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Global Warning

Bob Hoye
Institutional Advisors
Oct 19
, 2007

  • The Chinese market (FXI) is generating an "Upside Exhaustion" reading on both the daily and weekly numbers. Representing the oil play, Schlumberger (SLB) is also registering the same highly speculative condition. On the techs, RIMM is also at this Icarus altitude
  • On the financial side, our proprietary Bank Trading Guide has significantly deteriorated since Thursday
  • Today's 3% drop in base metal prices is interesting
  • Although quiet, this week's action in the dollar index has been constructive. That is for students of the market - for the nattering nabobs of interventionism the worst of all worlds would be a sound dollar
  • Recent work on the gold/silver ratio suggests that rising above 56 would resume the uptrend. The recent low with market rejuvenation was 53.8 on September 28. Today's close was 56
  • As noted last week, the BBB subprime bond is setting new lows. The old low with the initial panic was 41.42, now it is at 33.78, and this melancholy fact with the absence of the likely touts about "containment" is eerie.

The widely discussed the $100 billion "liquidity" pool arranged by Treasury Secretary Paulson along with Citigroup, Bank of America, J P Morgan and others reveals a weak hand and an inadequate understanding of the credit markets in today's condition. Moreover it will take some 90 days to implement.

But for those who prefer the brighter side, the bailout pool is going to be called the "Master Liquidity Enhancement Conduit" or MLEC. Sounds like more artificial credit to us.

Phil Mackesy's Oct 12th interview with Bob [Hoye] can be visited at the following link:


-Bob Hoye
Institutional Advisors

Hoye Archives

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