Archive for the ‘China’ Category
Posted by Larry Doyle on March 13th, 2009 10:35 AM |
If I go to a comedian, I look to be entertained. I do not look for piercing insights on global issues. Alternately, when I want cogent financial analysis I don’t go to an entertainer. The following photo and captions from the New York Post are self-explanatory:
If you want to review a topic which is less entertaining, but much more critically important in navigating the economic landscape, let’s take a quick look at how the Chinese export engine is humming. Uh-oh!! Chinese exports in February dropped almost 26% from a year earlier. That decline displays an acceleration in the 17% drop experienced in January. Thank you John Mauldin, one of our Economic All-Stars (left sidebar), for providing us this less than entertaining but extremely insightful perspective, China: Exports Drop.
LD
Tags: Chinese exports, exports, Jim Cramer, John Mauldin, Jon Stewart, New York Post
Posted in China, Commerce, Current Affairs, Economy, Foreign Affairs, Risk, Wall Street | 2 Comments »
Posted by Larry Doyle on March 5th, 2009 6:37 PM |
Some of my favorite movies are The Sting, Rocky, and Papillon. I could watch those films a few times a year and appreciate the plot, character development, and climax.
In that same vein, for newer readers here at Sense on Cents, I want to highlight a piece I wrote on November 12, 2008. I believe this piece is as clear cut an historical explanation as I have seen to highlight the background of the debacle on Wall Street which precipitated this economic disaster. I also find it interesting as to my comments about potential market reaction to an aggressive tax/spend program under President Obama and a Democratic Congress.
I hope you find this article informative and enlightening: (more…)
Tags: AIG, asset-backed market, Bank of America, Bear Stearns, Bernanke, capital, CDS, Centex, China, collateralized mortgage obligation, Countrywide, Fannie Mae, financial quants, Freddie Mac, Hedge Funds, JP Morgan, Lehman Bros, Merrill LYnch, National City Bank, originate to distribute, Paulson, Pulte Homes, rating agencies, Ryland, SEC, Sheila Bair, walll Street
Posted in American Consumers, Auto Industry, Bad Bank, Bailout, Bank of America, Banking Institutions, Barack Obama, Barney Frank, Ben Bernanke, Business, China, Christopher Dodd, Commerce, Congress, Wall Street | 5 Comments »
Posted by Larry Doyle on March 5th, 2009 12:45 PM |
I had written that yesterday’s 2-3% upward move in the market was very likely a Dead Cat Bounce. Well, that cat is burrowing further into the ground as markets have more than fully retraced yesterday’s upward move and are making new lows. This type of price action, known as lower highs and lower lows, confirms bearish trends.
I hope our readers know that all financial information you could possibly want is on the Market Data tab on the Sense on Cents header. That resource provided by the Wall Street Journal is not only a great way to get a quick and comprehensive snapshot of all sectors of the market, but also a great way to keep your brokers and financial planners on their toes and working for you!!
Let’s take a quick look at the markets and then I will offer some commentary. (more…)
Tags: 2nd liens, banks, bonds, brokers, China, commercial real estate, commodities, corporate bonds, financial information, financial planners, GE Capital, General Electric, insurance companies, loan modification, market data, municipal bonds, Nouriel Roubini, stocks, trends, Wall Street Journal
Posted in China, Commerce, Congress, Current Affairs, Deficit, Economic Stimulus, Economy, Education, Equity Markets, Housing Crisis, Infrastructure, Insurance Industry, Mortgage Crisis, Mortgages, Real Estate, Unemployment, Wall Street | 1 Comment »
Posted by Larry Doyle on March 4th, 2009 6:31 AM |
Stocks in Asia rose on the heels of a report that China’s Wen May Announce New Stimulus Measures to Revive Growth
With China allocating this capital to a new stimulus, will that lead to lessened appetite for U.S. Treasury debt? In overnight trading, Treasuries Drop on Potential $60 Billion Note Sale Next Week.
In other market making news, the shine has come off gold somewhat. I had cautioned that I do not play in gold because of the large number of speculative traders. Gold dropped 3% overnight and is back to $910/oz.
The U.S. dollar continues to move higher versus the Japanese yen and is back close to par, 100 yen for $1 dollar.
I remain in the camp that the bond market will continue to be pressured by the global demand for capital.
One story that also bears watching is the “plundering” of Merrill Lynch. In breaking news the WSJ reports how Merrill Lynch paid a large number of individuals outrageous sums at the end of 2008. Merrill’s $10 Million Men highlights the details. If I am John Thain, I’m not sleeping well!!
LD
Tags: Asia, China, equities, gold, Merrill LYnch, stimulus, U.S. Treasury
Posted in China, Deficit, Government funds, Mortgage Crisis, Stimulus Plan, Wall Street | No Comments »
Posted by Larry Doyle on February 26th, 2009 4:30 PM |
I have always been intrigued by Germany. From the history of the republic, to the wars, the division and reunification, Berlin, Munich, the food, the beer — there is a lot going on there. I had the good fortune of spending a college semester in Freiburg, which is in the southwestern corner of the country. “Wie geht’s,” meaning “how are you,” evokes many pleasant memories. The education both inside the classroom and out was fabulous.
There is little doubt that Germany carries the most weight within the European Union. Germany suffered massive inflation after the Weimar Republic and the fear of hyperinflation is deeply embedded in their culture. Given my experience and interest, I watch developments there fairly closely. (more…)
Tags: beer, Berlin, China, Clinton, college, Germany, Munich, Russia, Technology, Trade, Wie Geht's
Posted in Auto Industry, China, European Union, General, Germany, Hillary Clinton, Obama Administration, Russia, Technology, Tim Geithner, Trade | No Comments »
Posted by Larry Doyle on February 20th, 2009 6:00 AM |
These are clearly the times that try our souls. In an attempt to bring a measure of perspective to the markets and economy, let me review some month-to-date stats for February and add economic commentary:
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DJIA
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-9%
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S&P 500
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-5.7%
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Nasdaq
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-2.3%
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Bonds
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Flat to -10%, depending on sector
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$/Yen
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94.14 vs.89.81
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$/Euro
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1.262 vs. 1.280
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Oil
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38.78 vs. 41.60
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Gold
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975 vs. 929
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There really has been no place to hide. Why? Very simply because in a “massive margin call” (selling assets purchased with borrowed money) when debt cannot be refinanced, all assets are “on sale” in order to pay down debts!!
We have achieved the objective we were looking for in the DJIA and are about 5% away from the objective on the S&P. If there are people who were outright short the market “nobody ever went broke taking a profit.” The question is where do we go from here? In order to address that question, we need to break it down into its component parts. (more…)
Posted in American Consumers, Bad Bank, Bank Nationalization, Banking Institutions, Barack Obama, China, Current Affairs, Economic Stimulus, Economy, General, Global Finance, Hedge Funds, Obama Administration, Sheila Bair, Tim Geithner | 1 Comment »
Posted by Larry Doyle on February 18th, 2009 11:07 AM |
It is often difficult, if not near impossible, for an individual, company, institution, or even a government to provide a measured, honest, and unbiased perspective of a difficult situation. Given one’s proximity and emotional attachment to the situation, human nature clouds one’s viewpoint and, in turn, one’s reactions and responses.
How great it is when we can receive the sage wisdom of a neighbor, a retired executive, a former coach, or on the international level a true statesman. While we may find it difficult to hear and deal with a tough message, ultimately the greatest form of “tough love” is simple truth and honesty.
A good friend of mine was gracious enough to share some video clips of a recent interview with Paul Keating, former Prime Minister and Treasurer of Australia. Mr. Keating speaks from experience and does not sugar coat the current economic turmoil. While the three video clips (listed below) run approximately 20 minutes in total length, please allow me to provide a bullet point overview of some of the highlights. When you do have some spare time, I strongly encourage you to view these clips and gain the benefits of his wisdom. I do not think you will be disappointed, although you may be a bit dismayed as to his blunt honesty. In the meantime, here’s a brief overview: (more…)
Posted in American Consumers, Australia, Bad Bank, Banking Institutions, Barack Obama, China, Current Affairs, Democratic Party, Economy, Foreign Affairs, Foreign Policy, General, Global Finance | 3 Comments »
Posted by Larry Doyle on November 11th, 2008 2:30 PM |
I will admit that, given the current dynamics at work in the economy and the markets, I have become somewhat numbed as to the magnitude of some of the developments. Many of the highlights that I will offer from yesterday’s news would be enormous stories in and of themselves. Taken collectively, they do become overwhelming if we let them.
The markets are down 5-6% on the month. Given the stream of negative news, one might think that the market could be even lower. The fact that markets aren’t even lower is testament to the trillions of dollars that have been put to work by governments around the world.
Let’s review the major stories of November 10, 2008:
1. China implemented a $563bln economic stimulus plan primarily to further develop infrastructure in the country. That figure represents 1/5th of their total GDP. I was surprised to hear that, but it also indicates to me how much growth potential that country possesses. This package had an immediate impact on our equity markets this morning when our markets were up 3%. This package also supported commodities, especially copper which bounced about 5% on the day. Aside from infrastructure, China directed this stimulus package to an area that was badly damaged in a recent earthquake. Last but not least, China offered “tax deductions” on the purchase of certain hard assets. (Are you listening, Barack??)
This stimulus package though indicates to me that it is not likely that many of our domestic companies will likely be receiving capital injections from sovereign wealth funds. With oil at $60, oil producing countries (such as Dubai) may need to support the real estate developers and exporters in their own countries.
2. Fannie Mae reported a loss of $29bln (I’m not going to say earnings when companies lose money) which equates to $12.96 a share vs an expected loss of $1.40 a share. (How can Wall St. analysts maintain credibility when they miss a call by almost 1000%?).
It is amazing how Fannie can rack up losses like this when their own incentive bonuses are not on the line and when collectively Uncle Sam owns them. Aside from this loss, Fannie did announce that they expect losses to continue and to increase into 2009. This to me means they see foreclosures increasing over the next 6 months. More than likely Fannie will have a negative net worth by the end of 2008 requiring an increased capital injection by the U.S. taxpayer. Where does it end!!
Again, this model is broken. The American consumer who is able to get a mortgage is being subsidized at the expense of the taxpayers. Let the private market set the mortgage rates and if the housing market re-prices, so be it. Enough socialized housing finance. (more…)
Tags: China stimulus November 2008, economic and market review 11/10/08, Fannie MAe earnings November 2008
Posted in American Consumers, Banking Institutions, Barack Obama, China, Credit Card companies, Current Affairs, Dubai, Economic Stimulus, Economy, Meredith Whitney, Mortgage Crisis, Real Estate, Retail Business, Warren Buffet | No Comments »
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