The semiconductor industry shows cyclical growth with periods of boom driven by developments in thesmartphone industry and pressures from inventory supply. Conforming with this view, Goldman Sachs in its note said that 2013 would be the year for another semiconductor boom. Their report said that the industry has a history of outperforming only once every five years and this could be that year. However their analysis admitted that the under-performance in 2012 was attributable to bearish investor sentiment prevailing in the industry.

Semiconductors Target of hedge funds…”

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Richard Koo on JGB Volatility

The surge in Japanese long-term interest rates between Friday, 10 May and Wednesday, 15 May probably caused some lost sleep among bond market participants and policymakers as the 10-year JGB yield climbed 34bp from 0.58% to 0.92% over the course of four days. Had this trend continued, it could well have marked the “beginning of the end” for the Japanese economy.

Fortunately, interest rates settled down that Wednesday and fell back below 0.8% at one point. But as of 20 May the 10-year yield is still trading at 0.84%, which is higher than it was the preceding Thursday. I suspect the rise in yields has left market participants and observers alike much more cautious for the first time in years.

Although the stock market has welcomed the yen’s continued slide against the dollar, this trend needs to be carefully monitored, as simultaneous declines in JGBs and the yen can be interpreted as a loss of faith in the Japanese government and the Bank of Japan. It is also worth noting that small-cap equities and REITs both fell in tandem with government bond prices during this period.

Overseas, meanwhile, a major debate on an exit from quantitative easing by the Fed and the Bank of England seems to be starting in the US and the UK. The IMF has also released a paper discussing the costs of this exit, and I expect the discussion to become more active going forward.

Further Reading  Kyle Bass’ Latest Poll Tells Him Japan Will Implode

Richard Koo: Sharp rise in JGB yields despite BOJ easing is cause for concern….”

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But early on, the promising power source had its detractors. They objected to the high initial cost of constructing nuclear plants, the problems of radioactive waste disposal, and the risks of nuclear accidents and nuclear proliferation.

The detractors had an impact. The heavy regulation they pushed for and the litigation they initiated extended construction times and drove up construction costs. But despite their efforts, over 100 reactors had been placed in service in the United States by 1974.

Then came 1979 and a landmark event – the nuclear accident at Three Mile Island. In the aftermath, public opinion turned solidly in favor of the anti-nuclear movement, several construction projects were canceled, and no new US building permits for nuclear power plants were issued for the next 33 years.

Though the US abandoned nuclear expansion in the 1980s, other countries forged ahead. Worldwide startups peaked in 1984 and 1985, as over 30 plants were brought online in each of those years. However, escalating regulatory and litigation costs and pressure groups were not unique to the US. By the 1980s, it was becoming difficult to cost-justify new projects. On top of all that, the Chernobyl accident occurred in 1986, and the world had its own Three Mile Island moment.

In the 1990s, global startups fell to an annual average of less than six per year; in the first decade of the new century, average annual startups were just over three per year. In fact, since 1990 there have barely been enough startups to offset shutdowns.

The recent flurry of closures was caused to a great extent by yet another accident. After the earthquake and tsunami in Japan on March 11, 2011 and the ensuing catastrophe at the Fukushima Nuclear Power Plant, several countries began to rethink their nuclear energy policies. In May 2011, Germany announced that it would abandon nuclear energy entirely, shutting down all 17 of its plants by 2022. In June 2011, Italian citizens voted overwhelmingly in favor of a referendum to cancel plans for new reactors. The Japanese Cabinet, though unclear about a specific plan, has issued a white paper calling for less reliance on nuclear power.

So is nuclear on its last legs? It would appear so… but before we make the funeral arrangements, let’s take a closer look.

A Nuclear Renaissance….”

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“A savage capitalism has taught the logic of profit at any cost, of giving in order to get, of exploitation without thinking of people … and we see the results in the crisis we are experiencing,” the pope said.

Francis greeted the men and women coming to the “Gift of Maria” food kitchen, located at the walls of the Vatican….”

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It is rare for investment firms to be charged criminally under the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO. Such a step would require approval from top Justice Department officials….”

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According to a report released Fridayby the Senate Subcommittee on Financial and Contracting Oversight, the bonuses must be paid under current Congressional regulations, even with some $85 billion in government funding cuts in effect.

Senator Claire McCaskill, (D-Mo) chairperson of the subcommittee, has introduced legislation to prevent the bonuses from being handed out during the sequester. Senators Tom Coburn (R-OK) and Ron Johnson (R-WIS) are co-sponsors of the legislation.

“”The idea that some of the highest paid federal government employees could be getting bonuses while others are being furloughed is outrageous,” said McCaskill, on her web site. “This legislation will ensure that doesn’t happen.”

The bonuses would go to Senior Executive Service employees who meet certain performance criteria. The group makes up less than one percent of the federal workforce…..”

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So, it was a shock back in March when he told his followers to buy stocks.

While his sentiment continues to be overwhelmingly bearish, for now he reiterates his bullishness toward the market.

Here’s Russell via King World News:

“To be honest, I’m outright bullish on the market myself.  Strange, I woke up Sunday morning with this dream.  Bear markets are meant to clean out the financial garbage, and put the fear of God into investors and politicians.  The crash of 2008-09 failed to do that, mainly because the Fed stepped in and reputedly saved the US and the world from disaster….”

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“The 50 largest hedge funds increased their equity exposure by over 5% in Q1 2013,” said FactSet‘s Michael Amenta.

Their biggest holdings include popular names in familiar industries like internet search and personal electronic devices.

“While the top 50 hedge fund managers largely increased their exposure to equities, the funds also made significant reductions to their stakes in two successful stocks in 2013: News Corp. (Cl A) and American International Group Inc,” added Amenta.

Factset included its list of stocks most widely held by the 50 biggest funds.  Google was the most popular with 31 one funds betting on the search engine. At the bottom of their list was Icahn Enterprises, which is basically owned by none other than Carl Icahn.

We ranked this list of stocks by number of holders.  We also included the percentage of shares outstanding held by the top 50 funds.  And for your information, we also included the top three hedge funds that hold each of these stocks.

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Rosenberg: “The Bull Market May Well Be In Complacency” (Gluskin Sheff)

“The gold-silver ratio has risen to its highest point in three years (August 2010) and in the past this served as a flash-point for a renewed risk-off trade. See the chart below and the divergence (S&P 500 surging and the gold-silver ratio sliding — historically this has a 71% correlation, likely because silver has far more industrial applications and as such this ratio is viewed as somewhat of a global economic barometer.) I have to say that when I read the front page of the USA Today business section and see this lead title: With Stocks This Hot, Why Worry?, with famed strategist Ed Yardeni declaring this to be the “mother of all melt-ups,” I do begin to worry. The bull market may well be in complacency.”

Gluskin Sheff

BlackRock’s Russ Koesterich Identifies 3 Places To Put Your Cash (Advisor Perspectives)

BlackRock‘s Russ Koesterich writes that it isn’t too late to move cash into  the market, though he warns that certain parts of the stock market look very expensive. Instead he suggests investors focus on 1. Some international markets like Brazil, China and Hong Kong. 2. U.S. Mega Caps – “they’re the cheapest area of the U.S. market and ten to be less volatile that small and mid-cap names.” 3. Some cyclical sectors like energy and technology….”

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It’s a tiny a gadget that fits inside cell phone batteries, and allows them to fully charge within 20- to 30 seconds. Typically, it takes several hours to get a full charge.

We first saw the news over on SF Gate.

Khare demoed her “super-capacitor” last Friday at the Intel International Science and Engineering Fair…”

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“The big event this week is Wednesday, when U.S. Federal Reserve Chair Ben Bernanke testifies in front of the Joint Economic Committee, while the Fed releases the FOMC minutes to the April 30 and May 1 meeting.

The markets were all aflutter last week as John Williams from the San Francisco Fed (a dove) indicated he wanted to taper off purchases sooner rather than later.

But Bernanke is likely to reiterate exactly what he said at the May 1 meeting: that they are “prepared to increase or reduce” their bond purchases as the labor markets or inflation outlook changes.

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The U.S. budget deficit will drop to $378 billion in 2015 from a record $1.4 trillion in 2009, according to Congressional Budget Office data. The federal government will post a $642 billion deficit this year, the first time in five years that the shortfall has been less than $1 trillion. Moody’s said Sept. 11 that the U.S.’s top Aaa rating would likely be cut to Aa1 if an agreement on the debt ratio isn’t reached.

“The fact that it showed much lower debt levels going forward, we view as a positive development,” Steven Hess, senior vice-president at Moody’s and based in New York, said in a telephone interview of the CBO forecast. “More needs to be done on the policy front to address this rising debt ratio.”

While projections from the non-partisan budget office forecast the ratio of U.S. debt to gross-domestic-product declining to less than 71 percent by fiscal year 2018, the CBO forecasts the measure will increase “thereafter, pointing to the uncertain long-term outlook if reform of entitlement programs does not take place at some point,” Moody’s said in a report.

Budget Proposals….”

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