Simply put… if things were all good, the healthy banks would repay TARP now. But they are not. They are not because they do not know, and if they (the people in the eye of the storm) do not know then uncertainty remains.
Archive for the ‘economy’ Category
A Word on this ‘bull market’
Friday, May 8th, 2009Copper inventory…
Thursday, May 7th, 2009Just an FYI… here is an article indicating copper inventory. (article)
(although i’m a chart guy, i secretly pay attention to fundamentals… so long as my charts don’t find out, i’ll have no problems 
)
Market Thought… Baltic Dry Index
Saturday, March 7th, 2009I was always skeptical that the rise in the BDI was simply a function of coming off of a very low level caused by the freeze in the credit markets. Over the past month it has been consistantly rising. I have seen reports that the rise has been merely a function of China purchasing commodities. When I look at a 8yr chart, I can not agree with that thesis.
The index is at levels previously seen in 2005-2006, combine this an apparent floor on commodities, we have a very real signal of the global economy showing signs of a floor.
To me… the all important question is how this would correlate with the market? IMO, it signals a market bottom, fundamentally. But we know the market is crazy during times of severe emotion. For instance, Crude kept rising despite other commodities crashing, and its crash lagged for a while despite negative economic data being produced.
I make it no secret that individual stocks are crazy cheap… T (with its secure dividend closely approaching it PE ratio), PG (which normally trades with a PE of low 20s in normal times is trading with peers around 10!). And if goods in the world are moving via boat, land transport should follow. IYT (transport index) can be the play, but I like BNI (currently trading at recession level PEs).
(Also… PBR, to take advantage of the oil play, and FXI, to play China’s multi-year credit expansion to spur a far greater consumer presence of their economy.)
Looking to sell puts on GS (the 70 or 75 March puts) and JPM common.
Japan to Contract by 10%
Friday, February 13th, 2009I thought it was a typo, but its not. 10%!!! A play on this can be the decline in the Yen against the dollar. The FXY has already broken its upward trend, and IMO peaked. A short on the FXY or June 2009 112 Put options on the FXY or play the Ultrashort Yen powershares YCS.
Negative Rate?
Wednesday, December 10th, 2008T-bills are trading at a negative rate. I just do not see the logic in this… safety or no safety, it makes not sense. Why give money away? Its like when the CDS market indicating BRKA was a greater risk of default than MS, GS, GE…etc.
IMO, the market is not being effecient… especially when investors are giving money away.
The big boys that need safe places, and putting it in T-Bills are really fucking up here. I would be a seller of them. (Wonder if there is a way to short the T-Bill?… it would be the first time I would make a yield on a short.)
Wanna Buy a Car?
Thursday, December 4th, 2008The supply is soooo large, prices will continue to fall for cars.
Just look at the level of supply out there… video
All one can say is ‘wow’. And the American auto unions think they can negotiate in this environment? They are dreaming.
Long and Deep
Wednesday, October 22nd, 2008No, its not a title to a porn 
, I just keep seeing these words from every (I mean every) article I read.
The “US economy will be in a long and deep recession”… that is all we keep hearing. Mind you the Market was telling us the economy has been sucking since early Jan 2008. Now everyone and their mother keep preaching the horrors. Where the hell were these people 10-11 months ago. To be fair, some were warning about the current mess, myself included via technical indicators, but I just find it funny that now… NOW… everyone will say ‘long and deep’.
No wonder these people SUCK at managing money, and are down big with the market… they can only see what is infront of them. Heaven forbid the people paid to think 5 steps ahead, actually think 5 steps ahead. We already know unemployment will rise, economic data will suck for then next 2 quarters… tell us something we do not know!
There is a light at the end of the tunnel… its called the Alternative Energy and the Efficiency Boom (aka… Clean Tech). We just have to get the credit market moving again to start truly implimenting it.
A lot of real jobs will be created from it. I have seen estimates range from 3-5million. This is good, but the question now becomes, when? When will this build out take place? It is currently happening, but finances (especially at the state level) have to get in order.
The single best play to the next boom is GE. They positioned themselves beautifully for it.
My message to the money men, that are loosing, and now are preaching ‘long and hard’… stop bitching and speaking of things we already know, and look ahead.
Market Thought… ho-hum reaction
Monday, September 29th, 2008Despite the decline, the market is still waiting for approval of the bill. Not a collapse, but a sizeable decline none-the-less. (Most likely because financials can not be shorted.)
The market is acting like a repricing of equities is upon us. MA and AAPL, to only name a few… but the general commodities as well, suggest a global slow down is upon us. At the very least US recession that will cause much slower growth abroad.
I am causious here, but I must say stocks are looking juicy, even when repricing for lower growth.
Unfortunately we have still not hit a market bottom.
Interesting Developments
Monday, September 15th, 2008MER gets taken out, and if I were a BofA shareholder, I would be a bit upset. No doubt there will be an obvious hit to BofA, but ultimately benefitial for the long-term holders… still, the price of the buyout was too pricey. MER would have opened in the low teens, and probably headed for bankrupcy next, yet gets bought out for Billions. BofA did MER shareholders a HUGE favor.
The markets will be seeing some major declines… major declines as the futures indicate. Do not know if capitulation will take place until we are open, but tomorrow may be a good time to get back into JPM (with an initial position). I will be in a conference all day Monday and Tuesday, away from a computer, but will put a limit order at 36 or so.
Do not forget, this financial crisis is taking place within a consumer led recession, and until the American consumer flushes out its negatives (ie… higher income growth, job creation, allowing for some savings… etc), the true market bottom may not take place.
The only real uncertaintly left with respect to major financial institutions is AIG. Once they get flushed out, the landscape looks a lot better.
(PS… I do not like the idea that the Fed will take equity as collateral)
Housing Bailout… rates will rise
Thursday, July 24th, 2008The Government will bail out housing with the Paulson Bill. (Annoys the hell out of me that my tax dollars will be used like this.) Then (IMO) a rise in interest rates.
I am under the strong impression that rates have not risen because of housing. (its okay to call me a genius with that extremely obvious assumption … weak economy be damned.) Negative rates have lasted for far too long, and with stability in housing and the credit markets I think the Fed will get the green light to raise rates.
What will this mean for the markets? I am not sure. After the White House said they will not Veto the Paulson Bill, markets rallied. The bill will solve one of the major economic issues, but the consumer slow down is still with us and most businesses are not growing profits as quickly. And until the VIX sees aroud mid 40s or so, I do not think the bear market is over.
(FYI… Brazil raised rates significantly, and are planing to do so again soon. The economic drivers… BRIC… are acting on inflation, and we will too, once housing is taken care of.)
