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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (59034)	12/16/2009 3:04:55 PM
From: elmatador	Read Replies (1) \| Respond to of 218031

Global Insight: Spain’s economic skies grow darker as the FT asked: "Please don't cut articles from FT.com and redistribute by email or post to the web." I cannot post full article. “The need to rein in deficits will test social cohesiveness,” were the ominous words in its latest review of sovereign risk. ft.com

To: energyplay who wrote (59034)	12/16/2009 9:17:14 PM
From: TobagoJack	5 Recommendations Respond to of 218031

just in in-tray player 1: We do have decent evidence developing that monetary stimulus is drying up, and in areas besides M3. Current M3 is actually shrinking on a YoY basis (attached and at nowandfutures.com and also my "alternate" M3 which includes all the alphabet soup repo like operations shows similar patterns (attached and at nowandfutures.com ) Then there's "total money", defined as M3 + all credit + all federal, state & local debt - it also has YoY below zero. Attached and at nowandfutures.com Lastly, the "original" M1 from the '90s that I've reconstructed by adding in sweeps (attached and at nowandfutures.com ), and that contains roughly 75% of TMS or AMS elements is also recovering from a nose dive since about 2005 and through late 2008 when it actually went into negative YoY change rates. It has a current YoY change rate around 5%... and of course, demand deposits have shown a large growth rate this year due to general conservatism, fear, relative unemployment etc. And as far and war and "help", I'm reminded of the final scene in the movie "The Fly": nowandfutures.com player 2: the decline in money supply growth rates is a major reason to expect a turbulent 2010 in the markets. note also that we have numerous warning signs in terms of market internals. the labored advance in recent months has been marked by phenomena typically observed near tops, such as a narrowing of the advance (increased concentration on highly speculative momentum stocks) and oscillators derived from price and volume increasingly diverging negatively from the cap-weighted indices.. also, while there has been much talk of a recovery, there are more and more signs that the putative recovery is already faltering again. see e.g. yesterday's Empire State manufacturing activity index, which surprised negatively by a large amount. at the same time the lagged effect of the liquidty injections earlier this year is still playing out in prices, leading to govenrment's 'Inflation' indices coming in above expectations. this will make it far more difficult for central banks to justifiy renewed liquidity injections, so they will need a fig leaf for same (as I've mentioned several times), which will very likely be provided by a sharp decline in risk asset prices. contrary to the post tech bubble recession trough in 2001/2, this time there is no expansion in private sector debt in evidence - on the contrary, deleveraging continues at astonishing rates (especially compared to the 'norm' of the bull market years). lastly, if one looks at the progression of events leading to the 2008 crash, then what stands out is how policy makers, although fully aware of the fact that the wheels were coming off the wagon, were ultimately unable to avert the panic in spite of pulling out all the stops. all they were able to achieve was a delay (the panic might just as well have struck a full year earlier already, since it was obvious what was happening), a tactic that may well have contributed to worsening the fall-out in the financial markets. imo the same holds true for the longer term outlook. we are in a secular downturn that will play out no matter what they do, and the tactics employed to delay the necessary corrective process will only make thing much worse. there is absolutely no reason to believe that the outcome suggested by both economic history as well as economic logic can be averted by state intervention.