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Malkiel

Malkiel
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  • Minimum Wage Battles And The Economy: Is The Timing Right? [View article]
    Corporations and their profits in a capitalist economy are heavily subsidized by public policy, rendering them highly profitable to privileged classes. In exchange for this profitability these enterprises provide employment and benefits needed to prevent the public sector from having to do so. If corporations are unwilling or unable to provide health or retirement benefits or living wages then the public sector will have to step in and do so, and it will have to be paid for. Corporations can pay through mandated survival wages, or they can pay through direct taxation which is distributed for them by government as social welfare, but as you say, there's no "free lunch", so corporations will pay in some way. Make no mistake about it that the one thing which won't happen is a society where unemployed people die of disease or starvation in the streets so that corporate elites can continue to make the same wages and profits they've made in the same old way they've always made them. If you make that criticism of labor unions don't be blind to the fact that change will also intrude on managements as well...
    Oct 24, 2014. 11:15 AM | 2 Likes Like |Link to Comment
  • John Hussman: The Ingredients Of A Market Crash [View article]
    To believe that "market timing never works" shows the degree of brainwashing the average investor labors under from the financial industry. Firstly, the choice to buy or sell any position inevitably constitutes some form of "market timing"! Whatever your stated purpose in buying or selling at a given moment, peeling back the layers of reasoning or self-deception behind it brings us to the fact that some belief about market trajectory ("timing") is involved.

    If we examine the charts of the various indices we see that incredibly simple "timing" methods can be developed which are usually more effective than all the pseudo-crypto economic theorizing which accompanies investment strategy. Simply waiting for the once-every-five-years major correction, buying some index-following product, and selling when the index hits a new high will average out to better returns than most investors get from managed funds of any kind. All kinds of nuanced versions of that--buying after 5% dips or declines, 3% dips or declines, etc., and selling when the index in question hits a new historic high may be even more successful. There are no investment decisions which are not "timing" decisions, so best to begin constructing your theory of timing rather than blindly denying the very possibility of timing...
    Sep 29, 2014. 04:20 PM | 5 Likes Like |Link to Comment
  • Patiently Waiting For Mean Reversion [View article]
    Unfortunately the history of market declines, particularly the quick, expensive ones like 2008, show that the "active managers" make all these same mistakes, only on a macro scale. Holmes' faith in active management isn't evidence-based...
    Sep 18, 2014. 02:19 PM | Likes Like |Link to Comment
  • Daily State Of The Markets: The Cycles Say 'Beware!', Or Do They? [View article]
    Another guy who needs a copy of Aronson's "Evidence-based technical analysis", stat...
    Apr 22, 2014. 05:01 PM | Likes Like |Link to Comment
  • Is The Entire Market Rigged? [View article]
    I tend to think that the official market makers must make such a tidy profit being able to goose the market up and down at will day to day and hour to hour and minute to minute (using stock index futures) that the hft guys are really doing it the hard way. It looks to me like the middlemen are the ones who get fat here, not the clever foxes hunting scraps...
    Apr 3, 2014. 10:49 AM | Likes Like |Link to Comment
  • A March Jobs Pick-Up Doesn't Change The Outlook For Modest Growth [View article]
    The VIX has become a measure of "fear" mainly for the market makers--when they know they're taking us up or down, nothing happens to the VIX even when volatility obviously expands, but when a decline is unexpected by them, meaning they didn't initiate it, that's when you know you're seeing organic market action. This is how you can sort out the market manipulation from economic fundamentals: the manipulators are too cheap to hide their machinations by tossing some money into VIX futures for the sake of appearances...
    Apr 3, 2014. 10:42 AM | Likes Like |Link to Comment
  • Checking In On The 1929 Stock Market Parallel [View article]
    You guys, including Ciavacco who does good analysis with faulty tools, need to invest your next 50 bucks in a copy of Aronson's "Evidence-Based Technical Analysis". Most of the pattern-matching you're doing has been shown to be hooey which fails formal statistical analysis...
    Feb 26, 2014. 02:56 PM | 1 Like Like |Link to Comment
  • Fed Warns Of Potential 'Cascade' Stock Market Crash [View article]
    Speculators don't dump all their leveraged ETF's in a crash, they dump their leveraged ETF's and buy inverse leveraged ETF's. I'm not sure whether the holdings which underly these offset the dumped upside shares, but at least the dollars spent on shares of some kind don't leave the market...
    Aug 13, 2013. 04:05 PM | Likes Like |Link to Comment
  • Back To Bearish [View article]
    I would love to see an overlay of the S&P chart on this to see how well this opinion was correlating with what happened (or didn't happen)...
    Jul 31, 2013. 08:33 AM | Likes Like |Link to Comment
  • Business Investment Picks Up [View article]
    The Mr. Rogers of economics has spoken again, turning away cognitive dissonance with gentle expressions of faith in the capitalist system. Economics in its current state is just a set of talking points anyway, so facts shouldn't interfere with anybody's unshakeable beliefs about the beauty and perfection of free markets.

    I notice that in addition to his 53,000 manufactured "followers" here on SA, CBP is now actually FOLLOWING just one account; but when we click the link it appears he's following HIMSELF. We hear the sound of one hand clapping...
    Jul 25, 2013. 04:47 PM | Likes Like |Link to Comment
  • AAII Sentiment Survey: Bulls Outnumber Bears By A 2:1 Margin [View article]
    Who would not be bullish after watching how effortlessly market makers have been able to engineer straight up paper rallies using index futures, without the slightest pretense of influence from the economy or investors? These guys have got their machinery running in the groove now that none of the retail players are big enough to upset the apple cart with their piddly buy and sell orders. To infinity and beyond!...
    Jul 25, 2013. 04:29 PM | Likes Like |Link to Comment
  • Daily State Of The Markets: Conversations From The Halls [View article]
    It hasn't been "normal" for glaciers to melt away into torrid rivers and disappear from mountaintops that they've occupied for 10,000 years, and yet now that it's happening it's hard to conceive of returning to the old "normal" in our preferred time frame. The bear markets of the last 13 years were brought on by leveraging and offsetting practices which have been proven destabilizing on a systemic basis, yet have not been forbidden by the regulators nor abandoned by major players, so why would a new bear market be so unlikely? We can't predict the exact situation which will bring on a deleveraging event, but we can be sure they are waiting to happen as they never were before...
    Jul 25, 2013. 04:20 PM | 1 Like Like |Link to Comment
  • S&P 500 Snapshot: Another All-Time High [View article]
    "Lack of critical thinking" is more applicable to the accuser here than the accused. Neither Chicago nor Illinois are in any particular danger, in fact they're healthy and doing better than most, though they've apparently offended you by not voting your preferences. It's also my impression that the teapartiers are making sure nobody is allowed to say GOOD things about the administration, even though it's managing the government and the economy out of a tough recession while the entire financial and banking sector and half the congress try to engineer its failure...
    Jul 19, 2013. 02:49 PM | Likes Like |Link to Comment
  • Why I'm A Seller Of Volatility And VIX Products [View article]
    I respect the logic of your theory, that Fed tapering is not seen as a systemic event and therefore not generating interest in buying VIX products as some kind of hedge.

    I also have the additional theory that the VIX remains relatively low (not your view, but mine) in the midst of this recent correction because the market makers and other parties in a position to manipulate prices knew they were taking the market down and therefore didn't need to hedge against what they were already prepared for. The VIX spikes when the manipulators who normally control the market are caught off guard by events not expected by them, which in hind sight always get labeled "systemic risks"...
    Jun 24, 2013. 08:22 AM | Likes Like |Link to Comment
  • What Volatility? [View article]
    And the low VIX indicates that those who create the artificial volatility know that there's nothing to worry about, hence no need to waste money hedging. As per Rod Serling, they control the vertical and the horizontal in their twilight zone...
    Jun 20, 2013. 04:08 PM | Likes Like |Link to Comment
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