David Einhorn Explains Why Only Gold Is An Antidote To The Fed's Destructive "Jelly Donut Policy"
David
Einhorn who crushed it this week with huge profits on his short
positions in both Herbalife and Green Mountain, finally takes on the
ultimate competitor: the Federal Reserve, likening its "strategy" to a
Jelly Donut policy, and explains what everyone who has been reading Zero
Hedge for the past 3 years knows too well: "I will keep a substantial long exposure to gold -- which serves as a Jelly Donut antidote for my portfolio.
While I'd love for our leaders to adopt sensible policies that would
reduce the tail risks so that I could sell our gold, one nice thing
about gold is that it doesn't even have quarterly conference calls." Or, as Kyle Bass said last year, "Buying Gold Is Just Buying A Put Against The Idiocy Of The Political Cycle. It's That Simple!" Not surprisingly, it is only the idiots out there who still don't get what these two investing luminaries are warning about.Cashin On Supermoons, 9/11, And The Israeli Call-Up
There
are only a few market prognosticators who can look to the stars for
sage advice and not come away being giggled at. Art Cashin, UBS
venerable trader-in-chief, notes that this weekend will see the biggest
full moon of the year from the perspective of the Earth. This so-called
'Supermoon' will exert 42% more tidal force than normal and given the
human body is 70% water, one can only imagine the bipolar impacts that
this extra-terrestrial 'pressure' will create on the tiny minds of
traders. What is more spooky is the fact that there is an unusual
astrological configuration, not seen since 9/11, also occurring this
weekend and rather worryingly The Times of Israel is noting the call-up
of Emergency Israeli Troops in response to the worsening situation in
the Sinai. So our minds will be wondering from an out-of-world
experience and at the same time developments in the already unstable
Middle East crank up one more notch on the Spinal-Tap-amplifier of
sabre-rattling. Previewing The First Of Many Greek Elections
This
weekend the Greeks will go to the polls - and with support for the two
main parties (New Democracy - center-right; and PASOK - socialist) at
historical lows (and the share of protest and extremist votes at
historical highs) - is Greece about to become Belgium. This is likely
exactly what the bankers want - a relatively ungoverned nation to pilfer
- but as the WSJ reports,
against a backdrop of economic crisis, a 'failed' election is expected
to usher in such political instability that officials from the
country's major parties are planning for another possible election
within months. Can they break Belgium's record-breaking run of not
having an official government or will the Greeks transform their
economy with Greek Fries, Greek Beer, and Greek Chocolate? At the
moment, New Democracy is widely expected to win the elections, without
however securing the majority in parliament and even in the case of a coalition with PASOK the two parties would not have a majority in parliament. The problem, of course, is that many of the extreme-left and extreme-right minority parties (who are likely to get seats) advocate
the renegotiation of agreements with official sector creditors, a
rejection of austerity measures, or even leaving the euro altogether. Credit
Suisse provides a succinct preview of the Greek elections and three
scenarios (bad, badder, baddest) that the post-election EU/IMF-dependent
nation faces with color from UBS on what happens if/when Greece fails
to deliver on its EU/IMF obligations as appetite for their demands is
very likely to wane post-election - no matter what percentage of Greeks
want to remain in the EU.Video Interview: May 2012
Latest video interview.
Topics: gold, agriculture, commodities;
*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.*
The Surprise In Oil Is Going To Be...
The surprise in oil is going to be how high it stays and how high it goes.
The IEA, has done a study. The world`s known reserves of oil are in steady
decline. We have to find a lot of oil or the price of oil is going to
unheard of heights. - *in a recent WSJ video interview*
*Related: United States Oil Fund (USO), Crude Oil Futures, Exxon Mobil (XOM)
*
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 regula... more »
Draghi Derails Gold
Apparently ECB President Draghi believes things are going so well over in
Euroland that traders are "correct" in their perceptions that no near
term stimulus is needed. Down went gold, and silver, and copper, etc. as
money flowed out of those markets and elsewhere into I have no idea what
based on the fact that the equity markets are lower and are the bonds.
Let's call it mattress money flows.
Meanwhile data coming out ahead of tomorrow's payroll numbers are
indicating that the report will not be particularly strong here in the US.
It will be interesting to see if we get a weak numb... more »
Labor Market's Influence On The Dollar & Gold
Focus on the trends and cycles rather than individual data points. When
the labor trends below change from down to up, it will reflect a transition
from marginal job creation to destruction. Money would react to such a
transition by flowing out of the dollar and into gold, thereby, forcing
another round of indirect or direct quantitative easing from the Fed. Chart
1: Challenger,...
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content, and more! ]]
The Keynesian Clowns Are Causing A Lot Of Volatility
“The Keynesian clowns are causing a lot of volatility in the markets and
economy.” - *in a recent interview with FMT*
*
*
Related, SPDR Gold Trust ETF (GLD)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Federal Reserve: Savers & Investors vs Spenders
"The Fed has waged war against the Savers and Investors to save the
Spenders and Reckless." - *in a recent WSJ video interview *
*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.*
Success In Life Comes On Many Different Levels
I think in life success comes on many different levels, monetary success is
just one of them, there are many other ways to be successful in life. If
you have a happy family and are a good father, this is also a measure of
success, if you can help other people this is also a measure of success.
I think our society over rates monetary success and associates success with
having a big house, having 3 cars, being able to go on holidays and live
the good life when in fact, these are all relatively superficial symptoms
of success. - *in Investment Postcards*
*Marc Faber is an international... more »
The Story Of Blind Chinese Dissident Chen Guangcheng Explained In Two Minutes
Confused by the latest flop in US foreign policy hyporicy (not to mention China's domestic) involving blind Chinese dissident Chen Guangcheng,
whom America (usually so very strongly in favor of human rights,
except when push comes to shove), sold down the river? Fear not,
because here, courtesy of Taiwan based cartoon outfit NMA World
Edition, is an abbreviated version for dummies and intellectuals alike,
explaining everything one needs to know about this story in 135
seconds.Should The Rich Pay More Taxes?
Those calling for taxing the richest more are not doing the same cost-benefit analysis I am doing that suggests that raising taxes won’t raise more revenue. But they’re not unfairly looking for a scapegoat, either. While probably the greatest culprits for the problems of recent are in government (Bush, Greenspan, Obama, Bernanke) Americans are right to be mad at the rich.
Why?
This isn’t about tax. This is about jobs, and growth. The rich, above and beyond any other group have the ability to ameliorate the economic malaise by spending and creating jobs, creating new products and new wealth. The top 1% control 42% of all financial wealth. But that money isn’t moving very much at all— the velocity of money is at historic lows. It should not be surprising that growth remains depressed and unemployment remains stubbornly high.
Eric Holder To Be Held In Contempt Of Congress?
While normally we stay away from outright political commentary especially of the kind that has no direct relation to finance or the economy, the fact is that if the US had a functioning, uncompromised, uncorrupt, and effective Justice Department, much of what we see every day on Wall Street would be vastly different since if crime did indeed have punishment, then a vast portion of the questionable behavior that is exhibited by financiers would have been eliminated long ago. Which is why we find the news just released from The Hill that "Rep. Darrell Issa (R-Calif.) has circulated a draft copy of a resolution that would hold Attorney General Eric Holder in contempt of Congress" particularly relevant. For it is none other than Holder's complete lack of involvement and intervention to outright daily crimes conducted in the financial world that is as much a reason for the deplorable economic state of this country and the world, as are all those other factor extensively discussed in books and documentaries each and every day.Class Warfare Succeeding: Rich Vs Poor Divide Near Record As Consumer Comfort Plunges
Bloomberg's weekly Consumer Comfort Index just had its largest two-week drop in over 13 months
after tracking stocks up to near four-year highs in early April. These
levels are still markedly negative compared to the zero print in early
2007 and while the index has generally tracked sideways, the consumer
finally seemed to go all-in when Europe's LTRO and Fiscal Compact was
announced and the world's coordinated easing occurred starting in
November of last year. However the divergences within the data are
growing rapidly with high-income individuals near four-year highs in
terms of their comfort as low-income individuals at near record-lows
for comfort. The comfort spread between rich and poor has not been this wide since before the crisis and yet so many expected 'change'.Swiss Gold Stored At “Decentralised Locations” – SNB Does Not Disclose Where
There are deepening concerns in Switzerland about the debasement of the Swiss franc. The SNB has pegged the franc to the euro and is engaged in the same ultra loose monetary policies as the Federal Reserve, BOE and the ECB. The SNB won't allow the franc to rise above an arbitrary “ceiling” against the euro Walter Meier himself said on April 5 that the SNB is ready to buy foreign currencies in "unlimited quantities." Meier’s comments regarding the vastly depleted Swiss gold reserves came after Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland, called on the SNB to disclose where its gold is stored, in a letter published in the respected Swiss publication Finanz und Wirtschaft. Meier said that the SNB holds its physical gold reserves “domestically and internationally, with provisions for a crisis scenario being a main factor in the decision for this decentralized storage”. “The criteria for the storage countries are: appropriate regional diversification, exceptionally stable economic and political environments, immunity for central bank investments, access to a gold market where stocks could be liquidated if necessary,” he continued. He concluded by saying that “such a decentralized storage is still preferable to an exclusive storage in Switzerland. The listed factors can change over time and that’s why the central bank is reviewing and adapting the storage locations periodically.” The SNB’s monetary policies have been imprudent in recent years and their gold sales have lost the Swiss people a lot of money.Non-Manufacturing ISM Slides, Posts Biggest Miss In 12 Months
Two
days ago, the Manufcaturing ISM soared, trouncing expectations, in a
very perplexing print because as the very next day we learned via ADP
that manufacturing jobs dropped by 5,000 in April. Today, however,
things are back to normal as the indicator that tracks the far greater
component of US GDP: the Services ISM,
just printed at 53.5, missing expectations of 55.3 wildly, and down
from the previous print of 56.0. This was the biggest miss in 12 months,
and the lowest print since December; it also printed below the lowest
Wall Street forecast. That this should not be surprising
to anyone we hope is a given: weak ADP but strong Claims (and now a
drop in the employment Index); soaring Manufacturing but plunging
Services, China expanding but China contracting, and so on: when we said
that "Baffle them with Bullshit" is an official policy we were not
joking. Remember: when in doubt ask: what would Schrodinger's cat do?More Than Half Of Retailers Miss April Sales Estimates
This is not the way to start a new GDP quarter in which consumer expenditures are supposed to pick up following a weak Q1 GDP driven higher by inventory accumulation and record hot weather. From Bloomberg: "Just over half of the retailers reporting April comp. sales trailed ests., led by misses in department stores and discounters. 11 of 20 cos. reporting April sales fell short of ests.; 4 of 6 dept. stores, 3 of 4 discounters missed." As a reminder, missed expectations means it was worse than expected: something quite stunning in a world where every other data point has hedonic, seasonal or birth/death adjustments.A Tide In The Affairs Of Man
There are two forthcoming dates which will set the direction and strength of the tide and certainly have a marked affect upon the ventures. They are this Sunday, May 6, when both the French and Greek populace will decide on who is running their government and then on May 31 when the Irish have their refrendum. At the least one must be thankful that there are Democracies that are working and that no group of Generals or some thug is making the decisions. Forthcoming we visualize many Socialist demands such as Eurobonds being made and Germany standing alone in the corner and refusing to fund which will make for all kinds of volatile markets. The bigger crisis though, we fear, will be when Germany says no to funding some grand Socialist idea. The problem is the size of the economy. The German economy is 25% of the American economy and it is going to get down to a matter of capital and what Germany can afford without being downgraded and a European Union without a AAA rated Germany is a very different affair both for the EU’s debt structure and for the Euro. In June the Fed’s Operation Twist comes to an end. There is no new stimulus plan on the table in either America or in Europe now. This means that the last four years of monetary easing and living off of that which has been printed is coming to an end. The consequences of this, historically, have been declines in the equity markets.Initial Claims Finally Beat Expectations As Prior Number Revised Higher As Usual
Well,
we were half right earlier when we predicted a miss in claims coupled
with a material upward revision in the prior number. We did get the
revision from 388K to 392K for the week ended April 21, but the current
week, which was expected to print at 379K, came at a far better 365K, a
drop of 27,000 from the revised number, which happens to be the biggest percentage drop since July 2011, and the biggest expectations beat since July 2009.
In other words, baffle them with bullshit as economic doctrine
continues: will NFP beat tomorrow, won't it? All depends on when
Bernanke feels like launching the NEW QE. In other words, the number
came in good (for the first time in 6 weeks), which of course is
horrible news for a market which continues to levitate higher on hopes
of more monetary heroin.Live Webcast Of ECB's Press Conference
ECB's
preliminary announcement was a big snoozer as expected. Much more hope
rests in the Mario Draghi press conference that begins in minutes, and
where the former Goldmanite is expected to at least hint at some more
conditional easing. Follow it live below.
*DRAGHI SAYS INFLATION RATES LIKELY TO STAY ABOVE 2% IN 2012
*DRAGHI SAYS INFLATION STAYING ABOVE 2% BECAUSE OF ENERGY, TAXES
*DRAGHI SAYS ECB SEES INFLATION IN LINE WITH PRICE STABILITY
*DRAGHI SAYS ECB SEES `DOWNSIDE RISKS' TO ECONOMIC OUTLOOK
*DRAGHI SAYS ECB HAS ALL TOOLS AVAILABLE TO ACT FIRMLY, TIMELY
*DRAGHI SAYS NON-STANDARD MEASURES HAVEN'T YET SHOWN FULL IMPACT
*DRAGHI SAYS INFLATION STAYING ABOVE 2% BECAUSE OF ENERGY, TAXES
*DRAGHI SAYS ECB SEES INFLATION IN LINE WITH PRICE STABILITY
*DRAGHI SAYS ECB SEES `DOWNSIDE RISKS' TO ECONOMIC OUTLOOK
*DRAGHI SAYS ECB HAS ALL TOOLS AVAILABLE TO ACT FIRMLY, TIMELY
*DRAGHI SAYS NON-STANDARD MEASURES HAVEN'T YET SHOWN FULL IMPACT
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