I ran into J6P Day Trader a few minutes ago. My cell phone was fully charged and I shot the above video for the hell of it. I can hear the silent pledge he's making.
You're in pretty bad shape when the tank on your truck is dragging the ground in sparks and you don't notice.
That salt is bad stuff man, and they literally pour it on these roads. Concrete bridges get eaten up pretty quickly too. I have to drive a beater car in winter.
That sounds more like the Ford Motor Company that I used to know. There's an old joke going back to the early 70's when their Pinto featured an exploding gas tank and during that same time Firestone was belatedly learning how to make radial tires:
"I feel like I am travelling down the Road of Life in a Pinto with Firestone radials".
GMO - "ELKO - Eureka County plans to appeal State Engineer Jason King's recent approval of General Moly's request for using water rights for mining at its proposed Mt. Hope molybdenum mine."
we keep getting these bounces intraday which just makes this market weaker in my mind. i'd rather see a washout selloff with huge volume and a close at the low before feeling comfortable committing to the long side.
Not surprised we got the selloff today. Too many people were playing for a bounce. But I do believe we go up significantly from here. I am not a chart reader, so perhaps the people calling for weakness here are correct, but unless the economy really does roll over, valuations are such that I don't see how this doesn't translate into higher stock prices over the next year.
From Bespoke via Raymond James:
Current quarter earnings reports have left the SPX consensus estimate around $100 for 2011 and $113.57 for 2012. That means, if those estimates are correct, at last week’s “lows” the SPX was trading at 11.3x 2012’s earnings with an Equity Risk Premium of ~700 bp.
BB - Well I think the bears' argument is summed up as follows: (1) Global economy isn't growing nearly as strong as people hoped for so the earnings growth won't be there; i.e., how can you estimate 2012 earnings? (2) Govts across world are contracting spending which will yield lower demand for products and therefore lower earnings (3) Margins at all time highs will likely fall (4) Serious contagion risk in Europe (5) Given above risks people will not be willing to pay up for earnings.
Me personally? I think we could see a bit more downside risk but ultimately I think once we clear through this rough patch we will see new highs before the end of the year. I still think the bull market is intact. I'm open to change opinion though.
I was out camping in Lake Tahoe since Friday afternoon and I am just catching up on my regular weekend reading: Mauldin and Hussman. First, here is an interesting excerpt from Mauldin regarding the deteriorating situation in Europe:
“In spite of last week’s Eurozone Summit agreement on Greece and EFSF ‘flexibility’, Italian and Spanish sovereign debt yields have resumed escalation this week. Moreover, the Italians had to cancel issuance of longer maturity debt as demand was insufficient. German Finance Minister Schauble damaged confidence Wednesday when he said the EFSF would not have a blank check to purchase Eurozone sovereign debt in the secondary market.
“Meanwhile, US money market funds have been withdrawing from Eurozone bank commercial paper, leaving Eurozone banks with a big gap in availability of short-term funding and a severe shortage of dollars.
“In the background, the Fed has quietly advised the ECB and some other central banks that Congress has warned the Fed not to repeat the huge liquidity support to Europe and Asia that it provided in 2008. European officials believe the Fed would be less able to come to the rescue again with increased swap lines and direct loans to Eurozone banks, as it did post-Lehman.
“Thus, in parallel with the US debt ceiling uncertainties, the Eurozone appears to be entering into renewed crisis of breakdown in interbank trust and escalating borrowing costs for Italy and Spain, and maybe even France. Whatever happens with the US debt ceiling, attention will soon turn back to Eurozone sovereign debt problems and threats to the viability of Eurozone banks from debt contagion.
“It is increasingly possible that the ECB may not be able to function as lender of last resort on the scale required to cope with an interbank lending breakdown. It is also thus likely that the Eurozone will suffer a shortage of dollars for its interbank credit markets. Demand for dollars will likely escalate, while confidence in Eurozone financial institutions falls. This could force Eurozone banks to purchase dollars in the open market and drive the dollar higher.”
So we could have yet another once-in-a-lifetime opportunity to load up on precious metals at a great discount to the long-term trend (we know that the temporary shortage of dollars will inevitably be resolved by printing more dollars and PMs making new highs...)
As for the US, Mauldin notes that "if year-over-year GDP growth dips below 2%, a recession always follows."
He then talks about last week's revisions to real GDP: "It seems that BEA went back and revised the numbers for the recession. Would it surprise you to learn that the recession was worse than we thought at the time? The peak-to-trough decline was 5.1% instead of 4.1%. That means that in real terms the economy has not yet recovered back to the pre-recession levels."
Then he points out that with the above revisions, the year-over-year GDP growth has already dipped below 2%, and reminds us that when this happened in the past, a recession has ALWAYS followed in a short order. And that during a recession, the stock market dropped by 40% on average.
HONG KONG/TAIPEI, Aug 1 (Reuters) - Taiwan's Foxconn Technology Group, known for assembling Apple's iPhones and iPads in China, plans to use more robots, with one report saying the company will use one million of them in the next three years, to cope with rising labour costs. "
“Meanwhile, US money market funds have been withdrawing from Eurozone bank commercial paper, leaving Eurozone banks with a big gap in availability of short-term funding and a severe shortage of dollars.
“In the background, the Fed has quietly advised the ECB and some other central banks that Congress has warned the Fed not to repeat the huge liquidity support to Europe and Asia that it provided in 2008. European officials believe the Fed would be less able to come to the rescue again with increased swap lines and direct loans to Eurozone banks, as it did post-Lehman.”
David – I have some questions regarding Mauldin’s comments…how does he know that US money mkt funds have been w/d from Eurozone bank CP? Also, how does he know that the Fed has “quietly advised the ECB” about this?
Also, in regards to his comments about the sub 2% GDP > How many times has this happened? I.e., what's the sample size?
I'm not saying I don't agree I just am always skeptical when I hear the someone that never strays from the same negative or positive bias...perhaps he/she is being paid to be negative/positive?
ETP - CP, I don't like LP's in general since I was "took" by T. Boone in the 1980's with his Mesa Limited Partnership. It went bust. ETP has a wonderful long term record but I cannot get over my prejudice. Another negative is the tax prep paperwork technically required when an LP is sold. Just too much of a hassle but can be overlooked by the IRS (at your risk) if you are not a big bucks player and just report it as any other capital gain/loss. To do such a thing probably is a wash or maybe is even in favor of the IRS.
And now for our next act: the test of the 200 DMA from the underside...
ReplyDeleteHey guys. Kinda wedged between the 200's here.
ReplyDeleteLooking at a quintuple bottom in XLF/FAS??
ReplyDeleteHate wedgies, man.
ReplyDelete:)..No doubt.
ReplyDeleteVB is fine. We've checked in through email. Hope to see her soon and she'll check in here.
Sold my SPY August $125 Calls just now at $5.20...what a day
ReplyDeleteF to recall 1.1M F150's. The gas tank might fall off. YES! Any excuse to watch this link again!
ReplyDeletehttp://www.youtube.com/watch?v=8-QNAwUdHUQ
HEK has been strong all day.
ReplyDeleteSomebody needs to get off the pot, we've got a dollar waiting on a dime over here...
ReplyDeleteha great skit Mark!
ReplyDeleteYou're in pretty bad shape when the tank on your truck is dragging the ground in sparks and you don't notice.
ReplyDeleteThat salt is bad stuff man, and they literally pour it on these roads. Concrete bridges get eaten up pretty quickly too. I have to drive a beater car in winter.
That sounds more like the Ford Motor Company that I used to know. There's an old joke going back to the early 70's when their Pinto featured an exploding gas tank and during that same time Firestone was belatedly learning how to make radial tires:
ReplyDelete"I feel like I am travelling down the Road of Life in a Pinto with Firestone radials".
GMO - "ELKO - Eureka County plans to appeal State Engineer Jason King's recent approval of General Moly's request for using water rights for mining at its proposed Mt. Hope molybdenum mine."
ReplyDeletehttp://elkodaily.com/mining/article_b8666210-ba0e-11e0-8aa3-001cc4c002e0.html
$2.4 Trillion - That's about 17,000 tons of gold?
ReplyDeletewe keep getting these bounces intraday which just makes this market weaker in my mind. i'd rather see a washout selloff with huge volume and a close at the low before feeling comfortable committing to the long side.
ReplyDeleteNot surprised we got the selloff today. Too many people were playing for a bounce. But I do believe we go up significantly from here. I am not a chart reader, so perhaps the people calling for weakness here are correct, but unless the economy really does roll over, valuations are such that I don't see how this doesn't translate into higher stock prices over the next year.
ReplyDeleteFrom Bespoke via Raymond James:
Current quarter earnings reports have left the SPX consensus estimate around $100 for 2011 and $113.57 for 2012. That means, if those estimates are correct, at last week’s “lows” the SPX was trading at 11.3x 2012’s earnings with an Equity Risk Premium of ~700 bp.
BB - Well I think the bears' argument is summed up as follows:
ReplyDelete(1) Global economy isn't growing nearly as strong as people hoped for so the earnings growth won't be there; i.e., how can you estimate 2012 earnings?
(2) Govts across world are contracting spending which will yield lower demand for products and therefore lower earnings
(3) Margins at all time highs will likely fall
(4) Serious contagion risk in Europe
(5) Given above risks people will not be willing to pay up for earnings.
Me personally? I think we could see a bit more downside risk but ultimately I think once we clear through this rough patch we will see new highs before the end of the year. I still think the bull market is intact. I'm open to change opinion though.
I was out camping in Lake Tahoe since Friday afternoon and I am just catching up on my regular weekend reading: Mauldin and Hussman. First, here is an interesting excerpt from Mauldin regarding the deteriorating situation in Europe:
ReplyDelete“In spite of last week’s Eurozone Summit agreement on Greece and EFSF ‘flexibility’, Italian and Spanish sovereign debt yields have resumed escalation this week. Moreover, the Italians had to cancel issuance of longer maturity debt as demand was insufficient. German Finance Minister Schauble damaged confidence Wednesday when he said the EFSF would not have a blank check to purchase Eurozone sovereign debt in the secondary market.
“Meanwhile, US money market funds have been withdrawing from Eurozone bank commercial paper, leaving Eurozone banks with a big gap in availability of short-term funding and a severe shortage of dollars.
“In the background, the Fed has quietly advised the ECB and some other central banks that Congress has warned the Fed not to repeat the huge liquidity support to Europe and Asia that it provided in 2008. European officials believe the Fed would be less able to come to the rescue again with increased swap lines and direct loans to Eurozone banks, as it did post-Lehman.
“Thus, in parallel with the US debt ceiling uncertainties, the Eurozone appears to be entering into renewed crisis of breakdown in interbank trust and escalating borrowing costs for Italy and Spain, and maybe even France. Whatever happens with the US debt ceiling, attention will soon turn back to Eurozone sovereign debt problems and threats to the viability of Eurozone banks from debt contagion.
“It is increasingly possible that the ECB may not be able to function as lender of last resort on the scale required to cope with an interbank lending breakdown. It is also thus likely that the Eurozone will suffer a shortage of dollars for its interbank credit markets. Demand for dollars will likely escalate, while confidence in Eurozone financial institutions falls. This could force Eurozone banks to purchase dollars in the open market and drive the dollar higher.”
So we could have yet another once-in-a-lifetime opportunity to load up on precious metals at a great discount to the long-term trend (we know that the temporary shortage of dollars will inevitably be resolved by printing more dollars and PMs making new highs...)
As for the US, Mauldin notes that "if year-over-year GDP growth dips below 2%, a recession always follows."
ReplyDeleteHe then talks about last week's revisions to real GDP: "It seems that BEA went back and revised the numbers for the recession. Would it surprise you to learn that the recession was worse than we thought at the time? The peak-to-trough decline was 5.1% instead of 4.1%. That means that in real terms the economy has not yet recovered back to the pre-recession levels."
Then he points out that with the above revisions, the year-over-year GDP growth has already dipped below 2%, and reminds us that when this happened in the past, a recession has ALWAYS followed in a short order. And that during a recession, the stock market dropped by 40% on average.
2354.TW - Foxconn - APPL Supplier
ReplyDelete" By Lee Chyen Yee and Clare Jim
HONG KONG/TAIPEI, Aug 1 (Reuters) - Taiwan's Foxconn Technology Group, known for assembling Apple's iPhones and iPads in China, plans to use more robots, with one report saying the company will use one million of them in the next three years, to cope with rising labour costs. "
http://www.reuters.com/article/2011/08/01/foxconn-idUSL3E7J10JW20110801?feedType=RSS&feedName=cyclicalConsumerGoodsSector&rpc=43
“Meanwhile, US money market funds have been withdrawing from Eurozone bank commercial paper, leaving Eurozone banks with a big gap in availability of short-term funding and a severe shortage of dollars.
ReplyDelete“In the background, the Fed has quietly advised the ECB and some other central banks that Congress has warned the Fed not to repeat the huge liquidity support to Europe and Asia that it provided in 2008. European officials believe the Fed would be less able to come to the rescue again with increased swap lines and direct loans to Eurozone banks, as it did post-Lehman.”
David – I have some questions regarding Mauldin’s comments…how does he know that US money mkt funds have been w/d from Eurozone bank CP? Also, how does he know that the Fed has “quietly advised the ECB” about this?
Also, in regards to his comments about the sub 2% GDP > How many times has this happened? I.e., what's the sample size?
I'm not saying I don't agree I just am always skeptical when I hear the someone that never strays from the same negative or positive bias...perhaps he/she is being paid to be negative/positive?
ETP -illini - Here's an Texas oil/gas company I had on an old list, weren't you recently looking at these plays?
ReplyDeleteETP - CP, I don't like LP's in general since I was "took" by T. Boone in the 1980's with his Mesa Limited Partnership. It went bust. ETP has a wonderful long term record but I cannot get over my prejudice. Another negative is the tax prep paperwork technically required when an LP is sold. Just too much of a hassle but can be overlooked by the IRS (at your risk) if you are not a big bucks player and just report it as any other capital gain/loss. To do such a thing probably is a wash or maybe is even in favor of the IRS.
ReplyDelete