Governments Help Markets Score Big in 2010...

What will 2011 bring?
THE year that was 2010 was a shaky one for the Global Economy, but it was also clearly the best of the last three. Growth returned or strengthened across most of the world, employment rose, and markets had a good year—the Dow was up around 10% for 2010. There were downsides, of course. Europe's crisis threw a shadow over much of the year, and threatened to tip several major economies back into Recession over the summer. Unemployment remains very high in much of the developed world, includi...

Summer Rerun: Buiter Provokes Wrath at Jackson Hole, Says Fed Too Close to Wall Street
This post first appeared on August 24, 2008 Go Willem Buiter! The London School of Economics prof and former Bank of England and European Bank for Reconstruction and Development official has been saying for some time that the Fed suffers from “cognitive regulatory capture” and has been far too responsive to the needs of Wall Street. It’s been puzzling to watch his detailed, well argued criticisms go unnoticed, particularly when they have been offered at forums where one would...

U.S. stock investors eye January with caution
NEW YORK (Reuters) - Stocks may have kicked off 2011 with a no-holds-barred surge but anyone predicting a sustainable rally through January may be overly optimistic. Many warning signs reveal a market that is ahead of itself after the best December for U.S. stocks since 1991. More signs of economic expansion in key economies, accommodative U.S. Monetary Policy, and upbeat forecasts for corporate earnings underpin the latest moves higher. But the question now is how much of last month's gains we...

Commodities: The bull that won't die - The Buzz
NEW YORK (CNNMoney) -- Gold, oil and other commodities enjoyed a stellar run in 2010. The party may not be over just yet ... but investors have to be wary. Several experts say that the main forces behind the bull run in commodities last year, namely strong economies in Emerging Markets coupled with worries about the health of the U.S. and Europe, are likely to remain in place this year. Email Print Comment Concerns about the Sovereign Debt crisis in Europe and the slow grind of a recovery in t...

How to Navigate the Bond Market in 2011
Related Articles 9 Strategies for This (Or Any) Market 50 Ways to Improve Your Finances in 2011 8 Investing Resolutions for 2011 The 100 Best Mutual Funds for the Long Term The outlook for the Bond Market in 2011 remains uncertain. Recently, treasury yields have moved upward, causing some investors to panic and forecasters to call for the end of the bond market's bull run. The big question: whether or not Interest Rates (and bond yields) will rise in the new year. That will depend on a num...

Fed Likely to Add New Dealers for Treasury Market
Yahoo! Buzz After a hiatus of more than one year, the Federal Reserve is likely to expand a select group of dealers to help with hefty Treasury Debt sales and the Central Bank’s monetary-policy operations, according to traders and dealers familiar with the matter. Demand for safe-haven Treasurys has eased over the past couple of months as optimism over the Economic Outlook sparked more buying interest in riskier assets such as stocks. That means dealers need to play a bigger role in underw...

Asia factory output powers ahead but inflation worries
By Tony Munroe Mumbai | Mon Jan 3, 2011 4:08am EST Mumbai (Reuters) - Asian factory output powered ahead in December to underline Emerging Markets' lead in the global recovery although data showed an increasing Inflation threat in the region even as growth is tepid in developed economies. Purchasing managers' indexes in both China and India fell but also showed that the pace of factory output was still expanding solidly. The sectors in both countries have been growing for close to two years. ...

Stocks Rally to Ring in the First Session of 2011
Stocks started the new year with a robust rally Monday, helped by encouraging corporate and economic news that pushed the broad market to a 28-month high. The S&P 500 ($INX) has now reclaimed nearly 90% of its losses from the bear-market bottom of March 2009. The Dow Jones Industrial Average ($INDU) spent much of the day with a triple-digit gain before finishing up 93 points, or 0.8%, at 11,671. The blue-chip index last closed above that level in late August 2008, or just a couple weeks be...

Is The Stock Market Cheap?
Here's the latest update of my preferred market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly averages of daily closes for December 2010, which is 1241.53. The ratios in parentheses use the December monthly close of 1257.64 (which this month gives the same ratio to one decimal place as the monthly average). For the latest earnings, see the adjacent table from Standard & Poor's. A standard way to investigate ma...

Economic Themes at the Start of 2011
3.  China’s Economic Growth appears to be moderating.  The official Dec Manufacturing ISM eased to 53.9 from 55.2 in November and compares with consensus expectations of around 55.5.  The results were in line with the private measure released last week.  The moderation was widespread including output, new orders and employment.  New export orders bucked the general trend and ticked up to 53.5 from 53.2.  Just as important, if not more so, input prices eased (t...

A New Year, new economic headwinds
Most analysts are looking forward to a strengthening Economic Recovery in 2011, but slowing growth and rising Inflation around the globe suggest the opposite will prove true. For the Stock Market, 2010 was a solid year by many standards. Despite some unfettered Volatility, most major U.S. stock markets ended the year comfortably in the positive. Leading the way were small cap stocks with the Russell 2000 up more than 26%. While the broader market trailed the small cap index, the S&P 500, of...

U.S. stock investors eye January with caution
By Herbert Lash NEW YORK | Mon Jan 3, 2011 3:30pm EST NEW YORK (Reuters) - Stocks may have kicked off 2011 with a no-holds-barred surge but anyone predicting a sustainable rally through January may be overly optimistic. Many warning signs reveal a market that is ahead of itself after the best December for U.S. stocks since 1991. More signs of economic expansion in key economies, accommodative U.S. monetary policy, and upbeat forecasts for corporate earnings underpin the latest moves higher. B...

Is the retail investor returning to stocks?
By Joseph A. Giannone NEW YORK | Mon Jan 3, 2011 5:18pm EST NEW YORK (Reuters) - U.S. stocks just posted back-to-back years of strong gains, yet the small U.S. investor largely remained a spectator. Now financial advisers say investors, many of whom rode out the Financial Crisis in cash and bonds, are slowly regaining confidence. "What I'm seeing now is there's a lot more talk about getting into stocks," said David Gottlieb, a Cleveland adviser for Edward Jones, a nationwide brokerage caterin...

How to beat the market? Only stay a day at a time
(01-02) 10:37 PST NEW YORK, (AP) -- It's one of the truisms of financial planning: trying to perfectly time the market is a fool's errand. For long-term gains, the advice goes, you should buy index funds and hold them indefinitely. Warren Buffett likes to say that his preferred holding period is "forever." But a very simplistic form of market-timing has worked for the past 11 years. It involves owning the Standard & Poor's 500 stocks, but only for the first day of every month. An S&P; report re...

What's Pushing Down Treasury Bonds? A Rising U.S. Economy
Stocks may be poised to deliver their best December performance in almost two decades, but it's the machinations in the Bond Market that have been captivating investors recently. The question on market-watchers minds is this: Does the recent rapid rise in yields on U.S. Government Bonds signal a return to economic normalization, or are the nation's creditors finally getting fed up with financing soaring U.S. Deficits? Both sides saw evidence to bolster their views this week. The doomsayers g...

ECB government bond buys drop
Data from the European Central Bank shows it bought €164 million ($218 million) in bonds from governments with shaky finances in the week that ended on Dec. 31, as pressure to fight the region's Debt crisis abated over the holidays. Monday's figure compare with €1.121 billion in investments in Government Bonds a week earlier, but the week between Christmas and New Year's only had three full trading days where volumes were low. The Central Bank started buying the bonds from highly ind...

Central banks underpin euro and diversify toward "other currencies"
The IMF released its Q3 2010 Currency Composition of Official Foreign Exchange Reserves (COFER) report. The COFER database provides the breakdown of official Central Bank portfolio holdings by currency across advanced and emerging/developing market economies. The picture is roughly half complete, as 44% of the global reserve positions go unallocated. But the trend in reported FX holdings indicates that central banks are supporting the euro, giving it a lower bound. Furthermore, there has been ...

A Primer on the 2007-2009 Financial Mess [Reader Post]
1.    Politicians had policies which supported bad Lending practices.  They believed that not enough loans were being made to minority groups, so they expanded the power and scope of the Community Reinvestment Act, which was designed to get more Minorities to buy homes. 2.    There was the problem of minority incomes not being high enough and their credit not being good enough to get home loans. 3.    FNMA and FHLMC are quasi-government instituti...

The New Year and Financial Crises
The New Year is likely to bring renewal of financial problems in the European Union. In Greece, the crisis was fiscal in origin and spread to Greek banks and banks in other countries that had lent to Greek banks and the Greek government. In Ireland, the crisis began with problem real-estate loans at Irish banks. That spread to European Banks, mainly British, that had lent to Irish banks. In its year-end issue, The Economist reminds us of the 2008 banking crisis in Iceland.  The Ic...

Stocks start 2011 with a lift
NEW YORK (AP) - Stocks started 2011 with a lift Monday thanks to better than expected economic news out of Europe. Shares rose throughout Europe after a report showed that Manufacturing in the Eurozone expanded faster than analyst's forecasts. The Euro Stoxx 50 index rose 0.8 percent. Benchmark indexes in France, Spain, and Germany each gained more than 1.1 percent. Investors will get reports on Manufacturing growth and construction spending in the U.S. on Monday as well. Economists expect tha...

Stocks start 2011 with a lift
(01-03) 07:59 PST New York (AP) -- Stocks started 2011 with a lift Monday thanks to better news on The Economy. Manufacturing activity and construction spending both rose more than analysts were predicting. The Institute of Supply Management's index of manufacturing activity rose in December for the 17th straight month. Separately, the Commerce Department said that construction spending rose 0.4 percent in November. In morning trading, the Dow Jones industrial average jumped 108 points, or 0.9...

Stocks start 2011 with a big lift
Signs that The Economy is improving pushed stock indexes higher on the first trading day of the year. Manufacturing activity and construction spending both rose more than analysts were predicting. The Institute of Supply Management's index of manufacturing activity rose in December for the 17th straight month. Separately, the Commerce Department said construction spending rose 0.4 percent in November. The Dow Jones industrial average jumped 128 points, or 1.1 percent, to 11,706 in afternoon tra...

Stocks Start 2011 With A Lift
NEW YORK (AP) — Stocks started 2011 with a lift Monday thanks to better than expected economic news out of Europe. Shares rose throughout Europe after a report showed that Manufacturing in the Eurozone expanded faster than analyst’s forecasts. The Euro Stoxx 50 index rose 0.8 percent. Benchmark indexes in France, Spain, and Germany each gained more than 1.1 percent. Investors will get reports on Manufacturing growth and construction spending in the U.S. on Monday as well. Economists ...

Stocks kick off 2011 on a high note
NEW YORK (CNNMoney) -- U.S. stocks started 2011 with 1% gains at Monday's open. Bank of America led financial shares higher after it announced a $3 billion Mortgage settlement. Investors were also awaiting a key report on Manufacturing. The Dow Jones industrial average (INDU) gained more than 108 points, or 0.9%; the S&P 500 (SPX) rose 13 points, or 1%; and the NASDAQ (COMP) increased 35 points, or 1.3%. Email Print Comment While The Economy has a long road to recovery, investors are bull...

Stocks poised to start 2011 with a lift
Stocks are poised to start 2011 with a lift thanks to better than expected economic news out of Europe. Shares are rising throughout Europe after a report showed that Manufacturing in the Eurozone expanded faster than analyst's forecasts. The Euro Stoxx 50 index is up 0.8 percent. Investors will get reports on Manufacturing growth and construction spending in the U.S. on Monday. Economists expect that Manufacturing grew at the same pace in December as in November. Analysts expect construction sp...