Charlie J

Options Trader Thursday Outlook: Get Ready for the Next Million Layoffs

"Firings may slow as the loss of 7.3 million jobs since the recession began in December 2007 probably means many companies have already cut staff to bare minimums."

You're right that we have cut to the bare minimum. But it doesn't necessarily mean that layoffs will end. The alternative is that we shut down the business entirely.

I own two small businesses. One is unchanged and stable. The other is an e-commerce retailer. Not good. No more cuts possible, and still losing money. I'm well off from a couple of successful startups, so I keep it alive, for one reason: the jobs of the people working for me. I don't want to jettison them into this job market.

But how long will I keep doing this? Probably not a whole lot longer, as I want to have something left to pass on to my children, instead of giving it to employees who are not family.

Publishers Wake Up: Online Readers Are Paying You - In Attention

"Readers online may not pay you directly with currency, but they pay you with their time and attention..."

Can you take this one step further, though, and explain to me how he pays salaries to employees when he receives the time and attention of readers, not money? How does time and attention pay the bills? (You might be able to discern from my question that I am an employer, not an employee.)

Changes in the Dollar's Value Reflect Changes in Money Velocity

"Now that it is clear that we are not going to fall into an economic black hole..."

Glad to hear that everything is OK now. I'll be sure to tell that to the bookkeeper in our small business who is getting cut to halftime this month (you have to have sales to need a bookkeeper to keep track of those sales).

Defending the Fed's Independence, Part II

The Fed is not a government institution, it is a cabal of bankers.

It has the ability to destroy our monetary system, and you think we should just leave it alone?

Options Trader Wednesday Outlook: Veteran Scammers on the Loose

"Does it bother you that your bank account has lost 20% of its buying power compared to the rest of the civilized World in just 8 months?"

You're berating all of us, when you're the one who is the big Obama supporter? When is your boy going to "change" things?

Nouriel Roubini, One on One: More Doom and Gloom

Just looked outside, didn't see any Hoovervilles.

I know that the economy isn't good. I'm positioning for a market downturn, etc. etc.

But Hoovervilles? Please provide one specific location of a Hooverville in the U.S. (I can show you incredible poverty just a few miles south of me in Mexico, but haven't seen any of this yet in the U.S.)


On Oct 24 10:47 AM De Graaf wrote:
>
> Look outside, look at the Hoovervilles poppin' all over America,
> look at the U6 unemployment... no depression like phenomenons?<br/>

Large Caps Could Lead the Market Much Higher

What? The market decides and the fundamentals fall in line? Are you saying that the stock market makes its moves, then a companies fundamentals go accordingly? So if the market is up, my business should be up?

Next, Elliott Wave stuff predicts a market downturn, but that is not bullish or bearish?

On Oct 20 05:11 AM danepol wrote:

> It seems to me that extrapolating from fundamental analysis in order
> to predict the market is not helpful and can be harmful. It all seems
> to happen the other way around: the market decides and the fundamentals
> fall in line. That implies that technical analysis may be a more
> reliable tool for basing investment decisions. But that too poses
> problems because it depends on what signs you choose to believe.
> My own position is to prefer Elliott wave analysis and the views
> of the top practitioners in that field are well known - which would
> be that we are on the cusp of the next wave down. That does not imply
> bearishness or bullishness, only watchfulness and being prepared
> to act in advance of the predicted turns.

Hands Off Goldman Bonuses

I cringe every time I see such shortsighted suggestions (70% tax). You might feel good that you'll be putting it to those rascally wealthy people, but you're missing something very important, which is funding of startup companies. I'm an entrepreneur who has started a couple of companies in the past (all of you use a technology that my second company created). I've also been a seed investor in over a dozen companies, including one just last week. If you put taxes at 70%, do you think I will take the risk of funding a startup, which is inherently very, very high risk?

Let's say I put $200K into a company and it does well and I get $2M back when it is acquired. Then, the govt (which of course would be much better at spending that money than I would) takes $1.4M of it, leaving me with $600K. I get my $200K back and a $400K.

I'm sorry to have to tell you this, but in that situation, I'm not going to make that investment. 7 out of 10 times, it is going to go poof and disappear. Those 7 times I lose the $200K, which is $1.4M. Three times I get a $400K profit, for $1.2M. Even if I pick three winners out of ten (which would be pretty darn good, actually), which each get a 10x return (which would be more than pretty darn good), I'm losing money.

I haven't given any thought to how one should keep bonuses down in a sector that you don't like, but taxing EVERYONE to accomplish this would be counterproductive.


On Oct 21 04:59 AM DL1947 wrote:

> There is only one way to keep the bonuses in the financial sector
> down to being reasonable ; and it is to tax them , but I would not
> want to live in a country that taxes the employees of one sector
> of the economy differently than those of other sectors . So if you
> decide to tax earnings over 500 000 at 60% and those over 1 000 000
> at 70% you will not only catch the bankers but also the movie stars
> and the ballplayers which is fine ; and if I am not mistaken all
> levels of government need to get a little more revenue these days
> .
> This is much better than government starting to tell who can pay
> what to whom .

The Debt-Equity Clock Is Ticking - Morgan Stanley

I used to be a Morgan Stanley high net worth client.

Past tense.

Large Caps Could Lead the Market Much Higher

Yes, I doubt that GDP is expanding 4% to 5%. I own a small e-commerce business, one that is nationally known in its niche space. Sales are still way down, with no improvement yet. We have continued to deplete our inventory as much as possible, and thus have not been ordering much, which is what many retailers are doing.

I'll let you know when business picks back up, but it surely isn't happening yet.


On Oct 18 03:13 PM richjoy403 wrote:
> Does anyone really doubt that the preponderance of evidence says
> we have seen the low for the cycle and the economy is expanding again
> (4% to 5% GDP growth in this qtr.)?

Skeptical Investors as a Bull Market Driver

You know what I never see in the comments of those who argue that it makes sense for the market to keep going higher? The current level of the S&P 500 P/Es. Here's what Dave Rosenburg has to say about this:

"On a reported earnings basis, we have a trailing P/E multiple north of 180x. On an operating earnings basis and looking at bullish consensus earnings estimates, the forward multiple is 15.7x, which is actually higher than the 15x multiple at the market peak in October 2007. So, while analysts say that the market must be priced on ‘normalized’ mid-cycle earnings, well, we have news for you, the S&P 500 is actually trading at peak multiples."

So with peak multiples already in place, what is the driver that pushes the market to higher prices and even higher P/Es?

Dollar Update: A Contrarian View

Calafia said, "I think the economy is doing better than most give it credit for, I think the Fed is going to move sooner than most expect, and I think that policies in Washington are going to turn out to be less awful than the market fears."

I have to respectfully disagree. I wish these were true, but I don't see any evidence to back them up, and I'm constantly seeing evidence to the contrary. Re the economy getting better: I suggest reading Dave Rosenberg, who tells it like it is. Re the Fed moving sooner: politically, they will not be willing to raise interest rates. Re Washington: Are you kidding me? Read Karl Denninger who has pretty good details about that.

"Stretching the Tape"

JGS following your Twitter updates with great interest. As mentioned above, a very 'bold' prediction. Based on all the info I see on the economy, I also expect, as do so many others, that there should be a downturn in the stock market.

But Yuu Wuu mentions the 800-pound gorilla in the room that can't be ignored. I get a market-timing newsletter that has also been predicting a major downturn, starting soon. When I emailed one of the principals and said, what about the liquidity from the government / Fed, he said that basically he goes by sentiment, that's what really matters. Does your model factor in all this liquidity that has been injected? Can it deal with an announcement from the Fed, say tomorrow, that it will interject more liquidity, immediately?

I would also mention that if this week passes without the start of a plunge, my suggestion is that you go a little longer with your campaign, at least one more week. If it happened to be that you were just one week early, no one would be less impressed with your call (and I would line up to get your newsletter or whatever it is you're doing).

The Death of Efficient Market Hypothesis and Random Walk Hypothesis

Quite an interesting discussion here. I'm a newbie, so I don't have much to contribute yet, but I will note that I've been receiving UBS's Art Cashin's daily email.

He has pointed out a couple of times what the press said about the market's move, and then shows it was not actually a possible explanation, because the move came before the news actually hit.

Just had a financial advisor, who was pitching to my son, say that the markets are efficient, so you can't expect to beat the market. As soon as he said that, plus the fact that they would only take long positions in stocks, no shorts, no options, we were done.

Will follow Savoldi and BAM on Twitter this week. I am fascinated by his conviction and the fact that he is stating, very publicly, what he predicts is about to happen.

The Dangers of Fiat Money: 'End the Fed,' by Ron Paul

The discussion here is terrific. It's the first time I've seen two sides of this issue presented. In isolation, the argument for gold seems so logical. But Buickoux's point (see more below) and Brian's point about how money that has value would be hoarded are quite interesting.

Buckoux brings up a point that one of my friends also hit on (he taught AP Economics in high school). He said, we went off the gold standard because there isn't enough gold, and it wouldn't work for an economy as large as ours in the U.S.

Can anyone refute this?

On Oct 03 12:18 PM Buckoux wrote:

> Because there were not enough precious shells to be found around
> the island to be used as currency as the population increased. <br/>