August 21, 2013

Key Market Trends Aug. 21, 2013



We've known about North Korea's practice of selling state-manufactured, high quality meth in foreign countries, typically China, for at least two years, but now it seems the drug is sweeping the country.

A new report in North Korea Review, highlighted today by the Wall Street Journal, is titled "A New Face of North Korean Drug Use: Upsurge in Methamphetamine Abuse Across the Northern Areas of North Korea," and alleges that meth has gone from the state's factories to smaller, independent "underground laboratories and 'home kitchens.'"


It appears the market may need to resurrect the implode-o-meter as surging mortgage rates and plunging mortgage applications are (unsurprisingly) taking their toll on the mis-allocated surge in mortgage lenders that 'market' signals encouraged. The latest, as Boston.com reports, is 1-800-East-West Mortgage which has largely suspended operations and laid off its workforce. "As rates rose, a number of people just went to the sidelines," the CEO said. The market, he added, "went into a drought." And yet, homebuilders (again unsurprisingly) remain as 'hopeful' as they have been since 2005 that all will be well.


Three Chinese naval vessels set sail for the United States, Australia and New Zealand on Tuesday to take part in a series of military drills involving more than a dozen countries.

The Chinese fleet — comprising the Qingdao guided-missile destroyer, the Linyi missile frigate and the Hongzehu, a large supply ship — departed from Qingdao, Shandong province, for waters near Hawaii, where it will participate in a search-and-rescue drill with the US navy.


No 10 was "kept abreast" of the decision to detain David Miranda, the partner of Guardian journalist Glenn Greenwald, a spokesman has said.

Mr Miranda was held at Heathrow for nine hours on Sunday, while in transit from Germany to Brazil.

He has launched a legal challenge over the police's use of anti-terror laws to detain him and seize his property.


BEIJING — As the closely watched trial of disgraced Communist Party leader Bo Xilai approaches, family members and characters who have stood at the periphery have begun to emerge.

Bo’s son in the United States broke his long silence on his parents’ cases Monday, criticizing the government’s treatment of his father and mother. The family of the British businessman whom Bo’s wife was convicted of murdering is negotiating for financial compensation for his death. And a top forensic scientist who last year cast doubt on evidence cited by authorities in that case resigned in protest against China’s justice system, saying evidence in many cases is routinely disregarded or manipulated.


A “very senior government official” acting on behalf of Britain’s prime minister demanded the return or destruction of files leaked by NSA whistleblower Edward Snowden, the Guardian’s editor Alan Rusbridger told the BBC.

The effort to seize or destroy the Snowden-related documents held at the Guardian’s London office was handled by senior Whitehall officials, who answered directly to Number 10 Downing Street, Rusbridger said during an interview with BBC News on Tuesday.


Israeli and Palestinian negotiators held their second round of talks Tuesday in secret. Justice Minister Tzipi Livni who leads to Israel team said that it is necessary to keep the talks far from the media in order to build mutual trust. She predicted there would be "dramatic decisions in the end," and lamented the hard-line parties in the government coalition who objected to a two-state solution were making her task more difficult.


The cause of death remains unknown for Moritz Erhardt, the 21-year-old Bank of America intern who was found dead last week in the shower of his East London dormitory.

Unconfirmed message board rumors have made their way through the media saying that that Erhardt fell into an epileptic fit after three consecutive all-nighters as part of his internship (sleep deprivation and stress can trigger an episode).


Barnes & Noble Inc's founder pulled the plug on his plan to buy the company's bookstores as the chain posted a deeper quarterly loss amid plunging sales of its Nook device and e-books and declining business at its stores.

Shares of the largest US bookstore chain fell 14% to $14.35 in premarket trading on Tuesday, even as the quarterly results came in slightly ahead of Wall Street expectations.


In one revealing sentence, Turkish prime minister Tayyip Erdogan undid the hard work performed by US and Israeli to gloss over his radical anti-Semitic views and the bankruptcy of his Middle East policies, in the hope of co-opting Ankara to a moderate regional lineup. This time, Erdogan went so far as to accuse Israel of orchestrating Egypt’s July 3 military coup in an address Monday, Aug. 20 to the provincial chairs of his ruling Justice and Development Party.


MUMBAI/SINGAPORE, Aug 19 (Reuters) - Indian traders said they will start importing gold again over the next week or so after the central bank clarified a new rule that brought the flow of the precious metal into the world's top gold consumer to a standstill at the end of July.

A resumption of imports would ease tight domestic supply and prices ahead of a festival and wedding season that kicks off next month. Indian imports would also support benchmark international gold prices, which hit a two-month high on Monday.


Most U.S. stocks rose, with the Standard & Poor’s 500 snapping a four-day losing streak, as retailers’ results surpassed estimates and investors awaited signals on stimulus measures from the Federal Reserve.

Best Buy Co. rallied 13 percent after posting quarterly sales that exceeded projections. TJX Cos. added 6.9 percent as profit beat forecasts. Urban Outfitters Inc. (URBN) jumped 8.2 percent as Wedbush Securities Inc. raised its rating on the stock. Zillow Inc. dropped 4.8 percent after the operator of the largest U.S. real-estate website announced a share sale.


GDP growth rate of about 7.5% seen as normal level, PBOC's Zhou says

No major falls will be allowed in China's economic growth rate, and no major changes will have to be made in its monetary policy either, the central bank governor said on Monday.


(CNSNews.com) - The Federal Reserve’s holdings of publicly traded U.S. Treasury securities—federal government debt—pushed above $2 trillion for the first time last week, hitting approximately $2,001,093,000,000 as of Aug. 14, according to the Fed’s latest weekly accounting.

The Fed’s accounting for the previous week showed that it had owned approximately $1,993,375,000,000 in U.S. Treasury securities as of Aug. 7.


Concern that a surge in U.S. bond yields will curb the expansion is overblown, says money manager James Paulsen. When coupled with gains in confidence, higher borrowing costs are a healthy sign for the world’s largest economy.

“Confidence is at the center of everything here,” said Paulsen, the chief investment strategist at Wells Capital Management in Minneapolis with $340 billion in assets under management. “If I had to pick one overriding thing, it’s confidence that’s been running through the financial markets and the economy this year.”


China and the United States aim to build more stable military ties by agreeing to expand exchanges and exercises, despite distrust over cybersecurity and recent tensions over territorial issues in waters near China, observers said.

During their meeting at the Pentagon, visiting Chinese Defense Minister Chang Wanquan and US Defense Secretary Chuck Hagel spelled out plans for visits to China by senior US officers, counter-piracy drills in the Gulf of Aden and a humanitarian rescue exercise near Hawaii.


(Reuters) - Indian traders said they will start importing gold again over the next week or so after the RBI clarified a new rule that brought the flow of the precious metal into the world's top gold consumer to a standstill at the end of July.
A resumption of imports would ease tight domestic supply and prices ahead of a festival and wedding season that kicks off next month. Indian imports would also support benchmark international gold prices, which hit a two-month high on Monday.


Technical analyst Charles Nenner didn’t mince words when asked about the United States facing another recession.

"It's going to be bad," Nenner told Newsmax TV in an exclusive interview.


One of the reasons for Apple’s recent run-up to $500 is the growing optimism surrounding a potential deal with China Mobile. Following a recent meeting between the CEOs of the two companies, fresh rumors have erupted about Apple being close to a deal with the carrier. What has raised hopes further is China Mobile CHL -0.74%’s chairman Xi Guohua commenting that “both sides sounded keen” during recent talks.


Germany's Angela Merkel visited the German concentration camp in Dachau - the first such visit by a sitting German Chancellor- where one may say, she could have picked her words a tad more wisely:

MERKEL SAYS NATIONS SHARING A CURRENCY WILL NEVER GO TO WAR; MERKEL SAYS 'WORTH IT' TO FIGHT FOR UNITED EUROPE


The Brent-WTI spread has been generally quiet between $2 and $4 for the last month or so (after its dramatic collapse back to $0 mid July). However, as soon as European markets closed today, it appears someone was decidedly negative on WTI Crude as it accelerated lower from over $107 to under $105 - all the while Brent crude pushed higher. This squeezed the Brent-WTI spread up over 100% on the day to $5.50, retracing more than half the plunge from the FOMC/Taper talk highs around $10 in early June.


Concern that a surge in U.S. bond yields will curb the expansion is overblown, says money manager James Paulsen. When coupled with gains in confidence, higher borrowing costs are a healthy sign for the world’s largest economy.

“Confidence is at the center of everything here,” said Paulsen, the chief investment strategist at Wells Capital Management in Minneapolis with $340 billion in assets under management. “If I had to pick one overriding thing, it’s confidence that’s been running through the financial markets and the economy this year.”

Courtesy - Emann Charts (EconMatters author archive here

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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