Geopolitics driving markets

Time to watch the geopolitics once again – Dominick Chirihella
Last week was the third week in a row that oil prices declined. As I have discussed on numerous occasions the main price drivers have been geopolitics, fundamentals and the state of the global economic recovery. None of the three price catalysts have been overly bullish over the last few weeks including the number one price mover...the evolving geopolitics around Iran.
Over the last few days the rhetoric has inched up a notch as the April 13th/14th meeting between Iran and the West scheduled for Istanbul moves closer. President Obama tightened up the economic sanctions on Iran's Central Bank in a hope to motivate them to come to the negotiating table with a more open minded view than they had during previous face to face negotiations. Secretary of State Clinton is in the region over the weekend for other meetings and has mentioned to the media that the US is only interested in a strategy of prevention and not a containment policy for Iran. She also went on to say it soon will be clear whether Iran's leaders are prepared to have a serious, credible discussion about their nuclear program. It is up to Iran's leaders to make the right choice. She further warned Iran (via the press) that the window for diplomacy is closing quickly.
I would say that the market is likely approaching a floor (at least temporarily) in oil prices as the 30 second news snippets floating around the media airwaves over the next several weeks are likely to increase the fear and uncertainty level of most market participants. I also believe that the meetings will not result in a black and white peaceful solution with only minimal progress being made. The market may interpret that type of an outcome as one that could result in the Israeli's becoming more impatient and thus increasing the likelihood of some sort of military strike.

China headed for recession?

7 signs China’s headed for a recession – Wall Street Daily, Louise Basenese

Much debate has already transpired over whether or not China – the world’s fastest-growing economy – is headed for a recession.

The most zealous China bulls consider such a possibility sacrilegious. Meanwhile, savvy hedge fund managers – with impressive track records, like Jim Chanos of Kynikos Associates – consider it a certainty.

So how’s an ordinary investor supposed to make any sense of such diametrically opposed viewpoints?

It’s simply, really. Stick to the facts. Specifically, the latest data points coming out of China. And then ask this question: Is this the picture of a country in tip-top economic shape?

Here’s a breakdown of the evidence…

What drives Oil Prices

Infographic – The Facts behind Oil Prices  (click picture for larger view - opens in new window)

Bonds safe or about to plunge?

This “safe” Asset could plummet 18% (or more) over the next two months – Wall Street Daily, Louise Baseness
By now you’d expect that every investor is preparing for a selloff in long-term bonds. After all, the Fed can’t keep interest rates near 0% forever.
Unfortunately, though, such expectations don’t entirely match reality.
Based on the latest fund flow data from Lipper Research, many investors remain enamored with long-term bonds.
In February, they plowed another $30.9 billion into bond funds, the largest monthly inflow since August 2010. And of that amount, $15.8 billion (or about 50%) went into long-term bond funds.
But not every investor is clueless.

Dollar as reserve currency – will it last?

10 reasons why the reign of the Dollar as the world reserve currency is about to come to an end – EconomicCollapseBlog

The U.S. dollar has probably been the closest thing to a true global currency that the world has ever seen.  For decades, the use of the U.S. dollar has been absolutely dominant in international trade.  This has had tremendous benefits for the U.S. financial system and for U.S. consumers, and it has given the U.S. government tremendous power and influence around the globe.  Today, more than 60 percent of all foreign currency reserves in the world are in U.S. dollars.  But there are big changes on the horizon.  The mainstream media in the United States has been strangely silent about this, but some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade.  There are also some oil producing nations which have begun selling oil in currencies other than the U.S. dollar, which is a major threat to the petrodollar system which has been in place for nearly four decades.  And big international institutions such as the UN and the IMF have even been issuing official reports about the need to move away form the U.S. dollar and toward a new global reserve currency.  So the reign of the U.S. dollar as the world reserve currency is definitely being threatened, and the coming shift in international trade is going to have massive implications for the U.S. economy.

A lot of this is being fueled by China.  China has the second largest economy on the face of the earth, and the size of the Chinese economy is projected to pass the size of the U.S. economy by 2016.  In fact, one economist is even projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.

So China is sitting there and wondering why the U.S. dollar should continue to be so preeminent if the Chinese economy is about to become the number one economy on the planet.

Over the past few years, China and other emerging powers such as Russia have been been quietly making agreements to move away from the U.S. dollar in international trade.  The supremacy of the U.S. dollar is not nearly as solid as most Americans believe that it is.

As the U.S. economy continues to fade, it is going to be really hard to argue that the U.S. dollar should continue to function as the primary reserve currency of the world.  Things are rapidly changing, and most Americans have no idea where these trends are taking us.

Nicest Cities in the world

10 Nicest Places to Live

1. Vienna, Austria
2. Zurich, Switzerland
3. Auckland, New Zealand
4. Munich, Germany
5. Dusseldorf, Germany
6. Vancouver, Canada
7. Frankfurt, Germany
8. Geneva, Switzerland
9. Copenhagen, Denmark
10. Bern, Switzerland

What affects Oil Market

Oil Market Dynamics and the Fear Factor – CME Group

Homebuying Financing Mistakes

5 Rookie Homebuying Mistakes & how to avoid them – Fox/HSH, Gina Pogol

With today's unprecedented low mortgage rates and home prices, you may be thinking of making the big leap into home ownership.

If you're a mortgage newbie, don't get caught making an error that could cost you big money. Here are five home financing mistakes that rookie homebuyers make, along with tips on how to avoid them.

1. Getting just 1 or 2 mortgage quotes
2. Not concerned with detailed credit score
3. Dismissing FHA loans
4. Choosing just lowest monthly mortgage payment
5. Fixation on 30-year fixed rate mortgage

Rent or Buy Home

Decision Points: Renting vs Buying a Home – Fox, NewsCore

Whether to rent or buy is a personal decision, with many important factors to consider. Many people prefer the flexibility of renting, and others want to the security of owning their own homes.

To help you choose the right path, here is a guide to the advantages and disadvantages of buying versus renting:

Priciest Cities to Rent

Priciest Cities to Rent – CNBC

#		Rent-Income ratio	Population	Median Household Income
1	New York, NY	52%	11,611,400	$60,161
2	Los Angeles, CA	36%	9,932,100	$55,579
3	San Francisco, CA	33%	1,789,900	$79,076
4	Miami, FL	29%	2,514,200	$45,219
5	Detroit, MI	28%	1,806,100	$36,127
6	Boston, MA	28%	4,576,700	$76,731
7	San Diego, CA	28%	3,138,200	$60,606
8	Orange County, CA	26%	3,050,400	$71,884
9	San Jose, CA	25%	1,854,300	$85,677
10	Riverside-San Barnadino, CA	25%	4,287,600	$53,365

Many factors can make a housing rental market difficult to negotiate, such as tight supply and fierce competition for the most desirable properties. But chief among potentially problematic rental factors is the cost. To get an indication of how stretched renters are in each market, the data team at John Burns Real Estate Consulting looked at the rent-to-income ratios in 40 major U.S. cities.
The resulting list is particularly heavy with representatives from one state. And while it might not be the argument-ender on where it's the most difficult to find a rental, it can speak to the costliness of these 10 markets.

Job vacancies

Jobs employers can’t fill – CNBC

1. Repair Technicians
2. Leisure & Hospitality workers
3. Administrative Assistants
4. Scientific Researchers
5. Accountants
6. Machinists
7. Nurses
8. Laborers
9. Software Developers
10. Truck Drivers

Although the employment picture is improving, the job market can hardly be described as robust, and many Americans still feel they can’t find work. Despite the common perception about a lack of work, however, there are jobs that employers can’t seem to fill.

The reasons are many. Applicants may lack training, demand for specific skill sets may outpace supply, and the jobs may not pay enough to constitute a step up from unemployment benefits. Whatever the reason, jobs in many major sectors of the economy, including retail, manufacturing and business services, are going unfilled.

Using data from the Bureau of Labor Statistics and the ManPowerGroup employment agency, as well as comments from employers and other placement firms, CNBC.com has compiled a list of jobs that are in demand. Read ahead to see them.

By Daniel Bukszpan – Posted 12 March 2012

Jobs numbers not quite so rosy

Could the rosy Jobs numbers be a false spring? – US News, Meg Handley

After several months of encouraging jobs reports, one might be tempted to get a little comfy and think the job-creating cogs of the country's economic engine might finally be getting a little grease.

After all, both January and February's jobs report showed employment gains upwards of 200,000 jobs, a far cry from the dismal numbers seen in the latter part of 2011.

But that's just the problem, according to some experts. The employment picture in the early months of 2012 is looking a lot like it did a year ago, and many of the same characteristics--high gas prices and unrest in the Middle East--are present as well.

Is the country in for a hard landing when March and April's employment figures come out? It's too soon to say, says Guy LeBas, chief fixed-income strategist at financial-services firm Janney Montgomery Scott, but there's certainly concern among economists that the budding optimism for a stronger jobs recovery in 2012 could be short-lived.

Stock market’s false hope

Did we jump the gun on this Economic Recovery?

Not so fast. Those that are publicly declaring that an economic recovery has arrived are ignoring a whole host of numbers that indicate that the U.S. economy is in absolutely horrendous shape. The truth is that the health of an economy should not be measured by how well the stock market is doing. Rather, the truth health of an economy should be evaluated by looking at numbers for things like jobs, housing, poverty and debt. Some of the latest economic statistics indicate that unemployment is getting a little bit worse, that the housing market continues to deteriorate, that poverty in America continues to soar and that our debt problem is worse than ever. If we were truly experiencing the kind of economic recovery that the United States has experienced after every other post-World War II recession we would see a sharp improvement across the board in most of our economic statistics. But that simply is not happening. Sadly, this is about as much of an “economic recovery” as we are going to get because soon the economy will be getting much worse. So enjoy this period of relative stability while you can.

Read rest of article on Economic Collapse Blog

What unemployment figures indicate

What’s the truth about the unemployment numbers? – FoxNews

The recent sudden drops in both initial unemployment insurance claims and unemployment rates have generated a slew of positive news stories and lifted White House spirits. Fox News contributor and former Clinton pollster Doug Schoen even writes about the “high-fiving in the White House.”

But other numbers show a much weaker job market and economy; the average unemployment duration remains near its all-time high, hiring is stuck near record lows, and there are almost 3 million workers in part-time rather than full-time jobs. Further, GDP grew just 1.7% last year and few new companies are being started.

So which scenario is right?