Friday, April 30, 2010
These are real, and serious headwinds, GS, Sovereign debt, lack of REAL SUSTAINABILITY behind the advancing economic data, you are fed....like pablum.
Ask the million people running out of 99 WEEKS, right 2 years of benefits and no job to be found (in most cases). Big shit was made of 166,000 jobs last month...folks we have at least 8 MILLION PLUS sitting on their hands....that ain't spiT!
Consumer spending perking up....they say REALLY? on what?
You out of work selling Jaguar cars...or managing the dealership, your 57....no one wants a old man...even if VERY experienced....but you also want MORE MONEY than a young dude....take a seat!
What do you end up doing?
SO MUCH REAL PAIN OUT THERE....I will not cease talking about it, bringing it out in the open......until I see different...I DONT see different.....I right on the firing line.....in with the trees....in with the people.
I cleared the debt decks, so I could survive....that aint living...but its better than being strangeled in debt for one reason or another....no fault or living beyond your means...why do people do it?..choke on debt?
Can you reinvent yourself, can you keep from getting depressed.....what is life worth without a decent job?
Those in the White House, those controlling the world financially (or otherwise), THOSE IN CHARGE OF MONEY THE FEDERAL RESERVE.....those in CONGRESS...THE SEC...the watchdogs, are share in the blame....all those special interest groups wanted mortgages for minorities...even if they couldn't afford a home.
Then some of these assholes, get grilled by congress and act like they had "no idea" comforted by the $10's of millions they pocketed....they not worried..they set for life, the high life.
Not even a little suspicious of an almost 80% move in little more than 12 months,,,, all is well? THAT WELL?
Funny how suddenly our debt looks so good....our dollar a "safe haven"....as our dent soars, one BIG difference...we can print more and more.....float what more than $100B a year of bonds?? WOW How's it feel to be $14 T in debt current another $50T unfunded liabilities...people are expecting to be paid.
Is our society heading for a collapse? People want jobs, people wnat fairness, people want the TRUTH...they aint gonna get it.
GS is in the crosshairs, and one of the top banks in the world.....maybe not the only players that allegedly did something wrong.
GOV will respond with more rules, more people, more divisions.....all that was needed were the ones existing to do their jobs....now we just got bigger more intrusive gov.
We have a gov trying to FORCE US INTO "NATIONAL SECURITY CARDS" do you think there will be a CHIP INSIDE THAT ID CARD TO track your every movement....how you feel about that friends, more safe? more free? THEY WILL DO IT UNLESS YOU STOP THEM
A little wake up call last few weeks, nothing a straight line, and you wont find too much truth or answers from the HAIR BRIGADE ON FINANCIAL MSM....you have to search out truth on your own....I hope I can help.
"I had one head-hunter tell me that I will never again find a full-time job," Coughlan said. "She was very pleasant about it. She said they're looking for someone 30 or 35 that they think will work for another 20 years. They look at you and think you'll work for another 7 or 8 years, and that's it. Depressing is hardly the word."
Coughlan, who has over 25 years of management experience, said he rarely gets called for an interview but when he does, he is immediately written off because of his age.
Berkshire Hathaway's CEO told the Fox Business Network on Thursday that reports from his company's roughly 80 subsidiaries showed a "big upswing starting in March."
Buffett says any improvement before last month had been slow, but March brought a real change, especially in the U.S. and Asia. <<<
Buffet always right? How dare I argue with a Billionaire?
GDP readings this AM, we all know this figure can't be manipulated?
Do you think we're on the right track? One of my customers who rents construction trailers across the country is retrenching still......guess he diagrees with BUffet.
Here's a piece by Paul Kriesel about BANK LOANS DECLINING AND WHAT THAT LIKELY MEANS GOING FORWARD
More later...I'm feeling that disgust start to rise again....
Thursday, April 29, 2010
We have the Ponzinomics Bendover economy, and policies which unlike Robin Hood steal from the avg Joe and give to the already rich bankers and such....or bailed out homeowners or klunkers....natural selection no longer at play.
It may be pointed out that Greece has defaulted many times before, those buying Greek Bonds were well aware of the risk ,now we have to hold our breaths hoping for a bailout? WTF!!??
Many companies go belly up, some come out restructured and stronger. others have no plan and those who took risks investing should bear the brunt, not us....not the rest of us.
The banks made bad bets, the banks made the products that turned around and bit them in the ass.....we pay.
GM touts on new commercial "we repaid our loans with interest 5 years in advance"......with other tarp loans...OMG.....the NEW GM!!! haa
Many of the jobs lost in manufacturing will never come back.
Capitalism has taken a shot in the chops, the taxman is sharpening his pen.....and we have NO leadership in the White House....just a socialist masquerading as a populist.......reshaping our lives like it or not........putting us in HOCK as far as the eye can see....GOV knows best
Instead of doing anything to rebuild our economy, they took a shot at resurrecting the stock market, and they have NO plans to alter this.....as we suffer on Main Street....an accident is waiting to happen...
I'm sure the headlines and the HAIR CAFE' over at MSM hype pot will be telling you of a dramatic drop in claims....this far into "recovery" we should be building boatloads of jobs.
Not one of those airheads, clueless mind controlled will mention that CHinese engine seems to be sputtering. That we can't forever be held up by GOV nor FED.
Holding rates at 0% the FED actions to me spoke louder than mind control words.....what is it about the 80% V shaped romp that stocks have accomplished that to me doesn't compute into holding rates at ZERO for indefinate period of time.
You think this won't comeback to bite us in the ass at some point?
Why doesn't the assholes running the show give me say $500,000 play money and I can guarantee 25 jobs, instead of the maybe $1M per job the stimulus supposedly SAVED? give me the money! DO you see the problems and inequities when the GOV is our saviour? wellit saved the wealthy bankers we know that and the seething disgust runs not far from the surface of the avg American and we will have something to say when elections come around.
They're gaming the market for the open, see if a high is made by the first hour or not.
"SHANGHAI'S stock market dropped to a five-week low yesterday, breaching the 3,000-point mark, on concerns that measures will be tightened in the near future to curb inflation risks."
Futures are green this AM, pattern of reversing trend after FED meeting? (stocks were up a bit WED)
How balanced is an economy that gives you NO CHOICES for safe gains? 0% basically for savings even though most Americans want to pay down debt and do just that?
There are systemic risks in the world's economies and recent market drama was just a subtle reminder. A perfect Polyana World is depicted, to me a peversion of reality.
Home valuations don't support spending, wages are flat don't support it, sentiment doesn't, unemployment doesn't, credit is contracting....bank loans outstanding contracting.....where is the backdrop for the new economic expansion? Jobs at 8:30 @briefing.com (calenders/economic)
Wednesday, April 28, 2010
"SIEGEL: How big a problem would it be if, say, the Greeks defaulted and the E.U. did not come to their aid?
Ms. ISHMAEL: Well, let me put it this way: Greece has 300 billion euro in debt outstanding, as in two foreign creditors, which is a sizable chunk of cash. Greek debt, European debt is held by other governments, it's held by institutional investors, it's held by various banks across the world. And if there were to actually be a significant sovereign default, you know, that has ramifications for two reasons. People trust governments to pay their debts back. You know, one of the things as a country that you do is issue debt and people trust that you're going to pay that back.
And the second thing is if they dont pay that back, not only have they breached the trust of the international community, but they're putting financial institutions in, you know, themselves in danger. "
From what I understand, they are trying to borrow $60B euro, but if they have $300B or more in debt, boy the $60B may be just the beginnng of what is needed, Gremany is balking.
Dominoes anyone? The declines on the NYSE come with big volume, the rallies not so....."we're dumb, but we're not stupid"
My blog is now enterring into its 6th year.
It's too early to tell, but Alice is not in Wonderland, and the man behind the curtain is a fat pasty white man.
Volume surged on the selloff.
If anyone was accidently watching, did you notice Comcast used their
CASH to BUY BACK $300 MILLION worth of their own shares?
Is this attempt to MEET or EXCEED estimates? IS buying ones stock a GOOD USE of CASH?
On YHOO FINANCE it lists CASH at $721 M and DEBT at $29 BILLION !!! Quarterly revenue growth at a scant 2.8%. I expect battle with VZ to heat up.
Tuesday, April 27, 2010
We got the ALL IMPORTANT (not really) FED meeting tomorrow,, shit I can't wait to hear what they'll do! take a doggone guess.
ZERO rates forever get used to it.....economy and world is so sound we don't want to jinx it.
Tomorrow the Greeks will be saved again I'm sure....and anyone else dangling out there, have no fear....except the common man....here's the middle finger for you.....we gave it all to the banks.
How bout that GM commercial for honesty? Got to admire them for paying back the money so quickly with a different pile of borrowed money!
VIX busted out today, but downtrend not yet reversed. WHen an uptrending VIX is established good chance BEAR has returned......Bulls may still be chewing their kuds......but today is reminder nothing is a one way street.....one day at a time folks.
What you weren’t told was that GM was able to repay the money by drawing down on a line of credit that it had from TARP! In other words, GM took funds still available to it through TARP and used those funds to repay the loan it received from the government. Of course, it now owes $4.7 billion on its line of credit with TARP, but, that doesn’t make for good news, so it wasn’t reported. "
IS anyone else getting sick of all these bald head lies? I mean deception...I mean white lies....
WHY DID 10 YR YIELD JUST PLOP to 3.765% WTF???
“SOARS to 52.5” more like swan dive? It really hasn’t budged barely at all…and should be above 100!
Confidence? Sure like in a used condemn with pin holes for an aides laden hooker
In 2003 as "RECOVERY" gained traction the "PRESENT" situation and "TOTAL" sentiment reading was going ABOVE 100......where is it now after a 75% MARKET RALLY????
Due out today total sitting near 55 about HALF of previous experience coming out of recession in 2003.
Since 1998 the US has gone from 30% of WORLD GDP production to 25%, emerging countries have improved from 22% to 31%!
China has moved into 3rd place behind US and JAPAN as most powerful nations, at this pace will overtake the US in 10 years. They have been using our $$$$'S to build their infrastructure and military, thank you fair trade status....thank you outsourcing, thank you manipulated currency.
Larger corporations are doing MUCH better than small ones and for one of the first times the ISM employment picture and the NFIB JOB picture are diverging.
More importantly, small businesses on the ropes CAN NOT GAIN ACCESS TO CREDIT!!! SInce 2007 this has fallen "off a cliff". SO the MOST POWERFUL engine of US economy for jobs and output have little plans to HIRE, can't get credit, putting off capital spending and otherwise rather gloomy....a sick dichotomy from the portayal in the US STOCK MARKET.
In every other past RECESSION OIL has plummeted and given big relief from energy prices and pump prices.......NOT THIS TIME, OIL hovering above $80 and PUMP near $3 !!! IMHO this helps to show the flow of stimulus cannot be controlled into productive means.
THE FED is purposefully pushing up prices or aiding such with 0% rates where they can.....thinking that HIGHER STOCK PRICES will make CONSUMERS feel good and they will expand credit and spend like drunken sailors again.....kick starting economy.......spending has improved , confidence languishes near historical lows and is WAY OFF where it should be comparing to any prior reading coming OUT OF RECESSION.
MOST BUSINESS opportunites surround anyone connected with or directly to the US GOVERNMENT, we do not have a balanced recovery or economy. GOV continues to grow, crowding out private sector.
Has the employment picture changed much during this historic stock market march?
Without government support and stimulus can the economy stand on its own 2 feet?
The SECULAR BEAR MARKET which began in 2000 in my estimation has not been allowed to repair the damage from prior bull market, heavy FED and GOV intervention have delayed the day of reckoning, and have resulted in 2 enormous bubbles bursting with devastating results.
What are current policies and ZERO RATES creating?
Monday, April 26, 2010
Read entire piece here at credit bubble bulletin then you must be willing to seek it out. Nobody puts it together better than Doug Nolan
GS in the news, of course Blankfein is telling anyone with stone ears how they wouldn't put themselves in front of their clients needs....need I say more? that rhymes with WHORE
CAT earnings lauded even though sales were off near $1B...that's recovery?
PLEASE tell me WHAT bank earnings if MBS's were valued at TRUE market value?
ANything is possible and recovery could grab teeth and expand, but too many things do not fit and I am afraid when the smoke clears and the reality hits home.....ugly would be a kind word for it.
With percieved LOW INFLATION and a weak employment backdrop the FED will not likely change its tune.
I finished an article this morning that points out there has been no known decline in a 3rd year presidential cycle.
Hope is that real economy begins to respond and we get an expansion of credit in the private sector, for now its all FED and GOV spending.
ANy and all dangers that persist are being shrugged off by the markets...for now as savers get punished, speculators rewarded.
WHy FEAR the bubble when the FED promises to make everything alright...
Sunday, April 25, 2010
The official, George Papaconstantinou, said Greece had no intention of defaulting on its debt obligations by repaying creditors less than what they are owed. After weekend talks at the International Monetary Fund's headquarters blocks from the White House, he said he expected the IMF's executive board in early May to approve Greece's request for about $13.4 billion in loans.
Saturday, April 24, 2010
Sloping declining volume is typical of right shoulder, even more bearish is the downward slope to neckline.
Intervention into the natural selection and healing process have short term positive momentum, but in the end as we have already witnessed over the last 10 years, does not bring about lasting sustainable recovery but only brief periods of mania followed by the BUST.
Along the way severe damage is done to the functional economy as money and resources are DIVERTED AWAY from productive means. How productive is it that the HUGE BANKS are playing the stock market for profits instead of normal lending?
How stable has our economy been since we shipped our manufacturing base overseas? a 70% Consumer economy and services which are now also being sent overseas? Inida, Pakistan, China and now the Phillipenes are doing service jobs we used to do here at a FRACTION of cost.
Our GOVERNMENT continues to gorge itself on debt and grow and consume resources meant for private sector.
You will not see another ascent this sharp on this chart, yet the V SHAPED scenario does not have the data to back it up. Small imporvements are sold as continuing proof we have enterred into another period of PROSPERITY.....a rise from 440,000 new claims 2 weeks ago to "unexpected" 484,000 was bearly mentioned but this week when "CLAIMS FELL SHARPLY" to 448,000 that ws plastered everwhere and touted as proff of recovery when it didn't even reach levels of 2 weeks ago!!!!!!!!!!!!
And ONE MILLION CENSUS workers have been added over the ensuing months, imagine claims without these "temp" jobS!!!
Consumer spending has been aided by tax cuts, stimulus, and mortgage payment cessation and abatement.
BANKS are still allowed to carry CDO's MBS's on their books or off at near FACE VALUE making their "EARNINGS" report BOGUS IMHO .....what is a gain if the losses are not subtracted??????????????
THE EARNINGS MIRACLE being posted is a fraud IMHO...and the FRAUD is being bought.....hasn't ANYONE learned their lessons?
I notice 2 things being gooosed by the FED and GOV, OIL and STOCKS.
How did GM pay back gov in less than ONE YEAR its $6 B??? they aren't even profitabLE!!!?? DID they make $6B in just 9 months?????
NO financial reform.
ONE PERSON INDICTED?
Foreclosed SHADOW INVENTORY HUGE and unreported. NO SHARP housing recovery as depicted in stock market or real housing data.
State governements continue to divert stimulus cash to fill holes in budgets.
Continued CONTRACTION of outstanding bank loans and consumer credit demand is reminiscent of bear market K winter, not SPRINGTIME BULL MKT.
Object of bear market rallies is to rekindle hope and lure in more for pain to follow.....good chance this one has done its job.
This H and S formation CAN BE NEGATED, but it BEARS watching, and IMHO as we near it, as the movement of stocks appears to me to come from MOMO and not underlying value...as the VOLUME associated on a monthly basis is troubling and not indicative of you normal bull market cycles......caution would be warranted especially for NEW PURCHASES.
BUY LOW.....SELL HIGH
IN 2001 a FED funds rate of 1% was kept there MUCH longer than needed, and those in charge now act that they had NO FING CLUE A HOUSING DEBT BUBBLE WAS FORMING?????????????????????????????
They also have said rather form a bubble than finally pay the piper. EACH ONE is bigger than previous.
IN 2007-2008 never seen before tools were used by FED and a ZERO 0% FED FUNDS rate was formed and we are STILL AT 0% even after 5,000 (nearly so) DOW points have been added!!!
SO the economy cannot function w/o normallizing rates? yet stock market we are told is SCREAMING V-SHAPED RECOVERY????? does this add up for you?
Have any of these policies normallized bank lending? JOB CREATION? RECORD FINANCIAL BONUSES? (YES)
Have the crimes and losses of the financial sector been foisted onto the AMERICAN PEOPLE?
BIG BANKS TO FAIL ARE NOW TOO BIGGER TO FAIL?
SECULAR BEAR MARKETS HAVE ALWAYS BOTTOMED with SPX PE ratios in single digits and YIELDS near 6% currently we have near 20 PE and 1.87% YIELDS.....ignore hsitory?
"For the previous year, the federal government has tried to revive home buying by driving down mortgage rates and providing tax credits. Now that the housing market is stabilizing, the government is pulling out. The federal support for mortgage rates, is set to end in two months. and the tax credit deadline is April 30th."
We have gov support ending for housing market, the pathetic blip we just saw no doubt many getting in front of this. We have FED ending certain programs, banks have been BIG buyers of treasuries (RECORD RISE IN MKT YET BOND YIELD CONTINUES TO FALL BELOW 4% !!)
No doubt this should raise the cost of buying a home and we could see a renewed decline in home sales and price.....a dying patient taken off resperator....
ALt A loans now resetting taking payments higher and biting consumers not yet bitten? Pressure on banks from Commercial Real Estate defaults.....after markets relentless 14 month 75% advance.....now bargains galore and best time to buy?
Consumer and small business confidence is WELL BELOW previous recoveries from crisis....yet mirror that with record vault of stock prices.......I COULD BE DEAD WRONG....but I lay out my thought process and it brings me to here.....so I prefer to be cautious going forward.
Should this even mediocre recovery sputter to where even the deaf dumb and blind cannot refute it, after what has been thrown at it kitchen sink and all.....and if rates are at or near 0% should that reality become visable......ouch!
Friday, April 23, 2010
The angle of ascent reminds me of 1998-2000
So, with the FED and GOV behind this most recent bubble, my message to the BEARS is you cannot fight this! Amounts of money have been thrown at the crisis that have NEVER BEEN SEEN BEFORE, but I have well documented my unhappiness with the results on main street.
The piece from yesterday showed how consumers aren't demanding the loans, banks are not lending, yet they have record profits again?!!
All these den of thieves are doing is trading for profit and sopping up the bonds...the ultimate reach around.
Imagine this scenario, at SOME POINT everyone is going to wake up and see, understand that we never got out of the woods nor the gate to recovery, that the causes were not identified and dealt with, that little if any justice was meeted out.
When that day comes, and especially if it comes with rates left at zero % !!!! the collapse could be shock and awe as no support for price will exist......no more tricks up sleave neither....is there another level of low beyond ZERO?
What kind of sustainable economy do you get based on low borrowing demand and low/declining bank loans outstanding? and tighter credit? Is that how you get to an expanding sustainable economy?
More people than ever are food stamps.....is that recovery? THE BS housing numbers trumpeted are pathtic by historic measures, that's not recovery...
2nd half year thru 2011 we have alt A resets, commercial real estate is in decline with vacancies galore and defaults.
Economy as repsresented by the STOCK MARKET is saying this is the BOOM OF A LIFETIME......yet we are still above 400,000 claims each week this far into it.
This is not money flowing into productive means is it?
MANIAS are hard to predict when they might end.....they always end with a BURST.
Sales of office furniture are back to 2001 levels. You buy furniture when you hire people.
State of Maryland as others are using so called stimulus money to plug funding gaps, holes caused by tax recipts declining something you can't fudge or fake.
Small business do the bulk of hiring, confidence is VERY LOW. LOW CONFIDENCE does not equal capital outlays and hiring.
Most of our economy and manufacturing went south and east....when the gov ended 2 very important protective laws, GLASS STEAGALL
and this one (SEE FOX IN HENHOUSE) see wickpedia
"The Commodity Futures Modernization Act of 2000 (CFMA) is United States federal legislation that clarified most over-the-counter derivatives (“OTC derivatives”) transactions between “sophisticated parties” would not be regulated as “futures” under the Commodity Exchange Act (CEA) or as “securities” under the federal securities laws. Instead, the major dealers of those products (banks and securities firms) would continue to have their dealings in OTC derivatives supervised by their federal regulators under general “safety and soundness” standards. “Functional regulation” of derivatives products by the Commodity Futures Trading Commission (CFTC) was rejected for continued “entity-based supervision of OTC derivatives dealers.”
"In an open letter disseminated by the Cato Institute, 200 economists stated, “More government spending by Hoover and Roosevelt did not pull the U.S. economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s ‘lost decade’ in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the United States today.”
ALL of our money went to bail out the banks, subsidize housing and autos, the public footing the bill and with the help of the HFT would be banks and their hedge funds.....we have record stock market appreciation......but the REAL ECONOMY STAGNATES AND PUTRIFIES.
When the bear mkt returns there will behell to pay
China's Retail Sales May Grow 16% In 2010
1 minute ago
"China's retail sales are expected to grow 16% this year, the Ministry of Commerce said in a report released on Friday. The basis for world economy is still relatively fragile and external demand reamains grim with rising friction in global trade, the ministry cautioned. This is putting pressure on the domestic economy. Inflationary pressures have increased along with natural disasters and other emergencies, the report noted. However, investments are likely to remain high in the short term. "
*Stimulated? Funds slated for local projects are being diverted towards 'DEBT" balto county is loving $118 million in cash away from capital projects to cover "revenue shortfall". ONLY ONE REASON for shortfall...TAX RECEIPTS!!! can't lie here
BIG BONUSES ARE BACK WHO CARES?
DOWN SHE GOES........DOES IT MATTER? (falling liquidity?)
SPX dividend yield a SCANT 1.87% BEYOND BUBBLE yield at 2000 TOP it ws 3% !
Thursday, April 22, 2010
WHAT kind of economy grows when BANKS aren't lending, standards are tightened, and consumer loan demand is weak too!!???? goodness gracious my head is going to explode!
Banks May Not Be Lending, But They Are Buying Treasurys (link)
On Thursday April 22, 2010, 2:16 pm EDT
Though banks continue to be hesitant to lend to consumers, they have stepped into the market for Treasurys that help finance the government's burgeoning debt.
With credit conditions still tight and Congress likely to clamp down on risk in the financial industry, banks are turning toward the safety of government debt, helping keep interest rates low but still not providing credit to consumers.
"Not only has lending been tight but demand for loans has been pretty small," says Kim Rupert, managing director of global fixed income analysis at Action Economics in San Francisco. "The Treasury market offers banks an attractive alternative."
Surprisingly strong Treasury auctions in March had help from banks, which normally stay away from such events.
Banks snapped up $5.7 billion of the total $34 billion auctioned in 10-year notes and 30-year bonds, providing demand for auctions that many analysts thought would flop. The auctions occurred as inflation fears began to grow and amid signs that investor appetite for the massive supply of government debt was beginning to wane.
At the same time, bank credit fell 5.1 percent in the month and loans and leases dropped 6.4 percent, according to the Federal Reserve.
"The pattern suggests that banks have been starting to put their large cash balances to work, but is not an indication that bank balance sheets as a whole have started to grow," Deutsche Bank said in a research note.
The suggestion is that banks are using Treasurys as a way to get some return on their money that they might otherwise reap from making loans.
That banks would get so involved with long-dated securities came as additional surprise since they aren't usually such active participants at auctions and generally buy mostly short-dated notes. Under normal circumstances banks don't have much interest in keeping long-term rates low as that could compress the yield curve and cut into the profits they could make on lending.
Yet combined with their purchase of agency-backed debt such as mortgages and student loans, banks bought a total of $40 billion from the Treasury in March, according to analysts at Deutsche Bank.
But there's also another less-obvious reason banks could be stepping in to the Treasury market: A type of tacit quid pro quo with the Federal Reserve to keep short-term rates low by helping the government finance its debt through Treasury auctions.
Art Cashin, director of floor operations at UBS, noted after the 30-year auction suspicions among traders about who was doing the buying. In remarks to CNBC, he spoke of "all manner of conspiracy theories floating around. Is the Fed putting on a fake moustache and a raincoat and coming in as an indirect buyer?"
While there's disagreement among analysts whether the actions are part of an explicit pact between the two sides, some suspect a gentleman's agreement in which both sides benefit.
"Banks are stealing money from the public, giving consumers zero percent interest on deposits, and instead of turning over risk to the over-indebted consumers, they're loaning money to the government," says Michael Pento, chief economist at Delta Global Advisors in Parsippany, N.J. "I'm sure it's at the behest of (Fed Chairman) Ben Bernanke-we're going to keep rates low but you must facilitate the Treasury auctions going off smoothly."
The Fed funds rate is near zero, meaning that banks can borrow at almost no cost and lend out at the prevailing rate-or invest in vehicles such as Treasurys. (WORLD”S BIGGEST PONZI SCHEME?????????)
The 10-year yield edged over 4 percent in the days after the weak March auction for the benchmark note but has fallen precipitously since then, trading around the 3.75 percent area and helping to keep government borrowing costs down.
Even though many analysts believe the 10-year will eclipse 4 percent this year and probably settle in the 4.25 to 4.50 percent area, which would erode the value of fixed-income securities, others believe that with relatively tame inflation the longer end will represent value to investors.
"We're constructive on the long end of the market. I don't disagree with their security selection," said Rich Bryant, head of treasury trading at MF Global. "As long as the inflation picture is as benign as I think, we'll continue to see demand for the 10-year."
The danger to buying longer-dated debt is if inflation does begin to spiral and the banks as well as foreign governments decide they no longer desire Treasurys or want to help the government.
Pento says they'll have no choice once the government can no longer continue to monetize its debt by printing money and rates start to rise.
"I can assure you that supply and inflation will overwhelm interest rates and they will be heading higher for many, many years to come," Pento says. "It will be slow at first but it will grow more and more pernicious as we go along."
But in the interim, if banks continue to participate in auctions-Treasury is planning on announcing another round Thursday-that would help rates stay low for now.
Deutsche Bank expects the bank Treasury-buying to continue as the institutions avoid riskier assets, preparing for congressional action on regulations and an uncertain Fed climate with respect to what it will do with its key lending rate.
"[B]anks are operating in an uncertain environment with regard to future regulatory capital regime," Deutsche said. "Multiple proposed bank regulatory regimes...all differ substantially and face widely diverse prospects for enactment. The key for banks is to maintain flexibility while taking advantage of current opportunities."
But the longer-range picture is dangerous, says Pento, who forecasts the 10-year to hit 4.25 percent by the end of the year but on its way above 7 percent in three years.
"When inflation does come back, and it's on its way here, there is no way anybody, not even a bank, will be compelled to buy a Treasury that is significantly below the rate of inflation," he says. "What happens going forward when rates inexorably rise?"
How can Consumer Spending equal what it was in 2007 when since then at least 8 MILLION JOBS have dissapeared? Some people have been recieving gov unemployment for 2 plus years, many have stopped paying their mortgage......47% now pay no taxes.....this has been diverted into spending.
Majority of "STIMULUS" is past, and mostly ineffective in creating jobs. 0% interest rates have aided banks but not anyone else, GOV incentives incl have not cleared the deck of unsold homes.
AT the root of our economy is housing and all the trickle down purchasing that goes along with it......bursting of DEBT bubble is not so easily erased.
We are back to price where the real fireworks went off, LEHMAN and AIG........at same time more and more stocks are fading from participation, and earnings news is not catapulting most forward.
IMHO we have enough on the table that I think the market takes a rest here, but who knows how much further the cyclical bull can go.
MM's, savers get nothing.......there is not much competition as yet for the alure of stock gains.
IMHO A SHITLOAD of V SHAPED recovery is priced into and then some in most stocks, good value being harder to find.....hasn't the EASY MONEY already been made?
PPI and claims at 8:30
Wednesday, April 21, 2010
“castles made of sand…slip into the sea eventually” mkt built of straw and smoke and mirrors sets up a CRASH SCENARIO IMHO
Pitch fork sales are setting records, so is tar and feathering. Transfer of wealth escallating as less paying any taxes and tax cuts set to end in 2010-2011.
Panera is busy, AAPL is selling IPHONES, all that is wonderful as I eye an empty parking lot at local best Buy......but people are in SHOCK business is still so bad. Reps are so far in hole they will never get out, commisioned sales people......"never seen anything like it" because there hasn't been in OUR lifetime.
Little biz out there propped up by excessive Gov spending and FED 0% rates...mostly benefitting the few....the BANKSTERS....as GOV grows and it is it crowds out small business.
Consumer sentiment and small business confidence is near its HISTORIC LOWS...but DUDE!!!!.......the market has advance plus 75% !!!!???? It is saying VVVVVVV SHAPED RECOVERY...it should be staring us in the face like the beam of light coming off a chrome dome! (do I ever get credit for my sense of humor?)
Something is rotten in America, the people will not stay asleep forever, as we're DUMB but we're not stipid
"consumer sentiment unexpectedly plunged to 69.5 in April (preliminary), the Reuters/University of Michigan Surveys of Consumers said, Reuters reported Friday. It was the lowest sentiment level in five months. "
WHY is consumer sentiment in some measures back to March panic levels?
Tuesday, April 20, 2010
1:01 a.m. April 14, 2010 - By Josh Lipton
Gluskin Sheff's David Rosenberg points out that we did $95 at the peak of the last cycle when the unemployment rate was at 4.5%, private sector credit was expanding at a 16.2% annual rate, and nominal GDP was at a 4.9% year-over-year pace. So the prediction that, barely two years into the second weakest post-recession recovery in the past six decades we'll return to peak profit levels, Rosenberg wrote in a recent research note, "seems to be a tad outlandish."
from April 8th
"For the time being, strategic mortgage defaults and higher tax refunds are
keeping consumer spending afloat. Yes, employment conditions have improved
but not enough ostensibly to prevent wage contraction. However, when wages,
rents, property prices, credit and now the money supply are all contracting, it is
very difficult to paint an inflationary picture no matter what China is doing to
I know the MSM and our leaders are telling it like it is, and all those price targets and reco's from those friendly Wall Street types.
I'll be honest with ya', my gosh what more do I need to convince me......nothing is broken, why I tell you I bet by next summer all those 8 MILLION plus will have meaningful jobs.....no not at Walmart smartass.....
Monday, April 19, 2010
Today (GEE It's MONDAY isn't it?) the rally was described as weak only 64% up volume, which I believe was being sold into.
90% down days will usually will be followed by 2-7 days of rally attempt.
Knoll earnings fell 17% and that is from already crummy 2009 comparison. Companies order office furniture when they hire people.....look under the surface and you will see what is real.
What is real is a handoff of debt from wall street to the citizens while they make almost ALL of their profits from "TRADING".......are there any real banks left?
Yeah banks got healthy.....they got bailed out, propped up.....accounting rule change to HIDE losses......allowed to HFT and nothing can make them lend. We don't have balanced economy....and we cannot grow to prosperity by printing money and creating even worse imbalances....OH the bubble can go further, the game continue....and it will end as all bubbles do.
SHANGAI BREAKING DOWN, and a wedge formation is in play
The downshoot of all this is people seem to have very short memories and we've been here before and the excercise ends with an economy that cannot stand on its own 2 feet and is badly off balance.
But you tell me if its any good if all this gov largesse doesn't reach its intended target and instead just insights wild speculation leaving most good values as a second thought?
What good is an indictment of GS that leaves one of its main pigs unscathed, Hank Paulson?
Saturday, April 17, 2010
We would like to see job generating and money changing hands and let it grow and spread to many areas of economy.
Will the many housing related, construction and finance jobs come back? Will we grow our manufacturing base? Can homeowners draw from home equity to increase spending? Are banks lending? Are banks tightening standards?
Are wages growing? Banks paying any interest on deposits? How's business confidence? Consumer sentiment?
Why did Friday report still show VERY high unemployment claims above 480,000?
There is an elephant holding onto the tail of the economy, there is a tremendous deflationary PULL and recovery from a bursting debt bubble does not occur as stock market infers....with a RECORD REBOUND...I would argue I don't see a V SHAPED RECOVERY as depicted in stocks.
And this summation from the always astute Doug Noland
"At the center of it all, policymaking at home and abroad has distorted market perceptions and market pricing mechanisms. The unsuspecting again have little notion of the underlying risks they are accepting. Fleeing zero rates and chasing inflating securities prices, investors have been left again dangerously exposed to another financial Bubble and a postponed economic restructuring. It may never be called “fraud” or “misrepresentation. The outcome will be about the same. At the end of the day, markets are made or broken on Trust."
Friday, April 16, 2010
SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages
By Catherine Clifford, staff reporterApril 15, 2010: 12:52 PM ET
NEW YORK (CNNMoney.com) -- The economy may be showing halting signs of recovery, but the turnaround hasn't reached Main Street yet: A pair of recent small business surveys found that most owners are skeptical or downright gloomy about their business prospects this year.
"Something isn't sitting well with small business owners," Bill Dunkelberg, chief economist of the National Federation of Independent Business, said in a written statement accompanying the latest edition of his organization's monthly "Small Business Optimism" report. "Poor sales and uncertainty continue to overwhelm any other good news about the economy."
Realty Trac announced foreclosures are rising in most parts of the country.
Owner of CNBC GE was touted this AM by BECKY QUICK (not so) as having robust earnings
NEW YORK (CNNMoney.com) -- General Electric reported quarterly revenue Friday that fell from year-earlier results and missed Wall Street's forecasts.
The Fairfield, Conn.-based conglomerate said its first-quarter sales fell 5% to $36.6 billion, missing the forecast of analysts polled by Thomson Reuters of $37.1 billion.
Net income fell 18% to $2.3 billion, or 21 cents per share, for the period ended March 31.
CRAMER ON GOOGLE
"Blowout fatigue. Blowout Intuitive. Blowout Google. Blowout Advanced Micro Devices. But not blowout enough and not guidance enough and hair, hair everywhere. I guess." off $25 this AM
IMHO LOTS of good news priced nto markets, even after reporting a 10% GDP Chinese markets flat to down, foreclosures STILL RISING.......HUGE numbers STILL showing in every Thursday job unempoyment report this far into "recovery" ! Home prices flat to declining showing little or NO recovery, senior realtors survey showing diminishing traffic looking, even as we still have historic LOW mortgage rates and FED assistance.....didn't we hire 1 MILLION census workers? small biz confidence in krapper, credit contracting....stock market up 75%.
We have a consumer that is trying to save get out of debt, heal, but what is the FED PLAN? SCREW THE SAVERS with 0% rates and heal the BANKSTERS who aren't lending.....well it's a plan
Thursday, April 15, 2010
Once in awhile when you "run with the bulls" somebody gets gored.....it seem slike fun, a good idea until you get gored and wonder why you didn't see it coming.
You asking yourself why the yield on the 20 yr is DROPPING amidst a record rally...getting even more feverish?
I see the light.......I want it to be the sky clearing, not the train coming thru the tunnel where I just fell down and can't get up.
Realty trac tracks forclosures, and funny thing, with market soaring.....foreclosure notices are also soaring.....1 in 100 home owners! even with moratorium, and all gov programs the volume is increasing......some things you cannot throw smoke over.
More foreclosures....more pressures of home owners and home prices.....must not be effecting bank profits....
SINCE 2007....there have been only 4 months where money flowing into bond funds did not exceeed stock funds....only 4. FED'S attempts to reflate main street have failed...as the bankers are rolling in it.
A stark reminder to me that something is horribly wrong here....fishy, the Conference Survey of Consumer Present Conditions as it now languishes around 35 !! This time in 2003 recovery it was closer to 100 !!! but this time we have 75% rally.....the movement of the stock market HAS BEEN VERY CLOSELY correlated chart wise to the rise and fall of this component.....except now.
WHY is it that after 75% stock rally guy on street wants none of it and continues to feed the bond market?....must not like what he SEES...HIS reality not the trumped up MSM one.
Foreclosures escallating, even in face of grand gov intervention, friends this isn't because consumers are getting jobs or feel more confident....recovering economy? or the recovery of overt BS? buyer beware
And IMHO the unreality of the markets rise compared to life on the street puts a MARKET CRASH BACK ON THE TABLE. The rise makes no sense, in the face of the real life data.....bottom was NEVER TESTED.......almost NO corrections in 12 months......WHOLE TIME LITTLE DUDES POURING MONEY INTO BOND FUNDS........8 million lost jobs since 2007? are they pouring money into STOCKS? 401k's??? how about all those people not making mortgage payments? THEN WHO IS?????????????????
The people supposedly of the WE THE PEOPLE just want some SAFE YIELD...but the FED SAYS NO WAY....reflation usccessful in just a few areas...commodities and stocks......the FED GAMBIT has not led to a recovering sustainable recovery IMHO
How can THEY say it's getting better if the cause of the CRISIS was housing, and housing sits in a deep deep whole? with foreclosures escalating? one in 4 underwater? where is the improvement?
Banks recording "record profits" FROM WHAT???????????????? and they are BULK of SPX reported earnings......but home prices have not stopped falling, bank profits are a mirage...a LIE if the depreciating paper is not shown at TRUE VALUE?
Strong hands of stocks would be LTBH types, where are they? then who is pushing up stock prices? WHO?????
The lie of recovery is spreading, from every mouth from the tube.......truth lies in the dark corners of the forclosed homes and shopping malls.....where millions stopped paying and diverted mortgage payments to consumer spending....and await their GOV bailout or principal reduction.....NO that wouldn't put pressure or everyone elses home value....or put losses on bank balance sheets.....we got bigger banks, which can assert even more CONTROL AND POWER over our lives.....thanks to WHITE HOUSE AND FED POLICIES....and all the avg Joe does is bend over and take it.....send some of that out of control spending my way...I know what to do with it...IN REAL MONEY.....the man behind the curtain is EXPOSED...pasty and full of back hair!
Wednesday, April 14, 2010
Any good system our goal is to get into sweet spot of rally, not to guess at tops or bottoms, but once trend is ESTABLISHED, leave your hat at door.....ride the sweet spot.
" We still have the same disease. We still have too much debt, too many big banks, too much state sponsorship of risk-taking. And now we have six million more Americans who are unemployed – a lot more than that if you count hidden unemployment.
[Interviewer]: Are you saying the U.S. shouldn't have done all those bailouts? What was the alternative?
NT: Blood, sweat and tears. A lot of the growth of the past few years was fake growth from debt. So swallow the losses, be dignified and move on. Suck it up. I gather you're not too impressed with the folks in Washington who are handling this crisis.
Ben Bernanke saved nothing! He shouldn't be allowed in Washington. He's like a doctor who misses the metastatic tumour and says the patient is doing very well.
Nobel prize winning economist Joseph Stiglitz calls it "socialism for the rich". So do many others."
Advance may not be done, and as long as the theme "we are on the road to recovery" continues to hold up the sellers to this point are in their tortoise shells.
It occurs to me the market is now much LESS about climbing a wall of worry than it is one where more than perfection is ALREADY priced in
Tuesday, April 13, 2010
GAO suspension of mark to market created fantasy, these fantasy earnings are now majority of SPX 500 earnings revival……maybe that;s why dividend yield is a scant 1.9%, hard to give out phoney earnings.
Fed action DID get people buying, spending building hiring after 2001……but this time it hasn’t worked…..and maybe is making things worse….is
Those engines not available to goose…..almost 5,000 Dow points in 12 months….well friends we SHOULD see more evidence of this V V BOOM!!! shaped on the streets.
A rally built on FALSE hopes and data…with a historic low PCE deflator..still falling….flagging small biz confidence, the engine of job creation…..I like to say ‘castles built of sand , slip into the sea eventually”
Chinese also putting some duties on US goods and RUssian steel.
Lots of headlines concerning...."end of low mortage rates and borrowing" isn't that exactly when rates begin to fall?
Consumer spending aided by mortage relief, or outright non payment.....no mortage payment means money spent on other stuff...silver lining to foreclosure crisis?
Yes I saw the jump in some gov money stats...."US bails out the world?" haven't we already done that? SO MANY unexplained data points not sure what to make of them.
Gold acting like SAFE HAVEN and not from inflation...rising in face of US $ strength.
As presented most gov data not worth the paper it was written.
VAST MAJORITY of SPX profits coming from FINANCIAL SECTOR.....trading profits and using their VAST historic excess reserves to SOP UP TREASURY BILLS......one reason why 10 yr still below 4%.....and you thought banks wouldn't lend again?
A shame it's not to the people who need it.....sounds like ponzi scheme, shell game to me.
GAO accounting rules have suspended accounting for MBS's values at face value......so I guess a profit is a profit in ALice's world.
Monday, April 12, 2010
During the recent rally highs it has been accompanied by new rally highs in the advance decline line, and a new spike in the new highs indicator. Small caps and financials have led the way. What has been LAGGING entire rally has been the 30 day up and down volume, peaking just ONE MONTH after rally began......but up til now this has had NO effect on price action. We continue to reside in overbought conditions suggesting a reasonable chance for a correction, none which suggest primary uptrend would suddenly come to an end.
But we do have several major head and tail winds to consider going forward.
The VIX continues to evaporate down to the 16 level, not too many seem to need to protect their longs, or worried about the uptrend ending anytime soon. A LOW VIX may signal complacency but a falling trend = rising prices. A HIGH VIX signals extreme fear and = selling and a rising VIX will = lower prices....it peaked long ago.
If housing is a canary in the economic coal mine, it has been residing at levels near unsustainable to the downside, has the market recovered because at least for now it signals not so much recovery but the worst has surely passed? SHorts have covered tons of positions in the market and home builders.....and they have not gone belly up in general.
Into 2011 we have the last of the major mortgage resets....ALT A and Option adjustable....is this priced in? everyone knows this......aren't we near both a peak in those losing their jobs and houses available for foreclosure?....if so price pressure will ease.
A bottom in home sales and demand etc does not mean housing begins huge recovery but surely we are at or near a bottom.....has the market priced that in during this rally?
Local governments suffer from declining tax revenues....and continue to cut headcounts.
Because yield has been manipulated and is hard to find, HIGH YIELD (also known as JUNK BONDS) Bond issuance has surged.....partly due to confidence?
Mutual fund cash ratios FEED STOCK BUYING, FEED RALLIES, but cash ratios have just hit NEW ALL TIME LOWS!!!
Lots of money resided in bond funds, WHY hasn't that money come out into stocks? WILL IT? WHAT WILL FEED THE RALLY GOING FORWARD?
Unless a reversal of supply and demand occurs, I can see why many call for many more months of stock market price appreciation, maybe it sees an improving job environment, maybe it sees nowhere else to put money for gains.........other measures that point to seeds being planted do not point to a BEDROCK being built for the economy specifically bank loan contraction and velocity of money.
I pray the rally is NO MIRAGE, but while we may have drug ourselves out of one dark hole, how we did it may throw into another one.....gov debt and deficits......
manipulation of money and interest rates usually builds an inbalance somewhere and blows a bubble which invariably will burst, the next one could be a doozy
Longer term consideration is in the PAST BEAR MARKETS have neded with S and P 500 DIVIDEND YIELD NEAR 6% and single digit PE ratios...as WAS the case near 1982 bottom....bargains of lifetime.....SPX DIVIDEND RATIO NOW? 1.9% what was the yield at BUBBLE BREWING 2000 top? 3% food for thought.
If the stock market is RIGHT, WHY THEN IS THE FED HOLDING FUNDS RATE AT ZERO? ISN'T FED POLICY RESPONSABLE FOR THE MKT RALLY?
Sunday, April 11, 2010
This is not 1990 nor is it 1982 ! What is this idiot smoking? IS the debt structure now the same, have we had a credit crisis? did we have 8 MIL plus out of work? wages declining? bank loans contracting? FED funds at ZERO? INDEBTED US to almost 1 to 1 with GDP ($14 T)? The need to finance over $1T each year as far as eye can see? Home equity? you get my point.....
Consumer spending recently has been boosted of all things "strategic defaults" freeing many of interest payments and GOV handouts of nearly $200B....is this sustainable?
We are a great country? WHY are we laying off firemen, police and teachers? My wife just got job in Nov at a title 1 school in B'more County, was told Fri she and 6 others would not has job next year...was told excessed...we know it's cutbacks.....and the QUALITY we always hear from the I say anything to get elected officials....education is NOT a priority except for speaches.....the world is passing us by in education and better in position to compete for those coming jobs and in manufacturing, well you already know story there....where will the jobs come from in the future? yeah service jobs....what for fing Walmart?
Higher energy prices translate into less available for spending which in turn adds to DEFLATIONARY SCENARIO as do falling to flat home prices....flat wages...contracting credit.
Total credit mkt debt has begun contracting as recent chart shows....this won't turn on a dime.
"Why do people ignore the bullish signs?" article implores......because people on street are suffering, people in real world cannot find jobs.....in the REAL WORLD Banks can show large profits even as their loan portfolios dry up????????????????????????
In March of 2009 (or just before) the GAO changed an accounting rule that allows banks to FALSIFY earnings.....this is not stressed enough even by remaining bears that the FINANCIALS make up a HUGE part of SPX earnings and IMHO rising SPX profits from energy related and financials DISTORT overall health of US economy.
WHAT would current landscape look like if this upcoming earnings season was returned to rules that existed during and before crisis of reporting operating conditions? MARK TO MARKET VALUE? Anything other than close to real value is make believe....hence investors buying into make believe profits and recovery.
What have we done after the crisis began that has actually changed anything? dealt with real issues?
Now we are building the MOTHER OF ALL BUBBLES....GOV FINANCE.......strategic defaults and principal mortgage forgiveness alone point to valuations of banks being far less than original face value of the paper they hold or the ones hoisted to FEDERAL RESERVE which in turn is guaranteed BY THE PEOPLE.
Yeah, great JOB leaders, handoff the resulting PAIN from the crisis caused by those still employed to the US citizen balance sheet which will result in higher taxes and lower standard of living....even as we pile even more gov spending and entitlements on top of everything already there we can't pay for.
SO here we are at the early stages of a new sustainable economic ecovery and a brave new world?