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THE   Page 1 Next Page » Friday March 12, 2010 3:36am From: An interesting chart comes from the Consumer Metrics Institute (via Clusterstock - Chart of the Day) that constructs a US consumption index based on actual transactions data for a range of major discretionary purchases such as cars, houses, durable goods, and vacations. Although the time series is rather short, the “Daily Growth Index” usually leads changes in US GDP (see chart below). Based on the historical relationship, the Index would seem to indicate slower GDP growth ahead. This concurs with a recent analysis of the US ISM non-manufacturing and ISM manufacturing surveys posted on the Investment Postcards site about ten days ago.
3:32am From: I yesterday posted part 1 of a two-part interview with GMO’s James Montier. The interview comes courtesy of Miguel Barbosa, editor of the Simolean Sense blog, who has kindly given me permission to publish this excellent material here. The second part follows below. (Please click here in case you missed the first part, dealing with value investing.) Part 2: The Little Book of Behavioral Investing - How not to be your own worst enemy
Miguel: James thank you for joining us for..... 3:31am From: The Daily Reckoning Financial Darwin Awards recognize the efforts of companies that, through dedication to idiocy, ended their own lives. The recipient of the dumb-dumb award, as well as the names of the finalists, are given below. Source: The Daily Reckoning, March 11, 2010.
3:22am From: The comments below were provided by Kevin Lane of Fusion IQ. Liquidity is a powerful tool. Given that liquidity goes hand in hand with sentiment, liquidity tends to be at its highest when equities are at their lows and investor sentiment is extremely dour; conversely, liquidity tends to be at its lowest when stocks are at their highs and investors are exuberant. As seen in the chart below, the recent correction saw equities get back to almost a 5.00% allocation above the mean allocation. Typically this is an area vulnerable to shallow corrections, hence it was not a surprise to see a minor pullback recently. Currently..... 3:12am From: Madoff hunter Harry Markopolos talks with David Weidner about how the SEC has fared since the Ponzi scheme was uncovered, and about what kind of regulatory role he would accept in Washington. Source: The Wall Street Journal, March 10, 2010.
3:11am From: This post is a guest contribution by Rebecca Wilder*, author of the of the News N Economics blog. Today I was thinking about tightening cycles in emerging markets, and more specifically about those in China. Because let’s face it, China matters. China matters to the rest of Asia via competition for export income. China matters to Europe via competition for jobs. China matters to Brazil via domestic production via imports. China matters. The inflation pressures are building in key..... Thursday March 11, 2010 5:08am From: Topics:MSCI Inc (NYSE:MXB), Emerging Markets, NASDAQ Composite, Russia, India, China, Chile, Mexico, Israel, DJIA, Australia, Argentina, Brazil The bull market that commenced on March 9, 2009, has just market its first anniversary. A summary of the movements of major global stock markets for the past 12 months, as well as various other measurement periods, is given in the table below. The MSCI World Index notched up one-year gains of 70.5%, whereas the MSCI Emerging Markets Index was on fire with +103.2%. As far as the US indices are concerned, the Dow Jones Industrial Index (+61.4%) and the S&P 500 Index (+68.6%) underperformed mature markets, but the Nasdaq Composite Index (+84.5%) and the Russell 2000 Index (+95.1%) gave investors reason to smile. BRIC countries..... 5:01am From: Topics:GMO (LSE:GMO), Gartner, Inc. (US Composite:IT), Panasonic Corp (US Composite:PC), Varian Medical Systems, Inc. (US Composite:VAR), Federal Reserve, Badger Meter Inc. (US Composite:BMI), AXA Easy iBoxx LIQUID SOVEREIGNS GLOBAL (Euronext NV:ISM), ADS s.r.o. (TSX Group:AAL A), CHEMFAB CORPORATION (US Composite:CFA), PE-EL, d.o.o. James Montier needs no introduction to the readers of Investment Postcards. Prior to joining Jeremy Grantham’s GMO in 2009, he was co-head of Global Strategy at Société Générale. Montier is the author of several books, including Behavioural Investing: A Practitioner’s Guide to Applying Behavioural Finance, Value Investing: Tools and Techniques for Intelligent Investment, and The Little Book of Behavioural Investing. A two-part interview with Montier comes courtesy of Miguel Barbosa, editor of the Simolean Sense blog, who has kindly given me permission to publish this excellent material here. The first part follows below and the second..... 5:00am From: I reported previously on the DiscoverCard Small Business Watch, i.e. monitoring small businesses with cash flow issues. As seen in the graph below (courtesy of Clusterstock - Chart of the Day), the situation has improved somewhat, although 49% of owners have still experienced cash flow issues in the past 90 days. Without a turnaround in this situation, small businesses will not create jobs. And this is key to the overall economic recovery as small businesses are responsible for more than 60% of employment. When asked if they are likely to hire new employees if offered a $5,000 tax credit, such as the one proposed by the Obama administration, 69% said that it was..... 4:51am From: Topics:China, African Markets, India, Russia, Brazil, Africa, S. Africa, Nigeria, Egypt, Kenya, Qatar, Kazakhstan, Vietnam, Romania, U.S. Dollar, Emerging Markets A recent Q&A with Mark Mobius, Templeton Asset Management’s emerging markets guru, follows below, courtesy of the company’s Market Views newsletter. What are the pros and cons of investing directly in emerging market equities and bonds as opposed to companies based in developed markets with emerging markets operations? By directly investing in emerging market equities you obtain full exposure to emerging markets while with investing in developed market companies with emerging market operations, you don’t get that full exposure and you also get slow moving markets with lower growth potential mixed in. One advantage of some developed market companies is that they could have a global coverage thus..... 4:44am From: 4:37am From: Topics:Greece George Papandreou, Prime Minister of Greece, who has just returned from meetings in Washington with US officials and President Obama, sits with Charlie Rose to discuss the Greek debt malaise. A link to the transcript of the interview follows at the end of the post Click here or on the image below to view the video.
Click here for a transcript of the interview. Source: Charlie Rose, March 10, 2010.
4:35am From: This post is a guest contribution by Asha Bangalore* of The Northern Trust Company. The financial press is inundated with discussions about the federal deficit and debt and the consequences thereof and our commentaries have addressed this matter also. At the cost of reiterating, we would like to share a picture (see chart 1) that presents the challenge of federal budget deficits succinctly. Congressional Budget Office (CBO) projections indicate federal outlays as a percent of GDP will consistently exceed revenues even after the economy moves away from the peak in outlays arising from the financial crisis and associated recession. On average, the federal revenues have been about 18% percent of..... Tuesday March 9, 2010 4:56am From: The following paragraphs come courtesy of John Hussman’s latest weekly newsletter, The rubber hits the road, and are republished below with the necessary permission. “Last week, we observed a subtle shift in yield pressures, which has historically been associated with fairly abrupt ‘air pockets’ in which stocks have typically lost 10% or more within the span of about 6 weeks. As usual, this isn’t a forecast, but given that we are already defensive on the basis of broader considerations about overvaluation and the overbought status of the market, the pressures we’re seeing on the yield front make our aversion to market risk somewhat more pointed. “Consider the following conditions: 1) market valuations above their..... 4:53am From: The comments below were provided by Kevin Lane of Fusion IQ. We said several weeks back that it was hard to see the market top when bullish sentiment surveys were so neutral. Additionally we stated that tops were usually met with exuberant buyers not traders salivating to put on shorts. So here we are several weeks later and two indices - the Nasdaq Composite and the Russell 2000 - are both at new post-market low highs. When the Nasdaq and Russell 2000 are both making highs it again is hard not to maintain a bullish bias. [Graphs inserted by PduP.] 4:50am From: Topics:Federal Reserve, USA, Bloomberg, Macy`s Inc (US Composite:M), Euro, Japan, China, Greece, Portugal, Italy, Ireland, Spain This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy. • Brian Sack (New York Fed - transcript of speech): Preparing for a smooth (eventual) exit, March 8, 2010. 4:49am From: Topics:US Composite:CNN Economist Simon Johnson, a British-American economist and professor of entrepreneurship at the Sloan School of Management at MIT, says the US needs to reinstate financial regulation that encourages transparency and disclosure. Source: CNN Money (CNN), March 4, 2010.
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