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Posts Tagged ‘overregulated’

2012/03/30: Quick Post: Obamanomics encourages OSD (Occupy Supply-Demand) Movement

March 30, 2012 Leave a comment

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

The President’s energy press conference was mundane populist politics at its finest on some levels, yet a most interesting affair regarding that on one level. It was a real showcase of the philosophical difference between free market capitalism and state-controlled pricing. Let’s allow there is indeed something to be said for whether oil companies that keep reporting record profits every quarter actually still need tax credits to support future exploration and drilling.

The oil companies cannot have it both ways. If high energy prices are due to sustained increases in global demand (which is true) and not cartel control, then prices are definitely going to remain high. The tax credits which the oil companies receive are (at least conceptually) a form of insurance. They were there to encourage the companies to take on (admittedly expensive) exploring and drilling for crude oil in spite of the risk that the initial return on any discoveries might be flat or negative if the oil price drops for a sustained period of time. As everyone now allows that is an unlikely development, is it really necessary to continue that form of subsidy?

It is thoroughly possible the President is on a reasonable economic view in that regard, even if at least part of the incentive to express his view is pure partisan election year politics. And that’s where the somewhat shocking, if subtle, attack on free market capitalism comes along. We don’t think anyone as smart as Mr. Obama flunked (or would flunk) an economics course. It is more so it suits his purpose to ignore basic economic maxims… and support ignorance of (as in ‘conveniently forget it exists’) basic things like the Supply-Demand balance. Occupy Supply-Demand!!!

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2012/03/07: Courtesy access to ‘Brief Update’ and extended discussion in new format

March 7, 2012 Leave a comment

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

Short & Sweet on the specific market comments in this post, because yesterday’s TrendView Brief Update was also actually very brief for a change. That is because the equities key technical indications were very well crystalized for the sharp failure yesterday after such a long churn to the upside. And we are referring you back to yesterday’s analysis because the levels and psychology explored there for the March S&P 500 future remain the same for the critical late week period.

And one of the reasons we did not post to the blog during the highly active market swings yesterday was that we felt the more critical decision will be made in the late part of this week. Yet not necessarily solely upon the market response to the US Employment report. As we noted in the title of Monday’s post, “You better have ‘game’ prior to Friday…” (which was to say prior to Friday’s US Employment influence.)

And why is that? Because of all the factors we have covered previous on the more critical nature of the next phase of the attempt to address the European Sovereign Debt Crisis. That is something we have explored at length in previous analysis. Any of our regular readers should have been ready for the potential market dislocation under the influence of (finally) a more definitive deadline for at least the current attempt to defuse any immediate sharp failure of those European rescue efforts.

Which gets us to the other reason we were not available to add another post to our already extensive observations in that area yesterday morning. In addition to all of our highly active institutional analysis and sharing our background thoughts on the blog, we have resurrected a previous media role that allows for more extensive, open-ended discussion of those factors.

And I am very excited once again about

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2011/12/19: Quick Post: Observations and Weekly Reports & Events Calendar Now Available

December 19, 2011 Leave a comment

© 2011 ROHR International, Inc. All International rights reserved.

The full calendar is available through the link in the right hand column. This is such a robust week once again, it is impossible to include anything but a fraction of the major influences in an overview. Yet, key aspects will be those that relate to the continuing debt and fiscal reform problems in Europe and less so US influences that are as goofy in their way, yet not as influential at present.

In addition to the continued sharp influences from the attempts to address the European Sovereign Debt Crisis, there is also going to be quite an impact from important scheduled reports, communication from central banks and bankers as well as political events and news releases, yet with much lighter government debt auctions.

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2011/10/07: QuickPost: Erratum, Markets, Banks on Volcker Rule, Soros

October 7, 2011 Leave a comment

It is a very minor misstatement that does not affect the trend view at all, but Tuesday’s December T-note future Close noted in our early analysis was in fact 130-30.5, and not 130-17. Still very much consistent with the need for the market to generally push more convincingly above 130-20 to foment a more aggressive bullish condition.

And to cut to the chase in the wake of the much better than expected US Employment report this morning, the December S&P 500 future maintaining itself to this point above the 1,160 trend resistance noted earlier must be respected for now. However, on balance, the response to the number (and especially the upward revision to the August figure) has been distinctly underwhelming. While its influence may keep the market today above that resistance, and it may even still run up to around the 1,200 area, any subsequent slippage back below the 1,155-45 area will be that much more troubling in the context of today’s UP Breakout attempt. We shall see.

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2011/09/09: Obama Jobs Plan DOA: Higher Taxes Won’t Fly with Republican House

September 9, 2011 Leave a comment

First of all let’s allow that there are many other factors buffeting the equity markets today. Greece had a failed T-bill auction, which heightens the fears that either over the weekend or some other time very soon it will actually default. There was also the downbeat communication from the ECB at yesterday’s post-rate decision press conference that it had significantly lowered its 2011-2012 growth forecast.

That was much like the recent change in the Fed’s projections. Yet, it was different for the ECB, because it had maintained upbeat expectations and raised interest rates over the earlier part of this year. It’s downside revisions for what was considered one of the few remaining much strong economic centers is that much more telling for the global economy as well as Europe. And in yesterday’s post we discussed why Monsieur Trichet’s claim that at 1.50% the ECB’s base rate was still accommodative was misguided; with political implications for Chancellor Merkel as well as a negative influence for the European economy.

Of course, Mr. Bernanke’s reiteration yesterday of the Fed’s concerns about the near-term economic weakness didn’t help either. Although, we can’t imagine what else he would’ve said without being completely disingenuous and looking foolish. And he revisited a very relevant point that set the stage for Mr. Obama’s jobs program speech yesterday evening: the current economic weakness was not created by faulty monetary policy, it is a creature of the political class, and they’re the ones who have to address it. And it seems less likely than ever that the political process in the United States is going to offer any solutions for the economic mess anytime soon… and that’s the real problem with what President Obama proposed yesterday evening.

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2011/08/15: AWAY on Holiday Until Later This Week

August 15, 2011 1 comment

As we are away on holiday this week, you’ll need to rely upon the post from later on last Wednesday for our background on why the equity market rally is most likely not sustainable. That doesn’t mean it can’t carry on for a while; but in essence the equities are fighting the weaker underlying economic tendencies that are likely to come home to roost for various reasons.

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2011/08/10: How We Got Here-IV: Welcome to the Island, Survivor (…we hope)

August 10, 2011 5 comments

Yep, it seems to have all turned into a big game of Survivor… And the two-way stretch from the stress factors is obvious. Getting through this is going to be a test of who can stand the huge amount of cognitive dissonance imposed from the outside. That includes the increasingly tedious and blindingly benighted machinations of the political class and alleged financial luminaries, and the radical, rabid dog reactions it foments in the markets.

It increasingly seems this is going to be a test of endurance, as Ben Bernanke was probably right to indicate that there won’t be much need to raise rates between now and mid-2013. In other words, after his previous soothing views on the economy and markets, the Fed head has thrown in the towel on expecting anything truly positive to develop in the intermediate term. And that’s not just us playing off his perceptions, as we have been great skeptics of the ability to return to an upbeat economic environment in spite of any improvement in equities and risk assets. And neither is it plain old bearish talk. Beyond the fiscal and debt ceiling dilemmas, there is good reason to believe it can’t get better this side of the next US general election.

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