http://alhambrainvestments.com/correction-or-more/ Independence is its own reward Tue, 07 Feb 2012 22:01:41 +0000 http://wordpress.org/?v=2.6 http://alhambrainvestments.com/correction-or-more/#comment-1725 Views and News for Tuesday | Finance HM - Finance and Forex News Thu, 30 Sep 2010 02:02:22 +0000 http://alhambrainvestments.com/?p=5558#comment-1725 [...] Markets overreacting to issues in Europe and China and overlooking economic [...] [...] Markets overreacting to issues in Europe and China and overlooking economic [...]

]]> http://alhambrainvestments.com/correction-or-more/#comment-473 Avery Zelaya Sun, 21 Feb 2010 19:43:30 +0000 http://alhambrainvestments.com/?p=5558#comment-473 Thanks for another fab article - I Thanks for another fab article - I

]]> http://alhambrainvestments.com/correction-or-more/#comment-431 Joseph Y. Calhoun, III Wed, 10 Feb 2010 20:51:25 +0000 http://alhambrainvestments.com/?p=5558#comment-431 Rantly: You'll notice that I haven't said anything about the duration of the expansion I expect. I have a lot of the same concerns as you concerning the durability of any recovery. Having said that, I think you have to wait to see how policy changes. Personally, I think we have to embrace the rebalancing of the global economy. The US has a place in the big scheme of things but it isn't on the consumption side. Our days as consumer of last resort are over. We should be changing policy to shift the tax burden to consumption and away from capital and income. We can't restore the status quo and we shouldn't be trying. Rantly: You’ll notice that I haven’t said anything about the duration of the expansion I expect. I have a lot of the same concerns as you concerning the durability of any recovery. Having said that, I think you have to wait to see how policy changes. Personally, I think we have to embrace the rebalancing of the global economy. The US has a place in the big scheme of things but it isn’t on the consumption side. Our days as consumer of last resort are over. We should be changing policy to shift the tax burden to consumption and away from capital and income. We can’t restore the status quo and we shouldn’t be trying.

]]> http://alhambrainvestments.com/correction-or-more/#comment-430 Rantly McTirade Wed, 10 Feb 2010 20:13:54 +0000 http://alhambrainvestments.com/?p=5558#comment-430 I was speaking in an economic forecasting context(generally not so useful), not a portfolio management one; the correlation is often uncertain. The US has been in relative decline for 40 years; completely normal given the massive relative advantage it had @ the end of WW2. Trying to avoid or reverse that inevitability, instead of intelligently dealing with it, has brought unnecessary travails. On ISM again, it typically has been a good directional indicator for the US economy, though again the magnitude of change has had a clearly looser link. This is because the manufacturing sector has been the 'swing' factor in the US economy for decades as the service sector has generally ploughed ahead at a very steady pace with minimal swing in pace in either direction. However in the current cycle, we've had a what looks to be permanent elimination of service sector activity, notably in a) financial services(I'll skip detail; its obvious) and b) retail(again, we've had a huge drop in retailing with multiple small-medium chains closing completely-as well as lots of individual stores- and store closures by nearly all major retailers as well. This has left a ton of excess capacity out there, primarily in retail and office(for financials) space and in unemployed people; I think one big reason the 'reemployment' process has been so hard is that retailing was the 'fallback' job source for those who lost jobs in previous recessions, especially the last couple. This overhang is going to be a drag on economic upside for some time; ISM services has seen a much less vibrant sequential rebound so far than the manf. one-since services is a good 4-5x bigger than manf., I wonder why the financial media hasn't pointed this out more(sarcasm drips). And since manf. remains in a very long term trend of shrinking employment, even a semirenaissance in US manf-which I think has a good shot of occuring in the coming decade-will not provide a significant job boost. To use a wrestling analogy, a NCAA champ @125 lb probably can 'fireman carry' , at least for a while, a quality 150 lb class wrestler;whether he can do it to a Sumo champ who's flat on top of him is different. I was speaking in an economic forecasting context(generally not so useful), not a portfolio management one; the correlation is often uncertain.
The US has been in relative decline for 40 years; completely normal given the massive relative advantage it had @ the end of WW2. Trying to avoid or reverse that inevitability, instead of intelligently dealing with it, has brought unnecessary travails.
On ISM again, it typically has been a good directional indicator for the US economy, though again the magnitude of change has had a clearly looser link. This is because the manufacturing sector has been the ’swing’ factor in the US economy for decades as the service sector has generally ploughed ahead at a very steady pace with minimal swing in pace in either direction. However in the current cycle, we’ve had a what looks to be permanent elimination of service sector activity, notably in a) financial services(I’ll skip detail; its obvious) and b) retail(again, we’ve had a huge drop in retailing with multiple small-medium chains closing completely-as well as lots of individual stores- and store closures by nearly all major retailers as well. This has left a ton of excess capacity out there, primarily in retail and office(for financials) space and in unemployed people; I think one big reason the ‘reemployment’ process has been so hard is that retailing was the ‘fallback’ job source for those who lost jobs in previous recessions, especially the last couple. This overhang is going to be a drag on economic upside for some time; ISM services has seen a much less vibrant sequential rebound so far than the manf. one-since services is a good 4-5x bigger than manf., I wonder why the financial media hasn’t pointed this out more(sarcasm drips). And since manf. remains in a very long term trend of shrinking employment, even a semirenaissance in US manf-which I think has a good shot of occuring in the coming decade-will not provide a significant job boost. To use a wrestling analogy, a NCAA champ @125 lb probably can ‘fireman carry’ , at least for a while, a quality 150 lb class wrestler;whether he can do it to a Sumo champ who’s flat on top of him is different.

]]> http://alhambrainvestments.com/correction-or-more/#comment-429 Joseph Y. Calhoun, III Wed, 10 Feb 2010 13:25:22 +0000 http://alhambrainvestments.com/?p=5558#comment-429 alex: Look at forward looking indicators such as the ISM or the Treasury curve or credit spreads. Look at corporate profits, particularly of the financial companies which benefit enormously from the steep yield curve. There are plenty of positive indications out there if you are willing to consider them. Your comment is similar to ones I've noted on other sites such as the Big Picture, Barry Ritholz' site. It almost seems as if some are so wedded to the US in decline scenario that they become almost irate at anyone who dares to challenge their view. That's a dangerous attitude for an investor. You have to remain open to the possibility that things are not as you perceive them to be. I certainly am. alex: Look at forward looking indicators such as the ISM or the Treasury curve or credit spreads. Look at corporate profits, particularly of the financial companies which benefit enormously from the steep yield curve. There are plenty of positive indications out there if you are willing to consider them. Your comment is similar to ones I’ve noted on other sites such as the Big Picture, Barry Ritholz’ site. It almost seems as if some are so wedded to the US in decline scenario that they become almost irate at anyone who dares to challenge their view. That’s a dangerous attitude for an investor. You have to remain open to the possibility that things are not as you perceive them to be. I certainly am.

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