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Posts Tagged ‘Crude Oil’

2012/12/04: Cal-Perspective and US Age of Austerity finally here?

December 4, 2012 Leave a comment

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

The weekly Report & Event Calendar is available through the link in the right hand column. This week’s Summary Perspective is also now available. Yet there is also an interesting anomaly in the fundamental influences. And it is not just the strongish US economic data versus the trepidation over the potential plunge off the Fiscal Cliff… there is also the negative outlook into next year.

The misguided perception in some quarters that the US election would settle enough ‘uncertainty’ to encourage an economic revival on the back of clearer parameters has now been completely dispelled. As noted in our post early last week, nothing could have been further from the truth, as the public pronouncements by highly partisan US political class leave little hope that there is common ground for constructive compromise. And with Mr. Obama’s reelection, we suspect he feels within his rights to push his agenda at the same time Conservatives find it as distasteful and counterproductive as ever.

It’s good old Nanny State Taxulationism1 finally run amok, as the President and his cohorts distract the opposition with outrageous proposals to waylay them from unwinding what’s already the law of the land.

1Taxulationism © 2010 Alan Rohrbach & Jack Bouroudjian. All rights reserved unless explicitly waived

Def.: Combined impact of taxation, regulation and protectionism to an oppressive degree as official policy

And while framing this as a US Age of Austerity might seem a bit harsh, it is something we have warned of since back in 2010 (well, a ‘Frugality’ mania in the first instance.) To revisit those major themes from a previous post, regardless of whether the Fiscal Cliff is addressed, the degree to which 2013 is going to be a tough year has not escaped the watchful eye of the best of the observers…

 

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2012/10/05: Quick Post: Courtesy MARKET ALERT: Employment Report technical trend assessment

October 5, 2012 Leave a comment

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

Very short and sweet today, because all of the perspective is still much the same as expressed previous on the critical nature of an effective response to the ‘perverse’ Spanish bailout dynamic. ECB President Draghi did a great job of offsetting the potential political risks by pointing out how forcefully the European Central Bank can and will act once the European powers-that-be reach agreement.

He waxed eloquent on credit spreads, conditionality, and mostly deferred back to the political class to strike the agreements that would allow the ECB to intervene at all. A masterful job of “doing something” without really doing anything more than reconfirming previous positions. And equity markets seemed to appreciate that quite a bit, as it leaves the door open to ECB activating Outright Monetary Transactions (OMT) on all manner of far-flung justifications anytime it can specify the Monetary Policy Transmission channel is disrupted. Possibly even prior to a final agreement by the politicians.

 

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2012/10/01: Quick Post: Weekly Calendar available and QE influence still a factor

October 1, 2012 Leave a comment

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

The weekly Report & Event Calendar is available through the link in the right hand column. The Technical Projections and Select Comments from late last week are also available and still relevant. This week’s Summary Perspective on Key Influences will be posted later this evening, and we hope you find that useful as well.

As is typical of the first week of the month, it is going to be a heavy data week all week, and that began today with Global Manufacturing PMI’s. Continued disappointment with Asia (including Australia) and Europe was offset to a fairly interesting degree by the better-than-expected US ISM Manufacturing. However here as well, there was some bad news…

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2012/09/28: QE-Infinity ‘Pie in the Face’ metaphor

September 28, 2012 Leave a comment

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

The massive central bank QE-Infinity influence already seems to be waning just two weeks after ringleader Buzz Lightyear “To Infinity and Beyond” Bernanke inspired the latest asset price surge. While others either preceded (ECB) or quickly followed the Federal Reserve’s leadership in this area, there is little doubt that initiating the steps the FOMC took two weeks ago was easily the most extensive and extended (i.e. “…highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens…”) central bank commitment to massive liquidity expansion. That said, there is still the question of whether this will do much good with a broken ‘monetary policy transmission mechanism’ (i.e. the real root of economic weakness being in misguided fiscal and regulatory regimes.)

And beyond the sheer consideration that it may fail to influence the economy as expected, there are significant risks of not just that failure but of more general central bank authority dilution. That has been reviewed in this blog and our full research both previous and over the past two weeks. It includes the concerns of some very well respected regional Federal Reserve bank presidents and other economic observers, complaints from other countries this is nothing more than a protectionist, beggar-thy-neighbor ‘currency war’ strategy, and the degree to which (at least so far) the impact is as transitory as many of the skeptics had warned.

It seems that the anticipation of the Fed’s QE3 was much more influential than the actual fact. As we have noted recently, now that the central banks are ‘all in’ on this major liquidity expansion effort, the real risk is it may impugn their ability to effectively intervene in a future crisis. And that is where we draw the analogy with the old Pie in the Face comedy routine, which we will discuss below.

But first, review of another key factor is relevant: the degree to which the Fed becoming ‘the market’ in long-dated US bonds and agency debt is pernicious. Among the most consistent critics of the implementation of this policy has been Newedge Senior Director Larry McDonald. As he noted two weeks ago today (i.e. the day after the Fed QE3 announcement), “There’s a new hedge fund… and it’s the Fed.”

For quite a bit more on that and McDonald’s views on Spain, and that dysfunction in the mortgage securitization market and much else, click into the video clip of his appearance on the Fox business News ‘After the Bell’ show that Friday.  It seems that events since then have borne out his assessment.

And if the Fed is indeed nothing more than a new hedge fund in town…

 

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2012/09/25: Quick Post: Weekly Perspective available… end of month data and Europe focus

September 25, 2012 Leave a comment

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

Very short and sweet today, because all of the perspective is still much the same as our expectations last week that QE3 can give equities boost market boost, but does it help the global economy? Even though the equities spent all of last week in a more reactive mode on the downside, they are likely still good as long as they hold some key near-term lower supports.

The quarterly financial futures expiration rollovers are upon us again as well. The early month expiration of the German Bund future was followed last Wednesday by the US T-note and T-bond, as well as Thursday’s S&P 500 future expiration. All of which has an impact due to the discounts to the September contracts.

That said, this is another late week influence week…

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2012/09/13: Fed Head Extends Anti-Dread Meds

September 13, 2012 2 comments

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

You have to admire the Fed for nothing quite so much as the sheer audacity of putting forth another major round of Quantitative Easing (QE3… or is it even more than that? See below.) Before our critique, let’s allow some Sympathy for the Devil (or whatever it is the fiscal and monetary conservatives consider Mr. Bernanke.) The Fed is in a really bad spot of having that dual mandate, which requires them to make some significant efforts in the realm of full employment.

It was painfully obvious that concerns over the weak US jobs picture was a primary driver for the extreme quantitative easing communication in today’s FOMC statement, which was fully confirmed at the Federal Reserve Chairman’s press conference. With Europe barely feeling its way along toward its own Sovereign Debt Crisis cure, and the rest of the world for the most part in a weaker state than the US, Bernanke & Company felt compelled to eliminate the “tail risk” of any further weakening of the US economy.

Will it help? There are some serious doubts based on a whole range of factors. But at least the logic is now perfectly clear, as Mr. Bernanke was extremely specific about the rather loose transmission mechanism he hopes will carry the day. It can be generally described as the ‘Portfolio Cure Channel’: asset prices moving higher includes the stock market, and that makes people feel better, and maybe they will go out and buy something. We will obviously need to seriously monitor whether those sorts of current Fed tactics actually amount to anything in the real economy.

Just as with our previous posts on QE is the Opiate of the Perma-Bulls, we remain more than a bit skeptical.  But the one thing we know for sure is the Good Doctor has certainly administered a massive dose of meds to help the patient get past the pain of the inept, ineffective regulatory policy in Washington DC. Yet there is much in the current market response, longer-term economic data and even the more conservative quarters at the Fed that leads us to doubt this will end well…

 

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2012/09/13: Quick Post: Pre-FOMC/Bernanke Fresh Tech Now Available

September 13, 2012 Leave a comment

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

Less than an hour until the FOMC statement, and our next set of Technical Projections and Select Comments are already available via the link in the right hand column. We delayed updating these levels until today in order to adjust them as close as possible to the critical influence emanating from the FOMC statement, revised economic and interest-rate projections, and Chairman Bernanke’s press conference.

As we all knew from the top of this week that the Chairman’s discussion would likely be the most prominent influence, it is not really much of a surprise. And yet, the degree to which individual markets and all asset classes are now all indeed poised for bigger decisions into key technical levels is impressive nonetheless.

And all trend tendencies remain very consistent with views expressed previous. Anyone who has not already reviewed it is encouraged to read yesterday’s TrendView MARKET ALERT on the various critical psychologies (including some very interesting inconsistencies) and technical levels. The bottom line is that recent price swings have brought many asset classes to critical trend decision levels.

And even though the “To QE or not to QE…” deliberation leaves quite a few folks with a strong feeling “that is the question”…

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