Expected Rally and Model Reductions
X-factor Report 18 August 2014
by Lance Roberts, Streetalk Live
In last week's newsletter, I wrote that the markets had issued a "confirmed sell" signal. Not surprisingly, such a statement sparked more than just a few emails given the fact I DID NOT changethe portfolio allocation model. In this week's missive, I want to review what I wrote in the previous analysis and clarify what you should be doing with your portfolios now.
Not As Much Labor Force Slack as Yellen Believes
by EconMatters, EconMatters.com
Fed Moving Targets
The Fed keeps moving their targets when they originally thought it was a good idea to provide forward guidance for markets, then when that guidance was met, they started moving the targets in order to justify pumping more liquidity and stimulus into the financial system for the benefit of the Big Banks.
Read more >>
Market Commentary: DOW At Triple Digits, Bulls Party On
Closing Market Commentary For 08-18-2014
DOW closes up triple digits, NASDAQ closes higher since 2000 and Ukraine fears fade as stocks push higher - just as I said they would.
By 4 pm the averages were sailing higher and a test of previous highs might be in the cards as the Bulls don their party hats.
What We Read Today 18 August 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 (and sometimes longer ones) 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.
- Fed blow to banks over 'living wills' (Gina Chon, Financial Times) The Financial Times has obtained information about confidential letters sent to banks by the Fed and the FDIC on 05 August when they rejected a number of drafts of "living wills". The specific guidance included prohibition of assuming access to the Fed discount window when the bank faced failure.
Debt Issuance In Non-Major Currencies Are Increasing
by Galina B. Hale, Peter Jones, and Mark M. Spiegel - FRBSF Economic Letter, Federal Reserve Bank of San Francisco
Historically, businesses in most countries have not been able to sell bonds denominated in their home currencies to foreign investors. In recent decades this trend has been changing. Research shows that bonds denominated in currencies other than the major global currencies have increased, particularly following the global financial crisis. However, not all countries were affected equally. Countries that were able to take advantage of the temporary disruption and near-zero interest rates in global financial markets were the ones with a combination of low government debt and a history of stable inflation.
Businesses Weigh In On Obamacare
by Jason Bram and Michael Kubiske - Liberty Street Economics, Federal Reserve Bank of New York
The Federal Reserve Bank of New York's monthly surveys of manufacturers and service-sector firms include special supplementary questions on topics of interest. The August survey questions focused on the effects of the Affordable Care Act (ACA) on businesses in the District, and how, if at all, firms are making changes in response to it.
Market Commentary: Averages Remain Elevated, DOW Still Up Triple Digits
Midday Market Commentary For 08-18-2014
By noon the averages remained elevated and trending fractionally upwards in a more or less sideways fashion. The DOW remained up triple digits as midday volume falls.
Former Bank Executive and Friend Charged With Insider Trading Ahead of Acquisition
by Securities and Exchange Commission
The Securities and Exchange Commission today charged a former bank executive in Massachusetts and his friend with insider trading in advance of the bank's acquisition of another financial institution. The SEC alleges that Patrick O'Neill, then a senior vice president at Eastern Bank, learned through his job responsibilities that his employer was planning to acquire Wainwright Bank & Trust Company.
Gates, Fees, and Preemptive Runs
by Marco Cipriani, Antoine Martin, Patrick McCabe, and Bruno M. Parigi - Liberty Street Economics, Federal Reserve Bank of New York
In the academic literature on banks, 'suspension of convertibility' - that is, preventing the exchange of deposits at par for cash-has traditionally been seen as a potential means of preventing economically damaging bank runs. In this post, however, we show that giving a financial intermediary (FI) the option to suspend convertibility may ultimately increase the risk of runs by causing preemptive runs.That is, investors who face potential restrictions on their future access to cash may run when they anticipate that such restrictions may be imposed.
Towards Greener Quieter Cheaper Flights First All electric Aircraft
Aviation company Airbus says it has conducted test flights of the first ever all electric aircraft it designed near Bordeaux in France. The Efan measures six metres from nose to tail is a key step towards greener quieter cheaper flights.
Market Commentary: Markets Gap Up At The Opening, DOW In Plus Triple Digits
Opening Market Commentary For 08-18-2014
Premarkets were up 0.45% this morning after the US NAHB Housing Market Index surprisingly printed in at 55 up from 53. Markets gaped up about the same percentage points and the DOW quickly eased up to triple digits on low volume.
By 10 am the averages were all in the green and reporting +0.70% or better. WTI oil and gold are falling and the US dollar is rising quickly which is a possible signal this mornings gains could be erased.
A Word from This Newsletter's Sponsor
The Number One Risk to U.S. Seniors
A Pentagon insiders new book explains why we are on the cusp of a major crisis that could wipe out the savings of millions. We bought over 1,000 books and want to send you a free hardback copy.
Get it here.
Is This The Summer of 2007?
by John Slater
(Originally Published on Axial Forum)
The summer of 2007 was a great moment. We were enjoying one of the strongest booms in both the debt and equity markets that any of us had experienced in our lifetimes. Just the sort of markets we've been enjoying for the past year or so. The leveraged lending markets have fully recovered from their low point following the market crash of 2008 and 2009 and volume reached a new high in 2013. While market activity declined slightly in the first half of 2014 from the prior year, current activity levels remain very high.
OECDean's '14
Age of Wisdom, Age of Foolishness (39)
Written by Adam Whitehead, KeySignals.com
'Now Showing!'
Age of Wisdom, Age of Foolishness (18) 'Beyond the Pale'[i] suggested that the unfolding events in Ukraine were based on the shared historical legacy of Israel and Russia. It was concluded that Israel would have an active role to play in the future of Ukraine.
Read more >>
Time Has Come To Bury Caesar
by Lee Adler, Wall Street Examiner
Friends, Romans, Countrymen,
I come to bury Caesar, not to praise him.
Ben Bernanke wrote it for all the world to see in November 2010 as the Fed announced QE2. QE would stimulate housing and cause stock prices to rise, leading to increased consumer confidence and spending.
Three Banks Cut; Geopolitical Uncertainty Gnaws at Sentiment
Monetary Policy Week in Review, 11-15 August 2014
by Peter Nielsen, Central Bank News
Last week in global monetary policy three central banks (South Korea, Chile and Armenia) cut their key rates to shore up economic growth amidst deep concern over geopolitical stability, a theme that is now reverberating through financial markets.
George Soros in the News
No one got the story right!
by Jeff Miller, A Dash of Insight
A seriously flawed story about George Soros got a lot of media coverage end of last week. In the midst of options expiration and breaking news from Ukraine, this story might not seem very important. But it was big enough to earn a play from all of the major news sources and a feature on
CNBC.
Tencent's Impressive Line Of Messaging and Social Platforms
by Felix Richter, Statista.com
Tencent, one of China's largest internet companies, released its second quarter earnings report today (PDF).
Insider Trading 15 August 2014: Facebook Again Selling
by Asif Suria
Insider buying decreased significantly last week with insiders buying $33.73 million of stock compared to $113.26 million in the week prior. Selling also declined with insiders selling $812.44 million of stock last week compared to $961.05 million in the week prior.
Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week went up to 24.1. In other words, insiders sold more than 24 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 8.49.
Infographic of the Day: The Google Car Will Change the World
We've all heard about Google's plans to launch a self-driving car, but perhaps few of us have really gotten to grips with the full implications.
