Economy also showing reasons to take a dip
Friday, September 24, 2010
Equity markets due for a leg down
Text book pattern for a leg down in equity markets. 50 Dma crossing over 200 Dma. check what happened when the Moving averages crossed over.
Thursday, September 23, 2010
Dollar Vs Equity
i think QE 2 will push dollar down and Equity up. Markets are waiting for an event to break out.QE 2 might be tht event
Wednesday, September 22, 2010
Gold Price in bull market
With QE 2 around and major resistance level of 1270 broken on the upside..i believe Gold has a way leg up.
Monday, September 20, 2010
Break Out ?
Break out or just a Stop loss triggering. Generally market tends to remain rangeboud before important economic announcements and events
NAHB Builder Confidence
The National Association of Home Builders (NAHB) reports the housing market index (HMI) was at 13 in September. This is the same low level as in August and below expectations. The record low was 8 set in January 2009, and 13 is very low
"Builder confidence in the market for newly built, single-family homes held unchanged in September from the previous month's low level of 13, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.
"In general, builders haven't seen any reason for improved optimism in market conditions over the past month," noted NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "If anything, consumer uncertainty has increased, and builders feel their hands are tied until potential home buyers feel more secure about the job market and economy."
"The stall in the nation's housing market continues," agreed NAHB Chief Economist David Crowe. "Builders report that the two leading obstacles to new-home sales right now are consumer reluctance in the face of the poor job market and the large number of foreclosed properties for sale.""
Sunday, September 19, 2010
Tax Cuts
(Click to enlarge the pic)
read more
http://www.nytimes.com/interactive/2010/09/19/weekinreview/19marsh.html
Frequent Recession
While our recent experience has been that recessions happen about once every decade, the U.S. used to experience recessions far more frequently.
The U.S. had a recession every 56 months on average going back to 1854 according to the Economist, but since 1982 the U.S. has only had a recession every 106 months on average. During the last three decades recessions have been have as frequent as during much of U.S. history.
Why?
Economist:
This seems to be down to credit availability; in the absence of a gold standard, the authorities could ease policy and stave off recessions.
But if we have reached the end-game of the debt super-cycle, then recessions will be more frequent. The last recession started in December 2007; if the cycle is 56 months, the next one is thus due in August 2012, less than two years away. Such short, sharp shocks make high-yield bonds look a very bad investment. The asset category changed in character during the great moderation; junk bonds used to be investment grade bonds gone bad, but after the mid-1980s, companies issued primary debt at junk yields. An economic cycle that lasts almost nine years gives investors a chance to earn their yield and get out before the bust; a cycle that lasts less than five years makes that much more difficult. The same principle applies to private equity.
However, even if we're in for a period of more frequent recessions, it doesn't mean growth stops. Even when the U.S. economy was experiencing recessions more frequently, it was still growing over the medium and long-term.
Read more: http://www.businessinsider.com/recessions-will-now-be-far-more-frequent-than-were-used-to-since-we-just-ended-a-debt-super-cycle-2008-8#ixzz102m9FeWJ
The U.S. had a recession every 56 months on average going back to 1854 according to the Economist, but since 1982 the U.S. has only had a recession every 106 months on average. During the last three decades recessions have been have as frequent as during much of U.S. history.
Why?
Economist:
This seems to be down to credit availability; in the absence of a gold standard, the authorities could ease policy and stave off recessions.
But if we have reached the end-game of the debt super-cycle, then recessions will be more frequent. The last recession started in December 2007; if the cycle is 56 months, the next one is thus due in August 2012, less than two years away. Such short, sharp shocks make high-yield bonds look a very bad investment. The asset category changed in character during the great moderation; junk bonds used to be investment grade bonds gone bad, but after the mid-1980s, companies issued primary debt at junk yields. An economic cycle that lasts almost nine years gives investors a chance to earn their yield and get out before the bust; a cycle that lasts less than five years makes that much more difficult. The same principle applies to private equity.
However, even if we're in for a period of more frequent recessions, it doesn't mean growth stops. Even when the U.S. economy was experiencing recessions more frequently, it was still growing over the medium and long-term.
Read more: http://www.businessinsider.com/recessions-will-now-be-far-more-frequent-than-were-used-to-since-we-just-ended-a-debt-super-cycle-2008-8#ixzz102m9FeWJ
Cash Hoarding
Perhaps because of the uncertain economic climate, companies are especially reluctant to spend money. Here’s a chart, from the director of Credit Suisse’s economics group, Dana Saporta, showing the ratio of cash assets to total assets at American businesses:
Wednesday, September 15, 2010
Food Inflation
These are powerful macro trends at work. The rapid wealth expansion of emerging economies, supply side constraints and the growth of market speculation make a strong case for this macro trend to continue in the coming years
Monday, September 13, 2010
Green Shoots
Households are reducing their debts and building savings faster than he anticipated, said Richard Berner, co-head of global economics for Morgan Stanley in New York, giving them more room to spend in the future.
“The deleveraging timetable is nearly a year ahead of schedule,” he said.
Debt payments as a share of disposable income fell to 12.46 percent in the first quarter from a peak of 13.96 percent in 2008 and are about in line with the 12.09 percent average of the last 30 years, based on Federal Reserve data. Berner sees the ratio falling to what he considers a sustainable range of 11 percent to 12 percent by year-end. This improvement will help the U.S. economy avoid a relapse into recession and put it on course for 3 percent growth next year, he said. The economy grew 1.6 percent in the second quarter.
History suggests, however, that the U.S. may face another seven years of subpar growth as consumers reduce the debt they built up prior to the recession, said Carmen Reinhart, a professor at the University of Maryland in College Park who presented a paper on the topic at Jackson Hole.
Aggregate consumer debt has fallen for seven straight quarters to $11.7 trillion as of June 30, 6.5 percent below its peak in 2008, the New York Fed said in an Aug. 17 report. Total household delinquencies declined in the second quarter for the first time since 2006, dropping to 11.4 percent of outstanding debt from 11.9 percent in the first quarter.
“Credit quality is improving very rapidly,” said Mark Zandi, chief economist at Moody’s Analytics in West Chester, Pennsylvania.
U.S. credit-card write-offs fell below 10 percent in July for the first time since April 2009, Moody’s Investors Service said on Aug. 25. Write-offs for loans deemed uncollectible dropped to 9.3 percent from 10.3 percent in June.
The top six U.S. credit-card issuers -- including JPMorgan Chase and Citigroup Inc. in New York and Charlotte, North Carolina-based Bank of America Corp. -- all reported lower write-offs and delinquencies for July in regulatory filings last month. "
- Bloomberg
“The deleveraging timetable is nearly a year ahead of schedule,” he said.
Debt payments as a share of disposable income fell to 12.46 percent in the first quarter from a peak of 13.96 percent in 2008 and are about in line with the 12.09 percent average of the last 30 years, based on Federal Reserve data. Berner sees the ratio falling to what he considers a sustainable range of 11 percent to 12 percent by year-end. This improvement will help the U.S. economy avoid a relapse into recession and put it on course for 3 percent growth next year, he said. The economy grew 1.6 percent in the second quarter.
History suggests, however, that the U.S. may face another seven years of subpar growth as consumers reduce the debt they built up prior to the recession, said Carmen Reinhart, a professor at the University of Maryland in College Park who presented a paper on the topic at Jackson Hole.
Aggregate consumer debt has fallen for seven straight quarters to $11.7 trillion as of June 30, 6.5 percent below its peak in 2008, the New York Fed said in an Aug. 17 report. Total household delinquencies declined in the second quarter for the first time since 2006, dropping to 11.4 percent of outstanding debt from 11.9 percent in the first quarter.
“Credit quality is improving very rapidly,” said Mark Zandi, chief economist at Moody’s Analytics in West Chester, Pennsylvania.
U.S. credit-card write-offs fell below 10 percent in July for the first time since April 2009, Moody’s Investors Service said on Aug. 25. Write-offs for loans deemed uncollectible dropped to 9.3 percent from 10.3 percent in June.
The top six U.S. credit-card issuers -- including JPMorgan Chase and Citigroup Inc. in New York and Charlotte, North Carolina-based Bank of America Corp. -- all reported lower write-offs and delinquencies for July in regulatory filings last month. "
- Bloomberg
Tuesday, September 7, 2010
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