Goldman to Clients: Get Out of Stocks Before Fiscal Cliff Hits
Major General: Why Are Domestic Government Agencies Purchashing Enough Lethal Ammunition to Put 5 Rounds In Every American?
Interview: Collapse in Europe is Absolutely Inevitable
The
easy answer is - well, its those dumb money 'safe' investors finally
rotating from bonds to stocks; but what about fund flows provides any
evidence for that reality. Alternatively, we suggest, the recent (and
somewhat market-unexpected) pop in macro data (surprising to the upside)
has seemingly provided a Goldilocks for equities (growth is rising and
even if it drops back, Bernanke's got our back) and the inverse for
Treasuries (growth is rising and if that's the case then Bernanke's Bond
Buying extravaganza is over - mark 'em down). What is stunning to us
is the incredibly tight correlation since LTRO2 between macro data (trend and beats/misses) and 10Y Treasury yields.
While correlation is not causation, discussion of the macro thesis is
strong top-down and suggests more than one person believes this
correlation. Our concern - what dominant data is this macro strength based on - NFP/Claims beat? Retail Sales beat? (consider the controversy of the seasonal adjustments in both and what that would do to the macro data index.
Just two short weeks ago,
we noted that Best Buy's 'news' regarding take-overs, take-unders,
LBOs, MBOs, or whatever it was - was an opportunity to fade the initial
spike. Today's reality-check is cracking the stock down over 7% on
heavy volume - as while founder Schulze (who left in June) restates his
desire to pursue his proposal, he was 'schocked' that the company has
just named a new CEO - signaling the company's desire to keep operating as a going concern as a public company.
In a normal market, whatever that is, we would not feel the need to note every tick in the Spanish equity market; but today's 2% decline - its worst in 3 weeks - is the first down-day in 10 days.
IBEX, the Spanish equity market index, rallied over 29% from it's lows
on 7/23 (following a decent leg down after the EU-Summit
disappointment) only to perfectly reach its Maginot Line at the 200DMA
on Friday and this morning. The volatility regime is very reminiscent of last year
with the binary (chaos or serenity) scenarios the only ones left for
most market participants and with a short-selling ban doing nothing but
exaggerating the whipsaws, we wonder if the IBEX is due to revert back
further - more in line with its sovereign credit moves on Draghi's
'believe-me!' speech. Perhaps the realization that another rumor
(rate-caps) has come and gone has broken the cycle of faith...
While
the geopolitical focus is once again all over Iran and Israel, it may
be time to take a quick look Egypt, where the recently elected, and
pro-US president Mohamed Mursi is "preparing to use aircraft and
tanks in Sinai for the first time since the 1973 war with Israel in
its offensive against militants in the border area." Reuters
continues: "The plans to step up the operation were being finalised by
Egypt's newly appointed Defence Minister General Abdel Fattah al-Sisi as
he made his first visit to Sinai on Monday following the killing of 16
border guards on August 5. Egypt blamed the attack on Islamist
militants and the conflict is an early test for President Mohamed Mursi
- elected in June following the overthrow last year of Hosni Mubarak -
to prove he can rein in militants on the border with Israel. "Al-Sisi
will supervise the putting together of final plans to strike terrorist
elements using aircraft and mobile rocket launchers for the first time
since the beginning of the operation," an Egyptian security source
said. Another security source said the army was planning to attack and
besiege al-Halal mountain in central Sinai, using weapons including
tanks, where militants were suspected to be hiding." Of course, what can
possibly go wrong in the middle east once a government decides to
escalate military expansion against militant terrorists. Look
for crude to rise ever higher, and for SPR release rumors to hit the
tape daily as yet another market is ensnared in price controls ahead of
the election.
I'm PayPal Verified
With
US and European equities showing a strange (though small) taint of
un-green this morning, we thought a quick top-down versus bottom-up look
at what has been going on was worthwhile. Macro-wise, US economic data
has been modestly supportive with Citi's Economic Surprise Model
mean-reverting as data came slighlty better than economists had
predicted - though notably a weakening trend (but second derivative
green shoots are back in vogue it seems). This supportive macro
picture is at total odds to the bottom-up earnings picture where
upward-revisions as a percentage of total revisions has plunged
- as stocks make new highs. With correlations rising as managers chase
performance, it is worth reflecting on the very recent ramp in outlooks
as stocks levitate (and analysts flip-flop one more time) - which came first, the market or the economy?
Around
1000 people per day are still losing their jobs in Greece with the
percentage of the population not working now uncomfortably larger than
those who are employed. This is creating drastic - or perhaps more
aptly philosophical - reflections by its people. As the BBC reports, the feeling in Greece is that a "whole generation is on hold"
and there is a growing trend towards the creation self-sustaining
eco-communities - free of the ties of money and modern civilization.
"What others saw as a global economic crisis, [Greeks] saw as a crisis
of civilization" and so they are trying something different, growing
their own food, bartering with one another, and exchanging surpluses
with other villages. The community calls itself "Free and Real" - an
acronym for Freedom of Resources for Everyone, Respect, Equality,
Awareness and Learning - and it is growing as a stunning 76% of Greeks would like to emigrate. The
positivist angle notes that the Greek crisis is not all bad as it
shows the lives we are leading are not working and Greeks can "begin to
look for alternatives." Everyone is stressed; but "Being able
to work is a basic human right in a civilized society, if the
government won't provide us with it then we will have to fight for it."
There
is plenty of talk about the looming Fiscal Cliff, but like so many
other downside risks in this market, investors are not positioned for
it as they appear convinced that it won't be allowed to happen or some
compromise will occur. We remain on the side of the fence where nothing
will occur; no compromise reached, until the governement is 'forced' by the market to take action
- by some asset value plunge that scares then into scramble mode.
Unfortunately, as these two simple charts from Morgan Stanley highlight,
gridlock appears guaranteed (but then again, with a market economy at multi-year highs the incumbents remain dominant).
Buy
everything I say without limit. Leverage each purchase to the maximum
allowed under the law. The markets will only go up and not down and
100,000 is the next stop for the S&P. It is to be Dow without
Jones, assets without liabilities and wealth without poverty. The Middle
Class has been evacuated and everyone is wealthy beyond belief. It is
just there, of course, that the truth lies in this merry old land,
“beyond belief.”
Today’s Items:
Finally, please prepare now for the escalating economic and social unrest. Good Day!
I'm PayPal Verified
 |
Major General: Why Are Domestic Government Agencies Purchashing Enough Lethal Ammunition to Put 5 Rounds In Every American?
08/20/2012 - 11:40
Interview: Collapse in Europe is Absolutely Inevitable
08/20/2012 - 05:49
Here Is The Chart That Explains Why Rates Are Rising In The US
The
easy answer is - well, its those dumb money 'safe' investors finally
rotating from bonds to stocks; but what about fund flows provides any
evidence for that reality. Alternatively, we suggest, the recent (and
somewhat market-unexpected) pop in macro data (surprising to the upside)
has seemingly provided a Goldilocks for equities (growth is rising and
even if it drops back, Bernanke's got our back) and the inverse for
Treasuries (growth is rising and if that's the case then Bernanke's Bond
Buying extravaganza is over - mark 'em down). What is stunning to us
is the incredibly tight correlation since LTRO2 between macro data (trend and beats/misses) and 10Y Treasury yields.
While correlation is not causation, discussion of the macro thesis is
strong top-down and suggests more than one person believes this
correlation. Our concern - what dominant data is this macro strength based on - NFP/Claims beat? Retail Sales beat? (consider the controversy of the seasonal adjustments in both and what that would do to the macro data index.Money Continues To Favor Safe Havens
Eric De Groot at Eric De Groot - 2 hours ago
A forceful and unlimited response to the weaker EU members in its various
guises will continue to tilt global capital flows towards safe havens such
as gold, U.S. dollar, US equities, and US bonds (yes even bonds). Contrary
to consensus expectations, US long bonds are likely to recovery once the
weak to strong hand transfer is over (chart). Chart: US Treasury...
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content, and more! ]]
White House studying what exactly?
Eric De Groot at Eric De Groot - 4 hours ago
Might has well have been titled "White House studying potential oil reserve
release on voter behavior." A strategic oil reserve release at this point
in the money flow cycle (down DI - red arrow, up oil price - green
arrow) would have no other effect than offering smart money an
opportunity to accumulate a short-term price dip. Chart: Crude Oil (WTI)
and Crude...
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content, and more! ]]
Investors Need Not Wait - Technical Signs Already Exist
Eric De Groot at Eric De Groot - 4 hours ago
Investors are waiting for what exactly? Signals of accumulation illustrated
below have been ongoing for months. Chart 1: NYSE Composite & AD(E)* Chart
2: NYSE Composite & Trin(E)** * AD(E) represents the level of
participation (advancing, declining, and unchanged stocks as well as
volume) within the NYSE composite. AD(E) often rallies or...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]
John Ralston Saul: The Collapse of Globalism
Best Buy; Best-er Sell
Just two short weeks ago,
we noted that Best Buy's 'news' regarding take-overs, take-unders,
LBOs, MBOs, or whatever it was - was an opportunity to fade the initial
spike. Today's reality-check is cracking the stock down over 7% on
heavy volume - as while founder Schulze (who left in June) restates his
desire to pursue his proposal, he was 'schocked' that the company has
just named a new CEO - signaling the company's desire to keep operating as a going concern as a public company.Exuberance Exits As Spain's IBEX Hits 200DMA
In a normal market, whatever that is, we would not feel the need to note every tick in the Spanish equity market; but today's 2% decline - its worst in 3 weeks - is the first down-day in 10 days.
IBEX, the Spanish equity market index, rallied over 29% from it's lows
on 7/23 (following a decent leg down after the EU-Summit
disappointment) only to perfectly reach its Maginot Line at the 200DMA
on Friday and this morning. The volatility regime is very reminiscent of last year
with the binary (chaos or serenity) scenarios the only ones left for
most market participants and with a short-selling ban doing nothing but
exaggerating the whipsaws, we wonder if the IBEX is due to revert back
further - more in line with its sovereign credit moves on Draghi's
'believe-me!' speech. Perhaps the realization that another rumor
(rate-caps) has come and gone has broken the cycle of faith...Egypt Prepares To Use Aircraft And Tanks In Sinai For First Time In 40 Years
While
the geopolitical focus is once again all over Iran and Israel, it may
be time to take a quick look Egypt, where the recently elected, and
pro-US president Mohamed Mursi is "preparing to use aircraft and
tanks in Sinai for the first time since the 1973 war with Israel in
its offensive against militants in the border area." Reuters
continues: "The plans to step up the operation were being finalised by
Egypt's newly appointed Defence Minister General Abdel Fattah al-Sisi as
he made his first visit to Sinai on Monday following the killing of 16
border guards on August 5. Egypt blamed the attack on Islamist
militants and the conflict is an early test for President Mohamed Mursi
- elected in June following the overthrow last year of Hosni Mubarak -
to prove he can rein in militants on the border with Israel. "Al-Sisi
will supervise the putting together of final plans to strike terrorist
elements using aircraft and mobile rocket launchers for the first time
since the beginning of the operation," an Egyptian security source
said. Another security source said the army was planning to attack and
besiege al-Halal mountain in central Sinai, using weapons including
tanks, where militants were suspected to be hiding." Of course, what can
possibly go wrong in the middle east once a government decides to
escalate military expansion against militant terrorists. Look
for crude to rise ever higher, and for SPR release rumors to hit the
tape daily as yet another market is ensnared in price controls ahead of
the election.
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I'm PayPal VerifiedMacro Hope Versus Micro Despair
With
US and European equities showing a strange (though small) taint of
un-green this morning, we thought a quick top-down versus bottom-up look
at what has been going on was worthwhile. Macro-wise, US economic data
has been modestly supportive with Citi's Economic Surprise Model
mean-reverting as data came slighlty better than economists had
predicted - though notably a weakening trend (but second derivative
green shoots are back in vogue it seems). This supportive macro
picture is at total odds to the bottom-up earnings picture where
upward-revisions as a percentage of total revisions has plunged
- as stocks make new highs. With correlations rising as managers chase
performance, it is worth reflecting on the very recent ramp in outlooks
as stocks levitate (and analysts flip-flop one more time) - which came first, the market or the economy?On The Fed's Sudden Need For "Risk Managers" And "Financial Engineers"
There was a time when getting a stable, lucrative financial job meant working for a hedge fund, preferably in the risk department. It still does: the biggest and most profitable hedge fund of all - the Federal Reserve - as well as its various adjunct "all P no L" offices, and judging by the spike in recent job wanted posting by said hedge fund et al, things are looking up for those who want to manage taxpayer funded "risk." For the job seekers our there disillusioned with a 2 and 20 model that no longer works in the new central planning normal, get involved. As for why the Fed would suddenly be fascinated with risk now, after its DV01 is well over $2 billion, we have no ready answers.Goodbye Civilization: So Simple A Greekman Can Do It
Around
1000 people per day are still losing their jobs in Greece with the
percentage of the population not working now uncomfortably larger than
those who are employed. This is creating drastic - or perhaps more
aptly philosophical - reflections by its people. As the BBC reports, the feeling in Greece is that a "whole generation is on hold"
and there is a growing trend towards the creation self-sustaining
eco-communities - free of the ties of money and modern civilization.
"What others saw as a global economic crisis, [Greeks] saw as a crisis
of civilization" and so they are trying something different, growing
their own food, bartering with one another, and exchanging surpluses
with other villages. The community calls itself "Free and Real" - an
acronym for Freedom of Resources for Everyone, Respect, Equality,
Awareness and Learning - and it is growing as a stunning 76% of Greeks would like to emigrate. The
positivist angle notes that the Greek crisis is not all bad as it
shows the lives we are leading are not working and Greeks can "begin to
look for alternatives." Everyone is stressed; but "Being able
to work is a basic human right in a civilized society, if the
government won't provide us with it then we will have to fight for it."Will Gridlock Prevail?
There
is plenty of talk about the looming Fiscal Cliff, but like so many
other downside risks in this market, investors are not positioned for
it as they appear convinced that it won't be allowed to happen or some
compromise will occur. We remain on the side of the fence where nothing
will occur; no compromise reached, until the governement is 'forced' by the market to take action
- by some asset value plunge that scares then into scramble mode.
Unfortunately, as these two simple charts from Morgan Stanley highlight,
gridlock appears guaranteed (but then again, with a market economy at multi-year highs the incumbents remain dominant).Daily US Opening News And Market Re-Cap: August 20
A weekend article from Der Spiegel has been the centre of must attention this morning amid a light economic calendar on both sides of the pond. The article reported that the ECB would set limits to the yields of periphery country debt and intervene should these limits be breached. This weighed on the German Bund from the Eurex open and saw the Spanish curve trade lower by 25bps to 35b ps, as well as buoying the EUR currency and riskier assets in early trade. Risk-on moves in EUR and DAX futures were retraced as the ECB denied these reports, saying that it was misleading to report on decisions not yet taken, though it will act within its mandate. A German finance ministry spokesman also denied all knowledge of the reports a short while before hand. Furthermore, the latest monthly bulletin from the Bundesbank that once again reiterated the disapproving German stance toward the ECB's controversial bond-buying programme also dampened the mood.Silver, Wine, Art and Gold (SWAG) To Protect From Inflation
Silver, wine, art and gold – or SWAG – may be the solution for investors looking to protect their wealth in the coming years according to perceptive Reuters Columnist, James Saft. In an interesting article and an interesting video for Reuters, Saft coins the term “Investing 201” which means having SWAG in your portfolio in order to protect investors from “a grim decade of money printing and financial repression.” SWAG, as in silver, wine, art and gold, are real assets that might just outperform if official policy causes the money supply to surge according to Saft. This is the idea of Joe Roseman, who says SWAG will do very well over what could be a very troubled next decade. "These assets effectively act as a money supply index tracker," said Roseman, who for 16 years was a money manager and economist at Moore Capital, run by the legendary Louis Bacon. "If the authorities are going to bail themselves out, money supply will expand. Every single time governments have been here, this is exactly what they have done."Living In A Land Beyond Belief
Buy
everything I say without limit. Leverage each purchase to the maximum
allowed under the law. The markets will only go up and not down and
100,000 is the next stop for the S&P. It is to be Dow without
Jones, assets without liabilities and wealth without poverty. The Middle
Class has been evacuated and everyone is wealthy beyond belief. It is
just there, of course, that the truth lies in this merry old land,
“beyond belief.”
"I like fantasy---it wakes up the brain cells.”
- Dr. Seuss
Overnight Sentiment: Subdued As PBOC Easing Hopes Fizzle
The market has reached a level where only recurring hopes and prayers of incremental monetization and easing by one or more central banks have any impact. For the past two months it has been primarily the ECB which continues to talk a lot but do nothing, with infrequent and false speculation that the Fed will step in during the annual Jackson Hole pilgrimage in 10 days and add more reasons to send gasoline to all time highs for this time of year 2 short months ahead of the election. It won't. Which always left the PBOC. However, as we have repeatedly explained, concerns about food inflation have and will keep China in check for a long time. The market finally appears to have grasped this last night, when the regional Asian markets reacted accordingly, and the dour theme has merely carried over into Europe and now the US, especially following the ECB's sound refutation of the Spiegel fishing expedition.Frontrunning: August 20
- Caterpillar warns on global uncertainty (FT)
- Only 3 years behind the curve as usual: Moody’s warns on California city defaults (FT)
- Monti Says ‘Tragedy’ If Euro Became a Factor of Disruption (Bloomberg) - the same Monti whose disruptive comments recently enraged Germany?
- China Home Prices Climb in More Cities Prompting Policy Concerns (Bloomberg)
- China's Big Four boost new bank loans in Aug first half (Reuters)
- EU Leaders Plan Shuttle Talks to Bolster Greece (Bloomberg)
- US rule set to slash cars’ fuel use (FT)
- Spain Seeks Commitment From Central Bank on Bond Buys (WSJ)... and preferably completely unconditional
- Finnish Euro Doubts Hide Business Plea to Commit to Currency (Bloomberg)
Today’s Items:
Patrick Artus of the French bank Natixis
said the euro crisis may last up to 20 years with the first five years
showing investors already fleeing from complex financial products into
gold, silver, and commodities. Excuse me; we have just seen the
beginning of the end of the euro… Period! Divergent economies using the
same currency, in this case… the euro, cannot stand…. Period!
Next…
Global Collapse Now Accelerating As Central Banks Buy Gold
http://kingworldnews.com 1
http://kingworldnews.com 2
Global Collapse Now Accelerating As Central Banks Buy Gold
http://kingworldnews.com 1
http://kingworldnews.com 2
Central bank’s purchase of gold is the
biggest reason why gold didn’t break down to the $1,200 level.
Their purchases, annualized, are at over 600 tonnes per year! In
addition, silver inventories are declining in the COMEX warehouse and
bears have failed twice to take silver lower; thus, we could see a
explosive upside in price action in the near future. With that in
mind, after preparing, keep stacking physical.
The Obama economy, which is as stable as
Joe Biden’s thought process, is getting even worse. Gallup reported an
uptick in joblessness in their latest survey of 30,000 households. With
true unemployment going higher, and the uptick in food prices due to
the drought, the situation is not good for Obama. Like James Carville
said… “It’s the economy stupid!”
After years of hearing about “free” energy
from the sun and wind, people are discovering that they’ve been lied
to. Of course, they have been lied to for years about ‘free’
everything from socialism, but they still believe it. Now, with new
environmental regulations, we can expect to see more cost associated
with producing electrical power; and as an additional consequence, more
coal burning electrical plants shutting down causing brown outs.
Next…
Agencies Tamp Down Speculation Over Hollow-Point Ammo Purchases
http://www.foxnews.com
http://www.cbsnews.com
Agencies Tamp Down Speculation Over Hollow-Point Ammo Purchases
http://www.foxnews.com
http://www.cbsnews.com
After the Social Security Administration’s purchase of nearly two hundred thousand of hollow point bullets,
people are waking up. Just how would the increasing Social Security
deficit be solved with hollow points? Oops! Guess, we really should
not answer that one folks. Meanwhile, while these agencies are buying
bullets, our border agents are told to use beanbags.
It appears that the officials, at the IRS,
are attempting to impose an illegal tax on private businesses. They
are trying to impose a $2,000-per-employee tax on business, starting in
2014, which is contrary to the clear language of the statute and
congressional intent. Hopefully various career managers at IRS will be
arrested and imprisoned soon.
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