Economic/Market Update – March 2013 Daryl Montgomery March19, 2013 Copyright 2013, All Rights...

Economic/Market Update – March 2013

Daryl MontgomeryMarch19, 2013

Copyright 2013, All Rights Reserved

The contents of this presentation are not intended as a recommendation to buy or sell any security.

Major Events

• Bank crisis in Cyprus reawakens trouble in EU.

• Serious bank lending problems in EU and U.S.

• U.S. Fiscal Problems- Sequestration started March 1st. - Debt Ceiling limit of $16.4 trillion must be raised by May 19th.

• Detroit in receivership. Significant selloff in municipal bond CEFs.

• Retail Sales (up 4.6% yr/yr) and employment supposedly improving.

Trouble in EU• EU decides to tax bank deposits in Cyprus

as part of bailout. Bank run follows.- Bank deposits 5 times GDP. - possible bail-in for bond holders.

• Now there is a danger of bank runs in all bailed out countries (past and future).

• Bank deposits experienced significant decline throughout EU in January.

• Economy continues to fail. Unemployment in EU 11.9%, Spain 26%, Greece 26.4%.

• Credit crunch in Italy.

Corporate Bank Debt in US and EU

Loans vs Deposits in Major Banks

U.S. Banks not Lending

U.S. Bank Lending Long Term

U.S. Monetary Base

US Fiscal State

• National Debt - $16.7 trillion.

• Debt to GDP 107%

• State and Local Debt - $3.0 trillion

• Unfunded Liabilities - $123 trillion

• Debt does not include Fannie Mae, Freddie Mac, FHA obligations or Fed Balance Sheet.

• Trade Deficit 2012 was $540 billion.

• Projected budget deficit for FY 2013 is now $845 billion.

U.S. Economy

• Fed printing approximately $40 billion a month in QE3.

• Interest rates have been 0 since 2008, Fed has promised to keep that rate until 2015.

• Employment supposedly improving, but seasonal adjustments largely responsible for better numbers.

• Retail sales improving because of inflation, but this is not admitted.

Central Bank Money Printing

US Inflation: Reported vs. Actual

US GDP Adjusted for Correct Inflation Figures

Detroit Abandoned Buildings #1

Detroit Abandoned Buildings #2

Detroit Abandoned Buildings #3

Detroit Abandoned Buildings #4

Detroit Abandoned Buildings #5

Background Material for Charts

• Moving Averages – 50-day, 200-day, 325-day or 10-week, 40-week, 65 week

• RSI – relative strength index, 80-overbought, 20 oversold, 50 divides bearish and bullish

• MACD – moving average convergence divergence, zero divide bullish bearish, peak and bottom numbers variable

• DMI – Directional Movement Index, +DI (blue), -DI (red) and trend line (black).

Market Analysis

@nyinvesting

Major Indices:

Dow Industrials 25-Years Monthly

RSI, DMI, MACD

S&P 500 25-Years Monthly

RSI, DMI, MACD

Nasdaq 25-Years Monthly

RSI, DMI, MACD

Russell 2000 25-Years Monthly

RSI, DMI, MACD

Dow Industrials 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

S&P 500 5-Years Weekly

10, 40, 65-Week Moving Average and RSI, DMI, MACD

Nasdaq 5-Years Weekly

10,40,65-Week Moving Averages, RSI, DMI, MACD

Russell 2000 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

UK FTSE 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

German DAX 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

France CAC-40 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Hong Kong Hang Seng 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Japan Nikkei 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Emerging Markets

Brazil Bovespa 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

India Sensex 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Shanghai Composite 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Russia RTS 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Metals and Oil

GOLD ETF: GLD 5-Years Weekly

10, 40, 65-Week Moving Averages, RSI, DMI, MACD

Silver ETF SLV 5-Years Weekly

10, 40, 65-Week Moving Averages, RSI, DMI, MACD

Mining ETF GDX 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Mining ETF GDXJ 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Copper ETF JJC 5-Years Weekly

10, 40, 65-Week Moving Averages, RSI, DMI, MACD

WTI Crude Oil 2-Years Weekly

Bonds and Currencies

30-Year Treasury Yield 5-Years Weekly

10, 40, 65-Week Moving Averages, RSI, DMI, MACD

10-Year Treasury Yield 5-Year Weekly

10, 40, 65-Week Moving Averages, RSI, DMI, MACD

U.S. $ DXY 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Euro FXE 5-Year Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Swiss Franc FXF 5-Year Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD

Australian $ FXA 5-Years Weekly

10, 40, 65-Week Moving Averages and RSI, DMI, MACD