Posts Tagged ‘Nouriel Roubini’

Paul Farrell Explains Why The Fed-Wall Street Complex Will Self Destruct By 2012

Paul Farrell Explains Why The Fed-Wall Street Complex Will Self Destruct By 2012

Courtesy of Zero Hedge 

Some rather scary predictions out of Paul Farrell today: "It’s inevitable: Wall Street banks control the Federal Reserve system, it’s their personal piggy bank. They’ve already done so much damage, yet have more control than ever.Warning: That’s a set-up. They will eventually destroy capitalism, democracy, and the dollar’s global reserve-currency status. They will self-destruct before 2035 … maybe as early as 2012 … most likely by 2020. Last week we cheered the Tea Party for starting the countdown to the Second American Revolution. Our timeline is crucial to understanding the historic implications of Taleb’s prediction that the Fed is dying, that it’s only a matter of time before a revolution triggers class warfare forcing America to dump capitalism, eliminate our corrupt system of lobbying, come up with a new workable form of government, and create a new economy without a banking system ruled by Wall Street." And just like in the Hangover, where the guy is funny because he’s fat, Farrell is scary cause he is spot on correct.

Handily, Farrell provides a projected timeline of events:

Stage 1: The Democrats just put the nail in their coffin confirming they’re wimps when they refused to force the GOP to filibuster Bush tax cuts for billionaires.

Stage 2: In the elections the GOP takes over the House, expanding its strategic war to destroy Obama with its policy of “complete gridlock” and “shutting down government.”

Stage 3: Post-election Obama goes lame-duck, buried in subpoenas and vetoes.

Stage 4: In 2012, the GOP wins back the White House and Senate. Health care returns to insurers. Free-market financial deregulation returns. Lobbyists intensify their anarchy.

Stage 5: Before the end of the second term of the new GOP president, Washington is totally corrupted by unlimited, anonymous donations from billionaires and lobbyists. Wall Street’s Happy Conspiracy triggers the third catastrophic meltdown of the 21st century that Robert Shiller of “Irrational Exuberance” fame predicts, resulting in defaults of dollar-denominated debt and the dollar’s demise as the world’s reserve currency.

Stage 6: The Second American Revolution explodes into a brutal full-scale class war with the middle class leading a widespread rebellion against the out-of-touch, out-of-control Happy Conspiracy sabotaging America from within.

Stage 7: The domestic class warfare is exaggerated as the Pentagon’s global warnings play out: That by 2020


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BULL VERSUS BEAR

BULL VERSUS BEAR

Courtesy of The Pragmatic Capitalist

In today’s segment of bull versus bear we pit a bullish Jeff Saut against an ultra bearish Nouriel Roubini.  Mr. Saut, who helps oversee $235B at Raymond James, says there is not a whole lot of downside to U.S. stocks and that there is a “bubble in pessimism”.  Roubini, on the other hand, believes we are on the verge of a double dip.

Bull:

Bear:


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Roubini: China’s Decision to Unpeg Yuan May Backfire On The U.S., Yuan May Weaken

Roubini: China’s Decision to Unpeg Yuan May Backfire On The U.S., Yuan May Weaken

Digital composite of Tiananmen Gate of Heavenly Peace and one hundred Yuan banknotes

Courtesy of The Shocked Investor 

"Be careful what you wish". Professor Nouriel Roubini says that China’s decision to unpeg the Yuan could mean the yuan will weaken against the U.S. dollar. That would be the opposite of that the U.S. wants.

China announced that it will slowly and gradually make the yuan "more flexible" after two years of being locked. According to the Reuters report, it was "the move that the U.S. government and others around the world have long been calling for". Not so says Roubini. "This is the first significant signal in years of a change in Chinese currency policy."

‘Since they have not changed the previous range for the band — plus or minus 0.5 percent — most likely on Monday China will allow the renminbi vs U.S. dollar to move,’ said Roubini.

[T]he renminbi would have to be allowed to depreciate relative to the dollar, a paradoxical outcome.

Roubini adds: "Even if the Chinese were to allow a gradual renminbi appreciation relative to the U.S. dollar, the size of such appreciation would be modest over the next year, not more than 3 or 4 percent as the trade surplus has shrunk, growth is likely to slow down on China and labor/employment unrest remains of concern to the Chinese."

Reuters says that Roubini’s comments mirror those of Li Daokui, adviser to China’s central bank on Saturday. He told Reuters in Beijing that the yuan could depreciate against the dollar if the euro falls sharply against the U.S. currency. 

Source: China forex move could thwart U.S. hopes – Roubini

 


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Roubini: “The US Economy Is Unsustainable”

Roubini: "The US Economy Is Unsustainable"

Courtesy of Tyler Durden

Red Bull Air Race Perth - Training Day

Yesterday Nassim Taleb said that his primary concern about an upcoming "Black Swan" is a failed Treasury Auction. This is precisely what Zero Hedge has been concerned about for the past year, although we feel that this event will likely be at least marginally telegraphed, either in the form of Direct Bidders taking down close to 50% of each auction (with the Primary Dealers monetizing the balance), and an accelerated flattening of the yield curve. Last night, Roubini, who has apparently thrown away the mantle of moderation and is back to his gloomier ways, said that he worries "that with a trillion deficit this year and next year, 2012, and for as far as the eye can see, eventually, not this year, but the next year, the markets are going to wake up and say, this is unsustainable." In other words whether via the Treasury market, or some other way, at some point the balance will shift from one where the market still believes that reserve currency is enough of a backstop to prevent the collapse of the US, to a regime where incremental bailouts will be seen as negative. That moment will be true black swan, and the beginning of the end of the great US experiment.

Back to Roubini, who in his last night’s interview with Fox Business’ Neil Cavuto is about as bearish as we remember him from the doom and gloom days of early 2008.

On Greece being the tip of the iceberg:

“In my view what is happening in Greece is just the tip of an iceberg.  With private debt in many parts of the world, we socialize these private losses.  Now with large budget deficits in Europe, in Japan, in the United States.  The bond market vigilantes have woken up in Greece, in Portugal, in Spain.

At some point they’re going to wake up in the U.K., in Japan, in the United States.  We’re running a 3.5 budget deficit.  It is obviously over time not sustainable.”
 
On why there has not been any market discipline:

“The Fed has near zero rates.  There is low growth.  There is still deflation.  So for a number of reasons, interest rates are still low.  That is why there is no market discipline. This is unsustainable.  There is going to…
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Roubini: “The US Economy Is Unsustainable”

Roubini: "The US Economy Is Unsustainable"

Courtesy of Tyler Durden

Red Bull Air Race Perth - Training Day

Yesterday Nassim Taleb said that his primary concern about an upcoming "Black Swan" is a failed Treasury Auction. This is precisely what Zero Hedge has been concerned about for the past year, although we feel that this event will likely be at least marginally telegraphed, either in the form of Direct Bidders taking down close to 50% of each auction (with the Primary Dealers monetizing the balance), and an accelerated flattening of the yield curve. Last night, Roubini, who has apparently thrown away the mantle of moderation and is back to his gloomier ways, said that he worries "that with a trillion deficit this year and next year, 2012, and for as far as the eye can see, eventually, not this year, but the next year, the markets are going to wake up and say, this is unsustainable." In other words whether via the Treasury market, or some other way, at some point the balance will shift from one where the market still believes that reserve currency is enough of a backstop to prevent the collapse of the US, to a regime where incremental bailouts will be seen as negative. That moment will be true black swan, and the beginning of the end of the great US experiment.

Back to Roubini, who in his last night’s interview with Fox Business’ Neil Cavuto is about as bearish as we remember him from the doom and gloom days of early 2008.

On Greece being the tip of the iceberg:

“In my view what is happening in Greece is just the tip of an iceberg.  With private debt in many parts of the world, we socialize these private losses.  Now with large budget deficits in Europe, in Japan, in the United States.  The bond market vigilantes have woken up in Greece, in Portugal, in Spain.

At some point they’re going to wake up in the U.K., in Japan, in the United States.  We’re running a 3.5 budget deficit.  It is obviously over time not sustainable.”
 
On why there has not been any market discipline:

“The Fed has near zero rates.  There is low growth.  There is still deflation.  So for a number of reasons, interest rates are still low.  That is why there is no market discipline. This is unsustainable.  There is going to…
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When Will China’s Bubble Burst?

When Will China’s Bubble Burst?

A sales agent waits for customer in front of the model of a property development at the 5th China (Shenzhen) Real Estate Fair, in the southern Chinese city of Shenzhen

Courtesy of Washington’s Blog

As Bloomberg notes, Marc Faber thinks China may crash in 9 to 12 months, and hedge fund manager Jim Chanos and Harvard University’s Kenneth Rogoff are also warning of a crash.

Nouriel Roubini told Bloomberg:

In China, where property prices rose at a record pace in April and consumer prices climbed at the fastest rate in 18 months, the economy faces the risk of a “significant slowdown,” Roubini said.

“China should be tightening monetary policy, increasing interest rates and let its currency appreciate over time,” he said. “They are too slow, they are not doing it fast enough.”

On April 20th, BusinessWeek wrote:

China’s Shanghai Composite Index may drop as much as 6 percent after breaching the 250-day moving average for the first time in a year, Shenyin & Wanguo Securities Co. said.

The benchmark gauge plunged 4.8 percent to 2,980.3 yesterday, the most in eight months, on concern government measures to curb real estate speculation will slow economic growth. The index may extend losses until reaching the next support level of 2,803…

Yesterday, Calculated Risk noted that the Shanghai composite is continuing down: 

Keep an eye on the Shanghai index (in red). It appears China’s economy is slowing.

This graph shows the Shanghai SSE Composite Index and the S&P 500 (in blue).

The SSE Composite Index is at 2,622.67 mid-day – down about 300 points from 2 weeks ago. 

[Click here for full chart]

Vincent Fernando notes that Beijing property prices are starting to fall rapidly (and that Shanghai is next), as China clamps down on the property bubble.

As MarketWatch notes:

China’s economy is teetering on the edge of a major slowdown … according to a noted China strategist.

David Roche, an economic and political analyst who manages the Hong Kong-based hedge fund Independent Strategy, says the world’s third-largest economy is now on the brink, faced with the inevitable reckoning that follows an extended bank-lending binge.

"We’ve got the beginnings of a credit-bubble collapse in China," said Roche, predicting the economy will likely cool from its stellar double-digit growth rate to a 6% annual expansion as a result.

While that may not sound bad, Roche believes the collateral damage from the cooling will be anything but mild, as the banking sector comes under pressure from cumulative


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CHART OF THE DAY: HOW TO PROFIT FROM NOURIEL ROUBINI

So the stock market is a leading indicator of Nouriel Roubini’s popularity.  (Alternatively, Nouriel’s popularity is a leading indicator for stock market declines,… but I doubt it). – Ilene 

CHART OF THE DAY: HOW TO PROFIT FROM NOURIEL ROUBINI

Courtesy of The Pragmatic Capitalist 

Interesting chart here from the Ekonomi Turk showing Nouriel Roubini’s popularity (as expressed by Google Trends) versus the performance of the S&P 500.  Although Dr. Roubini is trying not to be viewed as a perma-bear it’s quite clear from the data that the general public thinks differently:

“When you look at the graph, you will notice the negative correlation especially after Summer of 2007. The graph covers Aug 2006- Apr 2010 period. The last time Roubini’s popularity increased tremendously was March 2009. Since then Roubini’s popularity has been declining and the stock market has been increasing. I also ran a regression test and found that 1 unit increase in Roubini’s popularity is associated with a 114 point decline in S&P 500 index. His popularity was 5.5 in March 2009 and it is 1 now, so this implies that S&P 500 index should increase by about 114*4.5= 513 points since March 2009. Considering that S&P 500 was around 680 when Roubini’s popularity peaked the last time, our regression tells us that S&P 500 index should be around 1200 today. “

Roubini vs. SP500 Ekonomi Turk CHART OF THE DAY: HOW TO PROFIT FROM NOURIEL ROUBINI

Source: Ekonomi Turk 


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The Age of the Rockstar Economist is (mercifully) Ending

The Age of the Rockstar Economist is (mercifully) Ending

Courtesy of Joshua M Brown, The Reformed Broker 

There was a time when every other post on Clusterstock was a synopsis of commentary from a ‘name-brand’ economist.

There was a time when we all shared links to the latest pronouncements from Ivy League econ departments.

There was a time when countdowns were chanted into each PPI or ISM release.

And in the midst of all this armchair econophilia, a short, dark and handsome NYU professor with a name like a famous magician captured our hearts.

It was 2008 – and in our certainty about the lack of certainty, America fell in love with the new breed of Rockstar Economists.

As recently as a year ago, The Great Roubini’s traveling prognostication show was pulling in 6 figures per engagement and publishers were hunting down any theorist with an oddly-colored animal to base a string of predictions on.  

Economists were one-downing each other with plummeting targets on a host of surveys and measures in an effort to make Abelson’s column or even earn a trip to Englewood Cliffs for a Squawk Box appearance.

A mythical, beard-stroking wizard named Charles Nenner was regularly appearing on CNBC, making ludicrous statements about his spoon-bending predictive powers with a straight face while the enthralled anchors strained to keep themselves from rubbing his head and making wishes. 

The Rockstar Economists were photographed paparazzi-style with their arms around models, chillin’ hard at ski lodges from Aspen to Davos.  Their every email missive was blogged and tweeted and re-blogged and re-tweeted.  Each TV appearance was dissected and harvested for meme-worthy nuggets and the prophetic visions on which their brands had been built. 

It was…
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Roubini And Jim O'Neill Spar On Greece, China And Man U

Courtesy of Tyler Durden

If there is one topic that has been beaten to death, reincarnated, then Friend-o’ed three more times by everyone in desperate need of a Google hit or a TV appearance, it is Greece and China (and also Manchester United if you live in the UK). This will not stop us from presenting this FT clip, in which Goldman’s Jim O’Neill and Nouriel Roubini spar over the Greek bailout and the Chinese economy (and, you guess it, Man U). Guess who is the optimist and who is the pessimist. For the most part a bland recreation of each pundit’s party line, although we do appreciate Roubini’s reminder that the immediate catalyst responsible for the 20% Black Monday drop (at a time when the market was poised on a precipice much as it is today) was a topic near and dear to everyone: the announcement of a trade war.

"20 years ago we had a large trade deficit with Japan and Germany. The dollar was weakening but the Germans and Japanese were resisting, and the US got angry. And the US Secretary of the Treasury Baker got on TV on Sunday and said if you don’t let if move we are going to retaliate. The next day the stock market crashed 20%."

Are the starts aligning for a repeat appearance of just such a crash, especially as the US has mere days left in which to brand China a currency manipulator?

Full clip after the jump.

 


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Hedge Fund Slams Rick Bookstaber For Comments On The Gold Bubble

Hedge Fund Slams Rick Bookstaber For Comments On The Gold Bubble

Rick Bookstaber

Courtesy of Gus Lubin at Clusterstock/Business Insider 

QB Partners fits the description of hedge funds that Rick Bookstaber accused of pumping the gold bubble and — even worse — of fueling the bubble with publicity.

The New York fund leapt to the defense of gold by sending an email to Business Insider with a message for Bookstaber.

Attached was the point-by-point rebuttal they gave to Nouriel Roubini in December when he had the nerve to diss gold.

Here are the highlights of QBAMCO’s Message To The Gold Haters >

See Also: 

Rick Bookstaber: Hedge Funds Are Pumping The Gold Bubble And Luring Investors Off A Cliff 

See also this chart (below) via Jesse’s Americain Cafe, and the comment by bidwhacker at Clusterstock

The economic cycle is definitely not the right framework for determining when to be in gold. Gold bull and bear markets can extend across economic upturns and downturns. 

Absent an "economic meltdown" as you call it, the best tool for determining when the gold price will advance (at least since Nixon broke the last vestiges of the gold standard) is real interest rates: 

Gold bull markets happen in an environment of negative real interest rates…This is the closest thing to an one-variable indicator for the gold market. But as you point out, it only good over longer periods of time and not a perfect correlation. The way I like to look at it is, when you have negative real interest rates, the odds are strongly with you that gold prices will go up. 


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Phil's Favorites

Trump's claim that Europe is 'losing its culture' is racism - and it must be challenged

 

Trump's claim that Europe is 'losing its culture' is racism – and it must be challenged

Courtesy of Chris Allen, University of Leicester

According to Donald Trump, Britain and Europe is “losing its culture” as a result of immigration. In an interview with The Sun newspaper, given in Brussels shortly before travelling to London, Trump explained how migrants from the Middle East and Africa are permanently changing Europe for the worse.

Speaking about the pain it causes him, given that both his mother and father were European, he added:

I think what has happened to Europe is a shame. Allowing the immigration to take place ...



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Zero Hedge

How CEOs Actually Spend Their Time: It's Not How You Think

Courtesy of ZeroHedge. View original post here.

Submitted by Nicholas Colas and Jessica Rabe of DataTrek Research

Legendary Harvard Business School professor Michael Porter and the dean of HBS have a new must-read article out; we have a summary and our take below. The topic: how CEOs actually spend their time. It’s not how you think...

When we came across a new study in the Harvard Business Review on how CEOs spend their time, we took notice. Time is especially scarce for CEOs after all, and how they use it sends a message about their ...



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Chart School

Reading the tape of ticker CVR Partners (UAN)

Courtesy of Read the Ticker.

This stock is going from very bad, to bad, but this change is good enough to change share price.


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Reference turnaroundstockinvesting.com, fundamentals for CVR Partners (readtheticker.com is not a member nor has any association to this service).






...

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Insider Scoop

Pot Stocks, ETFs, Top News And Data From The Cannabis Industry This Week

Courtesy of Benzinga.

This week, Tilray and Sproutly Canada went public, Sunniva announced plans to spin off its Canadian assets, Zynerba Pharmaceuticals posted positive data for its Phase 2 trial for ZYN002 in Fragile X syndrome, and Zogenix released positive top-line results from its second pivotal Phase 3 study of ZX008 in Dravet Syndrome.

Michigan added 11 new ailments to its list of qualifying conditions for medical cann...



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Digital Currencies

Mythbusting: Why Bitcoin Can Never Go To Zero

Courtesy of ZeroHedge. View original post here.

Authored by Darryn Pollock via CoinTelegraph.com,

Bitcoin’s polarizing effect has people on both ends of the scale either proclaiming it is going to the moon or it is going to zero. The volatile, unprecedented, and revolutionary monetary system that is cryptocurrency has a future that not many can accurately pred...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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Biotech

Opioids don't have to be addictive - the new versions will treat pain without triggering pleasure

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

Opioids don't have to be addictive – the new versions will treat pain without triggering pleasure

shutterstock.

Courtesy of Tao Che, University of North Carolina – Chapel Hill

The problem with opioids is that they kill pain – and people. In the past three years, more than 125,000 persons died from an opioid overdose – an average of 115 people per day – exceeding the number killed in ...



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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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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

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

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All About Trends

Mid-Day Update

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

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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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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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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