Year: 2009

GE update March 3/4

Hamilton

Ge march3

With a low at $6.85 intraday and closing on $7, the lower end of the suggested range, this is now a buy IMO at say $6.50. Yes they did not act very truthful in saying that they would not cut the dividend but that is in the nature of the business, sometimes it works like a charm think TRP ten years or so ago.  at around $6 two trend lines run from different channels and  as they say “De Wall keert het schip”. There is that “wall” again : freely translated it means that if you  (the boat in the channel) hit the wall you will change direction. At 1/10 of the peak value, lets hope so.

TM Toyota, March 3, the importance of Fibo

Hamilton

TM march 3

This is Toyota, arguable 5-waves up. We have recently heard that Berkshire’s income dropped by 62% and that AIG’s biggest loss ever was 61.7 Bln. This Fibonacci number 61.8 and the reverse 38.2 occur so often that it pays to anticipate them.  The high on Toyota was 140 and they are asking for a hand-out as well. Now we see the line but would like more of a cluster of points. We can get one more , 140 x 0.382 = 53.48 , looks pretty well precisely where the line runs. This does NOT imply that the drop will stop there, but is does imply that the probability of the drop halting there is appreciable better than otherwise.

Bank of Canada, rate cut today? to 1/2 %

Hamilton

Just a quick comment on the bank rate cut today if we get it. Every Tom , Dick and Harry tells us that we should get a cut. Just listening to a guy from  the C.D.Howe institute confidently proclaiming this kind of nonsense. Anyone who has red Keynes, Hicks etc. or otherwise taken the trouble to superficially understand a few things about monetary policy should be familiar with concepts like the liquidity trap. Essentially what that says, without getting into LM and IS curves, is that at some point the demand for money, liquidity becomes inelastic. What that means is that the market does not care. It happens when your kid refuses to mow the lawn when you raise his pay from $5 to $10. This is what is known as pushing on a string!

So they did it, “steadying quantitative easing” it is called. This is the 7th cut in a short period. Was not being insane defined as doing the same thing and expecting a different result???

EWN ishares for the Netherlands

Hamilton

Holland has a number of advantages when you study economics there. Much of history has actually happened there, for instance the first company to operate on a shareholder basis was the Oost Indie Compagnie , founded around 1604. Shipping then was highly entrepreneurial as many a ship never returned, but the rewards from the spice trade were very high. There was already in the mid 1600s a well functioning cherry futures market with 36 fungible varieties, privileges , options and the whole works. Nothing under the sun is new

Also the University of Amsterdam , my Alma Mater,happens to be located dead smack in an area known as the “Walletjes”, the same word that is embedded in Wallstreet  (wall = embankment , quayside , shore-line etc.) The area is also known as the Red light district and I have always thought it instructive to see that  two so very different professions can thrive on a similar base. Here is the chart:

EWN march  The Dutch exchange has a disproportionate number of multi-nationals and financial or insurance companies and consequently has recently been behaving as a high beta market. As a result it shows this whole 10 year correction quite well. The low is about 9.75 and the high 33. We are approaching the low again and if and when we do this one has a 10 point rebound built into it. (Note that here too we have a double-top albeit a very sloppy one as the second high is a little higher than the first, B is irregular).