60 Minutes on the Explosion of Disability Enrollees

60 Minutes this past Sunday did a piece on a story that has been talked about in these pages for a long time – the rapid increase in disability enrollment since the recession half a decade ago.  It is quite remarkable that effectively 5% of the working population is now enrolled. [Apr 7, 2011: Nearly 1 in 20 Working Age Americans Are on Disability, a Doubling Versus 1990]  [Dec…

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WSJ's Hilsenrath on Janet Yellen

With the demise of Larry Summers, all eyes point to Janet Yellen as the next Federal Reserve head.  Frankly it is a bit surprising she was not the leading candidate all along.   Earlier this year, we posted a NY Times piece on the woman [Apr 25, 2013: NY Times Does Janet Yellen] from a more personal level and now we have one on the Fed whisperer himself, Jon Hilsenrath…

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The Most Overbought Point in 2013

Quite an explosive rally yesterday at the 2 PM mark, in fact about 70% of yesterday's gains came in a minute or so per Bespoke Investment; the power of algos.   Obviously the Fed, by surprising just about everyone with "no taper at all", lit another fire under the market but coming off a near vertical rally since late August it is still a bit surprising to see the…

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Launch of Paladin Long Short Fund (PALFX)

Hanna Capital is proud to announce the launch of its flagship fund, the Paladin Long Short Fund (PALFX).  Available through a variety of brokers as well as direct purchase, this no-load fund seeks capital appreciation.  See the fund's prospectus here. Distributor: Capital Investment Group, Inc., Member FINRA/SIPC , 17 Glenwood Ave, Raleigh, NC 27603, (800) 773-3863.  There is no affiliation between Hanna Capital LLC, including its principals, and Capital Investment Group, Inc….

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Mar08

While in theory central bank balance sheets could go to infinity (which of course would destroy a currency), the massive growth we've seen on global central banks assets as a % of GDP in the past 5 years is quite awe inspiring.  How they are ever going to unwind these measures down the road is going to be one neat trick.  For now, it is just an epic kick the can and partial monetization of debt (as shorer duration bonds hit maturity and go poof into the night)

The WSJ takes a look at the massive expansion – believe it not since Draghi [Feb 9, 2012: 100 Days of Mario Draghi]  came to town he has actually pushed the ECB's balance sheet (as a % of the region's GDP) to the highest level among the West's major central banks.

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Mar08

I said late yesterday, a bit tongue in cheek, that we'd see how the market reacts tomorrow after the morning gap up … well of course that is exactly what the market did.  I didn't really see any reason news wise for the action, but we rarely have seen a gap down in 2012 and with that very obvious gap in the chart to fill it seemed almost fait accompli that this was the scenario "they'd" create.  So with that the S&P 500 has jumped back over its 20 day moving average and thus far the ceiling has been the 10 day.

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Mar08

While the stocks of the auto manufacturers and their suppliers have been on and off the past few weeks, February auto sales – announced last week – were at the best level in years.  There are a lot of positive dynamics in this sector as the average age of a car is at record highs, and affordability is at its best level in quite a few years.  In the hey day of auto sales when people used to routinely do cash out refinancing to buy autos 16-17M annual sales was typical.  In the worst of the recession, that number dipped well below 10M.  The past few years we've seen a rate of 12-13M(ish) but February surpassed 15M on an annualized basis.  Hopefully this is not too affected by 'seasonality' as this extremely warm winter has many claiming demand in the malls (and auto dealerships) is perhaps being pushed forward.  We'll know better in 3-4 months.

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Mar07

I mentioned yesterday there was a good chance that gap down the major indexes created yesterday would get filled in due time, but I did not imagine it would take roughly 1 session.  This morning markets looked ready to roll over and give back the knee jerk "oversold" bounce at the open, but that WSJ story changed the complexion of the whole day.  I really wonder somedays if the Fed employes a technical analyst because the timing of these things is far too wonderful.

The S&P 500 gapped down from a low of 1359.13 Monday, or using the SPY chart 136.28.   Today's high was 1354.76 (135.91 on SPY) so only 4.5 S&P points to go to make it as if yesterday never happened.  Of course volume was high yesterday (on the selling) and weak today (on the rallying) but in the central bank era post 2008 volume has no longer been a concern – light volume V shaped rallies are the order of the day.

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Mar07

I've spent some time this afternoon trying to figure out the whole point of what the Fed is considering.  I got this blurb from Realmoney.com, essentially it sounds like the hedge fund Bernanke & Partners is considering laying on a massive carry trade.  And since they are the bank, and can create unlimited funds to do it, they have a different risk parameter than Joe Schmoe's hedge fund.

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