World economy talk

[uls]

Morning

equities:

Equities sold off on Friday after weaker consumer sentiment data fuelled concerns that the economic recovery will be sluggish. Boeing (-3.75%) was the biggest loser in the Dow after the planemaker revealed it had stopped work on the 787’s fuselage due to manufacturing flaws. Elsewhere, the basic materials (-2.48%) and oil & gas sectors (-1.35%) underperformed after the USD index moved higher following the release of disappointing University of Michigan sentiment survey data. Also, the retailers were under pressure as JCPenney (-6.15%) warned that its full year results could miss expectations and as negative sentiment carried over from Thursday following weak retail sales data. Following the initial move lower after consumer sentiment data, equities traded sideways, though did pare back some of their losses in the last 15 minutes of trade on touted short covering. At the closing bell DJI closed down 0.82% at 9321.40, S&P 500 closed down 0.85% at 1004.09 and the NASDAQ 100 closed down 1.05% at 1611.58.

fixed income:

T-notes were higher on Friday after CPI data helped temporarily alleviate inflation fears, while an unexpected drop in the University of Michigan sentiment survey gave treasuries another boost later on, after the report suggested that consumer spending remains constrained. After, initially touching on highs 117.26, T-notes drifted lower on touted leveraged profit taking with talk of big macro funds involved. At the pit close t-notes finished up 8 ticks at 117.08+

USD index up

oil falls to below $68

---

happy weekend

[Monseratto]

Consumer "tight-wads" being blamed for putting the brakes on the "recovery"...

Wall Street looked to plunge at the opening of trading Monday as investors around the world feared that consumers are too anxious to help lift the economy into recovery.

U.S. stock futures fell sharply Monday after overseas markets extended the heavy selling that began on Wall Street Friday. That pullback followed a weaker than expected reading on consumer confidence.

Oil prices also continued to fall sharply, reflecting the growing concerns about a weak economy that will curtail demand for energy.

After rallying for months on expectations of an economic recovery, investors are now worried that they have been too optimistic given consumers' continuing reluctance to spend.

Friday's drop on Wall Street was triggered by a sharp drop in the Reuters/University of Michigan consumer sentiment index, which followed a surprisingly weak July retail sales report from the Commerce Department. While other parts of the economy, including housing and manufacturing, are showing signs of progress, the country cannot have a strong recovery unless consumers are spending more freely. Their spending accounts for more than two-thirds of economic growth.

Meanwhile, bond prices rose as investors sought safety of Treasurys. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.51 percent from 3.57 percent late Friday.

The dollar rose against other major currencies, while gold prices fell.

[tidus1203]

Hehehehe thats the story this week and the markets will come down. Next week consumer becomes confident again and the market goes up again.

Focus on the directional trend...

By the way the UK Pound is getting killed. This is a turning point for the GBP and its rally is finally over. I sense a trend reversal now and GBP back to 1.40.

[uls]

it about time there's a sell off

naging sobra optimistic ang market

[uls]

Good morning

equities:

US equities slumped on Monday, tracking European and Asian counterparts as investors speculated the recent run up in equity prices had been overdone following Friday’s unexpected drop in consumer sentiment. Lowe’s (-10.33%) was among the laggards in the S&P 500 after Q2 earnings missed analyst estimates, while ITW (-2.68%) also underperformed after it reported quarterly operating revenue fell 24%. Elsewhere, the VIX index jumped around 13% as investors snapped up options amid renewed economic uncertainty and Basic Materials (-4.43%) stocks tumbled as the USD index took a bid. The Financials (-4.22%) were also under pressure after the shut down of Colonial Bank last week by US regulators highlighted the fragility of the sector, with BB&T (-6.37%) amongst the worst performers after a USD 750mln common stock offering. On the flipside, Health Care (-0.03%) stocks rose on indications that the Obama administration may be ready to drop the public option as part of the health care system overhaul, with Aetna (4.77%) and Wellpoint (2.89%) shares benefiting from the news. At the closing bell DJI closed down 2.00% at 9135.34, S&P 500 closed down 2.43% at 979.73 and the NASDAQ 100 closed down 2.90% at 1564.89.

fixed income:

T-notes were higher on Monday amid lower volumes, as global equity markets sold off on concerns over the sustainability of the economic recovery following last Friday’s disappointing consumer confidence reading. T-notes also received a lift later in the session after the Fed bought back USD 7.016bln in coupon securities with an offer/cover 2.27 vs. Prev. auction of similar maturity 2.47. At the pit close t-notes finished up 15+ ticks at 117.24.

[uls]

Looks like the bulls have regrouped in Tokyo

Treasuries Decline on Speculation Housing Starts Climbed in July
http://www.bloomberg.com/apps/news?p...d=aXchRoSyt4uE

Aug. 18 (Bloomberg) -- Treasuries fell before a U.S. report that economists said will show builders broke ground in July on homes at the fastest pace in eight months.

Ten-year yields rose two basis points to 3.49 percent as of 9:02 a.m. in Tokyo.

[uls]

mOrning

equities:

Stocks were higher on Tuesday supported by an increase in German investor confidence and better than anticipated earnings from Home Depot (3.14%) and Target Corp (7.55%), as well as a report that showed single-family homes rose for a fifth consecutive month in July. The financial sector (1.91%) was a strong performer in the S&P 500, with Goldman Sachs (2.05%) and American Express (4.28%) shares benefiting from broker upgrades. Elsewhere, the Basic Materials (1.60%%) and Oil and Gas (+0.87%) sectors finished with good gains as the USD index declined. At the closing bell DJI closed up 0.90% at 9217.94, S&P 500 closed up 1.01% at 989.67 and the NASDAQ 100 closed up 1.38% at 1586.50.

fixed income:

T-notes moved in to positive territory following weaker PPI and housing data on Tuesday, however where unable to hold on to gains and soon retraced the entire move higher as equities trended to the upside. At the pit close T-notes finished down 8 ticks at 117.16.

oil past $70... that's from below $67

[Monseratto]

Very hard to anticipate on the direction of this market, was expecting a longer correctional period. Has the institutional buying returned yet?

[uls]

yep

actually institutional investors were a bit late going back into stocks

they totally missed the rally after the March lows

they were too scared to enter the market

took them a while to start buying stocks again (mostly around late May to June when they had to balance their portfolios before end of Q2)

the fund managers realized they needed equities in their portfolios (they were majority in cash and treasuries) coz it would NOT look good in their end of Q2 reports if all they had were safe haven assets at a time when riskier/higher yielding assets were rising

[tidus1203]

China enters bear market (technical term, pero base on my charts hindi pa) and the Yen strengthens. The GBP gets slammed and looks like its another seesaw week. Down last Monday, up yesterday and down again today. Good time to day trade, if you're a position trader hold onto your horses...

[Monseratto]

The US is looking at Asia for direction and it's pointing south...

In futures trading, the Dow industrials futures were down 74 points, or 0.8 percent, at 9,133 and Standard & Poor's 500 futures lost 8.4 points, or 0.9 percent, to 981.20.

The drops came after the Shanghai index plunged over 5 percent at one point before closing down 125.30 points, or 4.3 percent, at 2,785.58.

The index has lost nearly 20 percent this month on worries about corporate profits, the strength of China's recovery and possible changes in Beijing's easy credit policy that has helped to fuel the bull run in Chinese stocks this year.

World stock markets have mostly been rising since March on relief that the economic crisis will be shorter than previously feared. But once many indexes reached new highs for 2009, investors started wondering whether stocks are overvalued. Considering trading volumes are limited by the summer holiday season, the uncertainty has caused markets to hover in a range over the past few weeks.

[tidus1203]

Now that the US is in deep deep debt trouble. Besides money printing, they have been more than ever aggressive in collecting taxes... Hmmm... matagal na ito peor now that they need all the money they can get they start to become aggressive.

WASHINGTON (AP) -- Swiss banking giant UBS AG agreed Wednesday to turn over to the IRS the details of 4,450 accounts suspected of holding undeclared assets by American customers, ending an intense trans-Atlantic legal fight.

http://finance.yahoo.com/news/UBS-to...&asset=&ccode=

[uls]

Chinese stocks rallied before US stocks

Chinese stocks peaked before US stocks

people are looking at the China market and using it as a leading indicator

[uls]

Now that the US is in deep deep debt trouble. Besides money printing, they have been more than ever aggressive in collecting taxes... Hmmm... matagal na ito peor now that they need all the money they can get they start to become aggressive.




http://finance.yahoo.com/news/UBS-to...&asset=&ccode=

hehe

the USG is becoming scarier everyday

i can already see rich Americans leaving the US

kung ako i would seek citizenship in rich-friendly countries

hey dudes, come to Asia!

[tidus1203]

Maybe the Philippines should adopt Isle of Man like tax codes and believe me with our nice beaches and tropical climate daming old, rich and white guys pupunta to retire set up a business dito thus helping our economy. FCKU the US!!

[uls]

the USG is growing bigger by the day

it's scary

the USG will over-regulate and tax its citizens to death

kaya tama yung decision ni Jim Rogers na tumira sa Singapore

[uls]

From 52,000 names to 5,000

http://www.reuters.com/article/ousiv...090817?sp=true

GENEVA (Reuters) - The deal initialed last week between the United States and Switzerland over UBS (UBSN.VX) will involve the disclosure of around 5,000 holders of secret Swiss accounts, weekly newspaper NZZ am Sonntag said on Sunday.

Another Swiss weekly, Sonntag, said around 4,500 names would be handed over.

The landmark deal, ending a dispute in which the U.S. tax authorities had sued UBS to disclose 52,000 U.S. clients suspected of tax evasion, dispels a big cloud hanging over the world's second biggest wealth manager.

why did the US back off from their demand for 52,000 names?

if 52,000 clients withdraw their money from UBS, UBS could collapse

the global financial system could be taken down by the collapse of a bank as big as UBS

NZZ am Sonntag said the U.S. government had backed off from the original demands of the Internal Revenue Service (IRS) because the U.S. Treasury Secretary did not want to provoke another financial crisis by pushing UBS over the edge.

Swiss bank secrecy is over

the reputation of Swiss banks... gone... flushed down the toilet

It also formally leaves Switzerland's cherished banking secrecy intact, although many Swiss private bankers say it has been badly damaged.

let's see what happens to the CHF

[tidus1203]

the USG is growing bigger by the day

it's scary

the USG will over-regulate and tax its citizens to death

kaya tama yung decision ni Jim Rogers na tumira sa Singapore

Yeah Jim is rich and Jim is smart kaya he moved to Singapore so the USG will keep away from his money. The USG is growing desperate and desperate for money. And with Obamacare lalo lang sila lubog ng lubog sa utang...

[uls]

Good morning

equities:

Equities initially looked set to fall on Wednesday as Chinese stocks officially entered a bear market; however those initial concerns were offset by a large drawdown in DOE crude inventories. The drawdown in crude helped prop up equities with the Oil & Gas (1.93%) sector leading the S&P 500 higher, while Chevron (1.82%) and Exxon (2.27%) both led the Dow. Elsewhere, the Health Care (1.22%) sector advanced, paring back Tuesday’s losses, with Celgene (2.05%) amongst the leading gainers after positive Oppenheimer comments and the Basic Materials (1.06%) sector also moved higher, benefiting from a weaker USD. In the latter half of the session equities moved off their best levels, though maintained gains. At the closing bell DJI closed up 0.66% at 9279.16, S&P 500 closed up 0.69% at 996.46 and the NASDAQ 100 closed up 0.64% at 1596.61.

fixed income:

T-notes rose on Wednesday as concerns over the sustainability of the global economic recovery were reignited after Chinese stocks entered a bear market following a drop of more than 20% from the year’s high. After touching on highs 118.14+, T-notes drifted lower as equities gathered upside momentum and after a poor Fed Treasury coupon purchase. At the pit close T-notes finished up 14+ ticks at 117.31

big move in oil last night

surprise decrease in inventory

September contracts expire Thursday

everyone now trading October contracts



oil price above $73

[uls]

a NYTimes article written by Warren Buffett

it's about USG debt and the USD

The Greenback Effect
http://www.nytimes.com/2009/08/19/op...r&st=cse&scp=1

some excerpts:

first, Warren says USG was able to save the US economy

the problem now is the huge amount of debt the USG has incurred while saving the US economy

The United States economy is now out of the emergency room and appears to be on a slow path to recovery. But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.

To understand this threat, we need to look at where we stand historically. If we leave aside the war-impacted years of 1942 to 1946, the largest annual deficit the United States has incurred since 1920 was 6 percent of gross domestic product. This fiscal year, though, the deficit will rise to about 13 percent of G.D.P., more than twice the non-wartime record. In dollars, that equates to a staggering $1.8 trillion. Fiscally, we are in uncharted territory.

How do you raise $1.8T?

An increase in federal debt can be financed in three ways: borrowing from foreigners, borrowing from our own citizens or, through a roundabout process, printing money. Let’s look at the prospects for each individually — and in combination.

borrow from foreigners:

The current account deficit — dollars that we force-feed to the rest of the world and that must then be invested — will be $400 billion or so this year. Assume, in a relatively benign scenario, that all of this is directed by the recipients — China leads the list — to purchases of United States debt. Never mind that this all-Treasuries allocation is no sure thing: some countries may decide that purchasing American stocks, real estate or entire companies makes more sense than soaking up dollar-denominated bonds. Rumblings to that effect have recently increased.

$400B... that's not enough

borrow from your own citizens:

Then take the second element of the scenario — borrowing from our own citizens. Assume that Americans save $500 billion, far above what they’ve saved recently but perhaps consistent with the changing national mood. Finally, assume that these citizens opt to put all their savings into United States Treasuries (partly through intermediaries like banks).

$500B... that still isnt enough

still short $900B

print money:

Even with these heroic assumptions, the Treasury will be obliged to find another $900 billion to finance the remainder of the $1.8 trillion of debt it is issuing. Washington’s printing presses will need to work overtime.

if the USG doesnt cut back on spending, the USD will be destroyed