J. D. Swampfox

Imagine This Scenario for Earnings Estimates

Old Trader
Your argument is exactly the same as Morgan Stanley's in its bearish call for stocks.
See pragcap.com/analyzing-...


On Jul 24 08:39 AM Old Trader wrote:

> Given that analysts seem to be consistently a day late, and several
> dollars short, and cut estimates too far the last time around, resulting
> in the setting of a low bar, is it unreasonable to assume they will
> err in the other direction on the next go-around? An excess of optimism
> sets up the real possibilty of earnings misses for the next reporting
> period, and very possibly the year.

Do California IOUs Carry an Implicit Guarantee from the Federal Government?

While whatever banks choose to invest in does not have an implicit guarantee, the banks themselves ARE implicitly guaranteed. I suspect that, since it's not politically acceptable for the government to directly guarantee California IOU's, the government has already directed its captive banks to invest aggressively in those IOU's. The banks will do exactly as they are told-just as they did in the Chrysler and GM bankruptcies. If the banks take losses on those "investments", it doesn't cost the banks anything...only the US taxpayer.

Hedging Against ObamaCare: Potential Hedges Against Health Insurance Reform

Better to short health insurance stocks - not all heath care in general...

A Socratic Dialogue: Fearing the Collapse of U.S. Treasury Bond Prices

So Brad Delong thinks of himself as Socrates and of John Cochrane and Robert Lucas as fools... We shall see...

The Proof That There Are No 'Green Shoots'

There's this idea that we can legislate the problem away, but the consumer is crushed...

Julian Robertson Bets the Farm on Inflation

Hey Macro_Man:
good comment.
Is this you:
macro-man.blogspot.com/
...or should you change your handle?


On Jun 04 05:00 AM Macro_Man wrote:

> long Treasuries are becoming a crowded short. There is no one, it
> seems that likes long U.S. Treasuries. I for one, like long U.S.
> Treasuries...but have recently acquired only a small position and
> am not adding to it.
>
> So, if something is this unpopular and sentiment so universally negative
> and heavily shorted...there is a good chance that when it runs up...it
> burns the shorts. I agree, that the supply seems limitless and that
> is what many will point out. But..
>
> Now, what can make it change direction...some indication from the
> government that they are planning to cut down the size of the 30yr
> going forward. maybe take out 2 or 3 reopenings. making interest
> payments partly tax deductible. or just this rally running out of
> steam in a couple of months. geopolitical events..including swine
> flu.
>
> All I am saying is, when something is this unpopular...it is not
> a good thing to short now. limited upside...a lot of quick downside

John Hussman: Market Internals Suggest Heightened Concern

Dr. Hussman is always an insightful and pragmatic read. I, for one, am truly glad he makes his weekly opinions available for free..

Smart Money on Market Direction: Bears Caught Flat-Footed?

Great survey of opinions! Thanks for your hard work assimilating all the sources (pro and con) in one place.

I Can't See Major Market Reversal Before Dow Reaches 10,000

Dow hitting 10,000 is easy with irrational exuberance. The only thing that stands in the way is the Treasury's need to sell so much debt this summer. It seems right now to be an either-or situation, low Treasury yields and strong dollar...or Dow 10,000.

Thursday Outlook: Commodities, Global Markets

Thank you for the information. Best to you and your family.

My Oil Outlook

I like your call strategy as an alternative to a leveraged ETF. A $58 strike in Jan 2011 is a good bet in my opinion...

Louis Stanasolovich: Short Oil, Long Gold

To me expecting oil to go to $30 is a little extreme now...but, with the short term strength in the dollar and before recovery, to see $40 again seems plausible. However, gold seems to need to consolidate at present too... before advancing this summer.

Dow Drops a Bombshell; Turns in Profit

Let's hope Dow simply spins Dow Ag off to existing shareholders with a coincident new stock issuance going to Dow to shore it up...kind of like ATT/Lucent way back when...

Time for Transparency on Bailing Out the Bank Bondholders

I too agree. The major banks own each other's bonds and, of course pension funds and insurance companies own these bank's bonds. Nevertheless, all these entities should take a loss BEFORE the taxpayer does...it's the American way.

Capital One (COF): Q1 EPS of -$0.39 misses by $0.31. Revenue of $3.7B (-5.6%) vs. $4.17B. Adds $124.1M to allowance for loan losses in anticipation of higher expected charge-offs; sees 2009 charge-offs higher than the $8.6B it forecast last quarter. Shares -6.8% AH. (PR)

As Zero Hedge says, the stock should be at $1000 tomorrow.