Posts Tagged ‘Davos’

INTERVIEW WITH NIALL FERGUSON: Yes, The US Is Screwed

Exclusive for Business Insider, courtesy of Henry Blodget and Mamta Badkar

Editors Note: This is an interview conducted by Business Insider Editor in Chief Henry Blodget In Davos. Read the full transciption below.


BI: So, Professor Ferguson is the United States still screwed?

NF: Well this is not a technical term in economics that I recognize so let me maybe rephrase the question. Does the United States still have an economic problem? Yes. What is that problem? The problem is that having thrown massive fiscal and monetary stimulus at the economy it is still growing too slowly to bring down the unemployment rate. um what is the answer to that problem? some people say more fiscal stimulus and that indeed is what is being done and more monetary stimulus, and that indeed is what is being done in the form of QE 2. That may well have some short term impact but there is a risk that the fiscal position of the United States tips over from being stimulative to being unsustainable. And the big worry is that at some point this year, could be next year, the level of borrowing the United States engages in pushes inflation expectations or even default expectations to the point that nominal yields really start to spike and then The Fed is in a jam b/c it would then have to do QE3 on a massive scale and quite quickly we could be facing a really major dislocation either in the bond market or currency markets that is the problem. Is the U.S. screwed? No not the way Japan is screwed or even the way the Euro zone is screwed but the U.S. is certainly not out of trouble. 

BI: So isn’t that what people were saying about Japan, in 1993, that they were done and here we are 18 yrs later and interest rates are still zero, they’re still spending, still borrowing and borrowing and they…
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DoGS FiGHT aT DaVoS

Courtesy of williambanzai7

Jamie Dimon

 

Sark

 

DOGS FIGHT AT DAVOS

REUTERS--Jamie Dimon, credited with having steered JP Morgan through financial turmoil in 2007-08, had earlier in the day lashed out at persistent bank bashing nearly three years after the global credit crisis began, saying it was "unproductive and unfair".

But when he rose at a later session of the World Economic Forum to ask Sarkozy to get the G20 to avoid overregulation of banks, the French president launched into a broadside accusing financiers of behaviour that he said had caused the crisis. "The world has paid with tens of millions of unemployed, who were in no way to blame and who paid for everything," Sarkozy said to Dimon. "It caused a lot of anger."

The French leader also renewed his call for a financial transaction tax to fund development but acknowledged that many G20 countries opposed such a levy. He suggested a small pioneer group of states might go ahead with a tiny levy or some other form of innovative financing to lead the way.

Dimon praised governments for intervening to save the financial system in 2008. But he said the G20 group of major economies, which Sarkozy chairs this year, should take a deep breath before imposing more regulation. "Too much is too much," he said. The outspoken Dimon had earlier told a separate panel not all lenders made the same mistakes in the run-up to the crisis. "Not all banks are the same and I just think that this constant refrain ‘bankers, bankers, bankers’ is just unproductive and unfair. People should just stop doing that." He echoed comments by Barclays CEO Bob Diamond, who told a UK parliamentary committee this month that "the period of remorse and apologies for banks" needed to be over. MARKET OR MADHOUSE"

Sarkozy was having none of it. "The world was stupefied to see one of five biggest U.S. banks collapse like a house of cards," he told a plenary session of the Davos Forum. "We saw that for the last 10 years, major institutions in which we thought we could trust had done things which had nothing to do with simple common sense. That’s what happened."

The United States government spent hundred of billions of dollars of public money to bail out financial institutions, after the dramatic failure of…
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The New Perspective

"At Davos, the Globalizers Are Gone," is an excellent article by Ian Bremmer, and in sharp contrast to another excellent article I posted yesterday by George F. Smith writing at Mises Daily, By the Way, Free Markets Are Free. I would submit that the ideals of a truly free market are an illusion because we do not have the political system and laws framed in such a way as to support a truly free market system. We cannot go straight to free market remedies because we cannot dispense with the need for a functional, non-corrupted, political and legal system – laws constraining freedom – to provide the framework in which a free market can operate.  And hence, "free" is not completely free and it can’t be. – Ilene

The New Perspective

Woman Standing on Globe Beach Ball

Courtesy of Michael Panzner at When Giants Fall

Say what you will, but one reason why globalization has had the traction it has up until recently, despite anecdotal and other evidence that it has not lived up to many of the promises of its proponents, is because of the support of the movers and the shakers. In America and elsewhere, corporate executives and other powerful interests have used their money and influence to ensure that policymakers were not swayed to move in a different direction. But the times are a-changin’. As foreign policy expert Ian Bremmer notes in a commentary for the Washington Post, "At Davos, the Globalizers Are Gone," some of the biggest supporters of unfettered cross-border trade and free markets, no doubt shaken by the events of the past two years, seem to have lost their mojo.

For 40 years there’s been a consensus view at the Davos World Economic Forum that globalization’s increasingly free cross-border flow of ideas, information, people, money, goods and services is both irreversible and a powerful force for prosperity. As with meetings of the G7 group of industrialized nations, there was broad agreement on the proper role for the state in the performance of markets. Sure, a French cabinet official and an American investment banker might spar over the relative merits of state paternalism and Anglo-Saxon labor laws, but the bargaining table was still reserved for champions of Western-style free market capitalism.

Davos has always had its critics. For those who believe globalization empowers the rich at


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Singing “Davos Done and We Need Another Loan”

Debt-O, debt-uh-oh
Interest come and we need another loan
Debt-O, debt-uh-oh
Interest come and we need another loan

Work our lives just to lose our homes
Interest come and we need another loan
Stack default swaps till they come undone
Interest come and we need another loan

Come on Economists, tell us some more BS
Interest come and we need another loan
Come on Economists, tell us some more BS
Interest come and we need another loan

6%, 7% – it's a credit crunch
Interest come and we need another loan
6%, 7% – it's a credit crunch
Interest come and we need another loan

Debt-O, debt-uh-oh
Interest come and we need another loan
Debt-O, debt-uh-oh
When interest comes we'll need another loan

 

It was the best of times (with the IMF predicting 3.9% Global growth) and the worst of times (with Roubini saying we're all doomed) at Davos this week as the men who rule the world gathered to divide the spoils over card games while vying with each other for podium and TV time so they could talk their various books from the safety of the Swiss mountains.  Davos, a tiny village perched on a mountain with just two main streets, lacks the protests of other Global gatherings.  During the annual meeting, the town is taken hostage by thousands of police.  “Anyone who looks like a protester can be thrown off the train,” says Marco Leutholz, head of the local Socialist party (and that train often overlooks steep cliffs!).  Sir Howard Davies (director of the LSE) writes:

The mood is certainly better than last year, when the world was ending, but it is worse than at the beginning of last week. Alessandro Profumo of Unicredit acutely observed that Davos is likely to accentuate whatever mood you arrived in, rather as alcohol does, I guess. So those who arrived nervous about the economic prospects are leaving even more jittery. If you arrived feeling pessimistic, you will leave somewhere between suicidal and homicidal.

The market background has not helped. Anxiety about Greece has grown over the past three days. In the circumstances, it was strange to see both the Greek prime minister and his finance minister here. Maybe the subtext was to show that there can be no crisis if they are munching muesli


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The Only 10 Important Things Said So Far In Davos

The Only 10 Important Things Said So Far In Davos

Courtesy of Clusterstock’s Lawrence Delevingne davos world economic forum switzerland panel WEF

Davos is a crowded place this week.

Luminaries and assorted hangers-on are all jostling for attention at the World Economic Forum’s annual meeting. There are some 224 sessions over five days for opining on the future of the world, not to mention countless interview opportunities from hoards of reporters.

In short, there’s plenty said, most of it a huge snooze.

Here are the only 10 important things that have been said so far, including:

  • The recovery will be U-shaped
  • Bankers should aim for 10% return on equity, not a greedy 20% 

Ten Can’t-Miss Quotes From Davos So Far >>> 

See Also:

Soros: ‘The Ultimate Asset Bubble Is Gold’

Saudi Oil CEO Comes Out Swinging In Davos: ‘We Don’t Believe In Peak Oil’

Davos Goers Still Having Way More Fun Than You

Image: WEF/Monika Flueckiger 


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Thrilling Thursday – Obama plus Jobs (Steve, not employment) Boost the Market

You would think I would have a lot to say about the IPAD but I don't.

After all, I named the IPad back in December 2008 when I told Members: "AAPL just announced a deal to do Ebooks on IPhones and ITouch and that is the intermediate step towards the IPad, which should be a 2-3x size version of the IPhone that takes the place of a Kindle or a laptop or a notepad or…"  I also ran a very close to accurate picture of the IPad back on Sept 11th (and the live images are here), which documents our bullish take on AAPL all the way from $85 and reiterated in Sept at $170 (but we were out at $213 Tuesday, back in at $202 yesterday for the ride back up as we got our expected sell-off during the Apple event) – so this is all old news for us at PSW.

Back in September I said: "So we are happy, happy AAPL owners and Piper Jaffray’s Gene Munster thinks AAPL can sell 2M units of the IPad at $600 each to generate an additional $1.2Bn in revenues in 2010 and I think he’s low.  Also, it should be noted that we went with GLW back in December on the premise that millions of touch-screen IPads would use a lot of high-end glass."  I am very pleased that the basic model came in $100 lower than my target but, as with IPods – who buys the basic model?  Delivery in 60 days means I should hit my sales targets no problem and I it doesn't look like GLW will be the supplier of IPad glass (LPL seems more likely) but the demand for glass will still be stunning and GLW is up 26% since September so we're not going to whine about it (I still like them). 

OK, enough about toys, on to the President, who gave his State of the Union Address last night, making the following notable points (my notes in brackets):

I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. I'm also proposing a new small-business tax credit, one that will go to over 1


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Robert Shiller in Davos

Robert Shiller in Davos

Courtesy of Tim Iacono at The Mess That Greenspan Made

Some of the world’s smartest and dumbest economists have gathered in Davos, Switzerland to talk about the global banking system and how they’re all hoping that 2010 doesn’t turn out like 2008. CNBC’s Becky Quick grabbed Yale economist Robert Shiller for a quick chat.

Obviously, Shiller is one of the sharper tools in the economic shed, starting this interview by noting of his duller brethren: "The problem with a lot of economic theory is that they have not recognized what drives the economy." Sad, but true. 

 


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Kimble Charting Solutions

Dow Theory Concerns? Transportation Stocks Make New Lows

Courtesy of Chris Kimble.

The bull market is experiencing its first real test since the 2014/2015 stock market correction. Volatility is high and key sectors are heading lower.

One such sector is the Transportation Sector(NYSEARCA: IYT) and select stocks.

The age-old Dow Theory call for the Industrials and Transports to lead the market (and confirm each others moves). Currently, both are struggling. But the Dow Transports are on the precipice of a major breakdown. Looking at the chart below, you can see that the Transportation Sector ETF (IYT) is attempting to break down below its 12-month trading range and 9-year rising support line.

If the market doesn’t reverse higher soon, this break down will send a negative message to investors about the economy… and the broader stock market.

A move lower wou...



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Phil's Favorites

The NRA's financial weakness, explained

 

The NRA's financial weakness, explained

Political clout doesn’t guarantee a healthy bottom line. AP Photo/Evan Vucci

Courtesy of Brian Mittendorf, The Ohio State University

The National Rifle Association’s political spending fell during the 2018 midterm elections. There’s talk of ending small perks like free coffee at its offices and even ...



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Zero Hedge

Attention US Millennials: Japan Is Now Giving Away Free Houses

Courtesy of ZeroHedge. View original post here.

There are over 8 million abandoned homes in Japanese suburbs, according to The Japan Times. 

If you are a struggling American millennial: you could theoretically move to Japan because the sushi’s fresh, cost of living is low, and the government is giving away free homes. 

What is driving the government to give away these homes? Well, there is a mass...



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Digital Currencies

Crypto Bull Tom Lee: Bitcoin's 'Fair Value' Closer To $15,000, But He's Sick Of People Asking About It

Courtesy of ZeroHedge. View original post here.

Listening to the crypto bulls of yesteryear continue to defend their case for new new all-time highs, despite a growing mountain of evidence to suggest that last year's rally was spurred by the blind greed of gullible marginal buyers (not to mention outright manipulation), one can't help but feel a twinge of pity for Mike Novogratz and Wall Street's original crypto uber-bull, Fundstrat's Tom Lee.

Lee achieved rock star status thanks to ...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga.

  • Data on retail sales for November will be released at 8:30 a.m. ET.
  • Data on industrial production for November will be released at 9:15 a.m. ET.
  • The flash Composite Purchasing Managers' Index for December is schedule for release at 9:45 a.m. ET.
  • Data on business inventories for October will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the recent week is schedule for release at 1:00 p.m. ET.

Posted-In: Economic DataNews Economics ...



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Biotech

Those designer babies everyone is freaking out about - it's not likely to happen

Reminder: We're available to chat with Members, comments are found below each post.

 

Those designer babies everyone is freaking out about – it's not likely to happen

Babies to order. Andrew crotty/Shutterstock.com

Courtesy A Cecile JW Janssens, Emory University

When Adam Nash was still an embryo, living in a dish in the lab, scientists tested his DNA to make sure it was free of ...



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Members' Corner

Blue Wave with Cheri Jacobus (Q&A II, Updated)

By Ilene at Phil's Stock World

Cheri Jacobus is a widely known political consultant, pundit, writer and outspoken former Republican and frequent guest on CNN, MSNBC, FOX News, CBS.com, CNBC and C-Span. Cheri shares her thoughts on the political landscape with us in a follow up to our August interview.

Updated 12-10-18

Ilene: What do you think about Michael Cohen's claim that the Trump Organization's discussions with high-level Russian officials about a deal for Trump Tower Moscow continued into June 2016?

...

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Chart School

Weekly Market Recap Dec 09, 2018

Courtesy of Blain.

Bears are certainly showing the type of strength we haven’t seen in a long time.   A week ago at this time futures were surging on news of a “truce” for 90 days between China and the U.S. in their trade spat.  But the charts were still not saying lovely things despite a major rally the week prior.   And by Tuesday, darkness had descended back on the indexes, with another gut punch Friday.    A lot of emphasis was put on a long term Treasury yield dropping below a shorter term Treasury.

On Monday, the yield on five year government debt slid below the yield on three year debt, a phenomenon which has p...



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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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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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Promotions

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

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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...

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