This was a widely-read story back in March, Greek Crisis Is Over, Rest of Region Safe, Prodi Says:

“‘For Greece, the problem is completely over,’ said Prodi, who was also Italian prime minister, in an interview in Shanghai today. ‘I don’t see any other case now in Europe. I don’t think there is any reason to think the euro system will collapse or will suffer greatly because of Greece.’”

Listen to the market, not politicians. Read the price charts, not the “news.”

I got this flyer from the local real estate office this past weekend. If you compare it with the flyer I collected at the previous peak in October 2007, you can see that prices have at least doubled since then. Bubble, what bubble?

“Banks and hedge funds employ mathematicians with no financial-market experience to build models that no one is testing scientifically for use in situations where they were not intended by traders who don’t understand them.”

– Paul Wilmott

Subscribers and I got long the Homebuilders (XHB) last December. We’re up around 24% on this position so far. What do I know about the homebuilders? Nothing. What do I know about macroeconomics? Nothing. Housing starts, interest rates, consumer sentiment surveys? Nothing, nothing and nothing. But I can see when stock prices are going up or down and act accordingly.

If you want to join a group of successful know-nothings, just drop me an email to subscribe ($200/calendar year, pro-rated).

Greece continues to be a huge disaster… look at what their ten-year bond is now yielding. (And the two-year bonds are yielding even more. )

Earlier posts: Figures Less Than Greek, Greeced Lightning, and amusingly related: Both Greeks and Japanese Lie About Their Sex Lives (and finances?)

Continuing our conversation (kicked off by DougM, and followed up on by Jack and Babak) about the value of a spot gold versus gold stocks ratio, I’ve hastily made up two ratio charts: the top one is spot gold to the XAU (PHLX Gold/Silver Sector) and the bottom one is spot gold to HUI (NYSE Arca Gold BUGS Index). [Click to enlarge]

Babak mentioned that the original ratio was the Hardy & Harman Gold Index versus the Barron’s Gold Mining Index. I do have the H&H data but not the Barron’s Index, so I can’t make the original chart.

The descending triangle in Beichen that I recently pointed out broke down on this news. I noted last December that the real estate stocks were weak even though home prices here were going through the roof.

The divergence has grown more stark and with the latest policy measures I expect that real estate prices will finally cool down. Remember that stock prices reflect all public and private information. The stock market has been signaling for many months that the government would make firm moves to reign in the wild real estate market here.

Waxing nostalgic: I was looking at this trading platform called Anvil and noticed it had a high/low scanner/counter. It reminded me of something called “Eyes” which was included with the Gr8trade platform. Any other old timers remember that? It was slick and simple and… priceless.

Did CyberTrader have a high low counter? Anyone remember?

A new baby is born…

“Investors need a minimum 500,000 yuan (US$73,255) to open an account to trade stock-index futures….

They must pay cash deposits equivalent to 15 percent of the contract value for May and June contracts and 18 percent for contracts for September and December. The contract values are points of the CSI 300 multiplied by 300 yuan (~US$44) and the minimum contract price movement is 0.2 point….”

Beijing North Star is one of the biggest property developers here and a pretty good proxy for the CSI Real Estate Index (which is proprietary so I can’t see its components). Keep an eye on this descending triangle… price could break either way, and when it does it will be telling.