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Tue. Apr. 23rd , 2013 |
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"BEST OF THE WEEK " |
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Labels & Tags | TIPPING POINT or 2013 THESIS THEME |
HOTTEST TIPPING POINTS |
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MOST CRITICAL TIPPING POINT ARTICLES TODAY | |||
CANARIES - A Major Contrarian Warning Signal HUSSMAN: The Cover Of The Latest Barron's Is A Screaming Call To Sell 04-23-13 BI This weekend we mentioned the latest Barron's cover, which is about the paper's professional investor survey, which shows record high bullishness and a widespread belief that the Dow is going to go to 16,000. John Hussman, the famously bearish mutual fund manager, sees this as screaming sell signal, as he invokes the ol' contrarian magazine cover indicator. He writes: The Barron’s Big Money Poll is typically bullish, on balance. This is Wall Street, after all. But variations in the tone and extent of that bullishness can be informative, especially when the consensus is extremely optimistic at new highs of mature bull markets, and defensive at new lows of mature bear markets. I can’t really throw stones about 2009, as I had my own concerns at the time (relating to the need to stress-test against Depression era outcomes, despite our favorable views of valuation). But it’s worth noting that the 2009 Big Money Poll questioned the advance from the March lows, noting “good reason not to jump in with both feet yet.” The 2003 Big Money Poll – already well into a new bull market – was bullish on balance, and up from just 43% bulls in an October 2002 poll near the market lows. Still, the 2003 poll noted “the bulls’ views have been tempered by the market’s losses in recent years. Consequently their expectations for the Dow, the Standard & Poor’s 500 stock index, and the Nasdaq Composite have been ratcheted down from past surveys.” This certainly isn’t a criticism of Barron’s itself. I grew up on Barron’s Magazine, and will remain a devoted reader at least as long as Alan Abelson provides a worthy counterbalance to the more short-sighted views of Wall Street and the Market Lab section remains in print. Still, the Big Money Poll is most useful as a contrary indicator. Rule o’ Thumb: When the cover of a major financial magazine features a cartoon of a bull leaping through the air on a pogo stick, it’s probably about time to cash in the chips. Anyway, this chart from Hussman says it all. |
04-23-13 | RISK CANARIES |
ANALYTICS |
US PORT TRAFFIC - A Slowing Trend Showing in US Consumption LA area Port Traffic decreases year-over-year in March 04-17-13 Calculated Risk Container traffic gives us an idea about the volume of goods being exported and imported - and possibly some hints about the trade report for March since LA area ports handle about 40% of the nation's container port traffic. On a rolling 12 month basis, inbound traffic was up 2% in March, and outbound traffic down slightly, compared to the rolling 12 months ending in February. Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March. |
04-23-13 | US INDICATORS CYCLE GROWTH |
US ECONOMICS |
US RAIL TRAFFFIC - Trending Lower Rail Traffic Continues to Trend Lower 04-19-13 Pragmatic Capitalist Recent rail trends have weakened substantially from very strong levels earlier this year. The latest weekly reading came in at 3.3% year over year, but continues a trend of low single digit readings. This latest data brings the 12 week average to 4.4%. That’s still a healthy level, but well off the March high of 3.6%. In this environment I guess any growth is good growth so this has to go down as a moderate positive for the economy even though the trend is negative. Here’s more via AAR:
Chart via Orcam Investment Research: |
04-23-13 | US INDICATORS CYCLE GROWTH |
US ECONOMICS |
HOTEL OCCUPANCY - Back to Pre-Recession Levels Hotels: Occupancy Rate tracking pre-recession levels 04-19-13 Calculated Risk Another update on hotels from HotelNewsNow.com: STR: US results for week ending 13 April In year-over-year comparisons, occupancy was up 3.2 percent to 64.1 percent, average daily rate rose 7.2 percent to US$110.88 and revenue per available room increased 10.7 percent to US$71.04. The 4-week average of the occupancy rate is close to normal levels.
The red line is for 2013, yellow is for 2012, blue is "normal" and black is for 2009 - the worst year since the Great Depression for hotels. The occupancy rate will probably move sideways until the summer vacation travel starts. The occupancy rate has improved from the same period last year - and is tracking the pre-recession levels. Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com |
04-23-13 | US INDICATORS CATALYST CRE |
US ECONOMICS |
US BUDGET - As Represented and Spun for the Public President Obama's Entire Budget In One Chart 04-10-13 BI Obama's budget attempts to reduce the Federal Deficit by $1.7 trillion over 10 years, using a combination of spending cuts and increased taxes. So what does the budget really look like? We compared the numbers from the White House budget with the current CBO baseline of what budgets are currently expected to look like to figure out what he actually changes For each key category, the level zero is the current projected funding level for the next ten years. If a line goes above zero, the President's budget will spend more on it than current funding levels — or in the case of revenues, that number will be higher. Just a primer:
The general trend? Most of the lines on the budget exceed funding for the next two to three years (stimulus basically), then drop below projected funding levels following 2016 or 2017. So in other words, this represents the kind of stimulus-now, but-later budgeting that a lot of economists in Washington favor. |
04-23-13 | US FISCAL | US ECONOMICS |
BIG GOVERNMENT - A Budget That Institutionalizes Big Government President Obama's Predictable Budget: More Spending, More Tax Increases 04-19-13 Peter Ferrara, Contributor , FORBES
“more than $2 in spending cuts for every $1 of new revenue from closing tax loopholes and reducing tax benefits for the wealthiest.” SPENDING INCREASES: There are No Cuts But President Obama’s budget does not propose any spending cuts at all on net, not even reductions from expected increases in spending.
Indeed, President Obama’s talk of “spending cuts’ in his budget Overview is followed by pages of proposals for increased spending. That reflects Obama’s basic thinking that what drives economic recovery and growth is increased government spending. But Obama’s economic record is a thorough rebuttal to that thinking. Not one of those increased spending proposals in his 2014 budget would contribute to increased economic growth and prosperity on net. TAX INCREASES: Just More Tax Increases Besides these runaway spending increases, Obama’s budget also proposes
BALANCED BUDGET: A Deficit Doubletalk Mirage Despite all the tax increases, President Obama’s budget proposal would never balance the budget, by Obama’s own admission. His own budget admits that
ASSUMPTIONS: Revenue
ASSUMPTIONS: Growth
ASSUMPTIONS: Interest Rates
ASSUMPTION: No Recession
With these assumptions, the deficit and debt projections in Obama’s budget cannot be taken seriously, and most likely will turn out to be grossly underestimated. ENTITLEMENT REFORM - A Charade President Obama has his propagandist flacks out there touting his supposed entitlement reforms in this budget as a grand gesture of compromise with Republicans. But there is
Imagine what would happen to our national defense if the government refused to pay the builders of the Navy’s ships, the manufacturers of the Air Force’s planes, and the makers of the Army’s tanks. That is what is going to happen to health care for seniors under Medicare, given Obama’s so-called “reforms.” REAL ENTITLEMENT REFORM
POLITICAL POSTURING - This is What the Budget Is All About Federal law requires President Obama to propose a budget for the next fiscal year by February 4 of each year, before the House and the Senate adopt their own budget resolutions. But President Obama released his budget for next year just last week, after the House and the Senate had already adopted their budget resolutions. So what is the point of the President issuing a budget proposal now? The point is to simply posture for all those low information, Twitter voters in the 2014 elections, who will hear only from all the Democrat Party propagandists at the New York Times, the Washington Post, and MSNBC and brethren. They will hear only about President Obama’s “spending cuts,” his grand, compromising, entitlement reforms, and how he is fighting for the middle class, with declining median incomes throughout his Administration, for the poor, with record, soaring poverty, and for “equality,” even as inequality has actually risen throughout his Administration. Is this generation of Americans in the process of proving America’s more than 200 year experiment with democracy a failure |
04-23-13 | US FISCAL OBAMA BUDGET |
US ECONOMICS |
MOST CRITICAL TIPPING POINT ARTICLES THIS WEEK - Apr. 21st - Apr. 27th 2013 |
RISK REVERSAL | 1 | ||
JAPAN - DEBT DEFLATION | 2 | ||
BOND BUBBLE | 3 | ||
EU BANKING CRISIS |
4 |
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SOVEREIGN DEBT CRISIS [Euope Crisis Tracker] | 5 | ||
CHINA BUBBLE | 6 | ||
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MACRO News Items of Importance - This Week | |||
GLOBAL MACRO REPORTS & ANALYSIS |
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US ECONOMIC REPORTS & ANALYSIS |
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US GDP - Growth Through Manipulation
US GDP Will Be Revised Higher By $500 Billion Following Addition Of "Intangibles" To Economy 04-21-13 Zero Hedge Those who have been following the US debt to GDP ratio now that the US officially does not have a debt ceiling indefinitely, may have had the occasional panic attack seeing how this country's leverage ratio is rapidly approaching that of a Troika case study of a PIIG in complete failure. And at 107% debt/GDP no explanations are necessary. Luckily, the official gatekeepers of America's economic growth (with decimal point precision), the Bureau of Economic Analysis have a plan on how to make the US economy, which is now growing at an abysmal 1.5% annualized pace, or about 5 times slower than US debt growing at 7.5% annually, catch up: magically make up a number out of thin air, and add it to the total. And it literally is out of thin air: according to the FT the addition will constitute of a one-time addition of intangibles, amounting to 3% of total US GDP, or more than the size of Belgium at $500 billion, to the US economy.
What exactly will constitute GDP growth going forward? In a word, intangibles: films, books, magazines and iTunes songs.
Nothing like adding intangibles in the fluid, ever-changing definition of what constitutes an economy. Naturally, the only reason for this artificial "boost" to the US economy which apparently can be any old arbitrary number agreed upon by a few accountants, and which always goes up post revision, never down, is to make US debt/GDP under 100% once again, if only very briefly. Surely a few months later something else can be "added" to GDP making the US economy appear better than it is once more. Finally, all of the above is a distraction for idiots. As most people should know by know (this logically excludes economists), the only factor leading to economic "growth" is the expansion of liabilities of the financial system, whereby new credit (in a healthy environment, not one centrally-planned by several Princeton real-world rejects, where the central bank is forced to create all credit expansion with money that never leaves the banks and the capital markets closed loop) creates new money, creates demand for products and services, and circulates in the economy. This can be seen in the chart below which shows the nearly perfect correlation between total bank liabilities in the US, as per the Fed's Flow Of Funds report, and total US GDP. Bottom line: the BEA can capitalize air consumption if it thinks it will make US GDP soar, but unless new credit and bank liabilities are created not due to forced supply but demand, and unless the private financial sector is finally willing to start lending money (which for the entire duration of QE it has not) US growth will stall and then proceed to decline. Case in point: total US commerical bank loans are still lower than they were the day Lehman filed. In other words, all the GDP "growth" since the Lehman failure has come on the back of money "created" by the Fed. And there are still those who think the Fed will ever unwind... |
04-22-13 | US MONETARY |
US ECONOMICS |
TOO BIG TO GOVERN (TBTG) - Bloated Government Crowds Out Private Investment 100 Years Of Government's Takeover Of The Economy 04-20-13 Zero Hedge The ever-encroaching 'might' of the government - or perhaps, put another way, the ever-decreasing need to be gainfully employed or productive... |
04-22-13 | FISCAL | US ECONOMICS |
SURPRISE INDEX - Negative Annual Cyclical Pattern Occurs Again The Citi Economic Surprise Index Just Went Negative... 04-16-13 BI Lately economic data seems to be coming in week, and it's gotten a lot of people talking about a "spring swoon" for the economy. Actually, there's a bigger patter people are worried about, that every year we seem to have these false dawns for the economy, only for things to get sluggish again. The March jobs report (which came in at just 88K) was the most glaring example of the weakness, but also there's been some weak housing and retail data. The Citi Economic Surprise Index is a measure that tries to capture how well the data is coming in relative to economic expectations. After all, this is what's key to markets. It's not so much about whether the data is good or bad, but whether it's better or worse than what people thought it would be. Positive numbers indicate that the data is still "beating." Negative numbers show missing. The index has just turned negative. |
04-22-13 | US MACRO INDICATORS |
US ECONOMICS |
CONSUMER SENTIMENT - Americans Feel They Are In A Recession Consumers around the world grappled with increasing economic concerns Nielsen Q4 Consumer Confidence Report
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04-22-13 | CONSUMER SENTIMENT | US ECONOMICS |
US FISCAL - Taxes and Spending Show These Charts To Anyone Who Thinks Debt, Spending, And Taxes Are At All Time Highs 04-22-13 BI Think debt, taxes, and spending are at all-time highs these days? It turns out that belief is almost totally false. A presentation from the Bureau of Economic Analysis includes three charts that everyone should see. It turns out, taxes are lower than through most of history, debt as a percentage of GDP has been much higher in the past, and on government spending, only if you include transfer payments (like Social Security) is spending at a new high relative to GDP. If you look at actual government spending that doesn't go straight to people, it's low.
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04-22-13 | US FISCAL | US ECONOMICS |
CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES | |||
Market Analytics | |||
TECHNICALS & MARKET ANALYTICS |
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COMMODITY CORNER - HARD ASSETS | |||
THESIS Themes | |||
2013 - STATISM |
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2012 - FINANCIAL REPRESSION |
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2011 - BEGGAR-THY-NEIGHBOR -- CURRENCY WARS |
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2010 - EXTEN D & PRETEND |
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THEMES | |||
CORPORATOCRACY - CRONY CAPITALSIM | |||
GLOBAL FINANCIAL IMBALANCE | |||
SOCIAL UNREST |
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CENTRAL PLANNING |
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STANDARD OF LIVING |
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NATURE OF WORK | |||
CATALYSTS - FEAR & GREED | |||
GENERAL INTEREST |
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Tipping Points Life Cycle - Explained
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