US & Canada Archives - Page 135 of 169

May 10, 2012

Consumer Credit – Worse Than You Think | The Big Picture

Take out government-owned student loans and there has been virtually no rebound in consumer credit since the Great Recession ended. Restated, the consumer has not been borrowing since the Great Recession has ended. Rather, students took advantage of below-market rates on loans provided by the government starting in 2009…….“Most of the improvement in credit is a function of the explosion student loan debt,” said Neil Dutta, an economist at Bank of America Corp. in New York. “The reason student loan debt is exploding? Because the youth population is having difficulty finding work. Hardly a good reason for credit extension.”

via Consumer Credit – Worse Than You Think | The Big Picture.

May 9, 2012

Forex: Australia, Canada and South Africa

Weakening commodity prices are dragging the Australian Dollar lower against the greenback. Breach of support at $1.02 indicates another test of primary support at $0.96. Reversal of 63-day Twiggs Momentum below zero already warns of a primary down-trend. Failure of primary support at $0.96 would confirm, offering a long-term target of $0.84*.

Australian Dollar/US Dollar

* Target calculation: 0.96 – ( 1.08 – 0.96 ) = 0.84

Canada’s Loonie is strengthening against the Australian Dollar, having penetrated its long-term descending trendline and with 63-day Twiggs Momentum recovering above zero. Breakout above parity would signal the start of a primary up-trend.
Canadian Dollar/Australian Dollar

The Loonie retreated against the greenback, testing support at $0.995 after a false break above $1.01. Failure of support would confirm a bull trap and test primary support at $0.95. Recovery above $1.01 remains as likely, however, and would signal a primary advance; respect of zero by 63-day Twiggs Momentum would strengthen the signal.

Canadian Dollar/US Dollar

* Target calculation: 1.01 + ( 1.01 – 0.96 ) = 1.06

The Aussie found support at R7.90 against the South African Rand. 63-Day Twiggs Momentum remains weak and reversal below zero would indicate a primary down-trend. Failure of support at R7.90 would warn of a correction to R7.50*. Recovery above R8.30, however, would signal a fresh primary advance.

Australian Dollar/South African Rand

* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50

May 9, 2012

Commodity prices and the S&P 500

The CRB Commodities Index is testing primary support at 295 and respect of the zero line (from below) by 63-day Twiggs Momentum warns of another primary decline. Target for a breakout would be 265*. Divergence between commodities and the S&P 500 suggests that stocks are over-priced, with the Fed doing its best to depress bond yields and pump up stock prices ahead of the November election.

CRB Commodities Index and S&P 500 Index

* Target calculation: 295 – ( 325 – 295 ) = 265

May 9, 2012

Fannie Mae Profit Signals a Stabilizing Housing Market – NYTimes.com

[Fannie Mae] reported quarterly net income of $2.7 billion, up from a $6.5 billion loss in the first quarter of 2011……..Across the country, there are signs that the housing market is stabilizing. Home prices have continued to fall, but at a much slower pace. More Americans are buying houses than they were a year ago. Housing starts have climbed more than 10 percent in the last year, as home builders pick up construction of new homes and apartment buildings.

via Fannie Mae Profit Signals a Stabilizing Housing Market – NYTimes.com.

May 8, 2012

Nasdaq 100 and S&P 500 threaten a correction

The Nasdaq 100 is testing medium-term support at 2630. Reversal of 21-day Twiggs Money Flow below zero warns of a correction; follow-through below Friday’s low of 2620 would confirm, offering an initial target of 2400.

Nasdaq 100 Index

The S&P 500 continues to test support at 1350/1370 on the weekly chart after penetrating its rising trendline. Declining 13-week Twiggs Money Flow indicates medium-term selling pressure. Failure of support would signal a correction with an initial target of 1300*, but the primary up-trend is not under immediate threat.

S&P 500 Index Weekly Chart

* Target calculation: 1350 – ( 1400 – 1350 ) = 1300

May 7, 2012

Fedex double top

Bellwether transport stock Fedex is consolidating in a narrow band above the neckline of a double top reversal at $88. Follow-through below $85 would confirm a primary down-trend, warning of a slow-down in the broader economy. Reversal of 63-day Twiggs Momentum below zero would strengthen the signal. Recovery above $90 is less likely, but would suggest continuation of the primary up-trend.

Fedex

May 7, 2012

Canada TSX 60 breaks support

Canada’s TSX 60 index broke medium-term support at 675, signaling continuation of the secondary correction. Reversal of 63-day Twiggs Momentum below zero warns that the primary down-trend will continue, but 13-week Twiggs Money Flow holding above zero continues to indicate healthy buying pressure. Primary support at 650 is expected to hold and be followed by a rally to test resistance at 725.

TSX 60 Index
TSX 60 Index Twiggs Money Flow

May 3, 2012

Forex: Australia, Canada and South Africa

The Australian dollar has tracked the CRB Commodities Index fairly closely since 2009. Weakening commodity prices warn that the Aussie is likely to follow.

CRB Commodities Index and Australian Dollar

Against the US dollar, the Aussie is headed for another test of support at $1.02. Reversal of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of support at $1.02 would confirm this, offering an initial target of $0.99.

Australian Dollar

* Target calculation: 1.02 – ( 1.05 – 1.02 ) = 0.99

Canada’s Loonie is in a primary up-trend against the Aussie dollar — as signaled by the 63-day Twiggs Momentum cross to above zero. Breakout above $0.982 completes a bullish ascending triangle formation with a target of parity.

Canadian Dollar

* Target calculation: 0.98 + ( 0.98 – 0.96 ) = 1.00

The Aussie is also weakening against the South African Rand. Cross of 63-day Twiggs Momentum below zero warns of a primary down-trend. Failure of support at R7.90 would confirm, offering an initial target of R7.50*.

South African Rand

* Target calculation: 8.00 – ( 8.50 – 8.00 ) = 7.50

May 2, 2012

Paul L. Kasriel: Don’t End the Fed, Mend the Fed

Although the return to a gold standard for our monetary system has much appeal, it is unlikely to occur. So, let’s not let the perfect be the enemy of the good. Perhaps there is second-best monetary policy approach to the gold standard that might achieve most of the desirable outcomes of a gold standard but might have a greater probability of actually being adopted……. My suggested approach is very similar to one advocated by Milton Friedman at least 60 years ago. The more things change, the more they stay the same, I guess. I am proposing that the Federal Reserve target and control growth in the sum of credit created by private monetary financial institutions (commercial banks, S&Ls and credit unions) and the credit created by the Fed itself. I believe that this approach to monetary policy would reduce the amplitude of business cycles, would prevent sustained rapid increases in the prices of goods/services and would prevent asset-price bubbles of the magnitude of the recent NASDAQ and housing experiences.

econtrarian_043012.pdf (application/pdf Object).

May 2, 2012

FRB| Governor Tarullo: Regulatory Reform since the Financial Crisis

It is sobering to recognize that, more than four years after the failure of Bear Stearns began the acute phase of the financial crisis, so much remains to be done–in implementing reforms that have already been developed, in modifying or supplementing these reforms as needed, and in fashioning a reform program to address shadow banking concerns. For some time my concern has been that the momentum generated during the crisis will wane or be redirected to other issues before reforms have been completed. As you can tell from my remarks today, this remains a very real concern.

via FRB: Speech–Tarullo, Regulatory Reform since the Financial Crisis–May 2, 2012.