From the monthly archives:
May 2009
With ongoing grateful thanks to the Wall Street Journal for kindly providing such a neat summary, and so – for SaturdayMay 30th 2009 – here’s what what’s what was hot during the past week, and what……wasn’t;
We end this week’s Red Hook theme with two images of “Lady Liberty” (the Statue of Liberty) perhaps the world’s most recognizable iconic image. I could fill an entire photo album with images of her, but she is especially relevant to Red Hook because she dominates the view from the waterfront.
click on the image to view a gigantic version
and yes, there’s more
click on the image to view an enromous version
and finally, because I said above that she “dominates the view from the waterfront”, here’s an illustration of just that….
Our chart of the day for this Friday comes to us from chartoftheday.com. Now this is either utterly silly, hysterically funny, or highly thought provoking, depending on your personal perspective.
Anyway….
Today’s chart presents the median single-family home price divided by the price of one ounce of gold. This results in the home/gold ratio or the cost of the median single-family home expressed in ounces of gold. For example, it currently takes 192 ounces of gold to by the median single-family home. This is considerably less that the 601 ounces it took back in 2001. When priced in gold, the median single-family home is down 68% from its 2001 peak and remains within the confines of its four-year accelerated downtrend.
As this trading week begins it’s last day, I thought a bit of light and sardonic humor from the Sage of Omaha would be appropriate. After all, it’s Friday!
I have reluctantly discarded the notion of my continuing to manage the portfolio after my death– abandoning my hope to give new meaning to the term ‘thinking outside the box’.
– Warren Buffet, Chairman of Berkshire Hathaway, in his annual letter to shareholders
Friday, May 29th – Morning Market Radar
Snapshot | Focus | Calendar | Earnings | Speeches | Events
A big 1.9 percent jump in the always volatile durable goods report was all that it took for funds to move into equities and commodities on the expectation of economic recovery and inflation. But other data in the session were not so hot. New home sales firmed but remain very weak, while jobless claims continue to point to another month of massive job losses.
Oil rose nearly $2 to end under $65, given a special boost by drawdowns in oil and gasoline stocks. Tight management of supply has helped the oil industry to keep prices fairly high despite still weak demand. Money might not be moving to safety but gold keeps rising, up $10 to $960. The dollar fell slightly to $1.3923. All three followed indices showed gains on the day. The S&P 500 led the gains, closing up 1.54% at 906.83. The Dow recorded an upward move of 1.25% to finish at 8403.80, and NASDAQ ended the session up 1.20% at 1751.79.
In the bond market, prices held on to small gains, pushing 10-year yields down for the first time in 5 days. Yesterday’s Treasury auction was well subscribed, and – contrary to the worries of many observers (me included) – the $26 billion auction in 7-yr notes came in at an average yield of 3.30%. Interestingly, the auction received 2.26 times in bids more than the amount for sale, a little higher than the average of the last three auctions, when the government reintroduced the long-absent security to its auction calendar. Indirect bidders, a class of investors that includes foreign central banks, bought about 33% of the amount sold, matching the average of previous sales. (See the official Treasury Dept release here). Wednesday’s spike in 10 year yields was, I think, more connected with mortgage-related hedging than any underlying fundamentals. This would tend to undermine one – low mortgage rates - of the six parts of Ben’s core plan to move the economy out of recession.
The manufacturing sector may be bottoming, that is, showing no month-to-month change, which is what a 42 (consensus) reading from the 9:45AM Chicago purchasers report would indicate. Although unlikely in itself to be a market mover, it nevertheless forms a part of the picture investors are attempting to put together showing where in the recovery phase the economy is – or isn’t – at the moment.
All times are EST, consensus numbers, (where available/relevant) are indicated in brackets
[click to continue reading this post…]
click on the image to view a much larger version
Bait, tackle, fishing club, bar, ATM – what’s not to like?
This mostly applies to our US readers……
From Zero Hedge
And so it begins. Rep. Alan Grayson has distributed the letter below to all Democrats in the House and will use it to generate Democratic co-sponsorship for the HR1207 Bill, aka The Federal Reserve Transparency Act, allowing the GAO to audit the Federal Reserve, and also require a Fed report to Congress by the end of 2010.
This is the critical first step for U.S. Taxpayers to regain some semblance of control over the insanity that happens each and every day over at the Federal Reserve. The status quo must change.
Zero Hedge recommends all readers who believe in transparency and accountability join Glenn Greenwald, Naomi Klein, James K. Galbraith, Dean Baker, Bill Black, Tyler Durden, Yves Smith, US PIRG, Public Citizen, Mike Farrell, Digby, Rob Kuttner, Ian Welsh, Bill Greider, Stirling Newberry, ANWF, Les Leopold, Mike Lux and others in supporting Alan Grayson and asking Democratic members of Congress to cosponsor the Federal Reserve Transparency Act. Endorse your approval of the proposal and go to this site to sign the petition.
Tell your friends, tell your newspapers, make it viral. Let’s bring accountability back.
Again, the petition link is here.
Here is Alan Grayson’s letter to colleagues:
[click to continue reading this post…]
Thursday, May 28th – Morning Market Radar
Snapshot | Focus | Calendar | Earnings | Speeches | Events
Existing home sales showed solid strength in April, creating the dangerous illusion that the worst of the housing slump is behind us. Anything beyond a cursory examination of the new home sales data would reveal that a sizeable portion of the gains arose from bottom fishing – the buying of distressed (foreclosed) properties which I pointed out as a cautionary note yesterday. The likely bankruptcy of General Motors didn’t help the market, but the risk, and along with it massive new layoffs, really has never sparked a flight to safety. The dollar remains near lows at just above 80 on the dollar index. Gold also has seen little benefit, continuing to hold steady at $950, and oil closed at $63. Money moved out of the safety of Treasuries where the yield on the 5-year note rose 10 basis points to 2.40 percent. The ever building supply of Treasuries is weighing on the market though today’s 5-year note auction did go very well.
The Dow gave back the majority of Tuesday’s gains, falling 2.05% to 8300.02. S&P 500 fell a little less precipitously, losing 1.90% to close at 893.06, and NASDAQ lost the least, slipping 1.11%, ending the session at 1731.08.
Earnings Focus: Before the opening bell, the wholesale giant Costco, food conglomerate Heinz, and – for afficonado’s of tech – after the closing bell is Dell.
Economics Focus: Improvements in durable goods orders would send an optimistic message to the bulls that there are signs of an economic recovery, and consensus appears to support a modest half percentage point increase. A reversal however would bring the bears out in force, and demand for safety wouldn’t be a surprise.
Bonds Market Focus: Speaking of safety, watch the results of Treasury auctions today – in my opinion that’s the key point. Yesterday’s 5 year note auction went well, but today is tricky. 3, 6 and 12 month bills go on the block, along with 7 yr notes. The mix of maturities, combined with some portfolio adjustment from institutional holders could make today’s auction problematic. Plus, Treasury is selling a massive amount of paper. What’s “a lot” you ask? $26 billion in 7 year notes – and that’s on top of $40 billion combined yesterday. Supply and Demand anyone?
All times are EST, consensus numbers, (where available/relevant) are indicated in brackets
[click to continue reading this post…]
