Archive - Mar 25, 2010 - Blog entry

A US debt downgrade could trigger a stampede into the debt of healthier countries. Emerging market debt has a much rosier future of credit upgrades to look forward to than US bonds. A 6.44% yield on an appreciating asset. These days, many emerging markets have little or no debt. The sovereign debt crisis is sending bonds issues by financial responsible countries to decent premiums, while punishing the bad boys with huge discounts. Time to trade in Marilyn Monroe for Carmen Miranda? (PCY), (LQD).

The yuan-induced heated debates prompted two prominent economists--Paul Krugman and Jeffrey Frankel--to come up with two versions of swan songs for China. Ironically, the two, however diverging, could still lead to the same "next black swan" scenario warned by Albert Edwards at SocGen last November.

As Greeks celebrated a scaled-down parade for Independence Day, an IMF-EU accord was reached in Brussels, but many questions remain. China is watching nervously, increasingly worried about the large chunk of its $2.4 trillion (£1.6 trillion) of foreign reserves held in eurozone bonds. No wonder Trichet reversed course and came out in support of the deal...

The S&P 500, DJIA and NASDAQ Cash Indexes each registered bearish daily candlestick patterns on Thursday's close. Interestingly, the three primary US equity markets registered unique candlestick patterns in the form of a Shooting Star on the S&P 500, a Gravestone Doji on the DJIA and a Bearish Engulfing on the NASDAQ. Charts of the Dow, S&P 500, NASDAQ, VIX, BKX & SKF.

I get screwed, again.

The small banks will lend, if we just stop the too big to fails from stifling competition ...

China may seem to have defied the recession and the laws of economics. It hasn't. When China's bubble bursts, the global impact will be severe, spiking US interest rates.

Here's a link to the CFTC's webcast regarding position limits in the gold and silver futures markets taking place on March 25, 2010, 9AM EST. Anyone interested in restoring integrity to the global monetary system should be interested in these hearings.