Comments on: Retail Sales Ask: “What Soft Landing?”

By: paul07

paul07 — Sat, 14 Oct 2006 20:59:50 +0000

jagmohan I think your right about the debt this nation has. Its truly not understood on wallstreet though. The savings in america is actually -0.5. There is NO SAVINGS in this nation. I continue to read report after report about this goldilocks economy. Makes me angry.

I think everyone is prediciting more of chance of a softlanding rather than a hardlanding. Only reason why I lean towards a hardlanding is due to the housing sector which now for some reason many say may be looking better for 2007. I dont buy it. I think foreclosures are going jump dramtically in 2007 leading to a recession and loss of jobs. These new highs on the Dow are throwing to many people to think the economy is just perfect when in reality it isnt.

By: paul07

paul07 — Sat, 14 Oct 2006 20:59:47 +0000

By: jagmohan swain

jagmohan swain — Sat, 14 Oct 2006 19:46:41 +0000

So much time and space has been spent discussing the effect of gasoline and so little about the effect of rising long end yields, which beats commonsense since US is the largest DEBTOR NATION in the world. Let’s face the facts.An average 3 member american household carries a debt of 100,000 dollars and rising every day.If such debt is used for productive use such as technological R&D that can give a higher rate of return in future than present interest rate cost one would understand such profligacy.But we know where all that borrowed money is going.So the typical household balance sheet is getting bad to worse.Consumer spending is 70% of GDP as per BLS statistics.Rising yields means higher interest payment , hence less money for spending , hence economic slowdown and possibly recession.That’s why when GLD put a solid bottom last week I was wondering how come such an important development received so few attention.Does any one out their chattering about a possible top in bonds and a bottom in yields.If they are I have’t heard of it.Increasingly a super hard landing and run away inflation ( due to super loose credit growth ) scanario looks much more likely.
Stock market hasn’t yet bought into this theory, or so it may seem now? But we will see, as we will do well to remember it seldom looks ugly at the top.

By: ja

ja — Sat, 14 Oct 2006 19:22:23 +0000

any of you people traders? look at the 10 year reaction and tell me that was a soft report.

gas prices exaggerate retail sales to the upside AND to the downside. all i said is if you want a cleaner read on retail sales every month, look at retail sales ex-auto, ex-gas. barry is bearish and interpreted the data to fit his stance, that is what economists do. in my world, as a bund and 10 year trader, the only opinion that matters is the markets and it said strong.

By: Paul 07

Paul 07 — Sat, 14 Oct 2006 19:15:30 +0000

I am baffled by the rise in these markets. Some here are confused but I am really confused. Every damn day this market rises and more bulls say dow 13,000 is on its way. Everytime i turn on CNBC all i hear is how drop in oil and gas prices is contributing to consumer spending… When the hell is the “consumer” going to wake up and start putting away for retirement. The savings in America is very bad. There actually is no savings rate. We are taught to spend and that spending is a good thing to keep the economy going. The economy has to slow down once in a while but this whole talk of a “soft landing” is pissing me off. Cnbc every day talks about the goldilocks economy. I think these markets are moving up ahead of elections and that after a selloff should appear. These markets have gone straight up since early August. I think a pullback is coming sooner than later. IF oil rises back to 70+ and gas at pumps back to 3+ expect a drop in the indices. They are predicitng Xmas sales of 4-6%.

By: whipsaw

whipsaw — Sat, 14 Oct 2006 04:19:37 +0000

“BDG123, that gets my vote for “Comment of the Day.” Across the entire blogosphere. Thanks – you made my day.”

Agreed, nobody can’t rant like B and still be taken seriously. Impressive rhetoric.

By: diva

diva — Sat, 14 Oct 2006 03:58:19 +0000

BDG123, that gets my vote for “Comment of the Day.” Across the entire blogosphere. Thanks – you made my day.

Posted by: semper fubar | Oct 13, 2006 1:42:10 PM

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I second that motion!

By: whipsaw

whipsaw — Sat, 14 Oct 2006 02:13:12 +0000

How I lost a million dollars, lessons learned?

Total bullshit since I never had a million to lose, but now that I’ve got your attention

I really have been pondering my investment performance since March and maybe some of you have as well. Belay that, I know most of you have. In CorporateSpeak and CorporateMilitarySpeak, the process is called “Lessons Learned;” in the South, we call it “Who the Hell Coldcocked Me?” So…

_I took macro-short positions in March via Sept SPY puts which went red into April, but had modest exposure. My other stuff was neutral overall.
_That position was prompted by a belief that there were too many bad macro things going on to sustain the market and it worked fine in May.
_At that point I loaded up on SPY, DIA and QQQQ puts and did very well, even managing to dump them on the morning that things bounced up in June. So far, I am a genius.
_I stayed away until July and then concluded that the recent bounce was absurd in the face of macro data. I went back in and made a quick but nice profit with puts.
_But (here it comes) then I completely ignored all discipline and returned again not just risking the profits I’d already made, but twice as much. That worked fine for about two days.
_So then I decided that the thing to do was pile on while the bulls were at their most vulnerable in an upswing and raised the stakes by 20%.
_As time went on and the lunatic bulls did not run for the hills as expected, I ignored the sell signal at $SPX 1280 because I was quite confident that the CW that there would be a drop in May followed by an October low was dead on. After all, the first part worked out well.
_Of course the drop never happened despite data that should have triggered it. Eventually, I bought near calls in QQQQ and DIA to stabilize my NAV.
_I scaled back my puts considerably this week because it is obvious that things are going to go up at least thru the elections. You can attribute that to performance anxiety or election anxiety, but it is apparent that whoever is pulling the levers is able and willing to ignore what is going on in the economy in order to push things up. I cannot fight that by myself.
_The important lesson is that even tho I fancy myself a technical analyst of sorts, none of my actual trades were based on technical analysis- every single one was based on either my macro-analysis or pure impulse. If I had been living by the chart, I would have made (less) money during May/June and not lost any money since then. Lack of discipline = Lost money
_Do I blame BR for this? Not at all. I am a big boy and make my own decisions. Did this blog become too subject to groupthink? Maybe, but it doesn’t really matter if markets are being shoved around artificially does it?

So my answer to “Who coldcocked me?” is I did. Fortunately, I had defined (if somewhat excessive) risk, so I will be around for the next chapter and have blood in my eye for the bulls. But I will be watching charts instead of assuming too much market rationality next time. In the interim, I am going to focus on delta neutral straddles/strangles until the charts say it is time to get vengeance.

By: V L

V L — Sat, 14 Oct 2006 01:25:53 +0000

ja: “so my retail sales are down .4%, but i really spent .8% more.”

“$1000 last month’ and “this month i spend $996″

Since when $996 is more than $1000????

You have spent less and US consumers have spent less no matter how the data is twisted but $996 is less than $1000!

By: V L

V L — Sat, 14 Oct 2006 01:17:37 +0000

“Oh, I also think that this is a “soft landing,” but there are 3 Fed members who must step away from the crack pipe.”

Actually, there are 5 (five) Fed officials who feel that current “the Fed will cut rates” party is premature.
Just thought you might want to know it, just in case.

” Oct. 13 (Bloomberg) — Federal Reserve Bank of Chicago President Michael Moskow said central bankers may need more rate increases to curb inflation, bringing to five the number of Fed officials since Oct. 4 who have played down a possible rate cut.

“Some additional firming of policy may yet be necessary to bring inflation back to a range consistent with price stability in a reasonable period of time,” Moskow said yesterday in a speech at the Four Seasons Hotel in Chicago. “