So there is a tabbed spot up for grabs. You are not ready for this. Your pathetic links to other peoples content will make you roadkill. You have not the imagination nor the word manipulation skills to make the grade. More to the point your analysis is lame. You fail to make your case in the most rudimentary ways. You see nothing. And worst of all, you have no style.
The market, such as it is, refuses to acknowledge reality. Earnings are mostly OK but revenue is markedly down. The American consumer is spent. Or more accurately, paying down what was spent. Debt erasure is the play du jour. Volume is down. Way down. You know it and still you cheer every uptick. It’s August you say, this is normal. Everyone leaves in August. Bullshit. Clients want return 24/7/365. No days off.
1. The market will continue its upward momentum until I tell you otherwise.
2. Europe is a clusterfuck. Germany holds all the cards and God(not real) bless Angela Merkel. She is, as I have said before, the new(and improved) Iron Lady. The framework of the Euro is a fail. This is no longer a rescue mission. Greece has been dead for months. Spain is on the slab. Italy is terminal with no hope of recovery. And only the Germans seem to have any realization of this truth.
3. The Europeans take forever on everything. It could take another 2-5 years to unwind the single currency. And that is if everyone co-operates. Money will drain out of Europe. This will be a cynical maneuver though, as the money will come swooping in to buy as soon as the corpses start falling.
4. Energy, Utilities, Consumer Staples, Health Care, and Financials will lead the way.
5. Real estate is always a good addition. They are not making more land.
6. Bonds are fucked. (but you need them as a hedge dammit)
7. CBB, NYMT( I own), VASC, CVG, SFY(!)
I am trying to help you. I know not why.
Algorithms be damned. The market is not quantifiable in that way. The market is a F-1 race car. And no set up is right for every track(day/week.)
Now, a word from my heart, such as it is. Making money rocks. Killing the market is almost as good as a well struck golf shot(no equal.) In todays fucked up world the market is not pure. You know it. Nothing happens as it did ten years ago. It is buy the rumor sell the news, unless of course, it isn’t.
IBC is a most worthy community. Top hats are weak and the age of the gentleman is long since gone, but making money is always a satisfying and worthy goal. Avoid the Gung Ho and embrace the self directed. Lemming die.
I once had a friend.His name was Ralph. Ralph was a very good judge of artistic talent. He was also a fairly good businessman. Ralph was a couple yrs. older than I was but we usually engaged as equals. The clique we were a part of was not only creative but intelligent. most of us had a strong ability to think with both right and left side(sorry Greg). Ralph had a singular truism. America will not act unless and until there is only one path to take. It was his unshakable belief that the greatest nation on earth could only act when there was only one clear avenue to travel. This is in complete unison with BigBen’s copy and paste of his last position, namely wait and see.
It is almost surreal that we are actually waiting with bated breath to see what the ECB will do. We are no longer in control of our own fate. It is a sick and demeaning reflection of the USA’s current position but it is what we deserve given our abdication of everything that makes us free market champions.
Europe as savior? Really? Kurwa!!
Germany has made it clear that they are not about to foot the bill for the top hat-less greeks or anyone else.
What the fuck do really expect from this mish mash of Old World relics?
It is like watching a bad soap opera. Monti is trying to outmaneuver Angela with the help of Mario, meanwhile the Spanish and the Greeks quietly sit in the corner looking for any straw that will make them look legit and Italy just keeps boiling water for the pasta.
I have said, since the day I first tried, with limited success to join this august group of gentlemen(my bad entirely), that cash was king. If the EU fails to deliver then the blood will flow. Do not be comforted by the fact that you will know the EU fail prior to the markets opening stateside. The open will be down by 10 if not 20 percent. Draghi has made the proclamation. But he has zero ability to deliver. I see no way for the markets to be appeased by platitudes this time. Either the ECB delivers or the bottom falls out.
I do not envy those who bet on a rescue plan.
This could be the day.
Spanish 10 yr. bonds are closing in on 7.5%. Italian 10 yr. bonds are nipping at 6.5%. No shorting allowed in Spain. U.S. contraction is in full swing. Banking scandals are promulgating like rabbits on X. The Germans just got an outlook downgrade. Greece is under an audit, expectations are less than optimistic. Ethanol is burning in the fields of Nebraska. Tax cuts expire, payroll tax holiday expires, and 30% across the budget cuts will be enacted on January 1st,2013. Beggars on The Street crying for a useless QE3. Syria going down in flames. Iran and Israel are playing nuclear chicken.
The EU is broken. Don’t kid yourself. The only question is how bad the break up will be. Can they keep the damage limited to one or two stragglers being culled from the herd or have they walked right off the cliff? My read is that its all over but the crying and ripping up of euro denominated contracts. Two weeks ago 10 yr. Spanish bonds would creep over 7% and then coyly retreat to 6.95%. They are now 7.46% and rising. Whatever battle was going on it has been decided. Spain needs bailout and it will not be forthcoming. No one in their right mind is going to try to save this sinking ship.There is no band aid that will hold.
There is not just bad news at every turn it is disastrous. Italy is in lockstep with Spain and is now at 6.4% for their 10 year. Germany is being down graded to a negative outlook because of its exposure to the mess in the rest of the EU. Greece is being audited. That line almost has to come with a laugh track. The stage in Europe has been cleared for the fat lady’s entrance.
Now here in America we might be able to shield ourselves from some of this damage if we hadn’t spent the last 30 years fucking ourselves with a plunger handle. Beginning with Ronnie Rayguns this once great industrial nation has become a nation of burger flippers and jeans salesman. That in itself might not be so bad if we didn’t think that we could afford a $300,000 house on the cul-de-sac on peasant wages. But the American Dream had to be made available to every schmuck who could stand upright long enough to sign the loan papers so banks did as they were told and lent money to the people that couldn’t be trusted with a semi sharp knife. Even still we might have pulled out of that nosedive except the bankers saw a foolproof scam to bank coin on the backs of the peasant losers. They sold the rotten egg mortgages to investment banks and anyone else they could swindle thus collecting the coin in abundance and eliminating their risk. But the investment bankers weren’t stupid. They had a scheme of their own. They would divvy up these piles of shit and package them as piles of shit with great mint taste and sold them to investors who didn’t know the definition of the word “fail”. The investment bankers likewise got rid of their risk but their plan had another twist. They would bet that the minty piles of shit would soon lose their minty taste and when they did, second payday! The problem is they all made bets at the same casino. And when AIG said it was tapioca then the music stopped and there were no chairs. And that put us back about 20 years. All the while roads and bridges have been neglected, schools churn out citizens that can’t make change when you buy a Big Mac, and the political divide is so vast that nothing ever gets done until the last minute and everyone has gotten their bribe to vote for it.
So instead of standing upon stalwart defenses, we are watching a debt clock that spins like a Charlie Sheen bar tab. Consumers are having their own AIG moment so the “economic engine” has stalled and is threatening to quit. Deflation has won the day. The Fed Reserve did it’s level best to re-inflate the economy but it is a clear and decisive loss.
A service job/consumerism economy has turned out to be as good an idea as a single European currency.
The Middle East has a 12th century mindset but is armed with nuclear missiles, or at least helicopter gunships and F-16s and sits on the worlds gas pump. No reason for concern is there?
And that’s just most of the big stuff. The other stuff doesn’t even hit the radar.
So while you gaze at the AAPL today remember that the knife is dropping.
That is a quote from Treasury Secretary Tim Geithner. Words have meaning and when someone like Geithner speaks he is well aware of the meaning of his words, which is why he cut himself short when he realized what he had just said. This quote will get little if any play in the media yet it is the most significant thing he said. He was being interviewed by Larry Kudlow on CNBC at their Delivering Alpha conference and had pretty good answers to the questions put to him with a few exceptions of note.
Why is the economy slowing down? Europe, the rise in oil prices, government spending is tailing off.
Europe is a given, oil was up then down now up again, but obviously everyone will latch on tho the government spending part of the answer. Geithner pointed out that after the crash of ’08 the economy was shrinking at a 9% clip and within six months, because of the actions taken by government, the economy began growing again. He called that “remarkable” and I think it is a spot on description. Yes the fixes are temporary but they were also necessary, so you have to take the balance of that which was a net positive, I think for the country.
Why is growth so slow? De-leveraging by everyone from Main Street to Wall Street has pulled money out of the economy.
Geithner went on to say that the biggest risks to the economy are Europe and the so called “financial cliff” at the end of the year. Europe is a far greater threat in his estimation because it is not under our control. He said ” Europe is burning” and they are not yet back from the abyss. He described the financial cliff problem as completely fixable and, compared to the ’08 crisis among others, a relatively a simple process.
Having said that, his frustration with the political gridlock that rules the Congress was obviously very high. He revealed that there is a “valuable foundation” being laid down behind the scenes to fix the problem before the January deadline but he clearly feels that there is not enough focus on the entire solution. The Secretary believes that a dual solution of a short term fix within a framework of long term reform is the only way to ensure that we remain competitive and continue to grow in the next decade. He sees that the short term problem is being addressed fervently but the long term framework is not being given equal time.
It is entirely up to Congress to solve this problem he said. The Federal Reserve nor the Executive Branch can do this.
In the short term – Extend tax cuts for 98% of Americans, incentivize private investment, significant public investment(particularly infrastructure), programs for both basic scientific research and worker training. Remove the debt ceiling, let more people refinance their mortgage, give incentives for hiring, extend business credits for R & D and the like, and allow more teachers to be hired(?).
In the long term – Reform both the tax code and entitlements.
His estimate is that over 10 years this costs $1 trillion. He believes there to be two ways to get the money and borrowing it is not one of them. One is to tax the higher earning taxpayers more. The other is to cut spending on defense, medicare/medicaid, education etc. Both solutions will impact the overall economy negatively and he says the choice must be made as to which will hurt less. His pick is to raise taxes. His frustration with the politicians shows through when he talks about this as he accuses them of looking at solutions without considering the alternatives. He is adamant that these fixes will be made because the alternatives are just too disastrous for even the Fools on the Hill to tempt fate. I am not sure I agree with that assessment. He further said that the fixes are easily done if only the Congress would get “unstuck” and move on it.
The LIBOR scandal was raised and although much will be made of the issue, I was least interested in those responses than any other. He said that they alerted Europe to the problem and that actions are now being taken and more action is coming. Why did it take so long (4 years) for this to come to light? Geithner says that investigations take time if you want to make sure that the charges stick and that punishment can be meted out.
But the slip about Washington, calling it a place that evokes despair, man that was just devastating. People don’t use words like “despair” anymore. For a guy in his position to have that dark a view of our government is a brutal indictment of the current situation.
The New York Times is reporting that criminal cases are being built against some banks and/or employees. Barclay’s heads the list of course, and UBS is said to be the next target with many to follow. And while that sounds like a tasty headline that promises to finally extract some measure of punishment for the many misdeeds of Bankers and their sort, it really isn’t. This sentence, mid-way through the article, tells all:
“The investigation into the global banks is unusually complex and it could continue for years, and ultimately end in settlements rather than indictments, said the officials close to the case.”
The entire article is here.
Story developing. Employee(s) hid losses in Q1 apparently. Criminal acts possible. Q1 is now EPS $1.19 down from $1.31. (-$459M)
Q2 EPS is a blockbuster no?
“Whale” losses are $5.1B with potential future losses as high as $1.6B.
“In the first half of 2012, faced with the complicated and volatile economic environment at home and abroad, the CPC Central Committee and the State Council committed to the general tone of progressing steadily,” a spokesperson for the National Bureau of Statistics said.
The numbers are not good today. I do not care for what analysts expected, at all. The YoY GDP is down as is industrial production. Retail is up? Well, let’s open champagne! QoQ GDP is up but it is still the slowest growth number in three years.
The entire global economy is shrinking. Some of it is actually evaporating. The American indices are being bet up. The open could be green arrows but I don’t see how it lasts. I think the last two hours today will be all blood. No one is going to want to be in this market over the weekend. And it doesn’t matter why, remember that. Just look at it objectively. Emotions will kill you, I know it(for sure) I think you know it too. Today will be tricky. So many scenarios could play out. But we won’t know for sure which until the closing. My prediction is that we open higher but close down a bit, just like every day this week. Can you really make an argument that the market will be long over the weekend?
If you get a run up that gets you near targets, I would take the coin and buy it again lower. Of course I know nothing. I am expressing opinions hoping to help you think your way thru the day.
The last months sessions have left us essentially flat. Two big mountains of opportunity and now our second valley of death. Are conditions better or worse now?
Bigger than many realize is the dire straits of the American corn production. Mother Nature has turned Wicked Witch and it is going to impact household checkbooks like a rise in gas prices does if it doesn’t start raining.
Banks have been good. Well, except for the LIBOR scandal. Which was bad. Really bad. A lot of the world’s biggest names might get caught up in this actual (not CNN or FOX) scandal. Lawsuits and walks of shame might be on the horizon.That will help things not at all.
You almost forget that the EU is in a hole so deep it would make Courtney Love blush. Lots of talking, mostly about how it isn’t their fault. More talking about how very complicated it all is and that it will take some time (10 fuquen years) to get it all back right. Bonds are being bought with negative yields. Seriously, that is desperate.
Recession is looming(already here) in the USA. All the Fed horses and all the Fed men haven’t been able to keep this eggshell economy from starting to crack(not Marion Barry) on the sidewalk of reality. The question is whether or not they can stop it from frying or scrambling. November is the starting line, believe it or not. Leaving about a month to make a solution that not just sounds good but actually does some good. Kicking the can down the road is the typical action and it is reasonable to believe that will be the solution offered. If so, then short the major idiocies because it is all southbound from that station.
Don’t get cute. Play defense. Look to counter attack when the opportunity arises but don’t press the attack, you’ll just lose your sausage in the guillotine.
No hint of imminent QE3.
I think that a lot of people including myself fear a devastating inflationary spike resulting from the oceans of cash released to the banks finding their way into the hands of a waiting world of consumers. But that hasn’t happened. Two QE’s, a Twist and a half, toxic asset purchases, and putting a hammerlock on interest rates has done absolutely nothing to either stimulate the economy or cause any blip of inflation. Debt is every ones main problem from governments to households. Getting out from under this debt is a deflationary mechanism as explained here in a very well written and convincing piece. There will be no QE3 if for no other reason than BigBen will not spit into the wind. It is a vicious cycle if allowed to continue. Consumers who no longer trust government or markets are paying down debt. As they do so, dollars are not spent consuming. And the US of A needs it’s consumers don’t ya know. Just some food for thought.