Biderman On 2012: Long Gold, Short EUR And Stop Praying For A Miracle
Wearing a shirt that only a mother could love, Charles Biderman of TrimTabs offers his insightful perspective on the year ahead. Against the backdrop of a fog-bound Sausalito, Biderman sees only one path over the medium-term for Gold (up) as developed market central bankers print their respective fiat currencies and emerging market central bankers horde the one true sound money alternative. Just as we have been pointing out, he notes that the ECB has been QE-ing in all but name and the region faces at best a recession and at worst a depressionary breakup. Cost averaging into a Long Gold, Short EUR position is among his favorite ideas for 2012. Furthermore, he likes non-USD commodity producers in local currencies - implicitly long commodities and short the USD but it is his epiphany that a 'Miracle on Main Street' is hoped for by any and every market observer and media hack that rings truest. The hoped-for miracle that explosive growth (just as has always been the case post WWII) is just around the corner and will rescue us from the doldrums-like state we are meandering through is simply our heuristic biases run wild (together with an entire industry of asset managers and strategists who always see 10-15% appreciation ahead in broad equity markets over the next year). Until there is a total restructuring of developed market economies to the point where entrepreneurs are encouraged to act and where government spending is 'closer' to government income and not to 'wish fulfillment', there can be no jump-start to growth. Political will remains bereft of desire to do anything but kick the can down the road - and unfortunately, that can is getting bigger and heavier by the minute.
Happy New Year...
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TrimTabs, the same as Weight Watchers, no?
Live in Frisco and walk the hills and you won't need trim tabs, er....I mean weight watchers.
I thought his office was in Santa Rosa. Sausalito is not a short drive to work,
TrimTabs Research gets its name from the "trim tab" in sailing. A trim tab on a boat is a small rudder which is part of the main rudder. (The "rudder of the rudder" if you will). In order to change the direction of the main rudder, you first have to change the direction of the trim tab.
TrimTabs Research uses the term metaphorically for changes in market liquidity (and other indicators) being precursors to larger market moves.
We've got so many SHTF trip wires set up everywhere that if everybody just stands still like Congress and does nothing we'll be ok.
I like his analogy's quick to the point, using simple examples that my 5 year old son or even my wife's brain dead and bubbly girlfriends can understand.
Biderman is a good guy and a straight shooter. He is a real ZH kind of guy. He has said more that once that his research shows that the market over the past few years is totaly BS because there are no real buyers in the market. He suggested that govt money was holding it all up.
They have them on planes as well. Adjust them properly to allow the plane to maintain a level flight path without constantly adjusting the main controls during flight. I suppose you can read into the symbolism in a similar manner.
Read anything you can get your hands on by Bucky, you will not be disappointed.
Here's one starting point:
http://www.netcrucible.com/blog/2005/03/30/synergistics-and-economics/
Learning something new every day on the 0H. Thx.
What changes the direction of the trim tab? The teeny tiny tab?
weight watchers?
i'm not sure, but this paste from tyler's introduction might hold a clue: "...and unfortunately, that can is getting bigger and heavier by the minute."
so, maybe...
http://www.youtube.com/watch?v=A85cZeEOj-0&feature=related I'm sure since we're all interested in the truth here at Zero Hedge you'd like to look at a somewhat more detailed and scholarly analysis; which mentions the possibility of $3/oz. silver; soon enough to be a real concern to present investors.
We'll see three dollar silver only after gas goes under $1.00/gallon.
Everything is possible but 1oz of silver = 1 loaf of shit bread which is consisting of some not specified ingridients would be a bit of a streach don't you think? When we get to that point first you have to forget about internet, TV and other stuff (like cruise missiles, watches and so on), then we would have to have total famine in US. On other hand of course we may face future when bread is worth only 1c/loaf then 3$ silver will be fair value. What is your pick?
Now going to baking process of both, is it energy comparable? What about ingridients, is the scarciry comparable? What about preparing our dough for silver ounce and loaf of bread, is the machinery and labor comparable?
You cant live without bread but at the same time you cant live without silver unless you go back few hundred years back (smaller population, clean air, clean water and so on), is it fair?
Oh look, the guy who is banging the drums for war with Iran just happens to also be anti-PMs. Shocker.
After the dollar collapses and we go back to a gold standard it is likely that silver goes to under $3.00 an ounce and gold is $20.00 dollars a ounce...of coarse,$3.00 dollar a day wage will be middle class when that occurs and median home prices will be $15,000.00...New cars will be $2500.00 Its all relative...
Wrong. gold will be $10,000/oz, silver will be $700 oz, you won't be able to find gasoline, you won't be able to find new cars, bread will be a couple bucks a loaf, you won't have a job but if you did you will make the same you make today, and most houses will be sitting empty do to forclosure. People will be renting but not paying the landlord so he will be taking massive losses. DOW at 10,000 but DXY at 20.
Making fun of his shirt may be amusing. But would you rather take advice from some pretty-boy marketing type in his expensive outer wrapper -- all designed to deceive the viewer? Listen to the ugly guy/gal working from a modest office... maybe.
I cannot see the video. I cannot see it. Could someone describe his shirt and overall appearance? Did he improve his monotone delivery? Any details would be appreciated.
his shirt is.. indescribable
Did he shave today? Is he disheveled, unkempt?
He should prolly do a pod cast, without the video.
he far ahead of the curve. in 2 years time all your posterboys will dress like him. like his brave style ;-)
happy 2012 everybody
I don't have javascript in my browser so I can't see any of the videos or scribd's or anything else. So I can't see his presentation. I'm like a blind man.
I'm curious about his delivery. What's his demeanor? Sanguine or morose?
Acutally, he seemed to give a little chuckle when he mentioned the Wall Street attitude of "the economy will recover because it always has in the past" and "they hope and pray for a miracle" (loose quotes).
Try the NoScript plugin, if available for your browser, so you can allow scripts on only the sites you trust.
Linux is pretty cool too.
I still can't imagine why people continue to use Windows on the internet (or for anything else). Linux is free and takes minimal hard drive space. Puppy Linux will operate just fine on a 1 gig USB drive. Whenever you must use Windows (altho that is really no longer necessary) just select it from the boot menu (disconnect the Ethernet cable or disable Wi-Fi before you do that) and let it boot. You always have the option of using an Apple computer too.
http://www.reactos.org
Complete with kernel level debugger.
The ultimate goal of ReactOS is to allow you to remove Windows® and install ReactOS without the end user noticing the change.
The direct link is
http://www.youtube.com/watch?v=uVFwK-z5FSU
I would say it's Daisy Duke meets the Gypsy Kings.
purple gingham with something bordeline psychedelic embroidered down the front - at a guess, it was bought by a relative for Christmas from a charity shop that sells clothing made by the blind...
It has the overall appearance of something inspired by peyote...
Oh yes that's nice. Very descriptive. Thx.
mexican wedding shirt, meets ozzy and harriet
A Man without Qualities put it this way:
mmmmmmescaline...
Foggy Sausalito but clear advice...
I thought his advice for investing in raw material commodities was dumb. As the EU and the USA sink into deeper depression in 2012, China is not going to need all those raw materials. They have them up the wazoo already. Canada and Oz are headed for some major corrections. Of course, if the Persian Gulf goes up in flames, and oil goes to $250, Canada and Russia will make some nice bucks on their oil.
I agree on the raw material commodities, but I would go long on food commodities, as folks still need to eat.
Wait, I am long food. You should see my pantry. ;-)
And I didn't like the suggestion of investing in commodities in foreign currencies. That seems to me like a "double down" strategy where I think there is just as much of a chance of the dollar strengthening next year. So with his approach you would get a double whammy of stronger dollar pushing commodity prices down.
Long commodities isn't necessarily a play on higher demand in the future. The strategy is applicable when there is a concern about any demand existing in the future, as a hedge against the devaluation of fiat in general or in coordinated fashion across multiple currencies, There are also commodities other than base metals- PMs, Energy, FOOD, etc. Since the entire world (of institutional $s) is hiding in treasuries they are not a sound strategy from a diversification standpoint, or for fat people who know they will need to fit through that fire exit in a rush, and treasuries do nothing but prop-up the fiat ponzi and enable the bankers the keep kicking the can. I don't think it is a particularly brilliant strategy, but what else is one to do?
My Current (personal) Allocations
~1/3 beans, bullion, bullets, bitch(ez) and arable land on 3 continents
~1/3 equities (primarily traded on foreign exchanges [e.g. not the US or Switzerland/EU in my case] and with a significant slice of primary and long term positions held in paper certificate form biased in favor of commodity exposure and dividend yield, and against the USD/EUR/JPY wobble board, adjusting the allocations defensively and for minor profits on a weekly to monthly basis)
~1/3 Cash - that would be actual CASH in certain currencies, cash held in SAFEKEEPING accounts in various currencies, and limited traditional exposure to MMF/Short term high grade sovereigns etc
When the blood actually starts flowing in the streets I am well positioned to start picking the carcasses clean, but it would most likely be by adding to existing positions, since in my mind if the Chinese stop stacking and racking commodities and excess capacity- the market for iCrap for the rich western fatties who like to pretend they live in poverty will be in far worse shape...
Arable land on 3 continents? You wasted your money. What do you think is going to be the state of property rights of foreign owners of land if things get so bad that you will need that arable land? You going to fly to Africa or South America to enforce your title with your beans and bullets? Good luck with that.
Family/blood is a great thing, it allows you to effectively be in more place than once, and they definitely blend in with the locals.
The down side of family is they are statistically more likely to screw you over, the upside is it is easier to test them, so with proper planning, checks and balances, and on a long enough timeline... they're definietly preferable to MF'd Globally of MadeOff with everyon's money...
Out of Hopium!
"likes non-USD commodity producers in local currencies"
Does that matter when they earn most of their money in usd?
Did he just say Shit is Fucked Up and Bullshit
yes I think he called "Bullshit"
Best summary of what is going to happen in Europe - with the Greek music playing in the background:
http://www.youtube.com/watch?v=u6-NHK-GzwU
Hopefully all ZHers end up like Vinny Jones at the end LOL! Happy 2012 all!
Central planning has fucked the fundamentals up so bad that there are very few relevent factors anymore. Notably we have oil supply/demand and gold (PM) supply/demand. Oil supply has been flat for six years running now. Considering that the House of Saud has continually said they would raise their output, and haven't, and then considering they are the swing producer, and also considering that oil is finite, I think we will be on the backside of production shortly, if we are not already. Fraking will not mitigate the problem of world oil production, although it wil pad the US inventories. The EROEI of oil sands makes them irrelavent. There is no cure for peak oil.
With supply decreasing, demand would have to decrease at a like amount for equilibrium not to move price. Although demand is decreasing because the Keynesian stimuluses only go so far, I don't think we will see a huge drop off from where we are. The world will move up to a certain point, as nothing is static, and everything is falling apart, known to everyone or not. As far as the US is concerned, that point will be $192pb. This is the number that will turn gdp negative. Once that happens, all bets are off.
If GDP does go negative expect a greater stimulus than the $2 trillion that the Fed has given out each year for three years running. It would need to be around $6 trillion for the year. This would kill the dollar, further pushing up prices. Basically, Bernanke is staring into the void of his policy. Who knows what he will do.
Gold supply/demand is similar. We have seen a mad rush from Central Banks to stack gold on their books to balance out their liabilities. With increases in the chances of defaults around the world, look for this to continue. Look for gold to be spun as an asset (from a reserve) to further the fractional reserve ponzi scheme. Gold is a very simple trade; so simple I am surprised I never hear the big names (Schiff/Faber/Paul) talk about it: the left side of the ledger needs to equal the right. Gold can be used as an asset, reserve, or a liablility, depending on the cercumstances. In this economic climate, the liabilities are maxed out due to toxic debt. That means gold sits on the left side. The easiest thing to do is to move it to an asset and spin loans from it. The next is to loan it and use the cash as collateral. Either way, this increases demand for gold. Gold supply had been decreasing until the last two years. We are now double topping in gold production.
Every other fundamental is very minute. Stats from governments are falsified, reporting is inaccurate: the depression continues. Technicals are handled by algo machines from hell and from central planners like the President's Working Groups. Once one understands PM is monie, and oil, the lifeblood of the economy, is finite and decreasing in supply, one should understand where we are heading. That is all that one must know.
"The EROEI of oil sands makes them irrelavent."
care to explain this?
NG is used in the process and it makes the EROEI extremely low
EROEI is absolute fucking nonsense. It's time for you BP shills to come up with another meme. Different forms of potential energy have hugely different values. Examples of value extremes are jet fuel on one end and unusable, due to the demand, wind generated electricity or "stranded" NG on the other end of usability.
"Energy returned on energy invested" isn't simple enough for you? EROEI does exactly what you end your statement with: it shows the variation in energy output based on input.
And where do you get "BP shill" from? I hate BP.
It matters not whether you hate BP. You are repeating their meme. An unpaid shill is a shill nonetheless.
Not all forms of energy have the same value to society. Therefor EROEI is effectively meaningless. What kind of energy are you referring to? Petroleum, hydro, NG, geophysical, nuclear? They may all be equal in BTUs, but they're not all equal in usefulness. One could perhaps invest ten waste nuclear generated BTUs for one diesel BTU. The EROEI would only be 1/10. That might not be a bad deal. However if one was to invest one BTU of diesel energy to obtain one BTU of ethanol energy, an opposite conclusion is possible even though the EROEI is ten times as great.
Therefor nonsense. QED
Good luck with rewriting the book on EROEI. Please send me a copy when you are done.
As long as BP has ignorant sheep like you, they have nothing to worry about as far as keeping their empire intact.
Where do you want the book mailed to?
Praise the Allmighty BP!!!!
Mix oil sands with a little solvent and a little ionic liquid. The EI falls dramatically.
I doubt you care to consider that, though. Like most peak oilers, you likely use the concept as a religion, and meet any criticism or unsupportive facts with fanatical wailing and ad hominem.
Well then let's keep destroying the Canadian fresh water aquifers to get this dog gone miracle out of the ground!
Heretics should be burned at the stake, eh?
"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him." Leo Tolstoy, 1897
"Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful." -Lucius Annaeus Seneca
WTF are you talking about? Your argument was demolished by technological advances, so now you are suddenly an environmentalist?
As if aquifers haven't been continuoulsy "destroyed" since day one of hydrocarbon extraction.
tmoseley, why don't you get off your ass and save the world already.
I've got a better idea--how about you stop praying for its destruction, and examine it for what it is?
I'm sick of your judging. I am not praying for anything. I am a proponent of developing solar, and I am a realsit when it comes to the peak of production of oil. Please, get on theoildrum.com and get laughed off, come back here, and apoligize for judging me. Because until your stupid ideas about the earth having a candy center get any traction, I will hold true to the facts that OIL PRODUCTION PLATUED 6 YEARS AGO. Disprove that fact.
Yeah, sure, just like I could go onto the global warming forums, and get laughed off for not beleiving in AGW. You can't convince zealots of anything.
Facts don't matter to peak oilers any more than they matter to AGW people, or any group of religious zealots.
And exactly which of my "ideas" are stupid? I haven't posted any "ideas". Only observations. There are hydrocarbons on Titan. There are hydrocarbons beneath the Atlantic plate. Serpentization reactions occur. Not only that, but oil can also be produced artificially for use as an energy dense fuel (ie for transportation). There are numerous possibilities, but the peak oilers just want to run around screaming about the end of the world. Utter nonsense.
Good luck with rewriting the book on EROEI. Please send me a copy when you are done.
////////////////////////////////////////////
No. It is not about rewriting books on eroei, it is about mentioning that it can be ignored.
It is the point. With US citizenism, there is no other rationale to perform an action than being able to perform that action.
It is somehow incredible that after 200 years of US citizenism, denial about one major characteristic of this doctrine, waste, still is.
Waste will be performed as long as waste is a possible option on the tray.
That is why EROEI is useless.
Ah,
more words of wisdom and hate from our resident 'Tao of POO' distributor.
gotta ask, are you a fuckin idiot?
Doh.
Care to google that?
EROEI = Energy Return On Energy Investment - same concept as conventional ROI. In the case of tar (oops, "oil") sands, it takes almost as much energy to strip off overburden, dig up and transport the tar sand, boil it in a big tank of water till the tar rises to the top, catalytically and thermally reform the tar into something more closely resembling conventional oil, and pump that in a pipeline to distant refineries (whew!) as will be contained in the final refined products. I have seen credible calculations that this is EROEI is about 3; for perspective, during the last depression West Texas crude was produced at an EROEI of almost 100. That latter figure provides an economic surplus that makes it much easier to pull out of a economic contraction.
Figures don't lie. But liars figure.
I've seen calculations concerning the energy required to pump deep oil to the surface that "proves" deep oil is not usable. Those calculations don't take into consideration that the deep oil may be under pressure (it normally is) or what would happen if water were injected into that well from above forcing the oil out.
If one only considers EROEI, then it is not economical to grow food because the amount of energy in that food is less than the solar energy used to create it.
If you can't dazzle them with brilliance, baffle them with bullshit.
Why don't you and tmoseley get on theoildrum.com and let them all know what they don't.
Because we're lazy and you're here and easy? Why do you think?
Theoildrum.com is full of mutual masterbating peak oilers. LNG on Titan and BP's Gulf of Mexico debacle suggest their theory has problems.
ok, no need to answer my earlier question; you ARE a fuckin idiot
how exactly do you think Titan negates peak oil? Are you retarded? What's the expected production rate from Titan, you fucking moron?
EROI is about how much energy YOU have to put into an activity versus the return on it, not how much the fucking SUN does. Clown.
Ah, the deafening sound of the point whizzing over Trav's head. The point of hydrocarbons on Titan is that for hydrocarbons to be on Titan, there must be a production mechanism that does not involve degredation of life forms.
But then, you are well known in most corners for ignoring any and all evidence that runs contrary to any thought that happens to flutter into your otherwise empty little head, so I'm sure you will continue to miss the point, and continue to rant about how anyone who even so much as mentions the words "hydrocarbons on Titan" are "fuckin idiots", despite their very valid point.
This is only slightly off-topic, but strictly speaking the atmosphere of Titan is composed largely of nitrogen (98%) with about 2% methane (CH4). Where does the LNG come into the picture? Are there oceans of it on the surface or something?
Googling as a public service: http://news.nationalgeographic.com/news/2009/01/090130-titan-methane-rai...
"Methane rains on Saturn's moon Titan may have created a new lake about four times the size of Yellowstone National Park, scientists say.
The new lake covers about 13,000 square miles (34,000 square kilometers). It's part of a system of lakelike features around Titan's south pole."
Natural gas is primarily methane.
So trav, say I have a 10 mile deep hole in the ground into a big pool of oil. According to some calculations I've seen, that oil is not usable because it takes more energy to lift it the 10 miles than the energy contained in the oil from burning it. What if I take some water I'd like to get rid of like sewage and put it in the hole and in so doing the oil rises to the surface of the injected water. I do this until oil starts running out of my hole. What is the EROEI?
What's the difference whether energy that is put into an activity is solar provided or otherwise when one is computing EROEI?
BP in GOM proves the low hanging fruit thoery.
Funny how you peak oilers keep claiming that, while continuously ignoring the fact that BP had applied to drill in the SHALLOW waters off of the LA coast, but was DENIED the right to do so.
According to you logic, we also have peak uranium, because no-one wants to build a nuclear reactor in their back yard.
Tar sand oil is not the same as deep oil under pressure. It is important to also consider externalities.
If you had X energy and Y capital at your disposal, which would you rather extract?
Food does not equal energy for purposes of this debate. Obviously the ratio of energy input to food produced is important--as evidenced in the effects of the green revolution (thank you Bosch) allowing petrol inputs vs merely ox input.
Thx for the explanation. I should have googled it, mea culpa.
the saudi's are sure pumping a lot of sea water, into those fields.
The truth lies for all to see. If you look closely and are not distracted by a ghastly shirt. Stacking up on some Ag at these prices, lost most of it in a really freaky accident involving a rowing boat.
It's a much more believable loss if it's due to a margin call.
We have already entered the twilight zone of a near-zero return, near-zero growth, biflationary economy. Near zero interest rates, near zero real returns on the 10 year, near zero GDP, stocks flat for the year. Reflation policy no longer works because it's accompanied by deflation in other areas of the economy. Even headline core inflation measures are reading near zero despite solid energy, food and raw material inflation. We are entering the economic fog in the developed world. In the developing world they're entering the fire as today Bahrain and Syria erupt. Tomorrow somewhere else
Well, Kurt Vonnegut indicated in his novel, Lonely No More, that days with near zero gravity would result in a permanent erection. Something to look forward to. No reports though from the astronauts, but there may be a cover-up. Also speculated that the Chinese would miniaturize themselves to microscopic size, and that the last POTUS would make an unofficial visit to the King of Michigan who was at war with the Duke of Oklahoma. The POTUS signed over the Louisiana Purchase to the King of Michigan as a gesture of good will.
That's all part of an exciting world. Unfortunately our immediate future holds nothing more than the hazy grey fog of endless zeros, where everything cancels. We won't have a crash, we won't have explosive growth, we won't get a revolution. We'll get the wish for stability at any price that was dreamt up in 2008. We'll get what we wished for: zero. But that will cost.
But if you can get AIG to insure your over the counter swap agreements, and everything goes just the way your quants. have modeled it; you might make %.0015. No basically, I agree; a very expensive zero.
S&P 500 on Dec. 31, 1998 = 1229.23.
S&P 500 on Dec. 31, 2010 = 1257.64
S&P 500 on Dec. 30, 2011 = 1257.60
Somehow, this does not quite resemble the 5% annual increase that many financial calculators use to project one's retirement balance X years out.
Then again, as William Banzai's latest creation said; Count not what is lost, but what is left.