My favorite indicator of market frothiness is margin debt. When debt is on the rise, I tend to scale back and vice versa. At the present, margin debt stands at $255 billion, up 8.8% in September—the highest level since the infamous flash crash. Separately, most of the recent economic data is pointing to higher inflation (HELLO COTTON!), which lends to the idea that the Fed might not go “all in” with qe2. You know, it’s entirely disingenuous of the Fed to “target inflation,” proclaiming that it is “not high enough.” Well, color me stupid, but if you add in food and energy, current inflation is running hot at 10%.
The reality is: our government does not know how to create jobs. They are shooting peas at a tank and are frustrated by the durability of the tank to survive their onslaught of hard peas. We are not living in the 90’s anymore. The jobs market has moved to China and it’s not coming back.
Having said that, corporate earnings and balance sheets are as good as ever. I do not believe there has ever been such a divergence between the workforce and corporate balance sheets. Naturally, this is easily explained by the fact that most U.S. companies do more business overseas than here.
It’s easy to believe “China will grow forever” based upon what we are seeing there now. But, the real question is: if our jobs market continues to stagnate, at what point does our lack of consumerism affect the overlords at FOXCONN? In the meantime, go back to your casino, dressed like a stupid faggot. Place it all on black and hope for the best.
As for me, I will continue to look for cracks in the dam. Eventually, this city of idiot investors will be flooded with blood. I will be ready for such an occurrence, from the luxury of my frigate.
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You should market hard peas to the Chinese as a WMD.
If the bottom 10% or 20% are unemployed it is of little importance to the economy. It sucks for those folks, but they are not very productive.
Uhm, who’s paying to feed them? Communism is not productive.
you must read PTJ letters…
VXX tempting here…
CENX ?
Think multiplier effect. That 10% weighs on the economy more than you think. Plus, those are the people who will stab you in the face for an order of french fries.
Those folks get paid for being unemployed. 99 weeks. Then more benefits are available. The Mexicans sneaking in are better workers.
What’s your point?
Margin debt is up because firms are offering very low rates, 1.0% or so, and people are leveraging up 3x-5x to buy dividend paying stocks – most assume that 6% yielders can’t go much lower…but given the lack of yield alternatives to those that need yield, they have no choice. Interactive Brokers even advertises the strategy.
exactly.
+1
So if the money supply is expanding (hence inflation coming), this is not such a bad idea, even if yields do fall.
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+1
FLY,
you havent talked about your TLT investment are you holding on to it. Any idea why its dropping every day
Bill
FIRST!!!!!!!!!!!!!!!!!
^^^ Now that is comedy. ^^^
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Bill
You should read me more often. I sold it north of $105 weeks ago.
Tlt lower due to inflation
oh come on fly, who really “needs” food and energ?
I just need food, as I convert that to energy as it is.
Especially ding dongs, ho-hos, and devil-dawgs!
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Hey, here in houston a new manufacturing company is about to start gearing up! But here is the kicker, it is building the same products we manufacture here at my company. They are looking for over 200 positions to fill, i have already put in my resume, and they have a contract for 500 trucks or 100 a year. Thats pretty ambitious by our industries standards, 200 jobs might be on the low side. And its a foreign company owned with solid american leadership at the helm. So get ready for an oil ride in the manufaxturing world folks. Sorry, wont divulge name until i secure my job, but i will scream it once i land it!
Giving up on that Senator from Kentucky gig?
LOL. That Rand is an opthamologist, not a rigger.
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so the crashing $ is creating sort of a mini-China right here in the US of A … first Daimler Benz and next Volvo or Scania?
Volvo was already owned by us, no? And I think SaaB Scania was on the block at least.
This is what I’m talking about by competitive advantage in value added manufacturing, btw…. cars are just a touch better than textiles and mattresses, no?
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mfg is mfg … Thinkpads are made by Lenovo now … and when your ‘high end’ software goes to India then what?
PS: I was inferring that those auto makers are coming here to build factories as we are now competitive cost wise ($) but who needs autos, they are so horse & carriage
Rand
Didnt you just land the job you are at now? Lol
Who’s got employer loyalty these days?
It’s a day-trader’s world, we’re just existing in it.
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This is true. My wife and I have been talking about the future for my son. I’d really like to start my own biz that I can hand to him. Unfortunately, I have no skills nor work ethic….
…so I am teaching him to day trade.
Same here, though not day trading.
You are teaching him to snag pic-a-nic baskets?
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🙂
yeah, forget home ownership … buy a motor-home
thanks …and FIG
This is exactly what I was thinking this morning re: margin debt. I’ll say again though, look at the difference between PPI and CPI, costs are not being passed to the consumer. Also CPI is 42% based on housing prices.
The Fed cannot create jobs with monetary policy because of the same reason about which PTJ wrote. High interest rates are but a symptom for an employer looking to invest or hire. The structural issues lie in tax rates, healthcare costs, etc. It’s simple math to see it’s cheaper and more efficient to hire foreign workers where you don’t have to deal with these problems and can earn a superior return on investment as opposed to hiring in the US. I really don’t see how this is that difficult of a problem. Hell, do the opposite here if necessary: raise interest rates while increasing inflation, lower taxes, and make some decisions on healthcare.
High interest rates? What are you talking about?
Check that comment. What happened to the edit function? I wanna take back my comment just above here. Maybe the math questions were too hard for some.
Indexes are down but banks, financials, and chips are up.
Does one need to be hit over the head with a hammer to see how the day will go?
By the way, the recently renamed chips etf SOXX (used to be IGW) has a heavier weighting towards BRCM, and analogs than SMH etf.
SOXX is now up 1.90% and SMH .94%.
Don’t the semis always seem to be the last group that moves in a rally? And this indicates we may be done.
Not really sure.
But I do know that eventually they will overbuild and create an unsustainable inventory.
“In the meantime, go back to your casino, dressed like a stupid faggot. Place it all on black and hope for the best.”
LOL
This is definately in your top 10 best lines Fly.
You just explained everything there is to know about this market with one line.
Fly or anyone…I am searching around the NYSE for the Margin Data Fly mentioned. It appears it is released once a month, but I can’t find it…..does anyone have a link or a direction to point me in????? HELP.
It’s buried in the overnight Chinese solar rare earth data from UAE. It’s an obscure number.
Like Maxwell the piggie sez: REE, REE, REE!
Moobs, lol, nope, I would have seen it there…still looking for it…….FLY WHERE IS IT????
Yogi…Are we home yet? Love that commercial
It’s Boo Boo’s favorite. The entire house is quiet until it’s over. Thankfully, it’s always available on youtube.
Can’t find it either…I want to see what the longer term numbers were, becuase I believe this could be just the beginning of the ramp up in leverage in order to gain performance…which could work as long as short term rates stay low.
lol, Found it, actually I found it earlier but didn’t think it was the correct chart cuz I misread Fly’s number vs their number, anyway it’s a once a month data from the NYSE http://www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=table&key=3153&category=8
And Chinese jobs are moving to Vietnam..
Lets put it this way, at 15 bucks an hour for only 40 hours a week, not so much. Along comes a new company offering a couple of bucks an hour more wirh unlimitted overtime, man thats hard to pass up! Besides the founder of the company i work for will be running the new company, i am loyal.
What does Kahlan think?
Oops, wrong character. I guess I mean what do Aviendha, Elayne, and Min think?
Where was your frigate made …. Korea or China?
100% Norwegian.
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Ah… Wood!
No Pomo day today. What a weak piece of crap market without Bubble Benny and Timmy G.
They may need to do emergency POMO at close so market doesn’t end up down 500