LaFerrari Hybrid

The Geneva auto show has debuted some fancy cars, but this electric Ferrari is super hot! For only 1 million Euros you can get on the waiting list and enjoy things like an iPad inside beyond the obvious features of this iconic brand.

Full article and video

A documentary presenting serious research and verifiable evidence on our economic and financial system. 97% owned is the first documentary to tackle this issue from a UK-perspective and explains the inner workings of central banks and the money creation process.

With money driving almost all activity on the planet, it’s essential that we understand it. Yet simple questions often get overlooked, questions like; where does money come from? Who creates it? Who decides how it gets used? And what does this mean for the millions of ordinary people who suffer when the monetary, and financial system, breaks down?

Political philosopher John Gray, commented, “We’re not moving to a world in which crises will never happen or will happen less and less. We are in a world in which they happen several times during a given human lifetime and I think that will continue to be the case”

If you have decided that crisis as a result of the monetary system is not an event you want to keep revisiting in your life-time then this documentary will equip you with the knowledge you need, what you do with it is up to you.

Cheers on your weekend!

The past four spring/summer sessions have brought a correction to the market place.

Look it up.

Will it happen again?

All speculation at this point.

However,  i like many have said expect the S&P to rise to 1560ish. You were warned at 1370 that if you went short you would die a slow death.

At any rate, it is time to sell into strength and take down some hedges for your safety.

The market in pictures:

The DOW

The S&P

The NADAQ

[youtube://http://www.youtube.com/watch?v=NjrCZj0VNIU 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=NjrCZj0VNIU

[youtube:/http://www.youtube.com/watch?v=aYtRze2OmHw 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=aYtRze2OmHw

The Dow Jones Industrial Average, one of the key benchmarks of the US stock market, has soundly surpassed its all-time high. And most of the investing world is toasting their collective success and celebrating the recovery.

It’s a funny thing, really. Most investors only think in terms of ‘nominal’ numbers, i.e. Dow 14,000+ is 40% higher than Dow 10,000 (back in November 2009). But few think in terms of ‘real’ numbers… inflation-adjusted averages.

Everyone knows that inflation exists. We can all look back on prices from the past and realize instantly how much more expensive things have become. Conversely, though, most people don’t think about the stock market like this.

The reality is, though, that when you adjust for inflation, the Dow is well below its highs from over a decade ago.

I thought I’d put this into a bit of perspective.

Take beef, for example. Based on USDA retail price data, today the Dow will buy you 3,332 pounds of beef in the supermarket. This sounds like a lot. But it’s actually about 20% less than the 4,046 pounds of beef the Dow would buy back in December 1999.

And if beef’s not your thing, let’s look at fruit. Based on the wholesale price of bananas, the Dow currently buys you a whopping 15.35 tons of the tropical fruit.

But this is exactly the same amount of bananas the Dow would buy back in February 2008, when the Dow was just 12,266. And it’s a massive 60% drop from June 1999 when the Dow bought 38.51 tons of bananas.

Gasoline is an even more interesting example. Today, the Dow will buy roughly 3,812 gallons of unleaded, non-premium gasoline in the United States. This is almost exactly the same as last January, just fifteen months ago, when the Dow was only 12,633.

But to match its high of 10,718 gallons set in March 1999, the Dow would need to almost triple from where it’s at today….”

Full article and more fun charts

Stoval is pointing out what history suggests; we have a successful track record suggesting only a correction as opposed to a bear market after making new highs.

Full article and chart

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“No downturn in Warren Buffett’s favorite economic indicator….Rail traffic has now reached its highest 12 week moving average since 2011.  With a weekly intermodal reading of 10.5% year over year the 12 week moving average is now at 6.75%.   Here’s more via AAR:

 The Association of American Railroads (AAR) today reported that U.S. monthly rail traffic showed mixed results in February, and gains in both carloads and intermodal traffic for the week ending March 2, 2013….”

Full article

“The nation’s top securities regulator proposed new rules Thursday aimed at preventing the breakdowns in automated trading systems that have threatened to undermine investor confidence.

The proposal, known as Regulation SCI, short for systems, compliance and integrity, would replace an existing program under which operators of alternative trading systems and other financial organizations operated under voluntary standards not covered or enforced by formal SEC rules.

Formal rules are needed, several SEC commissioners said, citing the 2010 Flash Crash in which the Dow abruptly dropped 600 points before recovering, the August computer problem that triggered a $460 million loss for trading firm Knight Capital Group and technology glitches that marred Facebook’s 2012 initial public offering.

In a unanimous 4-0 vote, the Securities and Exchange Commission proposed that certain alternative trading systems, self-regulatory organizations, clearing agencies and plan processors be required to design, develop, test and maintain the electronic systems that are integral to their operations…..”

Full article

“WASHINGTON (AP) — It took 5½ years.

Surging stock prices and steady home-price increases have finally allowed Americans to regain the $16 trillion in wealth they lost to the Great Recession. The gains are helping support the economy and could lead to further spending and growth.

The regained wealth — most of it from higher stock prices — has been flowing mainly to richer Americans. By contrast, middle class wealth is mostly in the form of home equity, which has risen much less.

Household wealth amounted to $66.1 trillion at the end of 2012, the Federal Reserve said Thursday. That was $1.2 trillion more than three months earlier and 98 percent of the pre-recession peak.

Further increases in stock and home prices this year mean that Americans’ net worth has since topped the pre-recession peak of $67.4 trillion, private economists say. Wealth had bottomed at $51.4 trillion in early 2009.

“It’s all but certain that we surpassed that peak in the first quarter,” said Aaron Smith, senior economist at Moody’s Analytics.

Household wealth, or net worth, reflects the value of assets like homes, stocks and bank accounts minus debts like mortgages and credit cards. National home prices have extended their gains this year. And the Standard & Poor’s 500 index, a broad gauge of the stock market, has surged 8% so far this year.

Some economists caution that the recovered wealth might spur less consumer spending than it did before the recession. Dana Saporta, an economist at Credit Suisse, notes that Americans are now less likely to use the equity in their homes to fuel spending. The value of home equity Americans are cashing out has fallen 90% in six years, she said….”

Full article

“All but one of the nation’s 18 biggest banks could survive even a severe recession and still have enough capital to keep lending, the Federal Reserve said Thursday.

Ally Financial would fall below the central bank’s guideline for how much capital would be needed in a downturn, the report said.

As a whole, the banks would lose $462 billion over nine quarters from a combination of loan write-downs and the falling value of securities, in a recession where unemployment hit nearly 12%, stocks lost half of their value and home prices dropped 20%.

“The stress tests are a tool to gauge the resiliency of the financial sector,” Federal Reserve Governor Daniel Tarullo said in a statement. “Significant increases in both the quality and quantity of bank capital during the past four years help ensure that banks can continue to lend to consumers and businesses, even in times of economic difficulty.”

The tests show banks’ woes are unlikely to intensify a future economic downturn, as in 2008 when they made the recession worse because they had too little capital to keep lending, said Paul Edelstein, director of financial economics at IHS Global Insight.

“Banks wouldn’t have to cut back sharply on lending to recapitalize themselves, even though they would take some pretty significant losses,” Edelstein said. “They have a cushion to absorb the losses now.”

Banks bolstered their capital in the last year by retaining their profits and shedding risky or non-performing assets, according to Keefe Bruyette & Woods, an investment bank specializing in bank stocks.

Wall Street has been awaiting the stress tests partly to learn whether the Fed will allow big banks including Citigroup to resume paying dividends…..”

Full article

“(MoneyWatch) With job growth still weak in the U.S., another trend poses both an opportunity and a challenge for American workers: The explosion in temporary and part-time employment.

To be sure, such jobs can ameliorate the high unemployment that has plagued the economy since the 2008 financial crisis. Yet labor experts also say that the surge in what they refer to as “contingent” work signifies a historic shift away from the kind of long-term employment that workers once expected and that helped power the rise of the American middle class.

“What’s changed in the last 20 years is that there’s been an unraveling of job security in the labor market, as well as a diminishment of benefit packages and a deterioration of stable, reliable wages and promotion pathways,” said Katherine Stone, a law professor at the University of California, Los Angeles, and labor specialist. “There’s been a really fundamental shift in the nature of employment — it’s a sea change. Whether you’re talking about the expanded use of short-term employees, temporary workers, project workers, contractors or on-call workers, the use of workers who don’t have regular jobs has increased a lot.”

Two new studies highlight the rise of the temp economy. First, job-search company CareerBuilder reported Thursday that 40 percent of employers surveyed plan to hire temp workers in 2013. Of that number, 42 percent of those employers say they hope to make some of those workers permanent, full-time employees. CareerBuilder lists several job categories in which hiring of temps is growing, including sales representatives, office clerks, manufacturing assemblers, nurses, home health aides, truck drivers and office clerks.

Meanwhile, a study by consulting firm Challenger Gray & Christmas found that employers in February said they planned to cut more than 55,000 jobs, with over 21,000 of those slated to come from the financial services industry and a healthy dose from defense contractors and aerospace firms. That represented a 37 percent increase in planned layoffs over the same period last year.

The Bureau of Labor Statistics defines contingent employees as “those who do not have an implicit or explicit contract for ongoing employment.” By contrast, people who don’t continue working because they are, say, returning to school or retiring would not be considered contingent.

Estimates of the number of contingent workers in the U.S. can range widely, depending on how they are defined. But recent data suggest that roughly a third, and perhaps up to 40 percent, of American workers are in part-time, contract or other non-standard jobs. Recruiting firm MBO Partners projects that there will be 23 million contingent workers by 2017, up from roughly 17 million today.

That phenomenon presents problems for workers and society as a whole. Temp and other contingent jobs frequently mean lower wages than those earned by their permanent counterparts, and there are typically no health care or retirement benefits. Lower wages sap people’s purchasing power and limits personal consumption, which in turn discourages companies from hiring and slows economic growth…..”

Full article

Sales are down 0.8%……

“There’s a lot of money riding on the accuracy and credibility of U.S. economic data. A lot of that faith is misplaced, but it’s not because the government is actively fudging the numbers or lying to us. Unlike a lot of people in Washington, the statisticians who crunch the numbers are a professional bunch who want to get things right.

MarketWatchEnlarge Image

The two alternative measures of unemployment have risen and fallen in tandem.

We know that because we can verify much of what they produce from other independent sources. By and large, the government data are consistent with numbers produced by the private sector.

Of course statistics, by their very nature, can never be perfect or pure, no matter how well-meaning their creators.

Frequently we make it even tougher on ourselves by misinterpreting what the data could tell us with a bit of certainty. Too often we pay attention to the wrong numbers and ignore a more useful alternative. Those problems in understanding the data are compounded when we try to use them to make political points.

In recent years, the unemployment rate has become one of the most politicized economic numbers. Which means it’s also become one of the most misunderstood numbers. I have a partial solution for that, as you’ll see.

In theory, the jobless rate should be noncontroversial. It’s simply the percentage of people who want a job who can’t find one. However, it’s more complicated in practice. What does it mean to look for work? How hard do you have to try? How often do you have to try? What does it mean to have a job? Does it have to be a full-time job to count? What if it’s irregular work? …”

Full article

“After laying off 4,000 Motorola employees last year, representing around 20 percent of the total workforce, Google just announced that it would increase job cuts by a further 10 percent — now representing 1,200 people. The WSJ intercepted an internal email laying out the motivations behind this move.

“Our costs are too high, we’re operating in markets where we’re not competitive and we’re losing money,” said a Motorola spokesperson in the internal email. The business division is still losing a lot of money every quarter and it impacts Google’s bottom line.

Employees in the U.S., China and India will be affected. Since the acquisition, many Google executives have changed position to help run Motorola. But the turnaround hasn’t happened yet.

For Q4 2012, Motorola generated revenues of $1.51 billion, which represents a dip from previous quarters. And the company reported $353 million of GAAP operating loss….”

Full article

“The Bloomberg Chart of the Day shows silver tonnage in exchange- traded funds backed by the metal rose for four straight months, while holdings for gold ETPs dropped in January and February. Silver futures may jump 20 percent this year to $34.50 an ounce from yesterday’s settlement of $28.808 in New York on investment demand and industrial use, said Rohit Savant, a senior commodity analyst at the New York-based research company. Holdings in silver ETPs rose 3.6 percent in the two months ended Feb. 28, reaching a record 19,699 metric tons on Jan. 18, data compiled by Bloomberg show. Last month, assets in gold ETPs fell 4.1%. Sales of American Eagle silver coins by the U.S. Mint jumped to a record in January and more than doubled in February from a year earlier, the Mint’s website showed. China’s imports of the metal surged 14% in January, the biggest monthly gain since July….”

Full article

“The world today does not smell of lavender and lilacs these days but more like old grease that has gone rancid. Always a skeptic, I find myself these days looking with more of a jaundiced eye than usual as I stare out on the fiscal landscape. Yesterday a High Court Examining Magistrate opened a second investigation into the ruling party in Spain examining new corruption charges that include Prime Minister Rajoy. These focused on money paid by the construction industry but a second article by Reuters made me wonder. This story centered on Santander selling off $393 million in troubled assets to a hedge fund. What caught my eye here was that they were apparently sold at four cents on the Dollar; a 96% discount. You might think write-off but the bank is having serious difficulties so that doesn’t quite fly. You might think some other reason in the normal course of business but at four cents on the dollar there is scant benefit to be gained. I wonder if Santander wasn’t, given the two ongoing investigations, not removing consumer loans from their books, as reported, but questionable loans that they did not wish to be investigated. If the loans are not there then they cannot be found and if they can’t be found then perhaps it lessens the chance of implication and criminality. I look at it all and wonder.

“Every man serves a useful purpose. A Prime Minister who has been caught stealing, for example, may make a perfect scapegoat for the next man that assumes his office.”

                       -The Wizard

Meanwhile in Italy the spaghetti sauce continues to boil….”

Full article

“Where stress tests are concerned, callCitigroup “most improved.”

The bank posted an 8.3 percent tier 1 common capital ratio – the highest of its peers – under the Federal Reserve’s annual stress tests, which show how financial institutions would fare amid severe economic crisis.

While the tests have been carried out for three years, this is the first that it’s been tackled in two, separate parts: The first, the performance of the banks on the Fed’s models. The second, the Fed’s sign-off on each bank’s plan to return capital to shareholders.

The splitting of the tests came after Citigroup in 2012 cleared the capital hurdle, but saw the Fed strike down its proposal to disburse some of its remaining capital. The bank, as a result, categorically failed the test…..”

Full article

“The euro zone is undergoing serious socio-political fragmentation which could lead to further de-stabilization in the bloc, Nouriel Roubini warned Friday.

Speaking at the Ambrosetti Workshop in Italy, Roubini, renowned for his pessimistic economic forecasts said the political situation in Italy was a “tsunami” risk and was a reflection of the broader problems facing the currency bloc.

“In Italy there’s the beginning of a political storm. The result of the Italian elections signal that the majority of people are against austerity and not just in Italy also in Lisbon half a million people were in the streets and 25 percent unemployment in Greece and Spain, 50 percent amongst young people and there is restlessness,” Roubini said.

Italy’s election last month failed to give any party an outright majority and so far the leading center-left bloc has been unable to muster up a coalition government….”

Full article