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GaltMachine

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  • Russ K's Guide To Economic Indicators (Infographic) [View article]
    Freddy,

    "Having collaborated with gov't statisticians, I completely dispute your insinuation of stat manipulation."

    Really you don't think the "margin of error" has room for some tweaking?

    I appreciate your sincerity and belief that they don't manipulate but seriously Q1 2011 was originally reported as a 1.8% quarter and then subsequently revised to this barely above zero level.

    I don't think so !!!

    Anyway I think you have the right read now.
    Aug 29 05:15 PM | Likes Like |Link to Comment
  • Junk bonds sold during periods of heavy issuance perform worse in the short term than those sold during slower times, according to very cool Barclays research from the last 2 years. High-yield paper sold in weeks with more than $7B of supply has lost money over the following 14 days. [View news story]
    High issuance means low rates on the issues. Corporations aren't stupid they take advantage of what the market is giving them.

    Low rates on junk mean higher risk. No need to over-complicate it.
    Aug 29 01:25 PM | Likes Like |Link to Comment
  • Russ K's Guide To Economic Indicators (Infographic) [View article]
    Freddy,

    Q1 2011 case in point - final revision 0.08 !!!

    I find that laughable. What combination of 3 month's growth could (0.04, 0.12, 0.08) possibly give you that final number with such accuracy?

    The Bureau of Lies and Statistics must have decided that a negative print would have been a no/no for the animal spirits and the "green shoots" even after the fact.
    Aug 29 01:23 PM | Likes Like |Link to Comment
  • The put/call ratio on the S&P 500 moves to the danger zone - low enough to signal few enough are hedging against stocks falling as to almost assure that outcome. However, cautions Tommy Thornton, wait for indicator to turn higher before beginning to sell. [View news story]
    Joe,

    The link I provided above provides a graph of the Investor's Intelligence Survey you provided. I also pay attention to this one as well.

    Still not at an overly extreme level - get bears under 20 and bulls over 50 and that's a pretty good sell signal.
    Aug 29 01:16 PM | Likes Like |Link to Comment
  • More on Pending Home Sales: "Limited inventory is constraining market activity," says the NAR, with chief spinmeister Lawrence Yun blaming sales weakness in the West on "an acute inventory shortage." More from Yun: "Expected gains in housing starts of 25-30% this year, and nearly 50% in 2013 are insufficient to meet the growing housing demand." [View news story]
    867,

    One thing often overlooked in these discussions is transaction costs. Houses are probably the single most expensive asset you can sell when it comes to the cost of the transaction - a rule of thumb is 10-15% of the selling price will go to legal, commissions, taxes, moving, etc.

    So it is really the net proceeds from the sale of the house that matter the most to the seller and their banker. Given where prices are today and a further deduction for transaction costs, anybody who bought in the 2000-2009 period is in for a rude awakening.

    Prices are going to have rise a decent amount especially if someone under water before they will be willing to put it up for sale.

    I live in South Florida bought in 2003 and according to the Broward property appraiser my house is worth less than what I paid for it back then.

    We need to get those distressed properties cleared from the system as quickly as possible.
    Aug 29 01:11 PM | 1 Like Like |Link to Comment
  • More on Pending Home Sales: "Limited inventory is constraining market activity," says the NAR, with chief spinmeister Lawrence Yun blaming sales weakness in the West on "an acute inventory shortage." More from Yun: "Expected gains in housing starts of 25-30% this year, and nearly 50% in 2013 are insufficient to meet the growing housing demand." [View news story]
    Tack,

    Would you play this with one of the etf's like XHB or ITB?

    PE's seem rather high at 19,18 respectively. I am kind of surprised they are that high.

    Thanks.
    Aug 29 12:09 PM | Likes Like |Link to Comment
  • Q2 GDP (2nd revision): +1.7% in-line with expectation, +1.5% prior. Price index +1.6% in-line with expectation, +1.6% prior. [View news story]
    bbro,

    That is somewhat true but are they commensurate with the risk?

    In 2008 you could have got a 5% return virtually risk-free so on a million bucks you would generate $50k of income. On that same money today and in the same instrument you might get $2.5k.

    I call that financial repression.

    By the way, I personally am an investor in corps, MBS's and everything else bond related and I have done very well doing so over the past few years but the average gramma/grandpa shouldn't have to do this. That's all I am saying.
    Aug 29 11:04 AM | Likes Like |Link to Comment
  • The put/call ratio on the S&P 500 moves to the danger zone - low enough to signal few enough are hedging against stocks falling as to almost assure that outcome. However, cautions Tommy Thornton, wait for indicator to turn higher before beginning to sell. [View news story]
    bbro,

    Do you look at the OEX in combination with these other indicators?

    http://bit.ly/xQNJ14

    Seems to also be signalling a near-term top.
    Aug 29 10:27 AM | 1 Like Like |Link to Comment
  • More on Pending Home Sales: "Limited inventory is constraining market activity," says the NAR, with chief spinmeister Lawrence Yun blaming sales weakness in the West on "an acute inventory shortage." More from Yun: "Expected gains in housing starts of 25-30% this year, and nearly 50% in 2013 are insufficient to meet the growing housing demand." [View news story]
    Funny that was the quote that made me chuckle as well. Inventory would be fine if the prices were attractive to sellers - that's called supply and demand.

    Potentially this could result in upward price pressure assuming buyers were willing to pay more. Sellers at these prices don't want to lock in losses and/or negative equity unless they have no choice.

    This looks like the signs of life in the housing market actually has some legs assuming we don't get that fiscal cliff economic weakness that is screwing with people's expectations.

    P.S. -- Larry Yun deserves a promotion or at least the "Perpetual Employee of The Month Award" - reminds me a lot of SpongeBob.
    Aug 29 10:22 AM | 3 Likes Like |Link to Comment
  • July Pending Home Sales:+2.4% to 101.7 vs. +1.0% expected; -1.4% prior. [View news story]
    bbro,

    That's quite the shocking factoid. Well at least there is room for growth without inflationary pressures!
    Aug 29 10:15 AM | Likes Like |Link to Comment
  • Q2 GDP (2nd revision): +1.7% in-line with expectation, +1.5% prior. Price index +1.6% in-line with expectation, +1.6% prior. [View news story]
    Does anyone believe the price deflator (inflation) is really that low?

    What are the Hedonics on gas, food, and shelter? Somehow the story of rising rents is not translating into inflation?

    Of course it is in the govt's interest to keep this number low so that all the inflation linked accounts (social security, medicare, pensions) don't see annual increases. I feel sorry for old people stuck on fixed incomes in combination with financial repression this is not a pretty story.
    Aug 29 10:13 AM | Likes Like |Link to Comment
  • The Treasury sells $35B in two-year notes at 0.273%. Bid-to-cover ratio of 3.94, vs. a recent average of 3.83; indirect bidders take 22.3%, vs. a recent 32.1%. Direct bidders take 16%, vs. a recent 8.7%. [View news story]
    bbro,

    People truly do not understand how our monetary system works. Cullen Roche has done an awesome job of making it simple at PragCap.com.

    We are in the midst of financial repression and I don't think it will be changing for a long time to come. The FED wants inflation but the deflationary forces are still very strong.
    Aug 28 01:51 PM | Likes Like |Link to Comment
  • More on Consumer Confidence: At 60.6, the index hits its lowest level since November, led by a sharp drop in optimism about the short-term outlook.  Those expecting business conditions to improve fell to 16.5% from 19%. Those expecting worsening increased to 17.7% from 15.1%. The report hits stocks a bit (Why? Shouldn't this make Fed action more likely?), the S&P 500 -0.2%[View news story]
    bbro,

    Do you pay attention to the Conference Board's LEI?

    Consumer Expectations has a pretty big weighting in the index. A number like this could make it negative all on its own.

    LEI component and weighting:
    10 Avg. consumer expectations for business conditions 0.1551
    Aug 28 10:29 AM | Likes Like |Link to Comment
  • More on Richmond Fed: New orders gains 5 points to -20. Capacity utilization gains 7 points to -9. Employment weakens, down 6 points to -5, average workweek down 4 points to -11, the wage index down 6 points to 3. (full report[View news story]
    This is so weird to interpret given that all the "strengthening" is to a lower level of contraction.

    Courtesy of Business Insider:

    "Manufacturing continued to contract in the South East and mid-Atlantic region of the country, although it did so at a less prononced rate, new data out of the Federal Reserve Bank of Richmond shows."

    Read more: http://read.bi/PYnFvW
    Aug 28 10:26 AM | Likes Like |Link to Comment
  • August Consumer Confidence: 60.6 vs. 65.8 expected, 65.4 (revised from 65.9) prior. Expectations 70.5 vs. 78.4 prior. Present Situation 45.8 vs. 45.9 prior. [View news story]
    This has a big weighting in the LEI - might be enough to drive it negative on its own in the next release.
    Aug 28 10:24 AM | Likes Like |Link to Comment
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