Blogger's New Dynamic Views Magazine Template

Look how good Blogger's new Dynamic Magazine template looks. I just need a way to add html/java widgets to the sidebars. They have seven other dynamic versions as well. By the way, if you want to put page numbers at the bottom of your index and label pages, get the code at Abu Farhan's blog (it doesn't seem to work on date pages though).

Market Timers' McClellan and DeMark Are Cautious on the S&P

Tom McClellan, who runs the McClellan Market Report, thinks the S&P will trade "violently sideways" for the next four months. He was featured on Bloomberg TV on 2/6/2012: McClellan Says U.S. Stocks May Trade Sideways Until June. He mentioned that the Eurodollar futures commercials COT (commitment of traders) chart from last year correlates almost perfectly with the S&P 500 today. For more info on this, read his "Chart in Focus" post from 5/27/2011: Commercial Traders Foretell Market’s Movements. The correlation correctly predicted that the S&P would peak in early June and bottom out in October. This is amazing. On 2/3/2012, before his Bloomberg appearance, McClellan released a new warning: Eurodollar COT Indication Calls For Big Stock Market Top Now.

Russia Behind Bulgarian Anti-Fracking Protests? - Guest Post

Guest post by John C.K. Daly of Oilprice.com

Russia Behind Bulgarian Anti-Fracking Protests?

Pity the poor Eastern Europeans. Fifty years under the domination of their massive Soviet eastern neighbor then the collapse of Communism there two decades ago offered undreamed of opportunities to join both the European Union and NATO.

But they still remain dependent on the Russian Federation for the majority of their oil and gas needs, and the new capitalists in Moscow do not hesitate to charge the highest prices possible.

According a number of East European nations, particularly Poland and Bulgaria, are actively investigating the possibility of establishing hydraulic fracturing ("fracking") operations on their territory to develop an indigenous natural gas industry and undercut the Russian Federation's state-owned natural gas monopoly Gazprom.

Bernanke Warns About Fiscal Challenges, Federal Debt/GDP vs. 10-Year Treasury Yield Chart

On February 2 and 7, Federal Reserve Chairman Ben Bernanke, in his testimony before the U.S. Senate and House Committees on the Budget, gave his outlook on the economy and warned about the U.S.'s "unsustainable deficits" and "structural fiscal imbalances". Read his statement below. I also added a chart of Gross Federal Debt/GDP from 1939-10/2011 versus the 10-year note yield from 1962-present. It is interesting that the 10-year yield peaked when Gross Federal Debt/GDP bottomed in the early 1980s, which was due to inflation. Related: Congressional Budget Office Sees Big Decline In Budget Deficit/GDP Between 2012-2022 (see their alternative scenario as well).


Link to chart at St. Louis Fed

"Fiscal Policy Challenges
In the remainder of my remarks, I would like to briefly discuss the fiscal challenges facing your Committee and the country. The federal budget deficit widened appreciably with the onset of the recent recession, and it has averaged around 9 percent of gross domestic product (GDP) over the past three fiscal years. This exceptional increase in the deficit has mostly reflected the automatic cyclical response of revenues and spending to a weak economy as well as the fiscal actions taken to ease the recession and aid the recovery. As the economy continues to expand and stimulus policies are phased out, the budget deficit should narrow over the next few years.

In the Bullring With Gold - Guest Post

Guest post by Frank Holmes, CEO and Chief Investment Officer of U.S. Global Investors.

In the Bullring With Gold

After prices fell 10 percent in December, many investors wondered if the bull market in gold was running out of steam. That was before Federal Reserve Chairman Ben Bernanke swooped in with a “red cape” and fired the bulls back up. Since the Fed reassured the world that interest rates will remain at “exceptionally low levels” for another two years, gold has jumped more than three percent.

UBS described the situation simply, “if investors needed a (further) reason why they should be long gold now, they got it yesterday … a more accommodative policy is a very good foundation for gold to build on the next move higher.”

To gold bugs, two more years of near-zero, short-term interest rates means negative real interest rates are here to stay, and this has historically been a strong driver for higher gold prices.

Bernanke and the Fed aren’t the only central bankers in the fiscal and monetary bullring. Brazil has cut its benchmark interest rate a few times and China lowered its reserve rate for banks in December. According to ISI Group, 78 “easing moves” have been announced around the world in just the past five months as countries look to stimulate economic activity.

One of the main weapons central bankers have employed is money supply, which has created a ton of liquidity in the global system. Global money supply rose 8 percent year-over-year in December, or about $4 trillion, according to ISI. I mentioned a few weeks ago how China experienced a record increase in the three-month change in M-2 money supply following China’s reserve rate cut.

Confidence Game - Film About Bear Stearns' Collapse (Trailer)

There's another film coming out on the 2008 financial crisis. Confidence Game, a documentary film by Blue Chip Films (Nick Verbitsky), is about the collapse of investment bank Bear Stearns in March 2008. I watched the trailer and it looks similar to Inside Job. I'm not sure when it comes out. Watch it below (h/t Market Folly).

EUR/USD at 50DMA (2/1 Low) Waiting On Greek Debt Decision For Next Move

EUR/USD is at 1.3049 (-0.28%) and testing the 2/01/2012 low and 50DMA, according to my chart. All eyes are on a Greek catalyst or unforeseen event in the eurozone.


EUR/USD 3-month chart snapshot (chart source: optionsxpress)

Links: Greek Bailout Deadline, Explosions in Homs, Syria (Video)

Syria and Greece are in the news tonight.

Greece

Greece reaches make-or-break moment: (eKathimerini)

PM’s talks with leaders spill over deadline (eKathimerini)

Greek Leaders Agree on a Rescue Framework (Bloomberg)

Greek parties face EU bailout deadline (International Business Times)

Britain Prepares for Worst as EU Struggles (Bloomberg)