Posts Tagged ‘Charts’

Testing . . . one . . . two . . .

Thursday, September 8th, 2011

After the jaw-dropping decline of late July/early August, we’re now in what appears to be a bottom testing phase. It’s probably not an inappropriate metaphor to think of testing the ice on a pond. So far, the testing is going okay. Yesterday’s drop in the S & P 500 stopped right at the trend line defined by the August 9 and 22 lows, meaning that each low has been higher than the previous low, the simplest definition of a trend. Now, if the trend gives way, we’ll be headed back to that August 9 low.

Here’s what the picture looks like.

There is still plenty that can go wrong in the world, and investors are on high alert for them. I’ve maintained for a while that the problem is Europe, and what’s seen as an eventual blow up there is being increasingly referred to as a Lehman Bros. moment, the period of time begun on September 15, 2008, when the market went into freefall. It appears that Greece is circling the toilet bowl, and the sooner the country can be allowed to default–in whatever form it takes–the better. That it might not be the worst thing was on evidence today in the Greek stock and bond indexes. While the 1-year Greek note now yields–I AM NOT MAKING THIS UP–89.18%–yesterday it yielded a mere–I AM NOT MAKING THIS UP–80.483%. That’s a bond that’s not going to get paid back. At the same time, the Greek stock exchange was up by +8%. The fine folks at Miller-Tabak mused that some bond pain might be good for the economy; therefore, bonds down, stocks up.

Please note the +14.5% and +8% (today) pops. To me, those are indications of a severely oversold market. Perhaps one thing that happened over the past month’s equity volatility is that market participants are geared up–maybe inured is a better word (no, not injured, although that, too)–for the worst case scenario in Greece. Anything better than worst would be good (huh?)


Cool feature at the Financial Times website

Friday, July 30th, 2010

The Financial Times–FT for short–is one of the world’s best financial papers.  Were it not for the pink newsprint, which is just sort of wierd, I’d put it ahead of the Wall Street Journal.  Anyway, it has this cool feature that lets you get a quick graphical look at the condition of the states.  (We’ve been concerned with the state of the states, but have recently taken solace in the widespread recognition of the problem–something we’ve been watching since late 2005.)

Here’s a look at the FT feature.  It shows the states in a typical heat-map fashion, based on budget shortfalls for each state.  (You should be able to click on it to jump to the FT’s site.)  There’s also a tab that brings up credit ratings for each state.  Indiana’s AAA rating is a bit misleading, though, since the State has no general obligation debt; most of it is shifted to local municipalities, most of which are not rated AAA.

While I’ve highlighted Indiana since I’m ethnocentric, notice all the states in worse financial condition–solely on this measure–than the poster child for states-worse-than-Greece, California.  They include California-by-the-lake (Illinois), as well as bucolic Maine and hip–well, I think so–North Carolina (think Asheville or the Raleigh-Durham/Research Triangle).

According to Indiana’s Treasurer (see below), Indiana is the envy of other states.  It’s also, “unlike our neighboring states ,” which happen to include one of the nation’s worst quantitatively (Illinois) and one anecdotally (Michigan), “that are deferring their obligations, we’ve continued . . . in a businesslike and sound manner.”  But I have to forgive Mr. Mourdock’s financial liberties since he included a great Roy Rogers quote.


A picture is worth a lot of money

Thursday, March 19th, 2009

If you appreciate the descriptive ability of pictures as much as I do then you’ll like this one, although you may not appreciate the effect it’s had on your net worth.  The chart below shows significant bear markets from 1929 to the present.  The horizontal axis measures the length of each, while the vertical represents the price decline.  Only one bear market has seen a worse decline than this one, although most have been longer in duration.