it'll come just give it some time
had to figure they were gonna at least take out the much publicized 1200/11000 momentarily after hovering around it for a while and squeeze the shorts...
we'll see how long it holds
valuations just stupid right now and estimates for q2 and beyond and really high regardless of how good q1 is
oil almost 87 now and this time of year prices at pump go up for seasonality reasons 3+ dollar gas a coming soon if it isn't already there in your neck of the woods
had to figure they were gonna at least take out the much publicized 1200/11000 momentarily after hovering around it for a while and squeeze the shorts...
we'll see how long it holds
valuations just stupid right now and estimates for q2 and beyond and really high regardless of how good q1 is
oil almost 87 now and this time of year prices at pump go up for seasonality reasons 3+ dollar gas a coming soon if it isn't already there in your neck of the woods
well back below 1200 we'll see if it stays there now and if this is finally the top....
oil and commodities getting clubbed too maybe no summer oil rally after all?
as far as "manipulation" it depends what you mean by manipulation
was the housing bubble "manipulated" by government sponsorship and no money down loans
is our current economy manipulated by unprecedented steps taking by global governements to prop up prices when this should be the most deflating environment we've seen since the last great depression
if you consider stuff like that "manipulation" than yeah..
as far as government DIRECTLY (they've been doing plenty in the indirectly arena crazy amounts) propping equity prices in the financial markets for the sake of propping nah....
markets eventually end up where they should be yeah at times they get overvalued and other times they get undervalued but over the long haul they get to where they should be eventually....
oil and commodities getting clubbed too maybe no summer oil rally after all?
as far as "manipulation" it depends what you mean by manipulation
was the housing bubble "manipulated" by government sponsorship and no money down loans
is our current economy manipulated by unprecedented steps taking by global governements to prop up prices when this should be the most deflating environment we've seen since the last great depression
if you consider stuff like that "manipulation" than yeah..
as far as government DIRECTLY (they've been doing plenty in the indirectly arena crazy amounts) propping equity prices in the financial markets for the sake of propping nah....
markets eventually end up where they should be yeah at times they get overvalued and other times they get undervalued but over the long haul they get to where they should be eventually....
full text of the SEC vs. GS stuff
http://www.sec.gov/litigation/complaints/2010/comp-pr2010-59.pdf
GS response
http://www2.goldmansachs.com/our-firm/press/press-releases/current/sec-response.html
http://www.sec.gov/litigation/complaints/2010/comp-pr2010-59.pdf
GS response
http://www2.goldmansachs.com/our-firm/press/press-releases/current/sec-response.html
i'm still trying to figure out what's the point though
shit like this just hurts investor confidence which is a necessary part of the "reflation" efforts
i guess maybe "they" know this pig is going to implode again anyway
so we gotta blame the banksters and such for all the problems and show the average joe we going after the bad guy
and shy any blame away from government who is just as much to blame for this mess and who in the process of the swiping more freedoms away from the average joe in the name of "protection"
shit like this just hurts investor confidence which is a necessary part of the "reflation" efforts
i guess maybe "they" know this pig is going to implode again anyway
so we gotta blame the banksters and such for all the problems and show the average joe we going after the bad guy
and shy any blame away from government who is just as much to blame for this mess and who in the process of the swiping more freedoms away from the average joe in the name of "protection"
weekly hussman rant....reason i listen to him so much is he isn't a permabear....
they sure don't wanna give up 11k do they....
lotso earnings this week we'll see if we sell the news as i'm guessing earnings will be fine for q1...the problem is estimates for q2 and beyond expecting a continuation of growth that is already baked into equity prices which likely won't happen
---------------------------------
April 19, 2010
Earning More by Setting Aside Less
John P. Hussman, Ph.D.
All rights reserved and actively enforced.
Reprint Policy
As of last week, the stock market remained characterized by strenuous overvaluation, strenuous overbought conditions, overbullish sentiment, and hostile yield pressures. The fraud charges brought against Goldman Sachs by the SEC may or may not provide a catalyst for market weakness, but significant risk is already baked into observable market conditions. The present syndrome tends to be followed by large and abrupt losses (though with somewhat unpredictable timing). To the extent that investors tend to attribute market fluctuations to the immediate news surrounding them, the Goldman Sachs issue may become more of a subject of investor attention in the weeks ahead than it deserves. But really, is anybody actually surprised?
With regard to credit concerns, I think the best characterization of recent data is that cross-currents are building between the recovery view adopted by Wall Street, and emerging data suggesting fresh deterioration. Clear evidence of either is still absent.
On the cheerful side, Equifax reported a slight decline the first quarter delinquency rate among the mortgages it tracks, from 6.60% to 6.57%. This almost imperceptible decline was attributed by Equifax to seasonal factors, but it has been enthusiastically reported as evidence that the housing market has turned around.
Also last week, we saw upbeat first quarter earnings reports from J.P. Morgan and Bank of America, with J.P. Morgan reporting net income of $3.3 billion, and Bank of America reporting net income of $3.2 billion. In contradiction to these indications of improvement, last week included several reports like the following:
April 12, 2010: The latest Mortgage Monitor report released by Lender Processing Services, a leading provider of mortgage performance data and analytics, shows that the total number of delinquent loans was 21.3 percent higher than the same period last year. The nation's foreclosure inventories reached record highs. February's foreclosure rate of 3.31 percent represented a 51.1 percent year-over-year increase. The percentage of new problem loans also remains at a five-year high. The total number of non-current first-lien mortgages and REO properties is now more than 7.9 million loans. Furthermore, the percentage of new problem loans is also at its highest level in five years. More than 1.1 million loans that were current at the beginning of January 2010 were already at least 30 days delinquent or in foreclosure by February 2010 month-end.
April 8, 2010: First American CoreLogic reports that distressed home sales – such as short sales and real estate owned (REO) sales – accounted for 29 percent of all sales in the U.S. in January: the highest level since April 2009. After the peak in early 2009, the distressed sale share fell to 23 percent in July, before rising again in late 2009 and continuing into 2010. Distressed sales are non-arms-length transactions such as REO or short sales. Market sales are arms-length transactions between a willing buyer and willing seller and they exclude distressed sales. Distressed sales have a very strong influence on home price trends and are an indicator of a housing market's health."
First American CoreLogic observes that when the proportion of distressed sales becomes a significant share of total sales, there is a negative and non-linear price effect. Specifically, "the prices in the two markets (distressed and non-distressed) begin to converge into one large distressed market."
Meanwhile, it is notable that the "favorable" earnings reported by J.P. Morgan and Bank of America in the first quarter were due to reduced provisions for credit losses - charges that are largely discretionary. In the fourth quarter of 2009, J.P. Morgan charged $8.9 billion against earnings to provide for credit losses, but in the first quarter of 2010, it charged $7.0 billion. Thus $1.9 billion of the $3.3 billion in earnings reported by JPM reflected reduced provision for credit losses. Likewise, the main factor driving Bank of America's earnings was a reduction in loss reserves. Indeed, the provision for credit losses was $3.6 billion lower than it was a year ago (when delinquency rates and credit losses were running at a fraction of current levels).
The reduced provision for credit losses might be reassuring were it not for the fact that delinquencies, foreclosures, non-performing loans, commercial mortgage strains, and actual charge-offs reported by various sources have been either unchanged or accelerating. Bank of America, for example, reported that 30-day delinquencies on residential mortgages hit a new record of 8.5% in the first quarter (though the surging FHA-insured portion will allow them to pass some of the consequent losses off onto the American public). Moreover, provisions for credit losses are again falling short of net charge-offs, which is what we saw in 2008 before banks got into trouble (see the June 2, 2008 weekly comment: Wall Street Decides to Close Its Ears and Hum). For example, actual net charge-offs at Bank of America were $10.8 billion during the first quarter of this year (versus $6.9 billion a year ago), exceeding the provision of $9.8 billion that was deducted from earnings in the first quarter. In effect, the Bank reduced its reserve for future losses by about $1 billion, which had the effect of boosting reported earnings accordingly. This accounts for the entire improvement in earnings from the fourth quarter of 2009, and then some.
Overall, the current data presents at best a mixed picture of credit conditions. My impression is that investors should not be surprised by a significant second-wave of credit strains. Still, as we've anticipated for months, we have now entered the window where those strains would be expected to begin, so I won't maintain this view if the data don't increasingly support it. Some evidence is consistent with fresh deterioration, but not nearly to the extent that we would consider decisive. Meanwhile, indications of improvement are also extremely thin. It seems unwise for investors to celebrate variations of a few basis points in delinquency rates. It seems equally unwise to celebrate "favorable" bank earnings reports that are exclusively driven by reduced loan loss provisions, particularly when the volume of impaired loans has not declined proportionately. Keep in mind that Enron and Worldcom were able to report outstanding earnings for a while by adjusting the manner by which revenues and expenses were accrued. I suspect that the U.S. banking system has become a similar breeding ground for innovative accounting.
they sure don't wanna give up 11k do they....
lotso earnings this week we'll see if we sell the news as i'm guessing earnings will be fine for q1...the problem is estimates for q2 and beyond expecting a continuation of growth that is already baked into equity prices which likely won't happen
---------------------------------
April 19, 2010
Earning More by Setting Aside Less
John P. Hussman, Ph.D.
All rights reserved and actively enforced.
Reprint Policy
As of last week, the stock market remained characterized by strenuous overvaluation, strenuous overbought conditions, overbullish sentiment, and hostile yield pressures. The fraud charges brought against Goldman Sachs by the SEC may or may not provide a catalyst for market weakness, but significant risk is already baked into observable market conditions. The present syndrome tends to be followed by large and abrupt losses (though with somewhat unpredictable timing). To the extent that investors tend to attribute market fluctuations to the immediate news surrounding them, the Goldman Sachs issue may become more of a subject of investor attention in the weeks ahead than it deserves. But really, is anybody actually surprised?
With regard to credit concerns, I think the best characterization of recent data is that cross-currents are building between the recovery view adopted by Wall Street, and emerging data suggesting fresh deterioration. Clear evidence of either is still absent.
On the cheerful side, Equifax reported a slight decline the first quarter delinquency rate among the mortgages it tracks, from 6.60% to 6.57%. This almost imperceptible decline was attributed by Equifax to seasonal factors, but it has been enthusiastically reported as evidence that the housing market has turned around.
Also last week, we saw upbeat first quarter earnings reports from J.P. Morgan and Bank of America, with J.P. Morgan reporting net income of $3.3 billion, and Bank of America reporting net income of $3.2 billion. In contradiction to these indications of improvement, last week included several reports like the following:
April 12, 2010: The latest Mortgage Monitor report released by Lender Processing Services, a leading provider of mortgage performance data and analytics, shows that the total number of delinquent loans was 21.3 percent higher than the same period last year. The nation's foreclosure inventories reached record highs. February's foreclosure rate of 3.31 percent represented a 51.1 percent year-over-year increase. The percentage of new problem loans also remains at a five-year high. The total number of non-current first-lien mortgages and REO properties is now more than 7.9 million loans. Furthermore, the percentage of new problem loans is also at its highest level in five years. More than 1.1 million loans that were current at the beginning of January 2010 were already at least 30 days delinquent or in foreclosure by February 2010 month-end.
April 8, 2010: First American CoreLogic reports that distressed home sales – such as short sales and real estate owned (REO) sales – accounted for 29 percent of all sales in the U.S. in January: the highest level since April 2009. After the peak in early 2009, the distressed sale share fell to 23 percent in July, before rising again in late 2009 and continuing into 2010. Distressed sales are non-arms-length transactions such as REO or short sales. Market sales are arms-length transactions between a willing buyer and willing seller and they exclude distressed sales. Distressed sales have a very strong influence on home price trends and are an indicator of a housing market's health."
First American CoreLogic observes that when the proportion of distressed sales becomes a significant share of total sales, there is a negative and non-linear price effect. Specifically, "the prices in the two markets (distressed and non-distressed) begin to converge into one large distressed market."
Meanwhile, it is notable that the "favorable" earnings reported by J.P. Morgan and Bank of America in the first quarter were due to reduced provisions for credit losses - charges that are largely discretionary. In the fourth quarter of 2009, J.P. Morgan charged $8.9 billion against earnings to provide for credit losses, but in the first quarter of 2010, it charged $7.0 billion. Thus $1.9 billion of the $3.3 billion in earnings reported by JPM reflected reduced provision for credit losses. Likewise, the main factor driving Bank of America's earnings was a reduction in loss reserves. Indeed, the provision for credit losses was $3.6 billion lower than it was a year ago (when delinquency rates and credit losses were running at a fraction of current levels).
The reduced provision for credit losses might be reassuring were it not for the fact that delinquencies, foreclosures, non-performing loans, commercial mortgage strains, and actual charge-offs reported by various sources have been either unchanged or accelerating. Bank of America, for example, reported that 30-day delinquencies on residential mortgages hit a new record of 8.5% in the first quarter (though the surging FHA-insured portion will allow them to pass some of the consequent losses off onto the American public). Moreover, provisions for credit losses are again falling short of net charge-offs, which is what we saw in 2008 before banks got into trouble (see the June 2, 2008 weekly comment: Wall Street Decides to Close Its Ears and Hum). For example, actual net charge-offs at Bank of America were $10.8 billion during the first quarter of this year (versus $6.9 billion a year ago), exceeding the provision of $9.8 billion that was deducted from earnings in the first quarter. In effect, the Bank reduced its reserve for future losses by about $1 billion, which had the effect of boosting reported earnings accordingly. This accounts for the entire improvement in earnings from the fourth quarter of 2009, and then some.
Overall, the current data presents at best a mixed picture of credit conditions. My impression is that investors should not be surprised by a significant second-wave of credit strains. Still, as we've anticipated for months, we have now entered the window where those strains would be expected to begin, so I won't maintain this view if the data don't increasingly support it. Some evidence is consistent with fresh deterioration, but not nearly to the extent that we would consider decisive. Meanwhile, indications of improvement are also extremely thin. It seems unwise for investors to celebrate variations of a few basis points in delinquency rates. It seems equally unwise to celebrate "favorable" bank earnings reports that are exclusively driven by reduced loan loss provisions, particularly when the volume of impaired loans has not declined proportionately. Keep in mind that Enron and Worldcom were able to report outstanding earnings for a while by adjusting the manner by which revenues and expenses were accrued. I suspect that the U.S. banking system has become a similar breeding ground for innovative accounting.
well earnings keep rolling in really good overall but market can't seem to go anywhere
think we just got a mini post SEC goes after GS squeeze when the shorts piled in on friday
S&P futures back below 1200 with amgen and ebay not doing well in after hours
think all this shit is baked in...only way we go up much from here is if mr. market predicts the future as it always does and says 2nd and 3rd quarter etc....gonna continue the upward trend which i say its not going too
mr. market generally speaking is looking 6 months ahead as far as earnings and GDP type stuff goes
think we just got a mini post SEC goes after GS squeeze when the shorts piled in on friday
S&P futures back below 1200 with amgen and ebay not doing well in after hours
think all this shit is baked in...only way we go up much from here is if mr. market predicts the future as it always does and says 2nd and 3rd quarter etc....gonna continue the upward trend which i say its not going too
mr. market generally speaking is looking 6 months ahead as far as earnings and GDP type stuff goes
remember what happened in 08? also i thought gov fig's were bullshit anyway...LOL
food and oil inflation went nuts in 08 and that's essentially and added tax and everybody packed it in and we went poof i mean it wasn't just that one thing obviously we had the other shit going on but...
only way i see them climbing much from here is if they manage to somehow keep oil down below 85 and equities continuing to climb while oil flat lines....
they put up a good fight today on equities nother sub 1200 dip but held......
100 oil will KO alot of things again...and that feeds into food costs and alot of other areas......its not all about the "3+ dollar gas" as i like to say...
the hoards of people that are spending their money at walmart on government UE checks can't take 90+ oil or they're spending will once again drop cause food and gas prices will be ramping on up
food and oil inflation went nuts in 08 and that's essentially and added tax and everybody packed it in and we went poof i mean it wasn't just that one thing obviously we had the other shit going on but...
only way i see them climbing much from here is if they manage to somehow keep oil down below 85 and equities continuing to climb while oil flat lines....
they put up a good fight today on equities nother sub 1200 dip but held......
100 oil will KO alot of things again...and that feeds into food costs and alot of other areas......its not all about the "3+ dollar gas" as i like to say...
the hoards of people that are spending their money at walmart on government UE checks can't take 90+ oil or they're spending will once again drop cause food and gas prices will be ramping on up
nope no commodities for now
gonna get short oil at end of summer or something if oil prices hang up here or go higher though...
overall i'm too chicken to get short commodities....obviously without all the crazy shit going on they are the place to be long term no doubt...
amzn and msft down pretty good in AH....
let the battle of 1200 rage on...LOL
gonna get short oil at end of summer or something if oil prices hang up here or go higher though...
overall i'm too chicken to get short commodities....obviously without all the crazy shit going on they are the place to be long term no doubt...
amzn and msft down pretty good in AH....
let the battle of 1200 rage on...LOL
I think INFLATION is RIGHT around the Corner
Further proof that the rising CCI (Continuous Commodity Index) is not without its effect on the pocketbook of the everyday citizen.
You still have to laugh at the writer’s conclusions. If A=B and B=C, then A=macaroni:
"Still, there was little sign of budding inflation… excluding food and energy…”
That is the Best line put out by the Gov't...Excluding everything YOU EAT and Everything you drive, fly, transport, lights, heat, AC...WTF are these people talking about
Yep, that’s the stuff that no one needs or no one buys and therefore has no effect on the real world.
Rising lumber prices at the home improvement stores, rising hardware costs, rising PVC costs, rising sheetrock costs, rising gasoline prices, rising meat prices, rising sugar prices, rising baby food prices, rising fruit prices, rising diaper prices, rising fees on local services,… Nope – this has zero effect on the average consumer.
Are you not relieved after learning that what your eyes tell you when you watch the cash register at the local grocery store and you hands tell you after carrying fewer bags out to the car for a larger amount spent is all just a function of an overactive imagination, a bit of indigestion resulting from the previous evening’s dinner?
Wholesale prices rise in March as food costs jump
Wholesale prices rise in March as food costs jump, but core inflation remains all but flat
Further proof that the rising CCI (Continuous Commodity Index) is not without its effect on the pocketbook of the everyday citizen.
You still have to laugh at the writer’s conclusions. If A=B and B=C, then A=macaroni:
"Still, there was little sign of budding inflation… excluding food and energy…”
That is the Best line put out by the Gov't...Excluding everything YOU EAT and Everything you drive, fly, transport, lights, heat, AC...WTF are these people talking about
Yep, that’s the stuff that no one needs or no one buys and therefore has no effect on the real world.
Rising lumber prices at the home improvement stores, rising hardware costs, rising PVC costs, rising sheetrock costs, rising gasoline prices, rising meat prices, rising sugar prices, rising baby food prices, rising fruit prices, rising diaper prices, rising fees on local services,… Nope – this has zero effect on the average consumer.
Are you not relieved after learning that what your eyes tell you when you watch the cash register at the local grocery store and you hands tell you after carrying fewer bags out to the car for a larger amount spent is all just a function of an overactive imagination, a bit of indigestion resulting from the previous evening’s dinner?
Wholesale prices rise in March as food costs jump
Wholesale prices rise in March as food costs jump, but core inflation remains all but flat
