As the year comes to a close, and we look forward to 2012, I continue the tradition I started last year and offer a brief look at the top stories that shaped China’s business and economic climate in 2011:
1. High-Speed Rail. It was the best of times, it was the worst of times — China’s ambitious high-speed rail program embodied the highest highs and the lowest lows the country experienced this year. In January, President Obama cited the planned 20,000km network in his annual State of the Union address as a prime example of how America need to catch up to the Chinese. As if to prove his point, June saw the grand opening of the much-heralded Beijing-Shanghai line, timed to coincide with the Communist Party’s 90th anniversary celebrations. But even before then, there were signs of trouble on the horizon, starting in February when the powerful head of China’s railway ministry — the project’s godfather — was abruptly fired as part of a massive corruption scandal. Then a crash on a line near Wenzhou, in which at least 35 people were killed, unleashed a wave of fury on the Chinese internet, forcing the government to re-think the entire project amid charges of cover-up and sloppy construction. By November, with high-speed trains running at chronically low capacity and construction debts piling up, the railway ministry was asking Beijing for a rumored RMB 800 billion (US$ 126 billion) bailout just to pay the money it owed suppliers.
2. Inflation. Few issues preoccupied the average Chinese citizen — or Chinese policymakers — this year as much as rapidly rising prices. The consumer inflation rate, which began the year just shy of 5%,rose to 6.5% by July. The increase was led by food prices, particularly pork – a staple part of the Chinese diet — which skyrocketed by more than 50%. Keenly aware of the potential for popular unrest, Beijing made containing prices its top economic priority — even if that meant reining in growth. Throughout the year, the central bank repeatedly raised interest rates and bank reserve requirements, in an effort to bring the pace of credit expansion back under control. The powerful state planning bureau leaned heavily on Chinese companies not to raise prices, and even hit consumer goods giant Unilever with a stiff antitrust fine for publicly discussing possible price hikes. While CPI did decline to 4.2% by…
Here's the latest weekend update from Serge Perreault, a Chartered Professional Accountant and market technician located near Montreal, Canada. Serge has been following the U.S. market in a series of weekly charts. Here is his update on the S&P 500.
The S&P 500 resumed its ascension, on 20.2% above-average volume (quadruple-witching day) and on strong momentum. It is about to test its uptrend resistance while RSI is approaching overbought territory.
The unelected central planners at the Federal Reserve have decided that the time has come to slightly taper the amount of quantitative easing that it has been doing. On Wednesday, the Fed announced that monthly purchases of U.S. Treasury bonds will be reduced from $45 billion to $40 billion, and monthly purchases of mortgage-backed securities will be reduced from $35 billion to $30 billion. When this news came out, it sent shockwaves through financial markets all over the planet. But the tr...
Stocks soared higher on quadruple-witching day after the third estimate of third-quarter GDP was revised upward from 3.6 percent to 4.1 percent.
Friday’s third estimate of third-quarter GDP from the Bureau of Economic Analysis sent the Dow Jones Industrial Average, the S&P 500 and the Russell 2000 to new record highs. Stocks got a big boost after the third estimate of third quarter GDP was upwardly-revised from 3.6 percent to 4.1 percent. The fact that the news arrived on “quadruple witching day” – when contracts expire for stock index options, stock index futures, individual stock futures, and individual stock options – helped amplify the stock market surge.
The report validated a claim made by outgoing Fed Chair Ben Bernanke ...
We don't want to discuss the artistic merits of modern art, except to say that we are not averse to it at all. In other words, we personally like quite a bit of modern art, regardless of the field. Paintings, sculptures, literature, music, we find stuff that speaks to us everywhere. Of course we are not completely uncritical, we merely want to point out that art doesn't end sometime in the 19th century for us. We even like quite a bit of that modern 'classical' scratchy music that is on the receiving end of much contempt elsewhere. As it were, de gustibus non est disputandum.
HIG – Hartford Financial Services Group, Inc. – Shares in the insurer rose 0.60% today to $35.73 this morning before backing off slightly to trade up 0.10% on the day at $35.56 as of 11:15 a.m. EST. Hartford’s shares have increased more than 20% during the second half of 2013, and trading in far out of the money call options on the stock this morning may mean some strategists are positioning for the stock to continue to advance during the first half of 2014.
The Jun ’14 $39 strike calls traded more than 7,000 times near the start of the session again...
Well, Fed Chairman Bernanke has proved me wrong by dipping his toe into the dreaded tapering of QE3. In retrospect, I suppose he preferred to take this first step on his own rather than put the onus (and any associated fallout) on the back on his successor. However, by wrapping his announcement with a pink bow and couching it in reassuring terms, stocks reacted favorably -- and on strong volume, to boot. In fact, I think it’s safe to say that Bernanke said all the right things and equity investors took it as the green flag for their widely-anticipated year-end rally. It’s always easier to forge ahead into uncharted territory when you know there’s someone powerful who’s got your back.
Despite an initially negative knee-jerk reaction to the Fed’s taper announcement, the Dow Industrials and ...
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This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
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These rallies are becoming familiar. In early July we saw a streak of 12 of 13 sessions in a row up, early September 11 of 12, and mid October 11 of 13 (current streak). It is a bit uncanny the similarities and how the escalator goes straight up in vertical ascent as we see indexes come out of mini corrections during QE. So we are about at the same stage where the last two began to tire, so it will be interesting if this is similar or if the current consensus of the market that there is nothing to worry about until next year as the Fed and D.C. are both off the table and this 3% annual growth rate in earnings we are now seeing in the S...
Welcome to the fouth update of the IRA Virtual Portfolio. First I am going to summarize the current state of the Portfolio then I will get into all the activity we had during September expiration.
Profit and Loss – Net of closed positions the portfolio is up a total of $769
Market Commentary – Last expiration I said, "I would like to put a total of $20,000 to work by the end of SEP expiration. If the VIX pops up to around 20 I plan to put about $50,000 total to work." The market didn't quite reach the goal but I did manage to deploy $15,000 of buying power. I still feel the market is too high and expect a correction during October. If the vix pops up to around 20 I still plan to put about $50,000 to work. If a correction doesn't happen I still plan to have a total of $25,000 in buying power put to work by October expiration. Now on to the act...
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Come and get it! Read all about it! Biotechs, biotechs and more biotechs to buy buy buy for your portfolio! To date, almost 30 biotech companies have hit the market. Most of the time, there are fewer than 10-12!
For the last five years, biotechs have had issues obtaining offer prices above expectations. In 2013, that trend looks to be broken. According to BiotechNow, the offer prices are 4% above expectations! In addition, biotechs are going public with little more than a wing and a prayer (pre-clinical or Phase 1 data only). Really? What this means is that the drug or technology looks good in mice, rats, or dogs, etc, but there is no smidgen of evidence that it will work in humans. That's what is called an appitite for RISK!
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