Updates of some significant Economic vs Markets Charts. All in all, the credit markets are pricing in a somewhat more “realistic” picture of the Economy, where credit spreads etc all imply a significantly lower equities prices. While many of the European and Asian (check Hang Seng) indices have collapsed during the last months, the US markets have held up “stubbornly high”. The SPX index has been forming a rather big formation suggesting a significant sell off, if we are to break down, check here. It almost looks like somebody has been supporting the SPX chart, but this one is running out of bullets…All charts by Macro Story.
Copper vs SPX. Last time Copper traded here, SPX was close 1000. See our post earlier this week, Dr Copper and SPX.
For all charts continue below.
Increasing anger, discontent and a rise in financial concerns. This is not Greece, nor the MENA region. The ever increasing polarization of the US society, is making USA vulnerable to social unrest. Below is graphical representation by Visual.ly of American discontent, according to the Pew Research Center:
Guest Post Weekender by MoreLiver.
What a week – Super EFSF proposed last weekend, shorting bans continued, financial transaction tax (FTT) gaining ground. Now even Barroso is switching to the same hypomanic gear as Trichet. Somebody please send them more lithium before it’s too late.
During the week the proposed Death Star (leveraged EFSF) has been mostly shot down by commentators: it has been argued that it does not solve the underlying fundamental problems of the eurosystem, leverage would not be credible, ECB’s commitment is uncertain and above all, markets are not impressed, as the EFSF and the Death Star-EFSF is too little, too late.
Expect more can-kicking and soothing the voters by playing the bad cop to PIIGS and the banks. As the banks are weak, the bad cop routine will be limited to indirect threats like the shorting ban, FTT and HFT. They will not make additional moves until the EFSF is ratified.
While some of the European banks managed to crawl higher (at least a few days), Morgan Stanley has been selling off heavily this week. As the exposure towards the European banking sector seems rather huge (and we can only wonder where the exposure is marked), we have also had a rather dramatic uptick in Chinese CDS prices. Morgan Stanley, highly exposed to both the European banks and an aggressive exposure in China, is feeling the heat. Tim Backshall of Capital Context gives his recap on CNBC.