Signs of Life Behind the Bad News
By Barry Ritholtz - January 5th, 2009, 11:15AM
Some vital signs are improving
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Signs of Life Behind the Bad News
Everything is on such a clear financial basis in France. It is the simplest country to live in. No one makes things complicated by becoming your friend for any obscure reason. If you want people to like you you have only to spend a little money. I spent a little money and the waiter liked me. He appreciated my valuable qualities. He would be glad to see me, and would want me at his table. It would be a sincere liking because it would have a sound basis. I was back in France. —Ernest Hemingway, The Sun Also Rises.
Macro Notes
Fed Vice Chairman Kohn/It still is someone else’s faultPeter Boockvar
I know its late Friday and I'm sorry for the rant but a headline across the tape forced my hand. From a speech on June 25th to the BIS that the Fed officially released today, Fed Vice Chairman Kohn said that "the root cause of our problems was the underpricing of risk as the financial sector interacted with nonfinancial sectors" and that "leverage was a symptom rather than a cause of the underlying crisis." He has a Ph.D and I don't but I want to correct him that easy money policy under Greenspan that had the fed funds rate at...
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January 5th, 2009 at 1:22 pm
This is real simple. The market can fool some of the people some of the time, but the forward PE on the SPX has risen to 22 based on most recent 2009 earnings estimates.
I’ll take the short side of that bet with global manufacturing of just about any durable good falling off of a cliff. Not only are there no sales, there are going to be massive inventory writedowns, unless of course the Fed decides that inventories should not be written off. Even then, people of average intelligence will figure out what’s really going on.
No earnings. No capitulation.
No sustained rally.
Look out below.
January 6th, 2009 at 9:59 am
There might be a rally if the Fed and the Obama administration manage to devalue the dollar but such ‘gains’ are useless to those that want to see an increase in their purchasing power. I won’t take the long or short side of the general equities and prefer to have exposure to the precious metals and commodities that have sound fundamentals behind them.