Most Popular Barron’s Article
By Barry Ritholtz - December 8th, 2008, 3:00PM
My interview is the most viewed and emailed Barron’s article:
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In any great organization it is far, far safer to be wrong with the majority than to be right alone. —John Kenneth Galbraith
Macro Notes
US$ rally continuesPeter Boockvar
Asian currencies continue to sell off vs the $ on the heels of the news yesterday that South Korea said they will look into hot money inflows stemming from the $ carry trade and the Bank of Indonesia said they are looking into the foreign buying of bills. This follows the news a few weeks ago that Taiwan was limiting foreign deposit holdings and Brazil was taxing foreign inflow transactions. As I mentioned yesterday, we may have reached a short term pain threshold in terms of $ weakness and foreign countries are fighting back as they certainly won't wait for...
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December 8th, 2008 at 3:06 pm
It is better to be looked over than overlooked.
- – Mae West
December 8th, 2008 at 3:09 pm
While the actual interview took place last month, the release/publication date seems to have been perfectly timed, especially with all the talk today about a $10 million “bonus” for Thain… BR’s words:
…how do you give money to banks who need capital and not say, ‘By the way, you’re cutting your dividend.’ What’s happening instead is they’re saying, ‘Here is money: Give it out as dividends and bonuses.’ It is unbelievable. There is no clawback. It is unconscionable.
December 8th, 2008 at 3:11 pm
DL, I love that quote! Although in my case, I prefer to be overlooked.
December 8th, 2008 at 3:24 pm
breaking news: 3:14 PM ET 12/8/08 | Marketwatch
SAN FRANCISCO (MarketWatch) — Morgan Stanley Chief Executive John Mack will not take a bonus for 2008, The Wall Street Journal reported Monday on its Web site, citing people familiar with the matter. Mack also passed on his bonus last year. Morgan Stanley’s two co-presidents, James Gorman and Walid Chammah, will also forgo a bonus this year, as Morgan Stanley accepted $10 billion in federal money and will lay off thousands of employees, the Journal reported.
December 8th, 2008 at 3:29 pm
karen @ 3:11
“…in my case, I prefer to be overlooked”.
Surely you’re referring to your predictions, and not yourself (in person).
December 8th, 2008 at 3:32 pm
And it almost certainly depends upon who is doing the looking …
December 8th, 2008 at 3:34 pm
Barry, funny but I’ve never thought of you as a bear. More than anything, you’ve presented the data, allowing us to draw our own conclusions.
December 8th, 2008 at 3:42 pm
But wait. If semi-bears are getting bullish, then isn’t that bearish? I am SO confused.
And congratulations on the article and media exposure.
December 8th, 2008 at 3:48 pm
Gravitas, my friend…you move markets! Some day soon though, people are going to realize how bad things really are.
December 8th, 2008 at 3:48 pm
Does Bear equal Realist?
I was watching the UF-Bama game Saturday w/ my twelve year-old daughter and observed after Florida jumped out to a quick lead that things didn’t look good for Bama (disclosure–Bama alum). She jumped on me for being a “pessimist”. I told her I was a realist–Bama had a very good football team, but Florida had Tim Tebow, and we’d have to be near perfect, and also lucky, to win.
Alas, my realistic assessment proved true. But the Tide played as good a game as it could, so no tears. Now “realistically” that was the mythical national championship. Sorry Sooners. Ain’t nobody gonna beat Florida again.
December 8th, 2008 at 3:50 pm
I have been a bull this last week but I turned neutral today, I like cash tomorrow.
See you in Memphis, Bruce.
December 8th, 2008 at 3:57 pm
Nice interview, I’m sure; but I can’t be absolutely sure, since I don’t subscribe to Barron’s online and access is subscribers only.
I’m positive you were great, as usual Barry. (No! I’m not being sarcastic)
December 8th, 2008 at 4:00 pm
leftback @ 3:50
It’s still possible that the VIX could get down to 50, although I wouldn’t bet on it (by being long).
December 8th, 2008 at 4:06 pm
Leftback,
I now live on a mountain in East Tennessee, but know Memphis well. I sent you the best ribs and burger joint in the city, if you didn’t get it, let me know here..
By the way, our Nobel prizewinner in economics has turned decidedly bearish, imo…
http://finance.yahoo.com/news/Nobel-winner-Krugmans-worst-rb-13773278.html
Nobel winner Krugman’s worst case: a lost decade
He’s beginning to sound Roubinish…..
December 8th, 2008 at 4:17 pm
SteveC:
Anyone not pumping the market is called a bear…true bears are called “Dr. Doom”
December 8th, 2008 at 4:20 pm
Second batch of moneybags getting set up for a cleansing.
Once no one has any money left, that’s when the new bull market will start.
December 8th, 2008 at 4:20 pm
Bruce, excuse me, you meant you now live on a “hill” in East Tennessee, right? : )
December 8th, 2008 at 4:21 pm
Did we reach a 50% fib retracement off the October 14th high? Looks to me like the 14th fits pretty good. Techs brought it up techs will take it back down. imho
December 8th, 2008 at 4:40 pm
After hours warnings: Two big ones…Fedex and Texas Instruments. Let’s see the market shake this off, with its 10 day put/call near year-long low.
December 8th, 2008 at 4:43 pm
WOW…Texas Instrument guides EPS to .13 for 4Q from .33.
December 8th, 2008 at 4:44 pm
Karen:
They call them “Nobs” here…it is a fairly big hill…
December 8th, 2008 at 4:44 pm
Even with the rally I think we’ll still see lower lows. There is a spark of holiday excitement in the markets. Maybe it is just wassail and egg nog? S&P @ 975 before the end of the year, then plunging next year to new lows.
December 8th, 2008 at 4:47 pm
When we had all the spike in copper and steel prices and lumber…that was my wife building “her” house…caused a worldwide shortage of bricks, etc….Chinese embassy called several times, something about needing building materials in Hong Kong….
December 8th, 2008 at 4:54 pm
Translation – “You love me, you really love me!”
Just breaking balls Barry. Congrats.
December 8th, 2008 at 5:07 pm
your article was posted on the Real Clear Markets website… http://www.realclearmarkets.com/
December 8th, 2008 at 5:10 pm
There’s a video of “permabear” David Tice on Bloomberg.com
Calling for a 50% drop in the S&P, but is bullish on gold.
December 8th, 2008 at 5:33 pm
This must have been a mistake….surely most people thought it was an interview with Barry Manilow….
December 8th, 2008 at 6:11 pm
They should interview Cramer…by the time the article prints, he will have switched positions and then switched back, so the article will be timely.
December 8th, 2008 at 6:15 pm
One indicator I watch, 10 day put/call is at yearly lows (bearish for equities)…another is II Bulls…I see it in a range from 5% to 40% until the bear ends. It just spiked up right near 40% (bearish again)…then again I’m a short and hold guy.
http://www.investorsintelligence.com/x/free_chart.html?r=101#
December 8th, 2008 at 6:19 pm
Nice tradeable rally (which I utilized to sell several longs into, thank you very much) but THE bottom ain’t in yet. Not by a long shot. The so-called “experts” will be wrong again and will even take a few of the real experts with them on this one.
Call me a “perma-bear” if you will. I prefer “perma-realist” though.
December 8th, 2008 at 6:32 pm
@Mannwich – do you have S&P estimates that you’re basing that on? xMultiple expecations? Or is it just a gut feeling?
December 8th, 2008 at 6:43 pm
Said before: DOW reaches <7,000 and S&P <750 before =10,000 & 1050 respectively. Sticking to that. We may rally a bit more between now and the end of the year (and maybe even after the inauguration) but reality sets in after that.
Job losses are accelerating, which means home losses will accelerate and continue to plummet in value so how can we even begin to recover while those two things are happening? I fully realize the Feds are going to do everything they can to prop up this sucker and will probably eventually succeeed at moving money through the system, but I think it will take a lot longer for that to happen than people think. And beware all of the unintended consequences associated with such moves.
I’m putting my money where my mouth is – bought more SRS at 81 and QID at 65. Will continue to load up. Both are going to run again soon. Just don’t know when. I can be patient though.
We’re dealing with something that most people who are alive today (even the so-called experts) have never dealt with or lived through, so I think that far too many are underestimating the scope, severity, and lengthy of this mess.
December 8th, 2008 at 6:44 pm
Speaking of bears, check out this great photo at the bottom of the page! [lol]
http://www.nakedcapitalism.com/2008/12/links-12808.html
December 8th, 2008 at 6:47 pm
Congrats! Your rep seems to be growing.
I moved 19% from all cash into SRS and EEV. But I’m not real confident this rally is over. I just couldn’t resist the prices, and if we get a selloff tomorrow I may take what I can get and go back into all cash. I’m thinking we may see a rate cut rally until about 2:15PM next Tuesday.
December 8th, 2008 at 7:03 pm
Is bullishness any stronger than “sort of,” now that SPX has jumped above its 30-day?
December 8th, 2008 at 7:04 pm
If you think that things are going to get better any time soon read this:
http://mises.org/story/3247
December 8th, 2008 at 7:05 pm
As Ford and GM move so will the market. If this bailout doesn’t come together as helping both the equity holders and bond holders and tanks either the market will follow.
December 8th, 2008 at 7:09 pm
@Mannwich: I was talking about earnings estimates. I’m trying to understand what the bears are seeing.
December 8th, 2008 at 7:55 pm
Barry,
Tne 201k (used to have 401ks) crowd is looking for a bounce like they got from a bunch of below 5 dollar dogs like Corning and Yahoo back in late 2002 to 2004. I don’t think it will happen this time. This market is a sell.
December 8th, 2008 at 8:06 pm
Hey, Barry, still bullish?
We’ve come some ways since it seems that interview was done!
In this article you say you are now bullish and you might like gold.
And on the other hand, at the end of this cycle, we’ll see things half off.
Whew, can you clarify?
December 8th, 2008 at 8:07 pm
tangential:
#5 on the most e|mailed list: “Buy-Writes” Soar in Favor..
no better time than the present, I suppose..
the 100’s of Billions of ‘Mgmt.’ Fees, from MutFund/401(k), et al., that have gone up in Smoke, over the last decades, to say nothing of the assets under, so-called, ‘Mgmt.’..a real head-shaker..
y’all, try an experiment: Flop open your Yellow Pages, call a random ‘brokerage house’-listing, ask for “The Broker of the Day”, then, Query: What about Options?
I’ll lay you 7-2, that, more than 8 times out of 10, you’ll hear: “I don’t do Options, they’re tooo Risky..”
Today, 8 Dec 2008
It’s, really, UFR, a simple buy-write schema, after trans. costs, blows away the Tot. Ret. of 98% of any MutFund you’d care to name.. on y on…
BR,
re: FusionIQ, sometimes it’s easier to buy’m by the Box..
December 8th, 2008 at 8:36 pm
@Trickstar: Probably around $35-$40/share is my best guess but definitely lower than what’s being estimated by most.
December 8th, 2008 at 8:43 pm
Barry,
Would you please consider having a daily post committed to letting users comment on trading throughout the day? Seems it like it would be easy enough to automate a daily post at 9:00 am or so to let your readers comment on trading themes and what they believe is moving the markets on that day.
I think it would be a popular addition to the site and it would also keep discussion of the things you post on topic and not drifting off into whatever piece of news seem to be the story of the day.
Your writing is top notch but you have several vocal readers that add a lot of insight to what you write in the comments. It would be nice to be able to read these readers comments on the market action in one place instead of scattered over several posts throughout the day.
Thanks!
December 8th, 2008 at 8:59 pm
Justin,
Thanks for the link. It’s a good read. It’s just depressing the Fed is running around headless. They claim to be “fixing” the problems but all they really want to do is to avoid being the next Hoover who did nothing. To them “inaction is not an option”, what a load of bs. They are doing more harm than good by bring the nation into higher debt. The day we see our GDP on a 1-to-1 ratio to our national debt we might as well all stay home.
December 8th, 2008 at 9:02 pm
I second CCs motion above. I have always wanted to find such a blog. There was one on an IRC channel years ago, but it had a lot of BS and not much informative dialog / commenting.
There is always doubt as to the veracity of such posts, but I think it would still be useful, especially among regular users who know each other and their market views, and thus might be able to separate the truth from the BS, or at least most of it.
December 8th, 2008 at 9:06 pm
HOLD IT and wait a minute! Jeff, our bet is dow <7000, spx <750 before dow 10k and spx 1k. You just plunked an extra 50 pts in your favor on the spx. It’s only 6 PM in southern california; I can still read. : )
Further, I took it that both conditions didn’t have to be met in order for the winner to get her case.
December 8th, 2008 at 9:09 pm
@ Mannwich – that is some serious bullishness. Kodiak style. I’ve only heard one guy go to $40. At 10x forward, you’re talking about an S&P at 400. Jeez. Well, I can’t say I agree, but it’s good to get different opinions to keep checking an rechecking my own hypotheses.
I agree that rising unemployment means further bleeding into the currently more stable parts of the housing market. But as you and I have discussed real estate in MPLS, bleeding into other types of mortgages, means bleeding into households that might have a little more cash cushion. Like you, Daddy Warbux…LOL. On top of that, Obama seems to be allaying fears that unemployment will reach as high as some had thought (10% or so). If you look at layoffs as good for earnings, and gov’t as good for jobs and good for those in houses now, then I could see reasons to not be a kodiak bear. There’s also additional support for housing through good terms for new buyers.
Dunno.
December 8th, 2008 at 10:41 pm
@karen: Our bet is still in place! Don’t worry. Think that was just an oversight on my part……….although I am starting to get worried about that S&P bet holding more than the DOW!
December 9th, 2008 at 12:32 am
Perfect timing to flip bullish right before S&P 500 downtrend break out.
http://i34.tinypic.com/2e0lhz4.jpg