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Tag Archives: PIIGS

Short Economic Stories Feb 17 2012

In the US: •For years I have commented that S&P500 profit margin is one of the best mean reverting series of economic data there is. The final stock market peaks of 2000 & 2007 coincided with turning points when profit margins began retreating from their peaks. •Notice -like all mean reverting series- the larger the area above the average (green area), the larger the […] Read the rest of this entry »

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Short Economic Stories Feb 11 2012

  In the US: The latest economic false dawn resembles last year’s false dawn -and that of 2010- in so many ways: Stock markets are up — where they were in 2011, and within range of  the 2007 and 2000 levels.  Pundits in 2011 were forecasting 3-4% GDP growth. What we ended up with was annualized growth rates of 0.4% growth in Q1 2011 and 1.6% […] Read the rest of this entry »

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Short Economic Stories Feb 4 2012

US-only this week….. 4Q 2011 Earnings season is roughly 58% done — as of Thursday’s most recent data from S&P. •57% of earnings results beat, 32% missed, 11% met lowered earnings expectations. Again, this is below the 65% average beat rate for sandbagged results. Why do I refer to earnings estimates as sandbagged ? Because there’s a pattern of earnings estimates being lowered as […] Read the rest of this entry »

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Short Economic Stories January 28 2012

In the US: •The Fed announced it plans to leave short term interest rates in the current 0 – 0.25% range until late in 2014. And an explicit 2% inflation target was set. •Bond markets are interpreting the news something along these lines: the economy is sufficiently weak and likely to remain that way for several years. So the Fed is going to commit […] Read the rest of this entry »

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Short Economic Stories Jan 21 2012

Big Picture: Warning: The mini greedometer (tactical risk indicator) is displaying readings previously only seen when the S&P500 was within 5% of a secular (long term) top. The greedometer (strategic risk indicator) is approaching dangerous risk levels as well. There is very little upside and a great deal of downside to risk assets (stocks, junk bonds, commodities, REITs) at this time. A much more […] Read the rest of this entry »

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Short Economic Stories

Big Picture: The balance sheet recession continues here in the US, and in Japan and Europe. As Reinhart & Rogoff suggested in their book – This Time Is Different – we can expect recessions to come more frequently and economic growth to be more shallow than we’ve come to expect over the past several decades. The greedometer and mini greedometer are showing some very […] Read the rest of this entry »

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Short Economic Stories

  (with thanks to the Financial Times for this) 2012 began with a bang. The first day of trading saw some of the largest gains for a first day of the year in decades. Too bad all those gains occurred before markets opened on Tuesday. Indeed the entire US stock market gain for the week happened before the 9:30am opening bell on Tuesday (no, of course this game is not […] Read the rest of this entry »

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Year End Letter 2011 (& 2012 Forecast)

Strategic Indicator:  Greedometer Last week, the greedometer registered 5400 rpm, a respectable but not unexpected jump from the previous week 4800rpm. And with that, we have the end of the year-end rise in the greedometer.  The 2011 set of greedometer readings resemble that of 2007. Indeed, both years saw the last or second to last week finish with a 5400rpm reading. Uncanny.  And foreboding.   (the […] Read the rest of this entry »

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Short Economic Stories: Asia

Published on December 22, 2011 by admin in China, India

China: There’s more evidence of residential property prices dropping. The People’s Bank of China is going to have to step-in in Q1 if this continues. After the European financial system crisis, China’s property bubble is the number two strategic investment issue to track. How is China’s stock market?  Down over 60% since the peak in 2008, and down nearly 30% from this year’s peak.  India: The news […] Read the rest of this entry »

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Short Economic Stories: Europe

Published on December 22, 2011 by admin in Europe, PIIGS

The big news:  The ECB indicated banks bellied-up to the feed-trough that is its new unlimited three year line of credit. More than 500 European banks sopped-up nearly 500B euro of loans.  Roughly 300B of this will be used to refinance existing debt. This move by the ECB is a desperate one. The first quarter of 2012 will see a tidal wave of sovereign & bank debt […] Read the rest of this entry »

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