The week of 21 to 25 May 2007
ECONOMY: playing bubbles
It clarifies the situation Immobiliare U.S., where the bubble is begins to break out, at least for homes new: the manufacturers to be able to leave the new development had to bring down the prices of '11%, this has permitted an increase in the volume of sales (although the 16% recorded will definitely be revised downward, and it's all concentrated in a area of \u200b\u200bthe country). But what matters is the fall in prices. In fact, the owners of existing houses that are still trying to resist taking the firm prices, unable to sell: -2.6% and unsold reaches new record. It does not take a genius to understand that they will also give, if only because now the prices of new homes are much lower (with the same characteristics) to those of existing homes. Also has yet to befall many of them the blade of the adjustment of interest rates variables.
remains to be seen what effect will the economy overall, moving from a situation in which it was supported by a cash-case upside down, where not only is not able to get more money from their homes, but also need to spend on they more and more: the Fed insists that there will be serious damage, general and markets seem to believe it. In reality it is very likely that consumers will tighten their belts. But the real unknown is the financial system and the huge house of cards built on the mortgages, while foreclosures gallop.
precisely to compensate for the outbreak of the American housing bubble, the Trimurti Sino-US-Japan is desperately pumping the other bubbles, especially equities. It is believed that the wealth effect deriving from increased stock market may counteract or at least mitigate the effect of poverty deriving from the fall in house prices. Also, since the stock market bubble is global, it is believed that the U.S. recession is more than offset by growth in the rest of the world. To convince the most recalcitrant, they place around also theories that the actions today would be "undervalued" and have plenty of room for growth. The bubble because there would be no divergence between prices and fundamentals.
In fact, years of excess have greatly inflated the so-called fundamentals (profits, cash-flows). And the stock market bubble continues to expand, not because it is rational and economically sensible, but why it continues the imbalance in external accounts based in the country issuing the currency international monetary system in an essentially fixed exchange rates of the major creditor countries, and So that creates a constant and growing expansion of global liquidity and credit, which has to end somewhere. The game of the bubbles are able to grow all of Music in this context indicates that if and when someone breaks out, to be replaced by 'acceleration of another.
At this stage, the U.S. housing bubble is deflating, and those on comodities and bonds have stopped espandesi, ergo you blow up more than one shareholder, by massively increase the inequality between the income.
remains to be seen what effect will the economy overall, moving from a situation in which it was supported by a cash-case upside down, where not only is not able to get more money from their homes, but also need to spend on they more and more: the Fed insists that there will be serious damage, general and markets seem to believe it. In reality it is very likely that consumers will tighten their belts. But the real unknown is the financial system and the huge house of cards built on the mortgages, while foreclosures gallop.
precisely to compensate for the outbreak of the American housing bubble, the Trimurti Sino-US-Japan is desperately pumping the other bubbles, especially equities. It is believed that the wealth effect deriving from increased stock market may counteract or at least mitigate the effect of poverty deriving from the fall in house prices. Also, since the stock market bubble is global, it is believed that the U.S. recession is more than offset by growth in the rest of the world. To convince the most recalcitrant, they place around also theories that the actions today would be "undervalued" and have plenty of room for growth. The bubble because there would be no divergence between prices and fundamentals.
In fact, years of excess have greatly inflated the so-called fundamentals (profits, cash-flows). And the stock market bubble continues to expand, not because it is rational and economically sensible, but why it continues the imbalance in external accounts based in the country issuing the currency international monetary system in an essentially fixed exchange rates of the major creditor countries, and So that creates a constant and growing expansion of global liquidity and credit, which has to end somewhere. The game of the bubbles are able to grow all of Music in this context indicates that if and when someone breaks out, to be replaced by 'acceleration of another.
At this stage, the U.S. housing bubble is deflating, and those on comodities and bonds have stopped espandesi, ergo you blow up more than one shareholder, by massively increase the inequality between the income.
RAW MATERIALS: food inflation
bollificazione The cost of the pay the people, whose purchasing power scende.I prices of agricultural commodities and food retail record start to the increase annually by 30 years now. The prices of agricultural commodities in general are volatile due to changes in climate, crops, etc.. But what is striking in this current phase of inflation is that food are going up all at the same time, great.
This is an important event, as explained in previous notes, because if they are shot in the stomach in hundreds of millions in developing countries, their governments would be obliged to change their fixed exchange rate's policy of inflation (starting with China), and the background of the financial markets would change dramatically. For the rest phase
laterale.I metals moved little, they concluded the almost unchanged (except that the platinum back after the recent run due to the introduction of the ETF). The oil after rising last week, has retraced up to 64 and the deadline closes in July to 65.2. Also rejected by the resistance of natural gas to 7.8 on the end of July.
It concludes with gold at 662 (August) silver 13 (July) Copper 332 (July) platinum in 1277 (July) PD 373 (September). Index CRB at 313 (June).
position to more than 6 months upwards
3-6 months Location: Side
Location assets: physical gold
CURRENCY: U.S. dollar still strong
The dollar, as a general index, concludes the week slightly upwards to 82.27 achieved at the expense a little of all other currencies, with the yen as weak as ever, unable to maintain the gains occasional retreat in commodity currencies and the euro, which has not issued its own right. The profile followed by euro-dollar this week is in line with the scenario bearish note last week. Break since Monday in support of 1.348, 1.343 and then rebound to fall Wednesday 1.352 new fast and quick to fall Thursday at 1.3425 twice and tested without show strength in rebounds, with a tendency to gravitate to areas where 1.345 concludes. Overall, it still shows the predominance of downward pressure. Nevertheless I think that it is forming a base that should lead to a bullish phase from the lows of 100-150 Tiksi. More precisely, if 1.3425 will confirm the floor of the weekly range, a good chance of a leg bullish but it must prove to exceed the limit to 1.3525 for more ambitions. Next week there are lots of ideas to increase volatility, with the max. Friday at the two-hour fire on U.S. data. There in seven days the expiry of the options in June, you will understand in what range will be the end: for now the more likely is the one from 0.345 to 1, 355. Also for the next octave can therefore assume two scenarios, including favors to the upside above downward menzionato.Scenario: breaching new lows of 1.3425 and 1.338 envisaged up to where should develop a reaction but that is unlikely to bring over 1.35 with data for June 1 weak dollaro.Scenario upwards, keeping 1.3425 and bet up area 1.355, surmountable if the package on June 1 was clearly weak.
The general index of the dollar to 82.1 (June)
The general index of the dollar to 82.1 (June)
more than 6 months Location: dollar general downward
3-6 months Location: dollar asset side
Location: call + buy put spreads (deadline June 8), sold in September straddle
BONDS: arrive SWF
The rise in yields continues, homogeneous along the entire curve of the schedule, with the ten-year U.S. which reaches a maximum 4.9% the year before to reverse after the decline in U.S. existing home sales on Friday. The movement is based on the global stock-market bubble that attracts capital to the detriment dell'obbligazionario: for example, this week it was revealed that China has invested 3 billion. dollars of its reserves in private equity fund Blackstone (previously invested in U.S. Treasury securities). It 'just the beginning as China announced it would allocate up to 300 billion. in alternative investments, equivalent to the amount that can be operated with all the leverage disponiile the first 4 private equity funds in the world. Other countries (emerging, oil, etc.). They're going to go that route with the creation of so-called SWF (sovereign wealth funds): in other words, central banks become investment funds (SWFs are estimated to reach 2 , 5 trillion dollars)! Against all the prudential principles typical of these entities, there will be another huge boost to the global megabolla, but bond yields will lose a part of the classic state support, and therefore move upward. How to balance
week, the U.S., the future 3-month December 2007 rose by 2 cents. to 5.22%, the biennial salt of 4 cts. 4.86% in the five-year rises of 6 cts. 4.79%, the ten-year 6 to 4.86% and the thirtieth anniversary of 4 cts. 5%. In Europe, the ten-year bund salt of 7 cents. to 4.38% for which the differential with U.S. bonds of similar duration decreases to 48 cents. Japan also is adapting: the ten-year rises of 8 cents. 1, 72%, as well as the emerging bond markets, with rising yields in the range of 10 cents.
week, the U.S., the future 3-month December 2007 rose by 2 cents. to 5.22%, the biennial salt of 4 cts. 4.86% in the five-year rises of 6 cts. 4.79%, the ten-year 6 to 4.86% and the thirtieth anniversary of 4 cts. 5%. In Europe, the ten-year bund salt of 7 cents. to 4.38% for which the differential with U.S. bonds of similar duration decreases to 48 cents. Japan also is adapting: the ten-year rises of 8 cents. 1, 72%, as well as the emerging bond markets, with rising yields in the range of 10 cents.
position over 6 months to rising yields
position at 3-6 months: the rise in asset returns
Location: nothing
BAGS: Greenspan tries
As expected after clearance by the Trimurti, the week started well. But then came the declaration of the largest maker of bubble in history, Alan Greenspan, who now has no official position says to the other (the Chinese) that the stock market bubble is set to explode dramatically. Thank you, Alan, of discovery, shame, however, that when this gentleman spoke of irrational exuberance on the Nasdaq in 1996 and ran it would take 5 years before coming to the outbreak, which occurred just after that in March 2000, in another speech famous, Greenspan said, but believed that it was a "new paradigm".
fact is that Shanghai has continued unabated to run this week, while Wally has wavered a little, and there are signs of spoilage, as can be seen from the indicators mentioned below.
The week ends with Dow at 13,506 (-0.4%) SP500 to 1515 (-0.5%) NASDAQ in 2557 (-0%) Nasdaq100 in 1893 (-0.4%) Russell 2000 +0, Transport 8% -1.3% -2.3% Utilities -4.4% semiconductor broker-dealer Banks -0.3% -0.8%. The titles on the upside on the NYSE have fluctuated between the maximum and minimum at 2100 Monday to Friday at 600. The relationship between put and call rises 0.77 to 0.93. The volatility index (VIX) rose from 12.75 to 13.3. The Nikkey rises to 17,480 (+0.5%), always in expanding the bubble on the DAX in 7739 (+1.8%), flex are the other indices: the hunting down to 6057 (-0.9%), the Footsie in 6570 (-1%) without the Italy at the slightest hope (affects the coupon): Intel Corp to 43,019 (-4.2%) and Mibtel to 33,619 (-4%). \u200b\u200bcontinued spectacular super-bubble in China, despite Greenspan's warning (+3.7%) , Brazil, India +0.2% -0.9% -3.4% and Russia.
fact is that Shanghai has continued unabated to run this week, while Wally has wavered a little, and there are signs of spoilage, as can be seen from the indicators mentioned below.
The week ends with Dow at 13,506 (-0.4%) SP500 to 1515 (-0.5%) NASDAQ in 2557 (-0%) Nasdaq100 in 1893 (-0.4%) Russell 2000 +0, Transport 8% -1.3% -2.3% Utilities -4.4% semiconductor broker-dealer Banks -0.3% -0.8%. The titles on the upside on the NYSE have fluctuated between the maximum and minimum at 2100 Monday to Friday at 600. The relationship between put and call rises 0.77 to 0.93. The volatility index (VIX) rose from 12.75 to 13.3. The Nikkey rises to 17,480 (+0.5%), always in expanding the bubble on the DAX in 7739 (+1.8%), flex are the other indices: the hunting down to 6057 (-0.9%), the Footsie in 6570 (-1%) without the Italy at the slightest hope (affects the coupon): Intel Corp to 43,019 (-4.2%) and Mibtel to 33,619 (-4%). \u200b\u200bcontinued spectacular super-bubble in China, despite Greenspan's warning (+3.7%) , Brazil, India +0.2% -0.9% -3.4% and Russia.
position over 6 months: overall decline
3-6 months Location: general rise
asset position: buying put spreads composite maturity. June 15
WEATHER: final glowing
Monday holiday in the U.S. but also in England, Germany, Switzerland, there is nothing, and nothing should happen. Tuesday few secondary data arrives while the first event Wednesday night with the publication of the minutes of the Fed, the day will also come in M3 Europe. Then begins a final glow of the week. Thursday, Eastern German unemployment and confidence indices euro, while the weekly benefits to unemployed Americans, will be out for the second estimate of first quarter U.S. GDP could be revised from 1, 3 to 0.8%, followed the index for Chicago in May. Friday German retail sales and manufacturing indexes in Europe, but above all there will be a record of U.S. data contained in an interval of 90 minutes. 14.30 to come out data on the labor market in May as well as expenses and income of households in April, while 16 will come to the May ISM manufacturing, sales of homes (new compromises), and the index of Michigan. Needless to say, as most expected, as always, that the labor market, to which recently have formed positive forecasts (which have supported the dollar), a disappointment could trigger a strong movement.
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