January 2010 - outlook on leading indicators

at a snail's pace... a catalyst for sustained leveraging is much needed. i believe equity prices have quite a ways to go on the upside. speculation will heat up. there is synchronized global stimulus efforts to blow up the next bubble. can it play the role that sub-prime mortgages played in the us?

a.) corporations are sitting on mountains of cash. watch for stock buybacks to push equity prices.
the glut of dollars continues to grow. these dollars ultimately must be revalued downward. stocks will rise than fall from the wave of dollars seeking something above 0% interest.


b.) manufacturing output increasing:

philadelphia, new york indexes improve 5th month in a row

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a revised reading of 22.5 in December to 15.2 this month. The index has now remained positive for five consecutive months (see Chart). Indicators for new orders and shipments suggest continued growth this month, but they also declined somewhat from their December readings. The current new orders index, which has remained positive for six consecutive months, decreased 5 points. The current shipments index fell 4 points. The current inventory index, although still negative, increased 4 points, to its highest reading in 26 months. Indicators for unfilled orders and delivery times edged higher and are both positive, suggesting stronger economic conditions.

Labor market conditions have been stabilizing in recent months, and for the second consecutive month, the percentage of firms reporting an increase in employment was higher than the percentage reporting declines. The current employment index increased 2 points, to its highest reading since February 2008.

c.) exports increasing.

china's growth at 10.7% for Q4. banks ordered to slow loan rates.

d.) deleveraging proceeding

e.) unemployment trending lower but way too slowly

f.) war spending stimulus: continues to expand

g.) housing: prices stabilizing, but foreclosures continuing and threatening to rise.

h.) commercial paper: half the size of August 2007