Stock Preacher

In China the Government owns the Banks; the bankers do not own the Government. China’s stimulus plan is working better than in the US and the UK because the government is using the banks for public ends, rather than allowing the banks to use the government for private ends. In the USA, the banks are the most powerful lobby on Capitol Hill; they own the Government.

The USA is spending trillions of greenbacks to bail out its banking system, leaving its economy to languish, as China, now called a “miracle economy,” decoupled from the rest of the world, is maintaining a phenomenal 8% annual growth rate. That, by the way, is being questioned by lots of Pols, commentators, economists and other talking heads, as they ask how that growth is possible, when other countries relying heavily on exports have suffered major downturns and remain in the doldrums. Read more

Popularity: unranked [?]

Only one week after the US$ hit its lowest level for 10 months, the main talking point in FX markets is whether the US currency is about to strengthen. The change of sentiment has been sparked by last week’s US payrolls report, which saw far fewer job losses in July than expected. This strengthened the view that the US is past the worst of its recession and that its economic recovery could precede that of Europe and Japan. Some traders are hesitant to call an end to the trend of US$ weakness, given that the currency’s rebound has been based on its reaction to a single piece of economic data, but if the US$ does continue to rise, it would mark a very significant development given the pattern of trading that has tended to characterize the currency markets since the onset of the financial crisis. This has seen the US$ benefit from haven demand when equities, and hence risk appetite, have fallen. In contrast, the US$ has lost ground when stocks and investor confidence have risen as investors abandon the relative safety of the US currency in search of higher returns elsewhere.

Popularity: 1% [?]

As regular readers would know DRYS is has been one of my favorites for some time, both myself and Paul have published a number of research articles on this one including a report on how DRYS was trading well behind the Baltic Index. DRYS and GE marked our financial services divisions first “house trades” over the last few months and Buzz Inc has good sized positions in both.

DryShips Inc reported better than expected quarterly earnings, helped by the recent rise in spot charter rates that the Baltic Index indicated 2 months ago. Drys also seen an increased contribution from its offshore drilling segment. Read more

Popularity: 2% [?]

US President Barack Obama has Rock Star appeal among the investing class, except in the USA. The Quarterly Bloomberg Global Poll of financial investors and analysts finds attitudes about the new president in Asia and Europe are overwhelmingly positive. In the US, by contrast, they are slightly negative. In Europe and Asia, 87% of respondents say they view Obama positively, compared with just 49% in the US. His standing among American investors is even lower on economic matters: only a quarter of US poll respondents rate his economic policies as “good” or “excellent,” compared with more than half in Europe and Asia. President Obama’s “stratospheric favorability ratings” outside the US after five months in office are related to attitudes about his predecessor, former President George W. Bush. “It speaks as much to the visceral distaste for George Bush outside of the US,” she says. In Europe and Asia, more than four of five poll respondents choose Obama over Bush as the president offering better economic leadership. In the US, investors pick Bush, 43% to 41%.

Popularity: 2% [?]

Global wind capacity grew by 29 % in 2008 with the United States surpassing Germany to become the world’s leading wind power generator, Worldwatch Institute said. The Washington-based research organization said last Thursday that global wind capacity rose by over 27,000 megawatts (MW), or enough to power around 27MM homes, to some 120,798 MW last year. Wind now provides 1.5 % of the world’s energy demand, up from 0.1 percent in 1997. US wind capacity increased by 50 % or 5,170 MW, or 21% of world capacity. In Europe, wind represented the leading source of new power capacity, with 8,877 MW installed in 2008. This was 28% more than new natural gas capacity and over 10 times more than new coal, Worldwatch said. Europe now generates 65,946 MW of wind power, or 55% of global capacity, Germany still leads the region, generating 23,903 MW of wind power, but it saw new installations drop slightly in 2008.

Popularity: 4% [?]

A key factor is preventing huge panic selling of shares and augurs for an equities rebound is the piecemeal nature of government attempts to rescue banks and the economy, according to analyst , Sitaraman Shankar. “We need to see an index falling 7 or 8 percent intraday in high volumes and then ending up nearly flat on the day as the buyers come back in,” said Philippe Gijsels, strategist at Fortis in Brussels. “What we’re getting instead is Chinese water torture, and no massive cleanout. Governments and central banks are tending to watch stock markets and giving investors small glimmers of hope, not enough to take markets higher, but enough to prevent a sell-off.” So for capitulation to happen, markets will have to be hit by a big, negative news event, and for the rebound to be sustainable, the overall environment would have to improve. “We need to see an event that would shock everybody, a big US bank failure, or a country in Europe going broke,” said Mark Bon, fund manager at Canada Life. Bon said positive factors that would need to be in place for any strong rebound included an improvement in consumer or business confidence indicators, some merger and acquisition activity, successful rights issues and a belief among investors that company profits had bottomed out. “We would have a sharp sell-off triggered by an event, and then a turnaround as people reversed their short positions and bought into a rally,” he said. The MSCI world index .MIWD00000PUS hit its lowest point since April 2003 last week. The index fell more than 43% last year, punctured by a credit market crisis with its origins in collapsed subprime U.S. mortgages, and is already down 16%this year. Between November 2008 and January 2009, there was a 27% rally driven by investor relief that governments were acting firmly to deal with the crisis. Since January 2009 global equities have slipped steadily as it became clear that the government moves were not enough to stave off a sharp recession in top economies. NO CAPITULATION = SMALLER FALLS, WEAKER RALLIES

Popularity: 6% [?]