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EconMatters's Blog

EconMatters - Global Economic and Market Analysis That Matters

QE2 is Damaging the Economy and Reducing GDP Growth

April 26, 2011 by EconMatters   Comments (0)

By Dian L. Chu, EconMatters QE2 is going to go down as one of the worst monetary policy initiatives in the history of the modern Federal Reserve era. On almost any metric applied, QE2 ends up not only falling well short of its proposed goals, but actually turns certain metrics like GDP growth negative compared with the prior quarter, and heading in the wrong direction. Costs Eat into Corporate Profits = No Hiring Analysts all over Wall Street are starting to revise their 2nd quarter GDP forecasts down, and some like Goldman Sachs have made several downward revisions as higher input...

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The Rise and Rise of Apple: Time for a Split?

April 25, 2011 by EconMatters   Comments (0)

By Dian L. Chu, EconMatters (A Seeking Alpha Exclusive) Apple CFO Peter Oppenheimer said in the earnings call that “We sold every iPad 2 that we were able to make this quarter," with what Apple COO Tim Cook referred to as "the mother of all backlogs.” So obviously Apple’s gaining momentum with iPad, and expanding iPhone....Continue Reading FREE at Seeking Alpha .  (Repost or reprint with permission from Seeking Alpha) EconMatters, April 25, 2011 | Facebook Page | Post Alert | Kindle

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The Seasonality of Crude Oil & Gasoline (Guest Post)

April 25, 2011 by EconMatters   Comments (0)

By Camaren Hanover This year, a number of events are likely to occur along with the normal changes in the weather. January gasoline is typically the lowest in any year and, despite the common mythology, gasoline consumption does not normally fall steeply after Labor Day and then recover miraculously after Memorial Day. We do see an element of driving disappear after Labor Day, as drivers in the 16 to 25 year-old age bracket tend to drive less, or at least more predictably. Family vacations are also over by that point, as a general rule. But, there are pockets of demand during foliage...

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BofA New Oil Price Target Suggests $4.25 Gasoline by Memorial Day (Guest Post)

April 24, 2011 by EconMatters   Comments (0)

By Bob van der Valk While living in The Hague, Holland as a young boy I often wondered what was on the other side of that vast expanse of water known as the North Sea. How could I have known about the vast crude oil reserves lying underneath the angry waters of the North Sea and its eventual exploration by the countries surrounding it? Brent geese would fly over my province of South Holland much like Canadian geese fly over Montana on their way south. I now live in Terry, Montana, which is a long distance from Holland and the North Sea, but the word "Brent" once again has once again...

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The Fed Must End QE2 on April 27th

April 23, 2011 by EconMatters   Comments (0)

By Dian L. Chu, EconMatters The Federal Reserve has lost all credibility on Wall Street, and most of the American public with the absolute refusal to recognize the dire effects on asset prices that QE2 has created. But the refusal is part of the problem. It reinforces the wide spread belief of investors that the Fed is out of touch with reality, and that they sit in their Ivory Tower implementing an exceedingly loose monetary policy, with the stated goal of inflating asset prices. The Fed has refused to even acknowledge the possibility (rather than the indisputable facts) that not only...

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It No Longer Pays to Store Oil at NYMEX Cushing (Guest Post)

April 23, 2011 by EconMatters   Comments (0)

By Commodities Now Since December 2010, the front-month WTI/Brent spread has widened significantly. The spread hit a record of -$19.54/ bbl on 21 February 2011 when TransCanada announced that the second phase of the Keystone project had started to operate. The term structure for WTI has also weakened dramatically. The M1/M6 time spread also reached a recent record, of -$10.48/bbl, on 10 February 2011 (Figure 1). James Zhang, Commodity Analyst with Standard Bank, believes the widening of both spreads have been driven by concerns over the containment risks at Cushing, the Nymex WTI...

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Rein in Rampant Speculation Or Face The Black Silver Swan

April 23, 2011 by EconMatters   Comments (0)

By Dian L. Chu, EconMatters If you think the crude oil market has gone totally out of control in the past month or so, observe the Silver.  The Silver market has basically gone parabolic the week of April 17, going from $41.75 on April 15th to $46.69 on April 21st--a 12% move in 5 trading days, topping off the move with a 5% move on Thursday (See Chart).  As Silver is a thinly traded market, one thing the CME could do is to raise margin requirements for Silver speculators; otherwise risk is setting up the silver market for an record-setting crash, which...

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All's Fair in Coffee and Sugar

April 21, 2011 by EconMatters   Comments (0)

By Dian L. Chu, EconMatters You might recall that bitter coffee divorce from last December when Kraft Food (KFT) took Starbucks (SBUX) to court to prevent Starbucks from unwinding a 13-year packaged coffee distribution partnership. Well, that food fight has finally come to close with the partnership officially dissolved on March 1 after Kraft lost the court battle, although Kraft and Starbucks are still in arbitration to settle financial and some other outstanding matters. So, how’s life otherwise like after the corporate divorce? In my earlier analysis, I...

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15 Things You Might Not Know About Starbucks

April 21, 2011 by EconMatters   Comments (0)

By Dian L. Chu, EconMatters Since Starbucks is the first brand to have 10 million fans on Facebook, here are some news crossed my email inbox that Starbucks fans might find hard to believe. Although Starbucks started a community website in early 2008, My Starbucks Idea, designed to collect suggestions and feedback from customers, there's actually another web site--Starbucked.com--founded almost a decade earlier dedicated to oppose Starbucks and help Starbucks' would-be rivals--independent coffee houses. Starbucked.com was founded in 1999 by a...

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Oil Services Stocks: Correction Due? (Guest Post)

April 20, 2011 by EconMatters   Comments (0)

By Michael Tarsala Oil services stocks are seeing downside earnings revisions and bearish options bets ahead of earnings, and could be in danger of losing their price uptrend, according to a Thomson Reuters technical signal. The options positioning suggest there’s a lot less optimism for services versus drillers and refiners, and less hope they’ll have another blockbuster quarter. Bearish bets started to pile up right before the earnings release for the Oil Service HOLDR’s ETF (OIH), which counts Schlumberger (SLB), Halliburton (HAL) and Baker Hughes (BHI) among its...

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