Comments on: Appalling News Spurs Yet More Idiotic Buying

By: redwilldanaher

redwilldanaher — Sun, 08 Aug 2010 03:01:53 +0000

Gary your comments are utterly ridiculous. I just can’t tell if you’re being sarcastic or are actually serious. How hard is to not get something wrong when you’re shooting fish in the proverbial barrel? How hard is it to “win” or “beat” when the you’re the fixer? The top brokers are 90 for 90 in trading day wins? Does that sound possible? Why would people keep showing up to play the game if that were normal? Seriously, are you serious? Read a little from John Hussman and you’ll soon see how fraudulent corporate earnings shenanigans are on a regular basis. The entire system is rigged to convince you that its all good. Do you want to bet on the continuation of the fraud? That’s fine but please don’t act as if we’re dealing in actual reality when it comes to corporate profits or any of their accounting for that matter. It’s as laughable as S&P ratings and “stress tests”. Here, this is from a mainstream site: “It all sounds wonderful for investors and the U.S. economy. There’s just one problem: It’s a crock.

American companies are not in robust financial shape. Federal Reserve data show that their debts have been rising, not falling. By some measures, they are now more leveraged than at any time since the Great Depression.

You’d think someone might have noticed something amiss. After all, we were simultaneously being told that companies (a) had more money than they know what to do with; (b) had even more money coming in due to a surge in profits; yet (c) they have been out in the bond market borrowing as fast as they can.

Does that sound a little odd to you?

A look at the facts shows that companies only have “record amounts of cash” in the way that Subprime Suzy was flush with cash after that big refi back in 2005. So long as you don’t look at the liabilities, the picture looks great. Hey, why not buy a Jacuzzi?

According to the Federal Reserve, nonfinancial firms borrowed another $289 billion in the first quarter, taking their total domestic debts to $7.2 trillion, the highest level ever. That’s up by $1.1 trillion since the first quarter of 2007; it’s twice the level seen in the late 1990s.

The debt repayments made during the financial crisis were brief and minimal: tiny amounts, totaling about $100 billion, in the second and fourth quarters of 2009.

Remember that these are the debts for the nonfinancials — the part of the economy that’s supposed to be in better shape. The banks? Everybody knows half of them are the walking dead.”

So your “current PE” isn’t worth anything because it is based on fraud. They don’t get things wrong because they rig it. If they can’t rig it they manipulate the “reaction”. It’s amazing that the “beats” always outnumber the “misses” and you seem to think that it happens by chance. I can’t imagine how difficult it must be for Rick to refrain from responding to some of the nonsense with which people pollute his site.

By: rockingham

rockingham — Thu, 15 Jul 2010 00:04:16 +0000

@SJM
What is going on right now is a mish-mash of decisions by BP and the Obama-trons. Even if BP wanted to drill six production wells, no way will Obama and his minions allow that because they have halted all Gulf drilling. I agree with you that the relief wells can fail and there is no back-up plan. Drilling six more production wells is a back up plan and should have started immediately. But these are exotic drilling rigs that are booked up worldwide. You have to find some that are available.

By: gary leibowitz

gary leibowitz — Wed, 14 Jul 2010 20:33:32 +0000

There was/is no fraud involved. Your looking at the wrong data points. The street usually thinks with its ability to earn money. That means quarterly earning reports.

You would hope that they really do forecast 6 months in advance but it doesn’t always work out that way.

There were real winners in the great depression and people did make money during those times. That doesn’t mean the human condition withstood as well.

Show me these last 18 months where the street got it wrong? Current P/E for the SP500 is reasonable.

It wilol fall off a cliff soon but thats another story.

By: SJM

SJM — Wed, 14 Jul 2010 20:26:43 +0000

With regard to the blown-out well in the gulf, I can’t understand why they didn’t start drilling with every available deep-water rig available, additional production wells into that field. I’m surprised that this effort didn’t start within a few days of the disaster.

Even if there is only a 1% chance of the relief wells failing to stop the leak we should have been pursuing this effort. (I mean it’s not like they are allowing those rigs to be used for anything else anyway.)

If absolutely nothing can be done to stop this one hole from leaking, what choice do we have other than to reduce the pressure on it by draining that field as fast as possible? (Other than the nuclear option.)

I don’t understand the logic of just hoping the relief wells will work and allowing all the drilling rigs to leave the gulf for places like Egypt. What am I missing here?

By: gary leibowitz

gary leibowitz — Wed, 14 Jul 2010 20:24:51 +0000

Perhaps you missed the data coming from the fed?

Where to begin. Housing? nah thats too depressing. Retail sales? Ouch. Import/Export pricing? what down? fed funds rate changes? can’t get below zero.

Debt creation? nope that was last year and all those wonderful years before this minor debt debacle.

Lending? Banks would love to give away a house if you want it. Maybe even some bond debt issued from Fannie/Fredie or Greece or spain or portugal or…

Jobs growth? need I say more.

There is those wonderful earnings. If you look at history most if not all crashes happen at peak earnings.

The fed just released its minutes. Gotta say it was very optimistic. They prdict 6 more years of this recession before we get to “normal”.

I guess when a brick smacks you in the face your initial reaction is disbelief.

By: Rich

Rich — Wed, 14 Jul 2010 17:24:25 +0000

Rick,

As I’m sure you are aware before this rally started (9670+/- DOW) the market was the most oversold since 2001 per the RSI . I’m no expert but this appears to be a technical (manipulated) bounce coupled with the start of a new quarter.

The staircase market drop could very well continue.

By: rockingham

rockingham — Wed, 14 Jul 2010 17:23:28 +0000

OT–

BP has now stopped the relief well drilling and stopped trying to fit on the new cap. Can this be because the well casing is in very very bad condition? One of those worse case scenarios?

Thad Allen says they are doing seismic testing of the well. To me this means they are testing well integrity at various depths. I’m guessing that relief well drill head can somehow test the gusher well casing. Ping it somehow

Perhaps the best testing at 17,000 feet can be done while the oil is gushing. So no new cap for a few days

By: redwilldanaher

redwilldanaher — Wed, 14 Jul 2010 17:23:06 +0000

Robert,
I agree with much if not all of what you wrote but it doesn’t change the fact that Keith’s comments and many like them come off as “punkish” to me. The ’90’s bull market was largely based upon fraud. This past decades’ bull market was nearly entirely based upon fraud. There is deterioration and disintegration all around us by nearly every measure and yet the Manipulation Cartel still has a strong “pimp hand” at the moment. Again, if you want to argue that yet another round of the timeless shell game will be perpetrated and that we will see new highs as a result of their herculean efforts in the name of fraud then I can buy that and trade it accordingly. I don’t rule that out, not in the least. Nearly 2 decades of fraud watching have taught me to be prepared to be astonished by the next offering of BS that these financial sociopaths will bring forth. But please don’t characterize it, as Keith seems to, in a way that makes it seem like we’re just on the road to a standard bull market that’s based upon your organically produced garden-variety macro expansion cycle. That’s what his “minimalist” commentary implies to me and maybe that’s from reading so many posts like his around all over the Internet for over a decade. The notion that the market “always knows” with regards to the future should be put to bed at this point. I told people to get out of Tech in Dec. 1999. I started by the metals producers in 2004. I also told them to not buy into the housing bubble in 2005 onward. I also told them in the summer of 2007 to “collar” their portfolios at the very least. I’m a small timer with limited resources. I don’t claim to be a sage. I don’t have a research team and quant teams and I certainly don’t have access to insider scuttlebutt. I’m the father of 4 young ones and thus I only have limited time to work with. How is it that I could see imminent danger time and time again and that Wall St., their financial media, and the enabler/co-conspirators in DC were explaining it all away? I’ve seen round after round of deceived clowns pointing to indexes that were being manipulated higher on fraud and they all think that they will get out in time. Needless to say they rarely want to discuss the market after “distribution and markdown” have occurred. Keith is asking Rick to admit that he’s “wrong” because the Cartel momentarily has the upper hand. At best this ranks him as a lazy commentator in my book. If it weren’t for all that I enumerated and much, much more in my previous comments the indices could/would(?) likely be less than half of what they are right now. Remove the FED from buying debt from …well the FED and where would things be right now? Price Keith’s beloved DOW in something besides our currency that suffers from relentless and severe “domestic abuse” and tell me how well “investors” have fared over the last decade. So with that I’ll bring things to a conclusion by reminding Keith and his merry band of “buy and holders” that they need to raise their hands for 2 toasts when “the DOW” (with Hainesian inflection) vaults to new “highs”. First off, they’ll be nominal. But more importantly, Keith and friends will also be celebrating the triumph of the Manipulation Cartel and the perpetuation of their Matrix. “Here’s to Keith and his permabull brethren! Brothers! May they forever be comfortably numb.”

By: Robert

Robert — Wed, 14 Jul 2010 16:21:04 +0000

Keith seems to be a staunch member of the “if you can’t beat ‘em, join ‘em” crowd…

Keith’s perspective that we are in a new secular bull market may seem utopian to some, but there is data to support the viewpoint that if the PTB are successful with their plan of talking change while changing nothing, then the masses might just decide to go ahead and play another hand of 3-card Monty before they walk away from the Boardwalk….

For some, the power of the need to accumulate (hoard) is overwhelming, and like it or not, accumulating FRN’s still has a powerful psychological power over Billions of people around the world. It will take much longer for this confidence to unwind than many bears are willing to entertain (my opinion only), but the global unwinding will occur…
A new all time high on the DOW along the way will not prevent the inevitable- and if this new high should occur, then it will ABSOLUTELY be denominated in dollars that maintain much less than their already abysmal purchasing power.

By: Robert

Robert — Wed, 14 Jul 2010 16:06:34 +0000

“your child is worse off because of delusion, and idiocy; as will his child be worse off unless a Man teach the truth, and what value is.”

- You said a mouthful there, brother….