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  • What's Driving The Selloff? [View article]
    As opposed to your comment which took enormous effort and was very helpful to everyone at SA here.

    It's just information; I imagine the author is leaving interpretation to each investor and trader (I, on my part, interpret this data to mean that the last rally wasn't "real", as in it wasn't based on any fundamentals, since the data appears to be consistent with a reversion-to-mean, with the mean being lower than the high set by the rally---but this is just my interpretation; I'm sure some bull somewhere is going to think my interpretation is faulty, and the market could just easily prove me wrong next week).
    Sep 4 02:38 AM | 10 Likes Like |Link to Comment
  • The housing crisis is five years old. But for local governments that depend heavily on property taxes, the lag between falling home values and property re-assessments means the housing market bust is just beginning to ravage tax revenues.  [View news story]
    Well, except in New Jersey. Thankfully, the GOP governor there had the foresight to constitutionally cap the property tax rate last year.
    Dec 26 07:48 PM | 6 Likes Like |Link to Comment
  • A surprising story out of North Carolina tips off that Governor Bev Perdue's office often received advanced copies of the government's employment figures in advance of the official release from the BLS. The Carolina Journal reports that the governor's staff used the earlier look at the jobs data to massage its own press releases to cast the administration in a favorable light - in stark violation of federal laws regarding embargoed government data. [View news story]
    Name That Party! (TM)

    Really? Why isn't SA just coming out and saying "Democratic Governor Bev Perdue"? All it takes is 10 second skimming of her Wikipedia page to figure out what her party affiliation is.
    Dec 19 01:49 PM | 6 Likes Like |Link to Comment
  • There's No Reason Why Stocks Are Down Today [View article]
    I think this is what drives me to technical analysis: technical analysis would explain the sell-off---most particularly by telling you that it started before the day before the FOMC statement; FOMC statement simply delayed the sell-off for about a few hours or so (i.e. the flat trading before the statement release; short-sellers didn't really wanted to be short just before the FOMC statement release, so it just *looks* like FOMC statement release caused the sell-off, when the reality is that the anticipation of a positive surprise was actually holding off the sell-off in progress).

    In other words, we are down today because bulls failed to push the market past S&P500 1230 two days ago, where we have seen previous rallies fail also. If the market can't go up beyond that, it must be going down---hence the sell-off.

    By the way, you can have 10-year investing time horizon and still come worse off from stock market: imagine you bought near the top of 2000, in the middle of the dot-com bubble. You'd have a negative return in nominal terms (and speaking of tops, it looks like we are still rather near the last top in May).
    Sep 22 01:45 PM | 6 Likes Like |Link to Comment
  • President Obama's $450B jobs plan may wind up pushing us into recession rather than pulling us out, says John Carney. Following his logic, the crux of the plan is to have government spend more and tax less. However, if people fear increased government spending will result in higher taxes, they may wind up saving more than the government spends, in anticipation of the taxes - which could lead to economic contraction.  [View news story]
    One of the writers at National Review (I think it's Kevin Williamson but I'm not sure) had a similar viewpoint regarding government spending: all government spending *is* tax. If it isn't taxed in the same fiscal year, it will be taxed in the future.

    Also, by this logic, Reagan (much less George W. Bush) didn't really cut any tax; he just deferred a whole bunch to our generation.
    Sep 9 07:17 PM | 6 Likes Like |Link to Comment
  • The U.S. actually is closer to junk bond status than AAA if it were judged as a private company, Dick Bove says: "You've got a company which is losing about $1.4T this year [and] owes $14.4T... There's no likelihood whatsoever that this particular company is able to pay down from its own resources the amount of debt that it has... If that was a real company, of course, that would be a junk bond."  [View news story]
    If U.S. is so bankrupt, why do we have more immigrants than emigrants?

    Debt and deficit spending are real problems, but these flawed analogies aren't really helping either ...
    Aug 9 06:14 PM | 6 Likes Like |Link to Comment
  • Also not pleasing the markets into the close is a Bloomberg report that U.S. lawmakers will propose a transaction tax for stocks and bonds.  [View news story]
    Even if they were to enact it, surely they'd make loopholes for HFT and other big guys so that it ends up being yet another burdensome regulation on small guys---those who couldn't afford lobbyists to carve out exceptions for them?
    Nov 1 04:05 PM | 5 Likes Like |Link to Comment
  • Just A Short Covering Rally? [View article]
    I don't know about others, but when I short, I usually short the whole market through an ETF. Shorting individual stocks seems too risky, especially seeing how even troubled companies like HPQ or BAC seem to go through occasional spike in share prices.
    Sep 28 02:05 AM | 5 Likes Like |Link to Comment
  • John Taylor - who runs the biggest independent forex-based hedge-fund firm on earth - says Greece will default, the euro will go to hell, and the dollar rally is just getting started. And, in five years, we could see $500 oil.  [View news story]
    That sounds self-contradictory. Doesn't strong dollar necessarily mean deflation in commodities (including crude oil) in dollar-denominated terms?

    Maybe they're just throwing it out there as a wild speculation; in five years, economy will be booming again (we all hope), and with moderately high inflation (probably from all the easing this recession that couldn't be quickly unwound) and rising global demand (who knows; maybe China will stop burning coal), oil will go up?

    I guess the only problem with that speculation is last time oil went above $140, it played a role in bringing about a recession. I can't see how oil could possibly go above, say, $250, without bringing about a global recession again.
    Sep 25 06:24 AM | 5 Likes Like |Link to Comment
  • The bulls are setting up for a monster rally through the end of the year, asserts Forbes contributor Ali Meshkati. He says the present level of bearishness in the market is extreme, and accentuates the fact that many portfolio managers are currently underallocated and underwater. With that mix, any sustained rally is likely to be explosive when investors start chasing performance going into the final stretch.  [View news story]
    "any sustained rally is likely to be explosive"

    Isn't that almost tautological? Of course a sustained rally will be "explosive", like the one out of 2009 lows or from late 2010 to early 2011. If a rally didn't happen to be explosive and fizzles (like the one from late June), it won't have been sustained.
    Sep 7 08:10 PM | 5 Likes Like |Link to Comment
  • Democrats criticize a Republican plan to cut the U.S. deficit by overhauling the tax code as a sop to the wealthy, after the proposal had appeared to signal a new willingness to at least consider revenue increases. "They’ve got to put real revenue on the table," says Sen. John Kerry, who wants more than $1T. It's looking like the super-committee may be the real turkey this Thanksgiving.  [View news story]
    What a way to move the goalpost. Didn't the initial agreement between Boehner and Obama have $0.6T in new revenues?
    Nov 9 06:39 PM | 4 Likes Like |Link to Comment
  • Some Quick Math On Unemployment Benefits [View article]
    There are many zero sum games in economics (such as the stock market); labor isn't one of them. Labor is the one thing that actually generates wealth; when an unemployed person takes a job---any job---he isn't just displacing another worker; he is filling a position that might not have been filled at a higher wage (and producing wealth that he would not have produced, if he remained unemployed).

    Now, unfortunately due to a large hike in federal minimum wage over last decade, employers are not able to offer lower-paid jobs when marginal benefits of an additional worker is not justified by minimum-wage salaries, but that's an entirely a different story.

    Besides, there are plenty of data and anecdote out there that shows that there is a *shortage* of workers---both at low-paying positions and highly-skilled positions. Unemployment benefit running out fixes one of those two problems.
    Oct 7 05:46 PM | 4 Likes Like |Link to Comment
  • Hewlett Packard: The Cheapest Stock In The S&P Index? [View article]
    If they sold soft drinks (or other consumer staple), sure. But unfortunately for HP, it's a company in tech business; we don't even know what their *industry* would look like in 5 years.

    And can anyone say HP is well-positioned to adapt to the changes that are sure to come to the tech business?
    Sep 26 09:49 PM | 4 Likes Like |Link to Comment
  • An Unconvincing Rally [View article]
    That reasoning has the timing all off. The Libyan problem started in early spring as part of "Arab Spring". If that's what was going to affect the markets, the sell-off would've started in February, not in March (or rather, the rally started to stall in March; April is when the market made its high and the head part of the heads and shoulders pattern), after the Japanese earthquake.

    It's possible that market may go down further (I don't think a bottoming process will take only a week or two, as it would, if the market forms a double bottom and only goes up from where it is now), but it will have very little to do with Libya---or its sweet crude oil.
    Aug 30 06:31 AM | 4 Likes Like |Link to Comment
  • WSJ's Mark Gongloff wonders: What if we've got it all wrong? "What if the rally, rather than being fueled by misguided Fed hope, was about a hope that the global economy, rather than falling off a cliff, might still be on the road to recovery, however rocky it is?"  [View news story]
    I'm not saying anything definite until Friday comes and goes, but I find it difficult to believe that Mr. Market would be *so* irrational. What about a simple hypothesis that doomsday scenario has already been discounted and market is now pricing in a slow recovery?

    Look at the S&P 500 index, for example. We are at the levels where we were in April 2010, before QE2. Assuming QE2 had no fundamental effect (which I'm inclined to agree with), this is where we should be---and slowly improving.
    Aug 25 07:00 AM | 4 Likes Like |Link to Comment