That's an alternative way of saying "Monday Morning Ramblings" using one of today's Words of the Day.
Barron's this week had some interesting information, in addition to that insipid** article about the Rich - see Sunday's blog post.
The Fed's balance sheet is published weekly in Barron's. From it we see that free reserves are positive, hence monetary policy is somewhat easy. But as in classical mechanics where both a position and a velocity specify the dynamics of a system, for Fed policy we must also look to the absolute level of the monetary base and money supply. For this I use the year over year comparisons. One year ago the economy was growing. Now it is flatish or growing very slowly. And the monetary base is a mere 1.1% over its value one year ago. M1 is up only 1.5%. As the economy grew much more than that in 2007, the level of the monetary base is too small. The Fed must add more aggressively to the monetary base by purchasing securities.
In today's market, I think large outright purchases by the Fed of GNMA, FNMA and Freddie Mac securites would be most effective. That is one big arrow in the Fed's quiver they have not used. It's time to do it as that is where the stress exists.
The Barron's intermediate grade bond index continues to rise - it's now 8.54% versus 7.58% at year end 2007. That's the effect of the credit default swaps mess caused by the wierd structured products that the Street created and sold to hedge funds. An article on those appears in today's WSJ. The recent collapse of some highly leveraged hedge funds is another sign of stress caused by that nonsense vaporizing. But being derivatives, some entities must be minting money being on the other side of those derivatives. Who are they ? I don't know, but they are out there somewhere. At some point they will "cover" and clear that market.
Today I sell more silver and buy US stocks. I am also selling 1/2 of my Vanguard Precious Metals and Mining Fund and buying the Vanguard Total Stock Market fund with the proceeds. My Krypto Fund algorithm is ordering me to do sell precious metals & related funds bigtime and buy US stocks. I always obey it or fear the trading gods will punish me.
PS: Sheesh, the expert on Babblevision, Doug Dachille, who is really ok, must read this blog. He just reiterated my Fed proposal to buy FNMA, etc., securiteis instead of Treasuries.
Words of the Day
"Discursive" - adjective [$10]
Discursive means 1. rambling or digression; 2. (Philos.) proceeding by argument or reasoning (oposite of intuitive).
Sentence: Today's blog provides a discursive analysis of market conditions and influences.
"Iconoclast" - noun [$10] and "iconoclastic" - adjective [$10]
Iconoclast means one who attacks established beliefs and institutions.
Sentence: Bunkerman's blog post of Sunday was a fine example of how he is a vocal iconoclast with his populist libertarian views, neither worshiping nor envious of the rich, but sees the behavior of many as simply stupid.
"Insipid" - adjective [$10]
Insipid means 1. lacking vigor or interest; 2. lacking flavor, tasteless.
Sentence: see ** above.
"Polydaemonism" - noun [$100]
Polydaemonism means the belief in many evil sprits.
Sentence: Listening to stock and commodity traders speak of the "trading gods", one must wonder if they are adherents to polydaemonism.
Alternate Sentence: Some think Bunkerman's use of "beefers" to analyze stock market action is mere polydaemonism, but they are wrong.
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50 comments:
Yes I agree with your points re the Fed bunkerman....why don't they go right to the root of the problem? simply cutting short-term rates doesn't seem to be having much of a palliative effect...why is Ben resisting such a strategy?
Goood morning Bunkerites......With that big red volume bar..is SKF bearish engulfing or do you have to close at the low?
I don't know why he isn't. He has innovated several times.
Maybe he will - it would be percieved as less "inflationary" and perhpas teh rates needn't be cut as much if he did it.
Spin: Don't know re stock candles.
But in commodities, an outside day day is bearish if it closes at a new low. Needn't be at the low.
it is quite amazing to watch the US dollar's complete inability to rally whatsoever...
maybe dollar is the currency of choice now for carry trdes ?
back around lunch - delivering more silver.
Dear sal,
Your hard work and dedication mean so much to me, and I know you played a critical role in our wins on March 4.
I recorded a special message for you the night of March 4, and I hope you'll take a look.
Click here to watch.
We still have challenges ahead, but I know that we can win if we work together, just like we did in Ohio, Texas, and Rhode Island.
I'm so proud to have your support. Thank you for everything you do.
Sincerely,
Hillary Rodham Clinton
loool...proof that spam works...
BSC going under....Ben playing a 3rd set of squash at the local club....
Jeffries downgraded TMA today...extremely well done sir...have some drinks on me...
Dear Sal
Buy wheat...send me half the juice.
LMAOOOOOOOO
back.
Bunkerman...here is the test...do we pass or fail...ak 47 to the head.
Dear Frosty,
Go f'k yourself.
Sincerely,
Hillary Rodham Clinton
no idea ... beefer margin calls at 2PM mean fail, I'd guess.
bidding for a bit of JPM around 36.
American banks are a sham
their balance sheets are a house of cards
their earnings models are a ponzi scheme
we will see a large bank or broker go belly up
armageddon is comin to the financial sector
forget 2pm margin calls today
beefers are gettin liquidated big time
Bman's prediction ( or desire) to see beefers get eliminated is comin to fruition
buyin power for stocks is evaporating
who will take stox up now? real buyers? gimme a f'ng break
Bud are you bearish...I never understand what you are saying.
"1440 SPX" chip shot....we are going higher...huh?
Disagree, Abud.
Beefers get liquidated and maybe a big broker, but the Fed protects the big banks and gives them cheap money.
They do the liquidating.
Bunkerman any interest in adding to your India positions down here?
re India, maybe ... hadn't been watching them for awhile
Spitzer owns Cupids???lool
Spitzer..typical behavior....how do you live with yourself Bud.
lol spitzer
i luv this story
just another reason i hate prosecutors
Dear Sal
Ive been framed,please send bail money....
thanks again for your help
Elliott
1270 coming...can they hold it?
wonder if jimmie invovled with his boy spitzer
I hope so mfl...lool
is WM goin bankrupt?
what about CMO and NLY?
i sure hope so
Bud...die common man die.
this is where the boxing adage comes into force: "protect yourself at all times"
IFN India Fund down 10% today....hmmm...a closed end fund....wonder what the heck is going on there? maybe a beefer or two forced into puking....
or no uptick rule letting beefers play darkside in anticipation of overnight losses in India ?
maybe...but the stocks within the fund arent down much at all today...very odd....i bot IFN and shorted some of the India stocks against it...so far that isnt working...but we'll see...
how can telegraph Ben not cut rates when "the public trust is rattled"...lol
Bunkerman...spizter doing the dirty 2-13...where were you that day...NYC?...hhhmmmmmmmm
I think the most effective Fed policy would be to buy $100B of FNMA+Freddie at the market ... analogous to J. P. Morgan Sr. leadership in 1907.
$5500???...say your havin a bad day at the plate......Do ya get a do over???looool
no do over's sir....step in the box and fire....no shitting the bed like costanza....
IFN obvious beefer liquidation....die beefers die!
ROFL i got the dream job. seriously these guys do nothing. im home already. so BSC drops 10% today. how soon do i get layed off?
spitzer, just cant LOLing!
t boone taking it da shorts, literally.
oil up another 8%, since hitting 100. is this stagflation?
great mern. just be good for awhile ;-)
NEW YORK (CNN) -- New Yorker Evelyn Molina used to spend a lot of money eating out, buying her lunch and going out to dinner with friends about three to four times a week.
"I just wasn't conscious of it," she says.
But times have changed for the 25-year-old marketing analyst. Now she brings a sandwich to work and she's looking to cut her spending.
"I could be saving more," she says. "Do I need that extra muffin? No. Do I need scrambled eggs? No."
Molina, like many other Americans, is concerned about how fast money is flowing out of her wallet.
Consumers are painfully watching their money drain away as they fill up their car's gas tank. They're handing over more money for the same items at the grocery store. If pink slips haven't appeared on their desk, they may have appeared in their dreams. And who can't help but feel nervous as home prices fall?
"When they turn on the TV or pick up the paper and they read about values of homes declining -- that's the news. But the fact is, people are experiencing it," says Gary Drenik of BIGresearch, a marketing information company.
"They are putting gas in their cars. They're going grocery shopping and they're paying more. They're being hit with all these things that weren't there a year ago," he says.
Consumers are responding by tightening the purse strings. Sixty-four percent of people intend to cut indulgent spending this year according to a new survey by HSBC Bank USA. Another survey by Discover Financial Services confirms that sentiment. This month, half of consumers plan to cut down on non-essential spending like eating out, going to the movies and remodeling, according to the report.
Analysts are a little surprised at some of the ways consumers are changing their spending habits, especially in retail.
"It's a whole new ballgame," says Fred Crawford, a managing director at AlixPartners, a global consulting firm. "This year, consumers are saying it's all about price, price and price."
According to the 2008 AlixPartners Consumer Sentiment index, consumers are bargain shopping. If you shopped at Nordstrom and Macy's, you're now shopping at JC Penney or Kohl's. If you were shopping at JC Penney, now you're shopping at Wal-Mart. And those people who were shopping at Wal-Mart, they're at the dollar stores.
Crawford predicts, "You're going to see a lot more Lexuses and BMWs in Wal-Mart parking lots."
Stores can see the trend in their bottom line. JC Penney and Nordstrom had falling sales numbers while Wal-Mart reported strong sales last month.
Jody Derevenko, 30, works in retail. To curb her spending, she has decided to quit Starbucks for a week. "I used to go to Starbucks every day," she says, "but I'm trying to drink coffee at work, even though it's horrible."
Derevenko says for the past three to four weeks she has really been keeping track of her spending. Now she buys bananas instead of breakfast sandwiches. She goes grocery shopping and makes more meals at home. And when she does go out, she splits dinner entrees with friends.
Trimming the eating-out budget is a common consumer step. Casual chain restaurants, like Applebee's, TGI Fridays and Chili's, are really hurting, says Darren Tristano of Technomic, a food industry consulting firm. In 2006, major chain restaurants had sales growth of 6 percent. That's dropped to 4.2 percent in 2007.
Instead, consumers are gravitating toward fast-casual restaurants, like Panera Bread, Chipotle Mexican Grill and Zaxby's.
In a down economy, people look for better value, according to Tristano. In fact, he thinks we'll see more dollar or value menus in the future.
"This is something all chains should consider if they want to stay competitive," he says, adding, "price is king right now."
It would be expected that during tough economic times, beer and spirits would be king. But it just ain't so, according to David Henkes of Technomic. The percentage of people that ordered a drink at a bar or restaurant declined from 63 percent in the fall of 2007 to 44 percent during the holidays.
Henkes says that's pretty dramatic. "That's a season when you would expect to see more people going out and having a drink," he says. "It's a bit of a shock to see that much of a drop."
But for some folks, scaling back on non-essential spending is a good thing.
Angela Jones is a single mother with three kids. She says the end of decadence is a good thing. "We're all more aware of our spending. I've been meaning to make these changes," she says.
She is planning her 5-year-old's birthday party, which she says will take place in a park rather than at a party venue.
But, there are some places where people are still willing to part with their money. Travel spending is forecast to increase a little over 5 percent compared to last year.
"The airlines are saying how well late spring and early summer booking is looking," says Terry Trippler of Trippler Travel, a travel club.
"It's almost if travel is no longer discretionary spending. Americans are working harder, longer. They may not like their jobs, and they don't get a lot of time off. So when they get a vacation, they're going," he says. "Maybe the new car or the new lawn mover will take a backseat. Maybe people won't eat out as much. But they're going on vacation."
There's another hot spot in the economy -- the four-legged family member. Spending on pets and pet products is expected to increase 6 percent this year to $43.4 billion, according to the American Pet Product Manufacturers Association. Compare this to annual retail sales, which are expected to grow 3.5 percent.
The Fido phenomenon isn't surprising news to some folks out there.
"It seems like the dog always takes preference. I can do without ... but the dog can't," Drenik jokes.
is that stagflation?
ROME, Italy (AP) -- A Vatican official has listed drugs, pollution and genetic manipulations as well as social and economic injustices as new areas of sinful behavior
LMAOOOOOOOOOOOO
still nothing about raping little boys. mite wanna mention that one.
Mern...just tell us when to cover BSC.
alcohol is not a drug, apparently, either.
as peter griffin once said "is this really the blood of christ?"
priest: "yes"
peter: "jesus, this guy must have been loaded 24/7"
;-)
let me get this right: spitzer was with a whore the nite before valentines?
i paid for it once, just to see if id like it. was like 25.
i wud MUCH rather watch some gud porn and service myself. or hammer the worden once every 3 months, whether she needs it or not.
lol
frosty, do me favor cover it and go long!
Client 10(Hilldawg) speaking here @ 6 ...too bad I cant get her those 4 votes..as my $112 check and Rocks have not arrived....lool
sheesh, those Zers are changing to my lifestyle. Cook food, don't eat out much, don't buy coffee at Stabucks, eat at McD on $1 menu, etc.
Maybe they are getting some brains ?
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