Overall, however, stocks closed only narrowly to the downside. The Dow Jones Industrial Average closed off 29.93 points, or 0.32%, at 9280.67, marking its fourth straight day in the red and its longest loosing streak since June 24.
Helping mitigate some of the losses was robust buying in perceived safer stocks, including gold companies Newmont Mining, up 3.72, or 9.3%, to 43.90, and Barrick Gold, which closed up 2.84, or 8.1%, at 37.89. (more)
Yes, we know, could the title of today’s article be any more provocative? Surely we have lost sight of the fact that stocks have already enjoyed a huge advance with the S&P up nearly 56% from the March lows at the recent high near 1040. Surely, we recognize the huge swing to bullishness that has taken place within the recent sentiment polls, a development that always suggests the imminent death of a major rally. Or does it? As many in the babbling media and cacophony of CNBC would like to have you believe, the swing to excess bullish sentiment is NOT an instant death sentence for equities. On Wall Street, any number of technical analysts have also been pounding away on the “excessive bulls” theme. However, we see a lot of these warnings as overdone, and potentially way early. (more)
Ann Pettifor is a member of a select club — the seers who saw it all coming. Now the economist, who predicted the credit crunch as far back as 2003, believes that the worst is yet to come unless there is radical reform of the financial system. Six years ago she parodied the International Monetary Fund’s annual economic forecast with her own — The Real World Economic Outlook. Then, in 2006, her book The Coming First World Debt Crisis, warned that rich countries were heading for a debt crisis that would overshadow anything seen in the developing world. Both were ridiculed.
With the British and world economies languishing in the worst recession since the Great Depression and with once-mighty banks reliant on government life support, she could be forgiven for being a little smug. Not a bit of it: “No, being Cassandra is not something I wish for. I hate this role of being a gloomer and doomer, as I’m an optimist by nature. But I am very pessimistic now.” (more)
With technical indicators such as the MACD, STO and RSI fairly neutral, gold is at a crossroads. The chart below shows how gold prices are in a large wedge formation, going back a good six months.This wedge formation is what we will be watching very closely over the next few trading sessions for
Gold may advance to a record $1,325 an ounce if it first breaks out of a symmetrical, triangular pattern, a move that may occur in the next one or two weeks, Standard Bank Group Ltd. said, citing trading patterns. A so-called topside breakout would be indicated by a close at more than $980.85 an ounce, Darran Grabham, the bank’s technical analyst, wrote in a note yesterday. That would signal a short-term bull trend to at least $1,100 an ounce, he said. Gold traded today at $952.80.
In addition to the triangular pattern, gold rising to more than this year’s peak of $1,006.29 would “confirm the completion of a continuation head-and-shoulders pattern -- the eventual target is $1,325,” Grabham wrote. The precious metal’s record stands at $1,032.70, touched on March 17, 2008. (more)
The rise in global economic confidence might seem strange, given the financial problems that remain and new ones apparently on the horizon.
But Yale University economist Robert Shiller says something called a �positive feedback loop� explains the improved sentiment.
�Economic analysts often turn to indicators like employment, housing starts or retail sales as causes of a recovery, when in fact they are merely symptoms,� Shiller writes in The New York Times. (more)
China currently accounts for 93 percent of production of so-called rare earth elements — and more than 99 percent of the output for two of these elements, vital for a wide range of green energy technologies and military applications like missiles.
Deng Xiaoping once observed that the Mideast had oil, but China had rare earth elements. As the Organization of the Petroleum Exporting Countries has done with oil, China is now starting to flex its muscle. (more)
The Prius hybrid automobile is popular for its fuel efficiency, but its electric motor and battery guzzle rare earth metals, a little-known class of elements found in a wide range of gadgets and consumer goods. That makes Toyota's market-leading gasoline-electric hybrid car and other similar vehicles vulnerable to a supply crunch predicted by experts as China, the world's dominant rare earths producer, limits exports while global demand swells.
Worldwide demand for rare earths, covering 15 entries on the periodic table of elements, is expected to exceed supply by some 40,000 tonnes annually in several years unless major new production sources are developed. One promising U.S. source is a rare earths mine slated to reopen in California by 2012. (more)
The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.
While the details of the report could not be confirmed, it was Monday's hot topic in financial circles from Shanghai to Singapore as commodity marketers feared that companies holding underwater price hedges could simply renege on the deals, costing banks millions of dollars in profit. (more)
