Friday, July 8, 2011
Thursday, July 7, 2011
Tuesday, July 5, 2011
Headlines
Treasuries Decline on Concern Inflation Will Quicken; Two-10 Spread Widens -- great read!
The Political DynastiesThat Destroyed Greece, And The Real Reason The Country Is Such A Mess
America needs to worry about the contrast between its attitude to China and Europe’s
Global "train wreck" coming
The Political DynastiesThat Destroyed Greece, And The Real Reason The Country Is Such A Mess
So, with good reason, Greek's simply don't have faith that their fellow citizens are contributing and they don't trust the system. This distrust is cultural, pervasive and has infected the entire economy- Transparency International recently rated Greece the most corrupt country in Europe (along with Bulgaria and Romania).The Dow-Gold Ratio
For some perspective on the long-term performance of the stock market, today's chart presents the Dow priced in another global currency – gold (i.e. the Dow / gold ratio). For example, it currently takes less than a mere eight ounces of gold to 'buy the Dow' which is considerably less than the 44.8 ounces it took back in 1999. Priced in gold, the Dow has been in a massive 11-year bear market. Recently, the Dow (priced in gold) stopped declining for long enough to break above its six-year, accelerated downtrend channel. However, shortly after the break out, the Dow (priced in gold) pulled back to post-crisis lows.
America needs to worry about the contrast between its attitude to China and Europe’s
A report by the Asia Society in Washington, DC, says that scaremongering about China could lead America to forfeit a share of $1 trillion-worth of outward Chinese direct investment by 2020.
More of that cash is instead heading to Europe. Investment bankers there are now sure to dial Chinese clients if they hear that a firm is a possible bid target. Chinese banks are rapidly increasing their presence in Europe. Mainlanders are snapping up central London residences. Chinese direct investment abroad has increased faster in Europe than in any other region.
Why There's A 97% Chance Of A Big Market Rally (click for chart)
Indeed, the model fell into “panic” territory a week ago and continued to be in panic this week despite the market’s rally (see Figure 1), which statistically argues that there is a roughly 90% probability share prices are higher in six months and a 97% chance of gains in 12 months. On average, stocks appreciate 8.9% in six months and about 17.3% in a year when reviewing data looking back about 25 years versus random outcomes of market gains in the 75% range of likelihoods when studying the same time period. Note that this proprietary metric fell into panic late in 2008 and again in the summertime last year both in front of healthy market moves to the upside. Conversely, it surged into euphoria in both 2007 and 2008, implying forward equity market weakness as well.
Not really sure about this one (plus, read the comments on the post) and compare to Buffet's #1 metric
“It’s very unlikely that we will see a significant further decline,” Donovan said yesterday on CNN. “The real question is when will we start to see sustainable increases. Some think it will be as early as the end of this summer or this fall.”
I've heard that one before
Global "train wreck" coming
Professor McKibbin told the Melbourne Institute conference dozens of European countries now had gross government debts on track to exceed 60 per cent of GDP. ''Japan is forecast to be 200 per cent of GDP, the US is forecast to be over 100 per cent of GDP,'' he said.
''At zero interest rates that can be sustained, but at 5 per cent interest rates countries have to put aside 5 per cent of their GDP every year just to service the debt. That is not sustainable. ''Already consumers aren't spending and investors aren't spending because of the tax increases that are in prospect.
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