Hmm?!'s Comments

The Global Oil Scam: 50 Times Bigger than Madoff

Thu, 12 Nov 2009 09:36:08 -0500

Actually IMHO, there is always over reaction in this situation.

First Point: Commodity futures can only be manipulated, but the effect on the actual commodity is limited. The spot price is always for delivery between the buyer and seller. The ulitmate price for oil is determined by supply and demand.

Second Point: Price spikes in oil are going to occur because of inelastic supply and demand. Oil was the inelasticity example used in almost every economics textbook on the planet. About 15 yrs of low oil prices meant NO drilling for oil. Lets a look awhile kids, before saying there is none left in the house.

When oil prices spike, every dry well on the planet gets something pumped into to it, to force more oil out. There's Sassoil that can turn coal into oil for as low as $35 a barrel. There is the Canadian Tar Sands at $35 to $70 with more oil than Saudia Arabia. I heard all this in the 70's and the 80's...........and yet we went back to a glut of oil both times?

Wednesday Outlook: Commodities, Global Markets

Thu, 29 Oct 2009 01:21:03 -0400

apirri,

Good Question. I was not sure about David's gap comment.

As a general rule.....most gaps usually fill within a few days. However gaps are also indicators of strong directional movement.

Hmmmm???

On Oct 28 07:28 PM apirri wrote:

> David, UNG has only $10 to go before it is zero. What do you think?

Wednesday Outlook: Commodities, Global Markets

Thu, 29 Oct 2009 01:02:15 -0400

IMHO.......just speak to fundamentals and ignore the prognostiticators...who do not speak to fundamentals. Then your issues are timing and the spin doctors as you mention below.....that is still more than enough to worry about.

On Oct 28 05:57 PM Alex Trias wrote:

> Alas, what a difference a day makes. The big excitement today is
> how many ETFs sliced through their 50 day moving averages. I expect
> Dave will have something to say about that in his next article, which
> I await with great interest.
>
> Some would argue that a failure to observe a 50 day moving average,
> at a time when short term momentum indicators like the NYMO are already
> at oversold extremes, suggests we are at the front end of an intermediate
> downward trend (or worse). If so, then we will be in the most heavily
> and widely anticipated market correction in recent history. Yes,
> we are all conditioned to believe that the market rarely rewards
> the majority-held view, but perhaps this truly is The New Normal
> - to borrow a phrase from Bill Gross. In the New Normal, the majority
> actually get it right, and are richly rewarded by the market.

>
> Which reminds me, anyone notice Abby Joseph Cohen stepped down this
> year at Goldman? Ahhhh, at the highs of the market bubble back in
> the late 1990s, Abby Joseph Cohen was practically a household name,
> offering up her widely accepted views that the stock market had nowhere
> left to go but up, thanks to the miraculous and new dynamics of the
> tech industry. In the late 1990s, we all knew we were in a fundamentally
> new era, that markets would absolutely go higher and higher, perhaps
> forever, and Abby Cohen was quite the spokesperson.
> But no longer. Bill Gross is rapidly becoming today what Abby Joseph
> Cohen was to the financial media in the late 1990s. Like her, he
> points to a New Normal, a fundamentally new era that supports a continued
> slide in equities (and other risky asset) prices.
> Have we come full circle, then? Do we all have a high degree of conviction
> that asset prices must drop, that the economy is fundamentally different
> this time, and have we finally settled on financial celebrity spokespeople
> who will articulate this belief on our behalf? If so, with history
> as any guide, we are wrong. Unless, of course, we are all collectively
> smarter than we were in 1999.

Chart of the Day - Inflation Adjusted Dow

Sun, 25 Oct 2009 01:07:59 -0400

bobdark,

I am not sure I follow your comment. I see the chart and the cones on it pretty much supporting your conclusion. It does not look like the DOW could go a whole lot higher, without breaking through the cones? Within the cones, we should be revisiting DOW 5000 pretty soon.

On Oct 24 11:23 AM bobdark wrote:

> I see it differently from the other commenters. A double-top often
> implies a significant reversal. And, why should we the Dow be going
> up related to inflation anyways? The most logical long-term direction
> seems to be retracing down to 5,000.

Chart of the Day - Inflation Adjusted Dow

Fri, 23 Oct 2009 14:42:22 -0400

Very enlightening. It takes a minute to adjust your mindset......to what is a proper scaling (every doubling).

What stopped you from moving the suppport line even lower, where it would just touch the bottom of the second dip?

Will Housing Data Show Improvement This Week?

Wed, 21 Oct 2009 01:39:39 -0400

There are approximately 7 million homes in bank shadow inventories today.

By 2007 48% of mortgages were low/no doc loans. A sample of 100 low / no doc loans showed 60% of low / no doc borrowers overstated their income by MORE than 50%. (Data Source: Mortgage Liquidity Du Jour by Credit Suisse)

That means about 30% of all homes sold in 2007 are destined for foreclosure. The other Liars loans could still have up to a 50% overstatement on their income. Do you know how buyers who never qualified the first time come back into the market? They don't!! They never existed as qualified buyers in the first place.

A lot more will go wrong from the side effects of excess before it is all absorbed. With a downward spiraling economy and slowing population growth, the excess could last...........a decade? How does this get absorbed when builders are still building?

On Oct 20 07:37 PM PompanoFrog wrote:

> this is ridiculous..the FRB is well aware of the weak housing market..they
> will continue to create liquidity until the housing market stabilizes..meanwhile
> the spread between the rise of the stock market and the real estate
> market gets larger..at some point households will shift their asset
> allocation towards housing..
>
> If you dont understand that asset prices rise rapidly when central
> banks fight recessions i guess you havent made any money in the last
> 6 months..the turn in real estate prices will cause banks to have
> to take profits under the new estimation models..this will create
> an earnings explosion in financials..

Earnings Notwithstanding, Citigroup and BofA Have Two Different Stories to Tell

Mon, 19 Oct 2009 09:09:42 -0400

In the end. Maybe they both go down.

The Power of Unintended Consequences: SuperFreakonomics, by Steven D. Levitt and Stephen J. Dubner

Sun, 18 Oct 2009 22:36:11 -0400

I will respectfully disagree, there are some pretty cleary defined economic principles out there. None of them have been violated (unlike ethics), by the recent economic meltdown.

Some key points
- 300 economics professors signed a full page Wall Street ad stating the stimulus bill was a bad idea. Beyond government and Wall Street puppets, there has been no equilavent rebuttal.
- There is NO Keynesian or Austrian branch of economics....just economics. John Maynard Keynes had some theories, none of which supported large government debt. Keynes fought against deficit spending. Ever study Chinese Physics or Equadorian Mathametics???.....it is nonsense!
- The core principles are almost as clear as Newton's laws of physics. However the timing of economic outcomes and the rationality of human behavior will never be accurately clocked like a falling apple (9.8 m/s).

On Oct 17 03:56 AM Ponchovilla wrote:

> Of course their objective is not just shedding light on "behavorial
> economics" but to sell books. But the plot is entertaining. Can't
> wait for the charts and graphs, theories and conclusions.
>
> The problem with economics is there is no non-arguable definition
> of what economics IS. Remember that reply under oath? "It depends
> on what the meaning of the word 'is' is"
>
> Put 25 economists in a room for a week and I'll bet a war breaks
> out. Particularly if there are macro, micro, Keynesian and Austrian
> schooled "ECONOMISTS" still alive.

Friday Roundup: Commodities, Emerging Markets

Sun, 18 Oct 2009 21:56:27 -0400

Is it possible the banks are manipulating the technicals and the zombie public is being drawn in.....as long as posible....buying new issues to cover the losses on worthless real estate debt?

On Oct 17 08:41 AM tunaman4u2 wrote:

> It always seems down days produce a higher degree of oversold than
> up days produce over bought...
>
> We're oversold just under 10K after gaining overall last week?

Oil Traders Bullish; Analysts Aren't

Sat, 17 Oct 2009 01:27:32 -0400

The big misconception is that peak oil means running out now.....it does not. It means CONVENTIONAL oil output has likely reached its peak and will begin decay.

However South African Sassoil can make oil from coal for as little as $35 a barrel, and China, the US and even India have a hell of a lot of coal laying around.

Future Canadian Oil Sands production was going to be as high $80 a barrel to break even. But with the crash all the construction contracts were renegotiated....... not sure where it is at now. Most of the existing production is in the $40 - $50 or less range.

And lastly if oil prices jump high enough, just about every dry oil hole in the planet will start getting steam or something else pumped into it.

Until we reach peak oil production, can there be viable economic alternatives??

Minding the Markets' Gaps

Thu, 15 Oct 2009 00:58:52 -0400

Good Stuff. Thank You.

I was expecting a market drop with a dollar rebound. However some Dow 10,000 hype may destroy that opportunity somehow.

The sell side is pushing with all of their might to inflate the market...

Tue, 06 Oct 2009 00:56:37 -0400

Hang in there Reggie, justice shall prevail if everyone keeps on it.

I find the typo baking system rather than banking system quite humorous. Which makes me wonder......intentional or subconscious?

Politicizing the Olympic Decision

Mon, 05 Oct 2009 00:33:21 -0400

Mr. Miller,

You make somewhat of a point, ......... however neither Blair or Putin, is currently the leader of his nation.

In the case of Putin, some would say not officially the leader. Saying "the critics would have been loud" paints with a pretty broad political brush, ...... well beyond Mr. Kudlow.

It really comes down to...what else would President Obama have likely done with his time? Given Obama's history, I see nothing that would get the investment community or his critics jumping for joy.

On Oct 04 11:20 PM Jeff Miller wrote:

> Mr. Hmmm.
>
> I am always interested in well-researched comments. I suggest that
> you check out some additional information:
>
> www.universalsports.co...;ATCLID=204796264
>
>
> IOC president Jacques Rogge said disputes with the U.S. Olympic Committee
> will have "no negative effects whatsoever" on Chicago's chances of
> landing the 2016 Summer Games.
>
> and later...
>
> "I think I can make a bet today and say that it's probably going
> to be a couple of votes, two, three, four," Rogge said, echoing his
> comments in an Associated Press interview last week. "Something like
> four, five votes is only the situation of a change of mind of two
> or three persons. You see how close it is. You can convince two people
> more and you might win."
>
> If you google "Obama not going to Copenhagen" you will see many stories.
> Things have changed since the last US bid, with Blair and Putin both
> making personal appeals.
>
> I have provided a strong message in many articles that investors
> should not play politics with their investments. This article makes
> the point very clearly.
>
> Those who think that the Olympic loss has some grand implications
> for investments are looking in the wrong direction.

Politicizing the Olympic Decision

Sun, 04 Oct 2009 23:03:12 -0400

Your comment "No one knows what would have happened if Obama had not made the trip, but the critics would have been loud." ......is way off the mark!

President Obama announced well in advance that the First Lady would be making the trip and there was no public criticism. Never has a US president made such a trip in the past. Therefore the President may have taken a risk in going.

"we should be focused on investments, agnostic about politics ......... Overtly partisan messages do not fit." You are right, so hopefully you do not do it again.

Friday Outlook: Commodities, Global Markets

Fri, 02 Oct 2009 12:56:45 -0400

"how can one stay positive about things when we owe our economic existence to the Fed Gov" Good comment Enigmaman!

I would also add we owe our economic desitution to our Federal Government(s).

On Oct 02 07:45 AM enigmaman wrote:

> Without Gov support this faux economic recovery is toast, IMF Pres.
> states the world could face a double dip but as long as Gov support
> is provided, he doesn't see it and exclaimed how happy he was to
> find the Gov of the world were not going to pull the stimulus plug
> so quickly, in other words the patient must remain in the ICU, patient
> is not strong enough to survive on its own, plugging just IV could
> kill the patient, not very reassuring and recent new, car sales and
> unemployment numbers confirms that the USA is no way out of the woods,
> how can one stay positive about things when we owe our economic existence
> to the Fed Gov

Gold's Record Monthly Close: Technically Significant

Fri, 02 Oct 2009 12:40:04 -0400

" Meanwhile, European Central Bank head, Jean Claude Trichet warned that large currency fluctuations could derail economic revival. He warned that "excessive volatility" and "disorderly movement in exchange rates" would have "adverse implications for economic and financial stability."

I don't think so.....excessive volatility is the result of fundamental issues. The reason this comment irks me.....is that it plants the seed for blaming currency traders later on. It shifts focus away from the root cause......... all the various government entities that routinely falied to do their jobs for quite some time.

Better than Expected Q2 GDP Numbers: Part II

Thu, 01 Oct 2009 23:16:00 -0400

The last remark about government spending, I find ridiculous....

"That leaves either a substantial further improvement in net exports, or an increase in Government as a share of the economy. Those who rail about too much government spending do not understand this very basic fact about economics."

Government spending has rarely....... if ever .....been a more efficient use of capital than the private sector.

NO country in the history of the world has reached prosperity through government spending, taxes or debt. Plenty have collapsed this way, but none have ever succeeded.

Four Things You Didn't Know About Unemployment

Thu, 01 Oct 2009 09:23:37 -0400

This article is very weak.

#1 Presidents do not dictate statistical procedures?
Anyone who has studied Internal Audit will tell you the NUMBER 1 factor in any large scale fraud is "Tone at the Top". WorldCom, Enron, Nortel, Adelphia, Tyco. In each case thousands dictated to, by a handful of corrupt at the top.

#2 A clarification was made.....OK however you provide no data to show changes made any numbers worse, or even produced a significant result......... if the changes did anything at all to the results.

#3 We measured the impact. OK...... and any results? And what would you expect the government to say???......Yes we made changes but No we never looked at the impact!?

#4 Once again....... any numbers....... because your embedded link leads to nowhere.

This article appears to be unsubstaniated opinion and fluff.
"In God We Trust, all others must bring data" Deming

Tuesday Outlook: Commodities, Global Markets

Tue, 29 Sep 2009 23:07:57 -0400

It is really quite simple.......... look at any chart on big charts over a 3 month or 6 month daily period.

Looking at the ups and downs....... in general as stock goes up on lower volume a direction change will occur. As a stock goes down on lower volume a direction change will occur.

If it gets really out of whack, then a bigger correction is often in store.

On Sep 29 08:12 PM Charlie J wrote:

> Art Cashin, in his daily comments today, mentioned that Jason Goepfert
> of Sundial Capital has noted that the S&P and Nasdaq have risen
> for five straight months, while NYSE monthly volume has declined
> consecutively over those five months. Goepfert also says that previously
> this kind of divergence has never occurred for more than two months.
>
>
> Light volume on up days, heavy volume on down days. I wish I was
> experienced enough to really interpret this, and the above info from
> Goepfert. Maybe some veterans can comment here. All I know is, something
> doesn't feel right.

Florida and California See Home Sales Increase for More than a Year

Tue, 29 Sep 2009 22:43:00 -0400

Surely you jest??

I have to agree with some of the earlier comments:

>> Data from the realtor associations is NEVER going to tell you........ "stay away from the housing markets"!
>> banks are holding massive inventories, using Tarp money to bide their time. When banks sell the inventory, they have to take the loss.
>> At 20% and greater price declines homeowners in trouble can longer, refi or sell the house to pay off the mortgage.

We have a long ways to go yet.

Closing Update for Monday, Sept. 28: Ending the Slide

Mon, 28 Sep 2009 20:40:54 -0400

I also noticed the gains were almost all from companies being acquired...a couple of Cramer comments and some guidance numbers. I just do not see anything concrete in the upward movers.
Especially if the higher guidance is based on improving efficiency and not increasing demand.

Closing Update for Monday, Sept. 28: Ending the Slide

Mon, 28 Sep 2009 20:37:54 -0400

I just do not see too many positives. But a couple of positives...... realistic or contrived and we could be off in a moment.

Why I'm Skeptical About Asset Allocation

Mon, 28 Sep 2009 10:33:00 -0400

IMHO: The general problem is that Americans could historically be successful investing only within their borders. Recent events have made it clear, that is no longer the case for the forseeable future.

In general, I do not believe the public, the politicians, nor Wall Street are properly prepared for this new reality.

Time to Call Out Wells Fargo's Balance Sheet

Tue, 22 Sep 2009 23:03:38 -0400

Mayascribe,

So basically you are saying in about 3.5 years Wells will have paid off THEIR debts.

First off there is another round of foreclsoures to go (mortgage liquidity du jour, By Credit Suisse) and Wells Fargo was number one in low/no doc mortgages (same source). So there are are going to be a lot more debts to be paid off, before Wells can in fact make some cashflow that could actually go to shareholders.

This of course with the second shoe of commercial real estate still to fall. And the first shoe still in a downward, but slower drop. How could anyone know for sure......how much this will cost after the government props fade.

In the meantime 4, 5 or 10 years, apparently Wells won't need to invest in any changes. A completely changing landscape contains no risk for Wells. Eventually you will make money from this great deal, because your broker....... who only makes money if you buy something told you so.

On Sep 22 09:24 PM Mayascribe wrote:

> Adiposity and Mattzn: Over the past year, I have spoken here several
> times with my Wells Fargo Senior Advisor about Well's M2M exposure.
> I do not need to redo what the both of you have so excellently written,
> only to tell you from an inside source, that Wells will be out of
> this mess within the next 40 months. That's what my broker says.
> I have numerous times written about Wells in my comments about how
> fabulous and highly connected he is within Wells. So, I'm not going
> to rehash old news.
>
> At least six weeks ago my broker called this surge to keep on surging,
> puttting the screws to the shorters and underperforming hedgefunds,
> who have missed this rally. He put it like this: "The hedgies are
> like a Christian Scientist with a broken appendix. Sooner or later
> they will be forced to get in." Finally, in the last two weeks, the
> Street is finally seeing what he knew way before they did.
>
> Certainly a snapshot of Wells" balance sheet shows a big mess. But,
> this author has completely missed Wells' earnings power, huge deposit
> base, that they dominate new mortgages, and yes, that they can always
> have another offering, if need be. My broker has Wells being a $50
> to $60 stock within the next forty months. He knows what he's doing.
>
>
> Bank on it.

Time to Call Out Wells Fargo's Balance Sheet

Tue, 22 Sep 2009 22:27:22 -0400

I believe the author's point was....no matter how much leeway you give for the possbility of mistakes.....there is absolutely no way Wells Fargo can be worth $28 a share.

On Sep 22 10:12 AM BSexposer wrote:

> "I have spent weeks pulling apart their balance sheet "
>
> Hmmm, OK, can't wait to see what you found out...
>
> "And what I present below may include mistakes ..."
> "I gave it a shot using my fourth grade math"
> "I think, I am not sure, don't quote me"
> "the company assumes future losses...in a manner I literally cannot
> fathom "
> "Do they think we are stupid? Yes - and they are pretty much right"
>
> "It is hard to imagine they will duplicate the $3 billion in mortgage
> origination fees they had in 2Q - and even if they pull it off in
> Q3 it should not happen in Q4"
>
> Uh, OK. So you DON'T understand WFC. Thanks for playing, dolt.

Closing Update for Friday, Sept. 18: Bull Run Hangs On, Barely

Sat, 19 Sep 2009 00:51:11 -0400

"mortgage Liquidity Du jour" by Credit Suisse

Look at the ARM reset graph at the back of the document. You can usually just pull down the document from the internet. It should show everyone there is another round of foreclosures to go.

Dollar's Demise Drives Equities Up

Fri, 18 Sep 2009 22:45:30 -0400

Hmmmmm?

I thought it was the overalued stock market driving the dollar down? Everyone anticipating inflation, since it is all about massive cash infusions but virtually no improvements in efficiency.

Every possible piece of good news has been priced into the market. What happens when the inevitable bad news finally pops up?

TED Spread Now at Lowest Level in Five Years

Wed, 16 Sep 2009 23:16:13 -0400

Uhhhh????

Actually economists usually declare a recession officially over, long after everyone else knows it is over. The layoffs have only really slowed. There is no revenue growth, profit growth is not revenue growth. Increased government spending is not sustainable growth. Banks appear to holding massive amounts of real estate foreclosures form public view.

Sorry, but I am not convinced at this point.

Lehman's Lessons

Tue, 15 Sep 2009 22:44:11 -0400

Two issues with your article.

Issue 1: The reason credit default insurance experienced a massive meltdown is congress. That is where the justice should be served first.

There were serious rumblings from within Freddie Mac and Fannie Mae well before the disaster. Congress stopped oversight legislation of Fannie and Freddie in 2003. By 2006 half of all mortgages were low/no documentation mortgages. In order to compete Wall Street convinced regulators that packaged mortgage bundles had a once in a thousand year default rate.

It is ironic that the fraudulent Boston Fed report that claimed lending bias and pressured for no doc loans, and the congressmen who stopped oversight of Fannie and Freddie, are all from Massachusetts. Something has gone wrong since the first tea party.

Issue 2: So what! Justice served.
Your article shows me lenders protecting themselves from fraud and then investing against that fraud with their puts. They may not even have recovered their losses on existing loans. AIG and company should be closed and replaced with honest organizations. Those who DO NOT commit fraud should take their place, even if government funding is required. Instead the fraudsters got our tax dollars, continued with bonuses (for what I am not sure). While most of the politicians responsible for both rounds of failure are still in congress.

Rogers: 'More Banks Should Have Failed'

Mon, 14 Sep 2009 22:34:38 -0400

I hear the comment often but......."the banks can't fail"?????? Why?? We have got hundreds of them. There are bank branches on every corner and people are using internet banking.

So instead of the banks taking there hits and being replaced, the people pay for it with future tax dollars and executives continue on with their bonuses. Not sure waht the bonuses are for?

The banks should have been gobbled up until at least half of them were left.

On Sep 14 03:04 PM battman wrote:

> To let 10 banks fail would have been too much, but we definitely
> needed to purge the system a bit more than what was allowed. I agree
> 100% that you can't get us out of our current funk by spending and
> incurring more debt, because that is EXACTLY THE REASON why we are
> in this mess.
>
> If politicians weren't so crooked and cared about something beyond
> just the next election, maybe things would be different. Unfortunately,
> neither will happen and this mess will only get worse.
>
> Why save failing instituions? Failure can only make you smarter,
> why eliminate that option? It just keeps people stupid. Fat and stupid.
> God bless America.