Weighing The Week Ahead: Bring On The Economic Evidence [View article]
you want to buy and hold in here
don't get psyched out by red herrings
stocks follow earnings
right now there is a lot of fear in the equity risk premium - with the inflation rate and even adjusting up so that we don't have negative real rates the market PE should be 16 to 19. There is some math to do to get to that number which I won't get into. But it is obvious that there is much fear built in. Whether that far actually translates into negative effects is a judgment call. I suggest you list all the fears on th eleft side of a page and then consider the fiirst and second order effects and then place next to each - is it known or unknown. This will help you to deal with your fear and perhaps help you in your judgment call.
I am buying in here both US and European.
Efficiency is a term that is not well understood. Theory is that market use all the available information to price equities and that the price refects all information. It is not a judgment on under or over pricing. It is information and whether it is in or out of the price.
Since price is set by the marginal buyer and seller it is that last piece if information that is critical.
The market is made up of many actors - some smarter and more connected in than others. If I know something and have a better model on a stock and I see it trade at $8 and think it is worth $12 - I will bid it up to $12. Others will have different view points and the aggregate will be the price. That is how effiicency works.
But things are not perfect. Actors are buffeted by many forces and are boundedly rational (look it up) and so may act in ways in the moment that make no sense in hindsight. For that reason marekts are weakly efficent in the very short term but strongly efficient over the very long term. Therefore buy and hold.
The Treasury sells $35B in five-year notes at 0.748%. Bid-to-cover ratio of 2.99, vs. a recent average of 3.0; indirect bidders take 42.6%, vs. a recent 43.7%. Direct bidders take 6.5%, vs. a recent 12.2%. [View news story]
write your congressional rep demanding they borrow andd spend more
Henry Blodget sets a target range of $16-$24 for Facebook (FB -11%), based on a valuation of 20x-30x a 2013 EPS estimate of $0.80. Blodget's retort to those bullish due to Facebook's growth potential: Facebook has already been working on monetization for years; Mark Zuckerberg cares more about Facebook's "social mission" than its business; and the company's next billion users, weighted towards emerging markets, will be much less valuable than its first billion. (previous) [View news story]
he's right
that and the insulting governance structure makes this thing untouchable at these prices.
Expect denials soon, but sources says Angela Merkel suggested to the Greek president the country hold a referendum on continued use of the euro at next month's elections. Syriza: Merkel is treating Greece as a "Protectorate." New Democracy: Merkel proposal "unfortunate." The German Chancellor has managed to unite the feuding Greek parties. [View news story]
cutting off the gangrenous toe is always the right decision to make
greece is now at that point. they cannot stay in so therefore they must leave and try it on their own
cuttting off a body part is always painful in the short term but eventually the body heals
as for the rest leaving - believe me - once they see the punishment meted out to these idiots - they will swallow whatever medicine they need to take to stay in - it will get ugly for the greeks - there is nothing but pain and more pain ahead of them
that said good news for me - Athens will become a third world city with prices to boot - very nice - per capita GDP over there will sliced by about 40% - overnight. And the rest of Europe won't skip a beat because the ECB will print money to smooth the transition for the ones remaining.
Expect denials soon, but sources says Angela Merkel suggested to the Greek president the country hold a referendum on continued use of the euro at next month's elections. Syriza: Merkel is treating Greece as a "Protectorate." New Democracy: Merkel proposal "unfortunate." The German Chancellor has managed to unite the feuding Greek parties. [View news story]
it's over
the greeks (lower case - as that is what they will become) will leave the Euro.
Once that happens - they will print their money - it will be like artist commune scrip - and be cut off from external sources
After that they will appreciate the true meaning of πόνος
ECRI Reaffirms Recession Call Again [View article]
how about applying some commonsense
how do you have recession when loan growth is rising and businesses are expanding their LOC's. How is that possible? this is about the best forward indicator you can have.
if you were in business or had the remotest understanding of business you would get that recession - shallow or otherwise does not happen under those conditions.
as for the charts - leaving off all the calls on the cyclical trends chart is straight out dishonest
as for the RPI chart - it is a joke - look at the volatility on it - are you kidding with the arrow?
what an ass.
look - if you have good stuff and it makes sene you can persuade me. but this is nonsense. worse it is dishonest nonsense.
Asia's closer to getting on board the regional trade pact bus, as Japan's Prime Minister Yoshihiko Noda boards a flight to Beijing and says he'll speed up negotiations on a trade structure with China and South Korea. The so-called FTA would match up in size with NAFTA and the EU. [View news story]
Mark Thoma says ~200K people will lose unemployment benefits in California and other states today. Under the terms of last year's agreement in Congress, benefits would be cut off if jobless rates fell below certain thresholds; despite a weak job market, rates have been falling. "Will a cut in benefits motivate workers who have become dependent on the program to go out and find jobs?” [View news story]
Just two days after JPMorgan (JPM) announced a massive $2B trading loss, Pimco's Bill Gross comes to its defense, calling it one of the “best-run banks in the world." It’s a decently capitalized bank, Gross says, with $120B of Tier-1 capital. "That’s 10.5%, which is higher than the 9% U.S. average.” And capital quality, according to Pimco, is what you need to trust most in a situation like this. [View news story]
Kid Dynamite draws on his career in an internal hedge fund to provide outstanding perspective. The issue is JPM has TRILLIONS in exposure, too complicated for even the most seasoned professionals to understand. If this could happen to the best-in-class, what might we think about the rest of the banks? 2008 is not that long ago and the loss in "trust" is of far more import than the $2B. [View news story]
W Walker the explanation that kwm3 gave you is about as clear and as good as you will get.
Take it to the bank.
Banks do this stuff as part of the normal course.
In this instance as Dimon says JPM was sloppy etc. It is not the fact of doing this activity that should be the issue - although the chattering classes seem to be focused there - it is the way it was done - they messed up.
Two things about Dimon - he will beat the holy crap out of whoever did this and it will not happen again. You can take that to the bank also.
Stocks move into the green following the Consumer Sentiment print, S&P 500 +0.2%, Nasdaq +0.7%. At 77.8 the index is at its highest level since January 2008. The read on current conditions jumped to 87.3 from 82.9, also the highest level in 4 years. A slight negative, the gauge on expectations declined to 71.7 from 72.3. [View news story]
"This is demoralizing," says Dick Bove of the JPMorgan (JPM -7.5%) news. Bove was a loud voice arguing the mid-April London Trading Whale story meant little. He maintains a Buy on the stock as $2B means little to a company that could earn 10X that much this year. But, he says, people "buy and own this stock because they trust management not to make errors." So which is it? [View news story]
Weighing The Week Ahead: Bring On The Economic Evidence [View article]
don't get psyched out by red herrings
stocks follow earnings
right now there is a lot of fear in the equity risk premium - with the inflation rate and even adjusting up so that we don't have negative real rates the market PE should be 16 to 19. There is some math to do to get to that number which I won't get into. But it is obvious that there is much fear built in. Whether that far actually translates into negative effects is a judgment call. I suggest you list all the fears on th eleft side of a page and then consider the fiirst and second order effects and then place next to each - is it known or unknown. This will help you to deal with your fear and perhaps help you in your judgment call.
I am buying in here both US and European.
Efficiency is a term that is not well understood. Theory is that market use all the available information to price equities and that the price refects all information. It is not a judgment on under or over pricing. It is information and whether it is in or out of the price.
Since price is set by the marginal buyer and seller it is that last piece if information that is critical.
The market is made up of many actors - some smarter and more connected in than others. If I know something and have a better model on a stock and I see it trade at $8 and think it is worth $12 - I will bid it up to $12. Others will have different view points and the aggregate will be the price. That is how effiicency works.
But things are not perfect. Actors are buffeted by many forces and are boundedly rational (look it up) and so may act in ways in the moment that make no sense in hindsight. For that reason marekts are weakly efficent in the very short term but strongly efficient over the very long term. Therefore buy and hold.
E
Stocks: Why One More Major Correction Still Lies Ahead [View article]
seeing patterns where there are not any is a cognitive trap sounds like you have lots of company down there in the pit. enjoy.
E
The Treasury sells $35B in five-year notes at 0.748%. Bid-to-cover ratio of 2.99, vs. a recent average of 3.0; indirect bidders take 42.6%, vs. a recent 43.7%. Direct bidders take 6.5%, vs. a recent 12.2%. [View news story]
demand it
E
5 Undervalued Dividend Stocks With High Expected Growth Rates [View article]
E
Henry Blodget sets a target range of $16-$24 for Facebook (FB -11%), based on a valuation of 20x-30x a 2013 EPS estimate of $0.80. Blodget's retort to those bullish due to Facebook's growth potential: Facebook has already been working on monetization for years; Mark Zuckerberg cares more about Facebook's "social mission" than its business; and the company's next billion users, weighted towards emerging markets, will be much less valuable than its first billion. (previous) [View news story]
that and the insulting governance structure makes this thing untouchable at these prices.
E
Expect denials soon, but sources says Angela Merkel suggested to the Greek president the country hold a referendum on continued use of the euro at next month's elections. Syriza: Merkel is treating Greece as a "Protectorate." New Democracy: Merkel proposal "unfortunate." The German Chancellor has managed to unite the feuding Greek parties. [View news story]
greece is now at that point. they cannot stay in so therefore they must leave and try it on their own
cuttting off a body part is always painful in the short term but eventually the body heals
as for the rest leaving - believe me - once they see the punishment meted out to these idiots - they will swallow whatever medicine they need to take to stay in - it will get ugly for the greeks - there is nothing but pain and more pain ahead of them
that said good news for me - Athens will become a third world city with prices to boot - very nice - per capita GDP over there will sliced by about 40% - overnight. And the rest of Europe won't skip a beat because the ECB will print money to smooth the transition for the ones remaining.
E
Expect denials soon, but sources says Angela Merkel suggested to the Greek president the country hold a referendum on continued use of the euro at next month's elections. Syriza: Merkel is treating Greece as a "Protectorate." New Democracy: Merkel proposal "unfortunate." The German Chancellor has managed to unite the feuding Greek parties. [View news story]
the greeks (lower case - as that is what they will become) will leave the Euro.
Once that happens - they will print their money - it will be like artist commune scrip - and be cut off from external sources
After that they will appreciate the true meaning of πόνος
For that is the way they have chosen.
E
ECRI Reaffirms Recession Call Again [View article]
how do you have recession when loan growth is rising and businesses are expanding their LOC's. How is that possible? this is about the best forward indicator you can have.
if you were in business or had the remotest understanding of business you would get that recession - shallow or otherwise does not happen under those conditions.
as for the charts - leaving off all the calls on the cyclical trends chart is straight out dishonest
as for the RPI chart - it is a joke - look at the volatility on it - are you kidding with the arrow?
what an ass.
look - if you have good stuff and it makes sene you can persuade me. but this is nonsense. worse it is dishonest nonsense.
where do they get these people?
E
Recession Forecast Reaffirmed [View article]
I heard the same call - last September of an imminent slowdown
I heard it again in February - imminent
Now again in May - the same.
Eventually they must get it right.
So what. Even a broken watch is riight twice a day.
Smug, arrogant and wrong with zero accountability.
If he worked for me he would have been fired long ago.
E
Asia's closer to getting on board the regional trade pact bus, as Japan's Prime Minister Yoshihiko Noda boards a flight to Beijing and says he'll speed up negotiations on a trade structure with China and South Korea. The so-called FTA would match up in size with NAFTA and the EU. [View news story]
Mark Thoma says ~200K people will lose unemployment benefits in California and other states today. Under the terms of last year's agreement in Congress, benefits would be cut off if jobless rates fell below certain thresholds; despite a weak job market, rates have been falling. "Will a cut in benefits motivate workers who have become dependent on the program to go out and find jobs?” [View news story]
E
Just two days after JPMorgan (JPM) announced a massive $2B trading loss, Pimco's Bill Gross comes to its defense, calling it one of the “best-run banks in the world." It’s a decently capitalized bank, Gross says, with $120B of Tier-1 capital. "That’s 10.5%, which is higher than the 9% U.S. average.” And capital quality, according to Pimco, is what you need to trust most in a situation like this. [View news story]
Time to buy
E
Kid Dynamite draws on his career in an internal hedge fund to provide outstanding perspective. The issue is JPM has TRILLIONS in exposure, too complicated for even the most seasoned professionals to understand. If this could happen to the best-in-class, what might we think about the rest of the banks? 2008 is not that long ago and the loss in "trust" is of far more import than the $2B. [View news story]
Take it to the bank.
Banks do this stuff as part of the normal course.
In this instance as Dimon says JPM was sloppy etc. It is not the fact of doing this activity that should be the issue - although the chattering classes seem to be focused there - it is the way it was done - they messed up.
Two things about Dimon - he will beat the holy crap out of whoever did this and it will not happen again. You can take that to the bank also.
Time to buy
E
Stocks move into the green following the Consumer Sentiment print, S&P 500 +0.2%, Nasdaq +0.7%. At 77.8 the index is at its highest level since January 2008. The read on current conditions jumped to 87.3 from 82.9, also the highest level in 4 years. A slight negative, the gauge on expectations declined to 71.7 from 72.3. [View news story]
E
"This is demoralizing," says Dick Bove of the JPMorgan (JPM -7.5%) news. Bove was a loud voice arguing the mid-April London Trading Whale story meant little. He maintains a Buy on the stock as $2B means little to a company that could earn 10X that much this year. But, he says, people "buy and own this stock because they trust management not to make errors." So which is it? [View news story]