Monday, July 26, 2010

Chart of the Day

The World Financial Report, July 23, 2010

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BNN: Dr. Marc Faber

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Options Play: Crude Could Be Ready To Pop

OPTIONS PLAY: Crude Could Be Ready To Pop

Crude Oil Could Be Poised To Hit A New High For The Year, But The Market Must Get Through The $80/Barrell Area First.


Fundamentally, I look for NYMEX CRUDE FUTURES to rally above $80/Barrell and make new yearly highs for 3 basic reasons:

1. Hurricane Season

2. European Banks Passing Stress Test

3. Improved Equity Prices

Technically, I see NYMEX CRUDE FUTURES as being in a short-term trend higher as indicated to me by the market holding above the 9 period moving average. (more)

Gross: Look For Five Percent Stock Returns

By: Julie Crawshaw

PIMCO co-CEO Bill Gross says we're having "a mini-replay of 2008" in which return of money, not return on money, is becoming the dominant theme.

“Instead of 10 percent returns for stocks, look for five or so,” Gross told CNN Money. “And instead of the past 20 years' returns on bonds, which are actually better than stocks — close to double digits — it's 4 percent going forward.”

That's what the “new normal” is, Gross says, “based upon the primary assumptions of a deleveraging of the private sector and the public sector being limited in what it can spend.”

Gross says that the slight advantage stocks offer “barely” justifies their risk.

As to whether inflation or deflation is the most likely scenario, Gross sees four possible scenarios. “Scenario A is that the global economy rebounds back to past levels of high growth. B is just a decent rebound. C is that new normal — half-sized growth. And D is deflation, debt, destruction,” he observes. (more)

Why the U.S. Need Not Fear a Sovereign Debt Crisis: Unlike Greece, It Is Actually Sovereign

Ellen Brown, Huffington Post

Last week, a Chinese rating agency downgraded U.S. debt from triple A and number one globally, to "double A with a negative outlook" and only 13th worldwide. The downgrade renewed fears that the sovereign debt crisis that began in Greece will soon reach America. That is the concern, but the U.S. is distinguished from Greece in that its debt is denominated in its own currency, over which it has sovereign control. The government can simply print the money it needs or borrow from a central bank that prints it. We should not let deficit hawks and short sellers dissuade the government from pursuing that obvious expedient.

We did not hear much about "sovereign debt" until early this year when Greece hit the skids. Investment adviser Martin Weiss wrote in a February 24 newsletter: (more)

Chavez threatens to cut off oil to US


President Hugo Chavez has threatened to halt oil sales to the United States if Venezuela is attacked by its US-allied neighbour Colombia.

Chavez said during a speech to thousands of supporters that if there were an "armed aggression against Venezuela" from Colombia backed by the US, "we would suspend shipments of oil".

Chavez said "we wouldn't send one more drop" of oil to the United States, which is the top buyer of oil from the South American country. (more)

Is Oil Spill Cover for Massive Foreclosure?

by Jack Ragnarok

See the Gulf of Mexico oil spill not as an engineered environmental disaster but rather a savvy political move that diverts attention from foreclosure action by foreign financiers.

The lands have been offered by successive elected governments as collateral for the enormous cumulative debt of today. The Federal Reserve has issued unlimited debt instruments as fiat and electronic currency to government only through consent of its foreign owners. Ten foreign financial institutions are the corporate owners of the world's biggest alchemy machine, the Federal Reserve system.

Government is an agent of Plutocracy to transfer wealth from serfs to aristocrats. And the military serves to protect the economic interests of Plutocracy. Until recently the US has been Plutocracy's chief global policeman to enforce foreclosure and inflict punishments. Busily policing and bullying other nations, US citizens have yet to understand the time has come to foreclose upon the lands of the New World of Amaracu (America).. (more)

White House predicts record $1.47 trillion deficit this year, 9 percent unemployment next year Read more at the Washington Examiner

Associated Press

WASHINGTON — New estimates from the White House on Friday predict the budget deficit will reach a record $1.47 trillion this year. The government is borrowing 41 cents of every dollar it spends.

That's actually a little better than the administration predicted in February.

The new estimates paint a grim unemployment picture as the economy experiences a relatively jobless recovery. The unemployment rate, presently averaging 9.5 percent, would average 9 percent next year under the new estimates.

The Office of Management and Budget report has ominous news for President Barack Obama should he seek re-election in 2012 — a still-high unemployment rate of 8.1 percent. That would be well above normal, which is closer to a rate of 5.5 percent to 6 percent. Private economists don't think the unemployment rate will drop to those levels until well into this decade. (more)

Seven more US banks collapse on day of Europe's stress tests

The Guardian,

More than 100 banks in the US have now collapsed so far this year after another seven were taken over by regulators late on Friday – the same day that seven European banks failed a financial health check.

With rising bad debts tied to commercial and residential mortgages, the number of US bank failures this year is expected to exceed last year's figure of 140. The largest of the seven US banks just seized by the Federal Deposit Insurance Corporation – which acts as a receiver and protects depositors – was Crescent Bank and Trust Company in Georgia, with more than $1bn in assets. In all, the seven failed banks had total assets of $2bn.

In Europe, investors will have a first real chance tomorrow to react to the results of banking stress tests designed to ease concerns about institutions' financial strength and exposure to debt-laden countries such as Greece. (more)

US Economic Calendar

Jul 26 10:00 New Home Sales Jun
295K 310K 300K
Jul 27 09:00 Case-Shiller 20-city Index May
4.0% 4.0% 3.81%
Jul 27 10:00 Consumer Confidence Jul
51.0 51.0 52.9
Jul 28 08:30 Durable Orders Jun
1.0% 1.0% -0.6%
Jul 28 08:30 Durable Orders ex Transporation Jun
0.5% 0.5% 1.6%
Jul 28 10:30 Crude Inventories 07/24
NA NA 0.360M
Jul 28 14:00 Fed's Beige Book Jul

Jul 29 08:30 Initial Claims 07/24
450K 464K 464K
Jul 29 08:30 Continuing Claims 07/17
4550K 4550K 4487K
Jul 30 08:30 GDP-Adv. Q2
3.0% 2.5% 2.7%
Jul 30 08:30 Chain Deflator-Adv. Q2
0.7% 1.1% 1.1%
Jul 30 08:30 Employment Cost Index Q2
0.5% 0.5% 0.6%
Jul 30 09:45 Chicago PMI Jul
58.5 56.5 59.1
Jul 30 09:55 U Michigan Sentiment - Final Jul
67.5 67.5 66.5