Tradesense

Where is the US consumer crisis heading?

2009-08-17T19:55:00.009+05:30

It has been a while since I posted – was caught up in some personal issues and could not put my thoughts down. Having discussed many of the current hot issues including China before, it is becoming difficult to keep turning the same wheel again and again which many seem to be adept in doing. Let’s...

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Have Banks Learnt Anything From The Financial Crisis?

2009-06-20T18:06:00.025+05:30

With so much water having flown after the financial crisis I was wondering if anything has really changed in the way the key banks do their business. I came across an interesting Natixis special report which threw light on this and I thought I should share some of the key aspects of this report for...

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Why the US stock market is stalling?

2009-06-07T19:38:00.009+05:30

That the US and the Global economy are moving towards stability has been indicated by the rising oil and base metal prices as well as the stock market performance from the middle of March09. The surprising jobs data at a job loss of 345k against a much higher expected number, while did reaffirm the...

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Stress Test For The Street

2009-05-10T19:13:00.009+05:30

Funny are the ways of Street…but street is most honorable…and it cannot be wrong…never fight Mr. Market. If you do you would be mauled. But in 2007 those who went against the street benefitted the most. The street does loose its head and there are those phases when not all the facts/news is...

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Manipulonomics

2009-05-03T21:51:00.009+05:30

The feel good factor is back. Many experts opine that we have indeed put in a bottom and that with due corrections we shall now march upwards. The fact that most were talking about a recovery that would be shaped L, U, W etc., contrary to the expectations as markets usually do, many experts think...

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New Fair Value Rules – How Risky is the Game?

2009-04-04T21:00:00.012+05:30

The banks got it finally as lawmakers literally forced FASB to relax the fair value or mark-to-market rules and the market celebrated it as if by wave of magic wand all the underlying risk has magically vanished. The Bloomberg report (linked above) says: “Changes to fair-value, or mark-to-market...

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FED Feeding the Markets – Will it Work?

2009-03-28T21:05:00.011+05:30

I understand we have seen a 3-week rally of proportions not seen since 1938 in the US. On a weekly basis the Dow closed up 6.8%, the S&P 500 6.2% and the NASDAQ 6%. On a monthly basis till now the Dow is up 10.1%, S&P 11% and the NASDAQ 12.2%. The real push came when FED announced that it...

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CDS, AIG & the rally in financials

2009-03-15T10:53:00.025+05:30

For the uninitiated here is a Wikipedia snapshot of CDS: "A credit default swap (CDS) is a credit derivative contract between two counterparties. The buyer makes periodic payments to the seller, and in return receives a payoff if an underlying financial instrument defaults. CDS contracts have...

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The beginning of the bottoming process

2009-03-02T20:21:00.011+05:30

The headlines are becoming so depressing and it’s ‘given up’ tenor is making me believe that the bottoming process has started. By no means am I trying to predict the bottom or for that matter say that the worst for the markets is over. I’ am starting to sense now that the second half recovery...

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Decoupling – have the seeds been sown?

2009-02-23T16:58:00.006+05:30

The decoupling theory – Asia and Asian markets (sans Japan) decoupling from the rest of the world – keeps surfacing from time to time – specially when the markets in Asia tend to perform better than those of US and Europe. It happened in the first two weeks of February when the Chinese and Indian...

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Warning Signal

2009-02-16T17:35:00.010+05:30

Last week’s market reaction is attributed to the lack of details in Giethner proposal. The basic issue revolves around the valuation of the bad /toxic assets. A low price while taking the asset of the bank balance sheet will also cause further charges to be taken and may require further capital....

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The currency conundrum – is it another leg up for gold?

2009-02-07T22:02:00.005+05:30

The logic in the currency markets usually has been: sell lower interest rate currency and buy higher/stronger rates. The strategy seems to have reversed now – low/zero yield seems to positive. Sample this: “… when in Prague the Czech central bank slashed its interest rates to an all-time low, the...

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‘Good Bank -Bad Bank’ – Is there any other way out?

2009-02-01T10:52:00.006+05:30

The proposal to take the toxic/lousy assets of the US banking system into a ‘bad bank’ and leaving the performing/good assets with the existing banks had initially received a positive response from the street wise it appears has run into a block – how to value these assets? As one expert...

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OIL – What’s Cooking?

2009-01-18T16:39:00.022+05:30

Look at the highlighted rows in the following tables. As regards WTI (West Texas Intermediate) and Brent the large contago or forward premium is the order. Further the difference between the near/front month contract between WTI and Brent shows a $10 difference. This is staggering. It may also be...

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Will Asia Provide Diversification?

2009-01-13T19:06:00.020+05:30

Having looked at the possible developments in China, the latest news out of rest of Asia is also not good. Factory output in Japan fell more than 8% in November the biggest drop in 55 years. It is also expected that Toyota may report the first ever loss since WWII. According to a Bloomberg...

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China’s Possible Hard Landing

2009-01-12T21:17:00.008+05:30

We continue with our watch list. China showing any signs of bottoming out is a function of how its exports perform. Reports say “…China’s growth may have slipped to 5.5 percent last quarter, the weakest pace in at least 15 years, as recessions in the U.S., Europe and Japan cut demand for exports,...

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Euro-Zone & UK - Show Time

2009-01-12T20:59:00.007+05:30

We continue with our watch list albeit I’ am not captioning it so. Euro-zone has put together its own stimulus package. Given that the nature of the union where each country has its own typical problem and the political setup has to address its own constituencies it will interesting to watch how...

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Market Impact: 2009 Watch List – Part 10

2009-01-10T16:20:00.007+05:30

When the US treasury bubble bursts…. What will dominate? The good news: “…When the Treasury bubble does pop, it will likely be a sign that the economy is turning around and that credit is more available again, experts said. People will sell off their Treasury holdings because they think that...

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Market Impact: 2009 Watch List – Part 9

2009-01-09T19:11:00.010+05:30

What corporate bond market does? Economist explains as to why corporate bonds should probably rally before a genuine rally in equities begins. “A further dilemma is whether corporate bonds will rally before equities. That would seem logical, given that bonds have a prior claim on corporate...

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Market Impact: 2009 Watch List – Part 8

2009-01-09T16:44:00.016+05:30

What are US Tips and Treasury yield spreads indicating? By subtracting the yield of TIPS (Treasury Inflation Protected Securities) of a particular maturity from the yield of an ordinary Treasury note/bond of the same maturity, you obtain the implied annualized inflation over the time to...

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Market Impact: 2009 Watch List – Part 7

2009-01-08T07:21:00.021+05:30

How the US savings rate grows? “Americans are starting to save again rather than relying on capital gains to do their saving for them. The government says Americans set aside $260 billion from their disposable incomes in October, up from about $70 billion a year earlier. That's a step in the right...

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Market Impact: 2009 Watch List – Part 6

2009-01-08T07:15:00.006+05:30

How US Retail landscape shape up? “…This spending slump, which started in early 2008, has already claimed a number of retail casualties. Prominent national chains such as Linens 'n Things, Steve & Barry's, KB Toys, Whitehall Jewelers and Shoe Pavilion have gone out of business. Still others...

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India's Enron - Satyam

2009-01-08T06:25:00.015+05:30

Just a diversion from our watch list continuation as Indian market was hit by a scandal where a respected (till yesterday) Chairman of the company Satyam Computer Services (NYSE:SAY) resigned on Wednesday, saying profits had been inflated over the last several years. The Indian market tanked as a...

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Market Impact: 2009 Watch List – Part 5

2009-01-06T20:02:00.006+05:30

How the financial health of the Big Three progresses? With a 35% drop in sales reported by the big three auto companies the financial stress on them has only increased further. This will have its impact on employment as production is reduced. According to NYT G.M.’s chief market analyst, Michael...

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Market Impact: 2009 Watch List – Part 4

2009-01-05T18:52:00.010+05:30

How Quickly US home prices stabilize? Needless to say a very important factor as the genesis of the current crisis is attributed to the bubble this sector. It has seen a record decline of 18% in October08 on a year on year basis. As observed: “The 20-city S&P Case-Shiller index has posted...

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