Lee’s Free Thinking

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Markets Are Not Math!

August 9 – The Wall Street Journal (Henny Sender and Kate Kelly): Quant funds – ‘quant’ stands for quantitative — generally operate by building computer models of market behavior and then allowing the computer programs to dictate trading. A recurring characteristic of the recent trouble in financial markets is that many lenders, funds and brokerages […]

Fodder for Greater Fools

Resuming a familiar refrain, the market is moving up today for all the wrong reasons.  Bad news is being taken as good—as if the deteriorating economic situation over the past year is not proof enough that doe-eyed readings of the leading month or week’s data is pure folly.

Existing Home Sales Flat In May

The following is taken verbatim from the National Association of Realtors press release today. I have read between the lines and translated the press release for the benefit of anyone who might be tempted to take the Realtors words at face value. Follow the money. Find the profits!Liquidity is money. Regardless of where in the…

Smoot-Hawley’s Revenge

“The bottom line here is very clear: The US Congress just doesn’t do macro.”  –Stephen Roach, in Past The Point Of No Return
Isn’t it remarkable that the pea-brains on capitol hill don’t link the obvious negative consequences of the trade imbalance with China (manufacturing job loss) with the “positive” results we’ve come to depend on: […]

NovaStar: The Subprime Litmus Test

MorningStar has a pretty nice article out from yesterday featuring duelling analysts regarding the fate of NovaStar. After their almost naively-sanguine and narrowly-scoped Alt-A/banks article last week, I find this a breath of fresh(er) air. While I believe it is a little bit inane to be discussing subprime at this point (the […]