AAPL Intraday Updates (Archive)

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    Posted: 29 May 2009 02:20 PM #121

    Here are some ramblings about inflation that I shared with Eric earlier. As he pointed out, it’s important to distinguish between wage and other COLA inputs. In light of this morning’s thread I thought I would share. Also, since this is a first draft, please excuse the roughness. Any thoughts, comments or push-back is appreciated.

    i think the bond yields have to go up to attract buyers, hence the increase in yields. treasury will have to do something to finance $1tn deficits, and we know they have to raise $3.25tn by sept. taxes will be a part of the equation too, with implications for savings and discretionary purchases.

    on the other side, i don’t see any major impetus for inflation beyond the cost of capital. we have at least 6% excess capacity in the labor force at this point. we have excess capacity in manufacturing, as well as abundant office space. we will continue to have technology improvements, better communication, and productivity increases. the only other variable is raw materials, and global demand is quite depressed at this point. anyone who is expecting a one-way trip to the moon on commods will probably have to suffer a few more ups and downs before there is real pricing power in the face of weak demand.

    consumers will not be a strong source of growth in the near term. china’s middle class may have the same purchasing power as the US, but many developed countries will see reduced demand for some time (as a result of unemployment, lower housing values, weakened portfolios, restricted credit, and a new appreciation for living within one’s means). this means that we are unlikely to see a return to consumption levels of the last 10-15 years. not gonna happen. and when the analysts realize this is the case we will see reduced growth expectations and a equity values fall as a result of lower earnings. this will happen even if multiples don’t contract, but i think this, too, is likely. there will be a spill-over into prices for raw materials as a result.

    there you go—my 2c, and just one more fool’s opinion (worth about what you paid for it).

         
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    Posted: 29 May 2009 02:32 PM #122

    chartguy - 29 May 2009 05:20 PM

    Here are some ramblings about inflation that I shared with Eric earlier. As he pointed out, it’s important to distinguish between wage and other COLA inputs. In light of this morning’s thread I thought I would share. Also, since this is a first draft, please excuse the roughness. Any thoughts, comments or push-back is appreciated.

    i think the bond yields have to go up to attract buyers, hence the increase in yields. treasury will have to do something to finance $1tn deficits, and we know they have to raise $3.25tn by sept. taxes will be a part of the equation too, with implications for savings and discretionary purchases.

    on the other side, i don’t see any major impetus for inflation beyond the cost of capital. we have at least 6% excess capacity in the labor force at this point. we have excess capacity in manufacturing, as well as abundant office space. we will continue to have technology improvements, better communication, and productivity increases. the only other variable is raw materials, and global demand is quite depressed at this point. anyone who is expecting a one-way trip to the moon on commods will probably have to suffer a few more ups and downs before there is real pricing power in the face of weak demand.

    consumers will not be a strong source of growth in the near term. china’s middle class may have the same purchasing power as the US, but many developed countries will see reduced demand for some time (as a result of unemployment, lower housing values, weakened portfolios, restricted credit, and a new appreciation for living within one’s means). this means that we are unlikely to see a return to consumption levels of the last 10-15 years. not gonna happen. and when the analysts realize this is the case we will see reduced growth expectations and a equity values fall as a result of lower earnings. this will happen even if multiples don’t contract, but i think this, too, is likely. there will be a spill-over into prices for raw materials as a result.

    there you go—my 2c, and just one more fool’s opinion (worth about what you paid for it).

    I’d also throw in a devalued dollar pushing up energy prices but we may see another round of flight to safety which could push the $ up.  Also, there is speculation out there that as foreign cb’s move away from the $ by dumping Treasuries (Russia et al supposedly), that will force the $ up as $‘s need to be obtained to pay off the bonds.  So in a strange sense, the dollar weakness of late is not necessarily indicative of foreign gvmt’s fleeing the $.  OTOH, a weakening $ does dissuade them from increasing their investments.  My take is that the CB’s conspire to keep currencies within a range so I’d be careful being long energy past the typical summer peak driving season.  But either way is risky and I wouldn’t be surprised to see oil spike OR drop.  Interest rates are anyone’s guess.  I think we’re in DEEP doody if they go up from here.  Watch to see what this does to CRE!  No more refi’s means reality has to be faced by the banking sector.  I expect more weakness and dilution there as well on an ongoing basis.

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    The ends don’t justify the means…

         
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    Posted: 29 May 2009 03:14 PM #123

    Mayor Quimby - 29 May 2009 05:32 PM
    chartguy - 29 May 2009 05:20 PM

    Here are some ramblings about inflation that I shared with Eric earlier. As he pointed out, it’s important to distinguish between wage and other COLA inputs. In light of this morning’s thread I thought I would share. Also, since this is a first draft, please excuse the roughness. Any thoughts, comments or push-back is appreciated.

    i think the bond yields have to go up to attract buyers, hence the increase in yields. treasury will have to do something to finance $1tn deficits, and we know they have to raise $3.25tn by sept. taxes will be a part of the equation too, with implications for savings and discretionary purchases.

    on the other side, i don’t see any major impetus for inflation beyond the cost of capital. we have at least 6% excess capacity in the labor force at this point. we have excess capacity in manufacturing, as well as abundant office space. we will continue to have technology improvements, better communication, and productivity increases. the only other variable is raw materials, and global demand is quite depressed at this point. anyone who is expecting a one-way trip to the moon on commods will probably have to suffer a few more ups and downs before there is real pricing power in the face of weak demand.

    consumers will not be a strong source of growth in the near term. china’s middle class may have the same purchasing power as the US, but many developed countries will see reduced demand for some time (as a result of unemployment, lower housing values, weakened portfolios, restricted credit, and a new appreciation for living within one’s means). this means that we are unlikely to see a return to consumption levels of the last 10-15 years. not gonna happen. and when the analysts realize this is the case we will see reduced growth expectations and a equity values fall as a result of lower earnings. this will happen even if multiples don’t contract, but i think this, too, is likely. there will be a spill-over into prices for raw materials as a result.

    there you go—my 2c, and just one more fool’s opinion (worth about what you paid for it).

    I’d also throw in a devalued dollar pushing up energy prices but we may see another round of flight to safety which could push the $ up.  Also, there is speculation out there that as foreign cb’s move away from the $ by dumping Treasuries (Russia et al supposedly), that will force the $ up as $‘s need to be obtained to pay off the bonds.  So in a strange sense, the dollar weakness of late is not necessarily indicative of foreign gvmt’s fleeing the $.  OTOH, a weakening $ does dissuade them from increasing their investments.  My take is that the CB’s conspire to keep currencies within a range so I’d be careful being long energy past the typical summer peak driving season.  But either way is risky and I wouldn’t be surprised to see oil spike OR drop.  Interest rates are anyone’s guess.  I think we’re in DEEP doody if they go up from here.  Watch to see what this does to CRE!  No more refi’s means reality has to be faced by the banking sector.  I expect more weakness and dilution there as well on an ongoing basis.

    MQ, you’ve touched on one of the big unknowns. We’ve printed all this currency (is it money?) but the banks aren’t really lending yet. So without velocity we haven’t seen the full effect of the Fed’s actions. At some point, however, it’s almost certain that people will get tired of only making 1/2% on the money and the seeds for the next expansion will be sown.

    The problem with inflation is you never know where it will emerge. The reality is, the printing presses have been running. Sure Americans’ savings rate will go up. Sure demand will be weak. But at some point all these fresh dollars will start to emerge. Just as we’ve seen deflation in many (most?) asset classes, inflation will come. My guess is people start to see domestic Chinese demand firm, whether by consumers or .gov stimulus doesn’t really matter. Same for India and other developing markets. As today’s cheap capital goes to those markets it feeds on itself.

    So maybe the questions should be (1) How bubbleicious will it get? and (2) When will it happen?

         
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    Posted: 29 May 2009 03:19 PM #124

    AAPL has been very quiet today, with about a 1.3% difference from peak to trough. Has anybody been able to successfully trade today intra-day?

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    Tightwad.

         
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    Posted: 29 May 2009 03:26 PM #125

    chartguy - 29 May 2009 06:14 PM
    Mayor Quimby - 29 May 2009 05:32 PM
    chartguy - 29 May 2009 05:20 PM

    Here are some ramblings about inflation that I shared with Eric earlier. As he pointed out, it’s important to distinguish between wage and other COLA inputs. In light of this morning’s thread I thought I would share. Also, since this is a first draft, please excuse the roughness. Any thoughts, comments or push-back is appreciated.

    i think the bond yields have to go up to attract buyers, hence the increase in yields. treasury will have to do something to finance $1tn deficits, and we know they have to raise $3.25tn by sept. taxes will be a part of the equation too, with implications for savings and discretionary purchases.

    on the other side, i don’t see any major impetus for inflation beyond the cost of capital. we have at least 6% excess capacity in the labor force at this point. we have excess capacity in manufacturing, as well as abundant office space. we will continue to have technology improvements, better communication, and productivity increases. the only other variable is raw materials, and global demand is quite depressed at this point. anyone who is expecting a one-way trip to the moon on commods will probably have to suffer a few more ups and downs before there is real pricing power in the face of weak demand.

    consumers will not be a strong source of growth in the near term. china’s middle class may have the same purchasing power as the US, but many developed countries will see reduced demand for some time (as a result of unemployment, lower housing values, weakened portfolios, restricted credit, and a new appreciation for living within one’s means). this means that we are unlikely to see a return to consumption levels of the last 10-15 years. not gonna happen. and when the analysts realize this is the case we will see reduced growth expectations and a equity values fall as a result of lower earnings. this will happen even if multiples don’t contract, but i think this, too, is likely. there will be a spill-over into prices for raw materials as a result.

    there you go—my 2c, and just one more fool’s opinion (worth about what you paid for it).

    I’d also throw in a devalued dollar pushing up energy prices but we may see another round of flight to safety which could push the $ up.  Also, there is speculation out there that as foreign cb’s move away from the $ by dumping Treasuries (Russia et al supposedly), that will force the $ up as $‘s need to be obtained to pay off the bonds.  So in a strange sense, the dollar weakness of late is not necessarily indicative of foreign gvmt’s fleeing the $.  OTOH, a weakening $ does dissuade them from increasing their investments.  My take is that the CB’s conspire to keep currencies within a range so I’d be careful being long energy past the typical summer peak driving season.  But either way is risky and I wouldn’t be surprised to see oil spike OR drop.  Interest rates are anyone’s guess.  I think we’re in DEEP doody if they go up from here.  Watch to see what this does to CRE!  No more refi’s means reality has to be faced by the banking sector.  I expect more weakness and dilution there as well on an ongoing basis.

    MQ, you’ve touched on one of the big unknowns. We’ve printed all this currency (is it money?) but the banks aren’t really lending yet. So without velocity we haven’t seen the full effect of the Fed’s actions. At some point, however, it’s almost certain that people will get tired of only making 1/2% on the money and the seeds for the next expansion will be sown.

    The problem with inflation is you never know where it will emerge. The reality is, the printing presses have been running. Sure Americans’ savings rate will go up. Sure demand will be weak. But at some point all these fresh dollars will start to emerge. Just as we’ve seen deflation in many (most?) asset classes, inflation will come. My guess is people start to see domestic Chinese demand firm, whether by consumers or .gov stimulus doesn’t really matter. Same for India and other developing markets. As today’s cheap capital goes to those markets it feeds on itself.

    So maybe the questions should be (1) How bubbleicious will it get? and (2) When will it happen?

    CG-

    We know velocity is extremely low so we know the money isn’t entering the economy but why is that?  Well…it’s because J6P, Widget Co, the USA, California, NJ, Fl, IL etc. are all in debt.  J6P’s wages have been FLAT to DOWN for over a decade (inflation-adjusted).  Until there is a demand for borrowed money, I see no inflation from printed money.  It will simply sit where it sits right now.  The only driver of inflation I see is a weakened dollar and even that should only drive up prices of imports (OIL - which drives up everything else).  OTOH, demand is very slow and not likely to rebound which make the energy long play a risky one.

    When will this printed money push up prices?  When we have REAL economic growth.  When America produces something new, something great that the rest of the world wants/needs.  Could be alt. energy, could be tech.  But J6P, Widget corp, USA, GE, California etc etc etc all need to reduce their debt FIRST to take advantage otherwise usury eats up any advantages gained here.  So we need to pay down debt, turn our real economic engine back on, address social security/medicaid and THEN see inflation.

    I agree people will get sick of 1/2% but not while prices are dropping in housing.  Commodities might get bid up in a frenzy of printed dollars by GS, JPM, MS et al. but political pressure and public anger will prevent them from repeating 2004 - 2009.

    So I just don’t see inflation for a while unless it’s oil-related.  This is all my own thinking so take it fwiw (what you paid for it hehe).

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    The ends don’t justify the means…

         
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    Posted: 29 May 2009 04:38 PM #126

    artman1033 - 29 May 2009 07:20 PM
    awcabot - 29 May 2009 06:19 PM

    AAPL has been very quiet today, with about a 1.3% difference from peak to trough. Has anybody been able to successfully trade today intra-day?

    This morning, I read DELL’S EARNINGS CALL TRANSCRIPT..

    Since then, I have been in the corner of my gazebo in the fetal position, smoking my pipe, waiting for the coming apocalypse.

    I’ve been waiting for the apocalypse by tending my six tomato plants and three potted lemon trees…

    Maybe buy some puts?

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    Tightwad.

         
  • Posted: 29 May 2009 04:41 PM #127

    artman1033 - 29 May 2009 07:20 PM
    awcabot - 29 May 2009 06:19 PM

    AAPL has been very quiet today, with about a 1.3% difference from peak to trough. Has anybody been able to successfully trade today intra-day?

    This morning, I read DELL’S EARNINGS CALL TRANSCRIPT..

    Since then, I have been in the corner of my gazebo in the fetal position, smoking my pipe, waiting for the coming apocalypse.


    OTOH: It sure is a beautiful day.

    I haven’t read the transcript, but I would imagine one should consider the source of the “message”....Dell has been on the decline for quite some time.  Most of Wall Street seem to have overlooked that fact.  But, eventually, Dell WILL crash and burn.  Guessing they’re beginning to see the writing on the wall?  tongue laugh

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    Steph :apple:
    Id quot circumiret, circumveniat

         
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    Posted: 29 May 2009 04:42 PM #128

    artman1033 - 29 May 2009 07:20 PM
    awcabot - 29 May 2009 06:19 PM

    AAPL has been very quiet today, with about a 1.3% difference from peak to trough. Has anybody been able to successfully trade today intra-day?

    This morning, I read DELL’S EARNINGS CALL TRANSCRIPT..

    Since then, I have been in the corner of my gazebo in the fetal position, smoking my pipe, waiting for the coming apocalypse.


    OTOH: It sure is a beautiful day.

    Weird: I just dumped a pile of loose money into my Ghetto Trader, err Scottrader account so I pu that money to work when the apocalypse comes. It’s going to be awesome!

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    Black Swan Counter: 9 (Banks need money, Jobs needs a break, Geithner has no plan, Cuomo’s grandstanding, .Gov needs a hobby, GS works for money, flash crash, is that bubbling crude?).

    For those who look, a flash allows one to see farther.

         
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    Posted: 29 May 2009 04:55 PM #129

    Still waiting for the Great Pumpkin to fall! Not this week?hopefully next week. Reminds me a lot of late Feb./early March when the market would just never bottom and chug ever lower. Now it chugs ever higher with sharp intraday sucker drops and recovery.

    It certainly looks like the S&P could make a run for a new high and even punch through the 200-day and 50-wk SMAs next week. That could be the untimate bull trap and sucker most everyone! Monday likely will bring another powerful thrust up!

    So I will wait in my pumpkin patch.

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    “Whatever happens in the stock market today has happened before and will happen again.”    - Jesse Livermore

         
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    Posted: 29 May 2009 04:59 PM #130

    Somebody’s got sick sense of humor…watch AAPL close at the high of day, minus two pennies.

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    Tightwad.

         
  • Posted: 29 May 2009 05:00 PM #131

    Wow what a close for AAPL and the market!

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    “We hang the petty thieves and appoint the great ones to public office.” - Aesop