First Day of Quarter
By Barry Ritholtz - July 1st, 2009, 5:30PM
Today is the first day of Q3 — hard as it may be to believe, the year is officially half over.
Lots of activity as cash sitting around rolled back into equities.
I try never to read too much in the first day of the quarter — even tho we are now 80/20 equities/cash (mostly large cap tech).
Day one is usually just housekeeping . . .
July 1st, 2009 at 5:36 pm
FAZ and FAS info
http://www.direxionshares.com/pdfs/Prospectus_Supplement_FAS_FAZ.pdf
July 1st, 2009 at 5:43 pm
Yes, the first day of the quarter..but in Kalifornia, things are just getting interesting…
http://www.news10.net/news/local/story.aspx?storyid=62355
Gov. Declares Fiscal Emergency; Orders 3rd Furlough Day
“In issuing the orders, Schwarzenegger said, “Though the legislature failed to solve our budget problem yesterday, rest assured that solving the entire deficit remains my first and only priority, and I will not rest until we get it done. I will not be a part of pushing this crisis down the road – the road stops here.”
Yes, sports fans, and those of you who have misplaced the twins, things are gettting very interesting in the world’s 8th largest economy. If there was any question, I think Arnold is right on course here demanding a full (yeah, I know….) year solution for their budget crisis.
He’s not voting “present”………
July 1st, 2009 at 6:02 pm
Barry, can I use your blog comments as a platform for the “Help Jonathan Move Out of California” fund? I seriously need to get out of here…
July 1st, 2009 at 6:04 pm
I guess buy and hold really is dead. Last week investors were selling to take profits (end of the quarter and the half). Today they were buying. Is it possible they bought back today what they sold just last week?
@Bruce
I hear Michigan offered to take 13K of their prisoners to help Cal with their budget woes. So Cal is sending a delegation there next week . Really. Why? Send the f**king prisoners!! No delegation.
Cal just really needs to legalize pot and tax it. What budget deficit? lol
July 1st, 2009 at 6:12 pm
Was your off-hand comment about being 80% invested tongue-in-cheek? Or are you pissing in our collective ear and telling us it’s raining?
July 1st, 2009 at 6:13 pm
PatG – I very much agree
July 1st, 2009 at 6:24 pm
I’m sorry, but did you write 80% long?!?
Dennis Kneale and Barry are on the same wavelength now?
Forget it, I give up……….
~~~
BR: That’s up form 70/30 afew weeks ago.
We follow a rigorous system — with very tight stop losses.
This was from very little equity early March, getting more bullish into the lows . . .
July 1st, 2009 at 6:24 pm
To clarify, I only ask about your asset allocation because the FusionIQ model suggests a bearish skew, and there’s not a Master rank over 80 to be found in your whole database. Granted, there are many trading buys. But 80% seems very aggressive given the trend skew and seeming dearth of intermediate or long-term buys.
July 1st, 2009 at 6:29 pm
RIP Karl Malden
A man of class indeed.
July 1st, 2009 at 6:35 pm
saw this on the LAT website
http://www.latimes.com/news/local/la-statebudget-fl-2,0,6957202.htmlstory
makes it painfully obvious they have a problem that will not be easy to fix
try it, it will let you pick from a pallet of choices to fix it.
doesn’t look to likely that cuts only will do the job
July 1st, 2009 at 6:37 pm
and California isn’t the only state is trouble. there are at least 4 others all in about the same shape,.
http://www.msnbc.msn.com/id/31680340/ns/business-stocks_and_economy/
of those other 5, 3 are red states, 2 are blue
July 1st, 2009 at 6:40 pm
Lastly, the new FusionIQ site is a quantum leap above the previous services. Well done to all who contributed to the new tools. It is now a VERY useful screening service – and incredible value.
July 1st, 2009 at 6:41 pm
mortimus-
sounds a bit contrarian- BR’s play- to those on the TBP- however- he might be looking for a small run up- who knows really- fundamentals are out the window-
I am sure he has his own ideas as to when to press the sell button
~~~
BR: This is a trade, not a religion . . .
July 1st, 2009 at 6:43 pm
125% vs 105% – “all in”? Feds to refi up to 125% – of appraised value presumably. Interesting it was announced ad hoc, boots on the groundish – and at ground zero of speculative RE investing.
The big banks offload their worst morts onto F&F?
Sounds like taxpayers could be on the hook for an awful lot but it will help the 19 banks so it’s worth whatever it costs.
http://blog.seattlepi.com/realestatenews/archives/172722.asp
July 1st, 2009 at 6:45 pm
@Thor 6:13
Cruising other sites. Yeah, MI needs the work and CA needs the cash. But the alcohol industry will do its best to see that legalization won’t happen in our lifetimes.
July 1st, 2009 at 6:53 pm
@Ahab
True and he’s been amazingly right so far but I can’t bring myself to type or say G*&@#N Sh@@TS after a 40% run up with everything pointing to this economy cratering into hell. My head hurts
“A strange game. The only winning move is not to play. How about a nice game of chess? “
July 1st, 2009 at 6:55 pm
jc-
ZERO impact- might as well make it 300%- who cares- if you are under water AND in stress- and you can’t cover your bases with what money you have coming in- why refinance at all- especially on a loan that is HIGHER than your value-
better to negotiate with the bank for a principle reduction- if no progress-
fuck ‘em- jingle mail it and call it a day- at least you had fun while it lasted- you can rent the same home for less $
July 1st, 2009 at 6:56 pm
Bruce – looks like your state is the second worst in the country for bankruptcies three years running!
July 1st, 2009 at 7:23 pm
Barry,
80/20 Equity to Cash??
You’ve been throwing alot of Bearish views out there, and talking like your surprised to see the SnP still above 9hundy (a few days ago on your blog). You were confident that we’ll test the lows maybe in the Sept/Oct timeframe( tech ticker-a weekish ago).
Dont get me wrong, I love ya man, but what gives?
~~~
BR: The trading posture and the economic views are often out of sync — one is a 6 to 12 month view, the other is a 4 to 8 week view
July 1st, 2009 at 7:26 pm
Whoa! 80/20 equities/cash…that actually sounds aggressive…..would strongly consider reversing that weighting if SP500 takes out 888….until then….best of luck.
The good news is Put Options are on sale….so relatively cheap insurance is available….
July 1st, 2009 at 7:30 pm
TZ says (earlier thread)-
“The drafters of legislation (often lobbyists, as everybody knows) are always thinking a few chess moves ahead of us little brains. You get loopholes like GE qualifying for bailout funding because they own two S&Ls in Utah. Who has the time to scrutinize bills for shit like that?’
I too thought that was an incredible revelation- with very little air play- posted below-
http://www.washingtonpost.com/wp-dyn/content/article/2009/06/28/AR2009062802955.html?hpid=topnews
it is truly the insider’s gaming the regular folk- Immelt is a little bitch who will suck off the USG and American taxpayers because it makes business sense-
what a prick
July 1st, 2009 at 7:32 pm
“Lots of activity as cash sitting around rolled back into equities.”
This statement has zero explanatory power for what is going on, though. For each dollar amount for which equities are bought the same dollar amount is realized by someone else from equities sold. Every trade has two sides. Thus, you could say with equal validity, “Lots of activity as cash rolled out of equities to be sitting around”.
My allocations:
Trading account: 60% cash, 40% stocks long
Retirement account: 100% cash
rc
July 1st, 2009 at 7:46 pm
@Thor:
and that takes some doing…it is hard to go bankrupt when you can’t afford the payment on your doublewide…..
July 1st, 2009 at 7:47 pm
By the way.
I leave this screen on during the day, if I post and don’t get back, I have to see folks…I know you understand…some days I only get to check the blog every few hours or so…
sorry if I’ve offended anyone…
July 1st, 2009 at 7:50 pm
@PatG:
They could take half of Tennessee’s prisoners but I’m not sure they’d want to do that…everybody here is in prison for having a meth lab…Michigan would be the meth lab king of the country….
July 1st, 2009 at 7:52 pm
incredible economic minds at work-
http://graphics8.nytimes.com/images/2009/07/01/business/01leonhardt_600.jpg
L- with your thumb and index finger on you forehead- what does it spell-
LOSERS
July 1st, 2009 at 7:57 pm
@Bruce
“They could take half of Tennessee’s prisoners but I’m not sure they’d want to do that…everybody here is in prison for having a meth lab…Michigan would be the meth lab king of the country….”
—
[snark] Send ‘em to GITMO & waterboard ‘em…At least it would give Keith Olberman another 6 months of content to actually be on air…:-)
Just trying to ruffle some feathers here…no offense to anyone!
July 1st, 2009 at 8:00 pm
cv – you are a rascal
1 1/2 hours on the bike = mellow
chapeau…
July 1st, 2009 at 8:00 pm
@ahab
“L- with your thumb and index finger on you forehead- what does it spell-”?
I think it spells the type of recovery we’re going to have after the next downturn…
July 1st, 2009 at 8:01 pm
80/20: if I was to apply kalifornia maff I would be 160/120 invested in equities/cash, the remainder borrowed from anticipated realized P&L. Same crazy logic of denial.
July 1st, 2009 at 8:03 pm
@wes
I’m mellow as can be at the moment…2 1/2 hours of cardio/strength…Now kicking back with a brew…
looking forward to some nice ribs this weekend, plus some fishing, & some fireworks…
Just a few chores beforehand…
July 1st, 2009 at 8:04 pm
teraflop Says-
” if I was to apply kalifornia maff I would be 160/120 invested in equities/cash, the remainder borrowed from anticipated realized P&L.”
that is some funny shit dude
July 1st, 2009 at 8:05 pm
cv – excellento my friend
July 1st, 2009 at 8:06 pm
Bruce – Doublewide – hah! you have a great sense of humor!
July 1st, 2009 at 8:14 pm
cv – remember this one….
# Wes Schott Says:
May 19th, 2009 at 8:14 pm
I got it.
Let’s meet on Catalina Island (secretly, of course) and start the Central Bank of California.
Then, Cali can print all the money they need.
What d’ ya think?
Let’s talk exchange rate later.
July 1st, 2009 at 8:16 pm
Just got back from our favorite Mexican place…..I do find this California budget impasse fascinating…I mean, this is the golden state, and my only brother lives there. But y0u could almost call this masochistic…so much wealth and so little common sense. I come down on the side of the governor, not to cut programs to the poor, but to make the legislature and the next governor act like adults. Of course the entire deficit needs to be addressed. Of course handling it this way increases future costs. I see where general obligation bonds for California early this week were 7%…highest in the nation. And this will only increase the cost of any future borrowed monies…
Other than the climate, why would you want to live there? The entire state is or has become a laughingstock…Tennessee may be one of the poorer states, but common sense still has a home here…
July 1st, 2009 at 8:17 pm
Bruce:
I have a funny story about meth. Before I moved back east, I lived in Portland, OR. Politicians and the local media used to love to blame every single one of society’s ills on meth. Police used to use “suspician of meth” as a reason to search cars when they pulled people over. Politicians always raved about how they were making a stand against meth whenever one of their indiscretions came to light
My favorite was the local news. Any time they were short on details, the final phrase in the headline was, “Meth may have been involved.” It would go something like this:
“A fatal shooting occurred on Ainsworth St. at 7P.M. Police have not yet released any details. Meth may have been involved.”
“A local property was condemned after it was discovered a man was raising 60 dogs on the property. Meth may have been involved.”
They would throw that clause after almost every headline on the evening news. When I first moved there, I thought it was amusing (more amusing than the panic that ensued if you tried to pump your own gasoline). After a while, it really started wearing on me.
July 1st, 2009 at 8:22 pm
matt –
sounds like religion……wierd
July 1st, 2009 at 8:22 pm
@Wes
I’ll go with that…on several conditions…
1. No more FRACTIONAL BANKING SYSTEM (legalized “counterfeiting”).
2. Start with a Bretton Woods model.
2. Let’s nominate Volcker as first chief.
3. Bring the “Cubs” back to Catalina for spring training…
Oh wait…
“Then, Cali can print all the money they need”…wouldn’t qualify under #1, #2, & #3 (but it might start a new gold rush)…Nevermind…
JUST BRING THE CUBS BACK!
July 1st, 2009 at 8:24 pm
matt:
Actually, the farm and small mountain I live on used to have an “old house place” that had people in it until the 70’s…the folks around here say the house “blew up” one day, and the guy who was living in it at the time never came back…there was no structure until my wife and I bought the place and built our home here…
And when we bought the farm, there were 3 small pot plots on one of the edges of one of the fields…
We’ve moved a long way from urban America…
July 1st, 2009 at 8:25 pm
@Bruce
you’re state is poor because you are VOLUNTEERS…start demanding a wage for crying out loud!
July 1st, 2009 at 8:26 pm
We also have a cemetary with three small girls from 1840 on the place…pretty interesting place, actually…
July 1st, 2009 at 8:26 pm
I think cvienne, I would not trade places with my brother…
July 1st, 2009 at 8:32 pm
@Bruce
My place out in West Virginia is somewhat how you describe your place…
I’ve got my tractor, farmable land, off grid energy, well water…I’m equipped for just about the most doomsday of scenarios…
I sleep VERY WELL at night…I DO need a good fishing boat though…
July 1st, 2009 at 8:32 pm
…hey “the kid” demands wages for volunteers, no?
July 1st, 2009 at 8:35 pm
@Bruce
Oh…and you mentioned before that you were “up to your elbows” in patients today…
Understandable…
…just to let you know – the expression around here is “up to your ass in baby alligators”
July 1st, 2009 at 8:39 pm
cvienne…
My wife and I are going to buy a bass boat this weekend from Bass Pro Shops…it will be about 1/3 of the fiberglas ones, but I had one of those 20 years ago, and for my use( 7-8 weekends/year) this will be the thing… I am considering hanging up the shingle at the end of the year, but that may change…thank god for the tech bubble, is all my retirement fund says to me at this stage of my life..
July 1st, 2009 at 8:40 pm
Some of my patients resemble alligators…
July 1st, 2009 at 8:40 pm
@All
Here’s something to see…
Sears Tower Unveils 103rd Floor Glass Balconies:
http://guides.travel.msn.com/Guides/article.aspx?cp-documentid=1075814&icid=msn1075814?GT1=41000
IMHO…one could get the same experience by buying the SPY “on margin” this month…
July 1st, 2009 at 8:45 pm
@Bruce
“I am considering hanging up the shingle at the end of the year, but that may change”
I know how you feel there…You’ll figure it out…When a person is involved in doing something important OF SERVICE (like you do), the decision to put it behind is difficult…
Having read your posts on this blog for awhile, I’m 100% convinced that your character will allow your conscience to make the right move at the appropriate time…
July 1st, 2009 at 8:45 pm
cv – once again – you are a rascal – funny, it was on the MSM news – Brian Williams tonight – feature story
July 1st, 2009 at 8:49 pm
@Wes
Really? I’m SHOCKED (I assume that you’re talking about the Eddie Lampert er-um Sears Tower [soon to be renamed])…
Actually, I just caight the storyline off the internet…I’M SHOCKED you watch TV!
July 1st, 2009 at 8:53 pm
cv –
… i watch only a few things —
1.) NBC Nightly News – see what they are feedin’ the sheeps
2.) Formula 1 races
3.) Four de France
is there anything else?
July 1st, 2009 at 8:57 pm
@wes
4.) PORN…jk – lol
Formula 1 ? really? are you European (or Brazilian)?
July 1st, 2009 at 8:57 pm
After reading Jonathan’s desire to exit California (6:02) and the state’s real estate and budget troubles, I’m visualizing what a contemporary inversion of the Grapes of Wrath with a tinge of Beverly Hillbillies would be like:
A native Californian family tearfully closes the front door of their Option-Arm financed McMansion, leaving the keys in the mailbox in a package addressed to the bank. They walk to their vehicles which have been loaded with their most prized possessions. The 60-inch Plasma TV stuffed in the back of the Suburban and the hot tub roped to the top of the Hummer. Mother gets behind the wheel of the Hummer and thinks to herself “I hope out new home has granite counter tops and SST appliances”. Father fires up Suburban and leads the caravan down the highway towards Oklahoma, dreaming of a New Economy job in the burgeoning wind turbine farms of Oklahoma.
July 1st, 2009 at 9:02 pm
@Stillaway
Now THAT was classic…GREAT IMAGINATION (you need to be a screenwriter)…
The only thing is, you have them landing in OK…I think I’d have them landing in Arkansas (driving the Arkansas Chugabug – from the Wacky Races)
July 1st, 2009 at 9:04 pm
…or maybe the vehicle you describe could be a NEW ENTRY into the Wacky Races…
July 1st, 2009 at 9:06 pm
cv-
Well since the original had the Okies heading to California I thought the opposite would be appropriate for the Great Depression II.
July 1st, 2009 at 9:09 pm
kinda shocked to hear that you’re 80 percent in equities BR…but happy to hear you jumped in the pool…wondering how the perma-bear depressionistas here are gonna handle your revelation…
~~~
BR: We have been mostly constructive for a few months now . . .
July 1st, 2009 at 9:16 pm
Eric Tyson@9:09 –
green shoots baby
where are your stops set Eric?
how tight are your stops BR?
July 1st, 2009 at 9:17 pm
This one’s for you, Bruce. Doc Watson.
http://www.youtube.com/watch?v=dq-1G6Wif8s
July 1st, 2009 at 9:17 pm
California…..interesting times. I’m a native Californian, and I can tell you this has been decades in the making. It’s been an interesting political experiment….”direct democracy”….the population able to put “propositions” up for vote that become “law” without any adult supervision or debate (unless you call TV commercials “debate”). Like everything else in CA, it all seemed like a nice idea….but at the end of the day all you got was financial wreckage and a state in shambles. There are some really nice areas and some good people, but I’m afraid all the laws on the books there need to be blown up and the entire slate wipe cleaned….
July 1st, 2009 at 9:20 pm
@Stillaway
…let’s flesh this out…WACKY RACES
The entries are as follows…
The Boulder Mobile (Rock & Gravel)…BR & Tyler Durden
The Creepy Coupe Gruesome Twosome…Bill Gross & Mohammed EE
The Ring-a-ding Convert a car (feat Prof Pat Pending)…Bernanke
The Crimson Haybailer (with the Red Max)…Jeffery Immelt
The Compact Pussycat (Penelope Pitstop)…karen
The Army Surplus Special (Sgt. Blast & Private Meekly)…Bush & Cheney
The Bullet Proof Bomb (with the Anthill Mob)…Lispy Lloyd & Goldman Sachs
Turbo Terrific (with Peter Perfect)…Obama
The Buzzwagon (with Rufus Roughcut & Sawtooth)…Volcker & appointee to be named…
Dick Dastardly & Muttley (in the Mean machine)…Summers & Geithner
July 1st, 2009 at 9:23 pm
LOL ….that pretty good Stillaway!!
Texting the whole way undoubtedly….
Don’t forget MotoGP….real men race motorcycles.
July 1st, 2009 at 9:25 pm
So coy, Barry. Tossing that 80/20 in there like…”oh, is it Wednesday? I had no idea!”
July 1st, 2009 at 9:25 pm
eric-
it appears you are quite the stud- tell us what we should do- if – in fact- you are able to describe the most optimal portfolio-
we need guidance from a true financial genius
July 1st, 2009 at 9:26 pm
Let’s try to get some good punchlines.
How many Californians does it take to balance a budget?
July 1st, 2009 at 9:30 pm
Don’t mean to turn this in a California rant….but, I checked out the latimes.com website to get the “latest,” and of course the budget debacle is not even the main story posted…..
What’s interesting is that the main story is about some lobster purveyor in Nevada….
http://www.latimes.com/news/nationworld/nation/la-na-desert-lobster2-2009jul02,0,1646681.story?page=2
What’s terribly ironic is the Nevada crackdown on the dude selling crustaceans is EXACTLY the sort stupid shit California would no doubt have one of many laws for….and here’s the LA Times featuring this human interest story from Nevada….I wonder if the irony is lost on anyone there….
July 1st, 2009 at 9:38 pm
TZ –
three – one to hold the ladder, oh no that is the light bulb thingy…
OK, 36,OO,OOO peeps in CA?
i got it – one – aaaaaaarnold, no?
July 1st, 2009 at 9:43 pm
“wondering how the perma-bear depressionistas here are gonna handle your revelation…”
Eric, we like Barry, but you’ll find a lot of independent thinkers here who have various trading….errr “investing” styles….
July 1st, 2009 at 9:52 pm
HEY! no fair making fun of CA without me!
Seriously though, I agree with Andy, this mess has been a long time in the making. As I’ve said before, this is more of the same for us, just of a higher degree. One of the interesting pieces of news you don’t hear about is that when The Governator was elected, he repealed the vehicle license fee. Because of this, the state has lost out on over 20 billion dollars in revenue. Up until recently, this was more than offset by the increase in income, property, and sales taxes. Although I agree with the Governator in that we need to cut services before we increase fees and taxes, I do believe that we need to re-instate the original vehicle registration fees.
Out of curiosity – how much do you all pay for vehicle registration fees each year? I just paid mine and it was $122.00 . . .
July 1st, 2009 at 10:02 pm
@EricTyson, note that most of the 80% is in the tech sector. This sector will b the first turning the corner.
July 1st, 2009 at 10:06 pm
Thor-
Here in Ohio it’s $34.50
But arugula is $9 a bunch.
July 1st, 2009 at 10:12 pm
We need more regular Eric Tysons on this board. That’s when I know for sure the market is headed downward again. I’m guessing by fall we’ll have more of those here gleefully calling the new bull market, which will be just in time for The Fall part deux.
July 1st, 2009 at 10:14 pm
Methinks California will default this summer. A prelude to U.S debt rating downgrade.
http://online.wsj.com/article/SB124648274812182537.html
July 1st, 2009 at 10:15 pm
Thor. Ha….I always wondered about the usurious vehicle tax….back in the 90’s it was 700-800 bucks….in Texas it’s about $100 I think….I don’ t pay the bills….
That vehicle tax was ridiculous, but if you take away one source of revenue, you should probably replace it with something else….or maybe….let me see here….cut some benefits….
July 1st, 2009 at 10:15 pm
@Thor: We paid $105 for our Subaru and $55 for the Corolla here in Minny. Not sure why there’s a price difference? A little confused about that but I don’t bother questioning it. “Just pay it” is my motto.
July 1st, 2009 at 10:19 pm
“Lots of activity as cash sitting around rolled back into equities.”
I dunno. Looked like another low-volume up day.
July 1st, 2009 at 10:21 pm
At least things are going well for Wall Street employees (the real rulers of this country) again, well, the ones that are still employed anyway.
Wall Street Pay Approaches 2007’s Records
Comeback in Compensation So Far This Year Shows How Hard It Is to Break Old Habits
http://online.wsj.com/article/SB124649352055183157.html
July 1st, 2009 at 10:22 pm
Well…mt WACKY RACES post keeps getting eatin’…
Shame…it’s funnier than hell…
Hey Thor…is “Sushi on Sunset” still in operation? I just went to eat out at my local sushi joint on the lake…kinda miss Sushi on Sunset (upstairs) with it’s billowy couches (even though they needed to be cleaned more often)…
What about MARIX tex mex?…I LOVED that place!
July 1st, 2009 at 10:27 pm
Cvienne – not sure about Sushi on Sunset, I’m not a big fan of sushi, or avocados for that matter – yes, I know, bad Californian!
Marix is still there and still serving up good Tex Mex. It’s quite the scene these days.
July 1st, 2009 at 10:30 pm
@Thor
$52 and $61 for our two vehicles; two year registration renewal in MO.
July 1st, 2009 at 10:30 pm
Following is a paragraph from manhattanguy’s link in re: CA
~~~~~~~~~~~~~~
Meanwhile, small-business owners such as Manuel Belmarez are fretting over how to cope with payment delays from the state. Mr. Belmarez, of the Southern California city of El Centro, runs a family-owned medical-transportation business that takes patients to dialysis treatments. The state is his only client, and he nearly declared bankruptcy last fall when payments were delayed during the last budget stalemate.
~~~~~~~~~~~~~~
Let me first say, I’ve got a lot of sympathy for folks like Mr. Belmarez. But, I must suggest that he’s not actually an “entrepreneur.” He’s just some guy who is basically serving as an extension of the huge governmental safety net in CA. I don’t mean to get all Ron Paul here, but there are a lot of groups out there (usually religious groups) who genuinely care about people and their needs and will volunteer their time and services towards helping out others. I know this because I volunteer my time with lots of other like minded folks. One of the many side affects of the “nanny state” is that society becomes hugely dependent on it, and then has difficulty coping any other way.
Sorry, enough libertarian ranting on California….back to our regularly scheduled programming….I’m sure this is all going to work out swimmingly.
July 1st, 2009 at 10:36 pm
Andy, no one with a brain takes the LA Times (or the OC Register, for that matter.) You can learn more about CA from the NY Times.. or the Economist!
July 1st, 2009 at 10:37 pm
@Thor
Then…MARIX has been “the spot” for 20 years running now…
I’m gonna tell you my most classic MARIX story now…Although probably most people on this site will deride me for it…
back in ‘87…I used to go to MARIX every Friday night (for margaritas, food, etc.)…one particular occasion I got drunk as u know what on about 5 pitchers with some friends…Lo and behold, who was at my class the next morning (in sunglasses) at 9AM?…while I was in FULL HANGOVER mode…
Madonna…
F-me…
I sweated it out and she became my client…Tho I eventually FIRED her because all she did was argue all the time…That, and I couldn’t stand goiung to her apartment all the time and seeing panties draped all over the furniture (this was even BEFORE the Sean Penn days)…
So be it…stories…life…it’s all good…
July 1st, 2009 at 10:43 pm
Barry was rather coyly cryptic in this post, wasn’t he?
July 1st, 2009 at 10:44 pm
Cvienne – hah, great story! life has a way of working out like that sometimes!
July 1st, 2009 at 10:45 pm
Karen,
Ahhh……I just assumed the largest paper in CA might be fully featuring this crisis. MY BAD!
I thought you swore to never post after a certain hour….I assumed the Streets of TBP were safe…..
Ha.
July 1st, 2009 at 10:49 pm
@OT
I’m 100% with you there my friend…
“I love the smell of NAPALM in the morning…Smells like…VICTORY!”
or BAIT as the case may be…
July 1st, 2009 at 10:50 pm
Andy – don’t confuse the front of the LATimes website with the front page of the paper, they’re not always on the same page (pun intended). There was front page news about the budget crisis in this mornings paper.
July 1st, 2009 at 10:57 pm
Thor…..I assumed so. It was just funny to me to see the story of the crackdown on the crustacean restauranteur in NV…for me it was emblematic of everything wrong with certain governments/laws/etc…
July 1st, 2009 at 10:57 pm
@Thor
While we’re on the subject…
Hugo’s?…I loved that place (especially for breakfast)…is it still around?
Barney’s Beanery?
what about the “Bodhi Tree” bookstore?
I haven’t been in LA for about 10 years…
July 1st, 2009 at 10:58 pm
With BR probably off the island, that leaves only me and the Comstock Boys who still value “as reported earnings” and wonder why buy stocks with the market at 3 times the highest P/E ever recorded? Oh wait a minute…it’s all one-time charges.
http://www.comstockfunds.com/newsletterdownload.aspx?newsletterpictureid=26
July 1st, 2009 at 10:58 pm
Andy, the two good blog links to follow in CA are from the OC Register, however.
http://lansner.freedomblogging.com/
http://mortgage.freedomblogging.com/
A girl can change her mind now and then… anyway, as long as I stay ON topic, we should be safe.
July 1st, 2009 at 11:01 pm
@EricTyson:
I don’t think you have to be a “perma-bear” to consider stocks to be overpriced at this point and to question the optimistic outlook that there is a high probability for stocks going to go up from here, instead of down, based on fundamentals. At a S&P 500 closing of 923 as of today, the market has already priced in average reported 12-months trailing earnings of about $58 a share, assuming a long-term average of P/E of 16, or $66 a share, assuming a long-term average of P/E of 14 as it was for the time period from 1936 to 1997, before the average P/E ratio increased due to the excessive stock market bubble over the last decade. The current estimate of the 12-months trailing earnings for 2Q/2009 and 4Q/2010 is about $0 and $38, respectively. When will the $60 be reached then? For comparison, earnings were at about $85 a share during the peak of the last business cycle.
And if history is any guide regarding what is possible and probable, secular bear markets ended when the P/E ratio had reached single digits (6 to 9), but not at a P/E ratio of 1873, as it is currently estimated for the quarter 2Q/2009. To reach a P/E ratio of 6 to 9 and assuming earnings per share of $60, the S&P 500 would have to fall to 360 to 540, respectively. To reach a P/E ratio of 6 to 9 and assuming the current S&P 500 index value of 923 as reasonable, earnings per share would have to increase to $154 to $103. It already seems to be extremely optimistic to assume that even the peak earnings of the last business cycle will be reached again in the next years, considering de-leveraging of the consumers, all the bad loans in the financial system, a current total debt to GDP ratio of 370%, and that even professional optimists like Ben Bernanke who never saw the crisis coming, expect only subdued economic growth over the next years.
The whole argument above doesn’t assume any economic doomsday scenario or, not even a strong worsening of the crisis from here, only soberness.
What is your rational for being bullish at this point? This time, it will be different compared to other secular bear markets? Or counting on the irrationality of the markets to prevail over fundamentals not just over the next months, maybe into next year, but even over many years ahead?
rc
July 1st, 2009 at 11:01 pm
AndyT – Don’t you understand? We NEED this kind of fluff to distract us from the reality that is our state
Cvienne – yes, all of those places are still around. LA proper has changed a lot in the last 10 years. You wouldn’t believe Hollywood if you saw it now. I heard it was a slum when you lived here. It’s now Times Square lite.
July 1st, 2009 at 11:02 pm
BTW, the people of California are really suffering…
By ANTHONY MCCARTNEY, AP Entertainment Writer Anthony Mccartney, Ap Entertainment Writer – 1 hr 10 mins ago
LOS ANGELES – A plan to bury Michael Jackson at his sprawling Neverland ranch fizzled Wednesday, leaving details about his funeral undecided as another mystery was solved: His newly unveiled will says his mother should raise his children, or failing her, Diana Ross.
The changing funeral circumstances thwarted many Jackson fans who had descended on the estate in the rolling hills near Santa Barbara with the hope of attending a public viewing.
“We’re terribly disappointed,” said Ida Barron, 44, who arrived with her husband Paul Barron, 56, intending to spend several days in a tent.
“We were going to listen to music and watch Michael Jackson DVDs and party all night long, not just to have fun, but in memory of Michael Jackson,” Paul Barron said. “Now we’re going to have to just go home.”
July 1st, 2009 at 11:04 pm
I guess rootless cosmopolitan is also on the island…welcome!
July 1st, 2009 at 11:11 pm
@Thor
It WASN’T a slum when I lived there (1981 – 1992)…It grew into it’s “Melrose Place” image…The studios I made my fame at…”Body Express” & “Voight Center” were right in the heart of West Hollywood…Body Express was about two blocks east of Fairfax High on Melrose (just west of Spaulding) & Voight was on La Cienega & Santa Monica…
Karen (Voight) eventually moved to Santa Monica & I’m not sure what she’s doing now…
Anyway…I was outta there (&onto Italy by 1993)…
I visited the area a couple times in the 1990’s (slumtime, as you describe)…I even ran the Los Angeles Marathon in 1997…I think the last time I was there was in 2002 (but only for a day)…
July 1st, 2009 at 11:11 pm
I was surprised that David Rosenberg did an about-face on his call for a Q4 re-test of 600 — which he made within the last two weeks. My subjective take was that it looked and sounded from David’s body language like a kind of capitulation. I’m curious what prompted the turnaround. Does anybody know? Did I misread this?
July 1st, 2009 at 11:14 pm
Cvienne – no, I meant Hollywood, not West Hollywood. I don’t go near WEHO, not my kind of people.
July 1st, 2009 at 11:15 pm
@rootless_cosmopolitan, you obviously didn’t read “Dow 40000″, or “Dow, 30,000 by 2008″.
July 1st, 2009 at 11:20 pm
80/20? When did you ever mention you have been 70/30 for the last month or so? I was under the impression that you were bearish. Don’t understand it. Read your website every single day and 80% or more of your articles for the last few months have been negative. Where did all this enthusiasm come from? What has changed your mind? Thanks.
July 1st, 2009 at 11:21 pm
@Transor
Re: rosenberg
I think you might have MISREAD it…I didn’t notice capitulation in his body language…
To me, he basically seems to be in the SELLOFF camp…Significant pullback, RETEST, new lows…?
I think his body language only hedges there…JMO…
BTW…thanks for the post (even earlier)…It gave me the desire to really WATCH what he was saying in the interview…and wasn’t it interesting that they let him speak without interruption?)…
July 1st, 2009 at 11:23 pm
It’s interesting to hear Barry is bullish on stocks today as I just put on my first stock short in ages at noon today. I am usually early so Barry may well end up right for the next month at least. My time frame is 5-6 months out.
July 1st, 2009 at 11:30 pm
Barry,
First post here and first time back at your blog in a while.. I stopped reading because you were (talking) bearish and I was trying to pick up and hold some beaten stocks.. that was in Feb-Mar. Now you are bullish with a 80/20 mix at 920+?
~~~
BR: You missed the shift to a more bullish posture in early March.
We started scaling in during March and April. I still expect a major retest, but we have been constructive during the run up.
Nevert confuse rational analysis of a weak economy with short term trading gyrations.
July 1st, 2009 at 11:36 pm
@cvienne:
You prompted me to watch it again. At 4:30 he definitely says he’s not saying there’s going to be a retest of 666 in October.
He continues to hammer away at employment and thinks earnings (i.e., lack thereof) is going to cause a natural “relapse” but isn’t saying retesting the March lows.
But I see what you’re saying about his body language being about hedging — his first response is that it’s a question of timing. So I think I misperceived capitulation. More like he’s begrudgingly conceding his initial forecast was wrong about retesting the March lows. Agreed?
July 1st, 2009 at 11:38 pm
I think the question is what happened — or didn’t happen — in the past week that made him change his mind. Might be a clue to Barry’s position also.
July 1st, 2009 at 11:43 pm
@Transor Z…
Interesting debate…
Consdier this…I take what Rosie says VERY SERIOUSLY…
My impression (in his body language) is that he wasn’t conceding anything…Let’s put it this way (for arguments sake)…He certainly wasn’t stating that the MARCH LOWS were SURE to be violated…But I still think that’s on the table…
I simply think he’s considering…
1. a significant correction
2. a FULL retest
3. a break to new lows…
probably 40-40-20 as best as I can read the body language…JMHO…
Contrarian opinions are always welcome…
July 1st, 2009 at 11:46 pm
Barry’s equity to cash ratio of 80:20 doesn’t mean necessarily he his bullish regarding the whole market. It depends on what is in the 80%. It’s possible he is bearish or cautious with respect to the whole market, but optimistic with respect to selected equities.
However, if he were generally bullish at this point I really would like to know the reasoning, on which the bullishness was founded.
rc
July 1st, 2009 at 11:51 pm
Could be Barry just thinks it’s a safer parking place with a better return than a CD.
He did say large cap techs. Didn’t say manufacturing or service.
July 1st, 2009 at 11:54 pm
@All
You know?
Fuck it…
I’ll state my opinions RIGHT HERE, RIGHT NOW…I’m tired of clowning around in a tired market…80-20 notwithstanding…
I LOVE how cheap PUTS are getting (therefore I like the other side)…& therefore I ALSO love ben22’s idea that some things may end up UNREDEEMABLE (based on Franklin’s fucked up government dickwad spending)…
So guess what?
I’m buying TLT January 2010 calls (@105)…Fuck me if I lose money…I still have my farm (PAID IN CASH)
July 2nd, 2009 at 12:00 am
#1, no doubt about that.
I’d put #2 and 3 lower based on him clearly stating a couple of weeks ago that there would be a full retest — he didn’t hedge a couple of weeks ago. But that’s more quibbling than anything else.
July 2nd, 2009 at 12:06 am
@Transor Z
I don’t know…I suppose I’m the ULTIMATE contrarian…
If Rosie seems to be hedging on RETEST/NEW LOW call…& BR (in this very thread), seem to be giving a 80-20 call…
Well that, TO ME…seems to be the ULTIMATE reason to GO SHORT…
I’ll hedge that however…I still think we have about a week of DICKLESS days that the S&P meanders between 930 – 956 b4 it finally calls it QUITS on ‘09…
That’s just my DICKLESS opinion…
July 2nd, 2009 at 12:10 am
Eh, dicks are overrated IMO. They can end up costing you a lot of money.
Later.
July 2nd, 2009 at 12:21 am
I am going to restate my question from a few weeks ago. Like I said then, I am not as knowledgeable about the stock market as many of you on here are, but:
If stock purchases are based on the expectation / anticipation of “capturing” profits 6 to 12 months in advance, what industries are expected to thrive in the coming year. Currently, the transports don’t appear to be recovering (quite the contrary, if I am reading them right). So Dow Theory at least doesn’t seem to support rising stock valuations.
I would say alternative energy, but with the Cushing, Oklahoma tanks full and several tankers (also full) sitting offshore — not just in the U.S., but the world over — that would indicate to me that energy prices are headed down — at least in the short term; and that historically has been bad for alternative energy markets.
With California’s financial crisis continuing to get worse, how can that be good for the financials? Not to mention the potential fallout from credit card companies increasing payment demands from 2% to 5%. Defaults are already approaching 10% (if not already over it). This can’t make that number any better. Maybe they are counting on being able to take what few assets people have left after their homes values have fallen through the floor.
So, tell me somebody, what sectors are set to break out? I really want to know.
July 2nd, 2009 at 12:34 am
@OkieLawyer
Good question my friend…
I’ll do my best this way…
1. Ask Andy T, karen, & Leftback about the $TRAN…I’m fairly sure they’ll tell you it’s not looking that healthy…
2. As for Cushing crude…That’s ALWAYS been my PERSONAL story…It can give false signals, but USUALLY the false signals have to do with the OVERBIDDING of crude prices versus the fundamentals…Case in point…CLEARLY the fundamentals at present don’t justify a higher WTIC price…So…if oil rallies on a bearish number…it means the TRADING DESKS are in control of the market…Instead, if WTIC falls on the same number…HEAD FOR THE HILLS…I’m pretty sure “lefty” is all over this one…I’m surprised karen isn’t…She’s usually in the first spot…
3. CALIFORNIA?…I don’t know what to say…Despite the overall market holding up, banks are down 23% over the last months…I CAN’T BE THE EXPERT HERE…Financials are the DEVIL BOY…Books are cooked (as allowed by the USG)…Yet they’re “hyped”…because the fuckers need the cash & deposit base…
My best advice…STAY CLEAR & MOVE ON…
July 2nd, 2009 at 12:41 am
All I know is a bank had to borrow from the Fed at 7% in O/N (check out Denninger’s post at his site). If the Fed Funds is 0-.25% why did they have to do it at 7%? Something bad is brewing in the financials.
July 2nd, 2009 at 12:43 am
@Amen Ra
Give us a link…please do?
July 2nd, 2009 at 12:47 am
@Amen Ra
overnight?
or is this just another in the long line of FDIC Friday closures? on a holiday weekend for crying out loud…
This weekend…I just want to go fishing, watch some fireworks, & harvest two of my ‘melons if I can limit my worries to that!
July 2nd, 2009 at 12:55 am
@cvienne
Here it is http://market-ticker.denninger.net/archives/1177-BOOM!-More-Obfuscation.html
He links to the NY Fed’s OMO that shows the 7%.
July 2nd, 2009 at 12:56 am
Sorry the link didn’t paste correctly. Here’s the link as text:
http://market-ticker.denninger.net/archives/1177-BOOM!-More-Obfuscation.html
July 2nd, 2009 at 1:02 am
“Lots of activity as cash sitting around rolled back into equities.”
Um…. and the people who sold those equities now have said cash sitting around….
July 2nd, 2009 at 1:11 am
I think BR is bullish on the the Extraordinary Popular Delusions and the Madness of Crowds.
It is simply too early to go against the herd.
July 2nd, 2009 at 4:02 am
I’m all in for a retest of the March lows before year end ‘09. S&P puts with 2010 expirys are just too cheap to pass up. I don’t mind tossing pennies into the wishing well if the potential payoff is 1,000-fold.
July 2nd, 2009 at 4:30 am
Why not go short yet… perhaps the fruit is not yet be ripe to pick. Enthusiasm for stocks has not yet penetrated to sufficient depth within the investing populous to allow the market to roll over properly. The 50 day MA has just crossed above the 200 day MA and in the resent past that has been quite a good indicator for reasonably extended bullishness.
Personally I think it would be nuts to buy new longs here. The recession has been going since Nov 07 but its been only nine months since the biggest financial shock in living memory(almost) hit the worlds financial markets. It different this time. It’s gotta be.
July 2nd, 2009 at 8:17 am
But Barry, what are you looking at in FusionIQ as the Research Director that leads you to be bullish?
July 2nd, 2009 at 8:28 am
BR conjectured:
Lots of activity as cash sitting around rolled back into equities.
reply:
—————
Nope, my pile is just fine as is for now. Volume looks a little lame, too. Maybe you’ve been reading a little too much EricTyson lately?
July 2nd, 2009 at 9:43 am
Simon sez
It different this time. It’s gotta be.
tanman sez
Already is.
July 2nd, 2009 at 10:16 pm
BR, how can “cash roll into” (or out of) a secondary market? One man’s buy is another man’s sale.