User 305589

Not a Sucker's Rally - It's a New Bull Market

It is certainly futile to attempt to call the end of this rally. But let's be clear about a few points:
First, valuations are NOT at all near normal levels. Even if one were to take the 16 P/E handle for the DJIA at face value, this is actually pretty expensive given the normalized earnings outlook for the next couple of years. Earnings rebounded because of record govt. stimulus and record cost cutting. Anyone expecting rising earnings (except for selected companies) for the next year and thereafter is invited to provide the rationale against the macroeconomic backdrop that is inevitable to happen!

Second, the big banks have been playing this rally with the free money printed by the fed, frontrunning virtually everyone. Look at any of the big commercial and investment banks' earnings reports. they made tons of money from bond and stock trading and collecting fees from the US treasury while ther loand books continue to suck and will do so for many quarters to come. Now we get earnings reports left and right "better than analysts' expectations". And the market? It goes pretty much nowhere. Gapping up on the earnings "beats" and giving it all back therafter. Nobody can say for sure, but my guts telle me, Goldman and Co are sellers here - distributing into "good" news while preparing for the next downturn.
I fully realize that the market could go higher another 10 or 20% from here - especially given all the "benchmark"-oriented fund managers out there who likely are underinvested and who have to buy even more into any further rise.

And, btw: the big delevaraging - i.e. paying down debt has barely begun. I expect a severe cash crunch over the next 2-3 years to develop. At that time, watch out below as we face the possibility of a replay of Q4/2008-Q1/2009.

I stay long but i continue to lighten up into the rally and to put the proceeds into cash and highly liquid and safe short-term bonds.
Sucker rally or not - you will be glad to have cash on hand over the next 1-3 years when real opportunities will arise. Todays markets barely offer anything worthwhile to invest in.

Essay on Macroeconomics: Where Krugman Fails

it is quite stunning how most commentators have already arrived at judgements and conclusions to be drawn from this crisis and the Fed's and the govt's responses to it. Never mind that we are nowhere near to an end, that deleveraging has only started and that the effects of a deflating bubble always and everywhere have taken years to feed through an economy and the capital markets. I could understand these posts if we were living in 2019 looking back at a decade of strong and sustained economic growth (or the opposite, for the naysayers). But we are still in the midst of the ecomic, fiscal and financial woes and yet, people claim that policy X has worked, Y has failed, Z wasn't even needed and so on.
The scary thing is, I start noticing this trend among economists , too, recently.
But then again, why should those people who didn't see the debacle coming in the first place (though they are paid exactly to anticipate this stuff) now succeed in anticipating it's end? And yes, that includes Krugman, who is just another example in a long list of economists getting a Nobel price for essentially, crap.

Recent Contraction Has Barely Affected Decades of Sustained Economic Growth

''Recent Contraction Has Barely Affected Decades of Sustained Economic Growth''

Sorry, but when it comes to the sustainability of the economic growth of the past decade, the jury is still out. Statistics clearly and undeniably show that every $ of gdp growth has been achieved with ever higher borrowings - the count now stands at $5 to borrow for every $1 in growth achieved. GDP growth of course doesn't equal overall growth of profits and incomes - especially the latter have been flat or declining over the past decade (except, of course for govt workers and most of all legions of vastly overpaid corporate execs and bankers). assuming (very optimistically) that this $1 of economic growth translates into about $0.10 of incomes/profits growth you arrive at $5 in fresh borrowings getting you 0.10$ in additional net income. At (historically very low) long term interst rates of about 3.5% you are already paying 0.175$ for the additional interst expenses, though - or a net 0.075$ loss!!. It is obvious, that this isn't sustainable at all. Not to speak of what will happen once the interest rate cycle turns up in earnest!

''The living standards of the next generation will not be chiefly determined by the severity of cyclical fluctuations, but by the long-term rate of growth in the intervening years.''

true - but it looks as if that longterm growth rate will be much lower than the atrificially propped-up short-term cyclical rates of the pat 20 years. Let's look at the same chart 2-3 years from...

Another Natural Gas Bull Sticks His Neck Out

CHK bk?? Are you kidding??? Nothing is ruled out these days, of course, but before these guys go bk, most other players will have done. the CHK guys went very well prepared into this storm and they predict unvoluntary shutdowns for the 4th quarter this year. Still, they are in excellent financial shape and the löowest cost producers in the u.s. if i had to pick any NG producer whi will be a 4-5 bagger from here over the coming 5 years, it would be chk.
LOl, really funny that you picked the best of the breed as a bk
try kwk and other crappy producers...



On Sep 03 07:28 PM Tsy Fox wrote:

> At today's rate of injection, in just 9 short weeks we will reach
> the 3.9 trillion cap. Looking at the calendar, it's starting to look
> like we will be having a Halloween party like we've never had before,
> with a possible CHK Bankruptcy filing.

Apple vs. Microsoft: Apple's OS Wins Hands Down

oh yeah?
that old apple 7 OS certainly cannot and will not support the modern hard- and software. This is just biased crap, what you have told here. it's fine that you like AAPL's stuff and that you hate mr. softie's - i have no issue with that. But making bold claims that do not hold water and then sell this as facts is a different matter.
btw, I have had no problems with win xp and even vista, which i installed 3 months ago, doesn't suck as much as i had feared. Though I will certainly replace it with windows 7 as soon as the latter runs stable and with the necessary device drivers issued for my pc.

i really don't get it why people make a religion out of - OS software. Aren't there already enough religious wars fought allover the planet?

Natural Gas ETF Premium Reaches 20%: Time to Unload?

I tend to agree with mad hedge Fund trader here that stock plays like chk and xto - and i would add mcf - are attractive plays here, likely better than UNG. But, i think one has to put things in perspective here. 20% premium above NAV is of course, a big number. however, for many people there are few alternative options available to directly play NG. IF and when NG bottoms here anywhere between 2.50 and 3.00$ it has the potential to easily go up towards $4/$5. And longer term, well, $7 or $8 certainly are reasonable targets a few years out. the 20% premium paid now may not matter that much in the larger scheme of things. and of course you could just built some call-spreads on ung and eliminate much of that 20% premium problem alltogether...

Auditing the Fed Is Economic Suicide

I am with Ron paul and his intentions on this one. However, i doubt it will make a dent, even if passed. The fed will simply shift to a lot of off-balance sheet transactions. Abolish the Fed and you need not audit its missteps. But of course, that would be economic suicide, indeed - for private bankers and wall street, that is.

Due for a Correction? Market Is Already Priced for Grim Future

Two observations:

First, 2001/2002 definitely didn't mark the worst environment for corporate bonds since the Great depression. This claim by the author is absolutely off-base and ridiculous
I may just point to the wave of ever higher leverage and so-called financial innovation that worked to DEPRESS credit spreads to artficially low levels for much of the past 10-15 years. Viewed in the proper historical context, current corporate bond yields are NOT bargains any more (some select opportunities in individual companies notwithstanding)

Second: I aggree that the market doesn't price in happy days to be here again by this time next year. You may call that 'grim" if you want to. Problem is, times may look much more grim 1-2 years from now than Mr. market currently anticipates. And the odds for that to happen are extremely high.

bottom line: a repeat of past secular bear market cycles is very likely - with violent rallies and steep sell-offs over the next 5 years at a minimum

Goldman Code Theft Bombshell

I am not to discuss the journalistic quality of the article or whether all the claims in it are true. (Quite a big number of them, are, undeniably and the stolen code that "could be used for extensive market manipulation" is just another evidence whom you are dealing with when it comes to Goldman Sucks.)

But someone with your professional background should know that the shareholder is the last in line at GS. First come the partners and then the employees, when it comes to profit distribution. Shareholders get what is left - and shoulder all the risk. And that there are huge risks becomes apparent by just a brief look at their L3 assets and the fact that GS has been cash flow negative for the past 5 years despite all the supposed mega-profits.
Why do you think has Warren Buffet opted for perpetual preferred stock yielding 10% p.a. AND attached the strings that Goldman's major partners are not allowed to cash out from the company before he got his investments back? This imho is the clearest message there can be from one of the best investors ever that you can make a ton of money with GS, but only if you know exactly how and if you protect yourself from the GS guys. Good luck with buying Goldman#s stock. You may still make good money, mind you, but the risk-reward is pretty awful.


On Jul 08 05:54 PM Mad Hedge Fund Trader wrote:

> This is the
> most forceful buy recommendation of a stock I have ever seen. If
> GS really is that powerful, back up the truck. I want to own a stock
> with a “damn the torpedoes, full speed ahead” management who that
> will boost earnings at any cost. They’re just the alpha males in
> a world of predators.

Google Drops a Nuclear Bomb on Microsoft. And It's Made of Chrome.

I couldn't care less. And I am amused and a tad worried by the jubilation expressed by quite a number of people about how happy they are that Google will now attempt to wipe out MSFT on the OS battlefield. They better look carefully what they wish for!
For all the hate against MSFT, Google isn't any better, quite the opposite. Their privacy protection is nonexistant. they are the biggest data collectors and spys on the internet. No rules, no regulations. I will never ever install any google software on any of my PCs, notebooks or handys. They offer a terrific search engine and Google earth is a nice application, fine - but that's about it. I will not work on office documents via the web - how could I be sure that the data and information will not end up at places where i don't want them to be?
All the people who - often correctly - criticise Mr Softie today should learn to look at Google not as a smart innovator but as a company that increasingly tries to establish a giant hegemony over all that is web/handy and communications-related. Windows might be annoying at times. Google surely could become a real threat to freedom and privacy much sooner than most people think.
All the google admirers are now free to downthumb my post.

Google Chrome: Redefining the Operating System

I couldn't care less. For all the hate against MSFT, Google isn't any better, quite the opposite. Their privacy protection is nonexistant. they are the biggest data collectors and spys on the internet. No rules, no regulations. I will never ever install any google software on any of my PCs, notebooks or handys. They offer a terrific search engine and Google earth is a nice application, fine - but that's about it. I will not work on office documents via the web - how could I be sure that the data and information will not end up at places where i don't want them to be? The solution: the good ol' PC/notebook with a hard drive/usb drives. no web storage or office via internet.
All the people who - often correctly - critisize Mr Softie today should learn to look at Google not as a smart innovator but as a company that increasingly tries to establish a giant hegemony over all that is web/handy and communications-related. Windows might be annoying at times. Google surely could become a real threat to freedom and privacy much sooner than most people think.
All the google admirers are now free to downthumb my post.

The Full Aleynikov Transcript

why not just call the marines and just nuke that server in germany - after all, we are talking about safeguarding Goldman's holy profits. That should justify any means, shouldn't it? That the stolen code is all about manipulating markets (as Goldman had to confess in the course of events - see Tyler's other pieces on the subject) and robbing other market participants by obviously illegal tactics should be no matter of concern. After all, it is Goldman - moral standards and the rule of law should not be applied to them as that would just be too big an obstacle in their mad hunt for ever larger profits!

Detain the guy, torture him, threaten germany to immediately hand the server over to goldman - it's in the interest of Goldman's national security! Obama should interrupt his Russia visit and fly straight to Berlin! Nothing could be more important to the ordinary U.S. citizen and his well being than the safety of Goldman Sachs' profits.

Are Airlines Going Bankrupt Again?

the cash positions alone don't tell the whole story. there are debt covenants in certain lending agreements that require some airlines to hold a certain amount of cash as collateral and/or as additional cushion. some of these airlines won't be around as going concerns by this time next year, or 2011 at the latest, no matter what they do with their ticket prices and no matter where crude oil is going.

Teck Surprises with Equity Issue and Sale

even after this capital raise teck remains overleveraged and of course, the management that maneuvered the company into such a precarious position continues to run the company. I can't find any reason why the morons at teck buying overpriced assets for top dollars at the height of a commodities bubble will be any better capital allocators in the future.
That being said, I may scale bacl my short position on Teck since they have of course improved their financial position considerably. Over the longer term , though, this company will continue to baldy lag its competitors, unless competent management takes over. maybe thew Chinese will press for it, eventually.

Unwinding the Goldman Sachs Myth

what conflict of interest? There are just Goldman's interests - nothing else.


On Jul 02 02:56 PM Peter Iwanowicz wrote:

> A little too much conflict of interest going on here for my taste