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  • March Auto Sales: Headline Numbers Conceal Fundamental Weakness [View article]
    You need to look at a six-month rolling average to reduce the impact of weather and weekends.

    So what was the 10/1/13 to 3/31/14 sales number vs. 10/1/12 to 3/31/13? More or less?
    Apr 3, 2014. 12:21 PM | Likes Like |Link to Comment
  • Get Out Of The Bunker: Economy Set To Improve This Year [View article]
    That's a great point. As long as the Fed has any QE program, and continues to roll over it's greatly inflated balance sheet, then clearly things are still not right.

    Even just a couple of days ago Yellen had to remind everyone that from her perspective the economy and job market still looks very weak; therefore ZIRP and QE would go on for a long time.

    The Fed is the biggest pessimist of all.
    Apr 2, 2014. 07:31 PM | Likes Like |Link to Comment
  • When Will The Bubble Burst? [View article]
    "This happens as the economy starts to improve and inflation begins to rise. Think 2004 as Greenspan started to raise interest rates in quarter point increments from extremely low levels"

    The "economic growth" of the 2003-2007 period was based solely on credit expansion due to absurd housing over-valuation. When the real value of the collateral was exposed in late 2007 and into 2008 due to Greenspan's actions, the whole thing collapsed.

    Any "economic growth" we see now that might appear to be a justification for the Fed to embark on phase 1 again is based on the QE credit bubble. If the Fed fools itself into believing that the economy is actually strengthening and raises rates, they'll just expose another credit bubble, this time caused by their own ZIRP and QE. It's doubtful that the Fed will be able to run through the normal rate cycle again anytime soon.
    Apr 2, 2014. 06:14 PM | 3 Likes Like |Link to Comment
  • Bullard sees first rate hike in less than a year [View news story]
    He said 4.0% by the end of 2016 - 32 months from now.

    If the economy can't handle 4% rates by then you'll get a deflationary tailspin no matter what the Fed does. And I don't think the economy will be able to handle 4% then - so we're talking ZIRP for many years to come, just like Japan.
    Apr 2, 2014. 05:48 PM | 1 Like Like |Link to Comment
  • Get Out Of The Bunker: Economy Set To Improve This Year [View article]
    Of course the "Economy will improve this year", just like it has for the last five - at a 2 to 3% annual rate. The recession ended in June 2009, but the recovery has been pathetic.

    Each call for "accelerating growth" for the last 20 quarters has been wrong. Sure, there are a few glimmers of hope here and there, but the macro data still shows a lot of weakness.

    There may not be a "formal" recession for a while, but there might be another five years of "muddle-through" before it happens.
    Apr 2, 2014. 04:28 PM | 1 Like Like |Link to Comment
  • Mid-Year Target For The S&P 500 Of 1950 [View article]
    Mr. Wilson,

    Were you in the business in 2007 and 2008? If so, I'd like to see your predictions for market performance in those two years from the early April time frame. Actually, throw in 2009 as well. Thanks.
    Apr 1, 2014. 07:37 PM | 2 Likes Like |Link to Comment
  • Financial Planning Challenges In An Unequal Society [View article]
    Right, a Trillion.

    My question is: When the super-wealthy decide to cash in their stock market gains (due to the advice of their very-connected advisors), who buys their stocks? We all know who - the 401k shlups who are told to "buy and hold" even through -50% market meltdowns.

    OF COURSE the ultra-wealthy build dynasties - they reap most of the market gains while pawning off the losses on the small guys. The entire system of 401ks, IRAs, mutual funds, financial services, online trading, and financial media are part of this system. What to do? Usually, the EXACT OPPOSITE of what everyone else is doing. Right now the markets are being bid up to all-time highs. A good time to buy from the ultra-wealthy who may be selling? If it's not them selling than who is selling?
    Apr 1, 2014. 02:45 PM | Likes Like |Link to Comment
  • Black Swan Events: How To Protect Your Portfolio When It Is Needed [View article]
    "There were plenty of warning signs going into the 1907, 1929, 1987, 2000 and 2008 crashes"

    Mr. Wagner - you must have cleaned up shorting the markets in 2008 and 2000. Please let us all know when the obvious warning signs show up again.

    Also - it's really too bad that the market cycle is always "euphoria" followed by a crash. A market that climbs steadily 8% or so a year might avoid the destruction of 2000 and 2008, but with the slope of market gains looking just like the late 90's and 2003-2007, we just might be doing it all over again. Both of those crashes knocked 50% off the markets. So if the S&P climbs to 2500 in the next few years, the probable crash might send it back to 1250 or less.
    Apr 1, 2014. 12:09 PM | Likes Like |Link to Comment
  • Black Swan Events: How To Protect Your Portfolio When It Is Needed [View article]
    Not really.

    Even though the initial premise was "stocks good under Democrat Presidents, bad under Republicans", you have to dig under the surface a little and look at the Congress too. The economy seems to do best with a moderate Demo President and a Republican Congress (both House and Senate).

    That way there aren't any stupid ideas like Obamacare becoming law, but at the same time you have a President that is much more comfortable with inflation than preserving the value of the dollar.

    In 2009 and 2010, the Demos had full control, and they focused on a long-term political goal (taking over and ultimately ruining the health-care system) rather than helping the economy. We're still paying for that negligence four years later, as this recovery is NOWHERE as strong as the Reagan recovery.
    Apr 1, 2014. 12:02 PM | 3 Likes Like |Link to Comment
  • Key Indicators Still Positive [View article]
    "The VIX index is a good proxy for the market's level of fear and uncertainty. The VIX has been relatively low and stable for the past year, which in turn suggests that the outlook for the economy has become less uncertain."

    The VIX has nothing to do with economic outlooks, only with perceived short-term market volatility.
    Mar 31, 2014. 07:25 PM | 4 Likes Like |Link to Comment
  • Another Debt-Fueled Spending Spree? [View article]
    If you look at the 5-year average US market, right now it is around 13 million cars/year (obviously due to 2009-2011).

    But after the current sales surge, due to replacing worn-out cars as you indicate, I'd expect the rolling 5-year average to begin to decline again. 14 to 15 million per year might be the new baseline, due to demographics. When the "fleet age" begins to shrink again from the 11.5 you mention, that is likely when the annual sales rate begins to drop again. The fleet age will probably stay in the 9 to 10 year range once it stabilizes.

    By the way, are you staying long GM? Down almost 20% since the high in January and likely to fall more due to the recalls. Ford is also down about 15% from the recent highs.
    Mar 31, 2014. 03:08 PM | Likes Like |Link to Comment
  • Chicago PMI drop led by employment [View news story]
    They do care about unemployment - the worse it is the better it is for the markets.

    Yellen just put the hammer down - all because of what she perceives as "solveable unemployment". As long as "too many" people are out of work the Fed will ZIRP, and that could be for a long, long time.
    Mar 31, 2014. 12:39 PM | Likes Like |Link to Comment
  • Janet Yellen walks back hawkish vibe [View news story]
    Gee, you don't say?

    The Fed will ZIRP for many many more years. There is no recovery except for Wall Street. Labor participation is plummeting, and the Fed knows that without free money to the banks (a small portion of which gets lended out into the real economy) the country would still be in a very deep recession.

    They'll continue ZIRP for 10, 15, 20 years like Japan and wonder why it's not working.
    Mar 31, 2014. 12:10 PM | 2 Likes Like |Link to Comment
  • 971K cars added to GM ignition switch recall [View news story]
    "Bin Laden is dead and General Motors is alive"

    - Obama campaign 2012

    "Oh, and a few dozen people are dead due to GM"

    - Obama, never
    Mar 30, 2014. 08:02 PM | 2 Likes Like |Link to Comment
  • The Good, The Bad, And The Ugly Of Mortgage Reform [View article]
    "Is there any historical precedent for two massively profitable companies to be completely disbanded, wound-down, and liquidated like this?"

    Is there any historical precedent for two massively profitable companies to receive massive taxpayer bailouts when they should have been liquidated instead? The liquidation was postponed, not prevented.
    Mar 28, 2014. 01:01 PM | 1 Like Like |Link to Comment