whidbey

Top 10 Components of the Dow Jones U.S. Economic Stimulus Index

What, if anything, does your post prove? That the stimulus has been more effective for the index as compared to the S&P? If that is your argument you deserve to be ignored. Pitiful and meaningless.

Deficit Spending Is Fueling the Recovery

If you had a case for your contention you would have laid it out, without the silly attack on Republican economists. Most of us would like to see some arguments that the deficit stimulus is indeed effective in some way. As it is you have added little.

Your work has been marred for some time by your bias, which appears to be combative support for Obama. Second rate work by any test.

The Journey into Deflation

The concern I would have is the role of a purchase deflated component in the economy (it is not followed to my knowledge): how many consumers or policy makers use import costs to make decisions?

Instead consumers look at their incomes and more to the point, their "permanent income hypothesis". How much permanent income do I expect over the relevant horizon? Most consumers are income oriented and not too well aware of prices paid in the broad sense over any given time period. But very interesting.

Mexican Math Doesn't Add Up

Good piece.

We of course want Mexico to remain financially stable since it helps stem the illegal load in the US. But forget that.

The comment on drugs is the controlling argument. Mexico is not in a cash flow deficit and the government knows that, since the deficit ends up as cash in the politicos pockets and total inflows of cash are in surplus. Mexican accounting is sort of net, net approach centering on politics.

Show Me the Money: Money Market and Mutual Funds

Should be a good short term sign: the market should show the effects in September, and it is wider and deeper than in the past. The question is how much is hot money ready to leave at the first cloud? And how much is fashionable money seeks non-US involvement as a safe haven?

Regulatory Reform: The New Geithner Plan

Sounds like a great way to run a national treasury too! No sarcasm intended. will, maybe a tad bit.

Could Bill Gross Be Wrong in His Apocalyptic View?

Pimco is describing deflation, but not saying so. Holding short term debt might be appropriate.

The conditions for new normal are also conditions for period of deflationary depression that is in train now, and probably unavoidable. The policy options open have run out of time.

The necessary result is not recovery but eventually a grind down where consumers become less than 60% of the GDP. That leads to deflation.

FHA: The Next Disaster?

Smartcuss is a self-made man and deserves credit. But his case is not this case.

Yes, FHA is a problem. It is part of the Federal Charade to the effect " yes we can be everything to the voters". When no one will loan funds to the GSEs directly, and the Fed can not offer Trap funds, and Treasury will not touch them, FHA will stop and wait and wait; it is called zombie banking. All the GSEs will be monuments to the greatness of your Congress. The Ice Age comes soon to many, many federal programs. They just stop.

Cherokee - A Fashionable High Dividend Stock

This stock is part of the pretense that consumers are on a recovery path worldwide. That is not supported in the facts on US consumer behavior, or the reports of Target, for example, But! it is absolutely amazing that it can compete in Mexico and Asia. Finally, No debt. What do they do steal the goods? Does this come under the heading of it seems to good to be true, maybe it is not true?

Thanks very interesting business.

Fisher Price Deflation

Your opening list leads to Deflation and nothing else. In the end deflation lowers earnings which lowers stock prices (when Earnings fall Price follows) . Eventually it leads to depression deflation. This is widely recognized today, and this speech is important. Thanks.

Pastense (above) says his health insurance prices have risen 10%. I bet they have, but not due to inflation. Price increases are consistent with deflation when demand for health services is based on prices " below the fixed costs of providers". Everyone on Medicare and Medicaid is being subsidized by private users of care SS FICA and private provider subsidies. Rise the price of government programs to their marginal costs and watch private providers compete for business. It is terrible government policy and a great example too. The government screws up everything it touches.

Friday Roundup: Commodities, Emerging Markets

It was the long weekend, but it is also the edge of fall. The precious metals are on the verge, but can they break 1010? The world wants to know. As it stands this weekend the international markets are flat to up in Asia, and metals priced in foreign currencies are less enthused than in the USA.

EW perspectives say we could finish Wave B up at 11500 Dow, before wave C down. Potentially this is a killer wave, maybe to new lows.

Deflation is still the environment, covering action is required. Cash, short bonds and some gold ??

Merkel on Falkenstein's 'Finding Alpha: When Risk and Return Break Down'

This is a chase that started some 100 years ago: pursuit of advantage, defined as "alpha". The concept of alpha itself may be just the phenomenology of hope. The hope being that there is some way to achieve an advantage over market return. It is considerable reservation that one believes alpha exists in fact. That said one can attempt to define alpha.

The search commences in time, years in a series, many errors are based on the time series selected. Next, Analytic techniques are not "truth" per se, but " a point of view". In essence, one must be consistent in technique to avoid confusion (and learn anything) which is very difficult to do. Just since I got my doctorate the changes in financial theory have been voluminous, and dressed up with more mathematical statistics than are productive;( I think of them as chiefly makeweights to mundane theory). Finally, No one wants to appear to have lost, so much "touch-up" work is done in both the literature and the results of analysis.Technique Advocacy in is rarely criticized in Academia, nevertheless the advocates create cliques whose work is to further a theory/technique as the sole/best means of understanding a problem: modern portfolio theory is a prime example.

Having read the book I found it pedantic, pedestrian, and narrow, but if one wants to see what is currently one the table, read it, but not too deeply please.

5 Anomalies in the Current U.S. Markets

The possibility of a further rally into the fall is real. After that there is a very high chance of either a long period of in determinant backing and filling,
OR a major Wave C down to maybe new lows. (about 60/40)

The unknowns that control any market are:

1. Jobs recovery and demand growth to at least a 3% GDP for Q3/4.
2. Resolution of the Congressional spending binge downward to match tax revenues
3. Focused action to help small businesses ramp up activities.
4. Prosecution of some of the miscreants in the banking world to assure honest business people and tax payers that the field is level.

Cyclical Bull Market in Full Effect

Save your energy, we can get this anyplace.

World Equities and Bonds Remain at Mercy of Chinese Stimulus

Treasury paper and bonds are up in price, but not significantly up in yield. And, they will not be hurt by any yield increases because in deflation bond buyers are content to get any return and not just the top yield. Compared to equity EPS, bond Yields look rich and more stable.

I like your post, but I less concerned that you are with temporary yield changes. We are in a deflation and it is not going anywhere soon. So hold a few bonds.