General News

Even more problems for Greece – just couple of days after rumors of that country leaving the Euro began to circulate, one of the major rating agencies decided to downgrade Greek sovereign debt. Again. Just in March Standard & Poor’s lowered the rating to a “speculative” (junk) level and now assigned a “highly speculative” (super junk?) rating. This move came European politicians publicly commented that the current bailout might not be enough and additional funds will be needed. As always, the Greek finance ministry said the latest downgrade – especially so soon after the previous one – was “not justified”. Possibly, but according to the S&P, increasing the amount of the bailout package and extending maturities on the debt, amounts to a “selective default”. The agency claim that sooner of later private creditors will be forced to make similar accommodations, including lowered interest rates. That part of restructuring is believed to inflict massive losses on those who currently hold Greek debt. We shall...

Courtesy of our good friend (and now intrepid roving reporter) Jonathan Lederer, here’s an exclusive scoop on Gary Shilling’s commentary from last week’s Altegris/John Mauldin Hedge Fund Conference in La Jolla. 1) Deleveraging has barely begun and will last for many more years due to the huge growth in credit since the 50s 2) He still thinks deflation is the outcome 3) Federal budget deficits will stay in the trillions for many years or else unemployment will spike back up and politicians won’t stand for that 4) Savings rates will rise back up to double digits; they came down since the mid 80’s due to people feeling better about their stock market equity and home equity, but the stock market and housing declines killed people and now they have to start saving again, especially with unemployment staying high and baby boomers unprepared for retirement 5) Fed hasn’t influenced the real economy at all 6) Money supply and velocity are still low 7) He said he thinks stocks went...

Jeffrey A. Hirsch, Editor-in-Chief of the bestselling Stock Trader’s Almanac, discusses his stunning forecast of Dow 38,820. In this interview with Wall Street Sector Selector, Jeff explains his detailed research of market and historical cycles that point to the possibility of another super boom and details how you can prepare for what could be another historic bull market. John Nyaradi: Hi everyone, I’m John Nyaradi, publisher of Wall Street Sector Selector, a financial media site specializing in exchange traded funds, global markets, and economic analysis. Today, I’m really pleased to welcome our special guest, Jeffrey Hirsch. Jeff, welcome to Wall Street Sector Selector. Jeffrey Hirsch: Hey John, thanks for having me. John Nyaradi: Great to hear your voice again. Jeff is president of the Hirsch Organization and editor-in-chief of Stock Traders Almanac. He appears frequently on CNBC, CNN, Bloomberg, Fox News, and many other national and international media outlets. Now, Jeff is author of what I think is sure to be a new...

Holy cow, what a week! Will the market ever stop going up? Well, if it doesn’t, we need to be prepared – just like we were at the beginning of the year with our "Secret Santa Inflation Hedges" it is once again time to put a little thought into more strategies that can make us 300-1,000% gains on cash so we can make small commitments that will do a lot to protect our sidelined cash from yet another 10% drop in the dollar. That’s the stop on these trades, it is still very much my thought that the market will tank hard should the dollar recover but we already have that covered with disaster hedges against our longs – now it’s time to hedge our cash against devaluing simply because we were dumb enough not to spend it. The above chart is of the indexes priced in Euros with a view of the stunning fall in the dollar as it dropped 5%...

The past week saw 11 central banks announce monetary policy decisions, with just 3 making adjustments to interest rates. All 3 policy moves were tightening from emerging markets: Colombia + 25bps to 3.75%, Vietnam +100bps, and Russia +25bps to 8.25%. Meanwhile those that held rate unchanged were: Israel 3.00% Botswana 9.50% US 0.25% Namibia 6.00% New Zealand 2.50% Japan 0.10% Hong Kong 0.50% and Egypt 8.25%.   In terms of themes, it was a continuation of the emerging market monetary policy tightening theme with another one of the BRICs (Russia) making another move. But the lack of activity from the other banks also hinted at another theme; that of policy risks. Indeed as inflation begins to peak from the surge in commodity prices, perhaps toward the middle of the year, banks will have to tread increasingly carefully. The age-old trade-off in monetary policy concerns fighting inflation through tools that usually hamper growth, applying these tools too hard can result in an economic...

Equities Asian markets ended Monday mixed following the Easter holiday.  The Nikkei ended down .1%, while the Shanghai Composite tumbled 1.5%.  In Korea, the Kospi rose .8%.  Markets in Hong Kong and Australia were closed for the holidays. In Europe, the major indexes ended mostly higher, as the Dax gained .6% and the CAC40 rose .4%.  Chemical company AkzoNobel gained 4% on strong earnings.  The FTSE lagged behind, shedding .1%. US markets traded in a narrow range and also ended mixed.  The Dow slipped 26 points to 12480, while the Nasdaq gained .2%. Slot-machine maker IGT jumped 9.3% on surprisingly strong earnings and Sohu.com rallied 8.8% after profits rose 34%. Treasuries and Commodities Bonds rose slightly, with 10-year notes up 8/32 to yield 3.36%, and 30-year notes up 4/32 to yield 4.46%.  A Chinese Central Bank official warned that China must be careful of rising US treasury rates. US crude ended down fractionally in choppy trading, closing at 112.22.  Gold rallied 6.60 to close at 1510.40, and...