Here are a couple of charts I find interesting. First, let’s look at the QQQQ …
On a daily chart (not shown), the QQQQ seems overbought. On a weekly chart, we can see that it has followed up its double-bottom with a breakout.
And then there is a chart of gold as represented by the GLD …
Gold looks to continue under pressure. What it seems to me is that the recent trend in the market has been to move away from safety (gold) and toward risk (tech and other riskier investments).
In other news, do you know how safe your bank is? My wife and I have most of our cash in a credit union because they seem safer than banks. However, be aware that the Bank Implode-O-Meter has a page specifically for credit unions. You can read if your credit union is in trouble HERE.
Here’s an interesting bit from Professor Shiller: There have been four times since 1951 that Americans have worried that we’re spiraling into a Depression. In the article he also reveals how close we are to a real Depression …
Even though the current recession is already one of the worst since 1947, it is only about 1/3 of the way to a depression (commonly defined as a 10% decline in real GDP).
Stated another way, to reach a depression, the economy would have to decline at about the same annual rate as the last two quarters for the next four quarters.
Just to put this in perspective, during the Great Depression, real GDP declined 26.5% from the peak to the trough.
XX Sean’s note — you’ll remember from my note on Friday that, if U.S. imports hadn’t dropped so precipitously in the most recent quarter, we would have seen GDP swoon by over 12%.
Here is a story to go with the chart.
Is the Housing Bubble Reinflating?
That’s my question as I watch the latest video from Jim the Realtor …
Jim the Realtor has a good take ground zero in California. “There’s lots of appetite for buying new homes for $700,000 to $800,000,” Jim says in the video. I guess this is an example of the rebound in consumer confidence we saw last week.
But we also know, without a real rebound in the economy, this housing speculation (because that’s what it is) won’t end well. I have more on the economy in a bit. First …
More on the Swine Flu Hullabaloo …
The New York Times tells us that there are No Signs of Sustained Global Spread of Swine Flu. Whether it is deserved or not, the government has suceeded in scaring the bejeezus out of people. I am seeing a flood of bad advice, and as with anything else, a crisis brings out the charlatans. I swear one writer on Huffington Post advised that people beat the swine flu through colonic irrigation. You think I’m just being funny, don’t you? In fact, when I write those words, even I don’t believe it. Well, here you go.
The big concern for many of us (with kids) is that our kids will be infected by some toffee-nosed grubling at school. Here’s some advice from the Centers for Disease Control (CDC):
If your child experiences any of the following warning signs, seek emergency medical care:
* Fast breathing or trouble breathing
* Bluish or gray skin color
* Not drinking enough fluids
* Not waking up or not interacting
* Being so irritable that he or she does not want to be held
* Not urinating or no tears when crying
* Their symptoms improve but then return with fever and worse cough
High fever (103 degrees) is also a flashing warning. At that point seek medical help. Read more at the CDC’s H1N1 Flu - Swine flu - info page for parents.
How did we get in this mess, anyway? You can read about how Swine Flu’s Ancestor Was Born on U.S. Factory Farms
Moving on, I say “crisis,” you say “catastrophe …
Real Economy Continues to Sink Despite Economic Stimulus and Bear Market Rally
The Federal Reserve and Treasury are now staking the country’s future on the belief that they will be able to revive securitization and reflate the bubble economy through complex taxpayer-funded programs (TALF and PPIP) which no one completely understands. If they succeed, then the toxic assets on the banks balance sheets will regain their original value and GDP will grow in a low interest, easy credit environment. It all depends on whether the Treasury’s lavish inducements (94% government funding on non recourse loans) are enough to entice investors to purchase risky financial instruments for which there is currently no market.
The more probable scenario, is that the equities markets will periodically rally in response good news or the Fed’s liquidity injections, while deflationary pressures continue to push down asset prices, swell the unemployment lines, and further shatter consumer confidence. The real economy is sinking fast and, with it, any hope for a quick recovery. Policymakers are completely at a loss. The public knows that things are far worse than they are being told.
From financial crisis to global catastrophe
1) The crisis is the beginning of long slump (E. Yudkowsky term), which gradually lead mankind to a new Middle Ages. This point of view is supported by proponents of Peak Oil theory, who believe that recently was passed peak of production of liquid fuels, and since that time, the number of oil production begins to drop a few percent each year, according to bell curve, and that fossil fuel is a necessary resource for the existence of modern civilization, which will not be able to switch to alternative energy sources.
COOL STUFF I’M READING
The World’s First Solar Powered Waterproof Cell Phone
Details on Sharp’s phone are scant, with pricing yet to be released. The company hasn’t given a timeline on when the phone will be unveiled in the U.S., but Sharp’s cell phone will beat both Samsung and LG’s solar-powered models to market.
Researchers at MIT have genetically engineered viruses to build the positively and negatively charged ends of a lithium ion battery.
Fertilizers Are ‘Reducing Diversity’
Extra nutrients allow fast growing plants to dominate a habitat, blocking smaller species’ access to vital sunlight, researchers have found. As a result, many species are disappearing from affected areas.
Related Posts
- 3 Charts as Mister Market Aims Higher (04/30/09)
- Wages Fall as the Battle for Exports Heats Up – Sovereign Debt Default Risk Rises (03/08/10)
- Drowning Market Grabs for a Lifeline (11/21/08)
- $120 Oil Chart and Market News (05/05/08)
- Wild Days for the Dollar, Oil and Gold (10/01/08)
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