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  • How Deep Is The Hole? The Federal Reserve And Housing [View article]
    Hello John,
    I follow your column fairly regularly and find it to be both informative and thought-provoking. I also happen to agree with your conclusions regarding The Fed's intentions and concerns.
    As a layman (non-banking type), I have a number of questions regarding The Fed's operation and I'm hoping you can help.

    First of all, what will The Fed be doing with the MBS that they buy ? I can't imagine anyone wants them, which is why The Fed is buying them in the first place.
    Second, who is actually paying for the MBS ? The Fed is spending ( I believe) taxpayer dollars, correct ? So, in effect, isn't The Fed just spending one taxpayer's money (all taxpayers) to assist other taxpayers (homeowners) ? Isn't this exactly what our congress (and most of the general public) said they didn't want to do at the initial time of the financial crisis ?
    Lastly, how does this eventually play out ? It's nice that The Fed is helping to sustain housing for a little while, but keeping prices artificially higher than they would "normally" be is only a benefit to some, and a detriment to a lot of others. I think this is called "inflation" and I don't see how this will help the economy in the long run. I also think it will have a number of other side-effects which will end up being destructive.
    Many thanks, and I look forward to your next article.
    Nov 5, 2012. 08:32 AM | 2 Likes Like |Link to Comment
  • Thumbs Down On Earnings [View article]
    Thanks for another lively report. Sorry to hear about your case of Pneu., but (on the bright side) just remember that many great artists did some of their best work when they were sick or out of their minds !
    Oct 24, 2012. 08:02 AM | 1 Like Like |Link to Comment
  • Markets Digest Earnings And Eurozone [View article]
    Hey Dave,
    Good luck with those meds (hope you're not paying out-of-pocket).
    I know the calendar says October, but I think we're still in August- that's still rerun season, isn't it ? Anyway, at least we have daylight savings to look forward to, which may be the only savings our friends at The Fed will provide for pensioners. Cheers !
    Oct 18, 2012. 08:32 AM | 1 Like Like |Link to Comment
  • Jobless Claims SNAFU [View article]
    I'm starting to think that if our government handled baseball statistics, Bud Harrelson would have been a .350 hitter....
    Oct 12, 2012. 11:33 AM | Likes Like |Link to Comment
  • Jobless Claims SNAFU [View article]
    Hi David,
    Thanks for the usual informative and entertaining column.
    Looks like more of the same old B(L)S...maybe those non-carbon based traders got some of what they deserve, and the rest of us are starting to see just how bogus the market has become.
    Oct 12, 2012. 08:22 AM | Likes Like |Link to Comment
  • Mercedes Ben [View article]
    The Fed is pedaling awfully hard to have us believe they still are focused on their dual mandate of controlled inflation and low unemployment.
    After the complete ineffectiveness of QEI and QEII as they relate to this so-called "mandate", we now have "unlimited" QEIII (and the European promise of their version, whatever that might be), which should drive inflation still higher and create about the same number of jobs the other QEs created (can anyone say zero ?). IMHO, the only thing being created here is higher inflation and the monetization of a huge amount of debt (oh, that's right, Dr. Bernank said we weren't going to monetize the debt way back when ! My bad). Considering this helps no one but the debt owners (read- BANKS), it would appear that Old Ben & friends may be bracing for a possible bank run (why else build up the bank reserves to such an extent, despite the lower lending levels ?). Interesting to see what happens when The Fed has nothing left to buy, inflation is much higher, the economy stinks and taxpayers have a huge bill dumped on them.
    Conclusion: Big Ben is blowing smoke and this is his all or nothing moment.
    Sep 14, 2012. 08:32 AM | 2 Likes Like |Link to Comment
  • Regime Change, Economist Style [View article]
    HI Mike,
    Thanks for some more interesting observations (always very much appreciated and thought-provoking). I would be curious to see how housing fits into the S&P/Velocity correlation, maybe housing prices (including, perhaps, borrowing against the value of housing) over that time period. I'm thinking that perhaps more people are pulling more money from already-earned money (savings) in realtion to newly-earned money (wages/salary). Thanks, and I'm looking forward to see where this one goes !
    Aug 29, 2012. 08:13 AM | Likes Like |Link to Comment
  • 2 Things To Do And Not To Do When Your Investment Thesis Proves Wrong [View article]
    Hello James,
    Nice to see another article from one of SA's more insightful contributors. I have followed your thesis right throughout and, while I didn't always agree with your decisions, was able to benefit from your analysis of events and situations (I still think you're correct, but time will tell). I think you really went out on a limb by including an immediate time frame with specific market targets and should be commended.
    Just curious regarding this article, why not leave part of the investment where it is- as a hedge ? Pulling the whole investment is a little premature, no ?
    Aug 22, 2012. 08:47 AM | 6 Likes Like |Link to Comment
  • The Problem Child Returns [View article]
    Thanks for another nice roundup. Just one opinion, but I love your charts- one of the main reasons I read your column.
    Maybe you should do a chart on how many readers want more charts ?
    Jul 23, 2012. 09:25 AM | Likes Like |Link to Comment
  • Don't Fight The Tape [View article]
    David, thanks for another entertaining and informative piece.
    A little food for thought: If the bot traders are bidding up stocks against extremely light volume, aren't they basically bidding against themselves (more or less) ? Based on the trading patterns (extremely light volume with one or two very large trades -usually around opening bell and 2PM) and the long SPY/VIX options trade you mentioned, it would appear to be the case. This is either really dumb, as traders will be left holding the bag, or really smart (if they can manipulate the market enough to get their options to pay off and then try to keep the market propped up to avoid a loss on the SPY trade). Either way, looks like some serious market manipulation going on, aided and abetted by the Bernank.
    Jul 19, 2012. 08:25 AM | 1 Like Like |Link to Comment
  • A Slow, Light Volume Monday [View article]
    David, thanks for another fine piece. Speaking as a carbon-based investor, supposedly capable of free thought, I'm starting to believe that thinking is actually a hindrance in this market. It only gets in the way and renders one incapable of understanding the autobot strategy. Does this sound like a free market ?
    Jul 10, 2012. 08:22 AM | 2 Likes Like |Link to Comment
  • How Surprising Would It Be To Find Grain Prices Actually Rising With Overall Inflation Again? [View article]
    Mike, thanks for another terribly insightful piece. Anyone who can mention Dr. Seuss in the same breath as economics should be nominated for some kind of prize (and not some ESPY or MTV thigamajig)
    Interesting how the Fed's whole plan from the start seems to have had nothing to do with helping the economy, but rather to just help keep the banks open. All of those stored reserves, caused by IOER, seem never to have been intended to actually enter the economy, thus causing inflation (and possibly increasing GDP). I think a couple of intersting conclusions can be drawn from this (if you agree with that assumption): First, the banks must really be in awful shape and continue to need intravenous assistance to stay alive, and second, economic growth is simply a mirage that the Fed has created in order to allow markets (i.e stocks and real estate) to stay at loftier levels than reality would dictate. The Fed can now say that they are adhering to their dual mandate of limited inflation while also trying to create jobs, but the reality is that they can't have both, and may actually be accomplishing neither.
    Jul 6, 2012. 10:09 AM | 7 Likes Like |Link to Comment
  • Q3 Outlook: The Quarter Of Living Dangerously [View article]
    Eric, thanks for that great response. One other thing I'd like to add, and curious to know your thoughts: Do you think a philosophical argument can be made that The Fed has turned stocks into a sort of QE derivative play, whereby investors aren't primarily buying equities based on their current and future earnings/dividends but on current/future QE ? If you buy JHoop's comments, which I do, then I think stocks have been corrupted into something they shouldn't necessarily be- pretty dangerous experiment here.
    Jul 3, 2012. 11:11 AM | 4 Likes Like |Link to Comment
  • All Is Quiet On The Federal Reserve Front [View article]
    John, thanks for some nice information which you don't really hear much about through other sources. I'm curious to know what you think The Fed can accomplish in terms of helping the economy- it seems Fed policy is to ensure the continued existence of the banks (not an unreasonable objective) through increased reserves, particularly given the fact that banks are being paid to maintain those reserves. However, nothing is funneling back into the actual economy which, while not creating excessive inflation, means that there is no growth. From my perspective, this is a "slow burn" strategy which, with the other global problems, is designed to maintain the status quo and hope nothing else goes wrong. Eventually, I think this leads to stagflation.
    Jul 3, 2012. 10:33 AM | 1 Like Like |Link to Comment
  • Q3 Outlook: The Quarter Of Living Dangerously [View article]
    Thanks for a very balanced and interesting piece. It seems that the markets are most concerned with all of the issues but the one it is supposed to be most reflecting: The actual economy. S&P continues to jump on so-called stimulus (which doesn't seem to be stimulating anything other than the price of stocks) or just the rumor of it. How can this be healthy ? That old adage about the market being forward-looking seems to be just that- an old adage.
    Jul 2, 2012. 03:36 PM | 3 Likes Like |Link to Comment