This page has been archived and commenting is disabled.
Goldman Summarizes The "Frightful Week Ahead"
From Goldman Sachs
This past week's EU Summit boosted risk sentiment materially, even if it failed to resolve in a definitive way some of the underlying problems facing the Euro zone. This was borne out in the price action this past week, where spreads on Italian and Spanish government bonds over Bunds narrowed around 20bp and 30bp on Thursday, respectively, but then gave almost all of this back on Friday, as market focus returned to Italy and the need for growth enhancing structural reforms. The Italian bond auction did not indicate a substantial improvement in investor sentiment either. EUR/$ on Friday traded with a softer tone, thought it held onto most of its gains from Thursday, underscoring the fact that EUR shorts remain sizeable even after the rally from 1.32 over the past month. In fact, when looking at our proprietary GS Sentiment Index, based on IMM positioning scores, risk reversals and bullish/bearish news commentary, EUR/$ short positions have increased to stretched levels (Figure 1). Among high-beta FX, the best performers last week were BRL, MXN, TRY, CLP, and ZAR (all against USD), while HUF was a notable underperformer against EUR (Figure 2).
Source: GS Global ECS Research
Source: GS Global ECS Research
In the big picture, the market continues to be torn between two conflicting desires. On the one hand, there is a need to remain nimble and keep any "risk-on" positioning light, given that a permanent solution for the Euro zone remains elusive and that US and global growth may remain slow as also indicated in our forecasts. On the other hand, in the wake of the risk sell-off in August and September the market, in our view, remains underweight risk, which was underscored once again this past week by the outsized rally following what was really a relatively tepid EU summit. In short, while substantial uncertainty remains, there is always a possibility this gets brushed aside into year-end.
Given this uncertainty, we monitor two things. First, the European policy process obviously remains key, and we will be monitoring developments into the Nov. 3-4 G-20 Summit in Cannes and the Nov. 7 Eurogroup meeting in Brussels closely. The former will be key in fleshing out any emerging market contributions to the SPV announced in the EU summit statement from this past week. The Eurogroup has been tasked with finalizing the implementation of EFSF leveraging and the SPV in November. Second, we are closely watching cyclical data in the US and elsewhere, and whether downside risks to growth are abating. In this regard, the coming week brings the global PMIs, including the all-important ISM and October payrolls, where at 75k, we are below consensus (95k). In terms of central bank meetings, we expect the FOMC to leave policy unchanged on Nov. 2. The official statement also likely requires only minor edits, although the improvement in market conditions and some incoming data could warrant an incremental upgrade in the discussion of current conditions. Fed Chairman Bernanke at the press conference may, however, discuss communication options under consideration—including an explicit path for the federal funds rate—but we do not believe the FOMC is ready for major changes at this time. Mario Draghi's first policy meeting as President of the ECB will be important to watch on Thursday. We hold firm to our view that a rate cut will only come in December (50bp), and the market is pricing low odds for a cut this week.
With a lasting solution to the Euro zone crisis still elusive and uncertainty remaining over the pace of economic growth in the G-3, we remain focused on relative value FX opportunities. This past week, we went long SGD and MYR funding in equal parts out of EUR and USD. Funding out of EUR in addition to USD has the advantage that the correlation of this trade with risk appetite is close to zero, in line with our still cautious view overall. SGD and MYR have stood out in our analysis (see Figure 3) as having sold off heavily relative to other EM FX. On a one-week horizon and assuming that last week's dollar and risk sentiment trends persist, currencies with a current account surplus and commodity exposure look particularly interesting, for example the CLP versus the USD.
Source: GS Calculations
Monday Oct 31
Taiwan GDP (Q3) We expect 3Q2011 GDP growth to slow to 3.5% yoy, down from 5.0% yoy in the previous quarter. The Bloomberg consensus forecast is at 3.6% yoy.
Euro Zone CPI (Oct) Consensus looks for a reading of 2.9% yoy, down from 3.0% yoy in September.
US Chicago PMI (Oct) Consensus is looking for a moderation to 59.0 from 60.4 previously. We are forecasting a reading of 58.0, below consensus.
Tuesday Nov 1
Global PMI's We expect China's official PMI to show a moderation in October. We believe despite the rebound in activity growth in September, the underlying growth momentum remains weak amid still tight domestic monetary conditions and weak external demand. Seasonally, the official PMI tends to fall in October as well though the seasonal factor may not be stable over time.
Indonesia CPI (Oct) We expect October CPI inflation to come in at 4.7% yoy versus 4.61% yoy in September. The Bloomberg consensus expectation is at 4.78% yoy.
Korea CPI (Oct) We expect CPI inflation to moderate to 4.2% yoy in October. That said, inflation moderation is likely to be slow in coming months due to the recent KRW depreciation and pent-up pressure for administered prices including electricity, natural gas, and public transportation tariffs.
Australia Central Bank Meeting Following last week's benign CPI reading, our economists think a 25bp cut is all but assured. This is in line with consensus. The market is pricing a roughly 75% probability of a 25bp cut at this meeting.
UK GDP (Q3) We are significantly above consensus, looking for a reading of +0.6%-0.7%qoq (the median of economists polled by Bloomberg is just +0.3%qoq). Much of the growth that we expect reflects statistical distortions (in particular, the reversal of the royal wedding effect). It may be that the consensus forecast has taken insufficient account of these factors.
US ISM (Oct) Consensus is looking for a small rise to 52.0 from 51.6. We are below consensus and are looking for a reading of 51.5.
Wednesday Nov 2
US FOMC decision (see our discussion above)
Thursday Nov 3
G-20 Summit in Cannes
Euro Zone ECB rate decision This will be Mario Draghi's first decision as President of the ECB, which will make the press conference especially important. Consensus expects rates to be on hold, as do we. We are expecting a 50bp cut only in December.
US Initial Claims (Oct. 29) Consensus is looking for a reading of 400k, relative to 402k in the previous week.
Friday Nov 4
G-20 Summit in Cannes
Australia RBA Statement on Monetary Policy
Global Services PMIs
US Non-farm payrolls (Oct) We forecast that non-farm payroll employment rose by 75k in October. The deceleration from a gain of 103k in September reflects the lack of a boost from the return of striking workers and still-moderate hiring activity. Consensus is looking for a reading of 92k. In line with consensus, we expect the unemployment rate to remain unchanged at 9.1%.
»
- 11777 reads
- Printer-friendly version
- Send to friend
- advertisements -
Markets rose by about 20% in October. No reason why they couldn't fall 20% in the first week of November once people figure out that there has actually been no Euro deal at all - NOTHING.
Markets dropped in the fear of a credit event frrom Greek default that would have caused major banks to collapse. That wont happen now that the markets are assured banks will not be allowed to be failed and Greece was not a credit event. They were preparing for a Lehman like event, which will not happen because politicians, it seems, will not let it happen. Markets will rally on to year end unless Italian bond yields sky-rocket from here, which it might will now that nobody wants to buy soverign bonds when CDS offer no protection against a "voluntary haircut", especially banks are near death and they were the major buyers.
All bond yields will rise, sovereign and commercial. It's only a matter of days before bond investors realize all CDS are suspect, not just sovereign. I see a massive unwind of all CDS positions, and the concurrent rise in bond yields as the true cost of hedging/insurance. This is the bigger nightmare.
With a flight to US treasuries as a last resort, the derivatives market is dying, if not dead already. There is absolutely no trust left anywhere. The iBanks won't be reaping CDS profits, continuing their downhill slide. Institutional funds will find the safe harbor of last resort, and turn their phones off.
I would think, at this point, CDS investors would be looking at court action to nullify their existing contracts, based on recent 'precedent'. Forcibly taking a 'voluntary' haircut is only one half of the coin.
Cash will be king, and the Chinese aren't the only ones waiting on the sidelines for the bargains of a lifetime. The patience of well-fed vultures.
www.occupytheroseparade.org
FOUR DEMANDS: (1) Profit disgorgement & punitive actions (PRISON) for the CEOs & banks that benefited from the dot-coma & real estate ponzi schemes of 1998-2008;
Bernie Madoff with my money is first cousins with Lloyd "god's work" Blankfein!
The credit events will happen once PIIS demand their 50% cut. Then bond yields jump to near Greece levels. Flight to USD. That's when we'll see another big drop in ES. Just in time for US budget plan and more debt ceiling debate in mid Nov. Even the dumb money won't chase this "rally" much further, and certainly not into year-end. This is it, we're points from the top.
GS recs are a fade!
Not entirely. I mean what could not be more valuable than to point out the obvious driving conditions of beta, commit to monitoring such and equivocating after the outcome as to the reasons and viability of said into the future whilst generating commissions throughout. Let alone the proprietary desk whcih they no longer have uner the name proprietary but probably run now stealthily in the non-deposit taking commercial bank subsidiary so all's guaranteed 100% by the FDIC.
Now I ask you, what could be more practical?
FAZ SPXU Calls, nothing outright!
You know, I am a big fan of Zerohedge but you guys are really starting to tick me off...PLEASE try and be much more accurate than you are...I see nothing in what I read that Goldman Sachs said the following week will be "frightful." If they did, print it. Otherwise, refrain from this kind of inaccuracy and hyperbole. The situation is bad enough, it doesn't need more hype...And if missed it, then please point it out to me. Thank you.
usexpat
Just a thought,but have you given ZH the benefit of a doubt that this IS GOLDMANS SAYING THIS?.
I'm glad my comment is generating some discussion. When something is put in quote marks, it means the person said it. That is a rule in journalism. Period. Quote marks are sacred.
Too often in recent months, I find Zerohedge is sloppy and inaccurate and playing loosely with the facts.
It bothers me because it is a great website and it does publish a different perspective we don't get elsewhere.
But I find myself going to other sources more and more often to make sure the facts are accurate and too often, they aren't.
I will continue to point this out in future examples in an effort to improve the accuracy of the site.
If Goldman said next week will be "frightful" as they are quoted as having said, great, put it in the story. Otherwise, just give us the facts.
Sounds like you better stick to the WSJ, NYT, etc. ZH is not journalism. Question the rules. You need to go back and watch Fight Club.
The quote in the headline should be in the article below, that's not just basic journalism, it's basic English. But I'm hoping it was in part of the GS release that simply wasn't included in the stuff below, and thus a Tyler oversight. The title says Goldman is calling this week, "frightful," and I'm hoping they did, and it is! (SPXU)
I'm hoping the week is frightful too, I have options (puts) riding on it. Just part of my interest in accuracy..Hopefully, someone from Tyler's staff will respond to your query and mine and let us know if Goldman actually said it or not and, if it did, share with us the release so we can read it ourselves.
If "Frightening" is in quotation marks, then ZH is quoting them. If they didn't say it, then it's a lie. It's as simple as that. If ZH begins a practice of intentionally misquoting people, then it will lose all credibility and I will stop reading it. I come here to hear the truth, not just more lies.
Tyler is Referring to Halloween, an American holiday
If Goldman is suggesting roses, they really mean it's for the funeral.
Are you that simple that you take GS's words at face value?
Financial professionals with little journalistic knowledge, or skilled journalists with little financial knowledge?
Choose wisely. I read ZH because they are the "American Pickers" of finance, not because they have humbling penstrokes.
I think it safe to assume "Frightful Week Ahead" may be Tylers' commentary on the week's calendar of events/releases that GS presents.
And, I concur.
Here I'll do the first paragraph for you. You'll have to do the rest yourself. This is scary shit...
"market focus returned to Italy and the need for growth enhancing structural reforms"
"The Italian bond auction did not indicate a substantial improvement in investor sentiment either"
"underscoring the fact that EUR shorts remain sizeable even after the rally from 1.32 over the past month"
"EUR/$ short positions have increased to stretched levels"
here is another hint - see look for troublesome stuff like this
"We forecast that non-farm payroll employment rose by 75k in October." and
"we expect the unemployment rate to remain unchanged at 9.1%"
PLEASE try to understand what you read.
Not for me to defend ZH but.
The "headline" may not be in the text but if the improved sentiment on Thursday evaporated on Friday it does not bode well.
Had this latest plan been anything approaching the hyperbole of the EU one would expect a far greater appetite for risk.
It doesn't seem to be there.
Because the "plan" is empty.
yoy yoy ... I get it
Sadly - the hedge funds WILL chase the market up - because 95% are closet indexers, who are now under performing. Most know it's BS - but fear a wave of redemptions. Party on. The collapse will be that much bigger...
Here's the Shocker:
Despite the fastest equity rally since 1974,
Everyone is still buying bonds hand over fist.
Pull up a chart of AGG, barely moved last week.
Every week we get another report of inflows into bond funds.
Every week we get another report of outflows out of stocks and mutual funds.
We are in the midst of the worst recession on record.
Unemployment is the highest it has been since the 1930's.
Yet QQQ and XRT are outperforming.
What does that say?
What happens to stocks when fund flows reverse?
What happens to stocks when the economy actually improves?
Robot Trader,
Some salient points until this one.
What happens to stocks when the economy actually improves?
I do not see the economy improving in the next 5-10yrs.Unless we stop outsourcing jobs,bring em home, and penalize companies for doing overseas ops.
The West will not stop outsourcing work/jobs as long as the bankstersand their lapdogs, the polticiians, are in power.
It is going to take a revolutionary change to stop what is going on. At the moment tens of millions in the West are going to find themselves becoming poorer in the years ahead.
Don't forget who runs the show in this country.. it ain't the American entrepreneur or worker.
The economy might improve - it might happen.
And..
http://www.youtube.com/watch?v=QOKociU8t_Q
Based on this data set, they will go staight down...
They are shifting from Italian, French, Spanish bonds into US and German bonds and it seems like there is a shift from Euro markets in to US markets. I doubt this will end well as US companies have been making record breaking profits by shifting work to foreign nations where labor is cheap by using cheap money provided by the Fed. This will suck when foreign workers demand increased wages and US citizens are broke and unemployed except during retail seasons where they work part time to sell items made abroad to the rich people here who got richer because of the stock market and cheap money from the Fed.
exactly the same 'mo' scenario leading gradually up to the stock market crash of oct. 29, 1929 [black tuesday] -
"when logic is taken out of a rational equation,... an intuitive paradigm shift occurs - binary concrete structure is severed from abstract coherent thought - thus making a symbiotic transcript null and void, whereas this short-lived, and shallow face of exuberance painted upon human-nature's silhouette, is swiftly overcome, and dealt harshly by realities ubiquitous cohesion to balance"
* classic ___ yin and yang
That says that momos are the only players in town. EURUSD UP = QQQ/XRT up. As this article points out, the EURUSD shorts are stretched. The upcoming rally due to EURUSD short covering is going to be mind boggling and will suck in the blue-haired retail types. If you apply logic here and analyse the situation as it actually is you will be unceremoniously penetrated in orifices you don't want penetrated.
When the fund flows reverse, the momos will sell, sell, sell to the sheep. Just like always. Everyone will declare that they are rich again because their 401k is at all time new levels. All will be well in the kingdom. Delusion is more powerful and readily accepted than pragmatism and responsibility. Most people don't realize that their portfolios are worth nothing UNTIL THEY SELL THEM. Cost basis means nothing.
I think we are at a point in history where "when rape is inevitable, sit back and enjoy the ride" sums it all up. TPTB want equities way up and the minions in world governments are willing to give them whatever TPTB want as long as the retain their vassal job positions. Haircuts have to be offset by an equal or greater increase in equity holdings. They know that austerity is a joke and no one has the balls in ANY government to raise revenue streams via taxes or cut spending to any effective level. This whole manufactured world financial crisis is nothing but a vulture fund trade setup.
Every government to date has sold out their countrymen for the NWO vision by large margins when initially talking tough talk against the machine(aka Slovakia,Greece,Italy,...). The US is rapidly coming up too with this SuperCommittee BS.
So yeah, I think it's "Frightening" out there.
Every hedge fund is down for the year
Nobody is going to get a bonus
What happens when single digit crap stocks in the S & P 500 like Genworth and Monster Worldwide start going up 5% - 6% every day?
I guarantee you that millions of hedge fund managers will be scanning furiously the "Top Percentage Gainers" list every morning in order to start dryhumping all kinds of "bargains".....
It is the only way these guys can realistically "catch up" after a miserable year.
That is why you are seeing the favorite "hiding places" like AAPL, GMCR, PCLN, etc. sell off and the low cap junk really start to fly.
http://www.marketwatch.com/tools/marketsummary/screener.asp?exc&hange=13...
Those hiding places missed earnings and their accounting was taken under question.
"every", "nobody", "guarantee".
robottrader: "always" sure. "never" in doubt.
October 28, 2011 8:11 pm
How historians will look back on Euroland’s demiseBy Norman Davies
http://media.ft.com/cms/9bbe2940-f254-11df-9118-00144feab49a.png); position: fixed; width: 30px; display: block; height: 164px; cursor: pointer; left: 0px;">If Sparta and Rome perished”, asked Rousseau in his Social Contract, “how can any state hope to live for ever? The Body Politick, like the body of a man, begins to die as soon as it is born; it contains the seeds of its own destruction.” The histories of Europe’s numerous extinct states testify to this truth. Early examples come from the five Kingdoms of Burgundy or the Crown of Aragon, a recent one from the Soviet Union, which evaporated in 1991.
Yet states continue to vanish; sooner or later, all human institutions fall apart. The German Democratic Republic merged with West Germany. Czechoslovakia broke up when Czechs and Slovaks agreed their velvet divorce. The federation of Yugoslavia was torn asunder between 1991 and 2006. The map of Europe has repeatedly been transformed by state dissolution and EU expansion. Speculation spreads about which state will be the next to fall. Some say Belgium, others Italy.
More On this storyMost recently, the demise of Euroland came into view. It is not a sovereign state, but it is a body politick of sorts and subject to the same vagaries of fortune afflicting everything else. Launched only a dozen years ago, it may join the long list of organisations that have died young. It lacks viable organs of fiscal management and political governance; by general consent, it must reconstruct itself rapidly or break up. “The eurozone is doomed”, its critics argue. Britain’s Foreign Secretary describes it as “a burning building with no exits”. George Soros warns of possible “meltdown”.
The prospect of a conflagration, puts fear into europhile hearts and a smug sense of schadenfreude into eurosceptic minds. The former hope that the international fire brigade will intervene, the latter that the whole dastardly caboodle will blow up.“How marvellous” they chortle in the Tory clubs; “the busybodies of Brussels are meeting their come-uppance. After all, those ghastly Greeks who cooked the books to enter Euroland in the first place are sure to be cooking them again with an eye to ever larger bail-outs.” Euro summits, the argument goes, are just talking shops. Orderly default is a pipedream. The eurozone rescue fund is an underfunded piggy bank. The European Central Bank is toothless. There’s no central European treasury, and the German courts are obstructing remedies. Politicians are forever quarrelling and kicking the boite down the piste. Greece will push French banks down the chute first; but German banks won’t avoid it, and together they’ll finish Italy off. “With luck, Italy will suck Spain into the abyss; Portugal will follow Spain, and Ireland Portugal. Just think of it! Those Irish traitors from 1922 will get their deserts! Terrific!”
Then continental banks lock their doors and the cash machines dry up. Minestrone kitchens appear on the streets of Rome. Spanish bullrings house the destitute. The bridges of Paris fill with rough sleepers. Weeks and months pass free of money. Europeans relearn the art of barter. When the cash flow stutters back, machines distribute drachmas again, the franc nouvel and the peseta nueva … Yet Britain’s latterday Blimps will still not be satisfied. They hanker for the whole hog; before we pull up the drawbridge, they say, the EU itself must vanish.
As history books will explain, the disintegration of Euroland caused deep political rifts. Historians agree that the rejection of a constitution for the enlarged union had caused paralysis. When Greece defaulted and defected without warning in April 2012, a Committee of European Salvation met in Luxembourg and suspended all treaties; it quickly subordinated Brussels’ secretariats. It was headed by the dynamic Polish premier, Donald Tusk, aided by ex-Chancellor Angela Merkel, who had retired to her mother’s hometown of Sopot. Gaining the support of 16 of 27 EU members, they claimed to be acting democratically. “We’ve seen systems fail before,” said Mr Tusk, “we won’t let it happen again.” Presidents Barroso and Van Rompuy disappeared. Within a week, a self-styled Committee of Free European States was convened in London by William Hague, vowing last ditch defiance. Each committee denounced the other’s claims to legitimacy. The long process of splitting up Europe gathered speed. Two single markets arose, three Schengen-style border-free zones, and 20 currency regimes.
And the French and the Flemings pulled up the drawbridge. The Channel Tunnel was blocked at Coquelles; ports and airports under CES control impounded British freight. Britain’s pleas to the IMF for a rebate on her £75bn contribution to Ireland’s third bail-out fell on deaf ears. Economic life in the south east ground to a halt. The lorry queue at Dover stretched to Birmingham. The National Grid crashed. Fuel ran out. Riots far more violent than those of the previous year wrecked London. Barclays Bank HQ was torched; Sir Freddie Godwin was dragged from his Bentley and lynched; and Gordon Brown and Tony Blair were last seen rowing hard out of Heysham Harbour. Hunger stalked England’s pleasant land. After a shot-gun election, the British PM, Nick Clegg, declared unilaterally that a valid EU no longer existed and that British membership thereby ceased. Of course, the CES had not really abandoned monetary union or plans for European integration. As a gesture to national feelings, the euro name was dropped and members were permitted to re-name the common currency within their own countries, but only on condition that strict parity was maintained. The Constitutional Convention resumed.
What is more, on the day Britain left the EU, Scotland’s First Minister, Alex Salmond, returned from a tour of Warsaw, Berlin, and Luxembourg, celebrating undisclosed financial guarantees. Prior to the Great Depression of 2012-14, he had seemed to be settling for extended autonomy. Now he reverted to the SNP’s original proposal for a referendum on full independence. “Brave Scots!”, he began on reaching Edinburgh, “Europhiles! Citizens of Ecosse!” “Do you choose to stay under London’s heel in the company of Greece, Sicily and Latvia?” Then, drawing breath: “Or is it your choice to revive Scotland’s historic mission, and as partners of the majority of European nations, to join their union as a proud, free and sovereign kingdom?”
OK I will be the one to say it:
This is Tylers' blog... If you want to share entire articles, please start your own.
The comments section is for your own original thoughts and, where appropriate, LINKS to other articles you care to recommend. We may be lazy bastards, but we ain't too lazy to follow a link. At least not yet.
If you don't subscribe, you can't follow the link.
Fine.
-1
Ho-Hum. Risk-on, risk-off. BS. To WS and their banks, it's only risk-off when they gamble other people's money which is 99.9% of the time. Heads I win, tails you lose. What a system.
The headline of ESFS being an "empty box" is SPOT ON. There is a desperate search for money among "the poor sovereigns" trapped as they are by not only a euro currency but a central bank that makes Alan Greenspan look generous. A "frightful week" indeed lies ahead if you are "over there." I think the entire nation of Italy is being hung out to dry by Germany and France and, well...besides not sitting well with me i fail to see how in anyway this doesn't have a devastating impact on the entirety of the European Union. From what i can tell basically the European PTB have thrown up their hands and said "there is nothing more we can do." I would argue there is nothing more they WILL do...obviously there is more that can...and should be done. Eh. "Put it in to the complaint department." I say the greatest dead cat bounce in history with the entirety of the European bank sector just happened last week and as a consequence the entire French banking system is going from "On the Brink" to "Going over Niagra Falls in a Barrel." Don't worry it's no biggie. Why this would be good for equities i have no idea quite frankly. They have not only been rallying into the news but have now even taken to discounting it. As the Chinese property bubble pops that means as the entirety of Europe goes hat in hand looking for "the mother of all capital raisings"...the only places that have this ability are New York and London. That would be very few institutions in New York i might add--and they would have to be "politically connected" via the Fed. I expect dramatic moves in currencies excluding the dollar, commodities and in particular gold and oil and "the same old same old": yield blow-outs in European sovereigns.
x
Throw in the lousy housing market numbers and we have a PAHTAY!
Housing Inventory And Median Asking Prices Continue to Slide (Down 2.4% and 0.5% M-O-M)http://confoundedinterest.wordpress.com/
I long for the day tyler will find no need to post anything from the squid
Mario Draghi's first policy meeting as President of the ECB will be important to watch on Thursday. – Goldman Sachs
The end of nationalism, and the beginning of Draghi: the ultimate groomed insider mouthpiece.
“It would be a serious misjudgment of national and regional authorities to allow national authorities to allow national interests to weaken implementation of global reforms necessary to avert future crises.” Maria Draghi, June 6, 2011
The fact is, Mario Draghi was an insider-trained and trusted “player” before his three-years with Goldman. And there he was kept long enough for the Goldman training that would prepare him for the insider key positions to come.
The incestuous relationship of big banks, university economists carrying passports of more than one country, heads of government, the IMF and the Federal Reserve is striking; frightening. From the beginning this EU-appointed head of the European Central Bank has had insider connections, starting as early as his graduate days at MIT under the supervision of Franco Modigliani.
At MIT, Modigliani worked closely with Nobel laureate Paul Samuelson, uncle of former National Economic Council Director Lawrence Summers (family name earlier had been changed from Samuelson to Summers).
Draghi earned a PhD in economics from the Massachusetts Institute of Technology in 1976 under the supervision of Nobel Laureates Franco Modigliani and Robert Solow.
The following I wrote in 2010 shows the Modigliana connection:
The Greek “cross currency swap” engineered by Goldman Sachs just after Greece was admitted to Europe’s monetary union, for example, involved:
Greek Prime Minister Contantine Simitis, leader of the Panhellenic Socialist Movement,
Lucas Papademos (vice president of the European Central Bank from 2002 to 2010 and member of the Trilateral Commission since 1998) then governor of the Bank of Greece's rep on the IMF,
and Christoforos Sardelis, head of Greece’s Public Debt Management Agency at the time, who held Swedish citizenship for a number of years and came to his public post from the Bank of America, and is now with Banca IMI, the investment banking unit of Italy’s Intesa Sanpaolo.
Papademos, educated at MIT, had been at Columbia University and in 1980 was senior economist with the Federal Reserve Bank of Boston. He formed his Fed connections when he was a top research assistant to the late Nobel Prize-winning economist Franco Modigliani, who was born in Italy but left Rome in 1938 when Mussolini announced new laws against the Italian Jews. Modigliani had close contacts with the Federal Reserve and his students, along with Papademos, have included Charlie Bean, Deputy Governor of the Bank of England, and Stanley Fischer, Governor of the Bank of Israel.
Papademos now serves as European vp with its president, Jean-Claude Trichet, former alternate governor of IMF, governor of the World Bank and member of the Washington-based financial Group of Thirty. He’s also former chairman of the Paris Club, a financial group of officials of 19 countries that can provide debt cancellations, for restructuring for indebted companies and creditors referred by the IMF.
Fischer, before becoming an Israeli citizen to head Israel’s central bank, had been vice president and chief economist at the World Bank, first deputy managing director of IMF, vice chairman of Citigroup, president of Citigroup International, head of the Public Sector Client Group, a member of the Washington-based financial Group of Thirty, and Fed Chairman Ben Bernanke’s Ph.D. thesis advisor at MIT.
ask Jammie Dimond .. I,m sure he will tell the whole truth and nothing but the truth so help us god,
What makes anyone think the Govt #'s aren't cooked? Someone is buying these financial stocks (MS is up 55% since Oct 2nd!!!!). I would love for us to have a nasty pullback but this mkt just won't do anything but go up. You fade this market and you are toast.
This is the quote that most caught my eye. Sounds like GS essentially saying no additional QE coming this year. Is this a head fake? What happens if they do announce fresh injections of funds into the economy? We know the board is divided over the need/benefits of more QE, but some of the heavy hitters have been making noises in that direction recently.
"In terms of central bank meetings, we expect the FOMC to leave policy unchanged on Nov. 2. The official statement also likely requires only minor edits, although the improvement in market conditions and some incoming data could warrant an incremental upgrade in the discussion of current conditions. Fed Chairman Bernanke at the press conference may, however, discuss communication options under consideration—including an explicit path for the federal funds rate—but we do not believe the FOMC is ready for major changes at this time."
I have heard 10 or 15 times that this October is the best month for equities since October of 1974. Anyone else heard this?
Having just graduated from college I started a work/MBA program at the First National Bank of Chicago in September of that year.
Now comes the interesting part; has anyone looked at what happened to the market in November and December of that year? If not, check out this link http://www.the-privateer.com/chart/dow-long.html and you will see that December 6, 1974 was the last bear market bottom. Interesting?
By the way, while I was not fired because my comp package was $10,000/yr and reimbursement for an MBA at U of Chicago, the 45 MBA's that the bank hired that summer all received pink slips on about November 20th!
Revisionist, or selective, history can be very pleasant to discuss, but one has to watch out when one starts bringing up the real facts!
Short squeeze? or Carpe diem!
My former agent who works for bnp now called me up last week and proposed me to buy a few selected stocks for a 30% discount if i would hold them for at least 90 days.
I told him i was listening untill he named the stocks and mailed me the reports on the stocks... Every stock had a eps of minus 50% of the stock value.... Than i said i'd wait another few months before stepping back in and that made him very angry because i waited to tell him this after he named the stocks.
5 minutes later, i bought put option on every single one of them with a expiration date of 12 months.
Just ask yourself this: who is giving this advice?
And read up on reggie's posts before and after and think about it.
time to print Baby!!
and time for Au Ag to sky rocket
If the euro goes up and you're in dollars, yes. In euro's i'd wait.
I don't think silver will move much more in the next 2 months.
I'm still expecting a drop.
ECB "shadow council" just voted 12-3 FOR a lowering from 1.5, 7 of those 12 even for lowering it .5
=> http://www.handelsblatt.com/politik/international/ezb-schattenrat-forder...
I'l just wait another 5 to 6 weeks before i short the euro. I think that we might even go to 1.45 before it goes down to 1.26
Man I'm so dumb I can't figure out my password. But I really think Tyler used the word "frightful" cause Monday is Halloween.
LOL
I'm dumber still. I never even...