Archive - Aug 5, 2010 - Blog entry

The outlook for the US, with its still miserable 3.9% savings rate, does not look great. Countries with low savings rates historically suffer from weak economies and poor stock markets, because of a shortage of available capital. China, India, and Turkey look much better. (SPX), (FXI), (TUR), (PIN)

It's been a long, hot summer for hedge funds and things aren't looking up. Why are so many hedge funds struggling?

While relatively low liquidity equity and commodity markets are attempting to signal a global recovery (and hence a more inflationary environment), the two most liquid and therefore most efficient financial markets (Treasury and FX) continue to invalidate the claims made by these markets ultimately portraying a much more accurate environment with significant deflationary headwinds.

It looks like a feud is brewing among the credit rating agencies. For now, it is just the verbal bashing between S&P and Dagong. With S&P's fresh downgrade on Moody's this Tue., Moody's may have a score to settle as well.

For those who don't see the forest due to all of that tree bark getting in the way, allow me to outline the synergistic advantages Google is building through the prolific growth of the Android platform...

Markets in a Flash

· Overnight Japanese markets closed higher, reversing yesterday’s losses. The Nikkei 225 was up +1.73%.

· Equity markets in China finished lower overnight. The Shanghai index was down -0.67%, while the Hang Seng finished flat at +0.01%.

· European equity markets are pushing higher this morning. The Stoxx 50 is up +0.55% after it opened flat this morning.