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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Zero Hedge

European Carmakers Face Perfect Storm

Courtesy of ZeroHedge View original post here.

Authored by Irina Slav via OilPrice.com,

European carmakers are facing what could turn out to be a major crisis cooked up by EU regulators, and it’s all about EVs and emissions. The former are supposed to help solve the problem with the latter, but the likelihood of success is uncertain because there are literally millions of variables: car buyers.

The EU has been enforcing emission ...



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Phil's Favorites

Black Hole Investing

 

Black Hole Investing

Courtesy of John Mauldin, Thoughts from the Frontline 

Scientists say the rules change in a cosmic “black hole” at what astrophysicists call the event horizon. How do they know that? Not by observation, since what happens in there is, by definition, un-seeable. They infer it from the surroundings, which say that the mathematics of the universe as we understand them change at the event horizon.

Or maybe not. One theory says we are all inside a black hole right now. That could possibly explain a few things about central bank policy. ...



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The Technical Traders

Crude Oil Setting Up For A Downside Price Rotation

Courtesy of Technical Traders

Crude Oil has been trading in a fairly narrow range since mid-August – between $52 and $57 ppb.  Our Adaptive Dynamic Learning (ADL) predictive modeling system suggested the downside price move in late July/early August was expected and the current support aligns very well with our ADL predictions of higher price rotation throughout most of September/October.  Please take a minute to review the original research post below :

July 10, 2019: ...



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Insider Scoop

The Street Reacts To Kroger's Q2 With Mixed Takeaways

Courtesy of Benzinga

Kroger Co (NYSE: KR) reported second-quarter results that came in better than expected. The earnings beat may have been overshadowed by management's decision to remove its prior guidance of $400 million in incremental EBIT by fiscal 2021.

Q2 A Mix Of Positives And Negativ...

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Chart School

Dow to 38,000 by 2022

Courtesy of Read the Ticker

President Trump said the Dow would be 10,000 points higher if it was not for the FED. In truth if the Dow breaks to new all time highs the next stop is 38,000 and he may be proven correct. Is there an election on? 

Of course who knows? But lets continue. 

The fundamentals behind this may be:

  • A good deal with China.
  • The FED turning on easy money with further rate cuts (very strange with a market near all time highs). FOMC Sept 17th well tell us more.
  • The above turbo charging stock buy backs.
  • Off shore money running out of foreign equity markets in to US markets (see note1).

Note1: Of course this has happened before, one particular time was just before O...



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Kimble Charting Solutions

Bond Yields Due For Rally After Declining More Than 1987 Stock Crash

Courtesy of Chris Kimble

U.S. Treasury Bond Yields – 2, 5, 10, 30 Year Durations

The past year has seen treasury bond yields decline sharply, yet in an orderly fashion.

This has spurred recession concerns for much of 2019. Needless to say, it’s a confusing time for investors.

In today’s chart of the day, we look at a longer-term view of the 2, 5, 10, and 30-year treasury bond yields.

Short to long term bond yields are all testing 7 to 10-year support levels as momentum is at the lowest levels in a decade.

A yield rally is likely due across the board after a recent decline that was bigger than the stock crash in 1987!

If yields fail to ral...



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Lee's Free Thinking

Nonfarm Payrolls Not Seasonally Adjusted Tell the Real Story - Unspinning Wall Street™

Courtesy of Lee Adler

Not seasonally adjusted nonfarm payrolls, that is, the actual numbers, give us a truer picture of the jobs market than the seasonally adjusted garbage that Wall Street spews.

Friday’s seasonally adjusted nonfarm payrolls jobs headline numbers disappointed investors with slower than expected growth. But was it really that bad?

Here’s How The Street Spun It – Wall Street Journal Modest August Job Growth Shows Economy Expanding, but Slowly

Employers added 130,000 nonfarm jobs, jobless rate held steady at 3.7%

U.S. employment grew only modestly in August, suggesting that a global economic slowdown isn’t driving the U.S. into recession but has dente...



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Digital Currencies

China Crypto Miners Wiped Out By Flood; Bitcoin Hash Rate Hits ATHs

Courtesy of ZeroHedge View original post here.

Last week, a devastating rainstorm in China's Sichuan province triggered mudslides, forcing local hydropower plants and cryptocurrency miners to halt operations, reported CoinDesk.

Torrential rains flooded some parts of Sichuan's mountainous Aba prefecture last Monday, with mudslides seen across 17 counties in the area, according to local government posts on Weibo. 

One of the worst-hit areas was Wenchuan county, ...



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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

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

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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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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