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Tonite I will be on Fast Money with Dylan Ratigan on CNBC at 5:30pm discussing today’s Housing Rescue Plan — and the good and bad ideas within it.
See our prior suggestions:
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UPDATE
Click for Video:
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
"When the Fed is the bartender everybody drinks until they fall down." —Paul McCulley
Retail Sales in Jan rose .4% headline m/o/m, .7% ex auto's, .6% ex auto's and gasoline and .7% at the core. The headline figure was less than expected while the rest were slightly better. But, with respect to non headline sales, because Dec figures were revised lower, taking the two months together were about in line with forecasts overall. Sales rose in electronics, building materials, food/beverages, clothing, sporting goods, dept stores and restaurant/bars and fell interestingly for online retailers, health/personal care, furniture and motor vehicle/parts. Bottom line, headline sales were below expectations due to the greater than expected fall m/o/m...
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February 18th, 2009 at 4:40 pm
I meant to weave this stat in:
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/16/AR2009021601391_pf.html
February 18th, 2009 at 5:04 pm
Please ask Mr. Ratigan to turn down his tie. Just cuz the dial goes to 11 doesn’t mean it has to stay there. Kinda kidding, but seriously the guy talks like every male (and a few of the females) in my extended family. I think if we’re truly committed to saving this country, the Irish need to be deported- Caribbean, Maldives, Tahiti, Rapa Nui hell send some to Ireland.
February 18th, 2009 at 5:11 pm
What’s wrong with the tie?
February 18th, 2009 at 5:13 pm
Pete Najarian Gold Indicating Alert:
Pete went apeshit about gold today. This is the indicator I was looking for. He was foaming at the mouth about the GDX and GLD and how you can “protect yourself” with puts and it’s the “only thing working.”
Here’s my advice to anyone holding Gold length….
It’s time to get out…988 was a good EW technical target and 1000 should be some psychological resistance as well….the double top target up near 1040 will also be another huge hurdle. You can always get back in….If we’re about to see the greatest gold rush of all time it should decisively take out the previous highs. If this happens, you’re guaranteed to get pullbacks that will allow you back into the market….
Good Luck.
I’m not recommending a short yet, but it’s time to consider hitting the Exit button.
February 18th, 2009 at 5:15 pm
OT, But has anyone besides me noted the utter breakdown in Berkshire Hathaway stock? Has the market finally figured out that Warren St. Buffett is over the hill and has made just as many critical errors of judgment as those he has poked fun at over the years?
It will be interesting to see what marks he takes on his portfolio at year end, especially the GS and GE preferreds..
February 18th, 2009 at 5:18 pm
Fast Money?!? I thought it was called Fat Losses.
February 18th, 2009 at 5:27 pm
@microcap
BRK.A looks like smoking death. It broke back through the 78.6 retrace of the big bounce from November..Not good. If 77K breaks, then we’re heading for 60K in short order. I’ve said this a few times on the board, the bottom gets put in when Warren Buffett gets a margin call and must raise new capital.
February 18th, 2009 at 5:29 pm
@microcap:
I posted about that last May:
Has Warren Buffett jumped the shark with all these annoucements and CNBC appearances? Should’nt he be working behind the scenes? Bill Gates has rubbed off on him.
Posted by: Steve Barry | May 22, 2008 8:55:51 AM
and again in October:
About a year ago, Warren Buffet started to appear on CNBC quite often, usually with Becky Quick. Very recently, he pumped a huge chunk of cash into CNBC’s parent, GE. I said awhile back he had “jumped the shark” and now that he and CNBC are so intertwined, it’s time to fade Warren.
Posted by: Steve Barry | Oct 17, 2008 9:12:51 PM
Fading Warren last October would have returned about 30% so far.
February 18th, 2009 at 5:32 pm
There have been 10 too many hagiographies written about him. I have nothing against him, but you cannot believe the arguments I get when I dare to poke holes in his infallibility.
I like the argument that the bottom is in when they start firing the nitwit anchors on CNBC!! I forget who made that one :)
February 18th, 2009 at 5:43 pm
AT said: “Here’s my advice to anyone holding Gold length….It’s time to get out…”
No kidding. Let’s take a look at The Big Picture.
Oil/gold ratio = 25. Segment on gold on CNBC this morning.
Najarian indicator flashing… it’s the kiss of death.
As the Eagles song goes, old pal, I am “Already Gone”.
Been moving into other commodities all week. Oil, nat gas and ags.
This trade is about to turn. 5-10% retraction possible.
Then we’ll see where we are.
PPI/CPI could be the apparent triggers for this but it’s a technical trade.
Foregone conclusion.
Stevo: most people have jumped the shark in this market at some point.
Warren usually wins in the end. We’ll see.
February 18th, 2009 at 5:52 pm
@AT: I somewhat agree and vastly trimmed down my GLD and GDX holdings yesterday. Plan to load up again on any significant dips though.
February 18th, 2009 at 6:25 pm
BR perhaps you could have talked about this….
Remember last summer when UBS exec and McCain advisor Phil Gramm said U.S. is ‘nation of whiners’
UBS to pay $780M, open secret Swiss bank records
WASHINGTON – Banking giant UBS has agreed to pay $780 million and turn over once-secret Swiss banking records to settle allegations it conspired to defraud the U.S. government of taxes owed by big clients
As part of the deal struck in federal court in Fort Lauderdale, Fla., UBS has made the unprecedented step of agreeing to immediately turn over to the U.S. government account information for U.S. customers of the bank’s cross-border business.
In doing so, federal authorities have struck a big crack in Switzerland’s vaunted bank secrecy laws.
http://news.yahoo.com/s/ap/20090218/ap_on_bi_ge/ubs_secrets
February 18th, 2009 at 6:33 pm
@microcap,
I agree with AT and Steve BRK is in trouble. Kass has been ripping him up lately, in a nice way of course. You even wonder with the news today why he sold PG and JNJ and has big holdings in GE, GS and WFC, not to mention others.
re all: gold
I agree gold is looking risky here, I’m going to hold my fake paper gold until friday or will set up close stops and then that is it until it drops,
to add to some of the gold sightings: I was bored today and went to yahoo finance, that guy that writes those rich dad poor dad books was talking about gold in his article, that guy is a tool IMO.
February 18th, 2009 at 6:35 pm
another mention on gold is every day you get a new call for gold at some higher level and the adjustments seem to be going up not down, it’s slightly similar oil last spring
February 18th, 2009 at 6:40 pm
Great job BR, you’re getting a lot of air time, they must like you now, I still remember the “newsletter-writer” from Gasparino on that other CNBC show, I hope you never forget that jackass. Glad you are on Fast Money, its a great show. Dylan may talk over people a little, but Charlie G is a total prick and is proud of it.
What I found crazy was the Fast Money trader pushing homebuilders while you were on set. These companies just lost out of their huge Net Operating Loss 5 year carryback tax handout, as well as the homebuyer bonus payment(did that get cut in half or was it cut out altogether?) Too much land being held, too much inventory. They are in trouble.
(aggressively short builders, fingers crossed)
February 18th, 2009 at 6:44 pm
Damn fine job, Mr. Ritholtz!
You get it.
February 18th, 2009 at 7:03 pm
The only thing more you need on gold is the “Mr. T indicator. ”
Maybe just move up stops rather than sell. My read of that chart is a reverse H&s that measures to about 1100.
February 18th, 2009 at 7:04 pm
Another thing I note today and yesterday is 3x and 4x ADV in SLV. Somebody’s trying to play Hunt Bros.
February 18th, 2009 at 8:02 pm
HP just announced weak earnings and guidance. Tomorrow should be interesting.
February 18th, 2009 at 8:03 pm
I understand there are 17,000 “investors” who will be sell in there stock to pay back taxes. LOL
Feb. 18 (Bloomberg) — UBS AG, Switzerland’s largest bank, will pay $780 million to avoid U.S. prosecution and settle regulatory claims that it helped thousands of wealthy Americans use Swiss bank accounts to evade taxes.
The Justice Department filed a criminal charge accusing UBS of conspiring to defraud the U.S. by helping 17,000 Americans hide accounts from the Internal Revenue Service.
Is this a great country or what? All these fine, upstanding, patriotic tax dodgers are finally going to do their part to help all us poor bastards by paying up. And as for the bank (Hey, doesn’t our old freind Phil the pill Gramm have some action there?), if they’re willing to pay $780 billion, just think what they have hidden. But no-o-o-o. All our fiscal problems are due to us lazy, deadbeat, socialist, commie, middle class useless eaters. For those of you who haven’t figured this out yet, I can only say one thing,
” Sheesh!”
February 18th, 2009 at 8:20 pm
@zachattack.
Well. We already had Ed McMahon and MC Hammer pimping some gold company during the Super Bowl…that was definitely a signal for me.
February 18th, 2009 at 8:43 pm
I must add that it was another good appearance Barry.
I must also suggest that if anyone at CNBC every says: “Hey Barry, would you like to be an official ‘contributer’ to CNBC?” Please, please say “No thank you, but I appreciate being on your network from time to time.”
Too many appearances on CNBC WILL DILUTE YOUR BRAND.
February 18th, 2009 at 9:10 pm
Is it me or does Radigan go out of his way to ignore Tim Seymour?
February 18th, 2009 at 9:26 pm
purely from an anecdotal standpoint, you really want to be out of gold…especially with the chimpanzees on bubblevision and the vault commercials selling coins
that said, ya gotta admit, the fear/deflation trade still makes more sense than almost any other thesis you can think of
the next gold pullback will be sharp and should shake off some of the johnny-come-lately’s
just my 2 cents
February 18th, 2009 at 10:03 pm
LOL, I get a kick out of the guys taking shots at Buffett. I didn’t realize we had some other billionaires posting here. Don’t forget that in terms of whoever versus Buffett, the race isn’t over yet, and you haven’t won anything until you take your chips off the table and go home. Until then, you might be up but your chips are still at risk, and at some point Uncle Warren might pass you if you don’t realize when it is past time to stop pressing your bets:
http://runningofthebulls.typepad.com/toros_running_of_the_bull/2009/02/market-action-february-17-2009-fear-panic-despair-and-loathing.html
http://runningofthebulls.typepad.com/toros_running_of_the_bull/2009/02/stocks-are-cheap.html
Having said all of that, I think S&P 600 is very possible. After all, it hit 1500 at 35x earnings in 2000. Could definitely have the opposite extreme. Just curious, at what valuation level do you say enough? At some point, terrible fundamentals are overdiscounted and even the slightest improvement leads to a big move up.
February 18th, 2009 at 10:13 pm
Barry,
Excellent insights. Especially your comment on people who should be in the market for starter homes but are unable to get in because the prices are still way too high. What we have now is the worst of both worlds. Starter home prices are still way too high (thanks to the credit bubble) and there is now very little credit available unless you have a substantial downpayment (or even if you do have one). But I think the most telling statistic is that during the period 200-2008 there were far far too many homes built without any thought or regard as to whether a demand would exist for them; and now there is a massive overhang, consisting of the exact type of homes that are very hard to sell in a recession.
February 18th, 2009 at 10:18 pm
Mike C:
I must say I have all the respect in the world for Warren Buffett, because in his heart and soul he’s actually a TRADER. He’s a supreme NO LIMIT POKER player in the game of life, and he built up a huge STACK of Chips. But the fact is, he’s just a trader, and a poker player. There’s a reason they actually have “limits” in NO LIMIT POKER matches. The richest man in the world would ALWAYS win a NO LIMIT game. Yet it seems the axiom is holding yet again, ‘NOBODY is bigger than the market’, not even Warren Buffett. I can guarantee you I’ll NEVER EVER be .01% as wealthy as WB, but I’ve definitely outtraded him the last few years.
I guess I’m just envious….
- AT
February 18th, 2009 at 10:49 pm
Too many people out there who seem to think that they have a Constitutional right for their houses rise in value every year.
February 18th, 2009 at 11:26 pm
Actually, the Fast Money host was trying to get to a legitimate point about how the government has enhanced the housing market for us working stiffs, via mortgage interest deductions, FmHA loans etc. All of which is true. This is part of the basic social contract which also provides guaranteed public education for all children, no sales tax on food, and should (but does not) provide basic health care. The securitizing of the mortgage industry in the 1980s (thanks to Salomon Brothers) broke through the taboo of allowing home mortgages to be traded as fungible securities. Salomon worked very hard to change the laws to allow mortgages to be securitized and sliced and diced and sold and resold — and now we are seeing the downside of the trade. This should be as surprising as if we allowed parents to sell $200,000 bonds to send their kids to Colby or Harvard based on a rate of return that assumes all of the kids will become Bill Gates. That is basically what the investment industry did with the nascent mortgage market.
February 18th, 2009 at 11:37 pm
Surprise, suprise, looks like SEC may have been asleep at the wheel on Sir Stanford’s “firm” as well. Shocker. How many more of these are out there? Me-thinks more are coming. Hello hedge funds?
February 18th, 2009 at 11:37 pm
Here’s the link:
http://www.nytimes.com/2009/02/19/business/19stanford.html?_r=1&hp
February 18th, 2009 at 11:51 pm
Re:gold indicators
Cramer says gold not a bubble and everyone should have it in portfolio. Interview with ceo of AEM. You might get a bump up before you SELL.
February 18th, 2009 at 11:55 pm
@Mannwich:
And our friends at CNBC uphold their high standards…the video making all the MSM coberage is Carl Quintinilla on CNBC asking this ahrd hitting question of “Sir” Stanford last year:
Carl: “Is it fun to be a billionaire?”
Sir Allen: Thinking…”well, yes it is”
That was almost as hard hitting as their exclusive interviews with Jeff Immelt. Yes, America you accept CNBC as your leading financial network and now you are reaping the rewards.
February 19th, 2009 at 12:11 am
Stanford has a real slick website…they sponsor PGA and tennis events and players. After Madoff though, their investment philosophy sounds a bit too good to be true:
The objective of the Stanford Investment Model (SIM) is to provide consistent returns regardless of market volatility, and it is based on the investment philosophy that has been used successfully for all of Stanford’s proprietary funds. We target a consistent yield or income stream as agreed upon with our clients, while monitoring risk and managing the overall volatility of the portfolio.
Our strategy for diversification to minimize the effects of market volatility is sophisticated and far-reaching. We pursue true global diversification with relentless intensity to meet our objective of targeted returns. We carefully consider asset classes, investment strategies, sectors, and regions of the world that most investors either don’t have easy access to or rarely receive information about. SIM was developed first and foremost to minimize the downside risk of a portfolio.
We recognize taking risk is essential to achieve investor goals, but there is a difference between accepting the risk the market gives you and managing that risk.
Although we may not outperform the indices during a bull cycle, our investment strategy is one of long-term consistency through bull and bear markets. The Stanford Investment Model offers investors a truly different view of wealth management.
February 19th, 2009 at 12:41 am
Did somebody say that a 15k income could once buy a 700k house? Now that’s TV.
@gold worry – What do bulls climb? Also, “what if” a black swan? The probability is there. It is also worth noting that certain tech/quant analysis providers remain bullish on the yellow metal. Keep the worry coming, I need all I can get by April options expiration.
February 19th, 2009 at 12:46 am
Barry, what was the reit that the office was playing. i thought it was hfs but that doesnt seem right
February 19th, 2009 at 12:39 pm
Mr. Buffett is to receive guaranteed 10% dividends from his cash infusion into GE, and is receiving significant dividends from GS, Harley-Davidson, etc. So he bought in at $22on GE, rather than holding a few more months to buy at current way undervalued/distressed levels…how many of you really think that by the time you factor in these insane dividend payouts and future appreciation of these holdings, that he will not have come out black in the end. How many of you are capable of striking the deal he made with GS and GE? Mr. Buffett is a different investor from the rest of us…he has a large enough cushion to stomach any short term paper loss on an investment, and due to his size of investment and influence that his name brings, he can lock in great deals like these.
February 19th, 2009 at 12:54 pm
sure, GE is “undervalued”, that’s why they’re securely fastened to the tit of the FedRes to rollover their CP..
btw, if one’s belief in GE is that strong, their Common is yielding 10+%, as we speak..
who has bets that GE leaves ’009 with, both, their div. @ 1.24/sh. & their AAA-rating?
February 19th, 2009 at 1:56 pm
Mark –
GE tested the CP market last month and received overwhelming interest in their paper for rates lower than what the Fed is charging, and thus, no longer needs them. You and I if we buy GE common shares, would be facing a dividend cut from the current 10% yield. Mr. Buffett is NOT facing such a cut, his yield is LOCKED IN as per his agreement with GE. He got a better deal than you or I or any other fool on here could because he is an important figure and we are all no bodies.
GE is undervalued…take a look at its assets and book value, and then look at its current stock price. That is the definition of undervalued.
February 19th, 2009 at 6:01 pm
Attempting to prop-up home values inflated by low interest rates, whorish lending standards and the flipper mania that was going on is like pissing in to the wind.
Might be another 25% downward price adjustment to go. Maybe more.
The baby boomers are aging.
There are going to be gazillions of Mc Mansions on the market as these people scale down after their children leave the nest.
The’ll also be a whole lotta dumping of second homes.
Obama’s plan sounds all warm and fuzzy but the government does nothing efficiently and his whole mortgage relief program will be ripe for abuse.
It will be a good vehicle for morgtage relief on the part of those making contributions to the politician’s campaigns.
Nice segment where BR called-out the reality that the guys in the Green Room can’t afford to buy a home because of the unrealistically high cost of many homes.
I’m not being negative…I’m just sayin.
February 19th, 2009 at 11:12 pm
KG-
I’d been out of the loop over the last Month or so, missed the GE CP ‘good news’..
no doubt you are correct about the Deal that WEB was able to procure for his Interests..
I’ll 2x-check GE’s stated Balance Sheet, but I’ll, still, submit that they’re not, anytime soon, getting rid of the FedRes prop, at the minimum..
While GE, as opposed to AIG, is, relatively, rich in Real Assets, they have a tremendous Debt load, and many ?, serious unknowns, under the mantle of GE Finance..LSS: whether GE Common is undervalued @ U$D 10, remains to be known/seen..
and, to be clear, I think GE has tremendous opportunities, whether they come to the fore, or not, much like GM’s tale, isn’t a given–in either direction..
February 20th, 2009 at 11:51 am
Mark –
I guess what I was getting at was more of a response to the flood of people criticizing Buffett on here, and not meant to be an attack on you. Some of these posts are absolutely mind blowing. It’s like a bunch of phD physics candidates questioning the intelligence of Einstein.
In regards to GE, it’s levels are insanely distressed right now that I am willing to take a small gamble on a rebound of this company in a few years. GE is essentially the leader in many proposals outlined in Obama’s agenda and the recent stimulus bill. It’s industrial units have carried the company before the bailouts, thus, one would think a few more billion that they will be raking in from power grid improvements and wind turbines will add to growth in that area.
No doubt GE Financial is a mess…but still how many banks would kill to be leveraged 8 to 1? If GE ever falls into bankruptcy, I think we have more serious issues to worry about, like the collapse of capitalism.