Roberto Abraham Scaruffi

Articles posted on Thursday, 8 May 2014 Front Page  Analysis Blog   Investing Blog   News Blog    Opinion Blog   Current Markets   Economic News: Asia/Pacific  Europe  Middle East/Africa  Americas  USA Government

Do We Understand the Math behind the PPP Calculations? Many Who Should Know Better are Misrepresenting Global Economic Comparisons by Michael Pettis, China Financial Markets A new PPP (Purchasing Power Parity) study complied by the World Bank has generated some pretty excited and, to some, alarming headlines about the new world order. There has been limited reference to this in the Chinese press, for reasons I will discuss later, but hereis the Financial Times on the subject: Read more >> Market Commentary: Averages Melt Into The Red, DOW Stays Afloat For Now Written by Gary Closing Market Commentary For 05-08-2014 The DOW closed in the green and everything else close in the red. Volume picked up as the averages melted down and the $VIX mirrored the SP500 charts. What does today's action mean? I haven't the slightest idea. One guess is that we are witnessing a roll-off of the averages from their previous tops, small caps has already started. By 4 pm the averages had slithered up +0.05% to regain some losses, but the bears in the wings are starting their BBQ's in hopes of a nice steak soon. Read more >> Why Do Economists Still Disagree over Government Spending Multipliers? by Daniel Carroll - Economic Commentary, Federal Reserve Bank of Cleveland Public debate about the effects of government spending heated up after record-large stimulus packages were enacted to address the fallout of the financial crisis. Almost as noticeable as the discord was the absence of consensus among prominent economists on the issue. While it seems a simple problem to estimate the effect of government spending on output-the size of the government multiplier-it is anything but. Read more >> Rail Week Ending 03 May 2014: Strength Continues Econintersect: Week 18 of 2014 shows same week total rail traffic (from same week one year ago) grew according to the Association of American Railroads (AAR) traffic data. The rolling averages growth continues. Read more >> Market Commentary: Averages Continue To Melt Upwards On Anemic Volume Written by Gary Midday Market Commentary For 05-08-2014 The morning accent has slowed by the noon hour, but still melting upward on very low volume the HFT algo computers like. I wouldn't be surprised to see the averages back off somewhat before the closing bell, but if Mr. Putin decides to move into Ukraine, look for a crash. The noontime action is on a waning mode but do not caught off-guard because it wouldn't take much to make this market move sharply downward, even if it is the Wall Street Crooks doing it. Read more >> Military unveils hybrid Black Knight Transformer drone The militarys newest drone is a hybrid heli truck called the Black Knight Transformer. The drone is capable of carrying more than 4000 pounds in payload and is able to travel over land on truck wheels with an attachable boat hull.  Market Commentary: Markets Climb Out Of Negative Opening To Solid Green Written by Gary Opening Market Commentary For 05-08-2014 Premarkets were down almost -0.20% from yesterday's close, oils were down and the US dollar was up. The markets opened flat and in the red and slowly melted upwards on low volume. By the 15 minute mark the averages had topped out at almost +0.30% and continued to climb after a short pause. By 10 am the large caps were closing in on the historical closing highs and the $VIX had fallen to the low 13's. Today should not be any different than recent past session and susceptible to sudden reversals where investors should be on alert. Read more >> A Word from This Newsletter's Sponsor Is TESLA (TSLA) a Buy or Sell? Revolutionary trading software alerted its members with a TSLA SELL signal on 11/6/13 when it was trading at $151.16. Since that time TSLA plunged below $125.00. The software then alerted members on 11/5 to SELL TSLA. Had you followed these TSLA alerts, you could have turned $5,000 into over $20,000 in only 20 days for a 300% return. Click Here To See if You Should Be Buying or Selling TSLA! 03 May 2014 Unemployment Claims 4 Week Average Continues to Degrade Blue Line 4 Week Average The market was expecting the weekly intial unemployment claims at 320,000 to 335,000 (consensus 330,000) vs the 319,000 reported. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average degraded, moving from 320,250 (reported last week as 320,000) to 324,750. Read more >> What We Read Today 08 May 2014 Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included. Trade data relieve pressure on Beijing (Lucy Hornby,Financial Times) China's exports returned to modest year-over-year growth in April after a disastrous 6.6% decline in March. In the most recent month both imports and exports grew from April a year earlier by nearly 1%. The balance of trade was positive at $18.45 billion. See balance of trade graph from Trading Economics after the Read more >> jump. after Read more >> Ending the Drug Wars Econintersect: The London School of Economics has published a comprehensive study on the state of the "War on Drugs". The conculsion is that the war has been an abject and very expensive failure. The lead statement in the foreword to the report is: It is time to end the 'war on drugs' and massively redirect resources towards effective evidence-based policies underpinned by rigorous economic analysis. Read more >> The Economic and Social Case for Legal Recreational Drugs Written by Elliott Morss, Morss Global Finance Introduction Most Americans think the 'entertainment' drugs (Marijuana, Opioids, Cocaine, Amphetamines and their derivatives) are bad. Bad or not, their illegality should be reconsidered. Below, I make the factual case for legalizing them. Read more >> Ready For A Bear Market? Investing Daily Article of the Week by Robert Rapier, Investing Daily The Investing Daily Summit This past week I spoke about energy investing at Investing Daily's annual Investing Summit in Alexandria, Virginia. After listening to the other speakers and talking to a number of attendees, it was clear that the specter of a bear market was on almost everyone's mind. This is especially true for those who may have a short time horizon for their investments, as historically even conservative holdings have taken steep plunges during market downturns. Read more >> Are We An Oligarchy Yet? by Joseph M. Firestone, New Economic Perspectives Matt Stoller believes that the recent pre-publication release of a study by Martin Gilens and Benjamin I. Page doesn't support the idea that the United States is an oligarchy yet. He says: Read more >> What the Fed Is Really Doing to Your Money Interview with Warren Mosler by Chris Mayer, Daily Reckoning QE is a tax. That's an odd thing to say about the Fed's bond-buying stimulus program, known as quantitative easing, or QE. But the reality of QE is different than what most people think... To talk about this, I sought out Warren Mosler, a former hedge fund manager and now trailblazing economist. (I first introduced Mosler to you in your February letter, No. 120. See "How Fiat Money Works.") So on one Sunday afternoon, with Mosler in Italy and me in Gaithersburg, Md., we chatted on Skype about the Fed and its doings. Read more >> Monthly Budget Review for April 2014 from the Congressional Budget Office (CBO) The federal government ran a budget deficit of $301 billion for the first seven months of fiscal year 2014, CBO estimates-$187 billion less than the shortfall recorded in the same span last year. Revenues were about 8 percent higher and outlays about 3 percent lower. Read more >> Hedge Fund Advisory Firm Distributing Falsified Performance Results from the Securities Exchange Commission (SEC) The Securities and Exchange Commission today announced fraud charges and an asset freeze against a New York-based investment advisory firm and two executives for distributing falsified performance results to prospective investors in two hedge funds they managed. Read more >> Huge Profits from Your Local Food Market by Greg Guenther, Daily Reckoning "Our friends at the WSJ are attributing commodity price surges to El Nino," reports our commodities connoisseur Matt Insley. "Sure, the verdict isn't out. Maybe Brazil's drought and Mexico's heavy rains are due to El Nino?" Matt has no clue. Neither do I. Matt Says: "But what I do know, is that commodity prices for a lot of the staples you and I eat on a daily basis are going absolutely b-o-n-k-e-r-s." Read more >> Infographic of the Day: Minimum VS Average Wage What are the global wage gaps between average and minimum wage earners. Read more >> How to Address Inequality by Jeffrey Frankel, Voxeu.org Awareness of inequality is rapidly rising. This column argues that commentators should focus on identifying the policies that are best suited to improving income distributions efficiently, and the politicians that support them. It is not sufficient to sound the alarm about inequality and the political reach of the super-rich. Read more >> High Definition TV has Taken Over Homes from Felix Richter, Statista.com by Niall McCarthy Back in 2008, just one third of homes in the United States had a HDTV set.  Read more >>