I emailed one of the brightest guys I know today. He is easily one of the most connected guys on the planet. Economist, trader, & major player in politics. I asked him:
I know you run in an interesting world…how much worse we getting?
He responded:
No comment in writing.
So I called. The short of it from his fundamental big picture economy perspective?
1. What happens when all of those Circuit Cities are sitting empty? Multiply the effect out across jobs, commercial real estate and their competition, i.e. Can Best Buys of world survive? Now apply this thinking to all retail. How long can you go without a new suit? Think about it. He sees retrenchment on wide scale.
2. He sees us either at 1978 or 1931 and his guess is that we are at 1931.
3. When do stocks stop falling? When one of the big guys, preferably the bull’s poster boy Mr. Buffett, collapses. Buffett going down would be a signal for panic, which would lead to an eventual selling climax. He wasn’t predicting this, it was just his temperature gauge on what needs to happen for pain to subside. He did note Buffett’s derivative exposure.
4. From a trading perspective, this is not insight you can really use unless you see stock markets tumbling another 50% from here, you are a buy and holder, and just want out. He could see 50% more down from here.
Sobering stuff.
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Well, I thought I had seen it all:
Lifestyle drugs — chiefly Viagra — are costing General Motors $17 million dollars a year and the cost is passed along to car, truck and SUV consumers. The blue pill is covered under GM’s labor agreement with United Auto Workers, as well as benefit plans for salaried employees. GM executives estimate health care adds $1,500 to the price of each vehicle but they do not break out how much of the premium is caused by erectile dysfunction expenses. GM provides health care for 1.1 million employees, retirees and dependents and is the world’s largest private purchaser of Viagra. GM recently raised the co-pay for erectile dysfunction drugs to $18 under a new agreement with the UAW and the company has also pared benefits for salaried workers. Given the large number of aging autoworkers in the U.S., the industrys Viagra tab and bill for other erectile dysfunction drugs is certain to continue rising. Neither Ford nor Chrysler will disclose the amount spent on erectile dysfunction drugs.
Is this a technical sell signal?
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