Old school, kinda reminds me of growing up in the 70's
Tuesday, June 30, 2009
Q3 stock market rallies 2009
There is a stubbornness to stock market rallies at the moment, whether you believe that the central bank liquidity aspect (printing money) is causing assets to rise again namely stocks, or you see an economic denial psychology in the markets that have over emphasized a recovery in stocks. Either way you are either in these rallies or not; but degrees of caution should come into play. The last quarter has been staggering regarding the amount of gains made in stock markets, after such a hammering from March 2009 lows (Dow), to recovery so positively is astounding. Yes, in my opinion it is a rally running on empty but I have do have stock positions (discussed later in investment updates).
Technically the Dow is trading above the 50 day moving average support of 8425.97, the Dow could dip into the range of both supports (50 and 100 day). There isn't a lot of new money going into the Dow as indicated by the volume and also there is divergence of the On Balance Volume indicator and Dow price (OBV down, Dow up).
Another note is that even though the stock markets of the world more particularly the US has somewhat separated it's self from the broader ecomomy (meaning it's rallying without much external economic news) - mostly trading solely on overbought and under bought signals from it's March 2009 lows. In saying this the OBV, using as an example of when the Dow and other indices fell to March 2009 lows, the OBV support (prior to 2009 lows) occurred on 23th February 2009 (noted on OBV, Dow graph below). The bearish line on the OBV is currently edging towards the Feb 2009 support, before the market crashed.
A real shock to the markets could send Dow down towards this years lows (March 2009), but as discussed in Stock indices split form the real economy, q3 could extend stock gains, otherwise factor in a sell on some real nasty global/economic news. There is a lot of money still not flowing into stocks, more speculation than liquidity. So you can play these rallies, albeit with caution.
Technically the Dow is trading above the 50 day moving average support of 8425.97, the Dow could dip into the range of both supports (50 and 100 day). There isn't a lot of new money going into the Dow as indicated by the volume and also there is divergence of the On Balance Volume indicator and Dow price (OBV down, Dow up).
Another note is that even though the stock markets of the world more particularly the US has somewhat separated it's self from the broader ecomomy (meaning it's rallying without much external economic news) - mostly trading solely on overbought and under bought signals from it's March 2009 lows. In saying this the OBV, using as an example of when the Dow and other indices fell to March 2009 lows, the OBV support (prior to 2009 lows) occurred on 23th February 2009 (noted on OBV, Dow graph below). The bearish line on the OBV is currently edging towards the Feb 2009 support, before the market crashed.
A real shock to the markets could send Dow down towards this years lows (March 2009), but as discussed in Stock indices split form the real economy, q3 could extend stock gains, otherwise factor in a sell on some real nasty global/economic news. There is a lot of money still not flowing into stocks, more speculation than liquidity. So you can play these rallies, albeit with caution.
Monday, June 29, 2009
Stock indices split form the real economy
As the private sector shrinks, more so private credit growth on a global scale and unemployment continuing upward. Markets now will rely on support from a degree of wayward optimism and central bank/ goverment liquidity supports. This will split stock market buying and selling from the reality of flat lined economy.
Shocks that will effect stocks in the coming months will be economic (deficit issues), war or disease (pandemics). Although we may see sustained rallies into the next quarter.
Please note graph below is running real time (daily).
Shocks that will effect stocks in the coming months will be economic (deficit issues), war or disease (pandemics). Although we may see sustained rallies into the next quarter.
Please note graph below is running real time (daily).
Thursday, June 25, 2009
As Bernanke's Federal Reserve crushes the US ecomomy, Asia will sink further into a deflationary spiral
Simply, if Asia's export market recovers then the US is 'officially' in recovery. But this aint gonna happen if as the Federal Reserve inflation machines start to wipe out US purchasing power
So when Asia's export markets collapse. their economies suffers (particularly Japan), Bloomberg
"Prices excluding fresh food slid 1.1 percent from a year earlier after dropping 0.1 percent in the preceding two months, the statistics bureau said today in Tokyo. It was the sharpest decrease since comparable figures were first compiled in 1971."
In my opinion China and the rest of Asia will try their hardest to devalue their currencies. With the US falling into inflation and the consumers getting crushed with what little savings they have (thanks to the 0% Fed rate). No one is going to be buying anything except for the essentials.
It's a pending Global economic collapse scenario.
So when Asia's export markets collapse. their economies suffers (particularly Japan), Bloomberg
"Prices excluding fresh food slid 1.1 percent from a year earlier after dropping 0.1 percent in the preceding two months, the statistics bureau said today in Tokyo. It was the sharpest decrease since comparable figures were first compiled in 1971."
In my opinion China and the rest of Asia will try their hardest to devalue their currencies. With the US falling into inflation and the consumers getting crushed with what little savings they have (thanks to the 0% Fed rate). No one is going to be buying anything except for the essentials.
It's a pending Global economic collapse scenario.
Wednesday, June 24, 2009
Recalculate recovery equation: inflation/currency devaluation will kill recovery and Asian export markets.
The Federal Reserve is out touch with reality but they effect the markets so you would be foolish if you didn't factor that in when adjusting your portfolio. But an interesting aspect that has occurred with industrial output from some developed economies increasing, is the fact their exports have tanked; more notedly Asia. Now we have inflation, we all know it because we can see it creeping in from all every service cost you can think of. I know people that run/work in businesses, from financial companies to law firms to restaurants through to distributors and retail. They are all experiencing costs increases, there is no deflation. They have had to stay competitive with prices (marked down) as market share has shrunken (due to stagflation), but overheads have increased substantially. In turn prices have to rise, fees from administration, inventory costs and so on. This of course gets passed onto the client. This is happening now in a so called recession.
You can solely blame goverment intervention, central banks for creating inflationary environments. On a larger scale with Asian export markets dire a major issue will take place, that if the US recovers, it won't be a consumer based recovery as such. As mentioned costs and fees are increasing on a general scale so the consumer will try and put their cash away or save just to cover extra expenses from interest payments to goverment fees registration/insurance, food, fuel etc etc etc. This will hamper Asia's recovery significantly as the inflation will steal away growth prospects for export countries, especially consumer durable good exports (for the US and Europe). But on top of all that Asian countries may try and devalue their currencies (to boost exports) with each other as a currency based trade war will take place.
So the equation would be: US consumer's saves, income is taxed via inflationary pressures, consumption drops on Asian imports, US growth minimal = Asia exports remain negative. Asia then devalues currencies for export share, causes currency deflation, thus leading to hyperinflation.
You can solely blame goverment intervention, central banks for creating inflationary environments. On a larger scale with Asian export markets dire a major issue will take place, that if the US recovers, it won't be a consumer based recovery as such. As mentioned costs and fees are increasing on a general scale so the consumer will try and put their cash away or save just to cover extra expenses from interest payments to goverment fees registration/insurance, food, fuel etc etc etc. This will hamper Asia's recovery significantly as the inflation will steal away growth prospects for export countries, especially consumer durable good exports (for the US and Europe). But on top of all that Asian countries may try and devalue their currencies (to boost exports) with each other as a currency based trade war will take place.
So the equation would be: US consumer's saves, income is taxed via inflationary pressures, consumption drops on Asian imports, US growth minimal = Asia exports remain negative. Asia then devalues currencies for export share, causes currency deflation, thus leading to hyperinflation.
THE BOYS: HEROGASM #2 (OF 6) Writer GARTH ENNIS, Art JOHN McCREA
My goodness this is a nasty comic. With the flood of publications on the market, sometimes the impact or shock value of a book can go somewhat unnoticed. Herogasm is that kind of comic, yes it's a Garth Ennis scribe so you know it's gonna have some 'shock' to it; but this is off the scale. After finishing #2 Herogasm it's hard to know what psychology lays behind Ennis's purpose with this comic. If you look at the writing from a ruff analytical perspective you could make an assumption that Herogasm is Ennis's overall disdain for the superhero concept. I mean let's face superheros are a ridicules concept in many ways, the idea of superhumans in tights rescuing everyone and maintaining a kinda moral superiority, even the evil superhumans have a one dimensional image. So the superheros/being concept does represent a bland projection of what is good and is bad in humans (albeit superhuman).
So Ennis's world of superhumans is an unpleasant one where there is not so much evil doing as such, it's more just absolute disregard for everything. A kinda of excess, say a super enhanced elite just fucking hookers/porn stars/themselves all day, taking drugs, doing crime, killing for the fun of it, in fact doing whatever they want - whilst staying cushy with goverment. So overall the writer (Ennis) is saying that unfortunately the few that were granted super powers, by luck or whatever, are the worst kind of people you could imagine to have those powers (or are they just us on another level?). Garth Ennis writes the details of their antics in an almost unbelievable way, meaning you gotta read it again for the 'how the fuck a writer' (or other writers) could top some of the dialogue in this comic or comics there after. For example when superheros do drugs (in 'Herogasm'), we know excess leads to different levels of drug taking (cocaine, party drugs etc) in our reality. But superbeing drug taking would be different (according to Ennis), drug taking in Herogasm represents a superbeing world of a 'we can do anything we like and get away with it'; as they take excess and indulgent behaviors to a new extremes. What drugs do they do? The same as us, but with variations like 'dried fetus' (from an abortion lab) mixed into marijuana and smoked?? Shooting up Heroin laced with dried vaginal secretion from some other female superhero??? The sex in this comic is just crazy, I mean it's super heroes fucking everyone, but the first few pages shows what happens when a superhuman has sex with a non superhuman. In a somewhat mainstream comic, how could you top that?
Herogasm gives the worst possible impression you could have on the superhero/superhuman concept. Is that the aim? Possibly. Still it's hard to get into this comic, although it lasts 6 issues, the ongoing story of this particular 'world' continues in the comic The Boys.
Like I said it's hard to like this comic, but hard to dislike it at the same time.
Tuesday, June 23, 2009
Getting ready for more selling. Dow and VIX show market 'sell' anticptaion. (update 1)
Of course watch Fed meeting outcome. Which won't surprise many, except that inflationary measures (printing money) will (possibly) spike markets, in my opinion, briefly (on one day trade). Sell on USD. Watch gold and oil.
Basically fighting a losing battle against rising treasury yields. But the Fed will play up economic recovery and justify treasury buying.
Basically fighting a losing battle against rising treasury yields. But the Fed will play up economic recovery and justify treasury buying.
Could Asia go into a depression? (update 3)
Japan's export markets collapse year on year
-40.90% (-39.30% market/economist estimates)
...brutal
Also good indicator of China's weakening demand for Japanese goods at -29.70%
-40.90% (-39.30% market/economist estimates)
...brutal
Also good indicator of China's weakening demand for Japanese goods at -29.70%
Getting ready for more selling. Dow and VIX show market 'sell' anticptaion.
Some nice big sell off's have occurred on the Dow of the last few days, as mentioned in Market correction could be on it's way - June 2009 (regarding a potential major correction looming) supports on the 50 day average (8373) have now been broken, now it's down to the 100 day average support set at 7976. Thin volume with both indicators OBV and MFI showing funds flowing out of the Dow.
Also good to watch is the VIX as strikes on VIX calls have increased. So traders are lining up positions for more equity sell off's on US indices. (VIX index below running daily)
Also good to watch is the VIX as strikes on VIX calls have increased. So traders are lining up positions for more equity sell off's on US indices. (VIX index below running daily)
Sunday, June 21, 2009
When it comes to the markets don't listen to governments. (update 1)
Governments are good at one thing when it comes to the markets which is creating volatility. Goverment stimulus/bailouts have clearly distorted markets. Fundamentals (weakish rises at depressed levels) have overextended a stock rally. As noted in Market correction could be on it's way - June 2009 volumes in recent stock rallies is now thinning out. So a correction is on it's way, to what extend it will be is hard to predict, but as a current report says, insiders (company executives) that hold shares are selling, from businessday.
"Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March. The increase is making investors more skittish because executives presumably have the best information about their companies' prospects."
Technically and fundamentally there is growing evidence that a major sell is on the cards. This could be when company earnings come in weak and technically any supports that occurred on the main indices could break hence a steeper sell off.
Finally,
"Sales by CEOs, directors and senior officers have accelerated to the highest level since June 2007, two months before credit markets froze, as the S&P 500 rebounded from its 12-year low in March. The increase is making investors more skittish because executives presumably have the best information about their companies' prospects."
Technically and fundamentally there is growing evidence that a major sell is on the cards. This could be when company earnings come in weak and technically any supports that occurred on the main indices could break hence a steeper sell off.
Finally,
"Executives at 252 companies in the S&P 500 unloaded shares since March 10, with total net sales reaching $US1.2 billion, according to data compiled by Princeton, New Jersey-based InsiderScore, which tracks stocks. Companies with net sellers outnumbered those with buyers by almost 9-to-1 last week, versus a ratio of about 1-to-1 in the first week of the rally.
"They're looking to take some money off the table because they think the rally will come to an end," said Ben Silverman, the Seattle-based research director at InsiderScore. "It's the most bearish we've seen insiders, on a whole, in two years."
Wednesday, June 17, 2009
DAVID CRONENBERG (Pycho) 'NIGHTBREED'
So I was thinking since I mentioned the psycho killer that appeared in the 1990 Nightbreed flick (in this post), you might as well see a pic of David Cronenberg's original killer get up...
The morbius glass schlock, horror, 80’s, grindhouse, sex and violence movie marathon - Videodrone. Director David Cronenberg
David Cronenberg wrote and directed sci fiction/horror classics. Unique, mentally engaging and disturbing all at the same time.
I still think the best psychopath I have seen portrayed in a movie, or at least the most believable, was David Cronenberg in Clive Barkers Night Breed. You gotta see it just for Cronenberg's part, the mask, the fact he was a psychiatrist and that calm creepy voice. Memorable. Anyway....
Videodrone is a Cronenberg movie through and through. It draws from the idea of how reality situations on a medium like television could become more extreme; such as a pirate signal, image, or sequence that shocks an audience that normally would not have been prepared for horrific realist scenes of murder and torture. Then a desensitized and possibly curious/aroused aspect takes place and the viewer becomes addicted. Remember this was the early 1980's when Videodrone came out, the VHS video market was just beginning to become widespread; so it was time when the concept of a 'video nasty' emerged. More so the compact aspect of video media, meaning that everyone was either filming something with their VCR recorders in some shape or form. I guess Cronenberg was looking at the unknown elements of a massive wave of new media from all sources.
Videodrone is a critique of mindless media, but balances that criticism by asserting that manipulation by the overindulged has occurred by the unscrupulous. Which could be government or otherwise. It is a intense movie, violent, poignant and provoking in it's attempt to look at popular media (80's video style) to see where the downside could be in an over-saturated media orientated society.
And what a downside it is, a toxic signal from the TV show Videodrone (ultra reality violence) causes the viewers to eventually develop brain tumors. A kinda underlying trade off in which a culling of the viewers occurs as they become more addicted to extreme sex and violence.
Yes, Videodrone is a futurist type movie albeit a future that is unsettling. So what is portrayed in Videodrone is a not so subtle comment on mass media consumption. In that sense Videodrone, although unimagined by Crononberg, has somewhat arrived via the explosion of the internet (minus the hallucination's/brain tumors and conspiracy theories...well for me anyway) as a portal to voyeur extremities, y'know sex at one site (or a million sites) and ultra violence at another (latest beheading clip upload from Yeman straight to your desktop). Rapid succession of media bombardment, as an unconstrained thirst for the next extreme drives media content on the Internet.
Alright Videodrone is just a movie, but damn Cronenberg got some things very, very right in his expose of extreme media and manipulation. Watch for the pseudonym name (character in Videodrone) called Oblivion (ref: tube clip) in it's present parallels to internet names (no morbius glass isn't my name either...scary).
For previous morbius glass schlock, horror, 80’s, grindhouse, sex and violence movie marathon posts, click here
I still think the best psychopath I have seen portrayed in a movie, or at least the most believable, was David Cronenberg in Clive Barkers Night Breed. You gotta see it just for Cronenberg's part, the mask, the fact he was a psychiatrist and that calm creepy voice. Memorable. Anyway....
Videodrone is a Cronenberg movie through and through. It draws from the idea of how reality situations on a medium like television could become more extreme; such as a pirate signal, image, or sequence that shocks an audience that normally would not have been prepared for horrific realist scenes of murder and torture. Then a desensitized and possibly curious/aroused aspect takes place and the viewer becomes addicted. Remember this was the early 1980's when Videodrone came out, the VHS video market was just beginning to become widespread; so it was time when the concept of a 'video nasty' emerged. More so the compact aspect of video media, meaning that everyone was either filming something with their VCR recorders in some shape or form. I guess Cronenberg was looking at the unknown elements of a massive wave of new media from all sources.
Videodrone is a critique of mindless media, but balances that criticism by asserting that manipulation by the overindulged has occurred by the unscrupulous. Which could be government or otherwise. It is a intense movie, violent, poignant and provoking in it's attempt to look at popular media (80's video style) to see where the downside could be in an over-saturated media orientated society.
And what a downside it is, a toxic signal from the TV show Videodrone (ultra reality violence) causes the viewers to eventually develop brain tumors. A kinda underlying trade off in which a culling of the viewers occurs as they become more addicted to extreme sex and violence.
Yes, Videodrone is a futurist type movie albeit a future that is unsettling. So what is portrayed in Videodrone is a not so subtle comment on mass media consumption. In that sense Videodrone, although unimagined by Crononberg, has somewhat arrived via the explosion of the internet (minus the hallucination's/brain tumors and conspiracy theories...well for me anyway) as a portal to voyeur extremities, y'know sex at one site (or a million sites) and ultra violence at another (latest beheading clip upload from Yeman straight to your desktop). Rapid succession of media bombardment, as an unconstrained thirst for the next extreme drives media content on the Internet.
Alright Videodrone is just a movie, but damn Cronenberg got some things very, very right in his expose of extreme media and manipulation. Watch for the pseudonym name (character in Videodrone) called Oblivion (ref: tube clip) in it's present parallels to internet names (no morbius glass isn't my name either...scary).
For previous morbius glass schlock, horror, 80’s, grindhouse, sex and violence movie marathon posts, click here
Tuesday, June 16, 2009
They have got the inflation gauges all messed up
Everyone knows that central banks (and some economists/commentators) have got their inflation gauges all back to front. We all know prices have risen on most goods and services
Still they keep saying this:
From Bloomberg:
Economists said idle factories will help control inflation should raw-material costs keep rising.
For example a friend of mine decided to use Virgin mobile service after they offered a cheaper deal on their mobile plans. Still in our apparent 'deflationary' environment Virgin are increasing their late fee from $5.00 to $10.00!
And remember Virgin's mobile $4.4m loss 2008?
Still they keep saying this:
From Bloomberg:
Economists said idle factories will help control inflation should raw-material costs keep rising.
“Inflation is very much contained,” said Alex Li, an interest-rate strategist in New York at Credit Suisse Securities USA LLC, another of the primary dealers. “Industrial production is a little lower than expected, so that tells you that growth is still not strong. Inflation is under control.”
Industrial production might be dead in the water, but prices are still moving upward on pretty much anything related to all types of services/food/oil/insurance/mortgages and so on. So you gotta pay your staff more (to cover overhead costs) and therefor you'll increase prices on your services. All this when your production output has almost grind to a complete halt.For example a friend of mine decided to use Virgin mobile service after they offered a cheaper deal on their mobile plans. Still in our apparent 'deflationary' environment Virgin are increasing their late fee from $5.00 to $10.00!
And remember Virgin's mobile $4.4m loss 2008?
Market correction could be on it's way - June 2009
Which could be a substantial sell if it knocks down pass 50 and 100 day supports (currently trading just above moving averages). This could be the start of capitulating selling if more bad news comes out of the US markets, namely property (commercial) and credit defaults. Please note on graph represents the Dow Jones overlay with American Express (AXP); which is a heavily weighted stock on the Dow. If moving average supports (8,364 and 7,963) on the Dow are broken, we could see credit related stocks and retail stocks drag the Dow to March 2009 lows (6,470).
Also to note is the thin volume coming through with future declines on the QBV and sharp flow out of the market on the 20 day Money Flow Index (MFI)
(Side note: with Citigroup and GM knocked out of the Dow, could American Express be next?)
*morbius glass does not give investment advice. Trade at your own risk
Also to note is the thin volume coming through with future declines on the QBV and sharp flow out of the market on the 20 day Money Flow Index (MFI)
(Side note: with Citigroup and GM knocked out of the Dow, could American Express be next?)
*morbius glass does not give investment advice. Trade at your own risk
Monday, June 15, 2009
DEADPOOL #11 WRITER: Daniel Way PENCILS: Paco Medina
You gotta hand it to a writer who can formulate a story of the main character (Deadpool), who talks to his own brain and his brain (as a separate entity) talks back . It's a crazy set up, but the Deadpool arc is blast! Funny, bizarre dialogue mixing up with some action. It's a class act. The art is good because it caricatures the story, so it's not uber realistic art, but I mean lets face it it is a comic...with some completely unreal situations. So Paco Medina's art suits the story very well.
I always thought a good story would be having two psychopaths duke it out. From my memory not many books/comics/movies have done this but Daniel Way is topping it all by having a somewhat unstable goodguy (kinda) like Deadpool match up against a unstable bad guy (very much so) Bullseye. It's a psychotic, psychodrama with some of the most unique out there dialogue you'll see in a comic.
Memorable sequences? There are so many. But watch for Deadpool with an arrow in his head picking up a 'Dr Feelgood' radio talk back help line and Deadpool tries to talk back, as he hears the radio host attempt to help a caller (obviously not Deadpool). Funny stuff.
Way's Deadpool is one of the best reads of 2009.
Sunday, June 14, 2009
When it comes to the markets don't listen to governments.
They don't know anything, except the fact they will be broke...and you'll know about that soon enough (re: taxes)!
The private sector is where you'll find the truth on any economic recovery. From profits, unemployment and company extinctions; which all effects the real economy (us). Governments can make statistics seem nicer, work on confidence and generally sound like idiots (including their incumbent central banks).
From Reuters (re: Siemans:
"The chief executive of German engineering group Siemens (SIEGn.DE), Peter Loescher, does not see an end to the global economic crisis, he said in an interview published on Monday.
The private sector is where you'll find the truth on any economic recovery. From profits, unemployment and company extinctions; which all effects the real economy (us). Governments can make statistics seem nicer, work on confidence and generally sound like idiots (including their incumbent central banks).
From Reuters (re: Siemans:
"The chief executive of German engineering group Siemens (SIEGn.DE), Peter Loescher, does not see an end to the global economic crisis, he said in an interview published on Monday.
"People are talking about the biggest downturn for 50 years but I think it is unique in terms of speed and its global aspect," he told the Times.
"For us as a company, across our businesses, we don't have any reliable indicators that we see the bottom of the crisis," he continued."
This will be an ongoing blog post.Investment update -June 2009
The markets are showing bubbles in both stocks and commodities. Closing off some gold positions, oil may also come off highs, although holding oil stocks long term. Commodity producing currencies could finally get their correction particularly the Australian dollar (which has been nerve racking holding a put on the AUD!) and Latin American currencies as LATAM countries will continue to cut rates. Not buying Asia until the stimulus wears off in 2009 and swine flu's (H1N1 virus) possible economic damage. The US dollar has some short term gains as risk aversion finally kicks in soon - when stock/commodity markets correct.
Energy stocks, from gas, oil maybe some US renewable stocks (speculative buy) like solar (depending on the money they get from congress). Pharmaceuticals stocks right to the end of the 2009 awaiting the Northern hemisphere flu season outcomes. A mentioned holding gold physical but selling some positions on gold warrants. Holding off from the buying USD, inflation should speed up towards 2009 - which will be mostly oil/fuel based. So the USD is toast later in the year (but watch for short/mid term strength). US/Euro Banks are still trouble, may buy long term, although there is going to be more defaults coming through especially on car, credit card and even houses (again). As mention watching Japan and China, South Korea end year, so I may pick up some Asian ETF's (the larger economies). But concerns on their banks, particular China and Japan still weighs.
*morbius glass does not give investment advice. Trade at your own risk
Energy stocks, from gas, oil maybe some US renewable stocks (speculative buy) like solar (depending on the money they get from congress). Pharmaceuticals stocks right to the end of the 2009 awaiting the Northern hemisphere flu season outcomes. A mentioned holding gold physical but selling some positions on gold warrants. Holding off from the buying USD, inflation should speed up towards 2009 - which will be mostly oil/fuel based. So the USD is toast later in the year (but watch for short/mid term strength). US/Euro Banks are still trouble, may buy long term, although there is going to be more defaults coming through especially on car, credit card and even houses (again). As mention watching Japan and China, South Korea end year, so I may pick up some Asian ETF's (the larger economies). But concerns on their banks, particular China and Japan still weighs.
*morbius glass does not give investment advice. Trade at your own risk
Thursday, June 11, 2009
A global recovery? Or a re-run of July/August 2008 inflation peak boom/bust scenario?
Why does it feel like an economic repeat of mid 2008? Because the global economy is now showing hallmarks of the return to similar peak inflation (for that period in July-November 2008) before the bust. All this mixed with a very weak and smashed global economy in 2009. So the repeat of 2008 inflation highs is now being reflected in equity markets and commodity markets which are now all in bubble territories. 2008 is a year that stands as the decline in global economies, as opposed to 2009 where the global economies are fragile and distorted from Government intervention. Which of course has caused price fluctuation's in depressed economic environments, namely industrial output in Asia, Eurozone and the US increasing but private investment almost non existent.
The 2008 inflation scenario (price inflation namely on oil and commodities) lead into the massive sell off of equities and the consumer markets plummeting due to restrictive credit conditions. The question is, are we now entering into a mini bust scenario particularly some stocks, commodities and bank write downs . In which inflation is a precursor to risk aversion again? The answer is a very close possibility. The Commercial Mortgage backed securities market (CMBS) is looking dangerous, government bond yields are edging higher, thus effecting mortgage rates. So further falls in the mortgage sector in the US cannot be ruled out, which in turn will effect banks and overall credit conditions The markets have regained risk appetite in an overdone way; stocks, some currencies and commodities are now looking at peaking out.
As discussed in The US Dollar and Gold showing a reflected 'crossover' patten., the reflective gold/USD patten prior to the global economy sinking in August/September 2008. Showed the inflation conditions that caused gold to spike to $1007 on the 10th March 2008 and the US dollar to fall further (70 cents 17th March 2008), then reversed as risk aversion kicked in and the USD was bought (re: the equity sell off's towards the end of 2008). This could happen again if a correction is on the way, as discussed in this post we appear to be heading that way. A correction in both stocks and commodities (including gold) could occur at some point in 2009 and it will be a meaningful correction.
China and Japan are currently encouraging lending and speculation from their stimulus injections and government intervention will at some point have a banking problem not dissimilar to the US. I would say this is on the cards either towards the end of 2009 or mid 2010
Banks generally will start to lift interest rates on Mortgages to reflect rising global/US Treasury yields in the US.
The 2008 inflation scenario (price inflation namely on oil and commodities) lead into the massive sell off of equities and the consumer markets plummeting due to restrictive credit conditions. The question is, are we now entering into a mini bust scenario particularly some stocks, commodities and bank write downs . In which inflation is a precursor to risk aversion again? The answer is a very close possibility. The Commercial Mortgage backed securities market (CMBS) is looking dangerous, government bond yields are edging higher, thus effecting mortgage rates. So further falls in the mortgage sector in the US cannot be ruled out, which in turn will effect banks and overall credit conditions The markets have regained risk appetite in an overdone way; stocks, some currencies and commodities are now looking at peaking out.
As discussed in The US Dollar and Gold showing a reflected 'crossover' patten., the reflective gold/USD patten prior to the global economy sinking in August/September 2008. Showed the inflation conditions that caused gold to spike to $1007 on the 10th March 2008 and the US dollar to fall further (70 cents 17th March 2008), then reversed as risk aversion kicked in and the USD was bought (re: the equity sell off's towards the end of 2008). This could happen again if a correction is on the way, as discussed in this post we appear to be heading that way. A correction in both stocks and commodities (including gold) could occur at some point in 2009 and it will be a meaningful correction.
China and Japan are currently encouraging lending and speculation from their stimulus injections and government intervention will at some point have a banking problem not dissimilar to the US. I would say this is on the cards either towards the end of 2009 or mid 2010
Banks generally will start to lift interest rates on Mortgages to reflect rising global/US Treasury yields in the US.
Recessionomics - update 3. To buy junk or save up for somthing good?
Recessionomics - update 3The days of excess have come to an end and it's being a dramatic end . Which is kinda good in someways. I briefly discussed this in the blog post the The ‘death of excess’ and the movie Cloverfield . When we had a never ending supply of credit and our purchasing power increased thus causing the biggest credit bubble in history which of course has burst. So now it leaves us in the present state that we are all in (economically). I think back to vacuum cleaners, in the period of 4 years I had three vacuum cleaners with one year warranties on each one. Suffice to say within each of those four years 2 vacuum cleaners died on me and the current one is, well about to be given to the junkyard as a mechanical corpse. The price ranges for all three vacuums ranged between $90-$120. All made in China, all pieces of junk that I purchased because I thought that a $90-$120 vacuum cleaner would do the job and the price was relatively cheap. So, where am I going with this, well with excess dead in the water, quality shines. I am about to buy a Dyson vacuum, I did my math and of course looked at the average price of the three vacuums, the average costs (on all three vacuums) totals just over $300.00 which you could say has also been thrown into the junk pile with the crappy vacuums. So now I am preparing to buy a quality vacuum (a Dyson at $300+ USD). Jeez I mean a vacuum where engineers think about the design and dynamics. C'mon how can you go wrong with that? Originality and quality with efficiency, still you gotta pay for it and Dyson's aint cheap.
Tuesday, June 9, 2009
Could Asia go into a depression? (update 3)
As discussed in the last update. Look towards the end of the year for a clearer indication on price movements/economies of Asia. By then most of the government backed stimulus should be flushed out of the markets. Then it will all be down just to private investment and consumption.
- China's consumer price's down -1.4% May 2009 year on year
- China's producer prices down -7.2% (market expected -6.8%) " "
- South Korea's export down -28.5% May 2009 y/y
- South Korea's unemployment up 3.9% (May 2009) vs 3.7% (April 2009)
- South Korea's annual job losses most since 1999
Oil on a 25mth cyclical bull run? Update 2 - Oil reaches $70.00 a barrel
As forecasted, I mentioned in Oil on a 25mth cyclical bull run? Update 1 that oil would either reach 70 dollars a barrel early June 2009 or in the week 15th-19th June 2009. Subsequently oil is now trading above $70.00 (9th and 10th June 2009).
Although the OBV is showing a divergence with some thin volumes trades on the higher oil price. This could indicate that a sell may occur from the 70 dollar mark. Also there is a flattening out on the monthly graph of the CCI (14) line. A sell on oil will cause the price to fall back into a month to month trading rage of 60 -69 (note on graph).
There are murmurs and speculation (note futures on US interest rates) that US rates could start to move upward; this could drain some volume out of the oil market to support the US dollar. Still supply/demand issues and continued USD weakness could draw a support on 70.00 into 2009.
(Please click on graph for larger image)
*morbius glass does not give investment advice. Trade at your own risk
Although the OBV is showing a divergence with some thin volumes trades on the higher oil price. This could indicate that a sell may occur from the 70 dollar mark. Also there is a flattening out on the monthly graph of the CCI (14) line. A sell on oil will cause the price to fall back into a month to month trading rage of 60 -69 (note on graph).
There are murmurs and speculation (note futures on US interest rates) that US rates could start to move upward; this could drain some volume out of the oil market to support the US dollar. Still supply/demand issues and continued USD weakness could draw a support on 70.00 into 2009.
(Please click on graph for larger image)
*morbius glass does not give investment advice. Trade at your own risk
Thursday, June 4, 2009
Rio Tinto F***** up big time
A debt ridden monster (Rio Tinto) gets offered a lifeline from Chinalco (Aluminum Corp. of China) to continue feeding into the biggest commodity consumption market on the planet, China.
Still the spectra of protectionism has creeped in killing off common sense. Your biggest customer offers a direct investment, especially in a time when commodity markets got hammered. And you play hardball? China wants a cheap deal and they should be offered it, the AUD is too high, Australia's Terms of Trade on exports have collapsed (-11%) and Rio Tino forms a cartel with BHP... yes expect downsizing, in fact you can bet on it that there will be a lot more job losses. Fuck the shareholders they are clueless. As the USD sinks the AUD will be pushed higher thus effecting Australia's export recovery.
Still the spectra of protectionism has creeped in killing off common sense. Your biggest customer offers a direct investment, especially in a time when commodity markets got hammered. And you play hardball? China wants a cheap deal and they should be offered it, the AUD is too high, Australia's Terms of Trade on exports have collapsed (-11%) and Rio Tino forms a cartel with BHP... yes expect downsizing, in fact you can bet on it that there will be a lot more job losses. Fuck the shareholders they are clueless. As the USD sinks the AUD will be pushed higher thus effecting Australia's export recovery.
Oil on a 25mth cyclical bull run? Update 1
On July 11th 2008 oil hit 147 a barrel on the NYMEX exchange. At the time several issues were occurring, inflation was high as far as the US dollar losing value, geopolitical saber rattling between Israel and Iran. Not to forget the US/global recession was about to reach a critical point in 2008.
Upon a possible conflict in the middle east I saw a short term trading range between 141 and 150, please refer to this post World Crisis scenarios for the 21st century – Peak Oil (update 14) Oil heading towards $150.00 (written July 11 2008). Of course we didn't reach 150, but we did reach the all time high 147.
Now it appears that a 2 year cyclical bull run on oil is occurring again, this may reflect shorter price gains on a shorter period of time as the oil price was very over sold when the global recession kicked in later 2008 and early 2009. As discussed in Oil on a 25mth cyclical bull run?, there is an anticipated sell point at $70.00 a barrel. I mentioned that oil could reach $70 late in April 2009 or early June 2009. At this point oil has risen to $68-69, as there is now a trading range between the 60-69. It is quite possible oil will hit $70 early next week ( 15th-19th June 2009), the drop back into it's trading range.
What should be noted about a bull run on oil is that a market is driven on demand and supply issues, therefore the huge sell off that occurred after the highs of $147 in July 2008 was in response to the global economy grinding to a halt; the sell off was severe and probably a little over dramatic. So the speculation argument falls short by assuming that prices were deliberately being driven up, which is a foolish politically driven argument. It should also be noted that no one likes losing money in the market and traders rely on supply statistics and demand issues. Another factor is oil is a hedge against a weak US dollar and since the US goverment doesn't like it's own currency traders look at hedging against an asset losing vale (USD). As we all know oil is rare and getting rarer, More so in an environment when oil production became unprofitable (global recession) and will now struggle to become profitable (high production expenses) in a higher priced oil market with limited supply.
Please refer to graph (click for larger image). Note the On Balance Volume Indicator (OBV), see the volatility from 1st January 2007 (start of bull run) to June 2008 (collapse of oil price). Then it's a straight line down to a bounce on the 1st Januray 2009 (start of new oil bull market).
*morbius glass does not give investment advice. Trade at your own risk
Upon a possible conflict in the middle east I saw a short term trading range between 141 and 150, please refer to this post World Crisis scenarios for the 21st century – Peak Oil (update 14) Oil heading towards $150.00 (written July 11 2008). Of course we didn't reach 150, but we did reach the all time high 147.
Now it appears that a 2 year cyclical bull run on oil is occurring again, this may reflect shorter price gains on a shorter period of time as the oil price was very over sold when the global recession kicked in later 2008 and early 2009. As discussed in Oil on a 25mth cyclical bull run?, there is an anticipated sell point at $70.00 a barrel. I mentioned that oil could reach $70 late in April 2009 or early June 2009. At this point oil has risen to $68-69, as there is now a trading range between the 60-69. It is quite possible oil will hit $70 early next week ( 15th-19th June 2009), the drop back into it's trading range.
What should be noted about a bull run on oil is that a market is driven on demand and supply issues, therefore the huge sell off that occurred after the highs of $147 in July 2008 was in response to the global economy grinding to a halt; the sell off was severe and probably a little over dramatic. So the speculation argument falls short by assuming that prices were deliberately being driven up, which is a foolish politically driven argument. It should also be noted that no one likes losing money in the market and traders rely on supply statistics and demand issues. Another factor is oil is a hedge against a weak US dollar and since the US goverment doesn't like it's own currency traders look at hedging against an asset losing vale (USD). As we all know oil is rare and getting rarer, More so in an environment when oil production became unprofitable (global recession) and will now struggle to become profitable (high production expenses) in a higher priced oil market with limited supply.
Please refer to graph (click for larger image). Note the On Balance Volume Indicator (OBV), see the volatility from 1st January 2007 (start of bull run) to June 2008 (collapse of oil price). Then it's a straight line down to a bounce on the 1st Januray 2009 (start of new oil bull market).
*morbius glass does not give investment advice. Trade at your own risk
Wednesday, June 3, 2009
World Crisis scenarios for the 21st century - Bird Flu (H5N1) and other pandemic Virus concerns (update 11)
World Crisis scenarios for the 21st century - Bird Flu (H5N1) and other pandemic Virus concerns (update 11)
Already the A H1N1 (or Swine flu) has reached pandemic levels. With major country outbreaks (as defined by a pandemic) with Australia recording the highest amount, outside the Americas, of effected people by 620.
A H1N1 in it's present form is a mild influenza, but it's spreading more rapidly than nominal influenza, as far as moving from country to country in a short period of time. This is the concern as the southern hemisphere goes into it's flu season the question is how will the A H1N1 mutate. Will it become a pandemic killer like the 1918 Spanish flu pandemic ? This is why the World Health Organization is concerned is that it can rebound from the southern hemisphere to the northern hemisphere (in which the milder influenza A H1N1 has already achieved a footing) and become a global killer.
Already the A H1N1 (or Swine flu) has reached pandemic levels. With major country outbreaks (as defined by a pandemic) with Australia recording the highest amount, outside the Americas, of effected people by 620.
A H1N1 in it's present form is a mild influenza, but it's spreading more rapidly than nominal influenza, as far as moving from country to country in a short period of time. This is the concern as the southern hemisphere goes into it's flu season the question is how will the A H1N1 mutate. Will it become a pandemic killer like the 1918 Spanish flu pandemic ? This is why the World Health Organization is concerned is that it can rebound from the southern hemisphere to the northern hemisphere (in which the milder influenza A H1N1 has already achieved a footing) and become a global killer.
Tuesday, June 2, 2009
Australia avoids a recession.
Which is incorrect.
Unemployment trend up:
The key problem for policy makers/reserve bank officials is they will need to force the Australian dollar down, if they really care about exports. Other wise Australia like most countries bare the brunt of distorted markets and a weak USA dollar. So a weak AUD will eventuate to less imports, thus effecting domestic consumption and it reeks of protectionism (as policy makers/central banks try and ramp up exports).
It's terrible economics too measure recessions purely on export and import GDP numbers, unemployment and consumption should be factored into GDP numbers.
Look for yourself (if you live in Australia) Australian National Accounts: National Income, Expenditure and Product, Mar 2009
Unemployment trend up:
- Terms of trade fell 7.8%, meaning imports are shrinking (note. other countries have recorded the same); this means consumption is down i.e less people buying stuff (recession)
- Exports are narrow at 2.7%, this is because imports collapsed (recession)
- The largest negative contribution came from Private business investment at -1.1 percentage points (if you live in Australia note the huge amount of vacant office space in the CBD's)
The key problem for policy makers/reserve bank officials is they will need to force the Australian dollar down, if they really care about exports. Other wise Australia like most countries bare the brunt of distorted markets and a weak USA dollar. So a weak AUD will eventuate to less imports, thus effecting domestic consumption and it reeks of protectionism (as policy makers/central banks try and ramp up exports).
It's terrible economics too measure recessions purely on export and import GDP numbers, unemployment and consumption should be factored into GDP numbers.
Look for yourself (if you live in Australia) Australian National Accounts: National Income, Expenditure and Product, Mar 2009
Is a Credit Crisis 2 brewing?
Most probably.
Interesting aspect of the so called market stabilization that has occurred recently (apart from the tax payer/s underpinning the whole global economy) is that despite the Federal Reserve pumping money (buying Mortgage back securities and US treasuries) into the US economy to stabilize mortgage rates. Rates are actually moving upward as bond demand falls, particularly demand for US debt. So the the poor home owner is getting screwed between fixing a mortgage rate or shifting from a variable (floating rate) rate. Either way if the Fed (who obviously is going to lose control of surging bond yields), can't hold down mortgage rates. An ongoing spike in mortgage rates will continue. Which could lead to a new wave of foreclosures.
"NEW YORK (Reuters) - The global financial crisis may morph into a second, equally virulent phase where borrowing costs rise again, hobbling an embryonic economic recovery, debilitating cash-strapped banks, and punishing investors all over again.
U.S. mortgage rate rise threatens housing recovery (Reuters)
Interesting aspect of the so called market stabilization that has occurred recently (apart from the tax payer/s underpinning the whole global economy) is that despite the Federal Reserve pumping money (buying Mortgage back securities and US treasuries) into the US economy to stabilize mortgage rates. Rates are actually moving upward as bond demand falls, particularly demand for US debt. So the the poor home owner is getting screwed between fixing a mortgage rate or shifting from a variable (floating rate) rate. Either way if the Fed (who obviously is going to lose control of surging bond yields), can't hold down mortgage rates. An ongoing spike in mortgage rates will continue. Which could lead to a new wave of foreclosures.
"NEW YORK (Reuters) - The global financial crisis may morph into a second, equally virulent phase where borrowing costs rise again, hobbling an embryonic economic recovery, debilitating cash-strapped banks, and punishing investors all over again.
Early warnings signs of this scenario include surging government bond yields, a slumping U.S. dollar, and the fading of the bear market rally in U.S. stocks."
Rising U.S. bond yields may spark Credit Crisis IIU.S. mortgage rate rise threatens housing recovery (Reuters)
THE HOOD #1 WRITER: JEFF PARKER. ART: KYLE HOTZ (Marvel Comics)
I like creepy mysterious characters, something about them, despite their disadvantages (as opposed to being decent law abiding citizens), they somehow rise to the occasion and triumph. Or do they? History says otherwise, anyway in the mean time it's their euphoric rise (and possible failure) that makes a good story
Parker Robinson (The Hood) is that kinda of character, he runs a criminal underworld, has a criminal superhero lover and unknown to all his activities is a loving girlfriend with their unborn child.
As Parker Robinson tries to manage the unmanageable it will be interesting to see to what extend he can hold together his personal life, his criminal underworld collective, his demonic powers (that seem to want to take him over) and that everyday mundane chore of making money.
This will be a good read courtesy of the story by Jeff Parker with clean and dynamic art by Kyle Holtz.
Monday, June 1, 2009
The US Dollar and Gold showing a reflected 'crossover' patten.
In June 2007 inflation was running high, oil had started it's bull run please refer to Oil on a 25mth cyclical bull run?, the asset bubbles were overinflated and the US subprime housing market just went bust.
Gold, apart from other things, is a good indicator of US Dollar weakness and economic trouble and/or inflation hedge. The USD and Gold finally completed a crossover on the 25th June 2007, when a fear that inflation was becoming runaway and the slumping US property market was causing equity markets to decline (which they did).
Today a similar patten is unfolding, in June 2009 the USD is now falling further away from gold, as the USD bull run ended from August 2008 to November 2008 (USD seen as a risk averse currency and bought when the markets collapsed in 2008).
Now with talk of economic recovery, it is clear that the market is dumping the USD (fear of inflation) and buying gold (as a hedge). This mirrors that time when the Federal Reserve Fed fund rate was at 5.25% (June 2007). Where inflation was a problem. Now inflation is creeping back (possibly faster than expected) and the Feds current fund rate is 0%-0.25% and if you look at the below graph, there are wilder USD swings (towards a downside) and sharper sell off the USD. With gold inclining rapidly away from the USD.
From a comparable example of the last price crossover in 2007 (prior to the full market meltdown). It could be argued the market is showing a similarity, but this time with inflation expectations in full force. Will the Federal Reserve lift interest rates? Some commentators think not. The market at this point indicates subtle (or maybe not so subtle) concern (away from stock market euphoria) that something is brewing.
USD Dollar index and Gold Spot price. Note price crossover points on the 25th June 2007 and 1st December 2008. An overall wide patten is forming as the USD and Gold price move rapidly away from each other. In line for another bubble to burst?
Please click on grap for larger image:
Gold, apart from other things, is a good indicator of US Dollar weakness and economic trouble and/or inflation hedge. The USD and Gold finally completed a crossover on the 25th June 2007, when a fear that inflation was becoming runaway and the slumping US property market was causing equity markets to decline (which they did).
Today a similar patten is unfolding, in June 2009 the USD is now falling further away from gold, as the USD bull run ended from August 2008 to November 2008 (USD seen as a risk averse currency and bought when the markets collapsed in 2008).
Now with talk of economic recovery, it is clear that the market is dumping the USD (fear of inflation) and buying gold (as a hedge). This mirrors that time when the Federal Reserve Fed fund rate was at 5.25% (June 2007). Where inflation was a problem. Now inflation is creeping back (possibly faster than expected) and the Feds current fund rate is 0%-0.25% and if you look at the below graph, there are wilder USD swings (towards a downside) and sharper sell off the USD. With gold inclining rapidly away from the USD.
From a comparable example of the last price crossover in 2007 (prior to the full market meltdown). It could be argued the market is showing a similarity, but this time with inflation expectations in full force. Will the Federal Reserve lift interest rates? Some commentators think not. The market at this point indicates subtle (or maybe not so subtle) concern (away from stock market euphoria) that something is brewing.
USD Dollar index and Gold Spot price. Note price crossover points on the 25th June 2007 and 1st December 2008. An overall wide patten is forming as the USD and Gold price move rapidly away from each other. In line for another bubble to burst?
Please click on grap for larger image:
Crossed - Writer: Garth Ennis. Art: Jacen Burrows (Avatar Press)
Garth Ennis takes an idea and makes it better. That being the zombie, civilization breaking down and all hell breaking loose concept in fiction. So the core idea behind 'Crossed' is a 'rage virus' that turns people into maniacal killing machines, with Ennis topping it up with his prolific writing and characters. This comic is packed with dialogue as it builds tension and also allows the reader to align him/her self with the main characters.
Again Ennis writes in strong female characters (or character as portrayed in the 'Crossed' storyline) into his comics. Crossed is a snapshot profile of a society gone to it's basic level of survival and it's a woman with a small child that is able to lead a pack of survivor's up into Alaska and fight onward for survival.
Crossed has all the elements of an Ennis story, a harsh reality and how one can survive in that reality.
Jacen Burrows is a fucking amazing artist for comics, perfect for an Ennis story. Burrows draws characters with amazing lines, showing expressive character profiles from attraction, fear and insanity. There is a stern discipline to his art, it's clean but raw and bloody at the same time. He is drawing Crossed like he is writing the story, both him and Ennis are collectively putting out a classic.
Subscribe to:
Posts (Atom)