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Bob Janjuah Prepares For A Sell Off To Below 850, And A Coordinated $10 Trillion Quantitative Easing Part 2
From RBS' Bob Janjuah:
Plse refer to my most recent cmmts (26th Apr, 25th May & 27th May) for the backfill. Things are playing out pretty neatly so no change in view. However, a few observations/comments:
1 - WE have now had Ben B talk up the recovery and the outlook for rate hikes, following on from a few Fed hawks last week (even President Obama was talking up the eco recovery post the payroll release last week!!). I assume they are all rehearsing in public for some tragi-comedy skit they are abt to perform, maybe at some July 4th party. I can ONLY assume this because I cannot believe that they are being serious in any way when talking up the recovery and the prospect of rate hikes. And price action in markets is making it pretty clear that the market is fully prepared to call the Fed's bluff here.
Policy makers need to realise that YES, you can fool some of the people some of the time. But NO, you can't fool all the people all of the time. It seems pretty clear that the market is beginning to figure out how ridiculous the consensus view is for global growth and earnings, and instead is BEGINNING to price in the kind of multi-yr global growth outcome that Kevin and I have been talking abt - closer to 2.5% pa global, rather than 4.5% global.
Remember, I have used the word 'BEGINNING'.....850 S&P remains my fair value target for this yr - and I would not be at all surprised to see us undershoot even this low level on the way down. And in case you need to ask - the FED ain't raising rates for a very very long time (2012?). The world ALREADY has significant policy tightening on its way - fiscally in the UK and Europe (the most recent developments are moves towards EVEN TIGHTER POLICY), thru the strengthening USD in the US and China/the developing world (which is pegged to the USD), thru specific policy action in China, and globally thru financial sector reform/regulation.
So, Ben, keep up the rah rah if you have to, but I think you need to accept that folks are beginning to see the post-Lehman global recovery for what it was - a 1 yr wonder driven by the most extraordinary policy response ever seen in history at the global economy level. And folks are now beginning to accept that a slow down is on its way, with policy makers pretty much all-in.
All that's now left, as I have said before, is for the Fed to shift to a USD5trn or so new QE programme, likely in co-ordination with a bunch of other central banks, which in total may give us USD10trn or more of new QE. But this isn't happening until much much later this yr or, more likely, next yr.
2 - For the inflationists out there, you must accept that the true private sector trend, which govt's have fought hard against but where defeat for govt now looks clear, is one of debt deflation. BUT, there is an important source of inflation out there. Just look at recent developments in CHINA regarding the push by workers to demand and to get massive wage increases (Honda China, Foxconn). This is all part of the twin problem in China - speculative bubbles and inflation. As per my recent pieces, one way out of the global growth hole now building is for China to reverse policy and go uber easy again. Unfortunately these developments re workers and wages makes it even more unlikely that China rides to our collective rescue. Rather, I expect China to stay tight on policy for the rest of this yr. Not good at all for global growth. And watch import prices in the West - the trend will be ugly. However, CPI inflation in the West is unlikely as Western workers have zero bargaining power, and corporations have huge profit margins that can be cut into to absorb import price increases in order to sustain/grow market share & revenues. Of course the implication for corporate profits/earnings aren't that great, but the equity analyst community will figure that out...eventually.
At the outset I said that there was no chge in view. This applies Strategically where, on a 3/6mths I remain v bearish risk (equities, credit, EM etc) and bullish USTs & the USD. And Tactically, I still think the real fireworks and nastiness will be a July/Aug/Sept phenomena. HOWEVER, shrt term the key zone is, in S&P cash speak, 1040/1020. A clear break below this zone would indicate that a MAJOR sell-off is coming sooner rather than later, down to the mid-800s. It also seems to me that as part of this move, we are building up the pressure for a huge one/two day move where global stocks drop well over 5%, maybe up to 10%. This last 'call' is based on nothing more than my (ample!) gut-feel. But I know I am not alone in this regard. Let's see, but I am preparing for Flash Crash 2...sadly the excuses used to play down Flash Crash 1 have been exposed as bogus, so I wonder what the next set of excuses are - its been a while since we used the old 'rogue trader' excuse so my money is on that horse.
Cheers, Bob
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Serious question : does Mr. Janjuah have a economics degree ? My "ample gut-feel" is not enough of a qualified opinion...
Would you feel better if he had perfect SATs and an ivy league education like Bernanke?
Well, I would certainly feel more confident about him if he knew the difference between "phenomena" and "phenomenon" and didn't use the plural in a sentence that requires the singular. Sloppy writing usually means sloppy thinking.
If you feel this way, you should call your high-school english teacher for financial advice.
policy makers "all in"... and called on a bluff.
This guy is an idiot savant. He will make you money. Your cause and effect is not a statistical fact. He is a stream of conciousness and has little interest in spell and grammar check.
+ !!!!! Good one
Yes, a PhD in fact, from Harvard.
Oh, that makes me feel better.
Where did Mr. bubbles get his education from. Apparently he had a little flaw in his ideas.
I trust a common man with good reasoning skills more then a PhD without them.
bada boom
There are no Jed Clampetts.
Is that what the PhD's tell you?
But there are Grannies. And Granny always gets the last laugh. Hillbillies rule.
Your reasoning in your comment is the reason why the world is preparing to eat a shit sandwhich.
Perfectly said. Some people just don't get it.
Can I have a shit taco instead? The hot sauce helps the gag reflex.
The man is being HONEST. Unlike the whores in the financial media (CNBS, Bloomberg, et.al.) he did not just make an unqualified statement. The whores always make statements as if they are FACT and always go unchallenged.
You are confused by HONESTY?
How can you determine that he is being honest?
Let me look at his personal assets, then I might be able to judge his honesty.
When there's a phase-change the people who do best are those not wedded to the old state of things. We're going from liquid to gelatinous pretty rapidly. Bob gets that in a way BB does not. A degree is no substitute for judgement and open eyes.
Absolutely.
Instinct beats analysis every time, especially over a time-line that really matters.
If it were "ample-gut feel" would you feel better? - Ned
Seriously? if you want a qualified economics opinion have a listen to the idiot Jeffrey Sachs - plenty of economics degrees and not much idea about wtf is going on in the real world. BTW I'm not sure that having an economics degree would help anybody in foreguessing the likely low point in the SPX.
PHD=pervasive hyper delusion
PHD = Piled High and Deep
i have a PhD
my:
P a
h a s
D o u g h
Bearish sell side analysts have very short life span - hope hes got a job locked up at a big hedge fund, degree or not....
No, he's just a dummy with a good track record. A guy who the genuine smart guys pay attention to. So you can discount him and his poor proof reading abilities as well.
http://www.theatlantic.com/politics/archive/2010/06/the-biden-beach-party/57765/?pid=ynews
Rahm trying to score some goodwill with journalists.
http://www.guardian.co.uk/world/2010/jun/04/gaza-flotilla-activists-autopsy-results
Since we're off topic, the 4 Turks and the American that were killed by the Israeli commandos were shot in the back of the head.
with a paintball gun????
(sarcasm off)
Payback's a bitch...
From the Hamasistan truth squad.
So, the united states citizens will just be willing accept another 10 trillion on there backs for the few to profit (again). He states it like its just a matter of fact, not if, but when.
Good luck with that one.
95% of american public have no idea what QE is let alone its effects on their lives.
True, but from what I understand there was a low number of patriots at first that lead to the break away from Britain. The 9/12 march last year was quite impressive.
Thunder Dome
"95% of american public have no idea what QE is let alone its effects on their lives. "
Don't limit it, 95% of the worlds population have no idea how anything effects their lives. The individual sphere of understanding tends to be limited to the immediate and observable.
They think it's some sort of weight loss program. QE. Like a new slogan Marie Osmond might use.
That's actually a pretty good branding campaign. hmm.
And just to confirm what Bob is saying here; I offer you this:
And with than in mind; there is this:
One of the traders working on the SP desk said "They need to get these loans of their balance sheet NOW!"; meaning that balance sheet tightening and further tightening of consumer credit will continue unabated; meaning further rise in REAL unemployment figures, declining properties values and all sorts of default in commercial real estate arena [i suspect bonds will be affected heavily [today's widening of the CDS spread in some Euro retailers suggests that may have already started] will ultimately affect munis power to service debt and affect the CE facilities [mostly private insurers]].
Suggested trade would be shorting everything related to retailers [just dont do it if you trade on margin; dont gamble] and buying some CDS on CMBX [while the spread is still relatively cheap]. Probably going short some HY debt issued by those same retailers.
This also, probably, mean that the dollar will continue appriciating against other major currencies but will lag behind the rise in gold.
Godspeed and good luck gentlemen.
As I have said many times over the past 6-8 months, another huge QE will be attempted once the markets crash back to the 8000 level, maybe sooner, and at that point we will see what kind of people we have living here in the U.S. to whether that sit back and let it happen again or they fight back to stop it.
How the country responds to this, will tell me whether I continue to live in this country or get out sooner than I planned. This government must stop catering to Wall St and start doing something about Main St. Otherwise the crumbling will come faster and faster.
As long as the Cable TV box is on and the fast food is accessable the people will stay on the couch...though they may text their anger to someone.
"text their anger" That was beautiful, realy was.
"As long as the Cable TV box is on and the fast food is accessable the people will stay on the couch"
Yes, they will remain on the couch.
"though they may text their anger to someone."
They have no clue what is going on so what would they text anger about? As long as WalMart, fast food and crappy tv are available they will remain on the couch. If any of those disappear they will become angry and point fingers ... at anyone except themselves.
Anger sucessfully re-routed onto BP. Rightfully so - but a great outlet nonetheless.
I think Bob's best line was this one:
"CPI inflation in the West is unlikely as Western workers have zero bargaining power, and corporations have huge profit margins that can be cut into to absorb import price increases"
We, as a herd of sheep, have effectively policed ourselves into this position of outright slavery. The big corporations (have for some time now) hold all the cards, welcome to slavery.
Too many people depend on them for their paycheck, meager as it may be to meet the debts most have accrued. This is a horrible, horrible situation.
Boycott is a start for those who want to make a difference....
The US government of the last 40 years is history. A government that lies is a former government.
All the fags of finance on fraud street and the pussies in pinstripes in it's crooked banks will get what's coming to them.
Google "fall of Rome" for a taste of a revolt near you.
Glad Im not a thief masked as a corporation protected by a failed state.
Just because Idol is on TV doesn't mean the rest of us are dead. It seems that many online underestimate the common man.
CD is going off all about American Idol on his tract.
OK, yes, American Idol is popular. I have never actually watched a full episode. I saw five minutes once.
But, and this shows the male-centric nature of zh, have you guys not also thought about Sex in the City? Women love that show. I have never seen it, nor would I, but it's culture IS the culture.
And why? Well, you decry the pussies on Wall Street. But they are, in a way, a kind of Gatsby-ish ideal. Fops.
And Sex in the City is a modern day thesis of what women must be to please men. Bed hopping whores absorbed with consumerism.
Yes, it's a pornsumer society.
I smirk at the holier than thous here who smugly talk of everyman. Yet howl and drool at the next naked piece of flesh paraded as avatars and other assorted eye candy.
And the first thing that flashed into my gulliver was that I'd like to have her right down there on the floor with the old in-out, real savage.
it is a sad truth that television can be safely mocked as mind-candy for the conned-sumer, yet porn is still considered sacred territory - both obviously shape the point-of-view, pavlovian mind-salivating. . .
nice touch with the burgess quote too ^^
"fags of finance on fraud street and the pussies in pinstripes"
I like your alliteration.
He or she is just being a nattering nabob of
negativism.
Wyo -
Underestimation and subversion are our greatest assets - if I/you/we can play our hand correctly, we can (all) become the change we seek. It is not IF things will change, but as always WHEN, and most importantly for the future - HOW SO.
I would submit that honesty, integrity, and looking out for fellow man/woman are our greatest assets. One doesn't have to worry about the hand when those are the cards.
jk,
TRUST, once broken, is never regained.
Americans may not as a majority know what QE is, but they definitely know when their getting screwed, and they know what HUGE fiscal spending does...........to them, and their futures.
Hmmmm....... So from what I read and makes perfect sense we will see 2 things in the US and then outwards before the fall (of this year I mean):
1. More big name corp. bankruptcies, and some pretty incredible M&A as companies scramble to optimize. That unfortunately means more layoffs, less hiring (human capital is considered most expendable). But that is a vicious cycle, since it shrinks the conned-sumer base. Tough catch-22.
2. Currency controls, at least China style (good for big money, bad for medium and small money) coming to the west for the first time in a long time. They will be well disguised as the banks try to containerize all that sloshing QE money to make it more "managable".
@ mr. trader
If you want qualified opinions you are hereby referred to the dynamic duo Banana Ben and Goldman Geithner.
LMAO
Breaking News
JPM hit with $250 million losses on bad coal trades
http://www.reuters.com/article/idAFSGE6570CE20100608?rpc=44
Just wait until Silver explodes on their ass, the losses will be in the trillions instantly.
Read the above comment.
They will make 700 millions + on selling the worthless CMBS to their "customers" [who will probably be ass fucked once the majority of the constituents defaults, while JPM will probably make 10 billion+ by taking out multiple CDS on those same debts. Hell I would do it.]
Well, at this stage I'd say if you're still prepared to deal with JPM/GS/MS/..., then you allow yourself to be fxcked up the arse.
Anyone trusting these frauds with their pension funds are asking for it.
Meh. I was just kidding. I think they will make a deal with one of the major pension funds while the FED will guarantee the deal; or the FED will just buy it from whoever is the primary counterparty at a premium. But, it is odd that the securities are priced with a yield of 115 bips which is 21.7% higher than the yield RBS offered when it marketed a similar portfolio in April.
Also; there is this:
I dont want to post more charts, but you get the idea.
And the vertical upswings in some indexes are just hilarious [meaning churning of the collateral was probably done; think HFT but with CMBS securities].
CB,
Do you have these charts back to 07/08? or know where I can pull them up? TIA
CB,
Do you have these charts back to 07/08? or know where I can pull them up? TIA
ehh, sorry system got stucked LOL
JPM will get a nice slice of QE2 if need be. Little guy will sit on sideline watching his real wealth continue to deteriorate.
I see a global recovery, led by the US. Think positive:
The US and what money? and which broke consumer? and which broke state, municipal or federal government? Post something intelligent please
Broke consumer? WTF are you talking about? Retail sales are running at a 5% annualized rate so far. Wage bill keeps rising. Only thing broke is the "broken record of the sky is falling". Bullocks!
Leo,
Income tax receipts are plummeting, both federally and in the states. Therefore, the wage bill is not rising.
What is wage bill? Link?
As for retail sales, food and fuel costs are up over last year, so yes, people are paying more for those items. And maybe cashing in their 401k to buy an ipad, made in china. That's the stuff miracles are made of.
Wage bill:
http://lexicon.ft.com/term.asp?t=wage-bill
So if the CEO gets a raise that more than offsets the incomes of the workers he fires, wage bill rises. Is that a sign of a healthy economy?
Leo,
I can't speak for other "consumers," although I suspect many are in similar situations: I have 17k in student loans and 22k in cc debt (stupid, I know). Hence, I feel broke and and excess disposable income goes to acquiring PM or paying down debts. Fortunately, I don't have a mortgage. :)
Personally, I do not see how I am contributing to an increase in retail sales--I'm avoiding all but the absolutely necessary retail purchases (i.e., food, gas).
Finally, I'm more worried now than I was in the fall of 2008.
"Retail sales are running at 5%" - ammo and garden seed
Jesus Leo; its one thing to be bullish and another thing to be a full blown retard. How much more data sets do you need, how much more charts, projections and all that stuff does it take for you to realize that shit ain't gonna get better.
Fucking Christ; its one thing to have hope, but its another thing to nourish an illusion when everything points to the opposite of what you believe.
Sometimes, man; I dont get you. At all.
If nothing else; please check the CC availability. Nothing else; just that.
CB,
Don't mind me, while you all await Armageddon, I'm anxiously awaiting World Cup 2010. The markets are full of shit now, controlled by a handful of investment houses and their large hedge fund clients. HFT is killing the stock market, and everything is correlated to the fucking stock market. Exchanges love the fees they generate, but the truth is far from providing more liquidity, they're providing less liquidity (which is why the VIX grinds higher). I'm not a permabull, but I think this is just another dip that will be bought hard. Some elite hedge funds stand to make a killing again (most will die). Watch, you'll see.
Still got a 'sell' on gold leo? And a buy on those chinese solars?
Stick to soccer.
internet tough guy,
Care to wager gold vs. Chinese solars over the next year, five years and ten years?
Absolutely, based on the last five, ten and 5000 years.
A show of hands of those small traders that think they can trade against this 'system' and win consistently...
http://rajivsethi.blogspot.com/2010/06/new-market-makers.html
I cannot.
how to succeed investing
http://www.youtube.com/watch?v=5TQhl58GAxI
So, NASDAQ is helping the HFTs to ream all other market participants.
Yeah, World Cup baby. I really do nto give a shit if WWIII breaks out during the WC. The downside was that I had to go out [well not me personally] and buy a goddamn TV so I could watch the games. I almost vomited when I turned it on and saw the garbage that was airing at the moment.
OT: Leo, Im not talking about equities here; but mostly about debt, housing and CRE. Also the the shrinking amount of available credit will have a major affect on a broader economy. As for the hedgies; just a bunch of fucking morons [whose jobs could be done by monkeys on LSD]; and I really do not follow what other people say or do; nor do I act based on their actions. Those hedgies will burn like a bitch; and I will laugh and laugh secluded in my little enclave of peace and [in]sanity and I will not give a shit about the fires that will be engulfing the world.
"but I think this is just another dip that will be bought hard"
Once a bulltard, always a bulltard
You just spelled it out yourself:
"The markets are full of shit now, controlled by a handful of investment houses and their large hedge fund clients."
The market does not for a recovery make.
I think Leo has this idea that it was Robotraders female pics that made him popular, not his astute analysis.
That about sums it up for me.
By the way Cheeky, feel free to mail me from my web-site about what ails thee.
We have some magic here in India that western medicine just cannot match.
When Wash DC is set ablaze, Leo will say its great for the lumber industry bottom line.
Leo Kolivakis
If AE is correct in their assessment then the US is already behind in the game.
http://theautomaticearth.blogspot.com/2010/06/june-6-2010-go-long-euro-at-this-point.html
Ilargi: The cat is out of the bag (or Schrödinger’s box, if you prefer, to add some spice). And if not the whole cat, surely its tail is. Maybe French Prime Minister François Fillon spoke out of line, or maybe it was orchestrated, we’ll probably never know for sure, but the good soul brought the Euro down on Friday while at the same time confirming what The Automatic Earth readers have been able to read from me for a long time now.
Which is: Europe has been building a concerted effort to bring down the value of the Euro since at the very least the beginning of 2010. And the effort has been remarkably successful. While Americans often tout the power of the Federal Reserve, or the US Treasury Secretary, the comparative value of the US dollar has risen hugely in the past half year, which turns President Obama's goal of doubling US exports in the next five years into a red-nosed type comic relief exercise.
Mr. Fillon's "admission" leads some pundits to suggest that France and Germany are on different sides of an imaginary divide, but they haven't been paying attention. Germany’s economy is doing -relative to others- quite well, thank you very much, and many thanks to the falling Euro, and Angela Merkel has no reason to internally contradict Fillon's intentions, even though she may not have liked these to be out in the open. At this point it’s hard to guess when certain parties would like specific details known, even if Merkel looks like a musical director no orchestra member would or should like to clash with.
Mr. Fillon goes as far as saying that the European Central Bank (re: Berlin, Paris, Amsterdam) wants the Euro to achieve or sink below parity with the US dollar. Personally, I doubt that. It may be just a statement designed to speed up the fall of the currency. I’m thinking Merkel et al are aiming for $1.10-1.15 for the Euro. But they may have decided to go for the jugular, it's possible. A strong currency is great in times of strong economies, whereas a weak one fits weak times. It all depends on how Berlin and Paris view the future, which is something they'll never ever let the public in on. Politics, after all, is about looking ahead in silence.
Not that these people have some sort of absolute control, mind you. What's happening is that they have no choice. A very similar thing as applies to currencies in weak vs strong economic times also holds true for the relative value of exports to national economies. And I’ve talked about this before: very few people seem to understand that in bad economic times, where a lot of debt is involved, the relative values of exports rises exponentially.
What you can’t sell, you have to borrow, to put it into an albeit simplified way. We now see even Nouriel Roubini, who's been hiding in a dark humid doom corner over the past year, come out and say that a weaker Euro might save the Eurozone. Which, to wit, is what I’ve been saying all along: in order for Germany to save the union, and to bail out Greece and others, it will have to sell products, it’s really as simple as that, no big major mysteries there.
US Treasury Secretary Timothy Geithner calls for the opposite of all this: more domestic demand in the main Euro countries. Still, is he really that witless, or have the banks he works for in real life made trillion dollar bets on the very outcome we’re seeing develop before our eyes today, the US dollar doing precisely what no US manufacturer wants? That one I can’t answer. Geithner may not be the brightest light of day, but to presume he’s that thick is quite a different matter altogether. Still, yes, that would mean that he is actively trying to strangle US industrial capacity. Not a trivial trifle matter either.
A Euro at $1.40 or even $1.50 as always a threat to many parties, if only because many US products are assembled in 2 cents an hour economies. Parity? Perhaps, if Merkel et al are clear enough on the depth of the -inevitable- coming downfall (we don’t know what and how much they know). There would be a huge psychological advantage to a $1.10 exchange rate, but if Merkel knows what I do, and acts on it despite potential election losses (which I have no worries about), the decision may already have been made to aim for below parity, and the US interests have no choice but to rake in the profits from the resulting short trade.
And as we saw on Friday, Europe has a seemingly endless series of aces up its sleeves to achieve what it desires. Out of the blue, Hungary, which is not even a member of the Eurozone, became a major news item because of its awful economic prospects. That's where you get to think: look, the entire world, all of it bar none, has awful economic prospects. Why Hungary? And then the Euro went to below $1.20 for the first time in over 4 years. And you go: Ahhhh, Hungary, right!!, and next week Bulgaria, Romania, Latvia. By now I’m sure you get the idea.
And Washington will come back with: but we have New Jersey, and California, and Illinois, and they’re worse off than Eastern Europe by a mile, and we want exports too. Yeah, but the US has so far kept up the apperance that its central and centralized government will make good on all debt all over the 50-odd states. And as long as it keeps up that charade, Merkel wins. Whereas once that charade can no longer be maintained, there’ll be as many valid concerns about the survival of the USA as there now are about the European Union.
We're entering the reality phase of the economic downturn. The first party to recognize that has a head start. At the same time, as I indicated earlier, the major banks that own US and -most of- Europe politics and politicians may well have realized that a long time ago, and divvied up the loot well in advance. Still, go long the Euro at this point in time? Not me.
And then again, who's thinking about money when you see an entire and fast expanding (Louisiana, Alabama, Misissippi, Florida, Georgia, Carolina's and more) local ecosystem and economy go up into less than nothingness? What are our prorities, exactly?
Then you have this
http://www.businessinsider.com/china-labor-cost-inflation-2010-6
Why China's Labor Cost Advantage Is About To Disappear
The Nomura chart below, via Caixin, shows the troubling bind Chinese manufacturers are in. Compulsory increases to minimum wages, such as a 20% hike in Beijing starting July 1st, will only make the picture below even uglier.
Wages growth has been accelerating... while labor productivity gains have been falling:
Love them flash crashes. Got a GTC order in for 1,000,000 shares of Accenture at .01 and 2,000,000 shares BRK.A @ 1.00.
Gonna have more coin than a rapper before Armageddon, and live out my days on St. Lucia, Sailing the FWI, and hang with Mick and Keith.
Bring on Flash Crash, v2.
But your orders will be unwound!
Honestly.....
They will cancel your trades if you win.
Yes, just like card counters in Vegas.
"Gonna have more coin than a rapper before Armageddon, and live out my days on St. Lucia, Sailing the FWI, and hang with Mick and Keith."
LOL
BRK.A @ 1.00
I call you an optimist.:>)
Right up to the point they cancel your trade. Only somebodies get to keep their gains. Nobodies form at the back of the line. You need to make your money the old fashioned way, steal it from your customers. :>)
Short it on the way down also and buy St Lucia ha.
FWIW when the CME/Globex futures market opened on Sunday (at 17:00 CDT, 23:00 BST) there initially was huge buying of 900-strike ESM0 June puts. Literally thousands of contracts were bought, which caused the premium to more than double in an hour, from $1.80 to $4.10.
We're talking about 900 ESM0 puts that expire in ten days, being bought aggressively and in size!!! Something big is brewing. I wonder if there's a possibility of a repeat of the post-Lehman week, when the SPX fell from 1150 to 850 in about four days.....Thanks for the heads-up
"And watch import prices in the West - the trend will be ugly. However, CPI inflation in the West is unlikely as Western workers have zero bargaining power, and corporations have huge profit margins that can be cut into to absorb import price increases in order to sustain/grow market share & revenues. Of course the implication for corporate profits/earnings aren't that great, but the equity analyst community will figure that out...eventually."
This guy gets it.
The "gut-feel" comment is partially a joke as far as I can tell, directed at himself indicating he should lose a little weight. That said his gut-feel has been pretty good judging by his track record.
Gotta love it...Anthony Fry on CNBC...buy 'hard assets like guns and barbed wire'.
http://www.businessinsider.com/anthony-fry-buy-barbed-wire-and-guns-2010-6
Needed to post this first. Thanks in advance.
I thought the US is broke and that the deficit is a big issue that must be resolved.. I guess not. Bring it on Ben. I have faith in you. I cant wait for my taxes to go up. Thank you Ben for all you have done.
Nope - Because the US will default anyway the rational course is to rack up as much unpayable debt as possible and use it to buy hard assets that cannot easily be confiscated - of course the majority of the debt was used to fill up landfills with Chinese crap, but, dammit, it kept those ressources out of the hands of the wogs, where they would be wasted and create unwanted competition.
This man has it together.....
This is the most sensible prospective view that I have heard so far....
40/70
(40-10)/70
Based on 70/70....what does this suggest otherwise....
Printing lots of money does nothing to solve the problems of true production...
And if anything is to be added....is the fact that there is no incentive to save in this "saver's bailout".....and as taxes are increased...this will prove to be deflationary in the sense that economic activity will diminish...
So $5 Trillion QE will do what different than the $1 Trillion Euro rescue did? I think this 'further QE' is the most ridiculous thing to date...can you tell me WHO (besides Leo) would buy into that as good news? The Q/E has FAILED and more of it wont paint a rosier picture.
Who would buy into that? JPM, CITI, GSX, BOA, AIG... anyone with direct access to the teats.
+10,000
in other words the same ones who started buying in March 2009
Yo; Tyler.
Months? No. Years. Cheers !
Is Leo really Dennis Kneale? If not then you are right up there with Kneale for the Planet's Biggest D-Bag award yo.
Do try what seems a novel concept for you. This is the ability to disagree without being disagreeable. When you stand and write your own contributors copy for a challenging audience let us know.. Snuffing out a source of 411 just because it rubs you wrong needlessly narrows the pipeline of available 411.
Good point that should be absorbed by several regular commenters, who add nothing to the discussion but only visit to cast insults and demonstrate their command of grade-school vulgarity. It's safer to do here than at the neighborhood tavern (which could however provide a lesson in manners).
Bob - Dontcha know that the next flash crash will be blamed on the evil speculators in the S&P pits.. heh
Here's the problem, without getting too nerdy, there are really two classes of assets, MBS bonds made on loans against assets which are longer worth their original value, which the fed holds on its balance sheets. the second class of assets is this pension fund money you speak of, which is in general a stock equity, or paper asset, which can be hedged somewhat, through shorting the market. There is nothing the Fed can do to make MBS whole again, and that is their baby, but the stock equity bubble can be hedged by aggressively taking the oopposite position, and those are real assets anyway, cash contributions. At what point does the Hedge Fund community break with the Fed, put on the trade, and break the back of the Fed, by revaluing all assets?
Hell even widows and orphans can go double short the market with a phone call. Isn't the Fed in a precarious position here? Secondly the political manna to get QEII may be lacking. Obama, like Bush, is finding his mandate is thin, and the Dems in Congress were more united with Bush than they are with Obama.
I see government at odds with itself, and a Tea Party in the boardroom of Goldman, JPM. Lets take the market down, buy the bottom, break the back of the Washington players, and then we'll call the shots.
http://twentypercent.tv/2010/06/08/max-keiser-markets-finance-scandal/
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