Used car prices are going up – is this a sign of recovery and inflation or a complicated symptom of a deflationary environment? This debate illustrates, perhaps, why the same economic data can be interpreted in opposite manners by intelligent people. – Ilene
Scott Grannis, of the blog California Beach Pundit, is quickly becoming my new favorite blogger to disagree with because he:
Provides intriguing data
Has a strong opinion
Supports his opinion well
These opinions run counter (in almost every case) to mine
In general he believes in the recovery and inflation, whereas I don’t and believe deflation is a real possibility.
One example was yesterday’s post regarding ISM Prices. In his view, the jump in ISM prices (by jump I mean they finally didn’t fall month over month) means deflation is no longer a threat. On the other hand, I believe that may be a result of the temporary jump we saw in commodities. He continues his ‘don’t worry about deflation’ message with yesterday’s post that (again) gave me the exact OPPOSITE initial reaction. Here goes:
According to Manheim Consulting, used vehicle prices jumped 16.4% in the first half of 2009 on a seasonally adjusted basis. Once more we are reminded that a weak economy and rising unemployment do not necessarily create deflationary conditions.
In other words, an increase in the price of used cars (off a large previous fall) proves that deflation is no longer an issue and we should (if anything) worry about inflation.
He adds:
I think the rise in prices also has something to do with the return of money velocity. Consumers retrenched violently in the fourth quarter of last year, hoarding cash and repaying debt in the face of tremendous uncertainty. Money velocity collapsed. Now that confidence is returning, money is getting spent again. The economy is recovering some of the ground it lost.
Using what I refer to as the logic test, this makes no sense. If people are trading down (i.e. increasing demand for a cheaper / used good) this has deflation written all over it (not necessarily for that good, but for the broader economy). My logic and posted in
Following the market opening Tuesday, the Dow traded up 0.36 percent to 15,390.13, while the NASDAQ rose 0.17 percent to 3,502.38. The S&P was also up, gaining 0.30 percent to 1,671.30.
Top Headline Home Depot (NYSE: HD) reported an 18.5% increase in its Q1 earnings and lifted its 2013 earnings forecast.
Home Depot's quarterly profit surged to $1.2 billion, or $0.83 per share, versus $1 billion, or $0.68 per share, in the year-ago quarter.
Its net sales climbed 7.4% to $19.1 billion from $17.8 billion, while comparable-store sales rose 4.3%. However, analysts were estimating earnings of $0.76 pe...
Here's the latest weekend update from Serge Perreault, a Chartered Professional Accountant and market technician located near Montreal, Canada. Serge has been following the U.S. market in a series of weekly charts. Here is his update on the S&P 500.
The S&P 500 bounced off its uptrend resistance and paused its ascension, on average volume and on falling momentum.
A break of this week's low (1636) would confirm a correction in the direction of the EMA10 (1603).
While some, we are sure, will view this brief clip as partisan showmanship by Representative Steve Pearce, the questions he asks Treasury Secretary should surely be responded to in some manner that is anything but the typical perfunctory shrug these matters normally garner. From Lew's apparent disbelief that the IRS Audits debacle was in any way 'political' to Lew's "waiting for the investigation' on Jon Corzine's misappropriation of funds, and finally to the "War on the Poor" that Pearce describes the current administration's policies (for the benefit of Wall Street); these few minutes are well worth some time as we 'remember' this weekend.
Via google translate from Corriere Della Sera, Beppe Grillo is in favor of a "Referendum on the Euro Within a year" "Europe needs to be rethought. We consider just one year of information and then hold a referendum to say yes or no to the euro and yes or no to Europe. " Beppe Grillo to ride a strong theme of the last election campaign the 5 Star Movement. "Europe on the euro and the British teach us democracy. No party can claim the right to decide for 60 million people. "
"I want to go to Europe and re-discuss a Plan B to be in five years, "added the leader M5S, explaining:" When we ...
ANF - Abercrombie & Fitch Co. – Shares in teen retailer, Abercrombie & Fitch Co., are getting hammered today, down 10% at $48.92 in early-afternoon trading after the company reported a wider-than-expected first-quarter loss and missed topline estimates, lowered its full year earnings forecast and said same-store sales would be down slightly for the rest of the year. A review of pre-earnings report activity in Abercrombie options yesterday indicates one trader was prepared for the pullback today. It looks like the strategist initiate...
To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...
While the S&P 500 has had quite a year already the Nikkei has been the story of the globe as they are performing acts of central banking that even put the U.S. Fed to shame. And Japan's central bank can buy ETFs and REITs directly per their charter versus the U.S. bank. Combined with a yen in free fall it's been a heck of a move for the Nikkei since last November. I noted last week we were seeing extremely rare weekly and monthly type overbought readings on bo...
The market went through some gyrations on Wednesday in reaction to Fed Chairman Bernanke’s testimony before the Joint Economic Committee. He first defended continued quant easing by warning, “A premature tightening of monetary policy could lead interest rates to rise temporarily but also would carry a substantial risk of slowing or ending the economic recovery.” Stocks dutifully rallied and all major indexes hit new intraday highs.
But alas, consensus is apparently not a given over the longer term. The minutes hinted that a tapering off could start sooner, “A number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting if the economic information received by that time showed evidence of sufficiently strong and sustained growth.” So …...
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This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options.
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Reminder: Craigzooka is available to chat with Members regarding his virtual portfolio performance, comments are found below each post.
By Craigzooka
I am going to share with you how I manage my IRA and the power of reducing your cost basis. My goal each year is a 20% return in my IRA. Sometimes I make it and sometimes I don't, but I believe that all of my success is due to reducing my cost basis. To illustrate the power of reducing your cost basis here are some trades we did last year. These trades are taken from an educational portfolio we ran in a paper-trading account for a little more than a year.
We bought RIG on 5/15/2012 for $44.13, sold it on 1/18/2013 for $46 but booked a profit of $1,154.
We bought MT on 1/4/2012 for $19.24, sold it on 12/21/2012 for $15 but booked a profit of $454.
We bought CHK on 1/27/2012 for $21.93, sold it on 10/19/2012 for $18 b...
Stock market posts another record setting week, but the big news came after Friday’s close.
Courtesy of NASA
The stock market put on another record setting show with the Dow Jones Industrial Average (NYSEARCA:DIA) closing at a record high 15,118 and the S&P 500 (NYSEARCA:SPY) closing at 1633.70, another all time closing high.
For the week, the Dow Jones Industrial Average (NYSEARCA:DIA) gained 1%, the S&P 500 (NYSEARCA:SPY) climbed 1.2%, the Nasdaq Composite (NYSEARCA:...
Reminder: Pharmboy is available to chat with Members, comments are found below each post.
Well, well, well....it is good to know that there are others in the scientific arena who believed that YMI Bioscience's data (cough - Gilead) is a better drug than Incyte's Jakafi. Now, the definitive data are still unknown, but there was enough evidence from a Phase 2 trial to take a small risk for a huge reward. So, let's forget about Apple (AAPL), and do nothing but biotechs from now until Congress passes universal health care coverage for prescriptions....and drive the prices down so that research and development is no longer feasible to conduct in the US. Even Seattle Genetics (SGEN) has been on a tear as of late...
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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