Archive - Jul 2010 - Blog entry

Alberta Investment Management Corp., known as AIMCo, said overall returns are running in the range of about 17% for 2009-2010. It's too bad AIMCo's CEO, Leo de Bever, still doesn't get the respect he deserves. Come read his thoughts on AIMCo, markets and why he is in no rush to invest more in infrastructure.

BP plans to claim almost $10 billion in U.S. tax credit as a direct result of the Gulf oil spill, in accordance of the U.S. tax code. To me, somewhere, somehow, something is not quite right about this.

In the first quarter, the US economy grew by 3.7%, revised up from an originally reported 2.7% increase. But growth estimates all the way back to the start of 2007 were revised lower. Moreover, the level of real GDP in Q1 was revised down by $100 billion. Does this mean the secular bull market in bonds will continue? And are Treasuries the "last diversifier left"?

The Japanese economy operates on the assumption, soon to be proved false, that the government will always be able to borrow at low interest rates. As internal demand evaporates, the government will have to start hawking its debt outside Japan — in a more realistic world, where interest rates are a lot higher.

Ultimately markets will move sideways long-term.

Turkey is among a handful of emerging nations on the cusp of joining the economic big league. How painful economic reform measures and banking controls can work. Foreign multinationals are pouring in. Suddenly, being shut out of the EC doesn’t look half bad. Does its flexing of new diplomatic muscle have a pronounced Islamic, anti American bent? (TUR), (TKC).

Dear Mr. President, You don’t know me, but I was one of the millions of Americans who voted for you in the last election. I have since been fairly critical of your Presidency largely because I, like many others, feel betrayed by the policies you have enacted upon winning said election.

Markets in a Flash

· Asian equity markets closed down across the board last night. The Nikkei was down -1.64%, while the Shanghai index was down -0.4%.

· European equity markets are falling this morning ahead of the US GDP figures. The FTSE 100 is down -0.57% at lunchtime London time.

· Commodities are mixed in today trading session. Oil is falling back in correlation with equities while Gold is gaining as investors find safety.

The Spanish banks rallied after the (faux) stress tests, just to have reality spank them the following week. This time around, will the revolution be televised, or covered through a blog?

These days it’s hard to distinguish mainstream media financial journalism from the funny pages. Here are some of the best stories of the past week.

The Fed came out with its Beige Book, a summary of economic activity from June to mid-July. The report overall noted "modest" growth if not slowing growth. Consumer confidence declined and durable goods orders were also down.

With the lack of action lately we all seem to be confused - including Market Profile analysis. Watch out for the Chicago PMI...it comes out before you're really told.

When the Caisse released its 2009 results back in February, the annual report wasn't made available then, and I didn't provide a full discussion on it. It turns out they published one of their best annual reports ever, focusing on accountability.

Recent 1 to 1 Treasury to Equity correlation continues to break down as we noted monday...note Treasuries holding near high of the day as equities rally back into green...something is amiss in the financial markets right now with one of these markets being artificially skewed...

Could it be??? I don't know, so I'll let you decide...