SP 500 and NDX Futures Daily Charts - Alibaba Rang the Bell

There was a dead cat bounce off key support that took the major stock indices back up to prior support.

But that rally faded into the afternoon. The bulls were able to slow the descent and avoid a late day plunge as we had seen yesterday.

Stocks managed to finish slightly higher, holding their key support levels.

So what next. CSX and INTC reported beats on earnings and revenues after the bell. Earning *might* help if they are overwhelmingly good.

We will be getting some macroeconomic news for the week starting tomorrow. The bulls need to bounce them here and hold on to the gains.

Have a pleasant evening.

Comparing One Dimension of the Policy Responses of the ECB and the Federal Reserve

Here is a chart comparing the Balance Sheet Assets of the Fed and the European Central Bank.

It is important to recall that the Fed has been providing extensive funding to non-US, largely European, multinational Banks through their US subsidiaries.

This also does not compare the sovereign debt of the two regions, but rather just one measure of their Central Banks policy responses.  It does not indicate how those assets are being used, by whom, and to what effect.

Nevertheless there seems to be a clear divergence between the two policy responses.

 

Performance of a Number of Global Stock Exchanges Year-To-Date

Except for a few Asian countries, and special situations not pictured perhaps, it looks like a global slump from here.

There are still a select few unbroken housing bubbles out there that may find some adjustment in a future capital crisis.  Canada and Australia come to mind, among others.

Despite the billions of taxpayer funds poured into them, some if not quite a few of the troubled multinational Banks are still in trouble, and a few may be teetering.

Does anyone who is well informed not recognize that the policy errors of the Central Banks and their political cronies have failed to foster a sustainable recovery after five long years of enormous bank subsidies and public misery?

And the fruits of this selfish foolishness may likely be another crisis that is even more decisive?

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.


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GolemXIV: Trouble In Bankland

In the US:

• Home Equity Loans (HELOCs) are up 20% this year. 15% of all home loans originated are home equity extraction loans.
• People are taking equity out of their homes in the reigniting housing bubble, but adding to their bank debt.
• Student loans now total $1.2 Trillion.
• Nearly 35% of student loans [I believe David inadvertently says HELOC at one point] given to people under 30 are now 90 days delinquent.
• There are $924 Billion in auto loans, with nearly one third being subprime.
• It will not take much of a downturn for the HELOCs to go underwater.
• Jobs for those servicing new student loans are often low paid and hard to find and could become scarcer prompting more defaults.

In Europe:

• Royal Bank of Scotland (RBS) has now lost ALL of the £46 Billion bailout from taxpayers
• Espirito Santo recently went bankrupt AFTER recently passing the ECB stress test.
• Not only the bank, but the entire Espirito Santo group went bankrupt, after the bank sold their associated debt to unsuspecting clients.
• This certainly does not inspire confidence in any of the ECB testing of the Banks. We would have no confidence in an agency that tested cars with these kinds of results.
• There were fifteen other EU banks that passed in the weak manner of Espirito Santo.
• The Spanish/Italian/Greek Banks were allowed to count tax credits from the government as assets.
• What if China decides to support its domestic coal production by assessing a 3 to 6 percent surcharge on imported Australian coal? It would dampen exports and GDP.
• Australia's huge housing bubble is counting on 8 to 12 percent house increase NEXT year.

If things go south, the ECB,  Fed, and other Central Banks will have to engage in another enormous bailout.





Source: GolemXIV