Stock World Weekly: High-Stakes Histrionics
by SWW - July 31st, 2011 3:49 am
Here is the latest Stock World Weekly - High-Stakes Histrionics.
Facebook
Twitter
LinkedIn 
del.icio.us
DiggWorld Markets Weekend Review: The U.S. Leads a Selloff
by Chart School - July 31st, 2011 12:35 am
Courtesy of Doug Short.
What a difference from last week, when my update title was Major Rally. The seven major world markets I track all finished in the red with six of the seven down anywhere from two to nearly four percent. The S&P 500 finished dead last, down 3.92%, and doubtless contributed to the broader international retreat, thanks to our political incompetence in dealing government financial policy.
The tables below provide a concise overview of performance comparisons over the past four weeks for these seven major indexes. I’ve also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the comparative performance over time.
The chart below illustrates the comparative performance of World Markets since March 9, 2009. The start date is arbitrary: The S&P 500 and BSE SENSEX hit their lows on March 9th, the Nikkei 225 on March 10th, the DAX on March 6th, the FTSE on March 3rd, the Shanghai Composite on November 4, 2008, and the Hang Seng even earlier on October 27, 2008. However, by aligning on the same day and measuring the percent change, we get a better sense of the relative performance than if we align the lows.
A Longer Look Back
Here is the same chart starting from the turn of 21st century. The relative over-performance of the emerging markets (Shanghai, Mumbai, Hang Seng) is readily apparent.
Check back next weekend for a new update.
Adam Smith Would Neither Recognize Nor Approve Of Our Financial, Monetary, Economic Or Legal Systems
by Zero Hedge - July 31st, 2011 12:33 am
Courtesy of ZeroHedge. View original post here.
Submitted by George Washington.
The father of modern economics – Adam Smith – is used as a poster child to support the status quo that we have today. Smith is invoked as the patron saint of free market economics.
In fact, Smith would neither recognize or approve of our current financial, monetary, economic or legal systems.
I noted last year:
Americans have traditionally believed that the “invisible hand of the market” means that capitalism will benefit us all without requiring any oversight. However, as the New York Times notes, the real Adam Smith did not believe in a magically benevolent market which operates for the benefit of all without any checks and balances:
Smith railed against monopolies and the political influence that accompanies economic power …
Smith worried about the encroachment of government on economic activity, but his concerns were directed at least as much toward parish councils, church wardens, big corporations, guilds and religious institutions as to the national government; these institutions were part and parcel of 18th-century government…
Smith was sometimes tolerant of government intervention, ”especially when the object is to reduce poverty.” Smith passionately argued, ”When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.” He saw a tacit conspiracy on the part of employers ”always and everywhere” to keep wages as low as possible.
Paul Krugman pointed out:
Adam Smith … may have been the father of free-market economics, but he argued that bank regulation was as necessary as fire codes on urban buildings, and called for a ban on high-risk, high-interest lending, the 18th-century version of subprime.
And Damon Vrabel wrote:
It seems ridiculous to point this out, but sovereign debt implies sovereignty. Right? Well, if countries are sovereign, then how could they be required to be in debt to private banking institutions? How could they be so easily attacked by the likes of George Soros, JP Morgan Chase, and Goldman Sachs? Why would they be subjugated to the
…
Sabrient Divers – 07/31/2011
by Sabrient - July 31st, 2011 12:00 am
Top 5 Divers |
||||
| Stock | Rating | Analysis | ||
| FST | STRONGSELL | Projected value for Forest Oil is diminishing and long term growth rates are declining — someone throw them a lifeline. | ||
| EMCI | SELL | We project an unfortunate decrease in value for EMC Insurance, and we’re not alone in this opinion as other analysts are also reducing expectations. | ||
| DTG | SELL | Projected value for Dollar Thrifty is diminishing and long term growth rates are declining — someone throw them a lifeline. | ||
| AGN | SELL | Degradation in recent earnings and declining long term growth prospects are pushing Allergan lower and lower in our stack. | ||
| EXP | STRONGSELL | We project an unfortunate decrease in value for Eagle, and we’re not alone in this opinion as other analysts are also reducing expectations. | ||
Sabrient Risers – 7/31/2011
by Sabrient - July 31st, 2011 12:00 am
Top 5 Risers |
||||
| Stock | Rating | Analysis | ||
| AXL | STRONGBUY | The projected value for American Axle is still rising quickly even though past earnings have already improved significantly. | ||
| AG | BUY | An increasingly attractive expected long term growth rate and a significantly higher projected valuation from just a few weeks ago make AGCO a company to watch. | ||
| OLN | BUY | The long term projected growth rate for Olin is rising, and this is happenening at a time when historical earnings have already increased significantly. | ||
| MSFT | STRONGBUY | Many analysts are expecting higher than previously expected long term growth from Microsoft, and its near-term earnings outlook is also improving. | ||
| CROX | STRONGBUY | Many analysts are expecting higher than previously expected long term growth from Crocs, and its near-term earnings outlook is also improving. | ||
To DeFauLT, or NoT To DeFauLT
by Zero Hedge - July 30th, 2011 11:26 pm
Courtesy of ZeroHedge. View original post here.
Submitted by williambanzai7.
TO DEFAULT, OR NOT TO DEFAULT
William Banzai Shakespeare
To default, or not to default: that is the question:
Whether ’tis nobler at this time to suffer
The slings and arrows of outrageous financial misfortune,
Or to take arms against a sea of rising debts,
And by opposing end them? To die: to sleep;
No more; and by a sleep to say we end
The heart-ache and the thousand market cuts,
That insolvent flesh is heir to, ’tis a debentured recomposition
Devoutly to be wish’d. To die, to sleep;
To sleep: perchance to dream: ay, there’s the hubub;
For in that sleep of fiscal death what disastrous dreams may come
When we have lanced off the bankrupt boil,
Must give us pause: there’s the disrespect
That makes calamity of yields to maturity,
For who would bear the whips and scorns of fiat debasement,
The creditor’s wrong, the borrowing idiot’s contumely,
The pangs of despised austerity, the law of gravity’s delay,
The insolence of office and the spurns
That impatient murmurs of Wall Street snakes,
When he himself might his quietus make
With a debt addicts bodkin? who would loan fardels bear,
To grunt and sweat under a weary life of indentured serfdom,
But that the dread of something after forcible redemption,
The undiscover’d wasteland from whose bourn
No political hack returns, puzzles the will
And makes them rather bear those monetary ills we have
Than fly to others that they know not of?
Thus ignorance does make cowards of them all;
And thus the native hue of fiscal resolution
Is sicklied o’er with the pale cast of votes bought,
And swindling enterprises of great Ponzinomic moment
With this regard their ratings turn awry,
And lose the name of action. – Vote you now!
The debt ceiling hysteria! Banksta pimps, be in thy orfices
Be all our financial sins remember’d.
ABC Reports Tentative Debt Ceiling Deal Reached Between GOP And Obama
by Zero Hedge - July 30th, 2011 10:55 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
This could very well be another red herring like the NYT article from two weeks ago that proved to be a dud, but for what it’s worth according to ABC’s Jonathan Karl, the White House and the GOP have just reached a tentative deal as follows…
- Debt ceiling increase of up to $2.8 trillion
- Spending cuts of roughly $1 trillion
- Special committee to recommend cuts of $1.8 trillion (or whatever it takes to add up to the total of the debt ceiling increase)
- Committee must make recommendations before Thanksgiving recess
- If Congress does not approve those cuts by late December, automatic across-the-board cuts go into effect, including cuts to Defense and Medicare.
In other words, virtually the same as the Boehner deal in the actual cuts, which will likely be back-end loaded (we expect about $10-20 billion in 2012 cuts), but the Democrats get what they want in that it will not require a second debt ceiling hike before Obama’s re-elecetion as $2.8 trillion should last well into 2013. As for “future cuts”, well, that’s easily what Congress is so very good at. Indefinite future cuts that is.
Obama’s Final Loophole: The “Catastrophic Emergency” Clause?
by Zero Hedge - July 30th, 2011 9:13 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Politico’s Ben White has pointed out something interesting, namely that while the 14th Amendment may or may not be practical under the current situation (especially not without a full blown constitutional crisis), one potential loophole that Obama may have comes from none other than former president Bush, in the form of the Homeland Security Presidential Directive-20, one which deals with such trivia as “Catastrophic Emergency”, “Continuity of Government”, “Continuity of Operations”, and lastly, and perhaps somewhat ironically, “Enduring Constitutional Government.” Considering the amount of doom and gloom spun by the government is bigger than anything seen even under Hank Paulson, could this “crisis” be interpreted by the constitutional scholar as one that merits the invocation of Homeland Security privileges? Is America’s maxing out its credit card comparable to a nuclear or terrorist attack on the continent? We may find out in less than 48 hours.
So, for your reading pleasure, here is National Security and Homeland Security Presidential Directive 51/20
NATIONAL SECURITY PRESIDENTIAL DIRECTIVE/NSPD 51
HOMELAND SECURITY PRESIDENTIAL DIRECTIVE/HSPD-20
Subject: National Continuity Policy
Purpose
(1) This directive establishes a comprehensive national policy on the continuity of Federal Government structures and operations and a single National Continuity Coordinator responsible for coordinating the development and implementation of Federal continuity policies. This policy establishes “National Essential Functions,” prescribes continuity requirements for all executive departments and agencies, and provides guidance for State, local, territorial, and tribal governments, and private sector organizations in order to ensure a comprehensive and integrated national continuity program that will enhance the credibility of our national security posture and enable a more rapid and effective response to and recovery from a national emergency.
Definitions
(2) In this directive:
(a) “Category” refers to the categories of executive departments and agencies listed in Annex A to this directive;
(b) “Catastrophic Emergency” means any incident, regardless of location, that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the U.S. population, infrastructure, environment, economy, or government functions;
(c) “Continuity of Government,” or “COG,” means a coordinated effort within the Federal Government’s executive branch to ensure that National Essential Functions continue to be performed during a Catastrophic Emergency;
(d) “Continuity of Operations,” or “COOP,” means an effort within individual executive departments and agencies to ensure that Primary Mission-Essential Functions continue…
Meanwhile The Global Economy…
by Zero Hedge - July 30th, 2011 8:56 pm
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
While the biggest winner of the ongoing political melodrama is C-SPAN, whose ratings have likely never been higher, and the broad audience is logically largely distracted by the hourly lack of development out of the White House, what we do know is that QE2 has failed to generate any growth in the economy, with both Q2 and Q1 GDP crashing spectacularly to a point where post another revision Q1 will be the inflection point where America re-entered another recession. Furthermore, we have seen a stark example of the economic snake eating its tail, whereby the more than proportional increase in the price of commodities, courtesy of Bernanke’s policies, has offset any potential incipient growth germs that may have been lingering in the economy in Q3 2010 through Q2 2011. Yet all of these are backward looking indicators. The question is what happens to the global economy going forward? For the answer we again turn to Sean Corrigan, who remarks on some very disturbing developments in the global macro arena, which when tied in to core tenets of the Austrian Business Cycle theory, indicate that the global soft landing may be a mirage, and that the downslope we are already in, may convert into a stall from which the global airborne Titanic does not recover.
From Corrigan:
Market participants should not lose sight of the fact that, far beyond the twin, transatlantic farces, a rather darker drama is beginning to play out in terms of world economic activity.
The first warning signs come from the freight industry, where US West Coast container traffic has slowed appreciably. Imports, indeed, have decelerated to an extent only exceeded—and then by the smallest of margins—a handful of times in the past 15 years, sending the growth rate plunging from August 2010’s chart?topping 26.4% to a 17?month low of 2.2%.
More broadly, while US intermodal rail traffic is still setting records, its tally now stands a bare 2.5% above the reading recorded at the same juncture in 2010—a sharp deceleration from that earlier period’s 26% YOY increase.
Matching this, across the Pacific, Shenzhen port numbers are also barely in the plus column, as of May?June, while Shanghai has dropped from 18% yoy in the whole of 2010, to a
…
Hearing Fraud Chatter in Exceed Company
by Insider Scoop - July 30th, 2011 8:43 pm
Courtesy of Benzinga.
HSBC (NYSE: HBC) will announce on Monday August 1, it will cut at least 10,000 jobs over the next year, according to Sky News sources. The majority of these job cuts will be outside the UK.
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
(