US Growth Stocks Trade Higher And European Financials Trade Lower As The IMF Gives Up On The Greek Recovery Plan
Financial Market Report for January 9, 2011
Euro Intelligence provides the very best of reporting on the Euro; I suggest that one purchase their daily email advisory; in it they report IMF Has Given Up On Greek Programme
The IMF no longer believes that the troika’s plan to save Greece is working.
The fund forecasts a fall of Greek GDP by 6% this year, double the previous forecast.
The situation demands either an increase in PSI, more savings by Greece, or a bigger bailout.
The Greek government has decided to abolish the 14th salary in the private sector.
Nicholas Kulish of the NYT reports Merkel and Sarkozy Warn Greece on Debt. Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France warned Greece on Monday that it needed to move forward with promised reforms or risk losing the next installment of badly needed bailout funds.
Volatility, $VIX, rose today, as US Stocks, VTI, rose, in anticipation of earnings season, while European Financials, EUFN, traded lower. The ratio of US Stocks relative to European Financials, VTI:EUFN, rose to an all time new high.
Intel, INTC, and Semiconductors, XSD, rose today. The strong rise ongoing rise of Intel, which is near an all time high, relative to Semiconductors, INTC:XSD, evidences a stock market turn lower on exhaustion of the Dollar Trade coming from a flight to safety in US Stocks is coming soon.
The growth stocks, that is Biotechnology, IBB, Homebuilders, ITB, as well as Transportation, IYT, and Industrials, IYJ, US Preferred, PFF, traded higher, while European Banks, such as LYG, BCS,RBS,UBS, NBG, DB traded lower.
Ongoing global currency deflation means the end of money, and the end of growth. Growth cannot expand in the US and globally when currencies fail. FRED Real Gross Domestic Product GDPC1 will be turning down. US Federal Reserve policies provided inflationism and economic expansion; now its policies have turned toxic resulting in destructionism and soon coming economic contraction.
The spigots of investment liquidity, carry trade lending and central bank easing have been turned off; and former flows are now running toxic. Insolvent sovereigns and insolvent banks cannot support investment expansion or economic growth. Fiat currencies are dying. The seigniorage of fiat money is being replaced by the seigniorage of diktat, as evidenced by the rise in power of the EU ECB IMF Troika, as well as by the appointment of technocratic government in Greece and Italy. Fiat money is being replace by the currency of diktat. The global investment, economic and political tectonic plates have shifted, and an authoritarian tsunami is on the way; political capital is replacing investment capital, as indicated by the following news reports.
The ongoing Dollar Trade is reaching the end of its rally; lacking investment liquidity, and experiencing debt contagion from the European crisis, and inflation destruction from reduced profit potential and falling currencies worldwide, the stocks that rallied today will be falling soon. The flight to safe in US Growth stocks has a fat tail and can be expected to experience a sharp reversal.
Fat tails tend to occur in sheep, and in sheeple. Mohamed A. El-Erian in the WSJ writes Investing in a Fat Tail World. By pushing interest rates to very low levels, central banks are pushing investors out the risk spectrum. The NYT relates that the alliterative definition of a fat tail is an abnormal agglomeration of angst. Behavioral Finance defines fat tails as wandering far from the normal lanes, to put it simply, fat tails are seen when too many events or values stray widely from the average. Finance Dictionary relates a fat tail is a statistical distribution that is wider or larger than expected, increasing the probability that an extreme or unexpected value will result … Fat tail risk is a prime reason for investing in and taking possession of gold.
Bank of NY Mellon, BK, Bank of America, BAC, and Citigroup, C, led US Banks, RWW, KRE, IAT, KBE, QABA, higher. Investment Bankers, KCE, rose. Argentina Banks BFR, BMA rose higher still, and GGAL traded near an all time high. Brazil Banks, BBD, ITUB, BSBR, rose. Chinese Financials, CHIX, rose.
Industrials, XLI, rose. AGCO, led Agricultural Equipment Manufacturers, LNN, DE, TSCO, NC, CASC, seen in this Finviz Screener, higher. Ford, F, traded higher. Steel, SLX, rose. Small tools, LECO, SNA, SSD, SWK, seen in this Finviz Screener, traded to or near recent highs. Industrial Electrical Equipment Manufacturer, ETN, rose.
Most of the education shares, seen in APOL, DV, ESI, BPI, STRA, CAST, this Finviz Screener, traded to new highs or at recent highs.
US Truck rental Ryder, R, and US Railroads, KSU, UNP, CSX, NSC, GWR, seen in this Finviz Screener, rose.
US based business service companies, WXS, MMS, TBI, rose.
Debt laden Construction Equipment Manufacturer, MTW, rose.
Caterpillar, CAT,, rose taking most of the construction, building and enviornmental companies, CX, URS, NX, USG, NCS, TRN, GLDD, RBN, SXI, CLNE, AEGN, DY, PRIM, BECN, GVA, seen in this Finviz Screener higher.
The most risky of world shares rose. Argentina, ARGT, Columbia Shares, GXG, Central Europe, CEE, India Earnings, EPI, India, INDY, India Small Caps, SCIF, Brazil, EWZ, Russia, RSX, China, YAO, Brazil Small Caps, BRF, and South Korea Small Caps, SKOR, rose, as did the Shanghai shares, CAF.
Foreign Utilities, EDN, EOC, EBR, SBS, CIG, CPL, seen in this Finviz Screener rose.
Health Care Providers, UNH, WLP, ESRX, HUM, HNT, WCG, AGP, CI, CNC, MOH, seen in this Finviz Screener rose.
Most of the networking shares, FFIV, NTGR, CSCO, QCOM, RVBD, AKAM, IGN, seen in this Finviz Screener, rose.
Dupont, DD, led most of the chemical manufacturers, DD, ALB, ASH, WLK, CYT, NEU, RPM seen in this Finviz Screener lower.
The Baltic Dry Index falls out of bed; the chart of the Baltic Dry Index, $BDI, fell 6% on Friday January 6, 2011, and 23% for the week. It fell 3% today.
Chicago Tribune Freddie Mac to grant breaks on mortgage payments for up to a year
Dr Housing Bubble The top 20 zip codes list of price declines for LA County; the author focuses on real estates sales in Sherman Oaks, CA, 91403, where homes sell for $300/sq ft.
Ulrich Rippert of WSWS reports that the world’s largest printing press manufacturer dies. Several Thousand Layoffs Imminent At German Printing Press Manufacturer Manroland Representatives of Germany’s largest trade union, IG Metall, are offering their services to the liquidator intent on breaking up bankrupt printing press manufacturer Manroland.