When thinking about the markets and the world economy, I try to focus on (1) what is important and (2) what I know. This mode of thought works for many other endeavors, too. In other posts, I've written about what I think is important, viz., inflation, GDP growth and its momentum, and the Fed. The various jobs numbers are important, too, but have quite a bit of measurment error.
What do you know ? I use the government statistics - they aren't as bad as some think as many, many years of solid, detailed effort has gone into making them as good an estimate as possible. For inflation, use the core PCE on a monthly basis and on a year over year basis. Core CPI is a secondary indicator. The nominal numbers are less important, but on a year over year or multiple year moving average basis, it is important, too.
All the other economic indicators and business news can help one understand what is evolving, but none of them are definitive. Metaphorically, those bits of news are like individual molecules pushing a particle around in Brownian motion, or like quantum fluctuations and phases that are added up in a complex, multidimensional integral to determine the classical motion of the macroscopic economy.
This thinking works well for long term investing. For trading, one needs to think about the detailed news and perceptions of the beefers and their herd instincts. In short term trading, and for some intermediate term trading, perception matters and can be decisive. For longer term all those virtual actions get added up and averaged out. Reality matters for longer time periods.
So today's ADP jobs number, GDP and today's Fed policy decision are very important. I would like to see an ADP number at +30-50,000 and Q4 GDP at 2%. And I want the Fed to cut rates by 50 bps and signal a willingness to cut more.
PS: Q4 GDP was 0.6% very low; year ove ryear core PCE was 2.1% - very good number; ADP jobs was +130K good for the economy. Overall the Fed should cut 50bps by putting weight on the low GDP and good inflation numbers.
YHOO train wreck ... its still way overvalued at 29x with single digit growth.
ReplyDeleteUBS big loss ... combined with Soc Gen that fits Europe as the locus of the problem.
ReplyDeleteHillary now claims FL win and wants delegates ... typical Clinton duplicity. She is just a corrupt liar.
ReplyDeletehmmm I think I erred thinking the GDP number is today, so will fix the post. The ADP number is today and is moderately important as its real data from real firm.
ReplyDeletei was dying when i saw hildog say that.
ReplyDeleteill take the ADP report over the bls tripe anyday!
im not built for rugby. im 5'8, 165, id get killed in that pile.
as far as cardio goes the only thing that is probably more intense than soccer is wrestling or boxing, imo.
well off to another stupid interview
peace
so lemmings came out in droves to vote yes on 1. people at the bar were celebrating last nite, about property taxes. until i was the wet blanket and explained they only listened to the commericials and didnt read the fine print. all they passed, was the state govt can not increase by more than 3%. but if your county is over plan they can jack u to high heaven and there is nothing u can do about it. if that didnt pass, they wud have had to make some real adjustments this fall.
stupid americans
uh oh ... ADP jobs was +130K ... I hope the Fed doesn't trust that number. That raises the risk they will just go +25.
ReplyDeleteYuo could be a wing in rugby - those guys are at the the end of the line and are supose to be quick & fast for moslty open field running. But you still have to bear the tackles.
ReplyDeleteoh, we do get advanced Q4 GDP this AM ... sheesh, missread that twice.
ReplyDeleteQ4 GDP at 0.6% ... low ... that helps the Fed go 50 bps.
ReplyDeleteQ4 year over year core PCE was up 2.1% - a good number.
ReplyDeleteFed should cut 50 bps.
I read that inventory drawdowns pulled 1.3% off the GDP numbers. Excluding that, real sales were up +1.9% whihc was my number. I also read that inventories over time net out to about zero. So inventories might add to Q1 08 or at least not subtract.
ReplyDeleteI still want 50 bps.
Give me my 50 bps !!!
looks like I really blew my trannies postions. Got in too early, losses, closed out and now they rip up. That's a problem with spreding oneself too far around. I've concentrated more & hope to avoid that error again.
ReplyDeleteBunkerman...the spy has moved into modest overbought condition increasing the odds of sell the news with 50 bps and to the wood shed if 25 bps...a retest of the lows could well be in the cards to shake the weak hands...sure would like to see your IBD day two, but odds seem to be getting longer...what say you sir.
ReplyDeletei think Ben does 50bps....and market flies on that
ReplyDeleteof course.........i have no inside info.......Fed janitor prolly knows more than me
UPS, YRCW seem to say not drop off the cliff. 50 bps brings in real buyers imho ... possibly after a dip, but they come in.
ReplyDeleteBeefers can knock it down if they wish, but not too long. Perhaps a 50 bps + decent jobs number on Friday does it.
If I get my wishes and they knock it down, I'm a buyer.
Bud...so how do we play it...index products or beta? later stage cyclicals perhaps, the early birds an aticipatory move and a healthy one at that...Is this the fuel that pushes gold 4 digits?...back to the chicom card, solar maybe?
ReplyDeletesolars on my radar for sure
ReplyDeleteQLD SPY my index plays
i thinks S and p goes to 1400 on 50bps
the problem with Bman's constant and annoying and delusional bashing of hedge funds......uh....beefers.....is that
ReplyDeletehis portfolio won't go up 30-40-50 plus percent without their buyin power
he roots for them to fail and leave the market
remove all that buyin power from the market and we'll be lucky to get Tbill returns in equities
so rootin for beefers to fail is like rootin for your account to lose money
is Bman a phony? or is he just foolish?
also IWM frosty
ReplyDeletei just feel like guys want to buy stox......and they will unleash if ben does 50
hmmm ... wasn't there a great bull market in the 1990s without big money in beefers ?
ReplyDeleteAnd in the 1950s. And the 1980s (overall)
Uh .. Bud ... that's called a "counterexample" ... it disproves your theory ;-)
Beefer money will leave trading funds and go the strategies like the Krypto Fund. That would be good for all, except beefer managers.
if they dont go 50, crash and burn.
ReplyDeleteif they do 50, rally and splat, and then rally again. probably go out strong.
then its another 6 weeks until the fed meets again. since they used 125 bullets this week, hard to see them using any more amo until the next meeting.
i get absolutely leveled just playing soccer. especially in coed by chix! some of these girls r a biscuit under 225 and its a solid 225. if im flying and she just stands there, i usually slam into it. its like running into a wall. ive literally been knocked out in coed. its not fun, becuase u can hear people on sidelines LOL. but when u r used to playing against guys that move, sometimes the 225 lb wall gets u, BAD!
and if soccer is for pussys as the fat alcoholic janitor says then y is my body covered in bruises. right ankle and right foot is one big bruise right now. got a bruise on my left butt check, right arm. and a split lip from 2 weeks ago.
and almost every game on sunday ends early becuase of brawls. that aint my game but guys on my team love the HGH, and to start fights. 3 weeks ago i came very close to leveling my teamate, but the ref listened to me and red carded him.
and when we play the serbs, the police show up before the game!
nah, its not ruff out there, its for pussys!
Actually my strategies do prey on beefers. I think the reason stocks are so cheap is that huge sums are locked up in trading beefers funds. So that buying power is missing from valuations, causing stocks to be very cheap.
ReplyDeleteAnd my asset allocations and Alpha Fund dip & rips need beefers to work and get me my 30% per year.
I guess if I'm right and beefers disappear mostly, I'll lose this "hobby" and just go to pure Krypto Fund money management.
oh by the way, by the time to bls gets done revising q4, that will be the first q of contraction. 1st q is contracting. there is the recession.
ReplyDeletethey will tells us in the 3rd q, but they will tell us it is over already.
so once again, we have a recession but the bls wont declare it, until they claim its over.
im working on an invention. it wud take all BLS pr's and immediately email them to my toilet paper dispenser. how efficient wud that be? u cud wipe your ass in minutes with the latest from the BLS. and it is certainly more politically correct than my current bible TP.
that really doesnt go over very well when we entertain
But I'll be content and happy ;-)
ReplyDelete......50s? 80s?
ReplyDeletei'm talkin about 6 month surges .....i can't wait 8 years for my stox to double......alpha fund had an unreal return first 6months of 07
PS....oct1998 onwards bull run was the birth of the beefers
bud r u really going to orlando to toss revs salad?
ReplyDeletegeez what ass kisser u r!
rev is a facist.
id like to poke his wife with a stick to see what happens.
obama vs mccain in nov.
that is gonna be close.
the supreme court mite be in play again. that was so much fun in 2000y not do it again?
I think my Krypto Fund returns would become stellar if beefers get destroyed. I have a lot of money in US stocks and they could go up an incremental 30% over earnings gains as multiples go to normal levels. That's a lot of money for me since Krypto Fund is so much bigger than Alpha Fund.
ReplyDeleteGuess you made my point, Bud, beeefers caused the bubble from Oct 1998 to 2000. Dangerous. Need to be regulated.
ReplyDeleteThe market in the 1990s before Oct 1998 was a good one.
yes, Alpha Fund hit a grand slam from summer 2006 through summer 2007.
Since then it's been average.
no Bman
ReplyDeletethat money won't go to krypto fund or any other fund
it's destoyed
it's gone
PS.....i love bubbles!!!
we had a solar bubble, a shippers bubble, and an ag-chem bubble last few months
i can't wait for the next bubbles
so alan didnt create 98-00?
ReplyDeletehow much money did he throw at y2k that ended going up into the nazz 100?
that was the biggest meatball ever.
everyone waiting until 1/1/00 to buy, but all the money was made in the 4th qrt.
i think that was the last time i was right about anything, and im still living off that call
i agree bud. u just have to be ignorant enuff to embrace the bubble. wants u understand it, it is harder to play.
ReplyDeleteu r not very smart, so that gives u an advantage
Mern..,LMAOOO...knocked out by a chic...at 235, I don't back much fat, at speed you would be like bug on my windsheild.
ReplyDeletenah, Alan couldn't control that. The credit was being created in the stock market with the IPOs, margin, etc. Alan could have raised margin requirements, though.
ReplyDeleteFed can't control credit from assets well, as the housing bubble shows. Their policies are very slow and can't deal with them well. But I guess the Fed could had tightend loan standards are they are now.
So they just didn't use the right policies and hurt a lot of inncents using the wrong ones.
Don't agree, Bud. Money in beefers pulled for underperformance would go to index funds as infatuation of the rich with beefers goes away..
ReplyDeleteI think Q4 gets revised up to 1.5% and Q1 2008 comes in +1.5%, then back to 3% or more. Just a slowdown, no recession as long as Fed cuts.
ReplyDeleteya ive been knocked out by a girl twice, and one time it was girlfried who wasnt big, and she was on my team.
ReplyDeleteher knee hit my sciatic nerve.
i actually stopped breathing a turned blue, i was told, for a few seconds.
when i came to, i didnt know my name. i remember saying "who am i? where am i? what happened?"
then i walked off the field, drove home and fell asleep for 16 hours.
that was crazy
Bunkerman...you hit the nail on the head...regulators tighten lending standards after sheep have left the pen...they compound the problem, over reacting with broad brush restrictions...at least that what the janitorial supvervisor said in our staff meeting.
ReplyDeletemern how did the interview go?
ReplyDeletetrue, frosty. Regulators often are slow to tighten on new products, etc. since the staff wants jobs with the Street, etc.
ReplyDeleteBunkerman....are your GDP numbers below the current street average expectation?
ReplyDeletemern plays in the Warriors Soccer league...His team uniform?..baseball players with KISS face paint......
ReplyDeleteWarriors!!!....come outtt and plaaayyhaaayyy..clink,clink,clink
looooooooooool
don't know, frosty, what the Street expects. I'm just a guy in a bunker ...
ReplyDeleteThe key is for the Fed to cut now so that negative momentum cannot develop. That's when the "pushing on a string" thinking comes into play. Initially, Fed actions in a negative momentum state just go toward reducing negative momentum and not growth, so "appear" not to work.
ReplyDeleteFor those needing an analogy, one wants to step on the gas before the car stops on a hil & rolls back. Keep the car going up & over the hill. :-)
ReplyDeleteHuh? i didn't get that analogy
ReplyDeleteBunkerman...good luck to you...now lock down that bunker and get the gas mask on...wait until you see them in the wire to open fire.
ReplyDeleteYes !!! Fed obeys Bunkerman, finally !
ReplyDeleteDissenter Fisher is such a fool ... he was that 7th inning boob a few years ago.
ReplyDeleteBunkerman and Bud well done boys, good call by both...the common man lives to fight another day.
ReplyDeletesheeesh Bman.......it's always good to have a dissenter
ReplyDeleteonly sheep and republicans follow the sheperd
PS....S and p 1400 tomorrow?
Bud...dumped half the QLD 75.80 off a psot fed annousement buy...I owe you a shirley temple.
ReplyDeleteinterview left me feeling like whitey sux!
ReplyDeletecan i honest nigger catch a break?
i get offers, dig, then find the bull shit.
i think the fin industry shud die with da bible and dc.
im an anarchist, but smart enuff to know the "most" people will not honor the golden rule.
im ready to get off the ride and move to okinawa (sp?). that is where the worden is from. most live to 100 hundred there, and dont have a tv. that sounds better by the day!
Mern...it can't be all that bad...sounds like you only sober up for interviews...my thought, stop the interviews, they only make you sad and take away from time with your first luv....da' bong :)
ReplyDeletenoticing bud had no comment to kisses revs azz in orlando.
ReplyDeleteso i guess that means u r there.
seriously a major pikerish move!
get revs HGH connection for me. and im interested in the blond highlite connection, but i shave my head, becuase im bald.
can u ask him how much his extensions costs or do they come with the highlites?
also ask him how jimmys buckeye tasted? funny how when he got his chance to crash cramer in public ( like he said he wud) he shoved his head so far up cramers ass that when revy spit it came out of cramers mouth.
ive got 2 bumpers stickers.
bobby spit on me
cramer spit on me
guess which one is da cool one?
PITTSBURGH -- A high school wrestling coach accused of biting a wrestler in the leg has agreed to resign rather than face possible criminal charges, police said.
ReplyDeleteMike Marshall bit the Central Cambria High School wrestler at practice on Jan. 21, Cambria Township police officer James McGough said.
"The coach was wrestling with him and bit him in the leg, the upper thigh," McGough said.
The bite caused bruising but did not draw blood, McGough said. The student, who McGough did not identify, did not want to prosecute and opted to drop the matter if Marshall agreed to resign, police said.
i swear this shit only happens in PA, OH, and Fl. and other than a summer in alaska, that is where i lived.
no wonder im so messed up.
:-)
Ben is a coward...
ReplyDeleteThis is a bear market....
lost power; started the generator & working off it now.
ReplyDeleteisn't what this Ackman guy is doing is market manipulation re the bond insurers ?
ReplyDeleteMLF59...please share with us how you truely feel...dare I guess dickball indeed sir.
ReplyDeletewild - beefers control the market, no doubt.
ReplyDeleteSKF...check out that bounce off of 95 and a hammer on outstanding volume...thing of beauty.
ReplyDeletethis action is ludicrous and just shows that beefers should all be shut down. This Ackman guy should get a call from the Justice Dept. and SEC.
ReplyDeletejust sheer market manipulation. Back to the 1920s.
ReplyDeleteBunkerman...MBI downgrade as we discussed...folks saying another 70 billion write down potential...I know you say that is double counting...you should write CNBC if you truly think that to be the case...they appear to be hurting the common man more than the fed.
ReplyDelete