Posts Tagged ‘Tim Bond’

TIM BOND: EQUITY INVESTORS ARE DANCING ON THE EDGE OF THE VOLCANO

TIM BOND: EQUITY INVESTORS ARE DANCING ON THE EDGE OF THE VOLCANO

Courtesy of The Pragmatic Capitalist

Detail view of the wall of a dam

Tim Bond of Barclays has been remarkably accurate in predicting the strength and length of the global equity rally.  Despite the many signs of weakness over the last 9 months Bond has remained very optimistic (read his bullish note from 2009 here).  He claimed that analyst estimates and high levels of bearishness would lay the foundation for a continuing equity rally.

“Never has a bull market climbed a steeper wall of worry. Despite a proliferation of positive economic indicators, the consensus remains resolutely gloomy. Bullish economists are still rarer than hens’ teeth. The average forecast for Q3 US GDP growth is an anaemic 0.8% increase, which would be by far the slowest first quarter of any recovery on record.”

He couldn’t have been much more accurate.  The economic landscape is quickly changing, however, and Bond’s outlook is turning decidedly less optimistic.  Bond now believes the problem of debt is becoming contagious in Europe and that higher bond yields will accompany the process:

“Fiscal dynamics point towards higher government bond yields in many economies, including the UK and US.  History is unequivocal in linking fiscal deterioration to higher yields.  This point is clearly becoming recognized by investors.  As a result, a contagious process has started, during which risk premia in bonds, equities and currencies adjust higher to reflect the fiscal situation.  This process is unlikely to remain confined to southern Europe, but will eventually embrace all those economies with sizeable budget deficits.”

Bond has argued for much of the last year that low rates and de-leveraging were actually very bullish for equities.  As monetary policy begins to shift and fiscal policy remains imprudent the landscape is shifting.  Like Teun Draaisma, Bond is concerned about the impending higher rate environment that will accompany global rate increases and continuing risks associated with an indebted global economy.  Bond argues the long-term situation remains unfavorable for 3 primary reasons:

  • 1)  The majority of the G20 is a fiscal mess
  • 2)  Demographic trends of the G20 are highly negative
  • 3)  Containing the long-term government debt problem will be painful

Most alarming to Bond, however, is the close relationship between high…
continue reading


Tags: , , , , , , , , , ,




Don’t Be Fooled

Last week, we posted a couple articles discussing Tim Bond’s bullish arguments favoring a swift V-shaped economic recovery (see PIMCO Versus Barclays: Economic Pessimist – Economic Optimist and You Fools Don’t Get It: This Is A V-Shaped Recovery!)  Our friend Michael Panzner takes issue with Bond and presents the other side. – Ilene

Don’t Be Fooled

don't be fooledCourtesy of Michael Panzner at Financial Armageddon

I was originally going to write about something else, but after a loyal Financial Armageddon visitor alerted me to the following Financial Times commentary, "Insight: Learn to Love the Recovery," by Tim Bond, head of asset allocation at Barclays Capital, I changed my mind. Frankly, I couldn’t believe this piece of propagandistic excretia was written by a senior financial industry executive who makes decisions about where to invest. Because some FT readers might be fooled into thinking Mr. Bond had something useful to say, I felt duty-bound to respond to his "insights" with a few brief comments of my own (interspersed with his italicized text):

Never has a bull market climbed a steeper wall of worry. In spite of a proliferation of positive economic indicators, the consensus remains gloomy. Bullish economists are than hens’ teeth.

The average forecast for third-quarter US gross domestic product growth is a weak 0.8 per cent, which would be by far the slowest first quarter of any recovery on record. Since 1945, the average annualised real US growth rate in the first two quarters of recovery is 7 per cent. History provides abundant evidence that the deeper the recession, the stronger the bounce. Even the recovery from the Great Depression conformed to this rule, real US GDP grew 10.8 per cent in 1934 and 8.9 per cent in 1935.

There are so many inconsistencies and logical fallacies in the above paragraph that it’s hard to know where to begin. Among other things, Mr. Bond assumes that the consensus is correct in seeing a third-quarter uptick in GDP. That may or may not be the case, but given how wrong economists have been about every aspect of this downturn so far, I’d lean towards the latter. Even if they are right, what evidence does he have that a third-quarter rebound will be the turning point, rather than the equivalent of an economic dead-cat bounce? Moreover, his assumption that the postwar time frame is the relevant reference period when…
continue reading


Tags: , , ,




PIMCO Versus Barclays: Economic Pessimist – Economic Optimist

PIMCO Versus Barclays: Economic Pessimist – Economic Optimist

Courtesy of Tom Lindmark at But Then What

You couldn’t find a more divergent view of the future of the US economy than those offered up today by Bill Gross of Pimco and Tim Bond from Barclays. Gross is not deviating from his persistent call of chronic low growth while Bond says we have it all wrong, a boom is coming.

Gross spends an interesting first couple of paragraphs in his monthly newsletter castigating other investment managers for the fees they charge. It’s not revolutionary stuff and it’s a bit self-serving, nevertheless he makes a good point about fees.

He then gets into the meat of his presentation which is an argument that we have for decades the country has operated on an assumption that nominal GDP would grow at around 5%. This is in fact what hat has happened and accordingly the structure is geared towards that sort of growth. Now we have slipped below that number and he sees constraints in getting back there.

Gross argues that the economy can not get back to the 5% level on its own due to overcapacity and is destined to wander in either a recessionary spiral or some sort of stagflationary environment. The remedy for this is for government to substitute for the private sector. Gross contends that government this time is limited in its responses. Government leverage, in his view, is less robust than private leverage and thus will not contribute as much to recovery. Additionally, he believes that both domestic and international political constraints exist that prevent government from doing much stimulus over and above what it has already committed to. The bottom line is his expectation for nominal GDP growth of around 3% once a recovery takes hold.

Here is his concluding paragraph:

Investment conclusions? A 3% nominal GDP “new normal” means lower profit growth, permanently higher unemployment, capped consumer spending growth rates and an increasing involvement of the government sector, which substantially changes the character of the American capitalistic model. High risk bonds, commercial real estate, and even lower quality municipal bonds may suffer more than cyclical defaults if not government supported. Stock P/Es will rest at lower historical norms, and higher


continue reading


Tags: , , , ,




 
 
 

Phil's Favorites

Does raising the minimum wage kill jobs? The centurylong search for the elusive answer shows why economics is so difficult – but data sure helps

 

Does raising the minimum wage kill jobs? The centurylong search for the elusive answer shows why economics is so difficult – but data sure helps

The fight over the minimum wage continues. AP Photo/John Raoux

Courtesy of Veronika Dolar, SUNY Old Westbury

For decades it was conventional wisdom in the field of economics that a higher minimum wage results i...



more from Ilene

Zero Hedge

Powell's Stock Trades Leaked, Show Multi-Million Sale As Market Tanked

Courtesy of ZeroHedge View original post here.

With leaked trades in their personal accounts already costing two Fed presidents their jobs, and a third - vice chair Richard Clarida - currently on the ropes amid speculation he will soon follow, a few weeks ago we joked that if forces within the Fed want to get rid of all the hawks, they should just leak Esther George - the Fed's last remaining uberhawk - trading record.

If the Fed wants to get rid of all the hawks, they just need to leak Esther George's etrade blotter

— zerohedge (@zerohedge) ...

more from Tyler

Chart School

Price and Volume Swing Analysis on Bitcoin and Silver

Courtesy of Read the Ticker

Many take guidance from news, pundits or advisors. Well sometimes the swings of price and volume are a better measure of what happens next.

The big boys do not accumulate or distribute in single 1 second trade, they build positions over weeks, months and years. They use price swings in the market to build or reduce positions, and you can see their intent by studying swings of price and volume and applying Tim Ord logic as written in his book called 'The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks'.

Tim Ord is a follower of Richard Wyckoff logic, his book has added to the studies of Richard Wyckoff, Richard Ney and Bob Evans.

Richard Wyckoff after years of...

more from Chart School

Digital Currencies

Ethereum's Turn To Outshine Bitcoin Is Coming, UBS Says

Courtesy of ZeroHedge View original post here.

After a stellar start to the year, which saw its price soar to an all time high above $4,100, trouncing virtually all of its crypto peers, Ethereum has stagnated in recent weeks, with its place in the spotlight taken by bitcoin whose impressive outperformance has been the result of now confirmed speculation that a bitcoin futures ETF is coming. It also meant that what has traditionally been a close correlation between the two largest cryptos has broken in favor of the larger peer; it would also suggest that ethereum is trading about $1000 cheap vs bitcoin.

...



more from Bitcoin

Politics

Steve Bannon faces criminal charges over Jan. 6 panel snub, setting up a showdown over executive privilege

 

Steve Bannon faces criminal charges over Jan. 6 panel snub, setting up a showdown over executive privilege

Defiant or following Trump’s direction? John Lamparski/NurPhoto via Getty Images

Courtesy of Kirsten Carlson, Wayne State University

The House committee investigating the Jan. 6 attack on the U.S. Capitol is tasked with providing as full an account as possible of the attempted insurrection. But there is a problem: Not everyone is cooperating.

As of Oct. 14, 2021, Steve Bannon, a one-tim...



more from Politics

Biotech/COVID-19

Ivermectin is a Nobel Prize-winning wonder drug - but not for COVID-19

 

Ivermectin is a Nobel Prize-winning wonder drug – but not for COVID-19

While ivermectin was originally used to treat river blindness, it has also been repurposed to treat other human parasitic infections. ISSOUF SANOGO/AFP via Getty Images

Courtesy of Jeffrey R. Aeschlimann, University of Connecticut

Ivermectin is an over 30-year-old wonder drug that treats life- and sight-threatening parasitic infections. Its lasting influence on global health has been so profound...



more from Biotech/COVID-19

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...



more from Promotions

Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



more from Kimble C.S.

ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



more from ValueWalk

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...



more from M.T.M.

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...



more from Tech. Traders

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...



more from Lee

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.
...

http://www.insidercow.com/ more from Insider





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...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.