Picture of the Day - Deleveraging is a Myth
I continue to claim that most banks are insolvent, no matter what creative accounting, fake "stress tests", corrupt governors and the media tries to fool us into believing.
Austerity in Action
Crazy Photos From Yesterday's Greek Riots. Slideshow 22 PICS
Riots In Greece -- Blood, Sweat, Molotov Cocktails, Fire and Beatdowns >>
Probably just a teaser of what's to come, in the US, in Europe?
Riots In Greece -- Blood, Sweat, Molotov Cocktails, Fire and Beatdowns >>
Probably just a teaser of what's to come, in the US, in Europe?
The Order of Things
Work and pay your taxes. Borrow money and pay your interest. Buy and consume. Watch TV. Consume things you do not need and above all, do not forget to borrow money. Watch TV.
Who's keeping track of the 9 trillion dollars?
The exceptional Alan Grayson's insistent and, of course, impossible struggle against sovereignty and world leaders moves on. Entertaining and very disturbing.
Eisman, BarCap, RBS, Goldman
A different form of Activism - Eisman, the eccentric successful psycho for a "hero" from The Big Short is now paying a student loan for a poor student who went to a "for profit" universitiy (ie a pay & play school, but for those who are a bit worse off ) and got no job, so he couldn't pay the rent. Eisman sees a massive short in the sector and pays off the loan to get more attention to those companies' disgusting business model. http://chronicle.com/article/Investor-Who-Criticizes/66083/
Risk Off Risk On - Sentiment study by BarCap where 70% of investors surveyed believe a continued fall in prices / riskoff in Q3. A reason as good as any to buy and believe that 1040 holds. "We recently conducted our regular quarterly survey of market sentiment across our global client base. This quarter’s survey is particularly interesting because it took place at a time of unusual investor uncertainty and increasing pessimism. The general mood of worried uncertainty is reflected in the responses to several questions: following the sell-off of risky assets in Q2 around 70% of clients think that Q3 will see either further short-term weakness or prices remaining close to current levels; only one is six think that we are close to the bottom. Similarly, over 80% of clients think that the EUR is likely to have a further, albeit gradual, decline or to be rangebound; only 4% expect a EUR rally. (It is also worth noting that fewer than 10% think the EUR is likely to collapse.) Unsurprisingly, given the prevailing environment, positions are relatively light: five times as many clients responded that they are running light positions than both large and at limit combined."
RBS, Get Ready for the Cliff Edge - http://pragcap.com/rbs-get-ready-for-the-cliff-edge
More Goldman
Risk Off Risk On - Sentiment study by BarCap where 70% of investors surveyed believe a continued fall in prices / riskoff in Q3. A reason as good as any to buy and believe that 1040 holds. "We recently conducted our regular quarterly survey of market sentiment across our global client base. This quarter’s survey is particularly interesting because it took place at a time of unusual investor uncertainty and increasing pessimism. The general mood of worried uncertainty is reflected in the responses to several questions: following the sell-off of risky assets in Q2 around 70% of clients think that Q3 will see either further short-term weakness or prices remaining close to current levels; only one is six think that we are close to the bottom. Similarly, over 80% of clients think that the EUR is likely to have a further, albeit gradual, decline or to be rangebound; only 4% expect a EUR rally. (It is also worth noting that fewer than 10% think the EUR is likely to collapse.) Unsurprisingly, given the prevailing environment, positions are relatively light: five times as many clients responded that they are running light positions than both large and at limit combined."
RBS, Get Ready for the Cliff Edge - http://pragcap.com/rbs-get-ready-for-the-cliff-edge
More Goldman
BP filing Chapter 11 within a month?
Matt Simmons in an interview in which he predicts that BP, one of the world's largest companies, will apply for Chapter 11 within a month.
http://money.cnn.com/2010/06/09/news/companies/simmons_gulf_oil_spill.fortune/index.htm
http://money.cnn.com/2010/06/09/news/companies/simmons_gulf_oil_spill.fortune/index.htm
Bilderberg meeting in Spain
The Bilderberg group have now gathered in Sitges, Spain, for an informal 3 day meeting for some of the world's most influential individuals - politicians, business leaders, governors, bankers. Furthermore, there are individuals from the very top of the media, intelligence services and military. In short, representatives from the world's economic, political, military and media elite.
Bilderberg Group is an annual, non-official meeting where all participants are specially invited, about 120-130 in number. They meet at a hotel that is emptied of all other guests and where the surroundings around there are completely cordoned off. Security is huge and so also the secrecy.
Only a couple of years back everything about the Bilderberg meetings was considered conspiracies. Today you can no longer deny its existence but the silence from the participants is GRAND and so also from the media (which then continues to not do what they're paid to do, i.e. scrutinize those in power). Those who've attended the meeting and have been confronted about it just denies they've participated or simply categorically refuses to answer the question. Top Secret is just the first name.
Of course it is these peoples full right to meet in private and discuss the issues at any time. However, it is odd to say the least, that those of our elected representatives who attend, either denies their participation or chooses not to say a word on what has been discussed. Even more alarming, but of course not surprising, is that the media do not cover, report and investigate these events and what is covered therein.
Bilderberg Group is an annual, non-official meeting where all participants are specially invited, about 120-130 in number. They meet at a hotel that is emptied of all other guests and where the surroundings around there are completely cordoned off. Security is huge and so also the secrecy.
Only a couple of years back everything about the Bilderberg meetings was considered conspiracies. Today you can no longer deny its existence but the silence from the participants is GRAND and so also from the media (which then continues to not do what they're paid to do, i.e. scrutinize those in power). Those who've attended the meeting and have been confronted about it just denies they've participated or simply categorically refuses to answer the question. Top Secret is just the first name.
Of course it is these peoples full right to meet in private and discuss the issues at any time. However, it is odd to say the least, that those of our elected representatives who attend, either denies their participation or chooses not to say a word on what has been discussed. Even more alarming, but of course not surprising, is that the media do not cover, report and investigate these events and what is covered therein.
Div Yield > P/E and Productivity in a nutshell
Div Yield > P/E - seen any of those stocks lately? - Morgan Stanley states that stocks with a dividend yield above P/E are worth buying as they have a good track record to outperform. First thought – of course those stocks are worth buying, but hey how many are there? Forward P/E for the S&P500 is just below 13x, and quite frankly I don't know very many stocks with that kind of div yield. However, according to MS, "Expressed as a share of market cap, 2.4% of total market value currently have trailing DY > P/E, well above the long-run median of 0.7%." Apparently in Insurance, Energy and Capital Goods. Ok, I guess I'll have to take another look at that particular piece of research, but in my opinion it's never that easy.
That's productivity in a nutshell for you - According to the Bureau of Labor Statistics, Unemployment in the U.S. eased back down to 9.7% in May from 9.9% in April, but the number of new jobs added was only 431,000, in comparison to projections for payroll additions of 536,000. Well, only about 30-50% of the 2 m american jobs lost in recent years even have a chance of ever coming back. The reason anything is growing at all is because of efficiency improvements, but this growth won't produce any employed consumers. Unfortunately.
That's productivity in a nutshell for you - According to the Bureau of Labor Statistics, Unemployment in the U.S. eased back down to 9.7% in May from 9.9% in April, but the number of new jobs added was only 431,000, in comparison to projections for payroll additions of 536,000. Well, only about 30-50% of the 2 m american jobs lost in recent years even have a chance of ever coming back. The reason anything is growing at all is because of efficiency improvements, but this growth won't produce any employed consumers. Unfortunately.
More zeitgeist
I follow a lot of fanatic sources on the web, not because I agree with
what they're saying, but simply because I find it to be one of the
best gauges for the current zeitgeist.
With the mounting eurocrisis, the legendary investor Felix Zulauf sums
up the situation. All of the industrialized world has too much debt
relative to the size of its economy. He argues that we've lived in an
economic and financial pretend world for the last 20 years, where the
assumption has been that more loans and more debt would lead to a
state of sustained prosperity. His conclusion is to take cover in the
ultimate currency, Gold.
Link below
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/28_Felix_Zulauf.html
what they're saying, but simply because I find it to be one of the
best gauges for the current zeitgeist.
With the mounting eurocrisis, the legendary investor Felix Zulauf sums
up the situation. All of the industrialized world has too much debt
relative to the size of its economy. He argues that we've lived in an
economic and financial pretend world for the last 20 years, where the
assumption has been that more loans and more debt would lead to a
state of sustained prosperity. His conclusion is to take cover in the
ultimate currency, Gold.
Link below
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/28_Felix_Zulauf.html
Government propaganda for the weak-minded
Quite simply propaganda to citizens. Miss Christian is laughing and
crying at once. Sad and disturbing.
crying at once. Sad and disturbing.
Where does Money come from?
Entertaining movie about our fraudulent banking system and how Ponzi scheme "works". Fiat money and fractional reserve banking.
The reason it won’t be a bull market anytime soon
One of the most reliable rules of the market is that when everyone
says the same thing, it's guaranteed not to happen. I have never seen
the sell-side more bullish than now, probably never ever in my career.
12 of 12 strategists are bullish. I have counted 25 major stock
upgrades in recent days and 0 (zero) downgrades. The market's sure not
to turn until we get some sell-side surrender.
says the same thing, it's guaranteed not to happen. I have never seen
the sell-side more bullish than now, probably never ever in my career.
12 of 12 strategists are bullish. I have counted 25 major stock
upgrades in recent days and 0 (zero) downgrades. The market's sure not
to turn until we get some sell-side surrender.
I also wonder when the sell-side will start lowering earnings
estimates? Or any estimates for that matter? When will 2H Slow Down
become a theme? Or 2011 earning miss? Estimates for the S&P500 for
2011 is +19%, after this record year. Will anyone buy on better Q2
numbers that are almost already history?
The market's likely to be particularly difficult for traders, with
ever lower volume and increasingly tighter range, apart from opening
gaps. Although it has felt so messy, we have only acted in the
1060-1100 S&P500 in the last five days. Feels like sharp movements,
but really we are just still - and it will remain, with the risk
skewed to a break downwards.
The gold speaks to you
The gold speaks to you. The message is simple and clear. Take cover in good faith. It will not be pretty. Unfortunately. Gold managed to break through the December 2009 high - but we still have a long way to go before the inflation-adjusted high
Lucky for me I'm mostly into diamonds
Lucky for me I'm mostly into diamonds
Update - >4% moves, Scenario analysis, Trading Strategy, Australia and Pain Trade
4% moves - Last few times the U.S. stock market was > 4% in one day was the 10th, 12th and 23rd March 2009 - ie the start of the big rally.
Scenario analysis - Sad to say, since i'm a fundamentalist myself, but as I've said several times on the blog, fundamental analysis is not only not in play, it's dead, at least right now. Earnings forecast, estimate changes, all meaningless now. Right now only scenario analysis applies, and it will stay that way for a while.
Trading Strategy - Time to express views through the options - and to risk as little capital as possible, and be long extremes. One thing is for sure - it is NOT the next few weeks that you will earn the big easy money.
Australia, not Asia - Australia is a Western country, but happens to be ahead of us timezonewise. In addition the country's stock market's also heavy on commodity, so I follow it because it can be an indication of how European stock markets behave when they open. Tokyo, China can perhaps point out the direction too, but these countries' economies differ more from Europe and the EU than Australia does.
Pain Trade - The biggest pain trade is probably still that we turn straight down like lightning. The second biggest pain trade is that we have a melt-up and go 10% in a few weeks without any time to enter again. The only non-pain trade right now is that we go into a tight range with an every second day's market where you have time to lick the wounds and think - but that's probably exactly what's not going to happen.
Scenario analysis - Sad to say, since i'm a fundamentalist myself, but as I've said several times on the blog, fundamental analysis is not only not in play, it's dead, at least right now. Earnings forecast, estimate changes, all meaningless now. Right now only scenario analysis applies, and it will stay that way for a while.
Trading Strategy - Time to express views through the options - and to risk as little capital as possible, and be long extremes. One thing is for sure - it is NOT the next few weeks that you will earn the big easy money.
Australia, not Asia - Australia is a Western country, but happens to be ahead of us timezonewise. In addition the country's stock market's also heavy on commodity, so I follow it because it can be an indication of how European stock markets behave when they open. Tokyo, China can perhaps point out the direction too, but these countries' economies differ more from Europe and the EU than Australia does.
Pain Trade - The biggest pain trade is probably still that we turn straight down like lightning. The second biggest pain trade is that we have a melt-up and go 10% in a few weeks without any time to enter again. The only non-pain trade right now is that we go into a tight range with an every second day's market where you have time to lick the wounds and think - but that's probably exactly what's not going to happen.
Homage to the macro man
It is with great sadness that I note that macro man is now putting down the keyboard. Second only to BCA Research, his blog has been a true source of intelligence in the never ending information overflow that drowns our industry every day.
For those of you who haven't had the pleasure of reading his stuff, quickly pay a visit to http://macro-man.blogspot.com/ while his stuff there is still relatively hot.
For those of you who haven't had the pleasure of reading his stuff, quickly pay a visit to http://macro-man.blogspot.com/ while his stuff there is still relatively hot.
The assets of the sucker of last resort
I suppose that it's only me and Grayson who cares but I can not help but post this. The exceptional Alan Grayson again. Probably one of the few honest and upright politicians who seek truth and justice. Here in a stunning display in Congress. Well worth listening carefully to and reflect. Cred to Grayson, and let's audit the FED!
Now I'm in my sweats and gonna hit the gym.
Now I'm in my sweats and gonna hit the gym.
Millions, no, billions of euro bail out
Guess the ECB does not want to make the same mistakes that the FED and U.S. State did with the first TARP money. Perhaps 420bn had been enough, but so that no one should dare "game" the system they added 150bn, and to make sure that people would really shut up they added another 150bn on top.
More (less than) fun facts about China
- There are nearly 40 million more men than women in China. Still, it is mighty popular to abort female fetuses in China.
- China has the world's largest shopping mall. Located in Dongguan, with a vacancy rate of 99% since its opening in 2005!
- Close to 10 000 Chinese inhabitants end up in so-called "black prisons" each year. Illegal and secret prisons where people (mostly dissidents) are held prisoners for months and subjected to physical mistreatment and psykist.
- If the average Chinese person spent his entire annual income, an annual salary, to buy space in Beijing he could barely get over 1 sq. Average wages per capita is 2000 yuan / month. The average price per sq in Beijing is at 26 000 yuan.
- China has about half a billion pigs. It is more than the next 43 (!) pork-producing countries have together. U.S. has about 65 million units.
- The Chinese together consume about 3 million cigarettes per minute.
- 80% of all "American" toys are manufactured in China.
- It is planning a "New Orient Express", a fast train to go between Beijing and London. trip expected to take two days. The flight takes about 10 hours.
- China's huge Gobi desert is now as large as Peru and adding an area 60 of Manhattans every year.
- Beijing Olympic Games was the most expensive so far been with an estimated cost around EUR 25 billion. Twice as much as the previous most expensive Olympic Games. The ongoing World Expo in Shanghai is expected to be even more expensive and cost approximately EUR 33 billion.
- China has the world's largest shopping mall. Located in Dongguan, with a vacancy rate of 99% since its opening in 2005!
- Close to 10 000 Chinese inhabitants end up in so-called "black prisons" each year. Illegal and secret prisons where people (mostly dissidents) are held prisoners for months and subjected to physical mistreatment and psykist.
- If the average Chinese person spent his entire annual income, an annual salary, to buy space in Beijing he could barely get over 1 sq. Average wages per capita is 2000 yuan / month. The average price per sq in Beijing is at 26 000 yuan.
- China has about half a billion pigs. It is more than the next 43 (!) pork-producing countries have together. U.S. has about 65 million units.
- The Chinese together consume about 3 million cigarettes per minute.
- 80% of all "American" toys are manufactured in China.
- It is planning a "New Orient Express", a fast train to go between Beijing and London. trip expected to take two days. The flight takes about 10 hours.
- China's huge Gobi desert is now as large as Peru and adding an area 60 of Manhattans every year.
- Beijing Olympic Games was the most expensive so far been with an estimated cost around EUR 25 billion. Twice as much as the previous most expensive Olympic Games. The ongoing World Expo in Shanghai is expected to be even more expensive and cost approximately EUR 33 billion.
Sunday circus
Well, what do you know? This morning it was announced an coordinated action to combat escalating financial market tensions triggered by worldwide fears over public finances.
ECB finally announced that it would intervene in the government bond market, something which it had said it wasn't considering, only last Thursday. While this is positive, it's also an indication of how much worse the ECB are now judging the situation to be. Probably the eventful Thursday and Friday trading helped a bit.
Also, the European Union and the IMF agreed on an emergency funding facility worth as much as €720bn ($930bn, £625bn) in loan guarantees and credits to the eurozone.
Guess we're likely to see a rally today, less the market deems this too little too late, but asia is up 1.6% now so it seems good. It'll be a while before fundamentals are back in play again, but at least we'll be getting out of defensives today.
Miss Christian was at the circus yesterday with my niece and nephew. Concluded that all in all they have revenues of about GBP 60 000 per show at the most. No wonder the sea lion wrangler has to man the popcorn booth in the intermissions.
ECB finally announced that it would intervene in the government bond market, something which it had said it wasn't considering, only last Thursday. While this is positive, it's also an indication of how much worse the ECB are now judging the situation to be. Probably the eventful Thursday and Friday trading helped a bit.
Also, the European Union and the IMF agreed on an emergency funding facility worth as much as €720bn ($930bn, £625bn) in loan guarantees and credits to the eurozone.
Guess we're likely to see a rally today, less the market deems this too little too late, but asia is up 1.6% now so it seems good. It'll be a while before fundamentals are back in play again, but at least we'll be getting out of defensives today.
Miss Christian was at the circus yesterday with my niece and nephew. Concluded that all in all they have revenues of about GBP 60 000 per show at the most. No wonder the sea lion wrangler has to man the popcorn booth in the intermissions.
The sound of the IPO window breaking
No matter what happens to the stock market from here you can at least be sure that the massive IPO month flagged for by all the brokers in May are now guaranteed not going to happen. That crashing sound you just heard was the IPO window not closing but being completely broken. Apart from the past week's price action, it has been extremely difficult to see why investors would desire to put new money into healthy fresh new stories when many existing midcaps completely implodes. Appetite to buy "Tomorrow Stories" have been very close to zero. And seems likely to stay that way for a while.
Me, I just got back from a day trip to the archipelago. Salt stains, but no sunburn though.
Me, I just got back from a day trip to the archipelago. Salt stains, but no sunburn though.
Friday flight to safety
Just came back from a company visit earlier this afternoon. Seems like a huge waste of time doing your homework on the fundamentals in this sentiment driven market. Or maybe it’s the opposite, the right time to do your homework on the fundamentals. Made it into the office just to see the market collapse on the screens the last 2 hr of trading in europe. Nasty. Just the fact that 290 000 new jobs in the US, which was a surprise to the expected 190 000, didn’t gain any traction in the market must have scared some people numb.
It rather seems like everyone wants out of risky assets over the weekend, so we’re glad to be deep in the deepest safe haven of all, the 10y US govt.
Now I’m gonna head out to dinner. Outside everyone already seems to have left the office.
It rather seems like everyone wants out of risky assets over the weekend, so we’re glad to be deep in the deepest safe haven of all, the 10y US govt.
Now I’m gonna head out to dinner. Outside everyone already seems to have left the office.
Greece Euro Crosstalk
The rescue package to the greeks is nothing more than a enourmous bailout of french and german banks. Here Hugh Henry advocates soverign bankruptcy. Watch here
Acropolis now
People are in a real glass-half-empty funk at the moment. But with the increasing likelyhood that ECB will step in and buy eurozone govt bonds, the market makes a minirally after a couple of days of severe declines. Market fundamentals do not justify the sentiment-led price declines, but it’s hard to believe that the greek gamechanger waiting with the finale around the corner will be solved in a way that will result a positive outcome for stocks.
This just proves that fundamentals are not back in play just yet. ECB press conf later today. Stay tuned.
This just proves that fundamentals are not back in play just yet. ECB press conf later today. Stay tuned.
