Daily Reading – Thursday, August 4, 2011


Yesterday’s stock surge off the lows was attributed to comments by several Fed officials who said they are now in favor of the Fed implementing QE3 if the economy continues to deteriorate. I think it would be useful to review what QE2 did and what it did not do.

The Slope Of Hope: Tigger Time

There isn’t a person on the planet better at beating me up about trading than me. Today, however, I’d like to give myself a hearty pat on the back. This is one of those few days that I’m really pleased at how I handled myself.

The Big Picture: S&P 500 Index (SPX) – Technical Snapshot

As seen in the chart above the S&P 500 Index (SPX) recently broke its up trend line (green line) from the 2009 lows.

FT Alphaville: Trichet, you’re our only hope

And even if they do it’s difficult to see EFSF 2.0 being signed off before mid-September (the German parliament will probably wait for a Constitutional Court ruling – due around that time – before enacting any legislation, while the French parliament votes in early September).

So that means it is ECB, and the ECB alone, which can attempt to halt the eurozone contagion for now.

FT Alphaville: Inter-yention action

The Bank of Japan hit the currency intervention button for the first time since March, which, er clearly didn’t turn out so well…

FT BeyondBRICs: Turkey surprises with rate cut

The move is counter-intuitive to say the least. Turkey’s economy grew by 8.9 per cent in 2010 and by 11 per cent in the first quarter. Although it is slowing down, many economists expect growth this year to be uncomfortably fast at 6 to 7 per cent.

Macro Man: They are NOT Alone

But are they strong?

Japan is joining the fray on its Intervention day. As with all intervention days the markets puts down its economic playthings, dresses up in its finery and heads off down to the tilt-yard to either participate or spectate in the medieval sport of FX jousting.

Infectious Greed: Global Financial Stock Back to Pre-Crisis Levels

Global financial stock is back to pre-crisis levels, largely on the back of public debt increases, of course.

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