Here is the latest on the falling Spanish properties market. From IMIE’s latest March report.
The General IMIE Index recorded the highest year-on-year decrease in the historical series during the month of March, with a drop of 11.5%, leaving the index at 1631 points. Since peaking in December 2007, house prices have seen a fall in value that now stands at a cumulative figure of exactly 28.6%.
|Capitals and Major Cities||1925||1683||-12,6%|
|Balearic and Canary Islands||1576||1423||-9,8%|
With regard to the performance of the different market segments, “Capitals and Major Cities” once again recorded the steepest decline of 12.6% in March, followed on this occasion by the “Other Municipalities” with a fall of 12% compared with the same month last year. In both cases the reduction exceeded the market average.
Mr Granville, 89, one of the greatest Technical Analyst is predicting Dow to fall 4 000 points in 2012. He has been around for decades, but on the other hand, that was before we had HFT. Whatever your outlook, video worth watching. Volume precedes prices…
We won’t bother you by bashing out the sell argument further, as the market is reaching some short term support levels a little lower. The long term picture sure does not look too rosy. One of the people having been spot on is Napier. Although somewhat “extremely” bearish (SPX to reach 400) , Napier’s arguments are still valid. From his book, “Anatomy of the Bear, lessons from Wall Street’s Four Great Bottoms;”
The debt cycle will end when the world realizes that the US government is a terrible credit risk. This is the most likely catalyst to reduce equities to a 70% discount to the replacement value of their assets (the valuation that marked the bottom in the previous bottoms of US equities through history). It will be then that you should re-read this book, as great fortunes will be made by investing in very cheap US assets. Until then you should be wary of equities, unless you feel comfortable investing in bear market rallies, and you should be terrified of Treasuries.
Classic video below.
If you wonder why we got into this mess, here is a great summary by Forbes.
US stocks turned sharply lower in late-day trading after a report warned of eurozone risks to US banks, with European Central Bank attempts to prop up the Spanish and Italian bond markets failing to stem investor fears over sovereign debts, http://ftalphaville.ft.com/thecut/2011/11/16/750921/bank-fears-hit-us-financial-stocks/
The exiled chief abbot of a monastery that has become the flashpoint of sustained Tibetan unrest has appealed to the Chinese government to end a repression campaign seen as the source of an unprecedented string of self-immolations by monks from the area, http://ftalphaville.ft.com/thecut/2011/11/16/750881/abbot-urges-china-to-help-stop-self-immolations/
Mario Monti will serve as both prime minister and finance minister in Italy’s caretaker government of technocrats that was sworn in on Wednesday, the FT reports. The new cabinet also includes Corrado Passera, http://ftalphaville.ft.com/thecut/2011/11/16/750841/italy-forms-cabinet-of-technocrats/
With markets having put on nice gains during the past weeks on hopium of the Euro mess getting solved, let’s review some important charts. SPX has retraced approx. 57% of the move down from the highs we put in this summer. We are slowly approaching the 200 day moving average, and major resistance levels.
Compared to 2008, the chart set up is looking similar. Back in 2008 we had the same collapse, and we retraced approx. 57% from the highs made back then. The long term trend line was broken, and we traded below the 200 day average. The situation now is almost identical. If we are to witness another collapse of equities or not, you decide. With volatilities crushed last couple of days, fewer people seem to even consider another possible sharp decline in the equity markets. Stay tuned.
Detailed view of 2008 and 2011 SPX set up below.
While Equities are doing their own thing, under siege by the HFT Community, let’s review how it all looked back in 2008. We have seen a lot of weakness in Dr Copper lately. Despite the sharp sell offs, the metal has not managed to recover more than a few percentage points. We had a similar situation in 08. The set up looks rather similar, but of course, this time they will quick fix Europe in 8 days, no problem. Chart is rather self explanatory. (Green Copper, blue USD/EUR, orange SPX.)
Remember this interview and video with Barton Biggs, not even a month ago. In Biblical terms, the world was almost ending according to Biggs, and he wished he was ultrashort. Less than a month later, the SPX is upp 100 handles from that day. This market is sure confusing all pundits.From Bloomberg,
Bets that stocks will gain make up 20 percent of Traxis Partners LLC’s holdings, down from as much as 85 percent six months ago, as the threat of a recession makes equities too risky, according to founderBarton Biggs.
“I wish I was minus 20,” Biggs said during an interview today on Bloomberg Television’s “Street Smart” with Matt Miller and Carol Massar. “I wish I was zero. I don’t think any place is a place to invest.”
Guest Post by Macro Story.
Wells Fargo published a report titled “Why Long-Term Investors Should Consider Buying Stocks Today.”
However as CNBC is quoted “Wells is among a number of Wall Street firms that have scaled back their portfolios’ exposure to equities in the past month, shifting away from stocks and into fixed income and cash.”