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Courting Germany to court Russia
Let’s adjust context for a moment from the economy and financial markets back to the topic of Iran’s nuclear program. Germany’s Foreign Minister is currently in Israel to meet with Israeli Prime Minister Benjamin Netanyahu, President Shimon Peres and Foreign Minister Avigdor Lieberman. Germany has long been the one European nation that consistently has political and business dealings with Iran. Additionally, Germany is the nation in Europe that is trying to deepen its ties to Russia. This makes sense since Russia provides...
read morePay your mortgage & grab your scuba gear
Good morning everyone! I have some not very good news to report. Santa Ana, California’s First American CoreLogic is reporting that 23% of homeowners in the U.S., or a staggering 10.7 million households, owe more on their house than the house is worth!! What’s more, as I reported yesterday, home prices continue to fall as home sellers keep dropping their prices to sell their houses. [If ever there were a buyer’s market, this is it.] Clearly this is not a good thing and bodes extremely ill for the economy and especially for...
read moreHome resales lift off
Home resales in October were up 10.1% vs. a consensus expected increase of 2.3%. The gigantic outperformance has to be attributed to the first time home buyer tax credit that Congress voted to extend. What this means: While the number is certainly welcome and will likely drive the financial markets much higher, the fact is that the economy still is only doing well in the presence of big government incentives. So this is the first thing to note. The second thing worth paying attention to is that home prices continue to fall, though at a slower...
read moreDisagreement among climate change scientists
Hello again – so glad that you have joined me here on ze blog! The Wall Street Journal is reporting this morning about a number of e-mails that were hacked out of East Anglia University in the U.K. East Anglia is a clearing house for much of the climate change research being conducted all around the world. These e-mails, some dating back to 1996, demonstrate a lot less consensus on the climate change issue than we are led to believe exists by traditional media. This is a fascinating thing that deserves some exploration on our part. One...
read moreQuant out, qual in
Good morning folks! J.P. Morgan Asset Management has just published results of its annual European Equity Survey. This survey covered the 128 largest institutional investors in Europe. Of those 128, 102, managing over $3 trillion, said that they were more inclined than a year ago to favor qualitative approaches to investing than quantitative. Only 1 in 10 of the big investors said that they are more favorably inclined to quantitative approaches. As I am certain most of you know I feel deeply that an equal weighting of quantitative and...
read moreEconomy sashays sideways
Good morning everyone! I was traveling over the last several days so apologize for the lack of a post about a couple of important economic data points. Let’s get to them… Jobless Claims: Last week 505,000 newly unemployed folks applied for unemployment benefits. That total was flat with the previous weeks total. What’s more, jobless claims lasting longer than a week declined. And most importantly, the four week moving average that smooths this estimated data fell by 6,500 claims to 514,000. What it means: I have been saying...
read moreSummary of the earnings season mostly passed
Good morning everyone! I hope that each of you is doing well and gearing up for a relaxing and rejuvenating series of Holidays. We are in the 7th week of the 3rd quarter earnings season, meaning that it is just about over. How have the businesses that compose the S&P 500 performed? Of the companies reporting so far 80% have beaten analyst expectations for earnings per share and by a median amount of 7.3%. The number exceeding expectations is a record. So everything must be going great, yes? Not exactly. The earnings profile of U.S....
read moreYou heard it here first
I normally don’t post on Sundays but there is significant news coming out of the “Association of South East Asian Nations” (ASEAN) meetings. The Wall Street Journal states: “After meeting privately with Russian President Dmitry Medvedev, the leaders of the U.S. and Russia declared that ‘time is running out’ on Iran. They demanded an answer to a Russian proposal to send Iran nuclear isotopes for research in exchange for the closure of a nuclear enrichment plant that the West believes is for weapons...
read moreFurther update on Iranigans
Yesterday I highlighted the importance of Russian President Dmitri Medvedev’s “State of the State” speech to the Russian citizenry. I was anticipating that he was going to give hints to an opening of the Russian economy to Western investment. The speech also needed to be monitored for where Russia stands relative to Iran right now. Fortunately, there were no surprises. The speech did in fact indicate that Russia is undergoing massive economic structural reform right now. Medvedev called for an opening of Russian markets to...
read moreHas Wal-Mart climbed over the wall, yet?
Happy Friday everyone! You may have seen that the financial markets snapped a 6 day winning streak. The cause, of course, was that massive bellwether or consumer spending, Wal-Mart (ticker: WMT). While WMT does not normally provide quarterly earnings guidance (thankfully) the Company said in a pre-recorded message that it expected its fourth quarter earnings to be between $1.08 and $1.12 per share. Meanwhile, analysts had been expected earnings at the high end of that range. Furthermore, CEO, Eduardo Castro-Wright said “We recognize...
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