Category: Countries & Regions

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Challenging Putin’s Values | NYTimes.com

Thomas L. Friedman’s opinion at the NY Times:

…….Ukraine is not threatening Russia, but Ukraine’s revolution is threatening Putin. The main goal of the Ukraine uprising is to import a rules-based system from the E.U. that will break the kleptocracy that has dominated Kiev — the same kind of kleptocracy Putin wants to maintain in Moscow. Putin doesn’t care if Germans live by E.U. rules, but when fellow Slavs, like Ukrainians, want to — that is a threat to him at home.

Don’t let anyone tell you the sanctions are meaningless and the only way to influence Russia is by moving tanks. (Putin would love that. It would force every Russian to rally to him.) If anything, we should worry that over time our sanctions will work too well. And don’t let anyone tell you that we’re challenging Russia’s “space.” We’re not. The real issue here is that Ukrainians, as individuals and collectively, are challenging Putin’s “values.”

We couldn’t stop them if we wanted to. They’ve been empowered by globalization and the I.T. revolution. Get used to it, Comrade Putin.

Read more at Challenging Putin’s Values – NYTimes.com.

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No Alan, more income tax is not the answer | MacroBusiness

Leith van Onselen comments on Alan Kohler’s support for a proposed debt levy:

The first best solution is to shift Australia’s tax base away from productive enterprise (both individuals and companies) towards more efficient sources, such as land, resources and consumption. According to the Henry Tax Review, the marginal excess burden (i.e. the loss in consumer welfare relative to the net gain in government revenue) from the GST is just 8%, whereas it is near zero for taxes on land and resources. They also compare very favourably against the two biggest current sources of tax revenue – personal income tax (24% marginal excess burden) and company taxes (40% marginal excess burden) – offering the nation large productivity pay-offs from fundamental tax reform.

Read more at No Mr Kohler, more income tax is not the answer | | MacroBusiness.

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Medium-term selling pressure but long term bullish

Summary:

  • Medium-term selling pressure is strong, warning of a secondary correction
  • But the primary trend is up and VIX remains low
  • Long-term prospects remain bullish

The S&P 500 continues to encounter resistance at 1880 and bearish divergence on 13-week Twiggs Money warns of medium-term selling pressure. Breakout above 1900 would signal a primary advance, but a secondary correction is more likely. The primary trend, however, remains upward.

S&P 500

VIX below 15 continues to indicate low risk typical of a bull market.

S&P 500 VIX

The Nasdaq 100 displays stronger selling pressure on 13-week Twiggs Money Flow. Respect of resistance at 3600/3650 would be cause for concern, breach of support at 3400 completing a head and shoulders reversal with a target of 3100* at the primary trendline. Recovery above 3750 is unlikely at present, but would offer a target of 4000.

ASX 200

* Target calculation: 3400 + ( 3700 – 3400 ) = 3100

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Fractional reserve banking: ‘the chief loose screw’ | House of Debt

By Atif Mian and Amir Sufi quote from The Chicago Plan (1933-1939) of which Irving Fisher was a strong supporter:

“A chief loose screw in our present American money and banking system is the requirement of only fractional reserves behind demand deposits. Fractional reserves give our thousands of commercial banks power to increase or decrease the volume of our circulating medium [money] by increasing or decreasing bank loans and investments. The banks thus exercise what has always, and justly, been considered a prerogative of sovereign power. As each bank exercises this power independently without any centralized control, the resulting changes in the volume of the circulating medium are largely haphazard. This situation is a most important factor in booms and depressions.”

Read more at 100% Reserve Banking — The History | House of Debt.

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ASX 200 breakout

The ASX 200 broke resistance at 5500, signaling a primary advance to 5800*. A 13-week Twiggs Money Flow trough above zero indicates buying pressure. Reversal below 5450 is unlikely, but would warn of a correction.

ASX 200

* Target calculation: 5400 + ( 5400 – 5000 ) = 5800

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Shanghai weakens

The Shanghai Composite Index is retracing and likely to test primary support at 1980. Breach of support would signal a decline to 1950. 13-Week Twiggs Money Flow continues to oscillate around zero, signaling uncertainty.

Shanghai Composite

* Target calculation: 2000 – ( 2150 – 2000 ) = 1850

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Robust European Recovery

Dow Jones Euro Stoxx 50 respected support at 3100 and follow-through above 3180 would indicate an advance to 3350*. 13-Week Twiggs Money Flow oscillating above zero indicates a healthy up-trend. Reversal below 3100 is unlikely, but would warn of a correction to the primary trendline.

Dow Jones Euro Stoxx 50

* Target calculation: 3100 + ( 3100 – 2850 ) = 3350

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S&P 500 and Nasdaq selling pressure

The S&P 500 is testing resistance at 1880 and follow-through above 1900 would signal another primary advance. Bearish divergence on 13-week Twiggs Money, however, continues to warn of selling pressure and another secondary correction remains likely. But the primary trend is up.

S&P 500

VIX below 14 suggests low risk typical of a bull market.

S&P 500 VIX

The Nasdaq 100 is testing resistance at 3600/3650. Breakout would suggest another advance, while respect would be cause for concern. Reversal below 3400 would complete a head and shoulders reversal with a target of 3100* at the primary trendline. 13-Week Twiggs Money Flow below zero indicates strong selling pressure.

ASX 200

* Target calculation: 3400 + ( 3700 – 3400 ) = 3100

I would suggest that even a Nasdaq fall to 3100 would not disrupt the bull market. Penetration of the primary trendline at 3100, however, would be cause for concern.

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S&P 500 recovery

The S&P 500 recovered above 1850, suggesting an advance to 1950. Breakout above 1900 would confirm. Recovery of 21-day Twiggs Money Flow above its descending trendline indicates that selling pressure is easing. Reversal below 1840 is less likely, but would warn of a test of primary support at 1750.

S&P 500

* Target calculation: 1850 + ( 1850 – 1750 ) = 1950

CBOE Volatility Index (VIX) retreated to 14, indicating low risk typical of a bull market.

VIX Index

The Nasdaq 100 found strong support at 3400 on the weekly chart. Recovery above 3600 would suggest an advance. Breakout above 3700 would confirm, offering a target of 4000*. Recovery of 13-week Twiggs Money Flow above zero would be a bullish sign. Respect of resistance at 3600 would be bearish.

Nasdaq 100

* Target calculation: 3700 + ( 3700 – 3400 ) = 4000

The primary trend continues upward and none of our market filters indicate elevated risk.

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