2012-2020 US Debt clock runs out of numbers

[Dave_vic_ozz]

Fed meetings and an interesting take of the outcome from the USA web site, The Economist. dated 23/4/12

The dollar is inching upward, and markets are signaling lower expectations of future inflation. All of these data points correspond to effective tightening of monetary policy. If the Fed doesn't take steps to counteract these developments at this week's two-day meeting, it will have allowed policy to become more contractionary. It will, in other words, help to transmit the trouble in the euro area to the American economy.

http://www.economist.com/blogs/freeexchang...nomy?fsrc=gn_ep

BTW the timing of the EU leadership void is perfect for the Fed. Imagine if this all overlapped and neither could change paths.

[flower]

In Reply To: Petert20's post @ Apr 23 2012, 11:37 PM

I believe the RBA dropping interest rates will have more of an affect on the ASX

IMO well and truly already factored in by the market. It's the bigger world picture that matters more.

[kahuna1]

In Reply To: Petert20's post @ Apr 23 2012, 11:37 PM

Hi,

Well Peter would agree with you ... the CPI numbers today were way below expectations and whilst I expected the RBA to act last month next month they act. Question is how much. Market expecting 0.25% but seriously could be 0.5% with the CPI data today well below expectations.

What amazes me is the RBA had a fair idea which way these numbers were heading and DID not cut. I suppose maybe they await the federal budget but suspect we have 3 cuts minimum by end of year 0.75% which is expected by the market already but the way they do it might not be.

Today again despite overseas leads very very weak and we should have been down 0.7% we ended up o.2% ... yet again another one of these gains vs overseas.

AUD smacked a little on the CPI .

Has to be said we are creeping up vs overseas and a %% here and there always welcome.

Then again EU news not good and as always I look at Japan and USA and go eeek. In the meantime however we crawl higher and even my pet TLS getting close to reducing about 5% of it every 10 cents higher from $3.50.

Have a great Anzac day.

Take care

[Petert20]

In Reply To: flower's post @ Apr 22 2012, 01:11 PM

Sorry but I disagree, flower. I believe the RBA dropping interest rates will have more of an affect on the ASX.

[flower]

In Reply To: kahuna1's post @ Apr 21 2012, 03:49 PM

Well another week another rally.

K1---next "moment in time" arrives this Wednesday as the FOMC meet, whatever is said or not said IMO is the next likely catalyst for the world's markets---moving them either way.

[kahuna1]

In Reply To: Petert20's post @ Apr 22 2012, 12:12 AM

Hi Peter,

Well have done exactly the opposite. Held and traded the banks for the last few years and the rides whilst profitable and the franked dividends great the variation between the share price high and low for me at times was scary. Did managed to get rid of most of them at the peaks and reload at the lower ends but those which i still had when the markets took a tumble the banks took a hit about twice the overall markets and played this range well over 10% quite a few times.

The day the market hit its lows sub 4,000 late last year ... closed my eyes and added that day. Had a range for example on ANZ I liked to buy it with a $20- in front of it and sell it a lot higher ... that day ANZ hit $18-90 ish and the recovery to here over $23- something like 24% vs the markets 13 or 14% ... so not buying banks here. Still feel there is more to come via EU and Japan and US on the financial side beofre this GFC is resolved.

TLS as you say no hurry to do anything its not doing anything to be frank and the market loves to hate it despite its underlying numbers getting better. Dont expect it to get to where I will even think about reducing $3.50 anytime soon. Most other income stocks I owned have done the opposite and APA which was one of the larger holds went from a low well below $3- to a high now above $5- and as such the yield itself has dramatically reduced.

Each to their own. whilst I like banks in my portfolio and have had very large if not overweight holdings of them for most of the last 3 years I am at present very light on the holdings and just awaiting the last puff of this rally ... to 4,500 on the ASX 200 ... if we get there to totally exit them. If and when we have a correction it will as usual be fiancially inspired I suspect via overseas factors ... as has been the drivers for the last 5 years and the first thing that takes a hit seems to be the banks.

Have fun

[Petert20]

In Reply To: kahuna1's post @ Apr 21 2012, 03:49 PM

kahuna1
I have sold out of TLS as I believe they have had a good run and no longer represent good value. I'm looking at accumulating ANZ WBC and NAB purely on the fact that they will be paying the next best fully franked dividend. I feel there is plenty of time to switch back into TLS.
Cheers.

[kahuna1]

Howdy,

Well another week another rally. Actual numbers out did not inspire me but the US rose over the week and so did we. As seen of late we actually gained vs overseas on a comparative basis and it was around 1% on the close Friday we had picked up.

As expected China acted and lowered margins for banks and increased repos to put some liquidity back into the market. Our market did like this an more noises that seem to indicate its likely we cut next month with the RBA meeting.

Noises out of Canberra in regards to the budget and they are searching for places to slash spending and make the budget balance so don't expect anything nice.

Not much to say about things beyond that. Japan still looks awful, Spain had a bond tender that went of much better than expected but its always the case when these sorts of things happen. The cover ratio was good but to me the prices especially on the long dated ones sucked. French elections going as expected ... Ho hum ... US ones even more zzzzz.

Clearly our market has broken the topside and is being held aloft. Still however basically going no where. One might think the 4,500 level on the ASX 200 was a very long way away for the length of time I have been waiting for it, but its less than 3% from here and we just cant seem to even spike as yet.

On debt securities had a pretty good look at those on offer and whilst its nice to bag the banks there is some serious evidence that they are struggling to raise funds with two issues of notes trading at BBSW + 3% or more and this is two of the big four not the second tier ones either. One is a convertable issue maturing 2018 via Westpac and the other a perpetual bond issue via NAB. Whilst its perpetual its trading at 75% of face value so you are being rewarded for the investment either way. Bottom line the margins are BBSW +3% or more.

Nothing to suggest beyond this. Telstra still going on and don't understand the pricing of this one and haven't since it was here 3 years ago and getting paid 28 cents fully franked is around 11.4% to me. TLS came out this week and said no its not going to return funds to shareholders, not going to do a buy back but its thinking of raising dividends in 2014. In the meantime 2012 and 2013 I will take the money thanks very much.

Hope everyone has a great weekend

Cheers

Mark

[flower]

In Reply To: kahuna1's post @ Apr 14 2012, 11:24 AM

Its all smoke and mirrors right now ... the US is the prettiest horse in the glue factory ...

K1--spot on, however the likleyood has to be that our beloved FOMC/FED Chairman will lose his cool and hit the QE life preservation button yet again some time soon---next formal opportunity comes on April 25th, Anzac Day, the day the FOMC next meet.

As you said China has plenty of ammunition, and in the very best position to engage in some QE.

[kahuna1]

Howdy,

Well in NY on Thursday the rumor was Chinese GDP out yesterday would be close to 9% vs the expected 8.5% ... yesterday out comes the number and its 8.1% much weaker than expected. Have to love the market at times like this. NY shed its gains and closed at a low for the week.

One thing, the Chinese like us tightened and have massive amounts of ammo to stimulate their economy so EXPECT some move their either on reserve requirements or rates. This said however the number sucked so it shouldn't support our market ... stange but post the number we hit a low and went up the last 4 hours and even in overnight trading we seemed supported.

Any number of reasons for this RBA acts next month, China likely to act and so on. Other side of the coin is that ANZ raised its rates 0.06% late Friday so again we see a quasi tightening.

Our market however despite US and EU sliding still feels quite well bid. Short term anything goes and commodity prices got hit last night and China worries could send us 2% lower ... or conversly the fact the RBA acts at last next month and the fact we are quitely bid vs the rest of the world we could and likely still try and go up at least vs overseas.

Basically still waiting for the santa 4,500 but overseas leads not good. Japan a basket case, US unemplyment numbers yuk. Spain just awful and the list goes on. The US may actually go up as the best basket case in the glue factory full of horses !! But the analysts expectations on US earnings just keep going one way DOWN and with a massive cut in the stimulus in 2013 there seriosuly is only one direction. Lots still bullish on US bonds and I suppose as asafe haven they are it. What always concerns me longer term is the size of this debt and its not a matter of IF ... but when it falls apart. Could be years and taking the US 30 year down below 3% yield is possible even 2.5% ... as the 10 years yet again went under 2% as people went for safe havens yet again.

Prettiest pig in the pen is sadly what the US is and with offical US federal budget running at 8% of GDP overspending and these unfunded pensions social security medicaide and medicare at best adding another 20% of overspending to the US budget I do wonder every time I look at it when and where it ends. but short term buy buy buy US bonds ... I can however remember when I first started in financial markets ... trainee dealer ... luch boy ... the yeild on US 30 years was well over 10% :}

On the US side had a good look at the unemplyment numbers and my assumption lots of over 55's left the workforce is wrong ... the gains in employment last 12 months have been this area. What is happening is more have been employed here vs the under 55's and in fact there has been if anything a loss of jobs there if your below 55. Overall of course there have been gains and what we have seen is the offical unemployment rate fall in the US ... oh yes it has ... statistical buggery aside. Something about the over 55 jobs is the quality of them ... the real US wages have fallen in real terms by around 1.5% the hourly earnings last 2 years ... so the addition of these new jobs have been ULTRA low paying ones. minimum wage sort of things to get the real average wages to go down almost as much as the unemployment rate has fallen is not a good sign at all. Getting paid $8- an hour vs the average does this sort of thing to the actual real picture.

Of course all the rest adds up. One US department usuing an inflation number of 1.1% to estimate GDP, another the offical one was at 3.1% and then the BLS usuing yet another at 2.6% to estimate real wages growth and the real estimate out of shadow stats is around 6% price increase ... it buggers belief one dept used 0.6% as the deflator vs even the offial 3.1%.

Shadow stats inflation ... http://www.shadowstats.com/alternate_data/inflation-charts

BLS offical CPI 2.7% http://www.bls.gov/news.release/pdf/cpi.pdf

BLS on wages usuing a CPI of 1.6% despite their own CPI at 2.7% ??? Overstating the gains in real terms 1.1%
http://www.bls.gov/news.release/pdf/eci.pdf

And the GPD usuing 1.1% inflation vs the offical 2.7% at the time overstaing the GPD by 1.6% ... more than the actual gain in the headline number ...
http://www.bea.gov/national/index.htm#gdp

Seriously rubbish in equals rubbish out.

It does sound strange to be suggesting the US inflation is above 5% ... but unlike our gains in our currency theirs has lost purchasing power and they have got every gain like us in energy with the one exception of natural gas. Like our fuel prices at the bowser theirs are withing 7 % of the all time high :} http://fuelgaugereport.aaa.com/?redirectto...t.com/index.asp

Basically no change to anything here other than the quality of this rally in the US off the back of supposid improving employment when you scratch the surface, like most things in the US the smell is like a swamp> They have added a large numbe rof over 55's going to work but working at minimum paying jobs which have dragged the overall emplomyment costs down despite more actually at work if you employ 2% more at half the price it tends to drag the overall index down which is exactly what has happened. If one uses logic and the overall index of the 100% employed has fallen by 1.5% in real terms as to what they are earning ... WHAT IS THE POINT ?

If you used a more realistic closer to the mark number of say 4% CPI the number is going backwards like the US GDP to the tune of 2% for the GDP ... they may have more being employed but in real terms as a group they are earning less ... not more and it leaves me again wondering about the magic recovery.

In the meantime this is just the tune playing in the background ... an aside short term. Again the market tried rallying overseas one day on the back of the China GDP rumour ... another that the US fed would act again with easing if needed ... to me however the options they have are very limited and my anology back in 2006/7 was putting a bandaid on the person missing two limbs is actaully not even as bad as things sadly seem now. Sure corporate profits look great and so would yours with goverment ignoring its own budget and obligations and overspending to the tune of 30% of GDP. Have to say 2013 will be a doosey and wondering how they keep the stench away from the market as they have very well in 2011.

Its all smoke and mirrors right now ... the US is the prettiest horse in the glue factory ...

Its almost insane we have one credit market ours ... operating one way ... and theirs another. One market operating with interest rates set at historical norms another being set at ones not seen other than briefly once in 100 years ... our equities being priced off normality and theirs off skewed fiscal and monetay policy.

Time eventually sorts these things out but in the meantime playing with this going on for me just hoping for the total exit and wait till it resovles itself.

Have a great weekend