Sunday, November 28, 2010

Programme For Church Opening

my usual mustard on the current market situation 28.11.10

Hi,
as your notes, I've become lately read much lazier. I hope you read all the more attentive the few comments I read lately.

PIIGS The crisis seems like the last comment is concerned, to escalate. And faster than I would have thought. That the effect of the proposed rescue package to the Ireland markets fizzled out so quickly is frightening. If Spain should now tilt, the game appears to be off. In contrast to Ireland and Portugal, it would be for a Rescue probably too large. To do it yet, you have missed any powder. The targeted € 750 billion in May, although designed so that Spain is just starting. But then the crisis that ends exactly at where the politics out of money, is surely hard unlikely. And then it becomes dangerous to the markets. December is indeed historically anything but a crash month, and even a few days ago I would have thought that, accordingly, would escalate the situation until after the year, but maybe this year after a sensational September and October (the classic crisis months) this time anyway everything else. Optimism is in the light of the crisis potential in any case still very high, probably too high (weekly AAII sentiment survey of U.S. retail investors, the difference between "bulls" and "Bear"):


Since the announcement of the new QE-Programme of the Fed now several weeks have flown by. Time to first take stock. And there seems to Bernanke's washed to inflate stock prices and other risky assets, after a seemingly brief success but not to work. Instead, the situation seems to be what I've written a couple of times (eg at 29.8:. http://franzlischka.blogspot.com/2010/08/mein-ublicher-senf-zur-aktuellen_29.html , there are also links to my earlier QE-comment): For an inflation of Risky Assets purchased Bernanke simply take the wrong stuff, that is "safe" as once Satatsanleihen "risky" MBS. Here is an update of the MBS spreads (so that market that has been manipulated mainly by the 1st QE-Programme). The MBS spreads rise lately to new yearly highs. (Green: those decisions that led to a compression of spreads, red: those which led to a widening of spreads)


This also affects the stock market from:

interesting (or scary) again as in previous comments by the QE-related with €-government spreads (both 10-year government bonds, spread to Germany):


in the quantitative easing more than experienced Bank of Japan in their last meeting the purchase of corporate bonds and equities (using ETFs) decided. At some point, Bernanke will likely follow suit. Until then, his desire for asset price inflation will rise but not well-being.

As for the economic data, sees the camp in the U.S. are very different. Very strong Philly Fed, but catastrophic Empire State Manufacturing index, a very positive initial claims, but atrocious Durable Goods Orders, and a further weak housing market. The last few weeks provided very strong swings in the data, but in both directions. Let's see what brings the ISM on Wednesday. For me the most important indicator, but I look as ever more on the sub-indicators as the headline. (Data's on www.ism.ws) The further development in the PIIGS crisis is likely in the near future but superimpose anything anyway.

So until next time

Greetings
Franz

Saturday, November 6, 2010

What Is A Good Side Dish For Beef Tenderloin

my usual mustard on the current market situation 06:11:10


Hi, got the last weeks rather have a small hiatus inserted, while Uncle Ben has made his helicopter to go. His efforts, he seems to be actually completed with success have to. Respect! Being decisive would not so much the program itself, rather than its justification the day off was this:
http://www.washingtonpost.com/wp-dyn/content/article/2010/11/03/AR2010110307372.html?hpid = topnews
Most attention here has undoubtedly received the following sentence: spending "and higher stock prices will boost consumer wealth and help increase confidence, Which can then track. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will support further economic expansion. " Bernanke has made it clear that he, the asset prices, particularly wants to inflate stock prices. No wonder the share prices after an initial negative deflection directly following the Fed meeting, a day later exploded after the article. If the man wants to inflate with the largest printing press, stock prices, then you can fight it hard. Not least after the Japanese central bank decided on Thursday then you own QE program, while also buy government bonds in addition to equal shares. Whether the whole is true or mad holds, for now sits Uncle Ben has the upper hand and determines the action, (even if the central banks in emerging markets now increasingly a problem with the food prices and now run a more restrictive policy.) There seems every other analysis, whether the shares should go down now, or almost meaningless.

A few comments from me but it's then.

This week I had to think back to an old comment of mine about a year ago. Have then searched my blog (was not that easy this time I was even more zealous in the discs, as I noted.) And I've found on 21/11/2009:
http://franzlischka.blogspot.com/2009/11/ my-usual-mustard-to-aktuellen_20.html (last 3 charts at the bottom)
possessions at the time, even before I somewhere written by someone the subject PIIGS or even Greece in particular read the following lines: "Even a special theme, but it has the potential to hit big waves: At the time yes all Risky Assets generally seem to know only one direction: up. Especially in the credit area. When a market eventually does come under pressure, which in this context at least, remarkable. And since shown that the bond market, the budget concerns in Greece at present obviously takes more than seriously.
The fear of a collapse of the monetary union as the beginning of the year seems completely gone. Why is Greece but currently under so much pressure? Is this just a temporäreres topic, or the beginning of a new Euro-crisis "

Will not start Selbtbeweihräucherung big now and say:" Yes, I saw it first. "war grad mal time thinking out loud without having a clue about the dimension. As Marc Faber said many times: If you say much (or writes to the case) something like this will be correct. ;)
No, the reason why I find the rauskrame now because me the same combination struck again this week, but much more extreme. After QE program it said very clearly: On Risk. The U.S. dollar was weaker, thus won the carry trade, and virtually all risky assets increased dramatically. Just something did not fit so the picture, and they were just as then again a year ago, the government bond spreads:

If everything is rising, but at the same time break off the Irish, Greek, etc. Bonds, then this may mean no good. The amendment of the Treaty of Lisbon by a paragraph, the future also provides for the restructuring of government bonds, has made clear the risk of the bonds. Although it may be so easily have been a surprise. Since increases in me the fear that we are an end game stage in the move PIIGS story. At least at the moment shows that the situation may worsen here, as without it in the spring of turmoil in international financial markets comes. Even the euro continues to rise significantly. As is exemplified by many a German politician to ask the question whether Greece (and in future certainly Ireland) must continue to help out with tax money or whether it is time to put an end to the whole and to announce the restructuring. Sure, there has been a 3-year commitment, but one can make more and more conditions, then in the country are no longer politically feasible. Well, we'll see. At any rate - along with the fear of a new food crisis in developing countries due to price inflation as in the year 2008 - probably the biggest trouble spot right now and the story that Bernanke's money printing machine will not get a handle on.

Other history: economic data. Because there was this week a few. The most important date for me always the first of the month at the ISM. He was surprisingly strong. And most important: He showed a huge increase in the New Order component. The other sub-sectors, which I usually look were less positive. Further decline in the 2nd Order component (backlog of orders), renewed growth in the Customers' Inventories and the continued very high inventories component (53.9 for inventories is historically very high). But the new orders ... Wow, I can say. Where does the sudden strength? Well, I think the cause is at the end of the report, with 2 components, which I usually throw a wink at all and I have noticed this time, however, due to their massive eruptions: Import / export. Yes, the very weak dollar makes itself felt. Whether Bernake's QE program itself, which brings is very doubtful. What he has however been achieved is a strong U.S. dollar devaluation, and which brings the U.S. now has a regular competitive advantage.

The U.S. economic growth rates in the 3rd Quarter were disappointing: 2% pa, of which 1.4% alone from the stock setup. Subtracting from the rest of it from yet the growth of government economic programs, the result would be negative. But the 4th
Quarter should suddenly show strength. Douple dip is really the time being postponed again. But: if the U.S. wants rausexportieren from the crisis without increasing final demand in the major economies of the world, then the growth must be missing elsewhere.
showed on Friday at the German industrial orders for September, a decline of 4%, the sharpest decline since January 2009. The series is admittedly very volatile, even the annual change (red, right scale), the carrier will respond accordingly, is very unsteady. If the picture but have not improved in October, the German economic miracle could soon threaten one off. The OECD leading indicators predict anything too good.



yet another story, actually an ongoing issue, but times quickly be dated: the U.S. housing market. . Here now show the first house price indicators (blue and green, red, the amount of time it takes for an average sale, right scale, inverted See the first chart from 29.8: http://franzlischka.blogspot.com/2010. / 08/mein-ublicher-senf-zur-aktuellen_29.html ) of what the more notable, but slow-reacting Case-Shiller index (comes with two months lag and is in fact a 3-month smoothing, which very few know) will show up sooner or later: The U.S. Immobileinpreise go south again. As will be Bernanke's money printing machines need to run even stronger, whether to inflate the prices:


So and that's wiedermal.
Until next time!
Greetings
Franz