2012/05/22: Quick Post: Weekly Calendar and Perspective still available

© 2012 ROHR International, Inc. All International rights reserved.

The Weekly Report & Event Calendar is still available through the link in the right hand column. The focused comments below it are now also available as well in the calendar section as the now regular weekly Summary Perspective on Key Influences. We hope you find that useful as well. It also has the Concise Market View at the end.

For those of you who have not already seen it, there is a lot of emphasis again this week on Wednesday and especially into Thursday… with a much lighter reporting/influence day on Friday. However, as opposed to last week’s clear focus on the negativity generated by the potential Greek expulsion/departure from the Euro-zone, it’s a somewhat more balanced perspective as we head into the informal European summit tomorrow.

Can they really craft the sort of hybrid approach outlined at the G8 meeting that blends the further growth encouragement into the necessary fiscal rebalancing? It’s going to be quite a balancing act, and there are no small numbers of fiscal purists who might act as bomb throwers. While the Left-leaning governments on Europe’s periphery are all for it, the idea of greater funding for supranational organizations splashing out spending across the weaker portions of peripheral Europe is not necessarily a new idea.

In fact, that has already been articulated today…

 

2012/05/17: Fed more likely to step in. Does it matter?

© 2012 ROHR International, Inc. All International rights reserved.

It is one of those canards in the current equities market (and to a lesser degree economic) psychology that there is no more extensive QE (quantitative easing) at present by central banks outside of Japan. Nor is there any explicitly planned. Yet there could easily be more if conditions warranted.

This is a form of the central banks’ desire to both have their cake and eat it. Whatever one might call it (‘Bernanke Put’, etc.), the central banks have indicated that they are indeed ready to provide more liquidity if necessary due to deteriorating economic conditions or disorderly market activity.

Seems like a good way to underpin market psychology. Yet, will it really help all that much if the crunch returns? Frankly we’re skeptical. And the context of the FOMC minutes key passage yesterday highlights how the promise of easing or liquidity infusions in a crunch will not likely actually do much overall for the economy.

2012/05/14: Quick Post: Weekly Calendar and Perspective Available

© 2012 ROHR International, Inc. All International rights reserved.

The Weekly Report & Event Calendar is now available through the link in the right hand column. The focused comments below it are already available as well in the calendar section as the now regular weekly Summary Perspective on Key Influences. We hope you find that useful as well.

For those of you who have not already seen it, there is a lot of emphasis on Wednesday into Thursday this week. However, as opposed to last week’s clear focus on the data, it’s all about the facts on the ground out of Europe this week. After Wednesday’s FOMC minutes, the subsequent government bond auctions right into a European holiday on Thursday will surely be a bellwether for success or failure of any extended plans to stabilize the Euro-zone situation…

2012/02/27: OGB Alive & Well and Perspective along with Weekly Calendar

© 2012 ROHR International, Inc. All International rights reserved.

Our full calendar is available through the link in the right hand column. There is also a bit more extensive than usual fundamental factor review this week. That is due to the ostensible finalization of a Greek debt deal now being approved by the German Parliament not seeming to affect trends to any great degree. If this is such a major success, why were the equities only marginally higher from Friday and stalling into resistance in the strong sister US once again?

And the OGB (Occupy Greek Budget) movement in Germany is on the move again. According to an excellent Financial Times article on that today, “German tax collection experts have volunteered to go to Greece…” Oh, Goody!! The discussion of has played down all of the acrimony since an earlier article reported on initial responses to similar suggestions in late January from Davos; especially note the comments elicited by the latter. Here’s the bottom line: Rigid implementation of agreed Greek reforms that include strict enforcement of tax regulations are the good intentions which are paving the path to Hell.

The ‘hawks’ seem oblivious to the degree to which Greece has already been the learning lab, and the lesson is that pro-cyclical austerity will not result in the narrowly calculated fiscal improvement. Even allowing it may be a necessary evil, as we’ve noted previous you’d think the folks who suffered the occupation of the Ruhr after WWI would be a bit more sensitive about how they went about proposing tax collection ‘assistance’. We all know how well that episode worked out.

Why doesn’t Greece just declare war on Germany? They could throw the contest after the first shot, and put in for ‘reconstruction’ support rather than try to cure such a hopelessly over-burdened balance sheet. (Please reference “The Mouse That Roared.”)

And now (just now this afternoon in the US) we have Standard & Poors downgrading Greece to “Selective Default” and that seems to mean some of the actual debt has dropped to “D” …for ‘Default’ due to the insertion of ‘collective action clauses’ on some outstanding Greek bonds.

2012/01/27: It’s a wrap: Risk Fizzle, Euro-hope, WEF ‘Global Risks 2012′, Smartest Guy in the Room

© 2012 ROHR International, Inc. All International rights reserved.

Looks like Helicopter Ben morphing into Gusher Ben didn’t help much… except to exacerbate what we all knew was going to be a disjointed week from the time we walked in. And the markets certainly did not disappoint in that regard. Pops and flops (equities and to a lesser degree risk assets like commodities), solid extensions of up trends (those strange bedfellows govvies and Gold), and significant reversals (back to the ‘risk-on’ US dollar “carry trade” in foreign exchange) were all apparent. And substantially due to the FOMC opting-in to a consensus the Federal Funds rate should remain effectively at zero for much longer than the middle of next year projected at their last meeting.

That summary view is all the reasonable response we anticipated in yesterday’s post on Gusher Ben attempting to push psychology upward from underneath hoping that the enthusiasm will pop like an oil ‘gusher’. This is nothing less than a mind game version of quantitative easing (i.e. de facto Q3.) All of the specific asset class analysis and the intermarket implications that came home to roost by yesterday’s Close spilled over into today were noted in yesterday’s analysis.

That said, the resilient equities have found a new/old cause for hope: fresh upbeat assessment of the potential for a Greek debt deal. EU Finance Minister Olli Rehn said this morning at Davos, “A Private Sector Involvement deal is imminent; if not today then likely over the weekend.” We shall see. Certainly everyone hopes he is right.  Yet there are several grounds for skepticism which even go beyond whether a deal can be crafted. There is now some concern whether the Greeks will sign on to something as modest as “reform” (forget “austerity”), and other issues remain.

2012/01/25: Quick Post: Merkel’s Jerry Maguire Moment, Obama, Apple, and Hungary & the Fed

© 2012 ROHR International, Inc. All International rights reserved.

Well, it seems to have finally happened… Germany’s Jerry Maguire Moment. At long last this week it is finally agreeing to “show (me) the money” to the rest of Europe hungering for greater funding for its sovereign debt bailout funds. However, that comes with significant strings attached, along the lines demanded previous on major moves toward closer integration of the European Union…

…and that is along much more stringent Teutonic fiscal lines. Those are at the very least distasteful to much of Europe, and completely unacceptable to the UK. That much was clear from Mr. Cameron’s rejection of the push for such an agreement at the previous EU Summit. As such, if Frau Merkel made her assertion during her meeting last week with French president Sarkozy that everyone should relax on the sovereign debt dilemma because the entire EU treaty was going to be ready for next week’s follow-on EU Summit, it appears as specious as we suggested when they announced it.

In fact, it only reinforces our view that might’ve seemed a bit extreme when we noted it one week ago: the bombastic, bi-polar nature of the leadership in Europe right now. As noted then, the vacillations are almost as troubling as the lack of real progress. If the rest of Europe is not going to go along (and there are others who disagree as well) with the extreme strictures in the German proposals for closer integration, then the only inference that can be taken is that Germany is not going to agree to greater funding of the rescue operations.

So maybe it is not a huge surprise she has also at least partially thrown Greece under the bus this morning by noting the bailout may not be working. What is interesting about that is she allows that the combination of the requisite billions of euros along with austerity does not seem to be getting the job done. And that last bit is the most interesting part.

2012/01/24: (Yet) To Be, or Not To Be (Discounted)? That is the Question

© 2012 ROHR International, Inc. All International rights reserved.

The good ship Greek Debt Negotiation has seemed to suffer the same fate as the Costa Concordia (with due respect for the latter being a human as well as a financial tragedy.) Both ran close to the shoals of disaster. The Concordia in the form of an actual shoal, and the debt negotiations in the even murkier shallows of financial canard. The difference is that the Concordia should reasonably have had a chance to avoid its fate through either high-tech instrumentation warnings or more conservative navigation by its captain. The Greek debt negotiation was already effectively aground before it started, after very early technical indications the country was drowning in more debt than it could possibly service were widely ignored.

More on that intractable situation below. The real question is how the equity markets are gliding along so well near the top of their recent rally in the wake of the indication at the top of this week those negotiations were truly failing. Is it possible that a Greek debt default on (or into) its major March 20th €14.4 billion bond maturation is already discounted? Is it possible this is something the equity markets can simply ignore? Or is it more so that this is yet to be discounted at some point in the future? Drawing the full implications of all that is nothing less than disturbing and fascinating.

2012/01/23: Quick Post: Observations and Weekly Reports & Events Calendar Now Available

© 2012 ROHR International, Inc. All International rights reserved.

The full calendar is available through the link in the right hand column. Apologies for the delayed posting this week. We had some significant web connection failures earlier today. From last week onward we have been adding color-coding to the various reports and events to indicate the nature of the key influences. We will also be italicizing those reports and events which we add to the base table from other resources than the main table. That will assist with differentiating which bold font items are highlighted because of their importance, versus those that simply come from other sources.

This week typically sees a bit less economic data, even if some of it remains quite important. However, on many fronts this week in particular is likely to be one of the most convoluted, impactful weeks in the scope of recent trends in all asset classes. That is due to significant international influences on many fronts that overshadow things like the Tuesday’s preliminary European Purchasing Managers Indices and Euro-zone Industrial Production, Wednesday’s German IFO, and Thursday’s extensive US releases into a quieter day on Friday.

2012/01/17: Quick Post: Observations and Weekly Reports & Events Calendar Now Available

© 2012 ROHR International, Inc. All International rights reserved.

The full calendar is available through the link in the right hand column. From this week forward we will be adding color-coding to the various reports and events to indicate the nature of the key influences. We will also be italicizing those reports and events which we add to the base table from other resources. That will assist with differentiating which bold font items are highlighted because of their importance, versus those that simply come from other sources.

This is another important data release week, yet is less crowded and critical than some of the intense reporting last week even if the upbeat Chinese data has already been influential. Yet, continued sharp influences from any developments on the European Sovereign Debt Crisis will remain a major key even if the equities seem to be ignoring the recent sovereign debt downgrades for now (with more on that soon.) Thursday is a very key auction horizon once again this week as well.

2012/01/12: ECB Supports the Reflation Trade

© 2012 ROHR International, Inc. All International rights reserved.

It is no doubt just a bit presumptive to take the communication from one monthly ECB press conference and infer there has been a significant policy shift. There were certainly many interesting aspects to president Draghi’s Q&A session today. However there was one focal point he revisited on several occasions that seemed to point toward the ECB becoming more Fed-like in its approach to the European Sovereign Debt Crisis and economy than anything that might have been attempted by his predecessor. And that is showing up in the markets in the form of the risk-on ‘reflation trade’ seeming to return over the past few days. On several fronts this would seem to be another example of the markets exhibiting technical trend decisions where the reasons only become apparent once the further information driving the psychology is available.