I found this IBD cartoon fascinating — because of the focus.
The visual is great, but the labels are all wrong in so many ways. A tiny row boat labelled Congress pursues the giant ship called free markets — as if they cannot do anything. (Repeal of Glass Steagall, CFMA, etc.).
And, the basic idea that the Free markets are a super tanker — I’m not sure I would have gone with that. The idea was great, but the execution seems to have gone awry . . .
I’m not sure if this was the reason or not but Geithner in the Q&A
seemed to be open to accepting back TARP money and would welcome it from
those institutions that have been confirmed by the regulators to be
fully able to do so. This is in contrast to recent newspaper articles
hinting that the condition of the whole ‘system’ will be the deciding
factor of whether to accept TARP money back rather than the fundamentals
of any individual bank. GS and JPM in particular have responded
positively.
From Money Magazine: They rank four “standout financial blogs” in terms of being the are the most informative (and entertaining) financial blogs on the Web.
I’m not sure if this was the reason or not but Geithner in the Q&A
seemed to be open to accepting back TARP money and would welcome it from
those institutions that have been confirmed by the regulators to be
fully able to do so. This is in contrast to recent newspaper articles
hinting that the condition of the whole ‘system’ will be the deciding
factor of whether to accept TARP money back rather than the fundamentals
of any individual bank. GS and JPM in particular have responded
positively.
Here is half a century of Housing Starts, both Seasonally adjusted and NSA. (lower chart is the annual rate of change)
Note that we are now in uncharted territory — new home starts have never fallen to these levels for as long as the Commerce Department has been tracking this data (since 1959).
Note also the magnitude of the drop — it is unprecedented, having easily surpassed the 1982 collapse, the present circumstances have now become slightly worse than the 1973-75 fall.
Kevin Lane is one of the founding partners of Fusion Analytics, and is the firm’s director of Quantitative Research. He is the main architect for developing their proprietary stock selection models and trading algorithms. Prior to joining Fusion Analytics, Mr. Lane enjoyed success as the Chief Market Strategist for several sell side institutional brokerage firms. In those capacities he oversaw the firms’ research departments. He produced a broad range of widely followed institutional research publications ranging from industry specific notes to quantitative/fundamental reports on individual stocks. His buy side clientele consisted of many of the nations top money managers and hedge fund managers. Mr. Lane is a member of the Market Technicians Association.
~~~
S&P500 Failing at Resistance
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As seen in the above S&P 500 research note the index stalled at resistance and then subsequently broke its’ minor uptrend line on expanding volume. Directional volume is important as it suggests the conviction behind the move and as much as it was bullish not far off the lows, yesterday’s action while not equally negative was ugly. The skew of decliners on the S&P was torrential with 479 of 500 issues scoring price losses for the session.
That said for the time being (until proven otherwise) we have to assume the sellers are back in control as the skew of decliners to advancers suggested they overwhelmed buyers yesterday. We did suggest several days back that after a big rally that buyers were becoming more discriminating at what price they would pay for stocks. So part of the action yesterday was profit taking and also buyers being more selective now the question is where, when and if the buyers make a stand. For the record we believe this to be a classic retesting sequence, however what we believe and what may happen are not always in sync.
For now the market is on the defensive and it’s better to wait for reinforcements (buyers coming back in mass) before getting aggressive on the buy side.
Now not being at the front of the line may mean you miss the early part of the turn (if and when it materializes), however the odds of a successful turn once the front line has made its’ stand is far greater.
~~~
Contact Peter Greene for more information about institutional research & trading:
I’m not sure if this was the reason or not but Geit=
hner in
the Q&A seemed to be open to accepting back TARP money and would welcome=
it
from those institutions that have been confirmed by the regulators to be ful=
ly
able to do so. This is in contrast to recent newspaper articles hinting that
the condition of the whole ‘system’ will be the deciding factor of whether t=
o
accept TARP money back rather than the fundamentals of any individual bank.=20=
GS
and JPM in particular have responded positively.
DISCLAIMER
= Although
the information contained herein has been obtained from sources Miller Tabak=
+ Co., LLC believes=
to be reliable,
its accuracy and completeness cannot be guaranteed. This report is for
informational purposes only and under no circumstances is it to be construed=
as
an offer to sell, or a solicitation to buy, any security. At various t=
imes we
may have positions in and effect transactions in securities referred to
herein. Any recommendation contained in this report may not be appropr=
iate for
all investors. Trading options is not suitable for all investors and i=
nvolves
risk of loss. Although the information contained in the subject report=
(not
including disclosures contained herein) has been obtained from sources we
believe to be reliable, the accuracy and completeness of such information an=
d
the opinions expressed herein cannot be guaranteed. An options disclos=
ure
document may be obtained from Mr. Jay Stenberg, Miller Tabak + Co., LLC., 331 Madison Avenue, New York, NY
10017.
Additional information is available upon request.
The ‘Green Shoots’ of recovery that has been the favorite two words of many of late has been mostly predicated on the dramatic drop seen in inventories over the past few months and the subsequent inventory replenishment process that may help to stabilize the economy. The CEO of TXN in last nights earnings press release sums up this scenario well with a necessary caveat, “demand for our products has begun to stabilize after sharp drops in the past 2 q’s. Many customers have increased orders for TI products as they have begun to slow down their inventory reductions. However, we remain sensitive to continuing weakness in the global economy, and we have yet to see signs of a broad based recovery in our business.” With the results and release of the ‘stress test’ just two weeks away, the man leading the process, Mr. Geithner, testifies at 10am in front of the Congressional Oversight Panel. German ZEW rose to the highest since July ’07.
"I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." -Thomas Jefferson (letter to John Taylor in 1816)
After 3 quarters in a row that averaged just 1.2%, Q4 GDP grew 2.8%, a touch below expectations of 3.0% BUT Nominal GDP grew well below forecasts. Because the price deflator was up just .4% vs the estimate of 1.9%, Nominal GDP was up 3.2% vs the estimate of 4.9%. Personal Consumption rose 2.0% vs the forecast of 2.4%. Fixed Investment rose 3.3% helped by a 5.2% increase in equipment and software spending and residential construction rose by 10.9%. Trade was a slight drag on GDP growth and government spending was as well led by a 12.5% decline on national...
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