By Cees Bruggemans, Chief Economist FNB.

The SARB leading indicator peaked at 127.2 in March 2007, thereafter declining for two years, initially gradually during 2007 but acquiring freefall proportions in 2008.

This indicator hit a cyclical low of 105.3 in March 2009, thereafter rising very rapidly to 112.5 by August 2009.

Given the events of 2008 and early 2009, there presumably exists no surprise regarding the indicator’s freefall in 2008. But what has made it rise so phoenix-like rapidly since March this year?

As per the June 2007 issue of the SARB Quarterly Bulletin, this leading index today is a composite of twelve individual time series which together offer superior forward-looking ability regarding the South African business cycle, leading turning points by some six to nine months.

The twelve time series can be grouped in four distinct sub-categories, each making a peculiar contribution to the behaviour of the composite

...

After months of painstaking negotiations, GM has scrapped the Opel sale on the basis that it was 'no longer in the best interests of GM, now that the environment for car sales has started to improve', reports the Independent.  The decision comes just after Opel's labor force had agreed to contribute $390 million in annual savings.  'Management had planned a release saying that they will proceed with Magna, so there must have been a fundamental change of view within the board', the FT quotes an insider as saying.  The Russian government is planning to raise $1.87 billion to bail out ailing carmaker Avtovaz, most of which will be apparently allotted to bad debts, and some of which will be allocated to modernization and on job creation, Prime Minister Vladimir Putin has reportedly announced.  Daimler Trucks will proceed ...

One great thing about my position here as Director of Marketing is my extensive contact list. I say that because I have access to thousands of excellent traders, investors, and economists at my finger tips! So when things around the world catch my attention, I can quickly find someone who can give me the skinny on what’s really going down. One of my contacts is Nicholas Vardy, Editor, The Global Guru, and he’s got a MUCH better pulse on the world aboard then I do. That’s why I asked him to give us his reasons why the markets outside the US are doing so well and WHY!

He told me he’d love to get feedback from the Trader’s Blog readers, so let’s not let him down! You can also visit The Global Guru to get his new report on his favorite global picks.

====================================================================

Make Your Fortune from the

...

A stronger Japanese yen against the dollar may prompt Honda Motor (HMC) to shift production of its Fit model from Japan to the U.S. This is mainly because Fit is one of the Honda’s models that attracted attention in the U.S. but are imported from Japan. However, the strengthening of yen against dollar to around 90 is narrowing down the company’s revenues in Japan upon translation.  So far, Honda has focused on regional manufacturing strategy for its vehicles. The company produces about 80% of all the vehicles sold in the U.S. However, the 5-door hatchback Fit – introduced in Japan in 2001 and launched in the U.S. market in 2006 – is manufactured at a facility outside Tokyo.  The model gained huge importance in the U.S. due to its fuel-efficiency (30 mpg). For the first nine months of the year, Fit sales in the U.S. were ...

I have been talking for a time about the US Gov buying its own debt. I do not think they will stop with the QE. They cant. They cant because they will not be able to keep the lights on for one, but also because they cant allow a major financial institution to fail or we have global dominoes and a collapse of the financial system. What does that mean? Hyperinflation at some point. I sure hope you have taken measures to protect yourself. I have and sleep well at night. Hedge manager Sprott sees trouble when easing ends US government is new “dead man walking”, investor says By Alistair Barr, MarketWatch NEW YORK (MarketWatch) – When so-called quantitative easing by central banks ends, the world economy may slip back into trouble, Canadian hedge fund manager Eric Sprott ...

The market has definitely improved much since March, 09, but has it improved for the right reasons? Should investors still be bearish? In this article, I explore the biggest justifications held out by the “bears”.

“What’s with the insiders?”

Insiders are those people who have access to non-public information about a company – ie. Employees, senior management, executives. In recent months, insider selling has FAR outweighed insider buying by many multiples. With figures courtesy of TrimTabs (which tracks insider transactions), during August, insiders averaged $210 million worth of shares bought, while they sold $6.3 billion worth. That’s a whopping 30x sell-to-buy ratio! In the last week of August alone, there were $8 million worth of insider buys corresponding to $520 million of insider sales. That means a ratio of nearly 62x! If insiders are selling, and they know more than the market, then what does that show?

“Where is the volume?”

One of the …

India is now approaching a per-capita GDP level that may prove to be a tipping point for economic growth and consumption. At $2,000 per person, Indiarsquo;s GDP is only a third of the way to the point at which oil consumption begins to rapidly increase, according to the energy industry consulting firm PIRA. India is, however, approaching another key level. When Chinarsquo;s per-capita GDP reached $3,000 in 2002, car sales more than tripled to 7 million vehicles by 2008, PIRA points out. Also important to Indiarsquo;s economic growth is its trade with other countries. The UBS chart above shows that Indiarsquo;s trade as a percentage of GDP is similar to where China was in 2002. But to have the same export-led growth seen in China over the past 10 years, India needs to improve in several areas. A good place to start would be to clear away some bureaucratic red tape to encourage private foreign ...

India is now approaching a per-capita GDP level that may prove to be a tipping point for economic growth and consumption. At $2,000 per person, Indiarsquo;s GDP is only a third of the way to the point at which oil consumption begins to rapidly increase, according to the energy industry consulting firm PIRA. India is, however, approaching another key level. When Chinarsquo;s per-capita GDP reached $3,000 in 2002, car sales more than tripled to 7 million vehicles by 2008, PIRA points out. Also important to Indiarsquo;s economic growth is its trade with other countries. The UBS chart above shows that Indiarsquo;s trade as a percentage of GDP is similar to where China was in 2002. But to have the same export-led growth seen in China over the past 10 years, India needs to improve in several areas. A good place to start would be to clear away some bureaucratic red tape to encourage private foreign ...

The inflation/deflation debate is hot… It crackles and pops like a pine fire. But it gives off little helpful light. Abe Lincoln may have read by the light of an open fire. But when we tried it, we singed our eyebrows. It made us suspicious of Old Abe; maybe he wasn’t quite as truthful as he pretended to be. Later, we realized he was a mountebank. But that’s another story…

Today, we light a candle and try to interpret the shadows on the wall…

Yesterday, the Dow fell 81 points. Gold dropped $5 to $1009.

Will the feds succeed in causing inflation? Or will they fail? Will the dollar continue to go down? Or will it prove to be a safe haven currency in a time of deflationary trouble?

According to the papers, the feds have already done it. “Fed says recovery underway,” says a headline from yesterday’s press.

Another headline tells us that

...

Today's Fed decision was no surprise, but questions abound about the timing of Bernanke's next move. The Federal Open Market Committee (FOMC) voted unanimously to keep the fed funds target rate between 0% and 1/4%. The wording of the statement reflected a slightly more upbeat assessment of the economy, with the observation that "economic activity has picked up." In August, the Fed opined that "economic activity is leveling out." Expectations for long-term inflation were described as "stable," which is new language and something I don't necessarily agree with. A change to the planned purchase of agency mortgage-backed securities was also made, with the program now scheduled to end in the first quarter, instead of next month. Today's meeting was a no-brainer for Bernanke. All he had to do was say the economy is getting better and he wasn't tightening policy. Give the Fed chairman credit for ...