Whether they are wrong or right, it doesn't matter. The FED is huge, so when they QE , you want to be long stocks in general. When they reverse QE or tighten, you want to start selectively shorting the most sensitive to interest rates, like levered up Mortgage REIT's will get killed, easy money shorting this at 33-36, as we approach Phase II, FED Fund Increases, Shorting at $22-23 will be easy money again down to $10-12, and then when Prime Rate Increases Shorting at $10-12 will be easy money down to $1 - $2, if these guys have a rich godfather like Uncle Sam, like fannie and freddie, then they might survive, but they will be only a shell of what they were originally.
This is a FED gold mine. They have already announced what their plan is, they will follow through almost 99-100% certain. Sure looser if you bet against them.
Don't fight the FED. The FED warns well in advance and you can short all Mortgage REIT's on any rallies, especially this "Kain was buying REIT's based on valuation". I was shorting at 22.45 and over, easy money these fake hope rallies. REIT's are dying, slowly by a thousand swords. QE is ending in June. First FED fund rate hike will be in Summer when everyone is out on the lake. FED always warns in advance. Yellen's Wealth redistribution will be in full swing, as stock market slowly looses, passbook holders will slowly gain. DON'T FIGHT THE FED.....short mortgage convexity, easy money.
The market is very very very unstable. Price appreciation has been narrrowly skewed and mostly driven by margin debt. The volume and buying /selling is logrithmic specific, hense any skewed action up or down will be sharp. Unless someone meddles with liquidity then we will have a slow drawn out bear market. Demographiics is now coming into play, not much the FED's can do is watch and try to blame eachother. VERY UNSTABLE CONDITIONS, VERY HIGH RISK OF LOSSES.
June, 2014, is what the FED is saying on their website for first FED FUND RATE increase. If everything is on schedule, which it looks like, unemployment just fell to 6.6%, close enough to 6.5%.
The markets are very skewed and very unstable, this condition is very indicative of a topping action right after a Peak in a long term bull market. It is all downhill from here, whether this happens with a CRASH of 70-80% downside or a 10-12 year bear market like we had from 1970-1982. Anyway, markets will revert to the mean quickly or over time.
The FED is getting ready to raise the FED Fund rate. You had better get out of interest rate sensitive convexity type stocks, you will get slaughtered.
The numbers are aligning it is T(c) +24 and counting. The instability in the market internals is building. World markets are breaking down and there is more sell orders that buy.
A early 2014 crash is highly probable, this doesn't mean it will happen on a specific day, but analytical correlation analysis is targetings certain dates, like January 17 and February 14. You saw what happened on Jan. 17, get prepared for February 14.
Noted market-timer Tom DeMark did not sound optimistic about the prospects for stocks in an interview with CNBC this morning.
DeMark compared today's market to that preceding the Black Friday crash in 1929.
"When the market made its high on September 3, , there were 23 subsequent trading days where the Dow Jones Industrial Average had a short-term bottom," he said.
"23 days aligns with the low end on Monday. And subsequent to that, we had a four-day rally, and then the market unraveled — went down 48%. We are currently at that inflection point. Like I said, so far, everything is aligned. We think the next two to three days are extremely critical."
Good people should not be in the market at all, save yourselves before its too late, take this as a simple message from someone who cares.........GET OUT AND STOCKPILE CASH.....THANK ME LATER.
I am at the Olympics.....what do you want? Short this on any hope rallies. The spring thaw will bring pent up demand for mortgages and rates will rise, so will the draw down of the QE crack high. Stay in touch with reality, don't pay much heed to a CEO who said he was buying at 33-36 last year in a stock buyback, six months later the stock was down to 18-19. This is same guy that was loading up tens of thousands of share in the 50, 40, 30 20 in Fannie and Freddie.......I wonder how those bargain under book values are now. They are below low single digits.
A few years back, thought is was undervalued, I am assuming that. Why would he buy something he said publically it was undervalued, when his experience and wealth of knowledge knew otherwise? THAT IS THE KEY QUESTION HERE.
If a mortgage CEO was asked to assume he is no longer dependent on running a Mortgage REIT, what would he do with his own money assuming he had no self interest in the firm.
Every algorithm I have run, says you should be selling not buying.......volatility, loading up on MBS at record prices and record low yields is a sure NON-VALUE proposition. Don't be fooled by the 20% off SALE sign on an asset that is overpriced by 500-600%.
It like hearing the Cadillac dealer saying his new STS, with all the extra's is valued at $89,000 but is is a steal at $71,200........a year later you will be lucky to get $25,000 cash for it.
Sounds simple, but when a CEO starts a Circus Act, to promote stock valuations, TIME TO GET OUT ON ANY STRENGTH. History is filled will "ADVERTISED VALUES".. Remember Goldman Sachs buy JCP right before Christmas, as time passes, reality set in and JCP tanks.
IF IT WAS SUCH A STEAL, IF YOU FOUND SUCH A BARGAIN, LIKE A BOX OF GOLD COIN SITTING ON YOUR FRONT LAWN WITH NO ONE AROUND, WOULD YOU REALLY GO OUT AND TELL YOU NEIGHBORS WHAT A GREAT BARGAIN IT IS, WHILE IT SAT THEIR.
This is the same value tactic used by Costco and Sears to sell those $299 sets of pure stainless carving knife sets at Christmas, but you can have them now at $49.99, right after the demonstration.
SELL ON STRENGTH......ACCUMULATE CASH....
Asia is collapsing again as we speak, all seller no buyers, a route of a lifetime is occuring. WATCH OUT FOR THE MARGIN CALLS, RECORD STOCK DEBT OUT THERE, ALL TIME RECORD HIGH IN STOCK MARGIN DEBT.
MSCI's broadest index of Asia-Pacific shares outside Japan fell about 1.4 percent at its lowest level since early September.
Japan's Nikkei stock average (NIK:^9452) lost 2.9 percent, extending its declines into a fourth session.
This looks bad....before it's too late, I want to note, I warned the folks back at the market peak in 2007 just before the collapse started, back then like now, the forward operating earnings predictions are not reliable indications of value. Margin debt is at an all time high, higher than it was in the late 1990's before the bubble burst, THIS TIME IT IS MUCH MUCH MUCH BIGGER. Even if valuations drop 50% from now, we would still be double the valuation of the historic norm. What this means is a DOUBLE 50%, THEN ANOTHER 50% FROM THAT POINT IN TIME. Those are my two milestones T(c-50%) and T(c-75%). 50% times 50% = 75%.
It is still not late to get out......before its too late........another milestone is approaching, I would like to call this the St. Valentine Day Massacre, we are only 10 days and counting, the COUNTDONW STARTS, T(v) -10 and counting.
Wait until the earnings announcement and the footnotes, sad to say, these guys just plowed millions to hedge for higher rates and shorten duration, guess what, rates are now falling, they will loose almost as much is not more. THESE ARE VERY UNSTABLE TIMES, hedging will kill these REIT, especially the leveraged ones. THIS IS SO FUNNY......FOR THOSE WHO SOLD AT $36, FOR THOSE WHO DIDN'T YOU HAVE MY DEEPEST SYMPATHIES, I AM MOVING MY CASH INTO safe Turkish Money Market Account at 12%. Why Mustaq's Building & Loan, in Afghanistan is paying 5% on a money market accounts guaranteed by the government.
I was talking Euro Treasuries, mainly Yugo's, and Turkey's, the currencies are in free-fall and you can short their treasuries, they may be headed to 20-25%, before the unstable turbulance is over. THE RISK to US Treasuries ?????????????? when the worlds sovereign debt goes over 10% everywhere, I don't think money will flow to the USA. Smart money is already moving, the suckers are going to be left in US debt. along with all the REIT's. These are very unstable times, you had better understand currency stability etc. A weak economy has nothing to do with devaluation relative to other currencies. US dollar is rising dramatically, indicating a REAL DEFLATION IS AND HAS HAPPENED, wake up you Crack QE heads, Einsteins Relativity holds alot of weight here, the US has experienced deflation when you take into the account the value of the dollar..........HEE HAW......those who don't understand are going to be wiped out, just like 1914.
There is a very strong correlation with the cost benefit analysis of Obama's Solar Power Green plan, that spent 100's of billions, yet not many homes have solar, last count, the residential market is about the same and Obama spent almost a TRILLION on that and 6 big companies with ties to Chicago, got most of it and most filed Bankruptcy after just a few years, THINK OF THE MILLIONS OF PEOPLE STARVING TO DEATH, THAT COULD HAVE BEEN SAVED IN THE WORLD WITH A $TRILLION DOLLARS. Or alternatively, think of how many poor people could have been provided with actually FREE healthcare, without a website or tax penalties or all the paperwork and government red tape. With a government run medical system, the FUTURE GROWTH of the funeral home business is almost guaranteed to grow double digit for decades.
Think of how many thousands or tens of thousands could have been helped by now, versus the one person that was helped that was on TV last night, if this was handled like Mitt Romney would have handled it with SUCCESS. Everyone would have been covered a year ago, and we be on the forefront of curring cancer, not getting diagnosed and operated on so the insurance companies can rack in millions for the protected elite medical profession.
I have cleared all the hard drives of my 42 DELL and HP and I am performing an Nobel Prize analysis on AGNC and MBS and Treasury Yields. Lots of variables to consider and analyze. These are historic times and historic new math has to be used, along with Einstein's Theory of Relativity, because of the excessive Quantitative Easing, we have developed a Phase Warp or Polar Shift of correlation data and leading measure (purchasing managers surveys, regional Fed Surveys) and economic data of all sorts, including the price of ground meat and bread in the supermarkets, nothing is sacred here. We have enterred a very unstable Warp Phase and any small disturbance or process shifts may trigger massive instability. I believe a collapse is imminent, it will be of the instantanious type, what causes is not important, THE MOST IMPORTANT THING IS TO identify the high probabilities have tightened the skewness and to be cognizant that the skewness is centered and tight around the next couple of weeks if not days. Pray for everyone so that they may see the light and be saved.