RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 13/08/10
I will be updating this blog on about a weekly basis with market commentary, as well as articles on specific topics. I will instead also be providing daily market commentary in newsletter .pdf format. If you would like to subscribe (for free) to the Shadow Capitalism market commentary newsletter, please email me at firstname.lastname@example.org so I can put you on the mail list. Thank you.
Today, most pundits are growing increasingly concerned that we are headed for a “double dip” recession. I think this view is idiotic as the US “recovery” was in fact nothing more than a small bounce in economy activity within the context of a DEPRESSION.
Let’s be honest here. The money printing and Stimulus DIDN’T work last time. All it did was buy time. Indeed, from an economic perspective, the only thing the Feds can claim with any certainty is that the Stimulus produced a bunch of economic data points that were questionable in authenticity (GDP, inflation, employment, etc) many of which have since been revised lower (GDP again).
What made America great was her unsurpassed ability to innovate. Equally important was also her ability to rapidly adapt to the change that this innovation fostered. For decades the combination has been a self reinforcing growth dynamic with innovation offering a continuously improving standard of living and higher corporate productivity levels, which the US quickly embraced and adapted to. This in turn financed further innovation. No country in the world could match the American culture that flourished on technology advancements in all areas of human endeavor. However, something serious and major has changed across America. Daily, more and more are becoming acutely aware of this, but few grasp exactly what it is. It is called Creative Destruction. It turns out that what made America great is now killing her!
RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 12/08/10
Hinde Capital has expanded on an idea we have been toying around with and wish to follow up on soon (that ETFs are de facto the new CDOs, as the most actively traded products (SPY, GLD, etc) are now merely synthetic representations of underlying securities, as the actual securities are increasingly more thinly traded, thus creating a huge "tail wags the dog" paradox), by penning a presentation calling GLD "the new CDO in disguise." We don't think it is disguised - after all the two products share far too many characteristics, although having CDO-like features does not make something evil per se. The reason why implied correlation hit 0.8 yesterday as we first pointed out, is precisely due to the aggregation of products into such synthetic aggregators as ETFs, of which GLD is merely one of many. Yet Hinde's opinion focuses precisely on the disconnect between the "idea" of owning a hard asset, and the reality of merely having claims to a Cede & Co stock certificate which in turn has no liquid and direct physical collateral, in essence condemning GLD and all non-physical ETFs, by saying "we believe ETFs are a risky way to express a gold view." All this and much more on why GLD has more risks than are acceptable for any sophisticated investor in the attached Hinde Capital presentation.
Now that sovereign CDS (and ratings) are back in vogue with everyone finally expecting the world to relapse into a double dip, Zero Hedge has compiled Moody's sovereign ratings and spread these alongside the CDS levels in any given bucket to propose several trade ideas taking advantage of Moody's market lagging inefficiency.
RANsquawk US Afternoon Briefing - Stocks, Bonds, FX etc. – 12/08/10
RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 12/08/10
RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 11/08/10
Another day, another desperate attempt by GE's propaganda branch to keep its viewers disconnected with reality. Case in point: Bob Pisani, who has now said about 100 times that "volume was very low, no bids were hit, etc, etc." The truth: yes to the latter, and a blatant lie on the former. Exhibit A is below, where you can see that today's ES volume was the highest in 40 days! Maybe CNBC can hire an expert and analyze the chart below and advise us what it uses as the source for its lies, pardon, information.
RANsquawk US Afternoon Briefing - Stocks, Bonds, FX etc. – 11/08/10
RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 11/08/10
The first thing that needs to be said is that IF we have another systemic meltdown like that of Autumn 2008, Gold will likely go down along with everything else. There are simply too many big players (hedge funds, investment banks, etc) with heavy exposure to Gold who would be forced to liquidate their positions during a systemic collapse. I know this is not what the Gold bugs want to hear, but during systemic Crises, just about every investment on the planet plunges while the US Dollar and Treasuries rally.