Concerns about China's slowing economy are misplaced, asserts JPMorgan's Jing Ulrich. It's not so much about slowing as it is about rebalancing, she says. For years, growth came from exports and heavy industry, but now, China's economy is fueled by something else - consumers. And with unemployment in China running at just 4.3%, the consumer is doing just fine. Although the demand won't fully offset slower growth entirely, Ulrich doesn't believe the region will see anything close to a hard landing. [View news story]
How can you rely upon "official" economic stats from a Communist regime to make financial recommendations?
In the 80's the Soviets were kicking our butts according to their official stats and yet when the Iron Curtain was pulled back it revealed a bare cupboard (is that a mixed metaphor?).
http://nyti.ms/MINii3 "Chinese Data Mask Depth of Slowdown, Executives Say" HONG KONG — As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles."
Did Europe's Recession Begin In April 2012? [View article]
bbro,
The EU market as a whole is a bigger economy than ours so when it goes into recession the knock-on effects to the rest of the world and most especially China are huge.
Do you really think it is likely that the US can decouple economically from the Rest of The World and avoid recession?
I would not be surprised if we have close to a zero jobs month in NFP based upon the uptick in the weekly jobless claims which would imply a further slowing in the US economy, rather than the upswing that is necessary to keep us out of recession and pull the rest of the world back from recession.
What do you see as the catalysts to get us moving from the current 1.7% GDP, right now and slowing, back to the 3% plus range?
Personally I can't see what will get us moving again to a faster expansion so I would be interested in your insights.
For buy and hold-type investors, today was a great day for closing out the quarter, however speculators, by-and-large, got crushed. According to data from the CFTC, on net, speculators badly mis-positioned themselves for today's window dressing. For example: Traders cut their long positions in gold and silver, and boosted their copper shorts. But gold +3% and silver +3.3 % were both up huge today, and copper closed out +5%, killing the shorts. [View news story]
White,
Governments and CB's hate the shorts which is why it will be a much more volatile world from a trading point of view. We need shorts to stabilize markets but when markets can be so easily manipulated with headline risk, the value of the short position is always at risk to a far greater extent than historical experience.
The volatility/risk of being short has been raised by the market manipulation which I believe means there will be fewer shorts over time and market risk overall will rise. Some people do not understand the importance of short-sellers in maintaining an orderly market.
Market recap: Stocks finished Q2 with a bang as investors cheered the surprise EU summit agreement, even if it felt a bit like deja vu. The Dow and S&P wrapped up their best June in 13 years; Nasdaq posted its strongest since 2000. Commodities surged, as crude oil skied 9.4% and gold rose 3.5%. Reports on weak consumer spending and sentiment were brushed aside. NYSE gainers led losers six to one. [View news story]
UI,
For those keeping score the close on June 30, 2011 was 1320. So is that like 3% y/y from today's close? 1353 on July 7, 2011.
This year's quarter end ramp jobs are following a similar pattern. June 20, 2001 was 1272 so around 5% in the last 9 days of trading.
For buy and hold-type investors, today was a great day for closing out the quarter, however speculators, by-and-large, got crushed. According to data from the CFTC, on net, speculators badly mis-positioned themselves for today's window dressing. For example: Traders cut their long positions in gold and silver, and boosted their copper shorts. But gold +3% and silver +3.3 % were both up huge today, and copper closed out +5%, killing the shorts. [View news story]
Who will do the buying once short-sellers finally give up trying to outsmart these centrally planned markets?
Right at Europe's close, a look at some of the more eye-popping macro moves: Spanish 2-year yield down 113 basis points to 4.28% (the 10-year off just 62 bps to 6.32%), Italy's bank index +10.5% (the MIB a not too shabby, +7%), the MSCI World Stock Index (EFA) +3.3%. [View news story]
Who will do the buying once short-sellers finally give up trying to outsmart centrally planned markets?
Research In Motion (RIMM) has resumed trading following its giant FQ1 miss and layoff announcement. Shares are down 15.9% AH. The company's market cap is now barely above $4B. Mobile component suppliers such as Skyworks (SWKS), Broadcom (BRCM), Qualcomm (QCOM), and Marvell (MRVL) are off slightly AH. [View news story]
That may be one of the ugliest 5 year charts you will ever see. Apparently the lifespan of a tech "monopoly" is getting shorter and shorter.
From Mad Money, June 2007:
http://bit.ly/L5kNy8 "Finally, there’s Research in Motion where it’s game, set, match with the BlackBerry. RIM mops the floor with its competition, Cramer says, leading the pack on the enterprise side by at least 18 months as it successfully expands in Latin America. Cramer thinks RIM could even benefit from the iPhone release as consumers could turn to its 8300 model as a lower-cost alternative. They don’t call it the CrackBerry for nothing. "
Bottom Line: The jig is up. The new four horsemen of tech are here. Google, Amazon, Apple and RIM are all gigantic consumer names with mighty brands that are so powerful they're wiping out the competition, Cramer says. "
The Supreme Court healthcare opinion "is a classic example of why Prediction markets have minimal value," writes Barry Ritholtz as Intrade gets it wrong again by predicting that the court would invalidate the act. "Futures markets are really a focus group unto themselves: When the group is something less representative of the target market, they get it wrong with alarming frequency." [View news story]
labas,
It appears that November's election will now be a clear referendum on this issue. Romney has declared he will immediately repeal it. If you are correct then we will have a new President.
The Supreme Court healthcare opinion "is a classic example of why Prediction markets have minimal value," writes Barry Ritholtz as Intrade gets it wrong again by predicting that the court would invalidate the act. "Futures markets are really a focus group unto themselves: When the group is something less representative of the target market, they get it wrong with alarming frequency." [View news story]
Yippee! Let's all celebrate the new TAX on the middle class and the poor.
The Supreme Court healthcare opinion "is a classic example of why Prediction markets have minimal value," writes Barry Ritholtz as Intrade gets it wrong again by predicting that the court would invalidate the act. "Futures markets are really a focus group unto themselves: When the group is something less representative of the target market, they get it wrong with alarming frequency." [View news story]
Intrade had John Kerry winning the election by 95% the day of the election - not sure why anybody thinks these things are anything other than a financial opinion polls with the same level of accuracy.
Understanding Confidence Surveys Can Help Your Investing [View article]
Jeff,
"My purpose is to inform about investments, not to help people in their assessment of leaders"
Sadly in today's environment, I think it is next to impossible to separate the political from the financial. The governments of the world have so bound themselves to the fate of the markets that political ramifications can far overshadow basic underlying fundamentals. Deficit spending either expansion or austerity will ultimately bite into corporate profits if you accept James Montier's argument on the subject.
"It's far better to reply on corporate and industry data to aascertain where things are headed."
Trust the NAR over the regional FED reports?
December 2011: "Sales of existing homes since 2007 were 14% lower than previously reported, the National Association of Realtors said Wednesday. The downward revision offered statistical evidence that the U.S. housing slump that followed the collapse of the subprime mortgage market was even more severe than previously thought. According to the NAR, in 2010 there were 4,190,000 existing-home sales, down 14.6% from the earlier reported 4,908,000 figure. For the four-year period from 2007 to 2010, sales and inventory were revised downward by 14.3%."
Understanding Confidence Surveys Can Help Your Investing [View article]
"The failure of leadership is creating a negative climate. Some of this failure can be laid at the doorstep of specific leaders,"
If you don't name names then how can we assess who is failing?
Really the fact that we don't want to hold leaders accountable with specific examples of their failures rather than the usual ad hominem attacks means we will have a difficult time conveying to leaders what we want them to do to overcome their failures. If we don't create a vision for the people then we cannot expect meaningful change to happen.
The CEO is usually the person most accountable for the ultimate success or failure of the company (sometimes unjustly) and when confidence in the leader is lost the right prescription is to find a new leader in an effort to restore confidence and shareholder value.
Market fears may be reaching a crescendo, which, to contrarians at least, may wind up being good for stocks over the long run. In the most recent consumer confidence survey, the percentage of those who believe stock prices are going to fall shot up from 32.4% to 42.6%. This surge of pessimism is just what's needed, says Bespoke's Nadav Baum. "We're stuck in a trading range ... You need to get that pessimism on the retail side to get the market to break out." [View news story]
Van,
A "fat tail" event is not the same as a Black Swan event. All a fat tail means is that the projected impact in terms of market losses is far greater than suggested by all the Value At Risk (VAR) models that the financial institutions use. VAR models assume a normal distribution which unfortunately only exists until it doesn't.
So an actual implosion of the EURO currency although known would very likely exceed the losses projected by these mathematical models - the same models that said subprime was contained and a national decline in housing prices was impossible.
The major reason no one has a clue as to the impact is the derivative market - Buffett's weapons of mass destruction.
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing."
Measures intention not completion which given the high cancellation rate for mortgage underwriting explains why the follow through to actual sales has been tepid.
Basically flat with March's reading.
Truthfully although this is important, new home sales are where the economic activity is most important as you undoubtedly know.
This is not unimportant but the regional FED reports are more meaningful - Chicago FED was negative this morning continuing a string of disappointing reports so there's some doom and gloom for you.
Concerns about China's slowing economy are misplaced, asserts JPMorgan's Jing Ulrich. It's not so much about slowing as it is about rebalancing, she says. For years, growth came from exports and heavy industry, but now, China's economy is fueled by something else - consumers. And with unemployment in China running at just 4.3%, the consumer is doing just fine. Although the demand won't fully offset slower growth entirely, Ulrich doesn't believe the region will see anything close to a hard landing. [View news story]
In the 80's the Soviets were kicking our butts according to their official stats and yet when the Iron Curtain was pulled back it revealed a bare cupboard (is that a mixed metaphor?).
http://nyti.ms/MINii3
"Chinese Data Mask Depth of Slowdown, Executives Say"
HONG KONG — As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles."
Did Europe's Recession Begin In April 2012? [View article]
The EU market as a whole is a bigger economy than ours so when it goes into recession the knock-on effects to the rest of the world and most especially China are huge.
Do you really think it is likely that the US can decouple economically from the Rest of The World and avoid recession?
I would not be surprised if we have close to a zero jobs month in NFP based upon the uptick in the weekly jobless claims which would imply a further slowing in the US economy, rather than the upswing that is necessary to keep us out of recession and pull the rest of the world back from recession.
What do you see as the catalysts to get us moving from the current 1.7% GDP, right now and slowing, back to the 3% plus range?
Personally I can't see what will get us moving again to a faster expansion so I would be interested in your insights.
For buy and hold-type investors, today was a great day for closing out the quarter, however speculators, by-and-large, got crushed. According to data from the CFTC, on net, speculators badly mis-positioned themselves for today's window dressing. For example: Traders cut their long positions in gold and silver, and boosted their copper shorts. But gold +3% and silver +3.3 % were both up huge today, and copper closed out +5%, killing the shorts. [View news story]
Governments and CB's hate the shorts which is why it will be a much more volatile world from a trading point of view. We need shorts to stabilize markets but when markets can be so easily manipulated with headline risk, the value of the short position is always at risk to a far greater extent than historical experience.
The volatility/risk of being short has been raised by the market manipulation which I believe means there will be fewer shorts over time and market risk overall will rise. Some people do not understand the importance of short-sellers in maintaining an orderly market.
Market recap: Stocks finished Q2 with a bang as investors cheered the surprise EU summit agreement, even if it felt a bit like deja vu. The Dow and S&P wrapped up their best June in 13 years; Nasdaq posted its strongest since 2000. Commodities surged, as crude oil skied 9.4% and gold rose 3.5%. Reports on weak consumer spending and sentiment were brushed aside. NYSE gainers led losers six to one. [View news story]
For those keeping score the close on June 30, 2011 was 1320. So is that like 3% y/y from today's close? 1353 on July 7, 2011.
This year's quarter end ramp jobs are following a similar pattern. June 20, 2001 was 1272 so around 5% in the last 9 days of trading.
When the bots buy en masse they are unstoppable.
For buy and hold-type investors, today was a great day for closing out the quarter, however speculators, by-and-large, got crushed. According to data from the CFTC, on net, speculators badly mis-positioned themselves for today's window dressing. For example: Traders cut their long positions in gold and silver, and boosted their copper shorts. But gold +3% and silver +3.3 % were both up huge today, and copper closed out +5%, killing the shorts. [View news story]
Right at Europe's close, a look at some of the more eye-popping macro moves: Spanish 2-year yield down 113 basis points to 4.28% (the 10-year off just 62 bps to 6.32%), Italy's bank index +10.5% (the MIB a not too shabby, +7%), the MSCI World Stock Index (EFA) +3.3%. [View news story]
Research In Motion (RIMM) has resumed trading following its giant FQ1 miss and layoff announcement. Shares are down 15.9% AH. The company's market cap is now barely above $4B. Mobile component suppliers such as Skyworks (SWKS), Broadcom (BRCM), Qualcomm (QCOM), and Marvell (MRVL) are off slightly AH. [View news story]
From Mad Money, June 2007:
http://bit.ly/L5kNy8
"Finally, there’s Research in Motion where it’s game, set, match with the BlackBerry. RIM mops the floor with its competition, Cramer says, leading the pack on the enterprise side by at least 18 months as it successfully expands in Latin America. Cramer thinks RIM could even benefit from the iPhone release as consumers could turn to its 8300 model as a lower-cost alternative. They don’t call it the CrackBerry for nothing. "
Bottom Line: The jig is up. The new four horsemen of tech are here. Google, Amazon, Apple and RIM are all gigantic consumer names with mighty brands that are so powerful they're wiping out the competition, Cramer says. "
The Supreme Court healthcare opinion "is a classic example of why Prediction markets have minimal value," writes Barry Ritholtz as Intrade gets it wrong again by predicting that the court would invalidate the act. "Futures markets are really a focus group unto themselves: When the group is something less representative of the target market, they get it wrong with alarming frequency." [View news story]
It appears that November's election will now be a clear referendum on this issue. Romney has declared he will immediately repeal it. If you are correct then we will have a new President.
The Supreme Court healthcare opinion "is a classic example of why Prediction markets have minimal value," writes Barry Ritholtz as Intrade gets it wrong again by predicting that the court would invalidate the act. "Futures markets are really a focus group unto themselves: When the group is something less representative of the target market, they get it wrong with alarming frequency." [View news story]
The Supreme Court healthcare opinion "is a classic example of why Prediction markets have minimal value," writes Barry Ritholtz as Intrade gets it wrong again by predicting that the court would invalidate the act. "Futures markets are really a focus group unto themselves: When the group is something less representative of the target market, they get it wrong with alarming frequency." [View news story]
Understanding Confidence Surveys Can Help Your Investing [View article]
"My purpose is to inform about investments, not to help people in their assessment of leaders"
Sadly in today's environment, I think it is next to impossible to separate the political from the financial. The governments of the world have so bound themselves to the fate of the markets that political ramifications can far overshadow basic underlying fundamentals. Deficit spending either expansion or austerity will ultimately bite into corporate profits if you accept James Montier's argument on the subject.
Of course that is my view of the matter.
May Pending Home Sales:+5.9% to 101 vs. +1.2% expected; -5.5% prior. [View news story]
"It's far better to reply on corporate and industry data to aascertain where things are headed."
Trust the NAR over the regional FED reports?
December 2011:
"Sales of existing homes since 2007 were 14% lower than previously reported, the National Association of Realtors said Wednesday.
The downward revision offered statistical evidence that the U.S. housing slump that followed the collapse of the subprime mortgage market was even more severe than previously thought.
According to the NAR, in 2010 there were 4,190,000 existing-home sales, down 14.6% from the earlier reported 4,908,000 figure. For the four-year period from 2007 to 2010, sales and inventory were revised downward by 14.3%."
Read more: http://fxn.ws/MU1k0T
FED reports have a very high correlation to payrolls.
Understanding Confidence Surveys Can Help Your Investing [View article]
If you don't name names then how can we assess who is failing?
Really the fact that we don't want to hold leaders accountable with specific examples of their failures rather than the usual ad hominem attacks means we will have a difficult time conveying to leaders what we want them to do to overcome their failures. If we don't create a vision for the people then we cannot expect meaningful change to happen.
The CEO is usually the person most accountable for the ultimate success or failure of the company (sometimes unjustly) and when confidence in the leader is lost the right prescription is to find a new leader in an effort to restore confidence and shareholder value.
Does the same analogy apply to government?
Market fears may be reaching a crescendo, which, to contrarians at least, may wind up being good for stocks over the long run. In the most recent consumer confidence survey, the percentage of those who believe stock prices are going to fall shot up from 32.4% to 42.6%. This surge of pessimism is just what's needed, says Bespoke's Nadav Baum. "We're stuck in a trading range ... You need to get that pessimism on the retail side to get the market to break out." [View news story]
A "fat tail" event is not the same as a Black Swan event. All a fat tail means is that the projected impact in terms of market losses is far greater than suggested by all the Value At Risk (VAR) models that the financial institutions use. VAR models assume a normal distribution which unfortunately only exists until it doesn't.
So an actual implosion of the EURO currency although known would very likely exceed the losses projected by these mathematical models - the same models that said subprime was contained and a national decline in housing prices was impossible.
The major reason no one has a clue as to the impact is the derivative market - Buffett's weapons of mass destruction.
May Pending Home Sales:+5.9% to 101 vs. +1.2% expected; -5.5% prior. [View news story]
Measures intention not completion which given the high cancellation rate for mortgage underwriting explains why the follow through to actual sales has been tepid.
Basically flat with March's reading.
Truthfully although this is important, new home sales are where the economic activity is most important as you undoubtedly know.
This is not unimportant but the regional FED reports are more meaningful - Chicago FED was negative this morning continuing a string of disappointing reports so there's some doom and gloom for you.