Posts Tagged ‘Credit Spreads’

John Taylor Calls The Top: “The Rally Is Ending”

John Taylor Calls The Top: "The Rally Is Ending"

Courtesy of Tyler Durden

The Rally Is Ending
July 29, 2010
By John R. Taylor, Jr., Chief Investment Officer

For FX Concepts, this is a big day and a very scary one as well. Because our market view is now very precise, but at odds with the accepted wisdom, we are putting ourselves out on a limb. The euro is going to be hit again and commodity currencies will come under increasing pressure. Our cyclical analysis argues that the currency markets are making a major reversal right now, today, and that this will be at least a medium term reversal in equities and credit as well. Although it is more likely that the equity and credit markets will not begin their major decline until the last week of August, the odds favor an unimpressive month ahead which means that we are at the end of the exciting part of the rally of the past two months. By the end of next month, equities will be headed lower, credit spreads will widen sharply, and government bonds will begin a rally to new all time highs. Our completely technical cyclical work implies that there will be a return to dark times in September and October, with a sharp decline driven by liquidity and solvency issues likely to set the world back on a recessionary course.

Although the cyclical picture gets more uncertain the farther out we go, we believe that there will be a major cyclical low in risk during January and another one, possibly more aggressive in the third quarter of 2011.

Using this cyclical analysis as our base, we can work backward to generate a set of fundamental conditions that would allow a cyclical picture like this to occur. If the S&P 500 is going to challenge its March 2009 lows in the next year, and interest rates are going to drop sharply while credit spreads widen dramatically, what would the US economy have to do and what would the world look like? Clearly the widespread conviction that the 2008 recession is in the rear view mirror and that growth will slowly improve in the years ahead is wrong. All the forecasts of the G-20 governments are completely off base, which means that the politicians are not prepared for another downturn. We wonder what the downturn will…
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JOHN HUSSMAN ISSUES A RECESSION WARNING

JOHN HUSSMAN ISSUES A RECESSION WARNING

Courtesy of The Pragmatic Capitalist

John Hussman is officially sounding the double dip siren.  He issued a similar call in November of 2007:

Based on evidence that has always and only been observed during or immediately prior to U.S. recessions, the U.S. economy appears headed into a second leg of an unusually challenging downturn.

A few weeks ago, I noted that our recession warning composite was on the brink of a signal that has always and only occurred during or immediately prior to U.S. recessions, the last signal being the warning I reported in the November 12, 2007 weekly comment Expecting A Recession. While the set of criteria I noted then would still require a decline in the ISM Purchasing Managers Index to 54 or less to complete a recession warning, what prompts my immediate concern is that the growth rate of the ECRI Weekly Leading Index has now declined to -6.9%. The WLI growth rate has historically demonstrated a strong correlation with the ISM Purchasing Managers Index, with the correlation being highest at a lead time of 13 weeks.

wmc100628a JOHN HUSSMAN ISSUES A RECESSION WARNING

Taking the growth rate of the WLI as a single indicator, the only instance when a level of -6.9% was not associated with an actual recession was a single observation in 1988. But as I’ve long noted, recession evidence is best taken as a syndrome of multiple conditions, including the behavior of the yield curve, credit spreads, stock prices, and employment growth. Given that the WLI growth rate leads the PMI by about 13 weeks, I substituted the WLI growth rate for the PMI criterion in condition 4 of our recession warning composite. As you can see, the results are nearly identical, and not surprisingly, are slightly more timely than using the PMI. The blue line indicates recession warning signals from the composite of indicators, while the red blocks indicate official U.S. recessions as identified by the National Bureau of Economic Research.

Read the full article here.

Source: Hussman Funds 


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This Time its Different*

Courtesy of John Mauldin writing at Thoughts From the Frontline

This Time its Different*

I have often written that the four most dangerous words in the investment world are “This Time It’s Different.” If memory serves me, I have written several e-letters disparaging various personages who have uttered those very words, and gone one to confirm later that it wasn’t different. It almost never is. And yet – and yet! – I am going to make the case over the next few weeks that it really is different this time, with only a lonely asterisk as a caveat. What prompts my probable foolishness to tempt the investing gods is the rather large amount of bad analysis based on unreasonable (dare I say lazy or surface?) readings of statistics that is coming from the mainstream investment media and investment types with their built-in bias for bullish analysis. Normally, gentle reader, your humble analyst is a paragon of moderate sensibilities, but I have been pushed over a mental edge and need to restore balance. I anticipate that this topic will take several weeks, as trying to cover it all in one sitting would exhaust us both. It should be fun. But first…

Peter Bernstein, R.I.P.

Sadly, Peter Bernstein passed away at 90 years young on June 5. One of the great honors and privileges of my life has been getting to know Peter and his lovely wife, Barbara. Introduced at a small dinner five years ago, I have been privileged to share many dinners and meetings with him in the years since, soaking up his wisdom. Only a month ago, he made a presentation (by satellite) to Rob Arnott’s annual conference and was at the top of his intellectual game. His writing of late has been some of his best. Peter cofounded the Journal of Portfolio Management and truly was the dean of investment analysts.

He wrote 10 books (five after the age of 75!). I am often asked what books I would recommend for insight into the economic world. At the very top of my list has always been Against the Gods: the Remarkable Story of Risk. If you have not read it, then get it and put it on top of your summer list. Capital Ideas is also brilliant. The Power of Gold is a must-read. You can get all…
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Phil's Favorites

A second COVID-19 wave? Here are 6 lessons from the first

 

A second COVID-19 wave? Here are 6 lessons from the first

A man wearing a face mask to curb the spread of COVID-19 walks past a temporary Pride art installation in Vancouver on Aug. 3, 2020. THE CANADIAN PRESS/Darryl Dyck

Courtesy of Loren Falkenberg, University of Calgary and Jillian Walsh, University of York

As COVID-19 spread across the globe, governments looked to epidemiologists to slow its transmission.

Without a vaccine, large-scale testing capacity and sufficient critical-care beds, epidemiologists pushed...



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Biotech/COVID-19

A second COVID-19 wave? Here are 6 lessons from the first

 

A second COVID-19 wave? Here are 6 lessons from the first

A man wearing a face mask to curb the spread of COVID-19 walks past a temporary Pride art installation in Vancouver on Aug. 3, 2020. THE CANADIAN PRESS/Darryl Dyck

Courtesy of Loren Falkenberg, University of Calgary and Jillian Walsh, University of York

As COVID-19 spread across the globe, governments looked to epidemiologists to slow its transmission.

Without a vaccine, large-scale testing capacity and sufficient critical-care beds, epidemiologists pushed...



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ValueWalk

Coronavirus stimulus checks talks break over partisan fight

By Michelle Jones. Originally published at ValueWalk.

August 8th update: The likelihood of Coronavirus stimulus checks coming in the near future has dampened. Late Friday, Trump tweeted out that the Democrats were mostly interested in bailing out blue (Democratic) states, which are in deep date. Whatever, ones feelings on the matter the fact that there is public feuding over other crucial details does not bode well for checks anytime soon.

Editor’s note: This article contains the latest news on the coronavirus stimulus package. It’s updated regularly with news about coronavirus stimulus checks and related issues.

August 7, 2020 Update: Americans’ hope of a second round of coronavirus stimulus checks is drying up again as talks between the White House and key Democrats collapse. Although the two sides agree that they should send a sec...



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Zero Hedge

House Ethics Committee Finds Rashida Tlaib Violated Campaign Finance Rules

Courtesy of ZeroHedge View original post here.

Authored by Jack Philips via The Epoch Times,

The House Ethics Committee found Rep. Rashida Tlaib (D-Mich.), a member of the so-called “Squad,” violated campaign finance rules by receiving a campaign salary after she was no longer a candidate.

...



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The Technical Traders

Melt-Up Continues While Metals Warn of Risks

Courtesy of Technical Traders

What a week for Metals and the markets, folks. The Transportation Index is up nearly 4% for the week.  The Dow Jones Industrial Average is up over 3% for the week.  Silver is up over 14% and reached a peak near $30 (over 23%).  Gold is up over 2.5% and trading above $2025 right now – with a peak price level near $2090.  If you were not paying attention this week, there were some really big moves taking place.

MELT-UP WITH HIGH RISKS – PAY ATTENTION

Overall, our research team believes the current “melt-up” price action is likely to continue as global investors continue to believe the US Fed will do everything possible to save the...



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Digital Currencies

Raoul Pal: "It May Not Be Worth Owning Any Asset Other Than Bitcoin"

Courtesy of ZeroHedge View original post here.

Authored by Turner Wright via CoinTelegraph.com,

Raoul Pal, CEO and founder of Real Vision, says Bitcoin may soon become his only asset for long-term investments.

image courtesy of CoinTelegraph ...



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Kimble Charting Solutions

Silver Headed Back To $50, Top Of The Cup & Handle Pattern?

Courtesy of Chris Kimble

Could Silver be creating a multi-decade bullish “Cup & Handle” pattern? Possible!

Did a retest of a handle breakout take place in March at (1), where Silver created one of the largest bullish reversals in decades? Possible!

Could Silver be creating a 40-year bullish pattern? Anything is possible! I humbly have to say share this; I’ve been in the business for 40-years and I haven’t seen anything like this.

Silver looks to have double topped back in 2011 at $50, which was the 1980 highs. After double topping, Silver ...



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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: Sunday, 29 March 2020, 07:00:37 PM

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Comment: Silver Shorts Are In a Bind | Ted Butler youtu.be/qQc0AoJp-Q8



Date Found: Monday, 30 March 2020, 05:21:45 PM

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Comment: 5 Questions From You for Luke Gromen youtu.be/nVZD_fuxbQE


...

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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...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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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.
...

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Promotions

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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.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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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...

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