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nightfly

nightfly
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  • Another Central Bank Driving Markets [View article]
    Right Cynic,

    Everyone can get along as long as things are going well. But once the poop hits the fan, it's everyone for themselves. That's just human nature, which persists even at the national level and always will.
    Aug 15 12:24 AM | Likes Like |Link to Comment
  • Another Central Bank Driving Markets [View article]
    Stimulus junkies. How messed up the worlds markets have become - not entirely unintended either. Isn't that a goal of increased transparency and communication of the CBs? They understand that the control a lot by merely talking something up (see Draghi recently).
    Aug 9 08:41 PM | 6 Likes Like |Link to Comment
  • Housing permabears can no longer ignore the data: Home prices are up by the most in at least seven years. Among the many potential impacts: ~1M households regaining a positive equity position, and a meaningful decline in the number of newer mortgage delinquencies. The wealth effect from housing is 10x more than Bernanke's attempts to pump up the stock market, Josh Brown writes. [View news story]
    In Southern Cal, they've never been lower. So maybe prices are higher in non-bubble states/regions.

    It's just propaganda primarily, just like in 2010, 2011, and now 2012. In those previous years, a housing recovery was touted just as strongly.
    Aug 8 09:18 PM | 4 Likes Like |Link to Comment
  • Market timers are more bullish today than they were at the highs in May, says MarketWatch's Mark Hulbert. From a contrarian standpoint, this could mean trouble. The average stock market exposure recommended by short-term timers currently stands at 50%, compared to May's correction where is stood at just 42%. If these bulls get stubborn and dig in their heels, it's going be one heckuva run to the downside when they finally break. One caveat however: Watch the volume, if the bullish timers run for the exits too quickly, the any pullback will be modest at best. [View news story]
    Summer rally on extremely light volume - nuf said.

    Plus the Fed repos are pumping a lot of cash to the banks - clearly they aren't buying treasuries currently.
    Aug 8 09:15 PM | Likes Like |Link to Comment
  • The Stock Market's Worst 17 Years [View article]
    Nice analysis. I generally agree with your premise that the current business cycle is or has peaked and will only decline over the short term.

    Tack has a point though (and he makes it often) that there's no other game in town to make money with your money and keep up with inflation. So until that environment changes (I doubt it will for the next 10 years or so) that will keep a bid in the market and prices elevated.
    Aug 8 01:08 PM | Likes Like |Link to Comment
  • The new hot items - securitizations of U.S. single-family rental properties - may be unable to get top credit ratings from Fitch, the agency identifying a number of performance/data issues (mostly relating to short operating histories). A number of firms - KKR, BX, TWO, OZM among them - have joined the rush to get into the residential landlord business. [View news story]
    So the next bubble continues to form: residential real estate. Eventually, a glut of supply will erode profits which will lead to the inevitable collapse. Tricky to get out of rental assets very quickly. This sure thing will play out like all previous sure things.
    Aug 8 12:53 PM | Likes Like |Link to Comment
  • Now that the second quarter has come to a queasy finish, it's time to look ahead at what to expect for the next quarter. Looking back on the recent quarter, with nearly 85% of the S&P 500 companies reported, it doesn't bode well. Just 51% have exceeded net profit expectations, and only 40% or so beat on revenue. Even more disconcerting is that more than 50% of the companies in the index have already lowered estimates for Q3, while only 21% have raised. [View news story]
    This could be the business cycle starting to turn, irrespective of the economy. The amount of earnings growth and the time over which they have grown are very much extended and have no precedent (deflation is a good thing for earnings: lower salaries, fewer workers, lower input costs) but it has run its course. Future earnings growth will have to be on increased revenues and not primarily cost savings.
    Aug 7 08:58 PM | Likes Like |Link to Comment
  • "We're on the verge of the next great bull market," BMO's Brian Belski believes, undeterred by deteriorating earnings growth and weak investor confidence. "Stocks lead earnings, which lead the economy," he says. "We think the stock market revival we've seen in the last several weeks is foreshadowing what's going to happen in the economy again... a recovery in the second half." [View news story]
    A top call if there ever was one. More importantly - has this rally been on anything other that EU promises, QE hopes, and sugar cane dreams?
    Aug 7 07:30 PM | 1 Like Like |Link to Comment
  • A graphic look at the rotation into neglected sectors - Energy (XLE), Discretionary (XLY), Cyclical (FCL), and Retail (XRT) are all moving higher the past few sessions, while the popular mREITs (represented by NLY), Utilities (XLU), Pharmaceuticals (IHE), and Staples (XLP) all sell off. [View news story]
    Under performing fund managers buying at the or near the top, like usual.
    Aug 7 02:25 PM | Likes Like |Link to Comment
  • According to an economic barometer called the Money Market Index, the recent rally in the Dow over the past three trading sessions has been "totally irrational," says the index's chief researcher Dan Geller. The rally, mostly due to the release of Friday's monthly jobs report, shows that the enthusiasm has been mispaced due to the simple fact that a large portion of the 163K new jobs reported are only temporary, and likely to vanish soon. The move "has no economic merit," Geller insists.  [View news story]
    Tack,

    Between the Fed and the europeans there's no shortage of buyers of all bonds. Since there's likely no solution to the EU thing anytime soon and the Fed will go on and on with QE or QE lite or whatever it wants to call its constant bond buying, treasuries will continue to be bid.
    Aug 6 10:37 PM | Likes Like |Link to Comment
  • Focused on what ECB action may be on sovereign debt, markets are underpricing the chance the central bank steps into corporate bonds, opine two Goldman strategists. Measures could include direct purchases of corporate paper or a "funding for lending" scheme (a la the BOE). The moves would allow the ECB to provide market support without violating its mandate against financing of governments.  [View news story]
    We are now living in a world of perpetual bailouts and money printing. What happens when it all ends? Maybe it never can end.
    Aug 5 02:40 AM | Likes Like |Link to Comment
  • Bullish sentiment among individual investors is down to 22.2%, which could mean a stock rally is around the corner. Bespoke points to six other instances since Nov. 2009 when the sentiment indicator fell below 25%; each time, the S&P 500 rose in the ensuing month, averaging 5% gains. It's noteworthy that "the big drop in bullish sentiment came in a week where the S&P 500 was up more than 2%."  [View news story]
    Is it a rally when all you have are HF bots tossing the potato back and forth?
    Jul 20 02:37 PM | 1 Like Like |Link to Comment
  • Bernanke Q&A: A smug Chairman refers to his collection of editorials from 2008 and 2009 warning of Fed policies causing hyperinflation and a collapse in the dollar. Others keep a collection of Bernanke's predictions, including those of 5 years ago to the day: "The U.S. economy appears likely to expand at a moderate pace ... with growth strengthening a bit in 2008." The Fed was slashing rates a month later.  [View news story]
    Replace the Bernake with a bobble-head, you'd just as good of predicitions and results.
    Jul 18 11:04 AM | 1 Like Like |Link to Comment
  • Six losing days may be plenty for many investors; after an early-morning run, stocks have built steadily to solid gains: S&P 500 +1.4%; Nasdaq +1.2%; Dow +1.5%. Hewlett-Packard (HPQ -2.1%) is the only Dow component not trading higher.  [View news story]
    Nice shorting opportunity, near the top of the trading range and into continuing weakening fundamentals...
    Jul 13 12:05 PM | 3 Likes Like |Link to Comment
  • Fiat (FIATY.PK) wants to increase its exports to the U.S. as overcapacity in Europe leaves it with plenty of cars to offload, with CEO Sergio Marchionne saying it plans as many as 200 dealers in the U.S. over the next year. As opposed to Europe's slumping automobile demand, sales in the U.S have improved this year to the point that a few bullish analysts are calling for June sales numbers to come in north of the 14M mark when automakers report tomorrow.  [View news story]
    Auto sales are up due to the renewed creative financing options, same as employed during the 2004-2008 run-up to get anyone breathing and employed into a new car that they "deserve"!
    Jul 2 12:34 PM | Likes Like |Link to Comment
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