In the short term, though, fund investors have lost a lot. The average domestic stock fund in Morningstar’s database fell 16.2 percent in the third quarter.
….International stock funds, down 18.3 percent, fared worse than domestic ones and were dragged down by a 23.7 percent decline in Europe portfolios.
via Mutual Funds Dragged Down by Global Economic Unease – NYTimes.com.
German Chancellor Angela Merkel and French President Nicolas Sarkozy said Sunday that they have reached broad agreement on a plan to shore up Europe’s battered banks and restore stability to the euro zone.Speaking to reporters in the Berlin chancellery ahead of a working dinner as aides and ministers from both governments looked on, Mrs. Merkel and Mr. Sarkozy provided few details of the plan, pledging to unveil a comprehensive solution to the nearly two-year-old euro zone debt crisis by the end of the month. The plan will include a sweeping recapitalization of European banks endangered by a possible sovereign default in Greece as well as changes to existing European treaties to accelerate integration of the 17 euro-zone countries.
via Merkel, Sarkozy Claim Broad Agreement to Shore Up Banks – WSJ.com.
The simpler it is, the clearer the message, the more successful you will be.
~ successful Brisbane Roar Football (Soccer) coach Ange Postecoglou on Sport Insiders
The same principles seem to apply to running a football team, a corporation or the national economy — which is why Herman Cain’s 9-9-9 plan shows a clear grasp of what is needed.
“It’s hard to be optimistic,” says NYU professor and Nobel laureate Michael Spence. “There’s huge disagreements. Important policy issues are being held hostage to other things.” – Yahoo Finance from September 23, 2011.
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Consumer credit in the U.S. unexpectedly dropped in August by the most in over a year. The $9.5 billion decrease followed an $11.9 billion increase the previous month, the Federal Reserve said today in Washington. Non-revolving credit, which includes student loans and financing for automobile purchases, slumped by the most in three years. Decreasing credit shows American households are either continuing to pay down debt or lack the confidence to boost spending on non-essential goods.
via U.S. Consumer Credit Fell $9.5 Billion in August, Biggest Drop in a Year – Bloomberg.
The Conscious Investor is a handy reference tool for both the private investor and valuation professional, offering a thorough examination of the merits of a wide range of fundamental valuation techniques and fresh insights into their application. John Price has a PhD in mathematics and taught Mathematics and Finance at universities around the world, yet I found his book refreshingly practical. Highlight of the book is the chapter on Forecasting, with its analysis of forecasting risk and application of Benjamin Graham’s margin of safety, popularized by Warren Buffet in recent years. I recommend this book to anyone interested in fundamental valuation.
The Conscious Investor is published by John Wiley & Sons, Inc.
SkyNews interview with BOE governor Mervyn King:
Mervyn King on global currency imbalances and quantitative easing. Compare his view on QE to the German view as voiced in Der Spiegel.
I say this rather flippantly as we are in the middle of a bear market, and I do not believe we are ready, but a reader asked what it would take to signal a bull market. My answer: three decent blue candles on the weekly chart followed by a correction of at least two red candles that respects the preceding low. The weekly chart of the S&P 500 index displays a blue candle with a long tail, signaling buying support. That would qualify as candle #1.
* Target calculation: 1100 – ( 1250 – 1100 ) = 950
There is no supporting divergence on 13-week Twiggs Money Flow to signal a change in the underlying selling pressure. Reversal to an up-trend is unlikely but would take a rally of at least 3 blue candles to break resistance at 1250 followed by a correction that finishes above 1100 — and re-crosses 1250. What is more likely is a failed attempt or false break at 1250 followed by penetration of support at 1100, signaling a decline to 1000/950*.
The Basel III rules aren’t even law yet in any country, yet bank chief executives are under pressure from investors to explain how they will deliver a commercial return on equity under the new rules by 2013/14. Banks have resisted raising equity in the market not just because they don’t want to dilute existing shareholders but because they fear it will depress returns. Instead, they have tried to convince investors they can reach their capital and return-on-equity targets organically, through retained earnings and deleveraging.
Nonfarm payrolls rose by 103,000 in September as the private sector added 137,000 jobs, the Labor Department said Friday in its survey of employers. Payrolls data for the previous two months were revised up by a total 99,000 to show 57,000 jobs were added in August and 127,000 jobs in July. However, the September payrolls data was boosted by a one-time event: 45,000 telecom workers returning to their jobs following a strike at Verizon Communications Inc. in August.
Highlighting the stubborn weakness of the labor market, the unemployment rate—which is obtained from a separate household survey—was stuck at 9.1% for the third month in a row.
