Freddie aka Fraudie Mac / Market Sentiment

It´s always the reaction to the news that is important....And sending the stock higher almost 10 percent on the following news is a clear sign that the complacency has taken over again....A look at the VIX is confirming this view. On top of this Doug Kasshas observed this: "Investors Intelligence bulls are back up to 46, as bears drop to 29.9 -- at respective highs and lows since January". I think this headline via FT Alphaville sums it up nicely Not as bad as feared’ is the new code for ‘buy, buy, buy’ Here are More Reasuring Facts On Phony Mae aka Fannie Mae

Eine der wichtigsten Regeln für Anleger und Trader ist jeweils zu beachten wie der Markt auf bestimmte Nachrichten reagiert. Und wenn man nach den folgenden Neuigkeiten die Aktie fast 10 % nach oben katapultiert ist das für mich ein klares Zeichen das wir uns einem Level nähern der doch langsam wieder bedenklich wird.....Der sich rapide beruhigende VIX unterstreicht diesen Trend. Doug Kass hat diese Statistik die wunderbar zum Gesamtbild passt. "Investors Intelligence bulls are back up to 46, as bears drop to 29.9 -- at respective highs and lows since January" . Diese Schlagzeile via FT Alphaville fasst es ziemlich gut zusammen Not as bad as feared’ is the new code for ‘buy, buy, buy’ Hier gibt es mehr More Reasuring Facts On Phony Mae aka Fannie Mae

Parsing Freddie's Profit Report WSJ
Freddie Mac's earnings report more clearly than ever defined the battle lines between the company's shareholders and the government, which sees it as one of its main tools to bolster the housing market.

The report the mortgage giant issued Wednesday shows that the company's cushion for losses fell sharply in the quarter, giving it one of the weakest balance sheets in the financial sector and leaving it more vulnerable to future hits from the housing crunch.

This weakening in Freddie Mac's financial footing will unnerve politicians keen to see Freddie buy and guarantee even more mortgages to alleviate the credit crunch.

And investors sniffing around Freddie's shares may also want to pay heed to the enervated balance sheet. That is because the company likely will have to sell a large amount of new stock, diluting existing shareholders, to strengthen its balance sheet.

Freddie said Wednesday that it planned to sell $5.5 billion of common and preferred stock. "I think they'll continue to raise capital," said Paul Miller, an analyst at FBR Capital Markets.

The company's weakened state was lost on investors who rejoiced that the loss was smaller than expected and drove its shares up 9%. But the smaller-than-expected loss was primarily the result of accounting changes made in the quarter that allowed the company to book certain gains in earnings and exclude certain losses.

Freddie reclassified $90 billion in securities, boosting profit by about $1 billion compared with the fourth quarter.

Hat tip Calculated Risk

Analyst: There is a headline out there that you have level 3 assets of $157 billion. I was just wondering is that true and is that related at all to the markups of the 1.2 billion gain?

Freddie Mac: No, it is not Paul. We made a determination in the first quarter that given how widely the pricing we were getting on the abs portfolio [varied] that it no longer made sense to leave that into level two. So we essentially moved the entire abs portfolio into level three. We were still using the mean pricing that we were getting from the dealers. So we’re not using a model price. That is all that is. It has nothing to do with the trading portfolio

Another change -- related to its mortgage guarantees -- reduced a potential hit to profit by about $1 billion compared with the fourth quarter. A maneuver that delays taking credit losses also allowed the company to avoid losses in the quarter.

Excluding these and some other accounting changes, Freddie's modest $151 million loss would have been a more worrisome $2 billion.

More insights via Calculated Risk On Freddie Mac Accounting Change

One way to cut through the earnings noise is to go to the balance sheet and zero in on its leverage -- the amount of shareholders' equity Freddie has supporting its $803 billion of assets, which are the loans it has retained.

In the first quarter, Freddie's assets exceeded its $16 billion of shareholders' equity -- its leverage ratio -- by 50.2 times. Fannie's first-quarter leverage ratio was 21.7 times, while the first-quarter average for the 20 largest U.S. lenders was just under 12 times, according to data from SNL Financial.

A Freddie spokesman declined to comment on its leverage specifically. And to be fair to Freddie, some of the market losses that are driving down Freddie's equity may one day be recovered. For instance, equity plunged to $16 billion from $26.7 billion in the fourth quarter, in part because of unrealized losses on securities backed by subprime mortgages.

But if Freddie were a regular bank, its regulator wouldn't let leverage get anywhere close to 50 times. At a nosebleed level like that, the regulator would push Freddie to keep raising capital, even if some of its losses in equity might be fleeting.

Shareholders could sputter about the continued dilution, but the government won't be very sympathetic.

Number Of The Day....."Investor Sentiment"

WOW! Just waking up in Germany and looking at my screen. Asia and especially Honk Kong is up sharply, Gold at $ 793, the Greenback is tanking again, commodities are soaring, yields (of course) almost unchanged, US Futures are roaring higher.....

Was für Wochenstart! Gucke mir wie üblich gerade nach dem Aufstehen mal die Märkte an. Asien und besonders Hong Kong massiv gen Norden, etliche Indizes auf Rekordhöhen, Gold bei knappen 800$, Der US$ weiter im freien Fall, alle Rohstoffe auf dem Weg nach oben, Die Renditen (logischerweise) kaum verändert, US Futures massiv grün......

Fleckenstein

If you think of the return to sanity as a positive development, there's reason to be encouraged by Investors Intelligence's report, which recorded the most lopsided sentiment reading in many years. Last week, bulls stood at 62% and bears at about 19%. For anyone who's been around the stock market for any length of time, that is a clear warning sign.

On top of this i´ve found this chart from Ticker Sense October 22nd Blogger Sentiment Poll

Passend hierzu der October 22nd Blogger Sentiment Poll von Ticker Sense.

I hope you have seen this clip on investor sentiment. One of the best and funniest clips on this topic! One of the most prominent examples how quick the sentiment can change is the meltdown from Jim Cramer. A few days after this he raised his target for the Dow to 14500.....No kidding.....

Ich kann nur hoffen das Ihr diesen Clip zum "Investor Sentiment" schon gesehen habt. Mit Sicherheit einer des treffensten und zugleich lustigsten Beschreibungen zu diesem Thema. Eines der wohl bekanntesten Beispiele wie schnell die Stimmung umschlagen kann ist Jim Cramer der bereits einige Tage nachdem er das Ende der Welt prophezeit sein Kursziel für den DOW auf 14500 erhöht hat. Ein heisser Anwärter auf den Titel "Wendehals des Jahres" :-)

I would like to see a seperate poll for the sentiment in Hong Kong .......

Ich würde zu gerne eine seperate Investorenbefragung für Hong Kong sehen .........

The Hang Seng has now put on more than 11 per cent in the past week, and almost 55 per cent since its August low amid the credit squeeze.

Market Sentiment & SIVs Explained... :-)

This is a must see! Hilarious.

Sehr treffend! Fantastisch!



Hat tip to Calculated Risk

Are Traders Becoming a Bit Too Speculative? SentimenTrader

Jason Goepfert from SentimenTrader has put up a very interesting chart that might point to some slippery terrain for stocks and tech stocks in special. With almost no or only limited exposure to the housing slump it should be no surprise that tech and internet is one of the leading sectors. I also think that the very high beta has lead to a run after the Fed has lowered rates. To quote Jason "But at some point it becomes too much..." and David C Nelson " Winning Stocks continue to lead: Remember it is GAAP (Growth at Any Price) not GARP (Growth at the Right Price) that is leading the charge". The valuation question will be asked when sentiment has already shifted and the momentum has turned.....

Jason Goepfert vom SentimeTrader hat hier wie ich finde einen interessanten Chart der eine Menge über die aktuelle Marktstimmung aussagt. Da fast kein Bezug zum Immobiliensektor besteht sollte diese Outperformance nicht richtig überraschen. Zudem wird traditionell zumindest in Anfangsphasen wenn die Fed lockert nach dem höcht möglichen Beta gesucht. Der Chart könnte darauf hinweisen das die Grenzen doch momentan doch etwas "überdehnt" sind.... David C Nelson bringt es mit seinem Kommentar wohl treffend rüber "Winning Stocks continue to lead: Remember it is GAAP (Growth at Any Price) not GARP (Growth at the Right Price) that is leading the charge." Die Bewertungsfragen kommen immer erst dann ins Speile wenn die Stimmung bereits gekippt ist.

Are Traders Becoming a Bit Too Speculative?
Whenever one sector or asset class greatly out-performs others, it tends to generate a lot of interest among traders – we all want to be involved in what’s working now.

Tech has been an obvious out-performer of late, and predictably that has sparked interest among those looking to put money to work. More specifically, the internet group has been very hot, so we’re starting to see money flowing there. And it might be overdone.

The reason is because money flowing into the group seems like it has crossed the line into “too much, too fast”. One way to see that is to look at the assets going into the Rydex mutual funds.

That fund family has the Rydex Internet Fund (RYICX) available for its investors, and they release the asset levels in the fund daily. I’ve plotted the past few years of those assets against the NAV of the fund below.
enlarge / größer

We can see that currently the fund has nearly $60 million in assets. That’s peanuts compared to the market value of the sector, but we’re operating on the idea that Rydex traders are a proxy for a broader population of traders, behaving in a similar manner, and I think that’s a sound theory.

What has piqued my interest here is that over the past seven years, whenever assets in the fund have reached the $50 million mark, it has been an apparent indication that traders in general have become overly enamored with the sector’s prospects. The go-forward returns in the sector have been sub-par (to put it kindly) when we’ve seen this kind of activity.

The three-month forward return in Amazon (AMZN) was -8.3% with 2 of 8 occurrences showing a positive return. In eBay (EBAY), it was +1.0%, but with only 3 of 8 positive. For Yahoo (YHOO), the future three-month return was a dismal -8.9% with only 1 of 8 positive.

Even some of the tech giants that aren’t so glued to the internet specifically didn’t fare so well. Microsoft (MSFT) averaged -5.7% with 1 of 8 positive, Intel (INTC) was -9.3% with 1 of 8, and Apple (AAPL) was -5.1% with 1 of 8 positive as well.

Rising speculation coming out of an oversold market is a good thing, since it keeps people buying and prices rising. But at some point it becomes too much, and prices are more likely to either decline as that speculation ebbs, or go into a much more choppy environment – kind of a two steps forward, one step back kind of thing. I think we’re quickly approaching that point.

>Bespoke has put up as they call it a more bullish chart for the S&P 500 % of S&P 500 Stocks Above Their 50-Day Moving Averages. I´m not so sure if this is really bullish.

>Bespoke hat eine nach eigener Aussage einen bullishen Indikator hinsichtlich des S&P 500 gefunden % of S&P 500 Stocks Above Their 50-Day Moving Averages. Ích bin mit nicht so sicher ob das wirklich bullish zu sehen ist.

Bad-News Bulls / Economist

This piece from the Economist sums it up. It´s always amazing to watch how quick sentiment can turn either way. It will be interesting to see what will be the trigger for the next "minor correction". I´ll bet that it has something to do with the coming CPI numbers....... One more chance for the bulls to "buy the dip"......

Dieser Bericht vom Economist faßt die Lage recht gut zusammen. Ich bin jedesmal wieder erstaunt und fasziniert wie schnell sich die Stimmung drehen kann. Ich bin gespannt welche Meldung der nächste Auslöser für eine erneute "kleine Korrektur" sein wird. Ich denke das es evtl. etwas mit den kommenden CPI Zahlen zu tun haben könnte.... Das wird den Bullen eine erneute Chance geben um nachzuladen. Evtl. mehr als Ihnen lieb sein wird..... ;-)

Bad-News Bulls / Economist
THE news seems to go from bad to worse. In late September figures showed that the American housing market was in free fall, with both sales and prices plunging. On October 1st Citigroup and UBS, two of the world's biggest banks, said they were writing down $9.3 billion of debt between them because of the credit crunch.

Global stockmarkets have reacted not with dismay but with euphoria. Wall Street marked the Citigroup write-downs by driving the Dow Jones Industrial Average to a record high (see chart). The MSCI emerging-markets index has soared to new highs. This summer's turmoil seems to have been completely forgotten.

What explains this apparent insouciance? It seems that investors reckon they cannot lose. “Take your pick,” says Gerard Minack, a strategist at Morgan Stanley: “Equity markets are either behaving as if the worst is over for credit and housing problems or they remain convinced that the [Federal Reserve] can offset whatever bad news may unfold.” In other words, bad economic news means the Fed will cut interest rates and good news means recession will be avoided.

There are some signs to support the idea that the worst might be over in the credit markets. After strenuous effort, banks have managed to find buyers for $9.4 billion of the $24 billion needed to finance the takeover of First Data, a payments processor, by Kohlberg Kravis Roberts, a private-equity firm. According to JPMorgan, even the structured products that caused so much disquiet during the summer are moving again—$6.2 billion of collateralised-debt obligations were issued in the last week of September.

Risk appetite is resurfacing in currency markets, too. The “carry trade”, the borrowing of low-yielding currencies to buy higher-yielders, is back in full swing; the Australian and New Zealand dollars have been surging. Having reached a 27-year high on October 1st, gold (often seen as a safe haven for nervous investors) suddenly lost 2.5% of its value in a day.

The bullish case seems fairly simple. The American economy may be slowing but the rest of the world, particularly emerging markets, can make up for it. As a result, corporate profits can continue to be strong. Profits forecasts are being revised down, but not dramatically so. The dollar's decline has added impetus to the earnings of American exporters and multinationals with overseas subsidiaries.

In this light, the credit crunch seems like old news. Even bank write-downs can be spun in a good light. Much of the panic in August was caused by fear of what banks had on their books; now the bad news is out, investors can relax.

In addition, many investors are looking back to 1998 when the Fed cut rates in response to a previous crisis in the finance industry—the collapse of Long-Term Capital Management, a hedge fund. The markets recovered quickly and the dotcom bubble reached its apogee. This time round, emerging markets (or even alternative energy stocks) might be the big winners.

> Here comes a slightly different view Emerging markets: an exhilarating, but potentially lethal, ride

> Hier eine leicht andere Einschätzung Emerging markets: an exhilarating, but potentially lethal, ride

And in the short term at least, money that was pouring into the credit markets is now being invested in shares.

But not everyone buys the bulls' arguments. Experienced observers of the debt market, such as Tom Jasper of Primus Guaranty, a credit insurer, think the crunch is far from over. According to Moody's, a rating agency, the spread (excess interest rate) of high-yield debt over Treasury bonds has fallen from the crisis peak but is far higher than it was in June.

In the quick-to-rollover money markets, there is still a much wider spread than normal between the rate governments must pay to borrow money and the rate which big banks have to pay. That indicates investors remain nervous about the extent to which banks are exposed to losses from subprime mortgages, or large private-equity borrowers.

Problems in the housing markets are far from over, too. The latest gloomy statistic to emerge was a 21.5% annual fall in pending American home sales, a figure that is a leading indicator for actual sales. House prices will surely fall further and defaults increase, as homeowners struggle to cope with higher mortgage rates from “teaser” loans taken out in 2006.

That may well have a depressing effect on consumer sentiment, something which the Fed's rate cut last month may do little to help. Normally, interest-rate moves take 12-18 months to work their way through the economy. In any case, mortgage rates are barely lower than they were a month ago. The American economy could yet slip into recession, an event on which Goldman Sachs now places a 40% probability.

Even the argument that corporate profits are still strong does not look completely convincing. American profits are close to a 40-year high relative to national output, according to Longview Economics, a financial consultancy. That suggests they should return to the mean, especially as the profit numbers taken from national-accounts data look a lot weaker than those reported by quoted companies. The last time such a gap appeared was in the late 1990s, an era of much creative accounting.

And while the weak dollar may be good news for American exporters, it is bad for European companies. Having been strong in the early part of this year, the latest data on European economies have weakened sharply; Nicolas Sarkozy, the French president, is not the only one concerned by the euro's strength. There is the potential for turmoil in the currency markets, either because Europe takes a stand against the rising euro at the Group of Seven finance ministers' meeting on October 19th, or because international investors, who have to finance the American trade deficit, become alarmed by the weakness of the dollar. Stockmarkets might be able to rise above the problems of the credit markets. But whether they could gain ground in the face of foreign-exchange market turmoil as well seems a lot more doubtful.

This Rebound Can't Mask the Real Damage / Doug Kass

Looks like some people think that the worst is already over. No wonder that some of them work for CNBC ...... :-) . I´ll go with Kass.

Sieht so aus als als wenn mal wieder einige glauben es ist wieder Zeit die dips zu kaufen. Nicht verwunderlich das einige davon auf CNBC arbeiten...... :-). Ich sehe das ähnlich wie Kass

At about 5 a.m. EDT Wednesday, a well-regarded CNBC commentator suggested that, as in times past, the market has often recovered from abrupt and large down moves like we saw yesterday. (She seemed to be implicitly stating that buying the dip is a good idea.)

> especially when you hear statsictics like this from Rosenberg via Minyanville

> das gilt im besonderen wenn man Zahlen wie diese hört

• As many feared, auto sales were horrible in July, falling 12% in figures that encompass most major auto manufacturers including Toyota (TM), which saw a 7% decline.


• According to Merrill's David Rosenberg, other months where auto sales were down double digits include a 12% year-over-year decline in Dec. 2000; a 10.8% decline in April 1990; a 10.8%decline in July 1981; and an 11.1% decline in Dec, 1979.
• What do all of those months have in common? According to Rosenberg they were three months or less away from the official start of an economic downturn.
  

> The argument from the bulls is standing on a very weak foundation when you look at this chart that shows the pecentage of the financial sector vs. the entire stock market capitalisation.

> Das Argument der Bullen für einen weiteren Anstieg in den USA steht auf extrem schwachen Fundament wenn man sich diesen Chart ansieht......

And, Tuesday, many commentators on RealMoney.com and elsewhere suggested that investors were ignoring the positive news -- citing past earnings growth, past share appreciation, etc. (basically a lot of pasts were used in this analysis) -- and were saying that the market's selloff was unjustified. The short squeeze (which quickly disappeared) in IndyMac Bancorp was even used as an example of overdone negative sentiment that could have broad and positive market implications.

I disagree on all counts.

What is the favorable news? Why should stocks have a Pavlovian move higher and reverse this morning's weakness? And what bearing does one stock (i.e., IMB) have on the whole?

thanks to Cox & Forkum

The reality is that credit markets have (predictably) seized up and the credit cycle is in the process of normalizing. I have been concerned with this since December 2006, when I penned an editorial that described the bubble in credit availability in Barron's.

For a time, there was a disconnect between widening credit spreads and stocks. No more.

Risk is being repriced, the carry trade is being dissolved, illiquid assets are being forced to mark to market, hedge funds have started to be disintermediated and we are witnessing a worldwide margin call. And the folly of partial and conformational analysis of sentiment is being uncovered.

This is all occurring in what I have described as a tightly (and levered) financial system -- and why I thought on July 23 "It´s time to panic."

thanks to the Economist

The past levering up and current panic was importantly abetted by the fund of funds industry, the dominant investor in the dominant investment class (hedge funds), which failed to analyze how and why many hedge funds reported such consistent investment returns -- especially of a collateralized debt obligation and collateralized loan obligation kind.

The greatest risk is in our financial intermediaries that drank the credit Kool-Aid served up by the mortgage brokers, the investment brokers/bankers and the Fed, which kept interest rates too low for too long.

In looking at the dominant financial companies I have often written about and in quoting the lesson taught to me by my friend, bubby and pal, former Institutional Magazine's No. 1-rated bank analyst, Mark Biderman, during adjustments in risk premiums, it is not the "apparent" level of earnings (or net interest spreads) that are important; it is credit quality that is the culprit and, at times, the system's fundamental undoing.

Does this all mean that our investment world is coming to an end?

No, it does not. We could get a rally at any time. But the experience of the last two weeks should be a lesson learned. And that lesson is that a healthy amount of skepticism should provide the backdrop to all of our investment decisions -- in good times and in bad times

Disclosure: Short homebuilder, REITs, Russell 2000, KBW Mortgage Finance Index

If Leveraged Buybacks, Why Not Leveraged Dividends? / Kasriel

Kasriel from Northern Trust asks the right question. The management will be forced to do more "bondholder value" management. I recommend to read the Expedia story to see how the sentiment has collapsed within 3 weeks.

Kasriel stellt hier eindeutig die richtige Frage. Das Management wird sich zukünftig wohl immer mehr um die Belange der Anleihebesitzer kümmern müssen. Ein gutes Beispiel wie schnell die Stimmung gekippt kann man am Beispiel von Expedia sehen.

The equity investing community seems to get giddy when it hears the words "stock buyback." And why not if the stock is being bought back out of current profits? But what if the corporation is increasing its debt to fund its stock buybacks?

The chart below suggests that is what is occurring now and what occurred in the late 1980s and late 1990s. The red bars in the chart represent the dollar amount of the net issuance of equities of nonfinancial corporations. Readings below zero, which predominate, signify the net "retirement" of equities. As the chart shows, record amounts of nonfinancial corporate equities are being retired in this cycle. The blue line in the chart represents nonfinancial corporate borrowing as a percent of their nominal capital spending. If the percentage is rising, as it is now, then this indicates corporations are borrowing for purposes other than to fund their capital spending. If corporate borrowing is rising relative to capital spending and corporations are retiring equity, then it is likely that they are borrowing to fund their share buybacks.

Equity investors do not seem alarmed that corporations are leveraging themselves to fund stock buybacks. Would corporate borrowing to increase dividend payments be greeted equally as gleefully?

As an aside, with some risk starting to be priced into the credit market, funding stock buybacks via borrowing is getting more expensive. Ask Expedia . It recently had plans to buyback 42% of its shares, predominantly with borrowed funds. But with the credit markets having turned more discriminating in recent weeks, Expedia has scaled back its repurchase plan to only 8% of its shares.

Garbage and Potatoes / Hussman

Interesting chart once again from Hussman. Click on the headdline to read the entire piece

Mal wieder ein interessanter und nicht alltäglicher Chart von Hussman. Klickt bitte auf die Überschrift um den kompletten Report zu lesen.

To offer an idea of how much the recent advance has represented a speculative run on “low quality,” Bill Hester put together the following chart. It presents the performance of stocks rated “high quality” by Standard & Poor's, compared with the performance of all stocks with an S&P quality rating. Presently, the capitalizations being awarded to “garbage stocks” are very rich. Historically, these extremes haven't persisted.

The chart above is through the end of 2006. The same relative performance can be observed in the debt markets, where junk has clearly outperformed higher rated debt in recent years. It's notable that the “quality spread” in stocks has begun to reverse in recent weeks, along with risk spreads in the corporate bond market. Note that the yield spread on the CBOT's new credit default swap (CDS) index has just moved to a fresh high. A credit default swap is a way of transferring credit risk from one holder to another – a rising spread indicates increased concern about default risk. This will be important to monitor in the weeks ahead.

As I've often noted, the worst situation for an investor is when risk premiums are low and are being pressed higher. When that happens, stock and corporate bond prices can weaken significantly because the only way to get the yield (and risk premium) up is to drive down the price, and it takes a substantial amount of price decline to bring a low yield to higher levels.

Merrill Lynch Funds Manager Survey July 2007

Interesting numbers, charts and trends. Looks like the managers like the the "wall of worry" which is getting bigger on a daily basis....I think the main reason for the optimism is that the markets are still surfing the "monster liquidity wave".... On the flip side the optimism leaves lots of room for disappointments

Thanks to the FAZ.

Sehr interessante Charts und Trends. Sieht so als als wenn momentan nichts die Party stören könnte und hier weiter auf der Liquiditätswelle gesurft wird.... Auf der anderen Seite läßt dieser überschäumende Optimismus natürlich Platz für jede Menge Enttäuschungen.....

According to Merrill Lynch the optimism among Funds managers has reached a 16 month high in July

Der Optimismus unter Fondsmanagern lag im Juli auf einem 16-Monats-Hoch, wie die internationale Monatsumfrage von Merrill Lynch unter 186 Investmentprofis ergab.

The surveyed managers oversee over $ 618 billion and are expecting a robust world economy and rising corporate profits.

Demnach glauben die befragten Fondsmanager, die zusammen ein Vermögen von 618 Milliarden Dollar verwalten, fest an eine Fortsetzung des weltweiten Wirtschaftsaufschwungs und an weiter wachsende Unternehmensgewinne.

Corporate profitsThey favour riskier investments like Emerging Markets. 26% want to increase their tech exposure

Als eine Konsequenz setzen sie zunehmend auf risikoreichere Investments. Entwicklungsländer sind den Angaben zufolge die Hauptprofiteure dieser Entwicklung. Dies geht zu Lasten von Anlagen in Amerika und der Eurozone 35 Prozent erklärten, Aktien aus Entwicklungsländern überzugewichten. Zu den großen Gewinnern gehören Merrill Lynch zufolge auch Technologiewerte, die von 26 Prozent übergewichtet werden

Emerging markets 69 percent overweight equities in their portfolio ( up from 66% in June ).

69 Prozent der Vermögensmanager setzen der Umfrage zufolge die Anlagekategorie Aktien auf „übergewichten“. Das ist der höchste Wert seit Februar 2006. Im Vormonat waren es noch 66 Prozent gewesen. „Übergewichten“ heißt, dass die Befragten mehr Aktien halten, als es Vermögensmodellen entspricht

StocksThat is the highest number since February 2006. 72% percent are underweighting bonds in relation to their benchmark.

72 Prozent der Befragten gaben zugleich an, Anleihen „unterzugewichten“. Im Juni waren es 66 Prozent gewesen

Bonds

The biggest risk seems to be the credit market. 72 percent think that a rise in defaults poised to be the biggest risk for the asset markets overall. Monetary risk like higher rates or currency "adjustments" are only for 44% a bigger problem.

Auch wenn die Fondsmanager die weitere wirtschaftliche Entwicklung positiv beurteilen, sorgen sie sich doch um die aktuellen Kreditkrisen an den Finanzmärkten. In Amerika sind derzeit etliche zweitklassige Hypothekenkredite, die sogenannten Subprimes, notleidend. Solche Kreditausfallrisiken seien das größte Problem für die Stabilität der Finanzmärkte, glauben 72 Prozent der Befragten. Risiken aus der Geldpolitik, wie höhere Leitzinsen oder schwankungsreiche Wechselkurse, sind nur für 44 Prozent ein größeres Problem

US equities CashAlternative investments

Commodities....This one should be no surprise....Real estate!

It wouldn´t surprise me if we will see a own Gold survey chart very soon ..... ;-)

Es würde mich nicht wundern wenn wir dank der ganzen Tretminen demnächst eine eigene Erhebung für Gold sehen werden..... ;-)

Cover Story Indicator Update

wow. havn´t dreamt of doing an update just 4 days after the original post ......

http://tinyurl.com/ypo8uq

wer hätte gedacht das es sich bereits nach 4 tagen lohnt ein erstes update zu machen.....

they nailed the top in all three main indices.....since monday the losses amount from 5-7 percent!

das nennt man timing. am montag alle auf neuen hochs und seitdem verluste von 5-7%.

disclosure: short mdax, long dax (as a hedge)

Cover Story Indicator ?

one of the leading german newsmags has a coverstory about "how to profit from the stockmarket".......
so langsam wird es interessant. focus macht heute mit einem börsentitel auf. zwar noch nicht ganz die bild zeitung, aber immerhin.....

nice timing after the run up......... just the day the dax broke 8.000 ( ath 8163) and the mdax is making new ath and has even outperformed the dax by a wide margin.....

guter zeitpunkt das auf den titel zu hieven........ genau am teg als der dax 8000 durchbricht und der mdax ebenfalls tgl. neue rekordstände erklimmt.

Optimism on Global Stocks Climbs to 10-Month High

you would think that with almost every asset class hitting new highs that the demand for protection should lead to a higher a vix etc.....think again........ lots of the optimism is based on the believe in the fed and the " the U.S. Federal Reserve suggested economic growth is accelerating without generating faster inflation" good luck .......

reality check: read this"In less than two weeks the 4th quarter US GDP was revised lower from +3.5% or so to something closer to +2.0 to +2.5%" cleary an uptick in groth........
"http://globaleconomicanalysis.blogspot.com/2007/02/us-gdp-flunks-smell-test.html,
http://bigpicture.typepad.com/comments/2007/02/revisiting_gdp.html

man sollte meinen das wenn fast alle anlageklassen neue rekorde erreichen der bedarf nach absicherung hoch sein müßte. falsch gedacht....... der großteil des optimismus ist darauf zurückzuführen das ide fed es schon irgendwie regeln wird und der o.a. aussage. viel glück.....



Feb. 14 (Bloomberg) -- Investors in February were the most bullish on stocks in 10 months as concern eased that economic growth is slowing, a Merrill Lynch & Co. survey showed.

Europe remained money managers' favorite market, with optimism about the region reaching an 18-month high, according to 206 respondents worldwide who together oversee $680 billion.

``Investor pessimism towards global growth prospects is fading,'' said David Bowers, a consultant to Merrill, the third- biggest U.S. securities firm by market value. He spoke at a press briefing in London today. ``They are starting to think that maybe it isn't the time to pull the plug on equities.''

Morgan Stanley Capital International's World Index has climbed 3.1 percent in the past month to a record....

Stock benchmarks in countries including Switzerland, Israel, Russia, Brazil and China, as well as the Dow Jones Industrial Average in the U.S., have touched all-time highs in 2007.

A net 57 percent of fund managers questioned by Merrill this month said they were ``overweight'' equities. That's up from 47 percent in January and 50 percent in December, which at the time was the highest since April's 58 percent.

``People are starting to reassess where we are in the global economic cycle,'' Bowers said. ``It's an important message for the Fed as people believe there is more to come on growth.''

thanks to http://www.wallstreetfollies.com/

Lowest Since May
Twenty-six percent of respondents this month said they expect economic growth to weaken in the next 12 months, the survey showed. The amount fell from 35 percent in January and was the lowest since May.

Forty-seven percent held an overweight position on shares in the euro region this month.....

7 Reasons To Sell by Paul Lamont / safe haven

this cartoon from http://www.wallstreetfollies.com/ (thanks!) is back from 1999-2000. but i feel its fits just as good in the year 2007. you only need to change b2c to housing fiasco...........

dieser cartoon stammt zwar aus den jahren 1999-2000. ich persönlich finde das er ganz gut ins jahr 2007 passt. einfach das b2c durch immobilienfiasko austauschen......

Sentiment surveys allow an investor to gauge the emotional enthusiasm of the market. The Daily Sentiment Index from MBH Commodities has been tracking the percentage of bulls and bears for 19 years. In mid-December, this survey recorded its highest long-term bullish reading ever.

We called Jake Bernstein, President of MBH Commodities, to personally confirm these numbers. More traders are bullish towards the S&P 500 (91%) than at the peak of the NASDAQ in 2000 (83%). Remember delusional investors were buying tech "ideas" in 2000. Now there is even more consensus that markets can only go higher (see below). This suggests a major correction.

make sure you read allen 7 points (click on the headline / überschrift )

back to zero..... / zurück auf los....

this was from the end of october/von ende oktober
http://immobilienblasen.blogspot.com/search?q=Remember+What+a+1%25+Decline+Feels+Like%3F+s%269+500

the S&P 500 has yet to record a 1% one-day decline, and the streak now sits at 75 trading days. The chart below shows that the current streak is now the longest of the bull market and also the longest since way back in 1995

now add almost the whole november to this and you see the magnitude of this run. / nun noch den fast kompletten november dazuaddieren und man sieht wie gewaltig die bewegung war.

until yesterday! it really was about time........ / bis gestern. es wurde aber auc zeit.

no surprise that just last week the investor optimism was the highflying....../ kein überraschung das ausgerechnet letzte woche der anlegeroptimismus neue rekorde erreicht .. .... http://immobilienblasen.blogspot.com/2006/11/lot-of-room-for-disappointments.html

größer/bigger http://tickersense.typepad.com/photos/uncategorized/1declines1.jpg

a lot of room for disappointments / Investors Are Turning Optimistic

only wall street can judge this kind of data and expect more gains...... . the wonderful thing is that that leaves a lot of room for disappointments.......

bei der faktenlage kann wohl nur wall street mehr gewinne erwarten. das positive daran ist das heir sehr vile enttäuschungspotential lauert......

dank geht an mish und sein http://www.markettradersforum.com/

http://www.nytimes.com/2006/11/26/business/yourmoney/26fund.html?_r=1&oref=slogin
.. 59 percent of fund managers now say they believe that the economy next year will remain as strong as it is now or will improve, according to a recent survey by Merrill Lynch. That’s up from 32 percent of fund managers who thought so in October

The percentage of investors who think that the economy is likely to slip into recession, meanwhile, has shrunk to 8 percent from 20 percent last month.

That’s not the whole story. Investors are also growing more bullish about the outlook for corporate profits. Today, half of all domestic fund managers think that earnings will remain steady or improve in the coming 12 months. A similar survey in September showed that only 18 percent felt that way....

IN reality, profits for most S.& P. 500 companies are growing much slower than 9.6 percent this quarter. If you stripped out the financial sector, where a profit surge of 32 percent is expected, corporate earnings would be likely to grow by only 3.1 percent......

remember when you see this kind of data that a lot of the eps growth comes in the form of (often) debt fueled buybacks. the earningsquality isn´t always as good as wall street wants to make us believe.

bedenkt bitte bei betrachtung dieser grafiken das ein großer teil dieser gewinnzuwächse auf (oft) schuldenfinanzierten aktienrückkäufen basiert. die gewinnqualität ist also nicht immer so gut und schön wie wall street gerne unterstellt.