King’s Lead Hat… Eno

By Biiwii

“…the passage of my life is measured out in shirts”

Another musical hero of mine.  To me it wasn’t Roxy Music anymore after Brian Eno and his funny box of noise left.  Eno went on to make great records and produce lots of well known records by artists like Bowie, Talking Heads and U2.  He brought out some of the (IMO) greatest moments in their sounds.  It’s all because he understands sound on a level most of us just don’t.

Financial Services Industry Eats Clients

By Biiwii

Ref:  Why the big broker behind your financial adviser might be working against you

Tell me, which of them (the big brokers and investment houses) warned anyone about it being time to sell in 2000, or in 2007?  There are exceptions out there, especially in smaller boutique style shops.  But generally speaking, this thing we call Wall Street (big firms and the media that is their propaganda arm) exists to sell people the dream, then mark it up, front run it (in one way or another, legally or otherwise) extract fees from it and ultimately fleece it on the way down again (as regular people puke a tanking market and pay trading commissions for the privilege).

Here I cue up the old story about when I bought my first and only BMW (it was fine, but really it was not me) back in 2002.  The deal was done and I sat with the business manager to finalize the transaction.  He was a kid who had been fired from Merrill Lynch not 2 years earlier for keeping his clients in cash and totally safe at the market top.  Problem was, he was not turning tricks, err I mean commissions for Merrill.  All done.

Then there are the Certified Financial Advisers (the ones not incentivized with ties to performance) who are little more than mutual fund salesmen.  Don’t try to tell them about well rounded market analysis because they’re just going to go ‘la la la la la… I can’t hear you… have you stopped talking yet?… la la la…’ when you ask them about legitimate risk management strategies they employ.  Mine told me in 2000 ‘well, MFS and Putnam have professional money managers who would never allow big losses like you yourself would probably experience’.

Well thank you Putnam for cutting my wife’s IRA in half by 2002 (and it turned out, front running it) and MFS for chopping 40% off of mine.  This is when I pulled every penny from said adviser, did it myself and have since put on an annual average (including the last 3 very underwhelming years) of around 35% from 2002 to present day.

More than that though, the seeds were sewn for this website and its ‘not very pleased with Wall Street and the mainstream Financial Services industry’ orientation.

I get email updates from the White House and a recent one was talking about legislation to bring accountability to those financial advisers who are basically free to eat their clients (my words of course) and do not impose fiduciary responsibility upon themselves, and I think that is a good thing. These pigs need this responsibility imposed on them.

One thing that running NFTRH has done for me since 2008 is make me aware that there are plenty of advisers (some of whom subscribed) who are ethical and probably cannot live comfortably with themselves unless they are trying to do the right thing at all times.  This post is obviously about the other guys.  There’s a lot of them too.  Indeed, I’ll bet the big firms are infested with them.

Around the Web

By Biiwii

 

Nothing to Fear?

By Michael Ashton

Lots to Worry About but Nothing to Fear?

As we tick towards the end of the quarter, the news feeds are starting to look like they occasionally do when we are having a big spike in volatility.

We have the Greece deadline coming up. I don’t think anyone knows exactly when Greece’s finances will hit the wall, but it is going to be soon. And, compared with prior incarnations of this exact same crisis, there doesn’t seem to be nearly as much optimism about the probability of a “positive” resolution to this crisis. By “positive,” I mean in the sense that the status quo remains more or less preserved: Greece gets money, and pledges reforms, but nothing actually happens except that Greece’s depression continues. I don’t at all mean positive from the standpoint of the Greeks (I continue to think they will be better off in the medium-term to exit the Eurozone and default on Euro-denominated debt), or even from the standpoint of the Euro (assuming the single currency survives, the departure of Greece will be an important test case for the ramifications of re-shaping the currency bloc to a sturdier subset of countries that intend to move towards fiscal union). Interestingly, and in contrast to prior iterations of the exact same crisis, both sides appear to understand that Grexit does not mean disaster, and to perceive the possibility that it might make sense to let this happen – since, in any event, it is inevitable. There seems to be little urgency to craft a real deal, and the panicky increase in market volatility is missing this time.

Continue reading Nothing to Fear?

No Housing Bear Signal

By Tom McClellan

No Bear Market Signal Yet From Housing

US New Home Sales versus DJIA
March 26, 2015

Before each of the really ugly bear markets of the past 30 years, there has been an important signal from housing data well ahead of time.  We do not have such a signal now, and so that portends more upside in the months ahead for stock prices.

In fact, the past 3 months have seen a pretty substantial upsurge, especially in the Northeast and South regions of the USA as tracked by the Census Department.  That takes the seasonally adjusted annual rate of new home sales to its highest level since February 2008.  Generally speaking, seeing this home sales data make higher highs has been good news for the long-term path of stock prices.  It is when the two diverge that problems start to develop.

Continue reading No Housing Bear Signal

Durable Goods Take Feb.

By Alhambra Investment Partners

Durable Goods Take February Too

So far the economic retrenchment has persisted into February, outlasting any significant January weather. The latest worrisome figures came in the form of durable goods and especially capital goods. The former is another peg in the consumption side while the latter is one of the few glimpses of wealth creation (if far from a complete one). Both sides, demand and supply, have had a rough run under the “rising dollar.” Like retail sales, it is clear that the economy is no longer just sputtering along and is now poised precariously.

Shipments of product are not moving very quickly at all but the pace of new orders has seriously slackened which does not suggest this is a “transitory” development. New orders for durable goods ex transportation have been below 1% year-over-year in both January and February; while new orders for capital goods non-defense non-aircraft were flat in both months (February was actually slightly negative).

Continue reading Durable Goods Take Feb.

Currencies

By INO.com

currenciesThe June Dollar was lower overnight as it extends the decline off March’s high. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. If June extends this month’s decline, the 25% retracement level of the 2014-2015-rally crossing at 95.62 is the next downside target. Closes above the 10-day moving average crossing at 98.58 would confirm that a short-term low has been posted. First resistance is the 10-day moving average crossing at 98.58. Second resistance is March’s high crossing at 99.30. First support is the 25% retracement level of the 2014-2015-rally crossing at 95.62. Second support is the late- February low crossing at 94.53.

Continue reading Currencies

This Morning’s NFTRH Update on US Markets

nftrhYou could say it was cutting it close, but NFTRH has been in caution/cash raising/profit taking mode on the most recent up swing in the markets.  That is because I have committed to a view that will not invest (or go long-term bearish for that matter) until I get new, low risk trends across the markets.

So it has been swing trading, making sure to take the majority of profits and limit losses where applicable.  Because I am not nearly convinced that the market does not have an upside blow off in its future prior to the bull’s flame out, short positions have been worked the same way; take profits and limit losses.  For years I have felt the market is being driven berserk by those clown car shows.  That is not investment worthy.

Anyway, I am not the genius to tell subscribers what is going to happen and when, but I am the market participant who is going to tell them what I think and why I think it.

This morning’s subscriber update is opened to the public (I know, it’s not a heck of a lot of good now for people caught by the market’s hard down, but there is still value in it because it shows some signs I did not care for (while the SPX was still positive) and felt subscribers should know.

I think NFTRH is the best all around market service that I know of.  Maybe not the most number crunchy, technical (well, it can get technical, sure) or bold (predictions are for gurus).  But it is always on the job and it has kept its subscribers in position to succeed from its earliest days.

First we took advantage of the deflationary hysteria in 2008 to the tune of massive gains owing to the inflation we anticipated (I still recall using my late friend Jonathan’s classic line in an early NFTRH… “it’s inflation all the way, baby!”), then in protecting ourselves from the precious metals bear and most recently in interpreting the ‘Canary in the Coal Mine’ (Semiconductor Equipment sector) as bullish for manufacturing and the economy, and thus bearish for gold no matter how vigorously PM boosters waved their pom poms.

Subscribe to NFTRH before the price increases this year.  You’ll be glad you did, assuming you are not a casino patron, momo addicted wise guy looking for a wise guy of even more epic proportions to give you paint by number instructions as if you are an automaton incapable of rational and independent thought.

Okay, now the promo is getting silly; but you get the picture.  A weekly report and dynamic in-week updates that together are always fine tuning multiple markets in service to surviving and thriving during the interim trends but waiting ever so patiently for the next big trends.  Oh, they’re coming.

US Dollar Updated

By Biiwii

A real time view of the US dollar index by daily chart.  Today the trend line support was just about hit.  Lateral support resides at 94-95.  RSI is not over sold, but it has dropped to and through levels where it bounced in the past.  This is actually a negative on balance now that it is below 50 and is in a deeper correction than any since the rally started last spring and summer.

usd

Here is a longer view that includes the rally’s beginning.  Notice how the major trend line (as opposed to the short-term one above) intersects the lateral support cluster.  That is what we’d call some nice confluence and I’d expect that pending interim bounces, Uncle Buck can make its way down there.  But it remains bullish on a bigger picture.

usd2

 

Expensive Copper

By Steve Saville

Considering the overall commodity backdrop, the recent sharp rebounds in base metal prices and the copper price in particular are both interesting and incongruous.

Under the heading “Copper Bottom” in a TSI commentary a few days ago I discussed last week’s upward reversals in the copper price and the Industrial Metals Index (GYX). I assumed, at the time, that last week’s price gains were partly due to the risk that supply would be disrupted by the blockade of Freeport’s massive Grasberg copper mine in Indonesia, and therefore that the removal of this risk at the end of last week would result in some of the price gains being given back this week. Strangely, however, the copper price spiked higher at the beginning of this week and briefly challenged the bottom of the major $2.90-$3.00 resistance range before pulling back to the high-$2.70s (a few cents above last week’s closing level). It seems that games are being played by large-scale participants in this market.

I plan to write some more about copper later this week at TSI, but at this time I wanted to point out that the bearish participants in the copper market have relative valuation on their side. As illustrated by the following charts, the copper price is presently at a multi-decade high relative to the CRB Index and at its highest level since 1998 relative to oil.

copper

Post-CPI

By Michael Ashton

Summary of my Post-CPI Tweets

Below you can find a recap and extension of my post-CPI tweets. You can follow me @inflation_guy or sign up for email updates to my occasional articles here. Investors with interests in this area be sure to stop by Enduring Investments.

  • core CPI +0.157%, so it just barely rounded to +0.2%. Still an upside surprise. Y/Y rose to 1.69%, rounding to 1.7%.
  • y/y headline now +0.0%. It will probably still dip back negative until the gasoline crash is done, but this messes up the “deflation meme”
  • (Although the deflation meme was always a crock since core is 1.7% and rising, and median is higher).
  • Core ex-housing +0.78%. Still weak.
  • Core services +2.5%. Core goods -0.5%, which is actually a mild acceleration. So the rise in core actually came from the goods side.
  • Accelerating major cats: Apparel, Transp. Decel: Food/Bev, Housing, Med care, Recreation, Other. Unch: Educ/Comm. But lots of asterisks.
  • Shelter component of housing rose back to 3% (2.98%) y/y; was just fuels & utilities dragging down housing.
  • Primary rents: +3.54% y/y, a new high. Owners’ Equiv Rent: 2.69%, just off the highs.
  • In Medical Care, Medicinal Drugs 4.13% from 4.16%, but pro services +1.47 from +1.71 and hospital services 3.28% from 4.08%.
  • In Education and Communication: Education decelerated to 3.5% from 3.7%; Communication accel to -2.2% from -2.3%.
  • 10y breakevens +3bps. Funny how mild surprises (Fed, CPI) just run roughshod over the shorts who are convinced deflation is destiny.
  • No big $ reaction. FX guys can’t decide if CPI bullish (Fed maybe changes mind and goes hawkish!) or bearish (inflation hurts curncy).
  • Here’s my take: Fed isn’t going to be hawkish. Maybe ever. So this should be a negative for the USD.

Continue reading Post-CPI