Category: General

Yellen's Wand Is Running Low on Magic

Posted on by The INO.com Team

By Doug French, Contributing Editor

How important is housing to the American economy?

If a 2011 SMU paper entitled "Housing's Contribution to Gross Domestic Product (GDP)" is right, nothing moves the economic needle like housing. It accounts for 17% to 18% of GDP.

And don't forget that home buyers fill their homes with all manner of stuff—and that homeowners have more skin in insurance on what's likely to be their family's most important asset.

All claims to the contrary, the disappointing first-quarter housing numbers expose the Federal Reserve as impotent at influencing GDP's most important component.

The Fed: Housing's Best Friend

No wonder every modern Fed chairman has lowered rates to try to crank up housing activity, rationalizing that low rates make mortgage payments more affordable. Back when he was chair, Ben Bernanke wrote in the Washington Post, "Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance."

In her first public speech, new Fed Chair Janet Yellen said one of the benefits to keeping interest rates low is to "make homes more affordable and revive the housing market." Continue reading "Yellen's Wand Is Running Low on Magic" →

Weekly Futures Recap With Mike Seery

Posted on by The INO.com Team

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures in the June contract are trading right at their 20 and 100 day moving average which doesn’t happen very often telling you that this market has basically been going sideways over the last 2 months with very little volatility is as prices seem to be bottoming out around the 1,270 – 1,280 at the current time I’m sitting on the sidelines in this market as there is no current trend but a breakout seems to becoming in my opinion as I do think with low interest rates remaining for quite some time that gold prices are currently bottoming out.

If you’re looking at buying this market at today’s price of 1,294 I would place your stop loss below the 4 week low 1,275 an ounce risking around $20 per contract or $2,000 if you’re looking at a bearish position I would sell at today’s price while placing my stop above the 10 day high which stands at 1,310 risking around $1,700 per contract as the gold chart has excellent chart structure allowing you to place tight stops. The story this week was a lot of money going into the U.S treasuries as investors think the U.S could be slipping into a recession and if that is true you would have to assume that gold prices will benefit from bad economic news so keep a close eye on this market.
TREND: SIDEWAYS
CHART STRUCTURE: OUTSTANDING

Continue reading "Weekly Futures Recap With Mike Seery" →

Fill In The Caption - Tim Geithner

Posted on by The INO.com Team

What do you think would be the "perfect caption" for this photograph of the former 75th United States Secretary of the Treasury, Tim Geithner?

Here's my caption:
"I saved the world and paid no personal taxes. I am that smart!"

As always, I look forward to reading your captions.

For a good chuckle, be sure to read some of the captions from previous Fill In The Caption pictures.

Every Success,
Adam Hewison
President, INO.com
Co-Creator, MarketClub

The Futility Of Attempting to Predict The Markets

Posted on by The INO.com Team

By: Tim Melvin

We live in a world full of predictions.

People are always predicting things like the weather, the outcome of hurricane season, sporting events and, of course, the stock market. The scary part about all these predictions is how often they are wrong -- and how often individuals rely on them. If humans were such great predictors of events, there would be more far more successful investors and wealthy gamblers.

As a bonus, no one would ever get caught outside without an umbrella. The future is unknowable for the most part and making guesses is not a productive way to live or manage money.

Even those with the very best data and computing power are usually wrong more than they are right. Consider the amount of brain and computing power that goes into predicting the weather every day -- and how often they are just plain wrong. Some little unexpected wind gust a hundred miles of away and, instead of a nice sunny day, there can be a deluge of rain. Continue reading "The Futility Of Attempting to Predict The Markets" →

ZIRP Era in Pictures

Posted on by The INO.com Team

Zero Interest Rate Policy (ZIRP) was instigated by a credit induced collapse of the US financial system and perpetuated in December of 2008 by desperate financial policy makers as a fix to problems they created in the first place.

In reality, it is simply an epic distortion of normal economic signals that cleaned up the mess created by previous policy distortions (like the commercial credit bubble of the Greenspan era) by systematically (5+ years and running) main lining new distortions into the system.

zirp

So in addition to this picture, which could one day hang in a monetary museum with the title ‘Grandma and Her Savings Account Bail Out Wealthy Asset Owners’, let’s take a walk down memory lane and marvel at some other pictures created by this policy… Continue reading "ZIRP Era in Pictures" →