Wednesday, June 24, 2009
Banking Holiday Coming?
NEW YORK (MarketWatch) -- The top-performing letter that predicted the Crash of 2008 now predicts a confiscatory Franklin D. Roosevelt-style "bank holiday." But it's surprisingly sanguine about stocks -- in the (very) short term.
The Harry Schultz Letter (HSL) was my pick for Letter of the Year in 2008 because it really did predict what it rightly called a coming "financial tsunami." But its performance in 2008 was still terrible, albeit arguably for technical reasons. ( See Dec. 28, 2008, column.)
Now HSL has bounced back big-time. ( See April 13 column.) Over the year to date through May, it's up a remarkable 81.7% by Hulbert Financial Digest count, compared to 4.1% for the dividend-reinvested Wilshire 5000 Total Stock Market Index. (more)
Tuesday, June 23, 2009
US Wealth May Take 15 Years to Rebound
June 22 (Bloomberg) -- U.S. households may take as long as 15 years to rebuild wealth lost in the recession, said Columbia University professor Edmund Phelps, winner of the Nobel Prize in economics in 2006.
“The only way we’re going to get a healthy, full recovery is over a long period of time, involving households rebuilding their balance sheets and companies in trouble rebalancing their balance sheets,” Phelps said in an interview today with Bloomberg Television. “There’s no silver bullet that’s going to get us into good shape quickly.” (more)
Dow Industrials, Transports, S&P Close Below Key Moving Averages
Last week, we mentioned that technical indicators began to turn negative. Technical damage continued today as the Dow Jones Industrial Average, Dow Jones Transportation Average, and S&P 500 closed below their pivotal 50 and 200 day moving averages (first time since March), with all 3 averages registering an RSI sell signal. NASDAQ bucks the trend and remains above both critical levels. (more)
California Collapsing
Washington and Wall Street seem to be treating California as if it were a sideshow in the financial circus of these turbulent times.
It’s not.
California is home to the largest manufacturing belt in the United States and to Silicon Valley, the nation’s largest high-tech center.
California is America’s most populous state with 38 million people. Its GDP of $1.8 trillion is the largest in the U.S. Its economy is bigger than those of Russia, Brazil, Canada, or India. (more)