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What's bad for gold is good for stocks

posted to Calafia Beach Pundit on Fri 17th May 13

As the top chart shows, gold's brief recovery now looks more and more like a "dead cat bounce." Further weakness is likely in store, as the second chart suggests. As I mentioned last month, gold appears to be re-linking to commodities.This is a big deal, as
Weak housing starts? Permits are a better indicator

posted to Calafia Beach Pundit on Thu 16th May 13

April housing starts were sharply lower than expected (853K vs. 970K), but building permits were much stronger than expected (1017K vs. 941K). The past behavior of these two series suggests that in cases like this where starts are this low relative to permits,
Big things happening in Japan

posted to Calafia Beach Pundit on Tue 14th May 13

Japan is still the place where the biggest changes are happening on the margin. Stocks are still soaring as the yen falls, and now Japanese bond yields are soaring as well. Quantitative easing in Japan, which involves massive purchases of JGBs, has produced

The biggest change on the margin

posted to Calafia Beach Pundit on Thu 8th Mar 12

These two represent what is arguably the biggest thing that is changing in the U.S. economy these days. Not only is the price of natural gas declining significantly, but it is getting cheaper relative to crude oil by leaps and bounds. And it's all thanks to
Pity the Chinese

posted to Calafia Beach Pundit on Tue 19th Oct 10

The Chinese own about $1 trillion worth of Treasury securities, whose average yield is now probably in the range of 1-1.5%, and they are being forced to take a beating on those holdings. They are in a real bind, because they are being pressured to appreciate
Manufacturing index points to 2-3% GDP growth

posted to Calafia Beach Pundit on Mon 1st Apr 13

The March ISM survey of the manufacturing sector came in weaker than expected (51.3 vs. 54), but as the chart above suggests, the level of the index is nevertheless consistent with economic growth in the first quarter of 2-3%. That would be a welcome acceleration

Weighing the Week Ahead: Are You Ready for Some Fedspeak?

posted to A Dash of Insight on Sat 18th May 13

Ready or not, we should expect a week dominated by an even greater focus on Fed policy. There are four reasons: The economic data calendar is very light; Earnings season has ended; Many will be heading for the exits early, anticipating a holiday weekend; and
Weighing the Week Ahead: Interpreting Mixed Signals

posted to A Dash of Insight on Sun 21st Apr 13

The daily news from financial markets is often merely a footnote to events. Last week this was truer than ever. If you are a market professional it is your job to consider the effect of any event. The individual investor should have a different attitude. My
"Why is everyone so gloomy?"

posted to Newmark's Door on Tue 9th Apr 13

Here's Calafia Beach Pundit's answer:And then there is the strong likelihood that much of the increased federal spending in recent years has been a waste of our economy's scarce resources. We've taken over a trillion dollars a year for four years and essentially