Posts Tagged ‘Rosenberg’

Market Commentary From David Rosenberg: Just Call It “Deflationary Growth”

Market Commentary From David Rosenberg: Just Call It "Deflationary Growth"

Courtesy of Tyler Durden

If the way to classify the September stock move as "a confounding ramp on disappointing economic news" gets you stumped, here is Rosenberg to provide some insight. Just call is "deflationary growth or something like that." And as for the NBER’s pronouncement of the recession being over, Rosie has a few words for that as well: "this recovery, with its sub 1% pace of real final sales, goes down as the weakest on record."

It’s a real commentary that the National Bureau of Economic Research (NBER) decision on the historical record mattered more than the actual economic data. The National Association of Home Builders’ (NAHB) housing market index is the latest data point in an array of September releases coming in below expected:

  • Philly Fed index: actual -0.7 versus 0.5 expected
  • Empire manufacturing index: actual 4.14 versus 8 expected
  • NAHB: actual 13 versus 14 expected
  • University of Michigan Consumer Sentiment: actual 66.6 versus 70 expected

It’s early days yet, and these are only surveys, but it would seem as though the economy remains very sluggish as we head towards the third-quarter finish line.

It is truly difficult to come up with an explanation for the breakout, which in turn makes it difficult to ascertain its veracity. If we are seeing a re-assessment or risk or a major asset allocation move, then why did Treasury yields rally 4bps (and led lower by the “real rate”, which is a bond market proxy for “real growth expectations”)?

If it was a pro-growth move, why did copper sell off and the CRB flatten? And where is the volume? Still lacking? So we have a breakout with little or no confirmation. All we can see is that many sentiment measures have swung violently to the upside in recent weeks and the VIX index is all the way back to 21x —- somewhat contrary negative signposts for the bulls.

But the price action is undeniable and the bulls are in fact winning the battle in September, a typically negative seasonal month, after a bloody August. The fact that bonds rallied yesterday is a tad bizarre and perhaps the explanation, if there is one, is that the equity market is enamoured with the cash leaving the corporate balance sheet in favour of dividend payouts and share buybacks and


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David Rosenberg Vindicated

David Rosenberg Vindicated

Courtesy of Tyler Durden

From today’s Breakfast with Rosie

NOT IN KANSAS ANY MORE

Well, it took some patience but it looks like the economic environment I was depicting this time last year just shortly after I joined GS+A is starting to play out. Deflation risks are prevailing and a growing acknowledgment over the lack of sustainability regarding the nascent economic recovery. Extreme fragility and volatility is what one should expect in a post-bubble credit collapse and asset inflation that we endured back in 2008 and part of 2009.

History is replete with enough examples of this — balance sheet recessions are different animals than traditional inventory recessions, and the transition to the next sustainable economic expansion, and bull market (the operative word being sustainability) in these types of cycles take between 5 to 10 years and are fraught with periodic setbacks. I know this sounds a bit dire, but little has changed from where we were a year ago. To be sure, we had a tremendous short-covering and a government induced equity market rally on our hands and it’s really nothing more than a commentary on human nature that so many people rely on what the stock market is doing at any moment in time to base their conclusions on what the economic landscape is going to look like.

So, we had a huge bounce off the lows, but we had a similar bounce off the lows in 1930. The equity market was up something like 50% in the opening months of 1930, and while I am sure there was euphoria at the time that the worst of the recession and the contraction in credit was over, it’s interesting to see today that nobody talks about the great runup of 1930 even though it must have hurt not to have participated in that wonderful rally. Instead, when we talk about 1930 today, the images that are conjured up are hardly very joyous.

I’m not saying that we are into something that is entirely like the 1930s. But at the same time, we’re not in Kansas any more; if Kansas is the type of economic recoveries and market performances we came to understand in the context of a post-World War II era where we had a secular credit expansion, youthful boomers heading into their formative working and spending years and all the economic activity that…
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Rosenberg: Fade The Volumeless Rally As “The Market Is Completely Unprepared For 500K Claims And Sub 50 ISM”

Rosenberg: Fade The Volumeless Rally As "The Market Is Completely Unprepared For 500K Claims And Sub 50 ISM"

Courtesy of Tyler Durden, Zero Hedge 

Rosie’s market commentary from today is quite colorful, taking on both Barton Biggs (why bother) and Richard Russell as inflection point contrarians (we fully expect Barton Biggs who has now generated enough commissions for his broker to kill his entire P&L for the decade, to go bearish in about two weeks in keeping with his latest standing wave oscillation from one extreme to another). Rosie discusses a topic near and dear, namely that bonds continue to not buy the equity rally, and that the market is really not only stupid and inefficient, but wrong and overshooting most of the time. The only question is for how long can it remain wrong. And courtesy of the Fed, the answer is long, long, long. Not surprisingly David ridicules the constant lack of volume to the upside, and concludes that the rally should be faded, and that "this market is completely unprepared for 500k claims and sub-50 ISM." Obviously, he expects both to occur shortly (and just in time for Shiller to say he believes the chance of a double dip is more than 50%).

MARKET COMMENT … WE’RE ALL CHARTISTS NOW

We’re 142 trading days into the year – 52 days (37%) have seen 1% or greater moves. And the S&P 500 is now flat as a beaver’s tail on the year. I call this the meat-grinder market. Again, a huge rally into yesterday’s close – and now the S&P 500 is sitting right at the 200-day moving average. This is starting to get interesting. Again, the lack of ratification from Mr. Bond as the 10-year note yield came back and closed the day a smidgen below 3%.

Today is a critical day. The interim peaks since the April 23rd peak have been progressively lower but a three-point rally in the S&P 500 today would break that pattern:

April 23rd: 1217.3

May 12th: 1171.7

June 18th: 1117.5

July 26th: 1115.0

We should add that we are at a new post-April high in the Dow and the NYSE (the latter is not yet at the 200-day m.a.). We’re not there yet on the S&P 500 or the Nasdaq (13 points off) but we are getting close. While everyone is fixated on the 200-day moving average, we add…
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ECRI Plunges At 9.8% Rate, Double Dip Recession Virtually Assured

ECRI Plunges At 9.8% Rate, Double Dip Recession Virtually Assured 

Courtesy of Tyler Durden at Zero Hedge 

The ECRI Leading Economic Index just dropped to a fresh reading of 120.6 (flat from a previously revised 121.5 as the Columbia profs scramble to create at least a neutral inflection point): this is now a -9.8 drop, and based on empirical evidence presented previously by David Rosenberg, and also confirming all the macro economic data seen in the past two months, virtually assures that the US economy is now fully in a double dip recession scenario. "It is one thing to slip to or fractionally below the zero line, but a -3.5% reading has only sent off two head-fakes in the past, while accurately foreshadowing seven recessions — with a three month lag. Keep your eye on the -10 threshold, for at that level, the economy has gone into recession … only 100% of the time (42 years of data)." We are there.

Complete collapse in the long-term chart:

 


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“The New Bubble Is In Stimulants…..” Rosenberg

"The New Bubble Is In Stimulants….." Rosenberg

Courtesy of Jan-Martin Feddersen at Immobilienblasen

I want to add that the bubble is also in outright & hidden bailouts…..Nothing really new but hours/days away from the next mega bailout ( FHA ) a sober summary how wasteful the resources are "squandered"..…..

government spending

H/T Gary Varvel

Rosenberg

So the U.S. economy is growing again. But how can it not be growing with all the dramatic stimulus? The question should be “why only 3.5%”?

> If you can stand more details you can read "A Sham GDP For A Sham Economy"……

> Für einen teiferen Einblick was die USA veranstalten müssen um überhaupt ein positives GDP Ergebnis auf die Beine zu stellen kann das in "A Sham GDP For A Sham Economy"…… nachlesen….

Now the U.S. government is going to not just extend but indeed expand the tax credits for homeownership. This is happening at a time when the fiscal deficit is 10% of GDP. Simply amazing. The sector already receives more in the way of government support than any other area, and it adds zero to the capital stock or productivity growth. Oh, but it makes us better citizens. Renting must be for losers.

And then we see that the Fed’s TALF (Term Asset-Backed Securities Loan Facility) program that began in March just broke the $90 billion mark. This has basically supported 75% of the growth in the asset-backed market, almost evenly split between auto credit and credit cards because at over a 130% household liability-to-disposable income ratio, the government seems to believe we don’t have enough debt on our balance sheets. Honestly — you can’t make this stuff up.

But here is the real kicker. The Federal Housing Authority (FHA). If you’re wondering how it is that the U.S. housing market has managed to rise from the ashes, well, consider that the government-insured FHA program moved into high gear this year and has basically filled the gap vacated by the private sector. (where default rates are really becoming a problem) should not go unnoticed (and they weren’t by the staff at the WSJ that uncovered the growing problems in yesterday’s edition — FHA Digging Out After Loans Sour on page A2).

[No Easy Exit for Government as Housing Market's Savior]

The efforts to allow practically anyone to secure a mortgage not just


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Reflections on “The Last Bear Standing”

Reflections on "The Last Bear Standing"

bearCourtesy of Mish

Bill Bonner is one of my favorite columnists. On Friday he was discussing The Last Bear.

As they say on Wall Street, a rally ends when the last bear gives up. An old friend had been a source of inspiration for tech bears for many years. He suddenly saw the light and gave up in 1999. Shares he had formerly scorned – often dotcoms with no revenue and no business plans – were suddenly added to his own portfolio. This also heralded a big change – the end of the tech bubble. Tech stocks collapsed. Most disappeared. Then, Stephen Roach became vaguely bullish in 2007, after a long period of doubt and misgivings.

Now it is Jim Grant who has changed his mind. A generation of investors has gotten used to Grant’s ‘doom is nigh’ warnings. Now, he says, it’s a boom that is nigh.

What is remarkable about the Grant conversion is that his vision gives off so little heat and light. His WSJ article shillyshallies around; rehearses the history of previous recessions and comes to rest in front of a flickering match: “The deeper the slump, the zippier the recovery.”

But facts are survivors. They will tell whatever tale their interrogators want to hear. As for opinions, after six months of a stock market rally, the once half empty glass has become half full. We predicted it ourselves. But we’ll let Robert Prechter say, ‘I told you so.’ Even before the rally began, Prechter foretold its story:

“Regardless of extent, it should generate feelings of optimism. At its peak, the President’s popularity will be higher, the government will be taking credit for successfully bailing out the economy, the fed will appear to have saved the banking system and investors will be convinced that the bear market is behind us.”

As to Mr. Obama’s popularity, Prechter was wrong. But 4 out of 5 ain’t bad.

turning bullishWhat will happen next, we don’t know. But if we turn bullish on this economy and urge you to buy stocks, it will surely be time to sell them.

Enjoy your weekend,

Bill Bonner
The Daily Reckoning

From Deflation to Inflation

With the above in mind I note with interest Martin Weiss, a prominent deflationist has changed his stance. Please consider From Deflation to Inflation.

Step by step,


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Chart Of the Day “Today´s Rally vs Rally 1929/1930″

Chart Of the Day "Today´s Rally vs Rally 1929/1930"

Courtesy of Jan-Martin Feddersen at Immobilienblasen

For a daily dose of excellent "ANTI SPIN" i highly recommend to subsribe to the free daily update from David Rosenberg.

H/T Clusterstock

1929 comparison

This is from another Rosenberg piece via Mish

Rosenberg also points out that the 46% rally in 101 days is unmatched dating back to 1933. I suppose the rally could continue given the 1933 rally lasted 249 days taking the stock market up 172%. However, I would not recommend playing for it.

> Be careful if you´re still long this market…… The risk/reward ratio isn´t quite "favourable" right now….. If you´re considering to short this market i agree with Jesse ( even if it is very tempting) …..

> Denke man sollte sehr vorsichtig sein wenn man noch immer long ist…… Für meinen Geschmack ist das Chance/Risikoverhältnis wenig vorteilhaft und wie ich finde stand es sogar selten schlechter als dies momentan der Fall ist ….. Für alle die mit dem Gedanken spielen short zu gehen empfehle ich den regelmäßigen Besuch der Seite von Jesse
…..

 

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Ray Dalio on CNBC

 

Ray Dalio on CNBC

Courtesy of , The Reformed Broker 

Hedge fund legend Ray Dalio generally despises doing media and doesn’t make much of a secret about it. Fortunately for us all, though, he really wants his new book, Principles: Life and Work, to reach a big audience. And it should.

Anyway, Ray made a rare TV appearance this morning on CNBC’s Squawk Box. Obviously, podcasts are better for this sort of thing, so don’t miss the two hour ...



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Zero Hedge

A Startling Anecdote About Online Ad Fraud From Uber

Courtesy of ZeroHedge. View original post here.

One week ago we said that Category 1 storm clouds are gathering over what has traditionally been one of the most lucrative, and perhaps only profitable, sectors to come out of Silicon Valley in decades: online advertising. We directed readers' attention to the recent Global Retailing Conference organized by Goldman Sachs, in which Restoration Hardware's delightfully colorful CEO, Gary Friedman, divulged the following striking anecdote about the company's online marketing strate...



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Digital Currencies

Cryptocurrency Concentration - Just 4% Own Over 95% Of Bitcoin

Courtesy of ZeroHedge. View original post here.

Bitcoin has been making a lot of news lately. The cryptocurrency shot up in value by over 200% in 2017, making many people fear that the market is in a bubble. Last week, China...



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Chart School

Minor Changes: Yesterday's and Weekend Comments Remain Valid

Courtesy of Declan.

I don't want to overplay today's action as little changed in the broader scheme of things. Days like today are welcomed and help shape up swing trades for those trading in near term timeframes.

The tight doji in the S&P could be used for a swing trade; buy a break of the high/short loss of low - stop on flip side. High whipsaw risk but look for 3:1 risk:reward and maybe trail stops if deciding to go with partial profits.


Tech averages are still set up for a breakout. While not an ...

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ValueWalk

FBN Beats CNBC Even During Delivering Alpha Week

By VWArticles. Originally published at ValueWalk.

Fox Business Network ratings for the week of September 11th – September  15th.  FBN beat CNBC even during their big annual Delivering Alpha Conference which is one of the biggest investment conferences of the year with Lou Dobbs leading the pack – another big win for FBN – see more details below

FOX BUSINESS NETWORK SWEEPS CNBC IN BUSINESS DAY FOR EIGHTH TIME THIS YEAR

]]> Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your de...



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Insider Scoop

Considering Implications For Hasbro And Mattel From The Toys 'R' Us Bankruptcy

Courtesy of Benzinga.

Related HAS Toy Stocks Mostly Lower After Toys 'R' Us Confirms Bankruptcy Watch These 8 Huge Put Purchases In Tuesday Trade ...

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Members' Corner

"Citron Exposes Ubiquiti Networks"

What do you think?

"CITRON EXPOSES UBIQUITI NETWORKS" 

Does Ubiquiti Networks (NASDAQ:UBNT) actually have real products that sell to consumers? Of course! So did Valeant and WorldCom, but that does not stop its financials from having every indication of being completely fraudulent.

Citron will detail a series of alarming red flags and detail how Ubiquiti Networks is deceiving the investing public.

Read the full report here.

...

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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Biotech

Can low doses of chemicals affect your health? A new report weighs the evidence

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

Can low doses of chemicals affect your health? A new report weighs the evidence

Courtesy of Rachel ShafferUniversity of Washington

Assessing the data. LightField Studios/shutterstock.com

Toxicology’s founding father, Paracelsus, is famous for proclaiming that “...



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Mapping The Market

The App Economy Will Be Worth $6 Trillion in Five Years

Courtesy of Jean-Luc

This would be excellent news for AAPL and GOOG to a lesser extent although not inconsequential:

The App Economy Will Be Worth $6 Trillion in Five Years 

In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie. What explains the growth? More people are spending more time and -- crucially -- more money in apps. While on average people aren't downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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