Funny thing: I was just discussing this very thing with a pal last night — how to use various search engines for sentiment research.
Merrill’s Rosenberg via Abelson:
"A COUPLE OF WEEKS AGO, we ran a chart depicting how many times "Goldilocks" had cropped up in the financial press (it was an all-time peak number.) Incidentally and quite inadvertently, we failed to credit the source of that telling graphic, which was our estimable friends at Dresdner Kleinwort. On the theory that one good chart deserves two others, we direct your gaze to that pair atop these sacred columns, the handiwork of Merrill Lynch’s resourceful David Rosenberg.
As the legend that accompanies each explains, one chart shows the number of times "soft landing" has been mentioned, the other, the frequency "global liquidity" has appeared in this fair land’s beloved papers. As David observes, to a true contrarian, those graphics strongly indicate that the phrases are "already more than fully priced in the investment lexicon and market pricing."
What that means, in turn, he suggests, is "it may be time to think of what happens when these charts revert to the norm" and to even give some thought to "hard-landing plays" (high quality, low U. S. cyclicality and low risk), and plays that correlate inversely with "liquidity," especially if Japan, the fount of so much of that liquidity, begins to hike rates.
We buy that.
Up and Down Wall Street
Monday, DECEMBER 11, 2006
Another edition of our new series: Blog Spotlight.
We put together a short list of excellent but somewhat overlooked
blog that deserves a greater audience. Expect to see a post from a
different featured blogger here every Thursday evening,
Next up in our Blogger Spotlight: Russ Winter’s Economic & Market) Watch. A brief background: Russ was a broker for major firms in the Pacific NW for fifteen years in the late 70s and 80s. Moved on to land development, and vintage apartment ownership. He is now semi-retired and a cashed out bear, hunkered down in the Portland, Oregon area, watching the world go around.
This week’s topic: Understanding Consumer Ponzi Finance
Ponzi’ finance units must increase outstanding debt in order to meet its financial obligations.”
Credit Suisse on a monthly basis puts out one of the most data filled reports in the biz on mortgage and consumer finance. A careful reading of the latest issue, enables one to piece together the nature of the American asset Bubble consumer financing Ponzi scheme. A look at the following chart on housing cash out refinancings, clearly illustrates Joe Soccer Mom’s (JSM) largely unrestrained ability (so far), to effectively service their old debts and continue spending, with new debt. That’s true even with the kind of extremely low levels of cash in the bank, that I pointed out in my blog on demand deposits, earlier this week.
Category: Blog Spotlight
• Hickey points out another fallacy with the 1995 market meltup and 2006-07. Eleven years ago, the Republican Revolution ushered in lower tax rates on income, capital gains, dividends and estate taxes. By contrast, the Democratic tsunami in the YouTube Election of 2006 should be worrisome to corporate executives, bankers, consumers and investors. Instead, they are partying like it was 1995 and oblivious to what is happening on Main Street and, importantly, in Washington.
• The collapse in housing is spilling over and has begun to impact the general economy. Hickey highlights many of our concerns — the durable goods drop, rising subprime mortgage delinquencies and property foreclosures, a steep contraction in truck tonnage, a surprising decline in the Institute for Supply Management’s manufacturing index and reports (Lazard Capital Markets) that 60% of retailers missed their November same-store estimates.
• As the limited quantities of special deals were gone, retail spending came to a halt after consumers were baited with "doorbuster" deals on Black Friday. At every store he visited after Thanksgiving weekend, Hickey found empty stores and excess inventory. Circuit City (CC) was swimming in iPod inventory ("the new toasters") and at mobile phone stores (Hickey smells an emerging glut) it was the same story with Cingular awash in the new Blackjacks from Samsung, Verizon (VZ) with a plethora of "Qs" from Motorola (MOT) and T-Mobile with xcess Blackberry Pearls.