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Market Update

FT: Competetive Devaluation aka Currency Wars Begin to Flare Up Again

“A year after G-20 finance ministers agreed to end their currency wars, competitive devaluations are back in style.

European Central Bank President Mario Draghi called the euro’s strength a “serious concern” last week, and officials in Australia, Canada and New Zealand have been making noise about weakening their currencies for weeks, the Financial Times reports.

China moved strongly to push down the yuan during the first quarter, spending an estimated $100 billion-plus in direct market intervention. Other emerging market governments are apparently fighting off currency strength too, including India, Brazil and South Korea, according to the Times.

The dollar’s weakness amid the Federal Reserve’s determination to keep short-term interest rates near record lows has put upward pressure on other currencies.

“It is inevitable that we will see a rise in tensions,” Eswar Prasad, a Cornell University economist, told the Times.

Central banks in developed nations are “trying to send a message as clearly as possible that they will design monetary policy to weaken the currency,” he said….”

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Q1 Earnings are Done, Markets Left With Lackluster Prospects

“Behind the stock market’s anxious ups and downs of late lies the fear that a weakening U.S. and global economy could dash hopes for an uptick in corporate earnings.

For the first quarter, earnings season is nearly done. More than 90% of big companies have reported results and they were lackluster.

Most beat analyst estimates, but only because expectations were rock bottom.

Profit gains for S&P 500 companies were just 2.1% overall compared with a year earlier, well below the previous quarter’s 8.5% rise, FactSet said.

Now investors are seeing soft reports on industrial production, housing starts, consumer sentiment and European economic growth, and they are growing anxious.

Investors had expected results to improve in the second quarter. Analysts are forecasting a 6% profit gain.

Yet of companies offering guidance, 72% have warned that second-quarter results could fall short of Wall Street expectations, which isn’t great but is better than the 80% level of the past three quarters.

Now, investors are worrying they may have been too hopeful.

“People have been expecting better earnings forecasts, but I’m a little more concerned that earnings estimates are going to be ticking down,” said Robert Pavlik, chief market strategist at Banyan Partners, which oversees $4.5 billion.

In the portfolios he manages, he has boosted cash holdings and shifted toward more defensive investments. He said he sold out of biotechnology several weeks ago and now prefers bigger, safer companies…..”

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Can You Hang Hope on Better Than Expected Housing Starts ?

“U.S. housing starts jumped in April and building permits hit their highest level in nearly six years, offering hope that the troubled housing market could be stabilizing.

The Commerce Department said on Friday groundbreaking increased 13.2 percent to a seasonally adjusted annual pace of 1.07 million units, the highest level since November 2013.

Starts rose by a revised 2.0 percent in March. They had previously been reported to have gained 2.8 percent.

Economists polled by Reuters had forecast starts rising to a 980,000-unit rate last month.

The housing market recovery has stalled as a combination of higher mortgage rates and rising property prices, against the backdrop of stagnant wage growth, makes housing less affordable for many Americans. A cold winter also weighed on activity.

The residential sector contracted in the first three months of 2014, declining for a second consecutive quarter….”

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State of the Union: Homeownership is Not an American Dream Anymore

“The number of middle-class Americans who can afford home ownership is falling in more cities, according to a new industry study.

The report from real estate research firm Trulia concludes that in 20 of the top 100 largest metro area, the middle class are now frozen out of the home buying market.

Trulia considers a home affordable for a median income buyer in a given market if total monthly costs — including mortgage, insurance and property taxes — after a 20 percent down payment are less than 31 percent of a region’s median household income.

Editor’s Note:
 18.79% Annual Returns … for Life?

Trulia Chief Economist Jed Kolko noted monthly payments for an average home now cost 20 percent more than a year ago, according to USA Today.

“Even having a college degree is no guarantee that homeownership is within reach in the priciest markets. There’s no easy way to make housing more affordable, though new construction can help,” Kolko said.

The trouble with that last point, though, is that new construction is more rare in the most expensive markets because fewer people can afford to buy there — a simple case of supply and demand, according to Kolko.

“For America’s most expensive housing markets to become significantly more affordable, they would need either a spectacular drop in demand — a local economic collapse, for example — or a dramatic increase in housing supply.”

The least affordable U.S. markets, and the percentage of homes for sale in each where median-income Americans can afford to buy, are:

  1. San Francisco, 14 percent
  2. Los Angeles, 23 percent
  3. Orange County, Calif., 24 percent
  4. New York/New Jersey Metro, 25 percent
  5. San Diego, 28 percent
  6. Ventura County, Calif., 29 percent
  7. San Jose, Calif., 34 percent
  8. Fairfield County, Conn., 37 percent
  9. Honolulu, 39 percent
  10. Oakland, Calif., 40 percent.

In addition, some popular metro areas had particularly steep drops in affordability…”

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If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Pure Hell For The United States

“Does the economy move in predictable waves, cycles or patterns?  There are many economists that believe that it does, and if their projections are correct, the rest of this decade is going to be pure hell for the United States.  Many mainstream economists want nothing to do with economic cycle theorists, but it should be noted that economic cycle theories have enabled some analysts to correctly predict the timing of recessions, stock market peaks and stock market crashes over the past couple of decades.  Of course none of the theories discussed below is perfect, but it is very interesting to note that all of them seem to indicate that the U.S. economy is about to enter a major downturn.  So will the period of 2015 to 2020 turn out to be pure hell for the United States?  We will just have to wait and see.

One of the most prominent economic cycle theories is known as “the Kondratieff wave”.  It was developed by a Russian economist named Nikolai Kondratiev, and as Wikipedia has noted, his economic theories got him into so much trouble with the Russian government that he was eventually executed because of them…

The Soviet economist Nikolai Kondratiev (also written Kondratieff) was the first to bring these observations to international attention in his book The Major Economic Cycles (1925) alongside other works written in the same decade. Two Dutch economists, Jacob van Gelderen and Samuel de Wolff, had previously argued for the existence of 50 to 60 year cycles in 1913. However, the work of de Wolff and van Gelderen has only recently been translated from Dutch to reach a wider audience.

Kondratiev’s ideas were not supported by the Soviet government. Subsequently he was sent to the gulag and was executed in 1938.

In 1939, Joseph Schumpeter suggested naming the cycles “Kondratieff waves” in his honor.

In recent years, there has been a resurgence of interest in the Kondratieff wave.  The following is an excerpt from an article by Christopher Quigley that discussed how this theory works…

Kondratiev’s analysis described how international capitalism had gone through many such “great depressions” and as such were a normal part of the international mercantile credit system. The long term business cycles that he identified through meticulous research are now called “Kondratieff” cycles or “K” waves.

The K wave is a 60 year cycle (+/- a year or so) with internal phases that are sometimes characterized as seasons: spring, summer, autumn and winter:

  • Spring phase: a new factor of production, good economic times, rising inflation
  • Summer: hubristic ‘peak’ war followed by societal doubts and double digit inflation
  • Autumn: the financial fix of inflation leads to a credit boom which creates a false plateau of prosperity that ends in a speculative bubble
  • Winter: excess capacity worked off by massive debt repudiation, commodity deflation & economic depression. A ‘trough’ war breaks psychology of doom.

Increasingly economic academia has come to realize the brilliant insight of Nikolai Kondratiev and accordingly there have been many reports, articles, theses and books written on the subject of this “cyclical” phenomenon. An influential essay, written by Professor W. Thompson of Indiana University, has indicated that K waves have influenced world technological development since the 900’s. His thesis states that “modern” economic development commenced in 930AD in the Sung province of China and he propounds that since this date there have been 18 K waves lasting on average 60 years.

So what does the Kondratieff wave theory suggest is coming next for us?

Well, according to work done by Professor W. Thompson of Indiana University, we are heading into an economic depression that should lastuntil about the year 2020

Based on Professor Thompson’s analysis long K cycles have nearly a thousand years of supporting evidence. If we accept the fact that most winters in K cycles last 20 years (as outlined in the chart above) this would indicate that we are about halfway through the Kondratieff winter that commenced in the year 2000. Thus in all probability we will be moving from a “recession” to a “depression” phase in the cycle about the year 2013 and it should last until approximately 2017-2020.

But of course the Kondratieff wave is far from the only economic cycle theory that indicates that we are heading for an economic depression.

The economic cycle theories of author Harry Dent also predict that we are on the verge of massive economic problems.  He mainly focuses on demographics, and the fact that our population is rapidly getting older is a major issue for him.  The following is an excerpt from a Business Insider article that summarizes the major points that Dent makes in his new book…

  • Young people cause inflation because they “cost everything and produce nothing.” But young people eventually “begin to pay off when they enter the workforce and become productive new workers (supply) and higher-spending consumers (demand).”
  • Unfortunately, the U.S. reached its demographic “peak spending” from 2003-2007 and is headed for the “demographic cliff.” Germany, England, Switzerland are all headed there too. Then China will be the first emerging market to fall off the cliff, albeit in a few decades. The world is getting older.
  • The U.S. stock market will crash. “Our best long-term and intermediate cycles suggest another slowdown and stock crash accelerating between very early 2014 and early 2015, and possibly lasting well into 2015 or even 2016. The worst economic trends due to demographics will hit between 2014 and 2019. The U.S. economy is likely to suffer a minor or major crash by early 2015 and another between late 2017 and late 2019 or early 2020 at the latest.”
  • “The everyday consumer never came out of the last recession.” The rich are the ones feeling great and spending money, as asset prices (not wages) are aided by monetary stimulus.
  • The U.S. and Europe are headed in the same direction as Japan, a country still in a “coma economy precisely because it never let its debt bubble deleverage,” Dent argues. “The only way we will not follow in Japan’s footsteps is if the Federal Reserve stops printing new money.”
  • “The reality is stark, when dyers start to outweigh buyers, the market changes.” It all comes down to an aging population, Dent writes. “Fewer spenders, borrowers, and investors will be around to participate in the next boom.”
  • The U.S. has a crazy amount of debt and “economists and politicians have acted like we can just wave a magic wand of endless monetary injections and bailouts and get over what they see as a short-term crisis.” But the problem, Dent says, is long-term and structural — demographics.
  • Businesses can “dominate the years to come” by focusing on cash and cash flow, being “lean and mean,” deferring major capital expenditures, selling nonstrategic real estate, and firing weak employees now.
  • The big four challenges in the years ahead will be 1) private and public debt 2) health care and retirement entitlements 3) authoritarian governance around the globe and 4) environmental pollution that threatens the global economy.

According to Dent, “You need to prepare for that crisis, which will occur between 2014 and 2023, with the worst likely starting in 2014 and continuing off and on into late 2019.”

So just like the Kondratieff wave, Dent’s work indicates that we are going to experience a major economic crisis by the end of this decade.

Another economic cycle theory that people are paying more attention to these days is the relationship between sun spot cycles and the stock market.  It turns out that market peaks often line up very closely with peaks in sun spot activity.  This is a theory that was first popularized by an English economist named William Stanley Jevons.

Sun spot activity appears to have peaked in early 2014 and is projected to decline for the rest of the decade.  If historical trends hold up, that is a very troubling sign for the stock market.

And of course there are many, many other economic cycle theories that seem to indicate that trouble is ahead for the United States as well.  The following is a summary of some of them from an article by GE Christenson and Taki Tsaklanos…”

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EU Court: $GOOG Must Remove Certain Links on Request

“BRUSSELS—Individuals can ask Google Inc. GOOGL +2.24% to remove links to news articles, court judgments and other documents in search results for their name, the European Union’s highest court said Tuesday—a surprise decision that could significantly disrupt how Google and other search-engine operators work across Europe.

The case centered on the so-called right to be forgotten, which plaintiffs argued before the court gives individuals the opportunity to request old information about them be removed from search engines. The ruling means that individuals can request operators remove links that come up during searches. It doesn’t mean that the original article or website has to be removed or altered—it would only affect search results.

The ruling contradicts the position of the European Union’s advocate general, who offered an opinion last year saying operators were under no obligation to honor such requests. Google called the ruling disappointing but said it needed time to analyze the implications. Other search engine operators, like Yahoo Inc. YHOO +2.04% and Microsoft Corp., which operates the search platform Bing, would also be affected by the ruling. No one at Yahoo was immediately available to comment while Microsoft declined to comment.

The decision “makes grim reading for Google and will delight privacy advocates in the EU,” said Richard Cumbley, information-management and data-protection partner at U.K. law firm Linklaters.

The European Court of Justice said Tuesday that search companies are responsible for personal data that shows up on Web pages they link to in search results…..”

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U.S. Futures Rally Full Retard on M&A Activity

“(Reuters) – U.S. stock index futures pointed to a higher open on Monday, putting the S&P 500 within striking distance of record levels, though geopolitical concerns in the Ukrainecould cap gains.

In Ukraine, pro-Russian rebels voted in favor of self-rule in eastern regions of the country in a referendum dismissed by Kiev and Western governments as illegal. Separately, the European Union is set to step up pressure on Russia by taking steps to extend sanctions to companies, as well as individuals.

In the latest deal news, Hillshire Brands Co (HSH.N) agreed to buy Pinnacle Foods Inc (PF.N) for about $6.6 billion. Pinnacle jumped 20.5 percent to $36.70 in premarket trading while Hillshire was up 3 percent at $38.05.

The board of Allergan (AGN.N) rejected an unsolicited proposal from Valeant (VRX.TO), saying it significantly undervalued the company.

Separately, the head of research at Pfizer Inc (PFE.N) pressed the case for the company’s plan to buy AstraZeneca (AZN.L) for $106 billion, saying a deal wouldn’t disrupt drug research. U.S. shares of Astra (AZN.N) rose 1.1 percent to $78.11 before the bell while Dowcomponent Pfizer was up 0.6 percent at $29.20.

Virginia Rometty, chief executive of IBM Corp (IBM.N), told the New York Times the company was facing a “rocky time” but has a clear vision on how to pursue another generation of growth….”

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Old Man Buffett’s Stock Valuation Measure is in Nose Bleed Territory

“Market Cap to GDP is a long-term valuation indicator that has become popular in recent years, thanks to Warren Buffett. Back in 2001 he remarked in a Fortune Magazine interview that “it is probably the best single measure of where valuations stand at any given moment.”

My friend and guest contributor Chris Turner offered some analysis along those lines last year using the S&P 500 as the surrogate for the market (When Warren Buffett Talks … People Listen). For a broader measure of Market Cap, VectorGrader.com uses line 36 in the Federal Reserve’s B.102 balance sheet (Market Value of Equities Outstanding) as the numerator. Since both GDP and the Fed’s data are quarterly, the folks at VectorGrader.com do some interpolation and extrapolation to produce monthly estimates. Their latest chart is available to the general public here.

The four valuation indicators I track in my monthly valuation overview offer a long-term perspective of well over a century. The raw data for the “Buffett indicator” only goes back as far as the middle of the 20th century. Quarterly GDP dates from 1947, and the Fed’s B.102 Balance sheet has quarterly updates beginning in Q4 1951. With an acknowledgment of this abbreviated timeframe, let’s take a look at the plain vanilla quarterly ratio with no effort to interpolate monthly data or extrapolate since the end of the most recent quarterly numbers.

The strange numerator in the chart title, MVEONWMVBSNNCB, is the FRED designation for Line 36 in the B.102 balance sheet (Market Value of Equities Outstanding), available on the Federal Reserve website. Here is a link to a FRED version of the chart. Incidentally, the numerator is the same series used for a simple calculation of the Q Ratio valuation indicator.

Unfortunately, the “market cap” numerator is rather stale. The Fed won’t publish the Q1 data until the June 5th.

Click to View
Click for a larger image

For version that’s current through Q1…..”

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Mortgage Applications Hit Their Lowest Levels Since December 2000

“NEW YORK (Reuters) – Applications for U.S. home mortgages fell last week to their lowest level since December 2000 as both refinancing and purchase applications declined, an industry group said on Wednesday.


The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 5.9 percent to 333.2 in the week ended April 25. That was the lowest level since December 2000, the group said.

“Purchase application volume remains weak despite other data which indicated the overall pace of economic growth is picking up…..”

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European Markets Rally Full Retard on M&A Talks

“(Reuters) – M&A talk in the pharmaceutical sector lifted European shares on Tuesday, but failed to support the euro, which dipped to a two-week low against the dollar as ECB policymakers renewed efforts to weaken it.

British newspaper the Sunday Times said U.S. pharmaceutical giant Pfizer had approached British rival AstraZeneca to propose a 60 billion pound ($101 billion) takeover. Both companies declined comment to Reuters.

Eli Lilly and Co said on Tuesday it would buy Novartis AG’s animal health business for $5.4 billion in cash to strengthen and diversify its Elanco unit.

The FTSEurofirst 300 index of top European shares was up 1 percent at 1,342.38 points, building on last week’s gains on the back of largely better-than-expected results by U.S. companies. U.S. stock futures suggested a higher open in New York as well.

“There’s strong corporate activity which gives some energy to the market,” said Hans Peterson, global head of asset allocation at SEB Investment Management.

The stronger European stock market failed to lift the euro, which dipped to a two-week low of $1.3783, although it remained close to its strongest levels this year.

European Central Bank executive board member Benoit Coeure said on Tuesday that the strength of the euro could be keeping inflation too low and that there was further margin to reduce the main interest rate below 0.25 percent.

The comments were the latest in a series of efforts by ECB policymakers, including President Mario Draghi, to talk down the euro currency as they try to fight ultra-low inflation and keep the currency union’s economic recovery on track.

Euro zone inflation is running at 0.5 percent, far below the ECB’s target of just under 2 percent over the medium term, keeping speculation rife that the ECB may soon turn on the money printing presses and launch a program of asset purchases.


Business sentiment surveys such as the euro zone PMIs and the German Ifo could alter those expectations this week. Draghi is also due to give a keynote speech in Amsterdam on Thursday.

“Euro/dollar is likely to trade with a weaker bias this week given the German IFO and Draghi’s speech coming up,” said Yujiro Goto, currency analyst at Nomura.”

The ECB was not the only one hoping for a weaker currency.

China’s yuan fell to its softest against the dollar in 14 months, after the central bank set a lower official midpoint of its trading range, highlighting its desire for a weaker currency to manage an economic slowdown.

The ECB outlook is a key factor behind this year’s rally in lower-rated euro zone government bonds. Junk-rated Portugal will sell up to 750 million euros in 10-year bonds on Wednesday in its first bond auction since April 2011, pursuing a full return to market financing as the end of its EU/IMF bailout approaches…..”

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Equity Inflows Begin to Trickle Back Into Emerging Markets

“Emerging market bond and equity funds both experienced inflows for the first time this year in the week ending April 2, a further sign that optimism is growing toward developing world assets.

Investors plowed $2.44 billion into emerging market equity funds in this latest week, the highest amount since October 2013, Barclays said, citing data from fund-tracker EPFR Global.

Meanwhile in emerging market bond funds, investors poured $1.06 billion in, compared with outflows of $1.11 billion in the previous week.

“The price action and the mood may have turned on emerging markets,” said Koon Chow and Durukal Gun, analysts at Barclays.

“But given the long period of outflows and emerging market growth having yet to rebound, we may need a couple more weeks of positive flow numbers to confirm this,” they cautioned.

After a tumultuous start to the year…”

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Attention Scalpers: This Week Will Debut A Number of IPOs

“By all indications, Monday could be a quiet trading day, but don’t let the placid mood in the markets fool you — investors are preparing for a rush of initial public offerings this week.

The company behind the popular Candy Crush Saga online game is one of 14 companiesset to go public this week.

The IPO mania is part of a longer term, global trendthat has seen many companies make their public debut.

U.S. stock futures were relatively firm heading into the first day of the trading week. There’s little economic or corporate news on the docket Monday that could influence market sentiment.

The latest reading on the CNNMoney Fear & Greed index shows investor sentiment is in ‘neutral mode.’…”

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$HLF Dives 6% as the FTC Opens an Investigation, Bill Ackman Pops a Smile

“The Federal Trade Commission has opened a probe into Herbalife.

The stock, which had been halted, is now trading down 14%. Before the news came out, it was up 4.45%.

Herbalife confirmed that they received a Civil Investigative Demand from the FTC.

“Herbalife welcomes the inquiry given the tremendous amount of misinformation in the marketplace, and will cooperate fully with the FTC.  We are confident that Herbalife is in compliance with all applicable laws and regulations.  Herbalife is a financially strong and successful company, having created meaningful value for shareholders, significant opportunities for distributors and positively impacted the lives and health of its consumers for over 34 years,” the company said in a statement.

A spokesperson for the FTC would not comment on the matter. A spokesperson for Pershing Square Capital Management also declined to comment on the investigation.

Herbalife, a multi-level marketing firm that sells weight loss products and nutritional supplements, has been at the center of a major hedge fund battle.

Hedge fund manager Bill Ackman, who runs Pershing Square Capital Management, announced about 14 months ago that he is betting $1 billion that the stock will go to $0.  Ackman’s thesis is that the company operates as a “pyramid scheme” that targets lower income individuals, particularly those from the Hispanic population.

Ackman believes that regulators, particularly the FTC, will be persuaded to shut the company down.

He was recently the subject of a critical page-one New York Times article about how he’s been coordinating lobbying efforts in Washington, D.C. to bring the company down.

Ackman commented on a conference call yesterday  it wasn’t his “favorite” article, but he thinks it will be “helpful.” He thinks that regulators will have to pay attention now that it’s a mainstream news story.

Herbalife has publicly refuted Ackman’s allegations that they operate as a pyramid scheme….”

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NJ Tells $TSLA ‘We are Mafiaoso Ove’ Heara’ (sic,) ‘You Gotta Respect the Cartel Kid’

“Here was the score after Tesla Motors spent more than a year attempting to establish a direct sales operation in New Jersey: 0 to 696,749.

It was a blowout.

The luxe electric car company was outraged Tuesday when the The New Jersey Motor Vehicle Commission approved a proposal banning auto manufacturers from selling cars directly to consumers. In a blog post and series of tweets Tesla blamed the move on bad faith negotiating by the administration of Gov. Chris Christie and “attacks” from the New Jersey Coalition of Automotive Retailers. However, if Tesla was indeed under attack, it looks like the company didn’t make any attempt to fight back against the car dealers’ lobby on a crucial political front — the company didn’t give any money to local politicians.

Campaign finance records show, the New Jersey Coalition of Automotive Retailers’ political action committee, CAR PAC, has made hundreds of political donations as the group lobbied on behalf of car dealers in the Garden State. In contrast, records show no donations to any politicians in New Jersey coming from Tesla, its employees, or the company’s co-founder and CEO Elon Musk….”


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Worries Over China Growth Send Markets Into a Pitfall, Copper Hits Multi Year Lows

“(Reuters) – A fall in copper to near four-year lows compounded increasing concern about China’s economic slowdown on Wednesday to send a wave of unease through world financialmarkets.

Global stocks fell for a fourth day and copper, often regarded as a proxy for China’s economic fortunes, hit its lowest level since 2010 after Shanghai futures had again fallen by their 5 percent daily limit.

In Europe, bourses from London to Lisbon tumbled .FTEU3 and safe-haven German government bonds were in demand as the jitters added to the effects of the tug-of-war over Crimea, which has pitted Russia against Ukraine and the West.

“Markets are watching what is happening in copper with awe and trepidation,” said Societe Generale head of currency strategy Kit Juckes. “It’s partly ongoing concern about Chinese growth (or lack thereof) and nagging worries about the Ukraine. And partly it is just that the commodity bubble burst last year and not everyone noticed.”

Copper’s fall follows China’s first domestic bond default which has raised concerns about a possible unraveling of the many loan deals which have used the metal as collateral.

The metal has been in freefall for the last three days but the worries finally appeared to be catching up with other markets. Stocks across Asia – although ironically not in China – had seen sizeable falls, while the Australian dollar, Chilean peso and South African rand, currencies highly sensitive to commodities, all buckled.

The aussie was last down 0.5 percent at $0.8935 though traders said it could have fallen much more had it not been for demand created by a big A$7 billion bond sale.

Japan’s Nikkei .N225 retreated 2.6 percent, continuing the see-saw pattern of the last couple of months, while Australian stocks shed 0.6 percent .AXJO. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.2 percent.

That mirrored a lackluster performance on Wall Street, where soft data left investors no wiser on whether the U.S. economy’s troubles were weather-related or something more worrisome.

Futures prices pointed to another negative start when trading resumes later with little in the way of U.S. data to drag attention away from China and copper.


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Planned Layoffs Fall 7.3% According to Challenger Report

“…..U.S. employers planned to cut payrolls by 41,835 in February, down 7.3 percent from January’s 45,107 planned layoffs, according to a report by Challenger, Gray & Christmas. The February cuts compared with 55,356 planned cuts in the year-earlier month, down 24 percent…..”

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State of the Union: Leading in 36 Categories

“The 4th of July is a great time to celebrate our independence from Great Britain and to remember all of the sacrifices that our forefathers made to make this country great.  But is America still great today?  Have we squandered our inheritance?  Have we wrecked the great nation that previous generations handed down to us?  Those may sound like harsh questions, but the truth is that most Americans know that the United States is in decline.  In fact, a recent Rasmussen survey found that 49 percent of all Americans believe that the best days of America are in the past and only 35 percent believe that the best days of America are in the future.  Those are staggering numbers, and they are an indication that we need to take a good, long look at ourselves in the mirror.  Did we lose our way somehow?  If so, can we find our way back to where we were before?  We are a nation which is in trouble physically, mentally, emotionally, spiritually and financially.  Our house is crumbling and our foundations are rotting away.  We are in desperate need of national renewal.  The following are 36 embarrassing categories in which America leads the world…

#1 Of all the major industrialized nations, America is the most obese.  Mexico is #2.  Back in 1962, only 13 percent of all Americans were obese.  Today, approximately 36 percent of all Americans are obese.

#2 America leads the world in soft drink consumption by a wide margin.  Today, the average American drinks more than 600 sodas a year.

#3 America is tied with the UK for the highest average number of hours spent watching television each week.

#4 More people have been diagnosed with mental disorders in America than anywhere else.

#5 America has the highest divorce rate in the world by a good margin.

#6 America has the highest percentage of one person households on the entire planet.  According to the Pew Research Center, only 51 percent of all American adults are currently married.  Back in 1960, 72 percent of all adults in the United States were married.

#7 America has the most car thefts in the world by far.  Things are particularly bad on the west coast.

#8 America has the highest motor vehicle death rate on the globe.

#9 Americans spend more time sitting in traffic than anyone else in the world.

#10 America has the largest trade deficit in the world every single year.  In fact, nobody ever comes close.  That means that we buy far, far more stuff from the rest of the world than they buy from us.  Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.  That 8 trillion dollars could have gone to support U.S. workers and U.S. businesses, but instead all of that money left the country.  We constantly have more money leaving the United States than coming into it.

#11 Americans have more student loan debt than anyone else in the world.

#12 Americans have more mortgage debt than anyone else in the world.

#13 Americans have more credit card debt than anyone else in the world.

#14 America leads the world in illegal immigration.  And according to the Washington Times, since the year 2000 the number of jobs held by immigrants has grown by more than 5 million while the number of jobs held by native-born Americans has actually decreased…”

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Retail Investors Continue to Be Bullish

“The latest AAII asset allocation survey showed a continued upward crawl in retail investor stock bullishness.  The latest equity allocation reading came in at 66.9% which is above the historical average of 60%.  This is the eleventh straight month of 60%+ readings which is the longest streak since before the financial crisis.


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