….so goes the market. The greatest stock of them Apple, is showing “diturbing” signs of higher volatility. The biggest hedge fund hotel stock of all times, has lost the magic touch and trading at multiweek lows. What is even more concerning is the big volatility we are witnessing. This is a classical top formation, with every momo long Apple, waiting for the stock to hit 1k. With many of the new “smart” fundamental Apple longs, we are up for some interesting trading here. Beware of falling Apples.
3 Apple charts below.
A few months before submarines became the talk of Athens, Yiannis Panagopoulos, who heads the Greek trade union confederation (GSEE), found himself sitting opposite Angela Merkel at a private meeting the German chancellor had called of European trade unionists in Berlin.
When it came to his turn to address the leader, he instinctively popped the question that many in Greece have come to ask.
“After running through all the reasons why austerity wasn’t working in my country I brought up the issue of defence expenditure. Was it right, I asked, that our government make so many weapons purchases from Germany when it obviously couldn’t afford such deals and was slashing wages and pensions?”
Merkel’s reaction was instant. “She immediately said: ‘But we never asked you to spend so much of your GDP on defence,’” Panagopoulos recalled. “And then she mentioned the issue of outstanding payments on submarines she said Germany had been owed for over a decade.”
Guest post by Azizonomics.
Last December I took the time to explain capitalism for Angela Merkel:
Capitalism means both successes and failures. It is a fundamentally experimental system, with a continuous feedback mechanism — the market, and ultimately profit and loss. Ideas that work are rewarded with financial success, and ideas that don’t are punished with failure. With capitalism, systems, ideas and firms that fail to produce what the market wants fail. They go bankrupt. Their assets, and their debt is liquidated.
When that mechanism is suspended by a government or central bank that thinks it knows best — and that a system that is too interconnected to fail is worth saving at any cost — the result is almost always stagnation. This is for a number of reasons — most obviously that bailouts sustain crippling debt levels, and are paid for through contractionary austerity. But it is larger than just that.
In nature, ideas and schemes that work are rewarded — and ideas and schemes that don’t work are punished. Our ancestors who correctly judged the climate, soil and rainfall and planted crops that flourished were rewarded with a bumper harvest. Those who planted the wrong crops did not get a bailout — they got a lean harvest, and were forced to either learn from their mistakes, or perish.
These bailouts and interventions have tried to turn nature on its head — bailed out bankers and institutions have not been forced by failure to learn from their mistakes, because governments and regulators protected them from failure.
Obviously she did not read my advice.
So we got that Spanish auction out. As some cheered the fact Spain paid below 6%, the Med indices are back to normality, ie trading in red. Momentum regarding Spain and Italy is so bad. Quick chart kneejerk reaction below.
As the austerity situation is hitting Spain for real, the pain is being felt beyond the falling IBEX and rising yields. Similar effects as we have seen in Greece are now popping up in Spain, latest being the healthcare sector. With unemployment skyrocketing, the politicians delivering empty promises, Argentina stealing Spanish properties, and healthcare heading for a collapse, expect nothing less than the protest we saw in Greece. From El Pais.
Spain’s hospitals are reportedly in debt to the pharmaceutical companies that supply them with drugs and medical devices to the tune of 12 billion euros. Last week Sagrario Pérez Castellanos, the director general of Basic Services and Pharmacy at the Health Ministry, told reporters that she couldn’t confirm the figure, saying that the government didn’t have data for hospitals’ full costs because regional governments, who are responsible for budgeting their health services, can’t – or won’t – provide accurate figures.
Farmaindustria, the body that represents Spain’s pharmaceutical companies, has a clearer picture of the problem: it says that of the 12 billion euros, “6.4 billion covers medicines, and the rest covers items such as disposable gloves, bandages, syringes, etc.” It adds that regional health authorities take between 18 and 26 months to pay their suppliers.
Guest post by Doug Short.
On Friday of next week (April 27th) we’ll get the Advance Estimate for Q1 GDP from the Bureau of Economic Analysis. Meanwhile, the Wall Street Journal’s April Survey of economists is now available. Let’s see what their crystal ball is telling them about Q1 GDP (download the WSJ Excel File).
First, some context: The BEA’s Final Estimate for Q4 GDP came in at 3.0 percent, unchanged from the 3.0 percent Second Estimate, which was a downward revision from the Preliminary Estimate of 2.8 percent. The average GDP since the inception of quarterly GDP reporting in the late 1940s is 3.3 percent, which is nearly double the 1.7 percent 10-year moving average of GDP through the end of 2011 (illustrated here).
The April WSJ survey consensus, both the median (middle) and mean (average), is for a Q1 GDP of 2.2 percent. The mode (the most frequent forecast) was a slightly less optimistic 2.0 percent.