Goldman On The Five Key Questions For 2012
As
US markets remain in hibernation for a few more hours, Goldman picks
out the five critical questions that need to be considered in the
context of 2012's economic outlook. Jan Hatzius and his team ask and
answer a veritable chart-fest of crucial items from whether US growth
will pick up to above-trend (and remain 'decoupled' from Europe's
downside drag), whether inflation will find its Goldilocks moment this
year and if the US housing market will bottom in 2012 (this one is a
stretch). Summarizing all of these in a final question, whether the Fed
will ease further, the erudite economist continues to expect an
expansion of LSAP (focused on Agency MBS) and an official re-adjustment
to an inflation targeting environment. Their view remains that a
nominal GDP target combined with more (larger) QE improves the chances
of the Fed meeting its dual mandates (unemployment target?) over time
but expectations for this radical shift remain predicated on
considerably worse economic performance in the economy first (as they
expect growth to disappoint). We feel the same way (worse is needed) and recall our recent (firstly here, then here and here) focus on the shift in the balance of power between the Fed and ECB balance sheets (forced Fed QE retaliation soon?).European Economy Contracts For Fifth Month In A Row, More Pain Ahead
Following today's release of European manufacturing PMI data we are sadly no closer to getting any resolution on which way the great US-European divergence will compress. Because all we learned is that, very much as expected, Europe managed to contract for a fifth month in a row, with the average PMI in Q4 2011 the weakest since Q2 2009, essentially guaranteeing a sharp recession once the manufacturing slow down spills over to GDP. The only silver lining was that the contraction across the continent was modesty better than expected, however if this merely means that the band aid is being pull off slowly and painfully instead of tearing it off is up for question.
Spain Releases Another Stunner: Deficit Could Be Greater Than 8% Of GDP
One of the biggest headlines that floated under the radar late last week was the announcement by Spain that its budget deficit would soar well higher than the expected 6% of economic output and instead be at 8% of GDP, which while ignored by the broader media was certainly noted by the EURUSD which tumbled on the news. Probably the most humorous response came from the neo-feudal viceroy of the PIIGS Olli Rehn who was displeased. From Reuters: "The European Commission regretted missed fiscal targets announced in Spain on Friday, but hailed the government's announcement of an austerity plan intended to slash the Spanish public deficit. "I regret the sizable fiscal slippage" to a deficit of 8.0 percent of GDP instead of 6.0 percent initially targeted, Economic Affairs Commissioner Olli Rehn said, while welcoming the new measures announced from Madrid." We in turn regret that a year after adopting so-called austerity, Spain still has not understood that it means cutting the deficit, not blowing it up. Because just like in Greece, sooner or later the Germans will come knocking and demanding every last shred of sovereign independence from its bevy of debt/bailout slaves. Unfortunately today's news will not help: in another piece of news that many hope slip under the low volume radar, the government just said that the revised number could well be re-revised even worse as soon as a few days later.Iran Test Fires Second Missile In 24 Hours As Posturing Escalates
As expected yesterday, when the US went out full bore with a Japan-lite approach of McCollum-like strategy of leaving Iran no option but to keep escalating until finally the US has enough public support grounds for a response, in under 24 hours Iran has launched a second missile, this time not a medium-range SAM to a long-range shore-to-sea missile. Needless to say, the US 5th Navy is watching these quite welcome developments with great interest. From Reuters: "Iran said on Monday it had successfully test fired a long-range missile during its naval exercise in the Gulf, flexing its military muscle to show it could hit Israel and U.S. bases in the region if attacked. The announcement came amid rising tension over Iran's disputed nuclear programme which Western powers believe is working on developing atomic bombs. Tehran denies the accusation and last week said it would stop the flow of oil through the Strait of Hormuz if the West carried out threats to impose sanctions on its oil exports." At this point it is glaringly obvious to all but the most confused that the US is consistently pushing Iran to escalate further and further, until such time as the US ships stationed in Bahrain say enough and decide it is time to sink some boats.Only The Masters Trade Without Emotions
Eric De Groot at Eric De Groot - 58 minutes ago
Amid the short-term trend noise of panic created by periodic, sharp
declines, it's becoming increasingly obvious that the silver market is
undergoing a transformation of control since 2005. Connected interests have
been slowly increasing their net long position (as a percentage of open
interest). Why are the price managers, once massively short, slowly
repositioning to the long side under the...
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Expecting Further Weakness In Emerging Markets (vs. US Stocks)
Admin at Marc Faber Blog - 1 hour ago
What we will have in 2012 is initially maybe some maybe further weakness in
emerging economies against the US market and then a major low in emerging
stock markets, including, India. I was looking for India to bottom out the
Sensex between 12,000 and 15,000 and we are getting there slowly. - *in
MoneyControl*
Related, iShares MSCI Emerging Markets Index ETF (EEM)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Just BTFD... and enjoy the ride...
Gold Has Been Up 11 Years In A Row It Deserves A Substantial Correction
Admin at Jim Rogers Blog - 1 hour ago
It would not surprise me to see gold go to 1200 dollars per ounce – but if
it goes that low I’d buy a lot more – gold has been up 11 years in a row it
deserves a substantial correction. - in MoneyControl.com
*Related, Gold, SPDR Gold Trust ETF (GLD)*
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC.*
Corrections In The Gold Bull Market
Deposits With ECB Decline By €30 Billion In New Year, Still Near All Time Record
For those claiming the ECB's deposit facility soared in the last days of 2011 primarily due to year end window dressing (for Tier 1 pig lispticking purposes or otherwise) they were right. Just barely and negligibly, but right. According to the ECB, the deposits as of January 1, 2012 were €414 billion, a drop from €446 billion as of New Year's Eve, and just modestly off the all time record €452 billion. Alas, that does mean that all the other cash from the LTRO is there to plug capitalization holes for good, as was asserted here previously. As a reminder, ECB deposit facility usage as of December 21 or the day of the LTRO was €265 billion, which means that €150 billion of the total free cash uptake is locked up in the "out of one pocket and into another" pyramid scheme. The first print of 2012 is shown on the chart below.
Presenting NSSM 200: "Implications of Worldwide Population Growth For U.S. Security and Overseas Interests"
One of the topics touched upon by Eric deCarbonnel in the earlier article discussing the potential, if not necessarily probable absent further validation, implications of the Exchange Stabilization Fund, is that of the nature of AIDS. Which got us thinking. While we won't necessarily go into the implications proposed by none other than Chuck Palahniuk in his book Rant (word search Kissinger, especially what Neddy Nelson has to say on the topic), it made us recall that particular National Security Study Memorandum, aka NSSM 200, better known as "The Kissinger Report" authored on December 10, 1974 and immediately classified under Executive Order 11652 until 1989, titled simply, "Implications of Worldwide Population Growth For U.S. Security and Overseas Interests." What did the report say and why is it relevant, especially in our day and age when so many believe that all important substance - black gold - may have peaked? Well, since it has 123 pages full of very, very curious information as pertains to how US foreign policy is truly styled, we will leave it up to our readers to make their own conclusions, but here are some preliminary observations to help them on their way...The Main Question Of Early 2012
If there is only one question we would love to have answered early as we make our investment allocation decisions in 2012, it is this: which way will the following chart compress, because compress it will: will the US finally catch up with the European contraction, or will Europe, mysteriously, and against all conventional wisdom rise from the ashes, recouple with the US, and pretend as if 2011 never happened?
As The GOP Primary Race Goes Into Production, Here Are The Facts
With two days left until the GOP primary circus is fully underway, here are, courtesy of Reuters, the key facts to keep in mind as all that endless talk finally shifts to action. From Reuters: "Voters kick off the 2012 nominating process to pick the Republican Party's challenger to Democratic President Barack Obama with the Iowa caucuses on Tuesday, followed by primaries in New Hampshire and South Carolina on Jan. 10 and Jan. 21. The three contests are some of the most watched events in the election process. Here are a few facts about them."Goldman's Jim O'Neill Is Now Officially A Completely Broken Record
How Jim O'Neill still has a job is beyond us. Not only is he the head of the worst performing vertical at Goldman Sachs, not only is he the creator of the Bloody Ridiculous Investment Concept (BRIC), but now this? Come on...New Year’s predictions are always a fun exercise. We can bet each other over the price of gold on December 31, 2012, or who will win the White House this year, or even make wild, black swan predictions.
It’s like the Charades of thought experiments… good for laughs at a cocktail party, but ultimately meaningless. Serious personal and financial plans cannot be developed from mere conjecture– it takes significant research, uncovering little-known facts, reviewing historical examples, and looking for ongoing signs that either reinforce or void hypotheses.
I’d like to share a few with you today. In my assessment, these ideas are not so much predictions, but rather mathematical near-certainties that underpin some of my own plans and investments.
Note– the timing for these is loose, not based on some fixed calendar date (Mayan or Gregorian). Some may occur this year, others may not arise for another 3, 4, even 5-years. But with each passing day, the likelihood becomes stronger.
Read More @ SovereignMan.com
from eSilverPrices.net:
By the end of next year, financial experts anticipate gold prices to double or triple from its $29-per-ounce price – the mid-December level.
The financial systems around the world have been shaken up by a chaotic 2011, with rumors of complete financial collapse plaguing markets for the better part of this tumultuous year.
With financial worries spilling over into the new year, precious metal bulls have something to look forward to in the coming year…
David Morgan, precious metals analysts with Silver-Investor.com, says silver is set to hit $60 by the close of 2012.
Read More @ eSilverPrices.net
By the end of next year, financial experts anticipate gold prices to double or triple from its $29-per-ounce price – the mid-December level.
The financial systems around the world have been shaken up by a chaotic 2011, with rumors of complete financial collapse plaguing markets for the better part of this tumultuous year.
With financial worries spilling over into the new year, precious metal bulls have something to look forward to in the coming year…
David Morgan, precious metals analysts with Silver-Investor.com, says silver is set to hit $60 by the close of 2012.
Read More @ eSilverPrices.net
Ron Paul vs. Neocons
Ron Paul: The One We’ve Been Looking For
by Mike Whitney, CounterPunch.org:
Ron Paul is the only antiwar candidate who has a (microscopic) chance of winning in 2012. He’s also the only candidate who will make an effort to restore the Bill of Rights and reverse Congress’s decision to allow the president to “indefinitely” imprison American citizens without due process. For these reasons alone, Paul should garner the support of leftists, liberals, and progressives. But he won’t, because liberals are convinced that Paul will try to dismantle the social programs upon which the elderly, the infirm, and the vulnerable depend.
These concerns are not without foundation. Paul opposes government meddling in the market and sees Medicare, Medicaid, and Social Security as steps towards socialism. That means, there’s a good chance that these programs will come under fire if Paul is elected. The question is: How should we balance our concerns about Social Security with our opposition to the war(s)?
Read More @ CounterPunch.org
Ron Paul is the only antiwar candidate who has a (microscopic) chance of winning in 2012. He’s also the only candidate who will make an effort to restore the Bill of Rights and reverse Congress’s decision to allow the president to “indefinitely” imprison American citizens without due process. For these reasons alone, Paul should garner the support of leftists, liberals, and progressives. But he won’t, because liberals are convinced that Paul will try to dismantle the social programs upon which the elderly, the infirm, and the vulnerable depend.
These concerns are not without foundation. Paul opposes government meddling in the market and sees Medicare, Medicaid, and Social Security as steps towards socialism. That means, there’s a good chance that these programs will come under fire if Paul is elected. The question is: How should we balance our concerns about Social Security with our opposition to the war(s)?
Read More @ CounterPunch.org
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