Trading Week Outlook: September 5 - 9, 2011 [View article]
The ECB is funny. Do you know the new head of the ECB will be the former head of Italy's central bank in November? What did he say when running? Maybe he said, "I destroyed Italy's economy and couldn't control my government. I will now help you do the same so all the EU will be at poverty parity." Perhaps then he will propose feudalism again.
Central Banks' Battle With Currency [View article]
People getting out of SocGen, BoA, or the other weak banks people are focusing on are not speculators. Speculators are the ones gambling by staying in it.
Trading Week Outlook: July 4 - July 8, 2011 [View article]
Everything that isn't a catastrophe is liable to be seen as roses next week. The bears have finally decided to take a rest after 2 months of cavorting about. Is the sky falling? Bulls certainly don't think so although we are clearly not living it up in a land of milk and honey either. Don't get too positive, later this month the Republican's are liable to get downright hostile with Obama over the debt ceiling even though not passing a raise in it makes it easy to blame Republicans for an economic mess that could ensue. Washington never seems to care about the plight of America or Americans. It is shameful.
If Congress wants to stop spending the annual budget is where to do so, not the debt ceiling. The reason the debt ceiling is there is so they can claim that when they cut the budget and people scream about loss of their pet projects and entitlements they can say they had no choice. There is no reason to hide under the skirt of such tactics if they are honest about cutting the out of control federal government. Don't jeopardize America's credit. Congress may not even have the right to force a default on the debt, nor perhaps the President since the 14th amendment states, "The validity of the public debt of the United States, authorized by law... shall not be questioned."
Trading Week Outlook: June 27 - July 1, 2011 [View article]
Stock may be headed higher along with oil despite the silly release of oil reserves. Unless Obama plans on giving away cheap oil for his entire Presidency this effect is temporary and silly.
Trading Week Outlook: June 27 - July 1, 2011 [View article]
China's currency can play a major role as a reserve currency if it allows the free flow and free market to fairly price it. You can't have a restrictive currency regime and then hope people accept it while pegged. What's the point of pegging? It shows little faith and artificial pricing of their currency which no one likes besides China maybe.
Likewise, China's main argument that the US is restricting the free flow of currency is ridiculous. China completely restricts the free flow of their currency.
Key Market Movers for the Coming Week: No Easy Escape From Greek Contagion [View article]
Greece for the first time is "considering" the taboo issue of laying off public sector employees. Really! No wonder German citizens are protesting in the streets. Greece needs to cut its government all the way down to just enough employees to contain protestors and run the utilities. This is not a bureaucratic party.
Trading Week Outlook: February 28 - March 4, 2011 [View article]
Oil is the only major concern here. It must not go up or everything may derail. The world is already suffering due to the US' catastrophic monetary policy and decision to subsidize ethanol again this time by regulation through upping ethanol reformulated gas mixtures. Can you say inflation and food instability. Add energy crisisd and good luck with the weakest recovery ever.
Oil's Watershed Week: Why It Changes Everything [View article]
The worry is unrest will spread to other countries. Libya's oil output isn't a big factor at all and an overthrow of the government may be good for America. The spike in oil only reminds us that we need to find alternative energy and battery power doesn't do it. The energy in those still comes from burning waste crude, gas, and coal. Ethanol could produce some to offet oil at the cost of everyone starving and food prices going up 1,000% with government subsidies.
Personally, I favor methanol, LNG (liquified natural gas), nuclear, and algae based fuel as the most viable right now. The sooner we shift away from oil the sooner we can seperate ourselves from the constant turmoil in the Middle East and avoid more US bloodshed in the region which is more costly than anything else as we've seen in the Iraq war. Even when you win you lose there.
What war? It's just a lot of election posing. In reality the US government and Federal Reserve doesn't want anyone saying don't devalue the dollar and stop making funny money (even its own public). And so it seems to be the same with foreign governments. Making it an issue only makes it obvious that the US is trying to manipulate its currency down as much as China is trying to keep it's currency in equality with the dollar (making it a devaluating currency as well). By necessity a US peg is manipulatory since the US is manipulating its currency. How can the US decry others in this situation as they consider QE II, which is another go at artificial devaluation?
Top 5 Graphs of the Week: U.S., South Korea, Japan, New Zealand [View article]
The global economy decelerated some on Euro woes, but as you can see Asia is still decent and the US is still under the influence of a government spending spree. We will have to see if stimulus II and QE II takes root in the US next year. If so I'd be more worried about inflation than deflation.
Even in this weak economy commodity prices are rising. That is a big warning sign.
Carry Army Comes Out of the Woodwork [View article]
It is funny you should focus on Europe as a topic for the end of a bear market. Indeed Europe has had ends to bear markets (abet very weak with little to show for jobs growth or recovery). If you want to look at an end to a bear market you must look at rising corporate profits (often at the expense of workers meaning flexible hiring firing laws and a labor force able to migrate to other jobs hopefully up the value chain). You also have to look at government being a low percentage of GDP and manageable public and private debt (which is pointed out somewhat by the author).
The US had this all in the 40s to 90's. We are now in the process of losing it and people are saying the solution is to shed our competitive edge even further. It is not. Thank goodness the US still has some entrepreneurial spirit and innovation left. Corporate profits still are able to recover (thus the market rally), however we continue to burden this engine of growth.
This indeed may be one of the last recoveries in the US. Each recovery in the last decade has come back slower leading to slower reemployment of Americans. This is caused by higher taxes, more government, more rigid labor laws, and not keeping up with the rapid pace of educational advancement around the globe. We need less stimulus and more academics, less TARP and more incentives to innovate and invest in capital equipment, and less tax and more incentives to save. We are going backwards towards Europe's stagnant economies.
Trading Week Outlook: July 5 - 9, 2010 [View article]
Scary rallies or scary drops. It depends on which way you bet. If you talk about a market collapse it tends to be a pretty clear drop, no funny business. That is why I believe in volatility more than a double dip at this point, no one expect the numbers not to bounce in the summer. That still doesn't rule out a double dip, it just shoves it further down the horizon.
Last week the market discounted what it probably should have the week before, however, the Euro crisis discount has yet to unwind even though things seem to be much calmer there. So is the market perfectly efficient, certainly not, but I'd say it is inefficient only in the volatility spread and the margin between what you can buy and sell a security for (the real cost of buying and selling). Right now it is less efficient, thus the market is very choppy.
Economic Calendar: U.S. GDP, Fed and Housing [View article]
The home price index may not be indicative of the whole market since higher end homes that wen t underwater are now being added to the mix dragging up overall prices. Yet that doesn't mean anyone's homes are actually rising in price.
Don't believe the hype. Until the glut in excess houses gets purged, less people are being compelled into short selling, and the banks run low on foreclosures to sell I don't expect people's home values to even keep up with property taxes.
As for the other indicators, I expect everything to be positive or hit the mark as stimulus money keeps flowing and the government adds a few more thousands to each persons debt in the form of our national deficit. The real question is when will the stimulus/bailout meal end and the big fat tab end up on our table?
Which Country Is Next to Raise Interest Rates? [View article]
I disagree. Just about everyone is more firm about guaranteeing price stability and currency stability than the US. Bernake is the proverbial wimp. Like Greenspan, his unabashed mentor and now closet hero since he was discredited, Bernake will not raise rates until inflation is raging or until he leaves the mess to the next Fed Chief, whichever is first.
But the main reason the US will not be the next to raise rates is simple. Before raising rates the Federal Reserve needs to neutralize all the extra QE cash sloshing around and mend it's Bear Stearns like balance sheet first. Otherwise, it risks massive losses on it's own assets. Likewise, even if they do that if they raise rates by 2% they are liable to get blowback from all those trillions of low interest bonds they backstopped as well.
The liability the Federal Reserve has consumed at the ultimate risk to the taxpayer is unconscionable at best, definately negligent, and criminal at worst (not to mention unconstitutional). Thus, the Federal Reserve will not raise rates anytime soon because it jepordizes itself. If that hurts the American people so be it. Like they give a damn.
Which Currency Is the Better Trade: The Kiwi or the Korean Won? [View article]
Earlier the Korean Won was falling to the floor until our nice little Fed decided to give it free access to US money through a currency swap line as did Japan and China. How nice. In return they will keep buying these currencies with their trade surplus no matter how bad their finances get. Both very nice gestures to avoid facing economic reality. So who pays for these nicities? Certainly not the government agencies. Only the public. The US will keep losing money in trade imbalances for lower inflation and a their dollar will keep falling. Korea will keep exporting and buying green paper until it becomes worthless (that is if they stop buying other US garbage like Baer Stearns bonds and CDS sold by American brokerages lol). In the meantime, we all get to play like everything's fine and dandy.
As for the Kiwi, it's kind of ironic that the sounder your currency is fundamentally the worse off you get because everyone elses reckless depreciation helps them export their pain onto you. It's really wuite Alice and Wonderlandish. I really begin to see the illogic in our monetary system when I think about it. No wonder the general public feels lost, that something is not rational, and the world is wrong somehow.
Trading Week Outlook: September 5 - 9, 2011 [View article]
Central Banks' Battle With Currency [View article]
Trading Week Outlook: July 4 - July 8, 2011 [View article]
If Congress wants to stop spending the annual budget is where to do so, not the debt ceiling. The reason the debt ceiling is there is so they can claim that when they cut the budget and people scream about loss of their pet projects and entitlements they can say they had no choice. There is no reason to hide under the skirt of such tactics if they are honest about cutting the out of control federal government. Don't jeopardize America's credit. Congress may not even have the right to force a default on the debt, nor perhaps the President since the 14th amendment states, "The validity of the public debt of the United States, authorized by law... shall not be questioned."
Trading Week Outlook: June 27 - July 1, 2011 [View article]
Trading Week Outlook: June 27 - July 1, 2011 [View article]
Likewise, China's main argument that the US is restricting the free flow of currency is ridiculous. China completely restricts the free flow of their currency.
Key Market Movers for the Coming Week: No Easy Escape From Greek Contagion [View article]
Trading Week Outlook: February 28 - March 4, 2011 [View article]
Oil's Watershed Week: Why It Changes Everything [View article]
Personally, I favor methanol, LNG (liquified natural gas), nuclear, and algae based fuel as the most viable right now. The sooner we shift away from oil the sooner we can seperate ourselves from the constant turmoil in the Middle East and avoid more US bloodshed in the region which is more costly than anything else as we've seen in the Iraq war. Even when you win you lose there.
Is the Currency War Still On? [View article]
Top 5 Graphs of the Week: U.S., South Korea, Japan, New Zealand [View article]
Even in this weak economy commodity prices are rising. That is a big warning sign.
Carry Army Comes Out of the Woodwork [View article]
The US had this all in the 40s to 90's. We are now in the process of losing it and people are saying the solution is to shed our competitive edge even further. It is not. Thank goodness the US still has some entrepreneurial spirit and innovation left. Corporate profits still are able to recover (thus the market rally), however we continue to burden this engine of growth.
This indeed may be one of the last recoveries in the US. Each recovery in the last decade has come back slower leading to slower reemployment of Americans. This is caused by higher taxes, more government, more rigid labor laws, and not keeping up with the rapid pace of educational advancement around the globe. We need less stimulus and more academics, less TARP and more incentives to innovate and invest in capital equipment, and less tax and more incentives to save. We are going backwards towards Europe's stagnant economies.
Trading Week Outlook: July 5 - 9, 2010 [View article]
Last week the market discounted what it probably should have the week before, however, the Euro crisis discount has yet to unwind even though things seem to be much calmer there. So is the market perfectly efficient, certainly not, but I'd say it is inefficient only in the volatility spread and the margin between what you can buy and sell a security for (the real cost of buying and selling). Right now it is less efficient, thus the market is very choppy.
Economic Calendar: U.S. GDP, Fed and Housing [View article]
Don't believe the hype. Until the glut in excess houses gets purged, less people are being compelled into short selling, and the banks run low on foreclosures to sell I don't expect people's home values to even keep up with property taxes.
As for the other indicators, I expect everything to be positive or hit the mark as stimulus money keeps flowing and the government adds a few more thousands to each persons debt in the form of our national deficit. The real question is when will the stimulus/bailout meal end and the big fat tab end up on our table?
Which Country Is Next to Raise Interest Rates? [View article]
But the main reason the US will not be the next to raise rates is simple. Before raising rates the Federal Reserve needs to neutralize all the extra QE cash sloshing around and mend it's Bear Stearns like balance sheet first. Otherwise, it risks massive losses on it's own assets. Likewise, even if they do that if they raise rates by 2% they are liable to get blowback from all those trillions of low interest bonds they backstopped as well.
The liability the Federal Reserve has consumed at the ultimate risk to the taxpayer is unconscionable at best, definately negligent, and criminal at worst (not to mention unconstitutional). Thus, the Federal Reserve will not raise rates anytime soon because it jepordizes itself. If that hurts the American people so be it. Like they give a damn.
Which Currency Is the Better Trade: The Kiwi or the Korean Won? [View article]
As for the Kiwi, it's kind of ironic that the sounder your currency is fundamentally the worse off you get because everyone elses reckless depreciation helps them export their pain onto you. It's really wuite Alice and Wonderlandish. I really begin to see the illogic in our monetary system when I think about it. No wonder the general public feels lost, that something is not rational, and the world is wrong somehow.