Monday, August 23, 2010

Light Postings

Sorry for the slow pace of postings lately. The markets have been a little bit more interesting as of late so they are occupying a larger percentage of my free time.

A couple of technical quotes as of today:

1) The creator of the "Hindenburg Omen" says that it's flashing warning signs.

"The latest trigger has prompted the Omen’s creator, Jim Miekka, to exit the market. “I’m taking it seriously and I’m fully out of the market now,” Miekka, a blind mathematician, said in a telephone interview from his home in Surry, Maine. “I would’ve probably stayed in until the beginning of September,” depending on how the indicators varied. “That was my basic plan, until the Hindenburg came along.”The Omen has been behind every market crash since 1987, but significant stock-market declines have followed only 25% of the time. So there’s a high likelihood that the Omen could be nothing more than a false signal.But that isn’t stopping Miekka from taking any chances, especially as September, typically the market’s worst-performing month, sits only one week away.”

2) Another respected technician said today "The stock market is on a knife’s edge at the moment."

Like I've said many times before, I don't buy into the premise of technical analysis, but you have to be aware that many, many managers are deeply tied to technical analysis.

Another perspective on the pending expiring 2001-2003 Tax Cuts from Paul Krugman.

"According to the nonpartisan Tax Policy Center, making all of the Bush tax cuts permanent, as opposed to following the Obama proposal, would cost the federal government $680 billion in revenue over the next 10 years.

In fairness, there is some selective reporting there. The Republican plan will cost the government $3.7 trillion in lost tax revenue and the President's proposal would cost the government $3 trillion in lost tax revenue. The implication that the President's proposal is revenue neutral is incorrect and probably not an accident.

And where would this $680 billion go? Nearly all of it would go to the richest 1 percent of Americans, people with incomes of more than $500,000 a year. But that’s the least of it: the policy center’s estimates say that the majority of the tax cuts would go to the richest one-tenth of 1 percent. Take a group of 1,000 randomly selected Americans, and pick the one with the highest income; he’s going to get the majority of that group’s tax break. And the average tax break for those lucky few — the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year — would be $3 million over the course of the next decade."

This is a bit of an old data point but it's interesting to see that

"Travel on all roads and streets changed by +1.3% (3.4 billion vehicle miles) for June 2010 as compared with June 2009."

I think it will be interesting to see how this data trends in July and August as the economy seems to have hit an air pocket.

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