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  • Short sales on S&P 500 stocks fall to 5.6% of shares available, according to Bespoke. It's the lowest ratio since at least 2007 and compares to a record 12% amid the financial crisis. "When you have a market where investors are all in, there will no longer be short covering," says one money manager. [View news story]
    Lots of interesting contrarian signals out there.
    Mar 4, 2013. 08:17 AM | Likes Like |Link to Comment
  • More on Personal Income: The 3.6% decline in income was the sharpest in 20 years, but it comes after December's 2.6% spike on the wave of pre-tax hike special dividends and bonuses. [View news story]
    "The 3.6% decline in income was the sharpest in 20 years,"

    Interestingly that stat includes two recessions. Can that actually be correct?

    Just read this on Bloomberg:

    "The saving rate dropped to 2.4 percent from 6.4 percent. Disposable income, or the money left over after taxes, dropped 4 percent after adjusting for inflation, the biggest plunge since monthly records began in 1959."

    That's literally a freakish change in the saving's and DI rates in one month.

    How's this for spin in the article:

    " showing households were weathering the payroll-tax increase by socking away less money in the bank."

    LOL. Do you think this would be the phrase under an opening to an article with a Republican government?
    Mar 1, 2013. 09:07 AM | Likes Like |Link to Comment
  • Jan. Personal Income and Outlays: Income -3.6% m/m vs. -2.1% expected, +2.6% prior. Personal spending +0.2% m/m vs. 0.2% expected, +0.2% prior. PCE core price index +0.1% vs. +0.2% expected,  +0.0% prior. [View news story]
    Income was pulled forward in Q4 to avoid taxes which obviously was wise so anyone surprised by this shouldn't be.

    Amazing that cutting government spending could "plunge us into a recession" but somehow taking money out of people's pockets in higher taxes is somehow a good thing.

    Taxes hurt.
    Mar 1, 2013. 09:05 AM | Likes Like |Link to Comment
  • Jan. Chicago Fed National Activity Index: -0.32 vs. +0.25 (revised) prior. [View news story]
    "The index’s three-month moving average, CFNAI-MA3, increased to +0.30 in January from +0.23 in December. Given the substantial upward revisions for November and December, January’s CFNAI-MA3 marked the third consecutive reading above zero. Additionally, January’s reading suggests that growth in national economic activity was somewhat above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests limited inflationary pressure from economic activity over the coming year."
    Feb 25, 2013. 09:11 AM | 1 Like Like |Link to Comment
  • "If capitalism is America’s biggest problem, why save it?" asks MarketWatch's Paul Farrell. "Wall Street, Corporate America, Big Oil and the entire economy been transformed into a bizarre circus Adam Smith would never recognize. Capitalism is now an out-of-control Frankenstein monster that changed everything." Not that Farrell provides any alternatives. [View news story]

    Your writing reminds me of the Ali Poem:

    "Me. We!"

    Profound if you take the time to understand it :)
    Feb 24, 2013. 11:50 AM | 3 Likes Like |Link to Comment
  • Claiming auto lending as part of its mandate, the CFPB has sent letters to at least four banks threatening to sue over discriminatory practices. A highly fragmented market, it's hard to say which lender is being targeted. Regulation of auto lending was explicitly given to the FTC. It's fascinating how bureaucracies instinctively grasp to expand their size and power. [View news story]
    "It's fascinating how bureaucracies instinctively grasp to expand their size and power."

    What's fascinating is that someone would actually believe this to be an unusual side-effect of expanding government reach :)
    Feb 21, 2013. 12:20 PM | Likes Like |Link to Comment
  • Though Tesla Motors (TSLA -9.2%) CEO Elon Musk is taking the hardest loss today on the automaker's tumble in share price, Daimler (DDAIF.PK) is also suffering with its 4.7% stake in TSLA making it number two on the list while Toyota (TM -1.1%) also has a stake. Interestingly, Musk says he won't ask the big boys for more money but will fund Model X SUV production through profits. Look for issues of Tesla cash flow to be a major topic in 2013. (transcript[View news story]
    Just looked at the current quarter income statement. How exactly does he define the word "profit"?

    Looks like a $100 million dollar burn rate based upon the cash flow unless I am reading it wrong.
    Feb 21, 2013. 10:57 AM | Likes Like |Link to Comment
  • Initial Jobless Claims: +20K to 362K vs. 359K consensus, 342K prior (revised). Continuing claims +11K to 3.14M. [View news story]
    The next few weeks will be interesting with the more aggressive seasonal factors - could be messy unless there really is marked improvement (releasing my inner bbro :)).
    Feb 21, 2013. 09:10 AM | 1 Like Like |Link to Comment
  • Lots Of Dumb Money On The Sidelines: Should Smart Investors Buy Stocks? [View article]
    Every stock sale has a buyer and seller.

    The seller who thinks the price will fall in the future and the buyer who thinks it will rise. Who's right?

    As James pointed out in that prior article it is simply an accounting identity that money put into the market is replaced by money removed from the market with a net effect that the total money in circulation has not changed.

    Confusing individual micro level transactions and making macro judgments is the fallacy that James has been debunking in this series of articles and I for one really applaud his efforts.

    I learned two important things in working as a financial advisor for the high net worth client: read the footnotes on any exhibit first and all equity data/returns are beginning and endpoint sensitive. When you apply these rules you quickly realize there is no such thing as an "average" return on anything it all depends upon entry (buying) and exit (sellling) points.
    Feb 20, 2013. 05:03 PM | 3 Likes Like |Link to Comment
  • Some 40K people marched on the U.S. capital over the weekend to protest the Keystone XL (TRP) pipeline project, whose rejection could cause a deep and lasting rift with the U.S. But perhaps Canada is not such a benign trading partner, according to Huffington Post's Raymond Learsy, who says Alberta’s government has given "generous donations to Islamists with close connections to Hamas." [View news story]
    Those scary Canadians!

    We all know how radical they really are and who knew they were on our unprotected northern border.

    I say we rally to build a gigantic concrete fence on the Alberta border. Seriously who really wants cheaper gas?

    FYI, US foreign aid of around $500 million dollars is sent to the Palestinian authority on an annual basis - some of those dollars find their way to "Islamists" and Hamas.
    Feb 19, 2013. 09:28 AM | 1 Like Like |Link to Comment
  • Americans have regained $13.5T of $16T lost during the recession, says Alan Krueger, the chairman of the White House Council of Economic Advisers. "If you destroy that much wealth, people need to rebuild their retirement positions and they need to save for their children's educations," says Krueger. "That is a big challenge for consumption going forward." [View news story]
    I christen him: "The President of the 1%".
    Feb 19, 2013. 09:21 AM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Can You Bet On The Housing Recovery? [View article]

    "Do we have a bottom in housing?"

    Just thinking that the real sub-question is whether the housing bubble can be reignited again or was the psychology of housing as an ATM permanently altered for the foreseeable future?

    Even if prices fall 20% from this level, the absolute dollar value of those losses in wealth is not that significant anymore relative to what was lost in the explosion of the bubble. However if prices did fall further I suspect that that would be very damaging to consumer psychology despite a booming stock market.

    A steady state scenario, where prices rise with inflation is really a pretty good outcome when it comes to the economy. Deploying capital to buy used goods isn't that productive in the long run so rapidly rising prices in this asset class isn't a particularly good thing in any event in my opinion.
    Feb 17, 2013. 11:10 AM | 1 Like Like |Link to Comment
  • Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]

    That's really just a small subset of the overall money supply so hard to draw definitive conclusions from it and based upon the cryptic nature of your message it's not clear what you are trying to say in any event ;)

    The question that we all should be asking is what happens when the FED and the Treasury decide to tighten the money supply? What happens then?

    When the price of money rises, the preference for it will go up, not down, unless you believe getting paid more for idle cash is a disincentive.
    Feb 16, 2013. 02:01 PM | 3 Likes Like |Link to Comment
  • Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
    "Stock prices can "gap up" or "gap down" by large magnitudes on virtually no volume, while they can "churn" and remain unchanged on heavy volume."

    Favorite quote of the article. This is what happened to house prices in the bubble as well as the burst.

    Prices for hard assets are not fixed and are subject to emotion and illogic in the short-run - "Fear & Greed".
    Feb 16, 2013. 01:33 PM | 5 Likes Like |Link to Comment
  • Tesla Motors (TSLA) CEO Elon Musk is out with a blog post defending the range performance of the Model S. After putting out a combative series of tweets on the test drive of a Model S detailed in the New York Times, Musk goes even further with detailed charts and accusations of the objectivity of the NYT reporter. "When the facts didn’t suit his opinion, he simply changed the facts." [View news story]
    Don't run the heater or the AC, don't drive too fast, don't run the radio, don't accelerate too quickly, don't overcharge the battery, plan your stops exactly and you'll do just fine :)

    All that for a $100k and you get to save the world as well.

    Who wouldn't sign up for that?
    Feb 14, 2013. 09:54 AM | 3 Likes Like |Link to Comment