Monday, October 18, 2010


IBM Not So Impressive

Service signings are still on the light side.

Bank Stocks Take Off

And mortgage insurers take a hit.

With the announcement that BAC is resuming foreclosures in 23 states next week, bank stocks have taken off and mortgage insurers (the recent "flight to safety" trade during mortgage-gate) have gotten hit.

Huge call option activity in LNC today.

Looks like another round of quantitative easing is a done deal.

Atlanta Fed President (and centrist) Dennis Lockhart is coming out in favor of more Fed easing in a speech this afternoon.

As I mentioned previously, "QE 2" is a fait accompli -- the only question is size.

Size counts, at least in Fed policy, and an aggressive and open-ended "Quantitative Wheezing" is increasingly in the cards.

Recommended Viewing

Run, don't walk, to watch Gamco's Larry Haverty make a compelling case for Yahoo!

Office Depot a Takeover Candidate?

I am hearing vague takeover rumors regarding ODP

Investors Nonplussed by Drop in Business Activity

Industrial production dropped for the first time since June 2009, and capacity utilization fell modestly to 74.7%.

Thoughts on the Euro/Yen?

Are we getting a warning shot from the Euro/Yen cross rate undercutting last week's low?

Almost a month ago, Appaloosa's David Tepper made some very optimistic comments about the U.S. stock market and on the domestic economy. In part, based on those remarks, equities embarked on a sharp run up that began that Friday morning and has continued to date, more or less.

Sometimes it's just that easy.... What did the Fed just tell me? What did they say? They want economic growth. And they said, We want economic growth, and we don't even care -- not only do we not care if there's inflation but we want a little more inflation. Have they ever said that before?... They want the market up. So, what am I-I'm gonna say, No, Fed, I disagree with you?... Either the economy is going to get better by itself in the next three months. And what assets are gonna do well? You can guess the assets that are gonna do well. Stocks!... Or the economy's not gonna pick up in the next three months, and the Fed is going to come in with QE. And then what's gonna do well? Everything!... Let's see. So what I got-I got two different situations. One, the economy gets better by itself.... The other situation is the Fed comes in with money.... You gotta love a put.... I gotta buy; I can't take the chance of not being a little bit longer now.... That does not mean that I'm going balls to the walls.... That's how easy it is right now.

-- David Tepper, "Squawk Box" comments

I respectfully took exception to the certainty of a salutary investment and economic outcome for QE 2 -- or, as I called it, "quantitative wheezing" -- that Tepper expressed in his remarks on "Squawk Box." Tepper concluded that we were in a "heads you win, tails you win situation."

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