Here is an article from the Financial times posted to the Stockman website. It discusses the business of corporate America is financial engineering.
Igy
Here is an article from the Financial times posted to the Stockman website. It discusses the business of corporate America is financial engineering.
Igy
Monday's Bullish sentiment?
Ghost of Igloi wrote:
Here is an article from the Financial times posted to the Stockman website. It discusses the business of corporate America is financial engineering.
http://davidstockmanscontracorner.com/the-business-of-corporate-america-is-no-longer-business-its-money-shuffling/Igy
except manufacturing output is near all time highs
What are you talking about?
Then buy on the dip smart one.
Ghost of Igloi wrote:
Then buy on the dip smart one.
I just did. Sold a bunch of ETFs at a profit yesterday in anticipation of a dip. Just spun some of that cash into WFC and KHC. I'm probably done for today, but I've still got some cash waiting for the next opportunity.
Market is down, "life is good."
big,
Good luck with your trades. I like Heinz Ketchup and Kraft Velvetta cheese, but the stock trading at 51 times last years earnings no. Wells seems OK, best in class in mortgage business.
Igy
Thanks. I guess I'm sort of in a Warren Buffett kind of mood with these two plus my AAPL buy. Hoping for the best as always.
But there is something else that should be considered. 2008-2009 wasn't almost the second depression; In terms of earnings compression, it was something far worse than we have had going back to the Cival War era. Below are three time series for SP500 corporate earnings (not PE and not filtered or averaged). During the Great Depression, corporate earnings compressed by a factor of 3-4 (and this also happened after the end of WW1). In 2007-2009, SP500 earnings compressed by more than a factor of 10!
Jan-1930 Sept-2001 Jan-2007
1.56.. 53.70 82.06
1.50.. 52.47 82.60
1.45.. 51.23 83.15
1.40.. 50.00 83.74
1.34.. 48.48 84.33
1.29.. 46.96 84.92
1.24.. 45.44 82.81
1.18.. 42.56 80.71
1.13.. 39.67 78.60
1.08.. 36.79 74.46
1.02.. 33.96 70.32
0.97.. 31.14 66.18
0.94.. 28.31 64.25
0.91.. 27.10 62.32
0.88.. 25.90 60.39
0.85.. 24.69 57.38
0.82.. 24.69 54.38
0.79.. 24.70 51.37
0.76.. 24.70 49.56
0.73.. 25.38 47.76
0.70.. 26.06 45.95
0.67.. 26.74 35.59
0.64.. 27.94 25.24
0.61.. 29.14 14.88
0.59.. 30.34 12.21
0.58.. 29.42 9.53
0.56.. 28.51 6.86
0.54.. 27.59 7.08
0.53.. 28.50 7.29
0.51.. 29.41 7.51
0.49.. 30.32 9.19
0.48.. 31.73 10.86
0.46.. 33.14 12.54
0.44.. 34.55 25.35
0.43.. 23.03 38.16
0.41.. 11.52 50.97
There are a couple of reasons for the activity of corporate CEOs (aside from goosing the stock price so they can get paid more):
1. The 2007-2009 near second great depression did great damage to their balance sheets (those that had positive balance sheets and did not have to be saved by other companies like Merrill-Lynch or the government like General Motors)
2. There has been a global low growth economy since 2008, where investment in new production/products accrues greater risk (see all the frackers in the US now in bankruptcy). This has happened before: After the 1929 crash, it took all the way until almost day of the Pearl Harbor attack for unemployment in the US to fall below 10%.
3. Leaving too much cash in the bank invites takeover artists
Ghost of Igloi wrote:
Monday's Bullish sentiment?
What about it?
Evaporated with corporate stock buybacks:
Igy
Well I'm not sure there's been much of a bullish sentiment lately, but anyone who felt that way isn't going to be swayed by a 1% drop. Methinks you're overreacting.
Methinks you are a closet Bull, like most who post here.
Igy
INVESTOR SENTIMENT READINGS
High bullish readings in the Consensus stock index or in the Market Vane stock index usually are signs of Market tops; low ones, market bottoms.
Last Week
Consensus Index: Consensus Bullish Sentiment 70%
Market Vane: Bullish Consensus 59%
Methinks you wrong.
Igy
Nope
K5 detector wrote:
Ha ha, K5. I'm not the one who misspelled bullshit.
You ought to get a brain scan.
I am pretty sure you have holes in your head.
Doesn't everyone have holes in their head?
U.S. stock futures on Wednesday showed little change, as investors avoided big bets ahead of a release that could hint at when the next interest-rate hike will hit. Minutes from the Federal Reserve's last policy meeting are due at 2 p.m. Eastern Time. The stock market also could move on a weekly reading on U.S. oil supplies, which is expected at 10:30 a.m. Eastern.
On Tuesday, the S&P 500 closed 0.9% lower after Fed officials suggested interest rates could rise next month. The Dow fell 1%, or 180.73 points. Each gauge on Tuesday essentially erased its gain from Monday. The minutes from the April meeting are likely to reinforce the Fed's message that it's quite serious about hiking rates this year.
"The chances of a Fed move at the next meeting now stand at a heady 12%, having been just 4% on Monday," said Chris Beauchamp, senior market analyst at IG. "While on an absolute basis this might not be much, in financial markets it's all relative, and the steady rise in expectations has put new life into the U.S. dollar and firmly stymied expectations of a rally in stock markets," he said in a note.
Ghost of Igloi wrote:
Market is down, "life is good."
That's a strange sentiment.