Atlantic Charts of the Year

http://www.theatlantic.com/business/archive/2011/12/the-most-important-graphs-of-2011/250240/?utm_term=Money%20Game%20Chart%20Of%20The%20Day#slide6

some good stuff.  My favorite: the Plank Curve, when liquidity dries up, this is what happens:

Financial Crisis is over, deleveraging lives on

A late entry, but this very well might be the best chart of the year. source

Here's another good one from chartoftheday.com comparing post bear (50% drop) rallies:

GDP / Chicago Fed NAI

Real gross domestic product (GDP) grew at an annual rate of 1.8 percent in the third quarter of 2011, according to today’s third estimate. This follows a growth rate of 1.3 percent in the second quarter of 2011.

Chicago Fed NAI down to -.37 in November from -.18 in October:

China Banking Takeover

metric mania

50 Economic Numbers From 2011 That Are Almost Too Crazy To Believe

#1 A staggering 48 percent of all Americans are either considered to be "low income" or are living in poverty.

#2 Approximately 57 percent of all children in the United States are living in homes that are either considered to be "low income" or impoverished.

#3 If the number of Americans that "wanted jobs" was the same today as it was back in 2007, the "official" unemployment rate put out by the U.S. government would be up to 11 percent.

#4 The average amount of time that a worker stays unemployed in the United States is now over 40 weeks.

#5 One recent survey found that 77 percent of all U.S. small businesses do not plan to hire any more workers.

Jeff Gundlach -- To Have and To Have Not

12-13-11 JEG Webcast Have and Have Nots - FINAL

Bullish? Rail Carload y o y

i am done trying to figure out the markets & macro direction.  Railroads don't lie, tho & here's today's Money Game Chart of the Day

This chart showing the year-over-year change in rail carloads in November speaks for itself: Things are getting better and better.

Hussman weekly report -- indicator aggregates

http://www.hussmanfunds.com/wmc/wmc111205.htm


another great weekly post.  He aggregates indicators to try to gauge overall macro direction.  Not pretty.  accurate?

one pullout:

"...Moreover, we can select random subsets of these indicators across random periods of time, in order to make the model less sensitive to exactly how it is put together. That method typically produces more variation in the overall conclusion about the economy, so the confidence in that conclusion is particularly strong when multiple models agree. At present, we observe agreement across a broad ensemble of models, even restricting data to indicators available since 1950 (broader data since 1970 imply virtual certainty of recession). The uniformity of recessionary evidence we observe today has never been seen except during or just prior to other historical recessions...:

12 days of christmas index

http://content.pncmc.com/live/pnc/microsite/CPI/2011/index.html

US Naval Update

from Stratfor.  Syria and Iran fun.

Economist Global Housing analysis

Full article here

cutout: Based on the average of the two measures, home prices are overvalued by about 25% or more in Australia, Belgium, Canada, France, New Zealand, Britain, the Netherlands, Spain and Sweden (see table). Indeed, in the first four of those countries housing looks more overvalued than it was in America at the peak of its bubble. Despite their collapse, Irish home prices are still slightly above “fair” value—partly because they were incredibly overvalued at their peak, and partly because incomes and rents have fallen sharply. In contrast, homes in America, Japan and Germany are all significantly undervalued. In the late 1990s the average house price in Germany was twice that in France; now it is 20% cheaper.

COTD -- Cross-Border Equity Portfolio Flows

Source

When fear and volatility enter the stock markets, investors are particularly quick to sell off their international investments in overseas stocks.

However, Ian Scott, Nomura's Global Head of Equity Strategy, argues that these types of sell-offs are often followed by sharp, rapid rebounds in those very same equities.

Scott notes that the current international equity flow metrics are unusually negative, which is an argument to buy.  At the current level, the only time it would've been too early to buy was during the Lehman Brothers crisis.

Once again, investors have responded to the crisis environment by pulling in their horns, and repatriation has, once again, been the prevailing response. The degree of flight from overseas stocks in the three months to October is on a par with the three months prior to the Lehman bankruptcy – things then subsequently deteriorated further, reaching a nadir in October 2008 – and the three months after the stock market crash in 1987.

As mentioned above, since the nature and timing of these past crisis periods is so different, comparisons are fraught, but one thing we can say here is that the impact on international investor sentiment has been pronounced and their behavior is on a par with that during some extremely stressed periods. History suggests that these occasions are good buying opportunities and the market typically recovers quickly. The exception was the Lehman bankruptcy, where investor deleveraging in international markets became more pronounced and took a further five months for stocks to bottom.

historical gold prices

Also, GREAT zerohedge guest post on Gold:

Is Gold Still the Answer for Investors?

Though late to the party as usual, the proverbial man on the street – along with members of mainstream media and Wall Street heavyweights – is finally waking up to the decade-long, 700% increase in the price of gold, joining a growing buzz around the monetary metal. From questions whether gold is in a bubble to predictions that soaring prices are just around the corner, one thing is clear: a new phase of awareness for gold is upon us. How far might it move before these troubling times are over?

The Big-Picture Economic Environment

Kicking things off, I would like to explore several themes in order to put the current economic situation in context.

Mohamed El-Erian

If you're going to listen to only one person, Buffet might be it, or this guy.



zerohedge's intro: Something tells us that Mohamed El-Erian is aware of the bulls' last bastion of "growth" and "decoupling"- the dip in Initial Claims below 400K. Even so, his appearance on Bloomberg TV was full of sound and fury, and some quite memorable soundbites, starting with this one: "Let me tell ou what I find most terrifying: we’re having this discussion about a risk of recession at a time when unemployment is already too high, at a time when a quarter of homeowners are underwater on their mortgages, at a time when the fiscal deficit is 9%, a time when interest rates are at zero. These are all conditions coming out of a recession, not going into a recession." The Newport Beach dweller is spot on: the situation is getting worse by the day, and the only option left is to do more of what has already failed so many times, and which only makes non-dilutable transitory monetary equivalents that much more attractive (with the mandatory liquidation which may bring them to triple digits first of course).

guru focus top dividend stocks

How To Get An 8.4% Portfolio With The Help Of Buffett, Tepper, Pabrai, Marks And Einhorn (click for original -- gurufocus.com)

November-17-2011

At times like this, dividends are king. Stocks paying a high yield will hold up better as the market goes south. In this article I picked the highest yielding stocks from the portfolio of Warren Buffett, David Tepper, Mohnish Pabrai, Howard Marks and David Einhorn. By this way I created a portfolio of 5 stocks selected from superb Value Investors.

ZeroHedge Grand Unifying Theory Forecast

http://www.zerohedge.com/news/grand-unified-presentation-everything

Mauldin overview of Europe's problems -- a great read!

Long overview from http://www.johnmauldin.com/frontlinethoughts/where-is-the-ecb-printing-press that's worth reading.

Where Can I Find €3 Trillion?

First, for the record, the European issue is not a crisis of confidence, as Merkel and Sarkozy, et al., keep telling us. It is structural. And until the structural issues are dealt with, the problems will not be solved.

Barclays Capital ZEW German Economic Sentiment Index -- Bearish

The ZEW German economic sentiment index fell to -55.2 in November from -48.3 in September, below our forecast (-52.0) and consensus (-52.5). The current reading is far below the long-term average of about +25 points and reflects the very low expectations of the financial experts taking part in this survey for German economic activity over the next six months.

The ZEW's current situation index declined from 38.4 in September to 34.2 and the gap between sentiment and the current situation remains large. Current readings are now very close to those in June 2008, before the current situation index went into free fall and a sharp recession followed. The ZEW said that "world trade is weakening and the public debt problems in the Eurozone and in the US weigh heavily on business activity. These risks could even gain more importance and thus could further harm economic growth in Germany."

In our view, these figures underline the very pessimistic outlook of financial sector experts which is increasingly shared by others and clearly shaped by the sovereign debt crisis in the euro area. They point to growing risks to our German GDP Q4 forecast of only a slight contraction in Q4 GDP by 0.1% q/q.

Schwab Market Report -- Bullish

source

Every Picture Tells a Story: Market Charts Looking Good

November 14, 2011

Liz Ann Sonders
Senior Vice President, Chief Investment Strategist, Charles Schwab & Co., Inc.

Key points

• With so much focus on the macro, I thought an update on the micro would be welcome.
• Several measures of sentiment, valuation and technical conditions show the market to be in pretty good shape.
• Macro headwinds persist, but the expectations bar has arguably been set low enough to be easily hurdled.

1000 words (part 5)

Demographics / S&P ---> Bull market coming in 2012?

EuroZone Bank Exposure to Italy by country

fun!  follow the link to access the EuroZone Bank Exposure by country to Italy interactive chart

And bank exposure to italy map and graph:

Economist prediction chart

http://www.economist.com/blogs/dailychart/2011/11/poll-forecasters

" What our polls forecast for 2011 GDP growth and inflation

EVERY month The Economist surveys a group of economists and records the average and range of their predictions for GDP growth, consumer prices and the current-account balances for 14 economies (see this month's poll). The charts below show our pollsters' monthly 2011 economic growth and inflation predictions for America, Japan and the euro area since March 2010. The evolution of the forecasts shows that as 2011 has progressed economists have been gradually becoming increasingly pessimistic about the fortunes of the American economy and its ability to fight inflation. A marked divergence is also noticeable in Japan after the Fukushima earthquake in April, while the outlook for GDP growth in the euro area had been slowly improving but has deteriorated over recent months. "

Insider Selling -- october

"There were almost $19 worth of insider stock sales in October for every $1 of insider buys, according to market research firm TrimTabs. That was the most aggressive pace since February."

from CNN Money

ISM Weighted Employment

Jonathan Tepper of Variant Perception writes this week:"All of our leading indicators have been pointing down since early spring. Now many unrevised short leading indicators are pointing towards weakness in employment, output and asset prices. The GDP weighted employment reading for ISM services and manufacturing is now clearly below 50. The last times this happened was before the 2001 recession and before the 2008 recession."

Nice Europe summary

brief summary on current state of EU, italy, spain, etc.

1000 Words (part 4)

History doesn't repeat itself, but still...

source: Jason Kelly

IT, POR / GER 10 year bond spread

Bloomberg chart -- It/Ger bond spread

pretty good measure of European stress

also, A E-P article on Portugal

Here's the bloomberg POR/GER 10 year spread

NYT Overview of the Euro Crisis

http://www.nytimes.com/interactive/2011/10/23/sunday-review/an-overview-of-the-euro-crisis.html

"The European Financial Crisis in One Graphic: The Dominoes of Debt "

http://www.oftwominds.com/blogoct11/euro-debt-dominoes10-11.html  from Charles Hugh Smith's Of Two Minds blog

1000 words -- part 3

BIG Increase in M2

from groovy girl: Zerohedge reports this morning that the US Money Supply has surged 33% in the past four months. Click here.

And what happened four months ago to cause Ben and his pet banks to “print” more money? The European Debt Crisis started moving to the European banks and US banks, and we had a run on the money market funds causing a huge loss of liquidity for the system. This is QExx under the table for Europe and US Banks exposed to Europe.

Once again, huge amounts of US dollars are being created to try a bailout all global debt problems. It will not work. What it will do is push price inflation first higher in non-US countries and then in the US.

More US dollars in the world monetary system creates a situation where those US dollars will come flooding back to US soil when the rest of the world loses confidence in the dollar. Groovygirl has a feeling that the “powers that be” will not reorganize the global fiat money system until the US is feeling the pain of hyperinflation. By that time, all other nations will already be knee-deep in hyperinflation and the global debt problem will still not be solved.

Be prepared.

FXI 2005 - 11

source

For some perspective on one of the more important global stock markets, today's chart focuses on Chinese stocks and presents the current trend of the iShares FTSE/Xinhua China 25 Index (FXI). As today's chart illustrates, Chinese stocks have endured what amounts to an extremely wild ride since 2005. The FXI trended upward at an ever accelerating rate (i.e. parabolic) from 2005 to Q4 2007. As the credit bubble began to unravel, so too did Chinese stocks with the FXI trending downward at an ever accelerating rate from Q4 2007 to Q4 2008. Beginning in Q4 2008, the FXI surged -- gaining over 155% trough to peak. Since that post-financial crisis peak back in Q4 2010, Chinese stocks initially treaded water but more recently have entered in to a steep downward trend channel. Considering China's increasingly significant contribution to the global economy, this recent stock market action is most definitely a red flag.

5 page quarterly forecast -- great report

http://www.hoisingtonmgt.com/pdf/HIM2011Q3NP.pdf 


Negative economic growth will probably
be registered in the U.S. during the fourth
quarter of 2011, and in subsequent quarters in
2012.  Though partially caused by monetary
and fiscal actions and excessive indebtedness,
this contraction has been further aggravated by
three current cyclical developments: a) declining
productivity, b) elevated inventory investment,
and c) contracting real wage income.

Trade Deficit vs. GDP

from Business Insider Chart of the Day:

As part of this morning's trade balance report, the July trade deficit was revised wider from $44.8 billion to $45.6 billion.

Since the trade deficit gets subtracted from GDP, this is seen as a negative. ZeroHedge expects coming down ard revisions to Q3 GDP estimates.

That may be possible, but this misses the big picture.

Wide trade deficits are a sign of more robust growth.

Here's a chart going back a long way that shows that nicely.

When the trade deficit is shrinking, GDP tends to shrink too, and when it's widening, GDP widens too, even if the trade deficit comes out of GDP

1000 words -- part 2

1000 words -- part 1

Historical PE Ratios -- S&P 500

Empire State Manu. Survey

Economist -- nice overview

Excellent article -- worth a full read (it's not that long, even!)

last paragraph: In 2008 governments were credible backstops for their banks and the Fed, the central bank at the heart of the crisis, was willing to do everything it could to create confidence. Now the sovereigns are the problem and the ECB’s help is limited and conditional. That is the real horror film.

http://www.economist.com/node/21531467?fsrc=nlw|edh|09-29-11|editors_highlights

The Technical Evidence for a Bear Market Decline

Great Charts here!  Source

What is the technical evidence for a Bull or Bear market? If we keep it simple, the evidence is solidly Bearish.

Robert Reich blog post

Follow the Money: Behind Europe’s Debt Crisis Lurks Another Giant Bailout of Wall Street

TUESDAY, OCTOBER 4, 2011

Today Ben Bernanke added his voice to those who are worried about Europe’s debt crisis.

But why exactly should America be so concerned? Yes, we export to Europe – but those exports aren’t going to dry up. And in any event, they’re tiny compared to the size of the U.S. economy.

If you want the real reason, follow the money. A Greek (or Irish or Spanish or Italian or Portugese) default would have roughly the same effect on our financial system as the implosion of Lehman Brothers in 2008.

Financial chaos.

Normal Deleveraging Recession

from Jason Kelly

This is not news to longtime readers, but it’s worth remembering that we knew from the beginning this recession would drag on because it was not caused by a normal business cycle but by deleveraging after bad debt — with both rapacious banks and stupid borrowers to blame. Morgan Housel provides a good recap of this point:

Prophets Of Doom: 12 Shocking Quotes + 1 I found

12 below, but here's another:  "The markets are focused on the imminent default by Greece. But, this is not the most important issue now. The historic development the markets have not priced in as that Germany is preparing to exit the Euro. The markets are very likely to have to contend with the re-introduction of Deutsche Marks in the near future. This is bound to mean a collapse in the value of the Euro for those countries that will remain in it (devaluation for the rest of Europe). This step may seem unthinkable but, I believe that the German government is telling us in multiple ways that there is no other solution from their point of view."
-- This is from Pippa Malmgren -- smart enough that she worked for the Bush White House (her bio)

From The Economic Collapse Blog (nice title) & reposted by zerohedge

The following are 12 shocking quotes from insiders that are warning about the horrific economic crisis that is almost here....

#1 George Soros: "Financial markets are driving the world towards another Great Depression with incalculable political consequences. The authorities, particularly in Europe, have lost control of the situation."

#2 PIMCO CEO Mohammed El-Erian: "These are all signs of an institutional run on French banks. If it persists, the banks would have no choice but to delever their balance sheets in a very drastic and disorderly fashion. Retail depositors would get edgy and be tempted to follow trading and institutional clients through the exit doors. Europe would thus be thrown into a full-blown banking crisis that aggravates the sovereign debt trap, renders certain another economic recession, and significantly worsens the outlook for the global economy."

Goldrunner forecast

http://www.gold-eagle.com/editorials_08/goldrunner092611.html

The following Gold Chart shows that the cyclical tendency since early 2009 has been for Gold to bottom at the green arrows with Gold correcting down to and through the dotted Bollinger Band (BB) mid-line to hit the 34 week exponential moving average while the RSI Indicator approaches the 50 line. Gold fell to the BB mid-line on Friday as the RSI approached the 50 line. Black rays off of the 2008 top show that Gold has been bottoming at each black line extended over the "last top." Gold reached that juncture on Friday. We might see Gold weakness early next week, but we expect the basic relationship to hold. Near this point in the 70's Gold Chart, an imminent bottom produced a sharp rise.

Growth Correlations

A chart from Citi shows the rising correlation of regional economic growth to the global aggregate. For the past decade all regions have been moving in harmony, with correlation peaking right about now. Globalized trade, cross-border financial links and faster-moving information have all contributed to the trend. One major outcome of high correlation is volatility. 

Mister Bear Takes A Look At Gold, Silver & The Dow Jones

source: http://www.gold-eagle.com/editorials_08/lundeen092011.html

great article from Tuesday

Mister Bear Takes A Look At Gold, Silver & The Dow Jones

Mark J Lundeen
Mlundeen2@Comcast.net
20 September 2011

zerohedge on fire today

www.zerohedge.com

• Bank Downgrades Jump The Atlantic: S&P Cuts Italian Intesa Sanpaolo, Mediobanca From A+ To A
• Moody's Goes For Trifecta, Downgrades Citi Short-Term Rating Of Citi From Prime-1 To Prime-2
• Double Tap For Octogenarian Of Omaha: Wells Downgraded From A1 To A2
• Suck It Up Warren - Moody's Downgrades Bank Of America From A2 To Baa1
• 'Twist' Sends Ultra Investors Shouting With 30Y Treasury Yield Back To Jan 2009 Lows

truth in retirement

Gordon Brown: Euro Crisis Is Even Worse Than Lehman  

history doesn't repeat itself, but...

from Ciovacco:

If you review the monthly charts of the S&P 500 during the last bear market (below) and the current chart of the Euro Stoxx 50 Index (2nd chart), the answer appears to be “just getting started.” It should be noted that bearish signals on monthly charts are more important than those on a daily or weekly chart. Recently, the S&P 500 has started to lag the German Index, which has been a bearish signal in the past.

 Compare points A, B, C, and D in the chart above to A, B, C, and D in the chart below. It can be expensive in the longer-term to ignore the facts on these charts. You may be able to compare the charts better here.

There is next to nothing on the weekly charts to suggest the market has found a permanent bottom. Could stocks continue to rally, even for a few weeks? Sure, but the odds say the gains will be fully retraced in the coming months. The list below speaks volumes about the current outlook for the markets from a longer-term perspective. Our review of the charts was done in such a way as to bend over backwards looking for bullish signals - they are just not there, nor does it look like they will evolve from the current rally.

China to 'liquidate' US Treasuries, not dollars

Ambrose in the FT

pullout:

The Chinese are clearly vexed with Washington, viewing the Fed's QE as a stealth default on US debt. Mr Li came close to calling America a basket case, saying the picture is far worse than when Ronald Reagan and Margaret Thatcher took over in the early 1980s.

Mr Li, one of three outside academics on China's MPC, described the debt deals on Capitol Hill as "just trying to by time", saying it will not be enough to stop America's "debt dynamic" turning dangerous.

Chart of the Day

With second-quarter earnings largely in the books (99% of S&P 500 companies have reported for Q2 2011), today's chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today's chart illustrates how earnings declined over 92% from its Q3 2007 peak to Q1 2009 low which brought inflation-adjusted earnings to near Great Depression lows. Since its Q1 2009 low, S&P 500 earnings have surged (up over 1000%) and currently come in at a level that is greater than what occurred at the peak of the dot-com bubble and very near what occurred at the peak of the credit bubble. It is interesting to note that the original run up in real earnings from Great Depression lows to credit bubble highs took over 78 years. The current spike has taken 26 months.

Ciovacco Capital Management

http://www.ciovaccocapital.com/sys-tmpl/ccmbmsipublic/ -- new market analyst I'm going to track for a while.  Lots of interesting charts and stuff.  Today's post (TA re. Euro spdr compared to US '08) One recent chart:

Effects of Glass-Steagall repeal

All eyes still on Europe, but once the calamity happens there, we get our turn & we have 4 TBTF banks.


from groovygirl:


"Very clearly shows the impact of the repeal of Glass–Steagall Act of 1933 (was signed into law in 1999). Internet Bubble burst early 2001 compounded by 9-11. Final creation of formal “too big to fail” banks happened in 2008-2009. Chart also shows that 1990′s were not as productive as once thought. Financial industry just consolidated, they didn’t really expand."

Truth & rumors

Dutch Finance Ministry Says Greek Default Is Unavoidable, Immediately Retracts

Moody’s has downgraded French banks Société Générale andCrédit Agricole, citing their exposure to Greek debt.

China Premier Wen Jiabao Dampens Speculation on China Saving Europe with Statement "Debt-Laden Economies Must First Put Their Own Houses in Order"

Serious recession threat for U.S.

When do you expect the economic growth to rebound and stabilise?
The slowdown pressure will definitely remain till December across the spectrum. There can only be a rebound early next year but that will largely depend on the policy decisions the large economies take in the next few weeks.

The problem is this slowdown is happening within couple of years of huge recession and the world has not recovered fully from the 2008 crisis.

And, the ECRI Weekly Leading Index from last week: WLI Ticks Up, but Growth Weakens

Europe -- CDS and yields

PIIGS credit default swap info, from MarketTicker: "CDS spreads on the PIIGS (composite), ...is up an astounding 60% today"

And from Mish, bond yields:
"On a spread-basis, the only country whose yields have collapsed is Ireland.
Italy, Belgium, France and Spain are at or close to spread highs. Also note how France is creeping up.
On 1-year spreads, Italy, Spain, and Belgium are at new highs, suggesting the ECB is losing the containment war on Italian bond yields."

past, present, future

long term GDP economist chart 

A NEW book, discussed in this week's Economics focus, by Arvind Subramanian of the Peterson Institute for International Economics argues that China’s economic might will overshadow America’s sooner than people think. Mr Subramanian combines each country’s share of world GDP, trade and foreign investment into an index of economic “dominance”. By 2030 China’s share of global economic power will match America’s in the 1970s and Britain’s a century before. Three forces will dictate China’s rise, Mr Subramanian argues: demography, convergence and “gravity”. Since China has over four times America’s population, it only has to produce a quarter of America’s output per head to exceed America’s total output. Indeed, Mr Subramanian thinks China is already the world’s biggest economy, when due account is taken of the low prices charged for many local Chinese goods and services outside its cities. China will be equally dominant in trade, accounting for twice America’s share of imports and exports. That projection relies on the “gravity” model of trade, which assumes that commerce between countries depends on their economic weight and the distance between them.

9/11/01 - 9/11/11