Shameless self-promotion — I aced this quiz.
http://blogs.wsj.com/numbersguy/probability-quiz-results-and-winners-321/?mod=WSJBlog
2008 April 22 Tuesday
2008 April 21 Monday
The Bear Market Rally is Over?
From the Financial Times, because all of a sudden I am seeing Draaisma’s name a lot, and I want to track his record. Especially since his message resonates with me.
Draaisma: “The Bear Market Rally is Over”
Is Morgan Stanley’s equity strategist just unimpressed with the Bank of England’s efforts at a rescue package?
The second half of the bear market rally turned out to be rather shortlived, and Teun Draaisma is calling the top:
MSCI Europe is now up 11% since its trough on March 17. The biggest certainty for the next 12 months, in our view, is that there will be a big earnings miss, as margins are at all-time high levels while top-line growth is slowing and costs are rising, and expectations are too high. However, as is common in bear markets, we expected a bear market rally of 10%+ on the back of a drastic policy reaction to the problems at hand….
… We think that the bear market rally is now over, mainly because most policy action has now been taken or is now fully expected, while our all-important market timing indicators have given us the warning that the rally is over.
Is The Worst of the Credit Crunch Behind Us?
In a word, no. From The Big Picture:
One of the more common refrains we keep hearing is that the worst of the credit crisis is behind us. Not only that, but banks have written down so much bad debt, that there is an upside surprise ahead of us!
I’m not so sure about that. As to the first part, credit spreads, mortgage rates, and the actions of the Bank of England strongly imply we are still in the thick of it. As to the latter, I simply doubt management has been that forthcoming.
Blogged with the Flock Browser
Tags: creditcrunch
Oilwatch Monthly – April 2008
Latest petroleum production figures are out, in The Oil Drum.
I had a figure in my head of 85 Mbbl/da — that seems to be all liquid fuels, not just crude oil. Good to know.
There seems to be a divergence in the total liquids number since late 2006, between the IEA (international) and the EIA (US govt). Why is this?
The March 2008 edition of Oilwatch Monthly can be downloaded at this weblink (PDF, 1.65 MB, 21 pp).
Figure 1 – World Liquids Fuel Production January 2002 – March 2008
Blogged with the Flock Browser
Tags: oil
2008 April 20 Sunday
Commodities and speculation
Commodities are expensive. Some see this as a temporary thing — that as the recession kicks in, prices will come back down due to lack of demand. Others see it as a response to longer-term response to supply and demand fundamentals. Paul Krugman is in this latter group.
We’ve had a huge runup in commodity prices — fuels, food, metals.
But why? Broadly, the debate is between those who see it as a
speculative phenomenon, driven by some combination of low interest
rates and irrational exuberance, and those who see it as a collision of
rapidly growing demand with constrained supply.
My problem with the speculative stories is that they all depend on
something that holds production — or at least potential production —
off the market. The key point is that the spot price
equalizes the demand and supply of a commodity; speculation can drive
up the futures price, but the spot price will only follow if the higher
futures prices somehow reduces the quantity available for final
consumers. The usual channel for this is an increase in inventories, as
investors hoard the stuff in expectation of a higher price down the
road. If this doesn’t happen — if the spot price doesn’t follow the
futures price — then futures will presumably come down, as it turns out
that buying futures produces losses.
something that holds production — or at least potential production —
off the market. The key point is that the spot price
equalizes the demand and supply of a commodity; speculation can drive
up the futures price, but the spot price will only follow if the higher
futures prices somehow reduces the quantity available for final
consumers. The usual channel for this is an increase in inventories, as
investors hoard the stuff in expectation of a higher price down the
road. If this doesn’t happen — if the spot price doesn’t follow the
futures price — then futures will presumably come down, as it turns out
that buying futures produces losses.
He backs it up with charts to show that metal and oil inventories are in line with recent history.
Blogged with the Flock Browser
Tags: inflation, commodities
Why?
Why a blog? I follow the news, sometimes I have thoughts about it, sometimes I just want to save something, and have all these somethings findable from one place. Sometimes I want to be educated about issues. Somehow a bookmarking service with tags just doesn’t seem like enough.
There are certain subjects that interest me:
Economic issues:
- The financial markets generally
- The series of credit crises we seem to be having since last August: how, and what next
- Environmental questions — peak oil? global warming?
- Capitalism and its discontents
Politics:
- I’m not so much interested in horse-race type coverage, but I want to know what the candidates’ positions are
- Who can and cannot be trusted when they talk
- Who’s policies are good, or evil
Web design, and programming generally
- tools
- best practices
- exemplars
Other stuff as it comes up.
Why now? Because Flock makes it easy.
Blogged with the Flock Browser
Tags: meta
2008 April 19 Saturday
Hello world!
Stick around. I got this set up, but the shopping list calls. Back later.
Amos Newcombe's Weblog 