Yesterday was another ping pong day. I looked at the S&P 500 cash chart early AM and was surprised how neutral it was, despite all the anguish I hear on Babblevision daily. Time will tell and the future of the S&P depends on the prospects for the real economy.
Often I think about how the future is determined. One formulation of quantum theory holds that all possible future events and paths over all time and space combine and interfere in a manner described by a gigantic path integral over the future Universe; the actual path of real particle - viz., us - is the "mostly likely" determined by that one that has reinforcing phases, not the random ones that cancel out. It's an intriguing philosophical concept.
[Btw, the "phase" is related to each particle's energy-momentum at each point in space-time. And the "paths" include those coming from the future backwards in time to now.]
In the stock market, a similar concept helps. All the random phases of the virtual buyers & sellers tend to cancel out and the path of the market is determined by the real buyers who buy and hold long enough to let their phases add up, not cancel out. That is part of the reason I try to distinguish beteen the beefers, who tend to be virtual traders, and the investors, who are real buyers or sellers who move markets in the intermediate time scales. But sometimes when all the phases - trades - of the beefers line up and are additive, not destructively interfering - then they can move markets a lot and if that persists, they can cause a big intermediate term move.
Short interest keeps rising in absolute share count. So the beefers are getting more & more short in the same "trade" and their phases are adding and keeping or driving stocks down. How long will this go on ? That's uncertain.
Today's CPI number is important.
On Monday I plan to re-buy some WB as the wash sale 30 day time period for my 5/15 sale expires. I'm doing this simply so I can sell some older, higher cost shares in 31 days for another tax loss. This saves me real money.
Word of the Day
"Fideism" - noun [$10]; fideistic - adjective; fideist - noun
Fideism means a doctrine that all or some knowledge depends on faith or revelation.
Sentence: The once popular form of technical analysis called Elliott Wave Theory requires a bit of stock market fideism as its results don't depend on any real connection to actual stocks. Its fideistic prognostications do seem to work sometimes in short and intermediate terms for some market averages, but one wonders if that is simply the self-fulfillment of many traders using the same reasons for trades.
About Me
- Bunkerman
- I have a pioneer mentality. My wife & I live in the woods - neighbors aren't visible except slightly in winter. Our "bunker" - hehe, really a fine home & barn - has plenty of security. We have four dogs: Krypto (age 9, Kelpie), Ava (age 13, Rat Terrier), Sky (Kelpie, age 5) and Lucky Star (age 1, kelpie). I don't take crap from anyone anymore, having enough resources & gear stocked up to survive in any circumstance. I have three degrees from Harvard including a Ph. D. in a physical science, and an MS in Management from MIT. I worked as an investment banker for about 25 years, mainly in secured finance, at three major Wall Street firms and for the last 17 years with my partners at our own firm. I'm semi-retired now, managing some private corporations and business interests and doing my own trading & investing. This is not to boast, but to give you an idea I know a little about some subjects from experience. The photo is my 1943 M16 half-track which I am restoring. These armored vehicles were ubiquitous in the US Army in World War II and Korea. It's driveable.
50 comments:
sheesh ... "U.S. video game sales up 37 percent in May: NPD - Reuters"
What a waste of time and money !
Hmmm ... "The nationwide rate of increase for default notices and foreclosure auction notices slowed in May, with default notices up just 1% from the previous month and auction notices down 3% from the previous month."
from Briefing.
perhaps a deceleration pointing to a peak ? Unclear.
'today's CPI number is important'
huh???
no one believes inflation is at 2%
well....not no one......Bman believes it
what are talkin about Bman??
deceleration?? families are losin their homes in records....and it's rising
from today's wsj....(is wsj also on your banned list now)
WASHINGTON -- The number of U.S. homeowners swept up in the housing crisis rose further last month, with foreclosure filings up nearly 50% from a year earlier, a foreclosure listing company said Friday.
Across the U.S., 261,255 homes received at least one foreclosure-related filing in May, up 48% from 176,137 a year earlier and up 7% from April, RealtyTrac Inc. said.
One in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005
The Harvard and Yale and Princeton Phds that created CDO's and CDS's required alot of fideism on the part of the CEO's to approve such investments.
not sure if that works
foreclosures are a trailing indicator - default notices are leading.
I look out the front windshield while driving, not the rear view mirror.
Uh ... the Fed looks at the CPI and core ... is the Fed not important ?
SQUAWK @ Fenway.....good bye Sox..lol
that seems OK ... financial "alchemy" turned out to be ... alchemy ... a fraud.
CDOs, especially the CDO^2, used fideistic models to divert buyers from looking at the garbage pile the securities were based on.
or
The Ph D fideists took a good, simple and useful idea of a CDO and eventually destroyed it by their boundless avarice. Their models slowly morphed over two decades into a financial fideism that had no basis in reality.
Irish Min says unofficial vote tallies show EU treaty rejected - WSJ
No wonder there - why give an unaccountable, unelected EU power. Lunacy.
Why would small nations agree to be dominated by the larger ones ? Already the ECB is hurting the southern nations while letting Germany, etc. do well.
EU should just copy the US constitution, maybe with a much weaker President since I doubt if they would trust one now.
red sox 28-7 at fenway
here comes the squawk box hex
pffffffffffffffffffffft
.....that just means they've had a great couple of years( like..they wont be at Shea anytime soon...right mfl?..hey..Im Keith Hernandez loool)
I wonder what hit GE yeterday ?
year over year core CPI 2.3% ok.
Liesman made the point - in 1970s under real stagflation, the core CPI was right on top of the headline CPI - everything went up.
That's not happening because ther is NO general inflation ... just oil & some food.
Harvard & MIT & Princeton Ph D's are correct - core rules and is right.
:-))
heigh ho ... need I add that "bunkerman is right again"
;-)
"NO general inflation ... just oil & some food".
"some food"
yes just the food I EAT
my god how can you believe that tripe.
A. But even there, core prices are up 2.3 percent over the past 12 months, above the Federal Reserve's comfort zone.
B. Energy prices are rising at a 16.5 percent annual rate, compared with a gain of 17.4 percent for all of 2007, while food prices are rising at a 6.3 percent annual rate, up from a 4.9 percent increase for all of last year.
now please explain how that does not trickle its way down into everything needed to live? notice im not talking about durable goods.
C. ed McManon is losing his mcmansion, and even 90210 is getting hit.
D. sheesh ... "U.S. video game sales up 37 percent in May: NPD - Reuters"
What a waste of time and money !
some of that is definitely the new WII board, which actually makes u exercise. also staying at home gets more appealing by the day. CNN wrote an article about STAYCATIONS r the latest rage. just taking a week off from working and chilling at home becuase traveling is just too darn expensive.
lastly saw bob kraft in cnbc this am. let me summarize what this guy said.
"the song that women song
WAS LOOK OUT STAGGER LEE"
also in the 70's the was no reverse coerellation between the price of natural gas and rent equivalents. that was invented in the late 90's. if natural gas hits 15 shortly the core will be negative.
nah, that is not an antiquated model. its hip to be square!
good eye mfl
don't swing at spin's spitter in the dirt
be patient.......joba on the mound tonite......he'll get rocked
then take your swings
hmm ... my beer and chicken data didn't convince you, Mav ?
no sir, Bman
much of the oil price increases to business don't get passed thru due to productivity increases ... but of course the common man gets no raises, which goes to hold down core inflation
same for natural gas.
Buying fruits & vegetables from CA to ship 3000 miles will end. Local grown to substitute over time. That's how these costs are slowly absorbed WHEN the Fed doesn't cause inflation by printing money, as they did in the 1970s.
guess you're not a fan of turnips, either, mav ;-)
now that's an old fashioned meal: chicken, mashed turnips, beer.
so that makes sense to you, bman?
the higher the cost of natural gas the lower core inflation goes?
again, lets say it hits 15 this summer after a hurricane or the hype of one. core will go negative.
how does that work in the real world?
from bis:
"The index for housing rose 0.5 percent in May. The index for shelter increased 0.2 percent, following a
0.1 percent rise in April. Within shelter, the indexes for rent and owners' equivalent rent increased 0.2 and 0.1
percent, respectively. The index for lodging away from home, which had declined in each of the preceding
three months, increased 1.3 percent in May. (Prior to seasonal adjustment, charges for lodging away from home
declined 0.5 percent in May.) The index for household energy registered its fourth consecutive large increase--
up 2.8 percent in May. The index for fuel oil rose 10.4 percent and was 64.0 percent higher than in May 2007.
The indexes for natural gas and for electricity rose 5.6 and 0.9 percent, respectively. During the last 12 months
charges for natural gas and for electricity increased 16.5 and 5.8 percent, respectively. The index for household
furnishings and operations, which declined 0.1 percent in April, increased 0.2 percent in May."
So what's so far off ?
Why would rent, net of heating costs, go up much ? With surplus housing and lower prices, why shouldn't net rent be lower ?
from bnet:
"The rise in rental inflation in 2006 was probably a reflection in the increased demand for rental properties as home sales collapsed. The deceleration this year while home sales remain weak probably reflects an increase in supply, as would-be home sellers decided to rent out properties they were unable to sell. With home sales unlikely to recover much in the near future, this source of rental properties should remain in place, and a further deceleration in rental prices in coming months is expected to continue to push down core inflation. "
Seems correct.
i'm so glad i don't get in these stupid and silly and ridiculous and moronic debates over inflation anymore
Are landlords able to raise rents for apartments a lot ? I see signs for condos now renting. I doubt if rents are increasing anywhere, probably not even in Manhattan now.
where's the ops expo list frosty??
big weekend......euro 2008 and usopen..........what time you comin frosty??
hopscotch area all set up for you
go BIG JOHN!!!!!!!!!!!!!!!!!!!!
From a Canadian scholarly site is some suport for your case:
The BLS uses an owners-equivalent-rent (OER) approach in measuring the shelter-price
inflation facing homeowners (see Diewert 2003). In order to produce an unbiased index,
it is necessary to adjust for utilities. In particular, some rental units include utilities in the
rent; but OER is based upon the inflation in the pure-shelter component of the rent, not
inflation in the bundled good shelter-plus-utilities. (For example, if a rent on a utilitiesincluded
rental unit goes up merely because natural gas prices rise, this inflation should
not be reflected in OER.) Thus, the BLS must estimate the utilities component of the rent,
and remove this prior to using the rent in OER computations.
However, current BLS procedures to undertake utilities adjustments result in undesirable
dynamic properties. In particular, these procedures implicitly assume that rents change
every month, when in reality these typically change on an annual basis. This results in a
too-rapid adjustment of rents to utilities price changes, which in turn means that OER
inflation diverges from its measurement goal in the short run, and becomes too volatile.
However, a straightforward alteration of BLS procedures -- namely, the use of movingaverages
of utilities prices, rather than current utilities prices -- can remove these
undesirable features. The impact on inflation measurement can be nontrivial over the
short run.
Still, utilities are not the major determinant of the divergence between rent inflation and
owner's equivalent rent inflation in the recent US experience. I review some findings in
Poole and Verbrugge (2007), a paper which explores the multiple causes of this
divergence."
There is some effect ST, but not over time. You're overrating this factor in keeping core inflation down. Not clear if this effect you [mern] cite would exist in a year over year comparison.
Of course when nat gas prices were low, it raised core inflation a bit ST.
telic selling in GE continues ... obviously "real" - I wonder who's dumping it ? Gotta be a big mutual fund.
charges for natural gas and for electricity increased 16.5 and 5.8 percent, respectively.
exactly! if natty gas did not go up like that core wud be much closer to the headline #.
core is an antiquated notion. 95% of americans do not know or care about core inflation. all they know is they r being jacked up, in every direction.
remember this all started in early 07 and the fed and just about everyone said at the time, this will be contained to sub prime and inflation should roll over in the coming months.
well its been about 16 months. fed still saying they expect inflation to roll over any quarter now, and sub prime has morphed into the biggest credit crisis since the depression.
BSC BK, LEH down 64% ytd.
no one is getting raises.
virtually no economic growth and crazy inflation for almost everyone.
STAG what?
the problem with your imputing a lower core to that nat gas - rent claim is that the market rents - not owner's equivalent - are not gonig up much either.
"Within shelter, the indexes for rent and owners' equivalent rent increased 0.2 and 0.1
percent, respectively."
So the BLS estimates are correct or close to correct.
I suspect that market rents that are quoted net of uilities are NOT increasing a lot. Is that wrong ?
inflation hasn't rolled over because oil is still trending higher.
Asian nations still subsidize it. And US demand just recently went down.
love turnips Bman..get them at my local farmer's market...but they are still inflated in price
But it's not just oil and food that are leading to higher prices for consumers. A separate inflation reading reported Thursday showed the price of imports, excluding oil, were up 6.6% in the 12 months ending in May. That's the highest increase in that measure in 20 years.
70's stagflation caused by too much easy money, agree.
this stagflation is the result of americans living like stupid fat pigs since 1982 and the structual, secular inputs from china, russia, brazil, and india.
time to rewrite the CPI models!
Ireland rejects EU Libson treaty, final election results show - Bloomberg
imports prices are in the core if they are passed thru.
agree re Americans being stupid ... for decades buying all that stuff from overseas instead of buying American.
That has to change - either US buys less overseas OR sells more.
The selling more is happening.
must be some bad rumors about WB going around.
ditto GE.
ugh. soughing in pain ...
GE pe is about 13. when it is 9, that is STAGGER LEE.
Inflation getting 'uglier and uglier'
Surging energy prices help drive annual cost-of-living rate rise to 4.2%.
NEW YORK (CNNMoney.com) -- The cost of living rose in May as consumers were belted by energy costs, the government said Friday.
The Consumer Price Index, a key inflation reading, rose 4.2% through the 12 months ended in May, according to the Labor Department. This compared to an increase of 3.9% during the 12 months ended in April.
4.2% and no one is getting paid more except the darksiders.
lets face it, the world does not have enuff natural resources and food to feed over 6 billion people.
maybe if we took that # down to 4 billion it wud work better.
lets see if we replace saudi arabia, egypt, iran, iraq, pakistan, some of india and afghanistan with GLASS, that mite just get us there.
actually with sensible policies, there is plenty of energy in the world: coal, nuclear, then nuclear breeder reactors.
Ditto for food: with no idiotic third world cultures, GMO seeds and sensibl efertilizer poicies, there could be plenty of food.
Need to get rid of all greenies first. they are the problem.
For example - GMO seeds. Africa is afraid to use them as cuold not sell to Europe. And Afric ges pressured to not spray for mosquitos to get rid of malaria, etc. Greenies kill millions silently, then their culture does the rest with AIDs
"We just wet the bed," Kobe said. "A nice big one, too. One of the ones you can't put a towel over. It was terrible."
ROFL.
that quote alone is worth the 90 bucks i will lose when the celts win.
i really hate kobe. i hate the celtics with a passion.
what a crazy final. lakers cruised through the west which nobody wud have thought. ya, getting to the finals was possible but they only lost 2 games to the jazz and 1 to the spurs.
then the celts have to go 7 against the a sub 500 team in atlanta. lebron took them to 7.
so it was logical to lean on the lakers. the west is so much better and the lakers barely broke a sweat getting through it. the east is pathetic and the celts barely made it. plus they r totally banged up.
so the question is can kobe and company pull off the greatest comeback in NBA finals?
slim to none, but slim is still in town.
the west is not better
they play ZERO defense
the celtics and the pistons easily better then anyone in the west
pistons wud have destroyed the lakers.....too many white boys on the lakers
lakers suns utah ....all play no D
spurs play some D but are too old now
even cavaliers and orlando play better D than the lakers
can u imagine anyone in the west tryin to guard dwight howard....or tryin to get a rebound from him
i can't
Gasol is way overrated
i dont want to even think about the lakers next yr with bynum back.
spurs really aint that old.
i was stunned when they crushed the spurs who crushed the suns.
maybe the east plays better D but the east can not shoot.
west is more entertaining to watch and once again defense gets the ring.
i suppose my thesis that the spurs going deep the last 2 yrs, sorta left the tank empty for the lakers
wierd ... got a fund raising letter from Obama today.
I'm sure he didn't buy the NRA mailing list ;-)
Post a Comment