Tuesday, September 1, 2009

Ski jumping with the hair of the dog

(I don't believe I've ever heard the word recovery used more than I have in the last few weeks. But that was August news ... welcome to September. -AM)

(Its' always illuminating to watch the rats. -AM)

FT Alphaville:

Charles Biderman, CEO of investment-flow research firm Trimtabs, told Bloomberg viewers his firm’s data showed that insider buying had come to a virtual standstill in August.

'The insider buying-to-selling ratio was at a level of 30 times in August — a number Trimtabs has never seen despite tracking levels in this space since 2004.

And it wasn’t just that insiders weren’t buying, Biderman said the above applied to corporate buying in all its shapes and forms — from buybacks to acquisitions. As he said, 'Companies are saying they don’t want to buy stock at any price, they’re sellers. I have no idea where the money is coming to keep prices from plunging.' (Don't bite the invisible hand. Don't doubt it either. -AM)


Jones’s Tudor Investment Corp., Clarium Capital Management LLC and Horseman Capital Management Ltd. are taking a bearish stand as U.S. stock and bond prices rise, saying that record government spending may be forestalling another slowdown and market selloff.

'If we have a recovery at all, it isn’t sustainable This is more likely a ski-jump recession, with short-term stimulus creating a bump that will ultimately lead to a more precipitous decline later. Falling stock prices will strengthen the currency by forcing leveraged investors to sell equities to pay down the dollar-denominated debt they used to finance those trades',says Kevin Harrington, Clarium managing director.'The housing data isn’t as rosy as some see it. As existing U.S. home sales rose 7.2 percent in July from the previous month, distressed deals including foreclosures accounted for 31 percent of transactions according to the National Association of Realtors.

Tudor, the Greenwich, Connecticut-based firm started by Jones in the early 1980s, told clients in an Aug. 3 letter that the stock market’s climb was a “bear-market rally.” Weak growth in household income was among the reasons to be dubious about the rebound’s chances of survival..

'High unemployment, lower wages and potential missteps by policymakers around the globe may stifle economic growth in 2010", says Tudor." Also, toxic assets remain on balance sheets and credit growth is likely to be subdued for a long period.”

Banks are reporting better earnings because they haven’t been forced to account for their losses yet, Clarium’s Harrington said.

“We haven’t fixed the problem,” he said. “We’ve just slowed down the official recognition of it.”

(Bloomberg says these macro hedgies are going against Goldie. Give me a break, Goldie is short equities/long dollar right now no doubt. -AM)

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