Daily Investment Interpretations

Monday, May 15, 2012

2012-5-15: (Tuesday Night): The markets sank again today on the news coming out of Europe: Dow nears 4-month low; Stocks slide on Greek woes. The NASDAQ Composite moved down 8.82 points (-0.30%) to end at 2,893.76. The Dow slithered farther south 63.35 points (-0.50%) to close at  12,632; the S&P 500 subtracted another 7.69 points (-0.57%) to settle at 1,330.66. Oil ended the day  at 93.32: Oil futures fall, close below $94 a barrel; gold logged off at 1543: Gold settles at 2012 low as dollar gains on Greece. The VIX climbed 0.10 to 21.97.
    "The chance of an 11th-hour deal for a Greek coalition looks increasingly remote, rattling financial markets across the euro zone."
    "All three U.S. stock indexes ended the day down roughly 1% Monday. Investors sold out of stocks on worries over the political and economic stability of the eurozone and the safety of the U.S. banking sector. More"  
       Permanent Link to Eurodämmerung  What this Paul-Krugman article says is that he and some associates foresee:
1. Greek euro exit, very possibly next month.
2. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany.
3a. Maybe, just possibly, de facto controls, with banks forbidden to transfer deposits out of country and limits on cash withdrawals.
3b. Alternatively, or maybe in tandem, huge draws on ECB credit to keep the banks from collapsing. 
4a. Germany has a choice. Accept huge indirect public claims on Italy and Spain, plus a drastic revision of strategy — basically, to give Spain in particular any hope you need both guarantees on its debt to hold borrowing costs down and a higher eurozone inflation target to make relative price adjustment possible; or:
4b. End of the euro."
This may possibly explain today's stock market malaise.
    Marketwatch says: 
    Mick Weinstein writes: Don't try to time this chaotic market.
    The fallacy of dollar-cost averaging.
    Thomas H. Kee Jr.: No money for the market
    Dimon may be ‘stupid’ but he’s right on banks  
    Gates’s $4 billion foray into family planning  
    Darrell Delamaide tells of a Stay of execution for Greece in the offing.  
    Euro-zone GDP  
    EU avoids recession as Germany grows  
    Greek depositors withdraw $898 mln  
    Irwin Kellner observes that there's Good news on the labor front.  
    Inflation's cooling won't move Fed  

    State of the Markets articles include:   
Tuesday’s Economic Data Mostly in Line, Manufacturing Surprises  "Tuesday's slew of economic data was mostly in line with consensus expectations, though May's Empire Manufacturing figure did surprise to the upside... ... Read More »."  
    JPMorgan Fallout Continues, But The Question is Buy or Sell-  "Anyone tuning into the financial news media over the past few days has been inundated with split commentary on whether or not JPM is a “screaming buy” or a “run from sell” after being severely punished by the market for its $2.3 billion “whale-like” trading loss. We really don’t mean to come up with a recommendation here or rehash all the news flow, but do want to take a brief look at some of the arguments being put forward, both pro and con. First, let’s review the bidding on the stock itself. JPM is generally acknowledged as the major money center “too big to fail” bank which came out of 2008-2009 in the strongest shape possible, led by the strong-willed and talented Mr. Jamie Dimon. ... Read More »"    
    Gross and Hatzius: Investors Should Prepare for QE3 
    Market futures are slightly positive tonight.