The Eurozone economic sentiment number rose more than expected in June with the economic indicator at 73.3, revised from 70.2 in May. The Eurozone seems to be finding a hold as far as recovery is concerned, but the data doesn't tell anything about the strength of the recovery.
The dollar is still hated and stocks may be ahaed of themselves. Maybe the key to economic recovery in the U.S. is a good, solid recovery in the Eurozone.
Heated debate and a close margin was the rule, but the U.S. House passed the cap and trade energy bill. The vote was 219 - 212. About 40 Democrats voted against the bill. President Obama earlier in the week said that America must look for new energy alternatives and this bill was the way to go. Republicans said that the policy will result in higher energy prices for consumers and businesses.
In oil trading, August light sweet crude settled at $69.16, down $1.07 for the session. Oil finished the week down $1.27.
Personal income jumped up 1.4 percent due mainly to stimulus benefit payments from the government and lower taxes. Disposable personal income rose 0.2 percent in May.
The June University of Michigan consumer sentiment came in at 70.8, up from 68.7 in May. That's the highest since September! U.S. data saw personal income rise 1.4% in May. Americans are saving more. This is hurting China who export so much into the U.S. The consumption pattern change in the U.S. has forced China to get their Asian neighbors to take more of their goods. China is also limiting imports. China frankly needs world demand to rebound or their economy could be in real trouble.
The dollar ended the week mixed and traders see more two-way action ahead. Conditions are hard to read so let's assume that a seesaw market is coming up, especially with the 4th of July holiday in the U.S. upon us next week.
The pace of economic contraction is slowing and this seems to be in line with household spending showing signs of stabilizing. U.S. inflation data is still smooth with recessionary pressures helping there. Economic recovery may begin later this year.
The U.S. dollar has had a good week and could see further gains on Friday the 26th. U.S. data has, for the most part, been dollar friendly and given the current trend, the dollar could keep the gains going into early next week. Just how much risk appetite is out there among traders? That remains to be seen, but gold was a bit lower and commodities in general were lackluster this week.
In a press conference on June 23rd, President Obama said the government run universal heath insurance plan won't put private companies out of business. Obama's plan will cost $1.6 trillion according to the Congressional Budget Office. That's more than Obama projected. That number brought criticism from the U.S. House Republican leaders. They said the plan costs too much.
House Republicans weren't in too good of a mood because they felt jilted that Obama hadn't used any Republican ideas when it came to economic recovery. The reduction of patient choice also was a concern with Republicans on the government health insurance issue. One item that concerned most Republicans was the issue of Americans losing their private health insurace coverage.
Cost may be a larger issue than one might think. In a recent poll Americans are concerned more with reigning in the debt rather than with stimulating the economy. When we get to the last quarter of this year, we'll see that the government is propping up the economy more than it probaly should.
Housing sales may be higher and that would be a bull signal for the economy, but sales figures are very distorted due to the government's intervention in the housing market.
The dollar took a hit today (23 June, 2009) and some traders said it went a bit too far, but the usd is likely to go down tomorrow with more U.S. data on the way. The housing data may take on more importance than usually expected tomorrow especially if overnight trading is sideways.
The U.S. economy may be in better shape than expected, but still with a long way to go. Weaker equities in the middle of the day had a negative impact on the dollar. Most of the currency pair action was in the EUR/CHF today which caused the USD/CHF to drop the hardest to a low point of 1.0642.
Gloomy news spooked the markets on the 22nd and that news hit European markets to the downside. But the European Central Bank will offer unlimited credit at the ECB rate of 1% for 12 months. The demand is expected to be huge. This gave the EUR the turnaround today. Interesting to see what takes shape tomorrow, despite the U.S. news. Just maybe the U.S. news won't matter. Yeah, right!
I recently read comments that made me think of why we do what we do. Take traders for example. They are studying charts and data to get ahead. An excerpt of the book Paradigm Lost was used and I read about Being. What traders actually see in charts, etc is what lies on the surface. The power of ideas comes from being in the market. Timing is obviously essential and this article made me think of the multidimensional model, taking into account the past, present and future.
What can't be accounted for is real comprehension of the markets. Why must we always think in terms of one graph, one chart or one idea? Good traders don't. What one individual trader does goes out to the market collectively to be digested most likely the same way that individual trader digested the previous information used to make the decision to execute an order. The article asks if there is a way out. Think totality of markets.
With so much uncertainty in equity markets now can we assume that most traders will sit on the sidelines? Probably not. There happens to be too much "happenings" which gets people involved in the study of graphs, charts and data so to discern information to make an order.
And so on and so on and so on.
The Troubled Asset Relief Program (TARP) created a pool of $700 billion. An article on Seeking Alpha has a chart that shows the progress of TARP.
$435 billion has been committed to specific transactions.
An article by Bary Ritholtz sums up the new government spending we've seen lately. He mentioned that he gets puzzled looks from people when he mentions trillions instead of billions. Really? The very concept of a billion is enough to make me pull over and wonder how many years the earth is old. But now, bring me trillion.... ok.
In this article is a "building block" picture that shows what has been spent in the last 12 months versus the last 206 years. You take some major spending projects found in the illustration like the New Deal and the Vietnam War, they both pale in comparison to the Commercial Paper Funding Facility.
This "graphic way" to illustrate the spending tells the tale of massive debt laid on us...... or should I say our great grandchildren and beyond. How will "we" ever pay back this debt? And what impact will it have on the economy right now?
The U.S. dollar remained little changed, but on edge as a "mixed bag" of economic news still needs to be unwound. Jobless claims in the U.S. rose for the week. The dollar was unchanged against the sterling this afternoon and rose a bit against the euro.
The U.S. economic recovery still is a question that remains "up in the air" as the U.S. looks at healthcare reforms, the war in Iraq and turmoil in Iran. Oil prices have been below $70.00 per barrel this week, but prices were able to stay atop that level. OPEC stated earlier this week that production will remain below earlier expectations.
The EUR/USD is trading heavy this week. Inflationary numbers are still being monitored closely to see what the higher CPI will do to Fed policy in the coming weeks.
President Obama's health care reform speech on Monday may be giving some negative economic recovery signals to traders. The question is if more U.S. government spending is the answer to the economic recovery question. The Republicans in Congress say no as they were concerned about the private health insurance companies wanting to compete against a government program. Some Republicans on the Hill said that private companies may not even offer coverage aginst a most likey cheaper government plan.
This was one way for Obama to offer incentives to stablize the U.S. economy so more consumer spending can take place.
Search challenges never end. I discovered this and wanted to pass this along. Google has come up with this and I like. You probably will too.
Explore Google Search is a "new" way to find everyday "stuff" for your life. Take a look and I think you'll like what you find.
The Iranian Government had been intervening to keep information from leaving Iran. Twitter Tweets stopped for a few hours, however Iranians were able to use TwitterFall.com to work around the censorship.
The "main steam" media has been slow to cover the events in Iran and the news from bloggers is important. I have learned that Iranian Army forces are closing in oh Tehran to stop the protesters. This info came from a twitter entry.
There are reports of seven dead.
Reports also in that Iranian soldiers are going house to house.... sources dropping like flies. Cameramen are reported to be leaving their cameras alone, since they don not feel safe using them.
Five dead at Tehran University.
Here are a few things you can do to help twitters in Iran: LINK
New developments from Iran in the after math of the elections is not getting better. Students in Iran have called upon President Obama to intervene, and the President has said he is deeply troubled by the protests. One group of Mir Hossein Mousavi supporters were fired on when they started to surround a government complex.
The government has outlawed any protests after two days of somewhat violent protests.
