Stock World Weekly
by SWW - May 19th, 2013 1:09 am
NEW: Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.
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All Japan, All the Time
by ilene - May 18th, 2013 12:35 pm
All Japan, All the Time
BY JOHN MAULDIN, Thoughts from the Frontline
The evils of this deluge of paper money are not to be removed until our citizens are generally and radically instructed in their cause and consequences, and silence by their authority the interested clamors and sophistry of speculating, shaving, and banking institutions. Till then we must be content to return, quo ad hoc, to the savage state, to recur to barter in the exchange of our property, for want of a stable, common measure of value, that now in use being less fixed than the beads and wampum of the Indian, and to deliver up our citizens, their property and their labor, passive victims to the swindling tricks of bankers and mountebankers.
–Thomas Jefferson, in a letter to John Adams, 21 March 1819
I am definitely bullish. The budget deficit is shrinking massively. Guys who are short, they better have a shovel to get out of the grave.
–David Tepper, Appaloosa Management LP, CNBC, 14 May 2013
Never have investors reached so high in price for so low a return. Never have investors stooped so low for so much risk.
–Bill Gross, PIMCO, 14 May 2013
We can rightly declare victory on the housing front and (reduce) our purchases, with the aim of eliminating them entirely as the year wears on. I believe the efficacy of continued purchases is questionable.
–Richard Fisher, president of the Dallas Federal Reserve Bank, National Association for Business Economics, 16 May 2013
It will take further gains to convince me that the "substantial improvement" test for ending our asset purchases has been met…. We could reduce somewhat the pace of our securities purchases, perhaps as early as this summer. Then, if all goes as hoped, we could end the purchase program sometime late this year.
–John Williams, president of the Federal Reserve Bank of San Francisco, Reuters, 16 May 2013
The balance of risks of prolonged very low interest rates and unconventional policies is shifting. The costs are growing in relation to the benefits.
–BIS, Reuters, FT Alphaville, 16 May 2013
Jefferson was lamenting the woeful state of the dollar 200 years ago because the country was beset by fiscal problems, not because someone in the government wanted to ruin the value of the currency. Today, however, we find ourselves in a situation where it is the national policy of multiple countries,
…
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Fudging China’s export figures or currency trading?
by ilene - May 13th, 2013 3:59 pm
Why were China's monthly export figures over-stated? It's not due to the government manipulating data. It's due to Chinese exporters inflating the exports in order to buy more yuan. By exaggerating their exports, exporters are allowed to buy larger amounts of CNY (China Yuan Renminbi) than they need. They're taking a bet on the currency. The more exporters claim to have exported, the more CNY they can buy, and the more money they make when CNY appreciates.
Fudging China's export figures or currency trading?
Courtesy of Sober Look
Little doubt remains that China's export numbers are at best unreliable but more likely simply fudged.
MarketWatch: – While it’s unavoidable that any official data from China comes under criticism from the skeptics, the monthly Chinese trade data probably draws the most questions and head-shaking of them all.
The Customs, rather than the National Bureau of Statistics that produces most of China’s other high-profile economic numbers – can sometimes show striking contrasts with other data sets.
For instance, Tuesday’s Customs data showed exports surging 14.7%, well above a Dow Jones Newswires forecast for a 8.6% gain and prompting a swing in the trade account to an $18.16 billion surplus, compared to March’s $884 million deficit.
This paints a very different picture from data on manufacturing (which makes up the lion’s share of Chinese exports) as reported by HSBC and Markit. The HSBC manufacturing Purchasing Managers’ Index, probably the most watched non-government data on China, showed new export orders shrinking in April, the first time they’ve dropped since December.
A relatively straight forward way to determine the reliability of any export measures is to compare them with the imports reported by the trading partner nations. And that's where things don't match up for China.
CS: – Since July 2012, China’s exports grew by roughly $15bn, but only $5bn showed up in its trading partners data. The discrepancies can be found in several regions, but especially Hong Kong.
The reported numbers for Hong Kong for example diverge dramatically.
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| Source: Credit Suisse |
But who exactly is fudging the numbers and why? The typical answer one hears in the media and from the blogs is that China's government is doing this as a form of propaganda or to please the party leadership. But to assume that the government is…
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Stock World Weekly
by SWW - May 12th, 2013 1:23 am
NEW: Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.
Here's the new Stock World Weekly newsletter. Please sign in with your user name and password for PSW, or sign up for a free trial. Thanks!
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Time to Trade in the Investment Tricycle
by ilene - May 6th, 2013 3:44 pm
Key, remember it: "Over the last five years the news has been atrocious… investing based on current headlines is a horrible investment strategy."
Time to Trade in the Investment Tricycle
Courtesy of Wade of Investing Caffeine
This article is an excerpt from a previously released Sidoxia Capital Management’s complementary newsletter (May 1, 2013). Subscribe on the right side of the page for an entire monthly update.
As the stock market continues to set new, all-time record highs and the Dow Jones Industrial index nears another historic milestone (15,000 level), investors remain cautiously skeptical of the rebound – like a nervous toddler choosing to ride a tricycle instead of a bicycle. Investors have been moving slowly, but stock prices have not – the Dow has risen +13% in 2013 alone. What’s more, over the last four years the S&P 500 index (which represents large companies) has climbed +140%; the S&P 400 (mid-sized companies) +195%; and the S&P 600 (small-sized companies) +200%.
The gains have been staggering, but like the experience of riding a bicycle, the bumps, scrapes, and bruises suffered during the 2008-2009 financial crash have caused investors to abandon their investment bikes for a perceived safer vehicle…a tricycle. What do I mean by that?
Well, over the last six years, investors have pulled out more than -$521,000,000,000 from stock funds and piled those proceeds into bonds (Calafia Beach Pundit chart below). For retirees and billionaires this strategy may make sense in certain instances. But for millions of others, interest rate risk, inflation risk, and the risk of outliving your money can be more hazardous to financial well-being, than the artificially perceived safety expected from bonds. The fact of the matter is investing inefficiently in cash, money markets, CDs, and low-yielding fixed income securities can be riskier in the long-run than a globally diversified portfolio invested across a broad set of asset classes (including equities). The latter should be the strategy of choice, unless of course you are someone who yearns to work at Wal-Mart (WMT) as a greeter in your 80s!
Investor Training Wheels
I don’t want to irresponsibly flog everyone, because investing attitudes have begun to change a little in 2013, as investors have added $66 billion to stock funds (data from ICI). Effectively, some investors have gone from riding their tricycle to hopping on a bike with training wheels. With this change…
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Stock World Weekly
by SWW - May 5th, 2013 11:14 am
NEW: Newsletter authors are available to chat with Members regarding topics presented in SWW, comments are found below each post.
The newest Stock World Weekly is now available. Please click on this link and sign in with your PSW user name and password, or sign up for a free trial. Comments welcome below.
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Jeff Sachs: The Movie
by ilene - May 1st, 2013 4:56 pm
Background: Jeffrey David Sachs (born November 5, 1954) is an American economist and Director of The Earth Institute at Columbia University. One of the youngest economics professors in the history of Harvard University, Sachs became known for his role as an adviser to Eastern European and developing country governments during the transition from communism to a market system or during periods of economic crisis. Subsequently he has been known for his work on the challenges of economic development, environmental sustainability, poverty alleviation, debt cancellation, and globalization. Wikipedia.
Courtesy of Jesse's Cafe Americain
"You have no longer any cause to fear danger from abroad; your strength and power are well known throughout the civilized world, as well as the high and gallant bearing of your sons.
It is from within, among yourselves, from cupidity, from corruption, from disappointed ambition, and inordinate thirst for power, that factions will be formed and liberty endangered.
It is against such designs, whatever disguise the actors may assume, that you have especially to guard yourselves. You have the highest of human trusts committed to your care."
Andrew Jackson, Farewell Address
Viewing suitable for an FOMC day boogie woogie.
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Stock World Weekly
by SWW - April 28th, 2013 5:47 pm
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The new edition of Stock World Weekly is available now. Please sign in (with your Phil's Stock World user name and password) or sign up for a free trial after clicking on this link. Thanks!
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Stock World Weekly 4/21/13
by SWW - April 21st, 2013 3:42 pm
NEW: Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.
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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
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