Another Freaky Friday?
Submitted by Leo Kolivakis, publisher of Pension Pulse.
It
was another freaky Friday. First, let's discuss the US jobs report.
There was a decline of 20,000 payrolls in January and the unemployment
rate fell to 9.7%. Despite being off in my forecast (I was expecting
big payroll gains close to 150K), I am still convinced that big job
gains are in store for Q1 & Q2 2010.
There are two encouraging things worth noting from the January jobs report.
First, temporary employment added 52,000 jobs in January and it wasn't
all Census hiring. Since reaching a low point in September 2009,
temporary help services have added almost a quarter of a million jobs.
Why
is this important? Because employment lags the broader economic
recovery, and companies usually hire temp workers initially before
offering them full-time jobs. As shown in the chart below, the pickup
in temp workers has historically been a good harbinger of future
employment gains.
Next,
Stéfane Marion, Chief Economist & Strategist at the National Bank
of Canada noted the following encouraging news from the US jobs report:
...the wage bill is now expanding at a 4% clip in the last three months, the best showing since early 2008. We also note that the household survey from which the unemployment rate is derived showed the addition of 784,000 jobs in January (after adjusting for revisions to population). The employment figures derived from this survey, however, are much more volatile than those obtained from the payroll survey. As such, it is preferable to use a 3-month moving average to extract the underlying trend. As shown, household jobs still show a gain of 110,000 after smoothing. In the past, the household survey has led the payroll survey coming out of recessions.
All
this means that no matter how the BLS muddies the waters, job growth is around the corner. It has been a severe
recession which is why it's taking a frustratingly long time to see
some meaningful employment gains, but the recovery in the US labor
market is already upon us.
Now, the stock market is another
beast altogether. The explosion of algorithmic trading makes it very
difficult to understand the daily movements in stocks. Just look at
today's price action on the Dow:
What
happened at the end of the day? Traders will tell you "it's just short
covering" while conspiracy theorists will tell you it's the "Plunge Protection Team" (PPT) or Goldman Sachs.
Maybe it was just the
big hedgies manipulating shares lower in the early morning so they can
scoop them up at attractive levels. Who knows? All I know is that there
is still plenty of liquidity out there to drive shares much higher.
That's why I keep buying these dips, especially the big dips on solar
shares.
Look, is the market rigged? You bet it is. If you study
stock markets on a daily basis, you'll see very weird things that defy
logic. But at the end of the day, it all boils down to fear &
greed. Forget Greece, PIIGS and all the noise coming out of Europe.
This is just noise that the big hedgies use to feed off retail and less
sophisticated institutional investors.
So, while it was another
freaky Friday on Wall Street, I'd say the US jobs report was
encouraging as was the price action in the stock market. Things are
slowly getting better, but the pace of job growth is painfully slow.
However, as the recovery gains steam, job growth will follow. It's only
a matter of time now.
(22 votes)
on Sat, 02/06/2010 - 03:48
#220279
Just a couple points, Leo.
1) This article is entirely too rosy. Please try to include some gloom-and-doom next time. Nothing too dire though; maybe just some fanciful speculation that an asteroid will strike the earth and destroy all life.
2) Please post a comment so that the peanut gallery can flag it.
Thanks in advance,
Loup :)
on Sat, 02/06/2010 - 16:58
#220722
Exactly. Try telling this to a guy in the construction business looks pretty grim to me and I'm not in the real
estate game. Level of unemployment right now is at
129.5 million jobs the same as 1999. And there is more
people of working age and the baby boomers can't retire
their retirement portfolio is barely breathing. I know
there is alot of folks out there that has gone back to school to get their nursing certificate but internet
degrees take a year or two. I don't know if I trust this guys time line.
on Sat, 02/06/2010 - 17:56
#220765
employment I meant sorry.
on Sat, 02/06/2010 - 20:33
#220859
@loup,
FUNNIEST COMMENT OF 2010! I'M STILL LAUGHING OUT LOUD !!!
on Sat, 02/06/2010 - 07:43
#220315
Jeepers Leo! You are starting to sound like the Califia Beach Smokinator guy. Not ecerything is green....
on Sat, 02/06/2010 - 08:40
#220340
Bruce,
I am pounding the table, day after day, harping on the global pension crisis and people here think I wear rosy glasses and smoke pot all day long. Come on folks! There are serious structural problems but there are also good things happening in the US economy. This might be the cleansing it needed to get back on track. We shall see how things proceed in 2010, but one thing I can tell you is that corporate America also does not want deflation, so they better start hiring Americans because those profits from elsewhere will dsiappear fast without a sustained US recovery.
on Sat, 02/06/2010 - 12:01
#220459
Corporate Americais not going to start hiring so as to avoid deflation. It does not work like that. Corporations adjust employment based on real and perceived demand. There is not much of that around.
Their profits are disappearing. The $ is up 10% in a month. What does that translate to in earnings per share for the big multinationals? (the ones doing this hiring)
on Sat, 02/06/2010 - 12:07
#220463
I gotta say that I agree with Leo here, somewhat.
You can only sell inventories that were produced BEFORE the layoffs and cut costs to make profits for so long.
There will be more hiring to match natural demands, which never were as low as the amount of people that they laid off.
As they hire more people, demand goes up for goods and services because people will spend again.
The only way to right this ship is to hire people. Without hiring people, you'll see the inventory disappear and thus the job cuts won't bring any profits anymore.
Who knows if corporate America will do it, but it's the best way to go.
on Sat, 02/06/2010 - 12:38
#220493
Quite a big assumption that there is anyone to buy those inventories. Without hiring people, gross wages stay down, and less is sold at the same price, or more is sold at a lesser price. The inventory doesn't get up and walk away.
Also, don't overlook all the demand for big ticket items that was pulled forward by all the clunkers programs on autos, household appliances etc...
on Sat, 02/06/2010 - 13:47
#220551
No one even bothers to address sticky wage issues or the impact of commerical real estae issues coming up to a head in 3 and 4 Q.
Good luck with that. Employment might temporarily click up, but it won't last. This whole BS is little different than Big Push development theory that was used in the 70s and 80s. That didn't really work either.
Nor does Leo deal with the uncertainty of various policies of the Obama administration that act to actually discourage hiring (health care IRA proposals, socialism and taking over companies like GM in general).
I think Leo gets his wish for a couple quarters, then we Dine In Hell from there.
Ps- I am respectful of Leo's opinion and appreciate a different view. It pays for all of us to be nimble and not caught up in gloom and doom. That being said Argh! You're killin' me here Leo.
on Sat, 02/06/2010 - 19:29
#220823
Dear Cindy,
Thanks and while I agree with you, the commercial RE "bomb" is really not going to hit banks as hard as you think. It's not like they don't see it coming and aren't provisioning for it. As far as the Obama administration, they've made plenty of mistakes, but they know if they do not get their act together, they're cooked. Jobs will be the focus from now on. Period.
on Sat, 02/06/2010 - 12:46
#220500
That may be, by I suspect there's a whole hell of a lot more "cleansing" to come. Good things happening in the US economy? Taper out the governments efforts, and pretty much all of those "good things" pretty much disappear. And taper out it must.
on Sat, 02/06/2010 - 18:50
#220802
the only cleansing will be when Leo gets wiped out and cant post anymore
on Sat, 02/06/2010 - 17:48
#220754
Leo,
Couple of things:
Cash as a percentage of debt in the S&P 500 is at the riskiest (lowest) it has ever been. This is more true for smaller American firms. Debt as a percentage of assets is also at its highest recorded point. (Capital IQ)
1) As companies struggle to make profits each Q despite tight cash and low revenues....why in the world would they ever:
A) Load up on inventory... in a JIT (for two decades JIT is a mantra of every good business and the whole foundation of ERP systems, etc) world when data comes over the OCR reader by the hour?
B) Add people ...as opposed to hoping the company down the road does it first?
What Company do you know that makes decisions that way? Please name one?
2) Temp hiring at this time of year has four sources:
A) Weather snow shovelers
B) Tax accountants to close year end books and get ready for tax season (actually a big source of contract hires this time of year)
C) Retailers who hire temps to return inventory left over after Christmas season (especially true of goods typically on consignment like books, music, dvd's, shoes, winter coats, etc)
D) Census workers
None of those categories is going to turn around the economy and none of them signals much except its January
3) This mantra of yours leaves me with strange reactions. While everyone has a right to an opinion...and different opinions are to be treasured and listened to...opinions that are repeated frequently but unsupported and unexplained and generate no insight or analysis...are really borderline trolling or attention gathering
4) Lastly, American corporations wishing not to have deflation does not remotely enter the minds of corporations making decisions about what their forecasts and their cash flows tell them they can afford.
Thats precisely why they have been laying people off...forecasts and cash. Unless you can tell us where the cash is going to come from or why the jobs based on a solid ROI projections per company are going to start....you have expressed an opinion....based on a wish.
Unfortunately thats not very valuable imho. We all have wishes.
on Sat, 02/06/2010 - 19:49
#220829
Where are the good things?
Actual unemployment was 10.6% but they they "seaonally" adjusted it to 9.7%. Yeah tight! Another BLS fudge
on Sat, 02/06/2010 - 20:11
#220844
For small to medium businesses that have not closed
their doors hiring Americans is not economically
feasible between benefits and the vise like grip
unions have on this country. Our hope near term
export our way out of this mess while bozo the clown
in Washington figures out what plan c is to stimulate
jobs in this country in the private sector in order
to have a sustainable recovery. At the moment more
Americans are on the dole between gov hiring, gov
programs and so forth. Nobody with half a brain
wants the U.S. to be the round eyed version of Japan.
Next time I visit someone in corporate America I'll
be sure to tell them you said they better start hiring
or else! I'm sure that will get them to salute.
on Sat, 02/06/2010 - 18:24
#220784
"job growth is around the corner."
I guess if they say it enough people will believe it. Shoveling Unicorn manure is one opening I heard about. Scale-exfoliation for mermaids. "Escorts" for K Street lobbyists.
Any jobs added - outside of this Administration - will be low wage gigs which will put greater pressure on wage deflation. Not jobs in the "$100,000 Box." Credit contraction is exactly the environment where rose-colored glasses are needed to see the silver linings.
on Sat, 02/06/2010 - 18:28
#220785
I wonder if he made note that a record 38.2 million
people are on food stamps. Those guys are awash in
disposable income and their future looks so bright
that can barely contain their enthusiasm. It's Xmas
everyday for these souls. How do I get on that bus
that's heading towards DC? While I'm there I'll
get a job in the gov't. I hear their hiring people
to shovel snow when the record snowfall storm breaks..
on Sat, 02/06/2010 - 09:21
#220358
What is freaky is the total lack of wisdom as being totally demonstrated by the world's political individuals....
Do note that they are circumstantially inept....
If one questions this statement then one should quickly peruse their biographies....which will be proof positive that garbage in garbage out holds true not only with computer models but likewise in humans....
This is like sending a few hundred people to start a company that builds autos....but yet has never been to school for it....nor have ever built them....
The world's political system is comprised of those who have been successful at advertising 30 second TV and radio spots....and promising chips to cronies....
.......................
What is going to be interesting is the fact that there will be no AAA sovereigns when this sharade is over....there will only be the best of the worst....
The keypoint being that one has to grow in independence and live where it is best for themselves and their families....
The US is on track to tax over 60% of the incomes of small business ....through both progressive and VAT...and other employees related tax impositions....
This will prove to be the final nail in the coffin of US entrepreneurship....with regards to what could have been....
The best hope is that another set of politicos will come in and try to unwind the damages to entrepreneurship....
Until then talented people will tend to disperse where they can be the most productive and efficient....Those countries that see the light will gain the most....
on Sat, 02/06/2010 - 12:42
#220496
There are already NO AAA sovreigns left. It's just the ratings agencies are too politically and financially conflicted to do their job.
Greece's default worries are a joke when compared to the prospect of the USA making good on its debt. Hell, they still actually make something. Think I'll go have a salad loaded with kalamatas and feta cheese just to prove the point. Chased by a big swig of Metaxa.
on Sat, 02/06/2010 - 09:41
#220368
Leo;
There is nothing encouraging about 8 million jobs gone. So, stop running around like a wino with a five dollar bill screaming "I'm rich."
on Sat, 02/06/2010 - 12:59
#220518
Right. Wishful thinking, biased researching, neglecting to discuss a lot of negative data, e.g., people drawing from retirment accounts to pay expenses, current underfunding of social security, pensions underfunded, the pension insurer agency needing to be bailed out, states needing to be bailed out and a dozen more. Not to mention phony methods of calculating growth and everything else. This is the ¨titanic enconomy,¨sailing among icebergs while taking on water all the time.
on Sat, 02/06/2010 - 09:52
#220375
Leo,
The problem with you is that you probably advise pension funds and you can't write the world is exploding. So all your comments are always mainstream, stocks will go up bla bla. How can you for example seriously say "Forget about Greece, PIGS and all the noise coming from Europe" ? This is indeed extremely relevant even if the Euro technocrats will play this down day by day as it was done with Dubai. The PIGS are likely in a much worse situation as the EU wants the public to believe. And about the US ? I'm sure you see like ZH the reality, that is the debt is so astronomic that it will never be paid back. Even with all the trillions they pumped in, they can't create jobs, what a shame ! Of course they will continue to pump in trillions and trillions but is that fair for the future generations who will have to deal with that ? You will say it's easy to criticize and not bring a solution. OK, here is mine: make a default on US and European debt. I know it would be more than painful but it would let the system again work from itself.
on Sat, 02/06/2010 - 11:15
#220422
Not true, my bearish views back in 2005 & 2006 cost me my job at a major pension fund (among other dubious factors).
on Sat, 02/06/2010 - 12:37
#220491
What I dont understand is why those views have changed. Things have got a hell of a lot worse since then, people and states are ridiculously bankrupt, we are at or shortly to slide down hubberts peak so business as usual seems unlikely heading forward, and even this jobs report isnt as good as you make out, this from another ZH article:
A number that avoids some of the constant fudging by the BLS, the Non-Seasonally Adjusted number, hit a new recent record: instead of 9.7%, this number was 10.6%, a 0.9% increase from December!
The same can be seen in the U-6 data. NSA U-6 is now at a record 18%.
on Sat, 02/06/2010 - 12:41
#220495
Read this comment posted on Seeking Alpha:
The Labor Market Is Improving, No Matter How the BLS Muddies the Waters
A lot of the confusion comes from the fact that the BLS uses two different surveys and still can't figure out which one is more representative of what is really going on in the economy.
on Sat, 02/06/2010 - 12:53
#220510
The water is indeed muddy, in that data and others, but even if he is correct, and there is improvement, SOME improvement is no doubt going to happen off such a low point. The world wont just stop, these things take decades (or even centuries) to play out, but I think we are entering a long term structural change and decline of modern industrial civilisation, which of course will have some small improvement along the way. Solar is a small part of things which will help us post hubberts peak, but it is no solution to this long term decline.
The fact that you were fired for having overly bearish views, when these views were in fact correct, speaks volumes for the nature of the business you are in. Bad news is just not welcome, as correct as it may be.
on Sat, 02/06/2010 - 13:25
#220542
Leo,
Jesse from the Cafe Americain claims that no jobs are added.
He looks at the labour force participation rate and does not see an upturn. "That number continued its downtrend from 64.9% in November to 64.7% in January, with a slight uptick from December's low of 64.6%." http://jessescrossroadscafe.blogspot.com/
Lower unemployment should translate into higher participation rate, but for now it does not. Something does not add up here.
on Sat, 02/06/2010 - 13:42
#220553
Well, that explains your bullish views!
on Sat, 02/06/2010 - 10:04
#220380
Leo: is there any methodology behind your outlandish predictions that you can speak to ?
i see the tags "algorithmic trading" and "price action" and am wondering what employment numbers and personal opinion have to do with either of them.
have to tip my cap to your intestinal fortitude for (1) not only lapping up some of the most speculative issues with each (and every) "dip" (must have some pool of capital to keep dipping into) but also for (2) telling us (rather adamantly) how certain you are about their outcome ('sometime', down the road). Where do we hear that kind of anal-ytic rigour all the time ... oh yeah, gold bugs.
i realize that your arbitrarily constructed price tgt for solar spec is CSCO-ish and that you "know" equity mkts will reach new highs, soon enough ... again: just wondering if you'd be so kind as to share the actual methodologies that help you arrive at such 'logic.'
at the end of the day, I am but a humble student of Mr. Mkt (we all are), who prides himself on technical risk management and playing intellectual devil's advocate to the POV of my own theses ... so: I would love to learn how you arrive at such prophetic conclusions bookended by statements of certitude.
on Sat, 02/06/2010 - 10:55
#220397
Chopshop,
Saw your latest rant against "solar transmitted disease," and I understand your skepticism. Let me be perfectly clear with you and everyone else on the ZH board. When I was diagnosed with MS 12 years ago, I started thinking about how short life is. It affected my behavior in good and bad ways. But one thing it helped me with is to stay focused, listen to my body and do what I think is right for me, not what others think is right for me.
I am a risk taker. Always was one, always will be one. If I have conviction, I will go for it. This has gotten me in trouble in the past (lost a mint on fucking Nortel), but losing money is when I learned the most.
For the overwhelming majority of people, they should not be taking the risks I take. They will die of stress. They should be investing in low-cost index shares and read books like William Bernstein's The Intelligent Asset Allocator.
But I take risks in stocks. I pay attention to what the top funds are buying and selling, and if I have conviction on a stock or sector, I accumulate and sit on those shares. Don't forget, I use to allocate to the top hedge funds in the world. I know their strenghs and their weaknesses. In particular, as much conviction as they have, they will never allocate more than a certain percentage to any stock or sector. Ever. This makes perfect sense because they are fiduciary managers that need to diversify their holdings. Moreover, no pension fund would allocate to any hedge fund that bets the farm on a stock or sector (although some have).
Now, the other players I use to allocate to are top CTAs and global macro guys. The global macro guys were fundamental analysts who liked "shorting" the CTAs, going in ahead of a big trend. The CTAs (commodity trading advisors) used all sorts of fancy technical analysis and "stochastic price models" to confirm trends and then they would all jump in. This is why you see trends lasting for a lot longer than you think or price action overshooting on the downside and upside.
2008 and early 2009 was where we saw the ravaging effects of deleveraging. Hedge funds had to meet redemptions, so they sold indiscriminately. The market got way oversold. So that's why I laugh when some "technical guru" tells me "we are up 66% so the market needs to pull back". Huh? Are you kidding me? There is so much liquidity out there that this market can go much higher in a blink of an eye.
I know, financial reforms are on their way (holding my breath!), the PIIGS will get slaughtered (yeah right!), Israel will attack Iran (maybe but I doubt it), or Al Caca will attack the US (hope this never happens again). You can conjure up all sorts of evil, sinister plots in your head.
But at the end of the day, this isn't grandma's market. If you don't understand liquidity flows and sources of leverage (from pensions, insurance companies, sovereign wealth funds, hedge funds and PE funds), all the technicals in the world will not help you. Most traders are hopelessly myopic in these markets, and they put their stops too tight, which is why they get whipsawed by the quants and their equally dumb algorithmic models (based on spurious correlations that inevitably break down).
My take on these markets might be dead wrong, but I am convinced that the Fed and other central bankers will do everything in their power to avoid deflation, spurring on asset bubbles once again.You got to pick your spots carefully to make money here.
I take concentrated risks with my own money and will live with the consequences. That's my prerogative. It doesn't mean I will be right, or that anyone should blindly follow me, but at least you can't accuse me of hiding behind some smoke and mirrors report.
Enjoy your weekend.
on Sat, 02/06/2010 - 12:05
#220462
Leo, I commend you on your honesty and encourage you to keep posting. Yin needs yang for balance. I have no clue where you think the updraft in employment is coming from, but as I am in the residential housing and CRE business, it is raining every day where I work, and I'll grant that I see nothing but red ink coming right now.
on Sat, 02/06/2010 - 16:02
#220667
+1, but honesty in this context is a slippery fish. We tend to see things as we are, not as they are.
on Sat, 02/06/2010 - 19:47
#220828
wow honest person in the real estate business, thanks. as the buddha says rains fall equally on all beings. peace
on Sat, 02/06/2010 - 12:12
#220465
You know, I don't always agree with everything you say, but you're right about a lot of things too.
I think that you're a decent and honest guy and that you deserve to be respected for that.
Even if we don't agree with some of your specific calls (I don't agree with the solar calls at all, it's still too early to pick winners in that sector, IMO) your opinions are honest and well thought out.
I appreciate your decency, and don't ever let people be mean to you because they don't disagree. There's just not room in the world for such mean spirited comments from people.
on Sat, 02/06/2010 - 12:48
#220504
One can read between lines that you are, as Leo, a mainstream guy. Basically nothing against that but then I think ZH is the wrong forum for you. On ZH, one is also allowed to tell the truth a lot of people don't like to listen. So CNBC is probably the better channel for you.
on Sat, 02/06/2010 - 13:16
#220538
Spot on!
on Sat, 02/06/2010 - 15:33
#220641
Or the Yahoo! boards.
on Sat, 02/06/2010 - 20:41
#220865
This is only partially correct. Since truth can only be deciphered through hindsight, the disapproval from the peanut gallery comes instead from any opinion that breaches ZH peanut gallery group-think.
Sad. :-(
on Sat, 02/06/2010 - 13:04
#220525
MB, you are as good as Obama's speach.
on Sat, 02/06/2010 - 12:43
#220497
Leo,
You certainly miss two important aspects in your analysis:
1)the indebtness of the US consumer. Many people writing articles on economics don't understand that you cannot fix a probem resulted from rampant indebtness by encouraging consumers to take even more debt and artificially pumping up housing prices!!! you don't mention anything of the "too much debt" issue, you either are not aware of it or you intentionally leave it aside so to make your analysis more credible :)
2) price discovery. Companies will not hire on a sustained basis unless this mechanism works. Right now it doesn't. Why? One example: the Fed is the MBS market, price is no longer a function of demand and supply. Information is distorted. The real estate sector will not start recovering when the signals it receives from prices on one hand and the level of inebtness of consumer on he other hand are confusing and have lost significance.
Aside from that, I am sure you know everyhing on hedge funds and pension funds and your an expert in the "flows of liquidity" and what not and there's too much liquidity around only that the American consmer has none of that :))) And DOW will go to 20,000.
Buy the dips folks if want to lose your shirts!
on Sat, 02/06/2010 - 12:47
#220502
Zexe,
Ok, then I recommend you just buy high quality companies that pay decent dividends. :)
on Sat, 02/06/2010 - 12:51
#220507
Don't want to blame you but it looks like a lot of intelligent posters don't really buy your thesis. I would think about it !
on Sat, 02/06/2010 - 14:56
#220614
Leo: thanks for taking the time to reply.
While we agree to disagree on our outlooks / MO's, I retain nothing but respect for your willingness to stand with conviction.
As per TA: there are about 14 million 'chartists' and 1400 'technicians' ... virtually no one 'doing' TA has any clue wtf they're looking at, let alone how to escape the stochastics default club, let alone how to actually predict mkts with robust accuracy.
Don't ever take my word for 'it' ... you're own due diligence, et cet. While i don't expect anyone to take mine w/o a healthy does of sea salt (though all-too-cognizant of the fact that many will), and certainly don't anticipate winning any popularity contest (outside of Jimmy Chanos' & Michael Steinhardt' neck-o-the-Matrix) ... fade my / our TA at your own peril. Douchey ? yup. Accurate ? yup.
At the end of the day, this isn't Grandma's mkt ... and if you don't understand causality (how / why social mood is entirely endogenous) then 'you' haven't a prayer at investing, let alone trading.
fwiw, I've been a very, very active member of the NMSS for over twenty years (which ought not mean much if anything to you ... and will hopefully be glossed over by others - since i've got a public rep to maintain) ... and while we each have our own personal issues, which continually remind us of our mortality, hope is never an investment philosophy.
rant over ~ thanks for 'sharing' a part of your day with, Leo / fellow ZH junkies.
don't ever let someone tell you ya can't stir up a hornet's nest, Leo !!
and don't mind any of the hater-aid bullshit being slung your way here either, while we agree to disagree I always appreciate the effort & energies that you share with us all here each day. Thanks for, Leo & have a great weekend !
on Sat, 02/06/2010 - 20:46
#220869
+1,000,000
Leo, you got some serious stones to stand up and keep taking these bullets. My hat's off to you.
on Sat, 02/06/2010 - 15:46
#220650
leo, IMHO,the energy money, will go to the cheapest form, in a troubled economy. solar is great, it's clean, dependable, and simple. it's also much more expensive, than forms of energy, that can be readily integrated into existing systems. the time for solar to blossom, is when the economy is flush with funds, looking for something better.that won't be the environment, for a long time. people worried about paying their utility bills, aren't thinking about installing a solar system. for solar to take off, there will have to be widespread adoption. you can't make money in solars, unless the companies are making money. there is no money for solar, right now. be fearful, in this market, not greedy. take some chips off the table, protect yourself, live to trade another day.I like solar, but grid power, is so cheap, that solar, is not a good investment, unless you live off the grid. it takes over 20 years, for the average system, to pay for itself. SOLAR, IS GOING TO GET HAMMERED, WITH EVERYTHING ELSE. sell into any rally, keep your powder dry, and buy back in later, at a lower price. being off on the timing, is the same as being wrong. GOOD LUCK
on Sat, 02/06/2010 - 19:31
#220824
Leo....you wrote...
I pay attention to what the top funds are buying and selling, and if I have conviction on a stock or sector, I accumulate and sit on those shares. Don't forget, I use to allocate to the top hedge funds in the world. I know their strenghs and their weaknesses. In particular, as much conviction as they have, they will never allocate more than a certain percentage to any stock or sector.
If you look at the institutional holdings of stocks that had massive runs..Nortel, Enron, etc etc.... you will find that at the top the instituions held LESS shares than they did at the bottom. The MF's/hedgies who missed out on the ride up are the buyers on the slippery slope down. William Oneill has made this observation in his book How To Make Money Selling Stocks Short..pg 17
on Sat, 02/06/2010 - 20:36
#220862
Leo
If you bought Nortel (what do you want the Internet to be ? Anything you want it to be) you have my sympathy. Note that the banks got out of Nortel around $80-90 as they ran the pump-and-dump frenzy to $121. Then they stood back and watched as everyone else got fried.
Any optimism about the employment/unemployment numbers will be short term at best. Unless this economy insources its manufacturing jobs, there will be nothing for the service industry to service.
"World trade" cannot be purchasing inferior imported crap from China, while they hoard everyone else's currency. Somethings got to give, and it is happening now.
It is not only China who should be worried about jobless people rioting, this country is not far away. Unemployment is closer to 20%, once you back out the jiggy-jigging.
And eventually, even the most-excellent teleprompter reader, will fail to connect. The peasants are revolting so let them eat optimism....
on Sat, 02/06/2010 - 21:39
#220893
leo - you may be interested in this new treatment for ms:
St. Joseph's Hospital is one of just two places in Canada testing Italian vascular surgeon Dr. Paolo Zamboni's controversial theory that MS is a vascular disease -- a radical departure from long-held beliefs that it's an autoimmune condition. The University of British Columbia is the other place.
the new theory is that ms is a vascular disease, and thus easily treated.
more here:
http://www.thespec.com/News/Local/article/717814
back to the topic at hand, what about the issue that employers are going to first give more hours to existing workers, who aren't working full shifts, before hiring any new employees?
on Sat, 02/06/2010 - 10:30
#220391
so they better start hiring Americans because those profits from elsewhere will dsiappear fast without a sustained US recovery.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
No employer big or small is going to hire as long as the "flim flam man" is pushing communist healthcare and Crap and Tax.
on Sat, 02/06/2010 - 11:10
#220418
Leo's theme song...
LET'S HAVE ANOTHER CUP OF COFFEE
Album : Songs Of The Depression
(Irving Berlin)
Fred Waring & His Pennsylvanians - 1932
Just around the corner,
There's a rainbow in the sky,
So let's have another cup of coffee,
And let's have another piece of pie.
Trouble's like a bubble,
And the clouds will soon roll by,
So let's have another cup of coffee,
And let's have another piece of pie.
Let a smile be your umbrella,
For it's just an April shower,
Even John D. Rockefeller
Is looking for the silver lining!
Mr. Herbert Hoover
Says that now's the time to buy,
So let's have another cup of coffee,
And let's have another piece of pie!
(Repeat)
:)
on Sat, 02/06/2010 - 11:18
#220426
Keep chasing them skirts trader boy:
on Sat, 02/06/2010 - 20:50
#220870
Chase? Nah. Catch and release? You betcha. ;-)
on Sat, 02/06/2010 - 11:34
#220439
Leo, I look at reports too but I also look at reality on the ground. Some may call it anecdotal and perhaps it is, but it is also reality:
1. Everywhere I go outside of NY and Washington, people have lost their home equity, many have lost a chunk of their 401K and are about to lose an even bigger chunk and they simply are not spending.
2. Without consumer spending (and there is none) there is no recovery.
The bounce we're seeing is a result of two things. One is a massive government influx of cash that is a high stakes gamble that somehow it will reprime the consumer pump. It won't for observation 1 above and it comes with a heavy price tag in that it will lead to higher rates which will lead to more retrenchment. Second, we are bound to bounce a little since last year we fell off of a cliff. It's called reversion to the mean and it's about the only principle I believe is rock solid when it comes to economics. We aren't even back to the mean yet so we may bounce a little more. No argument there, but then again, I'm not ignoring the macro trend and it isn't pretty.
The problem with pinheads who never leave the beltway and see what's really going on in Milwaukee, Kansas City, Houston and a million other places in between is one of availability bias. I've read you for a long time and I always chuckle, never more so than this morning. You're in for a surprise, Leo. The only question is whether or not you're too arrogant to see it coming.
on Sat, 02/06/2010 - 12:38
#220494
+ 10
on Sat, 02/06/2010 - 12:54
#220513
+ 20
on Sat, 02/06/2010 - 12:09
#220464
Anyone else staring out the window in the Northeast at like 2 feet of snow and it's still coming? Retail will take a hit this month just from the sheer inability to get to the mall this weekend!
on Sat, 02/06/2010 - 12:15
#220468
That's why I left the northeast! The weather there is positively ghastly...
I live in Colorado now, where we might get 5 feet of snow once in a winter, but the sky will be blue and it'll be 60 the next day.
In the northeast, it was just gray, drizzle, and lake effect snow. Bah at the northeast.
on Sat, 02/06/2010 - 12:52
#220509
After living at 8500 ft in the Rockies for 2 years, all I know is we had the heat on in on July 4th. Taxes and gov't hoops to jump were out of control. Lost 50k when I sold to get out of that god forsaken state. Don't get me started about blizzards at -28degrees. Freekin bears in my garage after trash. Mountain lions eating small dogs. F Colorado. Just my opinion.
on Sat, 02/06/2010 - 19:53
#220833
Wow, you lived up at 8500 ft in the Rocky Mountains and had to deal with bears, mountain lions, heavy snow in the winter, and chilly evenings in the summer? Bet that came as a shock.
on Sat, 02/06/2010 - 19:56
#220834
where, south park?
on Sat, 02/06/2010 - 20:52
#220871
ROTFLMFAO!
2nd BEST COMMENT OF 2010 ON ZH !!!
on Sat, 02/06/2010 - 21:55
#220868
Say Al
Thanks for inventing that "Earth is Warming" thing. I really enjoyed meeting the President, uh, Prime Minister, uh, the Leader of the country of Copenhagen while I was promoting that Crap and Raid thing.
All the best.
Barry
p.s. can I borrow yer snow shovel ?
on Sat, 02/06/2010 - 12:17
#220469
The employment numbers are based on temporary workers-not real jobs. A lot of these jobs are seasonal XMAS jobs.
Plus the government uses a corny birth/death model for business and extrapolates what the employment numbers are-they don't have real numbers and their math is flat out stupid and it's a phoney,political number. u-6 is the real number. 18% unemployment. BLS is a bunch of math dropouts
on Sat, 02/06/2010 - 12:26
#220475
The Labor Market Is Improving, No Matter How the BLS Muddies the Waters:
on Sat, 02/06/2010 - 13:46
#220559
a 60,000 household survey-in a country with 600 million people.
And to boot, the BLS always revises their intitial number later with this survey number-and the revision is always+more unemployment.
for a primer on how phoney the BLS stats are:
http://globaleconomicanalysis.blogspot.com/2010/02/jobs-contract-yet-aga...
on Sat, 02/06/2010 - 13:47
#220561
BLS's stock in trade: official measurements of the speed of descent of a number of stones; just before they hit the ground, BLS steps in with its assumption that a few of those stones, despite the obvious (gravity), will definitely then reverse course and rise back up into the air. Then take the average of those two sets of events, and voila, a decrease in the rate of speed of descent of all of the stones!
And about the same level of common sense.
on Sat, 02/06/2010 - 12:27
#220479
I disagree with this far too rosy picture, deflation will come after the domino's start falling one by one. Double dip will hit, or better: continuation of the depression.
on Sat, 02/06/2010 - 12:32
#220486
Longer-term, the risks of deflation will explode if policymakers are too quick & too agressive in removing liquidity from the financial system. But they know this, and will proceed accordingly.
on Sat, 02/06/2010 - 12:57
#220517
Well, I don't think that the policy makers know what they are doing! And they cannot prevent all domino's from falling down. We get a reasonable Q1 and Q2 2010 at best, after which it will slide back to recession. At the moment the EU situation is dominant in the markets and as long as the threat of debt defaults in the EU remains, I don't see the markets go up. Expect Portugal and Spain to be next on the agenda, and pretty soon, too.
on Sat, 02/06/2010 - 13:03
#220522
One other thing: the market already priced in a V-shaped recession, so there is little room left to the upside. The markets already start worrying about the second half of 2010, which will very likely prove that this is not a V-shape recovery.... January 2010 was very telling in this respect. Earnings are quite OK, but not what most V-shapers expected. They are IMO in for more disappointment.
on Sat, 02/06/2010 - 16:26
#220692
-34.5 x 2
If true, then there should always have been the proper level of liquidity and the real estate bubble would never have ballooned in the first place. Keynesian Boom & Bust cycles are evidence that central planning does not work (or, to directly address your quote, that central planners have no idea how their policies affect the future until after the fact -- and even then, they suffer from hindsight bais thinking that this time they'll predict the future). They won't know when to pull liquidity any more than they have ever known, which was never.
on Sat, 02/06/2010 - 12:31
#220482
Leo,
The logical fallacy of stating "unemployment is a lagging indicator" and then using that statement to draw conclusions about job growth is that, even if unemployment lags all the time, it says nothing about the duration of the lag or the strength of the job recovery. You may ultimately be proven 100% correct in stating that there's a lag, but, likewise, be 100% wrong on the swiftness or magnitude of the recovery.
on Sat, 02/06/2010 - 12:37
#220492
Daedal,
I said nothing about the magnitude of the recovery, only that it will likely surprise to the upside in 2010. After that, it will be modest at best. Too many long-term structural problems (deleveraging of households and releveraging of public sector) to think that we are going to grow like crazy. Growth in emerging markets will help, but it's not enough. We need to get back to basics. Less financial engineers and more software, electrical, and mechanical engineers.
on Sat, 02/06/2010 - 13:01
#220515
I agree with that wholeheartedly.
Further, the squeeze by companies in current market perpetuates slow job growth. Here's an anecdote of a recent experience I had/am having:
My company recently eliminated positions from my department, and I ended up being 'laid off'. It's in quotes because I was offered to move into a different area to fill in another worker who was let go. So, my former position was being eliminated and I replaced a worker (I actually got a ~20% raise/promotion). Ok, so far so good. Then, a few weeks ago, they laid off another person in my new department and handed me the work. Now I'm doing work of 2 positions in new department, and am even providing support from the position which "no longer exists" of my former department. In 1 month I went from having work load of 1 person to work load of 2.5 people with a 20% raise! Meanwhile, the company eliminated 2 positions in the process. Even more absurd is the workers I replaced were more senior, and thus higher salaried. To summarize: I get 20% more money, 2.5x more work, and company saves 200%-300% of what they pay me. Needless to say, I'm trying to get the hell out of there. I've been sending resumes out for 2 weeks and nothing so far. I do not see any 'swift' recovery any time soon. And considering job market, other companies are squeezing their employees' by the nut sack for the same reason my nuts are in the vice -- because they can.
I'm also reminded of another interesting tidbit. Before the market totally collapsed, I was looking for a job in 2007 and was also finding it materially harder to get interviews, much less job offers, than I had in the past (when I had less experience). I decided to see what was going on, so I posted a position (similar to the ones I've been applying to) on craigslist to investigate the competition. In 12 hours I received 300 responses. And in 24 hours I received 500 responses. This was 2007... I can't imagine what it's like now, but now that I think about it, I might run that expirement again.
on Sat, 02/06/2010 - 13:03
#220523
Daedal,
Thanks for sharing. Ruthless and short-sighted capitalists will try to squeeze blood out of a rock. But they can't do this forever without hurting the bottom line. Smart companies know when to hire and keep their workforce happy, and don't treat them like slaves.
on Sat, 02/06/2010 - 20:56
#220872
Leo
On the micro level, most small businesses are hanging on by the skin of their eyelids. Liquidity is not on the ground. Anywhere in North America. Period.
Good luck with the head in the clouds thing.
on Sat, 02/06/2010 - 14:20
#220585
How are the models and statistics going to work with all these new behaviors. My personal anecdote is that I own my own small business with four employees. I worked six days a week for over ten years and finally got it to five days a week, then in 2008, I cut myself back to four days a week and waited, not cutting anyone elses hours. Then at the beginning of this year I cut everyone's hours 20% and their pay %15 and I'm back to six days a week personally. I'm afraid that these anecdotes time 100,000 are going to "look" rosy for a while(productivity gains, wage gains per hour worked etc), but the reality is that we're against the wall.
on Sat, 02/06/2010 - 14:42
#220602
Same thing happened to my sister in law, who
works at BofA. Her working hours are now 9am
to 11pm. No kidding. She looks like hell now,
they are working her ragged......
on Sat, 02/06/2010 - 12:56
#220516
I live in Eastern europe in an emerging market and all of the sudden emerging markets are the hottest and everyone in London trading emergings thinks this year is emerging mkts year! And that after equity indexes rose 2-3 or 4 times so far from March 2009 lows! Hedge funds are late to the party again, when (not if) things will blow they will lose their shirt just like they did in 1994. Why do think that?
Last week there were wise hedge fund guys selling EURPLN hand over fist below 4.00 and they coudnt even point Warsav on the map:) SO much sounds like the Bhutan Dry Docks story!
on Sat, 02/06/2010 - 12:30
#220484
Leo,
Some prayers and appreciate the honesty. IMHO, use little guys rarely get glimpses into what's going on in the backroom with the guys with stinky cegars and fine scotch.
I get you're drift, you're saying positive data and deep pockets keeps the smart money long. Pretty simple in my eyes.
Totally agree on risk and stops, and fwiw, my own story is similar.
Good Luck
on Sat, 02/06/2010 - 19:34
#220825
Great, at least I am not alone here! LOL! Best of luck to you.
on Sat, 02/06/2010 - 20:35
#220861
I'm with you. Seem like a good guy I'd have laughs and a beer with.
on Sat, 02/06/2010 - 20:56
#220873
I'll buy for everyone, so long as Leo keeps up these weekend posts! This stuff gets better and better with each passing comment.
on Sat, 02/06/2010 - 12:34
#220489
Amazing. Just amazing. With oil consumption down sharply from 2007, its price is still $4 higher than 2007's average. It's down because economic activity is down. Don't pretend there are enough Prius vehicles driving around to have had any impact at all because there are not. There is no significant consumption decline not attributable to economic decline.
But no one talks or even thinks about the 75 million barrels fewer in existence each day unless it's a day or week with a price spike.
Wake up, people. Oil gets burned every single day whether the market is up or down. It's not infinite. Production is down and everyone believes anyone's . . . ANYONE's . . . claim that all that production decline is voluntary.
The economy is NEVER coming back, sports fans. Oil will spike and crush any attempt it makes to do so.
on Sat, 02/06/2010 - 18:46
#220800
supply curve not falling as fast as demand curve - at least for now.
on Sat, 02/06/2010 - 12:46
#220501
Even if the jobs did return you wouldn't want them. Our standard of living is quickly diving down to the level of the third world. Rather than creating a middle class in China and India, the global economy has created world wide poverty. There will be soon be an underclass in America deprived of everything but entertainment. Why are Americans so docile in this challenge to their standard of living? Because we realize the true nature of things.
There is no technology which creates energy out of thin air, (that wind turbine requires other resources in order for it to build) and no economy which creates wealth out of paper.
While the various nation-states run their economies at full power to fuel the engines of war, and self preservation, (which are the same thing really) the wholly inefficient system gains speed as it lurches toward the edge of the cliff. (If America would give up its sham war against the terrorists we could run a sustainable economy, and a sustainable economy might allow some measure of self preservation)
Perhaps we need to figure out everyones carbon footprint, figure out what the earths resources can sustain, and set some realistic population goals which put this all in balance. Jobs are like buggy whips, but as McLuhan points out, the automobile made the horse and wagon obsolete, and those things became recreational destinations, through the movies where the western became a major film genre.
Entertainment, incidentally is Americas greatest export, something for which we receive very little compensation, and is exported practically for free. The rest of the world is a cultural sink hole, and this planet would be one dark gray gulag without American TV,Movies and Music.
You want jobs, check out Mike Rowe and his Dirty Jobs. Jobs are entertainment. You want to get rich, go to work for Goldman, the modern alchemists of money. Between cable programs about truckers, and laborers, and the high rises on Wall Street, there is nothing really, but the enervated masses. Do they have the same power as the crowd that took down the czars? Hardly, this is a different age.
A small (cultural) mass or a large mass, it matters little really. The demise of the corporate quasi fascist government business hybrid economy will buckle and break. Watch for signs of the strain. Government is doing its part to save the dinosaurs, which means the end is near. Watch for small vertical economies to rise up from the ashes, and the mass marketing of investment paper will fail too.
Ultimately small countries like Greece will begin to look good, while the major industrial powers falter. South Africa may become a financial center, as their gold reserves to currency ratio is very high.
on Sat, 02/06/2010 - 12:54
#220512
"THE world's top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets..."
...
"Three major religions have outlawed usury for thousands of years; and yet imposed across the world are currencies by which, if we merely maintain a vital circulation, can only perpetually multiply principal into ever greater, ever more usurious sums of debt. But worse, the pretended principles of purported modern "economics" are even inherently and inevitably terminal, because it is impossible to fulfill the obligation to service debt if we do not maintain a circulation, and because we can only maintain a circulation by re-borrowing principal and interest as subsequent sums of debt, perpetually increased in proportion to the circulation so much as periodic interest. Ultimately and inevitably then, every circulation subject to usury engenders a sum of debt which is terminal.
on Sat, 02/06/2010 - 13:10
#220529
Leo.. Leo.. Leo,
If you are looking for "lemmings" you came to the wrong place.
http://thereformedbroker.com/2010/02/05/a-tripling-of-those-unemployed-f...
http://www.bearmarketcomparison.com/Bear-Market-Comparison-Unemployment-...
http://www.bls.gov/news.release/empsit.a.htm
Put down that pipe you're smoking and take off your rosy sunglasses.
on Sat, 02/06/2010 - 13:15
#220536
Leo,
I predict you will be sorely disappointed in your predictions and lose a ton of money in the next 2 years.
on Sat, 02/06/2010 - 13:15
#220537
As long as yee guys across the pond believe that utilities have to make large profits to drive your economy - the rest of the economy will continue to have declining profits and increasing unemployment and poverty .
But I guess it won't mater much if your resident corporations make their money in euros and yuan and send them home to New York !
Europe has begun to adopt your enlightened industrial policey so don't expect much more doe from this part of the world but never fear you will always have China.....
on Sat, 02/06/2010 - 13:25
#220540
The advance number of actual initial claims under state programs, unadjusted, totaled 530,405 in the week ending Jan. 30, an increase of 28,234 from the previous week. There were 682,176 initial claims in the comparable week in 2009.
Folks on the EUC increased by +281,442 between Jan 9th and Jan 16th.
Let me know if I'm missing something.. but... official unemployment counts only those that are still on the rolls to receive unemployment payments from the insurance policies of employers, right?
And... unadjusted numbers start affecting the seasonally adjusted at some point, right? Some weeks they have been 200-400k different, with unadjusted always higher.
Let's back away from the government telling us what they want us to think, and use some common sense. Once these unemployment insurance benefits are exhausted, these people are not back to work, they just are not counted in the official total. A decreasing unemployment rate is now occuring as EUC additions are ramping up. It now appears that extended numbers are dropping (more and more states' funds sucked dry) and EUC, which is Federal Emergency Unemployment, is getting the spillover.
This is not improvement, it's just reporting a shrinking category of jobless and ignoring a bigger growing category.
You know, if the unemployment insurance companies lobbied, I bet they can get a new, federally mandated decrease in the weeks they need to cover. A little bailout for them, and the government get to report an even LOWER unemployment rate. It's a win-win!
on Sat, 02/06/2010 - 13:52
#220541
Leo--I am sorry folks are being so mean. Nonetheless, Picard facepalm. The more I read, the more worried I get.
on Sat, 02/06/2010 - 14:55
#220612
Cindy, I thought the discussion was quite civil
today. To summarize:
Leo is too optimistic.
The doom and gloomers (otherwise known as realists)
need a bit of balance.
We are surrounded by massive problems, everywhere we
look. My issue is not that we are inundated with disaster,
the issue is that we are not letting our brilliant
folks any where near these problems......
Fraud and corruption are everywhere.....Until we address
fraud and corruption, no solution is possible..
on Sat, 02/06/2010 - 13:27
#220544
Leo, you're playing a rigged game. You are going to get creamed. I truly wish you well. Godspeed to you, sir.
on Sat, 02/06/2010 - 13:32
#220547
Why do you have this creepy, cheerleading goombah writing on your site? Hasn't this goon made enough incorrect predictions, and isn't he ignorant enough? His waving a wand over the economy is pathetic. Get him OFF this site.
He was so wrong last month about jobs it was a pathetic joke. Now "things" are getting "better." Does he write for Hallmark greeting cards? Is he Goebbels?
This clown should follow the Mellonesque liquidation is in place, particularly the decline of supply chain, so beloved of cartelists. It started in transportation, has found its way into agriculture, and is moving toward utilities.
And you, reader? Just as corporatists always do, they are moving quickly to end your control over 401k and mutual fund assets. These will be loaned to the government and replaced by Treasury notes.
If Leo knew anything at all, he would read Sraffa on what Mussolini did to the banking system. It's exactly what our oligopolists are now doing to our whole economy: looting it.
on Sat, 02/06/2010 - 13:54
#220549
There's no doubt about it - everything is looking up. Er, ah . . . whoops spoke too soon . . .
http://www.news.com.au/business/secret-summit-of-top-bankers/story-e6frfm1i-1225827289543
nothing to see here, just visiting each other and having a few laughs . . .
"Central bankers are to meet in Australia's biggest city for two days of talks as plunging stock markets renew fears of a slow and patchy recovery from the global financial crisis, Sydney's Herald Sun reported Saturday. The paper said representatives from 24 central banks, including the US Federal Reserve and the European Central Bank, are to assemble Sunday and Monday in an undisclosed location.
The organizer of the meeting is the Bank for International Settlements rather than the Australian government, which would help explain why secrecy prevails. [Well, that certainly explains that - Ned]
The governors of the People's Bank of China, the Bank of Japan and the Reserve Bank of India are said to be on the guest list.
The gathering, arranged last year, takes place against a background of world share markets reeling from fears that governments, not just companies, may have difficulty with their balance sheets.
"It's been a long time since we have seen really serious sovereign risk in developed economies," Gerard Minack, the head of brokerage Morgan Stanley's Australian operations, told the public broadcaster ABC. "We don't have a lot of history to go by, at least in the modern era."
Minack said the concern was not just about Greece, Spain and other southern European countries - the so called Club Med - but about other economies.
"We are now seeing it spread around the ring of fire that surrounds core Europe," he said. "I mean, Eastern Europe looks terrible. We know already there are concerns about the Spanish, the Italians, possibly the Japanese."
Australian shares lost 2.3 per cent of their value Friday in line with stock markets around the world. The Australian dollar fell to a six-week low against the US dollar as investors sought a safe haven in the world's top currency. "
on Sat, 02/06/2010 - 14:12
#220570
Good on ya, mate! I knew if something like this was gonna happen this weekend, someone on ZH would be on it like stink on skunk.
Rock on, Ned! Excellent work. This one's for you:
Led Zeppelin - No Quarter
http://www.youtube.com/watch?v=RKOngTfTMs0
Wish I could pipe this into a Sydney hotel meeting room.
Hint: play the video on your link and then play No Quarter in the background. Spooky.
In the video, it's reported that global markets are being sold off due to the adjustment of an additional 1.4 million unemployed in the US. Obviously the rest of the world has no problem disregarding the 9.7% and digging for the truth.
on Sat, 02/06/2010 - 21:19
#220881
No Quarter - mmmmmm..........sweet
on Sat, 02/06/2010 - 13:46
#220558
Just don't understand where anything is gettting better.
1. We are just bouncing off the bottom, that is it. Jobs, what jobs? Jobs that pay well, full time with benefits. Forget it. Not gonna happen.
2. The banks will bring us down again as the toxic waste that is off their books will at some point have to be reloaded as those loans continue to not perform and foreclosures increase.
3. Never in the history of man has a country prospered from debt, never.
4. A govt. that is inept, lies to us and deceives us with spin is not a recipie for recovery.
5. When all this debt blows up on us you will hear about it world wide.
Does not mean we cannot rally for a few more months. Wall Street does not pay that much attention to debt.....Until it matters.
on Sat, 02/06/2010 - 13:52
#220564
In a deflationary depression, employment,GDP and the markets all trigger each other simultaneously.
Labor and employment is not a lagging indicator but a preceding indicator. If there are no job, then there is no buying and thus no GDP and thus no equity rally in earnings. If the market goes down, people hunker down and do not spend and that kills money velocity and that kills GDP which kills labor hiring.
If the business cycle turns down(GDP) then there is less hiring, less profits and that affects the stock market.
This is the unique problem in deflations and why it's considered a ponzi death spiral. It will stop when it decides to stop. And when it stops ALL 3 indicators will be moving up at the same time. We are 10 years from this
on Sat, 02/06/2010 - 13:53
#220565
Leo, you are mistaken that the stock market will go up just because the news is good (or appears to be getting good). The market has its own mind(s) controlling it. Most likely the 1.6T debt maturing in March will be the big controlling event until March meaning an engineered crash as has been often suggested on this site.
on Sat, 02/06/2010 - 13:54
#220566
If the inventory build that boosted the last report does not get pulled off the shelf by end consumers, it becomes a liability because it is largely financed by debt.
Until you see personal income rise and, even more, see it rise above the increased savings rate, you got nothing.
on Sat, 02/06/2010 - 13:55
#220567
leo,
I disagree. Keeping employees happy used to be the way to move forward, now with so many looking for Your job, that is not high in priority. They will continue to do more with less until the system resets and starts anew. And that will not happen until the people demand it. Politicians are useless thieving parasites that care about 2 things. Getting re-elected and how much money they retire with. I have never seen such a large part of the sheeples so disgusted with our govt. the banksters and our so called elected officials. Long way to go.
on Sat, 02/06/2010 - 13:59
#220571
Someone mentioned business hiring back to build up inventories. Well let me say that I'm a welder that was working 4 days a week for about 5 months last year. In October we were back to 5 days a week building up that inventory. Well guess what? the inventory is built back up and for the past month we have been working a 3 day work week, and I don't see any signs of a recovery in sight. We make hot water boilers and with the country in a deep freeze this winter, and record snowfalls, sales of our boilers have shown very little improvement. Three years ago, I would have been working 10 hour days and 18 hours overtime each week. Thats how busy we were. Now our customers say they can't get loans from the banks. If we can't sell our product when its usually the bussiest time of the year then I'm expecting to remain on a 3 day workweek for a long time. Forget those green shoots.
on Sat, 02/06/2010 - 14:20
#220580
Leo - a nice holiday destination for the solar enthusiast with dollars in the age of cheap euros
The first post war solar furnace built on the star shaped fortress of Mont Louis ( mirror made from a wartime searchlight) and a very modern large solar furnace built in 1970 just south of Mont Louis.
Unfortunetly less babes then seen on a typical Greek island but you can't have everything !
www.anglophone-direct.com/Mont-Louis-Font-Romeu-Odeillo-Via
on Sat, 02/06/2010 - 14:13
#220582
Why hire again when you can get as much work from a lot less employees? Thats whats taking place now. I know that because Im part of that now. Last year I went from working 5 days to working 4 days for about 5 months. When Inventory started to move lower, we were back working 5 days. Well guess what, that inventory is back up, but its not selling, so since the beginning of January we have been working a 3 day work week. We make Hot water boilers for homes and residentual properties. This is normally our busy time of the year. With record cold temps in most of the US, and record snowfalls, were still not moving much inventory. Customers say they can't get loans from the banks, so they are not buying our boilers. It looks like I'll be working 3 days a week for a long time. Forget those green shoots, there never was any, just politicians and wallstreet bullshitters trying to pump up the market. They were successful in doing that, but they haven't pumped up the jobs market one bit.
on Sat, 02/06/2010 - 14:36
#220598
My clients are cutting back even more in the new year, in every way, including on my hours, and the projects they want me to do. They are using temp help to get work done in crunch periods, then letting them go. If this is being done nationwide, it would explain the spike in temp hiring, but does not point to eventual permanent hires.
They are, however, investing in a faster server and more remote access capability, so that the fewer administrative employees they have can work even more hours while still getting some family time. If this is also happening nationwide, it backs up the increased IT spending and the increased productivity numbers, but again, does not necessarily point to a recovery.
Getting more done with less is all I see from here, too, Foxmuldar.
on Sat, 02/06/2010 - 14:29
#220593
Although not exactly on the thread of this conversation, I found the trading action on Friday afternoon highly curious. Until yesterday, the Friday pattern had been weakness and waning interest. Going into Superbowl weekend and a big East Coast storm, and in the absence of any option expiration induced activity, one would not have expected the explosion in SPY and E-mini volume that produced the highest volume days for both securities since March/April of last year. It strikes me that someone was getting bored, and saw that they could engineer a little action by working the CDS game again and alarming people with 40 page reports calling attention to the plight of Europe's weak members. The fact that the VIX went from 26 to 29 and back to 26 again in the last three hours of the day also suggests there was a big game going on because I did not pick up anything fundamental enough to cause the wild swings. Does anyone know what happened?
on Sat, 02/06/2010 - 14:35
#220597
We love Leo's pension stuff and in truth, we'd be thrilled if his "things are looking up" prediction is right. Our big problem is that we own a couple of manufacturing companies and also provide receivable financing to others. In these business (in US and Canada) things aren't looking so rosy.
But, I did hear how you can make money on solar - put some panels on the roof (they don't really have to be good or work) then buy the electricity for a dime per Kw and (in Ontario anyway) feed it back into the grid for 80-cents per Kw. Solar is great - it's meant to be milked just like the ethanol scam.
on Sat, 02/06/2010 - 14:51
#220607
Normal 0
I like this list as a starting point for discussing how screwed we are. I cut the explanations where I figured they were pretty clear. I could add to it, as most here could. This is stuff is bad. I pasted this on to a doc I plan to give my students Monday. Sorry for the remaining screwy stuff I can't get rid of that looks like code.
20 economic weapons of mass destruction triggering ticking Global Debt Time Bomb
Paul B. Farrell
Normal 0
1. Federal Budget Deficit Bomb.
2. US Foreign Trade Bomb.
3. Weakening U.S. Dollar as Foreign Reserve Currency Bomb.
4. Cheap Money Bomb: Credit Ratings Down, Rates Up.
5. Global Real Estate Bomb.
6. Peak Oil and the Population Bomb.
7. Social Security Bomb.
8. Medicare: A Nuclear Bomb.
9. Health-care Insurance Bomb.
10. State and Local Government Budget Bombs.
11. Underfunded Corporate Pensions Bomb.
12. Consumer Debt Bomb.
13. Personal Savings Bomb.
14. War and Military Defense Deficits.
15. Homeland Insecurity Bomb. Security at airports, seaports, borders, vulnerable chemical plants all increase budgets.
16. Fed/Treasury Bailout Bombs.
17. Insatiable Washington Lobbyists Bombs. Paulson, Goldman, Geithner, Morgan and Wall Street banks, through their lobbyists and former employees working inside now have absolute power over government spending. Democracy and voters are now irrelevant in America's new corporate-socialism.
18. Shadow Banking: The Derivatives Bomb.
19. Dysfunctional Two-Party Political Bomb. Polarized partisanship increasing: Every day both parties show zero interest in cooperating for the public good. Instead they fight viciously, resisting everything and anything proposed by opponents. Only goal: Score political points, make the other side look bad.
20. The Coming Populous Rebellion Bombs. Nobody trusts anyone in authority. For good reason. So immediate gratification, short-term betting and a lack of long-term perspective wins for individual investors, consumers and taxpayers as well as Washington, Wall Street and Corporate America CEOs. Today: "Doing what's right for the common good and country" is just empty political rhetoric.
on Sat, 02/06/2010 - 15:01
#220620
Thats it. I am commiting suicide, after the superbowl
of course. See everyone in the next world!
i hear the next world has perfect health,balanced budgets
and plenty of energy...
on Sat, 02/06/2010 - 20:29
#220857
wait, save the planet, kill yourself.
oh i kid the president.
on Sat, 02/06/2010 - 14:59
#220616
exactly
on Sat, 02/06/2010 - 15:01
#220619
While I think Leo does good work on the pension issues, I don't understand why the solution to every underfunded pension isn't to "buy solars on the dips"?
Less facetiously, I think the continued rallying cry "buy solars on the dips" has rightly made many skeptical of your actual purchasing of said solars. How are you buying the dips if you aren't selling the tops? Yet, you make no mention of sells. Also, I see no rules for when to buy on the dips. At the end of a down day? A down week? A down hour? If I bought CSIQ a month ago, I'd be down almost 30% already. Once a stock breaks down, technically, it really does become a matter of "Fools rush in". The much better play, from a chartist perspective, was to short that breakdown, especially once the late thrust from 29 to 32 failed to make a new high and reversed. For me, that would have led to a cover around 27, another short around 26 and cover around 23, etc. If you're going to play volatile stocks, why on Earth would you only play them from 1 side?
I'm glad no one else takes your calls literally, but I also hope that you don't take them literally, either, otherwise that "mint" you lost on Nortel will be repeated in the near future.
on Sat, 02/06/2010 - 15:14
#220629
All you have to do is think Calif, it is a mess along with most of the other states. ALL government funds are broke, Social Sec. broke and baby boomers retires. Look at the wars, 735 billion out the door for death and destruction.
Who is making money, Goldman do NOTHING for the economy. This economy is based on smoke and mirrors, anybody that uses the government numbers for any economic decision today is headed for trouble. Double dip recession and a currency collapse within 5 years.
on Sat, 02/06/2010 - 15:16
#220631
Can people become addicted to Prozac? Leo...look into this, I am concerned.
on Sat, 02/06/2010 - 16:25
#220699
I met a lady just yesterday who said she was addicted to exercise! so yes you can be addicted to anything.
on Sat, 02/06/2010 - 15:16
#220632
All you have to do is think Calif, it is a mess along with most of the other states. ALL government funds are broke, Social Sec. broke and baby boomers retires. Look at the wars, 735 billion out the door for death and destruction.
Who is making money, Goldman do NOTHING for the economy. This economy is based on smoke and mirrors, anybody that uses the government numbers for any economic decision today is headed for trouble. Double dip recession and a currency collapse within 5 years.
on Sat, 02/06/2010 - 15:30
#220638
Edited for multiples
on Sat, 02/06/2010 - 15:29
#220639
Every word Leo the K writes is BS, including 'And' and 'The'.
on Sat, 02/06/2010 - 15:40
#220646
I am accumulating as many solars shares as I possibly can. Would love if they can bring them down more so I can scoop up as much as possible. You do not need to do what I do; there are plenty of safe high dividend stocks for you to choose from. Trading solars is a bitch and that's not my angle. I have seen them go up and down 50% or 60% in a matter of weeks. Not interested in trading them, I just accumulate them every time they get whacked hard.
on Sat, 02/06/2010 - 16:05
#220672
The only reason why you invest in solars is obvious:
They mostly get governments contracts, so you think you are on the safe side. But that's exactly the problem as others pointed out: this recovery is not real ! The more I read your posts, the more I get convinced you still have a lot to learn.Perhaps in Canada, you find enough morons to believe your BS, but please not on ZH.
on Sat, 02/06/2010 - 16:15
#220677
so sad, does MS attack the brain too? when a stock goes down, it's not always getting whacked, things go down, when investors realize it's a POS. the chinese, are selling panels, for less than they cost to manufacture, look how well that worked out for GM
on Sat, 02/06/2010 - 18:42
#220796
MS is a central nervous disease which is a common neurological disorder afflicting young adults. Next time, do some basic research before talking out of your ass.
on Sun, 02/07/2010 - 01:21
#220958
delacroix,
I think you know I like you and you can handle it when I say this post to Leo was kinda mean. With that said, MS sufferers deal with brain lesions. The point of their medications is to lessen, or even reverse the spread of the lesions. Between meds and the disease it self, it can make the MS survivor irritable and have an unstable mood. Some days the pain is searing agonizing, or they can tingle, or go numb. They can be in the shower and experience the sensation of the drops of water as burns, too intense to bear. Or a sweater too much to have against their body. On others, they cannot move their bodies the way they want to move them. The meds are always changing, insurance is a bastard to deal with because of the constantly changing meds and scans.
This disease is really hard. Each case is a little different. I have someone close to me with the disease. She has to keep her chin up pretty fake some days, just to get through. She does not want to be seen as disabled and works hard to pass. But the effects are degenerative for most. Later, their bodies can start to twist as the muscles do what they do, and their is no "passing" any more.
It kills folks. It can be managed, with resources. I rode a benefit bike ride called the MS 150 because of the woman I know with the disease. If you cycle, it is a good cause, and a fun thing to do. You get contributions, ride the ride, and they spoil you at a hotel destination with free food and lodging.
on Sat, 02/06/2010 - 16:38
#220709
My point is that "whacked hard" is not a strategy for trading OR accumulation. If I accumulate on the first day they get "whacked hard", I may find the shares I accumulated that day to be 30% cheaper on the 30th day of their getting "whacked hard".
Quite frankly, the way you describe it, your accumulation "strategy" sounds like a very amateurish form of dollar-cost averaging. I mean, just to stick to CSIQ, it was "whacked hard" on January 11th-12th, but fell another 30% from there to yesterday. It was "whacked hard" in the 14th and 15th, too, yet fell another 20%+ from there. That's two instances of the stock meeting your subjective criteria for accumulation where you almost certainly overpaid. At the very least, you could have accumulated almost 1.5X the number of shares after the third "whacking" as you did after the first "whacking" with the same amount of capital.
I don't know, man, it just sounds like you're making some very big mistakes. The kind that inexperienced traders make and the fact that you're making them in a very public forum brings out two kinds of people: those who will cheer you on to watch you blow up your account and those who've made those mistakes and are trying to warn you. Put me in the latter camp.
As for your false dichotomy between accumulating solars on dips and buying safe, high-dividend stocks, I will just say that I trade the index ETFs for time periods varying from a couple of hours at a time to however long the market lets me stay in a trade as I ride a trend, so I'm not some grandma looking for dividends to supplement her Social Security checks. I'm in there trading every day for myself and what you describe seems insane.
on Sat, 02/06/2010 - 19:10
#220814
I am in the "made that mistake camp" and trying
to prevent him from ruination.
25 years ago, I lost my ass averaging down, an expensive
lesson well learned, permanetly learned...
I also think that solar is the greatest wealth destroying
technology ever created.That, coupled with high gov't
subsidies, doesn't bode well for solars
After Obama's state of the union address, where he
devoted $54 B to nuclear, I fully expect nuclear to
go into full production here.No choice. Dealing with reality finally.
SOlar providing our energy needs is pure fantasy..
Best of luck to you Leo, I hope you don't loose your
ass..
on Sat, 02/06/2010 - 21:18
#220879
Hey Leo
Don't forget to buy Nortel on the dips. Oh yeah, ya did. Sigh...
Solar is another empty tech Fuch show...
on Sat, 02/06/2010 - 15:46
#220652
Leo,
Honestly this article is idiotic. This was a very depressing report. The only reason the employment ticked down was becasue the denominator was changed!!! All gimicks. We need 150k+ a month just to keep up with demographics. You are just being unrealistic and unable to admit that your prediction was ludicrous, way off abse and just wrong. The REAL unemployment rate is now above 17%. That is a fact - wishfult hinking aside. And in another 3-4 months mass layoffs will continue. Just watch.
on Sat, 02/06/2010 - 15:52
#220658
Let assume Leo is right, recovery in labor is here or coming, and further assume there will be no double dip. What i've not seen discussed is just what is 'fair value' of the US capital markets with a 'recovery'. In order to hit dow 14K 2.5 yrs ago, we had to have an unsustainable number of ppl hold an unsustainable number of mortgages, at unsustainably low rates and then use those properties as an ATM in an unsustainably appreciating RE market. Nobody in his right mind can believe we are going back to that. I figures at lease 20% of those who had held mortgages, never will again. Property values simply should not rise with all the inventory, lack of demand, and requiring real down payments. THe ability to finance, via appreciation of one's house, a lifestyle that one does not merit is likely dead for quite a while. Running some numbers, i can't see how the dow is not fully valued at 11-12K, which oddly enough is where we spent a good deal of time in 07-08 before the bottom fell out with the collapse. Thus, if you buy this analysis (and/or market), you're looking at a market that has at best, 10-20% of upside to be FULLY valued ASSUMING FULL RECOVERY.
When the investing public hears "recovery", i wonder if they also hear "dow 14K?" which simply can't be in the near future. If you've missed the run, you've missed it. its over, its done, we are at fair value. THe risk is all to the downside even if there is a recovery because unless that recovery is perfect, u get the idea----
on Sat, 02/06/2010 - 16:12
#220682
Leo,
2 questions
1. You focus a lot on the ISM Manufacturing employment index, but what is you take on the ISM Non-manufacturing employment index which is still contracting, and what is the relative importance of the 2 indexes?
2. What do you make of TrimTabs estimate of a loss of 100K jobs in January? If you look back over the last several years, the BLS's initial estimates are all over the place, but after final revisions, the BLS's numbers generally track TrimTabs estimates quite closely.
on Sat, 02/06/2010 - 19:20
#220788
About one of the only good questions here. I attach a lot more weight to the ISM manufacturing index, which is clearly bullish for the US economy. The service index is a lot less reliable. As far as Trim Tabs, if I remember correctly, the predictive power was ok but nothing great. Look at the household survey to gauge future employment trends. Cheers.
on Sat, 02/06/2010 - 21:08
#220874
Leo, if you would, please elaborate on why you attach a lot more weight to the ISM manufacturing index, and also why you view the non-manu. index as a lot less reliable. Much appreciated.
on Sat, 02/06/2010 - 16:33
#220703
My dog is called Leo. I asked him about the future. He said he didn`t know which is as sensible an answer as you will get from all these self proclaimed EXPERTS.
on Sat, 02/06/2010 - 16:31
#220704
My dog is called Leo. I asked him about the future. He said he didn`t know which is as sensible an answer as you will get from all these self proclaimed EXPERTS.
on Sat, 02/06/2010 - 16:32
#220706
My dog is called Leo. I asked him about the future. He said he didn`t know which is as sensible an answer as you will get from all these self proclaimed EXPERTS.
on Sat, 02/06/2010 - 16:49
#220716
Leo is this your first bear market? I think it must be you seem to have a bad case of Tolstoy Syndrome you only seem to want to look at the figures that confirm you postion in the market. There is the small matter of the trillion plus budget deficit.
I have seen four bear markets and this one is no different from all the others the rally in the last 10 months is no great surprise a fifty percent retracment is no big deal especially when it is so fast on the back of so much money printing.
on Sat, 02/06/2010 - 16:53
#220720
Every small business owner I know, graphic designers, printers, mech. engineers, steel fabrication say growth is non-existant, stabilized at a very low level (-20 to -50%) and now is flat. Two people I spoke to 3 months ago told me business was booming, overtime, travel, etc. One worked for a HR outsourcing company, the other IT services for banks. The two green shooters from 3 months ago now tell me everything dried up and they're worried about getting laid off.
on Sat, 02/06/2010 - 16:56
#220721
In the US, it takes the creation of 150K new jobs created per month in order to absorbe new graduates into the workforce. There has been no net new job creation since 1999. The BLS and the IRS should welcome an audit by Tata Consulting Services in India to help understand their methodology. In the US, the upcoming Census allows us to hand count the unemployed, although I bet that question isn't on the Census form: "your salary in 1999?" Your salary in 2009?" should be the start of figuring the unemployment rate in the
A voter initiative or a consitutional amendment in the US is in order to take out the guesswork in the unemployment rate. Even SGS would welcome the confirmation.
on Sat, 02/06/2010 - 17:25
#220745
@leo
1. the jobs numbers are a terrible indicator, all the sp companies just got rid of all the jobs that werent needed, their eps is off the hook, they just cleaned things up, there isnt any revenue growth, 95% of all the revenue growth is in the banking sector(that we all know). and even if the revenue picks up they will be hesitant to hire again, fearing not to fall for the same trick twice.
2. if i had a 1,000,000 at the sp tops and on march 09 i was down to 300,000 even a 200% rally woudnt bring me back to were i was, and ur talking about a 66% rally
on Sat, 02/06/2010 - 18:20
#220774
Leo, seems that support of the idea of Global warming is beginning to fall apart in you home and native land, at least according to Canada's national newspaper (Implications on Solar???):
The great global warming collapse
http://www.theglobeandmail.com/news/opinions/the-great-global-warming-co...
on Sat, 02/06/2010 - 21:53
#220856
The Olympics will be amusing. I live 100 miles from them and this year is amazingly warm. It's 50 F now and that's about normal for this year. I exepect the the massive hay bale base, massive snow trucking and artifcial snow from huge snow making resources to fail.
They are runnig B-Trains full of snow from Manning Park about 80 miles from Cypress Bowl
I will be ROTFLMAO
on Sat, 02/06/2010 - 18:39
#220792
It's amazing how everyone here is so convinced that stocks are heading lower, and the economy is going to relapse into a depression. And solars will melt away along with all my life savings. LOL, good to know how traders think I am making rookie mistakes. (Love traders but do not take their long-term advice seriously).
on Sat, 02/06/2010 - 18:51
#220803
FWIW,
i live in Austin Texas - and work for a top web design company. we're busy as heck. but the client base has changed completely. the real estate, financial, consumer goods, and retail clients are gone (or they're dramatically cutting back). but public sector work is coming in strong. and there's a lot more work from local hospital networks, private security firms, bill collection agencies, and others.
so the economy isn't dying, its just changing. I agree w/ LEO.
on Sat, 02/06/2010 - 21:40
#220894
Hey Anon 220803
Surely you are joking !!! Your business is booming because of "public sector work, hospitals, security firms, and collection agencies ????
That's absolute confirmation the economy is in collapse. Please tell me you are joking.
And while you're at it, tell Bill Burk to pay the $46,000 he owes me.
on Sun, 02/07/2010 - 19:20
#221584
+100
on Sat, 02/06/2010 - 18:58
#220805
Leo - did you pay for the right to use that pic? You are going to be costing jobs at the AP by curbing their income
on Sat, 02/06/2010 - 19:24
#220821
Are there any optimists on ZH or is the world always dark and gloomy for you folks? How many of you expert traders made money in 2009? Where are you investing now and more importantly, WHY???
on Sat, 02/06/2010 - 19:50
#220831
mostly bad trades including the one I am stuck in now (as in long an equity index since week before last). Cannot fathom how this can possibly end well.
posted on another thread this is worth watching if you can get by the fact you are watching infowars
Damon Vickers on Alex Jones
pt 1 of 4
http://www.youtube.com/user/kalifornya1#p/u/4/AIT7AnE2W7Q
2of4
http://www.youtube.com/user/kalifornya1#p/u/3/85P3yh9HIV4
3of4
http://www.youtube.com/user/kalifornya1#p/u/2/ISSx0hK_rjM
4 of 4
http://www.youtube.com/user/kalifornya1#p/u/1/lo9b07abMZU
on Sat, 02/06/2010 - 21:18
#220880
The world is dark and gloomy for many people. Depression is rampant. Lots of dysfunction and stress out there. Having the luxury to risk money on solar stocks, gold or anything else is a privileged situation. Always darkest before the storm you know. Personally I'm looking forward to the meltdown of this business so I will be more optimistic about my children's future. The current path we are on is bleak. Nothing but political spin, corruption, and short term selfish strategies. I'd rather invest my energy in building a better future for them than to work my ass off to feed into this Ponzi. I would suggest that many of us are optimistic that this dark chapter ends.
on Sun, 02/07/2010 - 19:23
#221587
agree completely
on Sat, 02/06/2010 - 21:35
#220883
Leo,
I'm not an optimist, but I'm also definitely not a pessimist, either. If you were to show me an 8oz glass with 4oz of water in it and ask me for an opinion, I'd tell you it is neither half empty or half full- simply an 8oz glass with 4oz of water.
Wait, you use the metric system, don't you...
Well, I've been dollar long for the past two months, out of equities, and counting my winnings on my VIX options. As for the long-term (10 to 20 years), I think there is a lot to be said about solars and other alternative energy companies. But ultimately, someone needs to figure out how to make these damn things efficient in order for them to become part of everyday consumption.
I would be skeptical about getting involved in alternative energy plays for the next 5-or-so years unless I had a good source inside DARPA, but that's just my take.
Keep you chin down, your fists up, and keep moving forwards, Leo.
on Sat, 02/06/2010 - 21:47
#220897
Solar amounts to nothing without a better battery; unless, of course, Leo, you have developed the technology to have sunlight for 24 hours.
I, sir, am an optimist. But optimism ought to be well founded. When I hear a beating drum, I run for the hills and preserve my scarce capital.
on Sat, 02/06/2010 - 21:43
#220896
Mostly dark and gloomy, wife hates me...but stays with
me because I make money!
to answer your question
1) been long in Au for years . Mostly averaging up
(yes, taking a recent beating, but its not the first
beating Au has given me)
2) CREE LED lighting is the future and Cree has
excellent R&D coupled with good marketing
They recently broke 200 Lumens/watt.Started using
CREe LED lighting in the house about ayear and a
half ago and that sold me on CREE
3) Long oil,farming. Started investing in pasture based
farms (low cost basis farming) about 3 years ago.
Pasture based farm products in high demand and bring
top dollar. A dozen pastured eggs is about 10 buckss..
Acorn finished, pastured hogs can command up to
64 bucks a pound!
on Sun, 02/07/2010 - 09:01
#221041
Agree with your calls on oil and pasture based farms. GL.
on Sat, 02/06/2010 - 20:18
#220847
Demand is all there is. Everything else is it's bitch. There is and will be very little demand as the sheep are shorn. The wool will grow back ... in a while if you let them do it. Then you can go back to ... whatever it is that you do.
Two scotches and I'm an economist. ;)
on Sat, 02/06/2010 - 20:21
#220849
The March 2009 bear market rally is over.
DOW/SP500 downtrend is confirmed on the daily chart.
The 'recovery' is dead.
http://www.zerohedge.com/forum/market-outlook-0
on Sat, 02/06/2010 - 20:38
#220863
R U KIDDING ????????????
R U KIDDING ????????????
on Sat, 02/06/2010 - 21:16
#220877
Leo,
Too much kool-aid, or too much prescription drugs....in the real world there are several things, and several reasons why this will turn to a depression.....
1. Consumers are tapped out...Debt ridden, no more credit. ( current fact)
2. Banks will die this year in the coming CRS collapse. ( look at all the empty retail space)
3. Politicians are still spending like a drunk sailor, it will induce the tax environment of Europe x2.
4. DELEVERAGING.....look at all the carry trade margin calls going on....greedy traders with bernanke bucks are screwed.
5. China is the last lender, and they are about to implode with a real estate bubble.. then bernanke will print more money, devalue our currency further.
6. The market will never see 10,723 again for at least 5-10 yrs and we are headed to 450 on the S&P where the P/E will be about 5 times...due to STAGNANT GROWTH prospects for many years dues to the TRILLIONS of debt we are mired in now and more to come.
7. Sell that shit you are drinking, you'll make more money than being long.
8. This is/was NOT a bull market, just an up-leg before the c wave down.......of a continuing BEAR market.
9. The few things we make in the USA, are mainly MORE DEBT. Wow, what a commodity!
10 The only jobs, will be blow jobs, hand jobs and screw jobs.
I am no Harvard grad, or a floor trader, or hedge fund guru... Just a main street guy looking at the big picture, and buying lots of bullets. AND, I AM SHORT, for all the above reasons... WITH MY OWN MONEY, NO ONE ELSES.
on Sat, 02/06/2010 - 22:18
#220905
Good on ya Leo.
I don't think there is anyone on earth who doesn't see the risks out there. I can see plenty of ways the world might screw up but that does't mean its guaranteed or that specific situations won't do well even if/when those things happen.
I mainly trade exploration and mining companies. Indiviual ones - not ETFs - and I have had everyone and their mother lecture me about how ugly the markets were and that I was crazy to be in that stuff going into a "depression".
They are entitled to their opinions but I know I made a hell of a lot more than any of them in the past year. You have to trade smart and take money off the table all the time but anyone who thinks people riding a one year 70% rally are stupid clearly spends alot more fantasy time trading than real time.
Not a big solar fan either but keep up the good work Leo.
on Sun, 02/07/2010 - 00:16
#220943
Leo...obviously your MS, Nortel, the breathtaking decline in solars, being dead wrong in 05 and 06 and being fired have not humbled you at all. Your smug know it all act is a character flaw that I am surprised you have never come to grips with especially with your medical history.
What if there are people who actually follow your advice!!!! They are getting crushed! I have never,ever read one thing about investing or trading like you.....yeah yeah...I used to run money for all the big hedgies...buy solars on the dips...yeah yeah...liquidity...dips...buy buy. Your intellectual dishonesty is frightning.
The only nice reason I can think of why you act this way, is that you have been brainwashed with the whole optimist self help cult...placebos don't always work and neither does optimism in the face of cold hard macro economics and charts going from upper left to lower right...true optimism helps people cope with reality... (hint...its not going to make solar stocks rise no matter how many people in here you get to buy them.) You may not care because obviously it does not effect you, when you lose other peoples money...but the people in here, don;t want to lose 30 percent of there money in a few weeks or 50% in a few months. Most of us are not on an unlimited time line investing for pension funds that will eventually go bust...and most likely after all the jack ass pension managers who invested them in solars are dead!
If you want to be respected at all, respect the trade and respect the people you are giving advice too...you come off as a juvenile. Even if you are right...you need to bring something else to the table to be taken seriously. If you have not learned from the above mistakes...let me be the first one to tell you...you are not as bright as you think you are!!! And you have a lot to learn....as do I.
on Sun, 02/07/2010 - 08:58
#220979
I was not wrong being bearish in 2006 (even if I was early) and I couldn't care less if you or anyone else here respects me (you all obviously do or else why bother replying with such intensity). I am going to live and die with my trades.You can do whatever you want with your money (if you are older, buy high quality dividend stocks). This is my money and I can deal with the wild gyrations in solars, accumulating more when they get whacked, knowing they will go right back up. Have a nice weekend and god luck buying gold or whatever else you are doing with your money. As for brains, never really met anyone in finance that was exceptionally bright. The brightest person I ever met taught me political philosophy at McGill University, so excuse me if I do not take that comment of yours too seriously.
Disclaimer: I do not run pension money, only my money. You do not have to do what I do with your money. I am a risk taker and will live with gut wrenching volatility. I can't explain my strategy to risk averse people, but I do accumulate solars on the big dips. This is one sector I really like for the long-run. Others I really like are tech, medical devices, and agriculture. Will start buying more of these companies in 2010.
on Sun, 02/07/2010 - 12:47
#221196
Leo, I want to like you, I really do but then you post what proves to me you just don't get it:
"but one thing I can tell you is that corporate America also does not want deflation, so they better start hiring Americans because those profits from elsewhere will disappears fast without a sustained US recovery."
I could posit a 1000 words about how that has to be the most foolish statement I have ever read. Suffice to say you believe a company will sacrifice profits to halt deflation which is deflationary in itself.
You then follow up with another comment that is also baseless:
"Thanks and while I agree with you, the commercial RE "bomb" is really not going to hit banks as hard as you think. It's not like they don't see it coming and aren't provisioning for it."
Lets use WFC as just one example. Granted they have more exposer to res then cre loans. The fact is they reduced loan loss reserves in Q4 by 30% at the same time delinquencies increased by over 16%. WFC is not "provisioning" for the coming "bomb" and I doubt any others of the extending and pretending are either.
Then of course we have your NFP prediction which has so far proved you wrong, very wrong. Selectively choosing one article and omitting the massive 1.4 revision which was 66% worse then even the most pessimistic predictions is nothing short of malpractice.
I wanted to believe you had some inside track regarding employment. Your wild eyed optimism is laudable, who doesn't like an optimist but just like your statements noted above it's just not base in any reality.
Good luck, regardless.
TT
on Wed, 02/10/2010 - 12:39
#225106
Leo, cut this algo-trading slamming bullsh*t. You are beating a dead horse. Human short-term traders are done. Go play with your solar stocks and leave that speculation in the peanut gallery.
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