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Steen Jakobsen Warns Of Looming US Slowdown, "I'm Long Gold... And Adding"
Submitted by Saxobank's CIO Steen Jakobsen, via Tradingfloor.com,
- US Q4 growth revised lower, 0% looms later this year
- Europe has consistently beaten the US as regards expectations
- Neither EU nor EM have the heft to compensate when US growth fades
Societe General – Global Quantative Research has published an excellent report titled "Global Earnings Estimate Analysis – Is the US heading back into recession?".
I have borrowed the main chart – which shows how the six month change in 12-month earnings per share coincide with US GDP – not pretty and definitely not what Janet Yellen and Wall Street promised me less than two months ago.

I see a repeat of the growth pattern from late 2006 into 2008.
The market is focused on the telegraphed June potential Fed hike, but this week's speech by Janet Yellen clearly has got people thinking as she again introduced inflation concerns and “data watching”…. In other words, we need to again look at the actual economy and its performance which is a bad news for the happy campers in the equity market.
This chart will soon have relevance for all asset classes’ – It shows the outperformance on expectations from Europe over the US. May I add that this is exactly the opposite of the consensus two month ago, except for a few analysts. US data has consistently done worse than expected.

The point however is US data been worsening for a long time – I personally think we are in period where we yet again handover the growth engine from the US to emerging markets but via a significant new low in growth which will make Europe looks good. The expected path for me is:
Slowdown confirmation in the US over the next two months – that will kill the improvement in Europe by end of Q2 and leave it stable - not growing for the year. Meanwhile, emerging markets will come back as market realise the Federal Open Market Committee is years away from ‘talking up’ rates.
In other words, there is room for a +100 bps correction to the sustainable long-term growth which will render 10-year rates 1.0-1.5% before we are over with this part of the cycle, which I label: Restarting the business cycle.
Restarting the business cycle as policy measures, QE and targeted “help” for banks is running if not out of time then out of impact on the economy. The inequality and low salary to GDP base simply can’t produce enough domestic consumption anywhere for the middle class to be able to afford the products the stock market listed companies produce.
The chart below is my July 2013 projection of rates – as you will note the “calendar” needs to be moved further forward… 2014 in chart is now 2015 due to Bank of Japan and the constant hope of “lift off” in rates, but the actual pricing rhythm has been relatively precise and predictive.

There are a few more charts which are worthy of perusal:
Port of LA traffic has collapsed. Yes, some of it is to do with strikes and unions but…. look at size of the drop! Deeper than March 2009!

Have no illusions – US short-term rates are rising:
The outlook for Europe remains… more of the same:

Conclusion:
Macro
We are in a “in-between period” - where the US will slow down and ultimately hand over the growth engine to emerging markets by the earliest in Q4-2015 but firmly in 2016. The problem is that emerging markets are not ready due to high US dollar debt and waning commodity prices and Europe is still too weak to contribute net to world growth leaving a growth vacuum for new growth.
Europe will show one more month of improving data, then the global slowdown and EM and US will drag down the data to flat performance. Europe will still do better than expected in 2015 but not enough to constitute a real improvement yet.

Markets
I still only have one very strong view and that’s that 10-year fixed income will trade 1.5% even potentially 1.0% this year – everything else will lag this move by nine months. So in other words, if the low in yields comes in Q3 (as I expect) then the summer of 2016 will be the lift-off we all have talked about.
The US dollar will peak this quarter and will probably have peaked for this cycle. The weaker USD will stabilise commodities and emerging markets, creating the conditions for a hand over at the end of this year. The US dollar should be very sensitive to this relative slowdown in the US, especially as Europe is improving.
Gold remains top of my list for new investment – I’m long and adding – I have also re-sold Brent crude as the marginal cost of producing oil is still rising, meaning the global impact still is negative net-net. Jeremy Grantham makes the excellent argument that for world to benefit from falling energy prices it has to come with falling marginal cost. The opposite is the case now: lower prices, higher production/extraction costs.
The stock market…..Not time yet to call the top, but I'm preparing a special report on valuations and models, or the lack of it. The conclusion will be: There is potential for a 5-10% year but also for a 25% correction. The really totally binary, problem of course being that the market is very expensive by traditional standards, but this are hardly normal times. The expected return for reference over 1, 3 and 10 years can be seen below – the upside that first year still can carry the market higher, the downside the next 9-10 years!

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Nothing like World war III to boost the economy!
When a guy named Jacobson from Saxo Bank gives advice to go long on something (especially gold), both mouth and asshole tend to pucker shut.
Yup. Time to start rolling into the PM's. More deflation ahead - but - I predict we'll begin seeing a strong upward tick in 2016/2017.
Gold is an amazing hedge during deflation. Gold bottomed in the Fall of '08 but stocks didn't bottom until the Spring of '09.
Gold bitchez
"The inequality and low salary to GDP base simply can’t produce enough domestic consumption anywhere for the middle class to be able to afford the products the stock market listed companies produce."
Yeah, that. And for decades to come.
So what does GARTMAN say????? He was spot on last time!!! SOB cost me big time !!! And after an impeccable record fading his recommendations!!! Damn it, Jim! I'm only a doctor!
They're dead, Jim.
http://247wallst.com/investing/2015/02/26/despite-stock-market-highs-13-...
Economic collapse is bullish for everything.
Look at Heating Oil up 8% today alone. Hey it's still cold let's jack the price up higher than the start of the season.
FUCK YOU MONEYCHANGERS!!!!!!
Will it go round in circles
Will it fly high like a bird up in the sky
Will it go round in circles
Will it fly high like a bird up in the sky ....... BILLY PRESTON
Gold priced in USD may not be the way to go - yes, it's unpopular to say this.
If the USD continues to climb (as a result of the falling euro), gold should fall.
While a move lower in gold will take time, the best case scenario is that we are retracing.
http://bullandbearmash.com/time-running-find-gold-ready-collapse-600-ounce/
The other scenario is much worse.
If we are in a deflationary period, I'd fully expect gold to 'go down' in fiat-price as the dollar strengthens...
That widening black maw in front of you isn't gold depreciation, it's called the gift-horse's mouth. Stop looking in it and keep stacking!
The US did everything it could to force Japan to attack the US at Peal Harbor with great loss of life and property. They are hard at work now to destroy the value of the dollar, yes it is currently going up, How long until the Chinese or other parties finally reject the dollar. Will you be warned ! Gold is your only viable hedge.
That is NOT necessarily true.
Gold Bitchez!!!
Keep on Stackin' Bro
Meh...
Nothing to see here, move along...
Meh...
Nothing to see here, move along...
By: Eric Zuesse The post-coup leaders of Ukraine have routinely said that Ukraine should destroy Russia; and, now, starting on February 24th, they are placing into position the key prerequisite for doing so, which is the advanced Anti-Ballistic-Missile, or ABM, system, S-300, which is described as follows by wikipedia: “The S-300 is regarded as one of the most potent anti-aircraft missile systems currently fielded.[3] Its radars have the ability to simultaneously track up to 100 targets while engaging up to 12/24/36 targets. The S-300 deployment time is five minutes.[3] The S-300 missiles are sealed rounds and require no maintenance over their lifetime. An evolved version of the S-300 system is the S-400 (NATO reporting name SA-21 Growler), which entered limited service in 2004.” http://fortruss.blogspot.com/2015/02/ukraine-prepares-for-attack-against...
Knowing how to sail and tie a knot are gonna come in pretty handy...add as many skills to these as you can...
The economy is like a full gas tanker that has come to a halt because the fuel tank is empty. The driver has called the company, assuming they'll tell him to take some from the tanker to fuel-up. But it seems they expect him to search the cab for loose change, then push the tanker on to the next gas station...God forbid they should give up even a gallon of THEIR gas.
The driver needs to leave the thing there on the roadside and start walking. Fuck that tanker, and fuck those owners. And that's what we should be doing...if TPTB, who have all the gas, won't use some of it to get the tanker moving, and instead expect US to scramble for loose change, leave that shit on the roadside and tell them to come get it themselves.
BTW, walking never killed anybody. More of us should try it...:-)
US Economy is like a flooded (debt-laden) engine. A solution would be to turn it off and sit for a while (recession) but instead Fed keeps giving the engine more gas which just makes things worse and the eventual shut-down more painful.
Plus thanks to de-regulation US banks are monsters that cannot go bankrupt.
Problems have solutions. Predicaments have outcomes. Waiting for the US economy to face reality is like like waiting for Wyle E. Coyote to look down...taking foreva.
ALL HAIL CHUMBA
Those ads to buy gold everywhere in internet must make you suspicious. Everyone asks you nicely to buy gold = asks you to buy gold from them. I guess lots of ppl bough shitload of gold when it was at 1700usd, back then we had massive campains "buy gold it will hit 5000 any second" also. Good luck with gold i will spend cash on booz and whores :) since we got em legaly here. You just pick bitches... if you don't trust me you can order one, once you get to poland: http://www.odloty.pl/en/escorts-call-girls.html. Same as ordering pizza :D
Good luck with that.
The $usd is going to tank out in March as hot money flows to Europe when the Draghi PUT starts. The emerging markets should also get a boost from the softer $usd in the carry trade costs. That will also translate into better figures for Europe.
Make no mistake, Europe is in the same shitter as everyone else, but they'll be the best horse in the glue factory, for awhile. The eur/usd shorts are going to get squeezed.
Everyone is investing, but there are only five people left in the US doing anything useful.
No matter how many graphs, charts and data that are produced, these five guys just cannot do anymore.
Also, they are getting a bit tired supporting the millions of investors riding on their backs.
And now the Marxist, leftist idealists are throttling the Internet. Very bad news.
Fed's Dudley "I believe that the risks of lifting the federal funds rate off of the zero lower bound a bit early are higher than the risks of lifting off a bit late," (6 years isn't long enough?)
Fed's Fisher believes fed should hike rate sooner. (Lie)
Good cop Bad cop Good cop Bad cop.
Boy is this stuff getting old. Just think in less than 6 years WW2was over, and yet ZIRP is still going strong. The fact that even a token .25% hike is unpossible, tells you all to need to know.
Fisher also says a strong $ is good for American jobs, and this genius is the head of the Dallas Fed. Just remember lower oil prices are good for those in oil industry.
Jakobsen....Jakobsen....sounds vaguely familiar but can't quite place it.
Only a fool buys gold in a deflationary environment. Buy cash instead.
Cash? You want me holding something that has been printed ad infinum for 7 years now? No thanks I'll stick with the hard to find gold and silver.
Gold Coins, $247 and ships for free, Guilders, Swiss Francs, or French Rooster. $311 for British Gold Sovereigns.
What do you think? old coins still kind of expensive.
I always think coins are over priced.
Victor Sperandeo would disagree with you. Search YouTube for "Sperandeo Coming Hyperinflation".
Vic says the imporant thing is not the price at which you buy gold, but that you have some/get some. Buy at any price.
Jacobsen is fun to listen to and his advice is invaluable (if you do the opposite) - best mis-leading indicator since Stolper.
Here what he said in August 2014 (and you can search for it if you do not believe me):
pretty much spot on. Why he still gets so much airtime? I do not know
you only know what he writes - not what he does
"increasing gold holdings" probably means upping his GLD allocation from 5% to 6%
actually, I do, or at least did know what he invested in. At Saxo they gave him an internal pool of money and all his trades and performance was published. Unfortunately, after a few quarters the bank had to stop him for ever touching any real money again. He was down 30% and even more against benchmarks. It was too much negartive publicity; so they decided to let him talk instead. Steen doing the talk, the clients doing the walk; the casino is winning
This is what GreenSPAM calls the "END" stages of Depression
Bitcoin Last Price $254 as politicians around the world realize its usefulness.
They used to call long gold short crude a spread trade.
Funny how things have changed in the era of centrally planned "markets" guided only by lies, fraud, deception and CB open market operations.
Being long Gold may or may not help when the global debt bubble bursts. Regardless, the bubble is bursting and nothing can stop it now...
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
"I'm long gold and adding."
Isn't that a famous country-western song?
Now probably is the best time to get into gold. I say that because I'm currently wanting to get out of my gold stocks. I'm making a nice monthly profit from selling covered call options on them, but I actually want the call options to be used this time (meaning I'm forced to sell my stock). That's the contrary indicator. I want to sell my gold stocks -> this probably means they're near the bottom for the year.