Guest Post: Macro Outlook According to Street of Walls

Street of Walls is a brand new site that’s doing some interesting things with data visualization and community.  The site is authored by Wall Street professionals who maintain anonymity so they can continue to work at their firms.  It’s got some interesting information on hedge fund holdings, banking etc.  I recommend you check it out for yourself at the link below.  In the meantime, the team there put together a macro outlook that is very timely.  Enjoy – Josh


Current Macro Environment

This week the team at Street of Walls took at the current microenvironment, below are their thoughts. 

Growth Stocks Take a Hit

Jobless claims were much better than expected this week, but growth stocks we heavily sold as fears over consumer spending and China increase. Stocks like FOSL, HMIN, TIF, and WYNN all were heavily sold, even on days when the market was up.  Consumer discretionary spending, and in particular, luxury spending has held up exceptionally well, even as the fears over Europe spread. This effect had been described as the “rich get richer and poor get poor.” But maybe that isn’t true, and maybe everyone is finally starting to suffer. Maybe the rich have finally cracked!

Top ranked Wall Street economist Nancy Lazar, of ISI, expects real consumer spending to slow to a paltry .9% year over year in the first quarter of 2012, down from her 2% previous expectation.  If the American luxury consumer is finally tapped out, what does that mean for the stock market? Will Noriel Roubini and David Rosenberg finally be justified, or are too many people and institutions tied to the success of the market? Should we be shorting this tape given all the bad news and increased volatility?

Short at your own risk

Hedge funds have continued to show a lack of ability to generate returns, and with most funds being down 2-5% year-to-date, you can certainly make a case for heavy tape painting going into the 4Q. Painting the tape may be an understatement of what is about to come. It could more like an all out color war. Add to that, Obama’s career may be tied to how the stock market closes this year, so he is heavily incentivized to make some magic happen. Even though the luxury consumer may finally be cracking and housing prices may not rise for a long time, the system is just set up against shorting, so short at your own risk.

Housing, Even the Bears Are too Optimistic

Housing also continues its woeful path of failed recovery attempt after failed recovery attempt. Even the “pessimistic” reports on housing are probably too optimistic. A survey that just came out by the Professional Risk Managers International Association for FICO found that “49% of respondents do not expect housing prices to rise back to 2007 levels until 2020.” In most bubble areas, housing prices are down 50%, so in order for housing prices to increase back to peak levels, they would need to double from today’s price in 9 years, indicating a compounded growth rate of 8% a year for 9 years. That seems almost impossible. The only people who seem to be benefiting from the QE1-3 are the mortgage brokers, as they seem to have an endless supply of newly lower rates continuously allowing them to go back to their customers and tell them how they can lower their mortgage payment again, despite their just having refi’ed 6 months ago. Mortgage brokers are again making a lot of money, even though they will tell you a sob story of how hard it is to close a deal because appraisals keep coming in below purchase price.


Street of Walls

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. click here commented on Sep 14

    … [Trackback]

    […] There you can find 2094 additional Info to that Topic: […]

  2. sex commented on Sep 18

    … [Trackback]

    […] Read More to that Topic: […]

  3. commented on Oct 19

    … [Trackback]

    […] Read More here to that Topic: […]

  4. DevOps Consulting Services commented on Nov 02

    … [Trackback]

    […] Read More Info here on that Topic: […]

  5. pengeluaran hk 2020 commented on Dec 01

    … [Trackback]

    […] Read More here on that Topic: […]

  6. Automated Regression Testing Software commented on Dec 02

    … [Trackback]

    […] Info on that Topic: […]

  7. fake the best copy montblanc watches commented on Dec 31

    … [Trackback]

    […] Find More on that Topic: […]

  8. Pioneer X-HM26 manuals commented on Jan 22

    … [Trackback]

    […] Read More on that Topic: […]

  9. paito warna sgp commented on Jan 30

    … [Trackback]

    […] Information to that Topic: […]

  10. automation testing tools commented on Feb 07

    … [Trackback]

    […] Find More on that Topic: […]