Bulled?
This time is different….This bull is losing steam.
Friday Charts
Earlier this week we wrote that the “real” markets, SPX, DAX and other big markets, are about to break out of big formations.
Some of those are actually breaking big dynamic formations today.
Below is a quick chart recap of stuff that is at or breaking critical levels.
Bernanke Isolated!?
Is Bernanke losing it? To QE (more) or not to QE, to raise or not to raise are the next questions the Fed must adress, but there is a small problem, Bernanke is slowly losing his friends. That could be a huge issue going forward. Bernanke looks increasingly isolated, and that is not good for stability. More on this via the Atlantic.
Behind every great president stands a great central banker. Ronald Reagan had Paul Volcker. Dwight Eisenhower had William McChesney Martin. And FDR had, well, FDR.
Labor drop outs
Presented without comments.
Chart Scott Barber.
Bargain hunting in Berkshire stock
Repeat after me; “HFT provides liquidity”. If you were fast enough, you could have bought Berkshire stock at lower average price than the Oracle himself. Unfortunately, it was really hard to spot while taking place. From Nanex.
At 9:32:21, the stock price of Berkshire Hathaway crashed to just 10% of its value in the blink of an eye. Literally. In about 180 milliseconds, 29 trades took BRK.A from 121,862 to 12,011.10, a loss of 90%. Nasdaq’s bid dropped all the way to 1.00 — which is an improvement from 2 years ago when many stocks went to a penny after the flash crash.
Maybe someone needed to get out right away. Maybe the owners of Berkshire aren’t market savvy. Maybe Warren Buffett was splitting the stock. Maybe these High Frequency Traders (HFT) know a lot more about pricing stocks than the rest of us. Maybe this was their new volatility inducing algo (that we stumbled on yesterday) gone awry.
Nassim Taleb Refresher
Nothing new in these videos, but as always, it is good reviewing what risk is about.
A few videos with the master of Black Swans and Risk, Nassim Taleb.
Paul vs Paul. Round 2
Guest post by Azizonomics.
Bloomberg viewers estimate that Ron Paul was the winner of the clash of the Pauls. But that is very much beside the point. This wasn’t really a debate. Other than the fascinating moment where Krugman denied defending the economic policies of Diocletian, very little new was said, and the two combatants mainly talked past each other.
The real debate happened early last decade.
To wit:
Readers are free to make up their own minds who won that one.
And so, round two. From Paul’s FT editorial today:
Control of the world’s economy has been placed in the hands of a banking cartel, which holds great danger for all of us. True prosperity requires sound money, increased productivity, and increased savings and investment. The world is awash in US dollars, and a currency crisis involving the world’s reserve currency would be an unprecedented catastrophe. No amount of monetary expansion can solve our current financial problems, but it can make those problems much worse.
What about Geopolitics? War coming up?
Investors have been busy watching the Eurocrisis events continue the drama. Geopolitical risks is something not many talk of these days, but things sure seem to be heating up over there. Is the Middle East headed towards a war? It sure looks that way. The Israeli Defense Forces (IDF) have mobilized six battalions of reserve duty troops to meet what Israelis have termed a “growing threat” on the Egyptian and Syrian borders. The Knesset, Israel’s parliament, has approved the mobilization of an additional sixteen combat battalions, should the army brass feel it necessary. Additional reading;
Middle East War? Israel Mobilizes Reserve Battalions On Egyptian Border
Six army battalions called up under emergency orders to meet growing threat on Egypt, Syria borders
Amr Moussa: Camp David accords ‘dead,’ but Egypt still honors peace with Israel
“Cruel” April in Charts
It has been a rather volatile April this year. Some markets have collapsed, like the IBEX. Others have performed better.The “risk on/risk off” barometer moved back in the direction of “risk off” during April, as U.S. 10-year Treasury securities turned in the best investment gains (in U.S. dollar terms) during the month. The 2.8% jump in the value of the Treasury securities came despite the almost universal perspective on the part of professional investors that the 30-year bull market for bonds is finally sputtering to a halt and that eventually interest rates will begin to climb. Investors displayed a clear bias in favor of assets that not only generated income but also offered them security – in other words, bonds of various kinds were the only major asset classes to end the month in the black.
PMI Collapses in Spain
Spanish PMI data pointing to accelerated drop in GDP at start of Q2….
Maybe the idea of growing cannabis to pay off debt, presented by a small town in Catalonia, isn’t such a bad idea after all. Spain has been living in denial for many years, and now reality is catching up. Italian PMI soon, stay tuned.
Chart Markit.
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