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David Rosenberg - "Let's Get Real - Risks Are Looming Big Time"
Earlier, you heard it from Jeff Gundlach, whom one can not accuse (at least not yet) of sleeping on his laurels and/or being a broken watch, who told his listeners to "reduce risk right now" especially in the frenzied momo stocks. Now, it is David Rosenberg's turn who tries to refute the presiding transitory dogma that 'things are ok" and that a Greek default will be contained (no, it won't be, and if nobody remembers what happened in 2008, here is a reminder of everything one needs to know ahead of the "controlled", whatever that is, Greek default). Alas, it will be to no avail, as one of the dominant features of the lemming herd is that it will gladly believe the grandest of delusions well past the ledge. On the other hand, they don't call it the pain trade for nothing.
From Gluskin Sheff
LET'S GET REAL
We are constantly being told how much better the economy is doing. It's incredible what the January employment report did to people's perceptions of the macro landscape. It's as if we were just transported to the mentality that prevailed this time last year. Below we chart out the YoY trend in core capex orders on a quarterly basis ... the pace has slowed now for six quarters in a row.
The peak was 20.8% in the second quarter of 2010, but then again, that comparison was skewed by coming off the depressed 2009 base. In Q4 of last year, the trend moderated to 7.3% from 9.5% in Q3, to actually stand at its lowest level since the end of 2009. Food for thought.
Maybe the economy seems to be doing better because we have all adjusted our expectations so radically after being disappointed for so long — I mean — take 2011 as an example. A year that would normally see 5% real GDP growth for this stage of the cycle came in at a woeful 1.7%. This, despite a $3 trillion Fed balance sheet (triple its normal size), zero percent policy rates now for three years and now going on year number four of $1 trillion-plus fiscal deficits. Based on all this stimulus, if this were a normal post-recession recovery, GDP growth would be 8% right now, not sub-2!!
RISKS LOOMING BIG TIME
I remain amazed at how the consensus economics community is so certain the U.S. economy has suddenly hit escape velocity ... again! The economy is on major duty life-support and yet the recession, we are told, ended nearly three years ago. And the best the economy can do is a trailing GDP trend of 1.7%. Go figure. Housing has bottomed, we are also told. No kidding? From a real GDP standpoint, residential construction has actually contributed to headline growth for three quarters in a row, and overall growth was still tepid.
In any event, in terms of peak contribution, it's probably over. And yet economists talk about this as if it's new and not already priced into the market. Of course auto sales are doing fine and this is a heck of a model year—this is an area where an argument can be made that there is some pent-up demand. But what is interesting is that miles driven are down nearly 1% on a YoY basis — buy more cars, drive them less. But autos are just 10% of total consumer spending on goods and the improving trend here masks a serious deceleration in service expenditures, which represent the bulk of household outlays.
One wild card is gasoline prices which are on a rising trend. Four bucks by May looks realistic and that alone would siphon around $70 billion from consumer pocketbooks right into the gas tank. Capital spending growth is following the pace of corporate profits on a downward trend to boot. The boost from inventory accumulation is behind us. Governments are bent on austerity — that remains a secular theme. The biggest hurdle ahead: the hit to the economy from a widening trade deficit. The numbers out for December we saw on Friday were the thin edge of the wedge — that widening occurred for different reasons (inventory-induced import boom). Wait until the European recession and Asian slowdown hits the export sector.
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Preaching to the choir.
Indeed. Still good to read though, considering CNBC and Bloomberg can't seem to spread enough bullish fairy dust...
Bullish...or bullshit fairy dust?
Want to talk risk? Try taking a morning walk around a track and reading the bible with your two daughters in Orange County while black -
http://latimesblogs.latimes.com/lanow/2012/02/marine-shot-.html
A veteran Orange County sheriff’s deputy feared for the safety of two young girls sitting in a parked car when he shot and killed a Marine sergeant in a dark parking lot near San Clemente High School, authorities said Friday.
Sgt. Manuel Loggins Jr. was shot early Tuesday as he started to get into the SUV where his two daughters -- 9 and 14 -- were sitting, authorities said. Jim Amormino, a spokesman for the department, said the deputy was fearful that Loggins -- who he said appeared to be acting irrationally -- was about to drive off with the girls.
"The real threat that was perceived was the safety of the children," Amormino said.
"The deputy formed an opinion that he had a deep concern for the children, that he would not allow Mr. Loggins to drive away with the kids," Amormino said.
A former commanding officer said Loggins routinely went to the school with his daughters during the early-morning hours to walk the track and read the Bible.
Amormino said Loggins was not armed and that it doesn’t appear the incident was alcohol- or drug-related.
The shooting is being investigated by the Orange County district attorney's office. The deputy, a 15-year veteran, is on paid leave, which is routine in officer-involved shootings.
This cop is on PAID leave!?
One day soon people aren't going to give a d@mn that it's illegal to kill cops... just 'cause they're cops. I lived in New Zealand for a while, and one of the first things I noticed was how you could drive around a large city all day and maybe see only two or three cops in six hours of driving aorund. I see three cops in the first ten minutes of driving around my sleepy suburb in Florida. Now they're shooting people just because they think they're dangerous while the "brotherhood" protects them and sends them on paid leave while they fix things up?
I see a black color on the poor victim's face.
Does it matter here for the paid leave?
Or at the first hand, the shootout itself?
Skeptical, yet interested. I lost a "TON OF SERIOUS MONEY" being short, from the bottom, following this man. I have every daily market call to prove it.
"RISKS LOOMING BIG TIME" - uh yeah we know.
The risks are all over the place. I agree. But you still have to play the tape. Quiet the noise.
Armaggedon please....
Absolutely NOT! That is exactly what they want. See below. Watch the information on both posts.
Fuck this market!! LOL
LD scenario - is still alive (meaning the TOP could already be in place) -- the sharp rally into the close today could have been Leg B of C. LD's are comprised of 3 waves primarily. The market would need to turn down and put in a new low below today's low. My target is 1336 SPX for the C leg of the LD (leading diagonal)
http://jeffreygtc.blogspot.com/2012/02/tuesday-february-14th.html
Fuck Rosenberg -- bearish for a 3 year rally...now he's getting bullish?!?!
You need to reconfigure your perspective.
There is no rally. There is no market. There is no capitalism.
It all ended in 2008. Your target is decided or not decided by a digital playground, not an array of humans making predictions on company performance.
Open your eyes, guy. Correlations last year were 0.86! 86% of the variance in a stock was defined by the S&P as a whole. There is no stock market. There are only SPY algorithms.
Rosenberg needs to be conscious of only one thing in this overall context, and that is the Lesson of 2011. That is Governments Will Do Anything to keep the wheels turning. They will murder people (Gadaffi), they will jail people and later drop charges if they need them out of the way (DSK), they will force people to lend money to others they don't want to lend to (the Greek bond swap).
Similarly, it's an election year and the Strategic Petroleum Reserve can hold gas prices down long enough for November. If gas is to go high this year, it has to do so very slowly and then not spike until late September when it's too late for Obama to stop it in time.
So don't bank on gas prices following "fundamentals". Governments care about nothing but re-elections.
Nice post, Crash,
All true and the market is the virtual reality that can only be sustained by moving away from the street of the real world. They will do this depite the knowledge that it will fail, because they don't know what else to do. Neither do I.
But I do know that some of us old timers were having this discussion from the crash of '87 on, and we decided that the market would never be a real market again; and it turned out we were correct. So what?
We didn't have the guns then and we don't have the guns now-----the other side has the guns and they will use them. It is no longer a country that I recognize or can own. Perhaps---PERHAPS, more people will begin to understand that Occupy is the only game in town for now, and begin to at least send those young idealists money enough to carry on the only resistence there is; I hope so.
The infiltrators among are getting paid to inflame and ridicule anything that even seems like a tiny threat, So I hope all the real people here do not become discouraged by the number of hits the red arrow receives---fuck'em.
We never imagined in '87 that tyhere would be any market without humans, but as you point out---this is where we are. What to do? Shit, I don't know---but, I will do nothing because it seems most likely without something to push against---these vandals will self destruct as has the dead machine they tried to foist upon the entire species---again, I say---fuck'em.
We are in the twilight zone, so anything is possible and everyone who resists---actively or passively----deserves support no matter who they are or whether you agree with them or not---
This why I hang out here at ZH---I don't care about money or markets--I don't have any other way of demonstrating my solidarity with humans aside from being the troll I am,-----but please remember
it is never personal om
Indeed, it's as though the matrix went online in 2008, and mostly went unnoticed except for a few who notice strange things that don't make sense, then go writing about them on blogs...
Capitalism only ended in 2008? I know someone who will be taking out his red pom poms this November.
I will try to develop my ideas over time, please bare with me. The insanity of the US/Eur situation was brought home to me with the outrages of Leghman Bros collapse and the games that were played afterwards.
Those of us here lament many things and some solutions are offered. My concept goes along the lines of developing parallel means of economic action - along the lines of barter but on a bigger scale. Sure PM's are ok, and perhaps vital to survive to the next step. After all - humans will carry on in some manner no matter what the political outcomes.
I recall that after the fall of the USSR there was at least one individual that was able to keep large enterprises functioning by creating a barter clearinghouse. 'You produce steel and you need tires for your truck? We can help.' He was able for a short period maintain commerce by being an intermediary; I think the same thing will be in order in the US and also on a global scale. The bottom line, I think, is to cut out the banking and insurance systems.
I have done a bit of travelling and have realized that local economies are paralyized by the fixation on their strangled local currencies, but more importantly by not being able to realize/exploit alternatives.
There are some new tools: the internet ( as a foundation), bitcoin, I don't really know where this is all going...
Any thoughts as how to avoid the heirarchal financial structures?
Silver and gold, Silver and gold, nothing is better, than silver and gold... how do you measure it's worth? Just by the pleasure (treasure) it brings.... to.. the.. people.. of... earth
I love that fat ol' snowman...
So does that mean the Bumble is the economy? No wait, Bumbles Bounce!
http://www.youtube.com/watch?v=AbSsQR__bgE
For like minds Long Soup: Check out this video on YouTube:
http://www.youtube.com/watch?v=GRFokPHaOX8&feature=youtube_gdata_player
What LA doesn't count. Today I paid $4.11 9/10 for a gallon of Regular at Chevron. Yesterday it was $3.99 9/10. Not only that the gallons seem to be getting smaller because I'm getting less mileage per gallon with the same car. No one ever mentions LA in the gasoline statistics because there are more cars in LA than anywhere else in the Country. And, they charge more here.
Your latter effect is the consequence of obfuscation in the world of oil stats.
All barrels of "oil" don't have the same BTU content. Ditto "gasoline". If you're getting ethanol added in, it is a diminishment in energy content of the barrel.
Your gas tank holds the same number of gallons of gas, but that gas doesn't have the same energy it once did. Result, lower mileage.
BUT ITS DOMESTIC ENERGY SO WE ARENT SUPPORTING THE TERRORISTS. WHO CARES IF IT IS OF A LESSER QUALITY, US JOBS OMFG! /SARC
So, gas with ethanol costs more and delivers less btu? Only in updown blackwhite nightday Orwell world does that make sense.
they are probably adding ngl's to the fuel supply, and the emission additives, are just designed to get more gallons per barrel, by homogenizing solvents, with less combustibility. thats one of the reasons fuel doesn't store well anymore
That, or they're pretending to be a bar and watering down the likker....
I think the gas is shittier here out west - ethanol mixed into the gas maybe??
Less oxygen to burn it more completely....
Are the ctrl-alt-p keys broken?
Rosenberg's comments just raised my probability of an SPY breakout to new 4-year highs from 35% to 50%.
I mean really, that guy constantly jinxes the bears.
Heh, even tonight Kudlow was chortling about how he warned everyone of the "correction" that is occurring and he is still scared to death of what happens when Greece defaults.
And don't forget Cramer, he'll be anxious to be another chest-pumper bragging about how he "nailed the top".
Lots of top pickers out there.
Hey whats your latest and greatest rear view mirror trade today? You assclown.
well, there's the plain fact that the right bet so far, since October, has been to be long the S&P. The trend is your friend, especailly when it's what ben wants. RT si simply saying it will keep going, not that there is a rational basis for it.
Just sayin' not preachin'
But it does feel like riding shotgun in a runaway, brakeless car approaching yet another set of nausea-inducing tight curves. . . . .
Asia is ROCKIN' right out of the gates. Shall we check in and see how the Looney is doing? (He was last seen bombing down the highway laughing all the way to the bank...OH THE MADNESS! OH THE MADNESS!)
http://www.youtube.com/watch?feature=player_detailpage&v=vydG_3EWzkE
Isn't the SPX 200 points off it's all time high from 10/9/07? Still down from 12 years ago, too, right? All you do is come on here, when the SPX is above 1200, and start clamoring about how great equities are when they have continuied to be the shittiest performing asset class of the past decade. Commodities, bonds, a lot of currencies, etc. all beat the asset class you have a hard on for. What a dolt.
Robo has an anxiety problem that is manifested through chronic masturbation. Please disregard the discharge.
$4 gas?
oh shit - that is funny
try $25 gas IF YOU CAN GET IT
Don't worry, the asswipes at FRBNY are working 24/7 to figure out how to turn iPads into fuel now that they've already cracked its food code.
a human body can be rendered to 5 gallons of bio fuel
Oil lent green
Greece is not ok. If they were confident a default would be contained, they wouldn't give them any more money!! They would cut them loose.
Greece is simply a distraction from Italy..no, I mean Portugal...wait, er, I mean Spain...uhhh, er...I...oh fuck it.
That, sir, is a very good point.
I have thought for some time that the EU is CLEARLY terrified of default. Greece should have leaned on that and refused to do anything at all.
I'll bet the EU would have made their March payment for them.
This is a safe PDF download. Simply made a quick link. Taken from Google. Enjoy
The Grand Chessboard --Zbigniew Brzezinski
Your problem is you just don't have enough hope.
So true. Managing the life savings of hundreds of hardworking upper middle class folks in SMAs, it is so tedious trying to save clients from themselves--and insurance product salepersons Moreover, according to Buffett and BR's Finkmeister, be 100% in stocks. Assholes should shut-up and realize that the marginal utility of the average investor's dollar is a shit-load more important that theirs. Hopefully Gundlach's clarity continues, as his DMLIX fund is a sneaky way to lower beta while still looking for opportunistic returns on the equity side of a portfolio.
Second post
You can make up your own mind on what you see or don’t see unfolding in front of your eyes. Take a look for 3.57 minutes.
Warfare
Let's see, observations lately in the real world over the past few months:
I have a three year old boy.
A soft taco at Taco Bell has gone up from $.99 to $1.19
A new Star Wars figure is now $9 vs $6.79 for the older ones
For some weird reason Lego sets actually went down in price
Hot Wheels went from $.99 to $1.09 to $1.19
Not even worth going to the grocery store anymore, inflation is running what seems to be 5% per week.
Juice boxes have dropped in size by two oz, same price.
Thanks to the EPA my water bill went up by 15% Jan 1st.
Don't forget the runup in AAPL stock.
My Wunderbar german Bologna went up .10 a pound.
But ... but ... Obama says that everything is fine.
Is anybody going to wait around to March ... it will go down sooner.
i saw a lecture by a man on youtube that described his experience after that 1989 collapse of the Soviet Union, and b/c of their command and control system, people there still had basic services, but it was hell.
For us here, it is going to be much worse when this collapses as we are completely unprepared as a country and will have to rely on our own preparedness or lack thereof.
I have a friend who lived in Russia during '89. His grandfather saw the collapse coming, traded all his cash for gold, and buried it in the forest behind his house. He died soon after. His family is still digging in the ground for it.
Well, at least it's worth digging for. Imagine if Grandpa had simply buried Rubles..........
Well, at least it's worth digging for. Imagine if Grandpa had simply buried Rubles..........
http://www.kellycodetectors.com/?gclid=CN3r0oKDoa4CFQff4AodKB9f4w
http://www.tubeplus.me/player/1967593/Thrive/
Thrive
Thx blindman for link. Just grab it using JDownloader, a free versatile DL manager
-> Thrive 2011 DVDRIP 470mb in wmv / flv
The top is in ES at 1357.50 ... Valentines Day gift for the Bear
MINNEAPOLIS, Minn. & LOS ANGELES, Calif., February 14, 2012 The Ceridian-UCLA Pulse of Commerce Index® (PCI®), issued today by the UCLA Anderson School of Management and Ceridian Corporation, fell 1.7 percent in January following the 0.4 percent decrease in December*. January’s data places the PCI 2.2 percent below year-ago levels with essentially no growth in the year-and-a-half since the summer of 2010.
“It seems difficult to square the behavior of the PCI with the evident improvement in a number of economic indicators, most notably the increase in payroll jobs and the decrease in initial claims for unemployment,” said Ed Leamer, chief economist for the Ceridian-UCLA Pulse of Commerce Index and Director of the UCLA Anderson Forecast. “The PCI also seems out-of-sync with Industrial Production and with Real Retail Sales, which continue to grow in a healthy manner while the PCI is stalled out.”
...well if everything is going so great, then someone must have discovered a new way to ship things other than by truck....just a hunch, but the PCI is more trust worthy than the BLS numbers....PCI is based on actual card receipts for diesel used by truckers...without any fudge factors applied.
There is only `1 election between the USA and the deep blue sea....
Vote...but prepare for the deep blue sea...
It seems hopeless at this juncture. Obama vs. Romney is like Obama vs. Obama.
Its...probably not the same...at all...
I was wondering what your screen name meant, then I realized it's all about your life.
burt you nailed that bastard Osama...911, THAT'S what counts...USA,USA,USA <sarc off>
...and all you other non burts out there in USA land
No worries....Obama has it under control...the Chinese communists will bail out Western nations....Where is the problem....Buy Buy Buy
I'm not sure but I don't think that big time looming risks have anything with buying low and selling high. What seems to be important is if central banks are going to transfer more wealth to bankers and if there are enough non HFT to effect the market even if the world explodes. If there are not enough non HFT then BTFD.
What risk?
Trading this market is simple. Bet on Treasuries held up, stocks held up, gold held down, dollar held down, Euro held up (currency swaps), Euro sovereign debt not held up.
Next major event won't be in Treasuries nor stocks, it'll be currency collapse, and it'll happen very quickly, nobody has time to sell longs nor place shorts ...except insiders of course.
You don't understand how important it is to make people think the economy is improving so they will spend so we can show signs of recovery so Obama can get re-elected. If Obama doesn't get re-elected how can we keep the hope and change going?
It doesn't matter who gets elected (excluding RP who sadly has no shot of getting elected), the world economy will still be in the same shit storm it is in right now. How many of you will keep acting like it matters if a Republican (most likely Neo-Con Romney) beats Obama?
I can't believe that what appears to be a stock market bubble has driven the S&P, Dow, and Nasdaq to almost new heights. I can tell you the retail/sucker investor is starting to invest again (I'm not just talking about 401K's sadly). I have no clue how they got these suckers to invest in the market again, but it is happening.
Hmm, I wonder how long the rally will last now that the retail investor is back (new bag holders)..
I seem to remember CNBC saying something along the lines of: 'Buy high and sell higher.'
Rosenberg + Webb Gluskin Scheff
http://watch.bnn.ca/headline/february-2012/headline-february-14-2012/#clip618897
'Nother
http://ftalphaville.ft.com/blog/2012/02/13/878961/the-roubini-rosenberg-indicator/
"Governments are bent on austerity..."
Only in words, not actions. The total US Governemnt debt continues to go up, as it does here in the UK - "We're spending more, but we're not spending as mush as we thought we were going to therefore we are are being austere!". Crap.
DavidC
LIVE (ENJOY) FOR TODAY!
LEAVE THE LEGACY (BURDEN) TO THE NEXT GENERATIONS!!! who gives the f*ck about tomorrow...
"i'd worked very hard along the way to climb to the top...now i wanna enjoy my throphy at the fullest"
the gubmint ways of thinking