Archive - Jul 2010 - Blog entry

Markets in a Flash

· Asian equity markets made gains over night. The Nikkei 225 closed up 0.77% while the Hang Seng closed up 0.12%.

· European equity markets are flat today and are fluctuating between gains and losses. The Stress test results of Friday do not seem to have brought much direction to the markets.

· Commodities are mixed and Oil has fallen 0.84% today. Natural gas is also down on news of gas production in China.

Let's refocus the discussion away from Simmons and towards the Gulf itself...

Stay tuned, we might not need QE 2.0 after all...

Charting this market is similar to tracking the moves of a squirrel crossing a busy street.

The de facto reinstated drilling ban in the U.S. Gulf of Mexico resulted from the BP oil spill has created an onshore rush. The presentation discussed this onshore boom, profiled the prolific Bakken formation, and observations of the markets and the oil services sector.

The USD started the past week strongly, making good headway against most of its counterparts. However it dropped sharply on Thursday, from 83.3 to 82.6 according to US Dollar Index. The depreciation was mainly caused by Bernanke’s comments and a slew of European data showing signs of a recovery.

Where has my mid-tier non-performing real estate gone???

Occasionally, though, there arises a very different and far deeper type of fear: the terrifying thought that the entity of profit – and, worse still, the very institution of capitalization on which the entire capitalist megamachine stands – might cease to exist. This latter fear is associated with systemic crisis – that is, with periods during which the very future of capitalism is put into question. It is what Hegel meant when he spoke of the bondsman’s “fear of death”.

This week the S&P 500 was up 7.3% for the month, corporate earnings have been looking good, retail sales inched up last week, the CPI is low, interest rates are low, Dr. Bernanke is ready to pump money into the economy if things go awry, most European banks passed their stress test, and we've got a new financial markets regulation bill which will save us from economic collapse. What's to worry?

For all you pension buffs, a comparison of CPPIB and PSPIB FY 2010 results...

Here's the scary part ...

China is not a black swan, because a black swan is a rare, significant, and unpredictable event. However, the consequences of what is transpiring in China and Japan are for the most part predictable (especially if I am writing about it). We don’t know when they will play out, but they are predictable.

So, a bank that is insolvent nearly two times over is found to have passed the European bank stress tests. Exactly what does it take to fail!!! Let's dig in and find out, shall we.

Yes. You're being hoodwinked, Bamboozled, and Lied to. Let's take a common sense look at the parameters and criteria published concerning these (no) stress tests...

This is turning into a year when the world’s least liquid, most untradeable countries offering minimal amounts of public information and disclosure, are bringing in the best returns, shutting most of us out. The mainstream BRIC countries are becoming increasingly crowded. “Frontier” or “pre-emerging” markets are the place to be.