Morning Call [5:28am ET] Traders are speculating whether the financial crisis in Greece will serve to ultimately weaken or strengthen the European Monetary Union.
In a column in today’s Financial Times, German Finance Minister Wolfgang Schaeuble says “The fallout from the crisis is becoming ever more visible, labour markets in some countries are languishing and government debt almost everywhere is far in excess of permissible deficit limits… There is only one course of action: all eurozone members must return to adherence to the stability and growth pact as rapidly as possible… Co-ordination between euro members must be more far-reaching; they must take an active part in each other's policymaking… If we are successful in putting fiscal policies in the member states back on the right course, the crisis will have brought about a change for the better.”
http://www.lse.co.uk/FinanceNews.asp?ArticleCode=caxyp5ddvh9lyii
Could in fact the Economic and Monetary Union (EMU) of the European Union be replaced or in the least lead to a European Monetary Fund (EMF)?
http://en.wikipedia.org/wiki/Economic_and_Monetary_Union_of_the_European...
The latter is most likely. Simon Johnson, former chief economist at the IMF, says that the EMF will happen quickly, costing in the range of US$1 trillion.
http://baselinescenario.com/2010/03/08/european-monetary-fund-arriving-s...
http://en.wikipedia.org/wiki/International_Monetary_Fund
This is an important issue to the United States taxpayer and to traders trying to decide on the direction of currencies because, if the IMF is required to bail out financially troubled EMU nations, the US will have to foot as much of the bill as the Europeans themselves.
There is a lot at stake here as the Euro is the currency in use daily by 325 million Europeans and a further 175 millions in countries whose currency is pegged to the Euro.
It was five or six years ago when I opined in these pages that a General Agreement on Currencies was an absolute necessity for a stable economic and financial system, that matters had gotten out of control and the price of Gold (priced then in the 400’s and 500’s) would, as a result, soar. A month after I started this blog in mid-April 2004, the price dropped to about $375 and I was pointing readers to Gold.
Over 40 years I have been a keen observer and participant in gold markets. Like many of you, I was caught up at an early age by the glitter of precious metals, and the huge risks and potential rewards of mining.
When gold markets were in a Bull phase, I have been a flat-out Bull, knowing full well that during periods of extreme volatility there would be challenges to my credulity. I knew there would be people who call me perma-Bull with respect to Gold.
None of that bothers me because I know the truth.
The truth is that when I believe that the Gold has commenced a secular Bear phase, I will become bearish. And at that point there will be Gold Bugs who disapprove.
But the current Gold market is in a secular Bull presently for the simple reason that there is a War On Terror. Nobody wants this war. Everybody can debate why it has come to that. But the fact is that the major participants are printing money at an excessive pace to pay for it. That taxes the rest of the world because it puts out of balance the global forex markets, which in turn disrupts the stability of global import-export trade, which is essential to steady economic development. Consequently, the nations who don't consider themselves at war " at least not in the War On Terror " feel themselves compelled to print money at excessive rates as an attempt to stabilize cross-rates in the forex market.
The War On Terror " as long as the reasons are pure -- is a necessity. Once there is agreement on that by all economically powerful nations, there must be a General Agreement on Currencies. That is the mission of U.S. Treasury Secretary Paulson. If anybody has ever had the right credentials to make it happen, he would be it.
Henry Paulson is in China presently trying to convince the Chinese authorities -- who he knows well and respects and who know him well and respect also " to move toward that currency agreement.
I have said this for at least a year now. The imbalance and extreme volatility of currency markets is the most serious problem the world faces. Solving that problem will help solve others, like addressing the urgent issues of poverty and health.
But until that happens, there will be excessive money printed by all nations, and Gold will rally in a secular Bull trend. If you wish to be a cynic and say that such a General Agreement on Currencies will never happen again, and that Gold will go to $1,000, $2,000, $4,000, $10,000, or whatever, that is your prerogative. You can even be a cheerleader if you wish " just don't count me in the group.
I do believe that prudent leaders of the world's economic elite will resolve their differences sooner than later because they understand the consequences. They only have so much Gold in their possession " some like Canada have none, after having sold it all.
When all the govt gold is sold to private owners, then central bankers will have lost their ability to use the precious metal as a monetary policy and control instrument. At that point the world will have in effect a gold standard because any excess printing of paper money from that point will immediately be factored into lower market prices for that currency.
A lot is being written these days about central bank gold sales. I think more should be written about the need to get a global agreement on currencies. Once the latter happens, the world business and economic paradigm can normalize.
Sure, we'll all be facing issues related to personal privacy and other rights, but that is a consequence of the need for personal safety. The upside is that capital owners and managers will start to commit that capital to long-term economically-viable projects rather than using it for share buy-backs and the like.
Posted by Posted by Bill Cara on September 22, 2006 08:46:23 AM | Category: Gold
The bottom line is that government spending is out of control all over the world and the only hedge is gold and other precious metals. As long as traders deal in contracts that can be settled in paper currencies, there will be no control over govt spending as the price of gold will be depressed by govts and central banks.
Growing economies are fueled by money. The problem that governments have is that the owners of capital have been withdrawing from debt and equity markets and increasingly putting their money into currencies and precious metals. As there is no real wealth (i.e., economic) underpinning the contract markets (i.e., futures and options) in currencies and precious metals, this is hot money. As the hot money sloshes back and forth on whim and rumor, prices soar and then sink. Global trade in goods and services is materially impacted, causing even more speculation and lack of stability. If the problem is not quickly solved, the world will soon be caught up in the mother of all financial and economic crises.
In the interim, governments and private investors are at odds, with govt trying to put off the day of final reckoning. The longer govts keep the price of money unacceptably low and their spending unacceptably high, the lower all their currencies will go relative to the price of Gold. The European Monetary Fund (EMF) is not the ultimate solution; it’s only a tactical move to keep the Euro from collapsing, bringing on inflation, much higher interest rates, economic and financial hardship to the people, political instability and rioting.
Ultimately there must be a universal (“general”) agreement on currencies. I believe that before that happens, Gold will stay in a Bull phase that will peak at double, triple or quadruple today’s price.
In the short run, however, I believe that the US Dollar will strengthen and the price of Gold will test the 990-1010 base from the 2008-2009 neckline break-out. This will probably occur when traders reach a point they have maximum confidence in the ability of the EMU to solve the financial crisis in Greece. What to look for on that peak day is a leading European newspaper or magazine heralding German Finance Minister Wolfgang Schaeuble as the next coming of Obama.
In the intermediate term, i.e., peaking in 1Q2011, I believe that the price of Gold will soar to at least US$1500 an oz, and that will be when the Europeans join the Americans in total disgust with all their leaders, and with the state of government debt and deficits. Following that point, sometime in 2011 following the G-20 meeting in France, I foresee interest rates rising around the world, and money flowing back into bonds and out of Gold, at least for a while.
I believe the long-term cycle for Gold will last at least three to five years or until that General agreement on currencies is put in place by the G-20. I see the next G-20 summit will be held in Toronto June 26-27. Something for traders to look forward to.
http://en.wikipedia.org/wiki/G-20_major_economies
In capital markets this morning, the $USD is weak, the precious metals stronger, Gold bouncing off the 1100 level mid-day yesterday to almost 1120 presently, and US equity futures are moderately stronger. Asia-Pacific equity markets were mixed, but the three major Europe and UK markets are up an average of +0.60% at this point.
Have a good day.
CTA Trading Desk Post-Close Report
We are running out of ways to describe the dramatic compression of intra day volatility; whereas moves of 40 points were not uncommon in early 2009, nowadays the S&P seems to spend 4 or 5 hours in a three point range.
Driven by better than expected retail sales figures, e-mini futures jumped ½ of a percent before reversing and nose-diving -1% within the first hour of regular trading. This should have been a place for Bears to seal the deal; an opening burst up through yearly highs, pivoting back below the 1150 prior top was a golden opportunity to drive this market lower. Once again, however, no selling pressure materialized and equity prices flat-lined the remainder of the session, with the S&P closing down a measly -25 cents.
The Euro (FXE +0.60%) showed a bit of upside vigor and may be mustering the energy to a mount a counter-trend rally. Another bad day for gold (GLD -0.58%) surrendering solid early morning gains even as the US dollar (DXY -0.60%) weakened. As we said last evening, this is disappointing price action for gold longs to say the least.
Maybe the new moon next week will awaken the animal spirits. While the potential for a double top still exists if prices fail in this general area and turn lower, it makes no sense to sell short just because prices are over-bought and at yearly highs.
Let the market tell you if the tide has turned; the Bulls still have the ball and until prices meaningfully reverse the upside potential must be respected. It’s better to be a little late and very confident of the prevailing trend based on price action confirmation.
Have a great weekend.
Comments
"naked puts" on metals
I just wanted to mention several positions I have or will be taking over the next week or so {my cash secured account is tapped out till option exp next fri}. I am short 40 of the 5 HL 5 puts that should expire and will re-do them, like GFI 12s, KGC 18s, FRG 5s... all good for a several % pt return for apr exp........as usual I am trying for many singles and no home runs.........so far'so good......Bill C///the best gold review/preview in a long time...thanks for your advice/guidance. DYOD for sure
Cara 100 Ratings Changes
Good morning.
CELG - Coverage Initiated @ Piper Jaffray with an Overweight.
GILD - Coverage Initiated @ Piper Jaffray with an Overweight.
GOOG - PT Raised from $700 to $715 @ Oppenheimer. Outperform
Where is the economic output in such a medium term forecast?
Thanks for your thoughts Bill. China tightening, European and American citizens' growing disgust in the handling of their balance sheets, hot money sloshing around in non-productive assets - where's the beef, economically speaking?
An enjoyable and restful weekend to all here.
ps. question partially answered - US exports rising but threatened by lack of available shipping. WSJ cut n paste article:
Export Revival Threatened By Shipping Bottlenecks
Shipping might be about to make a comeback?
CAD
It looks like the Canadian dollar finally is breaking the 98-level on its third attempt since October.
98,42 aiming for par and beyond (who knows...)
Loannetter,
Seems like the Monsanto article touched a nerve... Good for you and your work... I try to eat organic. But, the point I was trying to make is the fact that DuPont, et al., are piggy-backing on Monsanto's very hardwork and investment, via ' stacking ', and are making big profits from it. Its like you have a dual agency with a client, do all the work showing the house (s), do the calculations, insure all the inspections and disclosures are known, and then the Client lets the listing contract expire, waits the mandated time frame ( on the Extender clause ) and sells the property to a buyer you had brought out a year earlier. Sucks, doesn't it.
Cara 100 Update
ABT - Downgraded to Sell @ Citigroup. PT Raised from $46 to $52
HBC - Downgraded to Neutral @ Government Sachs
RIMM - Removed from Focus List @ Kaufman Bros.
Re: Loannetter,
Following up on ag discourse.
Interestingly, while driving in city traffic yesterday, there was a news piece about MON and seed costs. A bag of seeds cost a farmer less than $100 not that long ago. Today, MON charges more than $300 for the same size bag, with a better, super type seed. Although a short news piece, gist was MON trying to commandeer (control)the overall market.
Of course there are competitors like DD as well as countries concerned about these genetically altered seeds. Just check previous MON encounters with EU. Speaking of EU, haven't seen any recent comments about ag co SYT which is also very active in the seed business.
(FD: no positions in mentioned cos.)
File under "What everyone knows isn't worth knowing"
http://tinyurl.com/yjcr3ky
FAZ near capitulation point (RSI 7 day is now 11.37). NBR talking about C's 1 week run (up 20%). Newsletter calling for XLF breakout.
Buy limit 13.86 (close-10 day ATR). March/April max pain 16.
If not executed by 10AM, I'll pull the order (or if other targets of opportunity emerge).
GL/do your own homework.
PS FAZ in Triple RSI accumulation zone.
Cara 100 Update
XOM - PT Raised from $70 to $72 @ Credit Suisse. Neutral
XOM - estimates tweaked at Barclays. XOM 2011 EPS estimate lowered 5 cents to $7.35, 2010 maintained at $5.95. Maintain Overweight rating and $92 price target.
XOM - estimates upped at Morgan Stanley through 2012. Equal-weight rating and $80 price target.
Re: File under "What everyone knows isn't worth knowing"
I think we have to go through 1150, get all those shorts to cover, and then HB&B can use that volume to unload all their inventory at 90+ RSI levels. Then maybe it will be time to buy a FAZ.
Imagine. Could HB&B sell at this week's low volume levels? I'm guessing not so much.
Isn't it interesting we went above 1150 in the futures markets overnight? As a result, we'll gap up through 1150 in about four minutes. Should make for an exciting day - at least at the start.
Food, glorious food
The other aspect of production is fertiliser. Note the big strruggle between AGU Agrium of Calgary and CF industies AGU:T CF:NY
AGU withdrew it's, hostile, offer, stock will rise, CF will drop.
POT:T is headed up.
Companies like Archer-Daniels and Monsanto are hurting farmers while the struggle continues
so, likely food production stocks will grow, a new type of gold.
SPY RSI7
Hit 89.5 this morning. That is the highest it has been since the rally began in March 09.
Cara 100 Ratings Changes (Final)
INTC - Coverage Resumed @ Needham with a Buy. PT = $25
Re: Food, glorious food
Interesting that MON,POT, and IPI are chosen stocks in the GS Sustain Report. I have a problem with believing in Monsanto. Some of that is due to having lived in St. Louis for so many years and watched how they operate. I also skimmed through their report that Baz posted. I see that their seed contain as many as eight new genes with most of them insecticides. That does not comply with my definition of corn anymore.
Re: Food, glorious food
Illini -
All that's required now is a merger between MON and GOOG. Scary thought of the day.
Downgrading Equities in Continental Europe
From Credit Suisse today:
Downgrade Continental Europe to 5% Overweight from 10% Overweight
· Continental Europe now has the second-worst economic momentum and worst consensus earnings revisions of any region. In consequence, we reduce our overweight from 10% to 5%. However, we believe that it is appropriate to stay overweight Continental Europe on a hedged basis for the following reasons:
· Continental Europe is the second most operationally leveraged region after Japan and we are still bullish on the global recovery. Continental Europe historically outperforms 9 months after the trough in lead indicators (half the time it is more than 12 months, ie now). It has outperformed on three out of the last five occasions when lead indicators have plateaued globally prior to the first rate increase.
· Continental Europe typically outperforms when short rates rise; it is currently the least leveraged G4 country and a net floating rate creditor.
· We think that the euro risks weakening further. We would not be surprised to see Eu/US$1.30 this year. Our reasons for this view are: the euro is still 16% overvalued on PPP; the US has much better economic momentum than Europe; the problems in peripheral Europe; the US current account deficit ex oil as a % of GDP has halved; the end of QE in the US; euro net shorts are only at average levels. Each 10% off the euro adds 0.8pp to GDP and adds 10pp to EPS. Since 1995, Continental Europe has outperformed 60% of the time the euro has weakened (in local currency terms).
· Germany is more important than peripheral Europe (27% compared with 18% of euro-area GDP) and there is substantial potential for reflation in our view: Germany has the most underleveraged G10 private-sector balance sheet, a neutral cyclically adjusted budget position and a seemingly undervalued property sector. Moreover, unit labour costs look 10% too low relative to the rest of Europe. German economic momentum is better than in the US.
· We think that the very strong austerity packages in Spain, Ireland and Greece (amounting to a tightening of 10%, 6% and 11% of GDP, respectively, adjusting for the cycle) limit further shocks. So far, critically, the electorate seems to support such adjustments.
· Capitulation: risk appetite in Europe is close to six-year low relative to global markets and global fund weightings in Continental Europe are the lowest since 2004.
· Modest valuation support. On our estimates, Europe's sector-adjusted P/E relative to the US is 10% below average. Continental Europe looks marginally cheap.
· Stock picks: The following European companies look cheap, relative P/E and P/B and have above-average consensus earnings revisions: Ryanair, SAP, Sanofi (Credit Suisse Focus List stock), Porsche. The following stocks look abnormally cheap on P/B and P/E against their US peers: Danone, Linde, Ryanair and Thyssen (Credit Suisse Focus List stock). We continue to favour domestic Germany (Metro, Heidelbergcement) and have a large underweight on peripheral Europe (owing to the required deflation).
team,
couple of weeks ago we talked about cagc, etc... increasing position in ' gro ' today... based on movement for the past 3 weeks... may have to cut and run, but I'll give a 5% leeway...
MDVN
adding to position with a buy stop 13.01/13.01 limit order good for the day.
Price is yesterday's 3PM close + 5% of 10 day ATR
Ave cost is 11.94.
Do your own homework.
Update: added to position @13.01
Ave cost is now 12.21
GME
amazing how it hit the 50 day MA yesterday and today.
Appears to be reversing. Left a buck or better per share on that trade.
FD: No position.
Pulp Price Surges on Chilean Quake, Finnish Strike
The story continues:
http://www.bloomberg.com/apps/news?pid=20601109&si...
“The pulp market has never seen a disruption this sudden and this large,” Schaefer said. “The market is so tight at this point that every disruption is magnified 10-fold.”
POT
looks like an exhaustion gap (which we won't know till Monday) and a kangaroo tail reversal (which we'll know by the close)
March/April max pain opts 110.
FD: No position.
Sir John Templeton's Last Testament
Came across this article this morning.
John M. Templeton
Lyford Cay, Nassau, Bahamas
June 15, 2005
MEMORANDUM
Financial Chaos – probably in many nations in the next five years. The word chaos is chosen to express likelihood of reduced profit margin at the same time as acceleration in cost of living.
.....
Accelerating competition is likely to cause profit margins to continue to decrease and even become negative in various industries. Over tenfold more persons hopelessly indebted leads to multiplying bankruptcies not only for them but for many businesses that extend credit without collateral. Voters are likely to enact rescue subsidies, which transfer the debts to governments, such as Fannie May and Freddie Mac.
Full article: http://tinyurl.com/ygk32tc
Interesting Movements
Gold and Oil are both down despite the dollar being down.
Re: Interesting Movements
"Gold and Oil are both down despite the dollar being down"
Same for Silver and Platinum
Very Interesting
" Nation-States "....
from Fleck site last night ( I took the liberity to condense ).. ' 2008 was the year of a total loss of confidence in bankers.. 2010 will be the year of total loss of confidence in politicians.. The politicians did not end the unwinding of the credit bubble - they only forestalled it. It will metastasize into something more sinister .. a hyper-inflation bubble. 2010 will also be a year in which a handfull of Nation States fail. Three generations of socialism have created a class that is dependent on their government. Remember subprime ? Greece is the new subprime. This time, the problem isn't some person with too much debt who overspent on a new home. This time, the problem is some politician who promised too much and bankrupted his country. Nation States do not simply collapse ( re: Lehman ). They go super-nova. This will not end well. (but this is many years in the future ).. First, you need to see default. Early on, the easy choice is to borrow money. Eventually, people refuse to lend to bankrupt institutions. Its all a faith-based system in the end... As for the US, you cannot fix our deficits easily... its nearly impossible to fix our future liabilities.
Greece is the canary in the coal mine. They will probably get bailed out. They will make promises on payments.. they won't keep those promises. Then, another Nation State will be in trouble. It will also get bailed out. Then another. Eventually, its every man for himself. No more IMF or World bank bailouts.. At some point, there will be a mad scramble for Gold. This will not be the first, nor last, time in human history this has happened. '
Spooky... my concern is, if this does play out, will the ' governments ' confiscate gold ( once again ) or even pull a Chavez edict, and declare ' Eminent Domain ' on the miners ? ... food for thought..
Re: " Nation-States "....
This guy isn't a genius, he's just read history. And its not even ancient history either.
Governments in this position will do whatever they feel they have to do to keep the state alive. But I think they'll go after the big money, and I'm not sure gold is where the big bucks are these days.
They'll do things like saying "oh yes, you definitely have those bank deposits in that failed bank, but you just can't get at them at the moment." (remember auction-rates?) And "you know that 6 month treasury bill you have coming due? Well we're going to automatically roll that over for you." And also "we need to make sure nobody ever loses money in their 401k again. As a result, effective today all 401k accounts will be managed by the government as an annuity program - exactly like social security."
As for fixing our future liabilities, that part is pretty straightforward - but not popular. We simply default on them. Retirement age is now 70, and medicare suddenly becomes much more basic. Many more procedures simply will no longer be covered. That's what we should do, because that's all we can afford to do. Will we? No. We'll print money instead.
This is years in the future, absent some black swan. First subprime, then Alt-A, then prime - from the outside in.
Just my opinion.
SRS capitulation
baz if you like capitulation on the ultras, look at SRS. It's below RSI 10. The thing it inversely tracks - IYR - is at RSI 91.
I recall someone here at cara saying they'd jump back into SRS when it was 6.66. Well...it's trading at 6.34. Perhaps its time to buy back into the beast again?
NOT advice. :)
Interesting bull-bear fight
in AONE today... crazy moves... wish I had more info. on the IPO providers, and what they are doing..
Re: SRS capitulation
You have quite a memory, dave !! However, the printing presses have made me a believer in the Mighty Oz. When the ink runs out, I will consider it... I believe it was Sir Templeton who said " You can have the first 20% and the last 20%... I'll take whats in the middle "... That is the only way I will play... take care..
Re: Interesting bull-bear fight
baz, it was just CNBC mention, nothing exotic
awesome retail sales explained?
Mish has a post that helped me to put in context the great retail sales numbers that have been a little perplexing. How is it that retail sales can show such improvement, in the face of reduced state sales tax revenues? The two can't possibly both be right, can they? Is this just another case of government manipulation?
No, it turns out they can both be right. What's reported for the retail sales are same store sales. This is fine in a normal, stable environment - but if you recall, over the past year many retailers have closed a large number of underperforming stores. In addition, failing retailers have closed their doors entirely - anyone imagine that Circuit City closing its doors didn't help Best Buy a little bit? So what we have here is survivor bias. This explains why same store sales can be up, while state sales tax revenues are down. Only the best stores were preserved, and traffic no doubt went to them.
He also talks about the peak of stimulus spending, and favorable comparisons over horrible performance last year, but for me the interesting bit was about the survivor bias. That's not how he put it, but that's what it boils down to.
Note that individual retailers probably ARE doing better because their competition went away, but using improved retail sales as a metric of how the economy overall is doing might lead one to drawing the wrong conclusions about how well things are going overall.
http://globaleconomicanalysis.blogspot.com/2010/03...
Re: awesome retail sales explained?
Sounds strange to me, Dave. Retail sales are adjusted for seasonal variation and holiday and trading-day differences; never saw them being adjusted for same store sales.
This is advanced sales report which is gathered from 5000 participants. Final, from 12000, is more precise; maybe some of unexpectedly strong number can be explained by smaller sample and will be corrected when final numbers come out... but as for this explanation, I'd have to see something official on method changed. Using SSS for this indicator makes no sense whatsoever.
Re: Sir John Templeton's Last Testament
CaptK,
Thanks for the link. Always was an interesting, soft spoken guy with much wisdom.
You might enjoy this interview with Sir John, Peter Lynch and Lou Rukeyser.
http://tiny.cc/2jKwP
Funny line about golf and investing — I'll let him tell it ;-)
Re: awesome retail sales explained?
Davefairtex,
Interesting way to spin the numbers. Every time I hear a bit of good (less bad) news I begin to wonder just how they are doing it.
Early this week on CNBC they reported the "good news" that there were fewer new claims for unemployment. They forgot to mention what I had just read on the internet — continuing claims were up.
People are not finding jobs. I have a friend whose son has been unable to find full time work in five years. Like my son he paid 20% down and has a 30 year fixed rate, but is underwater and houses are just not selling here. This means he can't even go somewhere else to look for work.
But we are told it is getting better.
I see those who are still not being let go as the worker survivors. If they are fired the company is kaput.
SLW appears to be coiling for a move...
See attached chart with annotated Bollinger band width... Not sure how to play it yet but entertaining a straddle at $15..
KC
Re: awesome retail sales explained?
My gosh Vad I love it when you challenge me like this! I learn so much more this way.
I went to the census.gov site. Here's what I saw:
"The U.S. Census Bureau conducts the Advance Monthly Retail Trade and Food Services Survey (MARTS) to provide an early estimate of monthly sales by kind of business for retail and food service firms located in the United States. Each month, questionnaires are mailed to a probability sample of approximately 5,000 employer firms selected from the larger Monthly Retail Trade Survey (MRTS). Firms responding to MARTS account for approximately 65% of the total national sales estimate. The change in sales from the previous month is estimated using only units that have reported data for both the current and previous month. There is no imputation or adjustment for nonrespondents in MARTS."
First glance at this suggest survivor bias can affect this survey. The survey can account for closed stores within one retailer, but not failed retailers, or for retailers who may no longer have the time or energy to report their sales.
Here's some more interesting detail:
Total retail sales Feb 2009: $342B
Total retail sales Feb 2010: $356B
Gasoline Sales:
Feb 2009: $28B
Feb 2010: $35B
Basically what this tells me is, half of the increase in retail sales came from increased sales of gasoline. Add survivor bias to this report and - is this saying "the consumer is back?" I'm thinking maybe not.
There's more detail there, specifically about which areas are seeing increases, and which are not.
non-store retailers - +11% growth
gasoline stores - +24% growth
Home furnishing, electronics, building materials - about -3%
grocery stores, sporting gods, general merchandise, motor vehicles - about +3%
clothing, misc, and food services & drinking places - about the same
Here's a link to the report:
http://www.census.gov/retail/marts/www/marts_curre...
You were right about same store sales though. That was methodology used in the ICSC report earlier this week - that also showed 3.4% increase y/o/y.
RE AG Discourse
Monsanto's Franken-Science
"The process behind genetically modified food involves a careful re-configuration of genes combining e-coli bacteria, soil bacteria and the cauliflower mosaic virus that causes tumors in plants. They add an antibiotic and then artificially force it into plant cells with a gene invasion technique. All this is so farmers can douse nearly unlimited amounts of Roundup Herbicide on the crops and the plants won't die."
http://standeyo.com/NEWS/10_Food_Water/100311.GM.b...
It's one thing to breed plants but the unknown consequences of Monsanto products is unacceptable.
Independent studies show Roundup to be damaging soil and water and contaminating non GMO fields.
Did you know Monsanto was the creator of Bovine Growth Hormone BGH, the milk additive.
Many countries ban their products....we should as well. Claims that production has benefited from Monsanto
GMO may be a myth. IMO, Monsanto is evil....I will not own any of their shares.
Re: awesome retail sales explained?
So, since "The change in sales from the previous month is estimated using only units that have reported data for both the current and previous month", adjustment for those who went out of business can happen practically by itself, as an outcome of them not answering the survey and their business going to survivors. SSS adjustment meanwhile probably doesn't happen at all since they report a simple total of sales.
Good investigational work.
Re: awesome retail sales explained?
How the survey calculates total sales using just a subset of business reports - would be interesting to know. I don't think it's simple addition, otherwise the results would vary wildly from month to month if a particular (big) respondent was flaky about reporting. My guess is they take the percentage increase/decrease from each company, and multiply by that company's market ownership, and apply that to the overall sector's previous (actual) data from the previous quarter.
It does sound like survivor bias isn't there for the month-over-month data, but would definitely be there for the year-over-year data.
And as you said, same store sales are not relevant for this survey - it would not make sense. That's used by the chain store sales report earlier in the week.
Trillion-Dollar Pension Crisis
What’s the difference between General Motors and California?
California hasn’t gone bankrupt. At least, not yet.
And it's just not California as we all know and as depicted in the article.
Keep in mind the ERISA law that sets strict funding requirements for private sector plans doesn’t apply to the retirement plans of state and local governments.
Inst. Investor Article on: Trillion-Dollar Pension Crisis Looms Large Over America
"If the problem posed by underfunded public sector pension plans is painfully clear, there are equally obvious solutions. That’s the good news. The bad news is that they require steely will on the part of politicians faced with determined and organized public employee unions. Such courage is a rarity in the world of realpolitik."
http://tinyurl.com/yzmxog2
Re: awesome retail sales explained?
ALOHA !!
I am not sure how accurate these surveys are. I can speak for the Agriculture surveys that I get from the USDA and I can tell you most of the farmers I know "guess" at their numbers, including me. Why do I want to spend what little spare time I have going into my Quickbooks reports and trying to calculate down to the last dollar and the last ten stems of sales? The government breaks these surveys into categories that I do not even track and why should I? For surveys?
As an example "foliage". Yes I grow and sell foliage but that pricing is part of total products as I am not exclusively growing and selling foliage. I do not know a single farmer who tracks foliage sales. They track product sales of which foliage is a part. No farmer I know strictly grows foliage just to only sell foliage. Its always just a component.
Also none of these Ag surveys account for any other overhead costs. They account for no pricing loss. They do not differentiate from domestic or international sales. So big deal SALES ARE UP but profit is non-existent!!! Where is that factor? I mean sales can temporarily rise given the 65% discounts I see at Macy's every time I walk in, but for how long can these discounts continue before Macy's starts to shut doors again? Sales are up? Hummmm ... and as I have noted by the US Treasury disclosures also "tax refunds" are up 68% since 2007. What about that angle? What do most Americans do when they get a tax refund check? I am seeing some huge "tax refund" numbers coming through the US Treasury right now on a daily basis. Should I label that STIMULUS #5? Maybe "awesome retail sales"?
The "last man standing analysis" is a valid consideration, but then even the last man needs a profit and if profits are not there then it matters little who wins the debt attrition game. Its back to square one, which in this case I can attribute to the failed "expenditure multiplier" of Keynes. What did Bush say to all us Americans when he started the first "stimulus"? Essentially he said, "Do your patriotic duty and spend!"
You really have to look into a lot of detail to know whether reports are "accurate" or not in terms of the "story they are selling". There are agendas out there all the way up to the top of the food chain. All these surveys are tailored to tell a story! How many "versions" of unemployment are we on now? Ten is it? How do you know what version of a survey you are looking at unless you have the same survey matrix that was put out in 1975.
You'd be amazed how long and deep the interventions have been. I have recently uncovered a FOMC transcript going back to the 1980s where the US Treasury is sharing "currency intervention profits" with the "German Bundesbank" splitting them 50/50. This policy was stated and discussed in detail by none other than Mr. Paul Volcker. I am still trying to write an article on this data.
Its a tricky thing to know what data is good and what isn't. I totally ignore CPI and jobs numbers now in terms of accuracy. I get that question about US Treasury data all the time and all I can say is that if these numbers the US Treasury puts out are their best "look good" numbers they have then we are in for some serious pain ahead, because God knows what they have not disclosed or have hidden away in strange line items like UNCLASSIFIED and OTHER.
I attribute this multiple choice accounting and data spin era we are in to part of the currency scam that exists when money is based on the human condition whereby "promises and faith" are all that backs a currency. If any of us have learned anything from the past three years of crony bailouts and bankruptcies it should be that "promises and faith" equal ZERO in the real world.
For me its back to the "anti-debt" BASICS ... food, water, shelter ...
Just some perspective from a business person who actually fills out those surveys that are analyzed by the "experts" at the US FED.
When I was in the communications industry doing tech work on MATV systems at California prisons the saying was always "garbage in-garbage out" in terms of signal quality. If your surveys are garbage then the analysis is garbage.
Using the Rob McEwen Playbook
Hi Bill,
Here's an excerpt from an announcement put out by Noront, a presenter at PDAC this week. The CEO, Wes Hansen, is a forward thinker like Rob McEwen. We know what was accomplished with the Goldcorp properties in Red Lake using the power of internet to determine optimum operational programs applying a "wisdom of crowds" methodology:
"NUMA (Noront Universal Mining Application) is best described as a free download application for devices such as iPhone, iPod Touch and Blackberry. The application allows the user to quickly and efficiently calculate the gross in-situ value of various resources. Calculations will be available in tonnes or in grams per tonne in precious and base metals categories. We invite PDAC delegates to the Noront booth, where demonstrations and downloads are available.
The Ring of Fire Viewer (RoFV) will allow Noront investors to visit Noront's website and view the McFauld's Lake projects via the RoFV. The RoFV will, allow you to select a drill hole on a project, view actual photographs of core from that specific hole, view the assay table, and the longitudinal and plan sections of the project and drill holes. Furthermore, you can access the RoFV via your portable device, such as an iphone or Blackberry.
The Noront Multi Touch Tablet (NMTT) is a new approach to putting large volumes of geophysical data literally at the fingertips of our geologists. Collaborative thought and easy access to information are encouraged through multi-touch technology and a new application developed specifically for Noront allows our exploration team to get more value out of our data. The Noront Multi Touch Table will be available at the booth for hands-on demonstrations by the Noront exploration team."
I've liked the way NOT included aboriginal native groups since their beginnings at the Ring of Fire and I have accumulated a substantial investment over the past year or so. Time will tell.....
Re: awesome retail sales explained?
Well, Kaimu, you wanted to know about the form? Here it is.
http://www2.census.gov/retail/forms_and_letters/ma...
It's very simple. There are 4 questions:
Total sales (dollar amount):
Reporting period (4 week, 5 week, calendar month), Ending Date:
Are these figures estimates, or booked sales?
# of retail establishments covered by this data
One amusing part in the "how to fill out this form" section includes the following description of what should be included as a sale:
* "Cash and credit sales of merchandise whether or not payment was received"
One would guess that transitioning between good times and tough times, sales based on credit (some of which will subsequently be reported as not collectable) would later turn into losses for the firm.
This whole process is actually pretty interesting. This was a very simple form. I'm sure if it weren't, nobody would fill it out.
Re: Loannetter,
Baz22,
Humongous Seed and Pesticide Companies (Monsanto and Roundup what a neat piggyback twosome) use their seed crop 'patents' to debase indigenous species. Monsanto plants their patented crops upwind of local farmer's native species then TEST their crops after they have been pollinated by wind and then SUE the local farmer who saves his own seed for 'hijacking their genes'. No kidding. Indigenous organic corn is an endangered species.
Re: " Nation-States "....
OH goody - mortgage brokers get to move up a notch from 'least trusted' status?
Re: Loannetter,
OK, you guys win... First thing Monday, I'll sell MON and buy GS and AIG...!!
Illini- Truckin'
http://www.youtube.com/watch?v=pafY6sZt0FE
Stopped out, got my chips cashed in
Now bidding, like the do-dah man
Higher, more or less in line
Just keep truckin’ on
Green arrows and flashing tickers out on Wall Street
Chicago, New York, Detroit and it's all on the same street
Your typical trader involved in a typical daydream
Hang it up and see what tomorrow brings
Metals, got a softer sheen
Nat gas, too close to New Orleans
New York's got the ways and means
But just won't let you be, oh no
Most of the cats that you meet on the Street speak of TA
Most of the time they're sitting and crying at home
One of these days you know they need to get their heads
Out of the charts and down to the Street all alone
Trading, like the do-dah man
Once told me "You've got to play your hand"
Sometimes instincts ain't worth a dime
If you don't lay 'em down
Sometimes the light's all shining on me
Other times I can barely see
Lately it occurs to me
What a long, strange trip it's been
What in the world ever became of Nat gas?
She lost her sparkle, you know she isn't the same
Living on LNG and cat’ 4/5 ‘canes
All a friend can say is "Ain't it a shame?"
Truckin', up to Galveston
Been thinking, you got to mellow slow
Takes time, you pick a place to go
And just keep truckin' on
Sitting and staring out of the hotel window
Got a tip they're gonna kick prices up again
I'd like to get some sleep before I travel
But if futures are green, I guess I’m gonna cave in
Busted, down on TZA
Set up, like a bowling pin
Knocked down, it gets to wearing thin
They just won't let you be, oh no
Sick of scalping and you'd like to trade big
Get tired of trading and you want to settle down
I guess they’ll rip off your soul for trying
Get out of the game and light out and look all around
Sometimes the light's all shining on me
Other times I can barely see
Lately it occurs to me
What a long, strange trip it's been
Busted, I'm going home
Whoa whoa baby, back where I belong
Day job, sit down and patch my bones
Music for the Market
Didn't get any music today from 2nd or anyone. That's ok because we didn't "go into the wild blue yonder" It was more like the "Ride of the Valkyries". Someone did, however, manage to "give em the gun" driving SPX up to altitude 1153.41. That took out a lot of bear stops and cleared the skies for bulls a lot.
On the other hand, the subscription trading tool I am using says there may be an altitude limit derived from todays high on SPX and NAZ (nothing yet on DJI). The algorithm has placed a "Top Spotter" on each of the two based on todays highs. This has to be confirmed by a Monday close below todays close and can be taken out by a new high anytime in the future. In my limited experience with this part of the tool it seems to be a fairy good indicator of a correction when confirmed.
More soothing weekend music anyone?
Edit: 2nd..just saw your post after i posted this. Thanks.
Re: Music for the Market
Spoke too soon, my man. Look up.
(In case anyone cares- it's all in fun. Does the song refer to me or anyone else? No.)
Re: Music for the Market
"What a long, strange trip it's been"
Well, I would say that could apply to me. I listened to the song while reading your lyrical impros. Delightful and fun. Even as delving into such things as TZA never has appealed. Too wild.
I been watching basketball tonight. Its the beginning of March Madness. My Illini won their 1st Big Ten Tournament game today against ranked Wisconsin but I suspect they may not handle next up Ohio State.
Reconstruction of a Mass Hysteria: The Swine Flu Panic of 2009
""The pharmaceutical industry did not influence any of our decisions," says Fukuda. But in mid-May, about three weeks before the swine flu was declared a pandemic, 30 senior representatives of pharmaceutical companies met with WHO Director-General Chan and United Nations Secretary General Ban Ki Moon at WHO headquarters. The official reason for the meeting was to discuss ways to ensure that developing countries would be provided with pandemic vaccine. But at this point in time the vaccine industry was mainly interested in one question: the decision to declare phase 6.
Everything hung on this decision. At stake was nothing less than a move to supply large segments of the world's population with flu vaccine. Phase 6 acted as a switch that would allow bells on the industry's cash registers to ring, risk-free. That's because many pandemic vaccine contracts had already been signed. Germany, for example, signed an agreement with the British firm GlaxoSmithKline (GSK) in 2007 to buy its pandemic vaccine -- as soon as phase 6 was declared. This agreement could explain why Professor Roy Anderson, one key scientific advisor to the British government, declared the swine flu a pandemic on May 1. What he neglected to say was that GSK was paying him an annual salary of more than €130,000 ($177,000)."
http://www.spiegel.de/international/world/0,1518,6...
Ka-ching baby. panic = profits.
Re: Reconstruction of a Mass Hysteria: The Swine Flu Panic ...
Les,
"Swine flu pandemic"?? What utter nonsense from authorities who are empowered to serve and protect the public, but who are bought and paid for by self-serving interests. But we in this community didn't fall for it, did we?
These heartless con artists should be named and shamed for putting children at risk. They should be indicted for fraud, or else there will be no end to such despicable behavior.
Lehman Bros Bankruptcy Examiner Concludes Fraud
Here is the link to the 2200 page report by the Examiner: http://lehmanreport.jenner.com/
This is a quick summary: http://ftalphaville.ft.com/blog/2010/03/12/173241/...
The Lehman brain trust and auditors ought to be spending a lifetime behind bars, joined by any of their colleagues at Humungous Bank & Broker (HB&B) who were involved in the same deceptive practices called Repo 105.
Saturday Morning Coffee: Five Charts
http://ronsen.blogspot.com/2010/03/saturday-mornin...
Interesting times, indeed. I saw an official from the Massachusetts Medical Society recently, an organization that supports "health care reform". I remarked that those most affected have almost no input...the patients!
Railroaded
Since the fall of the Soviet Union when the talk was about the "Peace Dividend", I have been trying to promote a high speed passenger rail system to Parallel our Interstate Highway System.
A project, in America, for Americans, by Americans — jobs, jobs, jobs!
Today — AP Wire
"China to bid on US high-speed rail projects"
http://tiny.cc/1zH0R
Instead of bailing the banks, we could have done this ourselves and put Chrysler and GM to work building rolling stock.
Since we have not learned from history, what WE are repeating is that of (formerly) Great Britain a century ago!
Plu cest...oh never mind...you get the picture...
"Re: Reconstruction of a Mass Hysteria: The Swine Flu Panic ... new
Submitted by Bill Cara (1384 comments) on Sat, 03/13/2010 - 07:06 #58995 (in reply to #58994)
Les,
"Swine flu pandemic"?? What utter nonsense from authorities who are empowered to serve and protect the public, but who are bought and paid for by self-serving interests. But we in this community didn't fall for it, did we?
These heartless con artists should be named and shamed for putting children at risk. They should be indicted for fraud, or else there will be no end to such despicable behavior."
"Saturday Morning Coffee: Five Charts new
Submitted by Ron Sen (447 comments) on Sat, 03/13/2010 - 08:03 #58997
http://ronsen.blogspot.com/2010/03/saturday-mornin...
Interesting times, indeed. I saw an official from the Massachusetts Medical Society recently, an organization that supports "health care reform". I remarked that those most affected have almost no input...the patients!"
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Justice and fairness...isn't that what we're looking for? Well, unfortunately neither exist, for all intents and purposes, in this world-at least in larger scale questions. It would seem to have "justice" and "fairness" adjudicated between two interested parties whose interests are different, they both have to wield the same amount of power. For if one is more powerful than the other, the decisions and outcome are likely to favor their definition, rather than that of the weaker party. As a wise man used to say, "In any negotiation, figure out who is the hammer and who is the nail."
So, to think anything healthcare related will benefit, in the aggregate, the weaker party (patients) is a fools errand, and so the thought government will produce an efficient and effective program, given the dynamics of power, will follow the same fate. How can an effort so wrought with "compromise" and special deals (Senator Landreau's "Louisiana Purchase" anyone?) work for the patient?
I remember Ed Markey pounding the table about how his telecommunications bill would reduce the cost of cable...think the "costs" went up about 30-40% within a year of passage...yeah...and they're gonna' fix healthcare.
Political solutions are by nature usually not the most effective or efficient solutions. Even former president Clinton said about the legislation, that politically you must pass something. Qualitatively, it could be a POS, but that is irrelevant to it's political value.
On a related note...If we look at these grand programs (Social Security, Medicare, Federal pay/pensions, etc) It would seem dynamically they are nothing more than legally sanctioned pyramid schemes that depend on two inter-related dynamics to function: (#1) A right-sided population pyramid of worker-bees acquiring enough (#2)wealth such that the amount of blood (wealth) siphoned from each worker bee does not kill them, or impair their function to such an extent that it can no longer support the system.
Well, looking at those two dynamics, I'd say their growth metrics will likely be insufficient to support those types of programs. The population ratio is inverting and, well, we all know what has happened to "wealth" the last 30 years, and every "high" paying job including any that can be digitized are arbitraged to the lowest cost area.
So...healthcare reform, as well as any type of reform for a pyramid scheme, will likely be rearranging deck chairs on the Titanic...merely a postponement of the inevitable.
It's funny...especially for those of you who know the source of my "rants." Man never ceases to create grandiose visions of the future. Unfortunately, he rarely understands that the law of Unintended Consequences always wins. And in his grandiose plans, he commits future generations to bear the responsibility and consequences for the lack of wisdom in their decisions-can there be any greater sin.
Re: RE AG Discourse
In all seriousness, Mojo, the boys that do this for a living ( the Farmers I know that cultivate over Well over 4,000 acres each ), use Far Less Roundup than just 5 years ago. I am not siding either way with GM crops. But I could post stories all day long about the Positive impact of GM crops, especially in drought-ridden areas where people are Starving while we sip our coffee and type on our computers. I am sure Monsanto is Far from perfect, but, since you favor gold investments, as do I , why not post articles about the environmental impact of gold mining, or, extraction of gas from shale deposits, the cheap labor and mining conditions in other countries that keep our copper investments nicely up. The list is endless. But I do know DuPont profits handsomely from Monsanto's work, as do the other companies that license over 200 Monsanto traits. Monsanto is a trading vehicle for me, nothin more, nothing less. But, there are always two sides to every story. Thanks for all the posts from everyone. Knowledge is the key.
More AG Discourse
Reference post earlier re radio report of MON commandeering the market.
Now we have the first of five meetings on agriculture monpolistic practices.
Listening to farmers?
Monsanto defends high seed prices.
ANKENY, Iowa, March 12 (Reuters) - Two U.S. cabinet members and other top officials on Friday pledged a thorough examination of allegations that monopolistic practices in agriculture are driving small farmers out of business and said they would aggressively enforce antitrust laws.
Attorney General Eric “Holder also emphasized the Justice Department's interest in pursuing any misuse of patents as part of an aggressive probe into agriculture.”
http://www.reuters.com/article/idUSN1215754320100312
Re: RE AG Discourse
baz22
"But I could post stories all day long about the Positive impact of GM crops, especially in drought-ridden areas where people are Starving while we sip our coffee and type on our computers."
Do you have first hand experience of this "positive impact"? We often believe what we have been sold. I was told a product I was helping advertise was feeding the starving. That company, Union Carbide, blew up a plant in Bhopal, India a few years later killing and maiming thousands of those starving. Compare these so called benefits (to whom?) to the benefits of maintaining indigenous crops, valuing endangered medicinal plants and NOT cutting down Amazon rain forests to raise beef for McDonalds...oh I do go on. 'Benefits' can be misleading and often are the means for selling a very bad idea.
Re: More AG Discourse
Farmers are always bitching about something. It's our nature. Back in the 50's and 60's is was about those big nasty corporate guys buying up and consolidating land to achieve economies of scale. In the 70's and 80's it was all about the plight of the small 'family' farmer who mortgaged himself into bankruptcy. Now it's those mean old agri-monopolists. To paraphrase the Attorney General 'big isn't necessarily bad but when big uses its power to corrupt, it is a national security issue and the Justice Department won't tolorate it.' Go sue a Bankster, Eric! National security indeed.
I know of no farmer who is forced to use GM seed, agri-chemicals or even synthetic fertilizers. I doubt Monsanto can influence prices and practices any more than Genentech has a monoply on genetically engineered drugs.
Man has been 'hybriding' plants and animals for thousands of years. MON just uses evolved science to do it better cheaper faster. I can't wait for a square tomatoe that fits properly on my sandwich!
My bitch of the month is about the weather. It's been so cold and wet in North Texas these last 5 months that the preachers are preaching against people praying for rain...
Weekend Movies - HBO 'John Adams'
Enjoying a representation of the founding of the United States through the eyes of one of the central actors. If you've yet to see it, a must have for the community here:
http://www.youtube.com/watch?v=t2FAAVPX-jg&feature...
Loan,
My only experience with ' starvation ' was when I served with the First Cav. and was stationed in Bien Hoa, Vietnam for a few months, and witnessed things most Americans will only read about. I did not set out to defend Monsanto.. I posted an article about the meetings in Iowa in response to a question about what was going on with Monsanto's price movement, thinking it might help explain what was going on.... so much for trying to help... http://blogs.forbes.com/streettalk/2010/03/11/the-...
Re: Illini- Truckin'
been lurking for years. I had to register just to say "I love it". Sigale trocando!
NEVER FIGHT THE FED!
What Have We Learned?
By Tim Knight | 12 March 2010 (Reprinted Here)
One solid year of an up market, and one solid month of the most agonizing trading time I've had in my entire life, have put me in a deeply reflective mood. Even though the January 19th high has not been violated (yet), I am having deep doubts as to my long-term outlook on the market. It seems to head higher, regardless of external news or realities.
So what has the past year taught us? I have some thoughts on this; and although these thoughts may seem grumpy, snarky, or even whiney, I promise you, they are not intended to be. Cynical? Yes. Despairing? Sure. But complaining? No. Complaining about reality is pointless. So here's what I think the world has learned:
1. Investment banks can, with few exceptions, act with impunity. Yes, Lehman and Bear are gone, but that's just a sliver of the investing banking world. By and large, investment banks entered into the crisis as winners and exited the crisis as even bigger winners. They now know there really is no consequence for negative outcomes. If they win, they keep the profits; if they lose, they will be bailed out. End of story. So I think that, far from being chastened, banks have been emboldened to act in a manner that makes 2007 look like doe-eyed innocence.
2. Financial reform isn't going to happen. Whatever gets passed is going to be feeble. Maybe they'll pass a bill demanding that disclosure statements on credit card applications be in a size two points larger than before, but that's about it. All this 'Volcker rule' hub-bub is only going to compel the Goldmans of the world to dispose of their classification as bank holding companies, now that the need to be in that category (with its benefits) has passed. The panic is gone, so the motivation for real change is dead.
3. Real estate is doing just fine. Think real estate is in trouble? Ask the holders of SRS how their investment is doing. Real estate isn't going to be permitted to fail.
4. The financial industry is doing fine. Disagree? Check in with holders of SKF. They, as with SRS holders, are holding on to securities at lows never before seen in history.
5. Keynesian "economics" works. On the rare occasions a government faces a crisis, they just have to "print" (well, electronically create) trillions of dollars in "money". Bang! Problem solved.
6. Buying as many stocks as you can during times of panic is like legally stealing money. Gobbling up stocks— any stocks!— a year ago was a brilliant move for those who did it. The old saw about buying when there is blood running in the streets surely has held true.
7. It's much easier being a bull than a bear. The reason is simple— pretty much all the vested interests in the world are on your side. You don't have to fight the tide all the time. Nine years out of ten, you're going to be right.
8. The unemployment rate doesn't matter. About 10% of the public has no income, and about 20% is underemployed. Obviously it doesn't matter to equities. The government will just keep printing up unemployment checks (no matter how many extensions are required) to keep things civil.
9. The US dollar is a one-edged sword. If the dollar is weak, equities will explode higher. If the dollar goes down, it doesn't matter.
10. The citizens of the U.S. love buying stuff. It doesn't matter if they need it, or if they have the cash on hand to afford it. This is the national pastime, and it's never going to end.
To a person like me, who is rational to a fault, and who loves free markets, these cold realities are depressing beyond imagination. But I'm not an idiot; I can see what's going on, and it's time to face the facts.
Have a nice day.
Who was it that opined,
Who was it that opined, "Never Fight The Fed!"
Re: Illini- Truckin'
Yes, 2nd is a musical and lyrical genius attuned to the market. He doesn't post as often as he did before but when he does it is a welcome respite. His method has re-acquainted this old guy with artists and songs which I dismissed in previous times. Thanks 2nd-Ave.
Don't Fight the Fed...
normzyx,
I think I first heard it (at least heard it often) on Wall St.Week With Louis Rukeyser from Marty Zweig.
As for your view on the markets, I must agree with much of what you say. What bothers me most is, however, that there seem to be no solid benchmarks. I was doing great with SKF until they temporarily banned the shorting of selected banks.
I'm sure the real estate market will continue albeit at great expense to those who invested large down payments and paid faithfully.
What is especially galling is the arrogance of those in positions of power. But I agree nothing will be done to punish or limit them. In fact I will be pleasantly surprised if the "new regulations" don't give them additional advantages.
Perhaps the greatest downside risk is that Bernanke & Co. may believe they have fixed the problem and raise rates — driving us into a deeper depression requiring even more taxpayer dollars and stimulus programs.
The question then is when does outright violent rebellion begin and how far does it go. I know I'm angrier than I have ever been in my 72 years.
We Men are Programmed to take Risk NY Times
This article takes the view that men tend to take more risk and pay the price. A quote from the article I found interesting:
Short-term financial news often amounts to little more than meaningless “noise,” he said. Far more than women, men try to make sense out of this noise, and to no avail.
http://www.nytimes.com/2010/03/14/business/14mark....
123
Re: NEVER FIGHT THE FED!
Ah, the sweet sound of capitulation. :)
Re: Don't Fight the Fed...
"I'm angrier than I have ever been in my 72 years"
Grym,
American's are becoming angrier by the day. According to Andy Kroll it is because we have become a Ponzi Nation with multilpe Ponzi Schemes in the public and private sectors. http://tiny.cc/1U68Z
My view is that we have known about many of the public sector Ponzi schemes, e.g., Social Security, Medicare, Medicaid, farm subsidies and various business subsidies for years without being angry. Most of us were not concerned because we were told that the schemes still had many years to run and the bill was so far in the future that many of those who would have to pay were not yet born. In other words we can all tolerate fraud that we do not have to pay for. In recent years, the national income was never sufficient to pay for all of this. Instead, we relied on our good credit to attract lenders to willingly pay so taxpayers do not have to.
The event that that changed everything was the bailout of the banks and investment banks. The trillions of dollars and euros that the bankers with the assistance of their politician friends have looted from the treasuries of the western democracies has moved the payment date from the future to the present. The amounts borrowed to finance this level of looting is so large that the ability of the US and other countries to finance Public Ponzi schemes that should have had a life of at least one more generation is now uncertain.
People are angry that they will now have to pay much higher taxes to support their social welfare schemes or else suffer a reduction in benefits.
The US Health care debate is a lightning rod. It highlights the national plight. Politicians will not enact reform for the public good. To pay for the unreasonably high profits of big pharma and big insurance companies Americans are going to lose some benefits and will face substantially increased taxation. The American public wants health care reform that reduces health care costs by reducing not increasing the profits of such companies. They do not want to pay increased taxes to support special interests.
GMO's and Your Food
Ross, Ba22,
My comments are not meant to damn the advances of agribusiness of the world. Much good has come of science to improve crop yields and feed the starving.
I am concerned when a particular Humungous Seed and Pesticide conglomerate (HS&P) gets it in their heads to take over a particular crop and insert GENES that are not part of the natural evolutionary process. Genetic Engineering is not about hybridizing. GE is scientific meddling.
I live in a farming rural area so this subject is close to home. We are meddling with the earth; our air, our wildlife and waterways when we insert anything 'new' into the DNA of plants that are dined on by insects, widlife and humans. That same DNA is plowed under and is rained on and spills over into streams and is carried downstream; consumed by acquatic plants and creatures along it's way into our foodchain.
The effects of Genetic Engineering are simply not known. The biggest problem is that the experiments are being conducted in OPEN AIR AND SOIL AND WATERWAYS. The GE pollen easily blows in the wind for miles, is carried to you honey by bees, plants are nibbled by deer, seeds are dropped by migrating birds, etc. Many species of insects are being killed by feeding on crops intended to kill Bug A while beneficial Bug B also gets a lethal dose.
We do know, for example if you insert a GENE of a peanut into a corn's DNA to improve a particular trait for that corn plant, a person eating that corn who is allergic to peanuts may very well suffer a reaction and wonder why. So now we have to know even more than we can possibly now take in regarding all our food products. Does Frito Lay know their corn sources use such things? You'd have to make the buyer aware of what is involved in every source. They cannot know if a grain crop was pollinated by GE corn growing a mile away. Its simple imposible to document this occuring until after the fact. They can test the harvested grain after it's been pollinated. That's when Monsanto swoops in to declare it's 'their hijacked GE seed' and claim the farmer owes them money for seed they gathered from their own crop. In India, a farmer's traditional right to gather their own seeds has been lost. Farmers are dying for lack of seed.
This short video suggests the pastoral image of faming is a veil:
http://www.youtube.com/watch?v=yh8c9OUti4c
This film explores the Monsanto and Roundup presentation and realities.
http://www.youtube.com/watch?v=hErvV5YEHkE&feature...
WIR, money flow, relative performance charts
Bill - two new things in the WIR are just awesome.
I certainly didn't make that money flow connection. I knew volume was important, but it just makes sense that volume multiplied by price move is the indicator that shows the real level of interest. "Money talks"
Likewise, I really like seeing the relative performance charts. I find that I'm using them more myself too. Most specifically, XRT:$SPY helped me to see quite visually what was one of the bigger relative moves off the 08 lows.
Day/week/month RSI for XRT:SPY is 81/88/79. Simply astonishing.
Re: Don't Fight the Fed...
Dave,
I was always aware that Social Security was a loser, but could see no recourse. Because I was self employed from age 19 (except for three years) I had to pay approximately 50% more. At least it was called what it truly was, "Self Employment Tax". Anyway we saved far more than many people and am really glad we did now.
I guess the biggest difference in such Ponzi schemes prior to the bank bailouts is the number of people who saw the immediate effect it would bring — plus the arrogant way in which it was forced through without any strings. The health care has the same style attached to it — secrecy and special treatment for some at the expense of all the rest of us.
A third factor which I believe is significantly different is the internet. There are far fewer secrets and far more alternative views being expressed. With only print, TV and radio it was much easier to put a smiley face on bad legislation and graft.
In my opinion the health care system in the US has made great advances in techniques and equipment. My wife and I have had excellent, but quite expensive care. To keep my premiums affordable we had to pay the first $10,000 and a few surgeries hit us hard before Medicare eligibility.
The biggest cause of expense is insurance and government involvement. Insurance companies are allowed to avoid the original spreading of risk by shuffling policy holders into separate categories.
When government gives contracts or large corporations sign on with individual insurance firms, we get a monopolistic result rather than a free market bidding. I had Prudential health insurance coverage back in the 1960s — when the landed the AARP account they dumped me — too small potatoes to bother with.
Insurance and big pharma reform and regulation will never happen for the special interest protection you alluded to.
Re: WIR, money flow, relative performance charts
davefairtex,
As one of the more observant and involved participants here, it would certainly be helpful if you would (if you could) keep people up to speed on these charts. I feel we are on the verge of drawing many more people into the community, and you could be very helpful in that regard because in addition to being perceptive you are also objective and independent. Thank you.
Re: GMO's and Your Food
Loannetter, Thank you for your response. Believe it or not, I feel the same as you. I trade MON as just another equity. I do not view it as harshly as some bank equities, however. maybe I should. Anyway, all opinions count, whether one agrees with them or not. And I think you for yours... baz
Did notice tonight at Wall Mart... frozen vegetable packages
that had been $ 1.50 ( for the past 6 months ) are now $ 1.78 .......
Re: GMO's and Your Food
Jezzz... ' THANK ' not ' Think ' you.... been a very long weekend. Loannetter, you might appreciate this.. been taking the ' Broker pre-licensing ' cram course for real estate sales in NC... whew!! Took it many years ago, but it lapsed. My, how things have changed legally.
McEwen Speaks to Kitco News: Gold offers shelter over devalued c
Toronto (Kitco News) -- Rob McEwen, Chairman and CEO of US Gold and Lexam Explorations said that with so much paper money being printed, it is important to protect one’s assets with gold.
In an exclusive interview with Kitco News during the 2010 McEwen Capital Reception last Tuesday, McEwen said that governments are printing excess amounts of paper currency and it is cheapening the value.
“It is making everyone’s bank account worth less, so you need to go out and find a way to protect it,” he said at the gala in Toronto.
According to McEwen, gold is the answer. He remains confident in his repeated prediction that gold will hit $2,000/oz by year-end and $5,000/oz before the gold bull run is over.
“It is up to me and you to protect ourselves by going into gold and other hard assets. It will deliver you multiples on your investments; this is what you need to protect yourself in this type of environment,” he said.
“I happen to like gold bullion and Junior Mining Stocks because they are going to run,” he added.
McEwen noted that not all juniors will run and it is important to choose wisely.
In terms of what he looks for when choosing juniors, he said he likes to see the CEO of the company have a large equity interest in the company.
“I don’t like to see him take a large salary and lots of options and have no stock. I like to see the property be in a place where it is not going to be taken away by a foreign government. That they are not people with more guns than we have and with no laws, so I tend to go in the Americas,” he said.
On the topic of the sale of the IMF’s gold, McEwen says it will have no depressing effect on gold. “When the IMF offers it, it will be gone in a nano-second,” he said.
For the Full Interview, Click to Watch
--By Daniela Cambone of Kitco News, dcambone@kitco.com
Is the market taking on the old 2003 - 2006 mindset of
Buy high, sell higher ? Many remember the motto of IBD's Bill O'Neill...
Cara 100 Correlations
From Shocked Investor:
http://shockedinvestor.blogspot.com/2010/03/correl...
FWIW, I can only get part of the chart in the text link that's in large enough font to read. Useful for portfolio diversification considerations although the concept is oversold to the public. When the market rolls over, this will not help. Good for hedging sector rotation but that's it.
Any thoughts?
Cheers.
Cara 100 Ratings Changes
Good morning.
ICE - Downgraded to Market Perform @ Keefe Bruyette
MICC - Upgraded to Overweight @ HSBC
UTX - PT Raised from $77 to $82 @ Jefferies & Co. Buy
WMT - Upgraded to Buy @ Citigroup. PT Raised from $54 to $65
Re: WIR, money flow, relative performance charts
The relative sector:spx charts made your points crystal clear to me as well. Big improvement to an already very helpful tool.
Cara 100 Update
HBC - The bank itself is cut to Market Perform from Outperform at Keefe Bruyette.
WIR
"One of the critical issues facing the US Treasury is that fiscal revenue is low and the budget deficits increasing. This is not a good time for the Fed to be raising rates, but the consumer inflation picture could start to get out of control otherwise."
Raising rates seems unlikely with the election coming up. But the perception of inflation in every day items seems to outweigh the "bargain" prices on many items and services. Just as black easily cancels white negatives stick in our minds more strongly.
Perhaps the biggest risk to the economy is that the true "deciders" may come to believe their own propaganda that they have saved us from calamity and boost rates too soon — drive the country into an even deeper depression — and then massive spending once again bringing on the hyperinflation we fear.
Edit: Seems to scream, "Buy gold, commodities and other "real" things as defense. Not so?
JAN NET LONG TERM TIC FLOWS:
JAN NET LONG TERM TIC FLOWS: $19.1B V $47.5BE; TOTAL NET TIC FLOWS: -$33.4B V $53.6B PRIOR
- Foreign net purchases of US Treasuries (notes & bonds) $82.2B v $128.9B prior (revised from $118.3B)
- China Total holding of US Treasuries: $889.1B v $940.7B (revised from $755.4B)
- Japan Total Holdings of US Treasuries: $765.4B v $768.8B prior
***China remians top foreign holder of Treasuries following upward revisions on past months data
Cara 100 Update (Final)
ABT - estimates lowered at Credit Suisse through 2012 as long awaited results for lipid study delivered negative top-line data. Maintain Neutral rating and $59 price target.
APA - Downgraded at Morgan Stanley from Overweight to Equal-weight. Sector will be hurt by lower natural gas prices.
BBY - numbers lowered at Oppenheimer. Shares of BBY now seen reaching $38. Estimates also cut, as competition could cut into sales. Market Perform rating.
BRCM - estimates, target raised at FBR. Shares of BRCM now seen reaching $39. Estimates also increased, following robust channel checks. Outperform rating.
JNPR - estimates, target increased at Government Sachs. Shares of JNPR now seen reaching $34. Estimates also raised, as the company can continue to gain market share. Buy.
NKE - estimates, target increased at UBS. NKE estimates were upped through 2011. Company is seeing higher sales demand across the globe. Neutral rating and new $74 price target.
RIMM - numbers raised at Morgan Stanley. Shares of RIMM now seen reaching $95. Estimates also boosted, following channel checks. Overweight rating.
Any one here follow AUY and care to comment?
I am looking for a possible entry point for swing trade. Thanks
Re: Any one here follow AUY and care to comment?
Break of 11.25 for long. break of 9.75 short. Wow that stock is flat. Maybe a big movement is coming. FD no position. Since it is at the bottom of its channel and close to its stop. You could enter long now with a 9.60 stop and a price target of 10.80 for a 2:1 or in Walstreet terms an 8% gain.
Bob
China / India Stocks
I think China is currently being held down due to fear of overheating and so long as the US markets hold in fine I think they will start outperforming other markets over the next 6 to 12 months once again. I think the same can be said for India.
Here are some links to sites I use for China stocks:
1.) http://chinaotcplayer.blogspot.com/2010_02_01_arch...
3.) http://seekingalpha.com/sector/china-stocks
3.) http://www.chinavestor.com/
4.) http://www.bloggingchinastocks.com
I don't have much on India stocks, but here is one:
1.) http://www.allindianstocks.com/
AUY
People don't believe in the CEO. Did he double dip? Questions arise as to why AUY sold some mines to a company in which the CEO is invested. Their expectation of a doubling gold production soon is way off base. Some experts think that AUY won't do much of anything over the next 12-18 months. I wouldn't touch this stock for now. There are other interesting miners to look at but I wouldn't rush in to anything now. Cash preservation doesn't hurt. Even my favorite, UXG, needs some consolidation.
Outstanding WIR
An exceptional WIR this week, Bill. I think you have been spot on for some time now about the lack of interest in participating in a rigged market. I know that I have been very inactive lately. So has another person I know who used to trade the market actively.
Some of it may be the result of people simply not having the money to invest. But there is also a significant constituency who just do not trust what they see in the market.
Credit Suisse maintains OVERWEIGHT rating for US Railroads
CS reports that 'Absolute Volume Growth Persists', which is an economic recovery story:
· Week 9 Carloads increased 11.6% y/y: Rail industry carloads increased 11.6% year-over-year in Week 9 - higher than last week's y/y increase of 8.9%, and the prior 4-week average of +3.9%. Sequentially, Week 9 carloads increased 1.0% vs Week 8, to ~617K units.
· Volumes: Carload volumes topped 600K for the second consecutive week, and Week 9 posted the highest carload count since Week 50, 2008. Not only did each rail posted positive y/y comps, but all of the rails (except BNI) posted double digit y/y carload increases.
· Scorecard Analysis: Our proprietary scoring analysis for 1) volume/mix, 2) service and 3) a composite of all three implies the following for 1Q10 to-date results:
..... Volume/mix score shows that UNP is the best performer and BNI is the worst.
..... Service score shows that CNI is the best performer and NSC is the worst.
..... Composite score implies that UNP is the top overall performer while BNI is the laggard.
Dow Jones US Railroad index charts:
http://tinyurl.com/ylbvmk9
UNP charts:
http://tinyurl.com/yjf47ar
Try UNP:$DJUSRR chart to see the best entry point to UNP as at the beginning of November when the $DJUSRR was breaking out, and UNP was a significant under-performer to the index at that point.
This speaks top my belief that soon before a big move in a stock, the company’s big investors typically are talking the stock down. So, to counteract the deception that goes on in the market, you need to monitor a set number of what I call Quality Growth stocks, and buy them after sell-offs, when the media is spreading negatives.
Re: Credit Suisse maintains OVERWEIGHT rating for US Railroads
And perhaps this is the time to sell the news - after a 21% rally in about a month with the RSI hitting 90 last Friday.
I've seen occasionally in the gold futures markets, a series of sell orders will come in, driving the price below support, causing a big volume spike as traders stops are taken out, only to almost immediately reverse higher breaking out to new highs. I recall reading somewhere a typical trade by a big guy might be "sell 100, then buy 1000".
The whole goal seems to be to trick the aggregate "uninformed order flow" into giving a big guy the volume needed to get in without moving the market.
Re: Credit Suisse maintains OVERWEIGHT rating for US Railroads
davefairtex,
Agreed. That was part of the WIR discussion re Industrials and Transports (sector 20) being over-bought.
While the RR had broken out, interesting to me was that FDX and UPS had not. I'm thinking there are too many followers of Warren Buffett out there (i.e., believing his acquisition of BNI was highly significant).
Re: Cara 100 Correlations
Dr. Strangelove,
I find correlations very useful. e, being "oversold", I actually find that the general public has little or no idea how to use it for proper diversification. It does not mean causality, but, for example, buying two stocks that have been recently correlated 0.95 or -0.90 is likely not the best use of limited investment funds for a regular investor. There are many other variables to consider, but this is the top one, or one of the top ones for diversification. Just my 2c.