by phil - September 29th, 2014 8:27 am
Wheeee, what a ride!
We're up, we're down and over and out – but That's Life in the markets, right? Life is being good to our Short-Term Portfolio, now up 59.2% for the year as we caught the bearish move very nicely. Because our STP was up, we have, so far, been able to ride out our long-term positions but we're certainly concerned about a major breakdown possibly in the works.
As noted by Dave Fry in his SPY chart, that 50 dma is a big point of contention now and of course we're going to get a bounce off a line like that. In fact, the new lows we hit at the end of the week led us to recalculate our bounce lines for this week and now we are looking for:
We weren't too convinced by Friday's low-volume rally and we aren't going to be convinced by anything that happens on the last two days of the month (window dressing) but clearly any failure of those weak bounce lines is going to have us racing back to some bearish bets into the start of October (and earnings season).
by phil - August 13th, 2014 8:21 am
MORE FREE MONEY!!!
That's all this chart says to traders this morning, who are taking the European Markets up over half a point this morning and are goosing our Futures by half a point as well as bad news is good news and TERRIBLE news is even better in this Central Bank-sponsored market.
Private Consumption in Japan fell 5% in April, May and June and wages dropped 1.8% while sales taxes rose 3% and – PRESTO – there's your 5% decline in Private Consumption.
Obviously, giving the workers more money is out of the question in a Conservative Capitalist Economy like Japan and we're certainly not going to tax Corporations when we can raise sales taxes that disproportionately target the poor instead so the only solution is: MORE FREE MONEY!!!
Japan has increased their monetary base by 50% since last year and this year they are on track to add another 25% to pump it up to 270,000,000,000,000 Yen. In March of 2000, there were just 50Tn Yen in circulation so a 5x increase in the money supply and NONE of it ended up in the hands of the bottom 80% who, just like in America, saw their standard of living DECREASE over the past decade and a half.
It's a great race to the bottom in annual GDP growth overall as essentially all of the economic gains in Japan and the US accrue to the top 10% (people and corporations) while the bottom 90% circle the drain on the "Road to Serfdom" that Hayek warned us about 70 years ago:
“It is one of the saddest spectacles of our time to see a great democratic movement support a policy which must lead to the destruction of democracy and which meanwhile can benefit only a minority of the masses who support it. Yet it is this support of the tendencies toward monopoly which make them so irresistible and the prospects of the future so dark.
"If we face a monopolist we are at his absolute mercy. And an authority directing the
by phil - April 16th, 2012 7:53 am
Despite Asia continuing their downhill slide, despite the Bank of Korea lowering their Economic Outlook, despite Swiss PPI showing DEflation, despite Spain's 10-year bonds rising to 6.07%, despite India's inflation at 6.89%, despite the 5-year CDS spread on Spanish debt hitting new records, despite James Galbraith warning that the EU periphery will collapse, despite the Saudi TASI Index dropping 4% in the last two days, despite the biggest weekly drop in Copper Futures of the year, despite Credit Suisse cutting 5,000 jobs and Best Buy closing 42 stores and even BMW sales off 30% in Brazil….
Despite ALL these weekend news items and DESPITE our very Depressing Weekend Reading – the bears, as Steve Martin says in the above clip, still have DOUBT in their heart and are allowing the Futures to rise this morning (7:30) as Europe bounces up 1% from their 30-day lows in this traveling revival show known as the stock market.
Faith is a wonderful thing and we all like to believe in miracles but a good investor demands PROOF – much the way many of our biblical heroes required signs from the Lord before making their own commitments. We don't need a burning bush but we do need more than vague promises of EU action before we believe their 5 loaves and 2 fish will be enough to bail out the entire continent, right?
On the chart above, I drew a blue line across the 50% levels between the tops of the last 6 days and the bottom. Not reflected on these charts is the fact that the Nikkei FELL another 1.74% this morning or that the Hang Seng dropped 0.44% – pushing them further from their goals.
As I mentioned above, the EU markets are off to the races on rumors that US Retail Sales will save the World at 8:30 with an upside surprise off very low expectations. Even if we do get a bump – so what? Retail sales were anemic last month except Gasoline, which was up 3.3% while…
by phil - April 10th, 2012 8:29 am
Bernanke gave a whole speech last night titles "Fostering Financial Stability" at the Federal Reserve's Stone Mountain, Georgia conference and didn't say one thing about more quantitative easing – not even a hint. Without an endless supply of MORE FREE MONEY from the Fed – what is going to hold our markets up at these inflated levels?
Goldman Sachs immediately covered their assets, putting out a note indicating "A number of factors reinforce our desire to be more cautious about the data in the near term:"
- First, our US forecast has continued to embody a relatively flat 2%-ish type GDP growth trajectory, so the notion that acceleration is now coming to an end is consistent with that forecast view.
- Second, we have become more confident that the weather has played an important role in some earlier data strength. The payback here may have begun, but there is probably more ahead. There is also rising focus on the US "fiscal cliff" at the end of this year, as Alec Phillips has described.
- Third, in the current post-bust setting, even modest slowing in growth feels more dangerous than normal. Fiscal policy is consolidating and conventional monetary policy has been exhausted in many places. And with plenty of leverage in parts of the global economy, slowing growth quickly also raises questions about debt sustainability in places. As a result, financial risks can re-emerge more quickly than normal as growth slows.
And, as pointed out by Business Insider – Goldman Sachs can't possibly be wrong. Not because they are smart, nor because they are amoral, evil, greedy, manipulative bastards (allegedly) – but because they talk out both sides of their Corporate mouth so they can always point back at something to "prove" they called it. Kind of like Cramer's daily flip-flop scam only with more people.
Business inside points out that while Jim O'Neill is on CNBC standing behind Peter Oppenheimer and Abby Cohen's bullish calls for the retail suckers who watch TV for investing advice, the official firm stance of David Kostin…
by phil - March 13th, 2012 7:52 am
For once I have to agree with Fox (and thanks to D Virginia for the link):
With gas at $3.87 and over $4 in California, New York and Illinois, Fox news says other journalists don't check "the substance of the accusations against the President," the media needs to "look at certain claims and promises to see what the facts are behind them." And what are the facts that Fox News presents us with?
- Cal Thomas: "No President has the power to increase or to lower gas prices – Those are market forces."
- Neil Cavuto: "China and India are slopping up oil faster than we can these days and THAT is the not so sinister response to what's going on."
- Cheryl Casone: "At this point, it really is tough for this President, I have to be honest with you, because he really does not have any control over what's going to happen with the markets and with the economy and with oil prices and with supply and demand and gasoline – it really is out of this President's hands."
- Bill O'Reilly: "Yesterday oil hit a record high and politicians can't do anything about it."
- Joe D'Agostino (VP of NYMEX on O'Reilly): "The only thing we can do is start to use less energy."
- Bill O'Reilly: "If every American who owns an automobile or an air conditioner says "I'm going to use 10% less" – the prices then would fall… Politicians can't do this."
- News team: "Get rid of gas guzzlers, buy decent insulation for your house and tell your local, elected officials to get on the stick and do some more mass transit/infrastructure spending because those kinds of fixes that can really help Americans."
- News team: "Drilling an ANWR would reduce the price of oil by about 40 cents a barrel (1 penny per gallon) or maybe as much at $1.40 per barrel (3.3 cents per gallon)." "If we drilled in ANWR we would get 4% of our daily consumption in oil." "It would take 20 years for saving from ANWR drilling to be realized."
- O'Reilly: "So the next time you hear a politician say he or she will bring down oil prices, UNDERSTANT IT'S COMPLETE BS! If Americans want lower gas prices, cut back – that's what the candidates SHOULD be saying. Sell those SUV's, ride a bike when
by phil - February 27th, 2012 8:02 am
This is frustrating isn't it?
The S&P fell to 1,355 in the Futures, breaking our rule to get bullish as they must hold 1,360 for 2 consecutive days so we're back to watching and waiting now as it's been two full weeks of teasing this line as the index creeps back into the bottom of David Fry's SPY channel.
We thought we were going to fail back at 1,300 but we caught a nice bounce off the bottom at the beginning of the month and flew up another 5.5% since then but now we're almost 10% over the 200 dma on less and less volume and that's one hell of an air pocket below us on the S&P so of course the lack of more free money from the G20 is going to hurt today – the question is – how much?
We discussed the G20 over the weekend, so no need to re-hash it here. Let's take a little time today to delve into the logic of S&P 1,360 and see if we can find some good reasons for it to stick. In his letter to shareholders this weekend, Warren Buffett very plainly says that his entire bullish premise is based on his believe that housing will make a comeback. Jim Bianco had an article on that this weekend noting Homebuilder Optimism has risen for 5 straight months, back to the highest level since May of 2007, at the early stages of the slowdown BUT – let's keep in mind that the sentiment level is 29 and anything below 50 is still NEGATIVE – so we have a long way to go!
We have been playing XRT short, expecting it to have been rejected at $56, like it was last summer prior to a 20% drop. Now XRT is at $58, up 31% from it's October lows and we have to wonder if the situation for Retail has REALLY gotten 31% better than high-volume investors were pricing it AFTER seeing last July's earnings reports or is this another major air bubble that's about to burst?
The January Retail Sales Report showed $361Bn in sales and that was up 5.6% from last year's $342Bn. This month we'll see an automatic 3.5% bump as February has an extra day (people fall for that one every 4 years) and we have strong…
by phil - December 14th, 2010 8:27 am
It's a race to the bottom!
While we may have thought we were flatlining yesterday near our breakout, Europe and Asia had a different view of our markets as we pulled back -0.5% to -1.73% when priced in other currencies. While you may not care what happens in other countries, there are 6.5Bn people who would disagree with you there and the US is not the World leader anymore (despite what the citizens of the US may think) – we can no longer afford to ignore things like how exchange rates affect us. Here's the chart for the Dow, S&P and Nasdaq priced in Dollars, Euros and Yen for the past two months:
Fortunately for the bulls (especially the commodity ones), the dollar has resumed it's pathetic decline as Obama and The Bernank have combined to dilute our currency by another $2Tn over the next 48 months, from about $14Tn to $16Tn (+14%) plus, possibly, the $110Bn of new $100Bills the Treasury is trying to run off. This has sent the dollar back down from it's Thanksgiving high and now it's going to be all about whether or not we can hold that 78.5 line as our Congress finalizes their vote on the Obama Tax Cuts and another $1,000Bn of US debt taken by our citizens in order to hand another $650Bn to the top 1%.
When $100Bills are being printed faster than rolls of Charmin are being made, your currency is probably on it's way to a crisis. You reach a certain point at which it's cheaper to just wipe your butt with dollar bills than to go to the store and buy toilet paper and, of course, we've all seen pictures of Germans in the 1920's, fueling their fireplaces by burning bills, which were cheaper than wood. Of course stocks and commodities are going up when priced in dollars – they are making more dollars every day, even Disney now has cartoons trying to explain to kids why this is a bad idea.
Telling Signs-of-the-Times: Layaways, Off-Brands, Goodwill Stores, Consignment Sales, Frugality, all Thrive in Middle-Class Suburbia
by ilene - November 9th, 2010 6:51 pm
Telling Signs-of-the-Times: Layaways, Off-Brands, Goodwill Stores, Consignment Sales, Frugality, all Thrive in Middle-Class Suburbia
Courtesy of Mish
Telling Signs-of-the-Times: In grocery stores, "No-Name" sales are up 2% and now represent 22% of total sales. Some full priced stores now offer consignment sections, an unheard of practice a couple years back.
Layaway sales are back in vogue at Toys-R-Us and jewelers alike. Layaways are a depression era phenomenon that all but died with the mass marketing of credit cards.
Old Stigmas Become New Badge of Honor
Frugality is the new "badge of honor" says the Yahoo!Finance report In a tough economy, old stigmas fall away
The Goodwill store in this middle-class New York suburb is buzzing on a recent weekend afternoon. A steady flow of shoppers comb through racks filled with second-hand clothes, shoes, blankets and dishes.
A few years ago, opening a Goodwill store here wouldn’t have made sense. Paramus is one of the biggest ZIP codes in the country for retail sales. Shoppers have their pick of hundreds of respected names like Macy’s and Lord &Taylor along this busy highway strip.
But in the wake of the Great Recession, the stigma attached to certain consumer behavior has fallen away. What some people once thought of as lowbrow, they now accept — even consider a frugal badge of honor.
At the supermarket, shoppers are buying more store-labeled products, like no-name detergents and cereal, and not returning to national brands.
And in a telling trend, Americans are turning to layaway more often when they buy expensive items such as engagement rings and iPads. The wealthy are also using layaway more often, a drastic change from the past.
"The old stigmas are the new realities," says Emanuel Weintraub, a New York-based retail consultant. "Now, people don’t have a problem saying, ‘I can’t afford it.’ It’s a sign of strength."
Two years ago, having second-hand clothes in the same store that sells regular-priced goods might have driven well-heeled shoppers away. Today, the concept works. The new consignment area, called My Secret Closet, has brought in new customers. Shoppers browse both the retail and consignment areas without hesitation.
"We are seeing a permanent change in how people shop, and we have to respond to that," says Tom Patrolia, who has owned the store for 24 years.
The growth in layaway also reflects Americans’ new willingness to set aside
by ilene - September 14th, 2010 11:28 pm
Courtesy of Mish
Inquiring minds are investigating the Advance Monthly Retail Sales Report for August 2010, noting the discrepancy between what is reported and reality.
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for August, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $363.7 billion, an increase of 0.4 percent from the previous month, and 3.6 percent above August 2009.
Total sales for the June through August 2010 period were up 4.7 percent from the same period a year ago. The June to July 2010 percent change was revised from +0.4 percent to +0.3 percent .
Retail trade sales were up 0.5 percent from July 2010, and 3.7 percent above last year. Nonstore retailers sales were up 10.5 percent from August 2009 and gasoline stations sales were up 9.6 percent from last year.
As typical, Calculated Risk has some nice charts of the data.
Calculated Risk writes "This graph shows retail sales since 1992. This is monthly retail sales, seasonally adjusted (total and ex-gasoline). Retail sales are up 8.4% from the bottom, but still off 4.3% from the pre-recession peak."
Although that is what the data says, I don’t buy it. If retail sales were back to within 4.3% of the pre-recession peak, sales tax collections would be back towards the pre-recession peak, if not exceeding the pre-recession peak.
Why might they exceed the peak? Because of numerous state sales tax hikes.
The Slow Rebound – Very Slow
September 02, 2010: State Tax Revenues Slowly Rebound, But …
The Nelson Rockefeller Institute reports State Tax Revenues Are Slowly Rebounding. However, as always, the devil is in the details. Let’s take a look.
Preliminary tax collection data for the April-June quarter of 2010 show improvement in overall state tax collections as well as for personal income tax and sales tax revenue. However, revenue collections remain significantly below peak levels and are still weak in a number of states.
The Rockefeller Institute’s compilation of data from 47 early reporting states shows collections from major tax sources increased by 2.2 percent in nominal terms compared to the second quarter of 2009, but was 17.2 percent below the same period two years ago.
State Tax Collections
by ilene - August 17th, 2010 5:26 pm
Courtesy of Mish
Excluding autos and gas retail sales ran out of steam in July 2010. Please consider the SpendingPulse Report July Retail Sales Show Mixed Results.
After several months of sales slowdown, total retail sales have stabilized somewhat, although overall growth has slowed sharply since earlier this year. In fact, growth in July headline numbers was driven largely by an increase in spending on gasoline, which is why the ex-auto ex-gasoline number is a better barometer to measuring the underlying health in retail spending.
July’s growth rate excluding auto and gasoline leaves the three-month average year-to-year growth rate of retail sales at 1.0%, well below the 3.5% for the prior three months. The ex-auto year-over-year numbers tell a similar story of a shallow and stabilizing trough, with the unadjusted three-month average year-over-year growth rate slowing to 1.6% compared to the 6.5% average growth rate for the previous three months.
The first table above compares June and July 2010 vs. the same month in 2009.
The second table shows July 201o vs. June 2010 seasonally adjusted. For an alleged recovery, these are weak numbers.
Industrial Production up 1 Percent, Led by Autos
Inquiring minds are taking a look at the July Federal Reserve Industrial Production and Capacity Utilization report.
Industrial production rose 1.0 percent in July after having edged down 0.1 percent in June, and manufacturing output moved up 1.1 percent in July after having fallen 0.5 percent in June. A large contributor to the jump in manufacturing output in July was an increase of nearly 10 percent in the production of motor vehicles and parts; even so, manufacturing production excluding motor vehicles and parts advanced 0.6 percent.
The production of consumer goods moved up 1.1 percent, as the output of consumer durables jumped 4.9 percent: Production for all of its major components advanced. In addition to a gain of 8.8 percent in the output of automotive products, which was mainly due to a large increase in light truck assemblies, the indexes for home electronics and for miscellaneous goods increased 1.3 and 1.5 percent, respectively; the index for appliances, furniture, and carpeting moved up 0.5 percent.
Among components of consumer nondurables, the output of non-energy nondurables declined 0.2 percent, and the output of consumer energy products moved up