Monthly Archive for August, 2008

Why the US needs a depression

Published on 12 August 2008 in Financial Markets. 0 Comments

Great Marketwatch article setting straight a few home truths on the state of the US economy.  Point number 5 stands out – if the banks, who have among other things during this credit crunch severely diluted the value of a share in their listed stock, are to regain anything like their EPS ratios from recent history, how are they going to do it without the fancy derivatives structures that got them the fat profits in the first place?

 The stuffy old brokerage businesses are going to have enough on their plate defending market share against low margin DMA platforms.  Will banks in their current form ever be as profitable again?

On the other hand…

Published on 5 August 2008 in Financial Markets. 0 Comments

Early this morning I supported the notion of a sideways market for the remainder of the summer.  Today we’re seeing a strong rally develop as the Fed announce the intention is to sit on their hands.  3 things have the capacity to move this market – macro economics, the fed & oil.  Oil prices are in the process of returning from Mars and are now merely situated somewhere on the Moon.  The Fed refuses to hand out any painful medicine.  The only thing potentially stopping an avalanche of sideline money from being launched into this market is further macro shocks:

Analysts reduced their earnings estimates almost every week this year. In January, the average projection was for profit growth of 3.2 percent at S&P 500 companies. As of last week the average estimate was for a decline of almost 19 percent.

Elizabeth Stanton, Bloomberg

It’s going to take something unexpected (& pretty ugly) to test new lows.  

For now, the path of least resistance is up.

Sideways equities, Valley reality check & some object oriented clarity

Published on 5 August 2008 in computer science, Financial Markets and Tech Labours. 0 Comments

Macro Man’s view on current equities quarter – can’t see past a sideways moving August myself.  Chinese PMI sub-50 also noted with an eye on the faux-support Asian demand has lent equities.

Cuil too cool – the Reg refreshingly telling it how it is as always

Unpacking concepts inside objects – something the standard java apis didn’t always adhere to