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Alcoa Inc. Message Board

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  • yourdeadmeat69 yourdeadmeat69 May 2, 2012 5:27 AM Flag

    China Factories Bottoming Out, HSBC PMI Signals

    The second largest economy in the world has seen 8 months of housing price contraction. China as driver of the world is on the edge of drop city.

    When that party is over US emerges as last man standing, again, the dollar improves, precious metals take a hit, and only engines of "growth", the difference between business during the early part of the Depression of 2008 and 2018, is the emergence of a real economic driver.

    FOMC is making noises about NO QE3 required, and taking low irates off the table earlier than later. Methinks it is to get dawdlers in mortgage refi land to work that as quickly as possible, get out of adjustable mortgages ( the last with any volume and irate pop were 2007 five year ).

    I don't see how US and the FOMC overlords can take irate pops off the table much before 2018--housing has barely nudged forward, and most of the volume increases arise from even lower prices, except for the DC area, and most of DC is dawdling around 2003-2004 pricing. Only warmer weather has pushed the buying season into February--a normal winter would have the East Coast sitting in the living room, not out hunting for real estate bargains. It's the longest head fake. Yesterday's FOMC pronouncements poured cold water on what looked to be a 1% day--AA held up near its high of $10. AL is up on kitco, but that hasn't been as reliant vis a vis AA as say, silver is to SLW.

    Meanwhile Europe gets to report CPI/PPI and economic health, to include our latest PIIGS scenario, in the wake of the Spanish downgrade, and Italian fiasco replacing the Greeks as the latest OMG moment analysts can fan flames and make the lemmings run like Chicken Little.

    Meanwhile a mixed auto report still sent AA onward and upward. Like musical chairs.

    It's flat days that make my covered call strategy worthwhile, down days that makes me even, squeezing both ends against the middle.

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