news.goldseek.com >> 8 May 2008
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news.goldseek.com >> 8 May 2008 |
A Rally To Nowhere
By: Brady Willett
The only thing remarkable about the recent rally in U.S. equities is how unremarkable it has been. To be sure, you would think that with the ‘worst’ being ‘over’ stocks would be able to mount a significant bounce. This hasn’t been the case, at least not yet.
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news.goldseek.com >> 14 April 2008 |
He Did It His Way (Unfortunately)
By: Brady Willett and Todd Alway
Greenspan did another media tour last week, this time defending his legacy in the Financial Times, Wall Street Journal, and on CNBC Television. Unfortunately the story from Greenspan was much the same: he reiterated that the financial markets are best left to self-regulate, and that investors around the world (not the Fed) took control of long-term interest rates thus leading to the U.S. housing bubble.
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news.goldseek.com >> 14 March 2008 |
Lenders of The Last Resort Unite!
By: Brady Willett
As financial regulators leap to the aid of the markets and the rating agencies continue their shenanigans, Mr. Schwartz tells us of the one step a financial stable company would never be compelled to make. Incidentally, the most pressing question at hand isn’t what happens next, but whether or not Bear Stearns called the Fed or JP Morgan first...
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news.goldseek.com >> 6 March 2008 |
Bernanke’s Gold Show Must Go On?
By: Brady Willett
Ben Bernanke has attacked the threat of deflation with great zeal. We knew that he would. But what we don’t know is how Mr. Bernanke will respond to today’s stagflationary pressures, if at all, and/or whether or not the slumping dollar will eventually ignite a monetary policy response.
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news.goldseek.com >> 21 January 2008 |
Cue Bernanke
By: Brady Willett
The stark reality, for those that care to think about it, is that the U.S. government cannot perpetually help avert painful recessions and economic crisis’s because eventually the government’s financial position will itself become the crisis.
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news.goldseek.com >> 7 January 2008 |
2008: Is Bernanke The One?
By: Brady Willett
We do not intend to start 2008 off by offering a preachy commentary about how best to invest – in any event an investment pre-disposition will not be materially altered by a simple 2000 word essay. However, we will offer some contrarian viewpoints that may help illuminate different and potentially opportunistic possibilities.
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news.goldseek.com >> 12 December 2007 |
Greenspan Sharpens His Comedy Routine
By: Brady Willett
In today’s Wall Street Journal former Fed boss, Alan Greenspan, attempted yet again to explain why he wasn’t to blame for all the ‘bubbles’ that coincidentally transpired during his tenure. In the piece Greenspan adds color to the same storylines he has harped on before, those being 1) that he took the Federal Funds rate down to 1% because he was scared of deflation, and 2) crazy investors, not him, are to blame for the euphoric booms in stocks and real estate while he was Fed boss.
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news.goldseek.com >> 3 December 2007 |
Popeye-Paulson Needs More Than Plain Spinach
By: Brady Willett and Todd Alway
Treasury Secretary Henry Paulson was trying to strong-arm the supposedly free markets again last week, this time catching headlines for his fronting of the government’s proposal to temporarily freeze interest rates on some troubled subprime mortgages. You have to give Mr. Paulson credit for having the bluster to constantly make media appearances – first to dispel contagion fears, then to announce that he was helping banks set-up an SIV bailout, and now to provide an update on his subprime bailout plans.
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news.goldseek.com >> 30 November 2007 |
DELL: Mending Models
By: Brady Willett
DELL reported positive results after the bell yesterday, with quarterly earnings and revenues rising by 27.5% and 8.5% respectively compared to last year. However, with per share earnings missing analyst estimates and operating margins sliding to 5.29% (from 6.1% in 2Q08), shares traded sharply lower after hours.
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news.goldseek.com >> 9 November 2007 |
Bernanke Squirms as USD Burns
By: Brady Willett
Bernanke’s larger than expected 50 bps cut on September 18 helped spark a sell off in the U.S. dollar. A deteriorating outlook for the U.S. economy and another Fed rate cut on October 31 accelerated the dollar’s decline. Fear has taken over in November…
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news.goldseek.com >> 5 November 2007 |
Rubin’s Cube
By: Brady Willett
In short, it is the calls that Rubin and others make, most of which we never find out about, that make it impossible for regulator and investor interests to perfectly align.
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news.goldseek.com >> 30 October 2007 |
The Hunt For Inflections
By: Brady Willett
As for when Mr. Inflection will enter the building, not withstanding the seemingly intractable gambles being played across the financial markets today, there is ample evidence to suggest that this moment already arrived for the global economy in July 2007. The delayed response by investors to Mr. Inflection’s arrival isn’t necessarily anti-archetype, but a product of resiliency conditioning.
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news.goldseek.com >> 16 October 2007 |
You Call That A Bailout?
By: Brady Willett
Imagine walking into a hospital with chest pains and the doctor telling you that he will do his best to treat you in a few months. Such is the latest development on the U.S. bailout/bust front.
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news.goldseek.com >> 16 September 2007 |
Mr. Bubble Writes A Book
By: Brady Willett
But just as the ‘blame Greenspan’ theme threatens to get rolling next week everyone will pause, abandon their senses, and beg the Fed for help. After all, while Greenspan’s book will be released on Monday, Bernanke’s first kick at the rate-cut-can is scheduled for Tuesday.
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news.goldseek.com >> 4 September 2007 |
The School of Hard Work Or Habituated Hand-Outs?
By: Brady Willett
After signing the ‘American Dream Downpayment Act of 2003’ Bush added, “We want people to be fully aware of what it means to buy a home and what it takes”. The contradiction, if otherwise unclear, was that the President was signing a law that gave free money to those who could not afford to buy a home, and then he planned to educate them about the hard work, savings, and planning that is required to buy a home.
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news.goldseek.com >> 21 August 2007 |
Forget Peak Oil, Peak Net Worth is the Real Danger
By: Brady Willett & Todd Alway
With the 1990s stock market mania about to go bust, it was easy to conclude that the U.S. economy would see an entrenched recession. After all, the bubble was arguably larger than any before, and - thanks to easy investing via the internet and the proliferation of 401Ks, mutual funds, etc. - the fallout in stock prices was going to impact an unprecedented proportion of the population directly.
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news.goldseek.com >> 17 August 2007 |
Relief is spelt B-E-N
By: Brady Willett
Yen carry is blowing up, global stock prices are in mini-crash mode, and the financial meltdown is threatening to spark an economic meltdown. Having gingerly danced with rhetoric and liquidity injections in recent days, the Fed started to boogie this morning.
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news.goldseek.com >> 14 August 2007 |
Short Selling The Road To Redemptions
By: Brady Willett
With the financial markets doing their best impression of a tinderbox waiting for a spark, it is not easy to use the word ‘oversold’ without cracking a smile. After all, if the S&P 500 - which closed less than 1-point below its 200 DMA yesterday - was really ‘oversold’ it would not normally be trading only 6.4% off of its recent highs (market corrections are generally -10% and bear markets are -20%).
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news.goldseek.com >> 9 August 2007 |
Bailout Backfires
By: Brady Willett
A funny thing happened during today’s central bank bailout attempt: the markets plunged. Is it just me, or when central bankers unite and throw money at a problem isn’t that problem supposed to go away?
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news.goldseek.com >> 6 August 2007 |
Cramer’s Sage Rage?
By: Brady Willett
With all of this said, it would be naive to think that Fed will stand idly by if the financial markets continue to tank. As much as Bernanke wants to be regarded as an inflation fighter there does come a point when failing to provide a timely injection of liquidity could have a devastating impact on investor confidence and the U.S. economy.
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news.goldseek.com >> 26 July 2007 |
What To Do As Stocks Go Bust
By: Brady Willett
With all of these tips about what not to do, there is one thing every value chaser should continue to do. Keep cash ready. To be sure, if you have the fortitude to ignore all the volatility in the marketplace you will come to realize that cash is fetching a decent return these days…
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news.goldseek.com >> 12 July 2007 |
Where Are All The Homebuilder Bargains?
By: Brady Willett and Todd Alway
With starkly differing business focuses – not to mention companies like Toll trying to play a new geographical card in ‘China’* - obviously the above calculations assume a lot. These limitations notwithstanding, in order to surmise that any homebuilder represents a ‘bargain’ - or a below book value long-term investment opportunity – you must conclude that asset write-downs will not be more than 20% and sales/losses will stabilize by summer 2008. Unfortunately such a conclusion is not one we are willing to make.
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news.goldseek.com >> 13 June 2007 |
Remain Calm! It’s only a bunch of Bear Markets
By: Brady Willett
The guaranteed yield on the 1-year Treasury bond broke above 5% yesterday and – suddenly? – a risky dividend yield of 3.05% becomes ‘less attractive’? Why were the lowly yields on utilities, which are the highest of any S&P group, not ‘unattractive’ a couple of months ago or even last year?
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news.goldseek.com >> 8 June 2007 |
Conundrum Unwind or Glut Rewind?
By: Brady Willett
The U.S. economy slowed to a crawl in 1Q07 and the U.S. housing market is, by many accounts, years away from a meaningful rebound. With this in mind, why are long-term U.S. interest rates spiking higher and why have mortgage rates risen in each of the last four weeks to rest at 10-month highs?
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news.goldseek.com >> 24 May 2007 |
Utility Futility
By: Brady Willett and Todd Alway
With S&P 500 bank/financial stocks the worst performing sectors so far in 2007, it is becoming clear that the inverted yield curve has damaged investor confidence in the group. Conversely, with utility stocks the best performing sector this year, it is obvious that investors have continued their defensive hunt for yield. Suffice to say, given that financial stocks typically outperform early in the cycle and utilities tend to beat other sectors late (or in the down cycle), the action in 2007 would seem to suggest that the bear is growling.
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news.goldseek.com >> 2 May 2007 |
Whistling Dixie To The Chicken Littles
By: Brady Willett
During the 2001 recession U.S. consumers never stopped spending and the U.S. housing market did not correct. As unprecedented as these events were, nothing is more unthinkable than a U.S. recession combining with a bull market in stocks (unless brought about by hyperinflation). In short, ‘liquidity’ doesn’t explain why a slumping U.S. economy is being met with record highs in stocks, delusion does.
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news.goldseek.com >> 28 March 2007 |
Learning Curves
By: Brady Willett
The carnage in subprime is at threat of spreading, lending standards are tightening, the U.S. consumer is up to their eyeballs in debt, the Fed is praying that inflationary forces remain in check, and the yield curve has turned positive. At risk of being labeled myopic, I tend to think the curve is the last of these worth mentioning.
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news.goldseek.com >> 14 March 2007 |
A Bailout Before The Bust?
By: Brady Willett
Mortgage Bankers Association Chief Economist, Douglas Duncan, believes that mortgage activity is set to dip and that “there's no question that the decline in [mortgage] volume will reveal excess capacity”. Although Mr. Duncan isn’t painting on overly grim picture, it is worth pointing out that he offered this negative outlook more than 3-years ago…
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news.goldseek.com >> 2 March 2007 |
Nero Fiddle Me This…
By: Brady Willett & Todd Alway
Late Tuesday afternoon, Dow Jones Indexes made a seemingly minor confession about a technical glitch that took place earlier that day. Specifically, in the middle of Tuesday’s market decline – beginning at 1:50 pm precisely – Dow Jones Indexes began incorrectly reporting the Dow Jones Industrial Average (Dow). In other words, instead of displaying say 12,200 - the actual trading level of the 30-Dow components - the Dow was showing 12,350. Ever vigilant, they eventually identified the problem and “switched over to a back-up system” at 3:00PM.
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news.goldseek.com >> 27 February 2007 |
Bernanke May Have To Break From The Greenspan Script
By: Brady Willett
Although subprime blowup fears continue to make for enthralling reading, the financial markets have yet to be seriously impacted. Rather, while some repositioning away from financial stocks and into utilities is suggestive of a developing defensive trend in the marketplace, this theme has yet to really get running. For that matter, the tightness in subprime is showing little evidence of spawning widespread restrictive credit practices.
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news.goldseek.com >> 26 January 2007 |
Bear’s Wait for the Dam To Break
By: Brady Willett
Before embarking upon another assault against the liquidity forces that be, it is worth recognizing that the remaining bears in this world have done well despite the fact that their macro beliefs have proven untimely. To be sure, ‘bears’ (or value investors) that purchased select stocks during the current bull market have produced acceptable returns, bears with precious metals exposure since the 2003 liquidity-fest started have done exceptional, and bears that reduced their exposure to the U.S. dollar along the way have outright thrived.
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news.goldseek.com >> 17 January 2007 |
Liquidity Dilutes!
By: Brady Willett
2006 was a year when ‘liquidity’ became the most important word for the financial markets. Moreover, with foreign stocks booming and emerging market spreads falling to record lows (compared to US Treasury bonds), 2006 either marked a key turning point in global capital/financial market distribution patterns, or a repeat of the hot money inflow/outflow crisis’s that have plagued emerging market economies in the past. With this in mind, two important questions leading into 2007 are 1) Does a boom in places like China and India portend a bust, and 2) Will the US reaffirm its safe haven status during the next financial crisis or not? Liquidity driven investment minds want to know…