Existing Home Sales Plunge, Unemployment to do the reverse
Existing Home Sales which are more important than the new home sales data plunged over 27% year over year, the amount of sales was the lowest since 1995. At the current pace it will take over 1 year (yes 12+ months) to sell the existing houses out there.
People have begun losing their jobs once again after a few months of lowering unemployment claims. How do I back this up? No data other than I now have more than one close acquaintance that within the next 2-3 weeks will receive a pink slip. They survived during the worst of it all and now employers are deciding its time to let go. Thats amazing! Keep your profits because you wont be making as much money in the future with 15% of the american workforce unable to afford staples such as bread without a food stamp.
On the currency front according to ZeroHedge
And once again, all of Europe is dumping its deposits in Switzerland, running away from domestic banking centers, and making the lives of Hungarian CHF-denominated debtors a living hell. The EURCHF just hit an all time low of 1.3066. The Bank intervention sonar just went apeshit as both the BoJ and the SNB are fully expected to intervene at any moment.
Technically Speaking? See for yourself how the market has acted recently especially since I officially returned from break August 6th.
K- August 6th, 2010
vacation just ended today so it will take me at least a week to slowly get the groove back. be patient this time...
Euro/Usd and SPX have been in a water slide since. Its hard getting from Information overload mode to 2 month no internet and back to information overload so I tire out by all the information I once processed in a usual day so the recovery process puts me on tract to return trading right after labor day and the Special chart that hasn't been posted here in a bit as well. (Click to Enlarge)
Happy Trading and make money trading not listening to baldies at CNBC unless he entertains you and the advice isnt followed. 
-K
Debt Reducing Tuesday
Bennie Balloon Bernankie has something to say about the koolaid.
“My best guess is that we’ll have a continued recovery, but it won’t feel terrific. Even though technically we’ll be in recovery and the economy will be growing, unemployment will still be high for a while and that means that a lot of people will be under financial stress,” he said. Via CalculatedRisk
But there is GREAT NEWS...You can use your credit card to Help Reduce National Debt. Via The Mess That Greenspan Made
Its ok that everyone is financially strained you are still welcomed to help especially if you have a credit card with 13 trillion dollar limit. 
There are two ways for you to make a contribution to reduce the debt:
- You can make a contribution online either by credit card, checking or savings account atPay.gov
- You can write a check payable to the Bureau of the Public Debt, and in the memo section, notate that it's a Gift to reduce the Debt Held by the Public.
And as mentioned yesterday the G20 Meeting relied more on taking the koolaid away and tightening the belts of the countries.
Here's what Germany decided to do:
Germany will cut child payments, pare government payrolls and boost taxes on energy firms with nuclear power plants in an effort to save 81.6 billion euros ($97.6 billion) between 2011 and 2014 in a package approved by Chancellor Angela Merkel's Cabinet on Monday. -Marketwatch
and how it would look if the United States did something very similar. (Click the option to View as One Page for easy reading)
Of course all these news were already priced in today and greenshoots galore tomorrow.
Make money!!
Mother Nature Shorts the Market: Volcano errupts, Cramer Says the Recovery is Real
Mother nature is fed up with the mountainous stock market climb and the Icelandic Volcano has finally put a top to it.
There have been many canceled flights across Europe and airliners will be feeling the effects of the volcano for at least a quarter if not more. This is one of those news items that is still not priced into the market (at least wasn't as of 4pm closing bell) so shorting an international Airliner should yield results (British Airways or AirFrance perhaps).
This is not just a minor news article as many airports have yet to close but will have to as the ash travels farther from its origin. According to BBC "Such a large eruption... would have the potential to severely affect air travel at high northern latitudes for six months or more. "In relation to the current eruption, it is worth noting that the last eruption of Eyjafjallajoekull lasted more than 12 months."
This could be a major win for global warming activists because it might cool us down according to an article in the Guardian that states "The dust can also help reduce global warming. The effect of the Iceland ash cloud will be small but larger eruptions help to cool the planet as they reflect sunlight back into space. The 1815 eruption of Mt Tambora in Indonesia produced so much volcanic ash that it triggered the "year without a summer" that brought widespread failure of harvests across Europe, famine and economic collapse."
Now that we established Mother nature's attempt to stagnate or destroy the economy lets turn our heads to the lovely Jim Cramer who tells us that the Recovery Is Real!
"Maybe this time, the recovery is better, Maybe it's healthier and more sustaining. Maybe this time we've got it right, not wrong, and Maybe the recovery will be responsible and Maybe fueled by a longer-term health in the consumer, and Maybe it will not be turbocharged bad lending." Now I added a few more maybes on my own to emphasize that Maybe the recovery is real and Maybe Cramer is a genius.
We know mother nature is short and Cramer is long. Lets take a look at some economic data domestically and around the world.
US Economy:
March Foreclosure Activity Highest on Record (Calculated Risk)
7 million households are behind on their mortgages. Now that the worst of the financial crisis appears to be over, banks are finally stepping up the foreclosure process again. Foreclosure filings were reported on 367,056 properties in March, an increase of nearly 19 percent from the previous month, an increase of nearly 8 percent from March 2009 and the highest monthly total since RealtyTrac began issuing its report in January 2005.
Weekly Initial Unemployment Claims Increase to 484,000 (The Big Picture)
Today’s Unemployment Insurance claims “unexpectedly” spiked to 484k vs. a 440k consensus, and were 24k higher than last week. Lets get to the excuses as to why the weekly claims for unemployment insurance are not dropping as quickly as everyone would like. "A Labor Department economist said this latest rise can be pegged to lag effects from the spring holidays, including Easter and Cesar Chavez Day, which is celebrated in worker-heavy California." If that puts a dent in employment then here are the Holidays: Thanksgiving, Christmas, MLK Jr. Day, snow storms, Easter, Cesar Chavez. Upcoming next week are Administrative Professionals Day and Take Your Children to Work Day, so fear not when UI claims breach 500k again.
Empire Manufacturing Index Soars (Econompic)
A gauge of manufacturing in New York State rose to a six-month high in April as new orders advanced and employment continued to improve, the New York Federal Reserve said in a report on Thursday. The New York Fed's "Empire State" general business conditions index rose to 31.86 in April, the highest since October and up from 22.86 in March. Economists polled by Reuters had expected a figure of 24.
World Economy:
Greece On Verge Of Activating Rescue Package (Zero Hedge)
A senior Greek Finance Ministry official told Market News that With the call for a meeting today, Greece is seeking to iron out “immediately” exactly what the details of the joint EMU-IMF plan will be, and what fiscal, macroeconomic and other conditions will be imposed on Greece in exchange for the aid. Last weekend Greece issued $2.1 billion in Bills, which auction by the way bankingnews.gr recently reported was a scam, with half the bids being fake!
Israel accuses Syria of arming Hezbollah(AFP)
Israeli President Shimon Peres on Tuesday accused Syria of supplying Scud missiles to the Lebanese militant group Hezbollah while publicly talking peace.
"Syria claims it wants peace while at the same time it delivers Scuds to Hezbollah whose only goal is to threaten the state of Israel," Peres told public radio.
Have a good night.
-K
Nightly Recap 4-7-2010
Market Summary:
DOW -72.47 (10,897.52)
S&P -6.99 (1,182.44)
Nasdaq -5.65 (2,431.16)
____________
Disclaimer:
Open Positions: SRS at 5.97
___________
Nightly News Links
US Economy:
Consumers Climb Out of Their Bunkers... (TheBigPicture)
As we have previously exhorted, the consumer is “not quite dead, yet.” Indeed, the data suggests that after falling into a state of frozen panic during the credit crisis, there are signs of pent up demand being satisfied slowly but surely. I will be the first to admit that the year over year comparisons are against absurdly low levels, but it is improvements nonetheless. A slow, painful recovery still awaits us...
Consumer Credit Contracts from January Bounce (Back to June 2007 Levels) (Econompic)
Consumer borrowing dropped in February, after increasing for the first time in a year during the previous month, according to a government report released Wednesday.
Total consumer credit fell a seasonally adjusted $11.5 billion in February,Economists predicted a decline in total borrowing of $0.7 billion in February. "February's decline reflects on the still dire state of the economy," said Yasmine Kamaruddin, an economic analyst at Wells Fargo.
"Even if we have seen retail sales and personal expenditure increase in past months, we haven't seen these gains translate into the use of credit because consumers faced with unemployment and slow wage and salary growth are still shying away from taking on credit," she added.
Strip Mall Vacancy Rate hits 10.8% Highest since 1991 (Calculated Risk)
Vacancies at shopping centers in the top 77 U.S. markets increased to 10.8% in the first quarter ... according to Reis.It is the highest vacancy rate since 1991, when vacancies reached 11%. Retail landlords continued to lower lease rates to attract tenants during the first quarter, revealing that optimism about a recovery in retail sales has yet to translate into gains for shopping-center owners.
AIG Goes Parabolic As Repo Desks And Prime Brokers Pull Borrow And Force Short Covering (ZeroHedge)
The "Same Manipulation Different Day" continues, as the powers that be run out of tricks to drive the market higher. Today: a well known and much abused trick to prevent market drops in desperate situations: forced covering in fins. This has culminated with a ridiculous move in AIG in the last 30 minutes of trading. And there you have it. From the administration to State Street, from there to the Prime Brokers and various Repo Desks, and from there straight to the market which jumps on a forced cover, which is supposed to indicate that the economy is hot, hot, hot.
BofA to increase Foreclosures significantly in 2010 (Calculated Risk)
Bank of America, which currently forecloses on 7,500 homes a month nationally, will increase that number to 45,000 homes per month by December of 2010. Bank of America is projecting a 600% increase in its already large number of monthly foreclosures. This isn't unsubstantiated rumor; this comes straight from one of the most powerful men in Bank of America's OREO department. It appears they have too many properties already.
Could Larry Summers Be Leaving?(Fund My Mutual Fund)
"I found the reason for the selloff - it appears Larry Summers is throwing a temper tantrum and took his finger off the "buy SPY futures" button at any sign of weakness.
Tim Geithner, not Summers, has emerged as Obama's key adviser on financial matters, and that Summers isn't happy about it. I think Summers is going to leave sooner rather than later, possibly before the mid-term elections, and if not then, soon afterward. Why? Because Summers is frustrated by his role, and his colleagues are clearly frustrated with him. Some of Summers's frustration no doubt stems from his wanting to be Treasury secretary. When that plum went to Geithner, Summers cast his eye on the Fed chairmanship and agreed to bide his time until Ben Bernanke's term ended. But Summers didn't get the Fed job either. Apparently that didn't sit well.... for more click on link above and it appears that Larry has left a comment as well (if thats the real Summers)
World Economy:
Greek Debt Hits New Fresh Record Of 410 Bps, National Bank Of Greece Tumbles As Greece Now Seeks Arab Money(Zero Hedge)
The whole world is fully aware that Greece is done, and now even the traditional long-term holders have thrown in the towel: the entire Greek curve has melted up more than our own S&P - Bloomberg now notes that even US accounts whose risk memory is non-existent, may not be willing buyers of Greek debt. Of course Greece can join the SEC in blaming the shorts, but that's an old tune. And the biggest and most supreme irony, bankingnews.gr reports that Greece is now seeking emergency capital from Abu Dhabi and other Arabic sources... As if they didn't have a Dubai of their own.
Vietnam Begins to Lure Business Away from China(Fund My Mutual Fund)
The communist nation drew 13.5 percent of the Association of Southeast Asian Nations’ foreign direct investment pool in 2008, up from 4.4 percent two years earlier, according to the 10-member group. And its allure may be rising, judging from a December survey by the American Chamber of Commerce in Shanghai. Vietnam is a preferred destination for businesses looking to relocate from China, Asia’s biggest investment recipient, the report said. Intel, the world’s biggest chipmaker, is scheduled to open a $1 billion testing facility in Ho Chi Minh City this year that will employ about 4,000 people. Samsung Electronics Co., the world’s second-biggest maker of mobile phones, opened a $1 billion factory in Vietnam six months ago. The number of foreign companies in China with plans to relocate plants inland or outside the country because of rising costs doubled last year.
Nightly Recap for April 6 doesn't exist because i only found 2 articles that struck me as important.
Have a Good Night
-K
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."
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
Nightly Recap 3-31-2010
Market Summary:
DOW -50.79 (10,856.63)
S&P -3.84 (1,169.43)
Nasdaq -12.73 (2,397.96)
____________
Disclaimer:
Open Positions: SRS at 5.97
___________
Nightly News Links
US Economy:
Ben Bernanke's Mortgage Buying Will Be Missed (Until Round 2 Begins) (Business Insider)
The mortgage backed security (MBS) purchase program began in earnest on March 18, 2009, when Fed Chairman Bernanke announced an expansion of the program to the size limit of $1.25 trillion. The result of that program saw the S&P 500 rise 55.08% between March 18 and today (March 31, 2010), its end. What will the world be like after?
Obama to Open Offshore Areas to Oil Drilling for First Time (NYT)
The proposal — a compromise that will please oil companies and domestic drilling advocates but anger some residents of affected states and many environmental organizations — would end a longstanding moratorium on oil exploration along the East Coast from the northern tip of Delaware to the central coast of Florida, covering 167 million acres of ocean.
Chicago PMI Dissapoints (Econompic)
Investors were also disappointed Wednesday by a survey of Chicago-area purchasing managers that showed U.S. business activity continued to expand in March, but at a slower pace than the previous month. The Institute for Supply Management-Chicago said its business barometer slipped to 58.8 in March, from a nearly five-year high of 62.6 in February. Economists expected a reading of 60.8.
Still, Croft noted that a reading above 50 still reflects expansion. "We think the economy is marching forward here, but not at an extremely fast pace," he said.
ADP Employment... Not Yet "Back in Black" (Econompic)
While many are waiting for Friday’s Payroll figure to tell them the state of the US labor market, I’m going to rely on today’s ADP report as a better gauge. That is because it is private sector based and thus won’t be distorted by the likely 100k+ adds of government census workers and the “methodology used to construct it” takes out most of the impact of the Feb snow storms and March snapback. It turns out that +40,000 was a bit optimistic as ADP showed a contraction of another 23,000 jobs. If these figures are to be believed (we will see "official figures" Friday), then we may have to wait for April for the private sector to stop contracting.
Market Call:Down(Zen Trader)
On a daily time frame I received my sell signal today and picked up DXD & SDS. We’ve been trading in a range with multiple distribution days this past week and it appears we’re in for some more selling. Could I be wrong and we rally? For sure. However, a number of other signals are pointing down.
World Economy:
European Unemployment to 11 1/2 Year High (EconomPic)
Euro zone inflation was much higher than expected in March and the unemployment rate reached 10 percent in February, data showed on Wednesday, highlighting the fragility of economic recovery.
The IMF Warns About German Banks... And That's Bad News For France's Too (Business Insider)
Mike O'Rourke of BTIG spotlights some interesting comments from a recently released IMF report (.pdf) on Germany:
“Simulation exercises suggest that German banks could suffer significant losses from commercial real estate investments in the U.S. and Spain, and more generally from exposures to Southern Europe. The simulations also suggest that a reassessment of risks associated with claims on Southern Europe could have a large impact on capital flows within Europe, as German (and also French) banks would significantly reduce their foreign claims to restore capital ratios.”
Interesting Links:
The Story Of Bottled Water (2010)
The Story of Bottled Water, released on March 22, 2010 (World Water Day) employs the Story of Stuff style to tell the story of manufactured demand—how you get Americans to buy more than half a billion bottles of water every week when it already flows from the tap. Over five minutes, the film explores the bottled water industrys attacks on tap water and its use of seductive, environmental-themed advertising to cover up the mountains of plastic waste it produces.
Have a Good Night
-K
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
Nightly Recap 3-25-2010
Market Summary:
DOW +5.06 (10,841.21)
S&P -1.99 (1,165.73)
Nasdaq -1.35 (2,397.41)
Nightly News Links
US Economy:
The Social Security Tipping Point (Econompic)
The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.
This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office. The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.
The Recession Ans Recovery In Perspective (Minneapolis Fed)
The 2007-2009 recession is widely thought to have ended sometime last summer. How bad was this recession, and how quickly is the economy recovering? How does this recession and recovery compare to previous cycles? Check the Link for interactive Charts.
Ambac to File Bankruptcy ( The Big Picture)
Bond insurer Ambac Financial Group said again that it may seek bankruptcy protection after state regulators took control of some of its most troubled assets.
The news Thursday sent the company’s already devalued stock into a tailspin.
World Economy:
Dell Leaving China In Search Of "Safer Environments" In India (TFTS)
India’s Prime Minister, Manmohan Singh, told the Indian press that Dell chairman Michael Dell assured him that Dell was moving $25 billion in factories from China to India. Original motives were cited for environmental concerns. But later details come up as to dell wanting a ’safer environment conductive to enterprise.’”
China Official: "Will not adjust exchange rate" (Calculated Risk)
After meeting with officials at the Treasury and Commerce Departments on Wednesday, China’s deputy commerce minister, Zhong Shan, told reporters, “The Chinese government will not succumb to foreign pressures to adjust our exchange rate."
“It is wrong for the United States to jump to the conclusion that China is manipulating currency from the sheer fact that China is enjoying a trade surplus,” Mr. Zhong told reporters in a meeting at the Chinese Embassy. “Besides, it’s wrong for the United States to press for the appreciation of the renminbi and threaten to impose punitive tariffs on Chinese experts. This is unacceptable to China.”
This is more posturing before the Treasury releases the worldwide currencies report on April 15th that might name China a "currency manipulator".
All Hell To Break Loose: April 15th (Reuters)
U.S. senators have introduced new legislation that threatens China with punitive duties if it fails to lift the value of its currency, boosting pressure on the Obama administration to take action under existing law.
The bipartisan measure, which merges earlier efforts to change the currency law, aims to end what the lawmakers said was Beijing's deliberate efforts to keep the yuan cheap to subsidize exports and tax imports.
Have a Good Night
-K
Nightly Recap 3-24-2010
Market Summary:
DOW -52.68 (10,836.15)
S&P -6.45 (1,167.72)
Nasdaq -16.48 (2,398.76)
Nightly News Links
US Economy:
Durable Goods Jump on Continued Strength in Aircraft (Econompic)
Orders for big-ticket manufactured goods rose for a third consecutive month in February, bolstered by strong demand for commercial aircraft and machinery. The
hope is that continued strength in manufacturing will help sustain the economic recovery.
The Commerce Department said Wednesday that orders for durable goods advanced 0.5 percent last month, slightly lower than the 0.7 percent gain that economists had expected.
Chicago Fed National Activity Index (Chicago Fed) [PDF]
Chicago Fed National Activity Index is a surprisingly good forecaster of economic activity. The Chicago Fed National Activity Index (CFNAI) is a monthly index constructed to summarize variation in 85 data series on U.S. economic activity.
New Home Sales Plunge To New All Time Record Low (Zero Hedge)
New home sales drop to a record low adjusted annual rate of 308K. All of the government's housing stabilizing measures are now a disaster, as existing home sales inventory surges to nearly 9 months, not counting the shadow inventory, which is more than double.
World Economy:
China: Sale of residential land temporarily halted (China Daily)
The Ministry of Land and Resources has ordered a temporary ban on the sale of land for housing in a renewed measure to ease soaring real estate prices.
Yun Xiaosu, vice-minister of land and resources, said local authorities should not sell land for residential purposes until this year's housing land supply plan is released in early April.
"Residential land supply will increase and low-income housing projects will top local governments' agendas," Yun said during a video-conference on Monday.
Getting Technical: Trouble Brewing in Europe (Barrons)
News that Portugal's credit rating was downgraded by one of the major ratings agencies sent a shiver across the European Union.
The question on investors' minds is whether this is the start of something bigger or just a contained incident. After all, Greece's problems did not take down global markets.The stock market, however, might have the answer and it is not good. Technical death crosses -- when key short-term moving averages move below longer-term moving averages -- have occurred in several of the troubled markets. Most will agree that the stock market looks forward to events expected to occur perhaps nine months down the road. It is one way we can explain why stocks rallied a year ago when the financial world was in danger of collapse. "We ain't seen nuthin' yet"
Have a Good Night
-K
Nightly Recap 3-22-2010
Market Summary:
DOW +43.91 (10,785.89)
S&P +5.91 (1,165.81)
Nasdaq +20.99 (2,395.40)
Nightly News Links
US Economy:
Chicago Fed National Activity Declines in February (Econompic)
The 85 economic indicators that comprise the Chicago Fed's index are drawn from four categories: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories. The three month average fell to -0.64 in February from -0.04 in January.
Tomorrow, Tim Geithner Urges End to Fannie and Freddie ‘Ambiguity’ (Bloomberg)
Tim Geithner is set to deliver unwelcome to news to those who play in the public Fannie Mae (FNM) and Freddie Mac (FRE) casino. Private gains can no longer be supported by the umbrella of public protection, capital standards must be higher and excessive risk-taking must be appropriately restrained,” Geithner said in testimony prepared for the House Financial Services Committee that was obtained today by Bloomberg News. The hearing is scheduled for tomorrow at 10 a.m. in Washington.
The Pressure on Malls: More Store Closings (Calculated Risk)
"Our outlook for retail properties as a whole is bleak ... we do not foresee a recovery in the retail sector until late 2012 at the earliest." Over the next three fiscal years, 25 percent of our store leases will reach maturity ... E-commerce is 30 percent of our corporate revenue and it’s very profitable ... even in this environment. The Internet and e-commerce have become the focus on our capital investment."
World Economy:
Global Productivity and Unemployment (Econompic)
Producing more by working less is the key to rising living standards, but in the short term there is a tension between efficiency and jobs. America and Europe have managed this trade-off rather differently. America has gone on a diet: it has squeezed extra output from a smaller workforce and suffered a big rise in unemployment as a consequence. Europe, meanwhile, is hoping to burn off the calories in the future. It has opted to contain job losses at the cost of lower productivity.
The Beginning of the End of the Eurozone As We Know It? (Naked Capitalism)
The widely-extolled idea, that the EU would find a way to muddle through the Greece crisis, looks very much in doubt. The pressure has not simply put the rescue of Greece into disarray, but appears to have led to some positions being taken that, if they hold, look likely to lead to the partial dissolution of the monetary union. This development would have far-reaching ramifications which are far from well understood, to put it mildly.
Interesting Reads:
Dear Evil Speculators (The Reformed Broker)
Dear Evil Speculators,As part of our ongoing program designed to render the US stock market completely dysfunctional, we have added an additional tax to be applied toward your investment income as part of the wildly popular Health Care Bill that we recently finagled through into law: * Individuals earning more than $200,000 a year, or couples earning $250,000 or more, would be hit with a 3.8% surcharge on investment income to help pay for the bill.You see, we are fully aware that in just the past decade, you have been slammed twice - 2000-2002 and 2007-2009 - with two of the most brutal bear markets in history - but we just don't care.
Health Care Expenses vs. Life Expectancy (The Big Picture)
A very insightful chart comparing Countries using Life expectancy and Health care spending.
Hedge Fund Ebullio Capital: Down 86.25% In One Month (Market Folly)
By now, many of you may have already heard the startling tale of Lars Steffensen's hedge fund Ebullio Capital Management. For the month of February 2010, they were down a whopping 86.25%. That brought their year to date total return to -95.83%. Immediately, questions swirl in one's head such as 'How did this happen? What kind of risk management did they have in place? How will they recover?' Remarkably, their investor letter had quite a calm tone to it.
Have a Good Night
-K