The Credit Crisis Financial Stocks Short Journal
- Thread starter Daal
- Start date
Well, that's macro for you...
Some data on Japan post-bubble collapse, money growth was quite weak
http://www.hoover.org/publications/hoover-digest/article/6549
"Defenders of the Bank of Japan will say, "How? The bank has already cut its discount rate to 0.5 percent. What more can it do to increase the quantity of money?"
The answer is straightforward: The Bank of Japan can buy government bonds on the open market, paying for them with either currency or deposits at the Bank of Japan, what economists call high-powered money. Most of the proceeds will end up in commercial banks, adding to their reserves and enabling them to expand their liabilities by loans and open market purchases. But whether they do so or not, the money supply will increase.
There is no limit to the extent to which the Bank of Japan can increase the money supply if it wishes to do so. "
The primary dealers also might sell USTs or MBS to the Fed because they are liquidating an asset that belongs to a client, so the client would be credited with M2 and the money supply would expand, even though no real loan was ever made
http://www.hoover.org/publications/hoover-digest/article/6549
"Defenders of the Bank of Japan will say, "How? The bank has already cut its discount rate to 0.5 percent. What more can it do to increase the quantity of money?"
The answer is straightforward: The Bank of Japan can buy government bonds on the open market, paying for them with either currency or deposits at the Bank of Japan, what economists call high-powered money. Most of the proceeds will end up in commercial banks, adding to their reserves and enabling them to expand their liabilities by loans and open market purchases. But whether they do so or not, the money supply will increase.
There is no limit to the extent to which the Bank of Japan can increase the money supply if it wishes to do so. "
The primary dealers also might sell USTs or MBS to the Fed because they are liquidating an asset that belongs to a client, so the client would be credited with M2 and the money supply would expand, even though no real loan was ever made
Tony robbins issues stock market warning 
http://business.tonyrobbins.com/78/an-important-note-of-caution/
Says 'major correction' is in the cards. I'm not so sure, I'd expect something like 900-950 SPX. Problem is even big bears like Bosenberg are calling for $75EPS(I believe that is operating) for the S&P500 companies next year. at 12x multiple(below the long-run avg) and the market is worth 900
Truth is everyone was fooled back in 2008 Q4 2009 Q1 when there was no operating earnings and a $10 print(respectively, reported was -$23 and $7.5 respectively) plus all the depression talk, that send the market to really low levels but its unlikely to go back there unless markets do a major change in what kind of multiple people will pay for stocks(possible given that stocks are in a secular bear market but I would expect that to take many years and meanwhile nominal GDP is rising, although weakly). But I wouldn't count on large decline, even though I own SPY puts for $70 strike, I dont expect to make money just betting on a fat tail but maybe I will get lucky
http://business.tonyrobbins.com/78/an-important-note-of-caution/
Says 'major correction' is in the cards. I'm not so sure, I'd expect something like 900-950 SPX. Problem is even big bears like Bosenberg are calling for $75EPS(I believe that is operating) for the S&P500 companies next year. at 12x multiple(below the long-run avg) and the market is worth 900
Truth is everyone was fooled back in 2008 Q4 2009 Q1 when there was no operating earnings and a $10 print(respectively, reported was -$23 and $7.5 respectively) plus all the depression talk, that send the market to really low levels but its unlikely to go back there unless markets do a major change in what kind of multiple people will pay for stocks(possible given that stocks are in a secular bear market but I would expect that to take many years and meanwhile nominal GDP is rising, although weakly). But I wouldn't count on large decline, even though I own SPY puts for $70 strike, I dont expect to make money just betting on a fat tail but maybe I will get lucky
Another reason people got fooled was that during the 2003-2007 period earnings did well but they should have done even better, profits were coming so fast companies did not got rid of the so called 'corporate fat'(inefficiencies and unnecessary costs). That was reveled during the green shoot rally when corporate earnings started to come back strong on the back of productivity gains.
So part of the decline in earnings of the Credit Crisis was a phantom decline, that earnings buffer was there all along, now that such thing has been reveled there is a floor in the stock market and its quite higher than 666 when people were lacking information and being overly fearful
So part of the decline in earnings of the Credit Crisis was a phantom decline, that earnings buffer was there all along, now that such thing has been reveled there is a floor in the stock market and its quite higher than 666 when people were lacking information and being overly fearful