Posts filed under “Really, really bad calls”

The Myth of Sideline Cash

A quick look a chart on Money Market Mutual Funds belies the common belief that “cash on the sidelines” is what powers markets higher.

As the chart below reveals, the Market goes up, and as we saw in the 1990s and from 2005-08, so too MMF goes up.

This is evidence against the standard sideline cash argument.

Indeed, rather than investigating these common aphorisms, if you trade on them at face value, you will be disappointed.  Unless you thoroughly data verify and prove/disprove ANY AND ALL Wall Street myths, rules of thumb, or standard trading phrases, you are going to a) develop a false belief system and 2) that will eventually lose you lots of money.

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MMF and SPX
chart courtesy of Fusion IQ

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See also:
Cash on the Sidelines Chart Book
Annaly Capital

http://www.annaly.com/blog/?p=520

There’s No Such Thing as Idle Cash on the Sidelines
Hussman Funds

http://www.hussman.net/wmc/wmc060710.htm

Category: Markets, Really, really bad calls

Giuliani: Clueless about Economics, Crisis, Bailouts

I’ve always been grateful that Rudy Giuliani was NYC mayor during the 9/11 attack. He was reassuring during a moment of crisis, when leadership was otherwise missing. He stepped into the void after the attack, while others seemed to disappear. Giuliani’s political career — which was in tatters at that time — was rescued by…Read More

Category: Bailouts, Really, really bad calls

Lessons to Be Learned From Dow 36,000

“This book will convince you of the single most important fact about stocks at the dawn of the twenty-first century: They are cheap….If you are worried about missing the market’s big move upward, you will discover that it is not too late. Stocks are now in the midst of a one-time-only rise to much higher…Read More

Category: Investing, Markets, Really, really bad calls, Rules

Speech-Less: Tales of a White House Survivor

There is an excerpt of Speech-Less: Tales of a White House Survivor by ex-Bush speechwriter Matt Latimer in this month’s GQ. I wouldn’t have paid much attention to this — although some of it is hilarious — except for the knee jerk response from the former Bushies. See Bush vets: Who is Matt Latimer?. I…Read More

Category: Politics, Really, really bad calls, Weekend

So Much For High Frequency Trading

The Securities and Exchange Commission has proposed halting high frequency and flash trading. In response, Nasdaq (and others) are now prohibiting flash orders. Supposedly, the NYSE is also considering banning the practice. This was a given. The real question that remains unanswered and demands a thorough investigation is this: WHAT EXCHANGE OFFICIALS APPROVED THIS? WHO…Read More

Category: Really, really bad calls, Regulation, Trading

Bernanke Says Recession Over; Should You Care?

Ben Bernanke has declared the recession over. This leads to one simple question: Why should you care what his recession forecasts are? Based on his track record as a forecaster and his acumen in identifying economic problems before they exploded, his views on starts and finishes of recessions are, to be blunt, irrelevant. Recall it…Read More

Category: Economy, Federal Reserve, Really, really bad calls

Happy Anniversary !

While everyone is so focused on the anniversary of Lehman Brothers (9/15) and AIG (9/16), today is a different sort of anniversary: Its been exactly one year months since the single dumbest column ever published in The Washington Post appeared: Quit Doling Out That Bad-Economy Line. Breathtaking in its ignorance, shocking in its fallibility, astonishing…Read More

Category: Really, really bad calls

Myths of the Collapse

Here it is, one year later, and we continue to hear an enormous amount of misinformation about the Credit Crisis: What were the actual causes, what could have been done, what should have been done. Lets consider the most widely held myths as the the cause of the crisis (skipping discredited nonsense). Here is a…Read More

Category: Bailouts, Really, really bad calls

Missing Radical Deregulation As a Cause of Crisis

Tyler Cowen’s NYT column today,  Where Politics Don’t Belong, comes perilously close to the mark in identifying the key problems of the bailouts: They encourage a reliance on special Government dispensation, regulatory exemptions and taxpayer handouts: “FOR years now, many businesses and individuals in the United States have been relying on the power of government,…Read More

Category: Bailouts, Really, really bad calls

Dumb Analysis of the Day: Bank Profits May Drop on Regulations

This has to be the single dumbest thing I have read in months: Investment Bank Profits May Drop on Regulations, JPMorgan Says.  (Note: I am referencing the analyst report, not the Bloomberg story) Here’s a news flash: With the least amount of regulatory oversight in generations in the 1990s and 2000s, bank profits were less…Read More

Category: Credit, Earnings, Really, really bad calls, Regulation