jlounsbury59

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349 Comments

    • Fri Dec 5th 09:41 AM
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      Rating: 0 0
      Commented on:
      Housing Affordability Reaches All-Time High
      In spite of critical comments of others, this is a worthwhile post. If User 515447 knows of data from before 1988, perhaps he(she) could post an article. The hand, Wandering Wayfarer and nobull: good comments.

      We have lost nearly 2,000,000 potential home buyers in the past year (lost employment). This is also a factor in lack of demand for houses. Not only those who lost jobs, but millions more with fear of losing employment and you have a reduction of 5,000,000 or 10,000,000 (or more) in the potential home buyer pool. The comment by nobull relates to this problem.
      View article »
    • Fri Dec 5th 08:43 AM
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      Rating: 0 0
      Commented on:
      Using the 5-10-20 Strategy to Trade the S&P 500 and Nasdaq 100
      Thanks for the thorough follow through on this subject.
      View article »
    • Thu Dec 4th 13:18 PM
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      Rating: 0 0
      Commented on:
      Wall Street Breakfast: Must-Know News
      My Boo Boo - I reversed the descriptions of bankruptcy law chapters.

      Chapter 7 is dissolution

      Chapter 11 is reorganization

      I'm surprised nobody jumped on this error. Either (1) nobody read the comment or (2) nobody understood that it was an error or (3) nobody cares.


      On Dec 04 10:38 AM jlounsbury59 wrote:

      > Bankruptcy Question - - -
      >
      > Reorganization bankruptcy (Chapter 7) usually wipes out common stock.
      > The exact situation depends on the final court decree. It is possible
      > for some sort of equity to remain, but that is very uncommon. <br/>
      >
      > Dissolution bankruptcy (Chapter 11) always discards all equity. Debt
      > is settled by distribution and liquidation of assets.
      View article »
    • Thu Dec 4th 10:38 AM
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      Rating: 0 0
      Commented on:
      Wall Street Breakfast: Must-Know News
      Bankruptcy Question - - -

      Reorganization bankruptcy (Chapter 7) usually wipes out common stock. The exact situation depends on the final court decree. It is possible for some sort of equity to remain, but that is very uncommon.

      Dissolution bankruptcy (Chapter 11) always discards all equity. Debt is settled by distribution and liquidation of assets.
      View article »
    • Thu Dec 4th 10:25 AM
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      Rating: 0 0
      Commented on:
      Answering Readers' Questions: Shorting the 5-10-20 Trading Strategy
      Michael - - -

      Thanks for addressing the questions. One question you didn't cover is whether T+3 delays for ETFs would impact results. If you haven't done the analysis, can you at least give your sense of feeling on the matter. If T+3 has significant negative impact, two strategies would have to be considered:

      1. Maintain a sufficient money market balance to cover the T+3 delay. Since this would be 50% of the account balance, returns would be reduced to 1/2 on the stock portion plus money market return. To mitigate this reduced return, do you think a strategy could be devised that would enter and exit positions in 50% legs, attempting to be 100% invested most of the time, but making a 50% move when the approach to a signal is anticipated?

      2. Trade in a margin account so that margin loans would cover the three days. This would not impact the size of the index investment that would otherwise have been made (non-margin account).

      Another question relates to ETFs. Aside from friction (transaction costs) and T+3 considerations, are there any other factors to be considered for applying the strategy to ETFs?
      View article »
    • Wed Dec 3rd 13:17 PM
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      Rating: +1 0
      Commented on:
      The Failed Subprime Clampdown
      g7enn - - -

      Good comment. We have had the perfect storm of misguided social engineering, ineffective regulation, opportunistic greed and an economically illiterate populace (including our elected officials).

      Free market philosophy? It has been too much free wheeling and not enough free will.

      Too much government? Some say too little government. Both positions are wrong. The problem is not the size of government; the problem is the effectiveness (actually, the lack of effectiveness) of government. It is perhaps too idealistic, but, in addition to national security, we desperately need a government that provides an environment for individual and group initiative. We need a government that coordinates social structures needed for societal improvement, not a government that provides all social services. We need a government that does an effective cost/benefit analysis of all tax money expenditures. We need a government with enough intellectual capacity and curiosity to evaluate unintended consequences of all initiatives. You say that would gridlock government? I say not gridlock but well considered actions would result.

      We just voted for hope. Is the ideal I describe too much to hope for?
      View article »
    • Wed Dec 3rd 11:09 AM
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      Rating: +2 -1
      Commented on:
      Listening to the President-Elect
      It took a Republican (Nixon) to open a dialogue with Communist China. Will it take a Democrat to establish fiscal responsibilty?
      View article »
    • Wed Dec 3rd 11:03 AM
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      Rating: 0 0
      Commented on:
      Wednesday Outlook: Commodities, Emerging Markets
      I much enjoy your chart analysis. Please continue to post.
      View article »
    • Wed Dec 3rd 10:56 AM
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      Rating: +1 0
      Commented on:
      Arms Index Climax May Signal Market Bottom
      Bill - - -

      Some of the skepticism other commenters have expressed is related to perspective. The TRIN is a decent short-term indicator for traders, but has little relevance for longer-term investors.
      View article »
    • Wed Dec 3rd 10:46 AM
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      Rating: +1 0
      Commented on:
      Is the Federal Reserve Pushing on a String?
      Edward - - -

      Inflation is the only solution? You may be right, not because inflation is deliberately planned, but because the target of exactly replacing written down assets on financial balance sheets with new money is extremely hard to hit. If you fall short the crisis deepens so the liklihood is overshoot. The immediate result of too much "free" money (money not in reserves on balance sheets) will be inflation.

      Very prescient article with an interesting thesis.
      View article »
    • Wed Dec 3rd 10:27 AM
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      Rating: +2 0
      Commented on:
      U.S. Stock Market Returns: What's In Store?
      Excellent article. However, one thing is not clear to me. (Maybe it is there and I am missing it?) Are the returns tracked index returns (not including dividends) or total returns? If they are index returns, the differentiation would be more extreme for total returns.

      Some might say this work offers no more than the adage: buy low, sell high. My view: that attitude is similar to someone taking a long hike through the wilderness without a map and compass. Things may go well for a time, but when you become disoriented you will regret lack of reference. What is low and what is high? Refer to the map and compass.
      View article »
    • Wed Dec 3rd 01:26 AM
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      Rating: +1 0
      Commented on:
      12 Observations on Current Market Stress
      Great article, Dave.

      As The Hand posits, the idea Bernanke has put forward to increase liquidity by the Fed buying treasuries is a way of retiring market held public debt. It is potentially very inflationary because it is monetizing the national debt in two ways:

      (1) It reduces the national debt by putting new money into circulation (buying up debt).
      (2) It the new money devalues the existing currency reducing the real value of the remaining debt

      It is likely to work in the very short term as the Fed purchase reinforces the flight-to-safety demand for treasuries, driving bond prices even higher. But this has a limited useful life because it simply drives the dollar level higher against the dike and hastens the day that the dike breaks. What I have called The Great Bond Bubble of 2008-2009 will burst with even greater force. And if the Fed uses the sale of treasuries in the future to fight inflation, it will be buying back what it has sold at much lower prices. So yes, Steve, the Fed does get to "keep" the interest, but it will be a pittance in comparison to the loss of principal.
      View article »
    • Wed Dec 3rd 00:55 AM
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      Rating: +1 0
      Commented on:
      NBER Eggheads Finally Proclaim a Recession
      Prof. Frankel - - -

      Thanks for your detailed explaination of the nber process.

      The Hand - - -

      You make some good points backed by excellent data. I would pose one question, based on a simile comparing a recession to a flood:

      If you are to designate the start of a flood, does it begin when the water reaches your ankles or when it goes over your head?

      Obviously, the flood is evident when the water goes over your head. I would maintain, however, that you can not designate the start of the flood until a flood is evident - that point in time you go under (or shortly before you actually go under). It is only then that you can look back and designate the start of the flood at the point the water started to rise. There may be many occurences of water over the ankles when the water recedes and no flood follows. So declaring the start of a flood requires that it be proven a flood is occurring (has occurred).

      Now let's complicate the simile. If the water rises over the ankles and then to the knees and then recedes back to the ankles, and then finally rises above the knees and continues on to over the head, didn't the flood start still start when the water first began to rise?

      The situation you describe, Steve, is like the flood that had water rise and fall back somewhat before really becoming deep. Your argument is analogous to designating the start of the flood when the water is much deeper than is the case with the nber process. The nber process looks back after the deep water is confirmed to define when the first rise in water occurred that was not interupted by a complete reversion to dry land.
      View article »
    • Tue Dec 2nd 12:47 PM
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      Rating: 0 0
      Commented on:
      10 by 10: A New Way to Look at Dividend Yield and Growth
      Hank S. - - -

      David specifically mentions that dividend reinvestment would improve the return. I believe the reason David has not attempted to calculate the effect of dividend reinvestment is purely a practical matter: To do this calculation requires assumptions about the price of the stock during the reinvestment period. There are nearly an infinite number of possible price paths over the time period (40 calender quarters). The only possible study would be to review a number of stocks in retrospect (a ten year history).
      View article »
    • Tue Dec 2nd 12:23 PM
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      Rating: 0 0
      Commented on:
      Sell-Side Sentiment: No Bullish Sectors
      Paul - - -

      I find your article very obtuse. You should supply more explaination of this chart for those who, like me, are not familiar with this First Choice metric.
      View article »