The Mess That Greenspan Made - Part 8

Tuesday Morning Links

Markets, Sprinkled With Fairy Dust – Bloomberg
4 signs the stock market is overheating – CNN/Money
Fed has grown complacent on credit market risk – FT
Stocks post 6th straight quarterly gain – USA Today
Ceasefire over, Ukraine forces attack rebel positions – Reuters
No Good Iraq Options for Obama as Russia, Iran Jump In – Bloomberg
The awful reason tens of thousands of children are seeking refuge – Vox
“Holy $340 Billion In Quarter-End Window Dressing, Batman” – Zero Hedge
Security Detail for Fed Chairwoman Irks Neighbors – WSJ
The race to stop Las Vegas from running dry – Telegraph
What Will America Look Like in 2024? – The Atlantic
Here’s how much pricier July 4th will be… – CNBC
The business cycle, RIP? – Washington Post

European shares gain, Asia lackluster – AP
What stock market’s first half tells us about second half – MarketWatch
Can U.S.-Listed ETF Inflows Hit New Record in 2014? – Barron’s
What Kind of Investor Are You? – A Wealth of Common Sense
USDA Report Unleashes Massacre in the Grain markets – Trader Dan
‘Why I am backing cash and gold until stock markets fall’ – Telegraph
Gold holds near 3-month high, underpinned by soft dollar – Reuters
Gold Gain Obscures Fund Outflow as Investors Buy Equities – Bloomberg
SGE Withdrawals 36 MT in Week 25, YTD 920 MT – In Gold We Trust
Five-month China HK gold imports flat, but trending down – Mineweb
Copper price closes at 16-week high – Australian

The Great Recession’s long-term damage – voxeu
Americans Aren’t Buying Obama’s Improved Economy – Fiscal Times
Tyler Cowen’s Scary Narrative About War And Economic Growth – Forbes
China manufacturing growth picks up in June – Channel News Asia
India spends nearly half the tax it collects to pay off debt – Quartz
UK manufacturing activity growing at fastest rate ‘for a generation’ – Telegraph
‘HGTV effect’ pushes home renovation spending to record $63-billion – Financial Post
Three reasons why the US housing market won’t be back to normal anytime soon – Quartz
California Housing And The Bubble At Hand – Contra Corner
Fed’s Williams sees no rate hike until after mid-2015 – Reuters
Monetary policy: Dead economies blow no bubbles – Economist
The World’s Central Banker – Project Syndicate


Following a surprising two-week rally in the middle of the month, precious metals ended the last full week of June almost exactly where they began after the gold price rose to a nine week high and silver reached its highest level since mid-March. The silver surge has been particularly impressive and a new technical setup has developed for both metals after markets appear to have “digested” the big mid-month gains.

Gold BarsThe threat of higher inflation combined with dovish comments by Fed Chief Janet Yellen as detailed here a week ago were countered in recent days by more hawkish outlooks from other central bank officials and geopolitical concerns have faded, at least for the time being. A weakening dollar continues to be positive for precious metals and more disappointing reports on the U.S. economy did little to halt that trend.

In China and India, seasonal factors played a key role in physical market demand reaching its lowest level of the year. There is disagreement about whether the unraveling of gold financing deals in China has had a positive or negative impact on the gold price and the story of Germany’s quest to repatriate a portion of its gold reserves held at the New York Fed took a surprising turn, one that will only add to the many gold conspiracy theories.

It was a quiet week for gold and silver but, given the plethora of potential catalysts to push prices higher, this could be “the pause that refreshes”…

[To continue reading this article, please visit Seeking Alpha and to access precious
metals commentary that Tim only shares with subscribers, join Iacono Research.]

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Monday Morning Links

Caliphate declared, Iraqi troops battle for Tikrit – Reuters
Moscow-to-New York Rally Fueled by Ukraine Progress – Bloomberg
David Rosenberg: The Fed is ‘playing with fire’ – Financial Post
BIS Report: Central banks warned of ‘false sense of security’ – BBC
Central Bankers, Worried About Bubbles, Rebuke Markets – NY Times
Here are the countries showing early warning signs for banking crises – Quartz
UBS: The Secret Reason The Fed Is ‘Tolerating’ Bubbles – Testosterone Pit
Argentina at Brink of Default as $539 Million Payment Due – Bloomberg
As China Gets Fatter, a Market Also Expands – Caixin Online
Bitcoin Becomes Legal Money in California – IBT
The Myth of America’s Golden Age – Politico
The Delusion of Perpetual Motion – Hussman Funds
No Bubble? – Noland, Prudent Bear

Global stock markets mostly inch higher – AP
This hot market is just a lot of bull – NY Post
Stocks’ Biggest Gains Are an Inside Job – WSJ
10 biggest S&P 500 winners and losers for 2014 – MarketWatch
Hope you owned these 11 stocks this quarter – USA Today
The truth hurts: When an advisor tells a client they can’t retire – CNBC
BlackRock ETFs near $1 trillion as it loses market share to Vanguard – Reuters
Treasuries Rise in First Half to Almost Erase Loss of ’13 – Bloomberg
Gold poised for second quarterly gain, U.S. data in focus – Reuters
India cuts tax on gold, jewelers run out of precious metal – arabian money
Hedge funds add record 61% to bullish gold bets –

Weak spending raising doubts about economy – USA Today
Eurozone inflation stuck at low 0.5 percent – Associated Press
ECB to wait for June measures to bite as inflation stays low – Reuters
Japan logs biggest monthly gain since January – MarketWatch
China to maintain current account surplus in near term: SAFE – Reuters
China housing prices fall for second month – Channel News Asia
Dubai Caps Worst Month Since 2008 in Real Estate Tumble – Bloomberg
U.S. Housing Market Fake-Outs Stump Economists – NPR
Santa Cruz median home price $675,000, highest in six years – SC Sentinel
Flashback – Even The Father Of The Fed ‘Feared’ Fiat Money – Zero Hedge
The case against maxing out monetary policy – Economist
Why Timid Reforms of Central Banks Won’t Work – Mises


The latest issue of the Iacono Research Weekend Update has been posted to the website and is now available for subscribers here. There will be no changes to the model portfolio or the buy ratings this week, but the model portfolio performance at mid-year is reviewed along with last week’s covered call sales in the following discussion topics:

The executive summary is as follows:

Economic data in the U.S. that included new signs of life in the housing market but an even bigger contraction in the first quarter than previously reported caused stock investors to become somewhat cautious and U.S. equity indexes ended the week mixed. Technology shares rose as large cap stocks moved lower after warnings from Federal Reserve officials about interest rates rising sooner rather than later. Trouble is still brewing in Iraq and Ukraine, but it did not dominate the news as in recent weeks.

The natural resource sector had its first losing week in the last four as prices for energy products and agricultural goods fell while related shares moved lower. REITs fell and precious metals ended the week almost exactly where they began as mining stocks continue to be one of the year’s best performers. For the week, the model portfolio rose 0.02 percent and remained up 8.3 percent for the year.

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