Friday, November 12, 2010
G20 meeting, Private message
Simply said, Mr. president , we have our own problems and your pouring more dollars on the world stage is not helping anybody. If anything, it is a lopsided trade which bring about a collapse of commodity prices when it soon unravelS. Your Wall Street bankers are having a record year in bonuses and your uncontrolled debt building is going to put us all out of business. So do what you must but don't beg for endorsements of your king of fools, Ben Bernanke. The USA is damaged goods! VIVA CHINA! ( but not for long )
Wednesday, October 27, 2010
September was different. Bulls won. October was a new commodities bubble in the making
Dollar trading value around the globe has reached epidemic proportions. It is trading at 5x its peak since 1929. At $63TB, it is incomprehensible that every trader is chasing bets against the lowly buck and fueling a rampant speculation boom that will consume markets and institutions over the next five years. Smarter is the person who can pinpoint where the next flash point will be. Is it China 60% portion of GDP related to NON-INFRASTRUCTURE CONSTRUCTION! ( a Healthy economy should be 10-15% MAX)?
Is it rapid food and other commodities reaching all time highs against the US dollar?
Let6's not get ahead of ourselves and work on DATA...
While the currencies gyrations we predicted did materialize in a big way, we can only start by commenting on the extraordinary moves on the S&P which is about to eclipse all previous records with a 10% gain for the month of September! As we analyzed the numbers and trading day patterns, we soon realized FLASH TRADING (supposedly outlawed) accounted for over 65% of the volumes. What is wrong with that? ( phew! I thought you would never ask)
http://www.time.com/time/business/article/0,8599,1914724,00.html
The process is obviously flawed. While US Economic data was awful, yes PLAIN AWFUL, the market traded really up on bad numbers and down on expected numbers. FLASH trading is encouraging rogue behavior and the markets are becoming nothing less than a rigged slot machine. So as September is usually a BAD MONTH if not the worse month of year, Flash trading made sure this was going to be a good month shopping a four month high on the DJIA and 20% of the S&P 500 stock index reached 52 week highs.We expect that the consequence of manipulated trading while seriously constrain smaller hedge funds which make real bets and are having their lunch handed to them. Any fund under $100MM in assets is surely to consider folding by year's end. Leaving an even bigger liquidity problem past the mid-term elections. We still contend that the markets will continue to go up Until the end of October.
But what is this really saying? Simply prices are manipulated and we are rapidly approaching hyper inflation. Signs?
On September 21st, Bloomberg reporter Jeff Wilson had this to say:
"The price of Class III milk, used to make cheese, rose in Chicago to the highest level in almost two years as global demand for dairy products increases. Cheese exports by major milk producers, including the European Union, New Zealand, Australia and the U.S., will rise 10% this year, the U.S. Department of Agriculture said… Wholesale-cheese prices are up 22% since the end of June, butter gained 25% and Class III milk rose 16%... ‘Export demand continues to improve’ for U.S. dairy products, said Roy Huckabay, the executive vice president for the Linn Group… ‘Milk is playing catch-up with the gains in butter and cheese.’”
To prove our point here are a few more:
September 21 – Bloomberg: “Imports of refined copper by China, the largest consumer, gained for the second consecutive month in August, as traders ordered material to benefit from a profitable arbitrage window. Inbound shipments totaled 267,153 metric tons last month… That’s 19% higher than… July and 22% more than…a year earlier…”
September 21 – Financial Times (Gregory Meyer): “The price of jeans and T-shirts could be about to rise. The world’s textile mills, nervous about a global shortage of cotton, have propelled prices of the fiber to their highest in more than a decade. This week’s jump in cotton prices above the $1 a pound level, for only the second time since the US civil war, has been a long time coming.”
September 21 – Bloomberg (Aya Takada): “Rubber advanced to the highest level in almost five months amid expectation that the global market is set for the worst shortage in four years next year as weather constrains supply and demand keeps expanding… The price increased for a second day and has gained 10% this year.”
September 21 – Bloomberg (Aya Takada and Supunnabul Suwannakij): “Bridgestone Corp., the largest tire maker by sales, is raising European prices for the second time this year and Goodyear Tire & Rubber Co. is charging more as rubber gains on prospects for the biggest shortage since 2007. ‘Drought earlier this year and heavy rains later on hampered tree-tapping across Asian plantations,’ said Pongsak Kerdvongbundit, managing director of… Von Bundit Co., the largest natural-rubber producer and exporter in the world’s biggest supplier. ‘Global production will lag behind soaring demand for at least another two years.’”
So here you have it, what you eat is in hyperinflation, what you wear and let's not forget basic material which were up at its highest levels in 10 years, Rubber, Copper, Gold!
Do you really feel confident Bernanke and Geithner really have Savers in mind when they push rates down to 1/10th of the real inflation rate?
The FED objective of trying to put a bid under distressed assets rather than avoiding rampant speculation in commodities seem totally illogical to us. If we WERE FED chairman, we would go out there and corner strategic commodities and start to take out people trying to corner the market. Hoarding is not really a valuable endeavor for Wall Street firms but it is exactly what they are doing with their excess cash. .. Making a fast buck on others people misery is really low.
That brings us to our probable two outcomes. Hyper inflation being ONE OUTCOME: As I alluded to earlier hyper inflation is a real possibility in commodities if further Dollar devaluation continues unabated. What is your best defense? It is still buying FARM land in a THREE SEASONS growing climate with good access to an adequate aquifer. Five years ago , I was already musing on the rich arable land in Africa which could use modern agricultural methods. Obviously those methods based on profits will not work there because unequal wealth distribution rapidly escalate into turf wars.Unfortunately commodities have gone way higher than they should have thanks to the new Bernanke bubble. Too late now!
SECOND OUTCOME: Much more unlikely, Fed policy changes and decide that people need access to cheap food (over cheap housing) and institutes a sane price program but preventing Wall Street from speculating in commodities through hedge fund investing. Deflation in over built housing is not a bad thing. Banks should bite the bullet and not repeat Japan's mistakes.
SOME PEOPLE ARE DOING WELL
Germany economic output has improved. China is moderating growth through interest rates. Brazil and Russia are still there supplying resources!
WHY can't the good old USA figure out that a loose monetary policy only benefits Wall Street and practically nobody else??
Is it rapid food and other commodities reaching all time highs against the US dollar?
Let6's not get ahead of ourselves and work on DATA...
While the currencies gyrations we predicted did materialize in a big way, we can only start by commenting on the extraordinary moves on the S&P which is about to eclipse all previous records with a 10% gain for the month of September! As we analyzed the numbers and trading day patterns, we soon realized FLASH TRADING (supposedly outlawed) accounted for over 65% of the volumes. What is wrong with that? ( phew! I thought you would never ask)
http://www.time.com/time/business/article/0,8599,1914724,00.html
The process is obviously flawed. While US Economic data was awful, yes PLAIN AWFUL, the market traded really up on bad numbers and down on expected numbers. FLASH trading is encouraging rogue behavior and the markets are becoming nothing less than a rigged slot machine. So as September is usually a BAD MONTH if not the worse month of year, Flash trading made sure this was going to be a good month shopping a four month high on the DJIA and 20% of the S&P 500 stock index reached 52 week highs.We expect that the consequence of manipulated trading while seriously constrain smaller hedge funds which make real bets and are having their lunch handed to them. Any fund under $100MM in assets is surely to consider folding by year's end. Leaving an even bigger liquidity problem past the mid-term elections. We still contend that the markets will continue to go up Until the end of October.
But what is this really saying? Simply prices are manipulated and we are rapidly approaching hyper inflation. Signs?
On September 21st, Bloomberg reporter Jeff Wilson had this to say:
"The price of Class III milk, used to make cheese, rose in Chicago to the highest level in almost two years as global demand for dairy products increases. Cheese exports by major milk producers, including the European Union, New Zealand, Australia and the U.S., will rise 10% this year, the U.S. Department of Agriculture said… Wholesale-cheese prices are up 22% since the end of June, butter gained 25% and Class III milk rose 16%... ‘Export demand continues to improve’ for U.S. dairy products, said Roy Huckabay, the executive vice president for the Linn Group… ‘Milk is playing catch-up with the gains in butter and cheese.’”
To prove our point here are a few more:
September 21 – Bloomberg: “Imports of refined copper by China, the largest consumer, gained for the second consecutive month in August, as traders ordered material to benefit from a profitable arbitrage window. Inbound shipments totaled 267,153 metric tons last month… That’s 19% higher than… July and 22% more than…a year earlier…”
September 21 – Financial Times (Gregory Meyer): “The price of jeans and T-shirts could be about to rise. The world’s textile mills, nervous about a global shortage of cotton, have propelled prices of the fiber to their highest in more than a decade. This week’s jump in cotton prices above the $1 a pound level, for only the second time since the US civil war, has been a long time coming.”
September 21 – Bloomberg (Aya Takada): “Rubber advanced to the highest level in almost five months amid expectation that the global market is set for the worst shortage in four years next year as weather constrains supply and demand keeps expanding… The price increased for a second day and has gained 10% this year.”
September 21 – Bloomberg (Aya Takada and Supunnabul Suwannakij): “Bridgestone Corp., the largest tire maker by sales, is raising European prices for the second time this year and Goodyear Tire & Rubber Co. is charging more as rubber gains on prospects for the biggest shortage since 2007. ‘Drought earlier this year and heavy rains later on hampered tree-tapping across Asian plantations,’ said Pongsak Kerdvongbundit, managing director of… Von Bundit Co., the largest natural-rubber producer and exporter in the world’s biggest supplier. ‘Global production will lag behind soaring demand for at least another two years.’”
So here you have it, what you eat is in hyperinflation, what you wear and let's not forget basic material which were up at its highest levels in 10 years, Rubber, Copper, Gold!
Do you really feel confident Bernanke and Geithner really have Savers in mind when they push rates down to 1/10th of the real inflation rate?
The FED objective of trying to put a bid under distressed assets rather than avoiding rampant speculation in commodities seem totally illogical to us. If we WERE FED chairman, we would go out there and corner strategic commodities and start to take out people trying to corner the market. Hoarding is not really a valuable endeavor for Wall Street firms but it is exactly what they are doing with their excess cash. .. Making a fast buck on others people misery is really low.
That brings us to our probable two outcomes. Hyper inflation being ONE OUTCOME: As I alluded to earlier hyper inflation is a real possibility in commodities if further Dollar devaluation continues unabated. What is your best defense? It is still buying FARM land in a THREE SEASONS growing climate with good access to an adequate aquifer. Five years ago , I was already musing on the rich arable land in Africa which could use modern agricultural methods. Obviously those methods based on profits will not work there because unequal wealth distribution rapidly escalate into turf wars.Unfortunately commodities have gone way higher than they should have thanks to the new Bernanke bubble. Too late now!
SECOND OUTCOME: Much more unlikely, Fed policy changes and decide that people need access to cheap food (over cheap housing) and institutes a sane price program but preventing Wall Street from speculating in commodities through hedge fund investing. Deflation in over built housing is not a bad thing. Banks should bite the bullet and not repeat Japan's mistakes.
SOME PEOPLE ARE DOING WELL
Germany economic output has improved. China is moderating growth through interest rates. Brazil and Russia are still there supplying resources!
The leader is Jakarta’s stock market which is up a stunning 44.1% thus far.Manila follows hard by, rising 40.2%. Bangkok is up 35.9%; Santiago’s market is up 34.3%, followed by Istanbul, also at 34.3% [Ed. Note: Istanbul lags Santiago by 0.1% to be precise.] and then comes Copenhagen, where stocks are up 27.1% [Ed. Note: Actually the Shenzhen “B” share index should be in 5th place, but because it is “B” shares we’ve chosen to avoid counting
it amongst the world’s leading equities markets. The Shanghai Composite Index, on the other hand, is down
7.8% year to date and that is after the massive rally ofthe past two weeks!]. Lifted from TGL.
Thursday, August 5, 2010
August: the calm before the fierce storms created by FX moves
WHO WOULD HAVE THUNK IT?
The S&P in July rose over 7%. Leaving many a hedge fund dumbfounded. As Gary Kaminsky suggested, they will be hard pressed to cover the reminder of the year and beat the indices. Expect a few stock names to go stratospheric but most bets will be on commodity speculation.
We are of the view that Oil prices are being propped up by a concerted effort of producers to keep the futures prices up. Anyways, we have lost all faith in getting a real sense of prices and their value. After reading Patel's book "Value of nothing" you soon realize that prices are set nowhere near the costs of owning anything let alone the cost to society and the planet as a whole. Prices for goods are set by a totally archaic and nonsensical basis of supply and demand. Through advertising, People are made to BUY BUY BUY while not really thinking about their actions and consequences.. In India a new car can cost less than $5K where you are hard pressed to find the same in Canada for less than $10K. Why?
Economic theory followed today was written when less than 1 Billion people lived on earth. With more than 6 billion it is totally inadequate to deal with the world's mounting problems.
Too bad the animals in the Gulf of Mexico don't get to vote on the price to charge for gasoline after the latest catastrophe.
According to some studies, some other 300 deep sea SHUT-IN or DISCONTINUED wells may also erupt due to corrosion... If it takes more than 100 days to fix a new well, we wonder how long it takes to fix an old one!
Well enough scary talk for a day! Let's get back to supply and demand!
DEFLATION AND MASSIVE GVMT DEBT SCENARIO is INTACT IN US
Next week the Fed meets. To prepare the terrain, US Treasury secretary Timothy F. Geithner (what does the F stand for? )wrote an Op ed yesterday in the New York Times vaunting his and Fed Chairman Bernanke calls in the past two years saying, the Administration's policies saved 8.5MM jobs vs. doing nothing. Interesting assumption... Bernanke is hinting that things in the near future will be done "à la Japonaise" i.e nothing. So if 2008, the FED was the BUYER of last resort, today the FED has delivered as they ARE, on our behalf, the HOLDER of last resort. This is for many years to come or until some sweet deal is negotiated in the backrooms. Good luck with that boys! Freddie, Fannie and the other in-breds' portfolios will continue to be held close to taxpayers balance sheets. This is a typical case of Prozac induced deflation courtesy of inane government policy. We are also curious to see how the FED plans to go after all those MBS issuers claiming fraud.
So deflation will continue unabated in the US and for good measure the Fed will continue to hold Treasuries as it has no choice but to maintain appearances in an INCEPTION type state of disbelief while using QE as the drug of choice. Expect 10yr Treasuries to trend towards an idiotic 2%. The pressure on that cauldron will be unimaginable when it blows, and blow it will, but we are not standing brave enough to face off both the stealthy Fed and the US Treasury. Best leave that to the young wolves and the old foxes!
According to Realty Trac , the top five US cities for foreclosures were:
That CHICAGO is third is both a surprise and a worry to us!
As this chart shows all gains of the last 7 years were washed away. Would have been better to rent and spend the money on vacations, some collectibles and retraining...
Gold has proven a poor insurance policy as of late and we still think its prospects are limited.
In conclusion, the US government, as a dying republic, funds a $1.3Tb deficit with very little hope of getting out of the tomb dug by the voting public. Nice Job people!
So how is it out there in the rest of the world? EURO / USD CHART (last 120 days)
BOOM for those who WANT TO WORK... EURO has RECOVERED SOMEWHAT
Freight rates in Asia are up 50% over last October and the ships that comprise the Baltic Index are steaming ahead now showing a 2% idle time vs. 12% last year.
Liner board prices have gone up and the UPSes of the world show nice numbers.
It has been our contention that Germany is enjoying a huge export boom and flooding the markets with its goods and machinery. Teutonic power at work. Our local dealer announces, with glee, further price decreases for 2011 Mercedes. BRING them on boys! We all need more gas guzzling toys!
WHEAT
With The Ukraine and Russia disparaging each other over wheat crops estimates, fall prices have seen huge speculation to the upside. I would hate to be an industrial baker right now and having to decide the future of those prices. It's a bit like airlines locking jet fuels at $67 or $140. There are going to winners and whiners.
Best for the bakers to recite the Lord's prayer. It can't hurt!
In the Meantime, we continue to hold a firm amount of US bonds, a healthy portion of Euros and expect Spain to be center stage this fall with its very precarious economy.
CHEAP OLIVE OIL COMING!
Good trading to you
DCW
The S&P in July rose over 7%. Leaving many a hedge fund dumbfounded. As Gary Kaminsky suggested, they will be hard pressed to cover the reminder of the year and beat the indices. Expect a few stock names to go stratospheric but most bets will be on commodity speculation.
We are of the view that Oil prices are being propped up by a concerted effort of producers to keep the futures prices up. Anyways, we have lost all faith in getting a real sense of prices and their value. After reading Patel's book "Value of nothing" you soon realize that prices are set nowhere near the costs of owning anything let alone the cost to society and the planet as a whole. Prices for goods are set by a totally archaic and nonsensical basis of supply and demand. Through advertising, People are made to BUY BUY BUY while not really thinking about their actions and consequences.. In India a new car can cost less than $5K where you are hard pressed to find the same in Canada for less than $10K. Why?
Economic theory followed today was written when less than 1 Billion people lived on earth. With more than 6 billion it is totally inadequate to deal with the world's mounting problems.
Too bad the animals in the Gulf of Mexico don't get to vote on the price to charge for gasoline after the latest catastrophe.
According to some studies, some other 300 deep sea SHUT-IN or DISCONTINUED wells may also erupt due to corrosion... If it takes more than 100 days to fix a new well, we wonder how long it takes to fix an old one!
Well enough scary talk for a day! Let's get back to supply and demand!
DEFLATION AND MASSIVE GVMT DEBT SCENARIO is INTACT IN US
Next week the Fed meets. To prepare the terrain, US Treasury secretary Timothy F. Geithner (what does the F stand for? )wrote an Op ed yesterday in the New York Times vaunting his and Fed Chairman Bernanke calls in the past two years saying, the Administration's policies saved 8.5MM jobs vs. doing nothing. Interesting assumption... Bernanke is hinting that things in the near future will be done "à la Japonaise" i.e nothing. So if 2008, the FED was the BUYER of last resort, today the FED has delivered as they ARE, on our behalf, the HOLDER of last resort. This is for many years to come or until some sweet deal is negotiated in the backrooms. Good luck with that boys! Freddie, Fannie and the other in-breds' portfolios will continue to be held close to taxpayers balance sheets. This is a typical case of Prozac induced deflation courtesy of inane government policy. We are also curious to see how the FED plans to go after all those MBS issuers claiming fraud.
So deflation will continue unabated in the US and for good measure the Fed will continue to hold Treasuries as it has no choice but to maintain appearances in an INCEPTION type state of disbelief while using QE as the drug of choice. Expect 10yr Treasuries to trend towards an idiotic 2%. The pressure on that cauldron will be unimaginable when it blows, and blow it will, but we are not standing brave enough to face off both the stealthy Fed and the US Treasury. Best leave that to the young wolves and the old foxes!
According to Realty Trac , the top five US cities for foreclosures were:
Top Foreclosure Cities
That CHICAGO is third is both a surprise and a worry to us!
Gold has proven a poor insurance policy as of late and we still think its prospects are limited.
In conclusion, the US government, as a dying republic, funds a $1.3Tb deficit with very little hope of getting out of the tomb dug by the voting public. Nice Job people!
So how is it out there in the rest of the world? EURO / USD CHART (last 120 days)
BOOM for those who WANT TO WORK... EURO has RECOVERED SOMEWHAT
Freight rates in Asia are up 50% over last October and the ships that comprise the Baltic Index are steaming ahead now showing a 2% idle time vs. 12% last year.
Liner board prices have gone up and the UPSes of the world show nice numbers.
It has been our contention that Germany is enjoying a huge export boom and flooding the markets with its goods and machinery. Teutonic power at work. Our local dealer announces, with glee, further price decreases for 2011 Mercedes. BRING them on boys! We all need more gas guzzling toys!
WHEAT
With The Ukraine and Russia disparaging each other over wheat crops estimates, fall prices have seen huge speculation to the upside. I would hate to be an industrial baker right now and having to decide the future of those prices. It's a bit like airlines locking jet fuels at $67 or $140. There are going to winners and whiners.
Best for the bakers to recite the Lord's prayer. It can't hurt!
In the Meantime, we continue to hold a firm amount of US bonds, a healthy portion of Euros and expect Spain to be center stage this fall with its very precarious economy.
CHEAP OLIVE OIL COMING!
Good trading to you
DCW
Wednesday, July 14, 2010
Bastille Day
Not many bullish people have made money year to date.
We have spent most of 2010 trying to understand which forces would define the year. Would it be deflationary or inflationary?
The result has been a mixed bag around the planet. While food prices have been contained for now, we saw foolish commodity speculation in metals and energy.
An encouraging note is the backstop on Greek debt is holding (probably to unravel after labor day though).
The most striking anecdotal observation was in tourism. Both in Montreal and The Berkshires, we noticed incredible tourism spending. It is evidence that there is money flowing when the consumer is not reeling from leverage compression.
On a more somber note, which comes from Middle America ( as usual), we have come to the conclusion that TARP has hurt local banking which was unable or willing to write off the more toxic commercial real estate on their books. While Wall street knew how to use Tarp money and lavish it on adroit traders , the more than 900 regional bank on the TARP continued to deal with gangrenous real estates loans. While it is beyond hope for many, expect vulture funds to swoop in until the FIDC receives a fire sale mandate form the powers that be.
As emerging economies continuing to adjust to tight credit conditions, America and the Yankee dollar are going to feel the credit raters readjusting...
Lets hope the Q2 results now in full swing get massaged enough to create an environment where investors back job creators otherwise a Republican landslide in both houses is to be expected. At this point, this might not be a bad thing as Obama know how to spend but is definitely not on a value creation agenda.
Enjoy the dog days!
PS BP FIX IT! enough already!
DCW
We have spent most of 2010 trying to understand which forces would define the year. Would it be deflationary or inflationary?
The result has been a mixed bag around the planet. While food prices have been contained for now, we saw foolish commodity speculation in metals and energy.
An encouraging note is the backstop on Greek debt is holding (probably to unravel after labor day though).
The most striking anecdotal observation was in tourism. Both in Montreal and The Berkshires, we noticed incredible tourism spending. It is evidence that there is money flowing when the consumer is not reeling from leverage compression.
On a more somber note, which comes from Middle America ( as usual), we have come to the conclusion that TARP has hurt local banking which was unable or willing to write off the more toxic commercial real estate on their books. While Wall street knew how to use Tarp money and lavish it on adroit traders , the more than 900 regional bank on the TARP continued to deal with gangrenous real estates loans. While it is beyond hope for many, expect vulture funds to swoop in until the FIDC receives a fire sale mandate form the powers that be.
As emerging economies continuing to adjust to tight credit conditions, America and the Yankee dollar are going to feel the credit raters readjusting...
Lets hope the Q2 results now in full swing get massaged enough to create an environment where investors back job creators otherwise a Republican landslide in both houses is to be expected. At this point, this might not be a bad thing as Obama know how to spend but is definitely not on a value creation agenda.
Enjoy the dog days!
PS BP FIX IT! enough already!
DCW
Friday, June 4, 2010
So much for Obama's promises.. S&P 666
There were no jobs in May... and 22,000 LESS in revisions to March and April...
Double dip here we come!
Worse, the credibility of the commander in chief is seriously put to the test.
While the president raised eyebrows on job creation earlier this week, his hubris has come to light. What is worse is the LACK of new jobs being created out there...
So back to the short on S&P... no harm done as there is much more to go on our way to S&P 666
Good trading to you
DCW
Double dip here we come!
Worse, the credibility of the commander in chief is seriously put to the test.
While the president raised eyebrows on job creation earlier this week, his hubris has come to light. What is worse is the LACK of new jobs being created out there...
So back to the short on S&P... no harm done as there is much more to go on our way to S&P 666
Good trading to you
DCW
Wednesday, June 2, 2010
My brakes work better than Toyota's, time to cover shorts... until friday
After a stellar month on the short size, Obama personally guaranteed me 500,000 new jobs For MAY.
Nice to know that he knows this three days before the rest of us but probably three days after the guys with the black boxes on Wall street...
During his speech at Carnegie Mellon, Obama said to expect a "strong " jobs report on Friday.
Would he stick his neck out like that if he didn't have some idea? ( how many are Census Jobs?)
Analysts are expecting unemployment of 9.8% and new job creation of 500K, so that's the benchmark.
Maybe the shorts should take the warning.
We will and wait until friday...
Nice to know that he knows this three days before the rest of us but probably three days after the guys with the black boxes on Wall street...
During his speech at Carnegie Mellon, Obama said to expect a "strong " jobs report on Friday.
Would he stick his neck out like that if he didn't have some idea? ( how many are Census Jobs?)
Analysts are expecting unemployment of 9.8% and new job creation of 500K, so that's the benchmark.
Maybe the shorts should take the warning.
We will and wait until friday...
Monday, May 17, 2010
Euro gold has run it's course; The profit machine of BIG OIL is in DEEP TROUBLE!
State of our successful calls
So this is getting repetitive bu today we are starting to pull back on all the negativity. We have been short ALL equities since April 21st when the S&P hit 1208. We maintain our call that the S&P 500 is still the best market to short and that the Euro suffers rightfully in the hands of its creators, malevolent Eurocrats. In the same esprit, we NOW recommend to cover EUROPEAN EQUITY SHORTS and start analyzing potential stocks that can benefit a low euro...
A 4 MONTH WINDOW...
North American and Asian exporters to Europe are going to report massive losses when their receivables start clicking at 25% less... Oh yes, supposedly, banks are supposed to help their clients hedge their currency risks but we all know that they charge a fortune for that service. When in the full midst of a recession, we all know that safety and R&D are usually the first items to be chopped off. In this case financial safety through hedging really got impacted. An analysis of Wall street desks did not show accrued business in currency hedging. Clients must have reasoned that is has been unnecessary for the longest of time and some people just took on a bad risk... Now the premiums are too high and frankly the export business has all but dried up.
In a fit of perverse reasoning ( which usually pays very well for us) we think that some Euro stocks will show stellar results because of a falling euro. The likes of Volkswagen, Nestle, Unilever and other multinational will thrive. They will compete very well at home against imports while their exports will show amazing currency gains. We therefore advise to look for European companies and use a steep sell-off (anything over 5% a day or 9% a week) to build a 1/3 position while instituting discipline stop losses).
While positions are built in Europe, Chinese and Indian stocks look ripe for selling. We have seen serious signs that infrastructure stocks ( landlines telecom notably) have been hitting 52 week lows. By the same token, the predicted fall of the Yen vs. the USD should have you place this no-brainer from May to September currency bet until end of August...
We still do not understand all the upward movement in gold in EURO terms. Interest rates will rise in the biggest deficit member countries. Holding gold will end up being a 10% gainer when there are are much higher returns to be had holding higher yielding instruments. We know very well that Greece and the other PIIGS might be able to announce IMF, World Bank, ECB intervention. We also fully well know it will take time before the money is in place and there is more grumbling ahead. With a kitty of $750BB no member is ont eh verge of defaulting any time soon. While we are convinced rated charged to members countries will inevitably divide the groups into As and Bs, the latter will pay at least 400bps more to borrow. Gold will then become a very unappealing instrument when the yields will confront low inflation. Good European companies with superb rating will be able to borrow at very favorable rates and showing stellar profits... SO if I can advise our European based gold bugs... change course, sell the metal and buy stocks... remember the date May 17th 2010...
OIL WILL LEAD EVERYTHING LOWER
Here all hell is about to break loose... Support lines are breaking everywhere and the currencies are too high for their own good. With no plan in place to balance its budgets, no political system with a clear mandate to do so, we can only wait for the depression to bring about new lows on North American equities... the Export picture for both March and April were well below our expectations and imports rose in both countries. that means anemic job growth at best.
With the latest 60 minutes http://www.cbs.com/primetime/60_minutes/video/?pid=pMKLhmm7XQBQ2O_0q8zOFxBFCmY6ixf3&vs=Default&play=true
which took two segments to explain the BP/TRANSOCEAN HORIZON RIG disaster, we just learned that there is a 16 well system which is 100 times bigger and probably as accident prone... You just need to remember what pictures and videos did to the seal fear industry, the oil spill will literally destroy any profit making scheme for big oil for the next five years... While the Titanic only sank once, in this case, there are hundred of accidents waiting to happen... SO if Exxon and many giant oil companies are hitting 52 week lows, we believe oil is going to hit many more lows. The industry has hit the iceberg of public opinion!
One guy who might enjoy all this diverted attention will be Lloyd Blankfein who must be enjoying his daily dose of schadenfreude. Adamant on destroying any possible passing of the Volcker rule, let big bad Oil that the wrap while Wall Street wants to keep business as usual.
WHY o WHY are we surrounded by such people?
Off on the bike to deliver our second to last stock certificates, we have sold all our private companies. We are going to buy farm land in many parts of the world and avoid many parts of the paper or electronic economy until an element of accountability and reason return to society... That might take a while...
Good trading to you
DCW
So this is getting repetitive bu today we are starting to pull back on all the negativity. We have been short ALL equities since April 21st when the S&P hit 1208. We maintain our call that the S&P 500 is still the best market to short and that the Euro suffers rightfully in the hands of its creators, malevolent Eurocrats. In the same esprit, we NOW recommend to cover EUROPEAN EQUITY SHORTS and start analyzing potential stocks that can benefit a low euro...
A 4 MONTH WINDOW...
North American and Asian exporters to Europe are going to report massive losses when their receivables start clicking at 25% less... Oh yes, supposedly, banks are supposed to help their clients hedge their currency risks but we all know that they charge a fortune for that service. When in the full midst of a recession, we all know that safety and R&D are usually the first items to be chopped off. In this case financial safety through hedging really got impacted. An analysis of Wall street desks did not show accrued business in currency hedging. Clients must have reasoned that is has been unnecessary for the longest of time and some people just took on a bad risk... Now the premiums are too high and frankly the export business has all but dried up.
In a fit of perverse reasoning ( which usually pays very well for us) we think that some Euro stocks will show stellar results because of a falling euro. The likes of Volkswagen, Nestle, Unilever and other multinational will thrive. They will compete very well at home against imports while their exports will show amazing currency gains. We therefore advise to look for European companies and use a steep sell-off (anything over 5% a day or 9% a week) to build a 1/3 position while instituting discipline stop losses).
While positions are built in Europe, Chinese and Indian stocks look ripe for selling. We have seen serious signs that infrastructure stocks ( landlines telecom notably) have been hitting 52 week lows. By the same token, the predicted fall of the Yen vs. the USD should have you place this no-brainer from May to September currency bet until end of August...
We still do not understand all the upward movement in gold in EURO terms. Interest rates will rise in the biggest deficit member countries. Holding gold will end up being a 10% gainer when there are are much higher returns to be had holding higher yielding instruments. We know very well that Greece and the other PIIGS might be able to announce IMF, World Bank, ECB intervention. We also fully well know it will take time before the money is in place and there is more grumbling ahead. With a kitty of $750BB no member is ont eh verge of defaulting any time soon. While we are convinced rated charged to members countries will inevitably divide the groups into As and Bs, the latter will pay at least 400bps more to borrow. Gold will then become a very unappealing instrument when the yields will confront low inflation. Good European companies with superb rating will be able to borrow at very favorable rates and showing stellar profits... SO if I can advise our European based gold bugs... change course, sell the metal and buy stocks... remember the date May 17th 2010...
OIL WILL LEAD EVERYTHING LOWER
Here all hell is about to break loose... Support lines are breaking everywhere and the currencies are too high for their own good. With no plan in place to balance its budgets, no political system with a clear mandate to do so, we can only wait for the depression to bring about new lows on North American equities... the Export picture for both March and April were well below our expectations and imports rose in both countries. that means anemic job growth at best.
With the latest 60 minutes http://www.cbs.com/primetime/60_minutes/video/?pid=pMKLhmm7XQBQ2O_0q8zOFxBFCmY6ixf3&vs=Default&play=true
which took two segments to explain the BP/TRANSOCEAN HORIZON RIG disaster, we just learned that there is a 16 well system which is 100 times bigger and probably as accident prone... You just need to remember what pictures and videos did to the seal fear industry, the oil spill will literally destroy any profit making scheme for big oil for the next five years... While the Titanic only sank once, in this case, there are hundred of accidents waiting to happen... SO if Exxon and many giant oil companies are hitting 52 week lows, we believe oil is going to hit many more lows. The industry has hit the iceberg of public opinion!
One guy who might enjoy all this diverted attention will be Lloyd Blankfein who must be enjoying his daily dose of schadenfreude. Adamant on destroying any possible passing of the Volcker rule, let big bad Oil that the wrap while Wall Street wants to keep business as usual.
WHY o WHY are we surrounded by such people?
Off on the bike to deliver our second to last stock certificates, we have sold all our private companies. We are going to buy farm land in many parts of the world and avoid many parts of the paper or electronic economy until an element of accountability and reason return to society... That might take a while...
Good trading to you
DCW
Tuesday, May 4, 2010
We all like records... sort of...
What a week.
This post was originally written on April 30th but stayed in our draft folder due to a medical emergency... So if the tone is dated the information is of relevance
Posturing and grandstanding on Capital Hill On Tuesday and criminal charges against GS filed on Thursday
Rating agencies and Greece yields competing for the limbo title
US exports numbers making some stocks shoot up but domestic look anemic at best
We are more worried by two events:
The oil spill in the gulf ( going to eclipse the damage of the EXXON VALDEZ)
US Illegals: Immigrants and Emigrants both records...
THE OIL SPILL
The leak from a blown-out well a mile underwater is five times bigger than first believed. Faint fingers of oily sheen were reaching the Mississippi River delta late Thursday, lapping the Louisiana shoreline in long, thin lines. Thicker oil was about five miles offshore. Officials have said they would do everything to keep the Mississippi River open to traffic.
This post was originally written on April 30th but stayed in our draft folder due to a medical emergency... So if the tone is dated the information is of relevance
Posturing and grandstanding on Capital Hill On Tuesday and criminal charges against GS filed on Thursday
Rating agencies and Greece yields competing for the limbo title
US exports numbers making some stocks shoot up but domestic look anemic at best
We are more worried by two events:
The oil spill in the gulf ( going to eclipse the damage of the EXXON VALDEZ)
US Illegals: Immigrants and Emigrants both records...
THE OIL SPILL
The oil slick could become the nation's worst environmental disaster in decades, threatening to eclipse even the Exxon Valdez in scope. It imperils hundreds of species of fish, birds and other wildlife along the Gulf Coast, one of the world's richest seafood grounds, teeming with shrimp, oysters and other marine life.
Sooner or later, the world will realize uncontrolled used of oil and passing on to taxpayers the real costs of its use must stop once and for all...
Europe understood that by taxing the hell out of it and somehow plowing back 30% into non-social projects. Can the US do the same... If you remember THREE MILE INCIDENT, it killed any nuclear plant construction for THIRTY (30) years. WILL this be the watershed event that will seriously curtail high risk drilling? I wouldn't want to be in the DEEP SEA OIL platform BUILDING business for the next three years... New regulations will take for ever to be finalized and in the meantime, the Shipyards will be vacant...
With a bunch of hillbillies , pick-up trucks and tea drinkers poised to wrap themselves in the American gas guzzler fall election parade, I fear the moment has not yet come to see $6 a gallon gas but it is a comin'.
Have you ever seen a COUNTRY SONG where alternative energy, hybrid cars are used?.. NAH! That would be silly and make you look weak. AMERICA stands for lots of BHP under the hood! the land of NASCAR, DRAG RACING, the 18 WHEELER and the DINER!
I think this disaster is going to make RAIL SERVICE have a bigger share of the transportation market. Too bad it falls in the middle of a depression...
EMIGRATION AND IMMIGRATION
Fighting for FIRST PRIZE in the 2010 WORST POLITICAL TIMING DECISION YEAR TO DATE:
1)PRESIDENT OBAMA EXTENDING OFFSHORE DRILLING RIGHTS
and close behind
2)ARIZONA CODIFYING RACIAL PROFILING INTO LAW
Governments are there to serve and protect the people. There are supposed to offer free access to commerce and to support thriving communities where access to education converts into high paying jobs and prosperity for all. They are not there to run car companies, provide arbitrary measures of what constitute value, efficiency or in this case what makes economic sense to a community.
TO start with a cliche , the world's greatest powers were always thriving when immigrants and traders came into to share work and exchange good and services.
THE fall of these mighty empires always can be traced to people not so inclined to come over and just happy to send underlings.
Soon enough this will come back to haunt those short sighted lawmakers as those economies will suffer one of their worst drop in economic activity... Thank god they will be able to blame everything and everybody except themselves... If you think Arizona had cheap real estate, you haven't seen anything yet!
TWO very scary statistics came out this year:
A) 2-3MM "illegal immigrants" aren't coming to work in the USA anymore finding the prospects not worth it. Already many misses in top line revenue by companies who catered to these hard underpaid workers who did the menial jobs any blue blood yank would not dare get his hands dirty doing...
B) A record number of US EMIGRANTS have renounced their citizenship... While a laughable number ( less than 600) it might be a trend as baby boomers realize that the US consumption craze is just not worth it any more especially as their broken Governments at most levels are creeping daily ever more into their affairs neither making them happier, healthier or safer.
Here is a short list of unconfirmed numbers of Ex-Pats who haven't decided to renounce their citizenship just yet but with massive deficits, higher taxes and a socialist agenda, get ready to see those numbers change considerably when 30% of your taxes doesn't have to pay the Pentagon's budget, 40% to Entitlements and most of the rest to debt servicing....
US EXPATRIATES LIVING IN
# Canada - 688,000
# Mexico - 500,000
# Philippines - 250,000
# Israel Israel - 184,195 (admirable precision to collect on Israel bond drives)
# United Kingdom - 150,000
# Germany - 92,000
# Dominican Republic - 80,000
# South Korea - 67,000
# Australia - 64,000
# France - 62,000
# Hong Kong 60,000
Finally, we maintain our sell rating on the Euro as we think Greece will be forced out of the EURO zone or quit on its own. May that be a lesson to all nations that have a laisser-faire attitude when fueling massive deficits and failing to prosecute tax dodgers. You may survive several bad marriages but when credit goes , you better have a new game plan!
Good trading to you!
DCW
Sooner or later, the world will realize uncontrolled used of oil and passing on to taxpayers the real costs of its use must stop once and for all...
Europe understood that by taxing the hell out of it and somehow plowing back 30% into non-social projects. Can the US do the same... If you remember THREE MILE INCIDENT, it killed any nuclear plant construction for THIRTY (30) years. WILL this be the watershed event that will seriously curtail high risk drilling? I wouldn't want to be in the DEEP SEA OIL platform BUILDING business for the next three years... New regulations will take for ever to be finalized and in the meantime, the Shipyards will be vacant...
With a bunch of hillbillies , pick-up trucks and tea drinkers poised to wrap themselves in the American gas guzzler fall election parade, I fear the moment has not yet come to see $6 a gallon gas but it is a comin'.
Have you ever seen a COUNTRY SONG where alternative energy, hybrid cars are used?.. NAH! That would be silly and make you look weak. AMERICA stands for lots of BHP under the hood! the land of NASCAR, DRAG RACING, the 18 WHEELER and the DINER!
I think this disaster is going to make RAIL SERVICE have a bigger share of the transportation market. Too bad it falls in the middle of a depression...
EMIGRATION AND IMMIGRATION
Fighting for FIRST PRIZE in the 2010 WORST POLITICAL TIMING DECISION YEAR TO DATE:
1)PRESIDENT OBAMA EXTENDING OFFSHORE DRILLING RIGHTS
and close behind
2)ARIZONA CODIFYING RACIAL PROFILING INTO LAW
TO start with a cliche , the world's greatest powers were always thriving when immigrants and traders came into to share work and exchange good and services.
THE fall of these mighty empires always can be traced to people not so inclined to come over and just happy to send underlings.
Soon enough this will come back to haunt those short sighted lawmakers as those economies will suffer one of their worst drop in economic activity... Thank god they will be able to blame everything and everybody except themselves... If you think Arizona had cheap real estate, you haven't seen anything yet!
TWO very scary statistics came out this year:
A) 2-3MM "illegal immigrants" aren't coming to work in the USA anymore finding the prospects not worth it. Already many misses in top line revenue by companies who catered to these hard underpaid workers who did the menial jobs any blue blood yank would not dare get his hands dirty doing...
B) A record number of US EMIGRANTS have renounced their citizenship... While a laughable number ( less than 600) it might be a trend as baby boomers realize that the US consumption craze is just not worth it any more especially as their broken Governments at most levels are creeping daily ever more into their affairs neither making them happier, healthier or safer.
Here is a short list of unconfirmed numbers of Ex-Pats who haven't decided to renounce their citizenship just yet but with massive deficits, higher taxes and a socialist agenda, get ready to see those numbers change considerably when 30% of your taxes doesn't have to pay the Pentagon's budget, 40% to Entitlements and most of the rest to debt servicing....
US EXPATRIATES LIVING IN
# Canada - 688,000
# Mexico - 500,000
# Philippines - 250,000
# Israel Israel - 184,195 (admirable precision to collect on Israel bond drives)
# United Kingdom - 150,000
# Germany - 92,000
# Dominican Republic - 80,000
# South Korea - 67,000
# Australia - 64,000
# France - 62,000
# Hong Kong 60,000
Finally, we maintain our sell rating on the Euro as we think Greece will be forced out of the EURO zone or quit on its own. May that be a lesson to all nations that have a laisser-faire attitude when fueling massive deficits and failing to prosecute tax dodgers. You may survive several bad marriages but when credit goes , you better have a new game plan!
Good trading to you!
DCW
Wednesday, April 21, 2010
DUMP equities.
YOU BEST SELL EQUITIES "EN MASSE"!
Bond rally coming... 3.60 on 10yr T
Gold going to tank... still saying 1060 and lower on way to $960. People who take refuge in an unproductive asset during deflationary times are wearing hydrogen filled balloons while smoking a cigar in a pine grove.
Euro going to retest lows... 1.28-1.30, will break 1.32 support soon
Why?
I could tell you but then you would go tell everybody and I would get these pesky reporters asking for my credentials...
A premise: massive deficits and FED fund rates nil... economy NOT growing nearly enough to justify MARKET VALUATION
A Little Secret... if you notice all these "stellar" PROFITS" ( remember PROFIT is a ACCOUNTING OPINION) on the NYSE and NAZ ... are LACKING OBVIOUS SUPPORTING indicator... NO TOP LINE GROWTH ANYWHERE...
I Don't know if you ever bet on fights... but generally you try to avoid betting on the guy with a hand tied behind his back...
Would also explain why insiders are SELLING 53:1 ... not a very comforting thought...
So if for the insouciants a 70% rally is not pause for reflection showing NO GROWTH!!!!!!!!!!!!!! then stay in this loonie bin, otherwise do like me, BAG profits... and check out safer ports until TOP LINE revenue comes back ... Without top line, no NEW jobs, with no jobs, state deficits have no way of cut down until administrators commit the sin of firing their own people... aka Harakiri... well that;s just before we release dandy numbers on people behind on their mortgages...
In the meantime don't mistake all the noise about Goldman and other investigated banks, it's all a PLOY to give you a REASON for a market fall but the real reason is the equity market is WAY TOO EXPENSIVE for an economy smaller than in 2000. PLUS when Goldman is busy fighting charges it will be lesser inclined to SHORT Obama, Geithner or Bernanke... Can a scorpion really be anything else? When it comes to GS, it will always be business, HUM...I mean, ruthless as usual!
BTW the S&P stands at 1208.06 when I said to dump... Let's see what the next 30 days show...
Bond rally coming... 3.60 on 10yr T
Gold going to tank... still saying 1060 and lower on way to $960. People who take refuge in an unproductive asset during deflationary times are wearing hydrogen filled balloons while smoking a cigar in a pine grove.
Euro going to retest lows... 1.28-1.30, will break 1.32 support soon
Why?
I could tell you but then you would go tell everybody and I would get these pesky reporters asking for my credentials...
A premise: massive deficits and FED fund rates nil... economy NOT growing nearly enough to justify MARKET VALUATION
A Little Secret... if you notice all these "stellar" PROFITS" ( remember PROFIT is a ACCOUNTING OPINION) on the NYSE and NAZ ... are LACKING OBVIOUS SUPPORTING indicator... NO TOP LINE GROWTH ANYWHERE...
I Don't know if you ever bet on fights... but generally you try to avoid betting on the guy with a hand tied behind his back...
Would also explain why insiders are SELLING 53:1 ... not a very comforting thought...
So if for the insouciants a 70% rally is not pause for reflection showing NO GROWTH!!!!!!!!!!!!!! then stay in this loonie bin, otherwise do like me, BAG profits... and check out safer ports until TOP LINE revenue comes back ... Without top line, no NEW jobs, with no jobs, state deficits have no way of cut down until administrators commit the sin of firing their own people... aka Harakiri... well that;s just before we release dandy numbers on people behind on their mortgages...
In the meantime don't mistake all the noise about Goldman and other investigated banks, it's all a PLOY to give you a REASON for a market fall but the real reason is the equity market is WAY TOO EXPENSIVE for an economy smaller than in 2000. PLUS when Goldman is busy fighting charges it will be lesser inclined to SHORT Obama, Geithner or Bernanke... Can a scorpion really be anything else? When it comes to GS, it will always be business, HUM...I mean, ruthless as usual!
BTW the S&P stands at 1208.06 when I said to dump... Let's see what the next 30 days show...
Friday, April 16, 2010
Why rub your nose in it.?
Our moment of clarity of our last post lives on .. with no changes ...
After tax deadline DAY, we figured we would try a different tack and discuss issues of a more cerebral nature than dirty old money scandals and such... keep that in mind when we realize no indictments will EVER be served, or any successful prosecution is a pipe dream against the puppeteers of Wall street. 41 REPUBLICAN Senators just voted against financial reform bill... does it surprise anybody? the party of the HELL , no!
After tax deadline DAY, we figured we would try a different tack and discuss issues of a more cerebral nature than dirty old money scandals and such... keep that in mind when we realize no indictments will EVER be served, or any successful prosecution is a pipe dream against the puppeteers of Wall street. 41 REPUBLICAN Senators just voted against financial reform bill... does it surprise anybody? the party of the HELL , no!
ON FAMILY
On his way to school, My son complained that at the ripe old age of 15, he could not write poetry for an assignment. I explained to him that his soul had been hijacked by devilish deeds brought about by his inclination towards mild forms of truancy (the apple does not fall far from the tree). I further developed ( in jest) a “conspiracy theory” that evil dwellers living in the deep recesses of "electronicians" ‘s psyches, pushed them to unleash these little hand held devises that ate children's souls one click at a time. He had long ago lost his soul and it would take some interaction with the real world before he got it back IF ever. I explained to him that material possessions, as a measure of self, rarely gave the soul any space to breathe and flourish. I am often reminded of Oscar Wilde’s definition of a cynic: “ he knows the Price of everything, value of nothing”. I relayed to my son, there are probably many more poets in the tinniest Favela than in all of Westmount or TMR... Mind you, he might dispute that by saying that a white 17yr old driving his own loaded Bimmer with a penchant for spewing Hip-Hop lyrics is indeed urban Poetry ( in motion). The debate was postponed as he had been driven to destination while I denoted over 200 kids in rain gear younger than him taking public transport to school. Do I need to get him a Bimmer to make him a Poet? Does a cynic forfeit his soul in exchange of his little attacks on those living around him? Man! Never thought driving a teen to school would become a philosophical navel gazing exercise?
ON EDUCATION
SYRACUSE UNIVERSITY
Whitman School of Management
Overall 2009 BusinessWeek Rank: 49
Private School ROI Rank: 18
Annual Tuition & Fees:$35,398
Median Salary: $53,000
Salary Per Tuition Dollar: $1.50
Business Students with Job Offers at Graduation: 80%
Top Industries Hiring Business Graduates: Accounting, Financial Services, Consumer Products/Retail
Top Employers: JPMorgan Chase, RSM McGladrey, PricewaterhouseCoopers
Overall 2009 BusinessWeek Rank: 49
Private School ROI Rank: 18
Annual Tuition & Fees:$35,398
Median Salary: $53,000
Salary Per Tuition Dollar: $1.50
Business Students with Job Offers at Graduation: 80%
Top Industries Hiring Business Graduates: Accounting, Financial Services, Consumer Products/Retail
Top Employers: JPMorgan Chase, RSM McGladrey, PricewaterhouseCoopers
Jamie Dimon getting mixed reviews as the choice for this year's Syracuse commencement day speaker.
After giving $30MM for a tech center to Syracuse U., JP Morgan should get to blab about all the good things NYC capitalism has brought to the world in the last decade.
As a recently undergraduate, I could be made to feel safer knowing Mr. Dimon and his kind are out there to create jobs, re-energize the American dream and make my future so much better... In the meantime , Portugal is now the second act of fake news engineered by Wall street guys who need trading activity to pay their sky high NJ property taxes...
In other news, this is the first time since WWII that more foreign post-graduates in % have decided to go back to their Shanghais and Mumbais of this world rather than either NYC or Silicon valley... Knowing full well they will receive 20% of a Yank's salary, they mostly cited Opportunity and potential Job satisfaction as reason to leave American shores...
A noted example is this year's graduating class of Harvard MBAs ( hardly useful people ) . It comprised 1/3 American males, 1/3 American females and 1/3 foreigners . More than 50% of the foreigners aren't staying and taking cushy jobs in the good old USA... The exodus of grey matter is even worse at Cal Tech, MIT or Princeton... Interesting no? When US housing is supposedly at its the most AFFORDABLE since WWII... me thinketh the 7-11K Sq. Ft. Homes are now going to be considered WHITE Elephants... ( Isn't the elephant some US party's mascot? The party of Christian values and the sanctity of the family unit ? How ironic! Good time to mention it to Sarah P. and other tea drinkers )
ON RELIGION
I found my road to Sainthood
ON READING
Between breaks, I have been reading three very different books and the perspectives are enlightening
How Jesus became a Christian
Beatrice and Virgil
The big Short: Inside the doomsday machine
I wish I could find people who actually read books any more... such a challenge!
ON SLEEPING ( OR EATING)
I have been kept awake by thoughts of the NEW tobacco baron of this Century ,,, EVIL MONSANTO which managed ( by paying off all three arms of US institutions) to get patents on seeds. That's about as insane as these genetics companies that can ( without asking) take YOUR OWN DNA and easily get a patent on Any of your genes and you LOOSE rights to your own DNA... These companies create markers that allow doctors to test you for specific diseases but as soon as you send your test sample ( and a $3000 check) you de facto forfeit the right to your DNA... HOW sick is that?
In the next twenty years, it will be the biggest fight of all times to get those pseudo biotech cockroaches out of the American food and healthcare system... The problem is they are destroying all ability for the system to source non GMO seeds... Monsanto has 75 fulltime investigators in the US alone ( ex-military, enforcement, linebacker types ) travelling the country side, unlawfully taking soil samples and issuing Cease and desist orders to targeting "sole" proprietors. The few farmers who tried to challenge Monsanto in court , few ever get there! http://www.percyschmeiser.com/
For the " privilege" to have a non-day in court, these farmers have paid UP to $1MM in legal fees NOT to get their cases heard...Monsanto will be rebuked but they have deep pockets and nobody YET has the money or the will to fight a $36BB mkt cap company and its yearly $1.36BB profit.
In the meantime, must we remind you “Monsanto SELLS 90% OF THE WORLD'S genetically engineered (GE) seeds”
Isn't that tobacco litigation COMING DOWN THE PIPE ALL over again? The US judicial system is so easily gamed by moneyed interests, WHY do people then DEPLORE the rise of US militias amongst rural populations?
Of 95 seed brokers , Monsanto and other robber barons have managed to put out of business 91... Not bad boys! Oh and I think of the last four, three are in litigation with... wait for it... Monsanto! You are good! thank you for guessing...
Next we expect Monsanto to get legislation passed to outlaw seed cleaners...
24 or 25 top executives at Monsanto were hired from FDA, Justice, and IN the last 4 administrations...
Here is our recent scorecard...
* Justice Clarence Thomas worked as an attorney for Monsanto in the 1970s. Thomas wrote the majority opinion in the 2001 Supreme Court decision J. E. M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc.|J. E. M. AG SUPPLY, INC. V. PIONEER HI-BREDINTERNATIONAL, INC.[5] which found that "newly developed plant breeds are patentable under the general utility patent laws of the United States." This case benefitted all companies which profit from genetically modified crops, of which Monsanto is one of the largest.[99][105][106]
* Dr. Michael A. Friedman was a deputy commissioner of the FDA before he was hired as a senior vice president of Monsanto.[99]
* Linda J. Fisher was an assistant administrator at the United States Environmental Protection Agency (EPA) before she was a vice president of Public Affairs at Monsanto from 1995 - 2000. In 2001, Fisher became the deputy administrator of the EPA.[99]. Now at DuPont as Vice President Safety, Health and Environment and Chief Sustainability Officer of DuPont
* Former Secretary of Defense Donald Rumsfeld was chairman and chief executive officer of G. D. Searle & Co., which Monsanto purchased in 1985. Rumsfeld personally made at least $12 million USD from the transaction.[99
* Josh King, former director of production for White house events, is now the director of global communication in Monsanto's Washington, D.C. Office.
* Clayton K. Yeutter, former Secretary of the USDA, former U.S. Trade representative who led U.S. negotiations in the U.S.-Canada Free Trade Agreement and helped launch the Uruguay round of the GATT negotiations, is now a member of the board of directors of Mycogen, whose majority owner is Dow. (Mycogen is also the corporation that holds the patent on a technology to genetically alter plants to produce and deliver "edible vaccines.")
* Terry Medley, former administrator of the USDA Animal and Plant Health Inspection Serve, former chair and vice-chair of the USDA Biotechnology Council, and former member of the FDA Food Advisory Committee, is now presiding as the director of regulatory and external affairs of Dupont's agriculture enterprise.
* Micky Kantor, former Secretary of the US Dept. of Commerce and former US Trade Representative, is now a member of the board of directors of Monsanto.
* William D. Ruckelshaus, the former chief administrator of the US EPA is now (and for the past 12 years) a member of the board of directors of Monsanto. On April 17, 2008, Ruckelshaus made news again when he announced his endorsement of Democrat Barack Obama for President of the United States.On May 7, 2008, Ruckelshaus was appointed to the Washington State Puget Sound Partnership, an agency devoted to cleaning up Puget Sound. ( basically the worst ecological disaster in the USA today...
* Lidia Watrud, a former microbial biotechnology researcher at Monsanto, is now with the US EPA. Here is her current bio... http://www.epa.gov/wed/pages/staff/watrud.htm Check out her recent papers... talk about the fox keeping guard at the hen house...
* Margaret Miller, a former laboratory supervisor for Monsanto, is now Deputy Director of Human Food Safety and Consultative Services in the US FDA. ( that makes me feel SO MUCH safer!)
* Michael R. Taylor was an assistant to the Food and Drug Administration (FDA) commissioner before he left to work for a law firm on gaining FDA approval of Monsanto’s artificial growth hormone in the 1980s. Taylor then became deputy commissioner of the FDA from 1991 to 1994.[99] Taylor was later re-appointed to the FDA in August 2009 by President Barack Obama.[107] There you go all you Obama lovers... Nice President you got there... same ilk as Rumsfeld now... Jul 17, 2009 — In a Tuesday afternoon press release, the FDA announced that Michael Taylor, a former Monsanto executive, had joined the agency as “senior advisor to the commissioner.” If the title is vague, the portfolio (pasted from the press release) is substantial—a kind of food czar of the Food and Drug Administration: Here are his responsibilities..
Assess current food program challenges and opportunities
• Identify capacity needs and regulatory priorities
• Develop plans for allocating fiscal year 2010 resources
• Develop the FDA’s budget request for fiscal year 2011
• Plan implementation of new food safety legislation
And my favourite quote
"Monsanto should not have to vouch for the safety of biotech food," said Phil Angell, Monsanto's director of corporate communications. "Our interest is in selling as much of it as possible. Assuring its safety is the FDA's job."
Drone of Citizen Monsanto, Supreme Lobbyist at FDA
New York Times Corporation, October 25, 1998
Phil Angell and Greenie must have gone to the same school of thinking!
Going to join my local Buddhist colony and practice my hummmmmmmmmmmmmm BUG! And find ONE US farmer selling non Monsanto soybeans....
You will know it’s time when you can catch a fly with chopsticks, Grasshopper!
RIP David Carradine
We will miss you!
Thursday, March 25, 2010
A Moment of Clarity: US DEBT, CURRENCIES, COMMODITIES and INDICES
Rarely can One pundit utter this phrase of enlightenment but we think we have a pretty good sense of where the markets are heading in the NEXT FOUR weeks...
US FEDERAL DEBT YIELDS
Like most people we knew this day would come, maybe later in the year , but it was coming... It was not a question of if but when and today March 24th, 2010 the market started to balk at yet another massive treasury issue. The government's auction of $42 billion in 5-year notes went poorly, pressuring an already sagging Treasury market and driving yields higher and Thursday issue of the 7 year notes will show the same thing as today...
So the first conclusion is if the 5yr NOTES is MOVING UP , the SEVEN YEAR won't be far behind ALL the WAY to the 30 year...
The FED has announced the end of March for buying MBS... so in effect Quantitative easing is going to be seriously curtailed
SO FIRST TAKE AWAY: FED TIGHTENS CREDIT AND US LONG RATES WILL MOVE BEFORE THE FED MOVES ON RAISING RATES
CURRENCIES
↓EURO: We still believe that the Euro is going towards USD parity but first it will have to go through 1.20... We have seriously complained about the undue interest in Greece knowing too full well that this is the least of the European union's problems. Everybody will soon realize that no partner nation can leave the union and like all bad marriages, there are still of lot of noise, demonstrations etc. to come out of Portugal and the unemployed Spaniards... There will be at least another 12 months of pressure on the EURO
↓YEN: Japanese traders will go for the carry trade chasing US raising rates, so the YEN WILL FALL VS THE USD in 2010 but EXPECT this in the JUNE to SEPTEMBER PERIOD
↓CDN: We believe commodities are going to move sideways if not lower in the next two years so the Canadian dollar is going to retrace towards 90 cents...
↓AUD & NZ: WE think tightening in China is going to put Chinese commodity buyers and these currencies will be under pressure vs the greenback...
COMMODITIES
↓PRECIOUS METALS With all these rates and currencies gyrations , we have become extremely BEARISH on ADDING TO GOLD POSITIONS HERE. We think that a rate rises in US RATES ON the LONGER END will have traders leave GOLD and ESPECIALLY SILVER to look for rising yields in carry trades. GOLD IS going to be below 950 in the next TWO years
↓METALS: We believe CHINA will be more interested in securing MINING rights over taking delivery. So you can expect some companies that fail to deliver their earnings forecast to be subject to takeovers...
↔OIL and NG. We see Oil trading in a range of 68-82 for the next two years. NG at $4.00 is pretty much at the bottom range and the summer should see it rebound.
↑FOOD: We think that as a basket this is still the best place to invest.
INDICES
↑DJIA will defy pundits and still has 100-250 points to the upside UNLESS FED moves rates 100 BPS (VERY unlikely)
↓TSX: with some commodities about to seriously correct, AVOID
↓NIKKEI: With Carry trades out of the yen and lousy export picture the Nikkei may not be your favorite market for now
↓SHANGHAI: With the central bank tightening, this will a picker's market but the indices will retrace
In conclusion, From Oct 11 2007 when the S&P 500 hit 1576.09 to March 6th 2009 saw the S&P 500 low of 666. That was a 57.7% retracement from the 2007 highs. THE SECOND worse drop. By march 2010, helped with the largesse of Washington yet backed by the taxpaying public, the FED and its free money policies have largely concentrated powers into fewer hands. The market is now around 1167 and the party is pretty much over.
From a rising tide to save a quasi bankrupt banking system, we now have to contend with FED tightening and many bets out there are about to face the reality that NOT ALL countries (or banks) will survive. The US is leading the way with banking reform and the next few weeks will give us a good indication on the NEW pricing of RISK Hold and wait won't work in this market and if you don't keep a tight lid on erosion the rest of the year will have you fighting the tape at every bump in the road!
Good trading to you!
DCW
US FEDERAL DEBT YIELDS
Like most people we knew this day would come, maybe later in the year , but it was coming... It was not a question of if but when and today March 24th, 2010 the market started to balk at yet another massive treasury issue. The government's auction of $42 billion in 5-year notes went poorly, pressuring an already sagging Treasury market and driving yields higher and Thursday issue of the 7 year notes will show the same thing as today...
So the first conclusion is if the 5yr NOTES is MOVING UP , the SEVEN YEAR won't be far behind ALL the WAY to the 30 year...
The FED has announced the end of March for buying MBS... so in effect Quantitative easing is going to be seriously curtailed
SO FIRST TAKE AWAY: FED TIGHTENS CREDIT AND US LONG RATES WILL MOVE BEFORE THE FED MOVES ON RAISING RATES
CURRENCIES
↓EURO: We still believe that the Euro is going towards USD parity but first it will have to go through 1.20... We have seriously complained about the undue interest in Greece knowing too full well that this is the least of the European union's problems. Everybody will soon realize that no partner nation can leave the union and like all bad marriages, there are still of lot of noise, demonstrations etc. to come out of Portugal and the unemployed Spaniards... There will be at least another 12 months of pressure on the EURO
↓YEN: Japanese traders will go for the carry trade chasing US raising rates, so the YEN WILL FALL VS THE USD in 2010 but EXPECT this in the JUNE to SEPTEMBER PERIOD
↓CDN: We believe commodities are going to move sideways if not lower in the next two years so the Canadian dollar is going to retrace towards 90 cents...
↓AUD & NZ: WE think tightening in China is going to put Chinese commodity buyers and these currencies will be under pressure vs the greenback...
COMMODITIES
↓PRECIOUS METALS With all these rates and currencies gyrations , we have become extremely BEARISH on ADDING TO GOLD POSITIONS HERE. We think that a rate rises in US RATES ON the LONGER END will have traders leave GOLD and ESPECIALLY SILVER to look for rising yields in carry trades. GOLD IS going to be below 950 in the next TWO years
↓METALS: We believe CHINA will be more interested in securing MINING rights over taking delivery. So you can expect some companies that fail to deliver their earnings forecast to be subject to takeovers...
↔OIL and NG. We see Oil trading in a range of 68-82 for the next two years. NG at $4.00 is pretty much at the bottom range and the summer should see it rebound.
↑FOOD: We think that as a basket this is still the best place to invest.
INDICES
↑DJIA will defy pundits and still has 100-250 points to the upside UNLESS FED moves rates 100 BPS (VERY unlikely)
↓TSX: with some commodities about to seriously correct, AVOID
↓NIKKEI: With Carry trades out of the yen and lousy export picture the Nikkei may not be your favorite market for now
↓SHANGHAI: With the central bank tightening, this will a picker's market but the indices will retrace
In conclusion, From Oct 11 2007 when the S&P 500 hit 1576.09 to March 6th 2009 saw the S&P 500 low of 666. That was a 57.7% retracement from the 2007 highs. THE SECOND worse drop. By march 2010, helped with the largesse of Washington yet backed by the taxpaying public, the FED and its free money policies have largely concentrated powers into fewer hands. The market is now around 1167 and the party is pretty much over.
From a rising tide to save a quasi bankrupt banking system, we now have to contend with FED tightening and many bets out there are about to face the reality that NOT ALL countries (or banks) will survive. The US is leading the way with banking reform and the next few weeks will give us a good indication on the NEW pricing of RISK Hold and wait won't work in this market and if you don't keep a tight lid on erosion the rest of the year will have you fighting the tape at every bump in the road!
Good trading to you!
DCW
Tuesday, March 2, 2010
Beware the Ides of March or a missive full of really bad analogies
Actually the equity market are pretty much set to keep their gains! March hope springs eternal.
Our answer is simple: Doubtful for a retreat over the next two months but Mid May to End of June should see the FED start to really try to reignin free money... Right now the perfect wave is allowing Dr. Bernanke to shine as a savior surfer and surf away in an idyllic setting. The fact that three board seats are still available at the FOMC must have something to do with it. It's 4:30PM and the sun is setting soon enough! Best be ready for a cold summer shower and some drinks!
We are more sanguine about commodities, especially food and energy, in the equity markets at this juncture. There are so many bids on the US dollar at this moment, this pig with lipstick is going to be the prom queen at the June graduation.
CURRENCIES
But like any commodity, when demand for US dollars surpasses supply, you are going to have dollar bulls saying all is well. Until the recent flood of new paper really hits the borrowers, it will be like an iceberg falling in the Jacuzzi. It always brings to mind the famous scene in the Titanic when Jack tries to stay on the doomed ship the longest time possible because he bloody well knows any time spent in the frigid waters of the North Atlantic will be the death of him and the Mrs. (please pronounce in a Scottish rogue for comedic effect). Ask Iceland bank shareholders if they have an opinion on the matter. So right now traders and old investors are moving to the top floor of this deck of wet cards using the US dollar as the quickest way to avoid a floundering pound and a Euro trading at a 10 month low. Is that wise? Gold in Euro terms always seem to us as the right move when pointed out by Dennis Gartman.
So if you don't like the analogies of cold/hot showers, jacuzzis and Icebergs... bare with us we only have one more. In the world of international finance, the sharks are now circling the easier prey that can be easily isolated. Take for example the GBP. Start with some juicy gossip about tyrant PM Brown, add a dash of bad economic data and voila,,, le disaster du jour with a Cherry-o on top!
The Euro is the most overplayed story with Greece playing the eternal insouciant profligate ingenue... a $40BB check from the rich German uncle should be forthcoming if enough mea culpas are proffered... ( sorry don't know the Greek translation to Mea Culpas).
The Italians continue business as usual but our bets are still with Spain and its terrible economic situation. So the Euro will stabilize here but we believe on the next leg down it may hover near parity to the USD.
The Europeans will quickly understand that if the Euro falters there will be no growth for quite some time and they will start to import inflation.
In the US, the government continues to dole out projects and expenditures are out of control. The real economy is masked by Uncle Sam projects of dubious value. I We are not sure the Pentagon expenditures fit in as infrastructures projects. Rebuild America! right, with bombs, Humvee s, Aircraft carriers and drone planes? Did I ever mention the expression one-term President?
WHAT to DO
We suggest you do a very strong Spring cleaning, push the outlook 5 years from now, wasn't owning Exxon, Intel, Petrobras and Nestle and other large well capitalized companies remains a much wiser choice that some NASDAQ darling with earnings "visibility" which is actually zigzagging pretty close to a precipice? Make sure all those stop losses are in there.
BUT PLEASE follow our advice and dump those US dollars for gold bars.!
THE REST OF THE YEAR ( for numerologists)
This sure has the feel of 1987 all over again... Stratospheric P/Es, rising rates and an ever shrinking pot to ...
In 1987, we sold everything in May, Took three months off in Greece ( of all places!), came back in September and hearing snickering remarks until that faithful day in October... The years ending in Os don't' do very well... need I remind you 1930 ( great depression), 1980 (Iran Crisis, NY default,,, etc.), 2000 Tech bubble burst aftermath, isn't 2010 just a repeat with the inconvenience of a bunch of technocrats hell bent on trying to keep alive a patient with no quality of life ( or job for that matter).
BUT PLEASE follow our advice and dump those US dollars for gold bars.! ( repeated for serious effect)
Meantime I am buying dinner to anyone who can call the low on US treasuries... been waiting so long I have dust on my buy tickets... TBT and the likes!
Good trading to you
Our answer is simple: Doubtful for a retreat over the next two months but Mid May to End of June should see the FED start to really try to reignin free money... Right now the perfect wave is allowing Dr. Bernanke to shine as a savior surfer and surf away in an idyllic setting. The fact that three board seats are still available at the FOMC must have something to do with it. It's 4:30PM and the sun is setting soon enough! Best be ready for a cold summer shower and some drinks!
We are more sanguine about commodities, especially food and energy, in the equity markets at this juncture. There are so many bids on the US dollar at this moment, this pig with lipstick is going to be the prom queen at the June graduation.
CURRENCIES
But like any commodity, when demand for US dollars surpasses supply, you are going to have dollar bulls saying all is well. Until the recent flood of new paper really hits the borrowers, it will be like an iceberg falling in the Jacuzzi. It always brings to mind the famous scene in the Titanic when Jack tries to stay on the doomed ship the longest time possible because he bloody well knows any time spent in the frigid waters of the North Atlantic will be the death of him and the Mrs. (please pronounce in a Scottish rogue for comedic effect). Ask Iceland bank shareholders if they have an opinion on the matter. So right now traders and old investors are moving to the top floor of this deck of wet cards using the US dollar as the quickest way to avoid a floundering pound and a Euro trading at a 10 month low. Is that wise? Gold in Euro terms always seem to us as the right move when pointed out by Dennis Gartman.
So if you don't like the analogies of cold/hot showers, jacuzzis and Icebergs... bare with us we only have one more. In the world of international finance, the sharks are now circling the easier prey that can be easily isolated. Take for example the GBP. Start with some juicy gossip about tyrant PM Brown, add a dash of bad economic data and voila,,, le disaster du jour with a Cherry-o on top!
The Euro is the most overplayed story with Greece playing the eternal insouciant profligate ingenue... a $40BB check from the rich German uncle should be forthcoming if enough mea culpas are proffered... ( sorry don't know the Greek translation to Mea Culpas).
The Italians continue business as usual but our bets are still with Spain and its terrible economic situation. So the Euro will stabilize here but we believe on the next leg down it may hover near parity to the USD.
The Europeans will quickly understand that if the Euro falters there will be no growth for quite some time and they will start to import inflation.
In the US, the government continues to dole out projects and expenditures are out of control. The real economy is masked by Uncle Sam projects of dubious value. I We are not sure the Pentagon expenditures fit in as infrastructures projects. Rebuild America! right, with bombs, Humvee s, Aircraft carriers and drone planes? Did I ever mention the expression one-term President?
WHAT to DO
We suggest you do a very strong Spring cleaning, push the outlook 5 years from now, wasn't owning Exxon, Intel, Petrobras and Nestle and other large well capitalized companies remains a much wiser choice that some NASDAQ darling with earnings "visibility" which is actually zigzagging pretty close to a precipice? Make sure all those stop losses are in there.
BUT PLEASE follow our advice and dump those US dollars for gold bars.!
THE REST OF THE YEAR ( for numerologists)
This sure has the feel of 1987 all over again... Stratospheric P/Es, rising rates and an ever shrinking pot to ...
In 1987, we sold everything in May, Took three months off in Greece ( of all places!), came back in September and hearing snickering remarks until that faithful day in October... The years ending in Os don't' do very well... need I remind you 1930 ( great depression), 1980 (Iran Crisis, NY default,,, etc.), 2000 Tech bubble burst aftermath, isn't 2010 just a repeat with the inconvenience of a bunch of technocrats hell bent on trying to keep alive a patient with no quality of life ( or job for that matter).
BUT PLEASE follow our advice and dump those US dollars for gold bars.! ( repeated for serious effect)
Meantime I am buying dinner to anyone who can call the low on US treasuries... been waiting so long I have dust on my buy tickets... TBT and the likes!
Good trading to you
Wednesday, January 27, 2010
Friday, January 22, 2010
Bernanke and other thoughts
Since WWII, it was the likes of Truman and Ike, the Kennedys with the Pentagon that ran the order of things and kept the country "safe" from the red menace.With the fall of the wall, Reaganomics were hailed as liberation and deregulation created its raison d'être. Clinton was the beneficiary of feel good years and money plowed into entitlements and the money agencies
The problems started when the NAZ bubble busted and the phlegmaticChairman Greenspan pontificating that cheap money combined with a deregulated bigger is better banking model could and would solve all ills. What followed was Wall Street greed at its worst... Another talker he was that Greenspan. Instead of Volkerizing the players, he chastised wiht empty words while relying on abnormally low rates. Ho, what the great guru he was. Creating a real estate bubble to eclipse all bubbles prior to it and leaving his successor to a bubble to supersede our wildest expectations. I will never forget Greenspan visiting the senate fiance committe hearings. He would show poise. He would reason and blab his musings to Congressmen more interested in their TV face time than meaningful queries. Using a muddled discourse pretty lean on sound bites if it weren't the exception of "Market exuberance", the Chairman spend more time explaining the actions rather than restraining the new leverage addicts.A FED chairman should be like a plumber. FIRST, he fixes the flood and then he tells who to prevent the next one.
So after the wheels came off in 2008, with a lot of finger pointing, useless commissions, printing money and a President who talks CHANGE but can`t change a tire without a 12,000 page bill , the question begs: who WILL take up the baton? the Leftists? Give me a break! I doubt Obama's Democrats will get a second term short of an atomic bomb exploding in Texas Stadium. 10% unemployment gives a lot of people time to hold other people accountable for their own lack of political activism.
WHAT THE FUTURE PROMISES
Push your timeline of future events towards 2012, and ask:
- "WHAT US political agenda will carry the day?"
If anything, we think SMALLER government will be the campaign slogan after vilified bankers will have been emasculated by legislation that comes BACK 25 years too late. Negative campaigns don't work...
- " WHO can run on a ticket of smaller government and show a portfolio of lean management?
That's the candidate the republicans will push
- " WHEN?"
With the Supreme court lifting campaign contribution limits, this is going to be great times for Media assuming they are reaching a wired world... Look for ads to pop on your smart phone soon enough. Candidates will come through in the fall of 2010 to build on this predicted jobless recovery...
-"HOW do you make money?"
Follow the money ... the reason why the US dollar is rallying against the Euro and even fiercer socialist rhetoric is in part due to SMART people having already priced in an end to Iraq involvement and a leaner form of government. What are Hutchinson, Power Corp, Buffett or Carlos Slim buying... sure wasn't real estate in 2006... but brand names , distribution, railways (i.e. coal), Newspapers.
Just like the market always think 5 months ahead, all the billionaires I read about have 5-7 years horizons for their plans in the form of buying and selling assets ... that is what killed GE's shareholders... lack of focus on thinking on what would happen in 2012 back in 2006. Instead they hope to grow the business, to increase the dividend and other nonsense...... the older generation would have bailed on the finance arm way before it took over the shop... meantime real estate looks like the play in 2012!
THE TRICKY PART: American Industry must now embark on a "peace" dividend and spend it on infrastructure and technology but they are held back by, of all things. the health care bill was meant to fix the costs of labor along a viable rate not an exponential curve. CEOs might be scratching their heads on trying to grow their top line revenue for the next shareholders meeting but if they really were any good at their jobs they would TRY to fix health care
Why trust the US as a place of business when health care costs and litigation derail business decisions in favor of China, Brazil? or anywhere for that matter? Any businessman worth his stock options will tell you: " not a good idea to go into a 5 year program where government rhetoric can impede rather than help minimize let alone quantify risk.
I believe it is a mistake on the part of the Republicans to partisan the debate and block health care reform... the sooner it passes the beter the dividend by the time they come to power in 2012. By 2015 you will read biographies where Republican congressional leaders will look back at 2009 and say THAT was the time to pass legislation. Now money talks in Washington not intelligent debate.
In the meantime, next week the ever frequent US Treasuries notes auction is coming to gauge the market appetite. Let's hope the Wall Street fat cats don't use the opportunity to show their displeasure with the Obama tactics to feed them to popular anger...
Now you may be asking yourselves , been reading this rant for 5 minutes, where is Bernanke in all of this? He 's the desert my friends! With a stalling reappointment vote
delayed in Congress, he may become the poor sacrificial goat to appease all the disgruntled. Quite unlikely for TIME's man of the year but HOW much fun it is to think of all the possible candidates... A good and true disciple of von Mises would be too much to ask for but I'd rather fall asleep on the thought of an appointment of an Austrian school economist rather than those awful choices rampant these days!
Enjoy your weekend and hope you have some cash stashed aside ... you might need it sooner than you think!
The problems started when the NAZ bubble busted and the phlegmaticChairman Greenspan pontificating that cheap money combined with a deregulated bigger is better banking model could and would solve all ills. What followed was Wall Street greed at its worst... Another talker he was that Greenspan. Instead of Volkerizing the players, he chastised wiht empty words while relying on abnormally low rates. Ho, what the great guru he was. Creating a real estate bubble to eclipse all bubbles prior to it and leaving his successor to a bubble to supersede our wildest expectations. I will never forget Greenspan visiting the senate fiance committe hearings. He would show poise. He would reason and blab his musings to Congressmen more interested in their TV face time than meaningful queries. Using a muddled discourse pretty lean on sound bites if it weren't the exception of "Market exuberance", the Chairman spend more time explaining the actions rather than restraining the new leverage addicts.A FED chairman should be like a plumber. FIRST, he fixes the flood and then he tells who to prevent the next one.
So after the wheels came off in 2008, with a lot of finger pointing, useless commissions, printing money and a President who talks CHANGE but can`t change a tire without a 12,000 page bill , the question begs: who WILL take up the baton? the Leftists? Give me a break! I doubt Obama's Democrats will get a second term short of an atomic bomb exploding in Texas Stadium. 10% unemployment gives a lot of people time to hold other people accountable for their own lack of political activism.
WHAT THE FUTURE PROMISES
Push your timeline of future events towards 2012, and ask:
- "WHAT US political agenda will carry the day?"
If anything, we think SMALLER government will be the campaign slogan after vilified bankers will have been emasculated by legislation that comes BACK 25 years too late. Negative campaigns don't work...
- " WHO can run on a ticket of smaller government and show a portfolio of lean management?
That's the candidate the republicans will push
- " WHEN?"
With the Supreme court lifting campaign contribution limits, this is going to be great times for Media assuming they are reaching a wired world... Look for ads to pop on your smart phone soon enough. Candidates will come through in the fall of 2010 to build on this predicted jobless recovery...
-"HOW do you make money?"
Follow the money ... the reason why the US dollar is rallying against the Euro and even fiercer socialist rhetoric is in part due to SMART people having already priced in an end to Iraq involvement and a leaner form of government. What are Hutchinson, Power Corp, Buffett or Carlos Slim buying... sure wasn't real estate in 2006... but brand names , distribution, railways (i.e. coal), Newspapers.
Just like the market always think 5 months ahead, all the billionaires I read about have 5-7 years horizons for their plans in the form of buying and selling assets ... that is what killed GE's shareholders... lack of focus on thinking on what would happen in 2012 back in 2006. Instead they hope to grow the business, to increase the dividend and other nonsense...... the older generation would have bailed on the finance arm way before it took over the shop... meantime real estate looks like the play in 2012!
THE TRICKY PART: American Industry must now embark on a "peace" dividend and spend it on infrastructure and technology but they are held back by, of all things. the health care bill was meant to fix the costs of labor along a viable rate not an exponential curve. CEOs might be scratching their heads on trying to grow their top line revenue for the next shareholders meeting but if they really were any good at their jobs they would TRY to fix health care
Why trust the US as a place of business when health care costs and litigation derail business decisions in favor of China, Brazil? or anywhere for that matter? Any businessman worth his stock options will tell you: " not a good idea to go into a 5 year program where government rhetoric can impede rather than help minimize let alone quantify risk.
I believe it is a mistake on the part of the Republicans to partisan the debate and block health care reform... the sooner it passes the beter the dividend by the time they come to power in 2012. By 2015 you will read biographies where Republican congressional leaders will look back at 2009 and say THAT was the time to pass legislation. Now money talks in Washington not intelligent debate.
In the meantime, next week the ever frequent US Treasuries notes auction is coming to gauge the market appetite. Let's hope the Wall Street fat cats don't use the opportunity to show their displeasure with the Obama tactics to feed them to popular anger...
Now you may be asking yourselves , been reading this rant for 5 minutes, where is Bernanke in all of this? He 's the desert my friends! With a stalling reappointment vote
delayed in Congress, he may become the poor sacrificial goat to appease all the disgruntled. Quite unlikely for TIME's man of the year but HOW much fun it is to think of all the possible candidates... A good and true disciple of von Mises would be too much to ask for but I'd rather fall asleep on the thought of an appointment of an Austrian school economist rather than those awful choices rampant these days!
Enjoy your weekend and hope you have some cash stashed aside ... you might need it sooner than you think!
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History shows us that nations that prospered to the top of the economic pyramid were those that had more benefits from comparative advantage of production methods, strong savings ethics, fostering an environment where education, innovation, entrepreneurship backed by solid development of intellectual property were the order of the day.
Right now the US economy has a monkey on its back where 20% of its economy is controlled by bankers when 7% would suffice PLENTY. Too many banks, too much capital tied to banks rather than flowing into the system of production and exports. The Federal reserve since the last nomination of Greenspan has perpetuated this travesty and exacerbates the problem with subsidized low rates and a conspiracy to protect Wall Street to the detriment of the public.
Instead now you have a whinny, socialist propaganda appealing to an unqualified electorate benefiting from handouts. As the same time, the establishment ( Banks, Pentagon and entitlement programs) continue to be propped up by soaring deficits, unfathomable debt loads and the most expensive health care in the world. Class warfare is growing and iniquity in the American society is trending down for the middle class. The only undeniable number one position that the US can flaunt is its title of the most litigious nation in the world.
WHEN is enough, enough?
In the State of the Union address, President Obama should get the message out that the US government is not Santa Claus. That people and corporations have to take responsibility for their follies of years past.
If I were to write that speech and most importantly not have to deliver it to a hostile crowd, this is what I would say
After the preliminaries , I would engage the audience with this:
"BUT WHAT IS REALLY THE STATE OF THE UNION?
1)The US economy is on its last leg as the freest and largest consumer economy in the world. It is transitioning back to an exporter of often raw materials which do not need skilled workers.
2) Congressional elections remain a sham. Nominations go the well connected and victories remain with the deepest pockets.
3) The office of the president is pretty much useless vs. the power yielded by Congress and the Supreme court. So help me out here, what can I do to get re-elected?
4) Things don't look very bright and the recovery for middle America is tedious at best.
5) While it might make the people feel good to be courted by promises of change, listening to candidates battle out it every two years for two years, the office of the President is a Hollywood prop up piece. It's the PR department of the Pentagon. It shows off nice toys like Air Force One. It is a reactionary office dealing with threats and crises. Sometimes I get to float programs but always at the expense of the taxpayer
6)The cabinet is usually made of very bright and accomplished people but their opinions and lasting legacies are few and usually very short lasting.
7) Foreign policy initiatives with touring secretaries of State walking like Darth Vader traveling to trouble spots and UN booze bashes are OK and we have to continue healing wounds.
WHAT WE HAVE TO LOOK FORWARD TO
As an administration we want to start with a simple agenda:
1) Promise of fair taxation
2) Simplified tax code
3) Programs to encourage savings
4) Private investment initiatives
5) A strong dollar policy to make debtors accountable
6) Once we balance our books, we will propose legislation for health care reform"
This would do more than all this useless pork barrel deficit spending run by a bunch of clueless academics , economists and other charlatans.
LIKELY OUTCOME
There was no recovery in late 2009. Just depleted inventories. Unemployment is going up this year to 10.5% and then up from there. From 2010 to 2014, the western world will be dealing with a depression and sovereign debt default.. 4 years of blaming the government, a lot of soul searching and then in 2015 a rebirth with outrageous inflation...Exporters' currencies will rise, importers will fall.
Not a pretty outcome... thank you Mr. Greenspan for getting the world hooked on subsidized rates
CONCLUSION
Mr. American voter, you should have let your government know that Volcker policies would keep you safe. The Clinton administration and Congress' push of the repeal of the Glass Stegall act fights with the Bush 43's invasion of Iraq as the worst blunders of the American government since WWII.
You continuously vote out of office politicians who come up with balanced budgets.
Now it is very hard to go rehab and clean up your act!
Good Night and god bless everyone who has to deal with the consequences of American policy. i.e. the American voter
Good trading to all!