Markets
CJF 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 MoreGermany’s First Failed Bond Auction – The European Crisis Continues to Spread
Germany failed to get bids for 35% of the 10-year bonds auctioned today. Yields are up about 10 basis points this morning. The increase in borrowing cost is insignificant for Germany. Yields are still well below 2%, and Germany continues to benefit from the combination of very low borrowing costs, and a declining euro which…
Read MoreEmerging Market Currencies Signaling More Risk Aversion
For almost a decade, emerging markets have been in a bull market with high growth rates, declining interest rates, and capital inflows. During the financial crisis, emerging markets were hit like financial assets around the world, and capital flowed out of the asset class. Over the course of 2010, and most of 2011, emerging market…
Read MoreQue Lastima – Spain in a Vice as Interest Rates and Unemployment Soar
I’ve been writing about the impossibility of the ECB running appropriate monetary policy for 17 different nations. The dilemma couldn’t be more evident when contrasting the economy of Spain with the economy of Germany. Spain actually has less sovereign debt relative to GDP than does Germany. The problem for Spain isn’t the level of debt…
Read MoreEurope’s Crisis Spreads as Spain, Belgium, France, the Euro and EU-17 get Questioned – How Does It End?
For a number of months, the financial crisis in Europe has been explained under the guise of sound versus unsound policy. If this were indeed the case, the fix would be simple; eliminate unsound and unsustainable policy and voila, the problems would just go away. European leaders have shifted blame continuously from one problem to…
Read MoreEurope Must Decide Its Future – Self Induced Financial Crisis Has Led Europe to the Brink
After Wednesday’s market action around the world, it’s a good time for a big picture assessment on the state of the financial markets. The attitude out of Europe has pendulated between nonchalance and vitriolic attacks among the EU-17. Italian sovereign rates spiraling above 7% have brought the eleventh hour upon the region. Escalation of the…
Read MoreNew York City Taxi Medallion Bubble – Prices Appreciate to $1M
Bloomberg recently reported that New York taxi medallions changed hands this October for a record $1 million. There have been a number of reports over the years demonstrating that investment in taxi medallions outperformed stocks, bonds, real estate, and other financial assets. While this may be true, the yield has clearly come way down making…
Read MoreMarket Confidence in Italy Hits New Lows – Berlusconi to Face New Rounds of Confidence Votes
Italian 10-YR bond yields hit 6.62% this morning, which marks a new high since concerns over the sustainability of European sovereign debt began to unfold. This wasn’t supposed to work this way after the Eurozone leaders announced a new structured investment vehicle to be put in place to leverage up the EFSF. It remains unclear…
Read MoreWhen Will the Market Start to be Forward Looking – Early Signals from Asia?
The markets have been through a period of wicked volatility with a significant pullback almost to the point of entering a new bear market. Intraday the S&P 500 was down 20% from its high but closed above those levels and went up from there. From the market’s closing bottom of 1,099 the S&P had a…
Read MoreYen Intervention Take Three – Reminder That There Are No Safe Haven Currencies
Japanese leaders intervened for the third time this year as JPY strength below 77 yen/usd is clearly constraining a recovery in the world’s third largest economy. Japanese Finance Minister, Jun Azumi, announced a unilateral move with an additional pledge to keep selling in the future. The action took place because Japan believes the yen strength…
Read MoreEurope’s Eleventh Hour Fix
After keeping the world on edge and pushing up against the brink of a European recession, details of the European fix are trickling out. It is sure to be a headline filled Thursday, Friday, and weekend. I won’t focus on the specific details because many of them still aren’t known and the ones that have…
Read MoreUS Industrials See No Evidence of Global Recession – Results from Caterpillar (CAT) and Parker Hannifin (PH) Hammer Home the Point!
Caterpillar (CAT) reported very strong earnings this morning, beating estimates quite handily. EPS of $1.71 compared to consensus of $1.57 (a 9% beat). As important, the company outlined an environment consistent with global growth persisting and a strong outlook for 2012. Caterpillar’s organic sales grew by 34% this quarter excluding the recent acquisition of Bucyrus.…
Read MoreGermany and France discussing a 2T euro rescue fund
This is being reported in the Guardian. If it is true and the plan gets confirmed it would be a set up for a lift-off.
Read MoreGermany Wants To Go At Their Own Pace – Implications for Financial Markets
German leaders are coming out with comments that indicate there will not be a sweeping fix to the Eurozone financial crisis when leaders meet at a summit on October 23rd. Angela Merkel has been credited as saying “dreams that are taking hold again now that this package will be solved and everything will be over…
Read MoreA Guide for Q3 Earnings Season – What I’m Looking For
Earnings season officially gets started this week, with reports already released from Alcoa, Pepsi, JP Morgan and a few others. Tonight Google will be reporting after the close – a stock I continue to view favorably. Next week the reports will pour in and by the end of next week we’ll have a pretty good…
Read MoreA Commitment to Recapitalize European Banks is Bullish for US Financials
The Euro rallied 2% today against the USD causing a sharp reversal of crisis-fearing “risk off” trades which have been working against all financial markets around the world. The Euro rallied based on indications that France and Germany are going to work seriously towards recapitalization of the European banking sector. This has been one of…
Read MoreOccupy Wall Street – Part Protest, Part Woodstock, Part Circus
Occupy Wall Street is part protest, part Woodstock, and part circus act, but none of it has anything to do with Wall Street. I live in Manhattan and figured I would check out the scene this weekend not quite sure of what to really expect. There has been plenty of financial press calling the protest…
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