Hi, welcome
wiedermal to my Gloom & Doom Report.
The bearish chart of the week due to the Existing Home Sales. Better still, the stock turnover rate or its reciprocal, the Months Supply. Meaning, enough for as many months of inventory currently for sale pending, or how long a house is situated very close to camp. (Red line, right scale, inverted)
blue links, the development of house prices (annualized)
The sharp rise was not due to the stock, but by the collapse of demand. The latter is likely to continue though. The weekly Mortgage applications continue to show no recovery. Probably the most predictable consequence, there if the relationship between excess supply and prices will remain: a renewed violent collapse in house prices in the U.S..
Other story that haunts me straight through the head, is the quantitative easing program of the Fed. 've Written this several times.
Zb at 8.5:. http://franzlischka.blogspot.com/2010/05/mein-ublicher-senf-zur-aktuellen.html
5.4:. http://franzlischka.blogspot.com/2010/ 04/mein-ublicher-senf-zur-aktuellen.html
7.3. http://franzlischka.blogspot.com/2010/03/mein-ublicher-senf-zur-aktuellen.html (below)
Am 31.3. ended the program. In the last Fed meeting on 10 August was a momentous decision taken now. The stock of bonds in the balance sheet of the Fed should be kept constant. However: The MBS bonds that are repaid are now replaced by government bonds. The result is that the MBS spread, which was returned in June and July, in the expectation of a new QE program again is in accordance with this decision again increased significantly
Volatility (red: VIX) began after the Fed-meeting rising, falling stock prices.
The worst of the decline of risk capital, but once again caught the government bond the European periphery countries. The spread of Greece is in the 10-year sector almost back to where he stood at the height of the crisis in May, who is from Ireland, even on a new all-time high.
I have to say is not really clear to me why Bernanke made this decision, by which increased the risk premium, while the boom in U.S. government bonds was further fed on. If he wanted to keep the Fed's balance sheet more liquid bonds in order to shorten the event of a planned exit strategy for a resurgence of inflation faster the balance sheet, without him the consequences of the replacement of risky assets by (theoretically) "Riskless-assets" were aware of? Or it is becoming clear that the greatest danger is not a renewed recession, which in any event can hardly avoid, but a crash in the Treasury market? China, the largest investor in U.S. bonds has reduced its holdings in recent months. A day could have the consequences.
the end, however, a slightly more optimistic outlook in the short term. Although on 12 August triggered the so-called Hindenburg Omen and 20 August is confirmed. (Who has not heard of them, just googled times. The Webnachrichten are currently full of it.) The likelihood of a crash within the next 1 or 2 months has increased significantly. On the other hand, has just intensive reporting on the atmosphere can fall on such a negative level, that an immediate crash is unlikely. Difference of bulls minus bears in the AAII weekly sentiment survey of private investors from Thursday (Blue):
At this level, this is more of a clear bullish signal.
As negative for the markets in principle I am also short a clear short squeeze is conceivable, as he was on Friday to see even a small scale.
And so again until the next time.
Greetings
Franz
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