A butterfly flaps its wings in Asia and causes a tsunami of the coast of Florida.
Now that may not happen given the latest news about bank deposits in tiny Cyprus, an island of roughly one million off the coast of Greece.
The Cyprus government bought some more time earlier today when it apparently decided to delay any vote on the matter until Tuesday.
But don't be mislead by the smallness of Cyprus.
It is a full-fledged member of the EU and people are not so dense as to recognize that what happens in Cyprus doesn't always stay in Cyprus. Italy, Greece and Spain have bank depositors, too.
And they are not alone when it comes to the possibility of further assistance.
This has always been a northern versus southern riff with fiscally sounder northern countries like Germany and Finland reluctant to bail out its weaker, southern members of the EU.
Like most cases there are unforeseen ripples that become visible later. The UK has a military presence in Cyprus and with reportedly over 1.5 billion euros deposited there. Any tax would, whether Britain is compensated in some way, send further ripples back to the UK where many oppose any connection with the Eurozone.
Many Brits oppose giving up its sovereign currency. And this could easily fuel more I-told-you-so talk.
Russia may have a say. Initial response from Moscow has been critical. Russia supplies much of the EU's natural gas thirst, so it is hardly without bargaining chips.
As for Americans who for the most part are getting next nothing on their bank deposits, perception becomes even more important. It can happen here with revenue hungry federal, state and local governments conspicuously on the prowl.
Recall that many big banks here not that long ago wanted to charge ATM fees for withdrawing your own money. A fee is a tax whether it's imposed by private or public entities.
Read the Cyprus story carefully and you won't have any difficulty finding the tax term.
Monday, March 18, 2013
MONDAY MORNING READS
FED TAPERING COULD TRIGGER
http://www.marketwatch.com/story/stocks-risk-harder-drop-if-fed-hints-at-tapering-2013-03-17
SO MUCH FOR PSI AND ONEOFF
http://www.ritholtz.com/blog
COULD THIS SPILLOVER
http://blogs.barrons.com/stockstowatchtoday/2013/03/17/cyprus-thai-baht-97-redux/
ASIAN STOCKS DOWN
http://www.bloomberg.com/news/2013-03-18/asian-stocks-drop-most-in-month-on-cyprus-deposit-tax.html
US STOCKS FALL
http://www.bloomberg.com/news/2013-03-18/u-s-stock-index-futures-drop-on-cyprus-bank-levy.html
Saturday, March 16, 2013
WEEK AHEAD
EUROPEAN DRAG
http://peakoil.com/consumption/17-signs-of-a-full-blown-economic-depression-raging-in-southern-europe
WEEK AHEAD
http://www.reuters.com/article/2013/03/16/us-usa-stocks-weekahead-idUSBRE92E11620130316
LOWER CONSUMER CONFIDENCE
http://www.futuresmag.com/2013/03/15/consumer-sentiment-in-us-falls-to-lowest-point-in?ref=hp
FED WILL DRIVE THE HERD IN WEEK AHEAD
http://www.cnbc.com/id/100558245
Friday, March 15, 2013
MARKET WRAP
The market took a brief respite today, a long overdue one many believe, after 10-straight up days causing just as many others to believe the run is the beginning of the next prolonged bull market.
The DJIA closed down a big 25 points, or 0.2%, on heavier volume, at 14,514.11 while the S&P 500 index declined 2.5 points, 0.2%, leaving it just under 5 points from its all-time high.
The slight decline sets the table for next week to see which way the market goes, onward and upward to new highs or downward to some kind of meaningful correction.
The specter of inflation popped into the equation Friday when February's consumer prices showed a 0.7% increase, most of it coming from higher gasoline prices, according to the US Department of Labor.
Most believe that the trend in February will not impact future inflation and cause the Fed to change monetary policy. The easy-money trend, in other words, according to these watchers, is still intact.
It should be noted that many people don't trust the government's numbers, to beging with, arguing the Fed and other central banks along with some hedge fund folks have been keeping a lid on the price of gold.
Toss in a compliant MSM and you have all the necessary ingredients to bake the perception cake of your choice. Markets are to peception as perception is to wealth effect.
Next week investors will be watching the latest FOMC meeting, news about the propsects of growth in EU and budget discussions in the UK.
The DJIA closed down a big 25 points, or 0.2%, on heavier volume, at 14,514.11 while the S&P 500 index declined 2.5 points, 0.2%, leaving it just under 5 points from its all-time high.
The slight decline sets the table for next week to see which way the market goes, onward and upward to new highs or downward to some kind of meaningful correction.
The specter of inflation popped into the equation Friday when February's consumer prices showed a 0.7% increase, most of it coming from higher gasoline prices, according to the US Department of Labor.
Most believe that the trend in February will not impact future inflation and cause the Fed to change monetary policy. The easy-money trend, in other words, according to these watchers, is still intact.
It should be noted that many people don't trust the government's numbers, to beging with, arguing the Fed and other central banks along with some hedge fund folks have been keeping a lid on the price of gold.
Toss in a compliant MSM and you have all the necessary ingredients to bake the perception cake of your choice. Markets are to peception as perception is to wealth effect.
Next week investors will be watching the latest FOMC meeting, news about the propsects of growth in EU and budget discussions in the UK.
Thursday, March 14, 2013
OUR TAKE
They say no risk no gain.
Here's our short-term view on this market. Expect a 5-6% pullback. We raised some cash recently for the pull back to buy at better prices. Know ahead of time what you want to buy. Stick with quality.
It's not the first half of this year we're worried about. If the second half gets ugly you may still get slammed, but you'll be glad you own quality.
The truth is no one--and we mean no one--knows for certain the future of this run, flash in the pan, mini-bull or major full speed ahead.
Ask yourself this question. Do you drive around at different hours of the day and night with a flat spare tire in your trunk?
Here's our short-term view on this market. Expect a 5-6% pullback. We raised some cash recently for the pull back to buy at better prices. Know ahead of time what you want to buy. Stick with quality.
It's not the first half of this year we're worried about. If the second half gets ugly you may still get slammed, but you'll be glad you own quality.
The truth is no one--and we mean no one--knows for certain the future of this run, flash in the pan, mini-bull or major full speed ahead.
Ask yourself this question. Do you drive around at different hours of the day and night with a flat spare tire in your trunk?
THE RALLY CONTINUES
The rally in the stock market continues, but where's the volume and the leadership?
The DJIA closed today up 83 points, or 0.6%, at 14,539.14, a new closing high on lower than average volume. Since March 1, daily volume has been declining, not particularly a positive sign for the market in general, some analysts believe.
Leaderships begs another question. So far it's been mostly defensive issues leading the parade. Also conspicuously absent, according to many traders, is Joe Retailer. There are few, if any real signs, retail investors are jumping on board.
The S&P P 500 also rallied, closing at 1,563.23, just points from its all-time high set in 2007. Advance-declines on the NYSE were 2:1.
Tomorrow should prove interesting going into the weekend.
The DJIA closed today up 83 points, or 0.6%, at 14,539.14, a new closing high on lower than average volume. Since March 1, daily volume has been declining, not particularly a positive sign for the market in general, some analysts believe.
Leaderships begs another question. So far it's been mostly defensive issues leading the parade. Also conspicuously absent, according to many traders, is Joe Retailer. There are few, if any real signs, retail investors are jumping on board.
The S&P P 500 also rallied, closing at 1,563.23, just points from its all-time high set in 2007. Advance-declines on the NYSE were 2:1.
Tomorrow should prove interesting going into the weekend.
ANOTHER VIEW
Editor's note: We don't have a greyhound in the race mentioned in Budget story nor do we know anyone connected with the Empire organization. We just bumped into the story in our wide readings as we search for solid, factual information to pass along to our readers, many of whom we're sure travel as we do. You can decide for yourselves.
BUDGET CAR RENTAL SERVICE
http://www.empirepage.com/37-editors-blog
THE RED AND THE BLUE LIVES
http://www.economist.com/blogs/democracyinamerica/2013/03/abortion-laws-south
THE WEALTH EFFECT: IS IT SHRINKING?
http://www.money.cnn.com/2013/03/13/news/economy/stocks-housing-wealth-effect/index.html
ASIAN STOCKS EX-JAPAN DOWN
http://www.marketwatch.com/story/japan-stocks-rise-as-rest-of-asia-lower-2013-03-13?pagenumber=2
PUNDIT SAYS BEWARE CHINA
http://blogs.marketwatch.com/thetell/2013/03/14/marc-faber-says-investors-should-fear-chinas-colossal-credit-bubble/
Exclusive: Chinese firm puts millions into U.S. natural gas stations
http://www.reuters.com/article/2013/03/14/us-enn-lng-usa-idUSBRE92D09Y20130314
Capitalizing on the Dow’s unloved rallyhttp://www.futuresmag.com/2013/03/14/capitalizing-on-the-dows-unloved-rally?ref=hp
Wednesday, March 13, 2013
MARKET WRAP
Well, they did it again.
The DJIA closed up for the ninth consecutive day, the best run since late 1996. Much of the uproar centered on better-than-expected February retail sales. Credit the consumer, but don't leave out the Fed with its bogus "wealth effect."
This is exactly what the Fed wants: Get the natives feeling better about themselves and their future via housing prices and construction or voodoo if necessary. That's what some believe the Fed's current MP is: A little of this, a little of that and a lot of voodoo.
The DJIA eked out a gain, closing at 14,45.28, up 0.04% while the S & P 500 inched closer to it all-time high closing at 1,554.52.
The nine day streak is the best since the 10-day run in November 1996. The thing to keep in mind is the longer the run goes on the more likely the upcoming pullback--and there will be one--might be steeper than most expect.
The DJIA closed up for the ninth consecutive day, the best run since late 1996. Much of the uproar centered on better-than-expected February retail sales. Credit the consumer, but don't leave out the Fed with its bogus "wealth effect."
This is exactly what the Fed wants: Get the natives feeling better about themselves and their future via housing prices and construction or voodoo if necessary. That's what some believe the Fed's current MP is: A little of this, a little of that and a lot of voodoo.
The DJIA eked out a gain, closing at 14,45.28, up 0.04% while the S & P 500 inched closer to it all-time high closing at 1,554.52.
The nine day streak is the best since the 10-day run in November 1996. The thing to keep in mind is the longer the run goes on the more likely the upcoming pullback--and there will be one--might be steeper than most expect.
ANOTHER VIEW
STOCKS UP FOR NINTH STRAIGHT DAY
http://www.reuters.com/article/2013/03/13/us-markets-stocks-idUSBRE92A07T20130313
HOLLOW BOOM
http://www.forbes.com/sites/joelkotkin/2013/03/13/wall-streets-hollow-boom-with-small-business-and-startups-lagging-employment-wont-pick-up/
US HAS STOPPED ACCUSING CHINA OF MANIPULATION
http://www.futuresmag.com/2013/03/13/qe-gun-boat-diplomacy-toward-chinas-currency?ref=hp
STRAIGHT AHEAD
http://www.cnbc.com/id/100549224
FED POLICY LIMITED
http://online.barrons.com/article/SB50001424052748704836204578358342392128724.html?mod=BOL_hps_highlight_top
IS THE RALLY GETTING READY?
http://www.thestreet.com/story/11868337/1/cramer-dow-rally-is-on-borrowed-time.html
http://www.reuters.com/article/2013/03/13/us-markets-stocks-idUSBRE92A07T20130313
HOLLOW BOOM
http://www.forbes.com/sites/joelkotkin/2013/03/13/wall-streets-hollow-boom-with-small-business-and-startups-lagging-employment-wont-pick-up/
US HAS STOPPED ACCUSING CHINA OF MANIPULATION
http://www.futuresmag.com/2013/03/13/qe-gun-boat-diplomacy-toward-chinas-currency?ref=hp
STRAIGHT AHEAD
http://www.cnbc.com/id/100549224
FED POLICY LIMITED
http://online.barrons.com/article/SB50001424052748704836204578358342392128724.html?mod=BOL_hps_highlight_top
IS THE RALLY GETTING READY?
http://www.thestreet.com/story/11868337/1/cramer-dow-rally-is-on-borrowed-time.html
TO CATCH THE FEW
One of the basic contentions we've spent a lot of time talking and writing about over the years is how governments seem to love punishing the many to catch the few.
You see it just about everywhere. Too big to fail is just another variation.
They're more examples than we could possibly go into here. But gun control is an obvious one. Another is punishing the prudent to rescue the irresponsible. Taxing the productive to prop up the slothful is still another.
A recruiter, no not a military but academic one, strolls into a high school senior class in early May and says he would like all the students who have gotten straight As for four years to raise their hands. Five do and he directs them to a corner in the back of the room.
He then does the same thing with all the students who earned straight Bs for four years. They are told to join the straight A students. Then all the ones who did the same with straight Cs for four years.
Nine students remain, six who have earned straight Ds for four years and three who managed only Ds and Fs for four years.
At this point the recruiter smiles, rubs his hands together and announces to the nine: "This is the day you've been working so hard for these last four years. We're going to reward you nine with free four-year scholarships to the Ivy League college of your choice. "
Now we didn't see the study ourselves, but an acquaintance we're told who follows such things closely informed us he did. Eight of the nine selected Harvard.
A lot of folks when talking First Amendment politics think its greatest feature is the guaranteed rights of freedom of speech, assemblage and religion. Sorry, but that's just wrong. Dumb wrong.
The greatest thing about the First Amendment is it guarantees one the right to do stupid stuff. Period. Think here of folks in New York City who choose to spend their own money gulping down extra-large sodas.
Judging from what history we've been able to study, people have been doing dumb and stupid stuff for centuries. Outlawing that right is akin to debasing a language or a currency.
Consider for a minute electing Joe Biden Vice President for two terms and Jimmy Carter president for one. Or George W. and Ulysses S. Grant. Or in California where those folks elected The Terminator twice and followed that with some warmed-up Brown hash.
Some folks would no doubt toss in Herbert Hoover and we'd have to somewhat agree. A lot of folks who don't know their history don't know he was the original originator of The New Deal, a pretty dumb idea in itself.
"There is no reason to assume that...the risks anticipated by each must be deemed equal in value, " as Daniel Bernouilli, a Swiss mathematician and physicist noted in the 18th Century.
That's a to-each-his own statement. The other half of that equation, utility, is intuitive and individual, a fact that punishing the many to catch a few clearly violates.
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