Archive for March, 2012

China’s PMI Surprises to Upside, Hits 11 Month High

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

This data should bode well for Monday, China’s PMI surprised significantly to the upside and varies quite significantly from the flash numbers seen about a week ago.  Keep in mind there are 2 sets of PMI’s in China; the official number covers larger and state supported businesses while the HSBC private version covers smaller and mid sized companies.   Generally I would put more stock in what a private firm is saying than any official government data, but the markets believe what they believe.  This should be a relief of sorts for for those who have been grappling with the potential for significant slowdown in China for the past few months.

  • China’s big factories were surprisingly busy in March as strong demand quickened the flow of orders, suggesting the economy is stronger than some estimates and possibly reducing the need for an urgent easing in monetary policy.  The National Bureau of Statistics said on Sunday China’s official Purchasing Managers’ Index (PMI) jumped to an 11-month high of 53.1 in March from 51 in February, comfortably beating analyst forecasts of 50.5.
  • Supporting prospects of a turnaround, the new orders sub-index jumped to 55.1 in March from February’s 51, while the sub-index for new export orders was up at 51.9, compared with February’s 51.1.
  • China’s vast factory sector, which accounted for 40 percent of its economy in 2010, had steadily lost steam in the past year as tight domestic monetary conditions aggravated waning global demand. Output hit 2-1/2-year lows in January and February.
  • A flash PMI published by HSBC last week had signaled that Chinese factories were struggling in March as their activity cooled for the fifth straight month and new orders sunk to four-month lows.

 

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog





BaNZai7 EVeNiNG HeRaLD APRiL 1, 2012

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.

BANZAI7 EVENING HERALD





BaNZaiI7 EVeNiNG HeRaLD APRiL 1, 2012

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.

BANZAI7 EVENING HERALD





No More Viagra For Mario Monti And His Ilk

Courtesy of ZeroHedge. View original post here.

Submitted by testosteronepit.

Wolf Richter   www.testosteronepit.com

Economic, regulatory, and entitlement reforms are tough. While they’re supposed to open opportunities, put budgets on sounder footing, or make the economy more competitive, they invariably cut into the flesh of some groups, who then react with demonstrations and strikes to draw attention to their plight and put pressure on the reformers to preserve the status quo.

This has been happening across the Eurozone wherever major reforms have been attempted. People in those demonstrations may speak of revolution—meaning a radical change. But they want the opposite: preserve the existing system, protections, and entitlements. So it’s complicated. Greece is a salient example with impressive TV footage of street battles, Molotov cocktails, and burning buildings. In other countries, France for instance, reforms have been greeted with peaceful demonstrations and more disruptively, with massive transportation strikes that throw innocent bystanders, such as businesses, commuters, and travelers, into utter chaos, sometimes for days.

But now the perhaps most tongue-in-cheek effort will take place in Italy where unelected technocrat Prime Minister Mario Monti and his government are trying to liberalize the economy and create conditions for growth by reforming a whole slew of professions whose insiders are protected by regulatory barriers to entry. Growth is essential. Italy is staggering under its debt. Already, the ECB bought piles of Italian government bonds and printed a mountain of euros that it handed to the banks, including Italian banks, so that they would buy crappy bonds for which the financial markets had lost their appetite. Without those actions, controversial and inflationary as they may be, Italy would have to face the music. It’s tough out there.

"The financial aspect of the crisis is over," declared a relieved Monti last week while visiting Japan, a country mired in a much deeper fiscal hole than Italy but endowed with a central bank that has no compunction about monetizing government deficits. But as he gloated about the progress his government has made in reforming the economy, the targets of his reforms weren't quite so happy.

Among them are state-employed hospital pharmacists, an integral part of Italy's public health care system. They’re upset because the reforms envision issuing 5,000 licenses mostly for new private pharmacies—creating jobs for young unemployed pharmacists who are stewing at their parents’ house while waiting for a…
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Germany the Vampire Squid of Europe

Courtesy of ZeroHedge. View original post here.

Submitted by RobertBrusca.

Herr VAMPIRE SQUID revisited and affirmed-

Germany is in it for Germany, not for united Europe. When you look at Europe and see that Germay is a success and no one else is, there is a reason for that.

Germany, after ‘trapping’ many countries in the e-Zone ignored their situation while Germany continues to post increasingly lower-than-required rates of inflation as many in EMU ahve run higher rates. As a result of this, there is a huge competitiveness conundrum in the Zone. It seems to have been engineered by Germany-and they are great engineers.

see http://robertbrusca.blogspot.com/ for a previous discussion of this toipic.

How are we to view Germany’s actions?

Now I do not ‘blame’ Germany alone but as you know in our financial system the low inflation Balance-of-payments-surplus countries rule. The others are forced to adjust. Germany has persisted in growing slowly, running a high rate of unemployment while others wanted to grow faster. Germany helped them to do that by lending to them. Germany was not mindful of the consequences of their excesses but there were consequences as they all were/are in the Zone together. the Zone was not a Bento box divided into various walled-off compartments; it was like bowl of soup and poison one place circulates to another place.

As the ‘adult,’ or fiscal conservative, Germany did nothing constructive. It held back and watched until the others were in trouble then it dropped the hammer. Am I supposed to view Germany kindly for this sort of behavior? Did Germany really ‘behave’ any better or did it simply spring its trap?

Why did it neglect the growing imbalances in the Zone? Not just the fiscal ones that might have been hidden, but the inflation differences that were reported month after month after month. I have been haranguing about EMU inflation differences in the zone for years.

Did Germany smirk and know that it was gaining competitiveness? Did it not realize this disparity would benefit its exporters but come back to haunt it politically and financially?

Now that it has… does Germany disavow itself of any responsibility?

What allows the US to to maintain a union that has areas of vastly different real income, property values, etc, is its fiscal transfer system. Germany instead of dealing with today’s…
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Europe: “€1 Trillion May Not Be Enough”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

A core piece of last week’s European newsflow was that following much pushback, Angela Merkel, who understands the underlying math all too well, finally dropped her opposition to expanding the European “firewall” in the form of a combined EFSF and ESM rescue mechanisms, to bring the total “firepower” to €800 billion (ignoring for a moment that when the true dry powder of the combined vehicle is just about €500 billion net as explained here, hardly enough to rescue Spain, let alone Italy). Yet as has been explained here repeatedly, and as Merkel has figured out, this is easily the most symbolic expansion of a rescue facility ever. Because while the ECB’s agreement to allow Eurobanks to abuse its €1 trillion discount window for three years (which is what the LTRO is), following the replacement of JC Trichet with a Goldman apparatchik, at least infused the system with $1.3 trillion in new fungible liquidity (and resulted in a stock market performance boost for the ages, one which is now unwinding), the ‘firewall” does not represent new money, nor is a “firewall” to begin with – it is merely one massive contingent liability which will remain unfunded in perpetuity. Slowly the German media is waking up, and in an article in Der Spiegel, the authors observe that “Even a 1-Trillion Euro Firewall wouldn’t be enough.” And they are correct, because the size of the firewall is completely irrelevant, as explained later. All the “firewall” does is shift even more backstop responsibility on the only true AAA-country left in the Eurozone, Germany. However, the main cause of problems in Europe – a massive debt overhang which can at best be rolled over but never paid down due to the increasingly lower cash flow generation of Europe’s (and America’s) assets, still remains, and will do so until the debt is finally written down. However, it can’t because one bank’s liability is another bank’s asset. And so we go back to square one, which is that the system is caught in the biggest Catch 22, as we explained back in 2009. We are glad to see that slowly but surely this damning conclusion is finally being understood by most.

From Spiegel:

European finance ministers meeting in Copenhagen on Friday agreed to


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Charles Biderman: The Problem with Rigged Markets

Courtesy of Jesse's Cafe Americain

Charles Biderman and Chris Martenson: The Problem With Rigged Markets

Here is a fascinating Chris Martenson interview with Charles Biderman.

This interview highlights the Ponzi-like, artificial nature of the current stock market rally. 

It reminds me very much of the 2003-2007 bull market that ended in tears. I have included a chart of what I called at the time 'The Great Reflation' at the end.

Charles Biderman: The Problem with Rigged Markets

"Even Wile E. Coyote had to come back down to earth sooner or later", says Charles Biderman, founder of TrimTabs Investment Research. In his opinion, the prices of stocks and bonds – enabled by excessive financialization of our economy and central bank money printing – have been defying gravity for a dangerously long time. 

If we continue to do all we can to preserve the status quo — to maintain "phony" asset price levels as Charles calls them — at best we will restrict overall growth and handicap the economy.

The problem isn't so much the unfairness and malinvestment evident in a rigged market. As Charles shrewdly asks: what happens when the market becomes un-rigged?

We've never experienced the unwinding of an entirely manipulated financial system, so we can't predict for sure. But at this point, a painful collapse of our markets and loss of the US dollar as the world's reserve currency seem entirely plausible…

Read the rest here.

 





Violence, Firebombings Erupt as Spain Announces €27 Billion Deficit-Cutting Plan

Violence, Firebombings Erupt as Spain Announces €27 Billion Deficit-Cutting Plan; Spanish Economy Will Implode; Spain Headed for Bond Revolt and Bailo

Courtesy of Mish

My friend Bran who lives in Spain writes …

Hello Mish

Here are thoughts from the last couple of days on the strikes, protests, and violence in the wake of more austerity plans by Prime Minister Mariano Rajoy. 

Pro-government news played down the strike to a virtual non-event, giving much criticism of the unions methods and exaggerations. Reality however, is that there is enough support by strikers to shape future politics, especially as austerity starts to bite. 

The unions have promised to step up protests. The Indignado 15 Million Movement also protested, but separately from the unions.

One comment stuck out – German Chancellor Angela Merkel said the protests did not represent Spain. Maybe she was trying to be reassuring, but she is taking sides against maybe a million or so people of a foreign population, not very wise at best and otherwise agitating.

Spain Announces €27 Billion Deficit-Cutting Plan

MarketWatch reports Spain Announces €27 Billion Deficit-Cutting Plan

The Spanish government on Friday delivered what it called the biggest fiscal adjustment in the country’s democratic history, unveiling a 27 billion euro ($36 billion) deficit-reduction plan that includes sharp spending cuts across government ministries and higher taxes for corporations. 

With images of nationwide demonstrations and strikes against labor reforms still fresh, the weight of the budget appeared to fall on big companies and government spending. Labor unions said nearly 1 million took part in Madrid’s rally alone Thursday evening.

Corporations will be asked to pay higher taxes this year, and their tax breaks will be reduced while the government said value-added-taxes would not rise. It said tax receipts for VAT would fall 2.6% as a result of weak growth in Spain.

Budget Minister Cristobal Montoro said all ministries would need to reduce their budgets by around 17% this year, which was slightly higher than expected, saving a total of up to €65.8 billion. Salaries for public workers will not be reduced, but will be frozen this year.

Electricity prices will rise 7%, to pay off a €24 billion electricity-tariff deficit that accumulated due to the difference between consumer prices set by the state and producer’s costs. Tariffs paid by electricity companies will rise 5%.


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Is Wall Street Full of Psychopaths?

Is Wall Street Full of Psychopaths?

One estimate suggests that one out of every 10 employees on Wall Street is a psychopath. That's probably off, but consider how many almost psychopaths there are instead.
 

Wikimedia Commons

Wall Street and its collective psyche have taken some very public lumps lately, with an executive director resigning from Goldman-Sachs via The New York Times because of the "decline in the firm's moral fiber," and the headline-generating article in CFA Magazine by Sherree DeCovney claiming that 10 percent (at least) of the people in the financial services industry are psychopaths (subscription required). That 10 percent figure could go a long way toward explaining the resignation, couldn't it? Perhaps. But, before deciding the answer to that question, it will be helpful to understand what psychopathy is.

Keep reading: Is Wall Street Full of Psychopaths? – James Silver – Health – The Atlantic.





The Muppets Are Confused How Goldman Is Both Bullish And Bearish On Stocks At The Same Time

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Ten days ago, Goldman’s Peter Oppenheimer published the “Long Good Buy, The Case For Equities“, a big research piece, full of pretty charts and witty bullets, which actively urged the rotation out of bonds and into stocks, yet not only marked the peak of the market so far, but drew ridicule even from the likes of CNBC. More importantly, it has generated a plethora of questions from the muppets (aka Goldman clients) themselves, who are wondering how Goldman can be both uber bullish, and yet still have a 1250 S&P 2012 YE price target, as per the other strategist, David Kostin (“We expect the S&P 500 will trade at 1325 by mid-year (-5.6%) and 1250 in 12 months (-10.9%).”), or said otherwise, just how is it that Goldman is having its cake and eating it too? Below is David Kostin’s attempt to justify how the firm can pull a Dennis Gartman (and virtually any other newsletter and book seller – after all what better way to say one was right than to have all bases covered) be both bearish and bullish at the same time.

From Goldman’s US Weekly Kickstart

Last week, Peter Oppenheimer and our European Portfolio Strategy team published “The Long Good Buy; the Case for Equities” in which they conclude equities are attractive for three reasons: (1) Periods of poor real returns in equities tend to be followed by periods of significantly higher returns; (2) equity valuation appears low versus bonds; and (3) an elevated equity risk premium (ERP) supports a long-term positive view for stocks.

We agree with the long-term thesis. Investors willing to position for a normalized growth and risk environment over the next decade should interpret high ERP and low implied growth as an investment opportunity.

However, path matters and our price targets reflect short-term tactical risks. We believe equity valuation will remain below average over the next year due to stagnant economic growth and high uncertainty. Both views can comfortably co-exist in the context of different investment horizons.

S&P 500 currently trades above fair value on a variety of metrics although the index is attractively valued relative to bond yields given the low interest rate environment. Equity investors fall into many categories and we believe views are currently most differentiated between equity-focused vs. cross-asset investors and…
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Zero Hedge

Traders Buy Stocks, Dump Bonds & Bullion As War Rhetoric Rises

Courtesy of ZeroHedge View original post here.

Makes perfect sense.

After the largest global oil disruption in history, Saudis agree with US that "Iran did it", the US president says the military is "locked and loaded" and what do markets do - bid stocks, buy USDollar, and dump safe-havens like bonds and gold...

The dollar is soaring...

Source: Bloomberg

And ...



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The Technical Traders

Metals are following downside sell off prediction before the next rally

Courtesy of Technical Traders

It is absolutely amazing how the precious metals markets have followed our October 2018 predictions almost like clockwork.  Our call for an April 21~24 momentum base below $1300 followed by an extensive rally to levels above $1550 has been playing out almost like we scripted these future price moves.

Now that the $1550 level has been reached, we are expecting a rotation to levels that may reach just below the $1490~1500 level before attempting to set up another momentum base/bottom formation.  And just like clockwork, Gold has followed our predictions and price is falling as we expected. Just look at our October 2018 chart where we forecasted the price of gold...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Phil's Favorites

Black Hole Investing

 

Black Hole Investing

Courtesy of John Mauldin, Thoughts from the Frontline 

Scientists say the rules change in a cosmic “black hole” at what astrophysicists call the event horizon. How do they know that? Not by observation, since what happens in there is, by definition, un-seeable. They infer it from the surroundings, which say that the mathematics of the universe as we understand them change at the event horizon.

Or maybe not. One theory says we are all inside a black hole right now. That could possibly explain a few things about central bank policy. ...



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Insider Scoop

The Street Reacts To Kroger's Q2 With Mixed Takeaways

Courtesy of Benzinga

Kroger Co (NYSE: KR) reported second-quarter results that came in better than expected. The earnings beat may have been overshadowed by management's decision to remove its prior guidance of $400 million in incremental EBIT by fiscal 2021.

Q2 A Mix Of Positives And Negativ...

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Kimble Charting Solutions

Bond Yields Due For Rally After Declining More Than 1987 Stock Crash

Courtesy of Chris Kimble

U.S. Treasury Bond Yields – 2, 5, 10, 30 Year Durations

The past year has seen treasury bond yields decline sharply, yet in an orderly fashion.

This has spurred recession concerns for much of 2019. Needless to say, it’s a confusing time for investors.

In today’s chart of the day, we look at a longer-term view of the 2, 5, 10, and 30-year treasury bond yields.

Short to long term bond yields are all testing 7 to 10-year support levels as momentum is at the lowest levels in a decade.

A yield rally is likely due across the board after a recent decline that was bigger than the stock crash in 1987!

If yields fail to ral...



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Lee's Free Thinking

Nonfarm Payrolls Not Seasonally Adjusted Tell the Real Story - Unspinning Wall Street™

Courtesy of Lee Adler

Not seasonally adjusted nonfarm payrolls, that is, the actual numbers, give us a truer picture of the jobs market than the seasonally adjusted garbage that Wall Street spews.

Friday’s seasonally adjusted nonfarm payrolls jobs headline numbers disappointed investors with slower than expected growth. But was it really that bad?

Here’s How The Street Spun It – Wall Street Journal Modest August Job Growth Shows Economy Expanding, but Slowly

Employers added 130,000 nonfarm jobs, jobless rate held steady at 3.7%

U.S. employment grew only modestly in August, suggesting that a global economic slowdown isn’t driving the U.S. into recession but has dente...



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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

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...

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