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Tonight at 5:15pm, CNBC’s Fast Money.
I will be appearing on the show tonight to discuss the latest housing data, bailout news, and perhaps a new book that might be worth mentioning . . .
The show is on at 5pm, and then rebroadcast at midnight.
~~~
UPDATE: Nice intro! The full Video is here.
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.
Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof. —John Kenneth Galbraith
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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May 26th, 2009 at 4:06 pm
Don’t forget to mention the NYSE’s Supplemental Liquidity Program.
May 26th, 2009 at 4:19 pm
i wonder, have there been any Macke sightings following his recent on-air train wreck? if there ever was anyone in need of a hospital stay for “exhaustion”…
May 26th, 2009 at 4:33 pm
Excellent, BR! Though I suspect given the way Page 6 says Dylan went out, Fast Money producers won’t let you don a black armband in memorium of Ratigan…
May 26th, 2009 at 4:34 pm
Semo, what day/broadcast did Macke’s train wreck occur on? I haven’t seen yet. Thanks.
May 26th, 2009 at 4:39 pm
What book is that?
Macke news:
http://dealbreaker.com/2009/05/unfounded-rumor-of-the-afterno-2.php
May 26th, 2009 at 4:53 pm
Wow, Macke was just plain out of it during that segment. He is usually quite sharp and fairly quick witted, but yawza was that bad….
I have to admit my FAZ trade is not turning out like I had hoped, but it does seem like up is down and down is up these days. Thankfully I’m not a professional trader or days like today would have me throwing up in my mouth more than a little.
Steve Barry – how can you keep holding to your QID trade week after week month after month of losses? Mannwich, you jump out of SRS yet?
May 26th, 2009 at 5:17 pm
@Mike,
That’s crazy, I said the same thing the day that happened. I saw Macke had just opened up a new shop around that time and I wondered if he was taking a beating. He looked like a guy that had just lost a lot of money that day. Who knows but one thing is for sure, that was some uncomfortable tv.
Jdamon33
Steve is probably still up on QID. The stock market is still down what% from October 07?
What else is there to say. Things aren’t getting better and the seasonal tech cycle is about to end. If anything it’s a great time to look at buying some QID.
May 26th, 2009 at 5:32 pm
On now…tuned in just in time. What about Macke? I stopped watching when Dylan left, but Macke was really getting annoying.
May 26th, 2009 at 5:34 pm
@jdamon: I’ve been in and out of SRS and QID quite a bit. Too early many times and have taken a beating on both but am hanging with some SRS that I’ve bought recently at 19-21+ and QID at 35-37+.
Still have 1/3 in equity longs (largely my wife’s 401k, which has terrible mutual fund choices and our IRA’s) and about 1/3 in cash, so I’m OK. Largely missed the big run up here in recent weeks, but I can be patient here.
May 26th, 2009 at 5:37 pm
thanks for posting the link Mike.
Macke is completely loony-tunes. That was Britney Spears-esque……. cocaine will really mess with your head after a while I guess. I don’t think we will be seeing him for a little while.
Too bad. Clear-headed, I think he would provide some good commentary on the utter meltdown occuring in the treasury market at the moment.
The U.S. is going Zimbabwe -style incredibly quickly.
May 26th, 2009 at 5:37 pm
@Barry,
And here I thought you were going to agree with my contention that America can never turn into Japan because the American attitude is totally different from the Japanese attitude. Instead, you advocate open immigration to solve the housing crisis! (Kidding!)
May 26th, 2009 at 5:54 pm
Oh boy, can’t wait to hear the opinion of the wicked witch of the Third Reich on the Supreme Court nominee.
May 26th, 2009 at 6:14 pm
@Franklin411
Have you ever been to Japan?
If yes, were you there in the period from 1987 – 1992 (like I was)…If yes, how many times?
What do you know about japan other than the sushi restaurant down the street?
May 26th, 2009 at 6:32 pm
Would this be considered a green shoot?
http://laht.com/article.asp?ArticleId=335481&CategoryId=14091
May 26th, 2009 at 6:34 pm
Do you know how much money will GM bondholders get from their CDS’s by refusing US Gov offer and temporarily losing 27 billion?
May 26th, 2009 at 6:35 pm
Karen @ 6:32
For buyers of EWW.
May 26th, 2009 at 6:38 pm
I am still in QID…still ahead (don’t forget I pocketed $10 a share in distributions). It’s no fun on the downside. But to be ahead when most are down around 30% is not bad. Also, I honestly believe the whole thesis for being short is stronger than ever…total credit per GDP is even higher than when we started…housing clearly not veering an iota from the Case Shiller extrapolation (which implies housing will fall another 25% at least and not bottom till 2015)…some sentiment indicators are at ridiculous bullish levels…the whole rally has been on anemic volume…the (formerly affluent) area I live in is a veritable ghost town of empty storefronts. I sleep fine with QID.
May 26th, 2009 at 6:41 pm
I miss Dylan the longer he’s gone.
May 26th, 2009 at 6:41 pm
oh and the forward P/E for GAAP on the S&P is a bubblicious 30
May 26th, 2009 at 6:48 pm
How can they say the BK of GM is good news? SH get 1% and bondholders get 10%. Those kind of valuations point to Chap 7 not Chap 11.
Will O’B give another “Up with People” speech talking about a better new GM like he did when he said Chrysler would be back in 60-90 days , whatever? These cases will drag on forever.
The small dealerships getting closed in jerkwater towns will really be a big negative impact for those places.
May 26th, 2009 at 7:07 pm
per ZH it seems that TALF is about to be reinvented (again): http://zerohedge.blogspot.com/2009/05/moodys-to-downgrade-most-of-2005-2008.html
May 26th, 2009 at 7:25 pm
what is eww
May 26th, 2009 at 7:27 pm
eww = mexico ETF
also, I thought it was tony, toni, tone
May 26th, 2009 at 7:52 pm
YES! Confirmation
Kudlow and Wayne Angell just confirmed there is NO threat of deflation.
May 26th, 2009 at 7:55 pm
No threat of deflation? I see no threat that we are not in a deflationary debt crash.
May 26th, 2009 at 8:15 pm
Steve,
Exactly.
May 26th, 2009 at 8:18 pm
I just said this today on another thread @ 3:04:
I’m telling you this thing moves to 965-1k. Watch for many more bullish comments on here as it presses up there and also watch for some flipping from some bears here. Look for the federal govt, the treasury and the Fed to say the plan is working towards the top. Watch the banksters reassure us that they are well capitlized and prepared for any losses. Watch the MSM push harder and harder the idea of taking risk again and most important, soon enough everyone will believe we have inflation already.
Kudlow went on and on about the expansion of M2. Does he no realize it’s all going down a black hole? Clearly he does not understand what is going on. He said several times, “the market is warning us about inflation!”
May 26th, 2009 at 8:20 pm
Steve Barry,
I’m sure you have posted it before, but what is your downside target for selling your shorts?
Did you take any off the table below 700 back in March?
Have you added any to your shorts in the current run up?
Always enjoy hearing your thoughts.
May 26th, 2009 at 8:25 pm
Also, have yall seen the new mortgage reset chart at Calculated Risk?
http://www.calculatedriskblog.com/2009/05/new-mortgage-loan-reset-recast-chart.html
It’s amazing how the option arms and subprime virtually disappear. I’m no real estate expert but that looks like it will keep a lid on housing prices for quite a while. Can the option arm wave be as big as subprime? Can we have a recovery in the face of that wave?
These people who took a neg am loan with no money down are f***ed !!
May 26th, 2009 at 8:40 pm
CC:
As stated, I technically am not short…I own QID which moves 2X inverse to the QQQQ by buying puts and entering swaps. I really have no target to sell them…I am in good financial shape, always living within means. I certainly would not sell them with QQQQ Bulls at ridiculous highs and II Bulls at near 5 year highs…and with maybe 5 days all year with a closing put/call greater than one. It’s really funny.
May 26th, 2009 at 9:08 pm
I don’t think you answered Karen Finerman very well. She asked that since volumes of sales are ripping in the former problem areas like So Cal, Nevada, etc. why isn’t that a sign of a bottom?
She specifically asked why big volume isn’t a sign of a bottom (which is similar to capitulation in stocks) and you didn’t really address the volume aspect. Instead you talked about how hard it is to get financing, how the pool of qualified buyers has shrunk, and how pricing in much of the country is still elevated relative to most metrics. BTW, I disagree with that last point. Maybe on a rent equivalent basis house prices are high, but relative to median incomes they are not, except for in outlier regions like NYC, San Francisco, and possibly one or two others. Additionally, the housing affordability for February was the highest its been since the index the NAR began compiling it in 1971. Add in the new tax credit and houses are now a bargain in most areas.
Anyway, Karen’s point was volume is soaring IN SPITE of all the things you talked about as potentially being a drag on sales volumes.
So why isn’t the increased volume of sales an indication that prices have fallen to market clearing levels?
May 26th, 2009 at 9:13 pm
@Groty: What do you think will happen to those lower end home prices that are “bargains” now when the higher end home prices come down? And this will eventually happen, putting even more downward pressure on those previous “bargains” that folks thought they were getting in the lower to middle end market. The housing market is like a tanker. Will not turn around quickly and easily.
May 26th, 2009 at 9:17 pm
@Groty: This is also a big issue with regards to any housing “turnaround”…..
http://www.calculatedriskblog.com/2009/05/dearth-of-move-up-buyers.html
May 26th, 2009 at 9:26 pm
She pronounced your name “Rith-oltz”…have never heard anything but “Rit-holtz.”
BR also said if housing would just stop at the mean and not overshoot, we would be at a bottom. I don’t see that…based on Case-Shiller, we are not only above the 100 year mean, we are 15% above previous all-time highs, before the bubble.
May 26th, 2009 at 9:29 pm
Mannwich,
I would be a move up buyer if not for my belief that we aren’t even close to the bottom. I troll an RE website every week in the philly burbs and all the houses I’d move up to are sitting on the market longer and longer. I’ve been doing this for over a year. At this point, I feel a far greater risk is buying a more expensive home only to lose money on it, and maybe a lot of money on it, than waiting too long and missing any turn around and paying more as a result. The long term return on residential real estate should give anyone pause looking to “move-up” in this environment.
Then again, 3/4 of the people that live in this country are complete idiots so who knows.
May 26th, 2009 at 9:36 pm
To further the move-up theme.
Do any of us really think that boomers are going for more expensive homes at this point. Nah, they want first floor bedrooms and downsizing. Problem is, when you look at the incomes of the generation behind them, and people as young as me, most can’t even come close to putting 20% down on the more expensive homes, let alone afford the taxes and other housing costs.
May 26th, 2009 at 9:43 pm
This might be worth noting:
As of Friday’s close 39% of ETF’s were trading above the 200 day SMA vs. only 8% on 4/14.
GDX also shows that the 50 day just crossed over the 200 day.
Worth keeping an eye on at the very least.
May 26th, 2009 at 9:48 pm
CC_in_Georgia @ 8:25
“These people who took a neg am loan with no money down are f***ed”
Nah, they’ve got nothing to worry about. They can just stop paying the mortgage, and wait for the sheriff to kick them out. Or better yet, rent the house out to someone else, stop paying the mortgage, then wait for the sheriff to kick out the renters.
The ones who have a lot of “skin in the game” are the ones who are f***ed.
May 26th, 2009 at 9:55 pm
@ben22: Totally agree. Might as well be patient and wait for the real turn. This isn’t it.
May 26th, 2009 at 9:57 pm
@DL: Thanks for the reminder. My wife and I are those very people. Now I’ll go jump out of my basement egress office window. Thanks again.
May 26th, 2009 at 9:57 pm
ben22@ 9:43
“GDX also shows that the 50 day just crossed over the 200 day”.
That was back on March 24th.
With GDX, I’d rather use the 10 DMA/21 DMA, which gave a “buy” signal back on May 4th.
May 26th, 2009 at 10:01 pm
Mannwich @ 9:57
Well, of course, if you’re going to stay there for many years, you’ll probably come out O.K. Besides, money isn’t everything.
Pray for rampant inflation.
May 26th, 2009 at 10:02 pm
@DL: But won’t rampant inflation eventually bring higher interest rates, which will then squelch the housing market again? Looks like we won’t be moving for a while, not that we want to, but the option to get out without taking a bath would be nice.
May 26th, 2009 at 10:09 pm
Mannwich,
I think that, if you have a fixed rate mortgage, then the higher the inflation rate, the better off you’ll be (insofar as your mortgage debt versus house value is concerned).
If you’ve got a variable rate mortgage, then you’d probably be screwed by higher inflation.
May 26th, 2009 at 10:13 pm
DL,
You are correct, I should not have used “just crossed over”. In just going through charts of other ETF’s tonight and seeing that the following are very close to doing the same, I was looking to see if any others had done this recently:
EPI and PIN
RSX
KOL
UGA
GUR
EWS
PGF
MOO
I’m not sure yet what conclusion to draw on the ETF’s doing this. I haven’t started to try to identify individual names doing it. Any insight on that?
May 26th, 2009 at 10:15 pm
Mannwich,
Just remember, if you are real concerned with inflation in the near term, you are in the same camp as Kudlow.
May 26th, 2009 at 10:16 pm
@ben22: I’m a near-term deflationista and long term inflationista, but definitely not a Kudlow-ista.
May 26th, 2009 at 10:17 pm
Mannwich,
YGTFKM, either stay in place, and suck it up. Or, be fixin’ to Sell, as in Tomorrow.
iffin’ you have “homefront” pattern recognition dissimiliarities, kindly, solve them on your own..
the, continuing, acidity that it is causing you to display is not beneficial for anyone bearing witness, at the minimum..
May 26th, 2009 at 10:19 pm
DL,
just curious, why are using the shorter ma’s? just a preference or something else.
May 26th, 2009 at 10:25 pm
http://www.nytimes.com/2009/05/27/business/27auto.html
U.S. Expected to Own 70% of Restructured G.M.
“No one is going to put U.S. government employees on the G.M. board,” one person close to the ongoing discussions said on Tuesday.
…Excuse me…of course there will be no government employee on the GM board, Vito Corleone is said to have told his youngest son, Michael. Since we bailed them out, we will be happy to oversee GM from the sidelines, as we always have.
Yes, there will be no government employees on the board, and we will have no input into decisions made by the company………………..yes. Pass the spaghetti….
May 26th, 2009 at 10:30 pm
ben22 @ 10:19
Well, of course, you can easily back-test any pair of MA’s that you want.
As for the 50 DMA/200 DMA, I think that this pair is O.K. for the “lazy” investor; I use that term (lazy) because this pair generates very few buy and sell decisions. As you go to shorter and shorter periods over which the data is averaged, the buy and sell decisions become more numerous, although the profit potential becomes greater.
And there’s another point with regard to the 50 DMA/200 DMA pair. My observation is that if the index or ETF in question gets to be more than about 7% above or below the 50 DMA, the buy and sell signals become too delayed to be useful; in that situation, I think it becomes very desirable to switch to a shorter term pair such as the 10 DMA/21 DMA.
But again, these theories/propositions are easy to back-test. (Just do it for different types of markets).
May 26th, 2009 at 10:37 pm
dl,
thanks. I’m also curious if when volatility was much higher you had a greater success using the shorter term ma’s or just the opposite, doing better as it has been lower.
imho anyone using ma’s as the first and then final investment decision is not only lazy, they are probably asking for a loss.
May 26th, 2009 at 10:41 pm
ben22
Use of moving averages can be profitable in certain types of markets, especially markets that (a) are trending, and (b) in which the volatility is low.
The bear is still out there. I’m long OIH and XLF, but I’m skittish.
May 26th, 2009 at 10:49 pm
oih looks like it has a nice trendline and it also looks to be tracing out a nice 5 wave up pattern since the march bottom.
xlf is not so clear to me. I refuse to touch anything financial.
good luck.
May 26th, 2009 at 11:12 pm
probably still up on QID. The stock market is still down what% from October 07?
http://stockcharts.com/h-sc/ui?s=QID&p=W&yr=2&mn=6&dy=0&id=p32667478141
QID is basically flat from the Oct 07 peak in the market and trading not too far from the absolute low of the past 3 years. I highly doubt any “buy and hold” positions on QID bought in late 2006/2007 are net profitable.
These leveraged ETFs are nasty vehicles and most definitely not useful for playing a long-term thesis (12-24 months+) to “buy and hold” or “short and hold”. They should only be used to capture very short-term trends.
If Yamada is right that this is 1938-1942, and I think that is a reasonable probability, then the Mar low was it, and we’ll just be stuck in a extremely choppy sideways range that rips these leveraged ETF positions even more. 3-4 years from now when the S&P is still stuck at say 700-900, QID will probably be down another 30 to 50%.
Time will tell, but I suspect the ultra-bears missed their opportunity to cash out with big profits. Whatever one believes about fundamentals and valuation, in late Feb/early March you had a generational oversold reading on the technicals, and retail sentiment was as bearish going back to the 1990 bottom. I just can’t fathom how one wouldn’t have at least taken some chips off the table at that point.
May 26th, 2009 at 11:18 pm
I also like the sly reference to the insanity of trying to keep mexicans out given our current trading policies. In my opinion, paying fair value for their fruits and labors as well as their mineral resourses, will only strengthen both countries. They come here to work for money because we screw them every other way they try to earn it.
Barry’s suggestion that allowing some immigrants in to ease the housing market is beyond brilliant, I wonder if he’s been reading “The Prince”
May 26th, 2009 at 11:26 pm
ben22:
You mentioned that people our age don’t have 20% to put down on a home. That’s true, but it’s also true that they don’t need it. I know two people (mid 20s) that just bought homes worth four times their income… with no money down. That’s right, they both got some kind of FHA no money down loan. I don’t know what they had to do to qualify, but at least one qualification was… not having any money to put down on a house, as far as I can tell. :D
Anyone that is calling a sustainable recovery is crazy. The government policies are aimed straight at bringing lending standards back to 2006 quality. They can’t even think of another bubble to blow for another short term recovery, so they are trying to blow up housing again (which is probably the most politically popular bubble to blow up).
Another note: It’s been amusing (to say the least) to watch the “healthy” consolidation in the banking industry. The general trend (from my perspective) has been to subsidize the “too big to failures” and continuing their accretion.
There is a video game called Katamari Damacy where you basically roll over a bunch of stuff and keep getting bigger. It reminds me of the big banks in 2008/2009. Where the regulators should be challenging M&A growth, they are dropping the ball.
From Wikipedia:
“Gravitational collapse occurs when an object’s internal pressure is insufficient to resist the object’s own gravity. For stars this usually occurs either because a star has too little “fuel” left to maintain its temperature, or because a star which would have been stable receives a lot of extra matter in a way which does not raise its core temperature. In either case the star’s temperature is no longer high enough to prevent it from collapsing under its own weight.”
What else collapses under its own weight? Yeah. Maybe TBTF isn’t such a good idea after all.
May 26th, 2009 at 11:46 pm
Mike C,
I said that b/c I have watched Steve’s comments on here for almost two years now. He didn’t buy all at once and is way ahead of the market. My comment was directed at Jdamon who asked Steve specifically about his position so it didn’t apply to QID itself, just Steve’s position in it relative to market performance since the peak. The time decay has been discussed at length here, I’m actually kind of tired of hearing about it.
That said, I would have sold something along the way as well but then again I have a completely different strategy than he does. Funny though, seems somebody trots out with this and says something to him about it right before it bounces again.
Matt,
My bad, and you are right, I should have said, you don’t belong in a house unless you can put 20% down. I’m one of the losers that actually made a real down payment on my first home. It was a cheap home though but good enough for me. Good luck to those people you know, however, I’d likely put them in the 3/4 I mentioned above. I can only imagine they work for someone else, hope they are still employed in a couple of months. Not that it really matters, they would probably just walk away since they didn’t have any equity anyway. I’m not in the mortgage industry but my guess is they didn’t get a conventional loan with no money down.
btw, your blog link doesn’t work.
May 26th, 2009 at 11:55 pm
I saw the original on my telly, thank you. But the replay was a bit sputtering, if that’s the right word.
Congratulations on the book. I have it on order and anxiously await it’s arrival.
I’d like for you to get in touch with Steve Keen, author of “Debunking Economics”, so that maybe the two of you can try to put together a framework within which a new form of economic thought can be formulated. What passes for “theory” today is a joke, akin to the “flat earth”, or as Mandlebrot put it, “alchemy”. Keen’s website is:
http://www.debtdeflation.com/blogs/
I hate to be the skunk at the garden party but I think the moniker about the housing crisis really belongs to “Calculated Risk”, a blog which has been right on about housing and finance issues (together with the late, irreplaceable “tanta.”) You do provide a valuable public service with this blog, and I hope that you will continue to let the public “in” on the action, long after you have reaped billions of dollars in commissions from the publication of “Bailout Nation”. :-)
May 27th, 2009 at 1:45 am
That’d be Mandelbrot, and not Mandlebrot. Apologies. Did it again. Yikes! Should know better by now.
May 27th, 2009 at 6:54 am
Mike,
Though I posted this very fact earlier, you still did not account for the massive QID distribution last year, which took about $10 off its price and put in in my pocket…so you really need to add $10 to the price of QID for an accurate return. I bought a lot of QID in the low 40s and 30s…it is now at 45, accounting for distribution.