201409.29
1
0

Confounding Home Sales

There was a surge in new home sales reported last week, breaking the current flat trend that extended back well beyond last year’s MBS problems. The huge increase in sales, so out of character with other indications recently, suggests possible noisiness in the data. That is particularly true when existing home sales fell in August…

201409.29
1
0

Bubbles As Market Efficiency

I want to believe markets are efficient and incorporate “all” the possible permutations as best as possible, but I don’t think that is the case under current conditions. Whatever efficiency there has been, or whatever may have been exhibited in the past, was degraded by financial engineering, and not just interest rate targeting by the…

201409.29
1
0

Where’s The Income Growth?

Continuing on with the theme of orthodox interpretation vs. context, in order to determine not just the relative position of the economy but how that relates to “markets” vis-à-vis bubbles, the current estimates of personal income and spending fit well within those rough confines as I have described them. The orthodox interpretation sees the changing…

201409.28
1
0

Shoeshine Boys & Thinking At The Margin

It is said that Joe Kennedy got out of the stock market in 1929 because he started to hear stock tips from his shoeshine boy. Bernard Baruch had similar feelings: When beggars and shoeshine boys, barbers and beauticians can tell you how to get rich it is time to remind yourself that there is no…

201409.26
1
0

Lockstep Credit Burdens The Economic Assumptions

For all the supposed and assumed disparities between US monetary policy direction and that in Europe, credit markets in both locations seem to be far too much in lock-step agreement. That would suggest a few implications, the first of which is that the global financial system does not really consist of many closed systems with…

201409.26
0
0

Further Measures of Market Risk

Continuing on with the valuation theme, there are a couple of additional “market” indicators that are also at or above dot-com levels. While not strictly a valuation technique, the level of margin debt and really customer net worth gives us an insight into one aspect of multiple expansion. Margin debt for FINRA accounts (which includes…

201409.26
0
0

More Depth To Market Risk

With last week’s release of the Financial Accounts of the United States (formerly known as the Flow of Funds; still designated Z1 by the Fed’s system) we can add to yesterday’s examination about bubbles and market risk. Putting the figures together, the composite picture is one where stocks are as stretched in terms of valuations…

201409.25 0

Being Wrong

Reflections upon the past few years bring out valid criticisms about “being wrong.” I have made no secret that I favor the bearish interpretation of eventually the stock market, but immediately the economy. The erosion and attrition I describe does not look like anything seen before, except the months and years immediately preceding the Great…

201409.25
2
0

The Dollar Short, Golden Bell

The purpose of this exercise of examination of global funding mechanisms is to put together means for inference about the state of dollar funding as it relates to the systemic short (Part 1 here; Part 2 here). There is no direct path for observation; that is why nobody can figure out how big it is…

201409.24
1
0

TNT Attrition

There was a bit of a stir caused by Dutch logistics firm, TNT Express. The company has been expressing caution, if not downright pessimism about its prospects due to economic considerations. Today, it lowered its targets for growth, with the stock taking a beating in so doing. However, it is the manner of that downgrade…