NEW SERIES RELEASE MONETARY MALPRACTICE AVAILABLE NOW MONETARY MALPRACTICE: Deceptions, Distortions and Delusions MONETARY MALPRACTICE: Moral Malady MONETARY MALPRACTICE: Dysfunctional Markets
NOW SHOWING HELD OVER Currency Wars Euro Experiment Sultans of Swap Extend & Pretend Preserve & Protect Innovation Showings Below
FREE COPY... Current Thesis Advisory: CONTACT US
|
Wed. May 15h , 2013 |
![]() We are looking for your feedback on MACRO ANALYTICS- What Do You Want To See IMPROVEMENTS, GUESTS, SUBJECTS? click to submit e-mail FEEDBACK (or email: general@gordontlong.com) What Are Tipping Poinits? |
![]()
Reading the right books? >> Click to Browse << We have analyzed & included Book Review- Five Thumbs Up
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
"BEST OF THE WEEK " |
Posting Date |
Labels & Tags | TIPPING POINT or 2013 THESIS THEME |
HOTTEST TIPPING POINTS |
Theme Groupings |
||
![]() |
|||
MOST CRITICAL TIPPING POINT ARTICLES TODAY | |||
NEXT TWO DAYS - We Need Your Input We are looking for your feedback on:
click to submit e-mail FEEDBACK (or email: general@gordontlong.com)
|
|||
AN INSIDER SPEAKS - Catherine Austin Fitts
|
05-15-13 | THEME |
CORRUPTION
|
VALUATIONS - The Incentive for the Anticpated "Great Rotation" David Tepper: ‘I’m Definitely Bullish’ 05-14-13 WSJ Tepper, Birinyi, Damodaran, O'Neill, Ritholtz All Love This Bullish Stock Market Metric 05-14-13 BI Liberty Street Economics With the S&P 500 at an all-time high, many stock market pundits have grown increasingly cautious. However, the savviest experts are reiterating their bullishness, and they are all pointing to one metric: the equity risk premium. "The equity risk premium is the key to investing and valuation," says legendary NYU finance professor Aswath Damodaran, The equity risk premium can be defined simply as the expected return on a broad stock market index in excess of the long-term risk-free rate, which is often measured by a government bond yield. Markets spiked this morning when influential hedge fund manager David Tepper held up a chart of the equity risk premium as he presented his uber-bullish case for stocks during a CNBC appearance. Blogger extraordinaire Barry Ritholtz and stock market legend Laszlo Birinyi each pointed us to Tepper's exact chart last week. Birinyi confident we'll see the S&P 500 pass 1,700 this year, and 1,900 relatively soon. Jim O'Neill, the now retired economist from Goldman Sachs, has long been bullish on stocks thanks to the equity risk premium. In the final slide of his final presentation, O'Neill argued, "Current ERP levels continue to indicate that equity markets are still quite attractive in many parts of the world." BIRINYI: History Tells Me We'll Soon See The S&P 500 Pass 1,900 05-14-13 BI Investor strategist Laszlo Birinyi, who accurately predicted the S&P 500 would break 1,600, told CNBC on Tuesday he thinks the closely watched index could eclipse 1,900 in the longer term. Expanding on bullish sentiment from hedge fund titan David Tepper, Birinyi said the market is for stock pickers, who should to look at individual companies instead of broad sectors. (Read More: It's a 'My Cousin Vinny' Market, Bullish Tepper Says) "I've been impressed with resilience of this market," Birinyi said on "Squawk on the Street." "The pauses are only temporary, and now we've seen a rotation to the cyclicals. Looking at the market perspective, I still think we're going higher." Birinyi pointed to Autozone, which was hit by a downgrade on Monday but bounced back quickly. "Those are the kind of things I think are more important," he said. In the near term, Birinyi sees the S&P 500 going to 1,700, but in the longer term (after 2013) he said the index could reach 1,900. He called the 1,900 number "guidance" based on historical parallels, instead of a target. Birinyi's call earlier this year that the S&P would eclipse 1,600 came to fruition, leading to another bullish prediction. He said his firm is currently buying S&P 170 calls on the SPDR S&P 500 ETF, a bullish options bet that the S&P will hit 1,700. (Related: Cramer: This Is the Short's Worst Nightmare) Birinyi characterized the climb as "a cross country trip," suggesting that there will be stops and starts along the way. "This market is very strong, but I want to take it one step at a time and I want to get to 1,700 before we decide where we're going after that," he said. "People don't realize how strong this market has been," he said. "This has been the strongest advance-decline in the S&P over the last 20 years. What that means is that you want to be picking stocks. I think that's the key here. You want to pick stocks here and not worry about sectors or themes." "When I look at the market, I look at what individual stocks are doing. People have been concerned about things like inflation, and I look at the inflation-sensitive names and they are not reacting the way you would expect them to if that was an issue," he added.
Global Financial Data - Ralph Dillon - rdillon@globalfinancialdata.com At 85 Billion a month, massive amounts of liquity are driving the markets higher each day. While we are closely watching the FED for signs of an exit strategy, I heard a very interesting piece from David Taper at Appaloosa Management this morning that put todays markets in a much better perspective. According to David, The FED will have a 368 Billion dollar surplus this year! That is 368 Billion in more liquity that “has to go somewhere”. With the Dow and the S&P 500 trading at or near all time highs and 10yr paper trading at historic lows, you would think that we have run our course and we may want to pull some money off the table. Think again? Do you fight the FED? Do you create the MOAS? (Mother of all shorts)….Or do you stay long? In this chart, we look at the Equity Risk Premium Index versus the DJIA, S&P 500 and the US 10yr to 1885. The red line reprersents the Equity Risk Premium Index and by all accounts, looks like it is ready to breakout and make a move to new highs. Provided the FED follows through to 2014 with the QE program, one would have to assume that the respective equity indices will all move higher with the massive amounts of liquidity that are in the pipeline. That has proven wise as long as the FED stays your partner.
|
05-14-13 | ANALYTICS FUND-MENTALS VALUATIONS
|
ANALYTICS |
GOLD MANIPULATION - The Gold Smakedown Gangster State America — 05-13-13 Paul Craig Roberts There are many signs of gangster state America. One is the collusion between federal authorities and banksters in a criminal conspiracy to rig the markets for gold and silver. My explanation that the sudden appearance of an unprecedented 400 ton short sale of gold on the COMEX in April was a manipulation designed to protect the dollar from the Federal Reserve’s quantitative easing policy has found acceptance among gold investors and hedge fund managers. The sale was a naked short. The seller had no gold to sell. COMEX reported having gold only equal to about half of the short sale in its vaults, and not all of that was available for delivery. No one but the Federal Reserve could have placed such an order, and the order came from one of the Fed’s bullion banks, one of the entities “too big to fail.” Bill Kaye of the Greater Asian Hedge Fund in Hong Kong and Dave Kranzler of Golden Returns Capital have filled in the details of how the manipulation worked. Being sophisticated investors of many years of experience, both Kaye and Kranzler understand that the financial press runs with the authorized story planted to serve the agenda that has been put into play. Institutional investors who have bullion in their portfolio do not want the expense associated with storing it securely. Instead, they buy into Exchange Traded Funds (ETF) and hold their bullion in the form of a paper claim. The largest, the SPDR Gold Trust or GLD, trades on the New York Stock Exchange. The trustee and custodian is a bankster, and only other banksters are able to turn investments into delivery of physical bullion. Only shares in the amount of 100,000 can be redeemed in gold. The price of bullion is not set in the physical market where individuals take delivery of bullion purchases. It is set in the paper futures market where short selling can drive down the price even if the demand for physical possession is rising. The paper gold market is also the market in which people speculate and leverage their positions, place stop-loss orders, and are subject to margin calls. When the enormous naked shorts hit the COMEX, stop-loss orders were triggered adding to the sales, and margin calls forced more sales. Investors who were not in on the manipulation lost a lot of money. The sales of GLD shares are accumulated by the banksters in 100,000 lots and presented to GLD for redemption in gold acquired at the driven down price. The short sale is leveraged by the stop-loss triggers and margin calls, and results in a profit for the banksters who placed the short sell order. The banksters then profit again as they sell the released gold into the physical market, especially in Asia, where demand has been stimulated by the sharp drop in bullion price and by the loss of confidence in fiat currency. Asian prices are usually at a higher premium above the spot prices in New York-London. Some readers have said “don’t bet against the Federal Reserve; the manipulation can go on forever.” But can it? As the ETFs such as GLD are drained of gold, their ability to cover any of their obligations to investors diminishes. In my opinion, these ETFs are like a fractional reserve banking system. The claims on gold exceed the amount of gold in the trusts. When the ETFs are looted of their gold by the banksters, the gold price will explode, as the claims on gold will greatly exceed the supply. Kranzler reports that the current June futures contracts are 12.5 times the amount of deliverable gold. If more than 8 percent of these trades were to demand delivery, COMEX would default. That such a situation is possible indicates the total failure of federal financial regulation. What the Federal Reserve has done in order to maintain its short-run policy of protecting the “banks too big too fail” is to make the inevitable reckoning more costly for the US economy. Another irony is the benefactors of the banksters sale of the gold leeched from the gold ETFs. Asia is the beneficiary, especially India and China. The “get out of gold line” of the US financial press enables China to unload its excess supply of dollars, accumulated from the offshored US economy, into the gold market at a suppressed price of gold. Kranzler points out that not only does the Fed’s manipulation permit Asia to offload US dollars for gold at low prices, but the obvious lack of confidence in the dollar that the manipulation demonstrates has caused wealthy European families to demand delivery of their gold holdings at bullion banks (the bullion banks are essentially the “banks too big to fail”). Kranzler notes that since January 1, more than 400 tons of gold have been drained from COMEX and gold ETF holdings in order to satisfy world demand for physical possession of bullion. Again we see that institutions of the US government are acting 100% against the interests of US citizens. Just who does the US government represent? |
05-14-13 | THEME |
CORRUPTION
|
MOST CRITICAL TIPPING POINT ARTICLES THIS WEEK - May 12th - May 18th 2013 |
RISK REVERSAL | 1 | ||
JAPAN - DEBT DEFLATION | 2 | ||
BOND BUBBLE | 3 | ||
EU BANKING CRISIS |
4 |
||
SOVEREIGN DEBT CRISIS [Euope Crisis Tracker] | 5 | ||
CHINA BUBBLE | 6 | ||
TO TOP | |||
MACRO News Items of Importance - This Week | |||
GLOBAL MACRO REPORTS & ANALYSIS |
|||
US ECONOMIC REPORTS & ANALYSIS |
|||
CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES | |||
Market Analytics | |||
TECHNICALS & MARKET ANALYTICS |
|
||
BAC TRADING - Profitable on 60 out of 60 days Bank Of America Q1 Profitable Trading Days: 100% 05-08-13 Zero Hedge After the "humiliating" performance in Q4 2012, when Bank of America had a whopping 2 trading loss days out of 61, in has managed to redeem itself in the first quarter of 2012, when not only did it record seven trading days when it generated revenue of over $100 million daily, but more importantly it had zero days (of 60 total) with any net trading losses: a track record that can only be matched by any daytrader on Twitter. After all, what is better than trading when there is no risk of loss. From BAC:
And the stunning histogram: Going further back, here is 2011 and 2012: And summarizing it all: since the start of the New Normal 2009, Bank of America has had 962 profitable trading days, with just 97 days with trading losses: a 90.8% win record. |
05-13-13 | US ANALYTICS FUND-MENTALS EARNINGS |
ANALYTICS |
JPM TRADING - Profitable on 63 out of 63 days JP Morgan Has Zero Trading Losses In The First Quarter 05-08-13 Zero Hedge Earlier it was Bank of America reporting a perfect trading quarter, with profitability on 60 out of 60 trading days, and now it is JPMorgan's turn. Moments ago, Jamie Dimon's firm filed a 10-Q in which, among other things, it announced than in the quarter ended March 31, it was profitable on 63 out of 63 trading days and had one day in which it gained more than $200 million, or said simply another case of trading perfection unmatched anywhere in the known universe except perhaps by sellers of newsletters on Twitter. It was not immediately clear why JPM got a freebie of three extra profitable trading days in the quarter compared to BofA, although we suspect Jamie Dimon's presidential cufflinks may have something to do with it. What is clear is that the probability of one firm trading without error for an entire quarter, let alone two (and soon more as other banks file their 10-Qs) is slim to quite slim. Although not nearly as slim as whoever the hot chick is on Dancing with the Stars this season, which we are confident is the only thing the bulk of the population cares about. For everyone else, there's E(rror free)-trade. Going further back in time, we find that JPM had a winning trading accuracy of:
This compares to Bank of America's:
Or, since 2009, BAC's winning trade hit rate is somehow even better than that of JPM, at 90.8% compared to 88.9% for the firm that is in charge of Tri-Party repo. The chances of this occurring, considering the traders at Bank of America (including those from Merrill) are the butt of every joke on Wall Street and certainly far inferior to the traders from a firm which until the London Whale assumed it had an unlimited balance sheet, are also slim to quite slim. Perhaps related to all of the above, and for those curious if the recent reports of regulatory action against Blythe Masters will lead to anything, this is what the firm had to say about its ongoing legal entanglement with FERC:
The first to figure out what a "Wells-type" notice is (a Wells notice that is not really a Wells notice if one has presidential cufflinks perhaps?) gets a tour of the JPMorgan gold vault. As for anyone harboring any hope that Blythe Masters may spend even a minute in prison, your chance of seeing the JPM gold vault first hand is equally high. |
05-13-13 | US ANALYTICS FUND-MENTALS EARNINGS |
ANALYTICS |
RISK - "Jaws of Despair" and the Regression-to-the-Mean The BTFD Strategy Has Never Worked Better (But Beware) 05-10-13 Zero Hedge There is a mathematical term used to describe a time series' propensity to mean-revert or not. Autocorrelation measures the tendency for today's price direction to be in the same direction as yesterday's. In a period of negative autocorrelation (such as today) when the market sells off one day it is much more likely to rebound the next. As Artemis Capital's Chris Cole notes, the current level of negative auto-correlation (often associated wite positive for 'buy-the-dip' strategies in an upward trending market) has never been higher. Mean reversion and negative autocorrelations are one reason why many pure 'portfolio insurance' strategies are struggling with losses. If you are constantly shorting volatility this trend toward powerful mean reversion is your best friend. However, empirically, this high mean reversion is unsustainable. Via Artemis Capital,
|
05-13-13 | RISK | ANALYTICS |
RISK - Historic Low High Yield (Record Price Paid) Race to Zero in High Yield Credit 05-10-13 SurlyTrader via ZH The average annual credit loss in high yield bond portfolios was 2.65% between 1992 and 2011. During that same time period, your average yield for taking that credit risk was 10.25% and your average option adjusted spread was 5.7%. Today, that total yield has dropped to 4.96% High Yield - The New Risk Free Asset Class At 4.96% you are picking up 4.04% above a comparable tenor in US treasuries. With a 2.65% average credit loss, you are expecting a 1.39% risk premium for taking on junk credit risk if we experience historical average credit losses. Do not worry though, because volatility has been removed from all asset classes. |
05-13-13 | RISK | ANALYTICS |
COMPLACENCY - Leverage Being Increased Investors Rediscovering Margin Debt 05-09-13 WSJ
But to others it is a warning sign that the Federal Reserve's easy-money policies are creating a bubble mentality among stock investors. As of the end of March, the most recent data available, investors had $379.5 billion of margin debt at New York Stock Exchange member firms, according to the Big Board. That is just shy of the record $381.4 billion in margin debt set in July 2007. The fear is that as more investors rely on money borrowed against stocks, any significant fall in stock prices will be magnified if investors are forced to sell securities to raise cash and meet margin requirements. "Borrowing is cheap," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab Corp. "The big danger in trading on margin isn't that the market goes down a little, it's that the market goes down a lot," said Mr. Frederick. "It could cause a downturn to accelerate." With margin debt, investors pledge securities—stocks or bonds—to obtain loans from their brokerage firm. The money doesn't have to be used to just buy more investments. The funds can be used in what ever way the account holder wishes. Interest rates can vary significantly for account holders. A valued client may pay less than 1% interest on the loan, while others could pay more than the prime rate, which is now 3.25%. Jamie Cox, managing partner at Harris Financial Group, a financial-services firm in Richmond, Va., that manages money primarily for retirees, said a client this week used margin debt to finance a $70,000 home-improvement project that included renovating a kitchen, bathroom and a couple of bedrooms. In this case, margin debt was viewed as a more attractive option to pay for the project than was selling stocks in the portfolio to raise cash, Mr. Cox said. One reason is that the interest on margin debt is tax-deductible, he said. Mr. Cox, after consulting with his client, could then selectively sell some securities and let dividend payments pay down the margin loan. "He decided it was a great alternative," Mr. Cox said. For some market watchers, rising levels of margin debt are a sign that investors are becoming complacent and making decisions based on the idea that stocks can only go up. "You have to feel really good about the market to be borrowing to buy more shares at these levels," said Bruce McCain, chief investment strategist at Cleveland's Key Private Bank, a subsidiary of KeyCorp . "It's probably a sign of excessively positive sentiment right now." As evidence that the high levels of margin debt are a warning sign, some analysts note that margin debt hit a peak at the onset of the last two bear markets. Margin debt topped out in March 2000, which turned out to be the top of the dot.com-stock bubble. Others are less worried. "This is not a warning that the markets are becoming frothy," said Jim McDonald, chief investment strategist at Northern Trust, whose firm manages more than $700 billion. "It makes sense in this environment to lever up and to take advantage of stronger returns." To some degree, margin debt reflects the movement of the stock market itself, some note. The more that stocks are worth, the more that investors can borrow. "Coincidence doesn't imply cause and effect," said Schwab's Mr. Frederick. "The fact that two things move together doesn't mean that one is causing the other." In addition, some note that when the level of margin debt is compared to the value of the stock market, it isn't as close to a record high as the absolute levels of debt. The total amount of NYSE margin debt as of the end of March was 2.7% of the market capitalization of the Standard & Poor's 500-stock index. At its precrisis peak, investors had borrowed as much as 2.9% of the S&P 500, and at its crisis low, investors were borrowing 2.3% of the S&P 500's market value. Still, many say that higher levels of margin debt could ultimately magnify any stock-market selloffs, even if they are not on the near-term horizon. "It's the irrational move of the leveraging up that helps [drive] the boom," said Cullen Roche, founder of San Diego-based Orcam Financial Group, a research and consulting firm. Because unwinding that debt could lead to forced selling, "when the air comes out of the bubble, the situation gets exacerbated on the way down." |
05-13-13 | RISK | ANALYTICS |
COMMODITY CORNER - HARD ASSETS | |||
THESIS Themes | |||
2013 - STATISM |
|||
2012 - FINANCIAL REPRESSION |
|||
2011 - BEGGAR-THY-NEIGHBOR -- CURRENCY WARS |
|||
G7 - Lying to Each Other
This is how a "Den of Thieves" Go about Lying to each Other! What is not being said by the G6 is they need the re-ignition of the Japanese Carry Trade
|
05-13-13 | THESIS | |
2010 - EXTEN D & PRETEND |
|||
THEMES | |||
CORPORATOCRACY - CRONY CAPITALSIM | |||
GLOBAL FINANCIAL IMBALANCE | |||
SOCIAL UNREST |
|||
CENTRAL PLANNING |
|||
STANDARD OF LIVING |
|||
CORRUPTION & MALFEASANCE | |||
NATURE OF WORK | |||
CATALYSTS - FEAR & GREED | |||
GENERAL INTEREST |
|
||
TO TOP | |||
|
Tipping Points Life Cycle - Explained
Click on image to enlarge
TO TOP
![]() |
YOUR SOURCE FOR THE LATEST THINKING & RESEARCH
|
TO TOP
FAIR USE NOTICE This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.
If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. DISCLOSURE Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments. COPYRIGHT © Copyright 2010-2011 Gordon T Long. The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him
|