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Dennis Gartman Says the Euro Has Had It
Legendary futures trader, Dennis Gartman, says the euro has had it, and has a long way to go before it finds a bottom. He is urging investors to short the European currency and go long Canadian and Australian dollars against it. They may resolve Greece, but not Portugal, Spain, or Italy.
The strong dollar is also causing a lot of damage to the commodities charts and their derivative equities, with those for Freeport McMoRan (FCX) and US Steel (X) broken. The government January crop report that forecasts the corn harvest will leap from 12.8 to 13.1 billion bushels is a total game changer, as genetically modified seeds are delivering incredibly tough, weather resistant strains and surprisingly large yields. Gartman is now repositioning his portfolio to go long industries that benefit from falling food and commodities prices, and go short producing industries.
Gold is also taking a hit, so he prefers to go long against weaker sterling and the euro. He hates to buy gold, as he is not a foaming at the mouth gold bug, but for now the fundamentals are with the barbaric relic. Fiat currencies are not going to bring on the demise of Western civilization.
Watch the euro/yen cross for short term market direction, as it is a great barometer of global risk taking. Seeing where the big hedge funds spent their borrowed yen is a great “tell” for financial markets.
Although he believes the economy is out of recession, it is not returning to the heady 3%, 4%, and 5% the economy sees in its rear view mirror. Instead, it is heading for the “square root” scenario I have been arguing for, which he refers to as “a tea cup with a handle.” With bankers reverting to their traditional 9:00-3:00 work day, the credit won’t be available to do any better. Why should they bother lending to customers of dubious credit quality when the steepness of the yield curve offers such a great free lunch?
Although there is much to worry about with Treasury bonds, it could be a long wait before we see a big move, and the early players could get bled dry by the cost of carry. Look no further than the JGB market, which some hedge funds started shorting 15 years ago, to their constant chagrin.
US stocks are going nowhere, and could end up the year unchanged from where we are now, after suffering a big dip in the interim. China (FXI) is another story, which is leaping from the 14th century to the 22nd. Dennis also likes stocks in Brazil (EWZ), Australia (EWA), Canada (EWC), and Indonesia (IDX).
Gartman has been in the market since they traded rocks for pre-Cambrian settlement. He has published his daily “Gartman Letter” since 1987, which is a must read for hedge fund managers, major corporations, banks, prop desks, and hedge funds.
Dennis started his career as an economist for “Cotton, Inc,” where he analyzed cotton supply and demand for the US textile industry. He went on to trade foreign exchange for NCNB National Bank in Charlotte, North Carolina, and to trade bond futures as an independent member of the Chicago Board of Trade. He then managed the futures brokerage operation of Sovran Bank. Dennis recently served as an outside director of the Kansas City Board of Trade, and taught classes on derivatives at the Federal Reserve school for bank derivatives.
Although a libertarian at heart, sometimes the center doesn’t hold and things become unstuck. If the government didn’t force feed liquidity into the system in 2008, things would have gotten very ugly. Dennis thinks the recent bout of Bernanke bashing was “disgraceful,” for a man who did a spectacular job under duress.
Dennis is going to share his thoughts with us on stocks, bonds, currencies, commodities, and the economy. If you are a qualified investor and want to shower his hedge fund with your millions, you can contact him at www.thegartmanletter.com. To hear my entire interview with Dennis, where we discuss the future of everything under the sun, please click here at http://www.madhedgefundtrader.biz/Dennis_Gartman.html .
For more iconoclastic and out of consensus analysis, you can always visit me at www.madhedgefundtrader.com , where the conventional wisdom is mercilessly flailed and tortured daily.
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I have just read one publication there Phoenix Marie was talking about the euro. I really support her opinion that it was a bad decision to create it because now some countries have many problems with it. Anyway I hope that everything in the future will became stable, the euro too. Thanks a lot for this kind post.
I've read Gartman on and off for a long time. Kind of like reading a daily dose of the Economist.....and who trades off them? You'd be short crude from $10 still.(I'll never forget that cover)
Anyway some friends know Dennis from his days in the Ginnea Mae pit....he was a bad trader back then....how much he makes from his newsletter vs. his own trading I don't know. I do remember he was in Suncor/SU early. As far as being a shill for TPTB....he wouldn't sell his gold, even when it looked pretty ugly at times...but if he thinks Shalom is a good guy, he MUST be complicit!
The euro/CAD and AUS/euro trades was the way to make pure profits in the last month or so, but be careful going forward. Australia's housing bubble is imploding and Canada isn't far behind. In fact, I told one Canadian billionaire that if the CAD overshoots parity, I'd be shorting it like crazy. As for the risk of "contagion" in Europe, I am starting to believe that these fears are way overblown. Europeans aren't as dumb as some of you think they are.
Yes !
GOLD IS MONEY.
Gold is money.
The only currency not subject to printing press.
The mother of all currencies.
The corner stone to our all financial system.
Its the CORE of all central bank assets.
Gold related assets are the only reliable way to survive the coming break down.
The EU and USA economies will either raise taxes or reduce spending over time. Both result in lower consumption which will leads to lower commodity prices and problems in the BRIC/ Asian markets Gartman recommends. There is no place to hide from the relentless deflationary pressures resulting credit oontraction.
Gartman has always been one of the best contrarian indicators for gold bugs.
This posting made me only more bullish for bullion.
To 0hedge admin:
There is an obvious tendency where mainstream media mascerading as "contributors" trying to infiltrade zerohedge and dilute the high quality with their own glibberish.
Get rid of these people !
They are scum.
Madhedgefundtrader is scum.
Gratman is a currupt individual who plays his role as change agent under the Fed. Otherwise he would not have gotten his secured income basis as "gold" guy on mainstream media. He is incompetent, and an idiot.
His job is, to mislead the american public and keep them away from the one singe chance to protect their assets from the US government.
Shame on Gartman, Shame on the poster !
You are all americans, how can you do that to your own kind ?
".....where the conventional wisdom is mercilessly flailed and tortured daily"
Give us readers of 0hedge MERCY, and then simply FUCK OFF.
Dump your garbage elsewhere.
You have disualified yourself to the ground.
Bye madhedgefundtrader. Go have a beer with Jim Cramer.
And I say:
I had it with madhedgefundtrader.
Stick Gartman in where the sun dont shine.....
All I got: short "madhedgefundtrader"
Gartman ? You must be kidding.
Go GATA !
Gartman on zero hedge ?
Have we asked for this ?
Please, post no more crap of this kind.
We have BRAIN here, you go away "madhedge.....whatever".
CNBC is your spot!
+1
"Although he believes the economy is out of recession..." pretty much speaks for the validity of Gartman's other "insights." Pure ivory-tower drivel.
With Gartman's take on gold he reached his goal: he is on national TV; the rest is BS
Gartman. LOL. Is this a slow news day?
Cramer without the sizzle.
http://jessescrossroadscafe.blogspot.com/2010/02/soros-more-than-doubled-his-gold.html
Got GLD?
Gartman, Soros and (from a post yesterday) Paulson...all long GLD. You captured my thoughts exactly when writing about Soros:
"Certainly not a man of serious intent, regardless of his positions, since he is buying the Gold ETF rather than something more --- substantial."
What do they know that I don't?
The author begins "legendary futures trader" ??? Based on what evidence? Anyone who has actually followed Gartman's letter will find untradeable advice and (by his own admission) meager actual results. Gartman is probably the most overpaid and underperforming futures advisor extant.
poo poo and pee pee
"China...is leaping from the 14th century to the 22nd."
The first time China had a "Great Leap Forward" (just after the Revolution in 1949), when Mao ordered every peasant to produce steel from his iron farming tools, the country suffered a multi-year famine and 30 million people died for lack of food.
While the economic progress since Deng's Open Door Policy (started in 1978) has indeed been spectacular, the entire country is now awash in excess capacity. Investing in China today is like catching 1.3 billion Chinese on their fall back to earth.
Good luck!
Here it is....
Let's simplify this....
Here is the ice cream....
The ice cream is getting together "ego academic" Central Bankers....and thus giving them the liberty of making some choices ....
Answer this question....
Let's say I came to you ....and wanted to sell you on the idea that a conglomerate is better than a single company in that the sales will be more stable.....in that when one company's sales are down....another company's sales are up.....and thus the income to all is more reliable....
Sounds ok....
BUT....
What happens when the products of one company stop selling.....and the other companies have to take up the slack .....?
What happens if one company is doing incredibly well because its people have it together and work harder than the people in the other companies....
Now ....just use your imagination....as to the rest of the problems ...this may represent....
My friends.....THIS IS THE EURO....
The "Conglomerate of Countries Theory" ie blanket currencies.....WILL NEVER SOLVE THE REAL ISSUES WITHIN EACH COUNTRY......
NEVER....
And thus a "blanket currency" is failed from the beginning....
Anyone who does not agree with the above.....feel free to respond.....
You can bank the above my friends....
So Dennis is short "of" the Euro? Grammatically correct, perhaps, but he sounds like a total weenie whenever he comes on CNBC and says that he is long "of" X and short "of" Y. And never take investment advice from a man who wears a bowtie.
Wow, another infomercial from Madhedgefundtrader, go find a spot on CNBC, you are nothing but a shill, you are out of your league here among authentic contributors.
Just for the fact that the Euro is the most shorted in it's history is enough to go against the grain and go long.
"The US is out of a recession" Oh my god did everyone just become employed again, Bernanke worked out how to get there money back???
My I must have slept well!!! Oh thats right an increased TAX is going to make everything ok.
Inflation oh right what inflation It's only 2.8% thats great!!!!! The fact that it has risen from -1.8% in a few months and is the steepest rise EVER doesn't mean anything.
It scares me that Guys like this actually manage other peoples money.!!!!!
Guys like that don't manage other peoples money. They steal it!!!
I shorted the Euro after reading the first paragraph ... making me an even bigger idiot Euro on the high of the day
I think Dennis Gartman is an idiot.
Duh. And Gartman claims he is a libertarian??
"I think Dennis Gartman is an idiot"
A walking reminder to pick up more physical w/ the tax return
You may be right GG. He is calling for "weak commodities" yet long AUD and CAD, and long Aussie & Canadian stocks (of which, the largest components are by far commodities extractors, exporters).
If commodities markets tank, you don't want to be long Aussie or Canadian.
much less Brazil for that matter....
If the propaganda in this post, was any farther left, it would fall off the edge of the earth. Every DOG has his DAY and Zimbabwe Ben's day is coming.
I never knew what people saw in Gartman. His constant bearish calls on gold have been wrong for years. The idea that people pay for his letter is amazing.