Roseman's Eruptions

At What Price Stability?

Housing legislation in the United States moved closer to becoming law last night with 272 Senators voting in favor of a rescue package versus 152 against. The bill, introduced in the House of Representatives now moves to the Senate where passage is highly likely ahead of the summer recess and Presidential elections this fall.

Oil Majors versus Drillers: The Battle for Profits

If you’re bullish on mining, don’t buy the companies. Instead, buy the companies that manufacture the shovels and picks…

That was conventional advice years ago before gold-mining developed into a legitimate investment sector. But that old adage still stands true today – especially as it pertains to the oil business.

Short-Sellers Add Balance to Market Speculation

Once again, global governments are trying to tamper with capital markets in an attempt to deter speculators and restore order to the battered financial sector.

Bear markets tend to rear the government’s ugly head. In my book, the less government intervenes, the better. Markets should be allowed to function freely provided participants are regulated and transparent in their reporting.

Stock Rally not Confirmed by Credit Markets

Global stocks posted their first weekly rally since early June for the week ending July 18th. Last week, the Dow gained 3.6%. Normally, a strong equity market rally would be confirmed by gains for credit indices, as investors raise their risk parameters and buy high-yield bonds and other risky fixed-income securities.

Gold’s Finest Hour

As the global economy continues to slow under the increasing weight of soaring inflation, credit contraction and a bear market in financial assets, gold is approaching its finest hour since January 1980.

The Lull in the Banks’ Storm

As expected, stocks are charging higher since Wednesday following weeks of protracted selling. That’s not a surprise. My blog yesterday detailed why a big rally was imminent as the VIX was heavily overbought.

A dose of good news finally arrived yesterday following Wells Fargo’s (NYSE-WFC) Q2 earnings report. A day earlier, State Street Bank (NYSE-STT) also delivered better than expected numbers.

Panic-Selling Suggests Short-Term Reversal

A broad array of market indicators now strongly suggests global equities will stage a massive counter-cyclical rally shortly. If this occurs, use intermittent market strength to reduce your equity exposure as the market eventually hits even newer lows this summer.

Northern Rock Comes to America

IndyMac Bancorp (NYSE-IMB) became the latest mortgage casualty in the United States this month, officially triggering the first attempted run on a U.S. bank since the 1970s.

On Monday, U.S. bank stocks suffered their worst single day of performance in years, dropping 8.5%. Some banks, including Washington Mutual (NYSE-WM), tanked 35% on the session.

Investor’s Beckon: Is this the End of the Financial System or the Greatest Buying Opportunity since 2002?

Amid the worst U.S. financial crisis in a generation, investors continue to dump stocks and flee to the relative safety of Treasury bills, foreign currencies and commodities in 2008. Stocks are now comfortably in bear market territory, defined as a loss greater than 20% from all-time highs.

Credit Crunch Worsening

As part of my ongoing series on the seemingly never-ending credit squeeze, it’s time to briefly review the big picture as it pertains to credit markets, lending and credit spreads.

The credit picture has been worsening since late May.

Following the rescue of Bear Stearns in mid-March, which marked a temporary lull in the credit crisis, credit spreads narrowed for most securities. But since late May, credit markets have reversed violently and, in fact, now exceed the previous depths of early March when credit spreads were soaring.