What would life be like without margin ?
Comments »The Aussie and Kiwi Dollars Gain on Rising Markets; Gold and the Swiss France Falls as Credit Crisis Fears Ease
Thailand Imposes Curbs on Rice Exports; Price Soars
Thailand will buy rice from farmers above market and put it into storage as the world sees a 5 year decline in stockpiles. Wheat, corn, and soy are also facing the same decline due to poor yields.
Rice is expected to jump in price by 20% by year end…
Comments »Japan’s Economy Slows Less Than Expected After Eathquale/Tsunami Disaster
Flash: Global Markets Update
Stocks Rise on Wall Street Cues; Franc Tumbles
Asian stocks climbed on Monday following modest gains on Wall Street while the franc tumbled against the euro and the dollar as some investors picked up bargains, though overall sentiment remained fragile after a wild week in financial markets.
Stocks in Australia .AXJO and Japan .N225 rose more than 1 percent as main Wall Street .N indices advanced on Friday in light volumes, but without the wild intra-day swings that marked the first few days of trading last week after the U.S. credit rating was downgraded by Standard and Poor’s.
The MSCI index of Asia Pacific stocks outside Japan .MIAPJ0000PUS rose 0.4 percent after tumbling nearly 4 percent last week.
Traders said the gains look sustainable for now, especially with U.S. stock futures up by 0.8 percent in Asia and after a short-selling ban on financialstocks in Europe last week.
But markets remain vulnerable to declines as debt cutting plans in Europe and the United States threaten to act as a further drag on already weak economic growth.
Early signs that equities might have marked a temporary bottom after last week’s volatile moves and persistent chatter that Swiss authorities may peg the franc against the euro to battle its surge sent the safe-haven currency tumbling by two percent against the euro and the dollar.
The euro, which plumbed a record low around 1.0075 francs last week, climbed to a high of 1.1294 francs in morning trade, up from 1.1079 late in New York on Friday.
But Barclays Capital analysts warned expectations of a peg seemed overdone, believing the franc would rally once again this week if markets started to change their view on its probability.
“We remain CHF bears in the medium run – we agree with the SNB’s view that it is “massively overvalued” – but, this week, we are not expecting the recent appreciation of EUR/CHF to hold,” said Paul Robinson, strategist at Barclays Capital.
The drop in the franc rippled over into gold markets with the precious metal slipping after a 1.5 percent slide in the previous session. Before Friday’s slide, gold had gained 9 percent so far this month.
U.S. crude futures were steady around $85.50 a barrel after settling down slightly on Friday.
Trading activity is expected to be thin with Korea and India out and Japan’s summer “obon” holidays this week.
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Asian Stocks Gain, Nikkei Rises on GDP Data
Asian stocks were off to a steady start to the week on Monday, but the fragile mood of equity markets and lingering concerns about a potential return to recession kept investors cautious.
The FTSE CNBC Asia 100 Index [.FTFCNBCA 6141.23 
93.62 (+1.55%)], which measures markets across Asia, gained 0.7 percent.
In Japan, Tokyo stocks climbed after global markets rose last week helped by a short-selling ban on financial stocks in Europe, while Japan’s gross domestic product data in April-June showed a smaller-than-expected contraction.
Shares of Osaka Securities Exchange were untraded with a glut of buy orders at 406,000 yen, 7.4 percent above Friday’s closing price after the Yomiuri newspaper reported on Saturday that the Tokyo Stock Exchange plans to take over the OSE through a tender offer bid.
The Nikkei [.N225 9073.70 109.98 (+1.23%)] gained 1.3 percent to 9,085.18, while the broader Topix advanced 1.2 percent to 777.65.
Australian stocks jumped 1.5 percent, helped by short-covering and solid domestic corporate earnings as investors recovered after a rocky week shaken by worries of a fresh global recession.
Shares in Leighton Holdings, Australia’s top contractor, jumped 4.2 percent after the company stuck to its profit guidance for the 2012 financial year.
The benchmark S&P/ASX 200 index [.AXJO 4253.70 81.10 (+1.94%)] gained 63.3 points to 4,235.9. New Zealand’s benchmark NZX 50 index rose 0.9 percent to 3,244.3.
Shares in Newcrest Mining, the world’s no.3 gold miner, dipped 0.5 percent in line with a retreat in the gold price.
The miner earlier reported a 36 percent rise in full-year underlying profit, thanks to soaring gold prices and its takeover last year of Lihir Gold, in line with market forecasts.
In Southeast Asia, Singapore’s STI [.FTSTI 2866.21 15.62 (+0.55%)] and Malaysia’s KLCI [.KLSE 1487.96 4.29 (+0.29%)] climbed 0.9 and 0.2 percent respectively.
Markets in South Korea are closed for a public holiday.
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MERGER MONDAY IS BACK: TIME WARNER TO BUY INSIGHT FOR $3 BILLION
Time Warner Cable has reached a dealto buy The Carlyle Group’s cable operator Insight Communications Co for around $3 billion in cash, a source familiar with the matter said on Sunday.
Time Warner could announce the deal as soon as Monday morning, the source said.
Insight is the 10th-largest cable operator in the United States, Carlyle’s website says. It sells cable television, high-speed Internet and telephone services, serving around 750,000 customers in Illinois, Indiana, Kentucky and Ohio.
Time Warner and Carlyle declined to comment. Insight could not immediately be reached for comment.
(Reporting by Yinka Adegoke, Writing by Michael Erman; Editing by Dale Hudson)
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FLASH: Futures Showing Strength
FLASH: Japan Annualized GDP -1.3% vs Forecast of -2.6%; 3rd Straight Quarterly Contraction
From CNBC. Developing…
Comments »Anxious Investors Look for Calm
Shell-shocked stock investors will search this week for calm to return to markets after the worst three weeks for stocks in 2-1/2 years.
With the blow from the August 5 U.S. credit rating downgrade behind them, investors will focus on the outlook for the U.S. economy as well as signs that European policymakers may be able to contain the euro zone debt crisis.
Widespread investor panic put the market on a roller-coaster ride last week, with steep losses followed by nearly-as-steep gains in high-volume trading. It was the busiest week for volume since October 2008.
Though investors are still searching for a bottom in the selloff that has taken the benchmark Standard & Poor’s index down 12.4 percent since July 22, indexes rose both Thursday and Friday — the S&P index’s first two-day rally since mid-July — and volatility eased.
The move could set stocks up for a calmer week, especially if economic data shows the United States is not headed for another recession, strategists said.
“Every bit of data that shows the economy not slipping into recession is going to be the basis for the market to begin to calm down in the weeks ahead,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
While Wall Street stocks ended higher on Friday, the market fell for the week. The Dow fell 1.5 percent and the Nasdaq lost 1 percent. The S&P 500 fell on 11 of the past 15 days, dropping 12.4 percent in three weeks.
Housing and manufacturing reports are among indicators on tap, including the New York and Philadelphia Federal Reserve regional manufacturing surveys and existing home sales.
Manufacturing has been among the strongest sectors of the economy, but a report earlier this month dented that picture.
The Institute for Supply Management manufacturing report, a gauge of factory activity, fell to in July to its lowest in two years and was barely above the mark dividing growth and contraction.
It was quickly followed by an ISM report showing the pace of growth in the U.S. services sector ticked down unexpectedly.
More recent data has suggested the economic recovery will stay on course.
U.S. Commerce Department data on Friday showed retail sales posted the biggest gains in four months in July, which was a catalyst for stocks to rise.
“We think the deterioration in the U.S. macro outlook got us into this mess and will likely get us back out,” said Barry Knapp, head of US equity portfolio strategy at Barclays Capital in New York.
“If we’re right … we will get the stock market to trade at least back into its old 1,250 to 1,350 range that prevailed from March through the recent downturn.”
Retail earnings were among the few bright spots in the market last week. Kohl’s Corp reported earnings that beat estimates and raised its full-year profit view.
Results from more top retailers are expected this week, including Wal-Mart Stores, due to report on Tuesday.
“I will be looking for any data that show what back-to-school (sales) might look like, and later, into the fall, we’ll be looking for what the holiday season might look like,” said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.
Earnings growth for the second quarter is expected to have risen 11.8 percent, according to Thomson Reuters data, and many analysts consider the solid growth to remain a cushion for stocks going forward.
The S&P 500’s price-to-earnings ratio is at 10.46, according to Thomson Reuters data, considered cheap by historical standards.
That valuations are cheap suggests to some strategists that stocks remain attractive, especially when compared with U.S. Treasuries, but others say earnings expectations are likely to deteriorate going forward.
Besides concerns about the U.S. economic outlook, worries about the European debt crisis persist.
Investors look forward to a meeting this week between French President Nicolas Sarkozy and German Chancellor Angela Merkel, who are expected to discuss how to make the euro zone work more effectively in dealing with the crisis.
TECHNICAL DAMAGE
Technically, the market remains weak.
“Most technicians would agree that the long-term market cycle has been damaged, given two-year uptrends have been broken, monthly momentum indicators have turned down, and a lengthy list of stocks have collapsed through important long-term support levels on expanding volume,” analysts at RBC Capital Markets said in a research note Friday.
Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said one sign the market’s downturn may not be over is a measure of stocks with 52-week highs versus 52-week lows, which is low.
(Reporting by Caroline Valetkevitch; editing by Kenneth Barry)
Blame it on Milli Vanilli
Riots, wild markets: Did space storms drive us mad?
(Reuters) – Rollercoaster financial markets and the worst riots Britain has seen in decades have made it quite a week for a time of year that is usually so dead the newspapers are filled with “silly season” tales of amusing pet antics.
Everyone is pointing fingers — at blundering politicians, hooded thugs, disaffected youths, bumbling police and greedy bankers — but could the cause for all the madness really be the star at the center of our solar system?
There isn’t a lot of evidence pointing to little green men involving themselves in Earthly affairs, but the sun has been throwing bursts of highly charged particles into space in a phenomenon known as coronal mass ejections or CMEs.
Three large CMEs prompted U.S. government scientists to warn of solar storms that can cause power blackouts and the aurora borealis, or northern lights, caused by disturbances in the Earth’s atmosphere, have been spotted as far south as England and Colorado, NASA said.
“Earth’s magnetic field is still reverberating from a CME strike on August 5th that sparked one of the strongest geomagnetic storms in years”, website SpaceWeather said.
Some academics have claimed that such geomagnetic storms can affect humans, altering moods and leading people into negative behavior through effects on their biochemistry.
Some studies have found evidence that hospital admissions for depression rise during geomagnetic storms and that incidents of suicide increase.
A 2003 study by the Federal Reserve Bank of Atlanta found that such storms could affect the stock market, as traders were more likely to make pessimistic choices.
“Unusually high levels of geomagnetic activity have a negative, statistically and economically significant effect on the following week’s stock returns for all US stock market indices,” the authors found in their report.
It could of course be mere coincidence that this has been a rollercoaster week on the markets, and that Britain was rocked by a wave of ferocious rioting and looting.
But market watchers may take comfort from the fact that the space weather forecast for Friday has gone quiet again.
They shouldn’t be too complacent though. The solar cycle is on an upswing due to peak in 2013 and there are likely to be more geomagnetic storms heading Earth’s way in the months to come.
Comments »TKO for TPaw
Here is the Full George Soros Editorial: Germany Must Defend the Euro
By George Soros
The opinions expressed are his own.
Financial markets abhor uncertainty; that is why they are now in crisis mode. The governments of the eurozone have taken some significant steps in the right direction to resolve the euro crisis but, obviously, they did not go far enough to reassure the markets.
At their meeting on July 21, the European authorities enacted a set of half-measures. They established the principle that their new fiscal agency, the European Financial Stability Fund (EFSF), should be responsible for solvency problems, but they failed to increase the EFSF’s size. This stopped short of establishing a credible fiscal authority for the eurozone. And the new mechanism will not be operative until September at the earliest. In the meantime, liquidity provision by the European Central Bank is the only way to prevent a collapse in the price of bonds issued by several European countries.
Likewise, Eurozone leaders extended the EFSF’s competence to deal with banks’ solvency, but stopped short of transferring banking supervision from national agencies to a European body. And they offered an extended aid package to Greece without building a convincing case that the rescue can succeed: they arranged for the participation of bondholders in the Greek rescue package, but the arrangement benefited the banks more than Greece.
Perhaps most worryingly, Europe finally recognized the principle – long followed by the IMF – that countries in bailout programs should not be penalized on interest rates, but the same principle was not extended to countries that are not yet in bailout programs. As a result, Spain and Italy have had to pay much more on their own borrowing than they receive from Greece. This gives them the right to opt out of the Greek rescue, raising the prospect that the package may unravel. Financial markets, recognizing this possibility, raised the risk premium on Spanish and Italian bonds to unsustainable levels. ECB intervention helped, but it did not cure the problem.
The situation is becoming intolerable. The authorities are trying to buy time, but time is running out. The crisis is rapidly reaching a climax.
Germany and the other eurozone members with AAA ratings will have to decide whether they are willing to risk their own credit to permit Spain and Italy to refinance their bonds at reasonable interest rates. Alternatively, Spain and Italy will be driven inexorably into bailout programs. In short, Germany and the other countries with AAA bond ratings must agree to a eurobond regime of one kind or another. Otherwise, the euro will break down.
It should be recognized that a disorderly default or exit from the eurozone, even by a small country like Greece, would precipitate a banking crisis comparable to the one that caused the Great Depression. It is no longer a question whether it is worthwhile to have a common currency. The euro exists, and its collapse would cause incalculable losses to the banking system. So the choice that Germany faces is more apparent than real – and it is a choice whose cost will rise the longer Germany delays making it.
The euro crisis had its origin in German Chancellor Angela Merkel’s decision, taken in the aftermath of Lehman Brothers’ default in September 2008, that the guarantee against further defaults should come not from the European Union, but from each country separately. And it was German procrastination that aggravated the Greek crisis and caused the contagion that turned it into an existential crisis for Europe.
Only Germany can reverse the dynamic of disintegration in Europe. That will not come easily: Merkel, after all, read the German public’s mood correctly when she made her fateful decision, and the domestic political atmosphere has since become even more inhospitable to extending credit to the rest of Europe.
Merkel can overcome political resistance only in a crisis atmosphere, and only in small steps. The next step will likely be to enlarge the EFSF; but, by the time that step is taken, France’s AAA rating may be endangered. Indeed, by the time Germany agrees to a eurobond regime, its own AAA standing may be at risk.
The only way that Europe can escape from this trap is by acting in anticipation of financial markets’ reactions, rather than yielding to their pressure after the fact. This would require intense debate and soul-searching, particularly in Germany, which, as the EU’s largest and best-rated economy, has been thrust into the position of deciding the future of Europe.
That is a role that Germany has been eager to avoid and remains unwilling to accept. But Germany has no real choice. A breakdown of the euro would precipitate a banking crisis that would be beyond the global financial authorities’ ability to control. The longer Germany takes to recognize this, the higher the price it will have to pay.
George Soros is Chairman of Soros Fund Management and of the Open Society Institute. This piece comes from Project Syndicate.
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Rick Santelli’s Best Trade for the Decade
A Redneck Riviera Renaissance
Sunday Afternoon Fun: “The Scum of the Earth”
[youtube:http://www.youtube.com/watch?feature=player_embedded&v=JqgDzEqdvb0#at=25 450 300] Comments »
Morgan Stanley: We Don’t Think Recession is Fully Priced In
This is opposite to most calls. Just like when the talking heads said the credit rating downgrade was already priced in.
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