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Mark Humphrey

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  • Zillow's Data Does Not Bode Well For Future Case-Shiller Releases [View article]
    There's a problem with that theme. Either QE brings on a boom in the real economy that improves incomes in a substantial way, or it does not. The boom has been in financial prices, not the real economy. That's why prices of real goods have been rising slowly, compared to stock prices that have tripled.

    The small lift in economic "activity" brought on by QE is temporary and unsustainable, for reasons I won't try to elaborate. Fed money pumping actually weakens the economy by destroying capital, similar to burning the furniture to heat the house. Now we're headed into a recession soon. Not good for builders.

    If I'm wrong and a boom miraculously develops, then interest rates will surge. We all know what that will do to home builders.

    Point being, the sweet spot for demand and pricing in real estate and home builders is behind us.
    Feb 28, 2015. 02:19 PM | 1 Like Like |Link to Comment
  • Offense Is Dead: 5 Shorts For Defensive Investors [View article]
    I like small shorts--I just made my CRM short smaller after the 10% jump, so I have to get in later again when it seems evident stocks may be in trouble. But I had to laugh when I noted the critic boosting among others, INTC, CSCO, AMZN, FB. I'm short these in modest sized positions, and have been short IBM for quite a while. I'll bet your critic likes IBM too.

    Since I covered about 28% of my CRM short, I'll add a little to my home builder shorts and definitely to Intel, probably small amount to CSCO.

    I'm sure no one cares what I'm doing:).

    I puzzling over whether or not to buy some TLT as a trade on falling interest rates, since I'm guessing we're tilted toward a recession. I might do better just waiting to short more later.

    I like gold, and silver's OK. But I believe we're not that far from a recession. If gold gets hammered further, because of general selling of investments in a scramble for liquidity, silver will get busted harder. I'm not saying gold will necessarily fall, though, since a stock market crackup--over due--will panic the Fed, knock the dollar and maybe give gold some legs. When the bull market starts soaring in gold, silver will outperform, because it is more volatile. But aside from political risk, and that's not imaginary, I concede, gold seems more secure, because unlike silver, demand is much less influenced by industrial uses.

    Northern California, Oregon,'s all gorgeous. Land with water, beats life in town.
    Feb 27, 2015. 10:49 PM | Likes Like |Link to Comment
  • Zillow's Data Does Not Bode Well For Future Case-Shiller Releases [View article]
    Further reading has convinced me that the 2014 swelling in bank's loans and leases reflects the big inventory buildup in the US, versus stagnant to slightly declining revenues. That's not sustainable, which means a bank credit expansion is unlikely to forestall a recession. So home builders are vulnerable to a big upset.
    Feb 27, 2015. 10:30 PM | Likes Like |Link to Comment
  • Zillow's Data Does Not Bode Well For Future Case-Shiller Releases [View article]
    Anthony, I read and appreciated your article. Home builders will dive, and perhaps sooner than we'd guess, based on the real estate market slowly rolling over. Even if the economy manages to struggle onward for another year or 18 months with no recession, the building and sale of new homes is vulnerable to buyer fatigue, due to all the well known metrics: stagnant joblessness, rising costs of building, and a stock market that is a great risk of diving. It doesn't take a lot of imagination to predict what falling stock prices will do to home demand from comparatively wealthy buyers.

    There's a chance the recession could be staved off for a while longer, based on a recent acceleration in the formation of loans and leases by commercial US banks. So while the Fed monetizes assets at a slower pace, thereby creating checking account money at a slower pace, ramped up bank lending creates new money to take up the slack.

    But if this trend of the last year keeps on, it won't help home builders. Money created via Q Easing goes directly into stocks and bonds. Money created via credit expansion bids up production costs of real goods. So the credit expansion, if it persists will bring rising prices of real goods, further dampen demand for houses, and threaten the stock rally. Rising business costs and slackened stock demand won't prolong the bull.

    It's odd. You'd think that investors would be tuned into the risk of an exhaustion to the bull market, after six years of run up. But they're mostly not, and many seem to deeply resent clear reasoning that explains the risk. It's human nature, I guess.
    Feb 27, 2015. 07:43 PM | Likes Like |Link to Comment
  • Right-Wing Keynesianism? [View article]
    Oh for sure. Government caused the housing crisis, through the Fed's money printing, via various agency injunction that forced banks to lend to deadbeats, through massive underwriting of worthless mortgages via government cartels funded with tax dollars. What a blessing!

    Is this an example of government "increasing transparency"?

    I'd try to teach you something, but I doubt you'd be able to follow. "Asymetric information and externalities..." What a bunch of pretentious jargon and academic-speak. Too bad you people can't actually think.
    Feb 25, 2015. 05:48 PM | Likes Like |Link to Comment
  • Right-Wing Keynesianism? [View article]
    Hey Blue Sky, you need to study American history!

    The booms and busts of the 19th century were not the outcome of the free market in money and banking. Sorry to disappoint you.

    State legislatures were constantly intruding into the market, for one, by imposing legislation that made legal fractional reserve banking, despite the fraud of taking a "demand deposit" and the lending Smith's deposit to Jones. In a free market, in which property rights are upheld, and fraud is outlawed, fractional reserve banking would be illegal.

    The fractional reserve banks would fund credit expansions that, naturally, caused false inflationary booms. When the credit deflation set in, as it always does eventually, legislatures would declare "bank holidays" to help bail out their bank clientele. Along the way, they'd underwrite bank notes issued by fraudulent banks, making the notes legal tender. Meanwhile, depositors were victimized, because they'd be shorn of their savings when dodgy banks failed. Obviously, this was not a free market; it featured massive coercive interventions into commercial activities that favored a select group of political operators. It was a forerunner of the beloved Keynesian banking system we suffer under today.

    The Fed was formed at the best of big bankers, for the purpose of orchestrating credit expansions. The idea was then banks could fund credit expansions profitably, without suffering the costs associated with the inevitable correction that always follows the fraudulent expansion-boom. They wanted to party, without the hangover.

    So here's an honest answer. Hope it gives you heartburn.
    Feb 25, 2015. 05:41 PM | Likes Like |Link to Comment
  • Right-Wing Keynesianism? [View article]
    Oh wow. He's "rather" familiar with some of the "literature" on market failure. What a sophisticate. I know all about arguments claiming market failure and they're all false. Pollution being a great example of misconception re "failure". Pollution is merely physical trespass on the property of someone else, in realms within which courts have not chosen to recognize private property rights that do, in fact, properly exist. It is another tragedy of the commons. All cases of "market failure" are misconceptions--claims advanced by people who are basically unfriendly to markets under any circumstances. Assigning the misconceptions a fancy moniker like "market failure" doesn't make those ideas sophisticated or advanced, or correct.

    "The notion that a free market healthcare insurance could actually work..." Obviously, if there is no free market in medical provision, and what we have does not faintly resemble a free market, then medical costs will be far higher, as they are today; and remedies ineffective and dangerous, as applies in our situation. (Contrary to dishonest assertions by apologists for the government controlled "private" medical system, like Limbaugh and Hannity.) "Our" medical system drastically restricts output, via medical and drug licensing, by enforcing Mussolini-style fascist guilds and cartels. These include AMA control of medical school accreditation and curriculum, FDA drug approval, punishment and persecution of alternative therapies and providers. Against the backdrop of restricted supply, demand is ramped up with welfare programs such as medicare-medicaid, and laws requiring provision of free medical treatment to indigent or people without assets.

    The medical guilds-cartels extract princely incomes for their beneficiaries, who are shielded from market competition. Demand is almost infinite, because welfare programs underwrite this unjust system with endless streams of tax dollars. So we have a corrupt medical system featuring unjustly enriched apparatchiks, drug companies joined at the hip to the state, poisonous drugs that receive the benefit of state sanction-"approval" and suppressed competition, and long lines of helpless patients stripped of the freedom to choose, but eager to apply for free "services" funded by people who pay their own bills and work for a living.

    The effect is a cost-plus medical system that has been able to function, barely and with ever worsening problems, only because the US has been a comparatively productive and prosperous country. That's the reason out health care costs keep rising, well in advance of the costs in other, less prosperous countries.

    Naturally, no free market health insurance program can overcome the waste, theft and fraud built into this corrupt system. It needs to be scrapped, licensing abolished, the FDA dismantled, all federal funding in medical research and medical care ended. A free market would make care accessible to everyone, inexpensively and effectively. Privileged doctors, bureaucrats, drug companies, and welfare people would shriek and pull out their hair.

    Of course, this is all beyond the pale, so it won't happen. But arguments that a free market in health care would be a disaster range from stupid, to ignorant to disingenuous.
    Feb 25, 2015. 05:25 PM | Likes Like |Link to Comment
  • Why I'm Buying Up Coal Stocks [View article]
    I am still astonished at the mindlessness, the sheer contempt for facts and reason, displayed by left wingers. Nothing matters to them except their precious ideological faith, wherein they get to push other people around under the guise of "making a difference".

    Walter Duranty wrote a series of now infamous articles in the New York Times in the Thirties defending the Soviet Union against charges of mass starvation in Ukraine, that it was later revealed were not only false, but mendacious. For it came to light that Duranty knew full well of the forced and purposeful starvation of Ukrainians by Soviet murderers, but abetted and covered up the crime to defend communism. The Soviets murdered, just in Ukraine in the space of a few years, 6 millions.

    I see this willingness to lie by left wingers constantly, and also by people on the right dedicated to defending their precious wars and national security state. People on the left will call out lies by those on the right, and sometimes bravely and with masterful attention to detail and coherence. Books by David Griffin regarding the lies of 911 are an excellent example of bravery and intelligence. People on the right will call out lies by the left, writing brilliant exposes of the ugly truth behind socialist crusading.

    Both strains of thought are authoritarian and in important ways, totalitarian. Neither of these ideological camps will ever admit to facts that imply weakness or falsehood in their political faith. Both lie without conscience or hesitation.

    Robert Conquest in his biography of Stalin, told of Stalin's henchmen locking up political prisoners and torturing them until they confessed to false crimes against the State. The purpose of the torturing and forced confessions was not to uphold any policy or derive any material or political advantage. The purpose, as explained by Conquest, was the pleasure the torturers took in forcing people to repudiate and denounce what they knew to be true.

    I am reminded of this in reading MWins' commentary, accusing me of alleging a "conspiracy", when I made no such reference.

    Do people ever ask themselves if their lying implies anything about the validity of what they believe?
    Feb 25, 2015. 12:54 PM | 1 Like Like |Link to Comment
  • U.S. Assets Of All Kinds Are Dangerously Overvalued [View article]
    2016-2017 could easily coincide with the next recession. The longer the market marches north, the more confident--arrogant sometimes--bulls become.
    Feb 24, 2015. 07:31 PM | 1 Like Like |Link to Comment
  • Beware The Stock Bear [View article]
    No one knows when the stock market will crack, falter and then fall. It's a cinch that stocks are rising because of past and prospective money printing. Meanwhile, the economy is punk, gauged by numbers of non-workers, weak capital spending in plant and equipment, sluggish home sales, and commodity price declines nearly across the board.

    So unless the economy resolves its problems and returns to "normal", stocks are floating on a sea of newly created money and debt. This makes them risky, since its doubtful we're sailing into prosperity.

    So now the Fed has paused and thinks its going to raise interest rates, as a celebratory victory lap. But paused QE and increased rates would spell trouble for stocks, and for the fragile economy.

    So stocks may surge higher for a while, but the downside risk is much larger than upside potential. That's hard for lots of people to believe when nearly all the analysts are bullish, stocks are on an elevator to the sky, and the Fed issues confident statements promising a restorative boom.

    When stocks finally break, and who knows when, they'll go down fast. Everyone's crowded to one side of the boat.
    Feb 24, 2015. 07:04 PM | Likes Like |Link to Comment
  • Offense Is Dead: 5 Shorts For Defensive Investors [View article]
    The longer the shutoff of QE continues, the closer we get to a slap down, unless banks ramp up lending.

    Wow. Look at home builders soar, while most home buyers struggle. Maybe they're getting bid, because they've stagnated for quite a while, while averages march higher. If I'm wrong that a recession is in the cards in the next 18 months, and instead a boom transpires based on bank lending-money growth, then shorts will be tough and scary. But interest rates will rise in any boom, hammering home buyers. I'm short some builders, way too soon.

    I'm short CRM and hoping the next recession features big troubles in the overbuilt cloud sector. Amzn would get hurt too.

    I won't get an award for timing in this cyclical melt up.
    Feb 24, 2015. 06:14 PM | 1 Like Like |Link to Comment
  • Why I'm Buying Up Coal Stocks [View article]
    Tony, I read the sea ice thing a few weeks ago. Sorry if I'm wrong about that--I doubt I am, but it's possible. I'm not spending any time trying to research it and report my findings in endless and purposeless debate.

    The main point about global warming is the hypothesis that mankind is destroying the earth's climate is stupid, unproven and riddled with contradictions. I won't bother to convince you of this. Anyone who is interested in truth can learn this for herself. It's not that difficult to figure out.

    The AGW movement constitutes a hiding place for disaffected socialists who're heart broken--devastated--lost in uncomprehending grief--over the tearing down of the Berlin Wall and the fall of the People's Paradise. I sat in the living room of such a person when the Berlin Wall came down. I could see the confusion and disturbance written on his face.

    Socialists always crowed--for decades, as I recall growing up in the Sixties, near the tail end of the recitation of this ideological narrative--about what they liked to believe as the "rationalism" of "scientific socialism". Supposedly, socialism was a superior economic system that produced greater wealth for the masses of mankind, because production was "for use, not for profit". This is the world view of authentically stupid--not just ignorant--people, who have their hatreds and resentments to nurture and know nothing about economics or history. There are lots of people like that in the world, who imagine that their feelings and disappointments and grudges somehow trump reality, and who do not care how many millions of people are to be murdered to prove their point that socialism ought to work. Even as they profess great "concern" for the poor.

    Sometime in the Eighties, a study was published by the Rand Corporation, Organization Supreme for State technocrats devoted to the westernized ideal of central planning (meaning: planned chaos), applauded by the press and all the right people as wise economic bedside doctors. Their study concluded that the GNP of the Soviet Union surpassed that of the USA, thanks to the superior planning capabilities of the communist system. If you think I've invented this, go research the topic on BING. It wasn't only RAND that considered socialism to be superior to capitalism in improving the lives of the masses--it was "right thinkers" everywhere--in the press, the universities and public schools, in the churches.

    Then reality struck, the communist system imploded of its own impossible contradictions, and the consequences of socialism became evident to most people, although only in a vague unfocused way. The consequences, of course, were mass murder, mass demoralization and hopeless poverty. People get this today, again with no clear understanding of why it would be so.

    Dedicated misanthropic socialists emitted the primal scream of rage and terror. (People who support a political system that over the course of the 20th Century murdered 100 million helpless people are misanthropic.) THEIRS was the superior system, the product of "science" and rationality.

    But now reasonable people could see, mostly without the benefit of much understanding about the subject, that socialism was a colossal failure. If socialism was judged on the basis of reason to be a failed system, the socialists felt, then screw reason. To hell with it. To hell with mankind, the species that stubbornly refused the virtue of socialism and responded only to the perverse incentives of a system dominated by "greed" and "exploitation". If man is the rational animal, then to hell with rationality and and its exponent, man.

    This is the subtext of the environmental movement, unexamined by millions who've thoughtlessly signed on to this crusade. The viciousness of the radical animating core of the movement is not sub-textual; it's explicit. These people want to reduce the human population to a few hundred thousands; destroy industry, on which we all depend for our lives; and take people back to a primitive struggle for survival--all in the name of VIRTUE. These are the people who saw to it that the small pox virus would not be eradicated from the earth, in the name of "SPECIES RIGHTS"!

    What I've written won't convince true believer greens of anything; they're not reachable through reason. But the global warming hoax is their crusade and it bodes ill for people who want to achieve good lives for themselves, who see human life as morally precious.

    There's no middle ground, no safe center, concerning the ethos of environmentalism. Either people have a right to rear up on their hind legs think for themselves, build and prosper, or they do not. Environmentalists and global warming fanatics--like their communist ancestors--have staked out a position that requires the sacrifice of your life and mine to their vicious agenda.

    It is sad that most people do not understand this, and many don't want to. They've swallowed uncritically all sorts of toxic notions peddled by the schools, universities and governments. One such notion is that smoke belching from an industrial stack is the original sin, and that we're about to be punished for our sins through global warming.
    Feb 24, 2015. 04:43 PM | 1 Like Like |Link to Comment
  • Right-Wing Keynesianism? [View article]
    Well, let's think about this for a minute:..."the mistaken conclusion that all things are black and white with their objective truth known."

    If a thing has objective reality, that's a fancy way of stating the thing exists. For a thing to exist, it must possess limiting properties that make it what it is, or is not. That's the law of identity that Aristotle wrote about a long time ago. For if a thing lacks limiting characteristics, it can be anything, or one thing this minute and another next. But if a thing is anything and everything, it is no thing in particular: nothing. It can't exist.

    So existence presupposes the law of identity, from which cause and effect are derived. As an entity interacts with other entities, it "behaves" in accordance with its nature as a particular kind of entity.

    This is why everything that exists is objective, limited, "black and white". The notion that the world contains lots of grey areas, conflates some thinker's inability to make sense of things with existence. Existence is not confused and "grey"; it just is.

    "The existence of businesses willing to act immorally for personal gain.." Your definition of moral versus immoral is false, based on the notion of altruism. This is the age old idea that people ought to sacrifice their lives and prospects for happiness for some supposedly greater good, to be defined by the political class, or by whomever wants something from another. The proper standard of good is the flourishing life of the individual, which requires self improvement, dedication, work and intelligence. That which advances one's prospects for a "good life", one lived up to the potential one has, is good. That which obstructs or destroys one's prospects is bad.

    Totalitarians on the left and right believe there is a conflict of interest among people in a free society. That's why they advocate unlimited power to the State to take over people's lives, to award booty to some and punish others, based on the whims of the ruling class. The ruling class is designated as "enlightened".

    But there is no conflict of interest among people in a free society, in which reason is embraced. In fact, there is a prevailing harmony of interests, which is not utopian; it is a natural order. This is somewhat obvious to anyone who understands, at minimum, what the division of labor entails. I wonder if the left wing notion of capitalist wickedness is psychological projection.

    The libertarian "position" isn't "that each individual has the ability to conclude what is moral for everyone in every situation". The proper position is that right and wrong do exist and can be understood by reference to the proper moral standard: the flourishing life of the individual. Flourishing implies fidelity to reason, non-aggressive behavior, thoughtfulness in choosing, persistence and bravery in pursuit of a good life. Business people striving to make money for themselves uphold this ethos, and do it very well, since overwhelmingly, they are honest, at least in the conduct of their business.

    Finally, you state "utopia does not exist". But it does, according to the left. Marxism and its various offshoots, including environmentalism, are utopian in outlook. The Left worships the state, which is institutionalized coercion; greens worship nature-without-human life. Both are utopian and vicious. They are vicious, because of what they do, and propose to do, to people.
    Feb 23, 2015. 05:17 PM | Likes Like |Link to Comment
  • The U.S. Economy May Be Headed Toward Contraction This Year [View article]
    The weakening indicators you wrote about accord with falling prices of lots of commodities. Declines in copper, oil, grains, precious metals, steel, home sales and etc. don't occur in a vacuum; they're part of the process of a slow rollover in the business cycle. '

    Meanwhile, money supply growth has slowed from 16% to 8% over five years. That's heady money supply growth still, no question. But the nominal rate of increase is less important than the relative rate of increase, which has slowed for several years running. They have to pump money, over an extended time, faster and faster to keep revenues of capital intensive ventures rising, despite the natural tendency for costs and debt to sink malinvested ventures.

    So I think we're tilted in the direction of recession.
    Feb 23, 2015. 04:35 PM | 1 Like Like |Link to Comment
  • Why I'm Buying Up Coal Stocks [View article]
    I'm struck by the Orwellian tone of contemporary authoritarians and totalitarians. "Climate Deniers". "Terrorists" (an official designation that today also applies to followers of Ron Paul), the "War on Terror", and the Department of "Homeland Security". (Das Heimatland uber alles!) People who disapprove of or consider to be unnatural homosexual behavior are designated as Homophobes. People who favor capitalism and disapprove of unlimited state power are "Extremists". Those who criticize or oppose the actions of any person of color are Racist or Uncle Toms. Have they gotten around yet to creating a pejorative for people who oppose forced vaccinations?

    None of this relates directly to climate change or the future of coal company profits. But reading comments of green fanatics always disturbs me because their language and attitude warns of trouble ahead.

    Every aspect of one's life today has been made into a matter for public debate and censure, or worse. Ask the fellow who lost the LA Clippers.
    Feb 23, 2015. 03:39 PM | 1 Like Like |Link to Comment