The chart of the stock is pointing to a possible trading opportunity however.
Another of those "triple tops" perhaps....
This is why it is important to pay attention to big picture items and market averages.
Control risk,
gh
Wednesday, October 17, 2012
Blackberry?
Research in Motion is the makers of the Blackberry device. I don't know anything about them except that they have had a hard time competing against the other devices out there.
The chart of the stock is pointing to a possible trading opportunity however.
Another of those "triple tops" perhaps....
Keep in mind that the profitability of any single stock is heavily dependent on what is going on in the broader market. This is a very important point. If the stock market as a whole is strong a breakout through previous highs will often be thought a buying opportunity. However if the general market is weak those same prices will be a selling opportunity as market participants reduce risk.
This is why it is important to pay attention to big picture items and market averages.
Control risk,
gh
The chart of the stock is pointing to a possible trading opportunity however.
Another of those "triple tops" perhaps....
This is why it is important to pay attention to big picture items and market averages.
Control risk,
gh
Tuesday, October 16, 2012
Monday, October 15, 2012
Technically speaking....
Here is an example of a technical chart pattern. I have found these to be high probability profitable over the years. Particularly in the Chinese stocks.
The timing is the trick. Too early and they are not highly probabilistic. Too late and you miss a good entry point.
Usually it is a mistake to take a position when a market is in a trading range if expecting a trend play.
However, with close observation the timing can be refined. I noticed in this pattern that there were a couple of days when the price traded below the price of a couple days previously and then recovered to the top of the range. ie, there was no panic about the price going down. If anybody sold just because the price was below a previous low, they were in small numbers, and others were buying those "low" prices.
The Chinese stocks often gap out of these ranges so I try to get at least a small position early....
This one is good so far. The Chinese market does seem to be bottoming.....
We'll see,
Control risk.
gh
The timing is the trick. Too early and they are not highly probabilistic. Too late and you miss a good entry point.
Usually it is a mistake to take a position when a market is in a trading range if expecting a trend play.
However, with close observation the timing can be refined. I noticed in this pattern that there were a couple of days when the price traded below the price of a couple days previously and then recovered to the top of the range. ie, there was no panic about the price going down. If anybody sold just because the price was below a previous low, they were in small numbers, and others were buying those "low" prices.
The Chinese stocks often gap out of these ranges so I try to get at least a small position early....
This one is good so far. The Chinese market does seem to be bottoming.....
Control risk.
gh
Sunday, October 14, 2012
Another train leaving the station
I ran across this and liked it so well I copied the link!
http://www.dailykos.com/story/2012/08/16/1118640/-Dear-Conservatives-The-train-is-leaving-the-station-You-can-hop-on-or-stay-cursing-at-the-platform
http://www.dailykos.com/story/2012/08/16/1118640/-Dear-Conservatives-The-train-is-leaving-the-station-You-can-hop-on-or-stay-cursing-at-the-platform
Saturday, October 13, 2012
Eureka!
I spend a lot of time watching markets trade. Paying attention to the sectors that are strong and those that are weak. Price and volume tell the urgency of the price direction. And taking that information in the context of recent market action, recent news, and the general discourse on CNBC and Bloomberg, as well as developments politically around the world becomes a puzzle that I seem addicted to. I am constantly trying to explain the market tone, assuming that by the time I hear the news it is baked into the market.
There has been much breathless reporting lately on the "fiscal cliff" that is approaching and how deleterious that will be for the markets and for the economy. If indeed it was anything as serious as the talking heads claim I would expect us to be in a fullfledged bear market by now.
But we aren't. The recent two week decline in the averages has been lackluster. I don't see any urgency in the selling. I notice strength in the iron ore/steel areas. I notice weakness in the long bonds. There is strength in natural gas. Continued strength in grains, cattle, hogs. Some weakness in the Nasdaq (QQQ) that I attribute to the AAPL weakness resulting from their first stumble in the mapping area. And of course the recent gold and silver strength...
Put simply, a rotation out of tech and into hard assets. Inflationary assets. Out of long bonds.
So it doesn't make sense. The fiscal cliff is a DEFLATIONARY event. A political response to paper over the cliff would be inflationary. But I don't hear much talk of fixing the fiscal situation before the presidential elections, nor would I expect to hear such.
And then I had a "Eureka!" moment..
If the Eurozone decides to move further toward issuance of a Eurobond that would explain the recent tone of the markets.
Suppose a Eurobond comes into existence. Or even is planned officially to come into existence. That will be inflationary for Europe. (This is why Germany opposes it) The sale of Eurobonds would provide a huge source of credit and liquidity for Europe. The Euro as a currency would move out from under the cloud of uncertainty it is under. It's status as a world currency would be refreshed. And for years countries around the world have lamented the lack of another world currency suitable for diversification away from the U.S. dollar. A move into the Euro by lending to the Eurozone (buying THEIR bonds) would result in a decline in the U.S. dollar as well as a decline in the U.S. Treasury bonds. This could cause the rush out of the long US treasurys that I have felt is inevitable. This money would find it's way to the stock markets and bond markets of Europe, our exporters would look better due to a strong Eurozone's purchasing power and a weak dollar. And at some point the U.S. investing public would have to give up the "safety" of their bond funds and go back to stocks, or something.....
Of course at some point the U.S. Federal Reserve and U.S. Treasury would have to defend the dollar. But their recent stance would take time to reverse...
After this idea struck I started looking around the internet and came upon something from the U.K. Parliament. The excerpt is below. I was particulary struck by the reference to a "professor Begg" who is a professor at the London School of Economics. (Look at their site) He stated that the Eurobond is almost certain to come about....
To read the full page follow the link.
http://www.publications.parliament.uk/pa/ld201012/ldselect/ldeucom/260/26007.htm
l
CHAPTER 4: OTHER POLICY RESPONSES
An expanded role for the ECB 54. Member States that enter the European Monetary Union relinquish the capacity to issue debt in a currency they control and the ability to supply liquidity in times of financial distress through their national central banks. The existence of the European Central Bank (ECB) prevents national policymakers from using monetary policy in times of strain on public finances. Outside the monetary union (as in the UK), national central banks have the ability to provide liquidity to banks and governments.
55. The ECB does not consider financial stability as part of its core mandate. As its then President, Jean-Claude Trichet, put it in a press conference in August 2011, the ECB has "only one needle on [its] compass", namely control of inflation.[49
] Frequent reference has been made by the ECB to Article 123 TFEU, which prohibits the direct purchase of debt from euro area states.[50] 56. The ECB's reluctance to take on a more interventionist role prompted EU leaders to come up with alternatives. As we have seen, they created the European Financial Stability Facility (EFSF) and the smaller European Financial Stability Mechanism (EFSM) as temporary mechanisms, with a permanent European Stabilisation Mechanism (ESM) now to come into effect in July 2012.
57. Despite these limitations, the ECB has for some months been purchasing from the secondary market government bonds of those euro area countries in financial distress, while making it clear that it sees such a role as limited, temporary and aimed at ensuring functioning markets.
58. On 30 November 2011, the ECB took part in the announcement of co-ordinated actions with the US Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan and the Swiss National Bank, to enhance central banks' capacity to provide liquidity support to the global financial system, aiming to ease strains in financial markets and thereby to mitigate the effects on the supply of credit to households and business and so help foster economic activity.[51
] 59. Then, in December 2011, the ECB announced a set of "additional enhanced credit support measures to support bank lending and liquidity in the euro area money market", including unlimited loans lasting three years to euro area banks. ECB President Mario Draghi stated that "these measures should ensure enhanced access of the banking sector to liquidity and facilitate the functioning of the euro area money market. They are expected to support the provision of credit to households and non-financial corporations."[52
] This 'Long Term Refinancing Operation' (LTRO) provided 500 European banks with a total of €489 billion in three-year loans at very low interest rates.[53] A second round is to follow at the end of February 2012: on 30 January it was reported that take-up for this operation might be twice as high as for the one in December.[54] The aim was to provide liquidity to the banking sector, thereby increasing the banks' ability and willingness to resume lending to the private sector and euro area states. 60. The escalation of the euro area crisis has led to intensified calls for the ECB to take more decisive action in the sovereign bond markets, notably through the widespread purchase of new sovereign bonds.
61. We discussed the role of the ECB with our witnesses. Sharon Bowles pointed out that the ECB was the only institution that had the ability to respond swiftly to the markets, and stressed that it had been more "market savvy" and had more foresight than other key players. In her view, the ECB had already by its actions "saved the euro".[55
] Professor Buiter made the point that "central banks are lucky institutions: they do not need equity"; that is, the ECB is not subject to capital requirements and its capacity to absorb losses is infinite if constraints on inflation are not considered.[56] 62. The fear of inflationary pressure is, in fact, a common argument against the ECB taking a more active role. This is in part a reflection of German fear of hyperinflation in light of the experience of the Weimar Republic during the 1920s. The reluctance of German leaders to countenance an enhanced role for the ECB was apparent in the evidence provided to us by the German Ambassador, who stated that "you have to keep in mind that the instruments of the Eurosystem are not designed and not intended to solve the structural problems of some [euro area] Member States. By buying certain government bonds the Eurosystem gave the [euro area] Member States enough time to address the problems where they should be addressed: at the fiscal level."[57
] Mr Amato also sounded a note of caution, arguing that the ECB could not act in the same ways as the Federal Reserve in the United States, because "you cannot be the federal reserve without a federal state".[58] 63. Welcome and necessary as they have been, a note of caution should be sounded regarding the steps taken by the ECB. It has been argued that there is little evidence as yet that the ECB's lending is encouraging banks to inject much-needed credit into the economy. Furthermore, there is nervousness that such large-scale lending could spread the disease of over-indebtedness to the ECB itself, thus "undermining the global economy's last bastion of strength", and further prolong the distortion of normally functioning markets.[59
] 64. The ECB has already taken unprecedented steps in relation to the euro area crisis through the purchase of sovereign bonds in the secondary debt markets, and more recently through a massive operation to refinance European banks. There has been pressure for the ECB to play an even greater role, which the ECB has thus far resisted, in particular citing the need to respect the Treaty provisions that bar the direct monetary financing of governments. In our view, although the ECB should not be regarded as a panacea, additional ECB intervention is likely to prove essential, at least to preserve the functioning of credit markets and thus to support economic growth, if progress is to be made in resolving the euro area crisis.
'Eurobonds' 65. We explored the idea of 'eurobonds'—bonds which are in some way mutually guaranteed by all of the euro area Member States—in our previous report.[60
] Since then there have been increased calls for their adoption as a means of calming the markets by providing liquidity to the euro area. 66. Professor Begg argued that the proposal for a 'eurobond' was attractive in the eyes of many because, by mutualising the debt, "you would have a highly rated bond ... on a par with a US Treasury bond, with a coupon that is much lower, on average. It will not be the average of the German and Italian rates; it will be very close to the German rate." He referred to the case of the United States where, despite their poor deficit and debt figures, which are higher than those for the euro area as a whole, the market was still liquid even after their credit rating was downgraded. He asserted that the Chinese would welcome European bonds as an alternative to investing in Treasury bonds in the US, and argued that other major creditors, such as the Gulf States, would see a 'eurobond' as a safe haven, especially with a strong commitment on inflation. In his view, "fully fledged eurobonds ... will almost certainly come."[61
] 67. Germany has been highly reluctant to countenance 'eurobonds'. Ambassador Boomgaarden argued that they "are not a solution for the existing crisis. If there is any debate about eurobonds, this is not the time to have it. This is something that could be the crown of an existing full fiscal union, but it would have very great moral hazard in an incomplete monetary union."[62
] Mr Amato stated that, even with the fiscal compact treaty in place, it was unrealistic to expect that Germany would accept fully fledged 'eurobonds'; and that attention should be focused on mutually guaranteed 'project bonds' for specific pan-EU projects such as the development of a European power grid.[63]
70. It remains to be seen whether a 'eurobond' could be designed in such a way as to meet the concerns of nations such as Germany, so that it will not lead to a risk of moral hazard nor lower the cost of servicing the public debt for some countries in the euro area at the expense of a considerable increase for others. The Commission's proposals are at an early stage of development, and, though 'eurobonds' could relieve pressure in the bond market, they are only likely to become a mechanism available for use in the medium to long term. The lack of reference to 'eurobonds' in the 9 December statement might be taken to suggest that their introduction remains a distant prospect. Yet the question of whether they are a necessary step towards solving the euro area crisis needs to be addressed.
Time will tell of course....
gh
There has been much breathless reporting lately on the "fiscal cliff" that is approaching and how deleterious that will be for the markets and for the economy. If indeed it was anything as serious as the talking heads claim I would expect us to be in a fullfledged bear market by now.
But we aren't. The recent two week decline in the averages has been lackluster. I don't see any urgency in the selling. I notice strength in the iron ore/steel areas. I notice weakness in the long bonds. There is strength in natural gas. Continued strength in grains, cattle, hogs. Some weakness in the Nasdaq (QQQ) that I attribute to the AAPL weakness resulting from their first stumble in the mapping area. And of course the recent gold and silver strength...
Put simply, a rotation out of tech and into hard assets. Inflationary assets. Out of long bonds.
So it doesn't make sense. The fiscal cliff is a DEFLATIONARY event. A political response to paper over the cliff would be inflationary. But I don't hear much talk of fixing the fiscal situation before the presidential elections, nor would I expect to hear such.
And then I had a "Eureka!" moment..
If the Eurozone decides to move further toward issuance of a Eurobond that would explain the recent tone of the markets.
Suppose a Eurobond comes into existence. Or even is planned officially to come into existence. That will be inflationary for Europe. (This is why Germany opposes it) The sale of Eurobonds would provide a huge source of credit and liquidity for Europe. The Euro as a currency would move out from under the cloud of uncertainty it is under. It's status as a world currency would be refreshed. And for years countries around the world have lamented the lack of another world currency suitable for diversification away from the U.S. dollar. A move into the Euro by lending to the Eurozone (buying THEIR bonds) would result in a decline in the U.S. dollar as well as a decline in the U.S. Treasury bonds. This could cause the rush out of the long US treasurys that I have felt is inevitable. This money would find it's way to the stock markets and bond markets of Europe, our exporters would look better due to a strong Eurozone's purchasing power and a weak dollar. And at some point the U.S. investing public would have to give up the "safety" of their bond funds and go back to stocks, or something.....
Of course at some point the U.S. Federal Reserve and U.S. Treasury would have to defend the dollar. But their recent stance would take time to reverse...
After this idea struck I started looking around the internet and came upon something from the U.K. Parliament. The excerpt is below. I was particulary struck by the reference to a "professor Begg" who is a professor at the London School of Economics. (Look at their site) He stated that the Eurobond is almost certain to come about....
To read the full page follow the link.
http://www.publications.parliament.uk/pa/ld201012/ldselect/ldeucom/260/26007.htm
l
An expanded role for the ECB 54. Member States that enter the European Monetary Union relinquish the capacity to issue debt in a currency they control and the ability to supply liquidity in times of financial distress through their national central banks. The existence of the European Central Bank (ECB) prevents national policymakers from using monetary policy in times of strain on public finances. Outside the monetary union (as in the UK), national central banks have the ability to provide liquidity to banks and governments.
55. The ECB does not consider financial stability as part of its core mandate. As its then President, Jean-Claude Trichet, put it in a press conference in August 2011, the ECB has "only one needle on [its] compass", namely control of inflation.[49
] Frequent reference has been made by the ECB to Article 123 TFEU, which prohibits the direct purchase of debt from euro area states.[50] 56. The ECB's reluctance to take on a more interventionist role prompted EU leaders to come up with alternatives. As we have seen, they created the European Financial Stability Facility (EFSF) and the smaller European Financial Stability Mechanism (EFSM) as temporary mechanisms, with a permanent European Stabilisation Mechanism (ESM) now to come into effect in July 2012.
57. Despite these limitations, the ECB has for some months been purchasing from the secondary market government bonds of those euro area countries in financial distress, while making it clear that it sees such a role as limited, temporary and aimed at ensuring functioning markets.
58. On 30 November 2011, the ECB took part in the announcement of co-ordinated actions with the US Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan and the Swiss National Bank, to enhance central banks' capacity to provide liquidity support to the global financial system, aiming to ease strains in financial markets and thereby to mitigate the effects on the supply of credit to households and business and so help foster economic activity.[51
] 59. Then, in December 2011, the ECB announced a set of "additional enhanced credit support measures to support bank lending and liquidity in the euro area money market", including unlimited loans lasting three years to euro area banks. ECB President Mario Draghi stated that "these measures should ensure enhanced access of the banking sector to liquidity and facilitate the functioning of the euro area money market. They are expected to support the provision of credit to households and non-financial corporations."[52
] This 'Long Term Refinancing Operation' (LTRO) provided 500 European banks with a total of €489 billion in three-year loans at very low interest rates.[53] A second round is to follow at the end of February 2012: on 30 January it was reported that take-up for this operation might be twice as high as for the one in December.[54] The aim was to provide liquidity to the banking sector, thereby increasing the banks' ability and willingness to resume lending to the private sector and euro area states. 60. The escalation of the euro area crisis has led to intensified calls for the ECB to take more decisive action in the sovereign bond markets, notably through the widespread purchase of new sovereign bonds.
61. We discussed the role of the ECB with our witnesses. Sharon Bowles pointed out that the ECB was the only institution that had the ability to respond swiftly to the markets, and stressed that it had been more "market savvy" and had more foresight than other key players. In her view, the ECB had already by its actions "saved the euro".[55
] Professor Buiter made the point that "central banks are lucky institutions: they do not need equity"; that is, the ECB is not subject to capital requirements and its capacity to absorb losses is infinite if constraints on inflation are not considered.[56] 62. The fear of inflationary pressure is, in fact, a common argument against the ECB taking a more active role. This is in part a reflection of German fear of hyperinflation in light of the experience of the Weimar Republic during the 1920s. The reluctance of German leaders to countenance an enhanced role for the ECB was apparent in the evidence provided to us by the German Ambassador, who stated that "you have to keep in mind that the instruments of the Eurosystem are not designed and not intended to solve the structural problems of some [euro area] Member States. By buying certain government bonds the Eurosystem gave the [euro area] Member States enough time to address the problems where they should be addressed: at the fiscal level."[57
] Mr Amato also sounded a note of caution, arguing that the ECB could not act in the same ways as the Federal Reserve in the United States, because "you cannot be the federal reserve without a federal state".[58] 63. Welcome and necessary as they have been, a note of caution should be sounded regarding the steps taken by the ECB. It has been argued that there is little evidence as yet that the ECB's lending is encouraging banks to inject much-needed credit into the economy. Furthermore, there is nervousness that such large-scale lending could spread the disease of over-indebtedness to the ECB itself, thus "undermining the global economy's last bastion of strength", and further prolong the distortion of normally functioning markets.[59
] 64. The ECB has already taken unprecedented steps in relation to the euro area crisis through the purchase of sovereign bonds in the secondary debt markets, and more recently through a massive operation to refinance European banks. There has been pressure for the ECB to play an even greater role, which the ECB has thus far resisted, in particular citing the need to respect the Treaty provisions that bar the direct monetary financing of governments. In our view, although the ECB should not be regarded as a panacea, additional ECB intervention is likely to prove essential, at least to preserve the functioning of credit markets and thus to support economic growth, if progress is to be made in resolving the euro area crisis.
'Eurobonds' 65. We explored the idea of 'eurobonds'—bonds which are in some way mutually guaranteed by all of the euro area Member States—in our previous report.[60
] Since then there have been increased calls for their adoption as a means of calming the markets by providing liquidity to the euro area. 66. Professor Begg argued that the proposal for a 'eurobond' was attractive in the eyes of many because, by mutualising the debt, "you would have a highly rated bond ... on a par with a US Treasury bond, with a coupon that is much lower, on average. It will not be the average of the German and Italian rates; it will be very close to the German rate." He referred to the case of the United States where, despite their poor deficit and debt figures, which are higher than those for the euro area as a whole, the market was still liquid even after their credit rating was downgraded. He asserted that the Chinese would welcome European bonds as an alternative to investing in Treasury bonds in the US, and argued that other major creditors, such as the Gulf States, would see a 'eurobond' as a safe haven, especially with a strong commitment on inflation. In his view, "fully fledged eurobonds ... will almost certainly come."[61
] 67. Germany has been highly reluctant to countenance 'eurobonds'. Ambassador Boomgaarden argued that they "are not a solution for the existing crisis. If there is any debate about eurobonds, this is not the time to have it. This is something that could be the crown of an existing full fiscal union, but it would have very great moral hazard in an incomplete monetary union."[62
] Mr Amato stated that, even with the fiscal compact treaty in place, it was unrealistic to expect that Germany would accept fully fledged 'eurobonds'; and that attention should be focused on mutually guaranteed 'project bonds' for specific pan-EU projects such as the development of a European power grid.[63]
70. It remains to be seen whether a 'eurobond' could be designed in such a way as to meet the concerns of nations such as Germany, so that it will not lead to a risk of moral hazard nor lower the cost of servicing the public debt for some countries in the euro area at the expense of a considerable increase for others. The Commission's proposals are at an early stage of development, and, though 'eurobonds' could relieve pressure in the bond market, they are only likely to become a mechanism available for use in the medium to long term. The lack of reference to 'eurobonds' in the 9 December statement might be taken to suggest that their introduction remains a distant prospect. Yet the question of whether they are a necessary step towards solving the euro area crisis needs to be addressed.
Time will tell of course....
gh
Friday, October 12, 2012
Markets drift lower
Recent declines in the stock markets have been met with breathless coverage by the talking heads. My take on the volume and price moves is a decline without urgency. Of course at some point there will be a flurry of activity as the weak hands throw in the towel. Then the real test will begin.
But many are calling the recent tops in the stock and precious metals markets and the energy markets the start of a precipitous decline. My experience with major market tops is that they take a long time to form and are characterized by a sideways trend with above average volume, particularly on the declines. I haven't seen that so far in the last couple of weeks. I see declines below the previous day on lower volume than the previous days. The markets usually press this pattern until they get some selling volume, then those waiting for that volume will buy.
And then the process may repeat for two or three cycles before there is a definitive top or a continuation of the trend.
Given that much talk is of the coming "fiscal cliff" the lack of volume is unwarranted if there is to be a precipitous and sustained decline.
I feel that we are on the verge of a sustained decline in the U.S. dollar with the inflation of assets inherent in that.
But we may have to do a gut check in silver. These markets nearly always go for the easy money. And there are probably a lot of traders who will sell below the recent low... So other traders will shoot for those orders....
SLV:
Meanwhile Chesapeake keeps pushing against the ceiling... Recent continued gains in UNG/natgas prices will push these producers up.... CHK, APA, GASL, APC
Chesapeake:
control risk, (don't let your losses get big)
gh
But many are calling the recent tops in the stock and precious metals markets and the energy markets the start of a precipitous decline. My experience with major market tops is that they take a long time to form and are characterized by a sideways trend with above average volume, particularly on the declines. I haven't seen that so far in the last couple of weeks. I see declines below the previous day on lower volume than the previous days. The markets usually press this pattern until they get some selling volume, then those waiting for that volume will buy.
And then the process may repeat for two or three cycles before there is a definitive top or a continuation of the trend.
Given that much talk is of the coming "fiscal cliff" the lack of volume is unwarranted if there is to be a precipitous and sustained decline.
I feel that we are on the verge of a sustained decline in the U.S. dollar with the inflation of assets inherent in that.
But we may have to do a gut check in silver. These markets nearly always go for the easy money. And there are probably a lot of traders who will sell below the recent low... So other traders will shoot for those orders....
SLV:
Chesapeake:
gh
Wednesday, October 10, 2012
U.S. National Debt: Who gets the blame?
I get so tired of all this talk of the tax and spend Democrats. The facts of the matter are that Democrats have been more fiscally conservative than the Repubs.
It was in the Ronald Reagan era that the national debt took off to the upside. And the private debt did the same. Asset prices did the same. You can substitute the phrase "asset prices" with " inflation". It is the same.
Everything went up except for the U.S. dollar and the savings of the U.S. citizens.
And starting there in that period of time began the practice of government bailouts of failing banks. And it is so because precisely at the time of the onset of "laizzez faire" economics, the volatility of the financial sphere and the economy began.
At that time the public was sold on the idea of tax cuts. They were never sold on the idea of safety net cuts. That doesn't sell so good. And with good reason. People know that they need the retirement and medical help from the large entitlement programs. The debt creation and the inflation has removed all possibility of actually saving for retirement. In a system that depends on inflation to have growth it is a necessity for the present day taxes to pay for the present day safety nets. There is no way to "set aside" money when inflation is constant.
Add to that the war on labor. Constant loss of real purchasing power made a private debt binge all but inevitable.
Give that some thought.
A link:
http://zfacts.com/p/318.html
A chart:
gh
It was in the Ronald Reagan era that the national debt took off to the upside. And the private debt did the same. Asset prices did the same. You can substitute the phrase "asset prices" with " inflation". It is the same.
Everything went up except for the U.S. dollar and the savings of the U.S. citizens.
And starting there in that period of time began the practice of government bailouts of failing banks. And it is so because precisely at the time of the onset of "laizzez faire" economics, the volatility of the financial sphere and the economy began.
At that time the public was sold on the idea of tax cuts. They were never sold on the idea of safety net cuts. That doesn't sell so good. And with good reason. People know that they need the retirement and medical help from the large entitlement programs. The debt creation and the inflation has removed all possibility of actually saving for retirement. In a system that depends on inflation to have growth it is a necessity for the present day taxes to pay for the present day safety nets. There is no way to "set aside" money when inflation is constant.
Add to that the war on labor. Constant loss of real purchasing power made a private debt binge all but inevitable.
Give that some thought.
A link:
http://zfacts.com/p/318.html
A chart:
Tuesday, October 9, 2012
Weakened currencies
And here is an article from the Economist regarding the worldwide move by governments to weaken their own currencies. An about face from an earlier time....
http://www.economist.com/node/21564210
enjoy
http://www.economist.com/node/21564210
nat gas news
DJ U.S. GAS: Futures Surge Back into Positive Territory
--Natural-gas rebounds as volume jumps in midday trading
--Gas futures recently up 3.4c to $3.437
--Some see drop in storage surplus ahead
By Jerry A. DiColo
NEW YORK--Natural gas futures rebounded from early losses Tuesday in a swift midday reversal, as investors resumed bullish bets after a brief pullback in prices.
Natural gas for November delivery was recently up 3.4 cents, or 1%, at $3.437 a million British thermal units on the New York Mercantile Exchange after falling as low as $3.346/MMBtu earlier in the session.
The bounce came just before 12:30 p.m. EDT when a surge in trading volume lifted gas prices from $3.36/MMBtu to above $3.40/MMBtu in just a few minutes. Volume shot above 1,000 contracts per minute as prices rose after holding near 100 contracts for most of session's earlier trading.
"You're finding a scenario where people will buy the dips," said Bob Yawger, director of energy futures at Mizuho.
Warmer-than-normal temperatures are expected across much of the Midwest and East Coast over the next two weeks, according to the reports of private forecasters, which initially sent prices lower Tuesday.
Warm weather this time of year typically keeps demand for natural gas low. Gas is used to heat more than half of U.S. homes, and many others use electric heat from gas-fired utilities. Moderate temperatures mean homes and businesses don't need to crank up their heaters.
But after a cool spell that kept temperatures below normal in recent days, some investors may be anticipating a lower-than-normal storage injection in Thursday's data, said Mr. Yawger.
U.S. storage inventories stand at 8.3% above the five-year average for this time of year, well below gas-storage levels that ended March roughly 60% above the five-year average for that time of year.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 09, 2012 13:44 ET (17:44 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.- - 01 44 PM EDT 10-09-12
Pay note to the trend in nat gas supplies/stocks.......
Volatile weather due to climate change? Hotter hots and colder colds...?
APC APA GASL UNG
Is the train leaving the station?
gh
Monday, October 1, 2012
Coffee?
I've noticed some interesting action in a coffee ETF that goes by the ticker JO. The first thing I noticed were the declines on low volume. Whenever I try to pick a bottom that is the first thing that I look for. To me it means that the selling is being done by habit, and that the urgency to sell is no longer there. It is usually after other bottom pickers have given up after a long decline. The lack of volume also has a tendency to make any big shorts nervous. They need volume to get out of their positions and a short covering rally can be sharp and vicious. (From a short's perspective)
The second thing I look for in a potential bottom is increased volume on the rallies. This may just be short covering, but coming after the declines in volume I would consider short covering the first part of a longer term rally.
For whatever reasons this chart of JO looks promising. It may be part of a coming inflationary trend.
The chart:
As always, put on a position slowly and on signs of continued strength. (To control risk)
UNG looking good. There will most likely be some consolidation or pullback from the $22.40 area here. But the next breakout MAY be after that. I would add some more after a rally above any consolidation of two weeks or more here...... Control risk. again.
gh
The second thing I look for in a potential bottom is increased volume on the rallies. This may just be short covering, but coming after the declines in volume I would consider short covering the first part of a longer term rally.
For whatever reasons this chart of JO looks promising. It may be part of a coming inflationary trend.
The chart:
UNG looking good. There will most likely be some consolidation or pullback from the $22.40 area here. But the next breakout MAY be after that. I would add some more after a rally above any consolidation of two weeks or more here...... Control risk. again.
gh
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