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  • April Producer Price Index: -0.7% vs. -0.7% expected and -0.6% prior. Core PPI +0.1% vs. +0.2% expected and +0.2% prior. [View news story]
    Deflation seems to be the real risk!

    "On an unadjusted basis, prices for finished goods advanced 0.6 percent for the 12 months ended April 2013, the smallest 12-month rise since a 0.5-percent increase in July 2012. "

    I can't imagine that that would be a positive for earnings growth in the next few quarters.
    May 15, 2013. 08:51 AM | Likes Like |Link to Comment
  • Thanks to U.S. shale oil, demand for OPEC crude will remain largely unchanged over the next five years the IEA says in its semi-annual report. "Output growth from North America dominates the medium-term growth profile," the agency notes. By 2018, U.S. output should reach 11.9M barrels per day, 20% of the projected total of 59.3M barrels per day of non-OPEC supply. [View news story]
    I blame Bush.
    May 14, 2013. 08:22 AM | Likes Like |Link to Comment
  • Lessons From Earnings Season And The Dog That Did Not Bark [View article]

    I like Price to Sales as well but mainly for individual stocks particularly growth stocks.

    However, the Buffett measure is similar to what you are calculating but uses the total stock market to GDP as the measure.

    Here is a link to GuruAnalyst which updates this number daily:

    The Stock Market is Modestly Overvalued. Based on historical ratio of total market cap over GDP (currently at 109.2%), it is likely to return 2.5% a year from this level of valuation. This page is updated daily with the market. This includes the returns from the dividends, currently yielding at 2%.
    As pointed by Warren Buffett, the percentage of total market cap (TMC) relative to the US GNP is “probably the best single measure of where valuations stand at any given moment.”

    This is not a timing tool but it does suggest that the best part of the buying cycle has passed unless you get really, really strong GDP growth or a major correction to bring down valuations. It seems to be a logical way to assess the current value of the market.
    May 9, 2013. 07:45 AM | 3 Likes Like |Link to Comment
  • March International Trade: The U.S. international trade deficit in goods and services -$38.8B vs. consensus of -$42.4B, -$43.0B in Feb. [View news story]
    Interesting that both exports and imports fell - that suggests a slowing of the global economy.
    May 2, 2013. 08:51 AM | 1 Like Like |Link to Comment
  • What Happens When Liquidity Disappears? [View article]

    Great, great post!

    All this before the train wreck of Obamacare has been fully implemented. Next year is going to be very scary.

    I love these two paragraphs:

    "Business Cycle Theory contends that down cycles are essential to a healthy economy; that down cycles should be accepted for their healing properties rather than avoided for their economic discomfort. Keynesian theory, on the other hand, contends that economic down cycles are economically unnecessary, can and should be avoided by appropriate government stimulation. John Maynard Keynes famously promised that “we will not have any more crashes in our time.”

    The benefits of down cycles are; excess debt is paid down, and risky business models modified or abandoned. Without down cycles, debt accumulates and excessively leveraged business models prevail. Since the Depression, stimulative Keynesian economic policy to avoid the economic discomfort of down cycles has caused borrowers to become addicted to cheap credit and dependent upon highly leveraged business models. Borrowers, at every level, individuals, corporations and governments have come to regard debt as wealth, a classic and tragic error of economic understanding and an unsustainable economic model. "
    Apr 26, 2013. 12:07 PM | 1 Like Like |Link to Comment
  • GDP Q1: +2.5% vs. +3% expected, +0.4% previous. [View news story]
    Is that bullish?
    Apr 26, 2013. 08:44 AM | Likes Like |Link to Comment
  • SocGen's Al Edwards doesn't disappoint his fans, believing the S&P is headed to 450 and gold to $10K. Most interesting is this chart on bond yields vs. forecasts. Forecasts in the deeper past essentially matched actual yields, yet for the last decade estimates have consistently called for "normalization," i.e. higher rates, but it's never happened. "Consensus has still not accepted that we remain locked in an Ice Age environment that will see U.S. (and U.K. and German) yields (TLT, TBT) converge to Japanese sub-1%." [View news story]
    Now if you actually believed in this forecast then buying SPX Put LEAPS (Dec 2015) would be a cheap way to play this for a potentially huge gain.
    Apr 25, 2013. 10:38 AM | Likes Like |Link to Comment
  • More on Caterpillar's (CAT) Q1: Sluggishness in the company's Resource Industries segment dragged down overall results. The year-over-year comparison comes in weak as dealers cut inventory dramatically despite the upcoming spring and summer crop seasons. The global giant lowers its outlook for 2013 to $57B to $61B in sales and $7.00 per share in profits - from a prior estimate of $60B to $68B in revenue and EPS of $7.00-$9.00. Shares are getting a bit of a lift by word Caterpillar will fire up a stock repurchase program for the first time since 2008, up 1.0% premarket. (PR[View news story]
    Growth accelerating?
    Apr 22, 2013. 09:42 AM | 1 Like Like |Link to Comment
  • California may face its biggest regional power shortages since the days of Enron this summer, as the state grid will be operating without Edison's (EIX) San Onofre nuclear power plant and two natural gas-fired units, while hydroelectric output will be at a three-year low. Even bigger shortages may await in the next decade as state environmental regulations force more plants to shut down. [View news story]

    Beware of Klingons on Uranus.

    Apr 20, 2013. 10:46 AM | Likes Like |Link to Comment
  • California may face its biggest regional power shortages since the days of Enron this summer, as the state grid will be operating without Edison's (EIX) San Onofre nuclear power plant and two natural gas-fired units, while hydroelectric output will be at a three-year low. Even bigger shortages may await in the next decade as state environmental regulations force more plants to shut down. [View news story]
    At least the global warming zealots will get what they want: shared misery for everyone!

    At least they are saving the planet for the rest of us ;)

    We should be giving them medals for their good intentions.
    Apr 20, 2013. 10:01 AM | 7 Likes Like |Link to Comment
  • Argentina creates a fund of up to $2B to help develop the country's 7.4M-acre Vaca Muerta shale field, which may hold one of the world's biggest unconventional energy resources. State-controlled YPF, as well as Apache (APA), Exxon Mobil (XOM) and Canada's Americas Petrogas hold exploration rights on nearly 80% of the site. [View news story]
    Peak Oil?

    In the immortal words of Nelson: "Hah hah!"

    Another Malthusian myth put to rest.
    Apr 19, 2013. 03:33 PM | Likes Like |Link to Comment
  • 5 Reasons Why I Am Shorting The Market [View article]
    Hi Tack,

    I think you have to factor in yen depreciation from a non-Japanese investors point of view to get an accurate return.

    So the absolute return is phenomenal if it was fully currency hedged but I don't think all investors understand this.

    DXJ shows a hedged return and the performance is awesome.
    Apr 16, 2013. 11:19 AM | 2 Likes Like |Link to Comment
  • The specs for the first version of Google Glass are out: the device can take 5MP photos and record 720p video, has Bluetooth and 802.11 b/g Wi-Fi radios, and 16GB of storage. Google (GOOG +0.5%) claims a battery life of 1 day with normal use, and states viewing Glass' display is equal to watching a 25" HD screen from 8 feet away. Google has also begun rolling out Glass apps in Google Play, and has prohibited developers (for now, at least) from including ads in their apps, or charging for them. Himax (HIMX +7.7%), a rumored Glass supplier, seems to be getting a lift. (previous[View news story]
    I predict that its biggest user will be the porn industry.
    Apr 16, 2013. 10:01 AM | 2 Likes Like |Link to Comment
  • March Housing Starts: 1.04M vs. 930K forecast, 968K previous (revised from 917K). [View news story]

    What has more net economic "value" (as in total GDP): multi family or single family?

    Slight drop in the pace of single family was offset by the surge in multi-family but I am not at all clear what that mix means from a GDP point of view.

    thank you.
    Apr 16, 2013. 09:33 AM | 1 Like Like |Link to Comment
  • Feb. Industrial Production: +0.4% vs. +0.2% expected, +0.7% prior. Capacity utilization 78.5% vs. 78.3% consensus; 79.6% prior. [View news story]
    Why such a big drop in utilization? Is that a typo?

    The prior number on the link was 78.3 as far as I can tell.

    Can't find it on the link anywhere. Doesn't seem to make sense based upon the IP number above going up.
    Apr 16, 2013. 09:29 AM | Likes Like |Link to Comment