Disqus - Latest Comments for enh124

Re: Consumer confidence sinking

enh124 — Sun, 15 Nov 2009 09:37:52 -0000

Like John Mauldin in a post from yesterfay I see 2010 benefitting from
stimulus not yet in the pipeline. So late 2010 would be the earliest.
Probably 2011 more likely.

Re: Get in the market before it’s too late

enh124 — Fri, 13 Nov 2009 13:38:17 -0000

It's high yield bonds here in the ad. I am not making a recommendation, by the way.

I am just pointing out that market boosterism (or lack thereof) breeds momentum.

Re: Jamie Dimon makes the best case for not breaking up banks

enh124 — Fri, 13 Nov 2009 12:11:50 -0000

I agree with your sentiments. I have added this at the end of the post:

Disclosure: I have no financial interest in any financial services companies. Further, I have said previously that I do not favor re-imposing Glass-Steagall as a magic bullet solution given that most financial carnage over the past twenty-five years has originated in the regulated commercial bank sector. Like Dimon and Bair, I see a robust regulatory regime as critical. On the other hand, I am generally in favor of reducing bank size, unlike Dimon.

Re: The politics of economics

enh124 — Fri, 13 Nov 2009 08:09:06 -0000

Your points about states raising taxes is on the money. This downturn is all about a raising disposable income in order to maintain some semblance of aggregate demand while the private sector deleverages. It is a tricky operation that will be years in the doing. Raising taxes and/or cutting spending decreases income and demand and creates a deflationary bias. he federal government is the only actor in the short-term that can prevent that deflationary bias from become a spiral and liquidity trap.

Re: Geithner: “Market-oriented exchange rates in line with economic fundamentals will be essential”

enh124 — Thu, 12 Nov 2009 14:46:42 -0000

The thing that is going to support a strong dollar is economic policy that normalizes interest rates and keeps down the inflation of base money and its transmission into monetary aggregates. Most of this is controlled by the Federal Reserve.

Why does what the Treasury Secretary think about a "strong dollar" have any impact at all. I find it meaningless rhetoric.

Re: Unemployment insurance for the 21st century

enh124 — Thu, 12 Nov 2009 14:38:28 -0000

Hey Brett,

my understanding is this would probably suppress wage prices (at least initially). If we have relatively high unemployment, putting this into effect is going to drive wages down. Longer term, the fact that we would be operating closer to full capacity means wages would rise. But, of course, so would output.

As far as unemployment insurance goes, this would be a replacement for that. Mind you, some social welfare programs are always going to be in place (disability as an example) but this would certainly eliminate a lot of those programs.

What I haven't come to grips yet is your last question, which is the one I'm sure you care about - infrastructure construction. I can't see how we could reasonably expect this not to compete on some level with for profit enterprises, especially on infrastructure spending.

If you want to build a bridge in Minneapolis and use the jobs guarantee program to do so. What happens at the company who would have gotten that contract otherwise? Is this a case where the project would not have happened otherwise because it is happening in a period of recession? The mechanics of that issue need to be fleshed out for me.

I know Scott Fullwiler above might have some comments on this.

Re: New unemployment claims are coming down

enh124 — Thu, 12 Nov 2009 11:25:04 -0000

I do. It says that there may be undercounting (small businesses?). I don't believe for a second we lost the number of jobs in the last three months that the household survey shows. It seems like a lot of it is people's reporting status changing.

Generally, I look at the unemployment insurance numbers as the best gauge we have. They tell me -200,000 jobs or maybe -300,000 per month is where we are right now.

Re: Chanos says dump munis as distress mounts and ratings attacked

enh124 — Wed, 11 Nov 2009 10:03:50 -0000

Terry, your comments are well-placed in that I can understand it might appear that I am saying all munis are bad. That is not what I am saying at all.

I am saying that financial stresses will lead to some municipal bonds underperforming - perhaps causing the entire sector to underperform. I would expect there to be a dichotomy in performance based on this - with bonds from better positioned municipalities or attached to specific revenue streams to outperform. General obligation bonds are obviously of more dubious security than bonds funded by specific income streams.

As I am not an investment advisor backed by a large legal team, I am not going to point to specific bond issues. However, I am making a general call for investors not to rely on ratings alone in determining where to invest in this sector. Do your homework and you will be ok.

Re: Consumer credit down, but does it show deleveraging?

enh124 — Sun, 08 Nov 2009 10:57:40 -0000

key word 'healthy.' I certainly don't see continued high leverage as healthy. It does sow the seeds for more pain to come.

Re: Consumer credit down, but does it show deleveraging?

enh124 — Sun, 08 Nov 2009 08:35:12 -0000

credit to personal income would do about the same thing, yes. But, Debt to GDP is a more generally recognized statistic.

Getting credit by class would indeed be revealing, but that data is not available.

Re: Consumer credit down, but does it show deleveraging?

enh124 — Sun, 08 Nov 2009 08:26:57 -0000

yes. I will change that.

Re: Intent and motive

enh124 — Fri, 06 Nov 2009 19:47:34 -0000

You're not reading the post accurately: "how or whether to vote" covers
what you are saying.

Re: Rosenberg: “the mother of all jobless recoveries”

enh124 — Fri, 06 Nov 2009 16:40:25 -0000

Of course it is. It points to systemic problems that are being papered over with short-term solutions.

Re: Comprehensive unemployment rate is 17.5%

enh124 — Fri, 06 Nov 2009 14:20:48 -0000

Also, my headline should tell you I see the labor market as weak. But again, in context, this is not a negative surprise.

Re: Comprehensive unemployment rate is 17.5%

enh124 — Fri, 06 Nov 2009 14:19:49 -0000

I'm sorry it read as positive spin. I did not intend it that way.

I get what you're saying, haris. And I know this: the fact that labor market participation is decreasing is a sign of economic weakness - not strength.

My last paragraph is a reflection of how I see the data in context: this is not a game-changer. The labor market is weak, but not deteriorating. It can still be this weak and yet the economy can show a statistical recovery.

Re: The coming collapse of the municipal bond market

enh124 — Thu, 05 Nov 2009 11:19:05 -0000

My general take here is not so much one of shorting an index (as I don't give specific investment advice) but of being aware of what you have in your portfolio.

For example, are the munis in your portfolio general revenue bonds or ones secured with income streams from specific projects? And what does that mean about likely cash flow in a period of distress?

As I see it, not all bonds are equal and that should lead to a relative value play if and when muni distress occurs.

Re: News from around the web: 2009-11-05

enh124 — Thu, 05 Nov 2009 09:56:50 -0000

That is the hope, isn't it?

Re: Fed to keep “exceptionally low levels of the federal funds rate for an extended period.”

enh124 — Wed, 04 Nov 2009 20:50:36 -0000

I'm interested to see how this will translate into consumer credit. Definitely something to watch given the still very low savings rate.

Re: Wood warns of correction, says “key variable in the West is government policy”

enh124 — Tue, 03 Nov 2009 14:19:20 -0000

Stevie, you know your Americanisms pretty darn well.

Re: Bullish data, recoveries, crashes and the psychology of forecasting redux

enh124 — Mon, 02 Nov 2009 21:58:15 -0000

On the economic/financial side: A major spike in oil prices, a collapse OR spike in the U.S. dollar, longer-term double digit unemployment, stock market crash. On the political side: War or realized nuclear ambitions in Iran. These are probably the most well-known exogenous events that are risks.

Re: The choice is between increasing or decreasing aggregate demand

enh124 — Fri, 30 Oct 2009 14:02:37 -0000

Yes, that's why I originally swapped the two mentally. Poor choice of colors.

Re: Simon Johnson’s testimony expunged from Congressional records

enh124 — Fri, 30 Oct 2009 13:40:40 -0000

It's definitely more trick than treat this year. I too had expected more fundamental change. But when Obama picked Geithner and Summers, I knew where this was headed.

Re: US personal income data shows for September shows pullback

enh124 — Fri, 30 Oct 2009 13:38:27 -0000

I definitely mean that in a bad way because it takes us back to the asset-based model which is unsustainable.

Re: The choice is between increasing or decreasing aggregate demand

enh124 — Thu, 29 Oct 2009 07:05:10 -0000

I am actually thinking most about financial services when I think of overcapacity

Re: The choice is between increasing or decreasing aggregate demand

enh124 — Wed, 28 Oct 2009 16:27:13 -0000

That's right. Thanks for catching that (I was mentally thinking green good, red bad)