The yellow metal soared 4.9% in euros in one week from the 11 week low set November 2nd and has since fallen 1.3%. The rebound from the November dip means prices should recover to reach the all-time euro high set last month, before rising to the point-and-figure target at 1,395 euros, said the bank’s research. Point and figure charts estimate trends in prices without showing time. Gold may then reach a Fibonacci level of about 1,421, the 61.8% extension of the May-to-October rally, projected from the November low, Commerzbank wrote in its report on November 13th which was picked up by Bloomberg. Fibonacci analysis is based on the theory that prices climb or drop by certain percentages after reaching a high or low. “What we are seeing is a correction lower, nothing more,” Axel Rudolph, a technical analyst at Commerzbank in London, said by e-mail Nov. 16, referring to the drop since November 9th. Rudolph remains bullish as long as prices hold above the November low at about 1,303 euros. Technical analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.
Silver remains the most under appreciated and under reported on asset in the world despite continuing positive fundamentals.
The Telegraph published an unusually bullish article on silver yesterday which suggests that silver might rise by over five times in the next few years.
Emma Wall interviews fund manager Ian Williams who says that "silver is about to enter a sustained bull market that will take the price from the current level of $32 an ounce to $165 an ounce and we expect this price to be hit at the end of October 2015."
Now that The Show is over, we are left with the equivalent of a Sunday morning hangover following a binge of promises and lies. After the Supreme Court upheld the PPACA, a spate of mergers rippled through the managed health care realm, to ostensibly cope with smaller profit margins and ‘compliance costs.’ But really, it’s because each firm wants to corner as much as possible of the market, in as many states as it can, to garner more premiums and control more disbursements and prices at the upcoming insurance ‘exchanges.’ Meanwhile the more hospitals are viewed as profit centers, the more their Chairmen will cut costs to maximize returns, and not care quality. They will seeks ways to sell underperforming assets, programs or services and reduce the number of nonessential employees, burdening those that remain. And if insurance companies can manage doctors directly, they can control not just costs, but treatment – our treatment. It’s not an imaginary government takeover anyone should fear; but a very real, here-and-now insurance company takeover, to which no one in Washington is paying attention.
As the government and Bank of Japan constantly survey the marketplace for speculation while intervening en masse with ever-decreasing levels of effectiveness, we thought the following charts would highlight the impact of the relative strength of the JPY. Of course, in the past, at least the trade surplus (thanks to these legacy companies) used to provide incremental capital into the country but now even that is gone. As Credit Suisse notes, "the TWI of the JPY has appreciated by more than 40% post crisis – even more than the CHF! But it is the relative strength versus the KRW that is really hurting Japanese firms. The Won plummeted sharply post crisis and has recovered nowhere near pre-crisis levels. Some of this shift in relative competitiveness may be reflected in the market cap of Samsung versus that of major Japanese tech firms. Samsung is more than three times the size of Japan’s top technology firms."
In a shining example of the law of unintended consequences, when 2012 started Wall Street bankers had expected that all it would take for bonuses to surge and offset 2011's deplorable comp, is another round of QE. Well, QE came and went, not only in the US, but virtually everywhere else, and sure enough the market traded up to new 5 year highs (and just why of all time highs as well), yet something was not going according to plan: bank revenues. Another side-effect of the Fed buying the long end is everyone piling in and frontrunning Bernanke in the 10-30 Year segment, flattening the curve, and making Net Interest Margin profitability a thing of the past. The result has been a year in which despite stocks rising, banker pay is set to tumble even more (for those lucky enough to still even have a job that is, which for UBS and Nomura means about 80% of the employees a year ago) with traders of cash equities and derivatives set to see another 20% drop in comp from 2011 according to Options Group. The end result: 2012 all in comp will be half of what it was in 2007. Say goodbye to the Master of the Universe - they will now have to settle for a galaxy or two at most.
Just in case anyone wanted to know what not to say to defend the absolute horrific mess of self-aware vacuum tubes and errant algos, formerly known as "the market", here is a great primer from Credit Suisse's trading strategist Phil Mackintosh.
Please, point me to the floor.
For millions of common people in New York and New Jersey, Sandy has been a historic disaster, with leaving ruined, homeless or forced to live in the dark and cold indefinitely. Sandy was a historic event for the Wall Streeters (a term used loosely as many of them reside in midtown or in Connecticut) among us too. And now, courtesy of Bloomberg's Max Abelson, we see how some of them managed to (just barely) scrape through...
- Greece Faces Need for Additional Assistance: €30 billion (WSJ)
- Greeks fail to agree on bailout terms (FT)
- The report that got the NYT banned on the Chinese interweb: Billions in Hidden Riches for Family of Chinese Leader (NYT)
- Bo Xilai: China parliament expels disgraced politician (BBC)
- Japan Adds Stimulus Amid Threat of Bond-Sale Disruption... $9.4 billion (Bloomberg)
- Hubbard Said to Prefer Treasury Chief to Fed If Romney Wins (Bloomberg)
- 9 More Banks Subpoenaed Over Libor (WSJ)
- Romney raises $112m in 17 days (FT)
- Amid Cutbacks, Greek Doctors Offer Message to Poor: You Are Not Alone (NYT)... no, we are all broke
- Muni Downgrades Top 2011 Total on Weak Economy: Moody’s (Bloomberg)
- Ireland urges ECB to commit to bond-buying (FT)
- Cameron and Clegg unite in EU demands (FT)
- Japan grapples with own fiscal cliff (Bloomberg)
- Japan Protests After Four Chinese Vessels Enter Disputed Waters (Bloomberg)
- Asian Stocks Rise as Exporters Gain on China, U.S. Data (Bloomberg)
- An obsolete Hilsenrath speaks: Fed Keeps Rates Low, Says Growth Is Moderate (WSJ)
- ECB Said to Push Spain’s Bankia to Swap Junior Debt for Shares (Bloomberg)
- Spain’s Bad Bank Seen as Too Big to Work (Bloomberg)
- China postpones Japan anniversary events (China Daily)
- Carney Says Rate Increase ‘Less Imminent’ on Economy Risk (Bloomberg)
- Credit Suisse to Cut More Costs as Quarterly Profit Falls (Bloomberg)
- Obama offers a glimpse of his second-term priorities (Reuters)
- Draghi defends bond-buying programme (FT)
Presented with little comment except to note that the ebullience (pre-crisis spread levels and dramatically rising PIK Toggle issuance?) driven by flow/technicals and financial repression - even in the face of releveraging and fundamental deterioration will see an over-crowded euphoric group of investors knocking at Ben's door when this turns to dysphoria as the credit cycle inevitably does...
While the infamous 'Gundlach' trade has done remarkably well since inception, our view on NatGas has become less vociferously bullish recently as the more constructive factors such as an under-appreciation of declining production and rising utility demand. While their remains upside potential to gas prices over the next 18 to 24 months, we tend to agree with Credit Suisse as they note five reasons why a near-term pause in pricing is likely. With unconventional supply more resilient than many had expected - covering the fall in conventional supply and absent an extremely cold winter (which NOAA is not expecting), a range-bound NatGas pricing market seems the new normal (for now).
Bernanke has fired his infinite bazooka and yet markets have done nothing but slide since and macro-economic data are showing further signs of weakness (New Orders and Capex) with the reality under the headlines of a housing 'recovery' hardly green-shoots. Draghi remains sidelined with his conditionally infinite bazooka as his region of the world slides deeper and deeper into the abyss of recession/depression with IFO expectations and New Orders slumping and deleveraging continuing. So, it seems, the hope for moar-money from central-bankers remains squarely on the shoulders of the PBoC. However, a glimmer of green shoots as a gentle acceleration PMI (and New Export Orders? to Japan?) suggest (as Goldman's Jim O'Neill would have us believe) that the Chinese have manufactured a slow landing (for now - given 'their' data). Hardly the driver for the next major round of stimulus that is so required to fill deleveraging shoes (leaving aside the question of food inflation concerns). So a 'blip' of a green shoot in China is in fact nothing to be celebrated as the world remains a closed-loop (no martians yet) and two of the world's three largest economies are lagging badly. Look at these three charts and decide which way the world is heading!
Once again confusion is rife overnight, following yesterday's main European event, Spain's first "mixed" regional election, which saw Rajoy's PP party in his home state of Galicia eeking a majority by a few seats, offset by wins for nationalist parties in the Basque Country. The immediate read here is that the Galician win is an endorsement of Rajoy's "austerity poilicies" and thus EUR positive (which have yet to be actually implemented as Spanish spending continues to rise, as tax revenues continue to drop), yet it makes the likelihood that Spain requests a bailout before the Spanish regional election on November 25, which is about secession, virtually nil, and thus SPGB negative. Furthermore as Bank of America points out "some euro-area govts may remain reluctant to support Spain’s request as long as yields continue to be low, banks haven’t been recapitalized; probably reinforced by Catalonia elections" but that is a reality tale for another day - the "market" can only handle so much.
With 20 days left to the big day and the candidates seemingly in a tighter race than many expected it seems appropriate to look at how the equity market is and will be positioned for a potential changing of the guard if Mitt Romney wins or if incumbent Barack Obama remains in charge. Credit Suisse has created a comprehensive 'cheat-sheet' outlining key issues for the election for each candidate, the sector impact of an Obama or Romney victory, and the extent to which that impact is already factored into current market prices. Everything you wanted to know about gaming the outcome of the election but were afraid to ask.