economy

Nightly Recap 4-8-2010

Posted by Investing Freak on April 08, 2010
General / Comments Off on Nightly Recap 4-8-2010

Market Summary:
DOW      +29.55 (10,927.07)
S&P        +3.99 (1,186.43)
Nasdaq  +5.65 (2,436.81)
____________
Disclaimer:
Open Positions:  SRS at 5.97
___________

Nightly News Links

US Economy:

Strong Retail Sales Prove Consumer Isn’t Dead (In The Money)
The one sector that is bucking the weakness is the retail sector, after a flurry of same-store sales reports that were very strong. Companies such as Macy’s (M), Target (TGT), and Gap (GPS) all posted double-digit increases in comp store sales, a solid showing. The Reformed Broker: ” On CNBC, a breathless Dana Telsey guided us through this morning’s March Same Store Sales numbers – against incredibly bad comps, the numbers end up looking miraculous. The bulls will make the case that this is the pent-up consumer coming out of the woodwork for good, the bears will remind us that Easter weekend came early this year and was wedged into the month’s tally.”

World Economy:

Greece is Dying! (The Big Picture)
Highlighting the increasingly troubled situation in Greece, the yield curve spread between 2’s and 10’s is now negative. Greek 2 yr note yields are rising a whopping 114 bps to 7.83% while 10 yr yields are up 34 bps to 7.51%. Greek 5 yr CDS is up 35 bps to 448 bps and now exceeds Dubai and Iceland. Greek stocks are down almost 4%. A German official didn’t help the situation by saying that their stance hasn’t changed and they will only assist Greece as a last resort. Well, that may be fast approaching but it’s looking more likely that it will be an IMF bailout that will lead the way.

More Links on Greece:
1.Goldman On Greece: “Could Turn Into The Endgame”
2.S&P Threatens Greece With Downgrade If Bond Spreads Are Not Quickly Reduced
3.PIMCO Compares Greece To Titanic, Says Bonds Not Attractive Even Over 7%
4.Is A Big US Bank Betting On A Greek Default In 11 Days?

Interesting Links:

Hispanics Create More than Half of Food Growth(Retailer Daily)
The U.S. Hispanic segment made up more than 50% of real U.S. food, beverage and restaurant growth between 2005 and 2008, generating $52 billion of new inflation-adjusted spending. In contrast, non-Hispanics generated $40 billion of new inflation adjusted spending during the same period. This means that between 2005 and 2008, Hispanics accounted for 57.7% of sales growth in the food, beverage and restaurant sector.

Southpark: Cartman as Jim Cramer of Facebook
A 1 minute clip which i found funny 🙂

Have a Good Night

-K

Tags: , , , , , ,

Nightly Recap 4-5-2010

Posted by Investing Freak on April 06, 2010
General / Comments Off on Nightly Recap 4-5-2010

Market Summary:
DOW      +46.48 (10,973.55)
S&P        +9.33 (1,187.43)
Nasdaq  +26.95 (2,429.53)
____________
Disclaimer:
Open Positions:  SRS at 5.97
___________

Nightly News Links

US Economy:

Recessionary Impact: Fewer Shopping Trips and Less Spending Per Trip (NielsenWire)
A consistent pattern of reduced shopping trips continues to be a major element of consumer’s economic coping strategies. In the latest battle for share of wallet, those retailers who satisfy consumers through differentiation will gain more of less. Retailers’ focus on store brands and price cuts helped keep spending levels in check driving more value for shoppers.

Gen X,Y Will Lead Economic Recovery (PWC)
As a result of recession-shrunk Baby Boomer household wealth, Generations X and Y will fuel the shopping growth needed to spur an economic recovery, according to [pdf] a new study from PriceWaterhouseCoopers and Kantar Retail.

ISM Services Jump (Econompic)
“Business conditions have returned to normal (pre-recession). Our business is up significantly since 2009. We are very positive about the upcoming year. “The economy appears to be holding its own; however, state and local funding is projected to decrease next fiscal year.” (Educational Services) “Brisk business activity continues as more projects get ‘green light.'” (Utilities) “Observing some relaxation on several fronts regarding spending and hiring. Still very cautious, but making investments where they make sense.” (Retail Trade)

World Economy:

Greece 10 Years Back To Crisis Levels As Germany Refuses To Subsidize Greek Interest Rates (Zero Hedge)
Greece has been largely forgotten by the media over the past 2 weeks. This is somewhat perplexing in light of what is happening over in Europe: 1) Greek 10 Year spreads are back to crisis levels, hitting 6.53% today, 50 bps higher than the sub 6% reached in early March when speculation that the EU would fix everything; 2) German disagreements with other eurozone countries on the shape of the Greek bailout are getting more acute by the day, and this is nearly a month after the European “bailout” has been announced.

Interesting Links:

Facebook vs The United States (InfoGraphic) (Mashable)
To find out more about the average American Facebook user and how he or she compares to the average American, we dug a little further. After crunching the numbers and comparing the data, this is what we found (Check link above).

Wikileaks leaked video of Civilians killed in Baghdad – Full video (!Warning! Video is Very Graphic)
After much speculation that it was nothing but a red herring, Wikileaks, which has recently gotten some substantial press coverage on both sides, has finally released a classified video leaked by “a number of military whistleblowers” which depicts “the indiscriminate slaying of over a dozen people in the Iraqi suburb of New Baghdad, including two Reuters news staff.”

httpvh://www.youtube.com/watch?v=5rXPrfnU3G0}

Sorry for missing a few days of recaps but with the April Fools combo and Easter I wasn’t able to.
Have a Good Night

-K

Tags: , , , , , ,

Nightly Recap 3-29-2010

Posted by Investing Freak on March 29, 2010
General / Comments Off on Nightly Recap 3-29-2010

Market Summary:
DOW      +45.50 (10,895.86)
S&P        +6.63 (1,173.22)
Nasdaq  +9.23 (2,404.36)
____________
Disclaimer:
Open Positions:  SRS at 5.97
___________

Nightly News Links

US Economy:

Seasonality Map for April, 2010(MarketSci Blog)
On the link above is a map of expected strong/weak days for the U.S. market for April, 2010 based on historical seasonality patterns. “I want to make clear that I do NOT think that seasonality alone is sufficient to justify a trade; however, all of the seasonality plays included in this report have been powerful enough and consistent enough that I do think they should be one of many tools in the trader’s toolbox.”

Have commodities outpaced fundamentals?(Investment Postcards)
Have metal prices and the prices of other commodities such as oil outrun the underlying fundamentals? The significant strength of the US dollar since December last year has capped rises in commodity prices. However, metal prices continue to be driven largely by Chinese demand, with China’s manufacturing PMI for new export orders and total new orders leading metal prices. The risks of investing in commodities are increasing as we move forward. The metal markets currently smack of speculation and manipulation. Metal stocks on the London Metal Exchange are currently at levels similar to those at the height of the global liquidity crisis

World Economy:

Euro Trashed (New York Times)
Germany and other “euro-optimists” hoped that the introduction of a common currency and the global economic competitiveness it spurred would quickly lead to sweeping economic and societal modernization across the union. But the opposite has occurred. Rather than pulling the lagging countries forward, the low interest rates of the European Central Bank have lured governments and households, especially in the southern part of the euro zone, into frivolous budgetary policies and excessive consumption. In short, the euro is headed toward collapse.

Greek CDS’s Exploding After Horrible Debt Auction, Greeks Blame Weak Demand on Easter(Zero Hedge)
Greek CDS are moving 10 bps wider from 293 to 303 bps as demand for the bailed out country’s bonds was much weaker than expected. Greek weakness is spreading to other European countries: The cost of protecting other euro zone government bonds from default were also mostly higher. The German 5-year credit default swap rose to 30.1 bps from 28.9 bps. In the meantime, and in keeping with the Greek tradition of scapegoating, the very weak demand for the new 7 Year issue was blamed on… Easter. About 175 institutions bid for a slice, sources at the lead managers said, compared to 400 investors for the 10-year issue.
“It is Easter week in Greece and Europe and this explains why demand may seem a bit softer, with the book growing at a slower pace compared to the previous 10-year bond issue,” said a source at one of the five banks leading the issue.

Japanese Production Takes a Breather(Econompic)
Japan’s industrial production retreated in February, snapping an 11-month winning streak that helped to secure a recovery from the country’s worst postwar recession.
Factory output declined 0.9 percent from January, when it rose 2.7 percent, the most in eight months, the Trade Ministry said today in Tokyo. The median estimate of 24 economists surveyed by Bloomberg News was for a 0.5 percent drop.
The slide is unlikely to last as Asian demand for the country’s electronics and machinery continues to fuel exports, Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo, said before the report was published. Factory output and exports have yet to return to their peak set two years ago, and the recovery remains plagued by deflation.

Have a Good Night

-K

Tags: , , , , , , , ,

Nightly Recap 3-23-2010

Posted by Investing Freak on March 24, 2010
General / Comments Off on Nightly Recap 3-23-2010

Market Summary:
DOW      +102.94 (10,888.83)
S&P        +8.36 (1,174.17)
Nasdaq  +19.84 (2,415.24)

Nightly News Links

US Economy:

Existing Home Sales fall further in February (The Mess That Greenspan Made)
The National Association of Realtors reported that sales of existing homes fell 0.6 percent in February after a drop of more than 7 percent in January and sales are now at their lowest level in eight months.  It’s probably best not to make too much of the winter data for existing home sales because it is a very slow time of the year but, the “Months of Supply” metric certainly looks to be going in the wrong direction right now.

What is the Homebuilders Index pricing in? (Investment Postcards)
David Rosenberg, chief economist and strategist of Gluskin Shedff & Associates, states that his regression analyses show the Homebuilders Index to be pricing in the following:
Housing starts: pricing in a level of 800-900k (versus 575k currently)
Existing home sales: pricing in a level of 5,500k (versus 5,050k)
NAHB Housing Market Index: pricing in a level of 35 versus 15 actual.
Is this the most expensive part of the US stock market?

US Debt Update: 6 Months To Revised Debt Ceiling Breach (Zero Hedge)
As a reminder, the debt limit is $14.3 trillion. We are $1.7 trillion away from the limit. At March’s run-rate of about $300 billion per month, the debt ceiling will be breached by October 2010. If somehow the government manages to reduce the monthly issuance to “just” $200 billion, we have eight and a half months until breach, or January 2011.

World Economy:

Spain to join Portugal in issuing Dollar-denominated Bond (Zero Hedge)
Yet more countries are anticipating the Fed finally killing the dollar sooner or later, as Spain now joins Portugal in issuing dollar-denominated bonds. If Europe’s most insolvent countries are getting on board of the asset side of the Fed’s balance sheet, it can only mean one thing: the odds for the winner of the currency race to the bottom are squarely in favor of the US currency.   (K remark:  I really see this as a contrary indicator being that there is an imbalance in those countries who are betting on a collapse of the dollar.)

Germany Sets tough terms for EU help for Greece (Reuters)
ermany signaled for the first time on Tuesday that it may accept European financial aid for Greece as a last resort, but only if the IMF is involved and euro zone partners accept tougher budget discipline rules.  “The condition for action, as a last resort, is that Greece’s financing on the capital markets is exhausted,” the official said.”Furthermore, it would be necessary for the International Monetary Fund to provide a substantial contribution,” he said, stressing there will be no decision on actual aid at the summit.

Interesting Reads:

Jim Rogers Starts Some Short Positions (Market Folly)
Potentially the most notable bit of his conversation was when he said, “I had no shorts for about 15 months so I started putting out some shorts recently. But the fact that I’ve been putting out shorts means the stock market won’t pull back.” So, it’s interesting to see Rogers fight the current trend. In his mind, it’s the right play, but he knows he’s going to potentially feel some pain first.

Morning Humor- American And Greek Capitalism Explained  (Video) (Zero Hedge)
Explaining US economics (with an emphasis on generally accepted criminal accounting practices).
httpv://www.youtube.com/watch?v=7uUXwakPR1U}

Have a Good Night

-K

Tags: , , , , , , ,

Nightly Recap 3-19-2010

Posted by Investing Freak on March 19, 2010
General / 4 Comments

Market Summary:
DOW      -37.19 (10,741.98)
S&P        -5.92 (1,159.90)
Nasdaq  -16.87 (2,374.41)

Nightly News Links

US Economy:

Leading Economic Indicators Point to Slowing Recovery (Econompic)
The index of U.S. leading indicators rose 0.1 percent in February, the smallest gain in almost a year, pointing to an economy that may expand at a slower pace in the second half of 2010.A pickup in manufacturing in the last half of 2009 that helped spearhead the recovery has prompted companies to slow the pace of job cuts. Stronger economic growth hinges on employment gains that have yet to occur, one reason Federal Reserve policy makers this week kept interest rates near zero.

The Fed must disclose bailout details (Calculated Risk)
The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program … The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released. It will be interesting to see these documents, but it might not be for a few more years.

Goldman Lowers Major Banks’ Projected Q1 EPS By 15% (ZeroHege)

World Economy:

German Central Bank Admits that Credit is Created Out of Thin Air (Naked Capitalism)
Germany’s central bank – the Deutsche Bundesbank (German for German Federal Bank) – has admitted in writing that banks create credit out of thin air.As the Bundesbank states in a publication entitled “Money and Monetary Policy”

The high price of failure in North Korea (The Mess That Greenspan Made)
North Korea has executed a senior official blamed for currency reforms that damaged the already ailing economy and potentially affected the succession, a news agency in South Korea reported today.Pak Nam-gi was killed by firing squad last week.


NOTE: I Will not do Weekend Updates of news. Sorry

Have a Good Night

-K

Tags: , , , , , , , , ,

Nightly Recap 3-18-2010

Posted by Investing Freak on March 18, 2010
General / 2 Comments

Market Summary:
DOW      +45.50 (10,779.17)
S&P        -0.39 (1,165.82)
Nasdaq  +2.19 (2,391.28)

Nightly News Links

US Economy:

CPI Shows Lack of Inflationary Pressure (Econompic)
U.S. consumer prices were unchanged on a seasonally adjusted basis in February, with falling energy prices offsetting increases in prices of cars, medical care and food, the Labor Department reported Thursday.In the past year, the CPI has risen 2.1%. The core rate is up 1.3% in the past year, the smallest year-over-year increase in six years.

World Economy:

Portugal Prepares To Sell $1 Billion Of Dollar Denominated Bonds In Goldman-Led Deal (ZeroHege)
Yet more rape and pillaging of US taxpayers as Portugal now plans to join the long and exalted list of nearly bankrupt countries who wish to join the dollar devaluation bandwagon, and issue debt denominated in dollars. The P in PIIGS is in the same position as the US, needing to plug a massive budget deficit, so it has decided to do what the US does so well – issue bonds with a $ sign on them.

China’s Exporters Hanging by a Thread? (Naked Capitalism)
China cannot tolerate much inflation. Remember, inflation will push up the price of good in local currency terms, which in a fixed peg currency regime, translates directly into price increases. Price increases from a country whose selling proposition is cheap prices would lead importers to look for substitutes in other emerging economies.

Greece Gives Germany And E.U. One Week Bailout Deadline (Bloomberg)
Greek Prime Minister George Papandreou set a one-week deadline for the European Union to craft a financial aid mechanism for Greece, challenging Germany to give up its doubts about a rescue package. Papandreou said he may turn to the International Monetary Fund to overcome Greece’s debt crisis unless leaders agree to set up a lending facility at a summit March 25-26.

Interesting Reads:

Read The Harvard Thesis on The CDO Market Meltdown (Distressed Volatility)
“A.K. Barnett-Hart, a Harvard undergraduate who wrote a thesis about the market for subprime mortgage-backed CDOs Inspired Michael Lewis to write “The Big Short”. It is an unbiased report about the subprime mortgage-backed CDO meltdown by a Harvard undergraduate last year.  The report is 115 pages long and packed with charts.

Have a Good Night

-K

Tags: , , , , , , , , ,

Nightly Recap 3-16-2010

Posted by Investing Freak on March 16, 2010
General / 3 Comments

Market Summary:
DOW      +43.83 (10,685.98)
S&P        +8.95 (1,159.46)
Nasdaq  +15.80 (2,378.01)

Nightly News Links

US Economy:

Housing Starts Stagnant (Econompic)
Housing starts in the U.S. fell in February as record snowfall in parts of the country hampered construction, while fewer building permits signaled demand is stagnating. Building permits, a sign of future construction, decreased for a second month.

Meredith Whitney: Housing Market will double-dip (CNBC)
The US housing market will face another retreat while mortgage-backed securities and Treasurys are likely to go through a “material” correction, Meredith Whitney, CEO of Meredith Whitney Advisory Group, told CNBC Tuesday. “The Fed has been supporting the housing market, a third of the Fed’s balance sheet is tied to mortgages,” she said.

FOMC Statement: Economic Activity “Continued to strengthen” (Calculated Risk)
As expected, the Fed will continue to provide the trough of free money, for now. You can bet they will be acting with extreme caution when it comes to removing the liquidity so as to not snuff out what could be an actual recovery in the making.

World Economy:

S&P affirms Greece’s BBB+ rating (The Big Picture)
S&P affirmed Greece’s BBB+ credit rating and took them off credit watch with negative implications but the outlook is negative from stable (which reflects their view of the govt’s ability to sustain reform momentum in the medium term). They see “real GDP contracting by 4% this year.”

Interesting Reads:

Our Next Economic Plague: Japan Disease (Caixin Online)
Typically provocative new Andy Xie piece out pointing to aging societies as being fundamental to why all economies are steadily catching “Japan disease”. Further, Xie goes on to argue that innovation won’t save us from debt and death. An economy ages in many ways.  Growing old is hard, but watching formerly vibrant economies choke on debt and wither away is downright ugly.

Have a Good Night

-K

Tags: , , , , , , , , ,

Nightly Recap 3-15-2010

Posted by Investing Freak on March 15, 2010
General / 2 Comments

Market Summary:
DOW      +17.46 (10,642.15)
S&P        +0.52 (1,150.51)
Nasdaq  -5.45 (2,362.21)

Nightly News Links

US Economy:

NY Manufacturing Index Shows Strength (Econompic)
Manufacturing activity in the New York region continued at a solid pace in March, the New York Federal Reserve Bank said Monday. The new orders index shot up 17 points to 25.4. Shipments also moved higher. Inventories climbed above zero for the first time since August 2008.

ECRI Leading Economic Index Drops For 12th Week In A Row (ZeroHedge)
Leading indicators in the U.S. are telling a similar story about a possible double-dip.  Friday’s reading from the ECRI continues to show a weakening recovery. Their leading indicator’s growth rate fell to a 31 week low. The smoothed ECRI leading economic index for the U.S. fell last week for the 12th week in a row, to stand at its lowest level since July 2009. Something tells us a slowdown is about to start.

World Economy:

Moody’s warns nations to cut spending or risk AAA ratings (Washington Post)
The United States and other top world economies need to make potentially painful government spending cuts or risk losing the high-grade credit ratings that have kept borrowing affordable, the Moody’s rating agency said Monday. Outlining the dilemma faced by policymakers in the United States, Great Britain, Germany and France, Moody’s said that debt levels in the four large credit-worthy economies had reached the point at which they are at risk of being downgraded — a step that would drive up interest rates, increase borrowing costs and mark a turn in perceptions about the world economy.

Germany’s Manufacturing Jobs Fell 4.9% in January (Business Insider)
The Federal Statistical Office said Monday the number of Germans employed in manufacturing fell to 4.9 million workers from about 5.15 million in January 2009.

Chinese Economic Indicators Are Starting To Roll Over (Pragmatic Capitalist)
“Early signs of softening in data momentum suggests we should be much more cautious about corrections in those markets that benefited late last, and early this year.” Despite being the strongest leg of the economic recovery, Chinese investors have turned remarkably cautious in recent months.  The Shanghai Index peaked in July of 2009 and has traded down ever since.  The index has declined 9.5% this year while U.S. investors have continued to run head first into stocks.

Interesting Reads:

Consumers Don’t Strongly Identify with Brands (Marketing Charts)
trendwatching.com calls these products and services “functionall,” or providing function for all. Often designed for lower-income consumers in emerging markets, they also have broader crossover appeal for more affluent consumers in mature markets. Look for brand manufacturers to produce more of these products, and for more global brands to try to penetrate mature economies.

Is The US Preparing For a Strike on Iran? (HeraldScotland)
Hundreds of powerful US “bunker-buster” bombs are being shipped from California to the British island of Diego Garcia in the Indian Ocean in preparation for a possible attack on Iran.The Sunday Herald can reveal that the US government signed a contract in January to transport 10 ammunition containers to the island. According to a cargo manifest from the US navy, this included 387 “Blu” bombs used for blasting hardened or underground structures.

National credit card statement (Cracked)
A National Debt happens when governments spend more than they actually have, and everyone getting the money agrees that’s absolutely fine.

60 Minutes: Michael Lewis’ The Big Short – Video (CBSNews)
If you had to pick someone to write the autopsy report on the Wall Street financial collapse 18 months ago, you couldn’t do any better than Michael Lewis. He is one of the country’s preeminent non-fiction writers with a knack for turning complicated, mind numbing material into fascinating yarns.

Part 1

Part 2

Have a Good Night

-K

Tags: , , , , , , ,

TED Target reached: Increasing short positions.

Posted by Investing Freak on November 19, 2009
Market Analysis / Comments Off on TED Target reached: Increasing short positions.

Here we go again.
On September 28 I stated the following:

The TED Spread which measures the general risk in the economy has been rising the last couple of weeks. today alone it rose 5.42% which means interbank loans are now riskier.  This is still not significant enough and I would like to see another 33% increase in the TED before I really put a lot of my sidelined money on the short side.

On the 28th TED was at around 0.195  so a 33% move would put the TED at around 0.26 and today TED closed at 0.262 which satisfies my reasoning for going short.

On October 27th TED was in an Ascending Channel and also stated that a higher TED spread would mean that a major market correction is underway as banks are raising loan rates between eachother. Rising rates means there will be some major trouble in at least the financial sector which allocates 15% of the S&P Index.

Here is the latest Chart of the TED showing the channel that has been broken.  (Click To Enlarge)

ted-11192009

Another Blogger has picked up on the TED and here is Daneric’s TED Chart.
Finally keep in mind that the current TED is still far below the average TED which is at around 0.50 (50 basis points).  We’re halfway there and its good to catch onto this risk indicator before CNBC does.

I will add shorts via options and inverse ETF’s very soon but always use my opinions as a viewpoint and not investment advice. Everyone has different risk tolerances.

Happy Trading,  K

 

Tags: , , , , , ,

A few words on the Economy from Christopher Probyn of SSGA

Posted by Investing Freak on November 02, 2009
General / Comments Off on A few words on the Economy from Christopher Probyn of SSGA

I was fortunate to attend a presentation by Christopher Probyn of SSGA

“The Financial Crisis: Causes, Consequences and the Prospects for Recovery.”

I spent more time listening than writing things down so pardon me for just providing an outline of what he mentioned that interested me.

  • Headwinds to the economy: Weakness Abroad, Deteriorating Commercial Real Estate Markets.
  • V Shaped recoveries usually follow deep recessions, Mr. Probyn is looking for a U shaped recovery to play out.
  • Unemployment will reach at least 10% (It’s close enough now and we shall see Friday if it happens already)
  • Inflation will come way down from the current 1.5% due to the higher unemployment rate.
  • There is a good chance CPI will break below 0% (It already has in Japan and Europe) Deflation Alert!
  • Do need to worry about inflation until capacity utilization rate goes to at least 80% (Currently in the 60’s)

That’s all Folks. I hope you found it interesting to say the least.

-K

Tags: , , , , , , , ,