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Steen Jakobsen Warns, Brace For The Next Recession

Tyler Durden's picture




 

Submitted by Saxobank's Steen Jakobsen via TradingFloor.com,

Steen Jakobsen's first major trading strategy change since 2013...

And here's why...

  • Significant changes to our JABA model's long-term outlook
  • Inopportune rise in gold and energy prices expected
  • Commodities will outperform and yields will add another 100 bps
  • Europe will suffer downturn and the US will flirt with recession in 2016

 Gold is one of those items that should outperform over the longer term. Photo: iStock
 
Saxo Bank’s JABA model rarely makes significant changes to its long-term outlook, but this quarter is different. Not only do we expect a steep increase in yields but higher gold and energy prices too.
The dynamics at work are plenty: The model’s predictions are always based on the lead-lag of different economic factors. Think of each economic data point, each market price as having its own Sinus curve. Once in a while this multitude of Sinus curves moves in the one direction and this time it’s upwards in the second half of 2015.
The biggest “news” is that we are very close to the secular low in interest rates globally. This will have material impact on stocks, fixed income and asset allocation over the coming one to five years, and probably an “upside-down” return profile relative to performance since the financial crisis started. Commodities will outperform and yields will move up by another 100 bps before Europe once again slides to downturn and the US flirts with recession in early 2016.
 
The headlines for the next 6-7 months say:
  • US, German and EU core government bonds will be 100 bps higher by and in Q4 before making its final new low in H1 2016. US 10-year yield will trade above 3.0% and Bunds above 1.25%
  • Energy: WTI crude will hit US $70-80/barrel, setting up excellent energy returns.
  • US dollar will weaken to EUR1.18/1.20 before retest of lows and then start multi-year weakness.
  • Gold will be the best performer in commodity-led rally. We see 1425/35 by year-end.
US 10-year yield next cycle  >3.25% then <1.50% then normalisation
dollar
Source: Bloomberg 

Next cycle for the US dollar  – test of new lows until 2019
eurusd

 Source: Bloomberg
 
US trade-weighted dollar index: gains first, then slides
trade weighted
 Source: Bloomberg

This, of course, is the same model that predicted Germany flirting with recession last year and the absence of lift-off growth in the US over the last few years. This very model has kept me 75% in fixed income since Q3-2013.

H1-2016 is now the cycle low for inflation, interest rates, the euro and employment. The year 2016 becomes the true zero against which we will compare all future data points.
The Saxo JABA model forces me to reverse engineer its predictions, and to be honest, it has taken me some time to adjust to this new reality – I like my 75% in bonds – but there is a logic to the model.
The changes in macro themes are:
  1. China and the new Silk Road.
  2. The zero bound interest rates and their unintended consequences. Expected return for all assets is zero.
  3. The Federal Reserve’s incoming margin call on the asset inflation and the Chinese impact on US rates.
  4. Time.
China and the new Silk Road
I have often argued that what happens in Beijing is more important than what goes on in Washington. During the peak of the 2008/09 stock market selloff, China initiated the single biggest fiscal expansion in history (4 trillion yuan = USD 570bn). Almost singlehandedly the Chinese managed to keep world growth afloat at a time where everything was coming off the tracks.
Now China has initiated the Silk Road land route and a maritime equivalent. It’s estimated to be the biggest economic experiment since the Marshall plan after World War II. China is going to use its excess savings to offer credit and infrastructure investment across Eurasia – from China’s east coast to Venice and all the way down to Cape Hope in Africa.
With USD4 trillion of foreign exchange reserves, which by the way earns them zero interest, they have decided to expand their customer base by offering supply – credit and investment. This is a modern day version of Say’s Law (supply offers its own demand), which by the way remains pretty much the only law I remember from economics and the only one of practical use.
When China comes online with the Silk Road it will be a significant boost to commodities as much of the work and investment needed across Eurasia is in infrastructure, buildings and railroads. 
 
China estimates the yearly value of the Silk Road and the supporting Asian Infrastructure Investment Bank in commerical terms alone will double to $1.25 trillion worth of business by 2020. 
 
This does not account for seed investment, lending and non-Chinese business among the counterparties in the Eurasia region. In other words it's enormous both in terms of scale and ambition.
 
Tibet railway
China is renowned for its large-scale projects such as the Qinghai-Tibet railway above. 
But the new Silk Road project will dwarf even that. Photo: iStock
The zero bound interest rate and its unintended consequences: Expected return is zero
 
Keeping interest rates too low for too long entails plenty of risks. Chief among them, of course, are bubbles in the housing and the stock markets. The conclusion no one wants to accept, however, is that zero interest rates, zero inflation, zero reform and zero hope really must mean that the expected return in the near future (less than ten years) is zero.
I was happy to see GMO’s recent predictions for asset classes over the next seven years in its Q1 2015 report called Breaking out of Bondage.

7-year

 

This has several implications but the one which I think will play a major role in H2 2015 is that commodities will experience a renaissance. They are deeply discounted and actually their return and Z-score almost scream for being bought:

Thomson Reuters /Core Commodity CRB Commodity Index – Price and Z-score on 52 weeks
Core CRB
 Source: Bloomberg
 

The chart above clearly shows that when CRY is 2 Z-score cheap it offers extreme valuations. For context the recent Bund move was an outsized move which should only happen once every 60 years – it’s Z- score? Barely 2 Z!

The return profile YoY is even more interesting – it shows how big money can be made and lost in commodities:
Thomson Reuters /Core Commodity CRB Commodity Index – CRY index ROC 12-month
CRB index
 
 Source: Bloomberg
 
Early 2015 saw commodities return reach minus 30% YoY. The only worse period was 2008/09 during the peak of the financial crisis. 
Add to commodities cheap energy prices. Energy is roughly 40-50% cheaper than a year ago. US studies shows energy costs are estimated to represent more than 15% of the total cost of production in the mining industry in the US. 
 
South Africa’s mines uses more than 6% of all energy in the country, and in Brazil the Vale mining corporation accounts for more than 4% of all energy used. This of course makes the mining sector more attractive and mining futures less so.
The commodity outperformance is driven by multiple simultaneous factors:
Under-owned, comparative advantages in zero-bound interest rates (tangible over intangible), inflation hedge into rising inflation expectations, tail-wind from mining costs, the Silk Road and finally, an expected return which beats any other asset based on its recent history.
Interest rates: Secular change? Fed’s incoming margin call on the asset inflation & the China impact on US rates
When Stanley Fischer was appointed vice-chairman of the Federal Reserve the dynamics of that institution's focus also changed. Fed chair Janet Yellen was already focused on inequality and job market prospects, but Fischer quickly established himself as pro “macro prudential frameworks”. 
He quickly started to talk about “asset inflation” and the need for normalisation of interest rates. (Note, it was not a call for higher rates, but for “normalisation”.)
I did extensive analysis of this in my “Is the Fed to do a paradigm shift”:
Fischer: "Well, the — I started learning about the Fed when I was an undergraduate. And in those days, we spent a lot of time on the Fed’s annual report of 1923, which set out how it thought monetary policy worked. I was amazed to discover in the NBR’s most — one of the NBR’s recent lists of papers, a paper saying, « When did the Fed give up on its 1923 principles?« , which included preventing banks’ lending for speculative purposes. That was one of the things that they were supposed to stop."
..and later:
“The other fact which has come up is, should the Fed be involved in regulation in stabilizing the financial system? And that was something that was believed in 1923, was regarded as not very important in the early 2000s, and is now very important. And I think we’re learning that. I don’t think we’ve learned how to deploy it, but we’ve learned that we have to figure out how to undertake financial sector stabilization, and that’s something which we’ll develop in the next few years, and I think we’re beginning to get a hold of that — that material now”

In other words Fischer believes in macro prudential frameworks and that it needs to be tied to misallocation of capital.

There is, however, one important caveat: If or when the Fed does hike it will be the first time in newer monetary history where it hikes despite not having financial support for it. I have created an extremely simple Fed Prediction Model which has been able roughly to call next direction and timing of change in Fed rates. Presently we are nowhere near a need for higher rates, the “magic” number being >1.0% against the present 1.6%. Clearly, this is not about the economy but entirely to deflate the “asset inflation” , which I guess is new central speak for “bubble like”….

Hike probabilities – inflation, growth and unemployment
FED hike

Source: Bloomberg
 

The consensus expects the Fed to delay hiking rates in a classic move of “rather wait than act”. This is interesting as the consensus as recently as early January saw 2015 as the lift-off point for growth in the US – expecting 3.2% as of end of January (Bloomberg Survey) – unlike the JABA model which early in Q1 called for “2015 to be another lost year for growth”.

We have had the worst start to data since 2009 and it looks like that Q2 GDP is heading to another disappointment. Atlanta Fed’s GDPnow model is indicating a Q2 growth of 0.7% vs a consensus of 1.7%

CESI

 

However, it should be noted that these data tend to mean-revert. I expect US data to pick up and by enough to create a real risk of the Fed raising rates in June or September.

Fed balance sheet and intervention is turning negative – few people realise this:
Atlanta Fed
 

 

YoY change
 

Total Fed assets

 Source: Federal Reserve

 
The final piece to this secular change to interest rates comes from China.
 
The recent “dramatic” cut of RRR by a full percentage point adds $260bn worth of stimulus to the Chinese economy – the reversal of the last two decades' policy of sterlising the massive current and capital account surplus. Now China runs a capital deficit and needs to divest its holding – meaning foreign bonds. These are mainly in US Treasuries, but also in EUR government bonds. China will no longer be a net buyer but a net seller of bonds – the speed of which is dictated by how much China needs to cut rates further.
I did a back of the envelope calculation of this recently in a piece called: Why China is more important than the Fed:
RRR is now 18.50% – the 20-yr average is 12.00%. However, assuming significantly more stimulus is needed to reignite China growth into Silk Road projections, we can conservatively estimate that RRR needs to go down. The BIS capital requirement is set at 4.5% and the US has operated with 6-8% since July 2013. In other words, the banking sector is allowed to leverage 22x outside the US and 12.5% in the US. Let’s assume China goes to the 12.00% 20-yr average:
The calculation then becomes:
($61 bn * ((20-12))*4 = $1.952 bn. ($61 bn per 25 bps, times 8% net change)) China FX reserves including “loss of RRR cuts”

Chinese FX reserves and the need for RRR to be cut to 12%:
China FX

 

Source: Bloomberg

This change of dynamics in China’s foreign exchange accumulation comes simultaneously with the country's clear definition of the next political cycle based on the Silk Road initiative. China is slowly, gradually, becoming not only the biggest economy in the world, but also punching its weight in the financial markets. We remain US-centric and Europe-centric is our world view but remaining so in the next ten years can have huge negative implications on investments.
Time – the unknown dimension
The crisis started in 2008 – the low in S&P-500 was in March 2009 at 666.00 (the devil's number!) since then we have had an unpredecented party of easy money, buying time and ignoring facts.
The financial world today is now an island on its own – separated from the real economy, as can be seen by the paradox of record high valuation in the stock market coinciding with record low inflation, employment , productivity and no hope. There is asset inflation, but deflation in the real economy. 
My old theory of the Bermuda Triangle of economics is about to collapse – when the world has been long enough time at zero-bound the misallocation, the inability to reform, and a toolbox without new tools creates a mandate for change.
We are nearing the seventh year of the low, which means we are at the seventh year of the high in the stock market.  All measures of valuation are above neutral. Maybe not expensive, maybe not in bubbles, but a bottom analysis recently by a client I produced just thirteen cheap stocks in a universe of 10,766 stocks.
You will note I haven't “called” on the market in this report, merely because I think the rotation into commodities and the secular change higher in interest needs to have the main focus. 
 
I expect stocks to trade sideways for the balance of 2015 as I always following my “nine-month” rule which dictates that changes in the cost of capital will impact the market will a lag of nine month. I don’t see stellar stock performance as the margin call would be an unpleasant surprise. The bigger risk probably is that for once I don't have a strong equity view.
I have now sold all my fixed income, increased my gold exposure, and I’m looking to buy mining companies and overall to increase my exposure to commodities beyond the normal allocation.
Remaining at “zero” is not an option for the real economy over the next 18 months. I expect the business cycle to come back with all the bells and whistles that entails after having spent seven years in hibernation. 
 

c

 Sometimes it's good to keep digging.

 

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Sat, 05/23/2015 - 13:06 | 6124721 Deathrips
Deathrips's picture

Next one?

 

When did the first one end?

 

How do you measure without a fungible convertible collateral for the currency.....?

 

Things I dont know...

 

RIPS

Sat, 05/23/2015 - 13:17 | 6124740 jerry_theking_lawler
jerry_theking_lawler's picture

Exactly....this is what it has felt like for the last 7+ years.

https://www.youtube.com/watch?v=OdctnPIR5kA

Sat, 05/23/2015 - 13:31 | 6124774 AIIB
AIIB's picture

Oh great! More charts!... Thx Steen ~ I'd have never figgered it out otherwise...

 

Am I supposed to put a coin in the box before I light the candle, or what?

Sat, 05/23/2015 - 14:42 | 6124909 Headbanger
Headbanger's picture

What I said here about the Fed reducing its balance sheet being one reason rates must increase.

But nooooo....

Again.. The Feral Reserve WANTS to crash the stock """market""" now to get all that cash into bank reserves fast

Cause there will soon be bank runs when the sheeple realize the economy is imploding without a safety net this time.

Sat, 05/23/2015 - 14:55 | 6124941 Surly Bear
Surly Bear's picture

Capex - Depreciation > Common share repurchases. Last I looked, of the S&P500, 116 companies were 'true' and most of those were energy related....I call it the Surly ratio :)

Sat, 05/23/2015 - 16:59 | 6125220 DetectiveStern
DetectiveStern's picture

The limits on some UK banks were tested last year when numerous banks and even the BoE stopped sending GBP payments. They claimed it was a "technical glitch" however the Bank of England demand that as a CHAPS member you turn off all payments once you breach certain liquidity limits. What do you call a system that's not working? A technical glitch. They never give the cause of the glitch.

Sat, 05/23/2015 - 19:42 | 6125571 messymerry
messymerry's picture

I called a 2150 top last year, but it's taking longer than anticipated for the software developers to get everything working.  All the stops will be pulled out until the mechanisms for bail ins are in place and tested, then when the exits can all be locked at the flip of a switch, the markets will be allowed to crash and in the turmoil, all the debt documentation will magically disappear.  Due I'm sure to various and sundry server crashes and massive bungling by certain organizations and TLAs which I needent name here... 

I love being part of the lunatic fringe,,,

;-D

Sat, 05/23/2015 - 21:32 | 6125798 stant
stant's picture

Thanks for the heads up. Kinda figured that's how it goes down. Off grid am i

Sat, 05/23/2015 - 15:50 | 6125069 Bangin7GramRocks
Bangin7GramRocks's picture

 "Steen? His name is Steen? Oh! That's a major appliance, that's not a name!" - Duckie Dale

Sat, 05/23/2015 - 13:10 | 6124727 JRobby
JRobby's picture

Brace?

It's been here for 7 years. No sign of relenting.

Sat, 05/23/2015 - 13:12 | 6124729 Trucker Glock
Trucker Glock's picture

Bookmarked to compare to reality at a later date.  JABA model and meaningless charts.

Sat, 05/23/2015 - 13:26 | 6124766 ebworthen
ebworthen's picture

Yes.  The charts have little meaning anymore now that money is free for banks and corporations via central banks.

The equity markets are an exchange mechanism to allow the little people to dream of retirement while it is skimmed.

Sat, 05/23/2015 - 13:19 | 6124747 stant
stant's picture

Civil war us . Outlaw cash in the eu ,uk. Lots a dead people. Hope I am wrong. Have a great Memorial Day weekend and enjoy life while ya can

Sat, 05/23/2015 - 19:45 | 6125574 messymerry
messymerry's picture

It won't be a civil war stant, it will be an insurrection and then a revolution...

;-)

Sat, 05/23/2015 - 13:23 | 6124758 kaa1016
kaa1016's picture

Whatever. Meaningless predictions. One guy says markets will keep going higher and another says crash. At the end of the day, no one has a clue of what is going to happen next. When a persons prediction is wrong, no one hears anything from that person saying how wrong they were. If they just happen to get one prediction out of 100 right, especially if it's a bearish one, that person will be touted as a financial genius. 

Sat, 05/23/2015 - 13:26 | 6124762 Parsecs Taxi
Parsecs Taxi's picture

Drifting past Potemkin's village.

I'll wait until the boat ride is over before I pay attention to clever economic forecasting.

Sat, 05/23/2015 - 13:26 | 6124763 Seasmoke
Seasmoke's picture

i have been braced for 7 long years.....i cant let go of the handlebar

Sat, 05/23/2015 - 16:26 | 6125150 negative rates
negative rates's picture

And feast and famine are both the same in your eyes.

Sat, 05/23/2015 - 13:51 | 6124785 Money Boo Boo
Money Boo Boo's picture

all charts do these days is track the absurd tragi-comedy corporate fascism has made of the global economy

Sat, 05/23/2015 - 14:15 | 6124858 TeethVillage88s
TeethVillage88s's picture

He is smarter than me, but I won't take his advice. He made it too complicated without taking the time to define any models used in USA, UK, EU. I'm not an Economist or Financial Expert, but why is the article not a little more practical.

For instance what do I care if the FED Consolidation and Reserve balance sheet is no longer buying crap. It is still at $4.4 Trillion. And why doesn't he address any traditional economic issues like debt, 12 Year Credit Bubble in USA, contraction of consumer market in the USA, Risk to US, China, and Global Markets from overly complicated Banking and complex linkages in Credit, Why is Current Account balance Trade Imbalance not an issue, Why is Economic Leakage not an issue as Dollars take flight from the USA, why is US infrastructure and planned obsolescence of our Bridges, Highways, Roads not an issue, What at US Dependence on External Trade not an issue for everyone, Why is Foreign Ownership of US Debt, Investments, and Businesses we depend on not an issue.

Yes, John Steed makes a great point about opportunities in China and the probable rise of Asian Tigers again.

Meanwhile back in the USA it looks like we are trading out of the Position as the Leading Economy by Design of wall Street/European Infiltrators.

Brain Drain From US Industries, Capital Flight from industries, Decapitalization of US Industries, Very Low Money Velocity, World Record Credit to GDP Levels, Questionable US Stats for GDP, Enormous Monopolization with complexity in US Financing, Power Centralized in VICHY DC and VICHY Wall Street, Core US Small Business Sector ignored and left open to lawsuits by giant corporations, Core US Small Business Declining amidst complex markets, complex competition, and complex rules and Risks.

----------------------------------------------------------------------
- What about US Corruption? Isn't that a Standard Economic Issue? -
----------------------------------------------------------------------

So John Steed Jacobson is a PC Type Analyst?

The Core of the American Economy was the Small Businesses. Today USA is looking like the Underdeveloped UK. Under the British Trade Economic Model the UK never developed again after World War I. This is what is happening today to the USA.

Sure there are some places to put money in the USA. I'm sure Big Oil will come back big. It seems that Decapitalization is happening in US Oil. The Wealthy Interests and the Mega Corporation will do fine. Globalism seems to work this way. Governments protect the Economic Winners like they were national assets. Communists focused on this before the USA perhaps.

And what is communism?

Central control of Finances (Wall Street), Central Control of the Economy (VICHY DC), Central Control of Education (VICHY DC), Command and Control of the Military by Apparatchik (Lobby Interests), Central Control of the Truth (VICHY DC), A Government that does not answer to the People (VICHY DC), A Banking System Controlled by the Super-Rich, Upper Class (VICHY Wall Street & Private FED).

But the EU & UK aren't any better now are they?

Sat, 05/23/2015 - 14:44 | 6124922 OC Sure
OC Sure's picture

Corruption is the standard economic issue but only if you correctly define it. Only if you can objectively deduce the facts from which it arises.

 

"...In the last few statements then we have arrived at the nature of an individual's right and the protection of Individual Rights.

 

As it is right for one to act upon their best decisions, as this natural demand to perform productive work occurs before any occurrence of compulsion, as it is wrong for one to compel another to act against their best decisions, as this unreasonable act of compulsory demand must come after productive work has been performed, then what can we call this transformation of right to wrong? Corruption is the result of transforming what was right into what is wrong. One who formerly acted right but now acts wrong is corrupted. No one is born evil. However, that some one currently is acting evil is indicative that at some moment along their journey from childhood innocence into the maturation of being the sole captain of their vessel that they were corrupted.  That one knows what is right but chooses to act wrong is their corruption. that one now acts wrong but formerly acted right is their corruption. That the protection of individual rights has transformed into the negation of individual rights is corruption. That there are classes, layers, castes, groups, and societal structuring of livelihoods whose demands are met not by their own productive work but by compulsory expropriation of someone else's is the corruption of civilization. The nature of business, the voluntary exchanging of values, is to be civilized. The nature of compulsion, the negation of another's volition is to be uncivilized. That business resorts to compulsion is its corruption..."  ~ What is Fractional Reserve Counterfeiting?

Sat, 05/23/2015 - 15:15 | 6124982 TeethVillage88s
TeethVillage88s's picture

Thanks. Number one is Conflict of Interest, Number two is Financial Conflict of Interest in the form of gifts, gift-giving, Lobby Funds, and Campaign Contributions.

Number three is Setting up a Trust Fund like Social Security or Medicare and using the funds in various schemes.

I don't have a clear priority on Corruption, but as you point out it starts out as subtle and can be very subtle when authority is given to people.

-----------------------------------------------------------------------
- Reduction of Legal Refuse Law, Mandatory Guidelines & Benchmarks
-----------------------------------------------------------------------

Number four is not having term limits, say 4-6 years max for all federal political offices. I would even apply this to practicing Law for Lawyers. In order to reduce Law work, the proliferation of laws, and to simplify, streamline, standardize, create guidelines, and crate benchmarks for use in civil, criminal, and other law... Lawyers would be forced to move into a new Industry after 6 years. This should make laws become clear for people with 6th grade education levels and give them fair chance to stand up to wealthy corporations or entities.

Call it Reduction of Legal Refuse Law.

Sat, 05/23/2015 - 15:03 | 6124958 TeethVillage88s
TeethVillage88s's picture

Just kidding. I really think it is called Fascism.

Why doesn't the US Federal Govt cut the big agencies and fix the infrastructure as a stimulus. The Interstate Highway system was a great economic stimulus and multiplier.

It is like there is no Plan for US Future, but they don't want to spend on infrastructure or national Assets like utilities so they don't step on some corporations toes or cause their corporate socialism to be cut by some amount.

But don't trust me look at all the money flowing out of the Middle Class and out of the Country.

Balance of Trade, Current Account Balance CIA Data:

183, Mexico -$21,920,000,000 2014 est.
184, Indonesia -$25,490,000,000 2014 est.
185, France -$33,900,000,000 2014 est.
186, European Union -$34,490,000,000 2011 est.
187, Australia -$37,000,000,000 2014 est.
188, India -$42,990,000,000 2014 est.
189, Turkey -$47,460,000,000 2014 est.
190, Canada -$50,800,000,000 2014 est.
191, Brazil -$80,920,000,000 2014 est.
192, United Kingdom -$117,900,000,000 2014 est.
193, United States -$385,800,000,000 2014 est.

Federal Debt Held by Foreign & International Investors as Percent of Gross Domestic Product, 2014:Q4: 34.75940 Percent of GDP,
http://research.stlouisfed.org/fred2/series/HBFIGDQ188S

Current Account Balance: Total Trade of Goods for the United States©, 2013: -703,911,000,000 US Dollars,
Sum Over Component Sub-periods (2013 was last data),
http://research.stlouisfed.org/fred2/series/BPBLTD01USA637S

http://www.bea.gov/newsreleases/international/intinv/iip_glance.htm (wow huge trend, $31 Trillion in Foreign Property in USA vs $24 Trillion)

http://research.stlouisfed.org/fred2/series/GINIALLRH

Sat, 05/23/2015 - 13:44 | 6124798 Jacksons Ghost
Jacksons Ghost's picture

Steen Jacobsen....he should know. Why would a Tribe member lie?

Sat, 05/23/2015 - 13:54 | 6124813 Raging Debate
Raging Debate's picture

The very wealthy always has an outsized say in a political system, it is a matter of scale in how much which links into discussions of bribery and corruption. When returns inevitably stall from such behavior, that is when reform begins but positive changes take years.

We'll see if the US allows China to finish implementing GRC or breaks promises causing what is starting to look under the surface like currency war which can then turn into hot war.

666 is geometry, you draw it out it forms a pyramid. It was also the seal of Nero. With that tidbit, reading Revelations and what it says makes a lot more sense. The good news is "end of days" does not mean the end of the world. It means we evolve into energy, classic death is no more and using the sun and moon as time measurements for how we manage our lives becomes irrelevant.

Science is showing us with quantum physics, nano tech and other advances that we are likely less than 50 years from extending biological life substantially and an understanding of consciousness to transfer and project
it through interstellar space and dimensions.

But first evolution shows us we will likely have to learn the hard way to collaborate and accelerate these goals. Really, what purpose is there to gain the whole world but die shitting your pants at 90?

Sat, 05/23/2015 - 13:58 | 6124817 q99x2
q99x2's picture

Mysterious that people have a fondness for rocks. Bitcoin last price $239

Sat, 05/23/2015 - 15:11 | 6124972 Trucker Glock
Trucker Glock's picture

21% of all time high.  Are you saying BTFD?

Sat, 05/23/2015 - 14:00 | 6124824 besnook
besnook's picture

ww3 means comodities are the best bet in town.

Sat, 05/23/2015 - 14:05 | 6124832 lakecity55
lakecity55's picture

When did the Last Recession End???

What a fucking crock.

It is easier to believe Bath House is a straight guy.

Sat, 05/23/2015 - 14:55 | 6124945 disabledvet
disabledvet's picture

Would all be bs but if the Fed really does normalize here "in spite of the recession" that does mean the rate differential plus the direction would be a big deal relative to Europe, Britain and Japan.

 

Throw in Fukushima and Generalplan Ost (of economics...which is failing as bad as the political variant) and hard to see the other "advanced economies" doing anything but eating dust here...

Sat, 05/23/2015 - 14:14 | 6124859 Bunga Bunga
Bunga Bunga's picture
Apple Watch Exploit: Steal a Passcode-Protected Watch & Use Apple Pay to Buy Things

https://www.youtube.com/watch?v=2blTo-Ej6mo#t=114

Sat, 05/23/2015 - 14:23 | 6124875 gwar5
gwar5's picture

We never came out of the last recession. And the last recession turned into the Depression we find ourselves.

 

(John Williams, Shadowstats.com)

Sat, 05/23/2015 - 14:37 | 6124903 Arthur Schopenhauer
Arthur Schopenhauer's picture

Well you made some money since 2007 haven't you?

You have plenty of money to pay for the next bailout, don't you?

Stop yer bitchin' and pay up.

Sat, 05/23/2015 - 16:12 | 6125128 rsnoble
rsnoble's picture

Exactly since when do we have to brace for a recession?  It's happened a gazillion fucking times.  And now we even have to wait till 2016 for it?  Tell you what, if it's the big collapse everyone keeps talking about then sure, i'll be worried.  Recession?  That's just more of the same crap we've always had.

Sat, 05/23/2015 - 19:18 | 6125527 Ajax_USB_Port_R...
Ajax_USB_Port_Repair_Service_'s picture

That last sentence has me scratching my head. Totally lost me after that one.

" I expect the business cycle to come back with all the bells and whistles that entails after having spent seven years in hibernation."

 

Sat, 05/23/2015 - 20:57 | 6125708 Wild Theories
Wild Theories's picture

- rise in gold and energy

energy I agree(though it might go down again if renewed economic weakness becomes reality again), gold I dunno, if only it's been monkey hammered so much I'll watch and wait for now

- Euro recession and US flirting with recession

agree

- govt bonds

I don't know shit about bonds, guess I'll just watch

- commodities will outperform

agree, now is the bottom of the commodities cycle, it's the best time to invest, as long as you pick your poison and don't touch iron ore

 

9 months lag from the fed B/S, lemme count my fingers, hmmm... I'll certainly keep that timeframe in mind

Sun, 05/24/2015 - 08:38 | 6126501 Wild Theories
Wild Theories's picture

On second thought, the current macro figures on euro area actually isn't bad

revise me undecided

Sat, 05/23/2015 - 21:44 | 6125826 moneybots
moneybots's picture

"I expect the business cycle to come back with all the bells and whistles that entails after having spent seven years in hibernation."

 

The business cycle has not been in hibernation for 7 years.  It is nearing the end of the current cycle.

Sat, 05/23/2015 - 21:53 | 6125850 Deflationist
Deflationist's picture

Steen has poor track record of guessing the future. Just ignore. Don't fight the FED, BOJ, POBC, ECB. When in trouble they will come to gether for world's 0.001%.

Sun, 05/24/2015 - 03:23 | 6126292 hedgiex
hedgiex's picture

Good prospects for commodities anchored upon China's silk road that cross soverign nations that will cooperate to uplift even their own economic future ?

there is just too much borrowings from the future and deflation to kill leverages has to take its course. This force is impeded by all the CB's contractions and they have lost their clout for even soft landing. Play short term in this deformed space.

 

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