Comments on: WHAT’S ON TAP?

By: Van

Van — Mon, 14 Sep 2009 00:53:49 +0000

Brian,

My guess is that when the recovery is undeniably obvious, the response will be similar to al Queda’s celebration of W’s carrier landing (financially speaking, of course)…

By: Brian

Brian — Sun, 13 Sep 2009 18:28:06 +0000

With Obama poised to make his own “mission accomplished” statement of sorts about the financial markets, one has to wonder what impact this will have. How bad would it look if the day of, after or even a month out, after he gets done telling people it’s safe to buy stocks again, the market experiences even a singificant retrcement. The odds of that happening are pretty low I’d say. If it does happen or any significant retracement begins consider it a massive and utter failure of the Fed to continue to control this market. To put him up on stage they must be feeling pretty confident their plan is working and will continue to work. The last time he told us to buy it turned out to be right and price is well above where it was at that point and probably will be for some time. Will history repeat itself?

By: Brian

Brian — Sun, 13 Sep 2009 18:12:37 +0000

The reason why the consumer is not buying the recovery story is because they sense life around them is not supportive of the recovery story. Not only do they have less money, people are still losing their jobs, friends, friends of friends, relatives, spouses and so on. With falling house values, saving money is becoming more important than spending it. The JPMs amd the GSs are so far removed from the real world its pathetic. They may be right only because they understand the relationship between the government and this market. The consumer only understands their world..jobs, house prices, 401K (which they can’t touch), credit card credit availability and those are not getting better. They have no way to rationalize the claims of wall street with their own observations. Obama will try to use his charisma to boost people’s confidence in his upcoming speech by telling people it’s OK to buy stocks now. He will have to convince people to ignore what they see around them, trust big government and wall street, and jump into stocks with both feet. As the public takes on more and more debt to save this market, one has to wonder whether government can literally really force a market to ignore fundamentals that are at odds with realtiy. Though insiders don’t seem to believe it obviously the president does. The question is do you?

By: TPC

TPC — Sun, 13 Sep 2009 18:04:30 +0000

Dean,

It’s a really interesting dynamic occurring. We have no insider buying, no revenue growth, massive consumer deleveraging, almost no real retail sales recovery, a very tepid recovery in rails, etc etc. And all of this is working against massive monetary stimulus and banks that are incentivized by pushing stock prices higher.

Which one will win out? Well, in the near-term the banks and the stimulus will win, but in the long-term the weak fundamentals will reassert themselves. IMO….

By: Dean

Dean — Sun, 13 Sep 2009 17:21:28 +0000

Even ex-autos will show a slight improvement. However, don’t we have to look at data with a seasonal lens? Autos, housing, tourism and their effect on retail sales are all seasonal plays. The way I look at it and starting w/ April there was a general sense of optimism and perhaps the consumer responded temporarily based on hope. After all being mentally invested in a better outcome helped to reason away most of our truly serious problems.

To put it bluntly, official stats will always be supportive of the “recovery” story. The true question is should investors be buying the story when insiders at a ratio of 36:1 clearly are not?