Will Canada Lead G7 Rate Hikes?
by Zero Hedge - May 31st, 2010 11:32 pm
Courtesy of Leo Kolivakis
Reuters reports, World trade growth slows in 1st qtr:
Global trade volumes in the first three months of this year were 5.3 percent higher than in the previous quarter, representing slightly slower growth than in recent months but still a healthy rebound from the crisis, data from the Dutch CPB institute showed on Monday.
The CPB, whose data are used by the European Commission and World Bank, said world trade in the three months ended February had grown by 5.8 percent over the previous three months and grown 6.0 percent in the last quarter of 2009.
Trade growth remained strongest in Asia and Latin America, but was relatively low in the euro area, it said in its latest monthly world trade monitor.
On the more volatile monthly figures, world trade volumes were 3.5 percent higher in March than in February, when they grew 1.7 percent.
Trade volumes grew worldwide except for Japanese imports, and both imports and exports in the euro area were strong.
World trade in March was 4 percent below the peak reached in April 2008 and 21 percent above the trough seen in May 2009.
The CPB report also showed a pickup in world industrial production:
On the basis of preliminary data, world industrial production grew by 0.2% in March 2010, following an unrevised 1.0% increase in February. Production continues to grow in all regions, emerging Asia excepted. In March, industrial production was 1.9% below the peak level reached in March 2008. It has risen by an accumulated 12% from the March 2009 trough. In the first quarter of 2010 production was up by 10.9% on year ago, the highest such value in our series (which start in 1991).
Robust global trade helped Canada register a record 6.1% gain in Canadian GDP during Q1. Phred Dvorak of the WSJ reports, Canada’s Growth Sets Stage for Rate Increase:
Canada’s economy grew at the fastest pace in more than a decade during the first quarter of this year, a stronger-than-expected performance that cemented expectations of an interest-rate increase on Tuesday.
Gross domestic product rose an annualized 6.1% during the three months ended March 31, fueled by continued
…
Facebook
Twitter
LinkedIn 
del.icio.us
DiggEuropean Cross Country Bond Spreads
by Zero Hedge - May 31st, 2010 11:32 pm
Courtesy of Tyler Durden
As we embark on what will likely be another painful week for European markets, here is where all the cross country spreads are as of this moment.
As compared to the stable German 10 year benchmark, the worst 5 continue to be the PIIGS, in the following order – Greece, Ireland, Portugal, Spain and Italy. The tightest spreads are for Finland, Holland, France, Austria, and Belgium. We anticipate some further divergence between the PIIGS and the rest of Europe by the end of the week.
Bank Of International Settlements Warns To Ignore Banker “Doomsday Scenario” Fearmongering And Racketeering
by Zero Hedge - May 31st, 2010 9:24 pm
Courtesy of Tyler Durden
Over the past two years, the one strategy that has elicited the greatest amount of anger in the general population has been the traditional resolution to the “lowest common denominator” strategy of fearmongering or racketeering by the financial elite, any time it was faced with a status quo extinction event. The primary example is the Fed and Clearinghouse Association’s threat that should the Fed be forced to disclose the details of its bailout of various banks (as two courts have already ordered it to do), the result would be the greatest run on US banks in history: “If the names of our member banks who borrow emergency funds are publicly disclosed, the likelihood that a borrowing bank’s customers, counterparties and other market participants will draw a negative inference is great.” This is nothing but the patronizing of the broader population by those who seek to preserve their millions in bonuses, while disguising their hypocrisy in bluster, and hoping that the topic will be promptly forgotten. Curiously one entity that has decided to take on this “fire and brimstone” head on and to warn the general population to ignore the bankers “doomsday scenarios” is the bankers’ bank, the BIS. As the FT reports, according to a soon to be released report by the bank’s Chief Economic Advisors Stephen Cecchetti, “Banks are exaggerating the economic effects of the regulations they are likely to face in the coming years.” While his focus is on the implications of the passage of the Basel III treaty, and to preempt counter lobbying by the bank themselves, his argument can be extended to ever instance in which banks present scenarios of collapse should they not get their way: as Cecchetti points out: “the banks’ “doomsday scenarios” were based on their assuming “the maximum impact of the maximum change with the minimum behavioural change.” This is a huge point, as it means that even the failure of the TBTF banks could have been mitigated in the context of a controlled (and even uncontrolled) bankruptcy, and the only reason they were bailed out was to preserve the equity interests and the existing management team, period. This also means that the Fed and Treasury are nothing but vehicles for perpetuating Wall Street’s status quo, as we have claimed from the very beginning.
More from the FT:
…
Swing trading virtual portfolio-results as of May 31st, 2010
by Optrader - May 31st, 2010 9:00 pm
The last month has been very good for our virtual portfolio! We were up 42.58% for a 3% risk per trade, and 28.39% for a 2% risk.
Year-to-date, the virtual portfolio is now up 70% for 3% risk, and 46% for 2% risk! Last month we had 17 profitable trades, and 15 losers. The big difference was that we had some big winners, and we controlled our losses very well.
We only had one trade at more than 2R loss, and it was the MON trade, where really we could not have done much better.
On the other side, we had 7 winners at more than 2R, with some even bigger winners (4R+) on the puts that we let run like AMZN.
If you were trading options, your results might have been even better on some of those puts, as delta increased significantly with IV. That was a very important month, as it shows us that we can make a lot of money, even when being wrong almost 1/2 of the time about direction. This is probably the most important lesson to be learned here: cut your losses short, and let your winners run, and you will make money consistenly!
Presenting A Dutch Proposal To Stop GoM Oil Spill “Within Days”
by Zero Hedge - May 31st, 2010 8:23 pm
Courtesy of Tyler Durden
The Netherlands has experience with controlling water: 2,000 miles of dykes preventing the sea from flooding the country’s nether regions have taught the Dutch a thing or two about hydroisolation and spillover control. Unfortunately, as the last 40 days or so demonstrate so amply, neither the US nor the UK have the faintest clue how to stop the GoM oil spill which is now entering into the realm of the surreal. Which is why it may be time to learn from those who do know something about the matter. Zero Hedge has received the following proposal from Van Den Noort Innovations BV, which asserts it can get the GoM oil spill under control within days, and it doesn’t even involve nuking the continental shelf.
From Johann H.R. van den Noort:
Please, be informed that we from our Dutch background water related inventions have found a most effective solution to stop the oil spill in the Mexican Gulf within a few days!
Just yesterday we have publicized this news on the front page of our website, see www.noort-innovations.nl
For the sake of all people concerned, we would appreciate that you could bring out this news on your website at your earliest convenience as so much time has already been lost. We have tried to reach president Obama but did not succeed on Memorial Day.
We are the first to admit we know nothing about the feasibility or practicality of the attached proposal, which is why we post it here and hopefully those who are experts on the topic can voice in. As the situation is indeed hopeless and getting worse, it may be time to consider every proposal, no matter how far-fetched it sounds.
Stop the BP Oil Spill in the Gulf of Mexico:
| Attachment | Size |
|---|---|
| Stop the BP Oil Spill in the Gulf of Mexico.pdf | 112.5 KB |
Jeff Gundlach Warns Massive Asset Managers Like PIMCO And BlackRock Are Greater TBTF Risk Than Citi
by Zero Hedge - May 31st, 2010 7:51 pm
Courtesy of Tyler Durden
In this brief interview with Morningstar, Doubleline’s star MBS analyst, and the bane of TCW’s existence, Jeff Gundlach, points out the glaringly obvious: i.e., that “if Citigroup was too big to fail, then so much greater is the risk for asset managers at a multiple of that market cap.” Obviously the mortgage expert here is contemplating asset manager behemoths such as PIMCO and BlackRock, which have quietly become even more institutionalized within the fabric of the financial markets, than some of the TBTF banks. And without access to the Fed’s discount window, liquidity threats to firms like PIMCO are exponentially greater than even for a bankrupt POS like Citigroup. No wonder Gross was offloading European sovereign debt with gusto as of last check. With total assets of over $1 trillion, saying that a failure by PIMCO, and by extension its Fed-unmoderatable counterparty risk, would have huge implications on the US financial system, is so obvious, that it is completely understandable that there is not one single provision in the Senator from Countrywide and the Congressman from Fannie’s FinReg proposals on how to tackle this most recent threat to capital markets.
From the Gundlach interview:
Jason Stipp: You had mentioned in a recent interview about the government and the whole notion of the “too big to fail” and you said that that should really be extended to asset managers. I am wondering if you could elaborate a little bit on what you see as a risk of asset managers that may be too big to fail and can you confirm if you were talking about PIMCO with that comment?
Jeffrey Gundlach: Well, I’m not talking about any one firm in particular, I am just saying that any investment management firm that is controlling many hundreds of billions or even trillions of dollars and is using a lot of counter party risk for synthetic transactions is introducing a lot of systemic risk into the system. Remember when we had all those problems in September ’08 and the government had to come to the rescue of Citibank, Citibank has a market cap of something like $300 billion, and that was enough capital at risk to be deemed too big to fail.
If there is an asset manager with $600 billion or $1.2 trillion or $3 trillion of investors’ money
…
France Worries About AAA Rating; UK Economists Urge Greece to Abandon Euro; Spanish Prime Minister Losing Support; Japan’s Industrial Output Weakens
by ilene - May 31st, 2010 6:07 pm
France Worries About AAA Rating; UK Economists Urge Greece to Abandon Euro; Spanish Prime Minister Losing Support; Japan’s Industrial Output Weakens
Courtesy of Mish
Inquiring minds might be interested in an international roundup for Memorial Day. Let’s take a look at top stories about France, Germany, Greece, the EU, Spain, and Japan.
French Finance Minister Says "Keeping AAA Rating a Stretch"
As Eurozone trade unions prepare to battle over various austerity programs, the French budget minister warns on credit rating.
France admitted on Sunday that keeping its top-notch credit rating would be "a stretch" without some tough budget decisions, following German hints that Berlin may resort to raising taxes to help bring down its deficit.
Euro zone trade unions are preparing for possible confrontations in the coming week if governments impose austerity measures or labor reforms unilaterally. But ministers made clear they were ready to take unpopular steps to prevent the Greek debt crisis spreading to their economies, although doubts are growing about whether the Spanish government in particular has enough support to get its way.
Budget Minister Francois Baroin indicated on Sunday that France should not take for granted its AAA rating, which allows Paris to borrow relatively cheaply on international markets and finance its big budget deficit.
"The objective of keeping the AAA rating is an objective that is a stretch, and it is an objective that, in fact, partly informs the economic policies we want to have," Baroin said. "We must maintain our AAA rating, reduce our debt to avoid being too dependent on the markets, and we must do this for the long term," he told Canal+ TV in an interview.
France has forecast its deficit will hit 8 percent of gross domestic product this year, but aims to bring it down to within the European Union’s 3 percent limit by 2013.
UK Economists Advise Greece to Abandon the Euro
The Times Online reports Greece urged to give up euro
THE Greek government has been advised by British economists to leave the euro and default on its €300 billion (£255 billion) debt to save its economy.
The Centre for Economics and Business Research (CEBR), a London-based consultancy, has warned Greek ministers they will be unable to escape their debt trap without devaluing their own currency to boost exports. The only way this can happen is if Greece returns to its own currency.
…
Weekly Market Report
by Chart School - May 31st, 2010 5:28 pm
Courtesy of InTheMoneyStocks
This past week the S&P 500 INDEX,RTH (INDEXSP: .INX) gained 1 point when all was said and done into Friday’s close. The broad based market cap weighted index did happen to close above the weekly 50 moving average after testing and briefly piercing the February 5th pivot low. The pattern on the weekly chart is a bottoming tail at a support level which could lead to further upside. However, every rally has been sold recently and that type of continued action cannot be ruled out. Next week is a holiday shortened week in the U.S. as the market is closed on May 31, 2010 for the Memorial Day holiday. Therefore, the holiday will give the European Union an extra day to come up with some calming news before the U.S. markets resume trading on Tuesday June 1st, 2010. As of this time it is prudent to expect more volatility as the markets remain uncertain.
The SPDR Gold Trust (ETF) (NYSE:GLD) gained $3.66 this past week to close at $118.88 for the week. The pattern on the gold chart is an inside week. Often this pattern can go either way and will usually require more time to define a move. The one positive for the GLD is the overall trend remains intact and healthy on the weekly chart. As of this time the GLD looks to be consolidating the recent double top high made on May 12th, 2010. Most traders and investors continue to hold gold because of the massive money creation by the central banks around the world. As we all know by now gold has been considered a global currency since the beginning of time and will likely remain that way until the end of time. If the stock markets did go into a deflationary spiral gold could get dragged down with everything else similar to what took place in 2008. If that does not occur gold can be bought after every pullback or correction.
The United States Oil Fund LP (ETF) (NYSE:USO) finished the week higher by $1.76 to $34.04. The USO bounced off the $31.60 support level last week and continues to remain in the long sideways base since June 2009. Should the $31.60 level fail to hold…
Here’s What You Need To Know About The Israeli Flotilla Crisis
by ilene - May 31st, 2010 3:24 pm
Here’s What You Need To Know About The Israeli Flotilla Crisis
Courtesy of Gregory White at Clusterstock/Business Insider
This morning, Israel intercepted a flotilla bound for Gaza from Turkey that was, according to the Israeli military, carrying a cache of weapons. Those on the flotilla, who included members of parliaments from the region, claimed they were carrying only aid items for the Palestinians.
- At least 10 people were killed in Israel’s assault on the flotilla. Israel claims 10 of its soldiers were also injured in the attack.
- The flotilla was meant to break the blockade on Gaza, a portion of Palestine ruled by Hamas, a political party but also a terrorist organization.
- The flotilla was attacked in international waters.
- Those on the boat, and those who support their cause, claim that all they were carrying was personnel, many of whom were teachers and doctors, and items to support their aid mission. Supporting video, from Al-Jazeera:
- Israel claims the boat was housing a weapons cache and that individuals on the boat attacked their troops with weapons when they stormed it. Supporting video, from the Israeli Defense Force (IDF):
- Protests against the actions of the Israeli government have broken out in London, Cairo, and Istanbul.
- Governments in Europe have spoken out against the attacks, with President Sarkozy of France and Foreign Minister Hague of the UK calling Israel’s actions "out of line."
- Israeli PM Benjamin Netanyahu has canceled his trip to the U.S. as a result of the attack, choosing to remain in Israel to deal with the problem.
- This is likely a massive political misstep for Israel, as tensions with the U.S. government were just beginning to dissolve, and now are likely to remain high.
Free 2010 Options Expiration Calendar
by ilene - May 31st, 2010 2:11 pm
Options Traders — check out this easy-to-read Options Expiration Calendar for a helpful reminder of the monthly expiration dates for various option types. (Note: mine landed initially in my spam file.) - Ilene
Free 2010 Options Expiration Calendar
The Options Industry Council, the primary, unbiased resource for Options education, now offers a free 2010 Expiration Calendar. Get yours today!
German
Spanish
French
Italian
Portuguese
Japanese
Korean
Russian
Chinese
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(
