Transcript August 2013 - Economic and Market Update

E-CON-nomic/Market Update – August 2013
Daryl Montgomery
August 8, 2013
Copyright 2013, All Rights Reserved
The contents of this presentation are not intended as a recommendation to buy or sell any security
and are for educational purposed only.
The Global Economic Situation
Surprise! Detroit Files for Bankruptcy
Gee, no one could have seen that coming.
GDP – The JK Rowling Approach
• U.S. revises GDP calculations and GDP magically
rises by $551 billion, per capita income up $1783.
• Revision indicates 2008/2009 Great Recession
really wasn’t so bad after all (uh-huh).
• GDP in 2013: Q1 1.1%, Q2 1.7%
• UK, France revise GDP calculations and as a
result recent double-dip recessions no longer
happened (they were just imagined).
• Changes to U.S. pension accounting also changed
and now the U.S. savings rate is much higher.
(Alleged) Changes in U.S. Savings Rate
Source: U.S. Economic Propaganda Ministry
The New GDP “Reality”
Source: U.S. Economic Propaganda Ministry
Employment
• Unemployment rate EU:
- overall 12%, 32% in Cyprus
- youth 24%, in Greece 59%, Spain 56%
• Unemployment in the US in July:
- 7.4% headline, 14% underemployment
- 162,000 jobs added
- job growth disproportionately low-wage,
temp and part-time.
- millions have exited U.S. labor force (not
counted as unemployed).
Official U.S. Unemployment Rate
Source: U.S. Economic Propaganda Ministry
Fed Policy
• Fed Balance Sheet now $3.571 trillion.
• Noticeable increase in last several months.
• Officially adding $40 billion a month with no end
date in QE3 program (QE1 started in 2008).
• Fed has lost $192 billion (mark-to-market) in capital
out of $62 billion because of rising treasury yields.
• Interest rates supposedly will be kept to zero into
2015 (started in 2008).
• Hints of “tapering” have already been made. If
unemployment falls below 7%, might start.
Monetary Base
MZM Money Supply
Fed Balance Sheet (Money Printing)
Fiscal State of U.S.
• National Debt: $16.9 trillion.
State & Local Debt: $3.0 trillion.
Unfunded Liabilities: $125 trillion.
• Debt to GDP ratio now 106%*
• Debt doesn’t include Federal Reserve or Fannie Mae,
Freddie Mac and FHA obligations.
• Debt Ceiling now $16.7 trillion (raised on May 18th).
Needs to be dealt with this fall.
• Federal Budget Deficit for 2012 was $1.1 trillion. 2013 is
now est. $0.759 trillion. 2014 est. $0.744 trillion
• 2012 Trade Deficit was $540 billion.
Stocks, Commodities,
Currencies, Bonds
Market Summary
• Aluminum Commodity market manipulation by
Goldman Sachs (in Detroit!).
• Fertilizer stocks experience crop failure.
• Stocks at highs: Small caps best, then Nasdaq –
classic inflation trading pattern.
• Volatility close to historical lows.
• Interest rates have had a strong 3-month rally.
• Oil close to post-crisis high.
• Gold and silver still weak.
• Dollar very choppy. Yen trying to rally.
Goldman Sachs Board Meeting on Aluminum
This is actually a cartoon on organized crime.
Goldman Sachs Testifying to Congress
Homer Simpson Sums up Goldman Scandal
Aluminum ETF JJA: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Fertilizer ETF SOIL: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Dow Industrials: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
S&P 500: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Nasdaq: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Russell 2000: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Volatility Index VIX: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
UK FTSE: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
German DAX: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Japan Nikkei One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Russia RTS : One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Brazil BOVESPA : One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
China Shanghai Composite : One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
India SENSEX : One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Gold GLD: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Gold GLD vs Brazil BOVESPA: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Gold GLD vs Russian RTS: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Gold GLD vs Shanghai Composite: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Silver SLV: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Copper JJC: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Oil WTI: Monthly Chart
10- Year Treasury Interest Rate: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
30- Year Treasury Interest Rate: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
US Dollar DXY: One-Year Daily
50, 200, 325-day Moving Averages, RSI, MACD, DMI
Euro FXE: One-Year Daily
50, 200, 325-day MAs, RSI, MACD, DMI
Australian Dollar FXA: One-Year Daily
50, 200, 325-day Moving Averages, RSI, MACD, DMI
Swiss Franc FXF: One-Year Daily
50, 200, 325-day Moving Averages, RSI, MACD, DMI
Japanese Yen FXY: One-Year Daily
50, 200, 325-day MAs, RSI, MACD, DMI
The End