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  • The New York Times downgrades Adam Jonas [View news story]

    I think there is a basic misconception about brokers that people keep missing: they own stock and other assets that they trade for profit. In other words they are trying to sell you stuff at a higher price that they bought at a lower price whether or not it's any good. Think used car salesmen and you won't get too upset :) They are just doing their jobs.

    Is it any wonder they promote the heck out of anything they own in addition to anything they underwrite?

    Follow the money!
    Aug 31, 2015. 09:57 AM | Likes Like |Link to Comment
  • China Entering Ugly Recession, Not Just A 'Hard Landing?' [View article]
    Can you export Deflation?
    Aug 30, 2015. 12:15 PM | Likes Like |Link to Comment
  • Have Peripheral Colds Caused A U.S. Recession Flu? [View article]
    "When the yield curve flattens meaningfully, I will become much more cautious."

    How is it possible for this to happen with ZIRP?

    No academic forecasting model on earth could or would ever predict a recession with ZIRP, so what real value do they have in telling us that according to the model one plus one equals one?

    It's a tautology!

    What you are saying is that no recession could possibly occur without inversion so why not just leave ZIRP in place forever?

    Presto, no more recessions!

    And I am not predicting recession just commenting upon the absurdity of relying upon a model that can't be invalidated until it is. That's the essence of complacency.
    Aug 30, 2015. 12:06 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: What Are The Lessons From The Market Turmoil? [View article]
    "The Chinese threat has been examined and the effects analyzed. The impact is limited."

    "At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency. We will continue to monitor this situation closely."
    Chairman Ben S. Bernanke
    The economic outlook
    Before the Joint Economic Committee, U.S. Congress
    March 28, 2007

    Seriously, how could we possibly know the impact of China on the world economy this early in the process?

    The deflationary impact of a rapidly slowing China could be massive and we are already facing big deflationary forces worldwide. The opening quote above certainly suggests a level of complacency all out of proportion to the risks in my opinion.
    Aug 30, 2015. 11:29 AM | 1 Like Like |Link to Comment
  • Expecting This Bull Market Rally To Continue? Don't Hold Your Breadth [View article]

    It's funny but people forget that originally reported GDP was revised UP (2.5%) in August 2008 while in hindsight we were already in recession and that number ended up going down, down, down!

    The recession in the reported numbers only shows up after it has happened - the history of so-called real time data is pretty mixed at best for an economy as complex as ours.

    It's like the parable of the blind men and the elephant.

    I am always interested in the divergence between GDI and GDP because it was posited that GDI is more predictive of the state of the economy at turning points whereas GDP is far less reliable and subject to far more revision. The recent GDI numbers did not confirm the recent GDP figures but are certainly not suggesting a recession just very weak growth.
    Aug 29, 2015. 12:31 PM | 2 Likes Like |Link to Comment
  • The Stock Market Speaks - We Learn Irrationality Isn't Always Associated With 'Exuberance' And 'Euphoria' [View article]

    I think you are generally right on the comments but you can find evidence of malinvestment in the stock market right now because of ZIRP which could be the catalyst for the next decline. The reach for yield and the "FED Put" is fomenting the same greedy behavior you are describing in the past with the exception that it is being led by the professionals and the "smart money" this time around.

    A bust in the market won't hurt mainstreet as much so the implications aren't as far reaching as a housing bust but I do think there are elements of reckless behavior occurring now.

    The only caveat is that maybe some of the air will be let of out of the enthusiasm bubble by recent events and we just have a go nowhere market for a few years. I doubt it though!

    “It's tough to make predictions, especially about the future.”

    ― Yogi Berra
    Aug 29, 2015. 12:08 PM | 2 Likes Like |Link to Comment
  • The U.S.'s Debt 'Supercycle' Ended In 2007... [View article]

    Awesome comment. Essentially the FED seems to have shifted its mandate to include Fiscal policy in addition to monetary policy to try to counteract the forces you are describing here.

    The FED was never intended to be a political animal but it certainly has become one!
    Aug 29, 2015. 12:02 PM | Likes Like |Link to Comment
  • Felix Zulauf: Bottom isn't in yet [View news story]

    The level of bullishness still left in this market and based upon commentary above suggests that optimism is still way too high for a bottom to have formed but only time will tell.

    You can always find a quote from any guru that contradicts or undermines their position bullish or bearish - that's the nature of making predictions. No one is 100% accurate.

    Trotting out all the dumb things that were said by pundits in the last down cycle ("subprime will be contained") only goes to affirmation bias one way or another. Attacking the messenger can be useful if it makes sense but the correlation between past commentary and current conditions are probably spurious at best.

    To be a good investor you only have to be right most of the time and put your money where your conviction is. Felix has had a tremendous track record of performance even while he has been wrong.

    When it comes to investing, I think you are better served by attacking the argument and ignoring the messenger.

    “It's tough to make predictions, especially about the future.”

    ― Yogi Berra
    Aug 29, 2015. 11:59 AM | 4 Likes Like |Link to Comment
  • The Sky Seems To Be Falling. What Now? [View article]

    Great comment. Like so many people who have an alarm system in their house I bought mine after I was robbed :)
    Aug 27, 2015. 03:06 PM | Likes Like |Link to Comment
  • Tesla: Actually, Consumer Reports Just Reiterated The Bear Case [View article]
    "Well, this is simple. Tesla doesn't refresh the car every year, but they will supposedly do a complete refresh every ~6-8 years."

    Fashion and taste is fickle - people always want the newest, new thing so waiting 6 or 8 years to remake it is a recipe for disaster. There is a reason why most companies have a 4 year cycle for cars or sooner.

    To me its already looking a little dated plus you lose the exclusivity of the brand when there are more people driving it which is always part of the snob appeal.

    Anyway for the sake of shareholders they better focus on freshening it up along the way or suffer the further consequences but unfortunately that will likely cost a ton and be one more nail in the coffin of the operational model.

    Great car - terrible business.
    Aug 27, 2015. 12:35 PM | 10 Likes Like |Link to Comment
  • What Every Investor Must Know About China [View article]

    There was a time when you had high conviction on CAT. What are your thoughts on it now?

    At the current price it looks pretty discounted but it has a very volatile price action and I have no idea where support could be rebuilt in the future. What would the catalyst be?

    Seems like it needs a new investment cycle to get going again. Is the next catalyst the rebound from a recession in China/US?
    Aug 26, 2015. 11:18 AM | Likes Like |Link to Comment
  • Tropical Storm Erika tracking towards Florida [View news story]

    Stupid cone is pointing bulls-eye on my house. Let's hope it is as accurate as an economist's forecast.
    Aug 26, 2015. 09:29 AM | Likes Like |Link to Comment
  • Automaker stocks hit hard by global worries [View news story]
    Yes, yes it does. It was pretty much dead at the recent $280 price. Quite the turnaround in the last 2 weeks.
    Aug 24, 2015. 12:48 PM | 1 Like Like |Link to Comment
  • Automaker stocks hit hard by global worries [View news story]
    All of a sudden, and I mean sudden, my put in TSLA is starting to look good. Holy Moley!
    Aug 24, 2015. 09:47 AM | 5 Likes Like |Link to Comment
  • The Case For A 300-500 Point Correction In The S&P 500 - And Still A 'Secular Bull' [View article]
    "You can always count on Americans to do the right thing - after they've tried everything else."

    Winston Churchill

    Aug 23, 2015. 12:10 PM | Likes Like |Link to Comment