Posts Tagged ‘credit bubble’

Hugh Hendry: “If There Was A Way To Short Obama, I Would”

Hugh Hendry: "If There Was A Way To Short Obama, I Would"

Courtesy of Tyler Durden at Zero Hedge 

Obama In his traditionally curt and to the point way, Hugh Hendry proclaims his "love" for the president, in this rare profile piece on the Scottish fund manager by the NYT. While none of his opinions will come as a surprise to Zero Hedge regulars ("The euro? It’s finished, Mr. Hendry proclaims.  China? Headed for a fall."), we do recommend the article to those still unfamiliar with one of the truly iconoclastic fund manager still left in the open.

While Hendry does not run a fund nearly as large as some behemoths out there (his Ecletica is less than $1 billion, John Paulson is $30), it does afford him a nimbleness that JP (whose recent rumored liquidations in the gold market are destined to create feedback loops that further accelerate liquidations) or, much more blatantly, Pimco (with its $1 trillion + in Treasuries, Corporates, Sovereigns and Mortgages) which is the market in all its verticals, can only dream about. It also affords him the opportunity to say what is on his mind, and on those of many others, who however dread the political consequences for being a little too honest. It is this forthrightness and honesty that has reserved Hendry a sterling place within the Zero Hedge community, his candor regularly scoring posts receiving well over 20k reads (and at 60k hits, his "I recommend you panic" is among the Top 20 most popular Zero Hedge posts of all time).

Some snippets from Julia Werdigier’s profile of Hendry:

Mr. Hendry runs the successful hedge fund firm Eclectica Asset Management. It is an old-school macroeconomic fund company with a big-think, globe-straddling style more akin to the Quantum Fund, of George Soros fame, than to the high-tech razzle-dazzle of Wall Street’s math-loving quant analysts.

“Hugh is an anachronism,” said Steven Drobny, a founder of Drobny Global Advisors. “He reminds one of the original hedge fund managers from the ’70s and ’80s.”

At 41, Mr. Hendry is also emerging from the normally secretive world of hedge funds to captivate fans and foes with a surprising level of candor.

And speaking of "I recommend you panic" which is must watch for everyone…

Last May, on British television, he verbally sparred with Jeffrey D. Sachs, director of the


continue reading


Tags: , , , , , , ,




Canaries in Coalmine: China, Asia, not Participating in Euro Bailout Lovefest; Beginnings of China Credit, Real Estate Bust

Canaries in Coalmine: China, Asia, not Participating in Euro Bailout Lovefest; Beginnings of China Credit, Real Estate Bust

Courtesy of Mish 

Taxidermy canary under glass dome.

Is China a canary in the coalmine of an impending global slowdown, or is China simply overloved as a beacon of growth as it was in 2008? I think it’s both.

China’s property and infrastructure bubbles are massive; that is for certain. Moreover, China’s biggest export trading partner is Europe, just as Europe is headed for numerous austerity programs.

While it’s doubtful the European austerity programs bring deficits down to where they are supposed to be, those programs will for a while cause a decline in European spending along with much social unrest.

Can China take a double whammy like this without overheating? I think not. And China will have to show things down, whether it wants to or not.

China Overheating, Tightening Coming

Please consider Hong Kong Stocks Fall as China Prices Prompt Tightening Concern

Hong Kong stocks fell as rising consumer inflation and housing prices in China stoked concern the country will act further to rein in its economy. The city’s developers pared losses after a government land sale.

“Domestic concerns are more important in terms of the policy measures coming out in China to cool things down,” said Binay Chandgothia, who oversees about $2.2 billion as chief investment officer at Principal Global Investors (Hong Kong). For Europe, “the question is the credibility of the billions of dollars of government debt that resides with European banks.”

“Domestic concerns are more important in terms of the policy measures coming out in China to cool things down,” said Binay Chandgothia, who oversees about $2.2 billion as chief investment officer at Principal Global Investors (Hong Kong). For Europe, “the question is the credibility of the billions of dollars of government debt that resides with European banks.”

“Price pressures have been building throughout the economy, strengthening the case for higher interest rates and a stronger yuan,” said Brian Jackson, a Hong Kong-based strategist at Royal Bank of Canada. “China is at risk of overheating, with spot fires breaking out in various parts of the economy.”

Chinese policy makers should focus on preventing excessive gains in asset prices and liquidity as Europe’s rescue package makes another global slump less likely, central bank adviser Li Daokui said in an interview yesterday. The increase in property prices across


continue reading


Tags: , , , , , , , , , , , ,




Why the “Nascent Recovery” Won’t Last

Why the "Nascent Recovery" Won’t Last

Democratic Donkeys Blowing Financial Bubbles

Courtesy of Charles Hugh Smith, Of Two Minds 

The "nascent recovery" continues to be nascent a year later. Why? Because it’s constructed on sand and hyped by smoke and mirrors.

The "nascent recovery" will soon be revealed as "failed" rather than "nascent." How long can "nascent" be deployed as cover for a "recovery" constructed of propaganda, manipulated statistics and "confidence-building" spin?

As my esteemed blogging colleague Mish pointed out not long ago, "nascent" continues to be the word of choice in the MSM, as if no one dares declare the "recovery" real for fear that such a claim will be easily revealed as utterly false. So to keep the spin machine intact, the "recovery" will remain "nascent" as cover for the less rosy reality.

Let’s run through the fundamental reasons the recovery is bogus, not nascent.

1. Propaganda and "confidence-building" are constantly substituted for reality. The problem, we are repeatedly told, is a "lack of confidence." Consumers’ and corporations’ accounts are bulging with idle trillions awaiting "renewed confidence" to gush back into the economy, creating millions of new jobs and trillions in new wealth.

Here is a typical example:

Forecasters optimistic about economy, job creation

How many MSM stories have you read which refer to the "162,000 jobs created last month" as evidence that the "economy is turning around? Dozens, if not hundreds. How many note that the 162,000 number is entirely bogus, boosted by temporary Census Bureau hiring and tens of thousands of fictitious "birth/death model" phantom jobs?

The spin, hype and forced good cheer is essentially unlimited. As I write, stocks are up on news that Caterpillar reported an 11% decline in revenue to $8.24 billion, a huge "miss" since analysts polled by Thomson Reuters had forecast $8.84 billion in revenue.

The "surge in profits" didn’t come from sales; it came from squeezing costs, a strategy which has some upper limit of effectiveness on goosing the bottom line.

Machinery sales surged 40% in the Asia-Pacific region, but of course no one explores the source of that "surge:" out of control spending on empty cities and luxury highrises in China. If that unprecedented real estate bubble in China ever pops-- and can any bubble continue forever?--then Cat sales will go into freefall.

That’s not "confidence building" so it goes unsaid, despite being glaringly obvious.

2. Tax/borrow and spend is alive
continue reading


Tags: , , , , , , , , ,




2007 Redux?

2007 Redux?

Courtesy of Michael Panzner at Financial Armageddon

The market value of the high yield FINRA-BLP Active U.S. Corporate Bond Index relative to its investment grade counterpart has now exceeded the level seen in May 2007, at the peak of the credit bubble.

HYIG

If you ask me, it looks like risk-taking is back with a vengeance.


Tags: , , ,




The Fed’s Lacker: More Threats

The Fed’s Lacker: More Threats

Courtesy of Karl Denninger at The Market Ticker

If you’ve done nothing wrong, why are you threatening people Mr. Lacker?

Lacker criticized legislation before Congress that would rescind an exemption on government audits of monetary policy and give politicians a greater say over the appointment of Fed bank directors and presidents.

“Such moves would present very serious risks to the effectiveness of monetary policy and ultimately to economic growth and stability,” Lacker said in a speech today to the Risk Management Association in Richmond, Virginia.

In a word: Why?

If The Fed has made "policy mistakes", which Lacker acknowledges, why doesn’t he want exposed to public view why those mistakes were made, who wanted them to be made and what happened as a consequence?

While the Fed has made “policy mistakes” leading up to the financial crisis, its structure has “given us a good record over the better part of three decades.”

I challenge Mr. Lacker to prove that. 

To expose the entire structure of monetary policy decisions. 

To "bare all."

See, I think he’s lying. 

I believe that an honest examination of The Fed’s monetary policy will show that The Fed has willfully and intentionally blown asset bubbles for the last 30 years.  That it has willfully and intentionally ignored risks to the economy posed by those bubbles.  That despite more than 30 years of knowledge of the below graphs and facts (all drawn from The Fed’s own data!) the institution has chosen a path of knowing monetary ruin, and wishes to conceal not only the "who" but also the "why."

It is my believe that the displayed willful and intentional ignorance of the above chart, along with an intentionally-blind eye toward the reality of compound growth in credit beyond that of GDP, will, if examined and audited, prove that The Fed has intentionally and willfully violated its lawful mandate:

The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively


continue reading


Tags: , , , , , , , , ,




Way too much risk in the equity market

Way too much risk in the equity market

Courtesy of Edward Harrison at Credit Writedowns

Following up on my “Sell equities” post, I want to highlight a factoid from today’s David Rosenberg’s Breakfast with Dave distribution.

Never before has the S&P 500 rallied 60% from a low in such a short time frame as six months. And never before have we seen the S&P 500 rally 60% over an interval in which there were 2.5 million job losses. What is normal is that we see more than two million jobs being created during a rally as large as this.

In fact, what is normal is for the market to rally 20% from the trough to the time the recession ends. By the time we are up 60%, the economy is typically well into the third year of recovery; we are not usually engaged in a debate as to what month the recession ended. In other words, we are witnessing a market event that is outside the distribution curve.

I had been pretty bullish in March and April.  But almost immediately, this rally just went straight up in a moon-shot kind of way that makes someone like me who is more oriented toward fundamentals a bit nervous. After months of wondering how long this thing could last, I’ve finally said sell.

I’m not saying that the rally can’t continue (after a correction).  That depends in part on the economy and reflation. What I am saying is that a two- or three-sigma move should have you asking yourself a lot of questions. And since this is a two- or three-sigma move to the upside, you should be taking profits, not chasing that last dollar.

The video below from 7 Sep with Cazenove’s Robin Griffiths gives one the bigger picture.  Going into treasuries is a flight to safety. Going into gold is the same. Notice that Griffiths dispels the notion that Gold is an inflation hedge alone.  In reality, it is a paper money hedge and its rise represents a fiat currency rejection as much as a portend of inflation.

Source: Breakfast with Dave, 18 Sep 2009 (PDF) – David Rosenberg, Gluskin Sheff

 


Tags: , , , , , , , ,




 
 
 

Phil's Favorites

Consumer Bureau To Decide Who Owns Your Financial Data

 

Consumer Bureau To Decide Who Owns Your Financial Data

What Should Banks, Fintechs Be Allowed to Do With All that They Know About You?

Courtesy of Jillian S. Ambroz, DCReport

A federal agency is gearing up to make wide-ranging policy changes on consumers’ access to their financial data.

The Consumer Financial Protection Bureau (CFPB) is looking to implement the area of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act pertaining to a consumer’s rights to his or her own financial data. It is detailed in section 1033.

The agency has been ...



more from Ilene

Zero Hedge

Cali Mansion Once Listed For $100 Million Sells For "Only" $48.4 Million

Courtesy of ZeroHedge View original post here.

Today in "a look into a luxury real estate market you will never likely participate in" news...

A famous L.A. mansion called "Opus" that was once listed for $100 million and has been on the market for over three years has finally sold - at a more than 50% haircut.

The 20,000 square foot mansion sold for $48.4 million this week, furniture included, according to Bloomberg. It is also the lates...



more from Tyler

Politics

Mythmakers: The Men Who Created Donald J. Trump

 

Mythmakers: The Men Who Created Donald J. Trump

Mark Burnett, Jeff Zucker, and the Trustwashing of a Fake President

Courtesy of Greg Olear, Prevail, author of Dirty Rubles: An Introduction to Trump/Russia 

...

more from Politics

ValueWalk

Einhorn's Greenlight Capital Re And Icahn's Icahn Enterprises

By The Acquirer's Multiple. Originally published at ValueWalk.

During their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discussed Einhorn‘s Greenlight Capital Re (NASDAQ:GLRE) and Icahn’s Icahn Enterprises LP (NASDAQ:IEP). Here’s an excerpt from the episode:

Q3 2020 hedge fund letters, conferences and more

Einhorn's Greenlight Capital Re And Icahn's Icahn Enterprises

Tobias: Einhorn genius for a decade. The GOAT for a decade, a GOAT for the last decade. I think it could be back to the GOAT stage, possibly for the...



more from ValueWalk

Biotech/COVID-19

Oxford-AstraZeneca vaccine is cheaper than Pfizer's and Moderna's and doesn't require supercold temperature

 

Oxford-AstraZeneca vaccine is cheaper than Pfizer's and Moderna's and doesn't require supercold temperature

Now there is a third possible vaccine for fighting the COVID-19 pandemic. Jakub Porzycki/NurPhoto via Getty Images

Courtesy of Sanjay Mishra, Vanderbilt University

The biopharmaceutical company AstraZeneca has released data on what is now the third promising vaccine candidate against COVID-19 – and it has several advantages over those of its competitors, ...



more from Biotech/COVID-19

Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Friday, 12 June 2020, 08:06:43 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Interesting (2)



Date Found: Saturday, 13 June 2020, 12:27:02 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Recession Forecasts Time Frame



Date Found: Monday, 15 June 2020, 11:07:52 PM

...

more from Chart School

Kimble Charting Solutions

Transports Sending Strong Bullish Message To Other Dow Indices?

Courtesy of Chris Kimble

Are Transportation stocks about to send a quality bullish message to other Dow indices this month? Sure could be!

This 3-pack looks at the Dow Jones Industrials, Transports, and Utilities indices on a monthly basis.

One week from the end of a month, the DJ Transports are attempting an important bullish breakout at (1). Unless a sharp reversal takes place in the next week, Transports could close out the month at new monthly closing highs!

The Dow is attempting to close at all-time highs this month, while the Dow Utilities Index remains a few percent below 2020 highs....



more from Kimble C.S.

Digital Currencies

Dalio Admits "I Might Be Missing Something" As Bitcoin Surges Above $18,000

Courtesy of ZeroHedge

Since the US election, Bitcoin prices (in USD) have surged a stunning 40%, also lurching higher after each vaccine headline hit.

Source: Bloomberg

Getting ever closer to its all-time record high...

Source: Bloomberg

As crypto prices soared overnight, Bridgewater Associates founder Ray Dalio stepped back into the fray, saying in a Twitter thread that “I might be missing something about Bitco...



more from Bitcoin

Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

...

more from M.T.M.

The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



more from Tech. Traders

Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



more from Lee

Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

http://www.insidercow.com/ more from Insider

Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

more from Promotions





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.