UBS' Top Ten Surprises For 2012

Tyler Durden's picture

Unlike other, more humorous instances, such as Byron Wein and his 10 endlessly entertaining year end forecasts, some banks take the smarter approach not of predicting what will happen, because only idiots think they have any clue what tomorrow may bring with any sense of certainty, especially under global central planning - a regime that is by definition irrational, but instead of stating what would be a surprise to a base case forecast. And with "surprise" now the new normal, it would be prudent to anticipate what to the status quo may represent as fat tails in the coming year. Especially since even UBS now mocks the Wall Street consensus, and the traditional upside biad: "Let’s face it: Bottom-up consensus earnings forecasts have a miserable track record. The traditional bias is well known. And even when analysts, as a group, rein in their enthusiasm, they are typically the last ones to anticipate swings in margins." Which is why, with that advance mea culpa in hand, we bring to readers the Ten Surprises for 2012 from UBS' Larry Hatheway: "At the end of each year, in our final strategy note, the global asset allocation and global equity strategy teams join up to consider possible surprises for investors in the year ahead. Inside, we briefly describe ten such outcomes, and also provide a review of how last year’s surprise candidates fared." For those pressed for time, here is the full list: i) The consensus of bottom-up earnings estimates is right; ii) Financials outperform; iii) The euro rallies; iv) Oil prices fall below $70/barrel; v) Sovereign default outside the Eurozone; vi) Rising Treasury yields; vii) An Italian sovereign upgrade; viii) EU or EMU disintegration; ix) Fewer than five governments switch hands and, last but not least, x) Britain does Great at next summer’s Olympics. Let's dig in.

Ten for 2012

At the end of each year, in our final strategy note, the global asset allocation and global equity strategy teams join up to consider possible surprises for investors in the year ahead. In what follows, we briefly describe ten such outcomes, and also provide a review of how last year’s surprise candidates fared.

Our aim is not to second-guess our or our colleagues’ baseline scenarios. Rather, we are all too aware of what can happen to forecasts, particularly when shocks arrive or when consensus-like positioning evaporates. Of course, in these turbulent economic times, with elevated levels of sovereign stress and market volatility, the bar for qualifying as a genuine surprise keeps moving higher.

Ten surprises for 2012

Caveats aside, here are our ten surprise candidates for 2012:

1. The consensus is right (for once)

Let’s face it: Bottom-up consensus earnings forecasts have a miserable track record. The traditional bias is well known. And even when analysts, as a group, rein in their enthusiasm, they are typically the last ones to anticipate swings in margins.

So it qualifies as surprise in any year if the bottom-up consensus is close. Maybe 2012 will be the year they get it right.

Unsurprisingly, the collective wisdom of analysts anticipates another robust year of earnings growth in 2012, with global earnings expected to be up 11.7%. While this figure has moved lower in recent months, expectations remain overly optimistic. After all, global economic activity is slowing. Our economists forecast global GDP growth of just 2.7% in 2012. That figure is only slightly above levels normally associated with global recession and implies earnings growth in the low-to-mid single digits, at best.

Furthermore, the current bottom-up earnings estimate is generated on forecast revenue growth of just 4.2%, which implies significant margin expansion in the coming year to arrive at a double-digit earnings forecast. The assumption of margin expansion appears heroic. Margins have flattened or shrunk in the last two quarters. It is unusual to see a further widening of profit margins at this stage of the cycle, particularly from current levels.

So what needs to happen for the consensus of analysts to get it right?

For one, global GDP growth would have to re-accelerate to drive up revenue estimates. Operating leverage remains high across  the corporate sector generally, so any increase in final demand above current forecasts could be magnified to the bottom-line. That would particularly be the case if companies remain cautious about hiring and capital expenditures. In that case, higher  turnover would lift productivity and capacity utilization, factors which typically push profit margins higher.

Still, the conclusion is inescapable: Consensus estimates will only be right if everything goes right.

2. Financials outperform

Perhaps, after five years of underperformance, financials will outperform in 2012. Readers will be forgiven if that sounds both a bit far-fetched and self-serving.

After all, most of the conditions that have caused the sector to sharply underperform are still in place: Mounting regulatory hurdles (many of which are yet-to-be implemented), insufficient capitalization, deteriorating credit and funding conditions in Europe, fears of hard landings and property bubbles in China, weak turnover in capital markets, moribund primary businesses, a stagnant US housing market, etc.

And then there are the new challenges: Shrinking balance sheets and sovereign stress in Europe coupled with woeful policy responses. Looming ahead are possible further regulatory changes, reflecting popular discontent with banks, as manifest for example in the ‘occupy’ movements.

Maybe, therefore, we should just move on to surprise #3…

The hope, however, is that much of the bad news about banks is known and discounted. According to our global banks team, for example, expectations for the sector are low and costs are being slashed. As a result, any unexpected revenue pick up could lead to nice bottom-line surprises.

Furthermore, if some elements of the Dodd-Frank bill and Volcker rule could be eased, that would provide a further positive catalyst for the sector. Most important would be an early recapitalization of European banks, coupled with
more decisive action to stabilize the Eurozone sovereign credit crisis.

Of course, if sector performance depends on European policy makers getting it right, then arguably this surprise is the longest shot of them all.

3. The euro rallies

The resilience of the euro in 2011 was one of the bigger surprises given the immense pressures seen in European equity and bond markets. After starting the year around 1.33, the currency rallied above 1.48 in April and only recently has started to fall more sharply. Yet it remains within a whisper of its 2011 starting value at the time of writing.

In classic British understatement, all is not well in Europe. Europe’s policy makers have shockingly mis-diagnosed the patient, administering pro-cyclical fiscal austerity just as a full-blown credit crunch and deep recession get underway.

Meanwhile, the ECB had the temerity to hike rates earlier this year. It has belatedly undone its error, but still remains incapable of providing the monetary stimulus the Eurozone now clearly needs to offset fiscal austerity and tighter credit conditions. The ECB is more worried about moral than economic hazard.

Predictably, the Euro area economy is forecasted to contract -0.7% next year (with the annualized pace of decline around -1.7% in the first half of 2012).

In short, Germany and the ECB are conducting a majestic string quartet while Rome, Athens, Madrid, Lisbon and Dublin burn. And the sparks are beginning to fly in Paris as well.

In less prosaic terms, the euro is sliding in the currency markets. So it would be a big surprise if, contrary to all evidence and reason, the euro were to rally in 2012.

So why might it happen? Part of the answer is ‘the pain trade’. As our currency strategy team points out, the consensus is already short of the euro. In addition, strategists are falling over themselves to see who can forecast euro/dollar parity soonest. Hence, short-covering euro rallies are surely possible in 2012.

What else could help the single currency? Fundamentally, renewed US economic weakness and another round of Fed quantitative easing might do the trick. Even if unlikely, that scenario can’t be ruled out, particularly if financial contagion from Europe spreads across the Atlantic. A second source of (temporary) euro support could come from aggressive asset repatriation by European financial institutions striving to shore up their domestic liquidity buffers and capital positions in the event the Eurozone crisis intensifies.

Come to think of it, euro strength might not be all that far-fetched.

4. Oil prices drop below $70/barrel

Brent crude oil prices began this year at $95/bbl and proceeded to rally in almost uninterrupted fashion up to $123/bbl by the end of April, as ‘Arab spring’ unfolded. Since then Brent prices have trended gently lower but have remained well supported above $100/bbl, apart from a dip in early October.

The resilience of oil prices has been notable, particularly given the US ‘soft patch’ this summer, the advent of Eurozone recession in late 2011, and slowing growth across the emerging complex, including in China. Demand is likely to soften further and oil production may get a lift from some resumption of output in Libya. Accordingly, our oil team forecasts that the price of Brent crude will fall to $95/bbl by the end of 2012.

But the idea of oil prices falling even further from current levels (say 25%-30% or more) is difficult to envision given still-present tensions in the Middle East.

While a repeat of the protests and rebellion seen this year may be unlikely, uncertainty is likely to remain high, particularly as now regards Iran.

So an unexpected sharper fall in oil prices would require some reduction in regional tensions. The other way oil prices could drop more than we expect is via global recession. We are sceptical that could originate in China (we don’t fancy the hard landing scenario there) or from the US.

Yet again, it seems all trails lead to Europe.

5. Sovereign default…outside the Eurozone

We doubt anyone would be surprised by a Eurozone sovereign default in 2012. Greece, after all, is almost certain to default—only the form and precise timing remain in question. What would be a surprise is if an emerging economy defaulted first.

As we have noted elsewhere, sovereign balance sheets and fiscal sustainability metrics look pretty robust across the emerging complex. But a few risk cases stand out. The following chart shows credit default swap pricing for selected emerging countries. The highest probability of default, according to investors, exists in Pakistan, the Ukraine, Hungary and Croatia.

Among emerging countries, our strategy teams have highlighted that Hungary looks particularly worrisome, given its high sovereign debt-to-GDP ratio and weak growth prospects. Hungary also has the highest external public debt ratio in the emerging world. With significant foreign currency funding exposure Hungary is vulnerable to ‘sudden stops and reversals’ of capital flows, without the backstop of its central bank (which can only act as lender of last resort for local-currency bank financing). That situation is reminiscent of peripheral Eurozone countries.

Any unexpected sovereign default would boost risk premiums across equity and debt markets, probably leading to an underperformance of emerging versus developed markets. Safe-haven assets such as US Treasuries, German Bunds, the Swiss franc, and Japanese yen would perform best.

6. US 10-year Treasury yields break out

Despite large deficits, mounting debt levels and a downgrade, US Treasuries remain amongst the safest of all asset classes. Coupled with strong support from the Fed (in terms of quantitative easing), this has led to a period of dampened volatility for Treasury yields. Most investors expect more of the same in 2012.

What could prove them wrong?

The case for higher yields would be presented by a sustained improvement in US economic and financial conditions. That scenario would most likely be accompanied by a recovery in risk appetite and, ultimately, in shifting expectations for Fed policy normalisation. All of those factors would lead to a rise in yields.

The other path to higher yields would be a significant worsening in US sovereign credit quality. To be sure, investors continue to assign a very low default probability to US government debt. Alternatively, the appeal of US Treasuries could be eroded by common bond issuance in the Eurozone, creating the potential for a larger homogenous market for European government debt that could rival US government debt hegemony. That, however, seems a remote possibility.

In market terms, rising bond yields would obviously erode the value of Treasuries. A rise in US ten-year yields to, say, 4.5% next year would imply a negative -16% total return. Stocks would clearly outperform if the reason was stronger growth. A US sovereign crisis, on the other hand, would produce just the opposite result—a risk asset sell-off.

7. An Italian sovereign upgrade

Yes, you read that right—an Italian sovereign upgrade.

Here goes. The austerity package proposed by the Monti government has not yet persuaded the rating agencies’ to lift their outlook on Italian sovereign debt from ‘negative watch’. An Italian rating upgrade within a year appears highly unlikely—clearly it would be a big surprise to markets.

But it isn’t impossible. There have been two examples in the recent past where investment grade sovereign debt ratings have been upgraded within two years of the initiation of a negative outlook. The first comes from the Baltic region, namely Estonia and Latvia. They were among the most severely hit economies during the financial crisis, which resulted in Fitch announcing a negative outlook in April 2009. But both Estonia (July 2010) and Latvia (March 2011) were upgraded (to A and BBB, respectively) within two years of being put on negative watch.

The second example is Turkey. In March 2003 Turkish sovereign debt was put on negative outlook, but the Turkish government responded by slashing the budget deficit from about 15% of GDP in 2002 to below 5% three years later.

Fiscal tightening resulted in Fitch upgrading the debt first to B in September 2003 and again to B+ in February 2004, all within a one-year time frame.

So, back to Italy—can it make the grade? As our European economists have noted, the reform package in Italy is credible. We suspect that the criteria for an upgrade are three: 1) Final political approval of the austerity package (our economists expect this to happen before year-end); 2) Efficient implementation of the austerity package; and finally 3) Restoration of ‘normal’ liquidity conditions in Italian sovereign debt markets. The second and third factors arguably pose the biggest challenge to an upgrade. They are also interrelated.

For liquidity to return to the Italian bond market investors need to be convinced about implementation of austerity.

Investors would also have to be re-assured that Italy can avoid a severe and/or prolonged recession. For that, Italy needs help from Germany or the ECB.

So it seems Italy’s sovereign rating, like so much else these days, will be made in Germany.

8. An E(M)U exit

Over the past year, we’ve written extensively about the prospects for, and consequences of, Eurozone exit. The bottom line is that exit would be a dreadful mistake for the departing country, as well as for those remaining in the Euro area.

That doesn’t mean it couldn’t happen. One clear lesson from history is that when populism and nationalism are in ascendency, rationality is usually in decline.

And frustration with the mis-diagnosis of the Eurozone crisis—and hence the application of the wrong policy prescription (fiscal tightening without any offset)—could lead to a populist backlash and calls for exit.

But, equally, the imperative for a closer fiscal union (with proper transfers and common debt issuance) implies the need for a closer political union. That’s where matters also get tricky. Fiscal subordination and other forms of sovereignty transfer are unpopular in many parts of Europe. Look no further than to Cameron’s veto of the proposed changes to the EU treaty last  week for evidence of ambivalence to ‘an ever closer European union’.

Nor is the UK as isolated as some might think. Within Germany there is open hostility to the idea of a ‘fiscal transfer union’. Nationalist and populist forms of discontent are already evident in Finland, the Netherlands and France.

Moreover, any discussion of ‘disintegration’ in the old world is not limited to the EU—it is also evident within countries. The rise of Scottish nationalism or the linguistic and cultural splits in Belgium offer examples of fault lines within nations.

To be sure, the political, legal and practical challenges of exit—whether from the Eurozone, the EU, or from national association are daunting. As a result, the probability of disintegration in Europe in the next twelve months remains very low.

But it has happened—Czechoslovakia and the former Yugoslavia provide the most recent examples of disintegration in Europe. And if Europe’s long history tells us anything, it is that political structures have a tendency not to last.

So watch this space. Even a rising probability of disintegration—particularly within the Eurozone—is likely to greatly unnerve investors and send them scurrying for the safest assets they can find.

9. Fewer than five governments switch hands

In 2012 a number of countries go to the polls. Incumbents are nervous, and rightly so as public opinion polls register mounting voter discontent. Already in 2011 turnover at the top has been in evidence, among others in Greece, Italy, Portugal, Belgium and Spain (not to mention in the Arab world, albeit under different circumstances).

So it would not come as surprise to see many fresh faces in office at the end of 2012. Given the number of elections (and other ways political change could happen), the surprise would be if fewer than five heads of state are shown the door in 2012.

Political change is already determined by process or law in China, Mexico and Russia—so we won’t count those in our baseline of five. Otherwise, elections are scheduled next year in Taiwan, Finland, France, South Korea, Switzerland, India, The Ukraine, the US, and Venezuela. In addition, coalition governments are feeling strains in countries where elections are not otherwise scheduled for 2012—among them, Germany and the UK.

10. Britain does Great

The summer Olympic Games will be held in London next year and provide a bevy of opportunities for surprise. Rather than think about individual events and the historical dominance of certain nations in certain disciplines, we choose to focus on the home nation’s prospects. The following chart shows that until the last Olympics in 2008, Great Britain consistently achieved a number six rank in the summer Olympics. In 2008, ‘Team GB’ leapfrogged to fourth place, narrowly missing out on a top-three result.

Next year, a ‘team bronze’ is within reach. Discouraged by Eurozone political ineptitude, we have recently turned our research focus to the academic literature of sports and have built a model to forecast the country medal count next summer.

One well-known tenet of ‘Olympic modeling’ is accounting for host nation advantage. Host nations usually manage to boost their medal haul relative to previous Olympics (and also suffer ‘hangover’ in subsequent games). Whether the host advantage resides in ‘home cooking’ or more favorable treatment by judges, officials and referees we can’t tell, but the tendency for the hosts to do well is clear.

So what do our models suggest? The table below is our prediction of the medal results at the London Olympics, ranked by number of gold medals (rather than total medals).

In short, we wouldn’t be surprised by a top-three result for Great Britain. The real surprise would be for the Brits to finish ahead of either the Americans or the Chinese. Or to finish below the Australians—heaven forbid!

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SilverDoctors's picture

Top 2012 surprise for me is that they've been able to hold it together till 2012 and keep things limping along without an official declaration of QE3 (although obviously QE is ongoing....the fed just currently isn't telling anyone about it!)


Hugh_Jorgan's picture

This is a ridiculous piece of tripe. Very little can be taken seriously here. Whomever did this analysis must have only asked Barney Frank, the board of the IMF, the Bernank, and Jim Cramer what they thought.

UnderDeGun's picture

And, unfortunately, the only competent one in relation to the group as a whole was probably Cramer.

lolmao500's picture

Financials outperform : not gonna happen (unless massive QE3)

The euro rallies : not (France elects Marine LePen)

Oil prices drop below $70/barrel : not. (Iran war)

US 10-year Treasury yields break out : not, but eh, the markets are so crooked, wouldn't surprise me.

An Italian sovereign upgrade : funny

An E(M)U exit : gee they got one right

Fewer than five governments switch hands : but some of them could bring a shitstorm (France (if Marine LePen), Taiwan (if nationalists), Ukraine (if anti-Russia party), US (if Ron Paul))

Britain does Great : smoking good stuff are you?

sqz's picture


Financials outperform : only way this is going to happen is if its US financials faring better or much better (haven) than EZ financials, especially with now expected QE3.

The euro rallies : only way this is going to happen is due to further non-Euro asset sell-offs as funds are repatriated. Rallies will be otherwise very much capped.

Oil prices drop below $70/barrel : possible but not likely, at least not H1 2012. It would require a fast deflationary scenario such as EZ break-up or China rapidly slows to a crawl. Even disorderly bank failures are not permitted these days!

US 10-year Treasury yields break out : not going to happen. If anything, yields will head lower.

An Italian sovereign upgrade : such a bad joke.

An E(M)U exit : possible, but not likely. Greece is being paid to remain within the Euro while they are busy writing CACs into their domestic law bonds. More likely to have an EZ restructuring or split.

Fewer than five governments switch hands : Arab Spring was only the start, tbh. When economies sour, regimes change quickly and sometimes drastically and many elections due.

Britain does Great :  we're talking about a country that had to be told how to run their games security by the Americans who said they would rather send a small army of federal security agents than trust the original British security plans. The British agreed they messed up and more than doubled their resources. They also have top athletes who are so badly funded they sometimes raise donations via eBay (no joke)!

s2man's picture

sqz, yours is the only animated avatar I have not blocked.  I find them distracting, but yours is mesmerizing.  +1  Ha! I just saved it to my harddrive.

Cast Iron Skillet's picture

"The euro rallies " - but if you think Currency Wars (Jim Rickards), it might. I sort of think if the EURUSD drops low enough, it could precipitate QE3. I mean, it wol dbe more like the $ plunges, but the effect would be similar.

Corn1945's picture

I would fade this TBTF fraud factory with both hands. 

I'm amazed Zero Hedge even posts this garbage. 

Tyler Durden's picture

After supposedly reading (instead of just commenting) Zero Hedge for 42 weeks one would assume it has become clear that it takes two opinions to make a market. Or maybe another 42 weeks is required? Or perhaps you wouldn't mind sharing with everyone your monopoly on every perspective and outlook in the known universe?

Corn1945's picture

Two sides of every trade. I get it.

But don't insult everyone's intelligence by degrading these frauds into the dirt while posting their "predictions" to be taken seriously. I bet you'll post a follow-up piece in a year making fun of this list after half of them turn out to be wrong, something you've done several times. 

I have more respect for someone who takes a solid stance rather than constant waffling. You can't expect people to take you seriously when you waver between diametrically opposed positions on a near daily basis. Either they are frauds to be faded or they aren't. They can't be both at the same time. 

Tyler Durden's picture

It's called perspective. They may well be frauds but at least they provide an outlook however wrong it may be. Said outlook will certainly be lost on you, but others will likely make money from it (regardless if it is right or wrong). Lastly, if it insults your intelligence to read a post about something, here's a hint: don't read it. Last time we checked there were no guns pointed at any readers heads.

slewie the pi-rat's picture

Last time we cheeked...

there!  fixtit!

i enjoyed my jaw dropping over many of these, btw

the unicorn archetype is strong @ ubs, BiCheZ!

Brother Revegend Magoun's picture

Corn1945 <quote>They can't be both at the same time.</quote>

"There are more things in heaven and earth, Horatio,

     Than are dreamt of in your philosophy." (c) 

CrashisOptimistic's picture

How in the FUCK can they see Euro increase (which is dollar decrease) and dollar denominated oil falling in price?

Azerbaijan just reported 200K bpd REDUCTION in oil output for 2011.  Mexico will be down double that.  US production MAY increase 20K bpd and that's supposed to offset 600K bpd reduction?

It's like these people are in a fairy tale.

brown_hornet's picture

Home field advantage...UK

Black Forest's picture

Surprise, surprise all over.

cossack55's picture

I thought George Carlin died.

earleflorida's picture

"a good writer often confronts his audience with practicalities,... but, a  great author extrapolates their dark side - it is the eloquent arbitrage of ambivalence"

jekyll island's picture

Exactly how is GB going to win 25 gold medals? 

Black Forest's picture

They will invest in an 24x ETF for winning a gold medal, and get one physical.

Dugald's picture

As always, they will muddle through...whilst the Germans look on and mutter about it all being a fiendish British plot and to be most careful....or..Achtung! es ist eine teuflishche Britische Grundstuck ist extreme Vorsicht geboten!

HellZero's picture

Number 9 should read

Fewer than five governments switch hands; replaced with ex-squid employees

aus_punter's picture

#11 UBS (The investment bank) closes its doors for good.

Buyemall's picture

I think they got it right. Some austerity, some inflation, some default a few haircuts , some central bank intervention, a touch of psi and everything is going to be just fine.No surprises!

Come Spring , Buyem'all !!

s2man's picture

The summary, "For those pressed for time", was so funny I had to read the whole thing.  Yes, those would be surprises.

re: $70 oil, IMO that would take a global depression and no ME war.  Yes, I'd be surprised...  Reminds me of my grandpa saying, about the Great Depression, "I remember when gasoline was 10 gallons for a dollar.  They only problem was, nobody had a dollar".

It must have been rough.  I don't know anyone who recovered, mentally, from the Great Depression.  Grandpa fixed, mended, made do, or did without for the rest of his life. I don't know how he did it, but he worked two full-time jobs when I was a kid, to pay off his 2% mortgage ASAP. He did get a little soft, and let Grandma buy a new couch, in his last years. ;-)

Great Grandma's life must have been even worse. She canned, canned, canned food until she died. Though folks laughed at her about it, she would walk into the pantry, give a big sigh, and smile.  Forget stocks, houses, or gold, THAT was wealth to her, having food.

I suspect we will see such times again, soon.  My pantry is full, but it does not make me smile.  I only makes me wonder, how much more will we need? What else can I do to prepare?

I apologize for wandering OT. As you can tell, I'm not feeling very optimistic about the future.

Dugald's picture

A nice trip down memory lane...Thank you, I enjoyed it..

grey7beard's picture

>> I apologize for wandering OT.

No need, it was one of the better replies I've seen in awhile.

I was raised by my grandparents who were in their 40s during the depression.  They had a farm out in the sticks of Alabama and worked in the cotton mills.  I can't imagine how tough life was for them.  In their later years they moved to one of the booming coastal cities to be closer to their son, but they maintained their farm life and depression surviving attitude.  My grandfathter was 75 years old when  he took me in as a young boy.  I grew up on beans and cornbread and triple mended clothes.  Needless to say I stood out like a sore thumb amongst my well to do city peers in school.  I now look back fondly and try to remember scraps of the life they led.  I certainly remember the huge vegetable garden out back with my grandfather saving his seeds from year to year.

After moving out of their home I assumed a much more standard middle class lifestyle, but I continued to be quite frugal.  When the bottom fell out of my personal financial life I was able to make major adjustments as I owned all my real estate free and clear, as well as my truck, had no debt what-so-ever, plus pretty decent savings.  After liquidating my property I was able to move to the country and am in the process of building a small hobby farm.  I am quite happy out here and give all the credit to my good fortune to my grandparents, who instilled in me just enough depression era lifestyle to give me a chance. 

Is that S2 as in boat?

RobotTrader's picture

Right now, a lot of "experts" have egg on their face.


The SPY is still up huge from the 2009 lows even with the worst economy in years.

Despite the naysayers, investors continue lapping up U.S. government and muni-bond paper like cotton candy.

And Peter Schiff, Martenson, Sinclair, Puplava, KWN, etc. were dead wrong about "Things" over "Paper".

Commodity prices are getting crushed across the board creating a huge boon for consumers.

And the U.S. is way out performing emerging markets and the "resource" economies.

Last week was proof positive that TPTB can control commodity prices with a flurry of paper pushing and jawboning.

geminiRX's picture

You're a little late joining the commodity bashing party. I did love the gold/silver reversals in their respective channels btw.

StychoKiller's picture

Last week was proof positive that TPTB can control commodity prices with a flurry of paper pushing and jawboning.

BUT, for how much longer?

grey7beard's picture

>> The SPY is still up huge from the 2009 lows

If I'm not mistaken, gold is also up huge from the 2009 lows.  AAMOF, I'm thinking gold has done a tad better.

>>And ........ Sinclair.....were dead wrong

I don't understand your apparent need to constantly denigrate Sinclair.  What has he done other than give good free advice?  If you want to attack a PM bug, maybe someone like Turd, who's advice has been tremendously bad, unless you listen to his rendention of his track record.  Plus he's in it mainly for the money, plus a little ego boosting. 

The only thing your constantly denigrating Sinclair does is highlight his class, and  your lack of.


Sudden Debt's picture



apu123's picture

I agree with the Tylers on the value of posting these opinions from the TBTF banks/brokers.  I like to see what the TBTF are trying to sell their customers and the public.  I can get some insight into the over optimistic side of things.  I also read some of the information I get from a friend still employed over at BAC/ML.  It is all just food for thought, there are still some good analysts and the cheerleaders are good for an occasional laugh.

StychoKiller's picture

Maya goes on (and on...) :>D

JimBobOMG's picture

Ron Paul please.

bbbilly1326's picture

"One clear lesson from history is that when populism and nationalism are in ascendency, rationality is usually in decline."


And I suppose the only rational statements/beliefs are coming from the economists/financiers then ?

So much for the Peoples' will......but then we know with what regard these guys hold the common people.

the tower's picture

Reverse their predictions all of a sudden it makes sense.

thegr8whorebabylon's picture

I don't know.  This reads a bit like Armstrong's latest.

ThrivingAdmistCollapse's picture

Well all bottom up decision making is a form of the "greedy" algorithm.  Thus it will always miss the forest for the trees to some degree.  

economic collapse

AgShaman's picture

Interesting Missive....

Almost as if it was a "Retraction on Steroids" 180 degree flip from their recent article of...

...."You better buy tinned goods, guns, bullets, and gold....cuz the world is about to erupt in chaos any day now"

I wonder who told them to "paint" a more optimistic picture all of a sudden?

DrunkenMonkey's picture

Europe has experienced the bubonic plague more than once.

We laugh in the face of pro-cyclical austerity.

AgShaman's picture


Could you perhaps spend less time drinkin' and 'debauchin'....and more time searching for the location of the guillotines.....your Euro-crats need servicing?