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The Swirlogram Speaks: "The World Has Reentered Contraction"

Tyler Durden's picture





 

The business cycle shifted into the Contraction phase of Goldman's 'Swirlogram' framework that we introduced here three weeks ago. The latest observations in their Global Leading Indicator (GLI) as well as the way we entered this Contraction phase suggest this could be a much more severe downturn. In their own words: "We do not yet see clear reasons for optimism in the data, and our GLI framework still suggests that the current phase of the cycle is in a challenging one."

Goldman's Global Leading Indicator, month-on-month, has turned negative...

and the Swirlogram has entered the Contraction phase...

but the angle at which we entered this Contraction phase is notably steep...

which has negative implications for forward 12-month S&P 500 returns...

 

As Goldman notes: "We think that the macro data are providing a clear signal. And hence, we think a negative bias remains warranted."

 

Source: Goldman Sachs

 


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Thu, 06/07/2012 - 13:14 | Link to Comment Soul Train
Soul Train's picture

read this

Roseanne wants to end the Fed - read the whole article.

http://politicker.com/2012/06/roseanne-in-the-rose-garden/

“I feel sorry for the American people who’ve been hoodwinked by both of these parties of nothing but criminals that sit in Congress there enriching themselves,” she began.

As it happens, legalization of marijuana is the first issue in the political platform posted on Ms. Barr’s website. She said she has a prescription to use the drug for glaucoma in California and vowed to smoke a joint at a public press conference if she is victorious in the Golden State’s Green Party primary this week.

“I don’t really smoke it, but I have a salve of it, you know, and if you rub it into your wrists, you don’t get high,” Ms. Barr said. “You’re not getting high but you feel release. I have salve and I have cookies.”

Other issues on Ms. Barr’s platform include ending the Federal Reserve, stopping “debt slavery” by “forgiving all school loans,” withdrawing military support for Israel and making war “obsolete.”

“Wars make the stock market go up and are fueled by profits. Where one puts their money is where one puts their energy,” Ms. Barr explains on her site. “The Military Industrial Complex is our shadow government.”

 

 

Thu, 06/07/2012 - 13:24 | Link to Comment redpill
redpill's picture

She said more sensical things than I expected, but then again even a bat shit crazy blind squirrel finds an acorn from time to time.

What do you want to bet that she believes MORE government will solve these problems?

Thu, 06/07/2012 - 13:28 | Link to Comment krispkritter
krispkritter's picture

Change that to a 'bat shit crazy blind pig' and I'm with you.  

Having just watched the Holder hearing and listening to a bunch of other 'bat shit crazy blind pigs', almost exclusively Democrats and non-whites, ass-kissing Holder so hard they left hickies, I'm pretty much 'bat shit' myself right now...

Thu, 06/07/2012 - 16:06 | Link to Comment AldousHuxley
AldousHuxley's picture

If you want corruption to stop, either pay them more money for the power in the position (Singapore pays her president million dollar salary), or create more government and split the power (ie. trust busting)

 

There is no easy way. Someone with power over military and other national assets in billions aren't going to just work for $100k/year.

Corruption in the capitol is as old as democracy itself.

Thu, 06/07/2012 - 16:15 | Link to Comment Jack Napier
Jack Napier's picture

Goldman wants you to sell. Therefore they will be buying as soon as they get the inside tip for the next round of QE so they can get in at the bottom. Dead cat bounce.

Thu, 06/07/2012 - 20:08 | Link to Comment Excursionist
Excursionist's picture

Beat me to the punch..  For philosophical consistency's sake, ZH should have added a recommendation to go long risk in light of the GS report.  But I guess this time is different.

Thu, 06/07/2012 - 16:24 | Link to Comment OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Ever since guys were running around in togas. Canada seems to have it licked, no campaign contributions over $1000, no matter who you are. Australia has a good law, too, campaigning more than 90 days before an election is ILLEGAL.

Thu, 06/07/2012 - 13:28 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Finds an ACORN did you say Redpill?

And I canot believe the world is still using 4 quadrant constructs.

SWOT! WOT WOT! 

Birng on web 2.0, we need to be seeing this Stuff Minority Report Style...

ori

Thu, 06/07/2012 - 13:43 | Link to Comment NotApplicable
NotApplicable's picture

Well, she certainly seems to have the typical "if we get a hold of the gun, then we can rein in the evildoers" approach to regulatory activity.

One thing though, like Perot before her, she's got the ability, the nerve, and enough name recognition to get up on a big ole soapbox and make the rest of them look completely stupid. I like how she states that she is "the only honest comedian in the race."

She certainly won't win, but she can sure do some damage to what's left of the Demonrepublicrat facade of integrity. Which is really all we can ever hope for in a land of mob-rule.

Thu, 06/07/2012 - 14:39 | Link to Comment DCFusor
DCFusor's picture

Too bad she pissed off the NRA and every gun owner who knows with her anti-gun screed.  Forced K-Mart to drop her as a spokesperson due to a boycott...

Oh, all her bodyguards are armed.  Guns just aren't for the "little people" in her opinion.

Thu, 06/07/2012 - 13:17 | Link to Comment Chris Jusset
Chris Jusset's picture

Whenever the "Swirlogram" enters the "contraction phase" ... LOOK OUT !

Thu, 06/07/2012 - 13:21 | Link to Comment DogSlime
DogSlime's picture

Similar to the path that shit takes when it's flushed down the toilet bowl.

Will the smell go away once the flush is finished?

Thu, 06/07/2012 - 13:23 | Link to Comment redpill
redpill's picture

Comedy of the week...

 

"Spain is warning that Europe's single currency will unravel unless its leaders decide within weeks to centralise budget and tax policies in the eurozone and agree on a strategy to pool responsibility for failing banks."

 

BAHAHAH bon chance, España!

Thu, 06/07/2012 - 13:46 | Link to Comment NotApplicable
NotApplicable's picture

A.k.a. "what couldn't be achieved at the ballot box in the beginning that guaranteed the collapse we see now."

Politics 101: Never let a crisis go to waste. Especially a fabricated one.

Thu, 06/07/2012 - 13:28 | Link to Comment TrainWreck1
TrainWreck1's picture

The Swirlygram goes counterclockwise in the southern hemisphere.

 

 

Thu, 06/07/2012 - 14:12 | Link to Comment Vegamma
Vegamma's picture

Confirmed by the fact that Australia and Brazil have things like positive real interest rates, GDP growth, etc.

Thu, 06/07/2012 - 15:55 | Link to Comment NumNutt
NumNutt's picture

Nope, it will linger for a long time, may even make your eyes water........

Thu, 06/07/2012 - 13:30 | Link to Comment Assetman
Assetman's picture

Look out for what?

Whenever I look at this Swirlogram thingy... I just want to curl into a little ball and cry.

Why is that? ;)

I know... there's more questions than answers here.

Thu, 06/07/2012 - 13:19 | Link to Comment ACP
ACP's picture

If the Bernank does QE is secret, that would be plenty of ammo for the powers to be to cram down PMs while PUMPing the major indices.

They've gone the next step in social engineering.

Thu, 06/07/2012 - 14:02 | Link to Comment StackAttack
StackAttack's picture

Sell equities and BTFD on PMs.  STACK ATTACK!

Thu, 06/07/2012 - 13:21 | Link to Comment otto skorzeny
otto skorzeny's picture

Miss Barr- for saying you want to "end military support for Israel" Obummer would like you to go stand in the nearest open field and "hang out for a little while"

Thu, 06/07/2012 - 13:30 | Link to Comment Bastiat
Bastiat's picture

Obama doesn't care if his targets are in the middle of a schoolyard--then he'll get the first responders and the funeral too.

Thu, 06/07/2012 - 15:36 | Link to Comment Overfed
Overfed's picture

Correction; O'bomb-a.

Thu, 06/07/2012 - 16:16 | Link to Comment Jack Napier
Jack Napier's picture

Barrack O'Bomberman

Thu, 06/07/2012 - 13:25 | Link to Comment sbenard
Thu, 06/07/2012 - 13:37 | Link to Comment Things that go bump
Things that go bump's picture

I have a video of her entertaining at a 12-year-old's birthday party.  

Thu, 06/07/2012 - 14:44 | Link to Comment killallthefiat
killallthefiat's picture

Roseanne has been on Alex Jones a few times.  She is mostly awake with a socialist twist.

Thu, 06/07/2012 - 22:50 | Link to Comment Newsboy
Newsboy's picture

I can't possibly vote for Romney or Obama.

I voted for Ron Paul in the last 2 primaries.

I just can't vote for Roseanne Barr, either.

Where's Ross Perot when ya' need him, or even Ralph Nader?

Thu, 06/07/2012 - 13:13 | Link to Comment slaughterer
slaughterer's picture

That is what GS says, what is GS doing?  

Thu, 06/07/2012 - 13:19 | Link to Comment Sandmann
Sandmann's picture
Geprüfte Sicherheit  GS stands for German thoroughness

If you want to sell your products on the German market, or perhaps give them an air of German reliability, you need the right certification mark.

At DEKRA we can offer you GS certified safety and reliability. This certification mark, which is monitored by the German government, gives you a head start if you want to sell your products on the German market.

 

Somehow I don't think Goldman Sachs  is certified for Safety and reliability so please use the form Goldman Sachs and not "GS"

Thu, 06/07/2012 - 13:23 | Link to Comment saints51
saints51's picture

GS is using the media as usual to sway retail. I believe they are buying or trying to get price at wholesale right now. Just my 2 cents.

Thu, 06/07/2012 - 13:20 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Forward S&P 500 returns are definitely biased to the downside given the angle of entry into this contraction...

I believe those are nominal returns.  The real returns will be far worse should the central banks continue with their synchronized diving and global free money policies.

We are all currency traders, now [still].

Thu, 06/07/2012 - 13:31 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Since August 15th 1971, has there really been any other game HH?

Carry on, Traders..

ori

Thu, 06/07/2012 - 13:16 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

bounce off $1580.

Thu, 06/07/2012 - 13:18 | Link to Comment Cdad
Cdad's picture

If it gets through 1597...it will scream higher again.

Thu, 06/07/2012 - 13:28 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

I don't see a scream higher until Monday, at the earliest.  Have to go into the weekend / close the weekly news cycle with Bernanke's "ALAKAZAM!" as the final word.

My feeling is that we have until the beginning of July to btfd before the next rip. 

This is starting to feel like body surfing.  "No, let this one go.  The one behind is better."

Thu, 06/07/2012 - 13:57 | Link to Comment Paul Atreides
Paul Atreides's picture

I was all ready wrong once today, I thought it would bounce back to form a V due to strong support...no more predications from me just stacking on dips and munching popcorn.

Thu, 06/07/2012 - 13:17 | Link to Comment Piranhanoia
Piranhanoia's picture

The patient is in both atrial and ventricular fib doctor,  and has just gone flat line

Give them a jolt

Fri, 06/08/2012 - 19:55 | Link to Comment Jena
Jena's picture

No, I think it is an example of electromechanical dissociation.  The monitor looks good but there is no pulse, no perfusion.  Dire outcome expected.

Thu, 06/07/2012 - 13:18 | Link to Comment insanelysane
insanelysane's picture

Is it really contraction if you "over" expanded???

If I get obese and then return to normal weight, is that bad?

Thu, 06/07/2012 - 13:56 | Link to Comment NotApplicable
NotApplicable's picture

Remember, this is a cancerous economy. From its perspective, it's either grow or die.

Thu, 06/07/2012 - 18:00 | Link to Comment cougar_w
cougar_w's picture

Grow or die is too true.

The exponential is the game. But it's a game that nobody can win, because the universe is not large enough.

Thu, 06/07/2012 - 13:18 | Link to Comment narnia
narnia's picture

these "experts" trying to rationalize their understanding of the macro are like dogs that have had their tail cut off chasing their tails.

Thu, 06/07/2012 - 13:18 | Link to Comment sbenard
sbenard's picture

Who needs an economy? We have PRINTED prosperity now!

Thu, 06/07/2012 - 13:23 | Link to Comment SheepDog-One
SheepDog-One's picture

Printed prosperity for the .0001%....everyone else pretty much shit out of luck.

Thu, 06/07/2012 - 13:58 | Link to Comment NotApplicable
NotApplicable's picture

Well, just what would the Kardashians be without all of those exotic rides?

Just can't see Kim's ass coming out of a Kia, ya know.

Thu, 06/07/2012 - 13:21 | Link to Comment rosiescenario
rosiescenario's picture

China's actions today confirm the world economy is accelerating in its contraction.

Thu, 06/07/2012 - 13:21 | Link to Comment SheepDog-One
SheepDog-One's picture

So WTF happens when you get to the center of the swirlogram? Nuclear fission or something?

Thu, 06/07/2012 - 13:26 | Link to Comment DogSlime
DogSlime's picture

Probably... actually more likely fission/fusion combination in nice 1 Megatonne packages.  Buy some sunblock.

Why the hell did they get rid of the proper nukes?  Anything less than 10Mt isn't worth getting out of bed for.

Thu, 06/07/2012 - 13:32 | Link to Comment Pairadimes
Pairadimes's picture

The reset button is in the middle of the chart.

Thu, 06/07/2012 - 13:59 | Link to Comment NotApplicable
NotApplicable's picture

It's the good ole Singularity, the point at which everything fails in every direction all at once, destroying every metric along the way.

Should be quite entertaining.

Thu, 06/07/2012 - 14:46 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Yes very.

Thu, 06/07/2012 - 15:28 | Link to Comment novanglus
novanglus's picture

Perhaps the fact that it is converging to a single point means that the system is stable after all? Unless that point is a singularity and then we just go booom!

edit: oops - I see N/A was ahead of me with that thought!

Fri, 06/08/2012 - 19:44 | Link to Comment Diogenes
Diogenes's picture

"So WTF happens when you get to the center of the swirlogram? Nuclear fission or something?"

 

The dirty bird flies up its own ass and disappears.

Thu, 06/07/2012 - 13:23 | Link to Comment bugs_
bugs_'s picture

too bad they can only see the macro

Thu, 06/07/2012 - 13:25 | Link to Comment Coldfire
Coldfire's picture

Not that the world economy is not in a parlous state, but in material context every word the Squid utters is a lie, including "and" and "the".

Thu, 06/07/2012 - 13:28 | Link to Comment ParaZite
ParaZite's picture

That's the same pattern my turds make as they are being flushed down the drain. 

Coincidence? I think not. 

Thu, 06/07/2012 - 14:01 | Link to Comment NotApplicable
NotApplicable's picture

I find it fascinating that right before they drop down, they rise all the way back up to the outer edge, just to get a good run at it.

Thu, 06/07/2012 - 13:31 | Link to Comment csmith
csmith's picture

Swirl-o-gram has no forward-looking political component for the coming end to the capital "strike".

1. Walker wins...Dow up 287.

2. SCOTUS strikes down Obamacare...Dow up 350.

3. Romney wins on Nov. 6, 2012...Dow up 500.

Thu, 06/07/2012 - 16:13 | Link to Comment BooMushroom
BooMushroom's picture

Bernanke reappointed ... Dow up OVER NINE THOUSAND!!

Thu, 06/07/2012 - 13:32 | Link to Comment SDRII
SDRII's picture

Larry Fink says be all in stocks

http://articles.businessinsider.com/2012-02-08/markets/31034621_1_bond-y...

 

Blackrock roel in Spanish Bank asset valuation questioned

http://www.ft.com/intl/cms/s/0/447bbb82-a00b-11e1-94ba-00144feabdc0.html

 

Blackrock picked by ireland central bank to value hard to sell assets

http://www.bloomberg.com/news/2011-01-06/blackrock-picked-by-irish-centr...

 

Blackrock buys Ishares

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNAheSGYWi_s

 

Thu, 06/07/2012 - 13:32 | Link to Comment Uchtdorf
Uchtdorf's picture

Yeah, but when you use the Spirograph to make the Swirlogram you can have endless hours of entertainment.

http://www.samstoybox.com/toys/Spirograph.html

You make funny joke, no?

Thu, 06/07/2012 - 13:33 | Link to Comment El Oregonian
El Oregonian's picture

"hence, we think a negative bias remains warranted."

Warranted? How about "GUARANTEED".

Thu, 06/07/2012 - 13:36 | Link to Comment Assetman
Assetman's picture

The thing I find most intriguing about the Swirlogram is how much earlier is actually signals the move in the equity markets.  When equities made its final re-test of a bottom in Dec-11, the Swirlogram was already in a very solid expansion phase... and it was in solid recovery when the market hit bottom in Oct-11.

I know... there's really not enough cycles on data points here, but it might be actually the first useful thing Goldman Sachs has actually produced for its clients in quite a while.

Thu, 06/07/2012 - 13:40 | Link to Comment TrainWreck1
TrainWreck1's picture

By the time GS is done working their magic, we will have a three-curler Swirlygram.

At that point, everything begins to back up, and if a fan is nearby...

 

 

 

Thu, 06/07/2012 - 13:40 | Link to Comment ebworthen
ebworthen's picture

They're talking about "ring-fencing" Spain now.  Good luck with that; fences don't contain fires.

Green shoots and mustard seeds talk in the face of drought and salt-encrusted soil.

Roulette wheels spinning and craps dice rolling in the equities casino.

Free drinks and shits and giggles on the road to armageddon.

Thu, 06/07/2012 - 13:39 | Link to Comment RiverRoad
RiverRoad's picture

Anyone care for some Kool Aid?

Thu, 06/07/2012 - 13:39 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

Two words sum it up.....

NO SHIT SHERLOCK! (an extra one for good measure).

(now pay these fucks 10s of millions for telling us it's a bitch out there!)

Thu, 06/07/2012 - 13:50 | Link to Comment Martial
Martial's picture

Fibonacci, bitches

Thu, 06/07/2012 - 14:55 | Link to Comment El
El's picture

Well... that doesn't look good.

Thu, 06/07/2012 - 15:04 | Link to Comment KandiRaverHipster
KandiRaverHipster's picture

does it look like the golden ratio in purpose?  sea shells!!!

Thu, 06/07/2012 - 16:10 | Link to Comment TrainWreck1
TrainWreck1's picture

Not Fibonacci's Golden Ratio, Blankfein's Goldman Vortex: a black hole, from which no investor's money escapes.

Do NOT follow this link or you will be banned from the site!