Jeremy Grantham , US Stocks overvalued by 15%

wsj.com: It feels good to be right. But the few analysts who accurately called the market’s bottom in early March aren’t feeling so great about where stocks are headed.

One of the most famous of this group, Jeremy Grantham, penned a note on March 10 entitled “Reinvesting When Terrified” that encouraged investors to buy, suggesting stocks were 30% undervalued.

Since then, the market has roared ahead, without stopping for a correction of 10% or more. Standard & Poor’s 500-share index ended last week at 1026.13, up nearly 52% from its 12½-year low on March 9 and its highest close since Oct. 6. The Dow Jones Industrial Average is at 9505.96, up 45% since its March low.

Now, the chairman of Boston asset-management firm GMO and his colleagues say the S&P 500 has zoomed right past what they consider fair value of about 880, based on earnings estimates and historical price-to-earnings ratios.

Mr. Grantham sees “seven lean years” of a sluggish market ahead, to atone for what the firm believes was a long era of overpriced stocks, according to his newsletter.

Bernanke to be nominated as Fed chief for 2nd term

reuters.com

U.S. President Barack Obama will nominate Ben Bernanke to a second term as chairman of the Federal Reserve on Tuesday as the economy shows signs of recovery, a senior administration official said on Monday. Bernanke, whose appointment as head of the U.S. central bank must be confirmed by the Senate, has led the Fed and the U.S. economy through its most tumultuous period since the Great Depression of the 1930s. Obama's Democrats control the Senate.

Full Article

Marc Faber: Chinese Economy may Implode in 2010

Roubini warns of a Double dip recession

ft.com

T he global economy is starting to bottom out from the worst recession and financial crisis since the Great Depression. In the fourth quarter of 2008 and first quarter of 2009 the rate at which most advanced economies were contracting was similar to the gross domestic product free-fall in the early stage of the Depression. Then, late last year, policymakers who had been behind the curve finally started to use most of the weapons in their arsenal. When will the global recession be over? What will be the shape of the economic recovery? Are there risks of a relapse?

Full article

News Today - Aug 19

* Asian stock markets trade mixed, with Japanese and Hong Kong shares lower, weighed partly by banks and airline stocks.

* Hewlett-Packard's quarterly earnings fall as sales of PCs, printers and software all decline in the recession, though the results manage to beat Wall Street's low outlook.

* Wholesale prices in the U.S. fell more than forecast in July as energy costs receded, capping the biggest 12-month drop on record and showing inflation will not be an immediate concern for Federal Reserve policy makers.

* The U.K. inflation rate unexpectedly held at 1.8 percent in July as the cost of computer games, DVDs and alcohol rose, a sign the economy is staving off deflation as the recession eases.

* US Stock Rally Has Hit a Wall: Bond market Giant Pimco's El-Erian

Robert Prechter On The Dollar

The founder of Elliott Wave International shares his views on Dollar

News Today - Aug 18

* U.S. stocks and commodities sell off, rekindling familiar fears that market is leading indicator.

* Crude futures follow stocks lower as tumbling stocks pressure futures to a more than 2% fall, Gold slides about 1.5%

* Japan’s 3.7 percent economic expansion last quarter ended the country’s worst postwar recession.

*German investor confidence probably rose to the highest level in more than three years in August after Europe’s largest economy unexpectedly emerged from recession in the second quarter, a survey of economists shows.

* This Economic Recovery Is On Such Shaky Ground

News Links - Aug 17

Sensex takes 626-pt blow on China meltdown

Shanghai index tanks 5.8% in Monday trading.

Bears prowl Wall St as insiders dump stock

10 Reasons To Be a Bear Right Now

Gerald Celente: The 2nd American Revolution

'Bill,' First Hurricane of 2009 Season, Seen Strengthening :U.S. National Hurricane Center

New York Area Manufacturing Grows First Time Since 2008 as Recession Wanes

Fed Extends TALF Program Through June 2010 to Support Commercial Property

News Links - Aug 14

S&P's increases growth forecast to 6.3%

New record set in U.S. foreclosures

Blackstone's Schwarzman is the Best-Paid U.S. Executive, Tops with $702 Million

Tim Geithner: No evidence of Street reverting to old ways

India Inc upbeat on hiring, hikes

Agri situation disturbing: RBI Governor Subbarao

Citigroup is still sitting on top of a mountain of toxic assets

‘The World Is in Trouble’: Deutsche Bank Chief Economist

Krugman's suggestion on how to track this global financial crisis

Nobel laureate Paul Krugman offers ways the public can look for signs of recovery

News Today - Aug 14

* A good lead from the U.S. and rising commodities prices help extend Asian stock gains, while official comments boost Australian shares.

* Sales at U.S. retailers unexpectedly fell in July, raising the risk that consumers will keep cutting back as job losses mount and temper a recovery from the worst recession since the 1930s.

* Hong Kong probably emerged from its worst recession since at least 1990 in the second quarter as a recovery in mainland China bolstered exports

* Billionaire Li Ka-shing, who predicted China’s stock-market bubble would burst in 2007, said the global economy won’t recover this year and told investors to be “cautious” about buying shares, especially with borrowed money.

* Dollar Will Rise and Punish Stocks: Marc Faber

* Six of world's top 10 economies out of crisis

* Drought almost certain now, admits Indian Met dept

Elliott Wave International : Oil Will Crash To $10 A Barrel

Bloomberg:

“I expect crude oil prices to fall below $10 a barrel sometime over the next decade,” Prechter, founder of Elliott Wave International Inc., said in an e-mail yesterday. “It took many years for it to achieve $147.50, and it will take a long while for the full retreat to occur.” Oil should fall to between $4 and $10 a barrel based on a technical analysis called Elliott Wave principle, Prechter said in the Elliott Wave Theorist report last month. The forecast rests on a “supercycle” theory, which through a series of five waves from last century suggests a decline from last year’s peak.

Full article

News Links - Aug 13

German, French Economies Unexpectedly Grow Over Quarter, Ending Recession

Is US dollar weakness overdone?

Economists Call for Bernanke to Stay

ISRO launches desi version of Google Earth

Indian Monsoon rains fall 56 pc short, situation grim

Robert Prechter of Elliott Wave International , “Quite Sure” Next Wave Down Will Be Bigger and US markets March Lows Will Break

Deflation is the economy's swine flu; printing money is its Tamiflu.'

RBS uber-bear issues fresh alert on global stock markets

Marc Faber vs Nouriel Roubini

Its Dr.Doom vs Dr.Doom, the 2 famous bears share their views on state of the Economy

'Black Swan' Taleb on Bernanke

News Today - Aug 13

* Fed-inspired rally in U.S. gives a bounce to regional markets, with Japanese exporters up, but Telstra down in Sydney after results.

* We haven't seen the last of the crisis despite all talk about green shoots, and the surge in markets was caused by nothing more than the excess liquidity coming from central banks, Marc Faber, author of the Gloom, Boom and Doom Report, told CNBC Friday. Full story

* Fed Extends Bond Purchases But Not the Amount, Read the Fed's Statement

* Shanghai markets extend losses after stocks fell 4.7% in yesterdays trade

* NHPC's IPO subscribed over 23 times

* Swine flu death toll hits 18 in india

Paul Krugman: How Deep in Debt Can America Go?

News Links - Aug 12

Nouriel Roubini on which countries weathered the global downturn

Roubini: Risk of Double-Dip Recession Not Quite Past Yet

New Tax code proposal, Pay 10% tax for salary up to Rs 10 lakhs

20,000 slots still vacant in H1B visas

U.S. Enters Recovery as Obama's Stimulus Overcomes Skeptics, Survey Shows

Should Russia be in 'BRICS' ?

China Bubble Version 2.0

Why Apple is more valuable than Google

Doug Kass publicly made a prescient bottom call for US markets in early March now he has turned bearish , Summary of his Bearishness

India's industrial output up 7.8 pc y/y

economictimes.com

India's industrial output rose by a much faster-than-expected 7.8 percent in June from a year earlier, data showed on Wednesday riven by higher demand for consumer goods and increased mining activity. The infrastructure sector grew 6.5 percent from a year earlier, higher than an unrevised 2.8 percent in May. Exports fell an annual 27.7 percent in June to $12.8 billion, the ninth straight monthly fall. There are signs the expansion in activity continued in July, with car sales rising by a blistering 31 percent. full story

U.K. Unemployment Climbs to Highest Level in 14 Years

(Bloomberg) -- U.K. unemployment rose to the highest level in 14 years as companies continue to cut jobs even as the worst recession in at least a generation begins to ease. Full story

U.S. Economy Has Hit Bottom: George Soros

US economy has hit bottom and the current quarter will see positive growth due to the government's stimulus spending, billionaire financier George Soros said on Tuesday.

"I think it (the stimulus) has made a difference, the economy has actually bottomed and I think we are facing a positive quarter, and I think that is largely due to the stimulus," he said in an interview with Reuters Television in New York.

Full article

News Today - Aug 12

* A drop on Wall Street ahead of the Fed decision spreads across the ocean to Asia, with most major asian markets lower in early action.

* Japan’s economy grew last quarter for the first time in more than a year as rebounds in exports and consumer spending helped the country climb out of its worst postwar recession, the government is expected to say next week.

* India’s 7 percent economic growth target may be jeopardized as the weakest monsoon rains in five years threaten harvests, according to economists.

* Wholesale prices in Japan fall a record 8.5% in July from the year-earlier period, though the heavy drop still manages to beat forecasts.

* China's imports of oil and iron ore hit a record high in July, customs data showed Tuesday, as the nation's $586 billion stimulus plan continues to push up demand for commodities.

Russia GDP Shrank 10.9% Last Quarter

Bloomberg.com

Russia’s economy contracted the most on record last quarter as rising unemployment sapped consumer demand, bank lending stalled and the government failed to approve a stimulus package until just two months ago. Gross domestic product contracted an annual 10.9 percent in the second quarter, the Federal Statistics Service said today, citing preliminary data

Full article

China’s economy cools as lending slows

Ft.com

China’s surging economy slowed slightly in July as state-controlled banks heeded Beijing’s instructions to rein in excessive lending, with the volume of new lending dropping 77 per cent from a month earlier.

Most economic indicators however suggested a continuing strong recovery, largely as a result of government investment and state-directed lending that saw new loans nearly triple in the first seven months from the same period last year.

Read Full article

News Links - Aug 11

Fed Nervous about Early recovery call

Are information technology's glory days gone?

Corporate earnings are no sign of recovery

The next meltdown will come in 2012

U.S. productivity rises 6.4%, fastest in 6 years

Mark Mobius view on emerging markets

U.K. Data Show Hope Of Recovery

wsj.com

U.K. retail sales rose in July and sentiment in the housing market reached its highest level in almost two years, providing further indications that the economy is on the mend.

The figures are consistent with a string of recent data releases that suggest the economy may grow this quarter, and come ahead of the release on Wednesday of new economic forecasts by the Bank of England.

Full article

Baltic Dry Index has worst week since October meltdown

telegraph.co.uk

The Baltic Dry Index, which tracks shipping costs and is viewed as leading indicator for commodity prices, has had its worst week since the peak of the financial crisis last October, as Chinese demand slowed.

The index fell from 3,350 to 2,772 this week – a fall of 17.2pc - as imports of iron ore and coal slowed down. The index is now 35pc lower than its 2009 high, hit on June 3.

Read full article

News Today - Aug 11

* The Bank of Japan unanimously votes to leave its policy interest rate and cautiously optimistic outlook unchanged, but offers anxious note over deflation.

* China reported below-forecast growth in factory output and investment on Tuesday, underlining why senior officials keep reminding markets that recovery in the world's third-largest economy is not yet on solid ground.

* China’s exports fell for a ninth month on weak global demand, reinforcing the government’s case for sticking with a “moderately loose” monetary policy to fuel domestic growth.

* Singapore’s economy expanded more than initially estimated last quarter as manufacturing and services improved, reinforcing the nation’s emergence from its worst recession since independence 44 years ago.

* CMIE revises india's GDP growth to 5.8%

* Swine flu scare spreading fast in India

News Links - Aug 10

• IMF Puts Total Cost Of Crisis At $11.9 Trillion

• The History of Stock Markets

• S & P Downgrades UK Bank Debt

• Paulson’s Calls to Goldman Tested Ethics

• Has the frenzy in China reached a peak yet?

Second Stimulus Needed to Avoid Lost Decade: Krugman

cnbc.com

The world economy needs a second stimulus if it is to avoid the fate of Japan in the 1990s when the country was stuck with years of sluggish growth, Nobel laureate and professor of economics Paul Krugman told CNBC Monday.

"The good news is that it does not look like the 2nd great depression. For a few months it did," Krugman said.

Read Full article

Weak Monsoon to hit India's Growth

(Bloomberg) -- A below-average monsoon may shave as much as one percentage point off India’s economic growth this year, an adviser to Prime Minister Manmohan Singh said. “The monsoon will have an effect, but not as devastating as it would have been in the past,” said Raghuram Rajan, who is also a professor of finance at the University of Chicago. “Now hopefully it takes a fraction of a percentage point or a percentage point off growth, which still looks reasonably healthy.”

The weather office today lowered its forecast for monsoon rainfall for a second time this season, saying the rain in the June-September season will be 87 percent of the average between 1941 and 1950, compared with a 93 percent forecast on June 24, said Ajit Tyagi, director general at the India Meteorological Department.

Read Full article here

News Today - Aug 10

* Japanese machinery orders rose for the first time in four months in June and the current-account surplus widened, the latest signs that the nation’s worst postwar recession is easing.

* China Investment Corp., the mainland’s sovereign wealth fund, reveals in its first-ever annual report that its global investment portfolio suffered a loss of 2.1%

* The U.S. economy may be on the cusp of a recovery and the impact of the nation’s stimulus plan should increase this quarter, said Laura Tyson, an adviser to President Barack Obama.

* Indonesia’s economy probably grew at close to the fastest pace in Southeast Asia as higher commodity prices boosted rural incomes and a strife-free presidential election buoyed consumer spending and investment.

* 33% Indians likely to get H1N1: Azad

News Today - Aug 07

* Bank of England Governor Mervyn King is betting that he can keep pumping money into the economy without an outbreak of inflation once growth returns.

* Central Bank President Jean- Claude Trichet indicated the economy may recover sooner than previously anticipated and signaled the bank is unlikely to provide any further stimulus.

* Economists at Goldman Sachs Group Inc. and Deutsche Bank Securities Inc. changed their July employment forecasts to predict a smaller drop in payrolls.

* The number of Americans filing claims for jobless benefits fell more than economists predicted, a sign some employers have stopped paring staff as the recession eases.

* Mortgage rates in the U.S. fell for the first time in three weeks, boosting the potential for further stabilization in the housing market.

* The U.S. Senate approved and sent to the White House on Thursday a $2 billion extension of the "cash for clunkers" autos sales incentive program.

* US Unemployment seen hitting 26-year high of 9.7% .

News Today - Aug 05

* Household Incomes in U.S. Weaken, Threatening Consumer Spending Recovery Household income in the U.S. is weakening as the influence of the government’s stimulus plan fades, prompting economists, Federal Reserve officials and a Nobel laureate to warn that consumer spending may stumble.

* Pending Sales of Existing Homes in U.S. Surge 3.6%, More Than Estimated The number of contracts to buy previously owned homes in the U.S. rose in June for a fifth straight month and exceeded economists’ forecasts, as lower prices and mortgage rates attracted buyers.

* Consumer Bankruptcy Filings Reach Highest Level Since 2005, Institute Says Consumer bankruptcy filings in the U.S. rose to the highest level since October 2005, the American Bankruptcy Institute said in a statement.

* U.K. Consumer Confidence Rises to Highest in a Year as House Prices Climb U.K. consumer confidence rose to the highest level in more than a year last month as house prices stopped falling, Nationwide Building Society said.

* Toyota the world's largest auto maker by sales posts a smaller-than-expected loss of $818 million and hikes its full-year forecast.

US Consumer Spending Rose in June

cnbc - U.S. consumer spending rose slightly more than expected in June, lifted by expenditures on nondurable goods even as incomes saw their biggest drop in four-and-a-half years, a government report showed on Tuesday. The Commerce Department said spending rose 0.4 percent after a revised 0.1 percent increase in May, previously reported as a 0.3 percent rise.

News Today - Aug 04

* The S&P 500 gained 1.5 percent to close at 1,002.63, the first time the S&P has closed above 1,000 since Nov. 5. The number is not only psychologically important but also technically: It puts the index up 50 percent from its March 6 low of 666.

* Global banking giant HSBC reports a 57% drop amid surging hits from bad loans, but shares rise on hopes losses have peaked.

* Manufacturing in the U.S. shrank less than forecast as stimulus-induced gains in demand worldwide helped resuscitate factories from the worst slump in three decades.

* The European manufacturing industry’s contraction slowed more than initially estimated in July, adding to indications the worst recession in six decades may have bottomed out.

* The United States, Europe and Japan still face the possibility of a double-dip recession and at the very least will experience below-potential economic growth for the next couple of years, said economist Nouriel Roubini

News Today - Aug 03

* Employers cut jobs in July at a slower pace and the factory slump eased, indicating the end of the worst U.S. recession since the Great Depression is getting closer, economists said before reports this week.

* Japanese wage earners' total cash earnings tumbled 7.1% in the year to June, the biggest annual drop on record, which could hurt consumer spending and add to deflationary pressure on the economy.

* China’s manufacturing expanded for a fourth month in July as stimulus spending stoked domestic demand, countering a slump in exports, a survey by CLSA Asia- Pacific Markets showed.

* Greenspan Says U.S. Recession Ending, 2.5% Third-Quarter Growth Possible

* President Barack Obama warned on Saturday it would take "many more months" for the United States to get out of recession even after GDP figures showed the economy shrank only modestly in the second quarter.


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