Login

Timing & trends

Two Short-Term Scenarios for the S&P 500 Index


Posted by Chris Vermulen - GoldandOilGuy.com

on Monday, 13 February 2012 07:51

Screen shot 2012-02-13 at 1.23.23 PM

For the first time since the last week of December of 2011, the S&P 500 Index closed lower on the weekly chart. Recently I have been discussing the overbought nature of stocks based on a variety of indicators. However, the real question that should be asked is whether last week was just a short term event or if we see sustained selling in coming weeks.

 

....read it all HERE



Banner

Gold & Precious Metals

Canada: Money & Real Estate Depreciating vs Gold


Posted by Chcp.biz

on Monday, 13 February 2012 07:44

1406180 orig

Click HERE or on Chart for Larger image

 

The chart above shows Vancouver, Calgary and Toronto detached housing priced in ounces of gold valued in CA$. Gold mining share prices rise as the "real price" of gold rises eg: the Gold/Commodities Ratio because the commodity cost (fuel, materials, equipment) is falling against the nominal price. See the Homestake Mining Chart from 1924 to 1935. Bullion attracts investment when credit markets contract because of its classic use as a hedge against currency depreciation and its ability to act as money. The millionaire metric allows you to see what your dollar is worth and the (declining) amount of gold you need to be a millionaire. In January 2012 the spot price of gold bounced back up causing the millionaire metric to tick back down towards trend but the sudden January data spike in Vancouver SFD prices has now priced an average house beyond that of a millionaire. Despite the Vancouver outlier, it requires 54% less gold to be a millionaire now than it did 5 years ago. See also the GOLD/CRB ratio here.

 

...more charts at http://www.chpc.biz/charts.html

 



Banner

Stocks & Equities

GLOBAL MARKETS-Greek austerity vote lifts euro, shares


Posted by Richard Hubbard

on Monday, 13 February 2012 07:31

Greek parliament passes unpopular package of cuts. Stocks and the euro rose on Monday on relief over sweeping austerity measures passed by the Greek parliament, but gains looked fragile with several issues still to be resolved before the shadow of a messy debt default is lifted.

sc

 U.S. stock index futures pointed to a recovery for equities on Wall Street after delays in agreeing a new Greek bailout deal sent the S&P 500 index to its biggest daily loss of the year on Friday.

 

....read more HERE



Banner

Bonds & Interest Rates

Greek Bonds And PSI - Beware The Ides Of March


Posted by TF Market Advisors

on Monday, 13 February 2012 07:24

So what is happening with PSI?  Here is a chart of the Greek bonds due on March 20th.  They have allegedly been trading up.  I use the term “allegedly” because the bonds are supposedly quoted 2 to 4 points wide, on a million up.  So not exactly a liquid market.  But let’s assume the chart is reasonably close.

 

Greek-March-20

 

The March bonds are up a couple of points today.  The May bonds trade at 33 and after that, all of the Greek bonds trade between 20 and 30, largely depending on coupon with a slight bias towards better prices for nearer term maturities.

 

So what is the PSI meant to do?  Is the PSI meant to treat all bonds equally?  If so, then it makes no sense for the March bonds to be trading at a significantly higher price.  The ECB may own some of these bonds, and may be getting paid out at par, but that shouldn’t affect the price of non ECB held bonds.  The payments and PSI aren’t pro-rata.

 

By all indications, PSI will chop the principal amount in half, and leave you with a small notional of long dated, low coupon bonds.  Most estimates put the value of those long dated, low coupon bonds, between 50% and 70% of face.  So the “NPV” loss shows up as around 70%.  Maybe the percentage of people participating is high enough, the austerity is enough, and the EFSF kicker is enough to give the new bonds a value of closer to 90% of par, then a price of 45 for old bonds would be justified.  But it would be justified for all bonds.

 

In the real world, bonds would exchange par plus accrued for the new bonds.  So each bond would have a “claim”.  So the bonds with the most accrued interest would have the most value.  That is not the case here.  Bonds with the shortest maturity have the most value.  Is it possible that the PSI that has been cobbled together gives better payouts for bonds closer to maturity?  That is possible.  The IIF and Greece may have decided to pay more to shorter term bonds.  It wouldn’t be standard, but on the other hand, the IIF isn’t exactly known for their bond restructuring expertise and experience.

 

So what else is happening here?  Do investors hope to buy these bonds and guilt Greece into paying them out at par?  Is the hope that the Troika will give Greece money, and Greece out of fear of default will use some of that money to pay holdouts from the PSI at par?  That makes some sense, but isn’t the Troika supposed to wait for PSI before releasing money?  Will they release the money if there are a lot of holdouts, particularly in this March bond?

 

Maybe it is simply a bet on the ineptitude of the politicians.  Betting that they won’t finalize a PSI in time for the March 20th deadline, so will have to pay these off at par (remember, they just paid some bonds off at par in December).  That bet also makes some sense.  In “holdout” trade, you rely on Greece flinching and paying you out in spite of the message it sends to those who agreed to PSI.  Under the “incompetence” trade you just need them to screw up enough that the PSI isn’t done and voted on before March 20th.

 

In any case, watch these short dated bonds both on an outright basis and versus the longer dated bonds.  Right now, it looks like they are signaling some more monkey business coming up.  Either the PSI is maturity weighted, or a decent number of investors are willing to bet that it will be profitable to holdout.  Hopefully we see the PSI details soon and can make an assessment.  It is possible the longer dated bonds are cheap, and I view increasing prices in the short-term bonds as signs of another round of headlines where the Troika gets mad at the private sector and it provides them with another reason to stop the bailout.

 

Main and IG have both drifted off their morning tights, but HY17 is still pretty much up there.  Makes sense given resilience of that market. HYG caught up to HY17 on Friday and with the bounce in the actual bond market late day, actually closed “cheap” to fair value for the first time in recent memory.  Given how illiquid the HY bond market is, it probably is technically still a bit rich, but worth watching this.

 

Read More Articles at TF Market Advisors



Banner

Personal Finance

Foreclosures and distressed sales INCREASE house values


Posted by Mark Hanson

on Monday, 13 February 2012 07:19

images

The entire world is now brainwashed to think foreclosures are a bad thing for the housing market. Perhaps four years ago when a million loans all went into default & Foreclosure at the same time but not today. They want you to believe Foreclosures are a bad thing so they can continue to kick the can, which benefits politicians and banks.

 

Most misunderstood facts on foreclosures… HERE



Banner

<< Start < Prev 2111 2112 2113 2114 2115 2116 2117 2118 Next > End >>

Page 2111 of 2118

Free Subscription Service - sign up today!

Exclusive content sent directly to your Inbox

  • What Mike's Reading

    His top research pick

  • Numbers You Should Know

    Weekly astonishing statistics

  • Quote of the Week

    Wisdom from the World

  • Top 5 Articles

    Most Popular postings

Learn more...



Our Premium Service:
The Inside Edge on Making Money

Latest Update

Taking Some Healthy Profits

This month, we update three stocks KeyStone has recommended in this column over the past several years. Two we reiterate our BUY recommendations...

- posted by Ryan Irvine

Michael Campbell Robert Zurrer
Tyler Bollhorn Eric Coffin Jack Crooks Patrick Ceresna
Josef Ozzie Jurock Greg Weldon Ryan Irvine