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Oh good! They are very biased to say the least, they love blaming CB's as you know. 71' did indeed open up Pandora's box and here we are on a slow drip QE IV. Increased government spending, financed by central banks could indeed create inflation, but will further elevate the problem of debt viability. If investors lose confidence in the current regimes methods of fiscal intervention they will loose faith in the market and the viability of our current debt problem ever being repaid thereby reducing their exposure IMO. To me it's a negative feedback loop. Keep firing up QE to keep assets artificially inflated and keep adding more debt to the balance sheets. Increasing the costs at some point for the govt to borrow down the road.
Gld, you can be frank. It's all quite allright. We live in a republic of opinions. I never realized you had such a disdain for zero hedge. I personally really enjoy the majority of the articles. For know I sold Apple preclose on Tuesday before the 10% drop. I'm in a bit of SLV , cash and shorting two others. I'm surprised the BoJ turned off the valves last night.
Cheers!
I prefer a deflationary depression with a prolonged soaring VIX. All of what you say here is true. But a reversal can show up out of no where like a thief in the night: these charts are horrible.
http://www.zerohedge.com/news/2016-04-27/its-time-again-stocks
I learned #3 the hard way
Indeed. Been taking a beating since feb 11. I could use some of Livermore's genius right now. Maybe there is a surprise bear attack coming out of left field. 7years and running with these artificial bulls on steroids. Once the juice stops flowing through the veins of these impostors it will be the mother of all feasts for those of us hibernating.
Apple down 9% after hrs and its I phone suppliers are getting hammered. Of course to counter this they issued some shareholder friendly news: an increase in dividends and an increase in its share buy back program. What has changed ? I still believe we are in a global recession. But what do I know?
Most likely June is what I'm hearing
Your posts are are great. Very informative as always. Thx!
Mario Draghi elevated from Wizard of Oz to God by zero hedge in a derisive manner as he now wants to put a final nail in the coffin of capitalism by guaranteeing the corporate bonds of specific companies. This must by the new way to incentivize businesses to move and do business in the EU. Plus helicopter drops are already being done and I'm an EU citizen. Maybe it's time to relocate?
http://www.zerohedge.com/news/2016-04-24/if-draghis-latest-doesnt-scare-you-you-just-arent-paying-attention
Lol! I'll be there as well!
If you want to get paid to borrow money move to Denmark where a person received a loan with an interest of -0.0172%. The negativeinterestrates will spread as desperate central planners think they can save the Fiat Currency System!
Thoughts?
Welcome back & benevenuto! I'm really glad that you enjoyed Rome, indeed it's quite like no other. I was hoping to catch you before you left with a couple recommendations but from the sound of things you had a great experience. It's always good to get away and see how the rest of the world lives and breathes. I always felt that traveling was the best educator in a persons life. So often we leave a special place and only realize later the impact and change that these locations have magically woven into our fabric of experience, never leaving us unchanged. And it is today the mythical founding of Rome by Romulus & Remus . Once again, welcome back and happy trading!
What a great trip. Two places to go:
1) IL PAGLIACCIO for excellent dining experience. The food is amazing.
2) Gelateria del Teatro,
Among other things, Gelateria del Teatro wins for most charming location: It's tucked just off the beautiful Via dei Coronari, not far from Piazza Navona.
My mother lives outside of Rome. She's in the states this month or I would have sent you to visit her for a dish of spaghetti al Dente with her homemade marinara sauce.
Enjoy the trip!!!
Drink some bubbly Lambrusco
I just saw this. Thank you. Wise foreshadowing on Eisenhower's behalf.
I'm sorry. I meant Paul Craig Roberts
Why do you think the policies of Paul Robert Kennedy to cure stagflation were opposed by the neo liberal economists. In your opinion did his supply side policies work, now that we have 30 more years of understanding behind us.
Sounds like '29 all over again . Except markets are so much bigger and more integrated than ever before. Not to mention that bonds until 1980 were not attached to derivatives. It took 25years to recover! Wow! But buy & hold is a great strategy!
" bartender! , salt the rim and gimmie a salty dog!"
You are right. Many a time I was caught catching a falling knife. Time has made me wiser. Should be an interesting '16 going forward.
What we've seen is enough good news to say we're not going into recession. This is a short-term top in a longer-term bull market." Confesses Art Hogan. Or a double top straight to the bottom. It's appropriate that This guy who works for wunderlich securities also gives a capricious, puzzling and over exuberant analysis on the current state of affairs. I guess in his view the bull market is never going to come to an end, hasn't reached maturity or isnt running on hope at this point. I was always told that if a quarterback throws 40 touchdowns in a row he is statistically much closer to throwing an interception on his next pass than he was when he threw his 39 th TD pass. Point being, 7 years into a bull market we are much closer to a crash than a continued run
When is the thirty year bond rally coming to an end? If the markets crash people will jump into bonds but this could be a simultaneous crash of both equity and bond markets.
Soon we will be hearing that discussion here.
Secular winter is right around the corner
Lol! Absolutely. Cheers!
Have a great trip. Lift one up for me will ya! Enjoy!
A friend tells me he is currently at Janus. He's having a bad year.
Bill Gross singing the bank blues.
Bond king Bill Gross is not known for his sunny outlook for the markets. But he took his pessimism to a new level in his latest monthly outlook.
He thinks that big banks are doomed.
Gross, formerly the head of bond powerhouse Pimco and now a fund manager at Janus (ERW), wrote that the combination of tougher rules and low/negative interest rates mean that bank stocks will be no more exciting than boring utilities for years to come.
He pointed to the collapse in the stocks of global banking giants Citigroup (C), Bank of America (BAC), Credit Suisse (CS), Deutsche Bank (DB) and Goldman Sachs (GS) since their 2007 peaks -- and warned that they may never get back to those lofty levels.
"Banking/finance seems to be either a screaming sector ready to be bought or a permanently damaged victim of write-offs, tighter regulation and significantly lower future margins. I'll vote for the latter," he wrote.
Gross almost seemed to be writing an obituary for the financial system -- and capitalism for that matter. (Perhaps he's seen "Mad Max: Fury Road" one too many times?)
"Capitalistic initiative married to an ever expanding supply of available credit has facilitated economic prosperity much like the Sun has been the supply center for ... life's sustenance," he said, adding that "finance itself is burning out like our future Sun."
Tell us how you really feel, Bill.
His advice to investors? Don't be tempted by seemingly cheap bank stock valuations.
He's also bearish on life insurers such as Prudential (PRU), Hartford (HIG) and MetLife (MET) because they depend on big returns from their investment portfolios to help fund their coverage costs.
"All of these insurers whether it be for life, accident, or storm damage, cannot cover claims as conveniently as they could in the past, because they can't earn as much on their bonds and stocks," he said.
He blamed central bankers around the world for creating this problem. The Federal Reserve kept interest rates near zero for eight years. The European Central Bank and Bank of Japan now have rates in negative territory.
And this doesn't just hurt people with money in the stock and bond markets. It's bad news for anyone putting their cash in the bank with the hopes of generating any return on their deposits.
"The damage extends to all savers; households worldwide that saved/invested money for college, retirement or for medical bills. They have been damaged, and only now are becoming aware of it. Negative interest rates do that," he wrote.
Someone might need to give Gross a hug -- although he did end his outlook on a slightly more hopeful note.
"The Sun still comes up every morning but at different times according to the season. Summer, for our credit based financial system, is past and a shorter winter-like solstice is in our future," he wrote.
But he's a doctor! Lol
I'm liking the 5 year chart on the Dow and S&P . That's a double top with a big drop coming. I think that when someone hits the auto correct button we will see Dow 6000 and S&P 666. I love to see this scenario play through.
China continues to inject life into its economy and the EU & US markets not only do not respond in a negative way, but respond positively in their respected markets. What has happened that the markets no longer fear the problems of the second largest influence in the world. Have we totally disengaged from the " unchanged" greater reality? There has been a crash in correlation between the two. But oil is still linked to the S&P . Please fill me in. China cash reserves are finite . And layoffs continue across the board in steel and coal.
Thank you
Much different I'm sure. Have a good weekend Gld...
That's funny! The street sign. I had a chance to visit in 09. A lovely people. Kind and helpful to visitors. Beautiful countryside and incredibly clean cities. Really an idyllic place. I throughly enjoyed my visit.
CNN headline: so much for that imminent market meltdown! Lol
However,How the Markets Are Feeling
And How We Got to This Point is a different reality.
The six-year mega-rally since 2009 has been called the most hated and most artificially pumped-up market ever. With good reason.
The Great Bull Market that began in March 2009 registered all-time highs across all major market indexes in late spring, early summer 2015. A huge driver of this rally was the U.S. Federal Reserve's massive stimulative efforts, particularly its articulated "wealth effect" policy to pump up markets to make consumers feel better about their 401(k), pensions, and futures, and to reinvigorate their consumption habits.
So stocks went sideways when warned the Fed was taking its foot off its QE accelerator. And they crashed in August when facing Fed rate hikes… just as China tried to devalue its currency.
At the same time, oil and other commodities were taking big hits.
The global reality was (and still is) that if the U.S. raises rates and strengthens the dollar, while other countries are trying to devalue their currencies (or end up having them devalued by currency market selling), the cost of servicing some $11 trillion of dollar-denominated loans would skyrocket and bankrupt a lot of borrowers. And, with oil and commodity prices collapsing, producers and exporting countries would struggle to make debt service payments and meet budgets.
The great global negative feedback loop had been triggered.
Intervention by the Peoples' Bank of China, by the ECB, by the Bank of Japan, and market Music from the Fed calmed markets, which then bounced back during the fall.
But nothing had changed. We're still facing the same dilemmas global markets came to grips with last August.
Stocks realized that as 2016 dawned. Nothing has changed.
And that's the backdrop for where we are today.
Maybe they should reinstate the Dane Geld
It seems so. They say the trend is your friend. I missed the trend this time around.
I'm quite shocked that the Shanghai down almost 7% had no impact today on us markets. Halliburton slashing 5k jobs and energy down 1.3% doesn't instill any market Confidence. Of course mfg numbers were up. But that's a minor development in light of what has happened in recent months. All of the sudden we are immune from China? I don't think so
Reliance on solid data should free us from unexpected and unwelcome outcomes, or at least have us better prepared for them.I thought you would agree with Bullard. Makes sense.