JP via RSS
Trading Primary Trends as Good Friends
As we saw with East Anglia University data fraud, scientists with integrity do not agree manmade CO2 is a factor in global warming, so much as volcanoes and solar flare cycles. After a decline in solar activity with global cooling, we may be entering a time of more solar energy and stronger weather.
Bank of America, Barclays, Goldman, JP Morgan or other investment houses see $100 oil inside a year because of peak oil production and continuing growth in China and India. Maybe.
Iraq may or may not pick up the slack, depending on whose payroll the terrorists are.
China is now the world’s largest car market. Export driven economies are not immune to credit collapse or economic cycles.
Third, the European Monetary Union and credit collapse created deflation that threatens to break up the union. These are serious lessons for the rest of the world, including Africa, the Americas and Asia.
The Swiss and United Kingdom did not surrender the Franc or British Pound to the Euro. They may be breathing a sigh of relief, despite considerable debt deflation challenges.
The Germans did unite East and West Germany at great expense. They compromised their productive Northern Deutschemark export economy to maintain union with less productive Southern states.
Now the Eurospam is hitting the fan. There is a tug of war between the EuroNorth and EuroSouth to rival the American Civil War. Longstanding resentments are returning to politics, with some of the PIIGS (Portugal, Ireland, Italy, Greece, Spain) or STUPIDs (Spain Turkey, Ukraine, Portugal, Italy and Dubai) calling for debt forgiveness or continued subsidies.
A one-size-fits all bespoke currency cannot easily be selectively devalued for Euro member countries without making things more complicated.
Some think Germans may be tired of carrying the load for poorer Southern cousins, having done it with poorer Eastern Germany brothers with reunification. The trade budget surplus Dutch and Germans may not want to loosen and the trade budget deficit Southern nations do not wish to tighten.
They would rather go on strike.
February 26th, 2010 at 9:46 am
Aloha All
After posting this, we noticed out of 23 market indices, commodity and industry groups, only two have the 20 day moving average above the 50 day moving average. Curiously, these are the Livestock and US Dollar index.
Despite numerous calls for indices, commodities and industry groups like retail to bottom here with choppy markets, the trend may still be our friend.
Our one year anniversary approaches and we are glad about our longs on equities last March 2009 above Dow 6469, the dollar last November 2009 above 74 and the short sell on gold last December 2009 below $1226 and the short sale on the Dow below 10,729 in January 2010. Subscribers to Big4 and TopTen did better.
Stay tuned. We have a hunch things may be about to get much more interesting, reminding us of the old Chinese Curse: May you live in interesting times.
Mahalo Regards*Rich