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Ted Bear

Ted Bear
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  • Stocks rebound to close higher after weak jobs report [View news story]
    Job Growth shows a late summer economy withering on the vine...and the equity market goes up.

    But it's not QE which is levitating stocks prices.
    Aug 2 05:03 PM | Likes Like |Link to Comment
  • July Nonfarm Payrolls +162K, unemployment rate 7.4% [View news story]
    So, with $85 Billion we created 162,000 jobs. That $50,000 per job! But Wall Street did pretty well with that money, didn't they?

    Oh, the hole we have dug. Even with massive stimulus we can't create escape velocity. What happens when we can no longer print, or the hue and cry that 'borrowing' an extra trillion dollars per year is distasteful and not doing much for the economy becomes so loud that it can't be disregarded?

    Ugly would be an understatement. Already you see the consumer backing off--KO, MCD, etc. missing on the revenue line. There is only so long that you fire employees and squeeze margins. Eventually you need customers, and by the numbers we saw today, even with stimulus, that is just not happening.
    Aug 2 09:03 AM | 8 Likes Like |Link to Comment
  • Summers backs away from hawkish statements [View news story]
    Just reminds me that politicians will say anything, and do anything, for self aggrandizement.
    Jul 31 08:25 AM | 1 Like Like |Link to Comment
  • Bernanke may be deposed in Greenberg / AIG suit: Judge [View news story]
    You are correct Seth......there is no credible reason (other than Hank P's need to save Goldman) why we should have stepped in with the plan which we did. If you believe the 'market' would have been more kind to AIG, that is for you to decide. I think they got a GREAT deal and ought to be kissing the ground for being allowed to survive Of course, THEIR survival wasn't the issue for Paulson. Nevertheless, in my thinking, without the bailout they would have become a skeleton. Of course, Hank G's Monday morning quarterback law suit argues otherwise.

    For a variety of reasons it is a shame we can't turn back the clock.
    Jul 30 08:44 AM | Likes Like |Link to Comment
  • Bernanke may be deposed in Greenberg / AIG suit: Judge [View news story]
    BB did what Hank Paulson told him to do. Hank did what was best for his firm, Goldman Sachs.

    Call me when they try Paulson for treason for what he did to this country.
    Jul 29 01:54 PM | Likes Like |Link to Comment
  • Michigan Gov. Rick Snyder and Detroit Emergency Manager Kevyn Orr defend their plan for the city's bankruptcy, reiterating their opposition to a bailout and maintaining that general obligation bondholders will get no new deal. Meanwhile, the muni bond market's self-regulator says the treatment of GO bonds risks changing how investors view what has long been considered the safest class of municipal debt. [View news story]
    Bondholders can have all the 'perceptions' they wish, but at the end of the day, a deal is a deal.

    Whatever resources are left in Detroit belong to their rightful owners--like pensioners--and bond holders are not on that list.

    It is sad that a public entity has to take the gas pipe, while a private firm like Goldman Sachs or Bank of America gets bailed out.

    I wonder why that is?
    Jul 26 08:03 PM | 3 Likes Like |Link to Comment
  • Steven Cohen's SAC Capital has been indicted by a Federal Grand Jury in New York, reports Bloomberg. [View news story]

    I was a market maker, the best call on the street...and also the worst...was when Stevie Cohen called up. You knew you were 'had'. even if you didn't know why. The best you could do was fill the order, and scramble like hell to get covered, and long, as quickly as possible.

    You knew if he lifted you, he lifted ten other guys around the street. So you were all short, and he was going to run the stock.

    Where did his info come from? A 'hot' call, a block trader looking for size, a research call that wasn't public, insider information. It was a VERY rare time when the stock you sold him didn't take off--and it wasn't just a sixteenth or an eighth. You knew you were going to lose at least a point, and probably more.

    Whatever else, conducting business like that is unethical. A 'real' account would tell you, hey , I just lifted Goldman, just so you know. Not Stevie. He didn't operate like that.

    Stevie's gains.,from my experience, were sleazy. Were they illegal? That is what we are about to find out. sure.

    And if he loses it all, well, it just a bad trade Stevie. Your fundamental research based trading style will earn it all back, I am sure.
    Jul 26 01:57 PM | Likes Like |Link to Comment
  • Goldman Sachs makes the case for holding commodities as a strategic move. On Brent crude, the market should be well supplied in H2 as significant non-OPEC supply comes online and weak Chinese trade data signals relatively weak demand. Gold prices should decline to $1,050/oz. by year-end 2014 given a less accommodative Fed. Potash producers will maintain discipline and good margins despite falling crop prices. [View news story]
    Well...I am not a gold nor a silver bug, and simply trade them just like any other instrument.

    Without dwelling on the charts, we have had one hell of a correction, but probably have further to go on the down side. A bull market of this length probably doesn't end so quickly, correct, and then rally toward whence it cometh. Just a superficial thought without really getting into it.

    The one thing I firmly believe in is that we don't have a hint of inflation. If anything, the collapse in certain commodities is signaling deflation. Bernanke alluded to it in his comments, as in 'we have an equal chance to experience deflation as we do inflation.' This coming from a man who would give his eye teeth to inflate--if even just a little bit. So, no reason to buy gold on that front.

    And if we are facing deflation, and as we are watching life unfold in Detroit where the aristocracy is trying to pit worker against worker (my rent subsidy versus your health care versus the next guys pension) while the leeches that created a lot of that mess slip away a la Chris Dodd with their riches, we are more likely to experience a period of anarchy if the leeches (nee politicians) can't control the outcome--and would that be a reason to own some gold? I just don't know. As a currency (Gartman's constant phrase) I am not sure it is really fungible/practical. As a hedge'? what are you hedging if you can't convert it? Like I said, I just don't know, and don't know if there is a plausible argument to be made there.

    So gold? Is it a chart buy? Even if there is no other fundamental reason?
    Jul 25 08:52 PM | 1 Like Like |Link to Comment
  • Shots fired. Some digging around turns up recent comments from Larry Summers in which he was dismissive of QE's effectiveness and suggested he might tighten policy ahead of when a Bernanke or Yellen-led Fed might. "If we have slow growth, we are not going to keep thinking that 5.5% UE is normal ... that is going to operate in favor of suggesting that we should normalize interest rates (sooner) ... I think the market is underestimating the pace at which the Fed will alter its current course and the consequences of that for interest rates." It's reportedly down to Summers and Janet Yellen to replace Bernanke atop the Fed. [View news story]
    Summers might be toxic for the Prez, but be careful what you wish for with Yellen...more of the SOS. Eventually, even the 'minimuim payment' is due.
    Jul 25 01:46 PM | 1 Like Like |Link to Comment
  • Meredith Whitney is back, warning that the ramifications from Detroit's bankruptcy will be felt far and wide, from bondholders to taxpayers. Problems in local governments have been glossed over for years, she tells CNBC. Detroit isn't a one-off, she warns in FT, saying the fiscal structure of many big U.S. cities is unsustainable. In 2010, Whitney predicted a wave of municipal defaults, which hasn't happened - yet. [View news story]
    I don't see the problem, quite frankly. We kick up QE by $15 bil or so each month, and presto, problem kicked down the road for another few years.

    On a serious note, it truly is a remarkable situation where the Federal Government is $20 trillion dollars in debt, a once great American city is in shambles...and interest rates are at zero and the stock market is at all time highs.

    What sort of economic theory explains that???

    And by the way, from Whitney words: You are going to see neighbor against neighbor"; Isn't that exactly what the aristocracy wants? Not that we find the folks (like Corzine) that ran off with the loot and bring them to justice, but that we get local folks slaughtering one another over who gets food stamps and who gets free heat.
    Jul 24 08:04 PM | 2 Likes Like |Link to Comment
  • At €33T, the eurozone banking system's assets are worth three and a half times the currency bloc's GDP, Royal Bank of Scotland notes, adding that the sector needs to shrink its collective balance sheet by €2.7T over the next three years in order for the situation to remain "sustainable." By comparison, the U.S. banking sector is about the same size as the broad economy. "If banks are three times the size of their underlying economy, then governments will not be able to support them all" in a crisis, RBS' Alberto Gallo reasons. (FT) [View news story]
    ...or they could solve the problem by marking the assets to market......that would solve at least part of the problem pretty quickly.

    ( I haven't done the math, but by some press reports, just one hiccup at Deutsche Bank would wipe out their entire equity capital--which was just increased, but by not nearly sufficient to insulate the bank from any single derivative washout).

    So we are left with a catch 22. The 'assets' at current marks are outsizeded to the underlying economy and any ability by Governments to (wrongly) support them. But the banks have insufficient capital to start the (painful) process of reducing them to something reflective of their true value.

    So, we have QE around the world while we attempt to float sinking balance sheets with artificially high seas of liquidity.

    It's all good until someone flinches.
    Jul 21 12:10 PM | Likes Like |Link to Comment
  • With the major averages edging towards pricey territory, Andrew Bary of Barron's screens the S&P 500 for stocks trading at single-digit multiples, then narrows the list to those whose prospects can be argued to be good. The names are all familiar ones, but their presence on the list may surprise: VLO, MPC, HPQ, FCX, ESV, PSX, GM, MET, WDC, PRU, APA, JPM, C, DE, AAPL[View news story]
    Curious why you would expand the multiple for a company whose growth is gone, and whose future profitability depends on out-selling, out-manufacturing, and out-margining the competitors?

    Apple needs a new block buster product. There is nothing on the horizon at present. Think in terms of HP--Apple will squeeze everything they can from existing products; they'll make a few acquisitions; but in the end, you either grow or you fade.

    IMHO there is no reason to pay up for 'fade'.
    Jul 20 01:53 PM | 2 Likes Like |Link to Comment
  • The stock market's (VTI, SPY, DIA) in for a rough summer, says Guggenheim's Scott Minerd as his favorite indicator - the advance/decline line - dropped more than the indices during June's decline, suggesting something bigger coming soon. The action is very similar to what we saw in 2007, he says. The deteriorating technical picture combined with worrying signs for the global economy makes this a rally to sell, not buy. [View news story]
    Market internals have been horrible for some time...but with the Fed Bid underlying things, it has no effect. Ask McClellan. He has been certain the world was going to end any time now.

    I doesn't matter until it matters. Tomorrow is set up for a pretty weak day....but it is doubtful that we will see it because of the QE monies 'always' there.
    Jul 18 03:44 PM | Likes Like |Link to Comment
  • Michael Dell and Silver Lake are "prepared to see [their] deal blow up" rather than raise their bid above $13.65/share, sources tell AllThingsD's Arik Hesseldahl. Concerns about Dell's (DELL) PC business and rising borrowing costs are said to underpin their reluctance to pay more. As it is, Bloomberg reported earlier this month Silver Lake's commitment to the deal was wavering. Meanwhile, a source tells Fortune's Dan Primack Dell's special committee believes ~15% of shares will qualify as absentees, which are effectively "no" votes. (previous[View news story]
    Would be very interesting to see Carl Icahn take the day, Michael Dell walk away with Carl's cash, and set off into the sunset.

    Stranger things have happened.
    Jul 16 07:02 PM | Likes Like |Link to Comment
  • Goldman Sachs (GS -1.4%) is downgraded to Outperform from Buy by CSLA's Mike Mayo, even as he raises his price target to $185 from $176 and ups earnings estimates through 2015. It's mostly a valuation call, but Mayo also notes the firm taking more risk in trading and investments, as well as continued regulatory and global macro headwinds. (earnings earlier) (CC transcript[View news story]
    When you have every central banker in the world as an alum, taking on risk has a whole different meaning. Regulatory 'headwinds' are whatever GS decides they will allow.
    Jul 16 02:54 PM | Likes Like |Link to Comment