would like to thank the Academy
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Thank YOU Larry, you do a great job running this. Beer on me in Vegas if you come out in July.
BACK! And I am a BIG sweaty mess. Going to hang out with ya through the unemployment numbers, and then take a shower.
Still think we are setting up for a nice pop and drop today, or pop today and drop tomorrow.
BAC not very strong PM, I am leaning towards those Puts when it pops. Would like to see about 12.26 before I decide to jump in. Then, it will be a choice between the May or the June expiration.
Will be watching my other plays, trying to keep the streak alive. Hoping CALL pops today, and the squeeze begins. It stayed strong yesterday trorugh a very crappy down day, so fingers are crossed.
Okie Dokie Lottos, off to run with the old man, and get some dinner. Will be back on the SLOW ass internet in my room before the open.
What I am hoping for, so I can get into some cheaper PUT plays.
Productivity and Costs. Q2 2003 to Q4 2012. Released at 8:30 AM ET. Consensus 1.3%, 0.1%. $MACRO http://stks.co/aSgm
Good morning dDT. Looks like we got us an up market today, to make up for yesterdays flop. Let's see if it makes it past the unemployment data. I am thinking it will, the consensus number is kind of high, would be pretty bad to miss.
Soon we will be finishing each others sentences. And I am PROUD to be your partner, it is a lot of fun.
PMs holding up nice so far, not dropping as they usually do at this time, let's see if it lasts.
That is a BIG ouch for FWLT.
LOL, did we cross post again? We are like a married couple.
Futures creeping up again. Still think we see more down than up this month, bagholders starting to come in at these levels. 0830 will really set the stage, as will the POMO.
LOL a few years ago I tried to short LULU, and my yoga pants were PULLED DOWN!
BAC a little green this morning. WOuld like to see the gap fill from yesterday, and then play those puts. June $12 Puts currently at .40, would like to get them in the .30s. Still think the banks tank this month.
Morgan Stanley Upgrades Arch Coal Inc ($ACI) to Equalweight http://stks.co/rAma
May float the boats of other coal companies.
Ah! That Market Currents is awesome, thanks! Twitstream only seems to post the BIG BOY earnings, and not a lot of the smaller ones.
Was looking at this one yesterday for an earnings play, figured it would miss somewhere, but did NOT like the big short interest, can make it move up no matter what. Interesting to see where it goes, if there is still life left in the 'housing recovery' nonsense.
Where do you get all that data?
An ECB rate cut today would be like 'rearranging the deck chairs on the Titanic' http://stks.co/hTzl @michaelbabad:
Mixed bag of results so far.
U.S. Stock-Index Futures Advance as Facebook Gains
By Jonathan Morgan - May 2, 2013
U.S. stock futures advanced, indicating the Standard & Poor’s 500 Index will rebound from the biggest drop in two weeks, as investors awaited an interest-rate decision from the European Central Bank.
Facebook Inc. (FB) added 1.2 percent in pre-market trading as the operator of the world’s largest social network reported sales that topped projections. Sprint Nextel Corp. (S) fell 1.3 percent as Clearwire Corp., the unprofitable wireless-service provider majority owned by Sprint, said it needs at least $1.7 billion to cover a cash shortage.
S&P 500 (SPX) futures expiring in June advanced 0.2 percent to 1,580.4 at 11:07 a.m. in London. The equity gauge lost 0.9 percent yesterday as U.S. payrolls and manufacturing grew less than forecast, trimming this year’s rally to 11 percent. Contracts on the Dow Jones Industrial Average added 30 points, or 0.2 percent, to 14,666 today.
“The prospect of an ECB rate cut won’t do anything to harm sentiment, even if it is priced in,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, said in a telephone interview today. “Company earnings have been reassuring in the first-quarter reporting season.”
Of the 358 companies in the S&P 500 that have reported so far, 73 percent exceeded analysts’ earnings predictions while 54 percent missed on sales, data compiled by Bloomberg show. Profit at S&P 500 companies rose 1.1 percent in the first three months of the year, according to estimates compiled by Bloomberg.
ECB Rates
The ECB will lower its benchmark interest rate by 25 basis points to a record low of 0.50 percent today, according to 44 of 70 economist forecasts in a Bloomberg survey. The bank will announce its decision at 1:45 p.m. in Bratislava, Slovakia, and ECB President Mario Draghi will hold a press conference 45 minutes later.
The Federal Reserve said yesterday it will keep buying bonds at a monthly pace of $85 billion while standing ready to raise or lower purchases as the economy changes.
A Labor Department release at 8:30 a.m. in Washington may show the number of people filing initial claims for jobless benefits climbed to 345,000 last week from 339,000, according to a Bloomberg survey of economists.
A report tomorrow is projected to show U.S. unemployment stayed at 7.6 percent in April, while payrolls rose 145,000, compared with an increase of 88,000 the prior month, according to the median estimates of economists in a Bloomberg survey.
Facebook advanced 1.2 percent to $27.75 in early New York trading. First-quarter sales surged 38 percent to $1.46 billion, a sign that Chief Executive Officer Mark Zuckerberg is making headway in a drive to make more money from mobile advertising. Profit excluding certain items was 12 cents a share, compared with an average analyst prediction of 13 cents.
Sprint Declines
Sprint Nextel slipped 1.3 percent to $6.97 in German trading as Clearwire said it needs $1.7 billion of funds through 2014 to continue operating. The deficit reflects “less certain revenues and high fixed costs,” Clearwire said. Clearwire didn’t trade in Europe today.
CommVault Systems Inc. (CVLT), a provider of data-storage software, increased 1.1 percent to $72.56 in Germany after Piper Jaffray Cos. upgraded the shares to overweight, the equivalent of a buy recommendation, from neutral.
To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
YAY! Good morning Stuff! Throwing out some more news for a bit, then off to run and get dinner before the market opens. Hope the head is a little clearer this morning.
Stock Market Bear Trap or the Start of a Correction? http://stks.co/eSeq
Futures have slowly been coming down as the day has been progressing. Hoping for a little bit of green this morning so I can get into some Put plays cheaper. Unemployment a market mover in a few hours, and then ECB rate decision.
Happy Thursday to ya Larry!
Just back from meeting with the old man. Our meetings consist of a few nice chairs out on the deck, a FINE cigar, and a cup of coffee. Smoked up a Punch Bareknuckle. Mmmmmmm.....
Last idiotic trade I am thinking about: MCD Puts Looks like maybe we put in a lower high on MCD, got some gaps below to fill. Went down with the market yesterday. I believe we will have some recovery today, but it will be short lived, especially if the crappy NFP numbers come out tomorrow. ADP a precursor? ANyway, MCD is coming off of ALL TIME highs here, needs a little breather. $100 Puts for May are .64 currently. If it pops a little this morning, can get them cheaper. Will be watching.
This is a dangerous play, MCD is a SAFE haven stock, but I think a small drop is in order.
Wow, just noticed MSFT here.....Really? Windows 8 is a DISASTER, nobody cares about their phones OR tablets....I find this odd. That is a big and FAST move, they usually crash and burn just as fast. Eyeing some puts here as well....
EDIT: Read this article on SA explaining the surge in MSFT. 2 Billion investment by a hedge fund. Also talked about other factors.
http://seekingalpha.com/article/1388301-why-microsoft-stock-is-going-up-despite-windows-8-going-down?source=yahoo
Fear the KITTEN? lol
I won't say it.
NUMBER 5 ALL THE WAY!!
Euro steadies, shares sag ahead of ECB meeting
By Marc Jones
LONDON (Reuters) - The euro remained near a two month high and European shares eased on Thursday, as investors waited to see if the European Central Bank will cut rates and hint at more measures to boost struggling eurozone economies.
The ECB is expected to react to the recent downturn in even core euro zone countries like Germany by trimming its main interest rate for the first time in 10 months to a new all-time low of 0.5 percent from 0.75 percent in a statement at 1145 GMT (7.45 a.m. ET).
But following Wednesday's message from the U.S. Federal Reserve that it could step up its bond purchase programme if required, focus in Bratislava where the ECB meets this month, will be on what else it can do to ease the pressure on the region's struggling economy.
Top European shares on the FTSEurofirst 300 (.FTEU3) opened down 0.2 percent ahead of the meeting, as London's FTSE 100 (.FTSE) fell 0.25 percent, Paris's CAC-40 (.FCHI) dropped 0.3 percent but Frankfurt's DAX (.GDAXI) edged up 0.1 percent.
In the currency market, the euro was beginning to inch back up although mild selling earlier in Asia left it down 0.2 percent for the day and off Wednesday's two-month high at $1.3155
"The central scenario is the main rate being cut to 0.5 percent and its other powder being kept dry for if the economy deteriorates further," said Nick Beecroft, a macro fund manager at Saxo Bank.
"That is priced in and the euro may continue higher if that is the case especially in a world where the Fed has opened up the possibility of more easing."
Weak manufacturing data out of China had already reinforced doubts over the health of the global economy as had weaker-than-expected ADP jobs figures from the U.S. in the previous session.
The HSBC China Purchasing Managers' Index dropped to 50.4 in April from March's 51.6 and a tad below a flash reading of 50.5, as new export orders fell for the first time this year.
That had weighed Australia's shares and currency while also hitting Chinese shares and oil and copper prices. (O/R)(MET/L)
Back in Europe's bond market, focus remained squarely on what the ECB would do with rates with expectations for a cut underpinning demand for the already ready rock bottom yields offered by German government bonds.
(Editing by Philippa Fletcher)
Off to lunch. Currently about 0300 New York Time, and the market is relatively GREEN, including the PMs.
ECB Rate Decision going to be a big driving force, as will unemployment numbers.
Expecting some pop this morning, then looking to fade some stocks with some PUTS.
Still holding:
CALL $17.50 MAY calls for @ .55
XLF $18 May Puts @ .07
Looking at:
BAC, CREE Puts
NUAN - Calls
HEK - Looking at JUNE $4 Calls for lotto
Market Moving Econ Data on Thursday is all at 0830.
International Trade
8:30 AM ET
Trade Balance Level PRIOR $-43.0 B CONSENSUS $-42.4 B
Jobless Claims
8:30 AM ET
New Claims - Level PRIOR 339 K CONSENSUS 345 K
Hmmmm....CREE looks like it is ready to drop. Will be looking at JUNE $50 Puts. Daily chart on top, monthly below, look at what it did in May last year. A bit of irrational exuberance on the LED lighting area, PE is way out of line. Looking at June $50 Puts which are currently at 1.40. If futures stay green, may get a little bounce, would like to get in at around that level.
CREE daily, big red candle start of the correction.
Look at what it did in MAY of last year, big red candle, looking for repeat performance this year.
North Korea reportedly sentences detained American to hard labor
Published May 02, 2013
| Associated Press
An American detained for nearly six months in North Korea has been sentenced to 15 years of labor for crimes against the state, the North's state media said Thursday, a development that further complicates already strained ties between Pyongyang and Washington.
The sentencing of Kenneth Bae, described by friends as a devout Christian and a tour operator, comes amid signs of tentative diplomacy following weeks of rising tensions in the region. North Korea had been warning of nuclear war and missile strikes, an angry response to U.N. sanctions for conducting a long-range rocket launch in December and a nuclear test in February, as well as U.S.-South Korean military drills in South Korea.
Analysts say Pyongyang could use Bae as a bargaining chip as it seeks dialogue with Washington.
In Washington, the U.S. State Department had no immediate comment.
It's not the first time an American has been arrested and sentenced to labor during a nuclear standoff.
In 2009, after Pyongyang's launch of an earlier long-range rocket and its second underground nuclear test, two American journalists were sentenced to 12 years of hard labor after sneaking across the border from China.
They later were pardoned on humanitarian grounds and released to former U.S. President Bill Clinton, who flew to Pyongyang on a rescue mission. He also met with then-leader Kim Jong Il, which paved the way for talks.
Bae's trial on charges of "committing hostile acts" against North Korea place in Supreme Court on Tuesday, the state-run Korean Central News Agency reported.
He was arrested in early November in Rason, a special economic zone in North Korea's far northeastern region bordering China and Russia, state media said. The exact nature of Bae's alleged crimes has not been revealed.
Friends and colleagues say Bae, a Korean American who was living in Washington state, was based in the Chinese border city of Dalian and traveled frequently to North Korea to feed orphans.
State media refers to Bae as Pae Jun Ho, the North Korean spelling of his Korean name.
Bae is at least the sixth American detained in North Korea since 2009. The others eventually were deported or released.
Three other Americans detained in recent years were also devout Christians. While North Korea's constitution guarantees freedom of religion, in practice only sanctioned services are tolerated by the government.
North Korea may be fishing for another visit by a high-profile American envoy, said Ahn Chan-il, head of the World Institute for North Korea Studies think tank in South Korea.
"North Korea is using Bae as bait to make such a visit happen. An American bigwig visiting Pyongyang would also burnish Kim Jong Un's leadership profile," Ahn said.
More Forceful Fed Stands by Stimulus
By BINYAMIN APPELBAUM - New York Times
WASHINGTON — The Federal Reserve said Wednesday that its economic stimulus campaign would press forward at the same pace it has maintained since December, putting to rest for now any suggestion that it was leaning toward doing less.
The Fed emphasized that it was ready to increase or decrease its efforts to spur growth and reduce unemployment as necessary, a more balanced position than it took earlier in the year, reflecting the reality that a strong winter has once again yielded to a disappointing spring.
It was the first time that the Fed had explicitly mentioned the possibility of doing more in a policy statement, although officials, including the Fed’s chairman, Ben S. Bernanke, have made the point repeatedly in public remarks.
Analysts disagreed about the central bank’s intent. Some saw it as a signal that the Fed’s next move could be an expansion of its stimulus.
Others, however, said the Fed was simply underscoring that it did not plan to reduce its asset purchases. It is buying $85 billion a month in Treasury and mortgage-backed securities.
“I don’t think there’s much chance of them stepping it up,” said Jim O’Sullivan, chief United States economist at High Frequency Economics in New York. “But this is certainly their way of saying there’s no bias toward scaling down.”
The Fed maintained a relatively sunny economic outlook in its statement, released after a two-day meeting of its policy-making committee. It said that the economy was expanding at a “moderate pace” and that the labor market had shown “some improvement.” It added, however, that federal spending cuts were “restraining economic growth,” an implicit critique of the rest of the government.
That language was stronger than the Fed had used in previous assessments of the economic impact of fiscal policy. Fed officials have repeatedly expressed frustration that fiscal policy is working at cross-purposes with their own monetary policy. The statement also noted that the pace of inflation had slackened, a potential sign of economic weakness. Bringing the annual rate of inflation closer to its target of 2 percent has been a primary goal of the Fed’s four-year-old stimulus campaign, but the statement expressed little concern about the recent deceleration to a pace of only about half that level.
Investors and the Fed have taken the view that inflation is likely to return to a more normal pace without additional effort.
“The committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline” to a level the Fed regards as acceptable, the statement said.
Michael Feroli, chief United States economist at JPMorgan Chase, said the stability of the Fed’s economic outlook suggested that policy, too, would remain stable.
“In effect, the Fed signaled that the pace of asset purchases would be data dependent in both directions, but that right now the data gives them little reason to change in either direction,” Mr. Feroli wrote Wednesday in a note to clients.
The statement won support from 11 of the Federal Open Market Committee’s 12 members. Esther George, the president of the Federal Reserve Bank of Kansas City, cast the dissenting vote, as she has at each meeting this year, citing concerns about potential “economic and financial imbalances” and the risk of excessive inflation.
The pace of economic growth appeared to slow in the weeks between the Fed’s previous meeting and the one this week. Inflation slackened in March to the slowest pace in two years, while employers added the fewest jobs in any month since last summer. And economists say that the pain of federal spending cuts is just beginning to tell.
Inflation was 1.1 percent during the 12 months ending in March, according to the most recent data from the Fed’s preferred inflation gauge, the Commerce Department’s index of personal consumption expenditures. That is well below the 2 percent annual pace that the Fed considers healthy.
The share of Americans with jobs has not increased since the recession.
The central bank is modestly expanding its stimulus campaign each month, as it increases the size of its bond portfolio. The Fed’s most recent economic projections, published in March, showed most officials expected persistently low inflation and persistently high unemployment for years to come.
Officials, however, are reluctant to do more. They see modest benefits and uncertain costs in buying more bonds. The volume of the Fed’s first-quarter purchases already roughly equaled the volume of new mortgage bond issuance and about 72 percent of the volume of new issuance of long-term federal debt.
And the Fed already has tied the duration of low interest rates to the unemployment rate, announcing in December that it intended to hold its benchmark short-term interest rate near zero at least as long as the unemployment rate remained above 6.5 percent, provided that inflation remained under control.
An official account of the Fed’s previous meeting, in March, showed that officials discussed reducing the monthly volume of bond purchases. Some officials who supported the purchase program when it began last year said they saw evidence that the economy was growing more quickly, and that the Fed might be able to curtail the volume of its asset purchases by the third quarter.
An account of this week’s meeting will be released in three weeks, providing a comparable look at the latest round of internal debate. But analysts said that the changed language in the statement reflected a shift in that debate.
The statement said, “The committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes.” The Fed’s previous statement said it would adjust the level of purchases based on economic conditions.
Michael Gapen, director of United States economic research at Barclays Capital, wrote in a note to clients that the statement was “a fairly obvious nod to some of the recent softness in economic activity, labor markets and inflation.” He said it reinforced his view that the Fed would maintain its $85 billion pace through the end of the year.
The Fed also could increase the impact of its campaign by telling investors how long it will run — either in terms of a date or an economic target. But officials say that it has been impossible to reach a consensus on that issue.
Some interesting plays I am looking at:
1. NUAN - Carl Icahn bought more after the crappy earnings that dropped it. Wants to take it over, and company plans a $500 million buyback of shares. Shouldn't stay this low for long, on watch for gap fill, maybe $20 Calls for June.
2. BP - Posted good numbers, yet couldn't go green. GAPS ALL THE DAMN TIME! All gaps get filled as well. My thinking is that some of those lower gaps get eaten before more new higher gaps get made. $43 Puts I think are about .70, may be a play.
3. BAC - The big banks are starting to drop, C, JPM, GS some examples. THis one not as bad as the others, but I think it will catch up. May pop up tomorrow if the market goes green after yesterdays mess, would look at $12 Puts if the price is right for May. Those C puts I got the other day really paid off, looking for another winner here.
China factory growth eases, adds to recovery risk
BEIJING (Reuters) - China's factory-sector growth eased in April as new export orders fell for the first time this year, a private survey showed on Thursday, suggesting the euro zone recession and sluggish U.S. demand may be risks to China's economic recovery.
The final HSBC Purchasing Managers' Index (PMI) dropped to 50.4 in April from March's 51.6 and was largely in line with a flash reading last week of 50.5. Fifty divides expansion from contraction on a monthly basis.
China's official PMI on Wednesday painted a similar picture, falling to 50.6 in April from an 11-month high of 50.9 in March as new export orders fell.
The pull back in both the official and HSBC PMIs are likely to add to concerns over risks to China's economy in the short term, although most analysts expect a steady and gentle recovery this year, aided by government support.
"The slower growth of manufacturing activity in April confirmed a fragile growth recovery of the Chinese economy as external demand deteriorated and renewed destocking pressures built up," said Qu Hongbin, chief China economist at HSBC.
"The looming deflationary pressures also suggest softer overall demand conditions. All this is likely to weigh on the labor market, which is likely to invite more policy responses in the coming months."
A string of global data, including lower-than-expected U.S. economic growth figures and record unemployment in the euro zone, has dented optimism seen at the start of the year that the world economy was picking up.
China's economic growth unexpectedly stumbled in the first quarter, slipping to 7.7 percent versus 7.9 percent in the previous three month period, as factory output and investment slowed.
MORE - http://finance.yahoo.com/news/china-april-hsbc-pmi-eases-020206679.html?l=1
Asian shares fall on fears for health of world economy
By Chikako Mogi
TOKYO (Reuters) - Growing doubts over the health of global economies pushed Asian shares lower on Thursday, adding to investor caution before the European Central Bank meeting later in the day that could see interest rates cut to support growth.
Investor sentiment has weakened as oil futures and U.S. stocks dropped overnight after the latest U.S. economic data cast doubts about the strength of the world's biggest economy.
The euro zone recession was behind mounting market expectations for the ECB to lower its main interest rate by 25 basis points to a record low 0.5 percent, while sluggish U.S. demand may be slowing China's economic recovery.
On Thursday, the final HSBC Purchasing Managers' Index dropped to 50.4 in April from March's 51.6 and a tad below a flash reading of 50.5, as new export orders fell for the first time this year.
Concerns about slow demand from China, Australia's top consumer and the world's second-largest, weighed on Australian shares and its currency while also hitting Chinese shares and Shanghai copper.
"The trend in the Chinese economy continues to improve and it has not lost momentum, but it is fragile and vulnerable to outside shocks, namely the U.S. economy which is showing signs of pausing," said Hirokazu Yuihama, a senior strategist at Daiwa Securities in Tokyo.
"Market tone is dictated by the tug-of-war between growth prospect worries and support from sustained monetary stimulus. Weaker U.S. growth may prompt profit taking in Asian equities which have outperformed earlier this year, keeping regional markets in ranges," Yuihama said.
MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> fell 0.5 percent, with Australian shares (.AXJO) leading the decline as miners dragged the key index down 0.8 percent.
"What we're seeing today is the material stocks lagging, pulling the market down, there's still no real conviction in the major mining stocks despite them being at pretty depressed levels," said Peter Esho, investment adviser at Wilson HTM Investment Group, of Australian shares.
Shanghai shares (.SSEC) were down 0.3 percent after earlier touching 2013 lows while a sharp slide for CNOOC made the Chinese oil major the largest drag on Hong Kong's Hang Seng Index (.HSI) which eased 0.4 percent. Shanghai copper fell nearly 5 percent to a session low of 49,240 yuan per metric ton (1.1023 tons).
Japan's Nikkei stock average (.N225) slipped 0.5 percent, heading for a fourth straight session of losses, which would mark the longest such losing run since November, just before Prime Minister Shinzo Abe starting making election-campaign promises of expansionary monetary and fiscal policies to spur growth.
Japanese financial markets will be closed on Friday and Monday for public holidays. (.T)
FED KEEPS OPTIONS OPEN
The dollar recovered from lows against a basket of six major currencies (.DXY) but stayed near its lowest since late February at 81.331 hit on Wednesday, after the U.S. Federal Reserve kept its plan to buy $85 billion in bonds each month, as was widely expected.
The dollar's weakness lifted the euro to a two-month high of $1.3243 on Wednesday, and the common currency was steady around $1.3178 this session.
"Poor growth prospects remain a major deterrent to credit demand in the euro zone. The lack of credit demand points to further contraction in the region. This poor prognosis along with the disappointing read on Germany's PMI in April should see the ECB ease policy," Barclays Capital said in a research note.
The dollar fell 0.1 percent against the yen to 97.30, pressured...........
MORE - http://finance.yahoo.com/news/asian-shares-fall-fears-health-032500515.html?l=1
The “Most Overpriced, Oversupplied, Over-owned Market in History”
By Aaron Task
The U.S. Treasury this week announced plans to retire $35 billion in notes, the first time the government has paid down debt since 2007.
It’s a significant milestone for Treasury and $35 billion is a lot of money for mere mortals, but barely a drop in the $16.7 trillion bucket of our nation’s debt.
Among others, Michael Pento, president of Pento Portfolio Strategies, believes the U.S. Treasury market is a massive bubble destined to pop with devastating consequences.
U.S. Treasuries are “the most overpriced, oversupplied and over-owned market in the history of American markets,” says Pento, citing current Treasury yields as 550 basis points below the 40-year average, the massive inflows into bond funds (nearly $120 billion from 2008-2012) and the 140% increase in issuance since the end of 2007.
Unlike most, Pento is willing to put a timeline on when he believes the bond bubble will burst, which is the theme of his not-so subtly titled new book: The Coming Bond Market Collapse.
Sometime in 2015-16, foreigners creditors will conclude with a high degree of confidence “’it’s impossible the U.S. will ever pay me back in real terms and I demand a higher interest rate,’” he predicts. “It will be just like Greece.”
Again, many others have made similar predictions in the past and, to date, have continually been proven wrong. “The world wants ‘em,” says longtime Treasury bull Gary Shilling, who continues to advocate a “buy and hold” strategy for U.S. bonds.
Such talk is heresy to Pento, who is steadfast in a long-held view the bond market is a bubble destined to burst. Once again standing out from other forecasters of bond market doom, he also lays out strategies to mitigate the damage. For individual investors, his advice is simple: “avoid Treasuries like the plague.”
For the U.S. government, his advice is a bit more nuanced and features the following recommendations, which go well beyond pure economics, as discussed in the accompanying video:
• Let the deleveraging process happen
•Strengthen & stabilize the dollar
•Allow rates to rise to supply of savings vs. demand for money
•Balance the budget
•Aggressively reduce regulations
•Simplify the tax code
•Expand fair & free trade
•Overhaul education
Aaron Task is the host of The Daily Ticker and Editor-in-Chief of Yahoo! Finance. You can follow him on Twitter at @aarontask or email him at altask@yahoo.com
Gold Bull Run Seen Over as Bear Drop Frays Faithful: Commodities
By Whitney McFerron, Maria Kolesnikova and Glenys Sim - May 1, 2013
Gold’s longest winning streak in at least nine decades is poised to end as diminishing trust in the metal’s ability to preserve value spurred a majority of analysts to predict the first annual retreat since 2000.
Prices will close the year at $1,550 an ounce, 7.5 percent less than at the end of 2012 and the biggest drop since 1997, according to the median of 38 estimates compiled by Bloomberg. Investors are selling bullion held through exchange-traded products at the fastest pace on record, hedge funds accumulated their second-biggest bearish bet ever and futures had their biggest two-day drop in 33 years last month.
Bullion slumped into a bear market in April even as central banks printed money on an unprecedented scale, Europe’s debt crisis spread and the International Monetary Fund made a fourth consecutive cut to its 2013 economic growth forecast. Gold’s drop at a time of record highs in U.S. equities underscores how some investors have lost faith in the surge that drove prices as much as seven times higher over the 12-year bull run.
“It’s the end of an era,” said Michael Haigh, the head of commodities research at Societe Generale SA in New York who correctly predicted the collapse a month ago. “ETF flows and hedge fund flows have gold changing direction for the first time in a long, long time. Prices are going to be dropping.”
Equity Index
Gold fell 13 percent to $1,454.55 in London this year and reached a two-year low of $1,321.95 on April 16. It would have to rally 15 percent to rise for a 13th year. The Standard & Poor’s GSCI gauge of 24 commodities retreated 5.2 percent since the start of January, with gold the fourth-worst performer after silver, lead and copper. The MSCI All-Country World Index of equities rose 8 percent and a Bank of America Corp. index shows Treasuries returned 1 percent.
Twelve consecutive annual gains have been matched by few other assets. U.S. Treasuries gave investors returns for at least 16 years through 1993 and Bank of America’s Global Broad Market Index of bonds advanced every year since 2000.
The value of gold owned through ETPs fell $37 billion to $106.1 billion since October as prices slumped and investors sold metal, according to data compiled by Bloomberg. The record 2,632.5 tons they held in December exceeded all but two of the world’s central-bank reserves and the 356 tons disposed of since then is equal to about 18 months of U.S. mine output.
Lower Prices
Institutions own about 50 percent of the 1,078 tons in the SPDR Gold Trust (GLD), the biggest ETP, and they may sell about half of it as prices drop and investors favor equities, Deutsche Bank AG said in an April 26 report. Bullion declined 25 percent from its record $1,921.15 in September 2011 as the MSCI (MXWD) All-Country World Index advanced 26 percent.
Societe Generale is predicting a fourth-quarter average of $1,375, the lowest for the period in three years. Goldman Sachs Group Inc., Barclays Plc, Credit Suisse Group AG and Morgan Stanley are also among those forecasting lower prices and just 10 of the 38 analysts surveyed by Bloomberg expect gold to gain for a 13th year. While Goldman ended a recommendation to sell on April 23, the bank said further declines are likely.
Prices rallied 10 percent since reaching a two-year low as the slump spurred purchases of bullion coins and jewelry. The U.S. Mint ran out of its smallest gold coin last month and sales across its products in April were the highest since December 2009. The U.K. Mint said it is increasing output after demand more than tripled and the Perth mint stayed open through the weekend to meet orders that reached a five-year high.
MORE - http://www.bloomberg.com/news/print/2013-05-01/gold-bull-run-seen-over-as-bear-drop-frays-faithful-commodities.html
Final Preview For ECB Meeting - Goldman, BofA, DB, Barclays, And Others http://stks.co/hTym
Good morning Stuff. Bright morning here in the 'Stan, lots of sun, and dusty as heck.
Currently doing some research in the wee hours out here. Can't believe the market tanked like it did, was expecting it to stay over $159, quite a surprise when I saw lower $158s. I take it the FOMC didn't work any magic like it usually does. The 'Sell in May' might be the play. Then again, futures are green right now, and this can all just be a BTFD moment as well.
HEK - HUGE short interest, earnings coming up, $4 calls just .15, may be a lotto if it has nice numbers. Doing research, but too slow to get anything done.
Now I am out, see ya tomorrow Stuff!