Archive for August, 2012

Low Volume Is Nothing to Worry About

Click to enlarge: – Low volume? Forgetaboutit!
Repeat after me: Low trading volume is nothing to worry about it. Of course, repeating this mantra doesn’t mean there’s nothing else to worry about. But, I can fairly confidently say: If the stock market does decline from here, it will have nothing to do with the recent low trading volume. That’s because volume tends to dry up every summer, like clockwork, and especially in August — when the greatest number of investors and traders take their vacations. So it is hardly a surprise, or particularly bearish, that it has done so this year as well. ( Read my July 10 column, “Should you sell a dull market short?” ) Yet memories are short on Wall Street. So, also like clockwork, traders in recent weeks have been taken by surprise by the low trading volume — and they think it’s a bearish omen.


Note that the 10-day average of composite NYSE volume is at its lowest non-holiday level since October 2007 and it is still falling.

Source: Bianco Research

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Category: Think Tank

Washable Keyboard

I may need to get one of these: Logitech Washable Keyboard K310  

Category: Technology, Weekend

The Investor Sentiment Wheel

I love these sorts of graphics:   Click to enlarge: Source: Trustable Gold     Hat tip: The Reformed Broker

Category: Digital Media, Investing, Psychology

Follow That Money! How Global Banks Manage Liquidity Globally

Follow That Money! How Global Banks Manage Liquidity Globally Nicola Cetorelli and Linda Goldberg August 29, 2012     Banks increasingly move money around the world. Over the last thirty years, gross international claims of banks from all countries have grown ten-fold, reaching a peak of about $25 trillion in 2007 (see chart below). Such…Read More

Category: Think Tank

Our Corrupted Elections: For Sale to Highest Bidder

Courtersy of, we see the specific dollars involved in electing a President. The process is  corrosive and corrupting.




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Category: Legal, Politics

James Grant on Markets, Fed Policy, Gold Standard

James Grant, publisher of Grant’s Interest Rate Observer, talks about Federal Reserve monetary policy and the financial markets. Grant, speaking with Tom Keene and Sara Eisen on Bloomberg Television’s “Surveillance,” also discusses the need to return to the gold standard.

Bloomberg August 29, 2012

Category: Video

10 Mid-Week PM Reads

My afternoon train reading: • An Investor’s Guide to Fees and Expenses (Bloomberg) • CNBC: kid gloves for bankers, boxing gloves for bank critics (Columbia Journalism Review) • The monetary Maginot of the Gold Standard (Telegraph) see also Even talk of a gold standard would boost the price (MarketWatch) • 401(k) savings advice for Gen-Xers…Read More

Category: Financial Press

Home Prices On The Rise

Click to enlarge:


Source: Bianco Research


Why Home Prices Are Rising: The ‘Distressed Share’ (Wall Street Journal)

Tuesday’s measure of June home prices from the S&P/Case-Shiller 20-city index is likely to turn positive when compared with one year ago for the first time in two years, according to a forecast by Zillow Inc. Prices have risen this summer for a simple reason: more buyers have chased fewer properties. But the drop in supply and the boost in demand isn’t the only reason that Case-Shiller is now turning positive. Another related factor is that the share of non-distressed home sales is rising and the share of distressed sales—foreclosures and short sales, mostly—is falling. (Case-Shiller reports prices using a three-month moving average with a two month lag. Several other home price indices have also shown bigger-than-usual price gains for the second quarter.)The decline in the distressed share is important for the housing market, and especially for home-price indexes like Case-Shiller. Because banks are faster to cut prices to unload inventory than are mom-and-pop sellers, home values can fall further as the share of distressed sales rises. This was the case throughout 2008, as home price declines were in virtual free fall amid a cycle of rising foreclosures.


Home Values Rise in U.S. for First Time Since 2010: Economy (

Home prices in 20 U.S. cities climbed in June for the first time since a tax credit boosted sales in 2010, indicating the industry at the heart of the worst recession in the post-World War II era is starting to rebound. The S&P/Case-Shiller index increased 0.5 percent from June 2011 after falling 0.7 percent in the year to May, a report from the group showed today in New York. The last 12-month increase took place in September 2010. Nationally, prices jumped last quarter by the most in more than six years. The lowest mortgage rates on record and a decline in sales of distressed properties may help the market contribute to the economic expansion that is now in its fourth year. A more sustained rebound may require easier lending conditions, which would also give consumers a lift after a report today showed household confidence sank to the lowest level of the year. “Finally, the housing market is forming a bottom,” Mohamed El-Erian, chief executive officer and co-chief investment officer of Pacific Investment Management Co., said on Bloomberg Television’s “In the Loop” with Betty Liu. “That should be welcome. It is not surprising because affordability is so attractive right now.” Stocks were little changed as investors weighed the economic reports ahead of Federal Reserve Chairman Ben S. Bernanke’s speech on the economy in three days. The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,409.3 at the 4 p.m. close in New York.


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Category: Data Analysis, Real Estate, Think Tank

QE3 Risk Trade vs Emerging Stocks

Click to enlarge:   “QE3 remains quite likely over the next few months . . . Emerging-market stocks remain the high-beta, risky end of the equity spectrum, which tend to outperform on good news.” -Geoffrey Dennis, Citigroup global emerging- markets equity strategist, wrote in an Aug. 24   Consider the performance of the MSCI Emerging…Read More

Category: Think Tank

Brown: Why I Quit Brokerage

Source: Ex-Stock Broker: I Realized That Most Of What I Did Was Bad For Clients–So I Quit

Category: Video