WhoisJohnGalt

Markets Aren't as Benign as They Look

Revealing piece, thanks.

A revolt against the bankers would be ironic (but welcomed) because the typical American consumer is/has been no better managing his debt.

Waiting for the Market Correction, But...

Despite the same time frames, I'm not getting same metrics as you: MACD indicates overheating and RSI hovers around 61. Not robust signals to trade off, but heading in a correctional direction.

Grab Your Shorts, The Correction Has Begun

Good points as usual, but I am not convinced on the timing, there's still a bit of wishful thinking pushing prices. High volatility preceded the previous market plummet, and we are seeing the same unfold this week. Might be a safer bet to buy indices measuring the swings (i.e. VXX) and carefully monitor the next inevitable slew of bad news.

Why Daytrading Stocks in the U.S. Is an Increasingly Limited Proposition

Hopefully your conclusion will not lead to a significant decrease in everyday market liquidity.

On a side note, let's not forget day traders' profits getting slimmed by HFT. It's no Terminator scenario, but the computers have got our number on the spreads.

Taylor Rule Estimate: Fed Fund Rate Differential at a Whopping 6.8%

With all respect to Keynes, but looks like the best solution right now is to bite the bullet and delever on all scales: consumer, corporate, and eventually government. We have kid ourselves for decades with an ever-growing standard of life that was actually propped up by a house of credit cards. The savings rate will have to shoot up to double digits for a while if we want to live within our means. So if anything, squeaky clean lending standards should be enforced. It's not sexy profit for banks, but at least it's sustainable.

Has the Rally Already Exhausted Itself?

You see Rick, for every bubble there's a downward spiral. The irrationality of markets are amplified in the midst of uncertainty. The reason why people probably did not jump the gun in March/April crying out "bubble!" is becuase they figured the fearful had oversold their securities. Q1 results beat expectations, and I don't mind the enthusiasm from that rally, but this past season of earnings was a bit well done.

Is China Selling U.S. Treasuries?

Solvent for now, but the magnitude of China's stimulus may have been overkill. These "private" banks still answer to the government and will keep lending to push the economy until they are told to do otherwise. I don't know what the lending standards are over there, but cash and credit cards are being handed to anyone who wants to spend it, namely the growing youth population.

China's sale of Treasuries makes sense in context of its shift from export growth to domestic growth. As we saw at the global economic conference few months ago, China is worried that of the USD's stability as the benchmark currency. At the same time, it cannot scream their concern in the streets because they have the largest to lose. We see them hedge through other methods, such as buying enormous quantities of gold. To their benefit, other G3 governments have picked up the slack on purchasing Treasuries.


On Aug 18 03:02 PM Dave Wrixon wrote:

> Actually, this is wrong. The reason China is able to lend to its
> people is because they are all solvent and not a bad credit risk,
> and because it is solvent. Not only that the temptation to default
> on a loan with a Publicly owned bank in China will be very small,
> if you wish to fulfill your admittedly small child allocation.<br/>

Bond Expert: Tuesday Wrap

News of the Fed extending the TALF program to March 2010 can serve as a hint to the government still wary of pulling the plug. But as shown by ZeroHedge, the Treasury seems to be running into problems of too much supply or too little demand, forcing it to monetize via itself and the Fed. If too big, the proposed offering may set itself up to fail and we could see bond prices tumble.

Take Money Off the Table: Insider Selling Increases Post-Q2 Earnings Reports

Thanks for sourcing the site, insider trading is a nice factor to consider when investing. Of course, make sure to look at the SEC filings when executives sell their shares, for it could be a pre-declared transaction.

Makes perfect sense that they're taking money off the table. The economic data looks rosey, but people within the companies whose earnings reinforce these statistics have a forward view of whether or not the good times will roll. Investors have fallen in line with the V-shaped recovery propaganda just as corporates are walking out.

Bank Lending Standards Tighter, Fed Says

Govt. money was given under the presumption of going in and going out. With the outflow tap cut, it implies that banks are protective of their losses and/or they don't feel the environment is conducive to lennding. Either way, this might be a good thing to let delevering work its magic to the mean.

Understanding the 'Q' Recovery

(Facetiously)

Corporate profits --> Optimistic market perception of company --> Stock rise --> CEO cashs in on options --> CEO buys a yacht, new home, etc. --> Consumption

If so much of our wealth is controlled by the top 1%, let's hope they spend.

iPhone 3GS Owners Are Happy, Good for Apple

I see the growth for Apple in a long-term horizon as it continues to take market share from Microsoft and its smartphone competitors. That said, its stock price seems to have overheated a bit. As a darling of Wall Street, it comes to no surprise that investors would flock to this stock first to ride the good times. For the prudent, ease back the coming dip(s) then buy up again imo.

Why China Buys U.S. Treasuries

Make sense, but like you said, China appears to shifting away from Treasuries since 1) it doesn't have to rely on export-fueled growth anymore and 2) it wants to reduce exposure to what could be volatile securities. News bits on Bloomberg show that China is trying to quietly buy gold without triggering a selloff of their largest proportion of assets.

Sentiment Data Shows This Dip Is a Buying Opportunity

Who says we're at the end of the recession?

Earnings Are Imaginary

Earnings are like sausage, crammed with all the numbers to come out with a stat that is satisfying yet you really don't know how it affects the company in the long run with its number alone.

Investors need to be a little better about breaking down the fundamentals and put them in context of meaningful financial ratios. This gets rid of some accounting fluctuations and shows a firm's true health. My favorites vary by sector and product, but I like to use these by rule of thumb: Lt Debt / Equity, RoA, Revenue growth, sharpe ratio, Quick/Current ratio, operating margin, and cash flow adequacy.