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Markets, Economic Data, & The Ben Bernanke Book – Ep. 73

  • Markets continue to rally worldwide
  • Record highs overseas – much more action in Asia
  • Markets riding a sea of liquidity
  • Gold had an interesting week, closing at 1207
  • The dollar had one of its best weeks in months
  • In terms of other currencies gold was at a 2-year high
  • This means that the euphoria about the dollar is not universally shared
  • Commodities in general were up – crude oil was up – holding above 50
  • This is a good indication of a solid bottom on the price of gold
  • Traders continuing to make bullish dollar bets in the face of bad economic data
  • Traders are willing to throw out the first quarter – regardless the excuse
  • The bounceback from Q1 2014 was due to reasons that will not be repeated
  • Obamacare created a huge rush to sign up
  • There was a big inventory build anticipating future sales
  • Bets for a 2015 Q2-3 rebound are based on optimism for consumer spending
  • February Revolving Credit tumbled by $3.7 billion
  • Non-Revolving Credit surged $19.2 billion – mostly student loans
  • Consumers are cash poor, yet Wall Street believes they will start buying when the temperature rises
  • Government under-reporting student loan defaults due to forbearances
  • Wednesday release of FOMC minutes encouraged the dollar speculators because there were discussions about higher interest rates in June
  • Currency traders still haven’t figured out the the Fed’s comments are all theater
  • They are playing the game based on FedSpeak until it falls apart
  • A drastic turn in the FOREX markets will take a lot of people down with it
  • February Wholesale Trade declined again after January reported biggest decline in 6 years
  • This marks the first 3-month decline since 2008 financial crisis
  • Inventories rose slightly because of decline in sales
  • Inventory to Sales Ratio at 1.29 – highest since 2008 financial crisis
  • 2014 GDP increase was due to rush to build inventory in anticipation of recovery
  • Bottom line: economic data shows that a second-quarter bounce in the GDP is just wishful thinking
  • Ben Bernanke’s new book titled “The Courage to Act” belongs in the fiction section
  • Let historians justify his role in history – it is far to early to claim success
  • This is the same guy who was blind-sided by the 2008 financial crisis
  • He claimed courageous decisions in the face of critics, while actually putting politics and the banks ahead of the country
  • His book may be coming out on eve of next economic fire that he set