Words from the (investment) wise for the week that was (June 8 – 14, 2009)
“Words from the Wise” this week comes to you in a shortened format as “day-job” responsibilities precludes me from doing a comprehensive commentary. However, a full dose of excerpts from interesting news items and quotes from market commentators is provided.
Signs of stability characterized trading on financial markets during the past week. As investors placed their bets on a global economic recovery, equities, base metals and crude oil made further headway, with long-term government bond yields remaining at elevated levels, but declining somewhat after a successful US 30-year bond auction and pro-US Treasury comments from Japan’s minister of finance.
Notwithstanding buyers returning to US long-term bonds, the greenback retreated on concerns of the huge issuance of government bonds, whereas commodity-linked and other high-yield currencies improved strongly.
Source: Jeff Stahler, June 9, 2009.
The British pound also advanced as the UK’s National Institute for Economics and Social Research said the recession had passed through its trough in March. Also, the Organization for Economic Co-operation and Development (OECD) reported on Monday (via the Financial Times) that most of the world’s big economies were close to emerging from recession and that data pointed to a possible recovery by the end of the year. “Twenty-two out of the 30 OECD countries saw a rise in forward-looking measures of activity,” said the report.
The week’s performance of the major asset classes is summarized by the chart below. Not shown, platinum (-2.1%) and silver (-2.9%) cooled off in tandem with gold bullion (-1.6%). As the precious metals consolidate, gold bull Richard Russell (Dow Theory Letters) said in frustration: “Gold, gold, you’re making me old.”
The surge in oil prices to an eight-month high of more than $72 a barrel (in the case of West Texas Intermediate Crude), raised concerns as this is equivalent to a two-percentage-point drag on real GDP growth, according to David Rosenberg (Gluskin Sheff & Associates). In order to provide guidance on the direction of crude oil, Adam Hewison of INO.com has prepared another of his popular technical analyses, arguing that the long-term trend is bullish, but that a short-term pullback appears likely. Click here to access the short presentation.
The MSCI World Index (+1.2%) and the MSCI Emerging Markets Index (+0.4%) last week again added to the rally’s gains to take the year-to-date returns to +8.1% and a massive +39.4% respectively. Both these indices have only had one down-week since the advance commenced in early March.
Although trading was relatively flat, the major US indices (with the exception of the Russell 2000 Index) nevertheless gained for a fourth consecutive week – and for the twelfth week out of the past 14 – as seen from the movements of the indices: S&P 500 Index (+0.7%, YTD +4.8%), Dow Jones Industrial Index (+0.4%, YTD +0.3%), Nasdaq Composite Index (+0.5%, YTD +17.9%) and Russell 2000 Index (-0.7%, YTD +5.5%).
The Dow on Friday became the last of the major indices to break into positive territory for the year to date, albeit by a meager 0.3%.
Click here or on the table below for a larger image.
As far as non-US markets are concerned, returns ranged from top performers Namibia (+8.5%), Vietnam (+6.5%), Mauritius (+5.4%), Palestine (+4.5%) and Thailand (+4.0%), to Ghana (-8.7%), Serbia (-5.2%), Sudan (-4.8%), Taiwan (-4.4%) and Bahrain (-2.4%), which experienced headwinds.
Among the major markets, the Japanese Nikkei 225 Average jumped by 3.8% to breach the 10,000 level for the first time since October on the back of recent data releases, indicating that the pace of Japan’s recession was moderating. (Click here to access a complete list of global stock market movements, as supplied by Emerginvest.)
John Nyaradi (Wall Street Sector Selector) reports that as far as exchange-traded funds (ETFs) are concerned, the leaders for the week included MSCI Thailand (THD) (+6.2%), iShares MSCI Sweden (EWD) (+6.0%) and PowerShares DB Base Metal (DBB) (+5.6%), with notable laggards being Market Vectors Gold Miners (GDX) (-9.2%), iShares Silver Trust (SLV) (‑6.4%) and iShares Taiwan (EWT) (-5.8%).
Other news is that Chrysler completed its deal with Fiat, the US Treasury Department announced that ten banks would repay TARP funds, and the Obama administration is dropping its plan to cap salaries at firms receiving bailout funds and has backed away from a large-scale reduction in the number of agencies overseeing financial markets.
Next, a tag cloud of all the articles I read during the past week. This is a way of visualizing word frequencies at a glance. Key words such as “banks”, “markets” and “financial” featured prominently. “Bonds”, “yields” and “value” have soared in prominence as pundits debate whether government bonds and stock markets have seen secular turning points. “Recovery” also moved up the ranks as an increasing number of reports showed the global recession was abating.
Back to the stock markets: an analysis of the moving averages of the major US indices shows all the indices (with the exception of the Dow Jones Transport Index) above their 50- and 200-day moving averages and May 8 highs. The S&P 500, Nasdaq and Russell 2000 have also surpassed their early January peaks.
Click here or on the table below for a larger image.
According to Bloomberg, the S&P 500 Index has not posted a daily rise or fall of 1% or more since June 4, the longest stretch in 14 months. Since September 15, 2008, when Lehman Brothers filed the largest ever US bankruptcy, 131 out of the 188 trading days have had moves of 1% or more.
The S&P 500 seems to be mapping out a trading range between 925 and 950 as shown in the chart below. Time will tell the direction of the eventual break out of the trendless market, but stock markets would appear to be getting somewhat exhausted, as indicated in last Sunday’s “Words from the Wise“.
The last words regarding stock markets go to David Fuller (Fullermoney) who said: “I am certainly not moving away from my view that this is a bull, since much of what we have seen since last October and everything since March has been consistent with a new bull market. However, extreme rallies to break the previous downtrends are often prone to lengthy pullbacks and ranging, because they discount improving or less bad news very quickly.
“Where the corrections occur, they are likely to be sharper in high-flying emerging markets but delay the next upward move on Wall Street for longer, because it is underperforming and is a much bigger market.”
For more discussion on the direction of stock markets, also see my recent posts “Video-o-rama: Risky assets – optimism waxing, pessimism waning“, “Faber: The frame of mind of American economic policymakers“, “Favorite theme: commodities“, “Donald Coxe: Investment recommendations (June 2009)“, “High-yield spreads heading south“, “Grantham on the markets“, “Technical talk: Sell the news” and “Interview with Yale’s David Swensen“. (Also, Donald Coxe’s weekly webcast makes for good listening and can be accessed from the sidebar of the Investment Postcards site.)
Source: Moody’s Economy.com
Nobel Prize-winning economist Paul Krugman commented that the US economy would probably emerge from the recession by September. “I would not be surprised if the official end of the US recession ends up being, in retrospect, dated sometime this summer. Things seem to be getting worse more slowly. There’s some reason to think that we’re stabilizing,” Krugman said at the London School of Economics (via Bloomberg).
According to Bloomberg, Richmond Fed Bank President Jeffrey Lacker said on Wednesday the Federal Reserve had to avoid the risks of “waiting too long or moving too slowly” to tighten monetary policy once an economic recovery begins. “The challenge for us on the Federal Open Market Committee will be to shrink our balance sheet and tighten policy soon enough when the recovery emerges to prevent rising inflation. The danger will be that we will not shrink our balance sheet enough when the recovery emerges.”
US interest rate futures rose to price in a tightening in the interest rate by the Federal Reserve by the end of this year. However, Andrew Balls, PIMCO’s managing director in London, believes this to be premature and wrote in a report (via Bloomberg) that signs of recovery in economies around the globe pointed to a slower pace of decline rather than recovery. “Rate hikes will be some time in coming.”
Week’s economic reports
Source: Yahoo Finance, June 12, 2009.
In addition to an interest rate announcement by the Bank of Japan (Tuesday, June 6), the US economic highlights for the week include the following:
Monday, June 15
Tuesday, June 16
Wednesday, June 17
Thursday, June 18
Click the links below for the following reports:
Source: Wall Street Journal Online, June 12, 2009.
Will Rogers offered the following advice: “Buy stocks that go up, and if they don’t go up, don’t buy them.” (Hat tip: Vitaliy Katsenelson.) It sounds simple enough! Let’s hope the news items and quotes from market commentators included in the “Words from the Wise” review will help Investment Postcards readers to have some advance warning of the most likely winners and losers.
(For short comments – maximum 140 characters – on topical economic and market issues, web links and graphs, you can also follow me on Twitter by clicking here.)
That’s the way it looks from a cold Cape Town.
The four horsemen of the Wall Street Apocalypse
Source: Edward Sorel, Vanity Fair, July 2009.
Financial Times: Lewis grilled over Merrill deal
“In a congressional hearing into whether federal regulators exerted undue pressure on Mr Lewis to move forward with BofA’s acquisition of Merrill last year, Mr Lewis reiterated his position that Merrill’s losses became a cause for concern only in mid-December. That was after BofA shareholders voted to approve the deal.
“But Dennis Kucinich, Democrat of Ohio, challenged that account, disclosing internal e-mails from the US Federal Reserve casting doubt on Mr Lewis’s that assertion Merrill’s problems only became more than BofA expected in mid-December. In one e-mail, a Fed officer writes: ‘Ken Lewis’ claim that they were surprised by the rapid growth of the losses seems somewhat suspect.’
“Another e-mail indicates disclosures issued ‘could cause problems for him’.
“Asked why he did not disclose Merrill’s mounting losses to his shareholders before they voted on December 5 to approve the takeover, or afterwards, when Merrill’s losses caused him to threaten the invocation of a ‘material adverse change’ clause to scuttle the transaction, Mr Lewis replied: ‘I leave that decision to securities lawyers and outside counsel.’
“Mr Lewis also adamantly denied the former Treasury secretary Hank Paulson’s pledge to remove Mr Lewis and his BofA board if Mr Lewis invoked the ‘MAC’ clause was a ‘threat’ that drove his decision to consummate the transaction. ‘It was a strong influence on my decision, but it wasn’t the only influence,’ he said.”
Source: Greg Farrell and Alan Rappeport, Financial Times, June 11, 2009.
Financial Times: Ten US banks to repay Tarp funds
“The companies, which also include Morgan Stanley and American Express, can now shed the restrictions on pay and hiring that came with the troubled asset relief programme launched last year at the height of the turmoil in global markets.
“However, the move raises questions over the competitiveness of other big banks such as Citigroup and Bank of America, which have not yet been allowed to repay the combined $90 billion in Tarp money they have received.
“The first batch of Tarp repayers includes eight banks that last month were found not to need additional capital after government stress tests. Others allowed to return the funds included Morgan Stanley, which was instructed to raise capital, and Northern Trust, a bank catering to wealthy individuals that was not among the 19 institutions subjected to stress tests.
“The repayment by the ten institutions, which stepped up their campaign to be free of Tarp after Congress introduced constraints on bankers’ pay, is a sign of stability in the financial system.
“Although the banks set to leave Tarp will escape the most strict rules on compensation, Tim Geithner, US Treasury secretary, told Congress that planned reforms – set to be announced in the next few days – would affect all institutions.
“‘We need to help encourage substantial reforms in compensation reforms,’ Mr Geithner said. ‘I think boards of directors did not do a good job [before the crisis]. I think shareholders did not do a good job.’
“The congressional oversight panel, set up to monitor Tarp spending, on Tuesday recommended a new round of stress tests on the banks because of worsening economic data, such as rising unemployment.
“The Treasury declined to identify the banks, but people familiar with the list said they were Goldman, Morgan Stanley, JPMorgan, Amex, Northern Trust, BB&T, State Street, US Bancorp, Capital One Financial and Bank of New York Mellon.”
Source: Tom Braithwaite and Francesco Guerrera, Financial Times, June 9, 2009.
Financial Times: Doubts mount over US toxic asset plan
“The plan has fallen prey to concerns from potential investors and regulators and waning interest from the banks themselves. Investors fear that Congress may set caps on pay while regulators are beginning to doubt whether the plan is really necessary.
“Last week, the Federal Deposit Insurance Corporation, which was supposed to provide finance for investors to purchase bubble-era bank loans, postponed plans for a pilot sale, saying it was less urgent than had been thought.
“‘The timing just is not right,’ an FDIC official told the Financial Times. He said the FDIC still wanted to test a mechanism for loan auctions but might hold it in reserve rather than activating it for general use.
“Officials say the need for these facilities has waned, and add that several banks have raised billions of dollars in share capital even with toxic assets on their books.
“‘Banks have been able to raise capital without having to sell bad assets through the LLP [limited liability partnership], which reflects renewed investor confidence in our banking system,’ Sheila Bair, chairman of the FDIC, said last week.”
Source: Krishna Guha, Edward Luce and Saskia Scholtes, Financial Times, June 7, 2009.
Financial Times: Geithner’s plans for Wall Street regulation
“Tim Geithner, the Treasury secretary, will next week unveil revised plans, which are likely to include the creation of two new structures on top of the existing alphabet soup of agencies. These will include a ‘council of regulators’ – likely to comprise the heads of the largest agencies – which will oversee the Federal Reserve’s new uber-regulatory role of overseeing systemic risk.
“There is also likely to be a new agency to regulate consumer products, such as mortgages and credit cards. Far from simplifying Washington’s inefficient system of regulation, many fear the envisaged reforms will ‘Balkanise the Balkans’, as one financial lobbyist put it.”
Source: Edward Luce, Financial Times, June 11, 2009.
MarketWatch: Stimulus funds susceptible to fraud
Source: MarketWatch, June 11, 2009.
Bill King (The King Report): Bernanke in Congress’s crosshairs
“Bernanke and the Fed are at the top of the scapegoat list. To date the Fed has refused to divulge what it is doing with taxpayer money, which is unlawful. “Politicians for the past several months have cowered to Hank, Ben and Little Timmy because they were afraid that they would be [correctly] blamed.
“Politicians again were betting that the Fed would paper over their destructive welfare-state spending. But now numerous politicians understand that Keynesian and monetarist free lunches are ending for the state.
“So Congress pressured the Fed to divulge what it is doing with taxpayer money. In order to avert legislation, which is redundant, the Fed released details of its holding but would NOT divulge to whom it was granting taxpayer money. Several Congressmen and Senator expressed outrage with the Fed.
“Bernanke is now in the Congress’s crosshairs. Pundits are already forecasting his possible replacement.
“The funny-money rebound of 2003 to 2007 greatly concentrated wealth and income. A select few made unimaginable profits, but the average American’s living standards and wages stagnated by bogus government statistics and declined sharply in reality.
“The same dynamic is occurring now on a greatly diminished scale. Banks and a select few insiders have been rescued at the expense of average Americans – in the present but more so in the future.
“Polls during the last recovery showed that average Americans were not doing well economically. The Street and its stooges were aghast that the serfs did not realize how splendid things were.
“Despite the recent robust stock market rally, average Americans continue to see their living standards and earnings fall. If another down leg materializes, public fury will be intense and someone will pay dearly.
“Politicians have their red paint are trying to artfully place bulls-eyes on would-be patsies.”
Source: Bill King, The King Report, June 11, 2009.
The Wall Street Journal: High court clears way for sale of Chrysler
“The high court’s move marks a victory for the Obama administration and its ambitious plan to remake the American auto industry by pushing both Chrysler and General Motors through quick and painful restructurings under Chapter 11 bankruptcy.
“But the order is a setback for a group of Indiana pension funds and others who maintained the government’s heavy-handed treatment of creditors in the case could chill private lending to distressed firms and alter the rules of bankruptcy reorganizations.
“The Supreme Court, in a brief order, said that the funds had not ‘carried the burden’ of proving that their grievances merited the court’s attention.
“Both Chrysler and the Obama administration argued strenuously that speed was of the essence in the company’s Chapter 11 restructuring, and that any delays could jeopardize the Auburn Hills, Mich., automaker’s future, chasing away potential customers, straining its suppliers, and potentially causing Fiat to turn away from the deal.”
Source: Mark Anderson and Neil King, The Wall Street Journal, June 10, 2009.
Financial Times: Geithner sees “global storm” abating
“Mr Geithner said: ‘The force of the global storm is receding a bit,’ as conditions in securitisation and the market for asset-backed securities eased.
“The Treasury secretary, who is to travel to Italy for a Group of Eight meeting this week, declined to criticise European efforts to fight the financial crisis but said they would be judged on their merits.
“‘They’re going to make different judgments than we are, partly because they have different systems, different constraints, different opportunities,’ he said.
“‘What matters to all of us is, are they going to achieve enough? That’s the standard we should be held to and that’s the standard I think we’ll hold them to.’
“France and Germany, in particular, have adopted a less aggressive stance to stimulus plans and unconventional monetary policy than the US.”
Source: Tom Braithwaite, Financial Times, June 9, 2009.
BBC World: The beginning of a recovery?
“Opinions are divided. The World Bank President Robert Zoellick has said it’s not clear where the demand to fuel an economic recovery will come from.
“The White House is optimistic, promising to step up the stimulus spending – pledging that 600,000 jobs will be created or saved in the coming months.
“So where would we be without all the stimulus money?
“One man thinks we might have been heading for another 1930s style Depression – and his opinion counts more than most, since he is one of the most successful investors in the world – hedge fund manager and philanthropist George Soros.
“Commentator Martin Wolf asked Mr Soros where he thought we were, in the course of the crisis.”
Click the image below to listen to the interview.
Source: BBC World, June 9, 2009.
Financial Times: Major economies are “close to low point”
“The Paris-based organisation reported in its latest monthly analysis of forward-looking indicators that a ‘possible trough’ had been reached in April in more developed countries that make up almost three quarters of the world’s gross domestic product.
“The composite index for 30 economies rose 0.5 points in April, the second monthly rise in a row, after falling for the previous 21 months. The index seeks to identify turning points in the cycle about six months in advance.
“The OECD said its overall measure of advanced member countries – ranging from the eurozone and the UK to the US, Mexico and Japan – now pointed to ‘recovery’ instead of the ‘strong slowdown’ they had been suffering since last August.
“‘It is still too early to assess whether it is a temporary or a more durable turning point,’ the organisation said. But the data ‘point to a reduced pace of deterioration in most of the OECD economies with stronger signals of a possible trough in Canada, France, Italy and the United Kingdom’.
“Twenty-two out of the 30 OECD countries saw a rise in forward-looking measures of activity. The US saw its first improvement in the outlook since July 2007, while Germany and Japan both among the worst hit economies in the developed world, saw an improvement in their outlook for the first time since early last year.
“China had seen a ‘possible trough’, though India, Brazil and Russia were still facing a sharp slowdown, the OECD said.
“The OECD measure is based on data such as share price moves, inventory levels and consumer and business confidence in its member nations.”
Source: Daniel Pimlott, Financial Times, June 8, 2009.
Ambrose Evans-Pritchard (Telegraph): Europe swings Right as depression deepens
“We have seen the ultimate crisis of capitalism – what Marxist-historian Eric Hobsbawm calls the ‘dramatic equivalent of the collapse of the Soviet Union’ – yet socialists have completely failed to reap any gain from the seeming vindication of their views.
“It is not clear why a chunk of the blue-collar working base has swung almost overnight from Left to Right, but clearly we are seeing the delayed detonation of two political time-bombs: rising unemployment and the growth of immigrant enclaves that resist assimilation.
“Note that Right-wing incumbents in France (Sarkozy) and Italy (Berlusconi), survived the European elections unscathed.
“Left-wing incumbents in Germany, Austria, the Netherlands, Spain, Portugal, Hungary, Poland, Denmark, and of course Britain were either slaughtered, or badly mauled.”
Click here for the full article.
Source: Ambrose Evans-Pritchard, Telegraph, June 8, 2009.
Forbes: Is Eastern Europe on the brink of an Asia-style crisis?
“Strong trade and financial linkages, not to mention similar macroeconomic vulnerabilities, mean a Latvian crisis would almost surely have knock-on effects on neighboring Estonia and Lithuania. A Latvian crisis would also have negative spillover effects into Sweden via Swedish banks’ heavy exposure to the Baltic trio.
“The wild card is how a Latvian crisis would affect the greater Central and Eastern European (CEE) region. Direct trade and financial linkages between Latvia and the CEE economies, excluding the Baltics, are limited. Nevertheless, many of these countries – particularly Bulgaria and Romania – share similar macroeconomic vulnerabilities with Latvia, meaning a crisis there could awaken investors to the potential for crises in the rest of the region.
“If a balance-of-payments crisis occurs in the Baltics and it spills over into other Eastern European economies (and note that this is a big ‘if’), then the Eurozone could be affected. The Eurozone’s exposure results from Western European banks’ heavy exposure to Eastern Europe, via subsidiaries, where they hold 60% to 90% market share (as a percentage of assets), depending on the country. Given the CEE’s strong financial linkages with Western Europe, the health of Eastern Europe’s economies and its banks could potentially afflict Western European banks.”
Click here for the full article.
Source: Nouriel Roubini, Forbes, June 11, 2009.
Moneynews: Einhorn – Obama blowing up another bubble
“‘The basic strategy appears to be to try to bring us back to 2006 by propping up asset prices and re-inflating the popped credit bubble while hoping for an economic recovery,’ Einhorn told attendees at the recent Ira W. Sohn Investment Research Conference.
“‘President Obama and the policymakers are not stepping up to the plate, but are instead trying to stretch things out in the hope that time will solve the problems.’
“Einhorn says the White House has adopted an attitude that ‘what’s good for the banks is good for the economy,’ setting in motion a plan by which big banks are buying time rather than restructuring their bad loans.
“As a result, companies and consumers with too much debt refrain from hiring, spending and investing.
“‘Forbearance has not stopped people from losing their jobs or prevented asset prices from falling; it is delaying the recovery,’ Einhorn notes.”
Source: Julie Crawshaw, Moneynews, June 8, 2009.
Kim Whelan (Wachovia): US budget – growing deficit set another record in May
“The US government is deeper in the red than it has ever been as taxes continue to come in at a slower pace than last year and spending continues to ramp up. This combination does not bode well for hopes for a shrinking deficit.
“Individual and corporate income tax receipts are down substantially, about 24% year-over-year. As the economy enters recovery we may see marginal improvements.
“With such an enormous deficit there is a significant need for financing, especially through public borrowing. As net saving nations look to diversify their holdings and bond yields creep up interest payments grow larger, making deficit financing increasingly expensive. While it has not yet become a problem to finance the deficit, interest payments may become increasingly burdensome to the Treasury.”
Source: Kim Whelan, Wachovia, June 10, 2009.
The Wall Street Journal: Deficit is both short- and long-term problem for Obama
Source: The Wall Street Journal, June 11, 2009.
Paul Kasriel (Northern Trust): Yes, Treasury borrowing is massive, but what about total US borrowing?
“Similarly, although Federal Reserve credit creation has soared in the past year, private financial sector credit creation has plunged. Before one gets too worked up about Treasury borrowing and Fed credit creation, one has to take into consideration how much private nonfinancial sector borrowing and private financial sector credit creation have slowed.”
Source: Paul Kasriel, Northern Trust – Daily Global Commentary, June 12, 2009.
Adam York (Wachovia): Retail sales increased for first time since February
“Sales moved higher for the first time since February, but are off more than 11% over the past year. Performance across sectors was mixed with big moves higher in gasoline stations and building materials, while sporting goods and electronics saw the largest declines. We expect that consumers will continue to prioritize spending towards essential items until the labor market begins to improve.”
Source: Adam York, Wachovia, June 11, 2009.
Kim Whelan (Wachovia): Another notch down in business inventories
“April’s data show that the inventory cycle is continuing in full force – the second quarter will likely experience another substantial inventory change.
“The overall inventories-to-sales ratio has likely peaked, albeit at an extremely high level, showing that stockpiles remain severely misaligned with sales. While sales are still falling, the pace slowed to -0.3 percent on the month.”
Source: Kim Whelan, Wachovia, June 11, 2009.
RealtyTrac: US foreclosure activity decreases 6% in May
“‘May foreclosure activity was the third highest month on record, and marked the third straight month where the total number of properties with foreclosure filings exceeded 300,000 – a first in the history of our report,’ said James Saccacio, chief executive officer of RealtyTrac. ‘While defaults and scheduled foreclosure auctions were both down from the previous month, bank repossessions, or REOs, were up 2% thanks largely to substantial increases in several states, including Michigan, Arizona, Washington, Nevada, Oregon and New York. We expect REO activity to spike in the coming months as foreclosure delays and moratoria implemented by various state laws come to an end.'”
Source: RealtyTrac, June 11, 2009.
Robert Shiller (The New York Times): Why home prices may keep falling
“Even the federal government has projected price decreases through 2010. As a baseline, the stress tests recently performed on big banks included a total fall in housing prices of 41% from 2006 through 2010. Their ‘more adverse’ forecast projected a drop of 48% – suggesting that important housing ratios, like price to rent, and price to construction cost – would fall to their lowest levels in 20 years.
“Such long, steady housing price declines seem to defy both common sense and the traditional laws of economics, which assume that people act rationally and that markets are efficient. Why would a sensible person watch the value of his home fall for years, only to sell for a big loss? Why not sell early in the cycle? If people acted as the efficient-market theory says they should, prices would come down right away, not gradually over years, and these cycles would be much shorter.
“But something is definitely different about real estate. Long declines do happen with some regularity. And despite the uptick last week in pending home sales and recent improvement in consumer confidence, we still appear to be in a continuing price decline.
“There are many historical examples. After the bursting of the Japanese housing bubble in 1991, land prices in Japan’s major cities fell every single year for 15 consecutive years.
“Why does this happen? One could easily believe that people are a little slower to sell their homes than, say, their stocks. But years slower?
“Several factors can explain the snail-like behavior of the real estate market. An important one is that sales of existing homes are mainly by people who are planning to buy other homes. So even if sellers think that home prices are in decline, most have no reason to hurry because they are not really leaving the market.
“Furthermore, few homeowners consider exiting the housing market for purely speculative reasons. First, many owners don’t have a speculator’s sense of urgency. And they don’t like shifting from being owners to renters, a process entailing lifestyle changes that can take years to effect.
“Among couples sharing a house, for example, any decision to sell and switch to a rental requires the assent of both partners. Even growing children, who may resent being shifted to another school district and placed in a rental apartment, are likely to have some veto power.
“In fact, most decisions to exit the market in favor of renting are not market-timing moves. Instead, they reflect the growing pressures of economic necessity. This may involve foreclosure or just difficulty paying bills, or gradual changes in opinion about how to live in an economic downturn.
“This dynamic helps to explain why, at a time of high unemployment, declines in home prices may be long-lasting and predictable.”
Click here for the full article.
Source: Robert Shiller, The New York Times, June 6, 2009.
Bloomberg: Nobel winner Krugman sees US recession ending soon
“‘I would not be surprised if the official end of the US recession ends up being, in retrospect, dated sometime this summer,’ he said in a lecture today at the London School of Economics. ‘Things seem to be getting worse more slowly. There’s some reason to think that we’re stabilizing.’
“Krugman, a Princeton University economist, has warned recently that the US government hasn’t done enough to help the country’s economy recover. Last month, at a conference in Abu Dhabi, he said the fiscal stimulus is ‘only enough to mitigate the slump, not induce recovery’.
“The National Bureau of Economic Research, based in Cambridge, Massachusetts, is the official arbiter of US recessions and expansions. Last week, Robert Hall, the head of the NBER’s business-cycle-dating committee, said it’s ‘way too early’ to say the contraction is over.
“Even with a recovery, ‘almost surely unemployment will keep rising for a long time and there’s a lot of reason to think that the world economy is going to stay depressed for an extended period’, Krugman said.
“The US Federal Reserve’s efforts to stabilize markets – measures that have swelled the central bank’s balance sheet – have helped, Krugman said. ‘A lot of the spreads in the markets have come down’ and ‘the acute financial stuff seems to have come to a halt’, he said.
“The Fed’s swollen balance sheet is ‘a little alarming. In the long run you really don’t want the central banks to be so involved in the business of lending,’ Krugman said. ‘But it’s arguably necessary’ even if there are questions about ‘where does it stop?'”
Source: Courtney Schlisserman, Bloomberg, June 8, 2009.
Moneynews: Volcker – chances for strong recovery unlikely
“The prospects for a really strong recovery, typical of most recessions, seem unlikely, Volcker told a meeting of the Institute of International Finance in Beijing.
“‘A long slog, with continuing high levels of unemployment, seems to be in store,’ Volcker, a former chairman of the Federal Reserve, said.
“‘This is not an environment in which inflationary pressures are at all likely for some time to come,’ he added.”
Source: Moneynews, June 11, 2009.
John Authers (Financial Times): Fed’s monetary policy – too soon for increases
“Last week’s US jobs report provoked the renewed concern about the punch bowl. Non-farm payrolls declined by 345,000; markets had expected more than 500,000 to lose their jobs.
“Yields on two-year bonds, which are sensitive to the short-term interest rate outlook, rose by more than 0.40 percentage points.
“Prices of Fed Funds futures implied a virtual certainty that the Fed will raise its target rate to at least 0.5% by the end of the year. They had previously showed virtual certainty that rates would stay at historic lows throughout the year. Stocks fell a bit, perhaps because of these rate fears.
“So as far as the market is concerned, the jobs report was clear evidence of incipient recovery, and sharply changed the punch bowl calculus for the Fed.
“But there are reasons for concern. First, nobody could yet liken the real economy to a party. The unemployment rate rose more than expected to 9.5%. May saw more jobs lost than in the worst month of either of the two previous recessions, and the data are prone to revisions.
“Thus a ‘punch bowl’ seems a poor analogy for the Fed’s current monetary policy. It is more like an energy drink, or even a syringe full of anabolic steroids. At some point, it will have to reduce the dose, or face inflation. But it looks too soon to say for sure that that moment will come within six months.”
Source: John Authers, Financial Times, June 8, 2009.
Bloomberg: Pimco says “rate hikes will be some time in coming”
“‘Rate hikes will be some time in coming,’ Andrew Balls, a managing director for the company in London, wrote in a report on the company’s web site.
“Signs of recovery in economies around the globe point to a slower pace of decline rather than recovery, Balls wrote. The outlook over the next three to five years is for ‘weaker global growth and especially weaker growth in the developed countries,’ he wrote.
“The report helped ease speculation the Federal Reserve is moving closer to raising rates, bringing a pause to the biggest surge in US two-year yields in eight months. Fifteen of the 16 US primary dealers that trade with the Fed surveyed by Bloomberg News said they don’t expect the central bank to raise the target rate for overnight loans between banks this year.
“The US economy probably will emerge from recession by September, Nobel Prize-winning economist Paul Krugman said yesterday in London. US job and manufacturing losses both slowed in May, government and Fed figures show.
“Traders see a 62% chance the Fed will raise its target rate by its November meeting, based on futures on the Chicago Board of Trade. The odds were 26% a week ago.”
Source: Wes Goodman, Bloomberg, June 9, 2009.
Bloomberg: Bernanke’s conundrum
“The yield on the benchmark 10-year Treasury note rose to 3.90% last week as volatility in government bonds hit a six-month high, according to Merrill Lynch & Co.’s MOVE Index of options prices. Thirty-year fixed-rate mortgages jumped to 5.45% from as low as 4.85% in April, according to Bankrate.com. Costs for homebuyers are now higher than in December.
“Government bond yields, consumer rates and price swings are increasing as the Fed fails to say if it will extend the $1.75 trillion policy of buying Treasuries and mortgage bonds through so-called quantitative easing, traders say. The daily range of the 10-year Treasury yield has averaged 12 basis points since March 18, when the plan was announced, up from 8.6 basis points since 2002, according to data compiled by Bloomberg.
“The rise in borrowing costs in the face of record low interest rates, Fed purchases and a contracting economy is the opposite of the challenge Bernanke’s predecessor, Alan Greenspan, confronted when he led the Fed.
“In February 2005, Greenspan said in the text of his testimony to the Senate Banking Committee that a decline in long-term bond yields after six rate increases was a ‘conundrum’. At the time, he was trying to keep the economy from overheating and sparking inflation. Now, Bernanke may be facing his own.
“Bernanke and other Fed officials say the improved economic outlook and rising federal budget deficit are the catalysts for higher borrowing rates, and see no need to increase purchases of bonds. Plus, the Fed has succeeded in shrinking the gap between 10-year Treasury yields and 30-year mortgage rates to 1.77 percentage points from 3.37 percentage points in December.
“‘To the extent yields are going up because the economic outlook is brighter, the answer would be, don’t do anything,’ Federal Reserve Bank of New York President William Dudley said in a transcript of an interview with the Economist last week.”
Source: Liz Capo McCormick and Dakin Campbell, Bloomberg, June 8, 2009.
BCA Research: Global yield curve strategy
“During the last recession, the 2/10 Treasury slope peaked in August 2003 but did not begin to steadily flatten until early 2004, a few months before the Fed began its tightening campaign in June of that year. Last week, Atlanta Federal Reserve Bank President Dennis Lockhart outlined the unusual scenario that if faced with inflation, the Fed could potentially increase the target funds rate even as it continued to pursue quantitative easing.
“Although technically possible, thanks to the recent policy of paying interest on bank reserves, this outcome is highly unlikely. Rate hikes will be politically impossible in the near term. It would be far easier to gradually and quietly unwind monetary stimulus in the reverse order that it was implemented, i.e. by selling long-term securities. Bottom line: Government yield curves are at cyclical extremes but a material flattening phase may still take until late 2009 or early 2010.”
Source: BCA Research, June 10, 2009.
Moneynews: Pimco recommends foreign, short-term bonds
“Those views are part of the bond giant’s secular outlook, which covers the next three to five years.
“Deflation represents the main risk in the short term and then inflation in the long term, the outlook says.
“The deflation concern stems from ‘the severity of the collapse in global demand and the resulting large gap in actual versus potential output’, the report states.
“‘Inflation risks will come to the fore later … as potential output becomes more constrained … and policymakers struggle to withdraw the massive levels of monetary and fiscal stimulus that have recently been introduced.’
“The case for foreign bonds: ‘US bonds, especially Treasuries, will face greater sovereign risk, as the US debt burden mounts and inflation expectations start to rise later [on],’ the report states.
“As for short-term bonds, their yields ‘are likely to be anchored near current low levels for a longer period than what is now priced into forward interest rate curves,’ the study says.
“‘Policymakers in many countries are likely to overstay with loose monetary policy.'”
Source: Dan Weil, Moneynews, June 9, 2009.
Bloomberg: Russia may swap some US Treasuries for IMF debt
“Alexei Ulyukayev, first deputy chairman of Russia’s central bank, said some reserves may be moved from Treasuries into IMF debt, reiterating comments made last month by Finance Minister Alexei Kudrin. Ulyukayev’s remarks were confirmed by a Bank Rossii official who declined to be named, citing bank policy.
“About 30% of Russia’s international reserves, which stood at $401.1 billion on May 29, are currently held in Treasuries, Ulyukayev said. Kudrin said on May 26 that Russia planned to buy $10 billion of IMF bonds using money from its foreign reserves.
“The IMF securities would give countries a different way to contribute to the fund and are unlike traditional bonds because they pay an interest rate pegged to the IMF’s basket of currencies, known as Special Drawing Rights.
“China is expected to buy as much as $50 billion of the bonds, IMF Managing Director Dominique Strauss-Kahn said yesterday.
“The IMF, which has rescued economies from Pakistan to Iceland in the past year, has never issued bonds before and is seeking more cash to finance loans and aid to member countries during the worst economic slump in the fund’s 64-year history.”
Source: Alex Nicholson and Dakin Campbell, Bloomberg, June 10, 2009.
Eoin Treacy (Fullermoney): Munis look overextended
“Most municipals peaked in December as Treasury yields began to rise. Over the last decade most states have yielded less than Treasuries and spreads are quickly heading back below zero. This suggests a return to more ‘normal’ conditions and that the ‘low hanging fruit’ in the municipal markets have been picked.
“In absolute terms, there is significant potential for municipals to pull back from their present overbought condition in terms of price, making discipline with regard to stops on long positions a sensible strategy for traders.”
Source: Eoin Treacy, Fullermoney, June 9, 2009.
Bloomberg: Berkshire bought municipal bonds amid higher yields
“Berkshire increased its investment in debt issued by state and local governments to $4.05 billion as of March 31 from $2.05 billion on June 30, 2008, the Omaha, Nebraska-based company said in regulatory filings. Berkshire added $1.09 billion to the bet in last year’s third quarter and $985 million in the first three months of 2009.
“Buffett’s firm bought municipal bonds while scaling back stock purchases and as its cash position fell to the lowest level in five years. As Berkshire was adding to the stake, hedge funds, mutual funds and other institutions that use borrowed money to boost returns were forced to sell holdings to meet margin calls and investor withdrawals, especially after Lehman Brothers collapsed in September.”
Source: Erik Holm and Jeremy Cooke, Bloomberg, June 9, 2009.
Anne Breen (Standard Life): Commercial property – confidence returning
“She points out that the collapse in commercial property that started in the summer of 2007 has so far been the swiftest downturn in the sector’s history, reflecting the deep global recession, the financial crisis and a turnaround in sentiment.
“‘However, the early months of 2009 have seen more stability in transaction yields in select markets, sizeable capital raising and renewed investor interest in this asset class,’ she says.
“‘While returns are likely to come under further downward pressure in the next 12 months, longer-term investors, particularly those with equity, should begin to analyse the property market carefully.’
“Ms Breen says that while the UK’s practice of monthly valuations, compared with much less frequent practices in other countries, exposed the excesses in 2007, it could begin to give confidence to those investors looking to re-enter the market at the bottom of the cycle.
“‘The UK market was one of the first to begin the process of repricing and looks to be furthest advanced in the global cycle,’ she says.
“‘Over a three-year time horizon, UK commercial property returns are likely to outperform cash.'”
Source: Anne Breen, Standard Life (via Financial Times), June 9, 2009.
Bespoke: Strategists turn slightly more bullish
“On the other hand, strategists had been increasing their recommended fixed income allocation since mid-2007 as well. Their target bond allocation reached a record high of 39.1% in early March, but since then it has dropped just a bit down to 38.1%. If investors were following these recommendations by selling stocks during the market decline and buying Treasuries, they can’t be very happy now that Treasuries are tanking and stocks are up.”
Source: Bespoke, June 11, 2009.
MoneyControl: Marc Faber – high risk in entering equities now
“He has booked some profits in Asia and finds valuations there reasonable.
“According to Faber, India has good growth potential, but was quick to add that economic, political uncertainty remains.
“He does not see attractive entry points for commodities currently.
“Q: In the last few days, global markets have sort of been ranging. Do you see this as a consolidation before another leg of the upmove or is it just tiring out?
“A: I would say that the entry point for people who want to buy equities around the world is a high risk entry point because the global economy has bottomed out. There is little potential to grow very strongly. So, there will be disappointments in terms of earnings in the second half of 2009. The gravy is a bit out of markets. India was below 8,000 on the Sensex and has gone up almost 100%. I don’t think it is a very good time to make an entry into the markets except for traders.
“Q: Till Friday last week, the Dow had almost reversed all its losses in 2009. How would you map the second half of this year?
“A: In the long-term, the dollar would be a weak currency. But we have a lot of volatility and can go either way. No paper currency is very desirable. That is the problem.
“Q: If you had positions in Asian equities at this point, would you be taking profits or would you remain invested?
“A: I have taken some money off the table. In Asia, we have lots of stock markets and lots of stocks that have reasonable valuations. I wouldn’t say very cheap, but reasonable valuations. If you have a long-term time horizon and have cash flow whereby you can buy more shares if they should go down, then I would say hold them. But as a trader, I think as of today I would rather sell than buy.
“Q: Where does India fit-in in that valuation spectrum? Do you agree with the theory that has been put forth that India now deserves a premium to other emerging markets or maybe even Asian markets?
“A: I think that India has of course good growth potential, but there are still lots of uncertainty, both political and economic. As a trader, I would rather sell India than buy it. But as a long-term investor, I would hold here in India.
“Q: Do you think commodities are also about to top out? If you look at crude and even metals, would you be taking profits here if you had positions?
“A: Yes, I have had positions. Many resource stocks have more than doubled from the lows. Some have even tripled. I don’t think that it is a very attractive entry point to buy these commodities and commodity-related stocks.
“Oil is up almost 100% from the lows. The demand for oil is still rising but not as much as before. There is plenty of flight. So, I just don’t think it is a very good time to buy.”
Source: MoneyControl, June 9, 2009.
Bespoke: Investors slowly becoming more comfortable with the rally
Source: Bespoke, June 11, 2009.
Bespoke: S&P 500’s new trading range above 200-day moving average
Source: Bespoke, June 8, 2009.
Financial Times: Emerging market equities outperform west
“Emerging market equities have dramatically outperformed their developed world peers since the start of the year, accelerating since risk appetite began to improve in March.
“The FTSE emerging markets index has risen 41.1% since the start of the year and 60.8% since the beginning of March. This compares with a rise for the FTSE All World developed markets index of 7.2% since the start of the year and 31.4% since the start of March.
“Jim O’Neill, chief economist at Goldman Sachs, expects China and India to grow strongly this year in defiance of recession in most rich nations.
“Mr O’Neill said he believed this was because of a structural shift in the world economy that was seeing the biggest emerging nations benefit from continued growth in domestic consumption.
“‘Contrary to widespread expectations, the chances of China showing growth of more than 8% despite the world crisis are quite high, and the markets are signalling that India’s election results raise the possibility of more reforms there,’ he said.
“‘Over the next five years, there is a genuine chance that both China and India could show domestic demand growth of 10% at the same time.’
“However, some analysts warned that emerging markets relied on the US consumer for their health.
“Nigel Rendell, senior emerging markets strategist at RBC Capital Markets, said: ‘The emerging markets are a geared play on the developed world. If you look at the main emerging economies, it is only really China and India that are continuing to grow strongly.'”
Source: David Oakley, Financial Times, June 7, 2009.
My Finances: Investing in Africa
“But could people in the UK use their money to help nations in Africa and still see a profit? Daniel Barnes investigated investing in Africa.
“Roger Whitcomb, director of InfraCo which sets up projects in Africa, preparing the ground work so larger investors can have a sturdy foundation, explains caution is needed.
“‘To invest in Africa, you need to be brave and well informed.’
“He explained the current financial crisis may well be a hiccough for Africa, but at the moment it has stopped investment.
“InfraCo funds the early higher risk stages of infrastructure development, with projects in Cape Verde, Uganda and Zambia among others developing wind power, irrigation and power generation projects.
“However, Mr Whitcomb explained there were now problems raising finance, as banks only seem to have an ‘on and off switch’.
“But he maintains positivity, but a major concern he raises is the stability of governments.
“‘We need robust governments to be confident that the world will not change and if you make an awful lot of money, it will not be taken away.
“‘You have to be very wary where social capital and governance [indices] are low.’
“He described Nigeria in recent years as being ‘a nightmare’, while countries such as Cape Verde were much better.
“Investing in Africa is not something you can dip in and dip out off.
“For consumers looking to invest in Africa there are a number of funds that look at the continent. But investors are warned to be prepared for volatility.
“Meera Patel, senior analyst at Hargreaves Lansdowne, explains: ‘There are some great investment opportunities around, but the problem is Africa is still labelled for having political instability and corruption.’
“However, she explains many companies are seeing economic growth and there are improvements in corporate governance being made.
“Mark Mobius, fund manager of the Templeton Emerging Markets Investment Trust (TEMIT), explains one of the main dangers of investing in Africa is a ‘lack of liquidity’.
“‘In a number of markets there is not enough turnover to enable meaningful investments without moving the price, and secondly, there is lack of custodial facilities – in some countries foreign custodial banks can’t find good local counterparts to safe keep securities.’
“He maintains a warning.
“‘I would not say that Africa suffers more volatile conditions than other parts of the world. However, there definitely are political and economic problems which investors should understand and prepare themselves for.'”
Source: My Finances, June 9, 2009.
Richard Russell (Dow Theory Letters): Dollar’s death cross
“The evil progression – a sinking dollar puts pressure on bonds. Declining bonds drive interest rates higher. Rising interest rates mean rising mortgage rates. Higher mortgage rates puts pressure on the purchase of new homes. Housing represents collateral for almost everything in the US economy.”
Source: Richard Russell, Dow Theory Letters, June10, 2009.
Bloomberg:Dollar’s reserve status may deteriorate, Roubini says
“‘We may see complementary reserve currencies,’ Roubini said at a conference today in Athens. While it’s ‘not going to happen overnight’, the development ‘will diminish the role of the dollar over time’.
“The dollar’s status has come into question as leaders of Brazil, Russia, India and China discuss substituting other assets for their dollar holdings amid a ballooning budget deficit that keeps the US dependent on foreign financing. China alone owns about $744 billion of US Treasury bonds among its $2 trillion of foreign-exchange reserves.
“Russian President Dmitry Medvedev last week renewed his call for consideration of a supranational currency to challenge the dollar. Chinese Central Bank Governor Zhou Xiaochuan said in March that the International Monetary Fund should create a ‘super-sovereign reserve currency’.”
Source: Natalie Weeks and Mark Deen, Bloomberg, June 11, 2009.
Bloomberg: IMF says new reserve currency to replace dollar is possible
“The IMF’s so-called special drawing rights could be used as the basis for a new currency, First Deputy Managing Director John Lipsky told a panel discussing reserve currencies at the St. Petersburg International Economic Forum today.
“‘There are many, many attractions in the long run to such an outcome,’ Lipsky told a panel discussing reserve currencies at the St. Petersburg International Economic Forum today. ‘But this is not a quick, short or easy decision,’ he said, adding that it would be ‘quite revolutionary’.
“The SDRs would have to be delinked from other currencies and issued by an international organization with equivalent authority to a central bank in order to become liquid enough to be used as a reserve, he said.”
Source: Alexander Nicholson, Bloomberg, June 8, 2009.
Richard Russell (Dow Theory Letters): Gold cooling off
“It looks as though gold is going to ‘cool off’ for a while, prior to its next advance. The current correction will serve to quiet down all the hoopla about gold.”
Source: Richard Russell (Dow Theory Letters), June 8, 2009.
Bespoke: Oil bull market – fast and furious
Source: Bespoke, June 10, 2009.
CNBC: Gartman – oil to hit $75?
Source: CNBC, June 12, 2009.
Bespoke: Will natural gas be the next to rally?
“With oil nearing $70 and natural gas below four, the current ratio between the two commodities is now over 18. Following prior periods when the ratio went above 18, while natural gas hasn’t always rallied, it has always outperformed oil. Additionally, as we near the end of the second quarter, natural gas is entering what has historically been its best quarter of the year. As shown in the chart below, the commodity’s average return (using the front month futures contract) during the third quarter of the year has been 12.95% with positive returns 63% of the time.”
Source: Bespoke, June 8, 2009.
CNBC: China’s economic recovery is on track
Source: CNBC, June 12, 2009.
Financial Times: Positive signs in China despite trade fall
“Exports fell 26.4% from a year earlier, a steeper drop than the 22.6% fall in April and the seventh consecutive month of decline.
“Imports fell 25.2%, after a 23% drop the previous month, but economists said imports and exports had stabilised and were basically flat if measured on a monthly, seasonally-adjusted basis.
“Chinese import volumes of many commodities and natural resources surged in May, indicating a rebound in infrastructure building. That supported figures on Thursday showing fixed-asset investment was 32.9% higher in the first five months of the year, compared with the same period in 2008, an implied rise of 38.7% in May alone from a year earlier.
“That was the third highest rise on record but because prices are falling in China, last month’s investment figure was the highest since the government began publishing figures in 1997, according to Goldman Sachs. ‘While government-led infrastructure investments continue to lead the charge, private investments are showing positive signs as well,’ said Yu Song, Goldman economist.
“The twin engines of the economy over the past decade have been the booming property market and surging exports. Thursday’s data appeared to indicate at least one of those engines could be starting to recover.
“Growth in property-related fixed-asset investment accelerated to 6.8% from a year earlier in the first five months, compared with 4.9% year-on-year growth between January and April. However, the growth rate was still 25.1 percentage points lower than year-on-year growth in the first five months of 2008.
“Sales volumes of commercial and residential real estate rose 45.3% in the first five months from a year earlier, but the huge rise in turnover did little to boost prices, leading some economists to question the accuracy of the statistics.”
Source: Jamil Anderlini and Justine Lau, Financial Times, June 11, 2009.
US Global Investors: China’s private investment growth also accelerating
Source: US Global Investors – Weekly Investor Alert, June 12, 2009.
Financial Times: Ireland’s credit rating is cut
“Standard & Poor’s reduced Ireland’s long-term credit ratings to double A, with a negative outlook, from double A plus. The country lost its top triple A rating at the end of March.
“S&P’s move sent Irish banking stocks plunging, hit the euro and forced up the cost of insuring the country’s debt against default.
“It puts more pressure on the coalition government of Brian Cowan, prime minister, which faces a no-confidence vote on Tuesday after a rout in local elections and the loss of a key seat in Dublin in the European parliament to a Eurosceptic rival.
“S&P said in a statement: ‘We have lowered the long-term rating on Ireland because we believe that the fiscal costs to the government of supporting the Irish banking system will be significantly higher than what we had expected when we last lowered the rating in March.’
“The cost of rescuing Irish banks may rise to as much as €25 billion against S&P’s previous forecast of between €15 billion and €20 billion.
“S&P took its decision after the recent announcement that losses at the nationalised Anglo Irish Banks were at the upper end of its expectations.
“The agency fears the scale of the government’s bad-bank plan, in which the Irish state will start taking on the liabilities of bank loans and assets with a book value of up to €90 billion from July, could cause national debt to surge past 100% of gross domestic product next year from about 41% last year.
“In spite of the problems, analysts at Royal Bank of Scotland said Ireland was unlikely to default on its debt obligations or turn to the International Monetary Fund for help.”
Source: David Oakley and John Murray Brown, Financial Times, June 8, 2009.
2 comments to Words from the (investment) wise for the week that was (June 8 – 14, 2009)
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