the U.S. Economy, But USD May Still Weaken [View article]
    Donald, you are likely one of those people who initially said that the TARP and fiscal stimulus would not work to pull the U.S. out of the financial crisis and deep recession. Now that the stimulus has done exactly what a fiscal stimulus program is suppose to do, that is stimulate economic activity, you dismiss the current growth and the growth over the last six months because it was due to government spending. It seems that you have created an argument where "heads you win, tails I lose". As someone who analyzes the sales trends, new order and backlog trends of many companies, I will tell you that there is growth happening in our economy and much of it has to do with normal classic economics versus artificial "government" stimulus as you characterize it. Comments such as yours are not informative, they are simply the same old sour grapes rant which comes from everyone such as yourself who highly criticized the actions taken during the financial crisis and who wanted so badly for those actions to fail in order the validate their dire predictions.
    Apr 4 08:06 PM | Likes Like |Link to Comment
  • 8 Core Portfolio Stocks [View article]
    Regarding ADP, everyone should remember that payroll processors like ADP and PAYX have earnings that are more sensitive to the level of short-term interest rates than to the rising or falling employment statistics. These companies benefit from the interest rate that they earn on the enormous float between when their payroll accounts are funded and when the money is actually dispersed to the employees.
    Mar 31 08:18 AM | 5 Likes Like |Link to Comment
  • Dividend Investors Beware: A New Paradigm Shift Is Coming [View article]
    Well said Tom! It is very interesting because I have talked to many small business owners about how they will react to higher tax rates in the near future and their reaction has been almost universally exactly opposite of what the supply-siders would have you believe that it would be. Almost all of them said the if the government take a higher percentage that they will work harder and smarter to make more money to offset the impact to their discretionary income.
    Mar 26 08:39 AM | 14 Likes Like |Link to Comment
  • Why to Avoid the Municipal Bond Market [View article]
    I think you article short-changes those of us who are active managers in the municipal bond market. Not all muni debt is created equal and that is what makes actively investing in the muni market so compelling. For instance revenue bonds versus general obligation notes. Revenue bonds which have a debt service reserve fund, revenue bonds which are guaranteed by a strong corporate borrower, revenue bonds backed by strong colleges, and my favorite are bonds which are priced cheaply because they are "un-rated" because either they were a small issue and the issuer chose not to pay for the rating or they were insured and lost their insurance. Many of these un-rated bonds are trading as if they are below investment grade when in fact the underlying rating of the issuer is investment grade.

    Roger, you paint the muni bond market with too wide of a brush.
    Mar 15 08:07 PM | 3 Likes Like |Link to Comment
  • Retail Sales Results Hint at Economic Strength [View article]
    There is really only one mainstream economist who has consistently been objective in both good times and bad and that is Paul Kasriel of Northern Trust.
    Mar 13 03:29 PM | 1 Like Like |Link to Comment
  • Retail Sales Results Hint at Economic Strength [View article]
    James, you are partially right and I do apologize for greatly simplifying my comments. Full disclosure is that I do not follow either LOW or HD and made my comments based upon some of the information which I came across shortly after there earnings were released.

    Here is some quotes from their earnings transcripts:

    HD: Comp sales were positive 1.2% with our U.S. stores posting a negative 1.1% comp for the quarter and our international stores contributing a positive 2.3% comp.
    Our business improved more than we expected in the fourth quarter. Of our top 40 markets in the U.S. all but two showed improvement in the fourth quarter on a comp sales basis. Every one of our regions showed comp sales improvement in the fourth quarter versus the third quarter and our Northern Division, our largest division with eight regions had a positive comp for the quarter. We also saw sequential improvement in California and Florida with a return to positive comps in some of the markets there.
    So all of this gives us some cause for optimism in 2010.

    Here is the same from LOW: Evidence of an improving environment is found in the fact that we experienced a sequential improvement in comps in all 50 states from the third quarter to the fourth quarter and 26 states had positive comps in the fourth quarter.
    Improving trends and comp sales including improvement in larger ticket comps combined with solid new store sales led to a 1.8% increase in total sales and only a 1.6% decline in comp sales, both better than our expectation heading into the quarter and also our best comp performance in three and a half years.

    I think reading these comments you would have to conclude that they are seeing much of the same improving trends to which I have been referring.

    I have never been a cheerleader and in fact I am very critical of those who cheerlead to investors. However, I do believe that if you call me a cheerleader than you must accept the label of a doomer.
    Mar 13 11:16 AM | 1 Like Like |Link to Comment
  • Retail Sales Results Hint at Economic Strength [View article]
    Did I mention Krugman? No I did not because he is more of a politico economist. I do read Krugman occasionally, but I do not form my forecasts based upon him.
    Mar 13 10:30 AM | Likes Like |Link to Comment
  • Retail Sales Results Hint at Economic Strength [View article]
    How do you explain YOY increases at most apparel stores, Home Depot, Lowes and many others. I don't really believe that they sell gasoline or groceries. I pay more attention to what company results are showing. I don't really tend to lien to heavily on government statistics one way or another. However, I find that when someone has a predetermined bias toward a particular scenario they will totally discount government statistics when they disagree with their premise, however they will jump all over those statistics if they even hint at supporting that premise.
    Mar 13 10:28 AM | 2 Likes Like |Link to Comment
  • Retail Sales Results Hint at Economic Strength [View article]
    The problem with mark-to-market account to which I assume that you are referring to as nature is that it only works when you have a functional market. However, when you have a credit bust and resulting deleveraging the market is not functioning as it is suppose to. At that point you don't have mark-to-market, you have market-to-firesale. If you take the opposite argument than we should take absolutely no action when speculative excesses reach extreme levels and bubbles occur. We are admittedly no very good about taking the punch bowl away and that was proven out in 2000 and leading up to 2008, however no one is really arguing that we just should let extreme inbalances just play out to there logical conclusion at either ends of the spectrum.
    Mar 13 10:11 AM | Likes Like |Link to Comment
  • Retail Sales Results Hint at Economic Strength [View article]
    James, you cannot compare todays retail numbers to early 2007. By doing so you are comparing retail activity at the late stages of an economic expansion versus retail numbers in the early stages of an economic recovery. This is an apple and oranges comparison. What you should be looking at is year over year trends. Of course those YOY numbers are easy comparisons versus last year at this time, however you must look at these trends as the recovery progresses. But forget about comparing retail sales with early 2007.
    Mar 13 09:56 AM | 1 Like Like |Link to Comment
COMMENTS STATS
412 Comments
479 Likes