Coming Soon!

Bigger and better. We will be providing more information on the markets. Our strategy will be more macro in nature but will not ignore the potential that arises in over-under valued items on any given day.

For the most part this will be a blog which will contain my thoughts on the market for my own benefit. Putting thoughts on a blog just help me stay much more organized and keeps my trading more logical.

Throughout the week I will be posting thoughts on the stock market, currencies, commodities, foreign markets, fixed income markets, and economic results from various countries.

I will also be including tweets that I use to link various articles that I view as relevant to the existing market landscape.

All this and much more...

Stay tuned.

posted from Bloggeroid

TBP on Manipulation of Everything by Big Banks

Barry Ritholtz has a great blog entry on big banks and the expansive list of items that they manipulate.

He explains that because fines or so trivial compared to the advantages they gain by rigging markets banks just consider it a cost of doing business. 

This is a good read.

The Rising Inequality in America

The rising inequality in America is becoming more and more of a problem.  How can we have a prosperous and thriving economy if wealth is concentrated at the top?

CBO finds that, between 1979 and 2007, income grew by:

• 275 percent for the top 1 percent of households,
• 65 percent for the next 19 percent,
• Just under 40 percent for the next 60 percent, and
• 18 percent for the bottom 20 percent. 

The share of income going to higher-income households rose, while the share going to lower-income households fell.

• The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income.
• Most of that growth went to the top 1 percent of the population.
• All other groups saw their shares decline by 2 to 3 percentage points.

Fed Tapers QE by $10B

What was expected happened.  The Fed cut rates by $10B/ month.

As Ben Bernanke said:

Reflecting cumulative progress and an improved outlook for the job market, the committee decided today to modestly reduce the monthly pace at which it is adding to the longer-term securities on its balance sheet.”

 According to Bloomberg Bernanke said:

 "The steps that we take will be data dependent,” Bernanke said. “If we’re making progress in terms of inflation and continued job gains, then I imagine we’ll continue to do, probably at each meeting, a measured reduction” in purchases. If the economy slows, the Fed could “skip a meeting or two,” and if the economy accelerates it could taper a “bit faster,” he said.

 As for borrowing costs:

 At the same time, the Fed reinforced its assurances that it’s a long way from raising borrowing costs, saying that its benchmark rate is likely to stay low “well past the time that the unemployment rate declines below 6.5 percent, especially if projected inflation continues to run below” the Fed’s 2 percent goal.

 

Industrial production Rose Reaching an All Time High

A little late in posting this but it is a huge sign that the manufacturing sector in this country is recovering nicely.

The report was summed up nicely by Bill McBride in his blog Calculated Risk.

Capacity Utilitzation is still 1.2% below the average for the last 30 years but seems to be climbing.

Industrial production increased 1.1% in November to 101.3 and at a new record high.

In addition, it seems like there is some manufacturing strength in Europe according to a Bloomberg article.

The charge higher is led by the auto sector.  Per Bloomberg article:

The production of motor vehicles and parts increased 3.4 percent after falling 1.3 percent in October, today’s report showed. Auto assemblies climbed last month to an 11.6 million annual rate, the most since June 2006. Excluding autos and parts, manufacturing rose 0.5 percent, indicating the pickup was broad-based.

 This is a great report but we need to pay attention to inventories to see if this will have legs to stand on.  Again per Bloomberg:

The outlook for production depends on whether demand is strong enough to keep pace with an increase in stockpiles. A report last week showed business inventories climbed 0.7 percent in October, the biggest jump since January.

Some charts for our viewing pleasure per Calculated Risk.

The Costs of too Low a Minimum Wage III

Another good article in Bloomberg View by Barry Ritholtz making the argument for a rise in the minimum wage.  This time he takes on Walmart.

Some excerpts:

 McDonald's recently found itself in the spotlight courtesy of its “McResource” line -- the company help line that helps its poverty-level, full time employees enroll in various welfare programs. A recording of that McResource line sparked outrage, driving this issue into public view.

More recently, Wal-Mart’s holiday public-relations headache began when a Canton, Ohio, store decided to hold a food drive for needy local families for the holidays. What made this a PR nightmare was that the needy families were full time Wal-Mart employees who were working in the store holding a food drive.

 And more to the point:

Why, I keep asking myself, do we effectively want to subsidize a private company’s employees? Wouldn’t it make much more sense to raise the minimum wage to a level that a full-time worker could support the average American family of four? Just $11.33 puts a 40-hour employee over the poverty line. The costs of this increase would be borne by the company and its consumers -- not the taxpayer.

Core Logic Report on Properties Returning to Positive Equity

Core Logic reported today that 791K properties Returned to positive equity.

The numbers are as follows:

• Nearly 6.4 million (13.0%) Mortgaged Properties are still underwater.
• The national aggregate value of negative equity decreased $33.7B to $397B at the end of the third quarter.  this improvement was driven by rising home prices.
• Under-equitied borrowers (less than 20% home equity) account for 20.4% of the 48.9M residential properties with a mortgage.
• Near-negative equity (less than 5% home equity) account for 3.2% of the 48.9M residential properties with a mortgage.
• Average loan to value is 61.4%
• Negative equity residential properties are underwater by 33%
• 82% of homes valued at $200K or less have equity vs. 92% for homes above $200K