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Chinese Economy Enters Contraction With First Sub-50 PMI Print Since October For the first time since October 2012, HSBC’s China PMI (Flash) printed at a sub-50 level (49.6) missing expectations (50.4) quite notably. This is the worst two-month drop in 17 months. This is problematic for the PBoC who are being arbitraged left, right, and center and know that any stimulus will merely serve to exacerbate the problems they face (as we noted here [...] by Tekoa Da Silva, Bull Market Thinking: Legendary investor Don Coxe, Chairman of Coxe Advisors LLP, and former advisor to the $540 billion BMO Financial Group, issued a powerful new commentary entitled, “Money Makes the World Go Round”. In this updated piece, Don spoke to the staggering growth of the U.S. monetary base, indicating that when monetary velocity regains its speed, a “nightmare scenario” could unfold, with gold to money supply ratios exploding from levels, “so far [below] any all-time lows, so as to [...] London Gold Market Report from Ben Traynor, BullionVault Tuesday 7 May 2013, 07:00 EDT
ETF Selling “Key Downside Risk” as Gold “Struggles in Sideways Resistance Range”
WHOLESALE gold market prices fell to $1460 an ounce Tuesday morning, around ten Dollars lower than where it closed last week, as the FTSE in London ticked higher following yesterday’s UK bank holiday.
Other European stock markets also edged higher, while the Euro gained against the Dollar immediately following the [...] Marc Faber, publisher of the Gloom, Boom & Doom report, appeared on “Bloomberg Surveillance” with Tom Keene and Alix Steel today, saying that he sees “considerable downside risk” for U.S. stocks and Faber went on to say, “We are creating bubbles and bubbles and bubbles. This bubble will come to an end. My concern is that we are going to have a systemic crisis where it is going to be very [...] Ed Pilkington International Monetary Fund chief Christine Lagarde has warned the US it has the potential to be its “own worst enemy” over the fragile economic recovery and that failure to reach a comprehensive settlement over the fiscal cliff could see growth plummet to zero. In forthright comments over the impending fiscal cliff, the IMF managing director said that “if the US economy was to suffer the downside risk of [...] Some very curious thoughts ahead of tomorrow’s FOMC announcement from none other than Citigroup:
“Why QE3 FX impact may fizzle There are several major differences between QE3 now and past QE. The one that is least remarked on is that the world outside the US is much less attractive now than in March 2009 or August 2010 when previous QEs were announced. In earlier QEs, EM was much more attractive, having shrugged [...] Despite high-flying equity indices, there is some underlying concern that all is not rosy in the global economy (and that Fed/ECB/PBoC might not save the day this time). As Morgan Stanley notes, the overcrowded trades are overweight US and within US overweight defensives – implying cyclicals are starting to reflect the current global macro weakness and that there are further downgrades to global growth forecasts to come. Expectations for a repeat [...] Some major European banks are warning of impending collapse of the Eurozone. Deutsche Bank and Commerzbank are warning that the collapse of the Eurozone is likely. The magnitude of bailouts and money printing happening in Europe is only going to bankrupt the Eurozone. Countries like Greece I believe are now requiring a 3rd bailout but this morning in a Handelsblatt interview that Germany had “reached the limit of its capacity” over additional [...] From dw.de: Germany’s second-biggest lender, Commerzbank, says it will no longer participate in market speculation on basic food prices. The bank says it has removed all agricultural products from its funds for moral reasons. Commerzbank of Germany confirmed on Thursday it had withdrawn from market speculation on prices for basic food items. The country’s second-largest lender said it had removed all agriculture products from its ComStage ETF CB Commodity fund. Commerzbank stated that the [...] In what S&P calls a ‘Perfect Storm’, the next four years will see a minimum of $30 trillion in companies’ refinancing needs related to maturing bonds and loans and further they expect $13-$16 trillion more debt will be required to finance growth. With bond portfolios over-stuffed with corporate debt (since angst over sovereign risk has skewed asset allocation away from that cohort) the rating agency is concerned that ongoing bank deleveraging, these [...] From The Dollar Collapse: Gold and silver are down again today, but the mining stocks are up big. One day does not a trend make, but this is still a possible indicator of several things: 1) The plunge in mining shares has finally gotten the attention of investors who understand that most of these companies are viable and profitable, and that they won’t go to zero. So at some point the downtrend [...] Patrick Chovanec, a professor at Tsinghua University (and well-known blogger) was on BloombergTV last night, talking about a ‘disconnect’ between official economic numbers out of China and what he’s seeing on the ground.
You can watch the video below, but we’ve taken notes, and the gist is that inflation is much hotter, and growth is much slower than what any official numbers say. GDP could in reality only be growing by 4-4.5%, well below official [...] by MarcToMarket The March US jobs report will be released Friday, Good Friday, when many European countries are on holiday and the US is partially on holiday. Unlike the proverbial tree that may not make a sound, if there is no one to hear it, the data will be important even if the lack of market participation prevents much of a reaction. Given these circumstances, perhaps what will be more useful than a [...] Equity and credit markets traded in a narrow range with late day ebullience (as VIX collapsed but we note implied correlation did not) pushing them to marginally new multi-month highs and tights respectively. The markets tracked one another very closely as did HYG (the high-yield bond ETF) but into the close HYG sold off quite notably (relative to the day’s action). Financials staged a late-day advance (responsible largely for the [...] January 12, 2012, at 12:32 pm Jim Sinclair’s Commentary If Alf is right concerning the accordion chop, the large downside risk of buying gold on reaction is over.
Gold Correction Is Over There is a strong probability that the correction in the price of gold has been completed. This article has four separate sections. They are: 1. The Elliott Wave (EW) justification for thinking that the correction in gold [...] Goldman Sachs: 5 Questions For 2012. Today’s focus article discusses what we see as the 5 most important questions facing the US economy in the coming year. First, will US growth pick up to an abovetrend pace? We think not. Underlying growth is probably considerably weaker than implied by our 3.3% tracking estimate for Q4 GDP growth; tight oil supplies act as a “speed limit” for global growth; fiscal policy remains a drag on [...]
Simon Johnson, MIT professor, and author of 13 Bankers, is interviewed by Russ Roberts, George Mason professor, and author of The Price of Everything. As always, there is much more to this interview than the few selected notes below. The full podcast is available via the link at the bottom of this post. On the financial sector: For 150 years – during the creation of the greatest economy the world had ever seen – finance was [...] by ZH With tonight’s multi-year record CNY fixing and trillions being flushed at maintaining an arbitrary JPY line in the sand, it seems appropriate to re-consider how to hedge a China hard landing and what probabilities various asset classes are assigning to it occurring. While many are pointing to what seems an entirely capricious level of 79.20 JPY to the USD as the ‘new normal’ being defended, we were curious at [...] “Absent deficit spending, we’re mired in the worst depression since the Great Depression,” observes Rob Arnott, “and the Fed may be making things worse.” We have negative real interest rates, and inflation rates in the range of 5%-7%. So, Arnott says, “if inflation kicks up another 1% or 2%… this creates some fairly serious downside risk for equities if the Fed continues on it’s current path.” With [...] kingworldnews.com With continued volatility in all the markets, King World News interviewed five time Graham & Dodd Award Winner, Rob Arnott, who oversees more than $80 billion as the Founder & Chairman of Research Affiliates. Rob sub advises the Pimco All Asset Fund and ETFs for the Schwab, Powershares and Nomura. When asked about what he sees happening with stocks and the economy going forward, Arnott stated, “When real interest [...] Dear CIGAs, The key element in this statement is “significant downside risk to the economic outlook” followed by “introduction of operation Twist, an ineffective strategy that will lead back to QE.” This is basically pro-gold, anti-dollar regardless of how the market has reacted. That is an undeniable reality as the accordion shaped chop in the price of gold continues. The third skier illustration is the final result [...] Gold’s “perfect storm” is expected to continue on renewed investor demand for haven assets, potentially driving the metal to its 1980 inflation- adjusted record, according to Morgan Stanley. The firm retains a positive view on gold for its role as portfolio insurance against a “formidable cocktail” of macro challenges including financial systemic risk, concern of a double dip recession and sustained low interest rates, [...] Graham Summers I’ve been warning that the markets were on the verge of another round of Deflation. By the looks of things, it’s here with the US Dollar breaking out of its massive wedge pattern.
The ultimate target for this pattern is the mid-80s. So consider this latest breakout the first leg up of a much larger move that will affect all other asset classes [...] - Trichet says “The Swiss Franc is not the Yen” |
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Impending Stock Market Crash: Time Is Short, Too Many Problems To Solve. The Fiscal Cliff Negotiations Are Failing. If US Can’t Avert Fiscal Cliff, Everything Will Collapse!
IMF Chief Christine Lagarde Warns U.S. of Worldwide Effects of Fiscal Cliff
from Guardian.co.uk:
International Monetary Fund chief Christine Lagarde has warned the US it has the potential to be its “own worst enemy” over the fragile economic recovery and that failure to reach a comprehensive settlement over the fiscal cliff could see growth plummet to zero.
In forthright comments over the impending fiscal cliff, the IMF managing director said that “if the US [...]