NEW YORK (CNNMoney.com) -- A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com.
Still, auto sales contributed heavily to the economy's expansion in the third quarter, adding 1.7 percentage points to the nation's gross domestic product growth.
The Cash for Clunkers program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for those rebates.
The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.
Macro equity trading strategies with risk management (paired trading when needed). Some might think these are crazy ideas but even a 'blind squirrel' will find a nut every now and then !
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Thursday, October 29, 2009
paying the biggest premiums since December for protection against a rise in the dollar
Market Currents, Thursday, October 29, 20093:22
More rippling effects from the apparent end to Fed debt buybacks: Options traders are paying the biggest premiums since December for protection against a rise in the dollar. The price for euro puts is outpacing euro calls and "the market is getting nervous."
More rippling effects from the apparent end to Fed debt buybacks: Options traders are paying the biggest premiums since December for protection against a rise in the dollar. The price for euro puts is outpacing euro calls and "the market is getting nervous."
Do 18M unemployed people care what our GDP is?
Things that are not good forr consumer confidence are not good for retail sales BUT today we will be looking at a very positive slice of the year in Q3, when we had Cash for Clunkers and we had housing stimulus and the stock market rose 20% while the dollar fell 7% and the Fed gave free money to the banks and IBanks, which drove many of them to record profits. Our corporations are reporting a Q3 that is much improved over Q2 because global stimulus is pumping money in and, thanks to the plunging dollar, they are paying the American workers they have left 15% less than they did last fall. That’s right suckers - you accept pay in dollars and you are not even smart enough to do what Europeans learned to do long ago - ask for currency-adjusted wages!
The farce in this earnings quarter is you have S&P 500 companies who collect 50% of their revenues overseas paying their American laborers in crappy US dollars. PRESTO - instant 15% "efficiency" savings on real labor costs. Companies have cut back on most capital spending so when you see companies telling you how well their cost-cutting program is going, keep in mind that they laid off 10% of their workers and are paying the remaining 90% just 85% of what they were getting last year when measured in any major currency on the planet except the Dollar and the Yuan.
What will happen when/if the dollar gets expensive again? Most companies have already stripped fixed costs to the bone. If they are forced to come up with 15% more net currency to pay their workforce, the only solution is to lay 15% of that workforce off. That’s why the Fed is in a weak-dollar trap. They probably sit at the table each day and try to come up with more dumb things to say to make sure no one accidentally wakes up one morning and decides to buy dollars. We don’t have a strong dollar policy - we have a weak dollar prison!
-Phillip Davis
I think this is right. Good article Mr Davis !
Jim Cramer's Mad Money, Wednesday October 28."The 5-7% correction Cramer has been predicting seems to be here"
Cramer is a disk jockey in a suit but sometimes he is right. I have noticed that he is a chartist. He is early or was this recent pull back a 'head fake' ? Today the Dow has gained 200 points on stronger than expected 3rd Q GDP. Time will tell. I am with Cramer on this one !!
==============
Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday October 28.
The Correction is at hand: Google (GOOG), Apple (AAPL), SPX (SPX), Panera Bread (PNRA), Colgate-Palmolve (CL), Walmart (WMT), Coca-Cola (KO)
The 5-7% correction Cramer has been predicting seems to be here; the Nasdaq's 2% decline, the Dow's 119 point drop and a "tell" on the industrial sector, SPX (SPX), fell 11% after a "major guide down." Panera's (PNRA) strong quarter and 7% rise in stock price seems to be the exception to the rule. However, weak home sales, oil prices and computers indicate increasing bearish sentiment; "We are right to worry that a new leg down might have begun.”
The banking, oil and technology sectors that propelled the market after March lows are starting to show signs of weakness; even Google (GOOG) and Apple (AAPL) are starting to slow down. The only strength on Wednesday came from defensive stocks, such as Colgate (CL), Walmart (WMT) and Coca-Cola (KO). Cramer recommends taking profits while some stocks are still healthy, and he added,“My conclusion is this market smells no end to the recession, and that we have seen the highs” for the year.
==============
Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Wednesday October 28.
The Correction is at hand: Google (GOOG), Apple (AAPL), SPX (SPX), Panera Bread (PNRA), Colgate-Palmolve (CL), Walmart (WMT), Coca-Cola (KO)
The 5-7% correction Cramer has been predicting seems to be here; the Nasdaq's 2% decline, the Dow's 119 point drop and a "tell" on the industrial sector, SPX (SPX), fell 11% after a "major guide down." Panera's (PNRA) strong quarter and 7% rise in stock price seems to be the exception to the rule. However, weak home sales, oil prices and computers indicate increasing bearish sentiment; "We are right to worry that a new leg down might have begun.”
The banking, oil and technology sectors that propelled the market after March lows are starting to show signs of weakness; even Google (GOOG) and Apple (AAPL) are starting to slow down. The only strength on Wednesday came from defensive stocks, such as Colgate (CL), Walmart (WMT) and Coca-Cola (KO). Cramer recommends taking profits while some stocks are still healthy, and he added,“My conclusion is this market smells no end to the recession, and that we have seen the highs” for the year.
Wednesday, October 28, 2009
7 month rally coming to an end ??
As seen in the action in the Dow Transports. Long ago, Charles Dow popularized his Dow Theory, which in essence views the market as healthy when both manufacturers (the Industrials) and shippers (the Transports) are rising in tandem. Divergences between the two should set off alarm bells. So while the Industrials have managed to claw their way back above 10,000, the Transports have tried and failed to surpass their mid September highs, tracing out a double top formation.
then again this just in from the US "U.S. sees no "undue" H1N1 economic impact". Who to believe ?
WASHINGTON (Reuters) - U.S. Homeland Security Secretary Janet Napolitano said on Monday she does not expect the H1N1 flu pandemic to have a larger than usual effect on the U.S. economy.
WHO TO BELIEVE ?
Estimates on flu's economic impact are more difficult to compile and can vary greatly.
But the World Bank said in July that a flu pandemic could trigger global GDP losses of 0.7 to 4.8 percentage points, depending on severity.
Regionally, official surveys suggested losses of 1.5 to 5 percentage points in U.S. gross domestic product, 2.6 to 6.8 percentage points in Asia and 1.6 to 3.3 percentage points for the European Union.
(Reuters Reporting by David Morgan; Editing by Anthony Boadle)
WHO TO BELIEVE ?
Estimates on flu's economic impact are more difficult to compile and can vary greatly.
But the World Bank said in July that a flu pandemic could trigger global GDP losses of 0.7 to 4.8 percentage points, depending on severity.
Regionally, official surveys suggested losses of 1.5 to 5 percentage points in U.S. gross domestic product, 2.6 to 6.8 percentage points in Asia and 1.6 to 3.3 percentage points for the European Union.
(Reuters Reporting by David Morgan; Editing by Anthony Boadle)
Will H1N1 hurt the world economic recovery ?
Pandemic (H1N1) 2009 - WHO (World Health Organization) update 71
Weekly update
As of 17 October 2009, worldwide there have been more than 414,000 laboratory confirmed cases of pandemic influenza H1N1 2009 and nearly 5000 deaths reported to WHO.
As many countries have stopped counting individual cases, particularly of milder illness, the case count is significantly lower than the actually number of cases that have occurred. WHO is actively monitoring the progress of the pandemic through frequent consultations with the WHO Regional Offices and member states and through monitoring of multiple sources of data.
New Activity:
Mongolia, Rwanda, and Sao Tome and Principe have reported pandemic influenza cases for the first time this week.
Iceland, Sudan, and Trinidad and Tobago reported their first fatal cases.
================
from: Gulf News, By Jumana Al Tamimi, Associate Editor Published: 22:43 June 27, 2009
Uncertain of the shocking global economic cost of H1N1? Ask Mexico.
When the authorities there announced a five-day suspension of all "non-essential" activities around the country shortly after the confirmation of the first case of flu on April 2, the cost was as high as $57 million per day, according to government estimates.
The national currency, the peso, fell four per cent against the dollar; the local stock market fell three per cent; and all hopes of a profitable tourism season were dashed.
So far, the number of reported cases has reached 59,814 from dozens of countries around the world, according to the World Health Organisation.
Within the several weeks since the confirmation of flu cases, signs of economic impact appeared.
Tourism, and airline stocks plunged and oil prices slid. The World Bank estimated last year that a flu pandemic could cost the global economy $3 trillion.
What increases the risks of big losses is the fact H1N1 started spreading at a time when the global economy was already under pressure from the international financial crisis started in the second half of last year.
$3 trillion thats trillion !!
Weekly update
As of 17 October 2009, worldwide there have been more than 414,000 laboratory confirmed cases of pandemic influenza H1N1 2009 and nearly 5000 deaths reported to WHO.
As many countries have stopped counting individual cases, particularly of milder illness, the case count is significantly lower than the actually number of cases that have occurred. WHO is actively monitoring the progress of the pandemic through frequent consultations with the WHO Regional Offices and member states and through monitoring of multiple sources of data.
New Activity:
Mongolia, Rwanda, and Sao Tome and Principe have reported pandemic influenza cases for the first time this week.
Iceland, Sudan, and Trinidad and Tobago reported their first fatal cases.
================
from: Gulf News, By Jumana Al Tamimi, Associate Editor Published: 22:43 June 27, 2009
Uncertain of the shocking global economic cost of H1N1? Ask Mexico.
When the authorities there announced a five-day suspension of all "non-essential" activities around the country shortly after the confirmation of the first case of flu on April 2, the cost was as high as $57 million per day, according to government estimates.
The national currency, the peso, fell four per cent against the dollar; the local stock market fell three per cent; and all hopes of a profitable tourism season were dashed.
So far, the number of reported cases has reached 59,814 from dozens of countries around the world, according to the World Health Organisation.
Within the several weeks since the confirmation of flu cases, signs of economic impact appeared.
Tourism, and airline stocks plunged and oil prices slid. The World Bank estimated last year that a flu pandemic could cost the global economy $3 trillion.
What increases the risks of big losses is the fact H1N1 started spreading at a time when the global economy was already under pressure from the international financial crisis started in the second half of last year.
$3 trillion thats trillion !!
Tuesday, October 27, 2009
Louise Yamada, technical comments
Listen to this MP3 if you have time.
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2009/10/23_Louise_Yamada.html
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2009/10/23_Louise_Yamada.html
S & P 500, correction to come or short term resistance ?
The target for this rally is SPX 1119. A close above SPX 1119 would point to a run to the next resistance level, at SPX 1226. SPX 1126 and SPX 1119 (the 50% retracement of the entire bear market) are very close together. The recent weakness may have been the result of this powerful resistance level having been approached.
If we do get to SPX 1119 in coming weeks, it will be difficult to surpass this strong resistance level without a correction first. Profit taking is part of any rally and typically it occurs at resistance levels so we may still have another round of selling ahead.
The good news though is that a close above SPX 1125 (a decisive close) would negate this correction to the bear market.
I'm back !!!!
Back from my 'mental' sabatical. Few things have changed over the past few months. Market keeps climbing the wall of worry but the economy is not showing big improvements in the US. My short positions have got beat up as indices moved higher. The VIX is back to the 24 range today after hitting near 20 last week (compared to 81.65 in March and 25 in Aug). This signals that investors are less concerned about a near term correction (this is a warning flag from a contrarian viewpoint).
This still points me in the direction that the market is overvalued and complacent.
The usual Sept/Oct correction has not happened but maybe it will be a scary Halloween correction !! Adding a position to FXP (ProShares UltraSh FTSE/Xinhua China 25 )
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