MoreLiver's Daily: 2012

Sunday, December 30

30th Dec - Review of 2012

The ultimate linkfest to reviews of the ending year ( I will add links to this later)

Due to lack of material, I am combining all the usual Weekender-posts to one.

28th Dec - Abnormal Update

The blog is still in a holiday mood, but some interesting picks:

My blog is still in holiday mood and returns to normalcy after the weekend. But just some recent articles to keep up with the world.

In addition to the fiscal cliff excitement, the big move to weaker Japanese yen and the clash between IMF and EU on the bailout of Cyprus seem to be the most important themes. I will do a "2012, 2013"-special during the weekend, just like I did last year (2011 Special and 2012 Special).

23rd Dec - Weekender: Off-Topics

Season's Greetings, I am taking some time off next week and will probably not post before next weekend.

22nd Dec - Weekender: The World

Some deeper thoughts on Europe, USA and Asia for the holidays

Week in review - and next one previewed. Last week's edition here.

21st Dec - US Open

The ending week's best reads, previous edition here.

Diving - the fiscal cliff style

20th Dec - US Close

From Nordea's weekly.

Japan’s central bank moved to inflation targeting and announced QE, as was more or less expected – but fiscal cliff negotiations in US are putting pressure on the markets. Stock indices still have bit more downside left – even in a bullish scenario. USDJPY actually down after the Japanese announcement, so again a case of buy the rumor, sell the news.

19th Dec - US Close

18th Dec - US Close

Forexinfo recently interviewed yours truly.

Talk that the fiscal cliff talks are nearing some sort of solution...

17th Dec - US Close: Crisis creeping?

Now that the Japanese elections are done and the QE-party won, it seems all the major central banks except ECB are on extremely easy. Is ECB playing the role of hard to get on purpose - to push national politicians to the right direction, as in Spain - or are the central bank's hands tied? Who do you call when you want to call Europe, which one is in charge, Germany or ECB? I believe this is the main question that has to be answered in the first quarter.

16th Dec - Japan's Elections

15th Dec - Weekender: Off-Topic & Finnish

This weekend's economics-section is huge: both UK and US are moving towards changing their monetary policies, while the fiscal cliff, general uncertainty over the recovery and Europe's continuing trouble caused a flood of articles.

The last week reviewed – and the next previewed! Previous Weekly Support here. Check back later for updates to this post.

14th Dec - US Open

Here are picks from my past seven day’s postings. Previous ‘Best of’ here.

13th Dec - US Close: B-union

Greece was promised the funds, banking union's single supervisor-part agreed (maybe), more on the Fed's change of tactics

Banking union's "single supervisor" agreed, but the details are sketchy - the goals of the rest of this week's summitteering were downsized from the earlier eurocrats' plans.

For more on the Fed's change, see my previous post. UK seems to be moving to the same direction, given the yesterday's comments by the next governor for the Bank of England. I think there is more to the Fed than currently meets the eye - but it will take time before markets understand this. Sell for couple of weeks.

Looks like both the US and UK are changing their central banks’ course. US unemployment 6.5% or below, as long as inflation stays below 2.5% (that's news - old ceiling target was 2%)

It seems like "the printings shall continue until the employment improves"

Quote of the Day:

If I was able to ask Ben Bernanke a question at today’s press conference, I would ask this: What in your models make you believe that GDP growth can accelerate to a range of 2.3-3% in 2013, 3-3.5% in 2014 and 3-3.7% in 2015 from 1.7-1.8% in 2012 but somehow forecast that PCE inflation will be no greater than 2% in each of those years vs 1.6-1.7% in 2012 in light of the massive expansion in your balance sheet? – The Big Picture

12th Dec - Fed Watch Repeat

FOMC links from my previous posts, have fun!

11th Dec - US Close: Fiscal Cliff & FOMC

A nice long creamy cake of credit talk from MoreLiver's dear friend Macronomics. This time, he drops the charts on the floor, stands on the table and says how things really look - the picture is not pretty, but it is comforting: it is an old song, even though it is not familiar to the contemporary audience.

10th Dec - US Close

9th Dec - Weekender: Off-Topic, Finnish, Views

For the lazy readers, may I suggest combing through the "Weekly Support"-post - it has the weekly previews to get you sorted through the next week. Everyone else, enjoy these not finance-related article links and the again quite worrisome Finnish-language articles: internal devaluation & federalization is the name of the game. It is going to be highly entertaining 2013-2015 if this shit goes through.

I'm not sure if I have time for a Views-post, so just quickies: ending week's uptick in Spanish and Italian bonds, ECB's non-decision, Monti's loss of power of power, followed by a resignation announcement. Bad European macros. Coming stormy talks on the federalization of the European Union, UK's threat to leave EU... I think the eurocrisis is now back on, after a brief pause. While the French and German stock markets have recently broken to new highs, I believe they will reverse, and we will see a continuation of the recent range. Meanwhile, as the Europe's periphery starts to deteriorate again from the yield perspective, rhetoric will become much harder, and finding a solution becomes again a nightmare.

I am not sure if we will see a repeat of the last December's show, when the ECB was forced to step in with the surprise LTRO annoucements - my current feeling is that things will slowly deteriorate and ECB will not pull the rabbit from the hat. This is mainly because the ECB does not have a rabbit anymore, but secondly also because they want to keep Spain under market pressure. The logic seems to be that Spain will not apply for a bailout before it is forced to do so, so pressure and force it will be. The policies and negotiations will not start in earnest before the core countries get severely hit. Thus, I expect gradually worsening picture, with temporary blimps of hope from some monthly indicators or something. Probably around Feb-March things look really dark. But the stock market will start anticipating this very soon.

Next week's FOMC meeting and the European summits are the main events. I expect all real numbers to be bad, but probably not surprisingly so.

This weekend’s edition has stuff on shadow banking, IMF’s change of attitude on capital controls, TARGET2, while the trading & markets-related links are a mixed bag.

9th Dec - Weekender: The World

This weekend’s edition of “The World” is heavy on Europe: Italy is about to have a change of leadership, some good ones on TARGET2, Federalization of Europe-articles, Britain’s possible exit. Articles on China concentrate on the leadership change and what this might mean for the future.

Last week review, next previewed. Previous ‘Weekly Support’ here.

7th Dec - US Close: Payroll Monster

Regular links, European horror macro and the most exhaustive list of payroll commentary, ever!

Payroll time!

The best article links from my past seven day’s posts – enjoy!

US Employment report and Dec consumer confidence in today's calendar. For ECB afterthoughts and payroll previews, see my previous post.

Friday's US payrolls reviewed, worrying federal developments from the eurocrats, ECB sees only black and will not turn on the lights - instead looks like it will have a match with Madrid instead.

6th Dec - US Open: Independence Day

Oh, almost forgot - ECB left the rates unchanged. Enjoy these two different versions of the classic story.

5th Dec - US Open

Europe 'surprised' by bad service PMI's, but the horror was pretty much expected after the manufacturing PMI's deterioration. Eyes now on Draghi on Thu. Again, no interest rate cuts expected, but the words will be scrutinized like never before.

4th Dec - US Close: Merry MF Global Christmas

The stock market rally has lost steam, ECB's non-event on Thu, FX boring and in ranges, but EUR surprisingly resilient. European summit schedules look like more 'roadmaps' to a federal Europe will be signed. No good economic news in Europe, but US has looked relatively ok recently. My gut feeling is that the Eurocrisis is about to light up again. Merry Christmas everyone.

3rd Dec - US Close

Quote of the Day: "We’re not against some business being done in London, but the bulk of the business should be under our control. That’s the consequence of the choice by the UK to remain outside the euro area." – Christian Noyer, the very French head of central bank.

1st Dec - Weekender: Econ, Market, O-T, Fin

Last 'Weekender' post is here: Economics, Markets, Off-Topic and Finnish. - I will make some changes to my regular post format on Sunday to make things a bit lighter for myself. Hope you understand, or if not, make yourself heard.

Latest articles on Europe, US and Asia, + some longer background reading I've come across during the ending week.

Last week reviewed, next previewed. Previous ‘Weekly Support’ here.

The best links from the ending week's posts. Previous BoW here.

30th Nov - US Close

JPY moving.

29th Nov - US Open: Eerie Ireland

Ireland studies the Greek bailout for ideas on how to exit its own bailout-hell. ECB is happy as it does not need to publish details of how Goldman Sachs helped Greece to hide its debt in order to get the euro membership. Happy times.

28th Nov - US Close: Fed Fades, Finnish Fun

The German parliament votes on the latest stealth haircut of the Greek debt on Friday. More on Greece in my earlier posts. And big shout out to Mr. Hurri!

Notice the news that German parliament votes on the Greek package on Thu - and this might be postponed. The Greek event risk apparently never goes away.

27th Nov - US Close: SuloRientoLiukas-measures

Katainen Kreikka-päätöksestä: Näitä asioita ei kannata millimetripaperilla mittailla – YLE

yksi Öllisentti = 1 miljardi euroa, jakaantuu 10 Käteismilliin = á 100 miljoonaa euroa. – Sulo Riento Liukas

More on Greece in my morning post. OECD's latest outlook is published - check it out, probably has something that will move the markets later. One thing to add: Germany's parliament votes on Greece on Thursday - so we have a new risk event.

26th Nov - US Close: Greek talks go on and on...

Macronomics is...back!...with another weaponized* credit analysis.

*to adapt (a chemical, bacillus, etc) in such a way that it can be used as a weapon

Outrageous predictions for 2013:

Europe’s step to solution & Senkaku islands

BND report kills bailout of Cyprus

25th Nov - Weekender: Off-Topics & In Finnish

First Europe, US, Asia - followed by some Economics and Markets.

24th Nov - Weekender: Weekly Support

Here are the links to review the past week and get ahead with the next one (previous Weekly Support here).

24th Nov - Weekender: Best of The Week

The best picks from my posts since last Friday

German IFO came out well above expectations – and rising. No good news from the EU’s budget talks. Plenty of action reported in FX option markets – someone is buying large amounts of at-the-money options – makes sense with all the event risks and the current very low volatility.

EURUSD keeps ticking higher, EU budget talks gridlocked, German IFO index today's main event.

22nd Nov - Fun (in Finnish)

Happy holidays, no US close update today. Here's links to Europe's and China's latest PMI numbers and EU budget talks. Greece postponed to Monday.

EU budget talks commence today – expect nasty comments from participants. US Thanksgiving keeping things quiet – stops might be cheap on low-volume, algo-driven day. China's PMI came out positive.

21st Nov - US Close: Greece Open, Budget Ahead

Good evening! Usual Euro-related horror stories, plus plenty of links in Finnish.

JPY has been very weak after the talk on possible inflation targeting by the BoJ...

20th Nov - US Close

Source: FT alphaville

Bernanke talked - nothing interesting, except the 'surprise' that FED cannot do fiscal policy, so the cliff must be solved. Some sort of peaceful solution in Middle-East looks probable.

Sorry about the late post - had to finally get some sleep :)

19th Nov - US Close: Rally

Spain bad loans reached EUR 182.2bln in September according to the Bank of Spain

Italian Industrial Orders SA (Sep) M/M -4.0% vs. Exp. -1.0% (Prev. 0.7%)

Lots of stuff to kick off the US holiday-shortened week. Check my most excellent and recently updated 'Weekly Support' for the weeklies. Short version: US holiday on Thu, Fri probably a dead day as well. Important European macro on Thu&Fri, EURUSD again trying the 1.28 resistance level. Friday's US close seemed a bit more positive, so a possibility of a minor rally. BoJ meeting ahead - probably on pause ahead of elections.

Another great one from Macronomics.

18th Nov - Weekender: Off-Topics & Finnish

I'll try to post a Views-post on Sunday.

Before my usual linkcollection, I would like to point out the following gems that you might have missed:

Bernanke's College Lecture Series:The Federal Reserve and the Financial Crisis: Part 1, Part 2, Part 3, Part 4 (youtube videos, approximately 60-70 mins each)

George Soros: Open Society, the Financial Crisis, and the Way Ahead – Open Society (links to youtube videos, excellent, including Q&A clips)

Europe is experiencing all the problems at the same time - real economy tanking, world not looking good, PIIGS suffering, political will weaning. The only thing that is not bad is the market pressure. Market pressure is kept away by Draghi's promise. In US, until recently relatively good data has now started to surprise to the downside - corporate earnings and real economy are looking cold, while fiscal cliff and uncertainty over monetary policy is troubling the markets. China got themselves new leaders, and it looks like it will be more of the same - playing tough on corruption but not reforming the economy. In other words - it seems all the bad news are already out in the world - a perfect opportunity to buy risk assets. But one thing I don't get - what happens when market pressure on Europe is back on? Thus, only tactical longs, boys and girls.

16th Nov - Weekender: Weekly Support

The ending week in review, and the next one previewed. MoreLiver is also here now.

Yes, MoreLiver is there now.

Just the regulars now - next up the usual Weekender posts. And check out my new gig:

The best from the ending week's posts.

See my last night's long post for plenty of high-quality reads. For additional commentary, check my new morning piece. Tension in Middle East, US budget talks, China's new leadership. EURUSD trying to drop after rejecting 1.28 level. No convincing moves in equity indices as of yet - potential double bottom developing in SPX, but too early to say. Europe looks just as doomed as for the past couple of years. Same old, same old.

15th Nov - US Close

Both EURUSD (testing bear channel resistance @ 1.28) and SPX near 'critical' levels. Europe is considered to be in a recession and the 2013 does not look any easier. Sweden is also worsening, but at least they have monetary policy left: EURSEK near resistance levels currently. Friday comes with triple-witching expiration in US, and next week the US will have a long weekend. I believe it will be an interesting day to end the week.

The SPX has now fallen to my target levels - I'll update my views in the next post. JPY weakness is an interesting development, given the current risk-off sentiment. See last evening's post - plenty of good ones there.

14th Nov - US Close

Huge post - and what a day. Markets tumbled, Bank of England was softer than expected, terrible numbers again from Europe - though within expectations.

What do people who are not good enough to become sell-side analysts do? That's right - they work for IMF, ECB and EU Commission. See the pic.

Now this is a sight for sore eyes.

13th Nov - US Close

To "KalkkisPena", enjoy!

Last evening's 'US Close' was good. Check it.

12th Nov - US Close: Greece and American oil

Plenty of stuff, for a US holiday. Japan started the week with even worse than expected GDP numbers. This was followed by an utterly useless Eurogroup meeting, where Greece was discussed. The early version of the Troika's report was leaked and is available and commented on FT's alphaville blog, links below.

International Energy Agency came out with a report and projected that US will overtake Saudi Arabia in terms of oil production by 2020. That's some heavy news and has a lot of implications financially and strategically.

Reformed Broker came out with a nice idea that 2013 will be a play between fiscal issues and housing. If the housing markets take off, the economy could be saved, but also the budget cuts and tax hikes could take the economy down. It could be a question which one 'shoots first'

US markets open, though banks are closed for the Veteran's Day. Eurogroup meeting will be deemed a success, if they can kick the can over the next Friday's t-bill expiration. That's how great things are at the moment.

US holiday today. To really get into this week, try the 'Weekly Support' below.

11th Nov - Credit Guest: Froth on the Daydream

Another ‘big one’ from Macronomics.

I'll write a separate Views-post later today, after doing some chores. Happy Father's Day to my Finnish audience. As a gift, see the links to the documentary, get some coffee & cognac and enjoy the ride.

Positive economic surprise index running high in US, while earnings are rolling over badly and threat scenarios abound. Everyone complaining about the high risk appetite, record-low yields, record-high issuance of high-yield debt (junk bonds). To me this all sounds like the bad news have become almost fully priced in - the SPX has not much room left below - soon some positive news will make risk markets jump back up again. ECB statement? Merkel coming out? Or most likely, that Greece is 'solved', and the US politicians are eager to avoid the fiscal cliff as they learned their lesson from the debt ceiling debacle. I'll update my chart views on the next Weekender-post.

10th Nov - Weekender: EU, US, Asia

The week's main event was supposedly the election in US. In reality, the main event was the decision to postpone decisions on Greece, lousy macro numbers from Europe, and the falling stock markets. Remember how we were told that any Grexit was kindly asked to be delayed until Obama got re-elected? He is now elected. Greece has voted 'yes' on austerity measures and will do so again on Monday. Troika's report has been read. What are they waiting for, and why they decided to delay the decision until 26-Nov? I think I'm onto something here - I'll try to figure this out.

Here are the links to help you review the ending week – and prepare for the next one. You might also want to see the previous ‘Weekly Support’. The missing links will be updated when the articles are published. The embedded youtube video is the 1989 video of "Just A Techno Groove" by a band called "Dow Jones". Must....palm....face....

9th Nov - US Close

Just the regulars now, get ready for my usual Weekender-posts.

Picks from my ending week's posts (previous Best of The Week here).

Check my previous post for some views & good links.

8th Nov - US Close

ECB did nothing, as was expected. In Europe the biggest news was that the decision on Greece is postponed to 26-Nov. Another round of terrible numbers from Europe, with record unemployment in crisis countries. EURUSD keeping in a narrow range and hardly reacting to negative headlines - so looks like plenty of negativity is already priced into the pair. SPX falling again like a rock, and looking at a weekly chart we are getting near levels where I would like to be a buyer. Around 1350? Everyone seems to be talking about that level. That would imply we never get there. If we see 1360, that's it, then. Done. Mine at 1360. I'll sort out my EURUSD view later.

BoE stood still - ECB soon.

Greece voted 'Jawohl' on austerity, next vote on Sunday. Today the main events are BoE and ECB meetings - Draghi has been getting more vocal - if you can call stating the obvious as being vocal. China pretends electing new leadership. Some sort of event risk could be seen coming from there - e.g. isolationism announcements or backtracking on reform.

7th Nov - US Close: Support in Short Supply

Source: Thomson Reuter

Very risk-off day today, both stocks and euro sold off heavily. Basically, bad European numbers coupled with Draghi's warning that Germany is starting to get its share of the crisis were the main drivers. So why was this so bad? Perhaps because Merkel and other key decision makers are still pulling their feet. By being forced to state that aloud, I interpret that behind the curtains there is no solid plan and commitment to it. Draghi tried to put pressure on Merkel. This means that polite private explanation of the issues did not work. And now, as everyone is getting publically smeared by everyone else, chances of finding a politically acceptable mutual solution are growing thin.

Euro selling off, for several reasons:

we had a break to the downside from a technical range
Greece votes on austerity measures (risk of losing further bailouts)
Spain's budget forecasts are based on growth forecasts that nobody, including the European Commission, believes anymore
Bad growth numbers overall -> debt defaults approaching

Now that the US elections are over, people will refocus on the European crisis (Greece foremost, but secondly Spain) and then then US fiscal cliff.

6th Nov - US Close

Election day, real event risks ahead, (Greece votes on Wed on Troika-required savings, Thursday ECB's and BoE's meetings), so I'm expecting less dramatic markets today.

Posting early and updating as stuff comes online. Notice my previous election special.

Some article links I've featured previously and new ones as well. Updates at the bottom of the post.

5th Nov - US Close: Election Eve

The commentators seem to be saying that the stock market correction is not yet over - while the elections and possible risk-positive news could cause short-term spasms of optimism, the earnings, fiscal cliff and Europe loom large.

EURUSD breaking lower from the range. SPX still sitting near the range's bottom.

Just wow... Tue, US elections, Thu ECB and BoE. Open questions: Greece, Spain, Eurogroup meeting, ECB’s collateral policies and divergence between economic data of Europe and US. Most pressing issue now is the ECB’s reaction to the news presented below: the collateral provided by Spain has not been marked down appropriately. For your market needs, I suggest taking a look at the Weekly Support below.

4th Nov - Views

Quick views: Event risks ahead, European situation deteriorating again, so I'm very careful now. Every time the euro crisis is 'on', we can expect surprise statements from several people, often contradicting each other. Quick swings, technical trading, keeping size light as volatility will be higher than in the past weeks.

Another 'stop the presses' post by Martin of Macronomics.

3rd Nov - Weekender: Off-Topics & Finnish

Wow, this was a long post, but plenty of enjoyable articles. For my Finnish audience, I'm especially happy about the several links to 80's-90's scene at the bottom of the post. I will post my market views on Sunday evening. The video clip is to celebrate some good news I got. Sorry if you don't get the joke.

Some longer background articles that I've come across in the past week.

2nd Nov - Weekender: Weekly Support

Last week's most excellent review and the week ahead under the microscope. See my earlier posts for even more link madness.

To end the week... usual Weekender-posts coming up next, beginning with the Weekly Support.

The best links from the ending week's posts. Previous 'Best'.

Payrolls coming up (updated today's EU Open post)

It’s payrolls today.

1st Nov - US Close

Greece is in deep, deep trouble - or rather, the creditors are in trouble and Greece will soon be just fine. Which shall it be, more 'extend and pretend' or mini-meltdown? In US, it will be about the elections, and result rests on tomorrow's employment numbers. Bad numbers: Romney wins. Ok to good numbers: Obama wins.

31st Oct - US Close

Bad European data: bank lending in eurozone just does not fly. Trilater commission to meet in Helsinki next weekend. Trichet leads, so expect stability, greatness and overall #winning.

Insurance vs. Home builder ETF's.

30th Oct - US "close"

Looks like the markets will be open in US on Wednesday. EURUSD turned up before properly meeting the trading range's bottom, but looks like it's on its way to the top end of the range.

EURUSD moving up from near the multiweek range's bottom. JPY 'surprised' everyone and after BoK printed, the yen strengthened. US markets still closed because the 'lady'.

Source: Bloomberg’s Nick Summer

Reporting seems slow because of the ‘Sandy’ in US. I'll update the missing ones if and when they are posted.

29th Oct - US "Close": Hold On

Stay sharp. Stay relaxed. There's something going on somewhere, all the time. In New York, the storm will pass. Others will come. We will stay.

News from Europe getting bad again - where to find the 30bn for Greece, Spain's economy continues getting worse beyond expectations. US markets largely closed due to "bad weather". EURUSD getting near the bottom of its multiweek range.

28th Oct - Weekender: Off-Topic & In Finnish

27th Oct - Credit Guest: When causation implies correlation

Another great credit post from MoreLiver's favorite blogger, Macronomics. Diverging France and Germany, trouble at the core, Spain. Pain, deflation ahead.

Se todellinen markkinavoima on se hiljainen raha, joka yrittää nähdä kakanpuhumisen läpi. Sekös poliitikkoja harmittaa, kun suunnitelmien ja ajatuksien ei pidä kelvata pelkästään äänestäjille, vaan alati maailman tilaa seuraaville lompakon päällä istuville.

Äänestäjät äänestävät yleensä koko elämänsä ajan sitä, mitä isi ja äiti jo kotona opettivat. Poliitikot tekevät teatteria näille ihmisille. Markkinavoima on se kollektiivinen n. parinsadan tuhannen ihmisen joukko, joka yrittää nähdä teatterin läpi, mitä oikeasti tapahtuu, ja mitä siitä seuraa.

Markkinamekanismin hyvä puoli on, että rahat tuppaavat kasaantumaan niille, jotka näkevät parhaiten. Sen takia se on äänestäjiä parempi poliisi. – Juhani Huopainen

Ohessa on kaksi ukkoa, toinen Turusta, toinen Espoosta. MoreLiver suosittelee molempia ja äänestää itse Helsingissä, joten jäävään itseni. Vantaalla Pauli Vahtera on hyvä - jopa lukee meikäläisen juttuja.

Henri Myllyniemi

Henri Myllyniemen tekstejä olen lukenut toista vuotta, ja kaveri on sähköasentajan koulutuksellaan tullut sen luokan talouskommentaattoriksi, etten epäile hetkeäkään hänen kykyjä, kunnianhimoa, ja arvomaailmaa hoitaa kunnallisvaltuutetun tehtävä menestyksekkäästi Turussa. Rauhallinen kuin viilipytty ja jatkaa argumentointia siinä vaiheessa kun vastapuoli on jo alentunut inttämään. Henri on Perussuomalaisten listalla ehdolla Turussa.

Jukka Kilpi

Jukka Kilpi on vanha työkaverini ja hyvä ystäväni, jonka mittava ja monipuolinen historia sekä elämänkokemus tekevät minuun aina vaikutuksen. Aina kun joku hyvä tyyppi on tarvinnut neuvoja yritysrahoitukseen liittyen, en ole edes miettinyt kenenkään muun suosittelemista. Halusit sitten keskustella kunnallistason korruptiosta, filosofiasta tai warranttien markkinatakaajista, Kilpi on mies paikallaan. Koska olemme vanhoja ystäviä, kehtaan laittaa tähän oman leikillisen ehdotukseni vaalisloganiksi: Jukka ei ole kakka! Jukka on sitoutumattomana Perussuomalaisten listalla ehdolla Espoossa.

27th Oct - Weekender: Weekly Support

Here are the links to review the past week and get ahead with the next one (previous Weekly Support here).

26th Oct - US Close: High GDP due to Defense

GDP came out, but most of bigger than expected growth came from aircraft purchases (volatile) and military spending (ahead of fiscal cliff, under budget review and the military's fiscal year ends in September), so the number was not as good as the headline would suggest. In the stock market language, the GDP growth was "low-quality". For acute reading needs, check my earlier posts, esp. the Best of The Week - I'll be back tomorrow with the usual Weekender posts, beginning with another Weekly Support. Have a good weekend - and if you're in Finland, remember to vote as your heart tells you.

US GDP ahead. Happy weekends, check back for my weekender posts.

The best articles from my posts of the ending week.

My previous post had plenty of article links and my own thoughts. ‘Best of’ coming soon.

25th Oct - US Close: Yen and Yawn

Is this Europe's "believe me"? Source: The Big Pictur

Apple posted earnings that were clearly below expectations. Right after taking a hit with Google, hedge funds are now hit on both two of their favorite holdings. I guess there might be the usual talk of redemptions, risk aversion and liquidity tightening by prime brokers as vol is up & price down. All of these could be seen causing selling pressure. Participants are trading the QQQ while the Apple's trading is closed - just as they did with Google. All this proxy trading and so on is good for - you guessed it - creating selling pressure.

UK’s GDP better than expected, recession over – but no reason to be too cheerful. ECB released latest lending figures, and they were low – money supply figures came in below expectations. The Greek bailout III is already almost certain, with leaked details on FT. Eyes now on the US durable goods orders, followed by the official agreement on Greece and US GDP tomorrow.

I'm expecting rising trouble with the European banking union plans: FT points out how unhappy Germany is. EURUSD and SPX are bouncing between clear technical levels, with an inclination to test the downside.

I updated my views in last night's post, so just the regular links for now.

24th Oct - US Close: Fed Slept, My views

After the Fed’s non-event, eyes turn to the EU-discussions on Friday, where Greece’s continued bailout payments are probably confirmed. Tomorrow UK’s GDP and US durable goods orders, Friday sees several less important European numbers and the main event, US GDP. Oh yes, click the charts below for larger versions.

The European economic data (PMI and Germany’s IFO) were terrible and markets reacted accordingly. Draghi’s comments are still ahead, and later the Fed’s FOMC conclusion. See my previous posts’ US sections for additional commentary – don’t expect much from the Fed, though.

China's PMI came out better than expected (see link section). Wednesday will be a busy day, as we get the first glimpses of the Q4 economic activity. Given the worries over the dismal Q3 earnings and the related recent drops in major indices, and the fact that both the FED and the ECB are already committed policy-wise, today’s numbers will be watched closely. Incidentally, FOMC will conclude today, but no press conference is scheduled and important policy changes are not expected before December’s meeting. In Europe, Draghi will be speaking in Germany’s Bundestag on the ECB’s OMT program, followed by a scheduled press conference.

23rd Oct - US Close: Pre-Open Dive

Markets were very weak after the bad Q3 earnings, signaling that the QE-effect is spent, and it’s back to fundamentals for now. Most of the reaction probably came from the bad Spanish news, and the yields on Spanish government debt increased somewhat. Incidentally, given the worries over the earnings, tomorrow we’ll see Q4 macro numbers from Europe and US, and these could set the tone for the rest of the week.

Fed is probably a non-event on Wednesday – but do notice that Draghi is visiting the lion’s den – he’s speaking to the Germany’s parliament, Bundestag, on the merits of the ECB’s OMT program. He will hold a press conference after the debate, and the market could use a word or two now. Perhaps he will provide that? Elsewhere, Canada's central bank surprised everyone and hinted that the end of easy monetary policy is going to end some day. Why? Are they worried about the house prices, or do they know something? Are they trying to do some "Chuck Norris"-monetary policy - creating growth by building up the inflation expectations?

EURUSD and SPX selling off on "low volume". Perhaps the Spanish lousy GDP estimates from the central bank, perhaps the growing pessimism on US earnings outlook or simply the realization that Europe still has not solved its crisis. In my view, the markets are still within the acceptable range for a range scenario. It is common for the markets to make marginal new lows or highs just to tease all the stop orders, but you people probably already knew that, right?

Another long piece of credit-goodiness from Macronomics

Looks like another test of the support areas in EURUSD and SPX is happening. Tactical longs, baby, tactical longs.

So, the stock market deciced to rally on the last minutes. I think it is safe to say now that the bottom of the daily range of the S&P 500 has been rejected, and a visit to the range's top is in progress.

22nd Oct - US Open: Bottom-fishing

Markets tried to move up, but failed for now. We might see some sort of bottom formation during the early part of this week, and perhaps then the markets decide whether the important support levels are taken out.

Long posts during the weekend. You probably missed a lot:

21st Oct - Weekender: Views, Off-Topics, Finnish

Last post of the week, with my market views, followed by some interesting off-topic articles and some in Finnish.

This week’s edition has sections on Regulation/Risk, Markets, Economics, Nobel prizes and Citigroup. The just resigned CEO of the bank made a cool one billion dollars from the bank. Your tax dollars at work. For fuck’s sake… EDIT: Calendar updated.

This week’s edition has sections on United States, Markets, Portfolio/Quant, Trading, High-Frequency/Algo, Hedge Funds and Other. EDIT: Calendar updated.

20th Oct - Weekender: Europe

The European summit turned out to be a dud, even given the very low expectations. Dedicated sections on both the summit and European banking union design.

Last week in review – next one previewed! For entertainment, see my special on the '87 crash.

Special: 25th Anniversary of The Crash of '87

You still remember this? I joined the game in 1991, and experienced this as an outsider.

Stock markets selling off nicely, making another swing towards the daily range's bottom - but EURUSD hanging in there - perhaps joining the "fun" later? Anyway, getting ready to long any decent intraday setup will be the order of the day for Monday.

Disappointment on the EU summit, technical resistance levels and general anxiety over the 25th birthday of the stock market crash of '87 could turn the session to negative territory. (EDIT: Calendar updated)

This week's main events were: EU summit agreeing on the banking union, Spain still playing time, better than expected data from China, US presidential election uncertainty increasing. A very important, but currently less discussed topic is the possibility of the central banks to write off the QE-acquired sovereign debts. As debt monetization has a bad ring to it, the discussion will be held in the background for political reasons.

First day of the EU summitteering confirmed the schedule for the common supervisor part of the banking union. This is a prerequisite for bailing out the Spanish banks, but it will be a long way to that result, and there are plenty of parties ready to change their opinion later. Markets nervous after Google's blunder.

18th Oct - US Close: Googod...

If there is a way to fail, we will find it. Google's outsourced paperwork did not work that well - but neither did their earnings. In Europe, plenty of stuff on the presummit statements - I'm not expecting much, and it looks like markets are preparing to a good old-fashioned "buy the summit, sell the news".

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