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The trading volume on the New York Stock Exchange has seen a jump in the last week from an average of 4.26 billion shares traded daily in 2011, to an average daily volume of 7.31 billion shares in the first ten days of August 2011. Analysts say this reflects market anxiety, trading on conviction now compared to the light trading and a rising market in the earlier part of the year. The jump in volume also looks ominous as individual investors pull back say analysts.

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The economic crisis is global because with a few exceptions like Germany the housing prices have seen a bubble around the world, worse than in the US in places like Ireland and the UK, and similiar to Florida and California in Spain, and also in places like China and India whwere a stock market bubble helped sustain housing price increases. In China and India the crisis comes in the shape of higher inflation, food prices, and huge stock market declines, along with the housing declines, and lower economic growth as China shifts from an export model to domestic consumption letting a third of the low cost factories in Guangdong province close down. Look for serious effects and global economic slowdown from a series of intertwined crisis housing credit and in Asia stock markets.

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Niederauer brings a straightforward style to his efforts to bring together NYSE Euronext and Deutsche Bourse in a new combination. He joined Goldman in 1985, after studying business at Emory University in Atlanta. In his 22 year career at Goldman he worked his way up as a stock trader. He worked in Tokyo where he supervised efforts for electronic trading. He was brought to NYSE in 2007 by Mr Thain, a former Goldman executive. The NYSE has seen its dominance erode since 2000, as investors shifted to fast trading. In the U.S. the NYSE traded 34% of NYSE listed shares bought or sold in January 2011, a significant drop from the 54% in late 2007, and more than 80% when the NYSE was the dominant exchange. This is reflected in the stock price, which is down 56% for NYSE shares since the end of 2007. With a merger Niederauer will be the leading executive of the merged company.

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Browning points out the record Dow Jones Industrial Average (DJIA) average was not in 2007 but in 2000 when adjusted for inflation- on Jan 14, 2000. Since 1994 consumer prices measured by the Bureau of Labor Statistics have risen by 55%. Using 1994 dollars the March 5, 2013 closing DJIA average is at 9256, the 2007 high at 10194, and the record on Jan 14, 2000 at 10424, according to calculations made by Bespoke Investment Group. In inflation adjusted terms these calculations show the Dow barely making any progress in relation to the 2000 figure. When dividends and taxes are included, Browning says the inflation adjusted Dow is still not back up to the 2000 level. For retirees and sensible investors the real value of this money has to be taken account. Yale University professor, who founded the CAPE cyclically adjusted P/E, confirms what Browning says in an article in the WSJ March 10, 2013. There Shiller says that the inflation adjusted S&P 500 index has not made it to the 2000 level, so that investors have not made up for money lost in inflation in 13 years....

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The real estate bubble in China continues to grow even after th pandemic. Local governments depend on land sales for about 60% of their revenues. The government in Beijing also is unwilling to let prices decline too much because this could create unrest. As a result households have continued to add second, third homes in speculative investment. Unlike the U.S. where households invest in the stock and bond markets and residential property investment is one of several options, in China this is the only option people believe. The notion of continually rising prices is built into the mindset in China. This is happening even as those who do not have homes are still priced out of the market, and those with savings are pouring them into housing, more so as people save more in 2020. This can be seen in the vacant homes rising to about 40% for those buying second homes. People are also taking on more debt with consumer, mortgage and other debt of households getting close to 60% of the country's GDP, a high leverage ratio. This also means there is less capital to invest in productive investments in industry as more and more savings are tied up in housing with large vacancy rates meaning the housing is not even being used. Some of the speculative nature of this can be seen in this report in the WSJ for cities such as Tianjin, Shanghai and Shenzen. ...

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The boost to Microsoft's share price expected from Windows 8 release in 2012.

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James Glassman, has published a new book, "Safety Net." In the book he makes an admission that he was wrong in his theory and understanding of the stock market described in his earlier book, "Dow 36,000," published in 1999. That book called for stocks to triple in value in 5 years. Glassman wrote then, at the height of the tech boom, that stocks could immediately double, triple or even quadruple as was happening at that time for tech stocks going public, and they would still not be too expensive. Part of the arguments rely on a definition of risk. Glassman said in his earlier book that stocks and bonds are equally risky in the long run, because stocks had never lost money over the long term and over long periods of time their returns were constant. But Glassman is using a technical definition of risk as how much returns can deviate from the average. What investors face in the real world is a common sense definition of risk, which is- what are the chances you will lose money? This point says Jason Zweig, is clearly stated in Howard Marks coming book, "The Most Important Thing." And what about the point about stocks never losing money, the central point in Glassman's thesis? Here research from Dimson, Marsh and Staunton of London Business School is useful. This research shows that in France from 1912 through 1977, stocks lost money after inflation. The upshot of this is to emphasize the need for looking at risks as real in the real world, where things have changed to the point where the current stock market rally is attributed by the Fed chairman to vigorous efforts to fight a downturn in the economy. For investors these risks are not going away with a sudden surge in stock prices....

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The Chief Economic Adviser to the Indian Government Mr. Anantha Nageswaran, makes these comments on the economy of India before the presentation of the new Budget for April 2023 to March 2024. The Economic Survey of India states that "India is prepared to grow at its potential once the one-off shocks of the Covid pandemic and of the supply chain recede." He sees the sweeping effects of the reforms across multiple dimensions taken from 2016 to 2022 having a lag effect and now making their impact. This means that potential growth can go up to 7 or 8% with macroeconomic improvement, fiscal improvement, infrastructure efforts, women's employment, and getting rid of LIC (License, Inspect and Compliance) across local, state and central levels. He says the central bank estimate of 6.8% retail inflation for 2022-2023 is outside its target range but yet not high enough to deter private consumption, and no low enough to weaken the inducement to invest. He says slower growth in the world including the US will bring two advantages for India- low oil prices and a better current account deficit situation.  ...

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Mark Hulbert lists the quality stocks with low P/E ratios, little debt, high return on equity, and long records of earnings growth spanning long periods that limit volatility after the emerging markets crisis of 2014. He adds a cautionary note on the idea of quality stocks by saying P/E ratios matter, that quality stocks at a high price are a bad investment and at extraordinary prices are a extraodinarily bad investment, citing the Nifty Fifty stocks of quality in 1972 that lost value in the stock market slide in 1973. He takes quality stocks Disney, Procter & Gamble, Johnson & Johnson off the list of quality stocks because of high P/E ratios, a critical criteria. Hulbert's list for financial quality companies and their P/E ratios in Jan. 2014: AT&T telecom 9.4, Aflac insurance 9.1, Allstate insurance 10.9, Apple computer and telecom 12.7, Bank of Nova Scotia 11.0, Chevron oil 10.0, Cisco computer hardware 12.2, IBM technology 11.7, Royal Bank of Canada 11.5, Wells Fargo banking 11.5. These P/E ratios compare with the S&P 500 P/E of 17.3....

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Bernanke's defense of the action of the Fed's monetary policy making committee, on November 3, 2010, (with a vote of 10-1) to buy an additional $600 billion of Treasury securities over the next 8 months. His defense focusses on the prospects of deflation- how low inflation can morph into deflation (falling prices and wages), that can create a long period of economic stagnation. In addition, with low and falling inflation, Bernanke sees spare capacity in the US that can be utilized to reduce the number of jobless people. He points to the rise in stock prices and fall in long term interest rates in anticipation of the Fed's action, as evidence that this Fed move would improve financial conditions. Lower mortgage rates would make housing more affordable, higher stock prices would increase consumer wealth, confidence and spending. Spending would lead to higher incomes and profits for economic expansion, from this viewpoint. The situation in November 2010, was a deepening housing slump anticipated for 2011, gridlock after the 2010 midterm elections and no agreement on additional stimulus for 2011, the need to rebalance the global economy lacking cooperation from China (with China increasing imports and reducing exports and the US increasing exports and reducing imports). Fed's Bernanke does not mention these factors, and only hints at the gridlock towards the end of the statement. This Fed action will push the dollar lower, just as efforts to improve exports and the trade balance are underway. The Fed's committee sees the risks of commodities inflation as an acceptable risk in the current situation, and the use of a cautious approach assessing the purchase program regularly as sufficient measure of safety. As to difficulties of the unwinding of these policies, the Fed sees present danger outweighing the risks of no action. For emerging markets such as Turkey, India, Australia and other countries seeing even more inflows of capital, the risks are left to these countries to manage. The central banks of India and Australia moved to increase interest rates at the same time that the Fed made its move....

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Joachim Klement of Wellershoff & Partners in Zurich emphasizes the need for international diversification and investing in Europe's recovery for a well designed investment portfolio.

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UAL's stock has gone down 93% in the past year more than its other U.S. rivals and the entire company has an equity value of $433 million smaller than the retail price of two jumbo jets. It will take second quarter noncash charges of $2.7 billion to writedown to zero the value of its intangible assets or goodwill. United will pare its 460 plane fleet by 100 planes by 2009, cut capacity by 15% in the 4th quarter 2008, cut 20% of salaried jobs or 1500 jobs, and furlough 950 of its 6000 pilots.

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The failure of regulators is one of the features of the last decade leading to the losses of capital that could have been better allocated to infrastructure, health education and paying down debt in the U.S. and Europe. This WSJ report says fintech or financial technology companies faced little regulation or critical oversight from regulators as regulators tried to foster growth in that sector. This puts more burden on shareholders to be vigilant, it says. Wirecard went into insolvency with huge losses and debt and accounts in the Philippines for over a billion dollars that were later proved not to exist. The astonishing aspect of the Wirecard scandal is the way German regulators not only did not investigate but pushed back against critics of the company's finances, that there was something fishy about the finances. Wirecard was established in 1999, and is described as a slow-burning story since 2016 when the stock price took off for a wild ride. This report says government regulators are relaxing important rules in the hope of coming up with a winner- this is proving to be a dangerous exercize and an exercize in folly, as it leads to losses of capital with no one taking responsibility among government officials or regulators. In the case of Wirecard the German officials even filed a criminal complaint against accusers, and banned short selling. of stock.    British and European financial watchdogs are acting as cheerleaders and watchdogs at the same time says the WSJ. Watch out it says when regulators play this kind of double role. During the financial crisis of 2008 the revolving door between companies being regulated and the regulatory agencies themselves was a defining feature of that period leading to huge losses of capital. Today this has taken on a new  and additional dimension, each time making things worse, even as infrastructure investments, investments in health and education are being deprived of capital because they benefit the public, and are not a benefit to small groups of well connected people willing to flagrantly conduct activities such as setting up accounts that do not exist for over a billion dollars.   ...

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Bloomberg View says it is important for the living wills for U.S. banks that are "too big to fail" to be ready by the end of August 2011. This is required under the Dodd-Frank legislation. The living wills are designed to provide the government and the FDIC with an orderly pathway for winding down the business of a bank. On August 8, 2011, when the Dow Jones Averages dropped by 634 points, shares of Bank of America and Citigroup led the decline. Bloomberg points out that investors think Bank of America's net worth is only one third of what the bank claims, and for Citigroup this is less than half. Investors view the stocks of these banks as risky because they are likely to need to raise fresh capital and this would dilute the value of existing shares.

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Rising bond yields for the bonds of Germany, USA and Spain are seen for 2011. The absence of solutions for deficit reduction after the passing of Bush tax cuts in the US, and the debt crisis in Europe, create a situation with the potential for sovereign shocks in 2011.

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In August 2023 the Ukraine war is reduced to small unit tactics after a stalled Ukraine offensive. The results of the war over the last 2 years is a broadened NATO with Sweden and Finland inside NATO increasing the borders of NATO with Russia. On the Russian side some of eastern Ukraine on the Black Sea and the Dnieper river are now part of Russia in addition to the Crimea. The Ukraine offensive is stalled. Russia's economy has shifted from its western European orientation for energy exports and auto other imports to a Chinese orientation.  These changes are likely to remain with a shift of supply chains back from China and its suppliers to the US and the EU. This acts to restore the factory bases in the US and EU and revive communities built around factories in small towns across the region. This will bring back regions in the EU and the US that suffered from the loss of factory jobs and public services they supported. Overall this is a healthier situation for the people of Europe and the US. For China also the situation reverses to better quality yet slower growth, and a pause to take stock of the immense changes that happened with explosive growth in trade- the damage to the environment, floods and heat waves from climate change, the explosion in debt to three time its GDP, higher unemployment, rural poverty, and devise solutions to these problems. The war has accelerated the unraveling of the existing economic, social and trade arrangements that had stopped working for many years. ...

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Some ideas from Robert Shiller of Yale University who has widely written about bubbles including the stock bubbles and has jointly developed the Shiller-Case index of housing prices. Shiller suggests creating futures contracts tied to home prices. And the thinking goes once there is enough trqding in these futrues contracts people can sell the housing market short-that is bet on afall in house prices- so that there is a restraining effect on housing bubbles developing. But the reviewer thinks that this is debatable because its possible to sell stocks short and yet we have stock market bubbles. Shillers other suggestion is for developing new types of insurance to protect people from a fall in house prices or from a longterm loss of income as a result of jobs becoming obsolete, but its not clear who would pay for this insurance and its cost. Another suggestion is for the government to to give subsidies or tax credits for ordinary people to get unbiased financial advice. This could be a useful suggestion if there are credible and honest sources of such advice and they are identified and made widely available to the general public by the government. A related suggestion is the development of a supplement to the consumer price index that is based on a realistic basket of goods and services that people use that gives people a realistic idea of what is happening so that they do not assume that houses are always a good long term investment and can separate inflation. And Shiller suggests a standard mortgage contract be developed so that people who cannot understand the fine print like most of us especially when its put in by lawyers for mortgage companies can turn to htis contract. This is an excellent suggestion but one wonders why something so obvious has been not already widely available as an alternative to those who cannot figure out all the machinations behind all that small print. The book is titled SubPrime Solution and one wonders whether much more than this is needed to control all the fog and euphoria about housing prices, and all the incentives and pressure in hard selling tactics of most of the large mortgage companies, and all the ethical violations of credit ratings companies who rated mortgage securities and ethical violations of mortgage companies....

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The Russian economy will contract by 10% and the Ukraine economy by 20% in 2022, says the European Bank for Reconstruction and Development. The bank was setup to revive Eastern European economies after the collapse of the Soviet Union. In 2023 the Ukraine economy is expected to rebound by 23% with assistance from US and EU. The Russian economy faces long term challenges with lack of access to technology from EU and US and the loss of well educated workers leaving Russia, and is expected to face a long period of stagnation. The war has affected 60% of Ukraine's economic output and electricity consumption is down by 60%, with one third of Ukraine businesses closed, factories shutdown. Ukraine will be a much poorer country because a lot of stock has been destroyed, says Beata Javorcik, EBRD's chief economist. For Russia the drag on the economy will be present even if a peace agreement leads to lifting of sanctions says EBRD. Central Asian countries such as Uzbekistan and Armenia will also feel the effect of the slowdown with loss of remittance from workers in Russia. The faster shift to renewable energy and LNG in Germany, and a similar boost to renewable energy with COP26 Glasgow getting a boost in EU and the US, will result in loss of value of oil assets in Russia. With loss of technology access from US and EU Russian conversion away from a energy based economy will be slowed. All this is likely to lead to a difficult period for Russia. This means there are no gainers from this war, including China, which could see a further acceleration in US and EU restructuring of the supply chain away from China, leading to further slowing of growth. ...

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Societe General's Jerome Kerviel worked at a Delta trading desk in the investment banking operation. Kweku Adaboli, 31, a UBS trader, worked at a Delta One trading desk specialized in exchange-traded funds and other securities positions. He is charged with two counts of false accounting and one count of fraud. Delta is a term in the banking industry for how a bank can customize a security for a client, and following this closely replicate another transaction that acts to mitigate the risk. The first transaction is a "derivative" trade, which is basically a bet on the direction of a group of stocks or other securities. Jerome Kerviel was accused of trying to hide $7.2 billion in losses and was sentenced to three years in prison. The Delta One trading desks can generate $1 billion in annual revenue for banks and are used by Societe Generale, BNP Paribas, Goldman Sachs and Morgan Stanley U.S. At the same time risk is increasing with unpredictability and higher volatility in the financial markets in 2011. Another feature of the trader problems at UBS and Societe Generale is the relative youth and lack of experience of the traders, and that risk management systems allow traders with insignificant experience to make such large transactions. Other questions about how much risk a bank should be allowed to take, and about ring fencing the investment banking units of each bank, are relevant. Swiss banking regulators were working to ringfence the investment banking units of UBS and other Swiss banks after earlier problems at Swiss banks in the global financial crisis of 2008. Under the proposed regulation by Swiss regulators UBS investment banking unit would be headquartered in another country and hold its own capital, and be subject to local regulators. ...

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The US Fed under Jerome Powell is going to raise interest rates one more time in 2023 following rate increases in 2022- by a quarter percentage point this week. This is not only a fight against inflation but a way to reverse a situation that has affected the wealth and standard of living of ordinary Americans by reducing interest on savings to a paltry less than one percent. Only stock market investors benefitted under the previous regime widening income and wealth disparities in America. Just as today's story in the WSJ showing Bath and Body Works returning to basics such as producing soap in America, something that would not even have been given a second of thought in the 1900's, the Fed is doing its job under Jay Powell of going back to the basics. Where interest on savings provided retirees a comfortable stress free retirement and the inducement to save help build a savings pool in America to invest in what really improves the standard of living for all Americans across this country, from rural to urban, from all parts of the land. ...