Archive - Oct 3, 2009
Grading the Fed
Submitted by George Washington on 10/03/2009 23:48 -0500How well has the Federal Reserve performed?
Let's take a look...
FHFA Makes a Big Bet
Submitted by Bruce Krasting on 10/03/2009 22:18 -0500Reports from FHFA show they are rolling over tons of dead mortgages. What's the objective? To buy some time.
The Bullish Bear?
Submitted by Leo Kolivakis on 10/03/2009 17:29 -0500Back in early March, Steve Leuthold told investors to "buy stocks now or you'll regret it". He was absolutely right then and I think he's right now. Forget retesting the March lows, the stock market is heading higher. He is now calling for the Standard & Poor’s 500 Index to jump to 1,350 next year as the economy recovers from the worst contraction since the Great Depression.
Interview With A Mad Hedge Fund Trader
Submitted by Tyler Durden on 10/03/2009 15:19 -0500"I think we’ll get more of a “square root” shaped recovery, a “V” followed by sideways to a gradually upward sloping grind. We’ve already had the “V”. Markets are overpriced. I don’t see how we can have huge economic growth with capital-constrained banks, catatonic consumers, and commercial real estate troubles up the wazoo. One of the only positives is the weak dollar, which makes everything we sell to the rest of the world cheaper. This is good for our multi-national companies, good for our exporters. So far, the dollar is on a grinding, controlled move down, which is good. But if the dollar’s fall accelerates, it would not be good. A real dollar panic would lead to the widespread dumping of dollar assets, and commodity prices would explode. Then we’ll get to $2,000 for gold and $40 for silver very quickly." - Mad Hedge Fund Trader
Guest Post: On Commodity Inflation And Long Term Underemployment
Submitted by Tyler Durden on 10/03/2009 15:02 -0500The government reflation experiment has ensured that company costs cannot reach equilibrium with weak final goods markets. This is similar to the Great Depression except that artificial wage inflation has been replaced by artificial commodity inflation to create the disequlibrium. To cut rising costs, the only option is to reduce salaried employees, or shut down completely due to losses in core operations. Rising unemployment will create further weakness in final goods. This portends continued macroeconomic performance below trend for a length of time not seen since the Depression. Asset prices will eventually fall to the market solution, government intervention aimed at avoiding this harsh reality will only delay the inevitable and probably assure a more painful destination in the process.
Janet Tavakoli On Why Meltdown Risk Now Is Greater Than It Was In 2007
Submitted by Tyler Durden on 10/03/2009 14:06 -0500One of the foremost experts on structured finance and derivatives presents a holistic overview of not only the current economic fiasco, and in 10 brief minutes with Max Keiser she provides more succinct, unbiased and relevant information that most pundits are able to convey in years on and off TV, but also highlights the bigger problem of how the administration keeps treating the US public as a bunch of stupid infants, throwing paper blankets over raging systematic fires that are anything but doused. And yet, the administration's ploy so far is successful, unfortunately speaking volumes about the intellectual rigor of the average American.
Was 1080 on the S&P a Multi-Year High?
Submitted by on 10/03/2009 12:53 -0500It looks like 1080 on the S&P is an intermediate-term high, with the potential to become a major multi-month—dare I say year—high. Sell the pigs that flew the highest in this rally now.
More On The Mysterious (Ongoing) Quant Disruption
Submitted by Tyler Durden on 10/03/2009 12:40 -0500"Indeed, this simultaneous underperformance of all our themes suggests to us that a disruption may have been (or still is) occurring in this space. This sobering thought has me searching for the appropriate words and so I find it necessary to turn to my truest and most reliable muse but I am still struggling to find the most appropriate reference. Is it best to paraphrase the opening of Side 1 of Darkness on The Edge of Town – that is the song, Badlands? Or is better to allude to the eerily appropriate last song of the vastly underrated and misunderstood Nebraska album – that is, Reason to Believe? Or still yet, is it the newest Springsteen song which world-premièred Wednesday night at the Meadowlands, where yours truly was privileged enough to be among the lucky people standing inches from the stage as The Boss belted out, for the first time, Wrecking Ball?" - Barclays Capital
Where in the World are the Jobs? New Economic Rule: Job Growth not Necessary in new Economy. The Second Derivative Gives Way.
Submitted by drhousingbubble on 10/03/2009 11:55 -0500For the first time since March, the stock market actually showed a little reaction to reality based information. As it turns out, even removing any hint of stimulus will cause the market to retreat. We already expected the cash for clunkers program was largely a gimmick with auto sales dropping like a stone in the last reading. Home sales are being artificially juiced by the $8,000 tax credit and the Federal Reserve keeping 30 year mortgages near historical lows. You can expect that if the Fed and the tax credit were removed we would see a similar reaction as the cash for clunkers program in the housing market. It is amazing that so much energy and focus is being put on bailouts, gimmicks, and transient market forces all the while ignoring one major component. Jobs.
Deep Thoughts From Dogbert
Submitted by Tyler Durden on 10/03/2009 10:50 -0500
It's funny cause it's so not true true
The Real Reason the Giant, Insolvent Banks Aren't Being Broken Up
Submitted by George Washington on 10/03/2009 04:18 -0500Want to know why the giant, insolvent banks aren't being broken up?
Here's why...
So Fellas, Do We Have Deflation?
Submitted by George Washington on 10/03/2009 00:17 -0500Inflation or deflation? Round 1 goes to ... deflation.






