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Monthly Archives: February 2017

JPM wants relief on bank regs

There’s an excellent and very timely article in the FT today (https://www.ft.com/content/441be482-fdcb-11e6-8d8e-a5e3738f9ae4).  JP Morgan’s CFO is asking for relief from burdensome capital requirements.   Banking is a pro-cyclical business — when the economy is good banks do very well  / when the economy is soft banks do poorly. Banking is a levered bet on interest rate spreads (among other things). So when the economy […] Read the rest of this entry »

Margin debt record!

Earlier this morning I did a blog post wherein I wrote that I expect February NYSE margin debt would set a new all-time record (over half a $T!).  A few minutes ago, the NYSE posted January’s margin debt data at $513B, setting a new all-time high.  February’s will be higher than this and set another new all-time record ($516-520B). Margin debt usually sets a […] Read the rest of this entry »

Will Fannie & Freddie get it right this time?

Fannie & Freddie were bailed out in 2008 because they were insolvent and were contributing to the housing crash. In an email conversation with someone that used to work at Freddie Mac, my contact mentioned “Even in mid 2007, they were talking about how great the credit spreads were and that meant huge opportunity. The two companies that owned over half the mortgages in […] Read the rest of this entry »

When no one believes your balance sheet

When no one believes the asset valuations on your balance sheet, you get a stock price reflective of this. Deutsche Bank has a price to book of  0.41 Citi has a price to book of 0.73 Bank of America has a price to book of 0.92 When you are believed, you get a stock price more like this: Wells Fargo price to book 1.46 […] Read the rest of this entry »

Banks prepping for a storm

This chart shows that bank lending tends to stall in recessions. A closer look…   And now the most recent data…. Notice the dip in early 2011? That was the last time loan growth contracted meaningfully. It was also a period when GDP growth fell into contraction. Q1 2017 will not post a negative GDP growth print. ECRI’s WLI is far too high for […] Read the rest of this entry »

Panic insider selling

Insiders are continuing to accelerate their pace of selling. It has reached full-on panic. Last week saw insiders panic sell their shares at a pace 11.47X their buy pace on the NYSE.  Not broad enough? Across all U.S. exchanges, insiders panic dumped at an 8.02 pace last week.  Not long enough? Across all U.S. exchanges and for the past 8 weeks (since the start […] Read the rest of this entry »

Chicago Fed: economy has been stalling over past year

The latest Chicago Fed data shows the U.S. economy growing but approaching stall speed over the past year. With no new central bank sugar bombs and no new Trump tweets about upcoming unfunded tax cuts, the U.S. economy will fall into recession in Q2. I’m betting someone will keep the party going a little longer, stalling the recession entry until Q3. For reference purposes, […] Read the rest of this entry »

Advisor Sentiment: euphoria. Impact on Greedometers.

The trailing 7 wk avg of advisor sentiment is nipping at 3.5 bulls to bears (Investors Intelligence advisor sentiment data). This is the highest annual opening 7 week stretch in the 13+ years of advisor sentiment data I have.  2nd place goes to 2015 (the opening months of Greedometer 10 sequence). Advisors tend to be wildly bullish near secular peaks and wildly bearish near […] Read the rest of this entry »

Insider selling approaching panic level

The past 7 weeks (first 7 weeks of this year) have seen insiders selling 5.5X as many shares as they bought. This is high enough & long enough that this data stream on its own should get your attention. I don’t rely solely on this data stream, but it is an input parameter in the Greedometer as well as mini Greedometer algorithm.  Insider sells […] Read the rest of this entry »

Fake economic news from the BEA

Next week will see the 2nd estimate of Q4 GDP growth from the BEA (branch of the Commerce Department). You should not place much weight in the report.  Here’s an update on BEA overstating real GDP growth.  This chart shows BEA 1st, 2nd, 3rd, and current estimates (years after the fact) for real GDP growth in Q3 of each year from 2000 through 2016. […] Read the rest of this entry »