The Pattern
I keep mentioning that the ECB is interfering heavily in the bond markets of various countries in their attempts to keep things going. Apparently they've tossed in the towel on Greece, as evidenced by the Greek yields above.
However, when we note the ways in which the Spanish, Irish, and Italian debts have come down off their highs, can we make sense of why the ECB focused their efforts there? Sure, that's easy, and the BBC has put together an extraordinarily helpful interactive chart to make it all crystal clear.
The interactive chart can be found here, but I've taken a number of screen shots so that you can more easily follow the story.
To begin with, what the chart is showing by the width of the arrows is how much money is owed to banks of other countries -- the wider the arrow, the greater the amount.
Here's the country that was let go:
The budgeted contribution margin is calculated by subtracting the variable costs of production from revenues and is what remains to cover all overhead costs including land, machinery replacement, family labor, and management. Today’s contribution margin is at its most favorable level in recent times. The chart also shows that cash rental rates have risen steadily, but not as rapidly as contribution margins. Given the large increases in contribution margins, one would expect that rental rates will continue upward at least in the short-term. One of the most important considerations influencing land values is whether these higher contribution margins and cash rental rates will be maintained into the future.As you can see, it has never before been more profitable to be a farmer which possibly explains a major reason for rising farmland values.
Data on sales of previously owned U.S. homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought.
The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured.
"All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought," NAR spokesman Walter Malony told Reuters.These downward revisions will likely make next years numbers look great. In 2012 we will probably see a great deal of "beat expectations" numbers coming out of the NAR. Just in time for an election year!
If one correlates each of the individual stocks in the S&P 500 to the index itself over a 50 day period, the average correlation hit 86% in October and is still near 80% today.
No other period since the inception of the index has yielded a higher correlation, not during the Great Depression, rampant inflation of the 1970s, the stock market crash of 1987 or even during the financial crisis of 2008.
This suggests 80% of a stock’s movement can be explained by a stock market index rallying or declining. The other 20% of a stock’s movement can be explained by the unique fundamental characteristics of that company such as management, product, a strategic plan and/or financial health.
Similar record correlations can be found between the S&P 500 and currencies (the euro), commodities (crude oil), foreign markets (emerging market and European stocks) as well as interest rates (corporate and Treasury yields).
In the entire history of the S&P 500, there has never been a day in which all 500 stocks in the index go up or all 500 go down. There have been 11 days in which 490+ stocks all move in the same direction on a given day. Of those 11 instances, 6 have occurred since July 2011.
Add this all up and it appears as though macro themes, such as government intervention in the marketplace, will dictate returns. For the time being, stock picking is a dead art form and diversification is a largely unattainable goal
The reports released with Black Friday and the holiday weekend are from trade groups representing retailers. (They do not hide this.) Each year, they make wildly optimistic projections, which are repeated in the media like clockwork. By the time the actual data come in, the projections have been forgotten. By then, we learn that early reports were pure hokum, put out by trade groups to create a “positive shopping environment.”
So far this year, the NRF is running true to form. According to actual spending data from MasterCard Advisors SpendingPulse, retail sales for the four-day Thanksgiving holiday weekend rose 8.7 percent — about half of the NRF’s estimate. SpendingPulse tracks actual purchases made with cash, checks, credit cards and debit cards as the basis of their analysis.
Year
|
NRF Survey Forecast
|
Actual Holiday Sales
|
2005
|
22%
|
1%
|
2006
|
18.9%
|
5%
|
2007
|
4%
|
-0.4%
|
2008
|
2.2%
|
-6.0%
|
2009
|
-43%
|
3%
|
2010
|
9.2%
|
5.5%
|
2011
|
16.6%
|
??
|
