Archive for December 2011
Sears Holdings (SHLD) – Flawed Strategic Experiment Results in Retailing Train Wreck – AutoZone and Sears Comparison
Sears Holdings pre-reported Q4 results which showed a rapid deterioration yesterday. The most alarming item in the press release was the rapid deterioration in sales trends at both Sears and Kmart. Sears comparable store sales trends ran -3.3% in the YTD period (which is a month away from the full year) while the trends through…
Read MoreSanta Hits the Beach as Warm Weather Continues in December
The warmth and subtle humidity in the air stirs emotions as one envisions heading to the ball park for opening day, preparing for the start of a new fishing season, or produces visuals (perhaps with dread) of how that new swimsuit or bikini will fit. Oh wait, it’s December 22nd! The northeast part of the United…
Read MoreLack of Confidence – A Key Driver of Investment Returns in 2011 – An Opportunity and Risk for 2012
2011 has been a difficult year for most investors. Market sentiment oscillated throughout the year and generating returns has been exceedingly difficult to come by, let alone maintain. The world experienced at least three distinct crisis; Japanese nuclear disaster, Arab Spring, and Sovereign Debt contagion through Europe. All three of these events were enough to…
Read MoreChina Moves Towards Opening Domestic A-Share Equity Market and Hints of Policy Easing Continue
China had an interesting announcement after the close of trading last night which entails opening up the mainland securities markets to Hong Kong investors. According to regulators, China National Radio reports the government is going to trial quota issuance to Hong Kong securities firms for mainland investment. Securities brokerages and fund management firms will be…
Read MoreInvesting Ahead of a European Recession
Investing ahead of a recession is like a trip to the dentist for a filling when the Novocain isn’t quite right. You know you are in for some pain, but it’s unclear just how much, and how long it will last. Europe is accepting the German path forward, which will at a minimum, lead to…
Read MoreThe Rest of Europe Can’t be German
The EU Summit and ECB meeting which transpired last week are likely to be the final supporting actions by Eurozone officials this year. The tack forward for Europe has been clarified; move ahead with the long and arduous process of fiscal unification, supported by a reactive ECB. The path ensures two outcomes; that there will…
Read MoreECB Cuts Rates 25 Basis Points to 1% – Hawkish Press Conference Q&A Squashes Hopes of Sovereign Debt Purchases in Larger Amounts
The ECB issued a terse press release detailing an interest rate cut for the main refinancing operations of the Eurosystem (from 1.25% to 1.0%) commencing on December 14th. In addition, the ECB cut rates on the marginal lending facility and deposit facility by 25 basis points. This move was widely expected and had a limited…
Read MoreStandard & Poors Places Europe on Negative Credit Watch – World Set for Downgrade!?
I find it rather ironic that Standard & Poors placed the EU-17 on negative credit watch on the same day the market provided the strongest one-day positive assessment to peripheral Europe’s sovereign credit outlook since August (borrowing costs were down sharply on Monday). I have no issue with actually conducting a downgrade of the entire…
Read MoreMario Monti Announces Serious Austerity Plan for Italy – 2013 Balanced Budget Target Leads to Sovereign Debt Rally
Italian Prime Minister, Mario Monti, announced sweeping austerity measures and reforms, bolstering confidence in Italian sovereign debt markets. Monti’s plan includes tax increases, government spending cuts, pension savings and raising the retirement age. Italy needs to enact these reforms over the next couple of years, and there are some political risks to implementation, but the…
Read MoreCJF Read of the Week – Acting Man: “The ECB and Balance Sheet Recessions”
Pater Tenebrarum, writer for Acting Man, did a great job of putting together a timely and comprehensive update on Mario Draghi’s speech to European Parliament. He highlights the hints that Mario Draghi and the ECB are moving closer towards monetary pump priming. Some great charts, relevant excerpts, and good humor. Click for the full piece…
Read MoreISM New Orders – A Strong Indicator of GDP Growth Improved Sharply in November
The financial crisis in Europe detracts from a normal focus on the underlying strength of the US and global economy. Despite the US economy being relatively solid, an escalating Eurozone crisis has the potential to derail economic growth because of the enormity of the impact from a financial seizure. While the solution to the Eurozone liquidity…
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