Why I No Longer Watch CNBC
There comes a time when you need to do your own unbiased homework and no longer listen to the mad crowd. CNBC is the mad crowd. Seldom do they have a serious intellectual discussion worth listening to. Instead it's a five minute core dump of everything any guest can think of to substantiate his or her opinion or a five minute unprofessional screaming match between opposing views. If you want to learn anything, personally, I'd watch Bloomberg.
Today, Mark Haynes, whom I really like as a host, had a guest interview. Now, I had a temporary loss of sanity because I like Mark but the exchange goes something like this. I am paraphrasing from memory.
Guest:Is housing soft? Yes. Will it get any worse? I don't think so. (Emphasizing a patronizing tone.) It is a mistake to ever bet against the consumer.
Haynes: What about capex?
Guest: If you expand capex to include a, b and c, it is doing fine.
Haynes: So, if the consumer is fine and capex is fine, what is there to worry about?
Guest: Exactly. (Emphatically) We hear the same thing every year.
Well, let me ask a question of the guest. If capex is fine and the consumer is fine, how come GDP was essentially zero if calculated without anomalies? In other words, the facts are showing the consumer and business aren't fine. How can you resolve everything is fine if the business sector and consumer sector facts aren't supporting your opinion?
Or the Richmond Fed survey, the Philly Fed survey, the Chicago Purchasing Manager Survey, the ISM data, CEO confidence survey, automobile sales data, housing data, Wal-mart sales data, technology stocks and everything else are showing below trend weakness? Weakness which, in many cases, is the worst since before the last recession? Now maybe we are at the bottom economically but the current data still does not support anything the guest was arguing. So, why would he say it? Does he believe it? Are his biases clouding the reality? Is he trying to calm his investors who may choose to pull money out of investments he is managing, thus hurting his business and his wallet? In other words, personal gain? I have no idea.
So, what about housing? Well, here's a chart of the housing index. My work shows alot of money has flowed into housing stocks since this most recent uptrend started. Yet, all we have to show for it is a very weak bounce in the stocks. In fact, the pattern on the chart is a consolidation pattern which by my estimates should be broken to the downside any day now. (Likely post election.) That doesn't mean we are headed right to zero but that we should expect to see a break to the downside as we saw on the last consolidation pattern identified on the chart. Opinions are nice coffee talk but the charts are telling me facts of what the home builder stocks are actually doing. The fact is unless the housing index can break this negative pattern or gain upside momentum soon, we are setting up for more housing weakness. Before it is all said and done, I expect many of the home building stocks to fall as much as 90% or more from their peaks. This is based on historical precedence, cycles and chart patterns as opposed to opinion. Now, I have to say that the future may change those estimates as new data points flow in. But, with the data available right now, that is what my work would provide as an estimate.
Courtesy of a prior guest, the information on this site is provided for discussion purposes only and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.
Today, Mark Haynes, whom I really like as a host, had a guest interview. Now, I had a temporary loss of sanity because I like Mark but the exchange goes something like this. I am paraphrasing from memory.
Guest:Is housing soft? Yes. Will it get any worse? I don't think so. (Emphasizing a patronizing tone.) It is a mistake to ever bet against the consumer.
Haynes: What about capex?
Guest: If you expand capex to include a, b and c, it is doing fine.
Haynes: So, if the consumer is fine and capex is fine, what is there to worry about?
Guest: Exactly. (Emphatically) We hear the same thing every year.
Well, let me ask a question of the guest. If capex is fine and the consumer is fine, how come GDP was essentially zero if calculated without anomalies? In other words, the facts are showing the consumer and business aren't fine. How can you resolve everything is fine if the business sector and consumer sector facts aren't supporting your opinion?
Or the Richmond Fed survey, the Philly Fed survey, the Chicago Purchasing Manager Survey, the ISM data, CEO confidence survey, automobile sales data, housing data, Wal-mart sales data, technology stocks and everything else are showing below trend weakness? Weakness which, in many cases, is the worst since before the last recession? Now maybe we are at the bottom economically but the current data still does not support anything the guest was arguing. So, why would he say it? Does he believe it? Are his biases clouding the reality? Is he trying to calm his investors who may choose to pull money out of investments he is managing, thus hurting his business and his wallet? In other words, personal gain? I have no idea.
So, what about housing? Well, here's a chart of the housing index. My work shows alot of money has flowed into housing stocks since this most recent uptrend started. Yet, all we have to show for it is a very weak bounce in the stocks. In fact, the pattern on the chart is a consolidation pattern which by my estimates should be broken to the downside any day now. (Likely post election.) That doesn't mean we are headed right to zero but that we should expect to see a break to the downside as we saw on the last consolidation pattern identified on the chart. Opinions are nice coffee talk but the charts are telling me facts of what the home builder stocks are actually doing. The fact is unless the housing index can break this negative pattern or gain upside momentum soon, we are setting up for more housing weakness. Before it is all said and done, I expect many of the home building stocks to fall as much as 90% or more from their peaks. This is based on historical precedence, cycles and chart patterns as opposed to opinion. Now, I have to say that the future may change those estimates as new data points flow in. But, with the data available right now, that is what my work would provide as an estimate.
Courtesy of a prior guest, the information on this site is provided for discussion purposes only and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.
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