Roberto Abraham Scaruffi: July 2013

Wednesday, 31 July 2013

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Articles posted on Wednesday, 31 July 2013
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Korea's Debt Mountain

by Jayati Ghosh,
Seoul, the capital of the Republic of Korea, is now one of the 'happening' cities of Asia. Psy's 'Gangnam style' (the pop music video that has gone viral online with more than 6 billion hits) that somewhat randomly celebrates the posh modern district of Gangnam is only one of various ways in which the city is supposed to reflect the new cool. There is growing recognition that this city is both vibrant and livable, with its vertiginous high-rise buildings coexisting with clean streets, fine new museums and spots that combine the natural beauty of its forested hills with carefully preserved (or reconstructed) palaces of the Joseon dynasty.

What We Read Today 31 July 2013

Econintersect: Click Read more >> below graphic to see today's list.

The top of today's reading list is about Daniel Tarullo, a Fed governor never mentioned as a replacement for Ben Bernanke ........ and the last article is about further discussion of misrepresentations about and by Reinhart and Rogoff.

Roller Coaster Casino Market Cleans Some Investors Clocks

Closing Market Commentary For 07-31-2013
The FOMC minutes was a dull reading and not saying very much but the markets reacted in a full blown buy for several minutes, but by 2:15 it was all downhill. But wait, it gets even better. In just 5 minutes the markets were back exactly where they were BEFORE the minutes release. Can you spell HFT algo computers at work? There will be a stink over this and then after a day or so everyone will forget about it as usual.
By 4 pm the markets had sunk to another miserable low taking with it all the sheeples that bought in. Unbelievable!

31 July 2013 FOMC Meeting Statement: Little New, Nothing Changed

Econintersect: The Federal Open Market Committee (FOMC) - the board of directors of the Federal Reserve - meeting concluded today and issued their meeting statement believing the economy went from moderate to modest expansion (good better or bad better or ??), and only word engineering their previous statement (see table comparing the previous meeting statement to today's).

Averages Slide Significantly On Low Volume

Midday Market Commentary For 07-31-2013
What rumor was started at 10:26? The averages jumped 0.30% in a matter of minutes where the DOW was up 0.70% at one point and the other indices followed suit. The DOW set a new record high along with the SP500, but then started melting downward totally confusing anyone trying to make sense of this mess.
By 1 pm it appears the averages are going to melt below yesterday's closing numbers before the session ends. Volume has fallen off to abysmal levels.

India's Silent War

A 40-year war that has claimed thousands of lives but been largely ignored outside of India. It has been raging in the jungles of central and eastern India. It is one of the world's largest armed conflicts with the Adivasis.

Markets Open Up But Cautious Of FOMC Meeting

Opening Market Commentary For 07-31-2013
Premarkets were up until the morning financials started coming in. ADP employment was up, but the GPD second quarter was down and that brought the SP500 futures down -0,01% and sending the USD sky rocketing upwards.
But you needed not to panic as the futures made an abrupt 180 and were back up where they were up +0.50% by 9 am. However the USD didn't fall back (bearish) and investors are now worried what the Feds will say at the FOMC meeting today.
At the opening bell the averages were in the green and melting upwards with the large caps in the +0.30% and the small caps in the +0.50%. Volume remains low so watch your large block trades if you are brave enough to dip your toes into this market.

July 2013 Chicago Purchasing Managers Barometer Improves Slightly

Econintersect: The Chicago Purchasing Managers Index improved after last month's largest drop in almost five years.

Nonfinancial Leverage NFCI Marginally Deteriorates Slightly w/e 26 July 2013

The Nonfinancial leverage subindex of the National Financial Conditions Index increased slightly (less good) this week but still remains well inside of economic expansion territory. Econintersect focuses on non-financial tools to monitor the economy.
This index remains on a "less good" trend line, and is believed to be a good forward indicator a recession is coming. A value above zero is a recession warning.

A Word from This Newsletter's Sponsor

The End of the "Made-In-China" Era

The 21st century industrial revolution has already begun. All because of an incredible invention that is made in America.
Business Insider calls it "the next trillion dollar industry." The Economist compares its impact to the steam engine and the printing press. And technology experts -- like the guys who brought you the BMW 3-series, the F-35 fighter jet, and -- think it could be "bigger than the internet."
A new investment video reveals the impossible (but real) technology that could make you impossibly rich. Watch it now, before the skeptics on Wall Street wise up and start looking for their piece of the action.

Advance Estimate 2Q2013 GDP Is 1.7%* (*new GDP baseline)

Written by Doug Short and Steven Hansen
The advance estimate of first quarter 2013 Real Gross Domestic Product (GDP) grew a positive 1.7% - up from a completely revised GDP database (discussed herein).
  • The market expected the advance estimate 2Q2013 GDP at -0.7% to +1.1%. 1Q2013 GDP has been revised down from 1.8% to 1.1%.

July 2013 ADP Jobs 200,000, A Second Good Jobs Report in a Row

Written by Steven Hansen
ADP reported July 2013 non-farm private jobs growth at 200,000.
  • The three month average of jobs gains improved - the rate of growth is accelerating. This is the second month of improvement after a 14 month "less good" trend.

Surgical Imaging: New Tech Investment Opportunities

Article of the Week from About Small Cap Stocks
by Allen Caron
Surgical imaging has long been a challenge for surgeons. Until about four years ago, patients undergoing surgery needed to be scanned post-procedure to ensure that the surgery was successful. However, intraoperative computed tomography (iCT) procedures now provide surgeons with a way to ensure successful surgeries before the patient has even left the operating room.
Image courtesy of; click to enlarge.

Quantifying QE

QE - Why $85 Billion per Month? Why Not $170 or $42 -1/2 Billion?
by Paul Kasriel, The Econtrarian
Author's warning: If you should choose to read this commentary, I recommend that you have ready a pot of coffee or your chosen type of cognitive stimulant. The commentary is lengthy and geeky.
Am I the only one who wondered how the Federal Reserve arrived at a figure of $85 billion as the amount of longer-maturity securities it planned to purchase per month in its third round of quantitative easing (QE)? Why not double that amount? Why not half that amount? How will the Fed know when it is time to 'taper' its securities purchases? How will the Fed know by how much to taper? Inquiring minds want to know.

Market Capitalization and GDP

Chart of the Week
by John O'Donnell
This week the Chart of the Week video discusses the ratio of market capitalization (total market value of all stocks). In this discussion we look at the apparent stock bubble of the past 20 years and the apparent trend toward reversion to the mean for the last century of stock prices.
[Watch the video after the Read more >> jump.]

BMW Enters the Electric Car Market

Econintersect: BMW has announced an electric car coming to market. based on modification of their 3 series design. The i3 is a 5-door hatchback design, has a base price of $42,000 and will be available for delivery in November in Europe and 2Q 2014 in the U.S. Based on the name it might seem that the i3 might be a modification of the BMW 3 series design, but the connection is not obvious in information released.
Click on picture for 43 image file from BMW.
bmw-i3-fig-1 Technical Analysis 30 July 2013 Technical Analysis (as of Tue, 30 July 2013 05:00pm EDT)
by Staff,
Below, technical overviews and analysis for key stock indices, commodities and pairs, based on market activity at the end of the 20 July 2013 U.S. session. This information is a comprehensive summary derived from simple and exponential moving averages along with key technical indicators shown for specific time intervals.

Profit from a Slower Growing China

Most Everything You've Heard about China's Currency is Dead Wrong (and that Means Money for Us) - Money Morning Article of the Week
by Robert Hsu, Money Morning
Nearly everything you've heard about China's currency, the yuan, is dead wrong. It's not undervalued and it's not undercutting the U.S. dollar as the financial press and politicians like to point out. I'll show you why.
You likely heard that China recently reported it had grown just 7.5 percent in the second quarter of 2013, the lowest level in over three years.
What you likely don't know is, more than half of that growth came from wasteful infrastructure and property investments, such as the new largest building in the world.

Fatal Train Crashes Are Rarer in the US than in the EU

by Felix Richter,
statistalogoIt has proven a deadly week for the European rail network. In the wake of last Tuesday's tragic derailment near Santiago de Compostela in Spain which claimed 79 lives, two regional trains collided at Granges-pres-Marnand in Switzerland yesterday. The driver was killed and 24 passengers were injured.

RFE/RL Afghanistan Report
RFE/RL Afghanistan Report
A review of RFE/RL reporting and analysis about Afghanistan.

For more stories on Afghanistan, please visit and bookmark our Afghanistan page .

Afghan Province Upset At Being Left Out Of Touted Rail Network Afghan Province Upset At Being Left Out Of Touted Rail Network
The dream of a northeastern Afghan province to become a regional trade hub has taken a knock after officials confirmed that Kunduz -- for now -- will be bypassed by a much-anticipated railroad linking northern Afghanistan to neighboring Central Asian countries. More
Honor-Killing Case Raises Fears For Women's Rights In Afghanistan Honor-Killing Case Raises Fears For Women's Rights In Afghanistan
Authorities in the northwestern Afghan province of Badghis have arrested a local cleric accused of killing a woman for allegedly having an affair with her male cousin. More
Afghan Arrest Over Fatal Fatwa
Afghan police say they have arrested a village mullah after a woman was publicly executed in accordance to a fatwa issued by the religious authority in northwestern Badghis Province. More
Afghan Women's Radio Closed Afghan Women's Radio Closed
The owner of an Afghan radio network dedicated solely to women says one of its regional stations has been shut down after he refused to pay bribes to officials. More
UN: Rise In Afghan Civilian Casualties UN: Rise In Afghan Civilian Casualties
The United Nations says that civilian casualties from fighting and insurgent attacks in Afghanistan have increased by nearly one-quarter in the first six months of this year. More
Reading Between The Red Lines Of U.S.-Afghan Security Talks Reading Between The Red Lines Of U.S.-Afghan Security Talks
Talks between Afghanistan and the United States over a long-term security agreement appear to have stalled, with both sides reluctant to make concessions on key issues. But the negotiations are poised to result in a deal that each side can claim as a victory. More
U.S. Afghan-Justice Award 'Deficient' U.S. Afghan-Justice Award 'Deficient'
Federal inspectors say a U.S. government award to an organization that promotes the rule of law in Afghanistan does not appear to contain basic oversight provisions from the State Department. More