Roubini getting more positive about the market

Roubini getting more positive about the market

(This is not an April Fools' Day joke)

The Markets today (March 3, 2009, 19.00 CET)

Asian Markets closed slightly down with the exception of the Shanghai market (minus 2.30 percent).
European Markets were in the green most of the day but turned red after Wall Street 's opening. However the losses were limited except for the Footsie with a more than 3 percent loss.
In Amsterdam the AEX closed just above the 200 points level at 202.57 with a 3 percent loss.
Wallstreet was up at the beginning of the morning session, than turned negative and is now (19.00 CET, Amsterdam) hoovering around yesterday's close and going down again.
Ford came out with a dismal report about the February U.S. car sales which fell 48 percent despite huge rebates and low-interest financing.

The Markets in the beginning of February 2009

The Markets in the beginning of February 2009

January 2009 turned out to be one of the worst months for the stock markets for years (or ever until now). Dismal results and predictions from large companies, rising unemployment, and a dire outlook everywhere. News about a global recession almost ever day.
The Obama Inauguration seems to be the only real changing news for many, although the quarrel about the Stimulus Plan between Democrats an Republicans is gathering momentum. Wallstreet and the Banking sector are despite the bailout money keeping on their large bonusses with showing few responsibilty for the social implications for their personal or corporate greed.
Social unrest was on the rise worldwide.
According to the latest news, incomes in the U.S. are falling and saving is on the increase.
An analysis from last months figures show a rise of inventories, the holiday retail sales in December were pretty bad as well.
All together no reason to expect an upsurge in the markets or a prolonged bear market rally, but more bad news for the first quarter of 2009.

Today, February 2nd, Far East Market were depressed with losses of 1.5 and 3 percent.
China is coming up with a second Economic Stimulus Plan, the unemployent situation is getting grimmer.
Europeam Markets were losing ground with losses of 2 up to 2.5 percent. (Amsterdam 16.00 CET).
At he same time U.S. Markets were slightly off with the Dow losing less than 1 percent and the Nasdaq turning green again, the S&P 500 just over a half percent in the red.
(Update 16.35 CET) Stocks pare losses after better-than-expected reading on manufacturing activity from the Institute for Supply Management. Markets in Europe and U.S. going up on this news.

From the WEF in Davos not much ground breaking news this year, the famous 'Davos man' seems to suffer a bit from an upcoming depression and a lack of creativity.

Global financier George Soros says the world needs to push faster to clean up the bad debt problem with a creation of a "Bad Bank" to absorb toxic assets.

Obama to Move On CEO Pay Plan, 'Bad Bank' Delayed
In an interview aired on NBC Monday, Obama said, "I don't want to pre-empt an announcement next week," when asked if the administration was committed to the bad bank idea.
The President added that "we're going to have see some of this debt written down."'

Soros has a new book, The New Paradigm for Financial Markets, I haven't read it yet, however, books of George Soros are usually worth reading and recommending.



There's an old saying on Wall Street: "So goes January, so goes the year."

If the so-called January Indicator holds any water, 2009 is going to be another rough year as January 2009 was the worst January ever for both the Dow and S&P, which began February in retreat as well.
Leo Tilman, president of strategic advisory firm L.M. Tilman & Co. and author of Financial Darwinism, is not a big believer in January's predictive capabilities. But he does expect 2009 to be another "difficult year for sure" for stocks, based largely because of the ongoing deterioration of the economy.
Because of the "unprecedented uncertainty" regarding the timing and composition of both a stimulus bill and the next phase of bank bailouts, Tilman's "best-case scenario" is for the economy to stabilize by year-end and financial markets to be range-bound.





Tilman about Wallstreet's survival
* The "strategic vision" of Wall Street executives, a group Tilman says is still largely ignorant of what levels of risk and leverage are (and aren't) appropriate. (Figuring out how to rethink the business models and reengineer the parts that aren't working is a big part of Tilman's consulting work and the focus of his book. )
* The structure of the U.S. economy. If it remains based on consumer borrowing and spending, don't expect Wall Street to change its securitzing ways, he says.
* The future regulatory environment.

Regarding the latter, Tilman is a believer in the need for more transparency and regulation that enables capitalism to "function in a more constrained, responsible way." But there's a "huge danger" regulation will be enacted very quickly in this current anti-Wall Street environment that will end up " choking the financial services industry and choking capital markets."

The Markets today (27 January)

The Markets today (27 January)
Yesterday (26th) was a good day for the markets although Wallstreet disappointed a bit.
European Markets performed well, especially the Dutch Market (Amsterdam AEX), on results from ING and Philips. The AEX closed higher with a gain of almost 6%, despite ING is asking again the Dutch government for a 25 billion Euro emergency loan.
The financial sector has been heavy battered last year and investors grab any bit of relatively 'good' news about the sector to start buying.

The Dutch Finance Minister Wouter Bos is going to face tough questions from the opposition in Parliament about his generous helping hand for the ING bank.
News from the U.S. suggests that of 9 out of 10 bailed out banks the CEO's are still in place, although more than 100.000 employees are laid off. (The trouble with the bailout is that nobody in government ever stopped to figure out who caused the avalanche and who simply got buried, said University of Maryland business professor Peter Morici, http://angrybear.blogspot.com/ )

In general the Dutch Government is not yet coming up with an intelligent stimulus plan, a state of 'collective denial' seems to exist.
Some people are waiting for the first Postbus 51 (government propaganda) TV spots, with texts like "Recession? don't worry, there are plenty of jobs in health care!" or "Don't use the word recession, it's a negative." or "Be a good patriot, never use the word recession, it does not happen in Holland!"
The massive layoffs planned by ING, Philips and Corus did not impress the market.
This morning the newspaper 'De Telegraaf' opened with news about the layoffs, the rising unemployment and the deteriorating real estate market.

This morning rises in European markets are very modest and it looks like the bear market rally cannot gain momentum. De German Ifo was up but not enough to indicate a turnaround in the economy.
The Far East markets were a bit subdued with the exception of Tokyo with a healthy gain of almost 5 percent. Australia and India (Sensex) closed up as well. According to the news Tokyo rose on optimistic news from Barclays.
The outlook for U.S. markets is undecided, futures point to a higher opening.

News from Yahoo Finance about lower dividend forecasts across the board.

Dividends being cut at fastest pace in 50 years


Dividends being cut at fastest pace in 50 years; Pfizer slashes its dividend in half
NEW YORK (AP) -- Dividends are being cut at the fastest pace in at least 50 years, and many of the reductions are coming from U.S. companies investors have been relying on to provide income during the recession.
Already this year, seven companies in the Standard & Poor's 500 index have decreased their dividends, removing some $12 billion from shareholders' pockets in the coming months. On Monday, Pfizer became the latest blue-chip company to do so.
These cuts serve up another hit to shareholders who have already been battered by the steep declines in the stock market. That is especially true of retirees, who tend to be attracted to so-called "widows and orphans" stocks that provide them with a steady cash flow.
If the trend continues, this will be the worst year for dividend cuts since 1958, when annual payments fell by 8.4 percent, according to new research from S&P.

The Markets Friday January 23

The Markets Friday January 23
The Far East Markets were weak, Tokyo (Nikkei) drops 3.81 percent.
European Markets were all down (Amsterdam 14,30 GMT, on the AEX only KPN was up 1.44 percent, the index was down 2.7 percent), FTSE 100, DAX, CAC 40 off between 2 and 3.10 percent.
The futures outlook for Wallstreet indicates an opening with heavy losses.

Google's Fourth-Quarter Earnings Beat Expectations

Xerox 4Q profit plunges, misses Wall Street view
GE 4Q profit falls 46 pct, adjusted net meets view
Harley to cut 1,100 jobs as 4Q profit falls
Samsung Electronics reports first quarterly loss

The Madoff Fraud, and the uncertainty

The story about Bernie Madoff's Ponzi Scheme is becoming pretty important and is getting a global impact with unknown effects.
In short, the New York financier and Ex-Nasdaq chairman Bernard L. Madoff was arrested last Thursday (Dec 11th) by the FBI on alleged securities fraud and running an illegal Ponzi Scheme. The total amount of damage could go up to 40 billion U.S. Dollar.
It is already rippling through the Global Financial World from the U.S.A to Europe (Switzerland) to Israël. Madoff was arrested after his own sons gave evidence to the FBI. Not only the wealthy and powerful are hit by this scandal.
Bernie Madoff was heavily involved with investments in the more than 1 Trillio Dollar Hedge Fund Industry.
Generally speaking: this could not have happened at a worser time for the global stock markets, and it makes people shiver at what more bad news is to emerge.
The last full trading week of the year could be one of high volatility.
On this blog we have already collected news and information about the Madoff case.
See these links.

The effect of the 'Madoff Mess' on the Markets


The Ponzi Scheme