Countries & Regions Archives - Page 225 of 383

March 26, 2013

The Dijsselbloem Principle | Felix Salmon

Felix Salmon makes this succinct observation:

If a gaffe is what happens when a politician accidentally tells the truth, what’s the word for when a politician deliberately tells the truth? Dutch finance minister Jeroen Dijsselbloem, the current head of the Eurogroup, held a formal, on-the-record joint interview with Reuters and the FT today, saying that the messy and chaotic Cyprus solution is a model for future bailouts.

Those comments are now being walked back, because it’s generally not a good idea for high-ranking policymakers to say the kind of things which could precipitate bank runs across much of the Eurozone. But that doesn’t mean Dijsselbloem’s initial comments weren’t true; indeed, it’s notable that no one’s denying them outright…..

March 25, 2013

RBNZ steps closer to macroprudential | MacroBusiness

Houses & Holes at Macrobusiness reports on macroprudential steps being considered by the RBNZ. Macroprudential regulation are measures aimed to mitigate the risk of the financial system as a whole, or systemic risk, as opposed to the risk to individual participants.

The [Reserve Bank of New Zealand] says it wants to increase the amount of capital the country’s big four banks must set aside to cover potential losses from high loan to valuation ratio (LVR) home loans. Such a move would, in theory at least, make such lending more expensive for the banks.

March 25, 2013

ASX 200: Resistance at 5000

The ASX 200 rallied above 5000 at Monday’s opening but gradually retreated to close at 4990. While failure to hold above the short-term support level is disappointing, an early break above 5000 on Tuesday would suggest a rally to 5150.
ASX 200 Index
The weekly chart shows the importance of medium-term support at 4950. Failure would signal a correction to test the rising trendline around 4700. Slight bearish divergence on 13-week Twiggs Money Flow warns of mild medium-term selling pressure. The index remains in a strong primary up-trend and only a breach of the rising trendline would threaten this.
ASX 200 Index

* Target calculation: 5000 + ( 5000 – 4500 ) = 5500

March 25, 2013

Asia tentative

Dow Jones Japan Index was tentative Monday, the inside day indicating hesitancy. Recovery above 70.50 would signal continuation of the primary advance, while penetration of the rising trendline would warn of a correction.

Dow Jones Japan Index

Dow Jones Hong Kong Index met resistance at its former support level. The Hang Seng Index is testing medium-term support at 22000. Failure appears likely and would test primary support — and the rising trendline — at 21000.

The Shanghai Composite Index found support at 2250 for the third week in a row. Rising 13-week Twiggs Money Flow indicates buying pressure. Respect of support would be a bullish sign: a shallow trough followed by breakout above 2450 would signal a primary up-trend. Failure of support, while less likely, would test primary support at 1950/2000.
Shanghai Composite Index

* Target calculation: 2450 + ( 2450 – 2250 ) = 2650

India rallied Monday, but failure of support at 18800 would test the primary level at 18000. Declining 13-week Twiggs Money Flow continues to warn of selling pressure. Failure of 18000 would indicate a primary trend reversal.

Sensex Index

March 25, 2013

Europe: Under pressure

European stocks are under pressure, with Dow Jones Europe Index again likely to test support at 270. Failure would warn of a reversal, while breakout above 290 would signal a fresh advance. 13-Week Twiggs Momentum trough above zero would indicate continuation of the primary up-trend.
DAX Index

The FTSE 100 is retracing to test the lower border of the recent flag on the weekly chart. Breach would warn of a correction to test 6000. Respect is less likely, but breakout above 6550 would indicate an advance to 6800*.
FTSE 100 Index

* Target calculation: 6400 + ( 6400 – 6000 ) = 6800

European markets may be under pressure, but they have not buckled. Expect further tests of support, but so far the primary up-trend is not threatened.

March 25, 2013

S&P 500 tests 2007 high

The S&P 500 continues to find support above 1540 on the daily chart. Breakout above 1565 would signal another advance. A higher trough on 21-day Twiggs Money Flow would indicate medium-term buying pressure. Breach of the rising trendline is unlikely at present but would warn of a correction. Target for the current advance is 1600*.

S&P 500 Index

* Target calculation: 1530 + ( 1530 – 1485 ) = 1575

VIX Volatility Index remains near its 2005 lows at 0.10. This does not offer much reassurance as volatility can rapidly spike. Breakout above the quarterly high at 0.20 would be a warning sign.
VIX Index
Bellwether transport stock Fedex dipped below $100 after an earnings disappointment. Reversal below the rising trendline at $85 would warn that the broader economy is slowing.
Fedex
The Nasdaq 100 continues to struggle with resistance at 2800. Declining relative strength against the S&P 500 illustrates how blue chips are being favored over tech stocks. Bearish divergences on both 13-week Twiggs Momentum and 13-week Twiggs Money Flow warn of another correction. Reversal below the latest rising trendline would strengthen the signal. Follow-through above 2900 is unlikely at present, but would signal an advance to 3300*. Only breach of primary support at 2500 would signal a reversal.
Nasdaq 100 Index

* Target calculation: 2900 + ( 2900 – 2500 ) = 3300

While there are structural flaws in the US economy, the market is gaining momentum and the current advance shows no signs of ending.

March 24, 2013

For America, Decline is a Choice | The Diplomat

William C. Martel concludes his series, highlighting the lack of a cohesive US grand strategy, with this summary:

A strategic weakness with American foreign policy is the deep and enduring political polarization in Washington that complicates, and often paralyzes, U.S. policymaking. While the United States once conducted its foreign policy on a bipartisan basis, we now see divisions on virtually all issues. Washington’s failure to move beyond this polarized environment puts at risk its ability to act with one voice on foreign policy. Essentially, it puts at risk the entire enterprise of grand strategy because a deeply divided nation cannot implement its resources and interests effectively.

By definition, American grand strategy demands that policymakers and politicians take the long view. While it is an enduring challenge for policymakers in Washington to look beyond the next election, the nation has no choice. It must build a grand strategy that addresses how the United States deals with the future that extends beyond the coming months or years. Abroad, the nation must work with other states and institutions to shape the secure international order that all states desperately need. The alternative is a world marked by uncertainty, fear, and strife.

March 24, 2013

Cyprus: The Operation Was a Success. Shame the Patient Died. | Some of it was true…

Pawelmorski (pseudonym for a london-based fund manager) gives this opinion of the EU ‘rescue’ of Cyprus :

How bad is the damage?

Bloody appalling…… Take a moment to realise the scale of what’s been done here. No human agency has achieved so much economic destruction in such a short time without the use of weapons. The combination of laying waste to the financial sector and tearing up the savings of thousands of residents means that Cyprus won’t return to current levels of output for a decade, a funeral pyre which bears comparison only with Greece. There are four shocks happening at once; the bog-standard austerity shock; the trauma of bank withdrawal controls; the wealth shock; and the structural shock of wiping out the financial sector. The bailout bill is certainly going to get a lot higher too, as a larger amount of debt is piled onto a smaller economy.

March 22, 2013

Exploding Australia’s nuclear delusion | Business Spectator

Geoff Russell writes:

France has been producing most of its electricity using nuclear power stations for an average carbon dioxide intensity of about 80 grams of CO2 per kilowatt hour (gm-CO2/kWh) for two decades. In that time, Australia’s electricity has just gotten dirtier, rising from 817 in 1990 to 841 gm-CO2/kWh in 2010.

….Switzerland and Sweden have been using a mix of hydro and nuclear to achieve even lower carbon dioxide intensity than France.

March 21, 2013

ALP has spread Europe’s disease | The Australian

Greg Sheridan writes:

Europe’s present distress is our future. Everyone knows that part of Europe’s problem is excessive welfare. As Germany’s Chancellor Angela Merkel has remarked, Europe has 7 per cent of the world’s population, 25 per cent of global gross domestic product and 50 per cent of the world’s welfare payments.