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Bull/Bear Weekly Recap: February 28 - March 4

Tyler Durden's picture




 

Submitted by Rodrigo Serrano of Rational Capitalist Speculator

Bull/Bear Weekly Recap: Feb 28 - Mar 4

+ Manufacturing continues to be the shining beacon of the US recovery.  The Chicago PMI came in at its highest level in 22 years!  More good news in manufacturing as February ISM readings point towards continued strength.

+ The much larger service sector also shows accelerated improvement and points to continued job gains in the immediate months ahead. 

+ Jobless claims continue to trend down
and reinforces the bullish thesis that the job market is improving and
will provide for more permanent and sustainable domestic demand.  We can
also see an improving job market from the ADP employment survey, which reports a stronger than expected @ 217,000
for February and is a good harbinger for Friday’s BLS payroll report. 
UPDATE: The BLS Job report shows an increase of 192K with back month
revisions totaling 58K…so overall it was a jobs report of +250K.  The
unemployment rate also declined to 8.9%, the lowest in a LONG time.  The
job market is certainly turning the corner. 

+ This can be seen in retailers February sales reports as they came in better than expected
as well as Auto sales for February.  They shot up to the best levels
since August.  Demand is coming back and this is feeding into
manufacturing. Continued growth in consumer demand will lead to firms
increasing hiring …the virtuous cycle has begun.  

+ Bernanke states that supply/demand forces are at work when explaining the rise in commodity prices.  This argument defends the Fed’s QE program and opens the door to a QE3
if stock markets begin to decline or economic growth begins to
disappoint.  The Fed’s there to help.  The Bernanke Put remains. 

+ German Retail Sales for January rise a stronger than expected
1.4%.  The engine that drives the Eurozone remains strong.  Fears of a
double dip in the region are exaggerated.

Bear

- Oil prices continue to rise, now over $100/barrel.  Libya is in a
civil war right now, though that country only accounts for about 2% of
production.  Saudi Arabia?  That’s a whole different animal and things
aren’t looking too good on that front.  The oil-rich nation’s stock
market has plunged nearly 20% in a sign that investors don’t like the
country’s prospects.  The date on traders’ radars?  March 11, 2011. Could oil spike in the coming weeks?  

- My worst fears may be becoming realized.  Both Chinese manufacturing PMIs come in showing weaker growth but increasing inflation.  Officials MUST combat inflation.  Red flags continue to wave and China may be entering a hard-landing scenario. Need more proof?  Non-manufacturing PMIs are showing signs of contraction!

- What else is new?  The housing market continues in the doldrums.  Construction spending for January falls
While it could be weather related, high amounts of inventory will
surely result in builders pairing back inventory.   Furthermore,
mortgage applications for the prior week showed a decline, signaling near term weakness in the housing outlook. 

- Incomes jumped for the month of January, however,
it was explained due to the tax-cuts taking effect.  Did consumers use
the cash to spend?  No.  They saved it instead.  If this behavior continues, then consumption estimates may have to be reversed 

- Gov’t spending cuts may be beginning to show through layoffs as the Challenger Job-Cut Report shows a sharp increase in layoffs in the sector.

- Certainly the Gallup Poll
doesn’t agree with the job recovery story.  Note that this indicator
may be more in tune with recent events in the middle east and oil
spiking as a result.  This may be a harbinger of March economic
reports.

 

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Fri, 03/04/2011 - 23:26 | 1021332 NOTW777
NOTW777's picture

for the bull just put up charts of silver and crude

Sat, 03/05/2011 - 04:13 | 1021613 Quixotic_Not
Quixotic_Not's picture

Hey, Bernank is in the middle of hyper-inflating the U$D as commanded by the (D) & (R) sock puppets - Only an idiot wouldn't know this is about turning .GOV liabilities into pennies on the U$D, and propping up assets (can't have big $$$ RE or equity markets losing $$$ value).

Precious metals will eventually be the only store of wealth, prepare to protect it accordingly!!!

Only a fool would use dollars as a point of measure - And don't be caught holding them when the music stops!

(Oops, you poor foreign devils)

Just ask Hank "Tanks In The Fuckin' Street" Paulson  (the Fourth Horsemen of the Apocalypse)

Sat, 03/05/2011 - 07:00 | 1021698 slewie the pi-rat
slewie the pi-rat's picture

hi, donkQ

tanks, but no tanks, w/ that paulson sludge, right now.

i'm finding "bull & bear" somewhat scatalogical at this point and am thinking of going w/ "the hatfieldZ & the mcCoyZ".  you don't need to keep them straight.  it doesn't matter, anyhow.  everything is rigged for the revenooers until they toast their own marshmall0ws, which, btw, they have done. 

i'm glad to see that either they let you out waay early again, out of self-preservation, or you just walked out, again, but even the jailers are starting to see that reflation's unintended consequences, specifically that trying to reflate the credit balloon in the private sectors by massive liquidity injections via the public sectors, has NOT resulted in private sector credit munchies b/c this 'aspect' of our economy is still in re-hab and recovery comes later. 

and now, the "public" aspect has been pretty well plundered and ITS credit needs have gone parabolic, while setting the credit worthiness on "self destruct".

i got the walkin, talkin, national debt fiat money blues, man...  donkQ, when you mentioned "pennies on the dollar"...it made me wanna go down to the holler, sit on a log...finger on the trigger, eye on the hog...

peace.

YouTube - MIssissippi John Hurt - Salty Dog Blues

Sat, 03/05/2011 - 12:38 | 1021887 cosmictrainwreck
cosmictrainwreck's picture

great word: "scatological". beauty. is this a great site, or what? ha!

PS you're dead on

Sat, 03/05/2011 - 16:30 | 1022308 slewie the pi-rat
slewie the pi-rat's picture

 

lol.  perhaps the uncharacteristic clarity was due to Doug Noland, whose weekly rap-up had entered my mental intestines via prudentBear.com.  he uses my ideas all the time! 

Sat, 03/05/2011 - 05:40 | 1021664 Popo
Popo's picture

Actually, for every item on the "Bullish" list, just insert the preceding words:  "Due to a historically unprecedented flood of government-induced global liquidity, ______"

And add the following statement to the end of each item:  "This micro-trend cannot be sustained without the flood of liquidity driving commodity prices into the stratosphere, causing massive global social unrest, causing devastating near-term inflation,  increasing geo-political instability, war and ultimately leading to margin-collapse and a massive, long-term deflationary depression."

 

 

Fri, 03/04/2011 - 23:37 | 1021357 Misean
Misean's picture

You forgot the buildout spending at American-Leyland...erm GM...dealers for the double decker inventory stuffing lots. And the demand for former Countryfried loan reps to process the zero interest, mirror fogging loans.

Fri, 03/04/2011 - 23:54 | 1021380 Bansters-in-my-...
Bansters-in-my- feces's picture

Stay away from the Kool-Aid.

It's too strong for you.

Sat, 03/05/2011 - 00:13 | 1021412 Oh regional Indian
Oh regional Indian's picture

All the bull in the bull part looks like poop. The NUMBers back it up, sure. But the NUMBers are pretty suspect too? Overall, kool-aidy bull section.

Perhaps the first real market shut down in recent memory (post 9/11 anyways) is now only week/s away.

A good time as any to be in the metal and out the paper and watch...

ORI

http://aadivaahan.wordpress.com/2011/03/04/astrological-and-other-deep-insights-from-ca/

 

 

Sat, 03/05/2011 - 00:42 | 1021459 sunny
sunny's picture

This is all getting sorta scary.  If anyone doesn't quite understand the situation, consider this description by Arthur Cutten who writes the Jesse's Cafe blog:

Adding liquidity and stimulus at this point is like pouring enormous quantities of gasoline into a car that has just been towed out of a ditch, with four flat tires, a seized transmission, and a crushed radiator, and saying, "We'll be back on the road anytime now once we fill 'er up."   And austerity is like making the passengers get out and push.  The Congress, who failed to properly maintain the vehicle by taking kickbacks from dishonest mechanics, the Banks, sits in the front seat eating doughnuts, urging the middle class to stop whining and push harder. And Bernanke is bouncing up and down on his seat saying 'vrooom, vrooom,' and the corporate media and economists marvel at his accomplishments. It is less a recovery than a tragedy.

Tragedy indeed.  History up front and in your face.  Pictures at 11.

sunny

Sat, 03/05/2011 - 01:06 | 1021503 Misean
Misean's picture

Nice pull. That was sweet.

Sat, 03/05/2011 - 14:20 | 1022070 snowball777
snowball777's picture

While chainsmoking and kicking the boot placed on it after being illegally parked for too long.

Sat, 03/05/2011 - 01:18 | 1021520 dick cheneys ghost
dick cheneys ghost's picture

could Cuba be next? 500,000 about to lose their jobs.

 

http://nakedempire.wordpress.com/

Sat, 03/05/2011 - 04:13 | 1021625 Bay of Pigs
Bay of Pigs's picture

Paradigm Shift Bitchez! Gold and silver are it...

Sat, 03/05/2011 - 04:12 | 1021626 sulfur
sulfur's picture

the bulls that are left must be really missing a brain

Sat, 03/05/2011 - 04:12 | 1021627 sulfur
sulfur's picture

the bulls that are left must be really missing a brain

Sat, 03/05/2011 - 05:41 | 1021667 BenLightYear
BenLightYear's picture

by BenLightYear
on Sat, 03/05/2011 - 03:04
#1021624

What would happen if we stopped printing? What i mean is what would happen if we set interest rates at a reasonable average rate of say 3.25% and left them there? What would happen if we changed the budget to where we broke even? If we lowered the budget and raised taxes? Aren't we in a perpetual state of holy shit? Is this not going to end badly? Is this not going to be a bumpier than shit ride no matter what we do? Why don't we stop the monetary and fiscal bull shit fiasco? Why don't we stand up and say "OK in the last 100 years some people fucked some stuff up and the 99% of the rest plead too dumb to have any clue what was happening;?

Can't we see that most economic models are flawed? Can't we see the correct parts and the incorrect parts of each clearly? Who the fuck is bernanke to sit in that chair and at best either show complete ignorance or corrupt mentality towards the very people who allow him to sit in that chair?

(bernanke i pick on only cause unlike most of our elected representatives he actually understands his god damn job...the number of our politicians who have no clue about the very things they vote on and how they work is 2nd only to the fact the majority of the country is unable or unwilling to see their complete lack of qualifications to make the laws and rules and create money/debt in our names)

Do we really need our lives to go through such a great trauma to wake up and at the very least pay attention? Do we not vote these people into office? Are we not the ones who choose the ones to coordinate our society?

Are they our leaders or are they the men and women we choose how to govern a nation with the sole intent and purpose of making every single citizens lives better and the future for our children brighter?

Their has to be a better way to make a country and economy function right? Are the ignorant majority and the crooked minority really so great that with our current level of knowledge we are honestly unable to provide a functioning and benefiting society?

edit reply flag as junk (0)

by BenLightYear
on Sat, 03/05/2011 - 03:49
#1021635

What if instead of the very small minority of us rewrote our fiscal and monetary policy? How about a group people who understand how it works ( i don't have a degree however in the last year i have read every single piece of econ theory, looked over every graph, chart, model, read every single argument against such that i could get my hands on) I by no means can fix this by myself. By no means am i capable of writing an economic play book by myself. To do so would require time and ability that i myself am unable to supply solely. If a group of 10 or so new school ( meaning we understand whats wrong and have ideas on how to fix it ) theorists got together and built, dissected and then reassembled an economic model that would actually work.

If we set basic fundamentals in regards to bank ratio, money creation, spending/taxation, regulated from corruption while not impeding business past oversight, regulated the risk associated with lending by institutions who should hold safe money, adopted a fair taxation rate which would be more fair based on cost of living compared to earnings ( I feel the amount of taxes people pay should skew from low to higher based on the fact that those who live grandly can afford it without it affecting their actual lifestyle...i am not proposing a 5%-95% range...i don't think it would need to be anywhere near as drastic) fix all the loopholes, money you earn is taxed a that the rising ratio based on the amount of money the govt spends the previous year...every years budget will include the tax rate ratio ( a constant ratio in reference to each other but vary from say 10%-50% one year to 12%-52% the following year thus for our govt to spend a dollar they must tax for that dollar) what if we wrote a true economic model...what if we took everything that we know base it off of where we are at ( people hate change however i think people would get more behind a change that was more fluid than abrupt) and wrote a govt fiscal and monetary playbook that worked and could not be disputed? If written and followed business would adapt, public and private wealth would adapt, and i believe both would strive knowing exactly what to expect and keeping the institutions that are meant to be solid aka banks, investments, insurance, under regulation that makes them the properly regulated environment they should be. Banks have no need to make large margins of profit. Naturally some bank policies would be regulated as needed to provide a low risk, highly solvent institution that can expand a small amount of money to provide growth but a more acceptable rate of growth ie natural growth or maybe .25% over natural.

If we write it we can fix it. If it was written so it worked and if we voted people into office who understand it, agree with it, and believe in it then they could put it into affect. As outlandish as this may sound it truly does not sound impossible or even impractical. By the time we finished it things will be at the point where more are willing to listen and look for a way to make things right.

We don't have too decide how much government or how little. We don't have to decide what the govt spends money on just he fact whatever they spend is taken back in with tax receipts the following year. Just simple economic ratio's that coordinate how to keep things in a steady environment with natural growth in a properly regulated environment. We stop our politicians from spending more than they pay for, a fed res that can not keep their hands off of monetary policy. ( i swear it's like a kid with a new toy especially now...each chairman believes he is so much smarter than the last chairman or the 100 years of economic thought he has been taught). We set the economic model and elect representatives who will keep the ratio's intact.

edit reply flag as junk (0)

by BenLightYear
on Sat, 03/05/2011 - 04:35
#1021658

I have been reading this website for over 6 months now. Tyler I thank you for providing a place where I learn in one paragraph and laugh my ass off in the next. I praise you for supplying a viewpoint contrary to what most are led to believe. I am grateful to my friend who directed me hear. Like I said I have spend the better part of the last year reading everything i could get my hands on. I sometimes found I ran into the problem of being able to actually visualize what it was that I was reading and the commentary/debate on this site has helped. More often than not I find myself being more able to argue against what i see and hear not because i remember someone else told me it was wrong but because i can actually see and understand why it is wrong.

Tyler

I would like a response to the post I made right before this one. I would like you to answer me as too why a group of 10 or so people can not sit down and write a fiscal and monetary policy that in effect would work.

From what I have learned I truly believe their is an equation, a formula, a treatise that if followed would lead to a stable pro growth ( albeit it natural) dependable economy that although it would start off in a less than desired state if it was stuck too would lead to a stable and productive govt and economy over a short to long period of time.

I would like you to respond. I would like you too tell me that I clearly don't understand enough and that what i propose is beyond man's means.

If it is not beyond our means than I would like you too tell my why you would be against doing such.

If it is not beyond our means and if you are not against it then maybe its time we sit down and write a play book.

Maybe its time we gather a small # of capable and intelligent people and we create an economy that actually works. That actually functions. That actually has a future.

By no means am I the most capable man to do this. By no means do I think I myself am able to accomplish this. In no way do i think this is something a single person could sit down and do without 9 other people correcting his flaws, dissecting his flaws, and recreating the solution.

I see once in awhile you interject here and their. I noticed you dissect news ( alot of which is news that actually pertains to this countries and the global economies juggling act of incompetence, misunderstanding, misuse, and corruption that we would otherwise not come across through normal news channels) and then leave it up to us to further dissect and debate on. I have noticed that you don't jump into the arguments after your posting. I am aware there are im sure numerous reasons why this could be. I give you the benefit of the doubt as to your reasons and intentions.

However I am calling you out. I have sat here for quite awhile now wondering why if there are people smart enough out there to say why others are wrong then of that bunch some must be smart enough to actually fix it.

I would like a response. I would like an answer. If I am crazy or delusional than plz say just that and I will bother you no more. I will go back to reading and keeping to myself. However if I am not, if what i propose is doable then maybe its time we get to work

We now realize beyond any doubt that corruption and ignorance if allowed to continue unabated will eventually ruin even the strongest nation.

Is today the day we stop what started as arguably the greatest nation in history from the death spiral it is in?

I ASK YOU TYLER IS TODAY THAT DAY?

Sat, 03/05/2011 - 07:39 | 1021710 Orly
Orly's picture

May I suggest that responses would be more forthcoming if your initial comments were pithy, succint and reasonable.

We really can't read through all those rambling, rhetorical and unanswerable questions.

Think short and sweet.

:D

Sat, 03/05/2011 - 11:37 | 1021852 ElvisDog
ElvisDog's picture

Gotta agree with Orly. I skim and then usually skip any post longer than 200 words or so. I'm looking for thoughts and points on ZH, not stream-of-consciousness ramblings.

Sat, 03/05/2011 - 17:02 | 1022360 UnBearorBull
UnBearorBull's picture

OK. We're f*cked.

Sat, 03/05/2011 - 13:25 | 1021951 cosmictrainwreck
cosmictrainwreck's picture

Orly's always so sweet. I'd say: "Good god, man - get a life; you really think anybody's gonna read that shit?" Well, I reckon it made him feel better saying it... 

Sat, 03/05/2011 - 06:20 | 1021686 Djirk
Djirk's picture

 would reverse the bull and bear titles in this

 

if the economy improves, QE ends markets drop

if the economy get worse QE extends markets go up.....purchasing power goes down

Sat, 03/05/2011 - 06:29 | 1021688 Tense INDIAN
Tense INDIAN's picture

Bull Bear weekly PRECAP::

 

http://markettechnicals-jonak.blogspot.com/

Sat, 03/05/2011 - 08:47 | 1021745 johnQpublic
johnQpublic's picture

methinks the author of this here article has been hitting the homegrown/homebrewed a bit to heavy

them rose colored glasses are actually bloodshot eyes

Sat, 03/05/2011 - 09:01 | 1021751 overmedicatedun...
overmedicatedundersexed's picture

MSM's job is to report all is well or is headed in the right direction..the" big lie" (orwell).

The big lie works ..until the people stop viewing and hearing it.

When enough people stop hearing the message

what do the elite do?

When sites like ZH provide better information that coincides with what people see in day to day life..ZH acts like a vaccine and all the propaganda tricks become worthless.

The BIG LIE will die. we will kill it. 

Sat, 03/05/2011 - 11:40 | 1021854 ElvisDog
ElvisDog's picture

But see, strictly speaking, it might not be a lie. Unemployed people may be going back to work. What is not covered in the govt statistics is a comparison between the jobs they lost and the jobs they now work in. If some guy lost his $80K middle management job and now makes $30K at Starbucks, the government counts that as an even exchange.

Sat, 03/05/2011 - 13:05 | 1021916 cramers_tears
cramers_tears's picture

I know someone who worked full-time at a Starbucks for the entire year 2010.  I helped them do their 1040.  Try 18,644 USD.

 

Sat, 03/05/2011 - 14:10 | 1022047 slewie the pi-rat
slewie the pi-rat's picture

don't forget the $7,200 in "tips" and the 75 lbs. of "bulk" that fell outa the big grinder in the sky...

the phone #'s are tax-exempt!

Sat, 03/05/2011 - 10:45 | 1021814 99er
99er's picture

Currency Pairs

EURUSD and USDJPY

http://www.zerohedge.com/forum/99er-charts-0

 

Sat, 03/05/2011 - 22:23 | 1022782 Orly
Orly's picture

Thank you for making your position more clear.  Targets are helpful but putting your word on the line is rather scary.  Believe, I appreciate that.

:D

________

I must disagree with your position on the USDJPY.  While it is intuitive to think that the USD will revert to a "risk-off" currency in the coming melee, I have the sense that the pair is rather heavy right now.

It is trying to create a base in the area of 81.8 and it has one more touch to confirm or to break through, possibly all the way to 71.  The immediate direction is down but a kiss off the trendline established in September 2010 will take it higher...much, much higher.  If it breaks through to the downside, however, that move will be either widowmaker or set you on easy street.

This is the big move to make it or break it.  We'll see.

Best of luck to you, 99er.

:D

 

 

Sun, 03/06/2011 - 00:19 | 1022970 99er
99er's picture

I agree that there could be a drop before the climb: an ideal Wolfe Wave would have point 5 break below the 1-3 line before heading towards point 6. The reason I believe there may be a truncated wave in this case is that we have just finished the back test of the upper boundary of the falling channel and may not require a second back test. Whatever happens here around point 5, the 6 target remains the same.

Sat, 03/05/2011 - 11:35 | 1021848 AN0NYM0US
AN0NYM0US's picture

interesting post from CalculatedRisk on the participation rate

 

Friday, March 04, 2011

Participation Rate Update
Sat, 03/05/2011 - 11:47 | 1021858 ElvisDog
ElvisDog's picture

declining participation rate = U.S. ponzi economy collapse. Every person who isn't working becomes a drain on the system. He produces nothing and most likely consumes government services. When the participation rate goes down, government revenues go down (relatively speaking) but spending goes up. Governments react to the revenue imbalances by trying to increase taxes and fees, further retarding economic activity.

Sat, 03/05/2011 - 11:50 | 1021859 AmCockerSpaniel
AmCockerSpaniel's picture

Bulls use Feb numbers, and Bears use Jan numbers???

Sat, 03/05/2011 - 12:17 | 1021878 apberusdisvet
apberusdisvet's picture

To respond to a previous post:  yes, 10 reasonably educated, honest and objective men/women could sit down and fix our problems.  Unfortunately, none of our elected representatives fit the criteria, and those that have been appointed by this Administration (think Czars, FED personnel, etc) are actually working against the American people.

Sat, 03/05/2011 - 12:49 | 1021894 Caviar Emptor
Caviar Emptor's picture

Is China just a step ahead of US with inflation?

Perma-bulls and Kool-Aid addicts smugly want to believe we're insulated. Because Chimerica was devised as a way for the US to export inflation (along with jobs, industry and manufacturing) and import cheap goods. But like any closed circuit, things will eventually equilibrate. We're seeing this in progress right now. Oil is only accelerating the process because it evens the cost-structure 

Mon, 03/07/2011 - 20:38 | 1028041 lsjcma
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