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Because Fundamentals Matter?

Tyler Durden's picture





 

Presented with little comment aside to note that US equities are once again resurgent near all-time highs fully supported by err... umm... fundamentals.

 

Bottom-Up?

 

Top-Down?

 

Charts: Bloomberg and @Not_Jim_Cramer

 


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Sun, 07/07/2013 - 17:18 | Link to Comment B2u
B2u's picture

Not to worry.  Stocks go up and when they don't, BTFD.

Sun, 07/07/2013 - 17:42 | Link to Comment flacon
flacon's picture

Does anyone know what the status is of those new $100.00 bills that they keep delaying? 

"The Federal Reserve Board announced that the redesigned $100 note will begin circulating on October 8, 2013"

Just in time for a deflationary collapse when CASH IS KING? 

Sun, 07/07/2013 - 18:06 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Deflation is a myth. No society/currency has ever collapsed/died because their purchasing power was too strong. However when the banks shutter and the guillotines roll, physical cash will be handy.

Sun, 07/07/2013 - 18:23 | Link to Comment DaddyO
DaddyO's picture

Fundamentals don't matter and here's why...

Half the readers of ZH still trade everyday...

Half the working class still have all their retirement funds tied up in the system...

Everyone plays along with a corrupt and broken system and nobody will call BullSh*t...

The only way to effect change is to quit playing along...

DaddyO

Sun, 07/07/2013 - 19:43 | Link to Comment joego1
joego1's picture

The working class? Retirement funds? Whats that?

Sun, 07/07/2013 - 19:50 | Link to Comment e_goldstein
e_goldstein's picture

Ancient beasts of foregone lore.

Sun, 07/07/2013 - 20:12 | Link to Comment aint no fortuna...
aint no fortunate son's picture

speaking of beasts, that SPX/Macro graph is another classic "crocodile on the Mara River" chart about to devour something/body for breakfast - there have been dozens showing up over here in the past 6 months... 10/19/87 anybody?

Mon, 07/08/2013 - 09:16 | Link to Comment Shizzmoney
Shizzmoney's picture

This is why, I think, my generation (18-35), as distracted as some of us are......the majority get a gist of why the system is so corrupt, because most of us DON'T own stocks, DON'T own real estate, and DON'T have a solid job......we already see the through the wickets because we are already LIVING a part of the road that will be paved when this things starts to blow (again).

In a sense, we are properly hedged by being broke.....no exposure to markets!

Sun, 07/07/2013 - 18:55 | Link to Comment ekm
ekm's picture

I can't have enough of this statement.

Each time you say, it's striking

Sun, 07/07/2013 - 17:19 | Link to Comment debtor of last ...
debtor of last resort's picture

The Keynesian fundamentals still rock!

Sun, 07/07/2013 - 17:25 | Link to Comment tecno242
tecno242's picture

QE or not is all that matters.  Pullback QE and 10 year yields shoot to 4%+.. keep QE as is and yields creep to 3%+ on the 10 year, .. at this point they will need to double QE Japan style to see 3.5% 30 year mortgages ever again.

Sun, 07/07/2013 - 17:28 | Link to Comment Yen Cross
Yen Cross's picture

    Great chart. Off topic; Just wait until those ARM's on existing loans, & 30 day locks on new builds start to kick in ;-)

  I would forfeit my deposit in a " Heart Beat"!   The people(yungsters) buying R/E are paying interest for 15-17 years!

  ( Their mortage just went from 2k to 4k per month)  30 year rates are doubling!

  CHAIR SATAN> will never quit printing!

Sun, 07/07/2013 - 17:36 | Link to Comment tecno242
tecno242's picture

If hes ever going to stop printing, he needs to do it now.  He must start pulling back and pull the rug completely over the next year or so.

If he does not, you are correct, they can never stop printing.   While stopping now will cause a considerable amount of pain, it will be nothing compared to what could occur if they never stop.

Sun, 07/07/2013 - 17:41 | Link to Comment valley chick
valley chick's picture

nah..never stop printing...jawboning about tapering..yes....I am waiting for the acceleration in the printing, until then keep stacking and canning...

Mon, 07/08/2013 - 08:31 | Link to Comment OldE_Ant
OldE_Ant's picture

Are you kidding.   Even the mere mention of 'taper' and markets dropped 5%, and interest rates bumped 50-100 basis points over a couple weeks.   Yap it up and markets recover the 5%, interest rates keep the 50-100bps, and PMs/commodities take a hit all the while oil keeps climbing.

The QE exit window is effectively closed.  IF the FED actually tapers now the markets crash at least 20-30%, interest rates go up another 100bps.  PMs drop another 10-20% (or more).  Virtually everyone holding anything but cash gets hosed faster than fast.

Funny the USD is up during this time period yet oil continues to climb.  Wait until the oil prices start rippling around the world.   BTW:  Oil prices creep into virtually every commodity.  As a note while gas prices where I live dropped from 4.3/gal down to 3.3/gal Diesel is still pegged to 4.2 like a fricken rock.

When the powers that be are fully positioned to rape everyone they can they will crash this bitch so hard everyone will be screaming for more QE, wihich is precisely when they buy up the next 5-10% of all assets.

Trickle down, no it roars uphill all the time never stopping.

'considerable amount of pain'.  What I find funny is the longer they let this go on the more the demographics in the western world turn against them.

I agree with another poster in that the FED should not have ramped any of the markets beyond the treasury.   The whole 'wealth effect' premise is flawed especially when played against the amount of USD devaluing that occured over the past 5-6 years.  With values ramped so high all money looking for return is now in crazy land and poised for the mother of all haircuts.

In fact the new hair cuts already started in PMs (small markets), and bonds (big markets).  Another 50-100bps and the cracks will turn into fissures.

Mon, 07/08/2013 - 09:25 | Link to Comment Shizzmoney
Shizzmoney's picture

They will never stop printing.

They can't.  The Market will collapse, either by design or by malice.

Sun, 07/07/2013 - 18:10 | Link to Comment olto
olto's picture

Yen Cross,

Whatever happened to Slewie the Pi-Rat?

Sun, 07/07/2013 - 18:58 | Link to Comment Yen Cross
Yen Cross's picture

   He bought a house in "Central Africa" and opened an 'anger management skool' for Gorillas.

Sun, 07/07/2013 - 20:50 | Link to Comment FreedomGuy
FreedomGuy's picture

What moron buys an ARM at anything below 5% much less the sub 4% rates we just witnessed?

Having said that, if I were a bank I would have sold ARM's rather than fixed rates all day and all night with a limited ability to convert to fixed. Unless you are smoking newly legalized weed in Colorado you know that interst rates are artificially and historically low.

Mon, 07/08/2013 - 09:30 | Link to Comment spine001
spine001's picture

Fixed rate loans. For years I wondered about what you say. Until I learned that they package the loans together and sell them to somebody else usually some pension fund or the government fannie or freddie mae. So the banks make their buck and cant care less how.

Sun, 07/07/2013 - 17:28 | Link to Comment EclecticParrot
EclecticParrot's picture

Average CNBC guest:  "Hey, what's the symbol for "US Macro" ?  That company looks clearly undervalued.""

Sun, 07/07/2013 - 17:45 | Link to Comment Abi Normal
Abi Normal's picture

That's interesting stuff, but here is the real guage of global (un)growth...

http://www.bloomberg.com/quote/BDIY:IND/chart

Sad.

Sun, 07/07/2013 - 18:02 | Link to Comment caimen garou
caimen garou's picture

bdiy 5 year chart tells the real story, i wonder if benny ever gets a chance to look at some charts to see his masterpiece at work!

Sun, 07/07/2013 - 17:49 | Link to Comment Yen Cross
Yen Cross's picture

   "A budget, is a budget, is a budget."   How many times have we heard that?   

Sun, 07/07/2013 - 17:51 | Link to Comment SAT 800
SAT 800's picture

I lost $650 on a tight stop on my last short of the S&P500 @1607; just shorted it again at 1627. The chart looks like shit to me.

Sun, 07/07/2013 - 17:53 | Link to Comment caimen garou
caimen garou's picture

what is this word "fundamentals"

Mon, 07/08/2013 - 02:17 | Link to Comment dunce
dunce's picture

It is the investing equivalent of the missionary position.

Sun, 07/07/2013 - 18:00 | Link to Comment Racer
Racer's picture

They lower the target for earnings so they handily 'beat' them, even if they are huge losses, so they will give that as the reason stawks are cheap and buy buy buy.

They are snake oil salesmen

Sun, 07/07/2013 - 18:09 | Link to Comment LawsofPhysics
LawsofPhysics's picture

There is no "market", don't think beyond that, QE and "mark to fantasy" accounting are still going strong.

Sun, 07/07/2013 - 18:17 | Link to Comment highwaytoserfdom
highwaytoserfdom's picture

Marked to printed reserves not lending.  What is the mater you have a problem with laws putting "pumpmonkey" fiance  guys ahead or cash-flow or balance sheets? Whoops excuse me while my forced 401 company squeezes some churn  fee...   Dam can't spell or multitask.

Sun, 07/07/2013 - 18:12 | Link to Comment asteroids
asteroids's picture

The fundamentals stopped working March 2009. That's when the FED started really fucking with the market. Now four years later, they are printing an amazing >$80B/mo. They dare not stop, they fear an implosion. They are cowards. They should have stopped after they stabalized the markets. The markets need to find their own way, not the FEDS. I see generations in poverty because of this.

Sun, 07/07/2013 - 19:45 | Link to Comment LooseLee
LooseLee's picture

Yup. And I see bankers and politicians hanging from lampposts...

Sun, 07/07/2013 - 19:45 | Link to Comment LooseLee
LooseLee's picture

Yup. And I see bankers and politicians hanging from lampposts...

Sun, 07/07/2013 - 18:15 | Link to Comment bnbdnb
bnbdnb's picture

Anderson Silva learned fundamentals matter.

...and just like the market, they thought he would never lose.

Sun, 07/07/2013 - 18:20 | Link to Comment ebworthen
ebworthen's picture

How else can the banksters and elites bribe politicians and make their billions without disconnecting their equity casino from the real economy while managing perceptions?

Sun, 07/07/2013 - 18:23 | Link to Comment sbenard
sbenard's picture

Fundamentals are irrelevant! Jobs are irrelevant! Reality is irrelevant!

Who needs an economy? We have PRINTED prospeirty now!

Sun, 07/07/2013 - 18:36 | Link to Comment sbenard
sbenard's picture

Uh, until reality eventually trumps fantasy, that is!

Sun, 07/07/2013 - 18:31 | Link to Comment Cult of Criminality
Cult of Criminality's picture

Hmmm

Gold still smashed im in .....Seriously.

Love those Kangaroos

Contrarian fundamentalist ? Glutton for punishment ? Cannot keep my finger off the Gold enter button ?...not sure, but it feels good.

Cheers to all ZHers

Had a great memorial service for The United States of America with some old rock and roll Vets 07/04/2013

Hope all is well with everyone here.

Sun, 07/07/2013 - 18:45 | Link to Comment DEVILDOG
DEVILDOG's picture

Stocks are cheap and there is plenty of money on the sidelines. The future is bright. Back up the truck. BOOYAH!

Sun, 07/07/2013 - 19:02 | Link to Comment thismarketisrigged
thismarketisrigged's picture

i know its mad early, but futures are already green, dow plus 24, s&p plus 4, all this despite being green the past week on nothing ( so why would there be any profit taking on hand) and all this while egypt is getting worse and worse and crude oil will be at 110 before we blink.

 

 

Sun, 07/07/2013 - 19:06 | Link to Comment thismarketisrigged
thismarketisrigged's picture

look at this headline from none other than cnbc, specifically the 1st paragraph. wow, amazing the  bullshit they spew.

 

http://www.cnbc.com/id/100868605

Sun, 07/07/2013 - 19:39 | Link to Comment joego1
joego1's picture

Watch the cnbc headline you are feeling relaxed your eyes are getting heavy. When I count to 10 you will not remember getting fleeced for your 401k.

Sun, 07/07/2013 - 19:22 | Link to Comment devo
devo's picture

Why even give stock bulls charts like this?

Just let them believe and find out for themselves.

Sun, 07/07/2013 - 19:51 | Link to Comment Yen Cross
Yen Cross's picture

 That chart looks like the flightpath into SFO. Level out @ FL10 and ride the turbulence in.

Sun, 07/07/2013 - 20:07 | Link to Comment Lmo Mutton
Lmo Mutton's picture

It is ok, we have a Tuesday this week.

Sun, 07/07/2013 - 20:53 | Link to Comment andrewp111
andrewp111's picture

Take a good hard look at the vertical scale on the first graph. It is a very expanded scale. The earnings estimates only dropped about 4%, and yet the way it is drawn makes the drop look big. On a properly scaled graph it would look like the little blip that it is.

Mon, 07/08/2013 - 09:46 | Link to Comment spine001
spine001's picture

The growth factor. The price of a share is determined by its discount rate. Its dividend+ earnings or its cash flow. And most of all by its growth rate positive or negative. The formula is P= Earnings *(1+g)/(R-g) where R comes from CAPM and R= Rf + Beta * (Rm-RF). Where Rm-RF is the average market premium over a 70 year period over the no risk return. And Rf is the current no risk return. As you can see the effect of estimating g is HUGE and when g changes sign in the short term its effects should be devastating to the value of the stock. Unless of course you are in a Ponzi game rather than a true market.

Sun, 07/07/2013 - 22:58 | Link to Comment knowshitsurelock
knowshitsurelock's picture

I think the cleaning lady must have turned my monitor upside down when she was dusting this morning.  That's the only thing that can explain what I am looking at.

Mon, 07/08/2013 - 05:35 | Link to Comment Disenchanted
Disenchanted's picture

AP Headline yesterday:

Why gloomy 2Q earnings outlook might not be so dim

 

lol... 

 

edit: actually that was from Friday the 5th

Mon, 07/08/2013 - 08:37 | Link to Comment orangegeek
orangegeek's picture

And the brainwashed herd feels everything is fine.

 

Another week of gong show.  ONWARD!!!!

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