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GDP revised lower by 0.5%, as expected; consumers weak
GDP was in-line with expectations, falling 0.5% in Q3. Consumer spending fell 3.7%, in the latest view, worse than the original 3.1%.
Markets are getting a lift from the latest addition to the TARP and news that the Fed will buy half-a-billion in GSE debt.
EUR/USD is back above 1.2900. It coulda been worse, seems to be the attitude on GDP.
Fed and Treasury unfold the TARP
Yet another new program is being announced to try and free up asset-backed lending with the Fed buying student loans, credit-card receivables, etc. Why not?
Other influences on the market today are rebalancing flows related to changes in the MSCI equity index, andGDP from the US.
EUR/USD is firmer in the wake of the latest Fed/Treasury action as mortgage-related aspects to the program are sparking a stock rally. EUR/USD trades at 1.2860, up from 1.2810.
Midnight at the Oasis
I’ve finally figured out a title for the new Prince video…click video to play…
Another day, another 5%
Now that’s change I can believe in! The Dow closes up 4.5% and the S&P up 6%. EUR/USD trades just above 1.2900 and EUR/JPY heads into Asian trade above 125.00. I’m still skeptical, but I’m very willing to be wrong, given my bedraggled 401K…
Looking for a dark lining for your silver cloud? Try this: GDP
Oh sure, Citi has a spankin’ clean balance sheet and Obama has appointed all the wizz kids to end the economic catastrophe. Reason enough to buy stocks and sell the dollar as risk aversion recedes, right? After months of modest optimism, I’ve come to conclude it’s always darkest before it goes completely black….
Another group of snotty Ivy League wizz kids got us into this mess, why do we assume this group will get us out? We had two 10% ralies last month only to fall to 11 year lows on the S&P last Thursday.
Markets are thin and volatile, adding to the short-covering bid but there is more bad news to come in the days ahead. I’m not getting sucked in again! I repeat, I AM NOT GETTING SUCKED IN AGAIN!
Case in point: A 0.5% drop in Q3 GDP is on top for tomorrow and a much worse (-5.0?) Q4 GDP certainly lies ahead. Even the most upbeat (like me) don’t expect a turn around until the second half of 2009.
A wise old friend on more than one occasion said “it’s never too late to sell the pound”. I’m beginning to feel the same way about the euro. And the stock market.
(This rant will likely mark to the day the very bottom in the stock market and the end of the dollar rally…)
Buy the dips, sell the rips…It’s worked before
In both equities and risk-aversion plays like EUR/JPY, there has been tons of money made buying weakness and selling strength. We’ve had about 12 false dawns in the last two months and what we’re seeing today could be another. Big bank bailouts have paid diminishing returns in the post while the appointment of a number of well-known entities to Obama economic team is unlikely to pay immediate dividends (though they could well turn water into wine).
Close your eyes and sell a break above the 1.2965 level with a stop above 1.3125 in EUR/USD and/or 126.00 with a stop above 128.50. Buy them back toward 1.25 or 120, respectively.
I wonder if Tiger will file for jobless benefits?
Those heartless bastards at GM kicked poor, injured Tiger Woods to the curb just because they’re about to go bankrupt…
Hang in there, Tiger.
Germany cutting stimulus checks?
The Handelsblatt, Germany’s biggest business newspaper, says the government is exploring issuing EUR 500 “consumption vouchers”. A government spokesman calls the report “nonsense”, according to Reuters.
Earlier today the Ifo survey tumbled to a 15 year low, showing the German economy continues to slow rapidly. Whether stimulus comes in the form of vouchers, it will come.
EUR/USD is consolidating gains around 1.2880, less than 20 pips below session highs. Equities are quote firm, adding to the gains from late Friday.
This is an outrage!
My favorite headline of the day: “Pubs left out in the cold by British budget plans”. What kind of right-thinking nation drafts a budget without the interests of the nation’s barkeeps at heart?
This is perhaps the most alarming part of the story: Beer sales are at their lowest level since the Great Depression, according to the British Beer and Pubs Association.
Clearly a stimulus package is warranted. Two-fers, maybe?
Moving target
During the campaign, it was the moving target on tax cuts. From $250k to 150K, Obama’s tax cuts were moved at various points during the campaign. He just slipped in another. Over the weekend, his stimulus plan was designed to create 2.5 mln new jobs, a measurable. Now, in front of the cameras, he says it is designed to create “and save” 2.5 mln jobs, an interesting distinction since there is no way to measure jobs saved…
He calls for a big stimulus plan to jolt the economy back to health, though he declines to put a price tag on it. He is now kicking the can on the timing of the tax hikes for the upper bracket. The market is giving back its earlier gains, about 150 points off earlier highs. The Dow is now up 200 points.
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