Did you see the bull and bear segment on CNBC this afternoon? Bill Cara did.
Ned Riley brought out a silly indicator about the show bookers being able to get bears to come on is evidence that the market will go up, Ned fancies himself as a contrarian even thought he is always bullish. The indicator lost on me as there is a collection of strategists of all shades that spend more time on TV than working. A far more constructive nugget for the bull case is the low number of bulls in the various surveys.
Bill pointed out that Ned is a perma bull. I pick on Ned, Joey Batts, Michael Metz and so on. Maybe I should ease up on that because clearly these guys will never change. So now I want to try to figure out if there is a way to utilize what they say, to glean a kernel of useful information when they come on, because believe me they aren't going anywhere.
To have a shot at this will require something that might be difficult, really listening to what they have to say and making mental note of when they tweak their respective stories. This will require being in touch with the things they talk about and the way assess information.
Funny enough Ned was also on CNBC Asian Squawk Box (what was I saying about more TV time than work?) He thinks the Fed will stop very soon (similar to me, gulp) he thinks rates going down at the long end will be good for stocks. He thinks the 10 year will be below 4% and Fed Funds at 3.25% at the end of the year.
A flat curve was bullish for stocks when the net bubble was inflating, a repeat would surprise me. I have a theory to account for this but it may be very off the wall. During the net bubble there was massive amounts of new capital created and while plenty of it went into stocks, not all of it did, some went into bonds. Capital in the equity market disappeared but not in the bond market as rates mostly stayed low after the bubble burst.
Also in the late 1990's the curve flattened in the face of unambiguous economic strength. Not too many people, save for Larry Kudlow, would describe the current economy as unambiguously strong.
Its just a theory.
Wikinvest Wire
3 comments:
Since the 1998-2000 dot com bubble, I really don't think people listen to the guests on CNBC anymore. The decline in ratings is partial evidence of this. There is some original reporting and the occasional insight but the signal to noise ratio is very, very low. I am reminded of Macbeth:
"...a poor player
That struts and frets his hour upon the stage
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,
Signifying nothing"
joec's point is clearly valid. A tweak; I think people do listen but there were more marginal market participants in 1999 than now. Less individuals follow and trade the market like a "hobby" IMOH.
Roger is being far too polite. The distinction between "bullish flattening" (long rates coming down with a stationary short rate) and "bearish flattening" (long rates coming down with a rising short rate) is pretty well known.
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