31 Charts That Will Restore Your Faith In Humanity

Rob Wile | May 22, 2013, 11:34 AM | 5,171 |

Lately, it feels like the news has been dominated by tragedies: natural disasters, evil people, and sometimes just carelessness.

But it would be a mistake to become cynical.

We've put together 31 charts that we think will help restore your faith in humanity.

It's Getting Better All The Time / Stephen Moore & Julian Simon

"The Improving State of the World" (c) Cato Institute 2007. Used with permission

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

"The Improving State of the World" (c) Cato Institute 2007. Used with permission.

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

Citi

It's Getting Better All The Time / Stephen Moore & Julian Simon

"The Improving State of the World" (c) Cato Institute 2007. Used with permission

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

It's Getting Better All The Time / Stephen Moore & Julian Simon

BONUS: It takes less and less time to buy all kinds of stuff. A bicycle in 1895 used to take 260 working hours to buy. By 1997 it was down to 7.2.

Jefferies

(Special thanks to Cato Institute's "Improving State of the World" for some of the charts)

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CHART OF THE DAY: Hedge Fund Performance This Year Is Just Sad

Sam Ro | May 22, 2013, 8:38 AM | 2,780 |

The analysts at Goldman Sachs have just published their latest Hedge Fund Trend Monitor report, which tracks the equity investments of the world's hedge funds.

One thing is clear: hedge funds are struggling to keep up with the market.

"The typical hedge fund generated a YTD return of 5% through May 10, compared with 15% gains for both the S&P 500 and the average large-cap core mutual fund," wrote Goldman Sachs Amanda Schneider.  "Hedge funds returned an average of 3.5% in 1Q 2013, lagging the S&P 500 by 700 bp. Last year the average fund returned 8% vs. 16% for the S&P 500."

We recognize that not all hedge funds are out their to beat these benchmarks.  Furthermore, five months is certainly too short a period of time to judge performance.

Nevertheless, this only supports the argument that most investors are much better off sitting in a boring, low-cost index fund.

Goldman Sachs

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UK's Anti-Europe Party Make Huge Breakthrough In New Poll

REUTERS/Luke MacGregor

UKIP, the upstart anti-EU/anti-immigration party that has been causing a stir in the U.K., has come just two points below Britain's traditionally dominant right wing party in a new poll.

The poll is the lowest result seen yet for the Conservatives, and the highest seen for UKIP, Political Betting's Mike Smithson points out  — part of a wider trend if we look at the last few years of data.

Here's what the poll from Survnation looks like:

General Election Voting Intention, Change Since Survation poll, May 1st

Conservative: 24% (-5)
Labour: 35% (-1)
Liberal Democrat: 11% (-1)
UKIP: 22% (+6)
Other: 8% (nc)

According to Survnation's Damian Lyons Lowe, UKIP and the Conservatives were neck and neck at 23% before the group adjusted for those who answered 'don't know' or refused to answer.

Crucially, this is the first poll Survnation has conducted since the weekend's report in the Telegraph that a close ally of Conservative Prime Minister David Cameron had called Tory activists (many of whom sympathize with UKIP) "swivel-eyed loons."

UKIP's apparent success comes despite a number of scandals that have engulfed the party, from the member who was allegedly photographed making a Nazi salute to party leader Nigel Farage hiding in a pub to escape an angry crowd calling him "racist scum."

The poll gives Ed Miliband's Labour Party a comfortable lead, which lies with Nate Silver's early prediction.

The next general election in the U.K. is set for 2015.

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How The Stock Market Will React To Bernanke's Big Speech

REUTERS/Brendan McDermid

At 10 AM EDT today, Federal Reserve Chairman Ben Bernanke will testify on the outlook of the U.S. economy before a Joint Economic Committee of Congress.

Along with the subsequent release of the minutes from the FOMC's April 30-May 1 monetary policy meeting, due out at 2 PM, the Bernanke testimony is the main event on the calendar for markets this week.

Because the stock market rally that began in November has yet to see any sort of meaningful downward correction, it has lent to the sense that the market just keeps going up, undeterred by weak economic data and the like.

As such, the stock market will likely be a topic of interest for the JEC, and it may wish to put the question to Bernanke: are stocks in a bubble?

In a preview of the testimony, Miller Tabak Chief Economic Strategist Andrew Wilkinson identifies two things the stock market will want to hear from Bernanke, and how the Fed chairman may respond to a grilling on stocks:

There are two things the equity market would appreciate hearing from Mr. Bernanke on Wednesday. First, while progress is progress, it remains painfully slow. Such recognition will create the feeling amongst investors that quantitative easing is here for longer. Bond yields would decline in response while stocks would rally and the dollar would fall on the notion that it is surrendering its future yield advantage.

Second, for it to build on already heady gains – the market closed 1,000 points off its March 2009 lows on Monday - the stock market needs a green light from Mr. Bernanke. Any reference to future bubbles building in “certain” asset classes or financial markets will be cause for a sell off in stocks. However, the Fed has developed ‘asset patrol committees’ in the aftermath of the financial crisis whose role it is to monitor developments in financial markets and send up distress flares when unusual correlations begin. Thus far they have only spotted minor solar flares in some asset markets, but nothing to worry about.

If Mr. Bernanke is grilled on the topic of the advancing stock market, we expect he will explain it in terms of a revaluation of earnings potential as a consequence of several years of financial repression rather than blaming it on ‘irrational exuberance’. He has said it before and we expect him to say it again, the stock market is hardly overvalued despite its recent rise.

As we noted last week in a note, several Fed speakers have revisited the difficulty in pushing the flow of credit to would-be-homeowners – those with less than stellar credit. It does not make sense for Mr. Bernanke to upset the applecart despite the fact that equity traders seem to have adopted another mantra in May as they party like its 1999.

In short, anything but optimism from Bernanke on stocks would probably come as a surprise.

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Silver Has Now Had An Insane Day, And Is Actually Higher After Plunging 9%

Silver got slammed last night when futures markets re-opened to begin the week.

At its lowest level, the precious metal had fallen nearly 9% to $20.25 an ounce.

Remarkably, it's already staged a big comeback, and it just turned positive on the day.

In the past few minutes, it's screamed higher, and is now trading around $23.00, up 2.7%.

Miller Tabak's Jonathan Krinsky offers some commentary on why the details of the sell-off may actually be positive for those bullish on gold and silver:

The other interesting action, which started last night, has been the precious metals. After being down over 8% at one point, Silver has nearly recovered the entire decline. Gold has actually gone into positive territory. If you are a Bull on precious metals, there are some positives in that type of action. First, Gold did NOT make a new low with Silver overnight. The low of 1338 was slightly higher than the April 16th low of 1322. That could be considered a non-confirmation and “potential” bullish divergence.

Also note that even as Silver made a new low by a wide margin, RSI does not appear to be doing so, another non-confirmation. Of course none of this means the medium or long-term trends have changed, they are still quite bearish. It does, however, open up the potential for a short-term bounce.

The chart below shows the price action in silver today.

The next chart is a bit more zoomed in and shows the vertical move in silver in the past few minutes.

Thinkorswim

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CITI: Good News, We No Longer Think Greece Will Exit The Eurozone

Last summer, Citi's chief economist, Willem Buiter, introduced a bold call: he assigned a 90% probability that Greece would exit the euro on January 1, 2013.

This assertion was made before European Central Bank President Mario Draghi introduced a new ECB bond-buying program, dubbed "OMT" (outright monetary transactions), which has more or less completely quelled the turmoil that the European sovereign debt crisis has inflicted upon markets over the past few years.

Needless to say, Buiter's dramatic call didn't work out. By October, Buiter and his team revised the odds of a Greek exit to 60%, and even then, only by the end of 2013.

However, they maintained that a Greek exit was still their base case, saying it would likely happen in 2014, after the German elections.

In a note out today, the Citi economics team is once again walking back their views toward the likelihood of a Greek exit from the euro.

Here's the key section:

Grexit Postponed, Euro Area Economy Still Weak

The euro area economy remains weak, and GDP has now fallen for six consecutive quarters. Growth prospects remain poor, and we expect that the euro area will continue to underperform versus official forecasts and the consensus in 2014 and 2015. Nevertheless, we have become a bit less gloomy on euro area growth for next year, and we are raising our 2014 growth forecast from minus 0.3% last month to 0.0% this month (while pulling our 2013 forecast down from minus 0.6% to minus 0.7%).

This upgrade reflects two main factors. First, with the drift to accepting deficit slippage amidst economic weakness and low government bond spreads, fiscal headwinds in the weak periphery economies should be less severe than seemed likely a few months ago. The IMF has scaled back its forecast for the average (unweighted) structural fiscal tightening in Italy, Spain, Portugal, Greece and Ireland in 2013 to 1.2% of GDP from 1.8% of GDP in its late-2012 forecast. Second, we are no longer including Grexit at the start of 2014 in our base case. We still believe that there is a fairly high risk of Grexit in coming years, but no longer put it in our base case at any particular date. This partly reflects a lower risk of Grexit, but also a sense that, with creditor nations taking a more relaxed line on fiscal targets and Greece’s coalition government holding together, triggers for Grexit as early as 2014 have receded markedly. The chosen date was always somewhat arbitrary, but to construct a consistent forecast we pencilled in sizeable Grexit-related uncertainties and financial strains around that date, hitting the 2014 growth outlook. That intensified headwind is now absent in our forecast.

Crisis over?

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