Weekend Telecaster -- Heavily Customized

A long time ago in a galaxy far, far away (actually, Austin, Texas in the early 1990s) I was a professional musician.  I even went to GIT.  This was one of my guitars -- which I obviously still have.  I got the idea for it from Jeff Beck in the Secret Policeman's Other Ball.  Seymour Duncan has now issued a limited edition of the...

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EU Inflation Jumps to 3%

From Bloomberg:European inflation unexpectedly accelerated to the fastest in almost three years in September, complicating the European Central Bank’s task as it fights the region’s worsening sovereign-debt crisis. The euro-area inflation rate jumped to 3 percent this month from 2.5 percent in August, the European Union’s statistics office in Luxembourg said today in an initial estimate. That’s the biggest annual increase in consumer prices since October 2008. Economists had projected inflation to hold at 2.5 percent, according to the median...

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Will Food Inflation Be A Continuing Problem Going Forward?

Consider the following charts of the grains when looking at inflation.Above is a 25 year chart of wheat.  Notice that for nearly 20 years, it fluctuated in a range between 2.25 and 5.00 per bushel.  Now $5 is the floor of a new trading range that has seen spikes to over 13 bushel.Soy beans traded in a range of roughly $4-$10 for roughly 20...

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The Century Bond

Greece is making plans to kick its debt can a very long way down the road, seemingly around 100 years if Reuters has its facts right:"One of the options the sovereign is looking at is offering a 100-year bond in return for outstanding short-term debt, said a banker at one of the institutions advising Greece who said he saw the plans being studied.  Two senior Greek government officials denied that such a plan was being considered."We are obviously not working on this"Well they would say that, wouldn't they?...

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Morning Market

Let's start by looking at the SPYs EMAs.  Think of each of these as a trend line representing various time periods -- that is, the 10 day EMA represents a short term (2 weeks), the 20 a bit longer (1 month) etc...  First, note the longest trends -- the 50 and 200 -- are moving lower a fairly sharp rates.  This tells us the longer trend...

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The Death of The Greek Economy

The gullible elements of the media may well be reporting the hype from the Eurozone, that yesterday's vote by the German Parliament to approve a larger EFSF resolves the Euro crisis.Well it doesn't!1 The EFSF that the Germans have agreed to is not large enough2 The implementation of the EFSF is not timely enough3 Wise eyes are now focusing on Greece, which is not in a position to meet its obligations.Greek Deputy Prime Minister Theodore Pangalos told AP:"I believe that the tax limits of Greek society have been exhausted. I would say they have...

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Bonddad Link Fest

Farm profits have hit new dimensionEuro on track to have worst quarter in a yearDouble dip ahead?Copper's fall hints at broader painsBernanke: lessons from emerging economiesDrug shortages are becoming a national issueDiamond: we need stimulus nowStronger dollar, cheaper gas -- for nowFrench GDP confirmed flat What are we spending our money ...

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Two Charts To Cosider When Thinking About Inflation

Above are two ETFs that track some very important commodities.  The top chart tracks copper.  Notice it is nearing a two year low and has fallen sharply in the near term.  In contrast is the grains ETF -- JJG.  It's currently trading in a downward sloping pennant pattern.  And while prices have dropped, they have not done so...

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The Primary Reasons For the Three Fed Governor's Dissenting Votes

Over the last week, I've looked at the various arguments advanced by the three Fed governors who voted against further Fed action (see here, here, and here).  Here I want to sum up these arguments into two categories: those that make sense, and those that don't.These arguments make sense.1.) The fed is already at the end of what is can do; any new policy will only help at the margins.This was advanced by Fed president Fisher and Plosser.  Fisher noted the Fed has already flooded the economy with money and yet few loans are being made. ...

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Morning Market

In yesterday's market wrap, I commented on the importance of looking at more than 1 equity market -- especially the risk based markets such as the IWMs.  Yesterday we see that prices retreated to support levels, printing a strong bar.  This is a very important development, because it indicates investors are moving from the more risk prone...

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The Guilty Idiots

Angela Merkel has won the vote in the Bundestag to expand the EFSF. The expansion to the fund is too little and too late.The Euro is collapsing under its own inherent weaknesses and contradictions.Votes in the Bundestag will do nothing to stop that.BTW, The Germans call the current iron eagle in Bundestag (the current version adopted is 1949) the PLEITEGEIER, ie the "CARRION BIRD OF DEFAULT"...

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It's time to admit that house prices have stopped falling

- by New Deal democratHow long do you suppose until any of the mainstream media picks up on the fact that housing prices have, in fact, NOT been declining for the last half year? Now, I realize everyone "knows" that house prices are declining. Unfortunately reality since the beginning of this year has not been conforming to what everyone "knows."Housing...

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Acropolis Now

Either the YesMen have infiltrated Italy's biggest, and most undercapitalied, bank, or the stress of constant, repeated lying and prevarication has finally gotten to the very people who know their livelihoods hang by a thread, and the second the great ponzi is unwound their jobs, careers, and entire way of life will be gone. Such as the head of UniCredit global securities Attila Szalay-Berzeviczy, and former Chairman of the Hungarian stock exchange, who has written an unbelievable oped in the Hungarian portal Index.hu which, frankly, make Alessio...

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Fed Governor Plosser's Reasons for Dissent At the Last Fed Meeting

 The above video from Fed governor Plosser was shot before the last Fed meeting, but the governor still explained in fairly good detail why he didn't think additional action by the Fed was warranted.  I took some rough notes of his primary points-- Interest rates are already extremely low -- how much lower can they realistically...

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Morning Market

 The above charts show why it is so important to look at several equity markets rather than just one. The news stories will focus around the SPYs (the lower chart).  Prices there have bounced from a technical level (the 112 area) and moved through the 10 and 20 day EMA.  Volume could be better, but the end result is prices are now above...

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Germany and USA Go To War, France Panics

It seems that the relationship between Germany and the USA has taken a nosedive.The Telegraph reports that German finance minister, Wolfgang Schauble, has said that it would be a folly to boost the EU's bail-out machinery (EFSF) beyond its €440BN."I don't understand how anyone in the European Commission can have such a stupid idea. The result would be to endanger the AAA sovereign debt ratings of other member states. It makes no sense."He then told Washington to mind its own business, after President Barack Obama rebuked EU leaders...

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The Solution To The EU Debt Crisis

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Bonddad Linkfest

Is the latest euro solution a game changer -- or notEurope's banks face new squeeze  Top four auditors face shake-upPeter Diamond on unemployment and debtMarkets flash warning signs Rising dollar is a headwind for growth Europe thinks the unthinkableMass sell-off hammers metalsThe market still has many technical barriers to go throughHouse prices increase for the fourth straight month...

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Rumours Feed Markets - The End is Nigh

The European Investment Bank has stated the following today:“There have been media reports about a potential involvement of the EIB in a special purpose vehicle in connection with the EFSF, for the purpose of bailouts.The EIB has not been approached and has no plans to be involved in this.The EIB will continue to focus on its mission which is financing viable investment projects."Why did these rumours start, and what purpose do they serve? Markets have rallied briefly, in time for the month end, useful for traders et al looking to show a "good"...

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Looking At Another Fed Hawk's Argument

Last week I looked at Fed President Fisher's argument for not engaging in further Fed policy easing.  While part of his argument made sense (the Fed had already done all it could do) part of it did not (that regulatory burdens were hindering a hiring increase).  Today I want to look at Minneapolis Fed President Narayana Kocherlakota's argument for not engaging in further Fed policy easing.Much of my discussion so far has been a look back over the past three and a half years, since the start of the Great Recession in December 2007. My...

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Morning Market

As Barry said yesterday, it's all about the bounce -- or, more specifically, the price action from the 112 are.  This is the third time prices have hit the 112 area.  In trading parlance, that means we really, really really need to see prices make a strong advance through the EMAs or we've probably got serious problems.  Yesterday's ...

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A Dishonest Man

"Guarantee that Greece will live up to all its commitments."Greek PM George PapandreouNonsense!People are planning for a Greek default, the Greeks know it and everyone else knows it.Greece will take the next tranche of bailout money, then default (as already planned by the EU and the Greeks).For the reality, see my article posted a few minutes earlier (entitled An Honest M...

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An Honest Man - Alessio Rastani

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Bonddad Linkfest

Watch the bounceGold and silver fall furtherCopper at 14 month lowGerman business confidence continues to fallInflation worries drive down Chinese stocksNo one is winning the electorateGrains slideEU may speed fund to calm marketsForex weeklyBrazil reverses Real policy...

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Measuring the Oil choke collar

- by New Deal democratRecently I've begun measuring the impact of energy costs not just by the price of West Texas Intermediate Crude (WTIC) which closed last week just under $80 a barrel, but also by the price of gasoline at the pump. That's because there has been a unique but marked divergence between WTIC and Brent crude in the last 12 months.Here's...

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How to Think About the Dollar

From this week's Barron'sSo why should the U.S. dollar appreciate in such a horrid environment? As the world's reserve currency, Taylor says, the dollar has become a reverse indicator of the globe's economic health. "Whenever things are good in the world, [the] currency goes down," since there's ample liquidity. But when the rest of the globe is doing poorly, there's no liquidity and therefore the U.S. dollar is worth more. "That is the most important thing to know about foreign exchange nowadays–it is kind of backwards," he sa...

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Distract The People With a Small War

Greek Prime Minister George Papandreou called for calm over Cyprus in a phone conversation with Turkish Prime Minister Tayyip Erdogan on Monday, a Greek government spokesman said, as regional tensions rise over oil exploration.Sourece Reuters. This will end bad...

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Morning Market

The oil market is in a clear downtrend, with resistance at 90 and support at 80.  The MACD has given a sell signal and the EMAs are bearishly aligned.  Prices have broken a short upward sloping trendline over the last week, and printed a very negative downward bar on Thursday.  If prices break support at the 80 level, there is ample...

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Catch 22 - The End of The Euro

The IMF and EU have got themselves into "right old pickle" by leaking snippets of a possible rescue plan, over this weekend, that may or may not save the failed Euro experiment.The key element of this "plan" (were it to ever come to fruition) is an expansion by trillions of the EFSF (the European Financial Stability Facitlity), the EU version of printing money without having the collateral to back it up.Unfortunately for the panicking Eurocrats (and believe me, they are panicking), leaking "plans" that have not been finalised, yet mention a 50%...

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The Grand Plan To Save The Euro

Here's just a few reasons why the plan to save the Euro won't work:1 The EU wasted a year dithering etc etc..it was in a far better economic position last year to do this.2 By the time the funding etc is in place, certain banks/countries will have already gone to the wall.3 The Greek people will not accept the level of austerity required to keep them in the Euro.4 The politicians are in denial, they won't accept that their view of how the world should work has been shattered.5 The timing and content of the announcement is a "hail Mary" designed...

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Weekly Indicators: September job losses look likely edition

- by New Deal democratMonthly data released this week actually wasn't gloomy. Housing permits, a leading indicator, were above 600,000 for the fourth month in a row. Existing home sales also beat estimates handily. Leading Indicators for August were reported up 0.3% (but see my discussion of money supply below). In the rear view mirror, in the second quarter households continued to deleverage and if the trend continues will be in their best position re debt servicing since before Reagan's presidency by next spring.With the major exception...

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Six Weeks To Save The Euro

Six weeks is too far away (even if there was a "solution" waiting there for them).Political timescales and market timescales are out of synch.Our so called political "elite" are presiding over the shattered wreckage of their "world vision". They are in shock and denial that their world view has been destroyed. As such they are a danger to themselves and a danger to the world economy, as they are attempting to put in place "solutions" for a world vision that no longer exists.IMO, Germany should leave the Euro and allow those who remain to...

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Household deleveraging continues (Updated)

- by New Deal democratThe Federal Reserve's report on household debt burdens was released Tuesday, covering the April - June quarter of 2011. According to the bank,The household debt service ratio (DSR) is an estimate of the ratio of debt payments to disposable personal income. Debt payments consist of the estimated required payments on outstanding...

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America's Failing Infrastructure

Just in case you were wondering ...From the American Society of Civil EngineersGrades ranged from a high of C+ for solid waste to a low of D- for drinking water, inland waterways, levees, roads, and wastewater. U.S. surface transportation and aviation systems declined over the past four years, with aviation and transit dropping from a D+ to D, and roads dropping from a D to a nearly failing D-. Showing no significant improvement since the last report, the nation’s bridges, public parks and recreation, and rail remained at a grade of C, while...

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Bonddad Linkfest

Record prices for Ontario farmlandIs there enough income at the top to finance the deficit?Treasury yields are the lowest since the 1940sNon-dollar currencies tankChile prepares for western economic downturnPMI signals EU on brink of recessionIndia food prices edge higherGlobal trade growth slows sharply  What really caused the eurozone crisis?Dollar rally sparks concern over crop expo...

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The 50% Haircut

Two Greek newspapers claim that the Greek Finance Minister, Evangelos Venizelos, told parliament that he sees three scenarios to resolve the debt crisis, including one involving an orderly default with a 50% haircut for bondholders.Unsurprisingly, the government is denying he said any such thing.Draw your own conclusions as to whether he said it or, most certainly secretly believes ...

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Morning Market

Given the turmoil in the markets, I'm putting this up early and will leave it up overnight.  I hope it helps to at least explain what is happening.Let's start with the equity markets: As I mentioned in yesterday's post, the IWNs were already on technically poor ground.  Today, they closed right at key support around 65.  The QQQs --...

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