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HomeDay of Reckoning in De-Americanized World
Posted by Larry Doyle on October 16th, 2013 9:55 AM |
Regardless of where you fall along the political spectrum, you can rest assured we will all pay ever increasing costs for the dysfunction on display in Washington.
Some may discount that reality and think the political power plays properly executed trump the costs incurred. I can assure you they do not.
Who holds the ultimate trump card in the current rendition of Washington’s political game of chicken? The bond market. And who especially within the bond market? Foreign holders of dollar-denominated assets. And who is the biggest holder? The People’s Republic of China. Let’s navigate eastward and get some insights on what folks there think about our dysfunctional government: (more…)
May 15, 2010: Market Week in Review
Posted by Larry Doyle on May 15th, 2010 6:12 AM |
The European Union, the European Central Bank, and the International Monetary Fund (and the Fed, as well, although they don’t want to truly highlight it) provide $960 billion in backstops for the Euro-zone and what happens? The Euro ends the week lower by 3%!! Ladies and gentlemen, that is nothing more than a major “F&%@ Y#&“ on behalf of global investors to the aforementioned central banks and government entities.
Think there is tension in Euroland, and specifically between France and Germany? As The UK-based Telegraph reports, President Nicolas Sarkozy ‘Threatened to Pull France Out of Euro’:
President Nicolas Sarkozy slammed his fist on the table and threatened to pull France out of the euro at a meeting of European leaders deciding Greece’s aid package last Friday, according to Spain’s El Pais newspaper.
The last time there was this kind of tension between these countries, guess who was coming ashore at Normandy? (more…)
March 2010 Market Review
Posted by Larry Doyle on March 31st, 2010 6:03 PM |
The 1st quarter 2010 returns are now in the books.
The Euro continued to lag given problems in the Euro-zone. That development supported our greenback:
The commodities index has given ground, but in the midst of that oil and copper have outperformed:
Although the equity markets started the year off on a rough note, the returns for the last two months have been impressive, albeit on generally light volume:
Bonds gave ground but remain within the trading range we have experienced all year:
LD
March 6, 2010: Economic/Market Week in Review
Posted by Larry Doyle on March 6th, 2010 6:08 AM |
Markets continued to rebound this week. Why? Dramatic improvements in Greece? No. Solid economic news here at home? I don’t think so. A slew of positive earnings reports? Hardly. What are we to make of it?
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic data and news, along with month-to-date market returns.
ECONOMIC DATA
Recovery? I would not classify the data this week as defining a recovery. I will be gracious and define the data as mildly negative. Don’t take my word for it, let’s review the data together and you tell me what you see and what I may be missing. Let’s dive right in. Unless a hard number is indicated, the data represents the percentage change for the prior month along with the consensus expectation for the current month and then the actual change for the current month. (more…)
February 13, 2010: Market Week in Review
Posted by Larry Doyle on February 13th, 2010 8:12 AM |
Markets remain volatile and skittish. Why? Our global economy along with our domestic economy remain under the pressure of massive debts and deficits across the sovereign, corporate, and consumer spectrum.
Global governments can not prop economies and markets forever, try as they might. Can 2010 successfully transition from these total government supported and propped markets to a hoped for return to private enterprise with private capital? This week brought us more ups and downs in the markets as the economy overall searches for its footing. We remain a long way from being out of the woods. Pack lightly and lets navigate.
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic news and month-to-date market returns. (more…)
January 2010 Market Review
Posted by Larry Doyle on January 30th, 2010 10:49 AM |
As January goes, so goes the year.
Does this adage hold water? The market direction for the year is correlated approximately 70% of the time with January’s move. I certainly would not make investment decisions based purely upon that rule of thumb. The rule did not hold in 2009 as major equity averages were down 8% last January. That said, 2009 was anything but a normal year given the massive economic and market supports implemented by Uncle Sam.
What rule of thumb would I recommend? Read and review Sense on Cents regularly to most effectively navigate the economic landscape. On that note, let’s review the market moves for January. The figures provided are month end statistics for the respective markets, then month-to-date and year-to-date returns. (more…)
January 23, 2010: Week in Review
Posted by Larry Doyle on January 23rd, 2010 7:15 AM |
From Massachusetts to Washington and from Wall Street to China, fireworks were flying this week across our global economic landscape. While the political focus in America is grabbing center stage, make no mistake, the issues driving the politics are largely economic.
Welcome to our Sense on Cents Week in Review where I provide a streamlined recap of the major economic news and the month-to-date market moves. Pack lightly as we have much ground to cover. That said, let’s enjoy the journey as the twists and turns along our landscape are truly fascinating and historic in nature. Let’s navigate.
ECONOMIC DATA:
1. Housing Starts: a disappointing report as starts fell 4% after an upward revision to a 10.7% increase in the prior month. I still take all the housing numbers with a pound of salt knowing that delinquencies and defaults continue to move higher. (more…)
January 9, 2010: Week in Review
Posted by Larry Doyle on January 9th, 2010 11:37 AM |
The economy continues to send very mixed signals. The market screams like a scolded dog. The more things change, the more they stay the same. Welcome to our weekly Sense on Cents Week in Review. I will provide a streamlined recap of the major economic news and the month-to-date market moves. Let’s navigate.
ECONOMIC DATA: (more…)
November 14, 2009: Month to Date Market Review
Posted by Larry Doyle on November 14th, 2009 7:32 AM |
Do as I say, not as I do. Why? What do I mean?
The markets in general and equities in particular were once again supported by talk rather than actual economic actions. Who was talking? What were they saying? Very simply, communication from G-20 ministers last weekend indicated strong support for ongoing fiscal stimulus. That talk drove the equity markets 2% higher on Monday of this week. On the heels of that, during the midweek we experienced Fed-speak once again indicating a strong likelihood of keeping rates at very low levels for an extended period. Markets immediately reacted by once again ratcheting higher. 
I have never been fully inspired by talkers versus doers, but these are unique times . . . so let’s collectively navigate the economic landscape. If you have any questions, please do not hesitate to ask.
ECONOMIC DATA
Economic reports and developments are carrying less and less weight currently. Why? Fed policies are not going to change. That comfort level has solidified the case for those who have sold and continue to sell the U.S. dollar short and use the proceeds to buy risk-based assets, primarily equities. That said, I am compelled to report significant data as I view my mission in helping people navigate the economic landscape, not strictly trade the markets.
Of note this week, the Federal Housing Administration is likely in need of an imminent bailout from Uncle Sam as defaults on FHA-insured loans show no signs of diminishing. This potential bailout has been discounted by FHA officials ad nauseam. They have no credibility.
The University of Michigan Survey of Consumer Confidence plummeted to a level of 66% from 70. Consensus opinion had this survey bouncing back toward 72%. With no legitimate bounce or improvement in the housing or labor markets, I do not know why the survey would improve.
Let’s move along to market performance. The figures I provide are the weekly close and the month-to-date returns on a percentage basis: (more…)
November 7, 2009: Month to Date Market Review
Posted by Larry Doyle on November 7th, 2009 8:39 AM |
Unemployment hits 10.2% and every self-respecting economist knows it is heading higher.
Does anybody want to ask Tim Geithner if he wants to review the rigor and integrity of the Bank Stress Tests conducted last Spring? What were the assumptions used for the Unemployment Rate? For those who care to review the premises of the long ago but now forgotten Bank Stress tests, I submit from the FDIC, FAQs-Supervisory Capital Assessment Program. In regard to the assumptions used for unemployment:
2009 Base Case 8.4%
2009 Adverse Case 8.9%2010 Base Case 8.8%
2010 Adverse Case 10.3%
Garbage in, garbage out. We are now within .1% of the more adverse unemployment case for NEXT year. Not that it might matter given the fact that the liquidity experiment undertaken by the Fed and Treasury is bubbling up in asset valuations while neglecting Main Street’s economic plight. That said, I would once again question as I did last April, “Bank Stress Tests: Major Sham??”
What are the implications for sham transactions? Subsequent misallocation of funds in order to cover and disguise the initial sham. I am not stating that government officials are stealing, although I’m not stating that they’re not. I am stating that there is little doubt that future funds continue to get redirected into organizations (banks, Freddie, Fannie) and programs the health of which were not accurately represented to the American public. (more…)
