Diary of a Financier

Top Newsstuffs (December 30-January 5)

In Bookshelf on Sun 5 Jan 2014 at 07:10

Welcoming the New Year 2014 the right way: gone skiing…

The world economy’s shifting challenges | George Soros (Project Syndicate)
Global optimism is due to recent Chinese developments: in 2012, PBOC curbed debt growth, then leaders backtracked & ordered steelmakers to restart production in 7/2013, followed by Third Plenum’s broad reforms in 11/2013.
“The Chinese leadership was right to give precedence to economic growth over structural reforms, because structural reforms, when combined with fiscal austerity, push economies into a deflationary tailspin. But there is an unresolved self-contradiction in China’s current policies: restarting the furnaces also reignites exponential debt growth, which cannot be sustained for much longer than a couple of years.
“A successful transition in China will most likely entail political as well as economic reforms, while failure would undermine still-widespread trust in the country’s political leadership, resulting in repression at home and military confrontation abroad.”
Also compares the draconian austerity in Europe’s Monetary Union to Japan’s lost decade.
#Keynesian $FXI $GXC $CNY $EUR

Sell side consensus indicator: Analyst sentiment remain cautious, barely a buy signal (December 31, 2013) | Bank of America Merrill Lynch (BAML)
Wall Street analysts’ sentiment remains slightly cautious (unch @ 53.3 vs 60.3% LT avg)–still indicative of consensus bearishness (a contrarian “buy” signal when pessimism <54.5 & “sell” when optimism >66.2).
Alltime low was 43.9% in July 2012, but we’re still below the March 2009 lows.
[Indicator measures “average recommended equity allocation of Wall Street strategists as of the last business day of each month.”  The last, lone, quantifiable handful of bears whose capitulation can trigger an exuberant ascent.  See also: NYSE margin debt (#Bearish) & AAII investor sentiment survey (#Bearish)]
#Bullish #Contrarian

Purchasing Managers Index (December 2013): Worldwide expansion rises to another 31-month high | Business Insider
Global Manufacturing PMI (+0.2 @ 53.3) keeps growing for 14th consecutive month:
– Australia (unch @ 47.6) still contracting after last month’s crash
– Japan’s (+0.1 @ 55.2) expansion continues
– China’s official PMI (-0.4 @ 51) declined & unofficial’s (-0.3 @ 50.5) deceleration continued to the brink of stagnation
– The rest of Asia’s unanimously expanding, including South Korea (+0.4 @ 50.8), Taiwan (+0.4 @ 53.4), Vietnam (+1.5 @ 51.8) & Indonesia (+0.6 @ 50.9)
– Eurozone (+1.1 @ 52.7) comeback keeps accelerating with far less dispersion; all the majors increased, like both Germany (+1.9 @ 54.3) and Italy (+2.3 @ 53.4) rising to new 2-1/2 year highs, Spain (+1 @ 50.8) recovering, but France (-1.4 @ 47) a lonely laggard still plummeting
– UK (-0.8 @ 57.3) relents after hitting highs
Brazil (+0.8 @ 50.5) rallied for 4th straight month, back into expansion
– US ISM (-0.3 @ 57 v 56.8 exp) beats again but decelerates off highs, with a mixed bag among new orders (+0.6 @ 64.2), production (-0.6 @ 62.2), inventories (-3.5 @ 47), deliveries (+1.5 @ 54.7), exports (-4.5 @ 55) &  employment (+0.4 @ 56.9)
[US components show healthy moderation in recent trends. See also: US ISM Non-manufacturing (Services) misses again (-0.9 @ 53 v 54.7 exp)]
#Bullish

How semantic search is killing the keyword | Another Word for It
Google upgraded its search algorithm, now know as “Hummingbird,” which has accelerated search engine results pages’ (SERPs) transition from keyword to semantic focus, with results anticipating more of the user’s intended query purpose.
[This is a big step toward computers answering qualitative questions, but it has major flaws; for example, it accurately answers popular, mainstream queries but cannot address more nuanced ones, known as “enterprise” topics.]
$GOOG

Picture of the week:

Cartoon: The Road Ahead, Choose One (2014) | Steve Greenberg

Cartoon: The Road Ahead, Choose One (2014) | Steve Greenberg

–Romeo

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  1. […] sentiment (PUSH)- BAML’s sell side consensus indicator is the only remaining, bullish gauge of psychology left–barely hanging-on to a contrarian […]

  2. […] real gross margin debt & net balances reach records3. Dumb money goes all-in (see below)BAML's sell-side consensus indicator is really the only bullish sentiment survey remaining, and barely so.]#Bearish […]

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