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3 Things That Can't Stay Hidden Long: The Sun, The Moon, & The Truth

Tyler Durden's picture




 

"The consensus narrative on market developments is set to implode," warns Steen Jakobsen, Saxo Bank's chief economist and chief investment officer. In his latest note, he explains precisely how to position ahead of the storm, with everything from calls on gold to German government bonds and more importantly, and their underlying rationale. As Jakobsen concludes, "Yes, the truth is often ugly, but often liberating too. We need to move away from chasing paper profit to investing in people, ideas and prospects. We should not fear the coming sell-off, but embrace and use it for creating a true mandate for change. It’s about time."

 

Via Saxo Bank's Steen Jakobsen,

This week saw US GDP rebound an impressive 4.0% taking the run rate for GDP in 2014 to 2.3% still shy of the ambitious 3.0% the consensus firmly believe in. Wall Street is busy selling strategies on how to hedge the coming hike in policy rates from Fed and we are, again, told how rates will explode.

This narrative will implode and shortly if I look at Saxo Bank's JABA models

Main Macro and Market calls:

  • Fixed income will outperform all assets class’ in 2014 – View established in Q4-2013. Long 1.5% Danish Government bond, Long Bunds futures, Long 10 Y USA.
  • US Dollar will sell off in H2 of 2014 – NEW VIEW. Long EURUSD and adding short USDJPY. Targets: 1.40+ and 96.00 USDJPY. Yield in US will accelerate to downside in Aug-Nov.
  • Germany will reach negative growth by Q1-2015 & France will be in recession. Euro growth reach zero again. 2014 another lost year in economics and non-reforms
  • Inflation expectations will bottom in Q4 – major buy signal for gold, silver and more importantly mining.
  • Short Dax since 10.000 - and still believe in 25-30% correction in H2-2014 as projected all year.
  • Geopolitical risk will see keep energy prices elevated – leaving the consumer with less disposable income and companies with thinner profit margins.

*  *  *
The world will see lower growth & lower yields in 2014 - yet another lost year in nonreforms and easy money.

There is no denial Q2 GDP was good, neither that the US has created more jobs (mostly parttime though), but... that the Fed is ready to take a risk and go early on raising interest denies history and even logic.

(*) The Saxo Bank JABA model is a proprietary model that uses lead and lags from multiple nbusiness & economic vectors to predict future moves.

The pink dotted line is GDP – note how is rises in Q2 only to collapse into Q1/Q2 2015 US GDP has averaged 2.0% in the last five years I don’t see it rising from this low-trend level and on the GDP I have following comments:

1.) From the 1st GDP release to the final 3rd correction the net change is on average 1.46% since 1970s – I see Q2 being 2.5% if not 2.0% offered by its third correction

 

2.) Tax receipt data does not confirm the uptick:

 

3.) US GDP has been reduced to an exercise in measuring inventories. It’s extremely volatile but also important to note they are way above their average for the last eight quarters further more in the last five years US GDP has grown 2% per year – when you exclude inventories the so called Real Final Sales even Q2’s numbers was? Yes – 2%!

 

4.) Disposable income continues to lag and so does housing – the two key components in the US economy.

 

Clearly, to me, this short-term sell-off is directly correlated to a narrative dictated by Wall Street to create trading volumes. Yes, it is a hard claim, but rest assured that next time chairwoman Yellen has a chance to show her extremely dovish credentials she will. A bigger concern for the Fed must be the fact Wall Street in its narrative almost totally ignores the wording and the text from Fed officers. Fed communication policy is failing day by day and its projections have little impact on investors.

My key call both in macro and trading remains new lows in interest rates (10 Y and above in maturity) by Q1 or Q2 2015. The high growth expectations and denial of international geopolitical risks will accelerate the move to the downside inside the next two months.

I suggest adding to IEF or simply buying more 10 Year Treasury bonds.

A new call is a weaker US dollar over the next two months. To that end I have added long EUR Sep Futures to my Alpha portfolio yesterday (31st July) below 1.3500. US data will disappoint as shown in the Saxo Bank JABA model and our US dollar model is now supporting the same outlook.

Jakobsen explains the rest in his full presentation below...
 

Steen's Chronicle August 2014

 

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Mon, 08/04/2014 - 19:51 | 5046588 FieldingMellish
FieldingMellish's picture

I wonder what would happen to the dollar if oil shot up? http://www.investing.com/analysis/oil-prices-when-isis-takes-baghdad-221591

Mon, 08/04/2014 - 19:54 | 5046599 zorba THE GREEK
zorba THE GREEK's picture

Oh yeah, and Obama can't hide his lying eyes any longer.

Mon, 08/04/2014 - 20:04 | 5046629 Bossman1967
Bossman1967's picture

could he ever? people don't care about his lies. to call him what he is then your called a racist and people just shut down when that word is said. for me that starts a great debate! I call a spade a spade no mater the color of their skin. he is a fucking two faced liar was then is now and will always be...

Mon, 08/04/2014 - 20:18 | 5046699 Dutti
Dutti's picture

The truth can not be hidden? That might have been true during Buddha's times.

Mon, 08/04/2014 - 21:51 | 5047120 The Blank Stare
The Blank Stare's picture

Putin would be smiling all the way to Hong Kong and the Obumbler will need a new 9 iron.

Mon, 08/04/2014 - 19:53 | 5046590 zorba THE GREEK
zorba THE GREEK's picture

My old lady has been hiding her beaver from me for a very long time.

Mon, 08/04/2014 - 19:58 | 5046613 db51
db51's picture

Unlike the Moon and Stars,  if you haven't seen a particular beaver in a very long time, it takes little effort to find a beaver that isn't in hiding.  Just saying....sitting around staring at the hiding beaver is pointless.

Mon, 08/04/2014 - 20:00 | 5046621 zorba THE GREEK
zorba THE GREEK's picture

Zorba has found such beaver, but would prefer his old lady didn't know.

Mon, 08/04/2014 - 20:18 | 5046697 NidStyles
NidStyles's picture

Zorba's secret is safe with us.

Mon, 08/04/2014 - 20:32 | 5046767 db51
db51's picture

Meanwhile, back at Zorba's, there is s very neglected Beaver needing attention.   FIRST!  LMAO

Mon, 08/04/2014 - 20:43 | 5046828 zorba THE GREEK
zorba THE GREEK's picture

db51 If you get to see that old beaver, please post a picture of it, Zorba has forgotten what it looks like.

Tue, 08/05/2014 - 03:27 | 5047790 Oracle 911
Oracle 911's picture

Good enough?

 

 

Mon, 08/04/2014 - 20:04 | 5046634 Bossman1967
Bossman1967's picture

that's what happen when we been married more than 10 years

Mon, 08/04/2014 - 20:20 | 5046703 zorba THE GREEK
zorba THE GREEK's picture

Zorba has been married since The Ice Age. Our wedding theme was the newest rage; FIRE.

Zorba is so old, he can remember when gay meant ' happy '. Zorba's wife knew EVE.

Zorba's grandchildren fought at battle of Thermopolies. After being married for more than ten

years, you just begin to get acquainted with each other. After 40 or 45 years, it gets a little easier.

Mon, 08/04/2014 - 20:05 | 5046636 logicalman
logicalman's picture

She has a pet beaver?????

Why would she hide it????

Look out for wood chips lying around.

 

Mon, 08/04/2014 - 20:07 | 5046650 zorba THE GREEK
zorba THE GREEK's picture

Yuk Yuk

Mon, 08/04/2014 - 20:34 | 5046777 db51
db51's picture

No mention of a Pet Beaver....merely a Beaver that hasn't been petted . . . . in a long, long time.

Mon, 08/04/2014 - 20:01 | 5046624 alien-IQ
alien-IQ's picture

The truth may be exposed, but if nobody cares, what good is it?

Mon, 08/04/2014 - 20:05 | 5046637 Grande Tetons
Grande Tetons's picture

9/11 was an inside job. Yeah, you don't say...pass the remote I need to record Pawn Stars on the DVR. 

Mon, 08/04/2014 - 20:06 | 5046645 logicalman
logicalman's picture

I think you might be mis-spelling 'pawn'

Mon, 08/04/2014 - 20:06 | 5046641 logicalman
logicalman's picture

Whether observed or not, I think truth wins over lies.

But that's just me.

 

Mon, 08/04/2014 - 20:16 | 5046691 alien-IQ
alien-IQ's picture

History seems to clearly contradict that.

Mon, 08/04/2014 - 23:37 | 5047497 janus
janus's picture

yes, but only on a near, mid and long-term basis...so what's your point?

Mon, 08/04/2014 - 20:05 | 5046643 zorba THE GREEK
zorba THE GREEK's picture

True...If you bang your old lady's sister in the forest and nobody sees it,

is it really cheating?

Mon, 08/04/2014 - 20:08 | 5046652 logicalman
logicalman's picture

If you bang your old lady's sister and nobody sees it would require that you are both, at least, wearing blindfolds.

Whatever floats your boat.

 

Mon, 08/04/2014 - 20:25 | 5046730 zorba THE GREEK
zorba THE GREEK's picture

Logicalman...you are too logical for me. But I give you an up-vote for being

true to your name.

Mon, 08/04/2014 - 20:10 | 5046667 Bollixed
Bollixed's picture

Good lord, if she has a forest down there I don't want any part of it...

Mon, 08/04/2014 - 20:23 | 5046717 zorba THE GREEK
zorba THE GREEK's picture

P.S. I didn't bang my old lady's sister in the woods or any place else.

She is a bigger bitch than my old lady.

Tue, 08/05/2014 - 01:27 | 5047688 HardAssets
HardAssets's picture

depends on whether she's a screamer or not

Mon, 08/04/2014 - 20:31 | 5046757 zorba THE GREEK
zorba THE GREEK's picture

Alien-IQ....That pretty much sums up what is happening in the U.S. today, and

we will pay a hefty price for our indifference.

Tue, 08/05/2014 - 03:28 | 5047792 bunnyswanson
bunnyswanson's picture

Most viewed video (54,000 in 2 days) is Richarge Gage on CSPAN.  Other vidoes are in the 100s to couple thousand range. 

Gaza Massacre will allow Americans to see viciousness of the Israeli people and open up the possibility for them to consider the facts more readily.

Dr. Alan Sabrosky on Mike Wayne who is making a prediction about the near future. 

https://www.youtube.com/watch?v=yJvnj8rHUYs#t=124

Mon, 08/04/2014 - 20:09 | 5046656 notadouche
notadouche's picture

I say with all certainty that GDP will fine.  I say this because I know that if the GDP answer isn't acceptible the metrics will be changed in order to come up with the agreed upon number in the name of a more "accurate reflection" of economic progress.  Inflation rate not acceptible, not a problem.  Exclude energy, food, taxes, education expense, medical insurance, medications.  Hocus Pocus, perfect number achieved. 

Any narrative the government wants to produce, they will produce the metrics needed as support for the narrative along with the economist to back it up.

Mon, 08/04/2014 - 20:09 | 5046661 starman
starman's picture

China has replicated the US financial and banking systems in one decade!

Next step? Afraid yet?  You should be.

Mon, 08/04/2014 - 20:10 | 5046668 Duc888
Duc888's picture

 

 

The truth.

The whole program (the world) is a Ponzi.

sux bein' u.

LOL.

Mon, 08/04/2014 - 20:13 | 5046679 Duc888
Duc888's picture

 

 

Bollixed:"Good lord, if she has a forest down there I don't want any part of it..."

 

Oh..... I dunno, I always liked the 70's style pizza slice down there.     Get me a hedge trimmer....or not.

 

It gets a little rancid after 12 hours but that's what alcohol is for.

 

Nuthin' like slammin' a good ole fashioned "bush" before you glue her eyes shut.

 

 

Mon, 08/04/2014 - 20:46 | 5046846 zorba THE GREEK
zorba THE GREEK's picture

Duc888... you are nuckin futz..

Tue, 08/05/2014 - 01:32 | 5047691 HardAssets
HardAssets's picture

Here's a vote for natural women (everywhere), with real boobs, and no freakin' tats all over

Tue, 08/05/2014 - 01:32 | 5047692 bunnyswanson
bunnyswanson's picture

You are gay.

Mon, 08/04/2014 - 20:16 | 5046680 medium giraffe
medium giraffe's picture

Long Eur on a 30% Dax correction and French recession combined with Euro area contraction and negative deposit rates, and a Jpy position in favour of negative risk trend? (Eur has been very risk sensitive of late).  I've long since given up on longer range fundamental prognostications (= much better results), but I'm scratching my head a bit here.  Eur isn't the anti-usd play it used to be.  Sure the COT position is overweight Eur shorts, but so what?   Just hit a YTD low too, and banks are already stuffed full of Euros.

Am I missing something?

Mon, 08/04/2014 - 20:18 | 5046696 Grande Tetons
Grande Tetons's picture

The guy just lobbed a bunch of darts...he will pick the winner next year. 

Tue, 08/05/2014 - 03:19 | 5047788 SAT 800
SAT 800's picture

I don't get it either; I'm willing to watch and be surprised, but I'm not interested in taking any such position.

Mon, 08/04/2014 - 20:28 | 5046724 buzzsaw99
buzzsaw99's picture

there is almost no way all those things can happen at once. some of those calls are late, some are contradictory, some are impossible. some of it sounds like something i would say which makes me question myself entirely. I even doubt the author understands the ramifications of what he is saying if some of those predictions did happen in tandem.

Mon, 08/04/2014 - 20:33 | 5046769 Tegrat
Tegrat's picture

Slightly off topic, but just as truthful, heres the best vid ever to explain the mid-east situation...

6 mins!

http://www.youtube.com/watch?v=8EDW88CBo-8

Mon, 08/04/2014 - 21:05 | 5046946 Keltner Channel Surf
Keltner Channel Surf's picture

Aw, for Christ’s sake!   Just put away all the colorful charts and find the balls to get massively short, you cerebral little Poindexter.

Mon, 08/04/2014 - 21:13 | 5046980 Notsobadwlad
Notsobadwlad's picture

So what if 50,000 Ameicans know the truth?!? The other 314,950,000 are blissfully ignorant. Some people always know the truth, but governments and the propagandist media ensure that the majority do not know the truth.

Tue, 08/05/2014 - 01:35 | 5047695 bunnyswanson
bunnyswanson's picture

7% of the population supported the 1776 revolution.  You cannot expect worker bees and misfits to grasp more than what is required to get through the day.

Mon, 08/04/2014 - 22:20 | 5047260 AdvancingTime
AdvancingTime's picture

The economic recovery that the media and talking heads have been bantering around does not exist and is just a myth. A manipulated stock market distorted by recent economic policy hides and mask the real truth, in many ways it is ground zero in the war to convince us all is well.

The American people and Main Street will tell you they are far from convinced that it is smooth sailing ahead. Huge weakness in the economy has been shown by numbers that barely get by even after record amounts of stimulus. Fact is if QE or the massive government deficit spending that props up our economy is removed it will fold like a cheap umbrella.

Recent changes in how the GDP is figured , which boosted growth thus reducing the debt to growth ratio, and attempts to spin poor numbers regarding employment have been met with skepticism. More on this subject in the article below.

http://brucewilds.blogspot.com/2013/10/myth-of-economic-recovery.html

 

Tue, 08/05/2014 - 01:24 | 5047681 Sokhmate
Sokhmate's picture

Actually, there is a fourth that cannot be hidden: pregnancy

Do NOT follow this link or you will be banned from the site!