The last of the bears Acuthan still stands by his call that the markets are up on fed juice and that data still stinks with the exception of employment; that he says will deteriorate.

In order to have a little less personal information stored it behooves you to delete history b4 Google launches a new program…

The correlation between oil prices and equities has fallen to the lowest level since April last year as the Iranian nuclear row and related oil price jump have swooped back onto the radar for global investors.

Until recently equities and oil have tended to move in the direction. Oil price moves have been primarily demand driven  – euro zone credit woes easing and better economic data from the U.S. have been good for oil and equity prices.

If oil prices start to rise due to worries about supply rather than improving growth expect equities to suffer. As the chart below shows the correlation between the two assets went negative last year as investors worried how much the spreading Arab spring may hit oil supply.

To read the rest and see the interesting chart, go here.

Term limits needed desperately….

Source

“Financial markets breathed a sigh of relief after the agreement by European leaders for a second bailout of debt-burdened Greece. But the continent’s crisis is far from complete, many experts say. Star Harvard economist Kenneth Rogoff is one of them.

“I don’t want to be a Cassandra, but the idea that it’s over is an illusion,” he tells The New York Times.

“I am amazed by the short-term psychology in the market. I don’t think we’re anywhere near the endgame.”

The idea that Greece can be starved into prosperity would seem laughable to an objective observer. And the idea that Greece will follow through on the severe austerity it has promised, when it already faces riots in the street for previous cutbacks, also seems a bit of a stretch.

In addition, Greece’s private creditors who are expected to agree to a loss of more than 70 percent on their government bond holdings may not suffer their losses quietly.

Some of the International Monetary Fund’s debt projections for Greece appear to be taken out of thin air. “This whole debt sustainability analysis is a joke,” international economist Charles Wyplosz tells The Times.

European leaders are hoping that the Greece bailout will act as a firewall to prevent the crisis from intensifying in Portugal, Ireland, Spain, and Italy. But it looks more like this will just postpone the day of reckoning.”

“The agreement on a second bailout for Greece buys the euro zone time, but its debt problems haven’t been erased, says Marc Chandler, head of currency strategy for Brown Brothers Harriman.

“This probably forestalls Spain and Italy from having worse problems. They put the firewall around them,” he tells Yahoo.

“But we’re going to return to this issue whether it’s one year down the road or two. And Portugal is the next one we’re going to have to watch.”
The reaction of European bond markets to the bailout accord shows Portugal is the weak link, Chandler says. Italian and Spanish bond prices rose afterward, but Portuguese bonds plummeted.

The Italian 10-year government bond has a yield of 5.44 percent, compared to 5.11 percent for Spain and 12.43 percent for Portugal.

Portuguese interest rates are too high, despite the European Central Bank’s easing, Chandler says. “That means a weaker economy.”

Read more: 

Source

“Hedge fund manager Doug Kass isn’t backing off his target for the S&P 500 of 1,345, despite the recent pop up to 1,367. It closed Wednesday at about 1,358.

“While I recognize the positive price momentum and the possibility of a further overshoot of my fair-value calculation, I remain cautious over the shorter term,” he writes on TheStreet.com.

“Indeed, the Greek debt agreement this week might very well mark a classic sell-on-the-news event.”

Editor’s Note: Is This the Video That Will Get Obama Fired?

He is sticking to his price range of between 1,250 and 1,550 for the year, calling his view “optimistic” for the intermediate term. Nevertheless, the S&P 500 now appears to be “overpriced,” Kass writes.

“I expect the index to be bound within a price range between 1,250 and 1,400 over the next few months,” Kass contends.

Even the so-called “Dr. Doom,” Nouriel Roubini, has turned bull, Kass points out.

He went on to list some of the points upon which he agrees with Roubini, including a higher oil price, increasing geopolitical risk in the Middle East, slowing economies in China and India, and the problematic issues of continued central bank easing and an unrealistic U.S. budget.

Stocks could plunge from here, says Sam Stovall, chief equity strategist at S&P Capital IQ.

“The market continues to work its way higher. We are knocking on the door of the April 29 recovery high. It feels like there are an awful lot of people calling for a correction — or at least a digestion — and I’m one of them,” Stovall told CNBC.”

All aboard!

Well this is going to be the hot read of the day.

SocGen’s Albert Edwards blasts the recent stock-market rally, and says there’s still way too much “hope.” Only when the hope is totally gone will we know the great ice age is over.

One key lesson from Japan is that an essential ingredient to the end of a long valuation bear market is revulsion. It is when buyers-on-dips become sellers-on-rallies. It is when volume dries up to almost nothing. It is the loss of hope.

In Japan we saw huge rallies in the Nikkei on the back of short-lived cyclical recoveries. Each cyclical failure and further new lows in the equity market saw hope being progressively crushed. Previous US valuation bear markets typically take 4 or 5 recessions to fully play out. We have only had two.

The market is once again in a hope phase hoping that the US is now in a self-sustaining recovery; hoping that China might be soft-landing; hoping that the Greece bailout and the ECB liquidity polices have settled things down in the eurozone. These bursts of hope are essential in long bear markets. Essential in the sense that hope must be crushed. It will be crushed. Hope still beats in the breasts of equity investors. The market will rip out that hope and consume it in front of investors’ eyes. Only then can the bull market begin.

As evidence that the current hope will be quashed again like last year, he posts this chart…

Read more: http://trade.cc/aoqi#ixzz1nDBquqw1

So get out there and buy…..

Source

“Marijuana is safer for drivers than alcohol, teenagers said in a survey by Liberty Mutual Holding Co. and a group promoting responsible behavior among students.

Thirty-six percent of teens who drove after using marijuana said the drug wasn’t a distraction. Among those who reported drinking before driving, 19 percent said alcohol presented no distraction, according to a statement today from the Boston- based insurer.

Adolescents have become more receptive to marijuana use by drivers, according to the company, which conducted the survey with SADD, or Students Against Destructive Decisions. The portion of teens who said marijuana use was very distracting or extremely distracting to their driving fell to 70 percent in the most recent study from 78 percent two years earlier.

The data reflect “a dangerous trend toward the acceptance of marijuana and other substances,” Stephen Wallace, a senior adviser for policy, research, and education at SADD, said in the statement.

About 19 percent of teen drivers said they’ve been behind the wheel under the influence of marijuana, compared with 13 percent who report driving after drinking. The study included a survey of more than 2,000 teenagers in 11th and 12th grades last year at 28 high schools across the country. “

Source

Everyone keeps wondering when this Teflon market is finally going to crack.

Here’s one chart, via Doug Kass, that more and more people are paying attention to.

It’s the S&P 500 (red line) vs. the ratio of the Dow Transports vs. the S&P 500 (blue line).

The idea among some “Dow Theorists” is that when the Transports get very weak (relatively) it’s a sign that the market as a whole is doomed to fall.

It is pretty stark the gap that’s opened up this year. At a minimum it at least shows that some parts of the market are getting roughed up by the rise in oil prices.

Read more: http://trade.cc/aohu#ixzz1n8CvfyXe

“The Secretary of State wants American companies to focus their efforts – and their cash piles – on spurring job growth by investing at home and abroad.

By Tory Newmyer, writer

Clinton: Businesses need to start spending.

FORTUNE — Secretary of State Hillary Clinton on Tuesday issued a challenge to American business: Stop hoarding your cash, and start investing both at home and abroad to spur domestic job growth.

“We can’t help you if you’re not hungry enough to get out there and compete for the business that is going to be available,” Clinton told a lunchtime crowd gathered at the State Department for a first-of-its-kind global business conference. Noting that American companies are sitting on “large cash reserves,” Clinton called on them to “take informed risks that have always been the key to success.”

Full article

“Stocks have done well this year, with the S&P 500 rising 1.4 percent to 1,361 in a week, up 24 percent from its October low and just points shy of its 2011 high.

The Dow, meanwhile, passed the 13,000 mark for the first time since May 2008.

Still, stocks may be due for a breather, and profit taking appears to be likely in the forecast, says Sam Stovall, chief equity strategist at S&P Capital IQ.

“The market continues to work its way higher. We are knocking on the door of the April 29 recovery high. It feels like there are an awful lot of people calling for a correction — or at least a digestion — and I’m one of them,” says Stovall, according to CNBC.

Stocks fell late in 2011 and normally under such scenarios, the rally that follows see equities rebounding about 23 percent in six months.

Stocks already gained that much in less than five months, which ups the chances of a correction, normally defined as a 10 percent drop.

“We think we’re going to get to where we are now, or even as high as 1380 (on the S&P) and then maybe go down to the low 1300s before approaching 1400. That’s the scenario our technicians are talking about,” Stovall says.

Others agree that a correction may be likely, and while it won’t mean the market will necessarily finish the year in negative territory, don’t expect blue skies ahead either thanks to homegrown and European uncertainties.

“This rally is not about irrational enthusiasm as much it is getting rid of irrational fear,” says Brad Sorensen, director of market and sector research for Charles Schwab in Denver, according to CNNMoney.

“There will be more bumps in the road. The whole year is not going to be as smooth as the first six weeks have.”

Read more:  

The middle class continues to lose access to credit says Whitney. The wealthy are keeping the consumer economy together with more than half of all purchases.

“Japan’s swelling bond sales risk pushing the world’s most indebted nation to a “trigger” point where capital inflows reverse and bond yields rise, former Deputy Bank of Japan Governor Toshiro Muto said.

“It’s common sense that huge bond issuances aren’t sustainable,” Muto, 68, who served as the BOJ’s deputy chief for five years until March 2008, said in an interview in Tokyo yesterday. “I don’t know how much time we have,” he said, noting that he doesn’t see the nation reaching the tipping point in the near future.

Prime Minister Yoshihiko Noda is struggling to double the sales tax to rein in debt expected to reach 1 quadrillion yen ($13 trillion) next year just as policy makers in Europe work to contain their fiscal crisis. Standard & Poor’s this week maintained a negative outlook on Japan’s sovereign rating and warned a downgrade is likely if growth prospects weaken.

“I have no doubt that a rating cut will take place” if the government can’t raise the 5 percent sales tax, said Muto, who also worked at the Finance Ministry for 37 years and is currently chairman of the Daiwa Institute of Research. “I don’t think the cut will cause a market rout, but we have to keep in mind the unwinding of capital inflows may happen” if Japan repeatedly fails to get its finances in order, he said….”

Full article

What do Homer’s Odyssey, Boombustology, and “financialese” have to do with wealth management? Quite a lot, it turns out.

Let’s start with the Odyssey. In his presentation on utilizing behavioral finance in the management of client portfolios at the CFA Institute Wealth Management 2012 conference, Greg B. Davies, global head of behavioral and quantitative investment philosophy at Barclays Wealth, explored the concept of what he called “behavioralizing finance.”

“This is not behavioral finance versus classical finance,” he said. “We don’t believe that classical finance is something that should be thrown away. What we believe is that classical finance has not gone far enough; it has not considered what it truly means to be human. It has not considered certain aspects of our intuitive responses to the investment journey in order to make us better investors.”

Davies argued that there is a fundamental disconnect between helping clients invest for the long term and the fact that we live perpetually in the short term, or what he called “the zone of anxiety,” where we are buffeted financially and emotionally by uncertainty. (See “What Should I Do? Translating Long-Term Trends into Action” published in Compass in October 2011.)

Behavioral finance, he told attendees, “recognizes that decisions are always made in the zone of anxiety, but the end goal is always long term and what we have to do is help the decision maker attain that end goal.” One way to do that is to purchase emotional comfort — even if it comes at a cost. (This is further explained in a recent book Davies coauthored with Arnaud de Servigny titled Behavioral Investment Management: An Efficient Alternative to Modern Portfolio. “Successfully implementing one’s optimal portfolio requires emotional comfort and shying away from risky assets and sitting on cash is one way of acquiring this comfort,” they write. “However . . . it can be a very expensive way of doing so because it means that your portfolio will have dramatically lower risk and return than is optimal.”)

Read the rest here.

The title was so funny…who even cares about the oped piece on a Friday afternoon ?

By Mark Hulbert

CHAPEL HILL, N.C. (MarketWatch) — Worried about the future of the NBA market — otherwise known as the “nothing but Apple” market?

You’re not alone. Many worry about the overall market’s health when more and more of the heavy lifting is being done by just a relatively few stocks like Apple AAPL +0.36%  .

And I fully expected to become worried too as I set out to investigate that concern for this column. But that is not what I found.

Consider first the data. During the week ending Feb. 3, two weeks ago, 16.4% of the issues on the NYSE hit a new 52-week high — which represents the highest level this percentage has reached over the last six months. Last week, this percentage contracted to 11.7%, even as the Dow Jones Industrial Average DJIA +0.96%   was itself hitting a new 52-week high.

That is the contraction that has some commentators worried.

But now consider what Ned Davis Research found upon trying to correlate the weekly new-high data with bull market peaks. They found that there typically is a long lag time between when the percentage of stocks hitting new weekly highs reaches its peak and when the bull market finally tops out.

In fact, the firm found that in no case over the last five decades did a bull market top out before a peak was reached in the percentage of weekly new highs. And, furthermore, the average lag time between a peak in that percentage and the bull market’s top was more than 33 weeks — nearly eight months.

So even if the percentage of NYSE stocks hitting weekly new highs peaked out at 16.4% earlier this month, the historical data would not warrant an immediate concern that the market was about to keel over dead.

Read the rest here.

Apparently not many at all. Some of you have commented that i need to stop hating on the industry, but the industry is in no short supply of idiocy to mock; plus those mofos need to got to jail.

Full article

“Former U.S. Vice President Al Gore said investors in oil and gas companies who ignore the cost of emitting carbon dioxide and othergreenhouse gases are making a mistake similar to those who invested in subprime mortgages.

“The value of the subprime mortgages was based on a false assumption,” Gore said yesterday in an interview. “In almost exactly the same way, the value of all of these carbon fuel reserves is based on a similarly absurd assumption.”

Gore made the analogy as Generation Investment Management LLP, the asset manager he founded with former Goldman Sachs Group Inc. (GS) executive David Blood, published a five-point plan titled “Sustainable Capitalism” to reform the investment industry. They want the proposals to help combat climate change and poverty as well as boost profit in the long term.

Gore and Blood recommended investors identify “stranded assets” whose value would change significantly under certain scenarios, such as a price being set for carbon or for water. Second, they said investors should use environmental, social and governance data as well as financial data to value companies. Third, companies should end quarterly earnings guidance to remove pressure for short-term gains. Fourth, companies should reward managers for long-term performance, and fifth, investors should be rewarded for holding shares longer with “loyalty- driven securities,” Gore and Blood said….”

Full article