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schatzl

schatzl
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  • "If the hawks aren't even daydreaming about ending the program, QE will continue with a long time," writes Adam Button. His comment comes after Dallas Fed chief Richard Fisher - never a supporter of asset purchases - tells Reuters (video) he supports tapering QE "sooner than later," but only if the economy keeps improving. [View news story]
    Great comment. There is no plan B.
    Feb 21, 2013. 11:46 AM | 1 Like Like |Link to Comment
  • The countdown begins to the Fed trotting out members to walk back yesterday's FOMC minutes after the big miss on the Philly Fed Index. New Orders fell to -7.8 from -4.3. Prices paid 8.9 vs. 14.7. Six-month indicators actually improved though, rising to 32.1 from 29.2, the 3rd consecutive increase. (full report[View news story]
    just maybe...
    Feb 21, 2013. 10:21 AM | Likes Like |Link to Comment
  • Google (GOOG) gets its $1,000 price target, with CLSA raising to that level citing improving cost-per-clicks (CPCs). Are they serious? In the meantime, Google is set to take on Microsoft (MSFT) with the sale of touchscreen laptops powered by its Chrome operating system. Shares +0.4% premarket. [View news story]
    This is so funny, yet so tedious and sad. Remember Apple price targets of 1000, even 1111?

    Well now its Google's turn to sucker in the dumb money. Muppets being milked.
    Feb 21, 2013. 08:23 AM | 7 Likes Like |Link to Comment
  • The FBI reportedly is launching a criminal investigation into certain trades made ahead of the $23B deal for Heinz (HNZ). Reports have at least one trader betting HNZ would gain 8.1% through June expiry, a trade that paid off more than 18x the investment when the deal was announced Feb. 14. Names of potential traders in the cross-hairs have not been released. (earlier[View news story]
    Well, if the FBI is doing the investigation instead of merely the SEC - which is really an extension of the banking industry, you might actually end up being right.
    Feb 20, 2013. 07:24 AM | Likes Like |Link to Comment
  • Japan's trade deficit increased to a record ¥1.63T ($17.4B) in January from ¥641.5B in December, due to the sharply weaker yen and higher energy imports. However, exports climbed for the first time in eight months, growing 6.4% on year to ¥4.8T, with sales to China +3% for the first increase since May. Exports to the U.S. +10.9% but to the EU -4.5%. Imports +7.3% to ¥6.43T. [View news story]
    So much for the argument that cheap currencies stimulate exports.

    Yeah, exports grow, but so do imports as they become more expensive. Countries with a strong exporting history for high end products yet are particularly dependent on commodity and energy imports such as Japan or Germany, do not necessarily benefit from low currencies.

    The net benefit of currency values is highly dependent on the individual economic make-up.
    Feb 20, 2013. 06:59 AM | Likes Like |Link to Comment
  • Wal-Mart (WMT -2%)  slides as it appears sales are taking a hit from this year's payroll tax increase. Cleveland Research says comps are running negative YTD (Street expects +1.9%) amidst a broad slowdown in consumer spending. "The magnitude at WMT seems more significant than we would have expected." [View news story]
    "February MTD sales are a total disaster"

    Zerohedge have done an article on it. That mail correspondence appears to be quite the harbinger of a US consumer melt down.
    Feb 15, 2013. 02:45 PM | Likes Like |Link to Comment
  • The SEC reportedly is investigating a surge in trading of Heinz (HNZ) call options on Tuesday, before news the company was being bought by Berkshire Hathaway (BRK.A) and 3G Capital for $28B, or $72.50 a share. A Heinz $65 call option expiring on June 22 apparently had a volume of 2,593 contracts on Wednesday vs. an average over the prior 20 days of 13. 3G's acquisition of Burger King in 2010 came under similar scrutiny. [View news story]
    The few handful that were ever convicted in the vast morass of Wall Street corruption and fraud probably didn't contribute enough to certain political campaigns to warrant intervention. Moral of the story: always make sure you've donated enough.
    Feb 15, 2013. 07:02 AM | 1 Like Like |Link to Comment
  • The SEC reportedly is investigating a surge in trading of Heinz (HNZ) call options on Tuesday, before news the company was being bought by Berkshire Hathaway (BRK.A) and 3G Capital for $28B, or $72.50 a share. A Heinz $65 call option expiring on June 22 apparently had a volume of 2,593 contracts on Wednesday vs. an average over the prior 20 days of 13. 3G's acquisition of Burger King in 2010 came under similar scrutiny. [View news story]
    "equally" is putting it very diplomatically. The laws of the USA do not apply AT ALL to those crony capitalists with strong ties to Washington. May I gently remind people of a certain wonderful fellow named Corzine who is responsible for the theft of over 1 billion $ and still a free man? Whilst your typical next door thug robbing a gas station for a case of beer ends up for years behind bars.

    What has become of the icon for freedom, democracy and justice?
    Feb 15, 2013. 05:27 AM | 4 Likes Like |Link to Comment
  • The G-20 draft communique pledges to refrain from competitive devaluation and says the group is committed to cutting global imbalances and avoiding foreign-exchange rate misalignment. The yen (FXY +0.3%) remains stronger on the session, the euro (FXE -0.8%) significantly weaker. [View news story]
    Exactly. Politicians saying/promising one thing, yet doing the other. What a surprise.

    Setting inflationary targets is an aggressive from of currency depreciation. Case in point is the significant Yen movement. Yet we get to hear: "well that's fine and legitimate and has nothing to do with exchange rate manipulation". Someone needs to tell these economic illiterates, that exchange rates are strongly correlated to inflation (and real interest rates).
    Feb 14, 2013. 12:28 PM | Likes Like |Link to Comment
  • German trade surplus +15.1% M/M to €16.8B in December vs consensus of €14.8B. Exports +0.3% vs -2.2% in November and forecasts of +1.3%. Imports -1.3% vs -3.8% and +1.4%. 2012 surplus rises to five-year high, jumping more than three-fold to €188.1B, a figure that's also the second-highest since the stats began in 1950. Exports +3.4% to €1.1T, imports +0.7% to €909.2B. (PR[View news story]
    Excellent observation. Germany was an export champion with the old and strong Deutsche Mark. They will survive a stronger € albeit at a lower level of trade imbalance, but the others in Europe will suffer dearly. The € is proving to be very counter-productive on the whole.
    Feb 8, 2013. 07:01 AM | Likes Like |Link to Comment
  • The ECB leaves policy unchanged, its benchmark lending rate remaining at 0.75%. Mario Draghi's press conference begins at 8:30 ET. [View news story]
    Big surprise (not). He'll instead probably spend ample time explaining why he (as head of Italian CB at that time) allowed the deals to go ahead that broke Banca Monte die Paschi di Siena's back.
    Feb 7, 2013. 08:43 AM | Likes Like |Link to Comment
  • The early retirement of BOJ Governor Shirakawa is cause for a party in Tokyo, with the Nikkei soaring 3.8%. The dollar strengthened vs. yen - nearly tapping on 2009 levels - before backing off to about unchanged on the session. BOJ board member Takehiro Sato says achieving the new 2% inflation goal would require as-yet untried QE methods. Can't wait. EWJ +1% premarket. [View news story]
    That would depend on who follows would it not? Is it possible to be much more dovish? There's more leeway in the hawkish direction, though I doubt it would ever find the political will.
    Feb 6, 2013. 09:48 AM | Likes Like |Link to Comment
  • The early retirement of BOJ Governor Shirakawa is cause for a party in Tokyo, with the Nikkei soaring 3.8%. The dollar strengthened vs. yen - nearly tapping on 2009 levels - before backing off to about unchanged on the session. BOJ board member Takehiro Sato says achieving the new 2% inflation goal would require as-yet untried QE methods. Can't wait. EWJ +1% premarket. [View news story]
    Hey I'm with you on that. Let's just print and distribute the money to the people. It's about time guys on the street get their share of the cake too. Even better, now no one has to work. We simply print all the money we will ever need! Hey, did I just invent the economic perpetuum mobile? Woah, better get a global patent on that quick!
    Feb 6, 2013. 09:39 AM | 1 Like Like |Link to Comment
  • The EU periphery is back in the news with the opposition Socialist party calling for PM Rajoy to resign amidst a widening corruption scandal. The IBEX 35 is down 1.6%, and off nearly 8% in the past few days. "The dynamics in Spain are devastating," says Commerzbank's Michael Leister, recommending selling Spanish debt. Spanish 10-year note yields +10 bps to 5.31%. [View news story]
    Why the sudden change of heart? I thought Europe was fixed?

    Really, I get the impression media and investors are fickle and superficial. Nothing is different today than it was 6 months ago. Merely the fundamentals have deteriorated - but that was to be expected.
    Feb 4, 2013. 08:00 AM | Likes Like |Link to Comment
  • Fasten Your Safety Belts In 2013 [View article]
    Great quality post, though I disagree on the fundamental approach and on some minor conclusions.

    Pushing interest rates so low as to completely negate the price finding mechanism of free markets, may not fundamentally improve long term investments, as companies are aware of the additional risk the uncertainty a lacking free market price entails. The same goes for government stimuli via deficits, that can only ever be transient and must at some point be reversed, if the concept of a balanced budget and household discipline has any meaning. Without that belief, there would be no trust, trust that is vital to the fiat currency system.

    Companies invest if they believe they can achieve future returns. Sure, the cost of capital plays a central role as it lowers the benchmark for what constitutes a profitable investment. But it isn't the only factor. Currently companies are hoarding cash, not hiring and deleveraging. Why? They lack confidence in the economic future. A future determined by a Fed running out of options, interest rates that cannot be reduced further, by a government over-spending, unable to make the necessary hard choices, real wages stagnating, a job market still under pressure and skewed towards keeping elderly on below average incomes as their pensions have become worthless thanks to ZIRP, thereby preventing the highly indebted college graduates to find work so as to pay off their student loans, exchanging full time jobs with benefits to part time without.

    The whole construct lacks sustainability.

    You can mess around with interest rates, fiscal stimuli, money supply and quantitative easing, but the market participants are not robots simply reacting to macro-economic tools. They're emotional, they have vision, they look further down the road than the next election and what they see in the real economy isn't pretty and is infused with risk.
    Feb 4, 2013. 05:34 AM | Likes Like |Link to Comment
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