Will Rahal

http://www.wrahal.blogspot.com
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114 Comments

    • Tue Aug 14th 12:46 PM | Rating: 0 0
      Commented on:
      Playing the Stock Market: It's Not Cheap
      Beware of "low" PE's.
      Earnings are peaking and with a comming recession, earnings could drop significantly.
      This economy is aging. The last shoe to drop will be employment. The last 4 months have shown no growth in the Household survey.
      View article »
    • Wed Aug 8th 10:49 AM | Rating: 0 0
      Commented on:
      It's Fed Speculating Time Again
      High Interest rates are suffocating the economy already.

      In the last three decades when the last(quarterly average) rise in interest rates takes place
      and Nominal GDP year-over-year growth starts to decelerate , the Fed has
      cut rates in within one quarter of this event, every time except for 1998.

      This time around we are in the fourth quarter of declining Nominal GDP growth.

      By this measure, Mr. Bernanke is already late!

      The lower US Dollar, high CPI rate and the Chairman’s reputation, prevent
      the Fed from lowering rates.
      View article »
    • Wed Aug 8th 10:49 AM | Rating: 0 0
      Commented on:
      The Fed's Done All It Can For Now
      High Interest rates are suffocating the economy already.

      In the last three decades when the last(quarterly average) rise in interest rates takes place
      and Nominal GDP year-over-year growth starts to decelerate , the Fed has
      cut rates in within one quarter of this event, every time except for 1998.

      This time around we are in the fourth quarter of declining Nominal GDP growth.

      By this measure, Mr. Bernanke is already late!

      The lower US Dollar, high CPI rate and the Chairman’s reputation, prevent
      the Fed from lowering rates.
      View article »
    • Fri Aug 3rd 11:31 AM | Rating: 0 0
      Commented on:
      Fundamentals And The Market: Review and Expectations
      I do not agree that looking at the Earnings Yield to Treasury Yield(Fed Model) renders the Stock Market inexpensive. In an inflationary enviroment of tangible assets(as commodities) the EY/TY should be greater than one.
      If the outlook for GDP and consequently Earnings is poor, then the market is definitively expensive.

      Today's up-tick in Unemployment is not a good sign. I have estimated that Payroll needs to increase by 143,000/month to keep the unemployment rate steady.
      View article »
    • Mon Jun 25th 11:53 AM | Rating: 0 0
      Commented on:
      Is the Fed Model an Accurate Predictive Tool for This Market?
      There is no doubt that the Earnings Yield and the (long-term)Treasury yield, are related.
      The assumption however, that the ratio of EY and TY should equal one, is erroneous.

      I have shown, that in an environment (as now) when the PPI is accelerating more rapidly than the CPI
      the EY/TY should be greater than one and should have an upward directional bias.
      View article »
    • Wed Jun 20th 16:28 PM | Rating: 0 0
      Commented on:
      New Gallop Poll: Americans Feel the Economy is Getting Worse
      Bob,
      You probably noticed how closely correlated CPI is, to Non-Durable Goods as percentage of PCE.
      It is hard to tell them appart! So the Fed is in a real bind. Core CPI can only be used for so long. The CPI
      (with food and energy inflation) cannot be looked upon forever, as some pesky bug. CPI is truly diminishing the capacity of the consumer to buy durable goods items. This has a significant effect on manufacturing(domestic... or abroad)
      View article »
    • Wed Jun 20th 10:41 AM | Rating: 0 0
      Commented on:
      New Gallop Poll: Americans Feel the Economy is Getting Worse
      Matthew,
      I have some charts that prove you wrong. There is a change in consumption taking place.
      CPI is rising because of food and energy (less income for big-ticket items). For the first time in 50 years we had wages going up strongly(after the 2001 recession) and the consumption of Durable Goods as percentage of Personal Consumption declined.
      View article »
    • Wed Jun 13th 10:52 AM | Rating: 0 0
      Commented on:
      Interest Rate Sell Off: Will the Fed Take Action?
      The economy ha s clearly been slowing down.
      But inflation is taking its toll. I came up with a chart showing how for the first time in five decades, Consumption of Non-Duraable Goods, adjusted by wages, has climbed to a new high level.This is due to Food and Energy inflation. So the fed has a slow economy and inflationary pressures to deal with.
      View article »
    • Mon May 21st 11:35 AM | Rating: 0 0
      Commented on:
      Is the Global Boom Affecting the U.S Market?
      During the recent extraordinary climb of the stock market, the Consumer Discretionary
      Sector failed to reach its February high.
      I believe that this is indicating a change. The US Economy is heavily influenced by the consumer-oriented sectors. This change suggest lower Profits Margins ahead.

      Factors contributing to profits such as reluctance to hire, a soft US Dollar and a steadily rising Capacity Utilization will slow or reverse their contribution
      as I expect a US Dollar rally.The squeeze on profits put by higher commodity prices will soon be felt.
      View article »
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