This post is an experiment — there are now enough people commenting here regularly, that I’m curious what happens if we just say — go at it! Have an intelligent, robust (but civil) conversation in comments.
What say ye?
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UPDATE: JUNE 8, 2006 10:04am
This was very productive — I’m qite please with how well behaved everyone was (unlike the debacle here: Good News / Bad News).
We will likely do this again . . . The question is, how often — once a or twice a week? More? Less?
Dumb idea. I rarely even read the comments. I read the blog primarily for Barry’s thoughts.
Rumour has it that an asteroid is heading towards earth, and NASA are keeping it under wraps.
i guess that’s why you are the first to comment?
think it’s a fine idea for pm thoughts. with the markets seemingly becoming more volatile and dynamic with each passing hour, no reason to shut down the dialogue.
japan off 2% already. looks like we are headed for another healthy wackage. dollar’s rallying. looking for another healthy commodity dislocation to shake things up further. when goldbugs start capitulating, i’ll stick a toe in the water. as for now, this is better than any movie i’ve seen recently.
I would think that we would bounce because everyone was so bearish, but I don’t see or hear of anyone buying anything except at the drug store, and that’s aspirin.
check this out and file it under sign of the appoaching rapture.
http://www.vanityfair.com/features/general/articles/060606fege03
“Today, the money that talks loudest in America belongs to a closely knit, inscrutable group of men who run hedge funds; Greenwich, where increasingly they both live and work, is swarming with them. Of the $1.2 trillion currently invested in hedge funds worldwide, approximately one-tenth, or $120 billion, is now managed out of Greenwich alone, according to Hedge Fund Research, Inc. To put that figure into perspective you should understand how small Greenwich really is: there are only about 23,000 households, a total population of 63,000.”
absolutely astounding.
Finally, i get to raise an issue that’s been burning in my brain for months now:
Surely you’re not *still* listening to those Death Cab for Cutie and Sufjan albums?!?
also, re: that asteroid:
http://www.theregister.co.uk/2005/10/31/nasa_has_a_plan/
Any one following the UVN purchase. Is it possible that they will just keep rolling the bid date out one expiration month at a time to keep butchering the leaches trying to suck a living out of the play?
try the new gillian welch album. she’s pretty haunting. very good live with her beau david rawlings.
“looking for another healthy commodity dislocation to shake things up further.”
Which one(s) ?
“when goldbugs start capitulating, i’ll stick a toe in the water.”
What will you define as capitulating ? $575 with healthy volume ?
“as for now, this is better than any movie i’ve seen recently.”
I know. This is the first melt down that I’ve watched closely. I watched the dot com meltdown, but from afar. This is a real education.
We need a poll, Barry. Here is one from me…
1) Do you think the copper will:
a) hold its current price for the rest of the year
b) decline slowly
c) climb further
d) crash
2) The price of copper is:
a) fully supported by the fundamentals
b) under priced vis a vis the fundamentals
c) now mainly driven by speculation
Thanks
i think in the near term (few weeks) oil will visit 65, gold will visit the 500’s and copper will be back in the (still irrational) 2’s.
i think a healthy rally for the dollar is overdue and it will catch most goldbugs offguard. falling oil will also bring things down. oil and metals have led the market for the last year or so, they should lead us lower. so many of the talking heads have it backwards thinking weak oil is good for the market in the near term. things are extremely fluid right now and any sign of weak demand, albiet rational, is sold down.
great, but scary (are they ever not!), buying opportunities await.
In n’ Out Burger in Los Angeles is the best fast food burger in the USA. I’ll take a double-double animal style any day of the week.
sorry for the motor mouth. just thought you might appreciate a perspective on copper. from don coxes commentary:
“Once again, the term “commodity bubble” was heard in the land, but this
time it was accurate: this year’s 100% rise in copper to $4 wasn’t so much a
statement of economic reality as it was a squeeze play by hedge funds
against the huge hedge positions of copper producers such as Phelps Dodge.
Those big bad calls the miners had made on the future of metal prices
because of their 21 years of commodity misery meant they were now sitting
ducks. The new breed of hedgers plotted to win big at the expense of the
old-style hedgers, assuming that the miners wouldn’t dare add heavily to
their own short positions because of the need to mark their forward
positions to market on their Second Quarter Earnings Statements, in
pursuance of Rule 133. That rule came into force at yearend 2004 for
publicly-traded mining and oil companies. It was a perfect example of the
Asymmetric Age in Investment Regulation: the Completely Unregulated can
mercilessly take advantage of the impact of a tough new rule change on the
Tightly Regulated. ”
good stuff
Copper back in the 2s ? That would be quite a cut. It would hit copper mining stocks hard. Time to buy some puts ?
Peru Copper (CUP) is running hard. Up like 20% in the last bit. Speculation ? Perfect short candidate ?
Thanks for explaining that, Erik. I don’t mean to be a motor mouth either, I’m just fired up about things these days.
So… what would it take (legislation ?) to get the hedges out of copper and oil and how much would that affect price ?
Or will liquidity take care of the hedges ? While the hedges make a lot of money doing this, they cost a lot of innocent people a lot of money too. Copper might be a currency to the hedges, but it is an input cost to others.
And that, my liege, is how we know the earth to be banana-shaped…
just for perspective with copper. when copper was at 2.20 it had completed the biggest bull run from it’s low in 2001 to high at 2.20 in history. every ta on copper showed exhausion from 1.90. at 2.5, 3.0, and 3.5 it’s just plain crazy. the only other comparison would be silver in 1980 at 50/oz. i’m not saying to go out and short the farm on the miners because you never know when consolidation will hit, but the commodity has complete decoupled from reality or even “respectable” parabolic behavior.
a) Open Thread is a good idea
b) Thanks eric, very interesting about copper.
c) If you like Gillian Welch, then you need to become familiar with the other alt.country/folk people around Nashville like Kieran Kane, Kevin Welch, pretty much anybody who did the tribute to Gram Parsons show a few years back that was organized by EmmyLou Harris and Steve Earle.
one of my favorite compilations was the tribute to gram parsons called “return of the grievous angel”.
absolutely beautiful. that’s when i realized elvis costello was truly a crooner.
This whole sell-off feels like a margin debt related event. Everyone was WAY too bullish in the face of all the concerns that we’ve been discussing here for months. BTW, for a good chuckle check out the yahoo finance message boards. They got REAL quite REAL fast.
I’m convinced that the real sell-off is over and that any further downside action is from traders dicking around seeing how far they can push their bets. Either that, or we’re headed MUCH lower.
What I’m fascinated with right now is Ann Coulter… Can you believe her? This will be her swan song. How outrageous.
Every once in a while someone comes around, says something SO STUPID and then totally flames out when they try to defend the undefendable.
It reminds me of a movie I saw this weekend….
“Is that what we are, misanthropes?”
“Heck, no boy! We’re a family!”
http://movies.yahoo.com/movie/1809260459/photo/611686
Greaattt movie if you can stand the violence.
OK, let me see if I got this right. Puts on Peru copper, long Gillian Welch, burgers at In N Out Burger when in LA, buy a place in Greenwich, wait for capitulation in gold at $575, the planet is banana shaped, and we need a survey to figure out what Kudlow’s panel is going to be tomorrow, 75% bullish or 100% bullish. That’s easy. Hey Barry, are you on Kudlow’s show tomorrow?
WOW …………. WOW JAPAN DOWN 460
Hey Barry, I think it is time you stop going on Kudlow. Besides the fact the guy has lost all sense of objectivity and is now purely a cheerleader who belongs on Fox’s Bulls & Bulls, he and his other permabulls (especially the painful to listen to Cody) are always cutting you off or twisting your comments.
Maybe you could return to your usual gig in about a year from now when MSFT is at $17 and ask Cody how his investment has worked out for him. Then you could remind Kudlow that he predicted gold in the 400’s this time last year when it is closing in on $1k.
Also, a couple of months ago Kudlow was saying he has no idea why the Fed keeps raising interest rates. Then the market started to sputter and he was the first to get angry when Neville claimed a pause was in the cards. Guarantee he will be back to questioning the Fed’s policies once this pullback becomes a crash….and why do these Fed people tell Kudlow exactly what they plan on doing, but yet cannot convey a consistent message to the market…..ugh.
gadzooks, erik, all of this music talk reminds me that I forgot to tell my wife that I just bought a John Lennon Limited Edition 12 string Rickenbacker off of ebay a couple of days ago that has “never been played.”
I probably paid too much for it, but will hang it on the wall for a few years and should pocket a couple of grand once it’s time to sell. Sure wish I still had my 1968 Gretsch Country Gentleman around to sell now.
Barry, what’s wrong? Not used to having a lot of people listening to you? Or are you just afraid that the inmates are going to start running this asylum with our comments? Looks like it’s already too late…
Anyway, I hear Copper over $2 is speculation, based on the costs of mining.
We should start a futures contract for when Barry will next appear on K&C.
…or better yet, a Kudlow Panel Sentiment Index. Not like it’ll be worth much.
JPAN down 480 …. OUCH
This place is turning into a Japan/Asteroid watching music forum, with some goldbugs scurrying around
We need guidance Barry!
There must be a few other ideas floating around, like making it easier to read the word verification. Or other short ideas. Or where to get a good steak and cheese on the East coast at 1:20 am
Asia off big time. Is this a crash scenario? These declines already coming off 10-20% declines the last few weeks.
China -2.93%
Hong Kong -1.67%
India -4.02%
Japan -3.19%
Taiwan -3.46%
Europe will be interesting…then we have our markets…
In n’ Out Burger in Los Angeles is the best fast food burger in the USA.
Check out Tommy’s.
And now that the important stuff is said, let me just add:
Gotta love those homebuilders, and GM (until recently) propping up the Dow. Can you imagine how bad things would be right now if GM weren’t in the Dow?
I like the idea of an open thread, as long as it can be kept germane to the topics covered in this blog (economy, music, and whatever else Barry says he wants us to talk about).
Will oil going into the $60s be an excuse to take another 10 or 20% off the energy stocks? Beause they’re all going bankrupt with oil in the $60s of couse.
This has a Refco like forced-selling funk about it. Or maybe it’s all over. Time to ‘mon back on a 6 month CD.
Looks like we are finally gonna get a real poor opening with futures down to the limit. Haven’t seen one of these in a long long time. Viva la volatility. Let all those permaBulls understand the meaning of RISK, TOO MUCH DEBT, WILD SPECULATION, NO-DOC LOANS, and 105% MORTGAGE LOANS. We are always reminded that shorts have to eventually cover. Time to remind permaBulls that margin loans eventually have to be paid back.
yeah, but in the end, the market is just a bunch of pilgrims getting pipe wrenched for buying at the wrong price. the rest is just post game analysis.
Talking of homebuilders, there is a new twist in the plot. A potential class action lawsuit , against Lennar is brewing. I think many others will jump on the bandwagon and it will engulf the whole industry, you heard it hear first. (Well, unless you already read mish’s blog, or Mike morgans..)
Asia off big time. Is this a crash scenario?
This might have something to do with it:
South Korea Unexpectedly Raises Rate to 3-Year High (Update6)
June 8 (Bloomberg) — South Korea’s central bank unexpectedly increased its benchmark interest rate a quarter percentage point to a three-year high, predicting inflation will accelerate. Stocks slumped.
Governor Lee Seong Tae and his board raised the overnight call rate to 4.25 percent, the highest since May 2003, in Seoul today. Three of nine economists surveyed by Bloomberg News expected the decision, while six forecast no change.
* * *
“This may be a mistake,” said Robert Subbaraman, senior economist at Lehman Brothers Asia Ltd. in Hong Kong. “The Bank of Korea is focusing more on the risks of rising inflation, household debt and house prices, rather than on a slowdown.”
* * *
“With global oil prices soaring and the won appreciating fast, the downside risk for the economy has become clear,” Finance Minister Han said today.
Higher fuel costs in a nation which imports almost all its oil may curtail consumer spending and erode company profits, and a gain in the won is making the nation’s goods less attractive to overseas buyers.
Industrial production declined 1.5 percent in April from March. Confidence among South Korea manufacturers fell for a second month in May because of the won’s gains.
The won has appreciated 6.3 percent against the dollar this year. While making imported goods cheaper, a stronger currency makes it harder for South Korean exports to compete with goods from lower-cost China.
The price of Dubai crude, South Korea’s benchmark, has risen 24.5 percent this year. South Korea is the world’s fifth-largest oil importer.
http://www.bloomberg.com/apps/news?pid=10000087&refer=top_world_news&sid=awkAjrZTs_Z8
Alternatively, you heard it here first :)
Definitely go on tomorrow and remind him what he said exactly one year ago:
June 20, 2005, 10:40 a.m.
The Housing Bears Are Wrong Again
This tax-advantaged sector is writing how-to guide on wealth creation.
Homebuilders led the stock parade this week with a fantastic 11 percent gain. This is a group that hedge funds and bubbleheads love to hate. All the bond bears have been dead wrong in predicting sky-high mortgage rates. So have all the bubbleheads who expect housing-price crashes in Las Vegas or Naples, Florida, to bring down the consumer, the rest of the economy, and the entire stock market.
None of this has happened. The Federal Reserve has effectively mopped up excess cash and calmed inflation expectations. That’s why bond rates are hovering around 4 percent, with most mortgage rates about a point higher.
Meanwhile, the homebuilders index has increased 76 percent over the past year, with particularly well-run companies like Toll Brothers up about twice as much. The bubbleheads missed all this because they haven’t done their homework. If they had put a little elbow grease into their analysis, they would have learned that new-housing starts for private homes and apartments haven’t changed much during the past three and a half decades.
So here’s the thing – the ECB is set to raise rates today. Supposed to be 25 basis but some are thinking 50 basis points. A reality given Korea’s surprise 25 basis increase today! The carnage has only just begun if the ECB goes up 50 basis points. I’m thinking the Fed would surely be headed a half point up if the ECB hits 3%. Seems like this round all started when Turkey raised its rates an alarming 175 basis points yesterday.
Just an observation: Seems like – since I can recall — 2-3 weeks before the FMOC meeting our government announces new major spending. Like yesterday’s additional $50B for the wars – now a whopping $450B allocated! I get the feeling that the Bush administration is influencing the Fed’s hand. Anybody interested in doing a table comparing Congressional committee budget increase announcements to FOMC meetings? (announcements dates/announcement $/FOMC meeting dates)
Hey, I’ve got pressure ! It’s not over !
Man I tell you what is most depressing. Is sharing an office floor with a bunch of realtors in Los Angeles. These people have no conception of the shiite storm that is going to hit them. They say the market has come down to a “normal level”, meanwhile they show me a chart of the area w/ inventory tripling since the last two years. I have this one guy who wants to buy a lease to own property on spec in Ohio and fund it with his IRA. I am telling you all these realtors are kool aid drinking Kiyosaki followers. I am not making this up, but these “professionals” play his cash flow game once a month as a work function. Sorry, but I had to vent….
‘Zarqawi… dies in US raid, Sky says’ just flashed across my Bloomberg
NBC News just broke in… Zarqawi dead. Does this affect the markets? Hard to feel bad about that news.
how many times has zarqawi been killed now?
Can anyone recomment well managed Bear Funds? Is BEARX ok? Would SRPIX be a good fund for playing the decline in real estate?
Barry: I also think it is time you stop going on Kudlow. Cody wouldn’t make a good clerk on the floor, he would last about 10 minutes on the corner of LaSalle and Jackson!!! Barry you look good on these shows nice tie, jacket, shirt ,etc. big smile (this is show biz) maybe you should have your own show. Listen to CNBC at the open floor shots (look for old friends) then its off off off for the rest of the day. Turning CNBC off I miss Art Cashin (my hero) shame on me.
I think we’re getting close to a tradeable bottom. S&P 500 stocks new highs getting close to 20.
http://stockcharts.com/h-sc/ui?c=$spxa50r
Charlie Gibson was talking about the market 4 minutes into last night’s ABC World News Tonight.
If not for the news out of Iraqi, I wonder if the mkt drop in the Far East would be the lead story.
Lots of comment here today. I’m surprised that nobody thought copper was fairly priced at $3.50. We must be a bunch of bears here.
Barry, I agree about not going on Kudlow. I find the guy rude. I don’t agree with his points of view and I think he should shut up and let his guests speak.
I don’t like how he used you as the “irrational bear” for the last couple months. And now that the market has shown you to be rational, I think Larry needs to be kicked a bit for how he bashed you.
I don’t understand why Larry thinks the market is so hot. He keeps talking about earnings, but those are backward looking, not forward looking. When the consumer slows down this summer, earnings are going to change dramatically.
Good to hear Zarqawi is gone. I think oil is going to fall a bit now. I wonder how much.
OK, is it just me? After hearing about the incredible In and Out burger, we went to on a recent trip to CA. And it sucked. Dry meat, no flavor…and the fries were inedible. Did we manage to hit the worst location in the world?
By the way, Shake Shack in NYC. Great burgers, every time. One location, so you can’t go wrong. Long lines, though.
“We want to give you the joyous news of the martyrdom of the Mujahed Sheik Abu Musab al-Zarqawi,” said the statement, signed by “Abu Abdel-Rahman al-Iraqi,” identified as the deputy “emir” or leader of al-Qaida in Iraq.
“The death of our leaders is life for us. It will only increase our persistence in continuing holy war so that the word of God will be supreme,” it said.
“Further, we are delighted to welcome to our team the celebrated Democratic consultant Bob Shrum to better help us communicate the true meaning of ‘moral victory’ to the Great Satan in the future, and to teach us more about this word ‘spin.'”
Barry, I’d love to see you as a guest host on Squawk Box. They might even let you get a word in edgewise. And you could talk about the market instead of how every little thing that happens in the world is a big help to Bush, as Kudlow always implies. Talk about the MARKET. There are enough political shows. Your brains and expertise are wasted on Kudlow’s show. I love listening to you. You just need a better forum. And thanks again for this blog!
Barry, I saw your Forbes interview. You were great! It takes courage and conviction to go against the crowd.
I am also a contrarian.
Would you write a thread on China and commodities, and how they’ll survive the next recession? You said on the video you are bullish on China, but look what happened during our 200-01 downturn: commodites and all export-oriented countries in Asia took a big hit.
The 2000-01 global slump was due to a slowdown in US capital spending. (China was spared because consumer spending was still strong)
This next recession will be a consumer spending recession, and China will be hit. How can they fabricate enough internal demand to support their factories?
In and Out is very good, don’t get me wrong, but Hardee’s/Karl’s has the best burgers anywhere. Granted, the small burger has about 80 grams of fat, which doesn’t hurt the taste, but if I really need some cow in the belly that’s where I’m headed.
This not only makes me hungry, but also reminds me of a scene from one of my favorite movies:
Vincent: And you know what they call a… a… a Quarter Pounder with Cheese in Paris?
Jules: They don’t call it a Quarter Pounder with cheese?
Vincent: No man, they got the metric system. They wouldn’t know what the f— a Quarter Pounder is.
Jules: Then what do they call it?
Vincent: They call it a Royale with cheese.
Jules: A Royale with cheese. What do they call a Big Mac?
Vincent: Well, a Big Mac’s a Big Mac, but they call it le Big-Mac.
Jules: Le Big-Mac. Ha ha ha ha. What do they call a Whopper?
Vincent: I dunno, I didn’t go into Burger King. But, you know what they put on french fries in Holland instead of ketchup?
Jules: What?
Vincent: Mayonnaise.
Jules: God damn!
Vincent: I seen ’em do it, man, they f—in’ drown ’em in that s—.
Jules: That’s some f—ed up s—.
A daily overnight open thread might be good. Somewhere that people can comment on things that happen while you sleep.
Does anyone think we’ll hit a circuit breaker today? Or sometime in the next month?
Wow. Emerging markets are puking up a lung.
Anyone think Japan (or anything else) is approaching buy levels w/ this carnage?
Ahh, Pulp Fiction, now THERE was a flik. And speaking of SmellA, In&Out is usually excellent but as a franchise you do get variance. When I want a first rate burger in Lost Angeles I go to Fat Burger; if I want to check out the scene too, I’ll go to the original Tommy’s on the corner of Beverly and Rampart around 2:00 AM: Everyone is there, from scraggy bums (and yes they are down on their knees) to tuxedo clad limosine dwellers, all looking to quell their incipient hangovers with a Tommy’s chili burger.
As for the markets, when I’m this uncertain about unfolding economic scenario — e.g., deflation or inflation — I’ll ride a couple relatively small and inherently contradictory bets (like Dr. Dolittle’s Pushme-Pullyu) to try to get a better feel for what is reacting and otherwise stick with my long-term equity positions, set up for what I think will be a gold rebound this summer, and raise cash. A left-handed way of saying I’ve already done all that, don’t really have a clue what’s coming next, and am waiting to see which way this thing rolls.
To sek, BEARX is okay but if you want an actively mangaged short fund, GRZZX is probably a better choice. IMHO
Great idea. Do it once a week. There’s good substance here, but if you do it too often you’ll get commentors who think they have to say something rather than commentors who have something to say.
Becky,
I’ve guest hosted 3X over the past few years, but since they revamped the show about 6 months ago, I haven’t heard from them.
Maybe I’ll give them a jingle sometime soon.
I agree that Kudlow talks too much about events and politics and not enough about the market. Spin, spin, spin.
CNBC should have a show just on markets and market trends and have it hosted by a person like Barry. Kudlow is useless as far as I am concerned.
Barry, I just can’t stomach Kudlow, even to watch you. Sorry. I glanced at his column in the newspaper this morning and almost threw up. Goldilocks colored glasses.
But I would love to see you on Squawk Box or the other morning show that comes on at 9 a.m. That is about all of CNBC that I watch. Then, after finishing my paper, I hit the internet for some “real” news.
Naw, I’d like to see Barry on one of those weekend Fox Business Block programs trying to out yell the others. This last weekend, Barry could’ve been on toe-to-toe with Wayne Rogers, Jonathan Hoenig, and Lenny Dykstra.
I agree that Barry would be a good Squawk Box guest.
I wouldn’t go on Larry’s show anymore. His ratings must be terrible.
BTW: I have newfound respect for Jim Kramer the last few weeks. Several times he has not had any big bullish stock picks and has, instead spent time education viewers or talking about the market. He should do more that that.