Posts Tagged ‘Gary Shilling’

The Chances of a Double Dip

The Chances of a Double Dip 

Courtesy of John Mauldin at Thoughts From The Frontline 

I am on a plane (yet again) from Zurich to Mallorca, where I will meet with my European and South American partners, have some fun, and relax before heading to Denmark and London. With the mad rush to finish my book (more on that later) and a hectic schedule this week, I have not had time to write a letter. But never fear, I leave you in the best of hands. Dr. Gary Shilling graciously agreed to condense his September letter, where he looks at the risk of another recession in the US.

I look forward at the beginning of each month to getting Gary’s latest letter. I often print it out and walk away from my desk to spend some quality time reading his thoughts. He is one of my "must-read" analysts. I always learn something quite useful and insightful. I am grateful that he has let me share this with you.

If you are interested in getting his letter, his website is down being redesigned, but you can write for more information at insight@agaryshilling.com. If you want to subscribe (for $275), you can call 888-346-7444. Tell them that you read about it in Thoughts from the Frontline, and you will get an extra one month on your subscription. And now, let turn to Gary.

The Chances of a Double Dip

By Gary Shilling

Investor attitudes have reversed abruptly in recent months. As late as last March, most translated the year-long robust rise in stocks, foreign currencies, commodities and the weakness in Treasury bonds that had commenced a year earlier into robust economic growth – the "V" recovery.

As a result, investors early this year believed that rapid job creation and the restoration of consumer confidence would spur retail spending. They also saw the housing sector’s evidence of stabilization giving way to revival, and strong export growth also propelling the economy. Capital spending, led by high tech, was another area of strength, many believed.

Not So Fast

But a funny, or not so funny, thing happened on the way to super-charged, capacity-straining growth. In April, investors began to realize that the eurozone financial crisis, which had been heralded at the beginning of the year by the decline in the euro, was a serious threat to…
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SHILLING: WE’RE IN A WORLD OF “CHRONIC DEFLATION”

SHILLING: WE’RE IN A WORLD OF “CHRONIC DEFLATION”

Courtesy of The Pragmatic Capitalist 

Few people have nailed the deflationary environment as well as Gary Shilling. Shilling was one of the few people who foresaw the housing crisis and the equity market catastrophe in 2008 and although he remained bearish in 2009 he has been largely correct with regards to the macro picture. He believes we’re in for a prolonged bout with deflation and says Obama’s economic policies are only making matters worse.

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Gary Shilling Says Yuan Move Is Risky

Gary Shilling Says Yuan Move Is Risky

Courtesy of Edward Harrison at Credit Writedowns

Gary Shilling talked with Bloomberg about the implications of China’s recent currency move and the European debt crisis. True to form, he is bearish – both on the Chinese move and on the European debt situation. His view is that the Yuan move comes at the wrong time given that the European debt crisis and fiscal austerity is already poised to slow global growth.

While I agree with his comments on the risks to the Eurozone and the Chinese economy, I will defer to Marc Chandler’s views on China’s forex move who has fewer negative things to say about the move. 


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GARY SHILLING’S FAVORITE 2010 TRADES

GARY SHILLING’S FAVORITE 2010 TRADES

Courtesy of The Pragmatic Capitalist  

The New Mutate Britain Exhibition One Foot In The Grove Is Launched

Gary Shilling has become infamous in the last few years for predicting the credit crunch and the bear market.  The bearish investor still believes deflation is the dominant force at work and that the credit crunch is in the process of unfolding.  But he isn’t bearish about everything.  The following are his 6 buys:

  1. Buy treasury bonds – the safehaven trade will return.
  2. Buy income-producing securities – high quality dividend names will be a safe place to hide.
  3. Buy consumer staples and foods – consumers won’t stop buying the necessities.
  4. Buy ’small luxuries’ – consumers are trading down.
  5. Buy the U. S. dollar – still the world’s safehaven currency.
  6. Buy eurodollar futures.

Unfortunately for market bulls Shilling is generally bearish about stocks and the global economy.  His 11 sells:

High angle view of a globe on a heap of Indian banknotes and Euro banknotes

  1. Sell U.S. stocks in general – U.S. stocks are just too expensive.
  2. Sell home-builder and selected related stocks – home prices will fall 10% in 2010 and the stocks will tank with it.
  3. Sell big-ticket consumer discretionary equities -  consumers aren’t buying luxury goods due to the trade down.
  4. Sell banks & other financial institutions – the days of big bank profits and bailouts are over.
  5. Sell consumer lenders’ stocks – consumers will continue to deleverage.
  6. Sell many low- and old-tech capital-equipment producers.
  7. If you plan to sell a home or investment house, do so yesterday.
  8. Sell junk bonds.
  9. Sell commercial real estate – the real estate bubble is a slow motion train wreck.
  10. Sell most commodities – the dollar rally will crush commodities.
  11. Sell developing country stocks and bonds – there will be no decoupling.

 


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Phil's Favorites

Recession

 

Recession

Courtesy of 

The bad news is piling up. The recession that people are looking for may already be here.

We heard about inventory buildup at Target and Walmart last week and the stocks responded with their worst day since…1987.  Those were not isolated incidents. This week we heard the same from Kohl’s and Abercrombie, whose stock is cratering 30% on the news.

In other news, Snap just warned of an imminent slowdown.

From The WSJ :

“In a surprise announcement, Snap Inc., the ...



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Politics

The big exodus of Ukrainian refugees isn't an accident - it's part of Putin's plan to destabilize Europe

 

The big exodus of Ukrainian refugees isn’t an accident – it’s part of Putin’s plan to destabilize Europe

Ukrainians fleeing the war walk toward a train in Krakow to bring them to Berlin on March 15, 2022. Omar Marques/Getty Images

Courtesy of Mark A. Grey, University of Northern Iowa

More than 6.3 million Ukrainians have fled their country since Russia first invaded in late February 2022.

The European Union h...



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Zero Hedge

Cattle Supply And Demand Issues For 2022

Courtesy of ZeroHedge View original post here.

By FarmBureau Market Intel

Introduction

At first glance, 2022 cattle prices are higher than 2021. At $140, slaughter steer prices are 17.5% above 2021 prices, but even with higher prices, farmers and ranchers will travel a rocky road to profitability, paved with inflation and higher input costs in 2022. This Market Intel addresses the USDA’s Cattle on Feed report released on Friday, May 20, 2022, the forces driving cattle prices higher and how inflation and input costs will affect the bottom line for ca...



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ValueWalk

The Snap Shock, Oil Falls On Growth Fears And UK Borrowing Drops

By Anna Peel. Originally published at ValueWalk.

“Investors are getting set for another twist on the rollercoaster with Monday’s gains set to be largely erased after Snap Inc (NYSE:SNAP) interrupted the brief rally with a very downbeat snapshot. The FTSE 100 and FTSE 250 have opened 0.9% lower while in Japan the Nikkei slid by 1% and the Hang Seng in Hong Kong dropped by 2%.

Q1 2022 hedge fund letters, conferences and more

The Snap Shock

The owner of Snapchat notched up fresh worries after the bell on Wall Street by lowering its revenue an...



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Kimble Charting Solutions

Can Treasury Bonds (TLT) Reverse Higher From Historic Oversold Level?

Courtesy of Chris Kimble

It’s been an ugly couple of year for US Treasury Bonds. T-bond prices have dropped sharply as yields have risen.

This has been an added pressure on retirement portfolios as treasury bonds are no longer trading like a conservative asset.

Time for a bounce in T-bonds?

Today, we take a look at the long-term “monthly” chart of the 20+ Year US Treasury Bond ETF (TLT).

As you can see, 2 years ago bonds peaked and formed a historic bearish reversal pattern at the highest momentum reading ever.

...

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Chart School

Powell has a debt problem

Courtesy of Read the Ticker

The last time the US entertained debt this high (relative to GDP) was post World War 2.


The prior US high debt years were between 1936 and 1954, back then the public understood why the high debt existed (WW2) and why the public had to suffer high inflation to allow deflation of the debt to a manageable level. This question was not as political as it is today.   


Current US debt levels are the result of 'end of empire' spending, simply spending on steroids beyond one means. The FED needs inflation for the same reason as the post WW2 period to deflate away the debt.


The current political talk of 'fight inflation' will be short lived and the FED will be forced to accept higher inflation levels over the 2% (say b...

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Biotech/COVID-19

What is monkeypox? A microbiologist explains what's known about this smallpox cousin

 

What is monkeypox? A microbiologist explains what’s known about this smallpox cousin

Monkeypox causes lesions that resemble pus-filled blisters, which eventually scab over. CDC/Getty Images

Courtesy of Rodney E. Rohde, Texas State University

On May 18, 2022, Massachusetts health officials and the Centers for Disease Control ...



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Digital Currencies

Stablecoin volatility shows an urgent need for regulation to protect consumers

 

Stablecoin volatility shows an urgent need for regulation to protect consumers

Shutterstock/David Sandron

Courtesy of Matthew Shillito, University of Liverpool

Some cryptocurrencies have always been fairly volatile, with values soaring or plunging within a short space of time. So for the more cautious investor, “stablecoins” were considered the sensible place to go. As the name implies, they are designed to be a steadier and safer bet.

At the moment though, that stability is proving hard to find. The value of o...



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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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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...



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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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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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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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