Ben Bernanke may not have overtly mentioned monetary policy during prepared remarks for a commencement address at Bard College Saturday, but he did reference Yogi Berra, and in the process made a statement that those of a cynical persuasion might say could have been pulled not only from the quips of a baseball legend, but from any recent speech by hawkish regional Fed presidents (I, II, III): "It's tough to make predictions, especially about the future." Some would undoubtedly say the Chairman should consider this sage advice when making conjectures about the supposedly benign effects of policy tightening. [View news story]
The likely outcome...the future...is not particuylarly hard to predict. You water the garden; it grows. You turn off the spigiot; it withers and wilts.
What is difficult to predict is when this will occur. We now even have some pudits suggesting that the "qantitative " will run out before the 'easing'. Regardless, the effect of no more rain will produce the same outcome.
Shares of Tesla Motors (TSLA) rip 12.9% higher premarket to $95.75 after the company files its mixed shelf and Elon Musk pours in some more capital. Reality check: Tesla now trades with a market cap just under 20% of Ford's valuation while selling only a fraction of the cars Ford sells indicating investors are betting either Tesla will become a "major" automaker or claim the highest margins in the industry. [View news story]
Some things defy logic...and gravity...until they do.
What's it worth five years from now? Struggles to turn a modest profit? Shares will be trading for five bucks or so.
But for now, it is all laughs and giggles.
BTW, i am VERY pleased that someone finally put together a decent electric automobile. Why Ford, GM or Toyota couldn't do this on a scale which pleased the broad market is another of those incredible mysteries of which life seems to be littered.
Citigroup (C) joins AIG in the hedge fund hotel (Apple was kicked out in late 2012/early 2013), with this week's 13F filings showing a number of well-known funds adding or initiating positions in Q1 (though Tepper's Appaloosa pared his). The stock's up 40% since Michael Corbat took the reins from Vikram Pandit and hit another 52-week high yesterday. [View news story]
How does Tepper go on national television on Tuesday and tell the world how much they love Citibank, that it is a huge position, and then...on Wednesday announces that they are selling stock?
Didn't there used to be something called the SEC which frowned on this sort of pump and dump stuff?
Market recap: Why do people listen to David Tepper? Because he's often right. His appearance on CNBC this morning to share his bullish views set the table for today's rally, led by big banks including BofA and AmEx. However, techs lagged after Apple sold off on no apparent news. Nymex crude ended below $95 as the IEA detailed a "supply shock"; gold fell to a three-week low at $1,424.50. [View news story]
Tepper laid it out...net of $800 billion per year is looking for a home.
What he didn't say in the fine print is that his math means the already insurmountable deficit increases by $200 billion each period. And he didn't say what happens when the $85 billion/month infusion winds down......
That is the key question, I can keep a leaky ballon up for a LONG time as long as i keep adding helium. It is inevtiable, unless i fix the leak (which Congress has not even remotely considered the idea) that the balloon wil deflate once i stop adding helium.
Tepper stays bullish. Confounding gnomes who whispered the hedge fund honcho was turning cautious on stocks, David Tepper tells the CNBC crew the wave of liquidity that turned him bullish in the first place is getting even bigger. Fed tapering? So what, he says. The U.S. budget deficit over the next 6 months will only be $100B, while the Fed is scheduled to buy about $500B. That's $400B coming out of the bond market and going to investors who can buy more fixed-income, more real estate, more stocks. SPY erases losses and gets back to flat premarket. [View news story]
But....BB told us he does not have a clue where the stock market is, and he does not target equity prices. Remember that from his last nerws conference?
Certainly with equity prices fueling the wealth effect, preserving retirement plans for the greast unwashed, and saving corporate america in the face of declining sales, there would be no reason for the Fed to be concerned with the stock market.
More from Tepper: "We're going to get this hyper-drive market," unless the Fed starts tapering its purchases, he says (referencing 1999), adding the June meeting wouldn't be a bad time to get started. He pulls out this chart from a recent FRBNY report, showing stocks remain cheap - the equity premium to bonds is as high as it's been in the last 50 years. [View news story]
The Equity Risk Premium work actaully came form the Fed in a report which was published last week. Teper is correct in his assessement.
However, what happens when the Fed can no longer, for a variety of structural reasons, buy $500 Billion of debt every six months? The flip side of Teppers hypothesis is that, in his rosy case scenario of $400/$100 billion, is that the $100 billion gets added to an already game changing Federal Debt approaching $20 Trillion.
THAT sort of deficit has never bade well for any economy. What was the expression, we have the 'known knowns, the known unkowns...and then there are the unknown unknowns'. That is the frightening part.
I am not sure the final chapter on Dimon is yet written.
There were guys like Jack Welch, Sandy Weill, and that guy from AIG who drove great companies into the ground--all the while they got folks to think they were the greatest managers ever to walk across the face of the earth. Turns out they took an entire economy down the drain, while they made themselevs filthy rich.
Too many little things..and not so little, really, are starting to pop up under Dimon's watch. This guy could turn out to be just as evil as the guys which society previously lauded as having been 'great managers'. Dimon comes across as being very believable and sincere...the old Warren Buffet 'aw shucks', but then we have the London Whale, the commodity trading, the gold puke, the silver corner...and????? You don't just lose billions and get away with saying it was just small peanuts and i was too busy with other things.
If i was the board and my management made a threat like Dimon has supposedly just made, i think his office would be empty on Monday. Nobody is THAT good.
Chipotle (CMG) dips in the post session, giving back most of the day's gains after hedge fund manager Jeff Gundlach repeated his short thesis on the company during his presentation today at the Ira Sohn Conference. “All you need to compete with CMG’s core business is a taco truck,” he quips. In fact, Gundlach takes it a step further, saying he's not interested in virtually "anything related to middle-class consumer discretionary income.” [View news story]
I think Ben has sort of usurped that 'middle class discretionary income' for the next few generations.
It happened in December when the stock market passed 13,000. It happened again in February when the Dow passed through 14,000. Now, as we bulldoze through 15,000 today we could be set for some sideways trading over the short term. Each time the Dow has broken through a psychological hurdle recently, we ended up trading in a volatile range over the next month. Atlantis Asset's Michael Cohn thinks the big number may be cause for a brief pause, but the Fed's spigot is what's driving this marktet - and it's not getting turned off anytime soon. [View news story]
It aint over til the Fed stops pumping.
And then?> OMG, the exits will look like pinholes.
JPMorgan (JPM) has "transitioned from model citizen to problem child" in the eyes of Washington, the NY Times says. The latest evidence of the shift is a government document (reviewed by the Times) which reportedly says the firm dreamed up "manipulative schemes" in order to wring profits from "money-losing power plants." The Federal Energy Regulatory Commission also says Blythe Masters (mother of the synthetic CDO) "falsely denied under oath her awareness of" certain activities allegedly undertaken by a group of Houston energy traders. It isn't clear whether actions will be taken against JPM, which will have a chance to respond to the allegations. [View news story]
You know what is even worse about all of this?
Maybe i was naive, but i have thought, even through the London Whale thing, that Jamie Dimon was cut from a special cloth. A decent person. Moral. Unique in his desire to do well by doing right.
It turns out he is just like the worst of them: say whatever you have to, but do whatever you can to make money. No regard for moral fiber, or the laws of the land.
Jamie is done. Throw him on the heap with the worst of the Jack Welch's, the Maurice Greenberg's and the Sandy Weill's. They burned the trust which people gave them, and now live a (rich) exile still pretending to be something they never were.
JPMorgan (JPM) has "transitioned from model citizen to problem child" in the eyes of Washington, the NY Times says. The latest evidence of the shift is a government document (reviewed by the Times) which reportedly says the firm dreamed up "manipulative schemes" in order to wring profits from "money-losing power plants." The Federal Energy Regulatory Commission also says Blythe Masters (mother of the synthetic CDO) "falsely denied under oath her awareness of" certain activities allegedly undertaken by a group of Houston energy traders. It isn't clear whether actions will be taken against JPM, which will have a chance to respond to the allegations. [View news story]
Sadly, if you assume that the folks on the other side of your business are nefariousit it is likely that you won't be disappointed to read the news that they have been behaving in a manner which is certainly immoral, and probably illegal.
Even more sadly, these practice have become so widespread that even the people we employ to curb them are more a part of the problem than they are of the solution.
I think they call it morally bankrupt....probably right on both counts.
Some of Wall Streets titans of finance say they are pulling away from the stock and bond markets, warning that central bank policies around the globe had set prices soaring too high. Apollo Management's Joshua Harris is one such manager. His advice to investors: "Run—do not walk" from bonds at current prices. He doesn't limit that advice to just bonds either. Harris warns of overvaluation in virtually all traditional asset classes. Another Apollo manager, Leon Black, agrees, calling the current market climate a "fabulous environment" - as long as you're selling. [View news story]
It doesn't end until people 'perceive' that the punch bowl is about to be withdrawn.
We have hardly seen a decent earnings report, and there have been plenty of downright gawd awful reports...all of which have been a 'reason' to go buy more. That sort of illogical logic is just the very thing which leads to a LOT of miserable people.
Bernanke told us...he doesn't target asset prices, and barely knows that the market is up.....
I'd be a seller of that statement as well.
Funyy..i just moved on to another thread, and what does this guy say (Which hasn't mattered a hoot thus far, and won't--until it does):
Some of Wall Streets titans of finance say they are pulling away from the stock and bond markets, warning that central bank policies around the globe had set prices soaring too high. Apollo Management's Joshua Harris is one such manager. His advice to investors: "Run—do not walk" from bonds at current prices. He doesn't limit that advice to just bonds either. Harris warns of overvaluation in virtually all traditional asset classes. Another Apollo manager, Leon Black, agrees, calling the current market climate a "fabulous environment" - as long as you're selling. [View news story]
It doesn't end until people 'perceive' that the punch bowl is about to be withdrawn.
We have hardly seen a decent earnings report, and there have been plenty of downright gawd awful reports...all of which have been a 'reason' to go buy more. That sort of illogical logic is just the very thing which leads to a LOT of miserable people.
Bernanke told us...he doesn't target asset prices, and barely knows that the market is up.....
Tech guidance roundup: 1) Flextronics (FLEX - earnings) expects FQ1 revenue of $5.3B-$5.6B and EPS of $0.12-$0.16 vs. a consensus of $5.45B and $0.16. 2) Sourcefire (FIRE - earnings) expects Q2 revenue of $60.5M-$63.5M and EPS of $0.13-$0.16, largely below a consensus of $63.3M and $0.19. 3) Jive Software (JIVE - earnings) expects Q2 revenue of $34.5M-$35.5M and EPS of -$0.16 to -$0.18, below a consensus of $36.2M and -$0.14. 2013 guidance is for revenue of $148M-$153M and EPS of -$0.55 to -$0.62 vs. a consensus of $151.9M and -$0.56. FLEX -2.2% AH. FIRE +4.7%. JIVE -0.7%. (Flextronics PR) (Sourcefire PR) (Jive PR) [View news story]
Imagine if FIRE had actually come close to making their numbers...and not guided lower.
You know you are in moments of extreme exuberance when missing doesn't even dent the share price.
Ben Bernanke may not have overtly mentioned monetary policy during prepared remarks for a commencement address at Bard College Saturday, but he did reference Yogi Berra, and in the process made a statement that those of a cynical persuasion might say could have been pulled not only from the quips of a baseball legend, but from any recent speech by hawkish regional Fed presidents (I, II, III): "It's tough to make predictions, especially about the future." Some would undoubtedly say the Chairman should consider this sage advice when making conjectures about the supposedly benign effects of policy tightening. [View news story]
What is difficult to predict is when this will occur. We now even have some pudits suggesting that the "qantitative " will run out before the 'easing'. Regardless, the effect of no more rain will produce the same outcome.
Shares of Tesla Motors (TSLA) rip 12.9% higher premarket to $95.75 after the company files its mixed shelf and Elon Musk pours in some more capital. Reality check: Tesla now trades with a market cap just under 20% of Ford's valuation while selling only a fraction of the cars Ford sells indicating investors are betting either Tesla will become a "major" automaker or claim the highest margins in the industry. [View news story]
What's it worth five years from now? Struggles to turn a modest profit? Shares will be trading for five bucks or so.
But for now, it is all laughs and giggles.
BTW, i am VERY pleased that someone finally put together a decent electric automobile. Why Ford, GM or Toyota couldn't do this on a scale which pleased the broad market is another of those incredible mysteries of which life seems to be littered.
Citigroup (C) joins AIG in the hedge fund hotel (Apple was kicked out in late 2012/early 2013), with this week's 13F filings showing a number of well-known funds adding or initiating positions in Q1 (though Tepper's Appaloosa pared his). The stock's up 40% since Michael Corbat took the reins from Vikram Pandit and hit another 52-week high yesterday. [View news story]
Didn't there used to be something called the SEC which frowned on this sort of pump and dump stuff?
Market recap: Why do people listen to David Tepper? Because he's often right. His appearance on CNBC this morning to share his bullish views set the table for today's rally, led by big banks including BofA and AmEx. However, techs lagged after Apple sold off on no apparent news. Nymex crude ended below $95 as the IEA detailed a "supply shock"; gold fell to a three-week low at $1,424.50. [View news story]
What he didn't say in the fine print is that his math means the already insurmountable deficit increases by $200 billion each period. And he didn't say what happens when the $85 billion/month infusion winds down......
That is the key question, I can keep a leaky ballon up for a LONG time as long as i keep adding helium. It is inevtiable, unless i fix the leak (which Congress has not even remotely considered the idea) that the balloon wil deflate once i stop adding helium.
Ditto BB, the punch bowl, and the market.
Tepper stays bullish. Confounding gnomes who whispered the hedge fund honcho was turning cautious on stocks, David Tepper tells the CNBC crew the wave of liquidity that turned him bullish in the first place is getting even bigger. Fed tapering? So what, he says. The U.S. budget deficit over the next 6 months will only be $100B, while the Fed is scheduled to buy about $500B. That's $400B coming out of the bond market and going to investors who can buy more fixed-income, more real estate, more stocks. SPY erases losses and gets back to flat premarket. [View news story]
Certainly with equity prices fueling the wealth effect, preserving retirement plans for the greast unwashed, and saving corporate america in the face of declining sales, there would be no reason for the Fed to be concerned with the stock market.
Would there?
More from Tepper: "We're going to get this hyper-drive market," unless the Fed starts tapering its purchases, he says (referencing 1999), adding the June meeting wouldn't be a bad time to get started. He pulls out this chart from a recent FRBNY report, showing stocks remain cheap - the equity premium to bonds is as high as it's been in the last 50 years. [View news story]
However, what happens when the Fed can no longer, for a variety of structural reasons, buy $500 Billion of debt every six months? The flip side of Teppers hypothesis is that, in his rosy case scenario of $400/$100 billion, is that the $100 billion gets added to an already game changing Federal Debt approaching $20 Trillion.
THAT sort of deficit has never bade well for any economy. What was the expression, we have the 'known knowns, the known unkowns...and then there are the unknown unknowns'. That is the frightening part.
Jamie Dimon is threatening to leave JPMorgan (JPM) if stripped of the Chairman role, sources say. [View news story]
There were guys like Jack Welch, Sandy Weill, and that guy from AIG who drove great companies into the ground--all the while they got folks to think they were the greatest managers ever to walk across the face of the earth. Turns out they took an entire economy down the drain, while they made themselevs filthy rich.
Too many little things..and not so little, really, are starting to pop up under Dimon's watch. This guy could turn out to be just as evil as the guys which society previously lauded as having been 'great managers'. Dimon comes across as being very believable and sincere...the old Warren Buffet 'aw shucks', but then we have the London Whale, the commodity trading, the gold puke, the silver corner...and????? You don't just lose billions and get away with saying it was just small peanuts and i was too busy with other things.
If i was the board and my management made a threat like Dimon has supposedly just made, i think his office would be empty on Monday. Nobody is THAT good.
Chipotle (CMG) dips in the post session, giving back most of the day's gains after hedge fund manager Jeff Gundlach repeated his short thesis on the company during his presentation today at the Ira Sohn Conference. “All you need to compete with CMG’s core business is a taco truck,” he quips. In fact, Gundlach takes it a step further, saying he's not interested in virtually "anything related to middle-class consumer discretionary income.” [View news story]
Scotts Miracle-Gro (SMG): FQ2 EPS of $1.60 misses by $0.41. Revenue of $1.02B misses by $0.12B. Shares -3.5% AH. (PR) [View news story]
Months ago they issued a profit warning, and the shares went up.
Now, they miss earnings by a huge margin, and the shares barely flinch.
Some day some of these things will matter.
But for today? Not so much.
It happened in December when the stock market passed 13,000. It happened again in February when the Dow passed through 14,000. Now, as we bulldoze through 15,000 today we could be set for some sideways trading over the short term. Each time the Dow has broken through a psychological hurdle recently, we ended up trading in a volatile range over the next month. Atlantis Asset's Michael Cohn thinks the big number may be cause for a brief pause, but the Fed's spigot is what's driving this marktet - and it's not getting turned off anytime soon. [View news story]
And then?> OMG, the exits will look like pinholes.
JPMorgan (JPM) has "transitioned from model citizen to problem child" in the eyes of Washington, the NY Times says. The latest evidence of the shift is a government document (reviewed by the Times) which reportedly says the firm dreamed up "manipulative schemes" in order to wring profits from "money-losing power plants." The Federal Energy Regulatory Commission also says Blythe Masters (mother of the synthetic CDO) "falsely denied under oath her awareness of" certain activities allegedly undertaken by a group of Houston energy traders. It isn't clear whether actions will be taken against JPM, which will have a chance to respond to the allegations. [View news story]
Maybe i was naive, but i have thought, even through the London Whale thing, that Jamie Dimon was cut from a special cloth. A decent person. Moral. Unique in his desire to do well by doing right.
It turns out he is just like the worst of them: say whatever you have to, but do whatever you can to make money. No regard for moral fiber, or the laws of the land.
Jamie is done. Throw him on the heap with the worst of the Jack Welch's, the Maurice Greenberg's and the Sandy Weill's. They burned the trust which people gave them, and now live a (rich) exile still pretending to be something they never were.
JPMorgan (JPM) has "transitioned from model citizen to problem child" in the eyes of Washington, the NY Times says. The latest evidence of the shift is a government document (reviewed by the Times) which reportedly says the firm dreamed up "manipulative schemes" in order to wring profits from "money-losing power plants." The Federal Energy Regulatory Commission also says Blythe Masters (mother of the synthetic CDO) "falsely denied under oath her awareness of" certain activities allegedly undertaken by a group of Houston energy traders. It isn't clear whether actions will be taken against JPM, which will have a chance to respond to the allegations. [View news story]
Even more sadly, these practice have become so widespread that even the people we employ to curb them are more a part of the problem than they are of the solution.
I think they call it morally bankrupt....probably right on both counts.
Some of Wall Streets titans of finance say they are pulling away from the stock and bond markets, warning that central bank policies around the globe had set prices soaring too high. Apollo Management's Joshua Harris is one such manager. His advice to investors: "Run—do not walk" from bonds at current prices. He doesn't limit that advice to just bonds either. Harris warns of overvaluation in virtually all traditional asset classes. Another Apollo manager, Leon Black, agrees, calling the current market climate a "fabulous environment" - as long as you're selling. [View news story]
We have hardly seen a decent earnings report, and there have been plenty of downright gawd awful reports...all of which have been a 'reason' to go buy more. That sort of illogical logic is just the very thing which leads to a LOT of miserable people.
Bernanke told us...he doesn't target asset prices, and barely knows that the market is up.....
I'd be a seller of that statement as well.
Funyy..i just moved on to another thread, and what does this guy say (Which hasn't mattered a hoot thus far, and won't--until it does):
http://seekingalpha.co...
Some of Wall Streets titans of finance say they are pulling away from the stock and bond markets, warning that central bank policies around the globe had set prices soaring too high. Apollo Management's Joshua Harris is one such manager. His advice to investors: "Run—do not walk" from bonds at current prices. He doesn't limit that advice to just bonds either. Harris warns of overvaluation in virtually all traditional asset classes. Another Apollo manager, Leon Black, agrees, calling the current market climate a "fabulous environment" - as long as you're selling. [View news story]
We have hardly seen a decent earnings report, and there have been plenty of downright gawd awful reports...all of which have been a 'reason' to go buy more. That sort of illogical logic is just the very thing which leads to a LOT of miserable people.
Bernanke told us...he doesn't target asset prices, and barely knows that the market is up.....
I'd be a seller of that statement as well.
Tech guidance roundup: 1) Flextronics (FLEX - earnings) expects FQ1 revenue of $5.3B-$5.6B and EPS of $0.12-$0.16 vs. a consensus of $5.45B and $0.16. 2) Sourcefire (FIRE - earnings) expects Q2 revenue of $60.5M-$63.5M and EPS of $0.13-$0.16, largely below a consensus of $63.3M and $0.19. 3) Jive Software (JIVE - earnings) expects Q2 revenue of $34.5M-$35.5M and EPS of -$0.16 to -$0.18, below a consensus of $36.2M and -$0.14. 2013 guidance is for revenue of $148M-$153M and EPS of -$0.55 to -$0.62 vs. a consensus of $151.9M and -$0.56. FLEX -2.2% AH. FIRE +4.7%. JIVE -0.7%. (Flextronics PR) (Sourcefire PR) (Jive PR) [View news story]
You know you are in moments of extreme exuberance when missing doesn't even dent the share price.
But in the end......