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Monthly Archives: April 2013
“The next Great Depression is already happening – it just hasn’t reached the United States yet. Things in Europe just continue to get worse and worse, and yet most people in the United States still don’t get it. All the time I have people ask me when the “economic collapse” is going to happen. Well, for ages I have been warning that the next major wave of the ongoing economic collapse would begin in Europe, and that is exactly what is happening. In fact, both Greece and Spain already have levels of unemployment that are greater than anything the U.S. experienced during the Great Depression of the 1930s.
Pay close attention to what is happening over there, because it is coming here too. You see, the truth is that Europe is a lot like the United States. We are both drowning in unprecedented levels of debt, and we both have overleveraged banking systems that resemble a house of cards. The reason why the U.S. does not look like Europe yet is because we have thrown all caution to the wind. The Federal Reserve is printing money as if there is no tomorrow and the U.S. government is savagely destroying the future that our children and our grandchildren were supposed to have by stealing more than 100 million dollars from them every single hour of every single day. We have gone “all in” on kicking the can down the road even though it means destroying the future of America. But the alternative scares the living daylights out of our politicians. When nations such as Greece, Spain, Portugal and Italy tried to slow down the rate at which their debts were rising, the results were absolutely devastating. A full-blown economic depression is raging across southern Europe and it is rapidly spreading into northern Europe. Eventually it will spread to the rest of the globe as well.
The following are 20 signs that the next Great Depression has already started in Europe…”Comments »
“Asian stocks declined from the highest level since June 2008, led lower by Japanese shares as the yen strengthened and data signaled a slowdown in global business activity. Oil and copper dropped.
The MSCI Asia Pacific Index dipped 0.3 percent as of 11:37 a.m. in Tokyo as Japan’s Topix Index slid 0.5 percent after posting its best month since 1999. Standard & Poor’s 500 Index futures were little changed. The yen climbed 0.1 percent to 97.36 per dollar. Crude oil declined 0.4 percent, and copper lost 0.4 percent after the biggest monthly loss since May.
An Australian manufacturing gauge slumped to a four-year low as currency strength weighed on exporters, while China’sPurchasing Managers’ Index expanded at a slower pace, according to reports today. U.S. private employers added the fewest jobs in six months, economists forecast, after business activity unexpectedly shrank in April for the first time in more than three years.
“There is little doubt that risks to global economic growth for 2013 are tilted to the downside,” said Matthew Sherwood, the Sydney-based head of investment market research at Perpetual Ltd., which manages about $25 billion. “Earnings growth after several years of very subdued performance still seems a bit of a stretch.” …”Comments »
“The first major economic report with complete April data is out and it’s a miss.
South Korean exports climbed by just 0.4% year-over-year. Economists were looking for a gain of 2.0%.
Economists across Wall Street dub South Korean exports as the global economic canary in the coal mine.
Korean trade data usually comes before the first trading session of the month in Asia, which makes it the first of the world’s major economic indicators to be released.
Because Korea’s exports are heavily exposed to China and Japan — the world’s second and third largest economies — it is considered to have strong predictive power….”Comments »
“China’s National Bureau of Statistics just published its April manufacturing PMI report.
The headline number fell to 50.6 from 50.9 in March.
Economists were looking for a reading of 50.7.
Any reading above 50 signals expansion.
Here’s a break down of the March and April reports…”Comments »
“As we approach the end of April, the inevitable question of seasonality arises. Is it time to sell in May and go away?
While many of my intermediate and long term technical indicators are starting to line up, indicating that it may be prudent to start selling now, I am not seeing the bearish trigger yet. To review, let’s consider the charts from the three major regions of the world, US, Europe and China.
What does defensive leadership mean?
In the US, the stock market remains in an uptrend. The SPX, as shown below, remains in an uptrend and it is above both its 50 and 200 day moving average. For traders, it may be premature to get overly bearish without some catalyst or trigger.
The warning signs are there. Defensive sectors have been leading the market. Analysis from Thomson-Reuters shows that the defensive sectors have fared the best in the May-October period during the 21st Century. Is the market is anticipating a downturn or correction?….”Comments »
“We’ve made progress on a lot of things since the 1950s and so have CEOs — in their quest for more money that is.
The ratio of CEO-to-worker pay has increased 1,000 percent since 1950, according to data from Bloomberg. Today Fortune 500 CEOs make 204 times regular workers on average, Bloomberg found. The ratio is up from 120-to-1 in 2000, 42-to-1 in 1980 and 20-to-1 in 1950.
“When CEOs switched from asking the question of ‘how much is enough’ to ‘how much can I get,’ investor capital and executive talent started scrapping like hyenas for every morsel,” Roger Martin, dean of the University of Toronto’s Rotman School of Management, told Bloomberg.
The findings come just one day after the S&P 500 soared to a new record, indicating that perhaps the only ones not reaping the benefits from the companies’ historic profitability are workers. Other reports have come to similar conclusions. An analysis from the AFL-CIO, the umbrella organization for many of America’s unions, found earlier this month that CEO pay was 354 times that of the average employee….”Comments »
“Expect Labs has already received funding from the likes of Google Ventures and Greylock Partners, but the San Francisco-based startup (and TechCrunch Disrupt alum) announced this morning that Intel Capital, Samsung Ventures, and Telefonica Digital have made their own strategic investments in the company.
In case you haven’t been keeping tabs on Expect Labs, well, you should be. It was founded by Tim Tuttle and Moninder Jheeta in 2011, and since then the team has been tackling a hefty problem — they want to be able to listen to and analyze your conversations as they happen, and surface relevant information right at the moment you need it without you having to search for it.
Granted, some of these new strategic partners are more surprising than others. Our own Jordan Crook sat down with Intel Capital president Arvind Sodhani back in March, who revealed that the chipmaker’s venture arm had indeed invested in Expect Labs and strongly hinted that Intel would lean on the startup’s Anticipatory Computing Engine to bring what Intel refers to as “sophisticated voice control” to ultrabooks. Tuttle naturally wouldn’t confirm whether ultrabooks in particular would soon benefit from Expect Labs tech, but noted that Intel is “trying to develop more expertise in software” and realizes that voice, touch, and gestures will become dominant modes of interaction with new devices.
At first glance, Samsung’s interest in Expect Labs and its thoughtful approach to surfacing information seems like a no-brainer. As seen in blockbuster devices like the Galaxy S4, the Korean electronics giant has sought to stay at the front of the smartphone pack by packing its smartphones full of first-party software like the S Voice assistant. That sort of approach hasn’t always been very well-received, but baking the ability to chew on conversations and spit out information on subjects users have just spoken about into yet another Samsung app would be a very savvy move for a company that’s continually looking to push the envelope on software. It’s not just smartphones that will benefit either — Tuttle specifically calls out smart TVs as a potential recipient of Expect Labs tech.
Telefonica seems like a much more interesting case — it’s the fifth largest mobile network operator in the world with roughly 315 million customers across Europe and the Americas. To date Expect Labs has shown off the proactive power of its Anticipatory Computing Engine in app form, but that sort of approach simply wouldn’t work for many of Telefonica’s subscribers since a considerable chunk of them in developing and mature markets don’t own smartphones…..”Comments »
“After three years of slow roll outs and testing with specific partners, Twitter’s Senior Director of Product for Revenue Kevin Weil justannounced the general availability of its advertising options for all US business. Weil revealed the move on stage at TechCrunch Disrupt, which could ramp up revenues and prep Twitter for a widely anticipated IPO.
Twitter first announced it would begin showing ads in April 2010. Since then it revealed promoted tweets and accounts, which let businesses pay to get their tweets seen and their profiles followed. Twitter more recently announced limited availability of a self-serve tool for buying ads, and an Ads API for programmatic buying of huge campaigns.
“Until today it’s been invite only, we’ve had brands and agencies and small business using the platform, and today we’re opening Tiwtter to all businesses, every account, every individual. Now every business in the US can us Twitter ads” said Weil.
Anyone can now go to Twitter’s self-serve interface to start buying Twitter ads….”Comments »
“The famously gloomy economist Nouriel Roubini has finally fingered an investment he likes. But his advice carries an expiration date.
Roubini is predicting an uptick in stock prices over the next two years as the Federal Reserve continues its stimulus efforts. But buyer beware, Dr. Doom says, because a day of reckoning is lurking at the end of the two-year horizon.
Roubini, an economics professor at New York University best known for predicting the U.S. housing crisis, thinks the Federal Reserve and other central banks around the world can and will prop up stocks and bonds for the next two years.
The Fed, he said, is creating the same problems that led to the financial crisis in 2008 by keeping rates near zero. “They are creating massive fraud,” Roubini said during a panel at the Milken Institute Global Conference in Los Angeles, Calif. Monday.
He pointed to the junk bond market as one example of a bubble.
“At some point, there’s a levitational problem,” said Roubini.
When gravity sets in, Roubini says there will not be a recession but a depression….”Comments »
“Dividend stocks are soaring, thanks to the Federal Reserve’s low interest-rate policy, and some experts wonder whether these stocks are becoming overvalued.
For example, Procter & Gamble carries a 3.1 percent dividend yield and is expected to register earnings-per-share growth of 6 percent this year. Meanwhile Google has no dividend, but is expected to produce earnings growth of 18 percent this year.
So which stock has the higher price-earnings ratio? P&G at 18. Google’s ratio is 16.6.
It’s all about the dividend. Many slow-growing companies with dividends are receiving more attention from investors than fast-growing companies without dividends are.
“You have these tech companies that have double-digit earnings growth, no debt, huge cash balances and they’re trading at 12 times forward earnings, while you have a utility in Ohio at 16 times earnings,” James Swanson, chief investment strategist at MFS Investment Management, told The Journal.
“If you don’t think there’s a recession coming, how far do you go with this game?”
The boost in valuations of dividend companies, sparked by yield-hungry investors, is “the biggest glaring discrepancy I see in the market,” he said.
Donald Taylor, a portfolio manager at Franklin Templeton Investments, believes this price discrepancy will last for a while.
“The macro environment that has caused utilities and telecoms, as well as consumer staples, to be expensive relative to history … is not at all likely to change anytime soon,” he noted.
“This is not a product of equity investors buying defensive stocks and hiding out,” Chris Wallis, chief investment officer of Vaughan Nelson Investment Management, told The Journal.
“What we have is money that had typically gone to fixed income now coming into equities,” he added. “They’re looking for bond substitutes and it doesn’t mean that the money is going to exit and go either to cyclical stocks or go to cash. I think it’s going to stay where it is.”
Income-seeking investors don’t have an attractive set of choices in front of them, according to Michael Aneiro of Barron’s….”Comments »
“Company guidance during the current earnings season is sparking a tumultuous rotation of money from big, safe stocks into riskier names, according to Peter Kenny, managing director at Knight Capital.
Guidance is a bit confusing at some levels, he noted, particularly with some negative economic trends such as a drop in durable goods order, flat business investment and continued Eurozone weakness.
“We’ve seen the trading off of the earnings very dramatically volatile,” Kenny told Yahoo. “It’s led to a lot of volatility in the overall market.”
Kenny said the “lumpy and uneven” quarterly results has created a lack of market harmony, but has also uncovered some sectors that were previously neglected.
“Earnings and guidance are helping that rotation out of the defensives and into the more risk-oriented or growth-oriented or alpha-oriented issues, and away from the Dow 30 and into the S&P 500,” he said.
Kenny said both small-cap and mid-cap stocks are beating the Dow Jones Industrial Average at the moment….”Comments »
“Oil refiners Marathon Petroleum Corp. (NYSE: MPC) and Valero Energy Corp. (NYSE: VLO) reported first-quarter 2013 results before markets opened this morning.
Marathon posted diluted earnings per share (EPS) of $2.17 on revenues of $23.35 billion. In the same period a year ago, the company reported EPS of $1.71 on revenues of $20.28 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $2.16 and $19.8 billion in revenues.
Marathon’s refinery throughput rose from 1.32 million barrels a day in the first quarter of 2012 to 1.67 million barrels. Sales volume also rose, from 1.53 million barrels a day to 1.88 million barrels. Gross margins fell, however, from $8.36 a barrel last year to $7.92 a barrel. Total income rose $200 million year-over-year, from $956 million to $1.16 billion.
Valero posted EPS of $1.18 on revenues of $33.47 billion, compared with an EPS loss of $0.78 on revenues of $35.17 billion in 2011. The first-quarter 2012 results include a charge of $1.09 per share related to the closure of the company’s Aruba refinery. The consensus estimate called for EPS of $0.98 on revenues of $30.41 billion.
Like Marathon, Valero’s refinery throughput rose. Unlike Marathon, Valero’s gross margins also rose. Refining margins rose from $7.71 a barrel in the year-ago quarter to $10.59 this year. Total input volume rose by about 11,000 barrels a day year-over-year and total yield rose by 16,000 barrels a day.
Valero’s CEO said…”Comments »
“While many investors see nothing but blue skies for stocks, economic performance around the world continues to sag, creating a “grand disconnect,” according to economist Gary Shilling.
“The reality is that investors are only enamored with what the [Federal Reserve] and other central banks are doing,” he told Yahoo, referring to easing programs.
“Their attitude is don’t fight the Fed. As long as the money is there, I’ve got to own stocks. They couldn’t care less about what’s happening to economies on the ground.
And what is happening to economies on the ground?
“They’re limping along at best,” Shilling, president of A. Shilling & Co., explained. “Europe is in recession, Japan is barely growing and China’s growth is slowing. The U.S. economy is certainly underperforming.”
When you add in investors’ hunger for yield and willingness to ignore major risks to achieve it, “you really have an unsustainable situation,” he said.
So what’s the ultimate outcome of this?
“Nobody will stop a party like this voluntarily,” Shilling noted. “It will only come to a grinding halt when there’s some big shock,” like a blow-up in North Korea or the failure of a European bank….”Comments »
“ZURICH—UBS AG UBSN.VX +7.00% posted a better-than-expected first-quarter profit Tuesday as Switzerland’s biggest bank pushes through an extended restructuring program in the wake of the financial crisis.
The Zurich-based bank still recorded a fall in net profit, to 988 million Swiss francs ($1.05 billion) from 1.04 billion francs a year earlier, though analysts had expected the figure to come in at 496 million francs. The result compares with a loss of 1.89 billion francs in the fourth quarter of 2012, when UBS agreed to pay $1.5 billion to various authorities to settle investigations into the bank’s role in rigging key interest rates….”Comments »