Friday 30November2012 - What About the US Fiscal Cliff?

From Danielle Park Juggling Dynamite website.

If the entire “fiscal cliff” hits in January, the total cash flow improvement to the US is estimated at $671 billion. Presently the government is spending about 1 trillion a year more than it is taking in. So best case scenario for the debt issue, is that they come to no agreement and the full “cliff” does hit in the New Year. But this will still add at least 400 billion to the the US 16 trillion dollar national debt tab in 2013. And this deficit will certainly grow larger either way in 2013, as GDP weakens amid the global recession.

Friday 30November2012 - What Next?

From Danielle Park re comments by David Walker, former US comproller general, and now CEO of the Comeback America Initiative.

It is also critical to understand that there are some 10,000 people turning 65 in America each day now. In many ways the budget fight at hand is not between the left and the right, but between the old and the young. Boomers on both sides want their tax savings and all of their social benefits too. Meanwhile this is a generation who have eaten their cake for years now, indulging their wants while setting aside very little for the future. Their expectations are simply crushing the financial viability of the nation. Now milked dry, it is time to feed the cow.

Wednesday 28November2012 - What Next?

From Western Unions Monday World Market Update.

More Pain in Spain?

Catalonian voters delivered victory to separatist parties in a regional election last night, raising the likelihood that Spain's strongest regional economy will hold an independence referendum in the near future.

On the surface, it seems that this should trigger significant volatility in the euro. After all, Spain has long tended to bear a strong resemblance to the former Yugoslavia. Tito's iron fist kept the country unified (at great cost), but once it was removed, the ties that bound different groups together began to fray— eventually leading to war and a dissolution of the state itself.

Since Franco's death, Spain has also struggled to remain intact. Leaders have attempted to prevent disintegration by granting many regions autonomy from the central government, allowing them to gain a degree of control over their own destinies while keeping them within national boundaries.

In a sense, this has worked to build a national identity, but it has also backfired. Because of this splintered political structure, Spanish economic policy is rarely applied across the country as a whole, and reform measures are almost impossible to pass comprehensively. As a result, the Spanish economy is struggling with one of the world's highest unemployment levels, while also maintaining one of its most rigid labour markets.

This is creating economic hardship that is providing fertile ground for those extremist parties that promise to upend the status quo. However, we must remember that the desire for change is not synonymous with a deep seated commitment to the separatist cause. The electorate's primary grievance is economic, not political.

What is worrisome however, is the precedent that is being set. Governing parties across Europe are increasingly vulnerable to upset, as voters react to economic circumstances by throwing them out of office. More political volatility is clearly on its way to the euro area, and market participants need to prepare for the consequences.

Monday 26November2012 - Changing Perceptions!


From Backbone Magazine.

Friday 23November2012 - Dagwood's Take!

Thursday 22November2012 - Happy Thanksgiving!

 

Wednesday 21November2012 - Chart of The Day!

From Danielle Park website.

Wednesday 21November2010 - Dagwood's Take!

Tuesday 20November2012 - Just The Facts!

In the recent November Odlum Brown - Chris Tidd Investment Advisory Newsletter the following chart was included. This chart covers 2012 tax rates for taxable income. It shows the marginal tax rate treatment for regular income vs interest income vs dividend income vs capital gains.

This is just one of a number of factors to consider in constructing ones longer term investment portfolio strategy. Including a few quality company preferred dividend paying shares can play a very important part in increasing the income stream in ones investment portfolios. 

Click to Enlarge.

Tuesday 20November2012 - Opinion That Matters!

Clip from Grant Williams article at Mauldin Economics.

I have been surprised at how many Americans fail to grasp the real problems that lie at the core of the European debacle; namely that nations now expected to band together in times of trouble have been fighting each other for centuries.

Watch as Kyle Bass lays out beautifully the simple truth about the Eurozone...

"A popular revolt will happen" is how Kyle Bass sums up the endgame from kicking the can in Europe. Dismissing the headline-making 'But, Blackrock is buying European bonds', Bass reminds Bloomberg's Stephanie Ruhle that very few ever get the crises correct and that the herd will keep buying things until it blows apart. With massively over-leveraged banks and a Greek dependency, Bass notes that investing in Europe now is like picking up a dime in front of a bulldozer and expects Germany will eventually leave the Euro (within 3-4 years) as the 'joint-and-several' liabilities will never happen. 150 well-spent seconds to summarize just what is going in Europe, as he concludes with Milton Friedman's quote on Europe: "when they hit a bump in the road, it will tear them apart at the core."

http://www.zerohedge.com/news/2012-11-16/150-seconds-you-cant-handle-european-truth-kyle-bass

Wednesday 14Nov2012 - Stock Market Trading Analysis!

The following analysis is from Chris Rowe's Tuesday 14November newsletter.

'First I'll tell you why I'm bearish. Then I'll give you some context. Because it isn't a "black or white" situation. There are many different shades of gray.

I'm bearish because the NYSE BPI (as well as the Russell 2000 BPI and NASAQ BPI) have flipped to a new column of Os.

What does that mean? Well, first look at the chart below and notice how the columns change back and forth from O columns to X columns. The column on the far right is in Os. That's the new column that was added after Friday's stock market close.'

Click chart to enlarge. From JD Stochcharts.

'As I mentioned, there are times when some signals are more potent than others. I told you that not all column changes are created equal.

Overbought sell signals (column changes) are much more potent than regular sell signals.

Oversold buy signals (column changes) are much more potent than regular buy signals.

But all column changes should be respected.

Let's talk about the column change we've just witnessed...

Friday's column change is not that extra potent "overbought" sell signal that I just mentioned. But it's pretty close to being one. On a scale of 1 - 10 in terms of potency, I'd say it's a 7.

As you can see, the signal came after the market sold off pretty dramatically. The only way it can generate a signal is due to a strong market move. Most people have a hard time understanding that strong moves are often followed by even stronger moves in the same direction -- but the stronger move often comes after a "correction".'

In today's case, we got a strong downwards move. My stock account (Chris Rowe's)  is HALF in cash and HALF in a bearish position. I believe the stock market will gain some strength and give me the chance to get into the second half of my bearish position. So, in terms of "notional value," my account will be 100% bearish soon.

I think the S&P 500 (chart above) is likely to move up to the green lines seen above. The horizontal green line is around 1,400 - 1,405 on the S&P 500. The down diagonal green line obviously changes price with every day that passes.

Now, if my indicator (the NYSE BPI) turns around and puts in a new column of Xs again, it won't matter to me whether I am at a profit or a loss, I will have to exit my bearish positions and work myself into a bullish positions -- if I hadn't already done so prior to the column change. Small losses don't matter much to me. It's the big moves that really count.'

Tuesday 13Nov2012 - Dagwood's Take!

Good Idea. Maybe I'll change mine to a favorite pizza.

 

Tuesday 13Nov2012 - What Next?

Chris Tidd an Investment Advisor at Odlum Brown included this chart in his recent Investment Advisory Newsletter. It shows a high correlation between the SP500 Index and commercial futures currency traders position re the Euro. The chart indicates a strong probability of weak equity markets for at least the next 9+ months. Thus, one should be cautious going forward with Preservation of Capital as a high priority.

Click to enlarge.

Tuesday 13November2012 - Chart of he Day!

This past Friday 09November the NYSE Bullish Percent Index rolled over to the downside with a column of O's. This is the start of a trend indicating fewer and fewer of the 1200+ NYSE traded stocks are bullish. This is an internal strength indicator.

This is just one of a number of technical indicators used to determine which way stock markets are headed. This indicator helps one be 'On the Right Side of the Market' for shorter term trading. 

Tuesday 13Nov2012 - Dagwood's Take!

 

Thursday 08Nov2012 - What Next? Pay Attention to the Presidential Cycle.

Charlie Rose talks with Jeremy Grantham of Investment Management firm GMO.

“As an investor, what do you do?

“I’ve hero-worshipped the presidential cycle. Going back to 1932, if you take the first and second year together, they’ve had no real return in the market. All of the return has been compressed into a gigantic Year Three and a respectable Year Four. For us, the cycle years start on October 1st. So now we’re in the dreaded first year. And we have Republicans threatening to add fiscal constraints into a very fragile economy. We have the European situation. We have China stumbling in an incredible slow-motion style. I think it’s a really good year to keep your head down….

I am going to be careful, particularly for the first half of next year. Great brands of blue chips are not so bad in the U.S. Emerging countries are about fair price. Beaten-down European stocks, particularly the so-called value stocks, are probably a little cheap, although risky. And resource stocks, once they reflect the weak economy—and we’ll get another whack-down—will be a wonderful long-term purchase. Farmland and forests, which should be the backbone of any long-term, serious portfolio. … It will also be a good time to buy in. “

JD - Personally, I am very cautious going forward and waiting for better opportunities to reinvest cash sitting on the sidelines.

A couple of options for cash held on the sidelines with current low interest rates.
Money market funds are an option.
But Investment Savings Accounts provide a better yield at about 1.25%
Some examples are:
RBC Investment Savings Account. Fund Code RBF2010
TD Investment Savings Account. Fund Code TDB8150
Altamira High-Interest CasPerformer. Fund Code NBC100

Sunday 04Nov2012 - Dagwood's Take!

Saturday 03Nov2012 - My 5 Cents Worth!

The Euro is now very close to breaking support levels for its bear market rally from late July lows.
If it breaks down, I plan to add to EUO-NYSE positions. EUO is a 2X inverse ETF that increases in price when the Euro declines vs the US dollar.

The following chart and comment is from EWI Friday Short Term Update.

Saturday 03Nov2012 - Dagwood's Take!