Manipulation is the beating heart of Federal Reserve and Central State policies.The centrally planned economy has failed to respond as expected, and so the response is to put more cocaine-laced pellets in the feedbox and encourage the poor starved rat inside the cage to press the bar labeled "debt" to get another pellet of addiction and highly profitable enslavement.
This week we look at data from the Bank of International Settlements, by which (if someone does a lot of work) you can figure out how much US banks have written in credit default swaps to banks in Europe on Greek, Irish, and Portuguese debt. The details should not make you happy.
I've plotted the S&P regression data as an area chart type rather than a line to make the comparisons a bit easier to read. It also reinforces the difference between the line charts — which are simple ratios — and the regression series, which measures the distance from an exponential regression on a log chart.
Oil Price Forecasts Raised
Even with the decline in crude oil prices from recent highs we remain bullish on the energy sector. We think investors are grossly underestimating the impact the shut-in Libyan sweet crude oil production will have on energy markets this summer and fall.
My all-time favorite movie by far has to be Braveheart released in 1995. My Father and I both saw it several times in the movie theaters and the film went on to win the Academy Award for Best Picture and Best Director. The movie was filmed with many vivid scenes and the one that comes to mind is when the English cavalry were bearing down on William Wallace (Mel Gibson) and his fellow Scots.
A Look at the S&P 500
The S&P 500’s short-term declining trend has stalled this week. Indicators are oversold and the market is ripe for a rally. So far, the S&P 500 rallied 9 points off of the lows to break 6 consecutive days of declines in equities, but it has failed to breach above 1296. 1296 use to be a demand zone, but now serves to supply shares.
Last month German politicians in a stunning policy reversal revealed that they will shut down all 17 of their nuclear reactors over the next decade. Germany is the largest national economy in Europe and the fourth-largest in the world. Nuclear power accounts for a staggering 23% of the power used in the country – a larger percentage than is used in the U.S. and U.K. (see charts courtesy Financial Times and The Economist).