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
|
Tue.September 3rd , 2013
|
THE SECRET US GEO-ECONOMIC STRATEGY
Part I: The Petro$$ Imperative Part II: The Social Engineering of US Complacency w/F. WILLIAM ENDAHL, Author and Freelance Researcher and JOHN RUBINO 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 |
||||||||||||||||||||||||
We post throughout the day as we do our Investment Research for: LONGWave - UnderTheLens - Macro Analytics |
|||||||||||||||||||||||||
WELCOME TO SEPTEMBER A list of Critical Economic and Geo-Political Events in Front of Us |
|||||||||||||||||||||||||
SEPTEMBER 2013 - A Mother Month "Explosive" September Straight Ahead 09-02-13 Zero Hedge If you thought August had more than enough events to crush the best laid vacation plans of Wall Streeters and men, you ain't seen nothing yet. Presenting "explosive" September. Here is a compendium recap, courtesy of Bloomberg, of the key events that may shake global markets in the next 30 days: Global event risks this month including
Natixis
Goldman Sachs
Credit Suisse
Societe Generale
Barclays
UBS
A summary calendar via RanSquawk: And as a reminder, from Bespoke... |
09-03-13 | MATA STUDY | 1 - Risk Reversal | ||||||||||||||||||||||
CANARIES - Mauldin a Cassandra How Do I Hate Thee? Let Me Count the Ways… The market is down about 3½% since early August, with trading rooms short-staffed the last few weeks. Will the senior traders come back from vacation rested and looking for value? Or will they survey the gains they have banked so far this year and decide to lock them in to assure their year-end bonuses? Finding value these days is tough. It won’t be hard for them to find reasons to head for the sidelines.
I was writing at the time that there was a recession coming, so I was saying pretty much the opposite. Perhaps the more appropriate lesson is to not fight the Fed unless there is a recession coming. Here is a graph from a webinar (see below) that I will be doing in a few days. The last two times the Fed has ended a period of quantitative easing, the air has come out of the market balloon. Has this coming move been so telegraphed that the reaction will be different than in the past, or will we see the same result? Want to bet your bonus on it? Or your retirement?
This has the makings of a grave policy error: a repeat of the dramatic events in the autumn of 1998 at best; a full-blown debacle and a slide into a second leg of the Long Slump at worst. Emerging markets are now big enough to drag down the global economy. As Indonesia, India, Ukraine, Brazil, Turkey, Venezuela, South Africa, Russia, Thailand and Kazakhstan try to shore up their currencies, the effect is ricocheting back into the advanced world in higher borrowing costs. Even China felt compelled to sell $20bn of US Treasuries in July. Back in 1998 the developed world was twice as big as the developing world. Today that ratio is about even. We all know what a crisis for the markets 1998 was. And now, more than a few emerging markets have clear debt problems denominated in currencies other than their own. Evans-Pritchard goes on to say:
The price of oil in Indian rupees has gone from 1100 to 7800 in the space of 10 years. Think about what a move like that would do to the US economy. (Chart courtesy of Dennis Gartman) The next chart shows the recent price spike in the Chinese SHIBOR (their short-term interbank rate, more or less equivalent to LIBOR). It is difficult to trust any of the economic data (positive or negative) coming out of China, so we really do not know whether China’s growth story is simply moderating or whether we are seeing a hard landing in progress; but the sudden shock in interbank lending rates is an important sign that all is not well in the Middle Kingdom. The big question: is the recent SHIBOR spike a harbinger of a banking crisis, or does it presage an RMB devaluation? Interbank rates do not spike from 3% to 13% (in about 2.5 weeks) in a healthy economy, and a big event along these lines in China would have enormous implications for global growth. And while we are on the subject of emerging markets, I have to give you the lead paragraph of the latest note from my good friend and uber-bear Albert Edwards of Societe Generale. It is just too delicious.
The table below shows the revision of second-quarter GDP released Thursday. We should all be happy that growth was revised upward by 85 basis points — 2.5% annualized growth is about as good as we could expect. In fact, this result would argue that tapering should begin sooner rather than later and should proceed faster than most market observers expect. If the economy has recovered that much, it is time to take the foot off the gas pedal. The problem I want to point out is highlighted in bold, and that is the implicit inflation deflator used by the Fed. Notice that it did not move at all with the revision, even though the economy was seen to grow almost 50% faster. That’s a tad unusual though certainly within the realm of possibility. But if after the massive quantitative easing we have seen, all you can get is 0.7% inflation, that simply illustrates one of my main contentions: we are in an overall deflationary environment. What happens if you then suck the juice from the markets? Will we see a further fall in inflation?
Just for fun, the next table gives us the numbers on CPI inflation for the last eight years. Notice that the number moves around a lot.
The Fed prefers to use Personal Consumer Expenditures (PCE) as its measure of inflation. For the last 12 months, inflation has been only 1.2% as measured by PCE. Even if you use core CPI, inflation is still rather tame. Couple tame inflation with the velocity of money’s continuing to fall and you get a deflationary environment. What will happen when the Fed removes QE?
The Silver Lining Yesterday after the markets closed I was invited to a local watering hole here in Dallas to meet with some younger but generally successful hedge fund managers (although younger for me is becoming a relative term). They were all interested in the macro environment, and they were all nervous. What interested me most, though, was not what they wanted to sell; it was what they wanted to buy. They were starting to find value in Saudi Arabia and Turkey and India and Indonesia — stocks of serious companies in those countries had fallen to very low levels. Some were getting on planes to go check things out. And here and there some of the longer-term investors were teasing out opportunities in the US market. For these young Turks, market corrections were not a problem but simply an opportunity to find value. And I picked up one other key thought from them. You would think, given their view of the world (which I generally share), that they were short a great deal of their book. That is not the case. Today’s environment is a very, very difficult short, because the carry costs are so high. (Definition: Costs incurred as a result of an investment position. These costs can include financial costs, such as the interest costs on bonds, interest expenses on margin accounts, interest on loans used to purchase a security, and economic costs, such as the opportunity costs associated with taking the initial position.) The Fed has distorted the interest-rate environments both in the US and internationally, and it is simply too costly to put on a short position for very long and be wrong. If you short something, you need to be right fairly quickly, or you will watch your portfolio begin to bleed. For young managers, their track record is critical, so they become quite sensitive to making longer-term macro calls that can go against them for a period of time. They have even more ways to hate the market than I do. Investing in a Market to Hate In my August 3rd newsletter (“Can It Get Any Better Than This?“) I shared research supporting our forward-looking prospects for the markets. There was no way to sugar-coat our conclusions: if history is any indication, we are looking at the potential for a significant peak-to-trough drawdown and negative annual returns in equity markets for an extended period of time. We pointed out that where there is danger, there is also opportunity. Investors have a lot to gain from diversifying as broadly as possible and reducing their |
09-03-13 | CANARIIES
GMTP MACRO CHARTS GROWTH
EM CHART INDIA CHINA CHART SHIBOR
MATA VAL PE
US MONETARY CHARTS DEFLATOR VELOCITY OF MONEY
|
1 - Risk Reversal | MOST CRITICAL TIPPING POINT ARTICLES THIS WEEK - September 1st - September 7th | |||||||||||||||||||||
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 |
|||||||||||||||||||||||||
GLOBAL MACRO REPORTS & ANALYSIS |
|||||||||||||||||||||||||
US ECONOMIC REPORTS & ANALYSIS |
|||||||||||||||||||||||||
CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES | |||||||||||||||||||||||||
Market Analytics | |||||||||||||||||||||||||
TECHNICALS & MARKET ANALYTICS |
|
||||||||||||||||||||||||
COMMODITY CORNER - HARD ASSETS | PORTFOLIO | ||||||||||||||||||||||||
PRIVATE EQUITY - REAL ASSETS | PORTFOLIO | ||||||||||||||||||||||||
AGRI-COMPLEX | PORTFOLIO | ||||||||||||||||||||||||
SECURITY-SURVEILANCE COMPLEX | PORTFOLIO | ||||||||||||||||||||||||
THESIS Themes | |||||||||||||||||||||||||
2013 - STATISM |
|||||||||||||||||||||||||
2012 - FINANCIAL REPRESSION |
|||||||||||||||||||||||||
2011 - BEGGAR-THY-NEIGHBOR -- CURRENCY WARS |
|||||||||||||||||||||||||
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
|