Gold may have longest run of monthly losses in 13 years (BB)EU inflation at 2.4% in April (Eurostat)Oil set for biggest monthly decline in three years (BB)The India story, Pt. IThe India story, Pt. IIThe India story, Pt. ...
Thursday, May 31, 2012
Ireland Goes to the Polls On Treaty
From the Washington PostLinked by a common currency but not a common economy, the crisis-battered euro-zone nations are facing a pivotal choice: Either move more closely together or risk their currency union breaking apart. But are European voters — some in nations divided by centuries of rivalries — willing to take that leap toward closer integration?The fiercely independent Irish are about to offer a window into the answer.From the emerald hills of Donegal to the shores of Cork, the Irish go to the polls Thursday in a referendum on a regionwide...
Why Is State College Tuition Spiking? It's A Lack Of Funding
Yesterday I linked to a piece on the Carpe Diem Blog that argued that "college for all" was bad policy. The post noted the increase in tuition and attributed it entirely to an increase in demand. However, it's really a lack of funding that has been shifting the burden of state schools onto the backs of students. Consider these data points:• From 1990-1991 to 2010-2011, total state appropriations rose from $65.1 billion to $75.6 billion. But state funding actually declined in relative terms. [From Bonddad: in inflation adjusted...
Spain Haemorrhaging Cash
Data from the Bank of Spain shows that a net of Euro66.2BN was sent abroad last month, the most since records began in 19...
Morning Market Analysis
Given yesterday's sell-off, let's check in on the US averages to see where we are in relation to key levelsThe IWMs are the worst off -- which is to be expected as they're the riskiest of the averages. However, prices are only down about 10% from their highs in late Market. Prices are under the 200 day EMA. They recently formed a...
Spain Effectively Insolvent
ZeroHedge has quoted Charles Diebel (Lloyds Head of Market Strategy) as saying that Spain is "effectively insolven...
Wednesday, May 30, 2012
Bonddad Linkfest
Italian and Spanish yields increase at recent auction (FT)GOP anti-tax rhetoric is softening (Politico) Euro Commission Reports spark EU equity market rally (Reuters) Economists expect a 50BP cut in Brazilian interest rates (Reuters) Economic sentiment drops in the EU (Europa) EU business climate continues to drop (Europa)Texas production index holds steady (Dallas Fed)Dryness may lower western Australian crop yield (Agrimoney)Emerging markets are faltering (Marketwatch)US consumer confidence falls (Marketwat...
The Exact Wrong Policy Proscription Regarding Education
From Carpe Diem:"The college-for-all crusade has outlived its usefulness. Time to ditch it. Like the crusade to make all Americans homeowners, it’s now doing more harm than good. It looms as the largest mistake in educational policy since World War II, even though higher education’s expansion also ranks as one of America’s great postwar triumphs......MP:...
The EU Oversteps The Mark
The EU has said today that the Eurozone should consider setting up a banking union and allow a rescue fund to directly boost the capital of banks to further stop expensive bailouts from pulling down governments’ own finances.That's all very nice, in theory. However, the EU is not the ECB; it is up to the ECB and central banks to determine the capitalisation levels of European ban...
Why Are the BRICs -- and the Slowdown of China and India -- So Important
Over the last month or so, we've seen stories that the two big BRIC economies of India and China are slowing down. However, a fundamental question that we have not answered is this: why are the BRICs -- and more importantly India and China -- so important?The first answer is population. Consider these charts of total population:The combined...
Morning Market Analysis
The technology sector is the largest sector of the SPY's accounting for a little under 20% of the average. Overall, this sector has dropped about 7.4%. Prices are right about the 200 day EMA and are also being hemmed in by the 10 and 20 day EMA. Also note the declining momentum and CMF. The real issue with this chart is...
Tuesday, May 29, 2012
Bonddad Linkfest
Republican Keynseians (NYT)The UK/Euro Connection (FT Alphaville)US consumer sentiment increases (Marketwatch)Interview with Canadian Banking Regulator (Marketwatch)UK devises contingency plans (FT)Weaker euro should boost EU exports (FT)Japanese unemployment at 4.6% SA (JSB)German inflation drops (...
Unemployment Benefits Start to Get Cut
This is not the proper way to deal with this situation:The checks are stopping for the people who have the most difficulty finding work: the long-term unemployed. More than five million people have been out of work for longer than half a year. Federal benefit extensions, which supplemented state funds for payments up to 99 weeks, were intended to tide over the unemployed until the job market improved. In February, when the program was set to expire, Congress renewed it, but also phased in a reduction of the number of weeks of extended...
So -- Who Is Really Spending More?
There's been a pretty big debate about whether or not the administration is the most spendthrift administration in the world, universe, or galaxy. What started this off was an article by Rex Nutting over at Marketwatch titled, Obama Spending Binge Never Happened. After that, the predictable sources chimed in in predictable ways. So,...
Case Shiller index shows turn in housing prices
- by New Deal democrat I haven't read any commentary by others on this morning's release of the Case-Shiller indexes. Unlike most others I focus on the seasonally adjusted numbers, since they will show a turn sooner. This morning both the 10 and 20 City indexes went up for the second month in a row. That is the first time there have been two monthly advances in a row since 2007, outside of the period of the $8000 housing credit which ended in April 2010. Fifteen of the 20 cities in the larger index showed increasing prices. Only 4 cities -- New...
Morning Market Analysis
Let's start the holiday shortened week by looking at where we are in the market cycle.The SPYs have fallen from their latest high around the 142 area to the 200 day EMA and have rebounded from that level to the 132 handle. Prices have found resistance at the 10 day EMA. All the shorter EMAs are moving lower, the MACD is declining, the CMF...
Monday, May 28, 2012
Happy Memorial Day
The markets are closed today and so are we. I'll be barbequing some ribs and enjoying the first game of the Stanley Cup playoffs. We'll be back in the AMHave a safe holid...
Greece Seizes Up
As Greece spirals downwards towards financial oblivion, the caretaker government has suspended rebates and payments to suppliers of the public sector.Additionally, according to The Slog, all loans by banks to any business, regardless of viability, have been stopped. The reason being that there has been a combined rush for credit alongside a massive hemorrhage of withdrawals from bank accounts.Unsurprisingly, foreign companies importing to Greece are asking for cash in advance.It is clear that this situation is unsustainab...
Sunday, May 27, 2012
Weekly Indicators: Memorial Day muddle through edition
- by New Deal democratThere was little monthly data reported in this past week. New and existing housing sales both rose, as did several housing indexes, adding to the evidence that the recovery in housing sales is real, albeit from record low levels. Consumer confidence rose to the highest levels since before the great recession, including the expectations index which is a component of the Leading Indicators. The high frequency weekly indicators were mixed this week, but generally neutral to positive as the Oil choke collar continues to disengage....
Saturday, May 26, 2012
Weekly Indicators: undisclosed holiday location edition
- by New Deal democratI'm vacationing this weekend, but will get this up sometime before Sunday night. In the meantime, enjoy yourselves over hot dogs, hamburgers, and the libations of your choi...
Friday, May 25, 2012
Weekend ..... 12C!?!?!?!?!
I realize that in posting this picture, I'm really dating myself. However, above is my indispensable HP 12C Financial Calculator. I've had this for over 15 years. As you can tell, it's been heavily used. It's been dropped, banged around briefcases and the like. If you look really closely at the lower right hand corner,...
The India Story is Deteriorating
From the FT:India’s economy has been slowing for more than a year as corruption scandals involving senior members of the Congress-led coalition government have paralysed parliament and blocked key reforms to boost investment. India’s macroeconomic landscape has deteriorated further since the start of the year. New Delhi’s fiscal and trade deficit have ballooned to 5.8 per cent and 9.9 per cent of GDP respectively, while inflation has shot back into double digits. The Indian rupee also weakened to a record low against the dollar this week, which...
The Dollar -- the De Facto Safety Trade
Earlier today, I noted that that dollar is approaching key levels and may be about to rally. The charts below show that the dollar is, in fact, the only safe haven currency out there.The Australian economy is actually one of the best performing economies in the globe. But recent numbers have shown some weakness, leading the Australian central...
Grexit Imminent
The long awaited Grexit is now regarded as imminent, with the likely "planned" departure occurring on 2nd/3rd of June. Given that a Grexit ought to catch the markets and people by "surprise", be prepared for the "planned" departure date to be brought froward to this weekend.French banks are in panic mode, and are now (somewhat late in the day) drafting plans for the Grexit.In other news, Bankia has suspended its shares and has asked the Spanish government for a bailout of Euro15BN; to add to the pressure on the beleaguered Spanish government, the...
Germany Ups The Ante On Greece
In the never ending game of chicken between Greece and Germany (the Eurozone's paymasters), Germany has just upped the ante by threatening to withhold the next tranche of bailout many.The "threat" was of course "subtle", as per the use of the phrase "not problematic":Russian Market @russian_market "German finance ministry spokesman says not problematic if the next Greek aid tranche is delayed beyond the end of Ju...
Thursday, May 24, 2012
Morning Market Analysis
I didn't mean to publish this until the AM. But, so long as it's up.... It appears the SPYs may be trying to bottom. Consider these charts:First, on the daily chart, prices are currently trending up the lower part of a Fib fan. In addition, they're hitting resistance at the 10 day EMA. However, the lower volume totals for the...
Bonddad Linkfest
EU composite PMI at 35 month low (Markit)UK revised GDP at -.3% (PDF)Germany IFO Business Climate (IFO)Australian LEIs increase slightly (Conference Board)BOJ Rate Decision (BOJ)BOE Minutes (BOE) EU economy contracting (FT) France calls on ECB to issues bonds (FT) Durable Good Increase Slightly (Census) Initial Claims at 370,000 (D...
Housing: department of "Huh?!?"
- by New Deal democratYesterday Barry Ritholtz published a piece that read, in its entirety: For the crowd who are still clinging to the RE recovery meme, have a gander at these charts. Note that there are more new permits than starts, and more new starts than completions Now, let me say that Barry has been a friend of this blog and has cross-published...
Long Term View of the Markets Not Looking Good
Pulling the camera lens back to a monthly view, the charts of the major averages aren't looking that good. Consider the following:In the last three year, the IWMs have rallied into the 80-85 price area and failed. Also note the declining MACD over the last two peaks, indicating declining momentum. However, we do an increase in the...
Morning Market Analysis; the Flight To Safety
Let's start by looking at the treasury market, where we see that the entire curve is trading near or above the top of a trading range that started at the end of last summer. This is the respective highest level for all of these sections of the curve in nearly two years. While the MACD has given a buy sign for all the sections, I wouldn't...
