zerohedge.com / By Tyler Durden / 12/08/2012 19:24
In the hours following the release of the latest Flow of Funds statement on Thursday, some of the glorified powerpoint-cum-statist
tabloid media outlets released a very disingenuous and flat out wrong
comparison of household net worth to total US debt (even though
technically total US GDP was showed, although the two are now
interchangeable with total US Debt having surpassed total US GDP).
Supposedly this was intended to demonstrate the “net worth of America is massively positive” and that America is “not even close to being broke.”
Of course, by doing so they merely confirmed once more their complete
cluelessness when it comes to the debt market, as US household net worth (source) is the direct beneficiary not just of sovereign debt, but certainly all on-balance sheet debt verticals in existence which include, again from the Flow of Funds report tab L.1,
household, non-financial corporate, non-financial non-corporate,
financial and rest of world debt. The grand total is also conveniently
tracked by the Fed in the Total Credit Market Debt Owed category (source) which in the last quarter was $55.3 trillion:
just “modestly” above the $16.3 trillion strawman of merely US Federal
debt. Comparing this to the $65 trillion in household net worth
certainly gives a far less rosy picture of just how “massively positive”
net worth of America is.
READ MORE
Monday, December 10, 2012
Chart of the Day - Canadian Pacific Railway (CP)
The "Chart of the Day" is Canadian Pacific Railway (CP), which showed
up on Thursday's Barchart "All-Time High" list. Canadian Pacific posted
an all-time Thursday at $100.85 and closed up +2.76%. TrendSpotter has
been long since Oct 5 at $88.88. In recent news on the stock, Canadian
Pacific announced on Wednesday that it will eliminate 4,500 positions,
or about 23 percent of its workforce, by 2016. Canadian Pacific said the
reductions will be achieved through job cuts, attrition and fewer
contractors as part of its restructuring plan. Citi Investment Research
analyst Christian Wetherbee rated Canadian Pacific a "buy" and said that
investors should be upbeat that the company's plan is being driven by
the job eliminations and other actions, such as the closing of some
train yards. Canadian Pacific Railway, with a market cap of $16.2
billion, is North America's first transcontinental railway, Canada's
second-biggest railway and is the only transcontinental carrier with
direct service to the U.S. Eastern Seaboard.
Investing Advice from Hugh Hendry
This is a good interview with Hugh Hendry, who I always enjoy. It runs twenty minutes.
Hugh Hendry, of Eclectica Asset Management, takes the long view on investing at The Economist’s Buttonwood Gathering on October 25th 2012. He was interviewed by The Economist’s Philip Coggan.
Westlake Chemical Corporation (NYSE: WLK)
Westlake Chemical Corporation manufactures and markets basic chemicals,
vinyls, polymers, and fabricated building products. It operates in two
segments, Olefins and Vinyls. The Olefins segment provides ethylene,
polyethylene, styrene monomer, and various ethylene co-products, such as
chemical grade propylene, crude butadiene, pyrolysis gasoline, and
hydrogen. The Vinyls segment offers polyvinyl chloride (PVC), vinyl
chloride monomer, ethylene dichloride, chlorine, caustic soda, and
ethylene. This segment also manufactures and sells products fabricated
from PVC, including water, sewer, irrigation, and conduit pipes; window
and door profiles; and fences. The company's products are used in
various applications, such as consumer and industrial markets comprising
flexible and rigid packaging, automotive products, coatings, and
residential and commercial construction, as well as in other durable and
non-durable goods. Westlake Chemical Corporation provides its products
for chemical processors, plastics fabricators, construction contractors,
municipalities, and supply warehouses in the United States, Canada,
Singapore, and internationally.
Westlake's stock is forming a head and shoulders (H&S) pattern. Please take a look at the 1-year chart of WLK (Westlake Chemical Corporation) below with my added notations:
Westlake's stock is forming a head and shoulders (H&S) pattern. Please take a look at the 1-year chart of WLK (Westlake Chemical Corporation) below with my added notations:
WLK started a nice rally in June from $50 that peaked in October and
November at $80. Over the last (3) months though, the stock has created a
very important level at $70 (navy), which would also be the “neckline”
support for WLK's H&S pattern. Above the neckline you will notice
the H&S pattern itself (red). Confirmation of the H&S would
occur if the stock broke below its $70 support. If WLK breaks that
level, the stock should move lower from there.
AAPL Death-Cross Pushes Dow To Highs
Of course, it makes perfect sense – the largest market cap company in
the world drops further and experiences a death cross and sure enough –
the evergreen Dow Jones Industrial Average ended near the highs of the day – well north of the critical ‘retirement-on’ 13,000.
In general risk-assets were quietly correlated with stocks today (amid
relatively quiet volume on the major averages) but we note that the
capital structure ETFs in general were less exuberant – though they did
get a little bounce after the consumer credit data. All-in-all, the Dow stood alone in its non-AAPL exuberance as the rest of the market was mired in the sentment shift that is occurring (note the Dow saw ts 50DMA cross below its 100DMA and its closed perfectly intersecting with those averages).
Must be the ‘great’ jobs number, right? Treasury yields end near their
lows of the week, USD near its highs, Gold down on the week though at
3-day highs (supporting stocks), and high-yield credit weak today. Paging Skynet…
The S&P remained considerably more excited that credit/rates/vol today – though the latter did tend to keep pulling back up…
The S&P remained considerably more excited that credit/rates/vol today – though the latter did tend to keep pulling back up…
US Weekly Economic Calendar
time (et) | report | period | Actual | forecast | previous |
---|---|---|---|---|---|
MONDAY, DEC. 10 | |||||
None scheduled | |||||
TUESDAY, DEC. 11 | |||||
8:30 am | Trade deficit | Oct. | -$42.7 bln | -$41.5 bln | |
10 am | Wholesales trade | Oct. | -- | 1.1% | |
10 am | Job openings | Oct. | -- | 3.6 mln | |
WEDNESDAY, DEC. 12 | |||||
8:30 am | Import price index | Nov. | -0.5% | 0.5% | |
12:30 pm | FOMC statement | -- | |||
2 pm | Federal budget | Nov. | -- | -$137 bln | |
2:15 pm | Bernanke press conference | -- | |||
THURSDAY, DEC. 13 | |||||
8:30 am | Weekly jobless claims | 12-8 | 370,000 | 370,000 | |
8:30 am | Retail sales | Nov. | 0.4% | -0.3% | |
8:30 am | Retail sales ex-autos | Nov. | -0.2% | 0.0% | |
8:30 am | Producer price index | Nov. | -0.5% | -0.2% | |
8:30 am | Core PPI | Nov. | 0.2% | -0.2% | |
10 an | Inventories | Oct. | 0.5% | 0.7% | |
FRIDAY, DEC. 14 | |||||
8:30 am | Consumer price index | Nov. | -0.2% | 0.1% | |
8:30 am | Core CPI | Nov. | 0.2% | 0.2% | |
9:15 am | Industrial production | Nov. | 0.1% | -0.4% | |