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  • Equity Market Ready to Make a Massive Move [View article]
    This is a good article. Most contributors base their analysis on either political or economic propaganda. This author has an analytical method and provides a rationale for his conclusion. You may not agree with his methodology or believe technical analysis has any validity, but from my perspective, it's constructive to see a presentation of the facts as he sees them.
    Jul 28, 2010. 08:36 AM | 1 Like Like |Link to Comment
  • How Far Can This Rally Go? Here's How to Play It [View article]
    Hmmm . . . DJIA, NASDAQ, RUT have all broken through, first the 50 day ma, then the 200. SPX will do so today. Why is this? Could it be earnings? Maybe investment pros (mutual and hedge funds) accumulating? Will it continue? If you believe that prices follow earnings and in momentum then it should. Too many people get locked into a negative mentality and only change when the evidence is overwhelming. Then they say, "I shoulda bought when it was low." It is low now, shorts are being squeezed - go long.
    Jul 27, 2010. 09:16 AM | 3 Likes Like |Link to Comment
  • Market Momentum Quickly Shifts Back to Bulls, But... [View article]
    Many, many stocks are showing an inverted head-and-shoulders or double-bottom formations, yet I haven't seen any references to it. If this is truly widespread, and follows its classical expectation, the indexes will soon show a nice rallly.

    My own speculation - the major indexes appear to have broken through the 50 day ma which had been resistence. We'll see if they hold this week. If the 50 now becomes support, the 200 should offer some resistence, but not much because it is so close (actually NASDAQ is there now). Then, for awhile, the 200 will be support as the indexes chase new technical resistence/support levels.
    Jul 26, 2010. 09:14 AM | Likes Like |Link to Comment
  • 17 Reasons to Be Bullish About the Markets [View article]
    When to buy is most important. I've lost money on great companies and made money on not so great companies. You left out number 3 - luck!
    Jul 26, 2010. 08:25 AM | 2 Likes Like |Link to Comment
  • 17 Reasons to Be Bullish About the Markets [View article]
    It seems 17 things happened.
    Jul 26, 2010. 08:11 AM | 1 Like Like |Link to Comment
  • The One Economic Chart That Really Matters [View article]
    And who was responsible for recent increases? Reagan-Bush and Bush 2.
    Jul 24, 2010. 08:48 AM | 1 Like Like |Link to Comment
  • The One Economic Chart That Really Matters [View article]
    But people, especially tea party people, are blaming the government for all of it when most of the debt belongs to people and businesses.
    Jul 24, 2010. 08:47 AM | 4 Likes Like |Link to Comment
  • With news that the deficit will top $1.4T again this year and next, Derek Thompson looks at debt-to GDP and says this isn't your grandfather's burden: former heavy indebtedness was caused by wars or recessions that came to an end, but now it's about inside factors (promises to seniors made years ago).  [View news story]
    Take another look at the chart. The ratio was trending down until the Reagan-Bush (cold) war military buildup. Then it started trending down again until Bush's 2 wars (only one was necessary). Now we're stuck the debt hangover of our military adventures. I am sure many would argue that these debt buildups were due to external events. Adding to that is the Bush/Greenspan economic disaster that we had to bail out and is significantly adding to our debt. The marginal increase, however, so far pales in comparison to Reagan-Bush-Bush.
    Jul 24, 2010. 08:19 AM | 10 Likes Like |Link to Comment
  • "Let's all take a long, deep breath" about the BP spill, Gus Lubin writes, because all the talk about damage is "vastly overblown." NOAA says it is re-opening one third of the closed Gulf fishing area where oil hadn't been spotted for 30 days, seafood has been safe to eat, and only one major beach is closed.  [View news story]
    So who's Gus Lubin and what makes him an expert? Is he a scientist? Does he know any better than 'the press' that he criticizes? The NOAA has opened 1/3 which leaves 2/3 still closed. It's probably not as bad as the worst media reports, but it's far worse than BP's ongoing assessment. We'll see what happens after Bonnie sweeps through. This is still an evolving problem that may get better but could get worse.
    Jul 23, 2010. 05:39 PM | 2 Likes Like |Link to Comment
  • The One Economic Chart That Really Matters [View article]
    the goods and services were guns, airplanes, battleships and soldiers. It wasn't 'Keynsian medicine' - it was called WWII.
    Jul 23, 2010. 08:26 AM | 12 Likes Like |Link to Comment
  • The One Economic Chart That Really Matters [View article]
    Government debt is approximately 90% of GDP. That's high but not nearly as high as during the Truman years.

    So your graph's other 280% must be personal and business debt. Undoubtedly the arithmetic gets fuzzy at this point as much business debt (borrowed funds) is loaned to others. Unless the chart accounts for netting then it is a gross chart and not a net chart. In other words, if I borrow $100 to lend you $100, that can be called either $100 in debt or $200 in debt. Without knowing what kind of accountant put this chart together, its reliability is questionable. In addition, much credit card debt is not real. Personally, I charge everything I can to my credit card (thousands per month) and pay off the balance each month. Millions of people do this. Is this debt? I'm sure it's counted as debt however it is materially different from a mortgage or car loan.

    So your chart is of questionable validity unless the details of its construction are explained. Now . . . did you hear who visited Lindsay yesterday?
    Jul 23, 2010. 08:16 AM | 4 Likes Like |Link to Comment
  • The first order of business for new Fed members Yellen, Diamond and Raskin likely will be to "print enough dollars to make something happen in the U.S. economy," Jim Grant says while skewering the Fed's "lack of intellectual rigor" on deflation as a threat. "If the world produces more at lower prices, is that so bad? Would [the Fed] please stop and help us understand why this is bad?"  [View news story]
    "If the world produces more at lower prices, is that so bad?" Probably, because it is likely at the expense of lower wages and higher unemployment. Also if inflation implies dollar devaluation, then deflation implies upward valuation. So on the debt side, an increasing dollar means paying back long term debt with increasingly costly dollars - a stealth interest charge.

    There is lots of excess capacity in large swaths of our economy and if that becomes utilized without increasing wage costs, then productivity increases and prices may go drop. With ever increasing automation, the fear is that a diminishing demand for labor is looming and/or a lower wage base. This can set the stage for a deflationary spiral.

    On a world scale, outsourcing means wages leaving the U.S. and going to a lower cost base. At some point, as U.S. wages decrease an foreign wages increase, a parity will be reached. Unfortunately for the U.S., this would imply a lower standard of living but a higher standard of living for the rest of the world. Witness China, India, Brazil and other emerging economies.
    Jul 14, 2010. 08:20 PM | 5 Likes Like |Link to Comment
  • Do Bonds Know Something Stocks Don't? [View article]
    'bond investors are typically more sophisticated than stock investors' but that doesn't mean they are more right about THE FUTURE. The managers of Lehman, Bear Stearns, and LTCM were pretty sophisticated also (the last included Nobel laureates and renowned business school professors) and they were often right, but ultimately, very seriously wrong.

    Sometimes when you're out running in the morning, you need to slow down or stop to catch your breath for awhile (at least a smart runner does). It doesn't mean you are about to die, just that you need to pause. The bond market (especially short term) provides that break for investors. Could it be that the rise of bonds merely reflects a pause in the investment cycle while money managers re-strategize?

    As to your doomsday questions - if I really believed that scenario likely, I would build a fallout shelter in the woods, stock up with canned goods, and buy lots of guns and ammo. If the world's economic system goes to hell in a hand basket again, your bonds won't be worth anything either as they will either be deflated by rampant selling or inflated away with newly printed money. Hmm . . . maybe you should look into Heinz stock . . . or bonds!
    Jul 8, 2010. 08:24 AM | 3 Likes Like |Link to Comment
  • Corporate Profits Are Strong, But Pessimism Rules [View article]
    Right Scott - tale the shackles off the oil industry. We don't need any more deep water oversight. Also the financial industry. Greenspan showed us that markets are self-regulating putting their fiduciary responsibility ahead of greed and self-interest. Also the auto industry. We don't need all these polution controls and safety devices. And drug companies need to be freed from the oppressive FDA as well as the food industry. And then, of course, we should cut business taxes and let individuals pay the whole bill. After all, it's businesses that create jobs right? But they don't destroy jobs, do they? It's government regulation that destroys jobs. While we're at it, why not open our national parks to drilling, mining, and forestry?

    While I agree with your assessment, above (except the last paragraph), I cannot agree that this white house is to blame for our economic ills. The Bush handouts to business, its deregulation fanatacism, its escalation of spending while it started 2 wars, coupled with Greenspan's hands off of the markets and 'stimulative' policies directly caused the economic implosion. This white house is trying to climb out of the hole its predecessor dug but is having a difficult time because the hole diggers won't help.

    One last point - in a consumer based economy, if consumers and businesses are spending, who can? Only the government is in a position to do so with the hope that increased spending will allow businesses to create jobs that pay money that consumers can then spend to create more jobs, etc., so that eventually government spending can be unwound. There is point at which we need to become more concerned about debt levels but not during a recovery, only after the recovery is in motion. We're not there yet.

    Oh, and debt - my parents left me the debt of the depression, WW2, the Marshall Plan, the Korean War, then Vietnam, the cold war and the space race. The debt my adult colleagues have pushed along are Reagan's budget busting defense buildup, (Clinton actually started to pay it down) and Bush's fiascos.
    Jul 7, 2010. 08:44 AM | 7 Likes Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    Yahoo's stock buyback "is consistent with the company's commitment to returning value to shareholders,"

    This is complete bull of course. To return value to shareholders they should simply give the $3billion to stockholders. This is called a dividend, but then high tech growth stocks like Yahoo don't pay dividends do they? More likely, management is trying to increase the value of its stock to drive employee options in the money.

    Yahoo's glory days ended in January '06. It's a good company but not a great one any more. It will make a nice division of some bigger, better company. They should have taken Microsoft's offer a couple of years ago at double their current price.
    Jul 1, 2010. 08:45 AM | 8 Likes Like |Link to Comment