News 
Market Data 
Discover
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Silver Correction – ABC Pattern Downmove Price Target
by Olivier on May 18, 2011
http://www.tischendorf.com/2011/05/18/silver-correction-abc-pattern-downmove-price-target/
The bullish sentiment after the Silver volume climax top is still very high. In my book way too many traders are trying to anticipate a bottom and are eager to buy into this downward move. Eventually there will be one lucky guy who doesn’t get his fingers cut off trying to catch a falling knife. In any case, try to catch falling knives on a regular basis and in the long run odds are extremely high for you to be taken to the cleaners.
That being said today was another day that infamous SLV vs. SLW divergence could be observed. SLV is up 3.4%, the best big cap silver miner proxy SLW – Silver Wheaton is up a measly 0.4 %. As long as we see the Silver miners and also the Gold Miners underperform, the path of least resistance for Silver is down. Here is a chart of the price of Silver which clearly shows the technicals call for much further downside:
Up-to-date Daily Silver price chart on my public list. Click on the chart to maximize.
The red lines in the chart imply we are in the midst of an ABC correction. Technically speaking the price target for Silver should be in the 27-28$ USD area. The price target does make sense considering the above mentioned situation. Everybody thinks we have one of the greatest buying opportunities at hand. I saw people who said this correction will be over ‘within weeks’. I couldn’t disagree more. These guys are biased and are always talking their book, no matter what happens. Every technical trader worth his salt expects this will ‘take months’ for silver to rebuild pressure and make its next attempt at taking out the 50$ USD level in order to make new highs. What makes a target below 30$ attractive is the fact we would see a test of the moving average 200. The 27-28 target would allow for some overshooting to the downside. This would be similar to a move gunning stops and killing bullish sentiment.
Conclusion: There is still way too much hope and denial when it comes to the recent silver price correction. A further move to the downside would take care of that. Don’t be greedy. Don’t try to be a hero. Let the price come to you. Let’s see what happens.
On to a quick overview of various sectors and a few individual stocks:
Solar: SOLR – GT Solar is still one of my favourites. The recent outperformance actually might imply the market is starting to price in the LED potential as the rest of the solar stocks are still seriously underperforming.
Uranium: First signs some of the Uranium stocks might not want to go down more. CCJ – Cameco is now pulling back to the downside of the descending triangle pattern. It’s do or die time. If price gets rejected we will see another downmove, if price can move ‘back into the pattern’ it will be a sign selling pressure is waning and sellers are starting to get exhausted.
Natural Gas: I’ve recently mentioned this sector will most likely be the biggest beneficiary of the Fukushima incident. I am also monitoring WPRT – Westport Innovations very closely as it is trading near its all time high as opposed to let’s say CLNE – Clean Energy Fuels.
Mobile Internet Theme: I will soon add a second sector overview chart as the theme is starting to garner a lot of attraction. Additional components that will most likely be part of the new chart are: MITK – Mitek Systems, AUGT – Augme Technologies, NXPI – NXP Semiconductors to name but a few.
Gold: Much stronger than Silver and less extended. CNL.TO – Continental Gold one of my favourites for this year is still far from acting well though. Unless the miners and especially the one’s like CNL.TO I am watching very closely are not displaying any kind of strength it is best to stand aside. BAT.V – Batero Gold is a good example for a gold miner getting killed. It has given back almost all of its gains after its huge break out a few months ago.
Agriculture: ANDE – Andersons is still one of my favourites. It is now bouncing off support but I am typically more interested in buying breakouts as opposed to buying on support. Regarding sectors flying ounder the radar, Sugar might be fitting that description. IPSU – Imperial Sugar is starting to display great buying interest. Suedzucker AG the biggest European sugar company is trading very close to its all time highs and is displaying a potentially very bullish multi year cup with handle pattern which could lead to substantial gains over the next few years. Stock is not listed in the US though.
Lithium: PPO – Polypore is the picks and shovels approach stock for this sector and is most likely to benefit immensely if we move towards using more and more electric cars. In any case, so far it is outperforming the LIT – Lithium ETF.
SP 500, what you need to know
http://gicharts.blogspot.com/2011/05/sp-500-what-you-need-to-know_21.html
Posted by Moise Levi at 9:47 AM
1) Re entry
2) Warning
3) Out
My friend Olivier, you can read his great blog here, http://www.tischendorf.com/ reminded me that it has been a while since the sell in May did not take place.
He is right, we could face a major slow down
We could actually face a global slow down if you read the latest news .....
Possible Market Top
by Carl Swenlin
A reader recently called me a perma-bull, which is amusing, since by nature I'm usually disposed toward bearishness. I will, however, remain bullish until our mechanical timing model switches from a buy. The model will be bullish until the 20-EMA for the S&P 500 crosses down through the 50-EMA. We can see on the chart below that those moving averages are converging, but there is plenty of room before a crossover will take place.
While the model provides discipline, we are still permitted to look at indicator charts and speculate about the future. For example, on the chart above we can see a rising wedge pattern, which is a bearish pattern that usually resolves to the downside. There is still room and time for prices to bounce around inside the wedge, and the rising trend line is still holding, so this is not strongly conclusive.
Below is a Percent Buy Index (PBI) chart for the broad market. It shows the percentage of buy signals for the 100 Dow Jones market sectors. While it is still at a relatively high reading, there is a negative divergence between the PBI and the price index. This shows that the price advance is being undermined because fewer sectors are participating.
The next chart is the weekly bar chart of the S&P 500 Index. The concern here is that the weekly PMO has topped and is falling below its EMA (green line). There is also a negative divergence between the two PMO tops and the price tops. This is really bearish.
Bottom Line: The S&P 500 has not yet given the fatal sign of breaking down through the rising trend line drawn from the August 2010 low, but there are internal indicators that are giving strong evidence that an important top may have been made on May 2. That is to say that we could have begun a substantial correction, or the bull market may be over.
http://blogs.decisionpoint.com/chart_spotlight/2011/05/possible-market-top.html
Farm Runoff in Mississippi River Floodwater Fuels Dead Zone in Gulf
By: Jenny Marder
http://www.pbs.org/newshour/rundown/2011/05/the-gulf-of-mexico-has.html
A dead zone -- already the size of the state of New Jersey -- is growing in the Gulf of Mexico, fueled by nutrient runoff from the swollen Mississippi River.
This year, with floodwaters from the Birds Point levee breach and the Morganza and Bonnet Carret spillways spreading over farmland and other residential areas, the river is collecting tremendous amounts of fertilizer and pesticides. This is contributing to what scientists say may become the largest dead zone ever, and posing a serious threat to already taxed marine life.
During the rainy season, fertilizer, animal waste, sewage and car exhaust wash into the Mississippi and the Atchafalaya rivers, flow south and empty into the mouth of the Gulf.
Nitrogen and phosphorous from farm runoff and animal waste are especially toxic to ocean life. They act as natural fertilizers, feeding harmful algae and causing it to bloom wildly. As bacteria consume these blooms, they suck oxygen from the water, depleting the ocean's oxygen reserves. Scientists call this oxygen depletion hypoxia.
"We're expecting probably the largest-ever amount of hypoxia," said Nancy Rabalais, a marine scientist and executive director of the Louisiana Universities Marine Consortium. "That's the the prediction based on the amount of nitrogen coming down the river."
A surge of fresh water creates a layering effect in the seawater, which compounds the problem. The freshwater sits above the heavier saltwater, acting as a cap that prevents oxygen from reaching the deeper water levels.
"The bottom layer of the ocean gets so low in oxygen that sea life has to swim away and vacate the area, and if they can't get away, they suffocate," said Matt Rota, science and water policy director for the Gulf Restoration Network.
Flooding could cause further injury to fisheries in the northern Gulf of Mexico, already reeling from last year's oil spill, Rabalais said. Dead zones alter the habitat for crab, shrimp, fish and lobster, often forcing them to shallow areas. This includes catchable seafood, like shrimp and snapper, which are vital to the area's fisheries.
"A lot of the Louisiana shrimp fisheries use smaller vessels," Rabalais said. "With the price of fuel and the distance they have to go, they might opt not to go offshore."
Possibly the largest source of nutrients comes from farms in Illinois, Iowa, Ohio and southwest Minnesota, where drainage tiles -- plastic pipes that crisscross underground - - drain the once-wet soil, making it arable, and dry enough for corn and soybean crops. But these pipes also flush nitrogen fertilizer into tributaries, which lead to rivers and eventually the Gulf.
In fact, research shows that the most heavily tile-drained areas of North America also contribute the largest source of nitrates to the Gulf of Mexico, which add to the dead zone, according to Mark David, a professor of biogeochemistry from the University of Illinois.
David is researching options for reducing nitrate levels. They include valves and beds of woodchips inside the tiles, as well as restoring wetlands, which filter pollution naturally.
It's not the farmers' fault, David said, but there's little incentive for farmers to reduce their nitrate output. "There's a fundamental problem in the whole system if we really want to reduce nitrate and phosphorous loss from the system. Everything's been voluntary up to this point, and that hasn't gotten us anywhere."
An Iraqi girl screamed Tuesday after her parents were killed when American soldiers fired on their car when it
failed to stop, despite warning shots, in Tal Afar, Iraq. The military is investigating the incident.
.......2005 article embedded in yours
http://www.nytimes.com/2005/01/19/international/middleeast/19iraq.html
Face That Screamed War’s Pain Looks Back, 6 Hard Years Later
Samar Hassan, with a relative, had never seen the photo of her, below, taken after her parents were killed by U.S. soldiers in Iraq.
By TIM ARANGO
Published: May 7, 2011
http://www.nytimes.com/2011/05/07/world/middleeast/07photo.html?_r=2&hp=&pagewanted=all
MOSUL, Iraq — Until the past week, Samar Hassan had never glimpsed the photograph of her that millions had seen, never knew it had become one of the most famous images of the Iraq war.
“My brother was sick, and we were taking him to the hospital and on the way back, this happened,” Samar said. “We just heard bullets.
“My mother and father were killed, just like that.”
The image of Samar, then 5 years old, screaming and splattered in blood after American soldiers opened fire on her family’s car in the northern town of Tal Afar in January 2005, illuminated the horror of civilian casualties and has been one of the few images from this conflict to rise to the pantheon of classic war photography. The picture has gained renewed attention as part of a large body of work by Chris Hondros, the Getty Images photographer recently killed on the front lines in Misurata, Libya.
The photograph of Samar is frozen in history, but her life moved on, across a trajectory that is emblematic of what so many Iraqis have endured. In a country whose health care system has almost no ability to treat the psychological aspects of trauma, thousands of Iraqis are left alone with their torment.
Now a striking 12-year-old, Samar lives on the outskirts of Mosul in a two-story house with four other families, mostly relatives.
The household is a cramped bustle of activity as women cook and clean and children scramble about. Samar’s older sister, Intisar, and her husband, an unemployed former police officer, care for her. Two of his sons are policemen, and their salaries support the extended family.
The pains of war have been visited on thousands of Iraqis, but even here Samar’s story stands apart. Three years after her parents were killed, her brother Rakan died when an insurgent attack badly damaged the house where she lives now. Rakan had been seriously wounded in the shooting that killed their parents, and he was sent to Boston for treatment after Mr. Hondros’s photos were published. An American aid worker, Marla Ruzicka, who helped arrange for Rakan’s treatment, was herself later killed in a car bomb in Baghdad.
Intisar’s husband, Nathir Bashir Ali, suspects his house was bombed by insurgents as retribution for sending Rakan to the United States. “When Rakan came back from America, everyone thought I was a spy,” he said.
Samar left school last year because she was too shy and not doing well, Mr. Ali said, although Samar said she would like to return and hoped to be a doctor when she grew up. She leaves the house only on infrequent family excursions and has two friends who visit to play with dolls and chat. She spends her days cleaning, listening to music on her purple MP3 player and watching episodes of her favorite television show, the Turkish soap opera “Forbidden Love,” about lovers named Mohanad and Samar.
“I am Samar,” she said, wearing a long red dress and sitting on the couch next to Mr. Ali. Two of her siblings, also in the car when their parents were killed, sat nearby.
“I’ve taken them many times to the hospital, where they get pills” for emotional problems, Mr. Ali said. “All of them take pills.”
He says Samar’s 8-year-old brother, Muhammad, talks to himself when he is alone. “When we go out and see a family, they get sad,” he said. Sometimes he finds the children in a room together, crying. “When they remember the accident, it’s like they just died.”
The photo of Samar had far-reaching impact, for it was visual testimony to a particular scourge of this war: the shooting of innocent civilians as they approached American checkpoints or foot patrols, killings made possible by liberal rules of engagement aiming to protect soldiers from suicide car bombers. The image was a point of discussion at the highest reaches of the Pentagon as it considered ways to reduce civilian casualties.
The Iraq war delivered few singular images for the popular imagination, partly because the country was too dangerous for photographers to move around freely, but also because in an age of saturated media coverage and short attention spans, it may be more difficult for news images to take root in the collective memory.
The military also set strict rules for embedded journalists that kept many graphic images from the public eye; the military asked Mr. Hondros to leave his embed assignment after he shot the pictures of Samar.
Liam Kennedy, a professor at University College Dublin, researches conflict photography and uses Mr. Hondros’s image of Samar in his class as one of the few photos from the Iraq war that could stand out in history, comparing it to the famous Vietnam image by the Associated Press photographer Nick Ut of a young girl running from a napalm attack.
“It really seems to say something of what’s going on at the time,” Professor Kennedy said. “All the arbitrariness of the violence that was going on at that time is summed up by that girl.”
Sarah Leah Whitson, director of the Middle East and North Africa division for Human Rights Watch, keeps a copy of the photo on a bulletin board in her office in New York. She remembers crying when she first saw the photo in a newspaper, and having to explain the image to her children.
“At the time, I thought it captured perfectly the horrors of the war that was not really understood by Americans,” she said. “Everything in that girl’s face symbolized what I felt all Iraqis must feel.”
She added, “I kept thinking, ‘I wonder what life will be like for this girl?’ ”
Mr. Hondros spoke about the photograph in a 2007 interview with the syndicated news program “Democracy Now.”
“I think one of the reasons the photo had this sort of resonance that it does is because it has a sort of empty feeling,” he said. “You know, the poor girl, all alone in the world now, just standing there in the dark.”
This week Samar, hugging a pillow to her chest, recalled: “He was taking pictures of me, I remember. Then he stopped, and they brought me a jacket and put me in the truck and treated the wound on my hand. And they gave me some toys.”
She had never seen the picture until this week, but she said she understood that it showed the world “the sad thing that is happening in Iraq.”
Near the end of the interview, she pointed to a family photograph on the wall. “I always dream about my father and mother and brother,” she said.
Duraid Adnan contributed reporting.
Tornado forecasting saved countless lives this week. Too bad Congress, including Alabama’s
entire GOP delegation, voted against maintaining forecast quality
http://climateprogress.org/2011/05/01/tornado-forecasting-saved-countless-lives-this-week-too-bad-congress-including-alabamas-entire-delegation-voted-against-maintaining-forecast-quality/
He's one hundred percent correct. Look what's happening here ..
Record floods cause Army Corps to blow up levee, inundate 130,000 acres of farmland to save small town
http://climateprogress.org/2011/05/03/floods-army-corps-levee/
.......look what happened in Alabama and Tenn. and the repubs all voted to get rid of the weather warning system .. go figure.
"Captain Wayne Porter of the U.S. Navy and Marine Corps Colonel Mark Mykleby, who wrote the paper for the Woodrow Wilson Center http://www.wilsoncenter.org/events/docs/A%20National%20Strategic%20Narrative.pdf , argue that the United States has its policies all wrong. America’s greatest national security threats aren’t terrorism or foreign armies—they are a crumbling infrastructure at home, the depletion of natural resources, climate change, and an overdependence on what they call “defense and protectionism.” Counterintuitively, this paper from special assistants to Joint Chiefs of Staff Chairman Admiral Mike Mullen, argues that America’s best hopes for world leadership lies in classical left-wing tropes of conservation, soft power, and aggressive humanitarian work abroad.
Click through for their four biggest (and most controversial) suggestions on the best path to maintaining America’s global hegemony."
This is nothing short of revolutionary. Read it!
(And in case anyone gets confused: That’s not CAPT Porter or COL Mykleby. It’s an Aussie officer and a USAF cameraman. And a solar cell. Rock on, military solar cells.)
http://motherjones.tumblr.com/post/5248424544/fastcompany-captain-wayne-porter-of-the-u-s
SP 500 warning level
SP 500 chart analysis ;
1) 50 days simple MA = Main resistance level
2) Short trigger is now "clear"
3) Bad news are "over" ??? Yeah, right ....
4) iPath S&P 500 VIX Short-Term Futures ETN (VXX) : Key support stands @ 32.5 $
Posted by Moise Levi
http://gicharts.blogspot.com/2011/03/sp-500-warning-level.html
The Bizarre Smear Campaign on Elizabeth Warren Continues
Posted in Uncategorized by Mike on March 18, 2011
http://rortybomb.wordpress.com/2011/03/18/the-bizarre-smear-campaign-on-elizabeth-warren-continues/#comments
Simon Johnson asks “Who is Afraid of Elizabeth Warren?” Zach Carter finds that editorial writer Mary Kissel is leading the Wall Street Journal’s opinion column’s attack campaign against Elizabeth Warren. Here’s their argument: ”The consumer bureau is essentially a bureaucratic rogue. We’d like to see Congress kill the agency entirely. But at the very least Congress should remove it from the Fed, make it part of the Treasury and subject it to annual appropriations.”
Jesus wept. Listen, the Federal Reserve had an agency called “Division of Division of Consumer and Community Affairs.” We know this because on January 20th, 1998, the Division of Division of Consumer and Community Affairs circulated to the Governors a memo urging them to vote to “adopt a policy to not conduct consumer compliance examinations of, nor to investigate consumer complaints regarding, nonbank subsidiaries of bank holding companies.”
They followed this advice of the consumer affairs division of the Fed. Which juiced the subprime market through a regulatory arbitrage; regular banks had a rule that shadow banks did not, and bank holding companies suddenly were given a push to find creative ways to create nonbank subsidiaries off-balance sheet hidden from investors. This is a matter of fact. The Federal Reserve has always been involved with consumer protection; it’s just that they’ve done a terrible job of it, always treating it as subservient to making bankers happy and we need to re-conceptualize the role of it as it being the priority mission.
You know who else is involved with consumer protection? Everybody. The OCC, OTS, NCUA, Federal Reserve Board, FDIC, FHFA, HUD, VA, FTC and DOJ all have consumer protection in their mission. For all (except possibly the FTC, which lacks massive jurisdiction) it’s an orphan and subordinate mission. By consolidating regulators lenders that deal with consumers have a single, straightforward regulator to deal with, reducing burden and increasing clarity by providing a level-playing field. From the Roosevelt Institute’s Make Markets Be Markets conference, graphs courtesy of the Consumer Federation of America, you can either have this:
or this:
Also, quick: How many mortgages are there in the country? Put away the google, the short answer is that nobody knows. There’s terrible data in general, and terrible public data in particular, on the consumer lending market. Most of the debt data we have are aggregate data that the Fed puts together for macro models. For people like me who think we have a balance sheet recession, where the distribution of debt matters, having a BLS-like set of resources to pull trusted and consistent data would be awesome. And here’s another interesting thing about the CFPB: it has a mandate for research and data collection.
This anti-Warren rage never ends, though it always surprises me. This Tim Noah article is the best I’ve seen about the CFPB: Phantom Rogue: How can the CFPB be raging out of control when it hasn’t done anything yet? Read all of it. The GOP is going crazy accusing Warren of doing things when (a) the CFPB doesn’t exist and/or (b) the CFPB can’t do that specific feature anyway. The CFPB’s actions are subject to a veto vote from the FSOC. If anything, that makes its not independent enough, and certainly not a rogue institution.
I still think Warren is the best candidate for the job. The past several months have gone very well. So what causes this level of freakout?
Is it that she’s critical of Wall Street and the way bailouts were handled? That’s pretty representative of the country. Is it that she doesn’t assume entry-level convex optimization math proves that markets always work perfectly in a world with bad information, bailed out too big to fail institutions shaking hands with the government, in a world with power, in a world where capital structure and debt matter in a critical way, etc.? Warren uses economic analysis, and uses it well, but as the beginning of the discussion, not the end of it. I still don’t get it.
Aside: For those discussing if economics is a science, and are frustrated that educated people think there’s something shady about the way economics as a science is deployed in elite conversation, this post of Warren’s from a while ago about whether an economic statement is a question of fact or of law shows a sophistication in terms of working through the implications of economics.
Preparing for the "Bang!"
by Carl Swenlin
http://blogs.decisionpoint.com/chart_spotlight/2011/03/preparing-for-the-bang.html
(This is an excerpt from Friday's blog for Decision Point subscribers.)
My wife is something of an insomniac, so she listens to a lot of nighttime talk shows -- not the best cure for insomnia, I'll bet. Recently she told me about the comments of some guest on some talk show -- sorry, but that's as good as I can do for attribution -- who had an analogy for the U.S. financial woes. He said we are like a person who makes $50,000 a year, spends $75,000 a year, and has $375,000 in credit card debt. Hopeless is what it is.
From Mauldin and Tepper's Endgame: The End of the Debt Supercycle: There is a limit to how much debt you can pile on. As the work of Reinhart and Rogoff points out in This Time It's Different (2009), there is not a fixed [emphasis mine] limit for debt or some certain percentage of GDP where it all breaks down. Rather, the limit is all about confidence. Everything goes along well, and then "bang!" it doesn't.
"Confidence" has always been the keyword in financial markets. We get a daily diet of economic news with a determined spin about how the economy is gradually improving, but in the background the Fed and the politicians keep digging a deeper hole of debt. And the story is the same around the globe -- governments trying to exacerbate the threat of horrible levels of debt by piling on even more debt.
The real question is if the collapse really will be a "bang!" moment, of whether there will be some kind of advance warning upon which we can act. As a technical analyst I believe there will most likely be a gradual deterioration ahead of the "bang!", and we must assume that the deterioration has gone too far when the 20-EMA crosses down through the 50-EMA. To illustrate this point, let's look at two of the most catastrophic financial events in the last 100 years -- the 1929 Crash and the 1987 Crash.
The first chart is of the Dow Industrials in 1929. Note that the 20-EMA crossed down through the 50-EMA about two weeks ahead of the Crash. Some will complain about the two whipsaw signals earlier in the year, but this kind of activity characteristically precedes major tops and part of the cost of doing business if you want to avoid major declines. To mitigate the damage of these whipsaws, our timing model only generates a NEUTRAL signal (instead of a SELL) when the crossovers occur above the 200-EMA.
Next is the 1987 Crash. It is hard to see, but the 20/50-EMA crossover occurred four days ahead of the crash. Again, there was a short whipsaw earlier in the year.
Bottom Line: Catastrophic market events are usually a big surprise to most people, but they rarely take place without giving some advance technical warning signs. The moving average crossover has been a reliable, though by no means perfect, signal for impending trend changes. It is certainly one way we can attempt to be prepared ahead of the "bang!".
* * * * * * * * * * * * * * * * * * * * *
LMAO!.. .this post now deleted for "personal attack"
even tho it was posted to "none"... LMFAO!
Request Deletion Review
Post Date: 1/31/2011 5:00:56 PM
Board: Your Economy Reason: Personal Attack
Obama and Business May Get On Well, but When Will That Produce Jobs?
By SIMON JOHNSON
President Obama is embarked on a major charm offensive with the business sector, as seen, for example, in the appointments of William M. Daley (formerly of JPMorgan Chase, now White House chief of staff) and Jeffrey R. Immelt (chairman and chief executive of General Electric and now also the president’s top outside economic adviser).
This should not be an uphill struggle – much of the corporate sector, particularly bigger and more global businesses, is doing well in terms of profits and presumably, at the highest levels, compensation. But when exactly will this approach deliver jobs and reduce unemployment? And does it increase risks for the future?
Republican rhetoric over the last two years was relentless in its assertion that the Obama administration was antibusiness. Supposedly, this White House attitude undermined private sector confidence and limited investment.
In reality, the opposite was the case. Relative to any postwar recession, the rebound in profits during the Obama administration has been dramatic. To be sure, the end of 2008 was shocking to many entrepreneurs and executives, as credit was disrupted in a much more dramatic fashion than they thought imaginable. Large and immediate cuts in employment followed.
But then the government saved the failing financial sector. The means were controversial, but the end was essential – without private credit, the United States economy would have fallen far and for a long time.
And profits rebounded almost at once. The financial sector recovered quickly on the back of implicit guarantees provided to our largest banks. The only bad quarter was at the end of 2008 (leading to great angst among bankers about their bonuses in 2009). The nonfinancial sector has done even better.
Profits for the private sector fell no more than 20 percent from top to bottom in the cycle, and in the third quarter of last year (the latest available data from the Bureau of Economic Affairs), profits were back at the level of 2006. After the deep recessions of the early 1980s, it took at least three times as long for profits to come back to the same extent (I went through this comparison in more detail last week for The New York Times’s Room for Debate).
Investment in plants and equipment has also recovered fast – this was the one bright part of the domestic economy in the last two years (the other being exports). Look around at the places you work, where you do business and where you shop. Is there any indication they have cut back on information technology spending recently?
Over all, the policies of late 2008 and early 2009, including the much-debated fiscal stimulus, protected corporate profits to an impressive degree. Even though this was the steepest recession of the last 70 years, profits fell only briefly and seem likely to be just as strong as they were before the crisis.
Large global American-based companies, in particular, are well positioned to take advantage of growth in such emerging markets as India, China and Brazil. But the link between corporate performance — measured in terms of profit or executive pay for American companies — and domestic employment has fundamentally changed in recent decades.
At the very least, employment responds more slowly now than in previous cycles as output and sales recover. Consider this chart from the Calculated Risk blog (and revisit it regularly). As the picture shows so vividly, we are still waiting for employment to turn back up decisively. Compared with previous recessions, the delay is simply stunning.
Ideally, in a situation like this, we’d provide more stimulus to the economy in some form. But our monetary policy is already close to exerting its maximum efforts, and the scope for using fiscal policy was undermined by high deficits during the “boom” years of the 2000s, so there is no safe fiscal space for action – even if the politicians could agree on what to do.
We are reduced to waiting for the private sector to recover enough to want to take on new employees. No one has a good answer for why this is so slow – perhaps because it is so easy and so cheap to hire workers in those emerging markets that are now booming, or perhaps because the skill mix available at prevailing wages in some parts of the United States is not what employers want.
Or perhaps companies are effectively keeping out new entrants, keeping profits artificially high and, at the sectoral level, limiting employment. The constraints on entrepreneurship in our post-credit-crisis economy need careful scrutiny.
Hopefully, the administration’s charm offensive will not prevent it from enforcing American antitrust laws, which were more than slightly neglected in the Bush years.
Listening attentively to the nonfinancial sector makes sense in this situation. In return, corporate leaders need to focus on creating jobs in the United States. But bending over backward to accommodate the wishes of the financial sector is exactly what got us into this mess to start with.
Allowing our largest banks to become even bigger and more dangerous would be a very bad mistake.
______________
Geopolitical unrest and world oil markets
Change is on the way in the Arab world, with Egypt the latest focal point. Here I review recent events and their implications for world oil markets.
I begin with a timeline, if not to connect the dots, at least to collect the dots in a single list.
• Sudan, Jan 9-15: Country holds a referendum whose apparent outcome will be a split of South Sudan into its own a separate country.
• Lebanon, Jan 12: Key cabinet ministers resign in protest against impending indictments from a U.N.-backed investigation into the 2005 assassination of former prime minister Rafiq al-Hariri, toppling the governing coalition. U.S. Secretary of State Hillary Clinton offered this assessment:
We view what happened today as a transparent effort by those forces inside Lebanon, as well as interests outside Lebanon, to subvert justice and undermine Lebanon's stability and progress.
• Tunisia, Jan 14: President Ben Ali flees the country in response to widespread protests.
• Iraq, Jan 17-27: Over 200 people killed in a spate of recent bombings, a sharp and tragic increase from the recent norm.
• Egypt, Jan 29: Cairo appears to be near anarchy as a result of an uprising against President Mubarak.
• Yemen, Jan 29: Demonstrations and rallies have resulted in clashes with police, with unclear implications at this point for the stability of the regime.
An optimist might see the common thread in many of these developments to be the realization across parts of the Arab world of the power of popular will to overthrow dictators, the first step toward democracy and a better life for the people. A pessimist might see in at least some of these situations deliberately orchestrated chaos for purposes of seizing power by a new group of would-be ruthless leaders. A realist might acknowledge the possibility of both factors in play at once, and worry that ideologically motivated uprisings have often turned out to be usurped by groups with their own highly anti-democratic agenda. In the event that some of the transitions of power prove to be more chaotic than peaceful, let me comment on their potential to disrupt world oil markets.
continued
http://www.econbrowser.com/archives/2011/01/geopolitical_un.html
Obama and Business May Get On Well, but When Will That Produce Jobs?
By SIMON JOHNSON
President Obama is embarked on a major charm offensive with the business sector, as seen, for example, in the appointments of William M. Daley (formerly of JPMorgan Chase, now White House chief of staff) and Jeffrey R. Immelt (chairman and chief executive of General Electric and now also the president’s top outside economic adviser).
This should not be an uphill struggle – much of the corporate sector, particularly bigger and more global businesses, is doing well in terms of profits and presumably, at the highest levels, compensation. But when exactly will this approach deliver jobs and reduce unemployment? And does it increase risks for the future?
Republican rhetoric over the last two years was relentless in its assertion that the Obama administration was antibusiness. Supposedly, this White House attitude undermined private sector confidence and limited investment.
In reality, the opposite was the case. Relative to any postwar recession, the rebound in profits during the Obama administration has been dramatic. To be sure, the end of 2008 was shocking to many entrepreneurs and executives, as credit was disrupted in a much more dramatic fashion than they thought imaginable. Large and immediate cuts in employment followed.
But then the government saved the failing financial sector. The means were controversial, but the end was essential – without private credit, the United States economy would have fallen far and for a long time.
And profits rebounded almost at once. The financial sector recovered quickly on the back of implicit guarantees provided to our largest banks. The only bad quarter was at the end of 2008 (leading to great angst among bankers about their bonuses in 2009). The nonfinancial sector has done even better.
Profits for the private sector fell no more than 20 percent from top to bottom in the cycle, and in the third quarter of last year (the latest available data from the Bureau of Economic Affairs), profits were back at the level of 2006. After the deep recessions of the early 1980s, it took at least three times as long for profits to come back to the same extent (I went through this comparison in more detail last week for The New York Times’s Room for Debate).
Investment in plants and equipment has also recovered fast – this was the one bright part of the domestic economy in the last two years (the other being exports). Look around at the places you work, where you do business and where you shop. Is there any indication they have cut back on information technology spending recently?
Over all, the policies of late 2008 and early 2009, including the much-debated fiscal stimulus, protected corporate profits to an impressive degree. Even though this was the steepest recession of the last 70 years, profits fell only briefly and seem likely to be just as strong as they were before the crisis.
Large global American-based companies, in particular, are well positioned to take advantage of growth in such emerging markets as India, China and Brazil. But the link between corporate performance — measured in terms of profit or executive pay for American companies — and domestic employment has fundamentally changed in recent decades.
At the very least, employment responds more slowly now than in previous cycles as output and sales recover. Consider this chart from the Calculated Risk blog (and revisit it regularly). As the picture shows so vividly, we are still waiting for employment to turn back up decisively. Compared with previous recessions, the delay is simply stunning.
Ideally, in a situation like this, we’d provide more stimulus to the economy in some form. But our monetary policy is already close to exerting its maximum efforts, and the scope for using fiscal policy was undermined by high deficits during the “boom” years of the 2000s, so there is no safe fiscal space for action – even if the politicians could agree on what to do.
We are reduced to waiting for the private sector to recover enough to want to take on new employees. No one has a good answer for why this is so slow – perhaps because it is so easy and so cheap to hire workers in those emerging markets that are now booming, or perhaps because the skill mix available at prevailing wages in some parts of the United States is not what employers want.
Or perhaps companies are effectively keeping out new entrants, keeping profits artificially high and, at the sectoral level, limiting employment. The constraints on entrepreneurship in our post-credit-crisis economy need careful scrutiny.
Hopefully, the administration’s charm offensive will not prevent it from enforcing American antitrust laws, which were more than slightly neglected in the Bush years.
Listening attentively to the nonfinancial sector makes sense in this situation. In return, corporate leaders need to focus on creating jobs in the United States. But bending over backward to accommodate the wishes of the financial sector is exactly what got us into this mess to start with.
Allowing our largest banks to become even bigger and more dangerous would be a very bad mistake.
______________
Geopolitical unrest and world oil markets
Change is on the way in the Arab world, with Egypt the latest focal point. Here I review recent events and their implications for world oil markets.
I begin with a timeline, if not to connect the dots, at least to collect the dots in a single list.
• Sudan, Jan 9-15: Country holds a referendum whose apparent outcome will be a split of South Sudan into its own a separate country.
• Lebanon, Jan 12: Key cabinet ministers resign in protest against impending indictments from a U.N.-backed investigation into the 2005 assassination of former prime minister Rafiq al-Hariri, toppling the governing coalition. U.S. Secretary of State Hillary Clinton offered this assessment:
We view what happened today as a transparent effort by those forces inside Lebanon, as well as interests outside Lebanon, to subvert justice and undermine Lebanon's stability and progress.
• Tunisia, Jan 14: President Ben Ali flees the country in response to widespread protests.
• Iraq, Jan 17-27: Over 200 people killed in a spate of recent bombings, a sharp and tragic increase from the recent norm.
• Egypt, Jan 29: Cairo appears to be near anarchy as a result of an uprising against President Mubarak.
• Yemen, Jan 29: Demonstrations and rallies have resulted in clashes with police, with unclear implications at this point for the stability of the regime.
An optimist might see the common thread in many of these developments to be the realization across parts of the Arab world of the power of popular will to overthrow dictators, the first step toward democracy and a better life for the people. A pessimist might see in at least some of these situations deliberately orchestrated chaos for purposes of seizing power by a new group of would-be ruthless leaders. A realist might acknowledge the possibility of both factors in play at once, and worry that ideologically motivated uprisings have often turned out to be usurped by groups with their own highly anti-democratic agenda. In the event that some of the transitions of power prove to be more chaotic than peaceful, let me comment on their potential to disrupt world oil markets.
continued
http://www.econbrowser.com/archives/2011/01/geopolitical_un.html
Extreme oversold condition in the Vix ?
http://gicharts.blogspot.com/2011/01/extreme-oversold-condition-in-vix.html
Just pay attention to the "extreme oversold condition" in the VIX.
Raise your stop on the SP 500 to 1260
Posted by Moise Levi
Gold and Silver warning
http://gicharts.blogspot.com/2011/01/gold-and-silver-warning.html
SPDR Gold Trust ETF (GLD) and iShares Silver Trust ETF (SLV) chart analysis ;
1) Using on both charts the support level (light grey) and their simple 50 days MA.
2) If you decided to go short on both, focus on the stop loss level
3) GLD shows a triple top ....
4) SLV shows a head and shoulder ?
5) Target on both ? 200 days simple MA ?
Not jumping to conclusions yet, but we do have a first real sign of a potential bearish reversal.
Posted by Moise Levi
AI
