Where are all the bears now?

[white_goodman]

more on Abenomics..

http://macromarketmusings.blogspot.com.au/2013/05/abenomics-and-supply-of-safe-assets.html

 

[Uncle Festivus]

what data? the JGB yields are up hence bond prices down despite BOJ purchases?

thats the point..

higher yields mean better growth prospects for Japanese economy

is your objection that the stimulus is working? or that its working too well and they wont ever step off the gas, which is another argument that I can agree with in many ways..

The data, the ones that matter,

• confirmation the EU (France & Italy) is still in recession = miss/worse than expected
• Germany & the UK barely into positive GDP
• German Prelim GDP q/q 0.1% v 0.3% exp v -0.7 rev from -0.6 = miss/worse than expected
• US Unemployment Claims 360K v 332K exp v 328K rev higher from 328k = miss/worse than expected
• US Housing Starts 0.85M v 0.98M exp v 1.02M rev down from 1.04M = miss/worse than expected
• US Philly Fed Manufacturing Index -5.2 v 2.5 exp v 1.3 prev = miss/worse than expected
• US Empire State Manufacturing Index -1.4 v 3.6 exp v 3.1 prev = miss/worse than expected
• German ZEW Economic Sentiment 36.4 v 39.5 v 36.3 = miss/worse than expected
• US Mortgage Delinquencies 7.25% v 7.09% prev = trend rising
• US Factory Orders m/m -4.0% v -2.8% exp v 1.9% rev down from 3.0% = miss/worse than expected
• US ISM Manufacturing PMI 50.7 v 51.0 v 51.3 = miss/worse than expected
• S&P 500 revenue growth = 0% (only 46.9 percent have beaten revenue expectations)

Thomson Reuters notes that S&P 500 first-quarter revenues (so far) have fallen 0.2 percent; to the extent that companies reported positive revenue “surprises,” this may well be due more to the low expectations than to the ability of companies to post higher sales. That means that for a majority of companies in the S&P 500, any growth in profits is coming not from robust growth but rather as a result of cost cutting.

OEX 100 investors have been covering their short positions at a very fast pace ”” a major force driving the latest rally. Have all the shorts been squeezed out yet?

US rate volatility has recently pipped up, and this has been led by a sharp increase of Japanese rate volatility as a result of the easing policies of the BoJ. A rise in bond yields in Japan accompanied by a rise in bond volatility could be very damaging, especially as Japan has to refinance about 50% of GDP’s worth of debt each year.

Etc etc ie the melt up continues eg DAX................

 

[CanOz]

This is the really dangerous part now for the mom and dads, buy and holds....they see the US making fresh all time highs and then want to get involved....

CanOz

 

[Uncle Festivus]

This is the really dangerous part now for the mom and dads, buy and holds....they see the US making fresh all time highs and then want to get involved....

CanOz

Cue sucking sound of mom and dads, buy and holds being enticed into the QE vortex....never to return

Maverick (US): He's going vertical, so am I!
Goose(Japan): We're goin ballistic Mav, go get em!

Keep an eye on this, rolling over before the seasonal peak....

Railfax report

 

[white_goodman]

This is the really dangerous part now for the mom and dads, buy and holds....they see the US making fresh all time highs and then want to get involved....

CanOz

thats not really saying much though, all time highs can be followed by all time highs for a long time... similar things have been said the entire run up..

 

[Porper]

thats not really saying much though, all time highs can be followed by all time highs for a long time... similar things have been said the entire run up..

The media, especially Buisness programs on T.V are getting bearish...again. They say a major correction is imminent.

Maybe, but sentiment isn't high. Far from it. The average trader/investor hasn't been making money on this run. Far from it, most have seen their accounts decline or go sideways;unless they've been trading the top 100 stocks which most don't.

The trend is up and trying to predict a downturn without evidence is futile. It's nothing more than an educated guess. We all do it but the strength is clear to see so why try to fight it.

 

[Vixs]

The media, especially Buisness programs on T.V are getting bearish...again. They say a major correction is imminent.

Maybe, but sentiment isn't high. Far from it. The average trader/investor hasn't been making money on this run. Far from it, most have seen their accounts decline or go sideways;unless they've been trading the top 100 stocks which most don't.

The trend is up and trying to predict a downturn without evidence is futile. It's nothing more than an educated guess. We all do it but the strength is clear to see so why try to fight it.

I don't think your statement that most investors haven't been making money on this run reflects reality, as I'd say that most peoples investments are in blue chip stocks.

 

[Porper]

I don't think your statement that most investors haven't been making money on this run reflects reality, as I'd say that most peoples investments are in blue chip stocks.

Right so "most people" invest in Blue Chip stocks? Hmm, ok but beg to differ and would be interested where you get that stat from. Even those in managed funds tend to diversify which will have dragged profits (if any) down.

Point is we aren't in a raging Bull Market (not in Australia anyway) so those suggesting the market is overheated like it was back in 2007 are dreaming i.m.o.

 

[Uncle Festivus]

The average trader/investor hasn't been making money on this run. Far from it, most have seen their accounts decline or go sideways;unless they've been trading the top 100 stocks which most don't.

Right so "most people" invest in Blue Chip stocks? Hmm, ok but beg to differ and would be interested where you get that stat from. Even those in managed funds tend to diversify which will have dragged profits (if any) down.

Point is we aren't in a raging Bull Market (not in Australia anyway) so those suggesting the market is overheated like it was back in 2007 are dreaming i.m.o.

Maybe if you generalise you might have to back it with a stat too? "Most have seen their accounts decline"?? If "most" are not making money in this market they never will??

 

[Porper]

Maybe if you generalise you might have to back it with a stat too? "Most have seen their accounts decline"?? If "most" are not making money in this market they never will??

Don't misquote me Uncle...decline or go sideways I said. Take a look at the Small Ords compared to the XJO. Chalk and cheese.

I thought you would have focussed on the negatives with you being bearish the past few years. Still waiting for your predicted Armageddon.

Hope you haven't been short whilst you've been predicting the end is nigh. Good luck with that strategy.

 

[Klogg]

Point is we aren't in a raging Bull Market (not in Australia anyway) so those suggesting the market is overheated like it was back in 2007 are dreaming i.m.o.

If you own the banks or Telstra, you're in a raging bull market. If you own resource stocks, you're getting slaughtered. Otherwise, you've seen a slight increase.

And comparing the current market to '07 is pure fantasy! Last I checked (was a couple weeks back) we were at a market P/E of ~15... Even though it's only one metric of many, it's a good indication that we're nowhere near that sort of market hype.

 

[tinhat]

If you own the banks or Telstra, you're in a raging bull market. If you own resource stocks, you're getting slaughtered. Otherwise, you've seen a slight increase.

It's a stock pickers market alright. There are dozens of high quality company stocks that have gone through the roof in this current bull market - not just the banks and Telstra. From the top of my head:

FLT
WEB
IIN
TPM
MTU
MNF
MMS
DMP
SUL
APE
AGI
CCP
CSL
CTX
GEM
IAG
REA
CRZ
CTD
RMD
TOX
WES
RHC
NVT
IVC

Alas, I don't own enough of them. It's not a market for buy and hold though. Got to set stop losses and keep to them and get out of the underperformers. Another problem is that for a fundamental/value investor, many of those companies have appeared overpriced the whole way through the bull run. They started with higher PEs, lower yields and seemed fully priced, or not priced at a good discount to earnings and forecast earnings yet their share prices have gone up as they have been risk rerated - going from PEs of 14 to 20+. A few in this category for me have been RHC, SUL, DMP - they've seemed expensive the whole way through and just get more and more so.

 

[FlyingFox]

more on Abenomics..

http://macromarketmusings.blogspot.com.au/2013/05/abenomics-and-supply-of-safe-assets.html

Given that Japan has had 20 years of deflation and stagnation, it is debatable that they have come off of the highs to what is normal given their macros. Therefore a policy like Abenomics can be effective ( personally I think Japan has gone past the point of no return although that has little to do with economic and fiscal policy).

Do you think something like that will work in the US? Europe? Australia?

 

[white_goodman]

Given that Japan has had 20 years of deflation and stagnation, it is debatable that they have come off of the highs to what is normal given their macros. Therefore a policy like Abenomics can be effective ( personally I think Japan has gone past the point of no return although that has little to do with economic and fiscal policy).

Do you think something like that will work in the US? Europe? Australia?

europe is hard to say as they are under a quasi gold standard, US especially future chairwoman Romer are looking very closely at the Japan experiment. Here in Aus our CB has performed quite well over the past few years and I dont think we will need to resort to anything too radical unless we really fall of a cliff somewhere... im just speculating though, these things are hard to forecast when theres so much CB intervention taking place atm and all the market relationships/correlations breakdown/change..

http://thefaintofheart.wordpress.co...h-commodity-exporters-but-different-outcomes/

The demographic headwinds in japan will be interesting moving forward, lets just hope they dont institute any Krugman 'death panels'... I know that id like to see some inflationary expectations trickle into japan before you get the full weight of deflationary demographics

 

[Uncle Festivus]

Don't misquote me Uncle...decline or go sideways I said. Take a look at the Small Ords compared to the XJO. Chalk and cheese.

I thought you would have focussed on the negatives with you being bearish the past few years. Still waiting for your predicted Armageddon.

Hope you haven't been short whilst you've been predicting the end is nigh. Good luck with that strategy.

Misquote? 'Go sideways' is = not making money is it not?

Actually, your post reminds me of the posters in 2008 who scoffed at those who pointed out some minor economic fundamental anomalies and who dared to discuss anything but rising bull markets, until, that is, they crashed. Then a few naked swimmers were left exposed. The only difference between then and now is that we have QE Unlimited and 'whatever it takes' rhetoric to continually juice the equity markets at least, until they (C word).

Perhaps a permabull can explain, and I mean really exlain it, why the DAX futures melted up Friday night?
I believe that only now are we seeing some short capitulation/exhaustion, so getting interesting.......

-----------------------------------

The same person who was in charge then is still in charge, and his calls have been ineptly wrong.

(March 28, 2007) "At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency."

"The GSEs are adequately capitalized. They are in no danger of failing."

(Two months before Fannie Mae and Freddie Mac collapsed and were nationalized) "They will make it through the storm."

(June 10, 2008) "The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."

 

[Porper]

The same person who was in charge then is still in charge, and his calls have been ineptly wrong.

A bit like yours Uncle. You have been bearish for years and still are. Where is the DOW now? All time highs and surging. Funny thing is when people like yourself continually call for a top and are always wrong you jump on the "it's manipulated" bandwagon. What's it matter why markets are going up? You can blame the Fed and money printing all you like. The charts don't lie...and never do.

If futures rolling over during one session is your best evidence that the end is nigh you are dreaming mate. Yes there maybe a pull-back coming up as nothing runs in a straight line higher indefinately. But a retracement will probably be a buying opportunity.

 

[Uncle Festivus]

A bit like yours Uncle. You have been bearish for years and still are. Where is the DOW now? All time highs and surging. Funny thing is when people like yourself continually call for a top and are always wrong you jump on the "it's manipulated" bandwagon. What's it matter why markets are going up? You can blame the Fed and money printing all you like. The charts don't lie...and never do.

If futures rolling over during one session is your best evidence that the end is nigh you are dreaming mate. Yes there maybe a pull-back coming up as nothing runs in a straight line higher indefinately. But a retracement will probably be a buying opportunity.

No, I was right back then - Bernanke wasn't.

I didn't say the end is nigh for the DAX did I? So in the absence of any reason, you don't know why the DAX did a woody after hours either?

 

[white_goodman]

No, I was right back then - Bernanke wasn't.

love them broken clocks

you saying you expected Bernanke as chairman should be talking up the chances of a fat tail event pre crisis... they are conservative for a reason...they arent economic oracles, most of the most favoured CB DSGE models show one thing, the folly of trying to predict with any mathematical certainty..

dont take this as a Bernanke loving comment his performance has been subpar even against his own metrics/advice

 

[Uncle Festivus]

love them broken clocks

you saying you expected Bernanke as chairman should be talking up the chances of a fat tail event pre crisis... they are conservative for a reason...they arent economic oracles, most of the most favoured CB DSGE models show one thing, the folly of trying to predict with any mathematical certainty..

dont take this as a Bernanke loving comment his performance has been subpar even against his own metrics/advice

Not sure why the broken clock analogy keeps getting airplay - the timing has always been the unknown but the conclusions from hard data is more certain? You can't fight demographics with QE?

 

[FlyingFox]

You can't fight demographics with QE?

Doesn't mean they won't try....