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Icahn: Too Bad We Can't Buy Puts...

There is an article in the Boston Globe today titled,"Carl Icahn has hit the roughest patch of his hedge fund career."

Icahn's long term track record speaks for itself. It's a great one. That said, I have not been bearish on him until recent months where I have taken the appropriate amount of heat for calling it like it is. Timing in this business is everything.

The bottom line remains. "Concentrated Activist" investing really only outperforms in bull markets where access to capital is readily available.

KM

Charting Brazil: What Happened to Jim Cramer's Macro Call?

Brazil's Bovespa is trading down another -1.3% right now at 58,308, taking the index losses to -21% since May 20th! I'll let CNBC argue about whether or not a -20% drop is a "Bear Market" or not; where I am from, this is labeled plain UGLY.

Of course, if you're levered long something in Brazil like Jim Cramer is, you can always "stop trading" as he so colorfully instructs his audience to do. Maybe take a siesta, of sorts?

Global Stagflation takes no prisoners. This short term decline in Brazilian stocks is severe.
KM

(chart courtesy of stockcharts.com)

Helicopter Ben Will Fly Into 2009! Then What?

"The Federal Reserve is strongly committed to financial stability and is considering several options, including extending the duration of our facilities for primary dealers beyond year-end..."

Gee, isn't that comforting commentary from bailout Ben today in Virginia... He is already on the public record stating that the Fed can drop money from helicopters, so this confirms the trend of his politization of the Federal Reserve.

It's a good thing that his easy money political policies will be gone at the end of his term (which incidentally run out at the end of 09' as well).

KM

Early Look

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Me Irish Eyes Ain't Smilin'!

As a follow up to this morning's "Early Look" note, I am attaching a chart of Ireland's stock market. Since October 5, 2007, it's down -46%. Yes folks, this is a crash.

Be careful out there. Perceived "Value" can get a lot cheaper here in the US.
KM

(chart courtesy of stockcharts.com)

Charting Japan: Watch Out Below...

I discussed the risks associated with the notion of buying perceived "value" in Japan yesterday, so I won't rehash my concerns, but I will revisit the chart of the Nikkei. Japan closed down another -2.5% overnight at 13,033.

There is no downside support for a central bank that devalues their currency at every hint of local economic fragility (sound familiar?). With a recent technical breakdown and renewed fundamental frustrations, the March lows of sub 12,000 in the Nikkei Index are now in play.

It is global this time, indeed.
KM

(chart courtesy of stockcharts.com)

Marking Your Homes (and the Homebuilders) To Market...

There is a simple reason why those smart "value" investors who bought the US Homebuilders in Q1 of 2008 are getting pummeled - like Lehman's "Level 3" assets, US Homes were marked to model, not to market.

In any economic situation with mounting inventories, eventually the dynamic of lower clearing prices evolves. US Pending Home Sales for the month of May was released this morning at -4.7%, down from the +7% reported in April.

Of course the revisionist historians can look back on April's rally in the US stock market (and the "housing is bottoming" thesis alike) as just another round of exuberant higher lows.

Marking US homes to market will reveal clearing prices that are much lower than those listed in your local real estate directory.
KM

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