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).

Have a Good Night


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