turning Japanese?

The Raven is really quite confused.

He's going to shoot out his thoughts as they pop up; maybe they'll make more sense tomorrow morning...

Just looking at the newsflow;
$AA beats, $INTC beats, $JPM beats, $CSX beats, and what does the market do to these stocks? FADES them.
$BP fits a cap, $GS get off with a $500mm fine, Fin Bill passes, etc.

You'd think we'd see the market a lot higher, or at least a bit more volume going through. The price action is terrible on the very short time horizon. Stepping back a little and it looks like we're right at the top of a decending channel, the Raven would have thought this newsflow would have squeezed out the shorts and we'd break hard out of the channel, but that doesn't appear to be the case, so he's a bit confused here.

$AMD up small in after market, another small hit for the Raven, however he got $GOOG wrong, but not all wrong as he'd not put capital on it.

WTI crude was all over the place today.

FX looks like the USD is still getting sold and EUR and GBP are still on fire.

VIX doesn't seem to care either way at 29

The one thing that does seem to care however is 10yr yields, which are <3%.

Interesting commentary from TeamMacroMan saying that it felt like summer last year and that we were starting a bear trap, the Raven was short then and he's short now and had been thinking the same thing for a couple of days.

$GS news probably not that good actually, given SEC had sod all $GS still had to pony up and the Raven guesses that it only covers this one series of trades, or apply to other banks. You'd have to think that they'll look at the other guys in the business, still its chump change. The Raven did laugh at a comment he heard that GS probably made more today trading their own stock, obvious joke.

Stocks are not expensive on Raven p/e, or on an equity risk premium model, both of which are backwards looking and take account of low interest rates. The Raven is tempted to look at Japan again, but its just not comparable, the stock market certainley wasn't at bubble valuations like the Nikkei and the policy response has been quite different (although not as dynamic as governments would like to pretend).

The Raven really disagrees however with some commentary he's been hearing; "either a depression is coming or stocks are screamingly cheap". Perhaps the stopped clock that is Bill Gross is telling the right time? perhaps this is the "new normal" (he had to swallow a bit of sick in his mouth just thinking about repeating that phrase). If the Raven is rolling out cliches that are wrong, maybe this time is different; maybe we've moved into a new regime where earnings grow at ~ less than half the old rate, so something like 2% not 6.2%, which would give a ERP based valuation of 950. Not inconsistent with where we are now, or the very low interest rates. what if growth went to zero? then we're really ugly and at 700. So a big enough spread to take these sorts of numbers with a lot of salt!

He can't resist looking at what the numbers would be like if we went back to the old normal; 2400. In which case, stocks are screamingly cheap.