Investment Check List - 2010
02/02/2012 Marc Faber :Expecting Further Weakness In Emerging Markets (vs.
US Stocks) What we will have in 2012 is initially maybe some maybe further
weakness in emerging economies against the US market and then a major low in
emerging stock markets, including, India. I was looking for India to bottom out the
Sensex between 12,000 and 15,000 and we are getting there slowly.
01/01/2012 AFIRE : As for the top cities for foreign investment in 2012, New York
remained No. 1. London moved up to No. 2 from No. 3, swapping ranks with
Washington. Sao Paulo was fourth, and San Francisco moved up to No. 5 from No.
10 last year.
27/12/2011 Goldman Sachs' forecasts for 2012:
2012 U.S. real GDP up 1.8%, and global GDP up 3.2%;
2012 S&P 500 operating profits of $100 a share;
year-end 2012 S&P 500 price target at 1250;
2012 inflation of +1.7%; and
2012 closing yield on the U.S.10-year Treasury note at 2.50%.
06/12/2011 Marc Faber The market is likely to remain highly volatile, and fail
to make new highs
18/11/2011 Jim Rogers In 2002 it was bad, in 2008 it was worse and 2012 or
2013 is going to be worse still - be careful.
01/11/11 Paul Krugman The question I‘m trying to answer right now is how
the final act will be played. At this point I‘d guess soaring rates on Italian
debt leading to a gigantic bank run, both because of solvency fears about
Italian banks given a default and because of fear that Italy will end up leaving
the euro. This then leads to emergency bank closing, and once that happens,
a decision to drop the euro and install the new lira. Next stop, France.
It all sounds apocalyptic and unreal. But how is this situation supposed to
resolve itself? The only route I see to avoid something like this involves the
ECB totally changing its spots, fast.
13/10/2011 David Rosemberg David Rosenberg says, the letter of the day is
―D.‖ In a note to clients, Rosenberg said the next major economic theme that
stock investors will be dealing with is the ―D‖ word –deflation – and to plan
accordingly. Rosenberg is not always bearish about stocks, except that for
quite some time he‘s seen plenty of reasons to be so: anemic economic
growth, moribund housing and high unemployment. Don‘t expect consumers
to rally to the cash registers in that environment. Instead, Rosenberg says,
expect Americans to rally to the cash – as in a savings rate that approaches
high single-digits or even double-digits, which saps consumer spending.
To fight that headwind, companies cut prices and consumers, expecting
further price cuts, delay purchases – which only exacerbates deflationary
pressures. Inflation, the economy‘s traditional nemesis, is nowhere in sight.
In such an environment, investors would need to focus on income and
capital preservation, Rosenberg noted. Portfolios should reflect what he calls
S.I.R.P. – ―safety and income at a reasonable price.‖
Here‘s Rosenberg‘s ―buy‖ list: High-quality corporate bonds; stocks that pay
reliable dividends; traditionally defensive utilities, consumer staples and
health care stocks; agribusiness stocks, such as seed and fertilizer
companies, crop producers and farm-equipment makers, and gold GOLD.
26/09/11 Marc Faber Equity Markets & Gold Are Very Oversold
Both equity markets and gold markets have become very oversold, and I
think a rebound is occurring. Following this rebound, which I expect to get
underway this week, there will be a longer slowdown. - in CNBC
24/08/2011 Nouriel Roubini "relatório explosivo" escrito pelo economista
Nouriel Roubini sob o título de "Growth Model: The Rising Risk of a Harding
Landing After 2013".
Novamente, na Ásia, uma bomba atômica está prestes a estourar. E mais
precisamente na China.
Os signos deste arsenal atômico são vários: "altas taxas de investimentos",
"pouca participação do consumo na formação geral da demanda", "estatais
ineficientes", "artificialização do mercado de terras", "câmbio
ultradesvalorizado", "dívida pública na beira da irresponsabilidade",
"sistema financeiro na beira do precipício", "um país administrado e
subsumido a "interesses provinciais mesquinhos"".
23/08/2011 Doug Kass Is Everyone Too Bearish?
I continue to see a successful test between 1130 and 1150 on the
S&P 500 (above the lows of two weeks ago) with the following
buffers of support that could insulate the markets from further
declines: S&P futures and every $5 change in the price of gold. (Futures were down 4
handles then and are now up 18 handles!) These sort of idiotic things don't happen at or
anywhere near market tops; they occur at or near market bottoms.
http://www.thestreet.com/story/11228474/2/kass-is-everyone-too-bearish.html
22/08/2011 Jim Cramer says take today's rally as an opportunity to
sell tech and cyclicals.
10/08/2011 Doug Kass I made the case on "Fast Money" that
several factors have conspired to make me conclude that the U.S.
stock market might have hit a 2011 bottom on Monday
02/08/2011 Goldman Sachs The options market is
telegraphing warning signals for the stock market.
Goldman Sachs is telling clients that trading patterns in so-called
binary options -- which increase in value should the Standard &
Poor's 500 index fall by 10% over the next month -- are
telegraphing bearish signals.
29/07/2011 CHAPEL HILL, N.C. (MarketWatch) —
Bad news, stock-market bulls: Corporate insiders are
selling their companies‘ shares at an abnormally fast
pace.
In fact, one measure of that selling activity shows insiders of
NYSE- and AMEX-listed companies recently were selling at the
fastest rate since data began being collected in the early 1970s,
four decades ago.
19/07/2011 Gary Shilling A slow-growth decade is already raging. You feel
it everywhere. And it’s going to get worse, much worse. A recession is virtually
certain for 2012, in an angry, volatile presidential election year. May morph into a
1930’s-style depression. http://www.marketwatch.com/story/5-buys-5-sells-for-10-long-
years-of-no-growth-2011-07-19?pagenumber=1
That’s the clear message we get from Gary Shilling, one of the world’s foremost
economic forecasters, long-time Forbes columnist and author of ―The Age of
Deleveraging,‖ where you’ll find tips and warnings: The American economy is
facing a huge shortfall in the 2011-2020 decade. We need real GDP growth of at
least 3.3% just to keep unemployment stable.
As a result of the blunders by our fiscal and monetary leaders, the ―private and
public deleveraging will take years to complete and keep economic growth
subdued.‖ As a result, in coming decades ―recessions will be deeper and more
frequent.‖ Yes, worse
More and more consumers are shifting from a 25-year borrowing-and-spending
binge to a saving spree. This trend will spread across the globe. Why? Because
American consumers will import less from developed and emerging nations that are
dependent on exports for economic growth.
Financial deleveraging is already reversing economic trends that financed much of
the world’s new growth in recent years.
Developed countries in Europe and others are moving toward fiscal restraint and
spending less.
Throughout the world, increased government regulations and involvement in major
economies will reduce innovation and increase economic inefficiencies.
Nationalism and protectionism will also slow, possibly eliminate, economic growth
throughout the world.
Declining commodity prices will further limit consumer spending by commodity-
producing nations across the world.
Excessive inventories and reduced interest from investors will continue to suppress
an already weak housing market.
Deflation will cut spending as buyers wait for lower prices and negotiate harder.
State and local governments across America are losing revenues, cutting services.
But perhaps most of all, certainly impacting everything, the extreme, accelerating
irrationality driving our angry political wars will undermine an already stagnant
economy … until a 1930s-style crash takes down the American economy.
Investment opportunities: What should you buy? Sell?
So where can you put your money in this increasingly unstable world? First, let’s check out
the bad news. Five risky “sells.” Then we’ll look at Shilling’s recommendations: Five-plus
“buys” extracted from his recent Insight newsletter and “The Age of Deleveraging,”
opportunities for the 2012 recession and the slow-growth decade, 2011-2020.
1. Emerging nation stocks. Warning: Behind the smiles, American banks, brokers and
financial advisers are running scared. They can’t find enough solid domestic companies, so
they’re frantically chasing higher returns in risky, unstable emerging nations all across the
planet. Sound familiar? Yes, this is an exact repeat of the build-up to the 2008 meltdown,
when Wall Street chased subprime derivatives off a cliff. China’s the biggest risk out there,
a new Humpty Dumpty headed for a great fall.
2. Sell commodities. This bubble’s blowing big, will pop. Commodities are not an asset
class for your portfolio. They’re a gambler’s bet taking you off your game. In the coming
years of weak demand, expect excessive capacity and soft prices. China is buying up long-
term supplies across the world, playing games, speculating, living dangerously.
3. Sell U.S. major and regional banks. Regulation uncertainty. Taxes. Gridlock. Huge
impact on capital. Vulnerable: Fannie, Freddie, regionals, community banks. In next four
years bank portfolios have $800 billion more mortgages coming due, majority underwater.
4. Sell your house, second home or single families investment realty. Most families have
the bulk of their net worth and retirement funds tied up in their home equity. That’ll hurt
Americans as underwater mortgages increase from 23% to 40% of the national total.
Shilling’s been warning of this for a long time: If you do plan to sell any time soon, do it
now, before inventories depress prices another 20%.
5. Sell home builders. Our disastrous housing market says sell builders, sell, sell.
Now what should you buy? Shilling highlights several key areas of investment opportunity
to counterbalance the risks and insanity driving the above sell suggestions:
6. Income-producing stocks. The stock market’s gone nowhere for 12 years, says Shilling.
Inflation-adjusted returns say Wall Street’s a loser. Buy direct or ETFs. Pick selective
income-producers: utilities, drugs, telecoms, high-grade munis, preferreds.
7. Treasury bonds. America is the long-term winner. Yes, banks, brokers and stockholders
may hate them. But this is your safe haven in the coming deflationary storm. Long
maturities. Zero-coupons. Lower commissions. Trust in America.
8. The American dollar. The American dollar is as good as gold in a vast sea of risky
black-swan currencies, and that includes China’s yuan. Have faith, the almighty dollar will
continue strong. Bet on ETFs, futures, the index.
9. Rental apartments. The American dream of homeownership is a nightmare thanks to a
depressed housing market. REITs are overpriced. Rental properties are looking real
attractive.
10. North American energy. America has a new national policy: Reduce dependency on
foreign oil. And since there’s never enough, the future for American energy is bright.
Want more? Read Shilling’s “The Age of Deleveraging.” He has detailed lists of buys and
sells in many sectors: Health care’s 16% of GDP. Going up. Medical office buildings solid.
Food and other consumer staples. You gotta eat, wash clothes. Also small luxuries that
folks indulge no matter what. And more. Check out his book:
“Some of these are already unfolding. Others may do so only in future years.” Either way,
Shilling’s lists are guaranteed to “help you prepare for the investment climate over the next
decade.” Buy it. Read it. Whether bull or bear, optimist or pessimist, “The Age of
Deleveraging” is essential if you want to be prepared for a volatile, risky, dangerous 2011-
2020 decade dead ahead.
04/07/2011 Marc Faber We Can Rally To 1330, But August, September-
October Will Be Rough Months
I think we can rally to around 1,330 on the S&P now, but not make a new high
above the 1,370 highs, which we saw in May. And then, in my view, we would be
going down to maybe 1,150 on the S&P.
23/06/2011 Marc Faber The S&P 500 Has Made Its High For The Year
―I think we’ve seen the high for the year (on the S&P 500 Index)‖ - in Bloomberg TV
11/06/2011 Roubini Sees Troubling Outlook 2013 For Global Economy
The New York University professor that foresaw the financial crisis has warned
that the global economy is facing a ―perfect storm‖ of headwinds that will
significantly slow growth around the world, according to Bloomberg. Nouriel
Roubini warned at a speech in Singapore on Jun. 11 that the U.S. fiscal crunch,
European debt woes, and stagnant Japanese economy following the earthquake
and tsunami have created a one-in-three chance for stunted global economic
growth by 2013. Roubini said, ―There are already elements of fragility,‖ adding, ―All
these problems may come to a head by 2013 at the latest.‖
Roubini forecast that the global economy might see slower growth in the second
half of 2011 due to ―deleveraging,‖ the withdrawal of fiscal stimulus measures, and
sagging confidence. In particular, the professor warned that the U.S. could face a
bond market ―revolt‖ should leaders fail to sufficiently address the budget deficit.
Roubini also highlighted the need for the rapid creation of a comprehensive plan
for debt-burdened European sovereigns to avoid a ―disorderly‖ resolution, and
warned China about increased reliance on fixed investment.‖
27/05/11 Jim Cramer Time to Put Your Money in the Banks
04/05/11 Marc faber Expecting a 20 Percent Plus Correction In The
Metals Complex. That Trade Is Too Crowded.
The markets are due for a correction and the technicals point to a weak market. In
particular, Faber points to the decline in new 52 week highs as evidence of an unhealthy
internal market.
Right now, Faber would stay away from cyclicals, tech stocks, and banks. If you have to
own stocks make sure it is something safe like consumer staples (MO, JNJ, PEP, KO, etc).
04/05/11 Jim Cramer no reason to invest in financials
25/04/11 Navellier : So this means that if history repeats itself, we
may have smooth sailing through July. Any consolidation around
mid-August, or whenever it arrives, could be a great buying
opportunity.
25/04/11 (TheStreet) - - Jim Cramer believes that by year end the
market can add another 12-13%.
And the big picture is simple.
>>> Ben Bernanke is going to do what is necessary to keep the
economy afloat until housing and employment are stronger.
That's his real mission right now. It is NOT to try to get the price
of oil down or defeat the price of corn or lower copper's price tag.
18/04/2011 Cullen ―An end to global monetary policy easing is on
the horizon, with the US Federal Reserve set to signal it will cease
asset purchases at the end of June.
When the rate-setting Federal Open Market Committee meets
on April 27, it is unlikely to limit its options by ruling out asset
purchases beyond the second $600bn ―quantitative easing‖
programme – or ―QE2‖ – that is due to finish by the end of the
second quarter.‖
While the credit ratings agencies are stealing the headlines this is
the more important story today. If the QE2 trade is ending today‘s
market action is fairly consistent with what I would expect to see.
Equities are falling, bonds are rallying and the USD is rallying.
This is not even remotely consistent with concerns over a
sovereign debt problem in the USA. What this is consistent with,
is the end of the QE2 trade. As I stated last week, the US dollar
will be the primary tell for the end of the QE2 trade. Today‘s rally
in the dollar is sending a loud message. Clearly, it‘s unwise to
extrapolate from one day‘s market action, but as we inch closer to
June the market is likely to become more volatile and these
signals are going to become more pronounced.
13/04/2011
April 11, 2011 Jim Roger
I'm not planning to sell my Chinese shares ever
I only like to buy China when it collapses and it hasn't collapsed in nearly two years. My
children are going to own my Chinese shares. I'm not planning to sell my Chinese shares
ever. - in CNBC
Related: China Mobile Ltd. (ADR) (NYSE:CHL), iShares FTSE/Xinhua China 25 Index
(ETF) (NYSE:FXI), China Petroleum & Chemical Corp. (ADR) (NYSE:SNP), China
Life Insurance Company Ltd. (ADR) (NYSE:LFC), PetroChina Company Limited (ADR)
(NYSE:PTR), Morgan Stanley China A Share Fund, Inc. (NYSE:CAF), Aluminum
Corp. of China Limited (ADR) (Public, NYSE:ACH)
04/04/2011 FED: he comments suggested the Fed chief is
committed to completing a $600 billion stimulus program as
scheduled in 30 June, despite calls from some of his colleagues
to consider cutting the effort short in light of an improving
economy.
31/03/2011 GOLDMAN: 3 REASONS ASIA EX-JAPAN WILL RISE
28% BEFORE YEAR END
09/02/2011 Faber remains very bearish on emerging markets in
general (Brazil, India, etc). He notes that many failed to make new
highs in January, despite favorable market conditions, which
could indicate a major top in some emerging markets. Faber
thinks emerging markets could fall between 20-30%. In fact, this
would be a great buying opportunity for investors."
18/01/2011 BlackRock Sees Oil Hitting $120 Per Barrel, Stalling
Economy ( Coal and Natural Gas and OIL ) sell if price reach
2008 peach
18/01/2011 Marc Faber Inflation is on the rise in emerging markets, and that
makes the United States and Europe better investment opportunities in 2011, says
Marc Faber, editor of the Gloom, Boom and Doom Report.
Rising food and energy prices will cause trouble in countries like China and India, he tells
CNBC.
“We have money printing around the world, and that has led to very high food inflation and
inflation in energy prices," Faber points out. "In low-income countries like China, India,
Vietnam and so forth, energy and food account for a much larger portion of personal
disposable income than in the United States."
The upshot: "These countries are suffering from basic high inflation, and that reduces the
purchasing power of people,” he says. “So I think the monetary authorities in emerging
countries are going to have to tighten or let inflation accelerate, both of which are not
particularly good for equities."
Faber recommends buying oil, which he believes will rise regardless of what happens in the
global economy. "You should own some oil and energy equities."
Not everyone agrees with him that emerging markets will suffer.
“Although the price rises will definitely hurt emerging Asia, it is probably one of the best-
placed regions to shrug them off,” Matt Parry, senior oil consultant at KBC Process
Technology, tells Marketwatch.
Read more: Faber: Inflation in Emerging Markets Makes US, Europe Better Bets
17/01/2011 David Rosemberg
STILL VALUE IN BONDS
- First, all the bad news is already out there ― that is almost
always the case when the WSJ runs with a headline like Pimco‘s
Bond Fund Pares U.S. Holdings as it did on page B7 of the
weekend WSJ. Treasuries are down to a 22% share of the Total
Return Fund, close to a two-year low and down from 30% in
November. So Bill Gross has probably done all the selling he‘s
probably going to do.
- Second, Ben Bernanke is another key buying source, at least
through June.
- Third, consensus economic growth upgrades have probably
gone too far or at the least have likely peaked.
- Fourth, sentiment towards bonds in general is extremely
negative.
- Fifth, the University of Michigan survey showed that long-term
inflation expectations have not budged despite the surge in food
and energy prices ― they remained stable at 2.8% in January.
-Sixth, core inflation remains very close to zero ― prices were up
by less than 0.1% MoM in December and the three-month trend is
just 70 basis points away from outright deflation.
17/01/2011 Zulauf: ―The market will range between 10% up and
10% down.‖
Faber: ―I expect to see the market move up and down at least 20%
this year, as it did in 2010.‖
The era of spending-beyond-our means denial is on its last legs
The case for classic long-short hedge fund strategies is
compelling if these two pundits are anywhere close to being right.
14/01/2010 Jim Rogers Gold is ―overdue for a rest‖ and probably will
fall after a decade of gains that sent prices to a record, said Jim
Rogers, the chairman of Rogers Holdings who predicted the start of the
global commodities rally in 1999.
While gold ―may go down for awhile,‖ the metal is ―going to go over
$2,000 in this decade,‖ Rogers, who owns gold, silver and rice, said
today during a presentation to business executives in Chicago. Gold
touched a record $1,432.50 an ounce in New York on Dec. 7. The
price closed Thursday at $1,387.
―I’d rather own rice,‖ Rogers said. ―I’d rather own something that’s
more depressed than gold.‖
Agricultural commodities are ―going to boom‖ as demand increases in
developing markets, primarily in Asia, he said. All commodities will be
supported by the weakening dollar, which is losing value because
Federal Reserve Chairman Ben S. Bernanke is ―printing money‖ by
buying Treasuries in an effort to shore up the U.S. economy, Rogers
said.
―Paper money is made of cotton, and I’m long cotton, by the way,‖
Rogers said. ―One reason I’m long cotton is because Dr. Bernanke is
out there running the printing presses as fast as he can.‖
Rogers said he doesn’t own shares in U.S. companies and is short
U.S. long-term treasury bonds. The Chinese renminbi may provide
―almost sure profits over the next five to 10 years,‖ he said.
―In the future, it’s the stock broker who’s going to be driving the cabs,‖
Rogers said. ―The smart stock brokers will learn to drive tractors, and
drive them for the farmers, because the farmers will have the money.‖
03/01/2011 Faber believes a correction is imminent for the stock
market as bullish sentiment (AAII sentiment) nears record levels
and mutual fund cash positions remain very low. Furthermore, the
latest upward move in stocks has occurred on declining volume,
which is usually bearish from a technical point of view. The
correction should occur in January. That being said, you should
be buying into the correction as it represents a good buying
opportunity. Faber prefers energy companies and speculative
stocks such as home builders and even AIG. He goes on to say
that the third year of a Presidential cycle is very good for
speculative stocks versus traditional blue chip value plays." - in
Commodity Online
01/01/2011 BOB DOLL
1. Crescimento dos EUA acelera-se, enquanto PIB (Produto
Interno Bruto) real atinge maior patamar histórico
2. Economia norte-americana cria entre 2 milhões e 3 milhões
de empregos em 2011, enquanto desemprego cai para 9%
3. Mercado acionário registra pelo terceiro ano consecutivo
retorno percentual de dois dígitos, com ganhos atingindo maior
nível já registrado
4. Ações superam câmbio e títulos
5. Mercado acionário dos EUA supera MSCI World Index
6. EUA, Alemanha e Brasil superarão performance de Japão,
Espanha e China
7. Commodities e moedas de mercados emergentes superarão
dólar, euro e iene
8. Fortes resultados e fluxos de caixa proporcinarão ganhos
significativos com dividentos, recompras de ações, fusões e
reinvestimentos
9. Fluxo de investimento migrará de títulos para ações
10. A campanha presidencial de 2012 para o governo dos EUA
registrará um excesso de candidatos republicanos enquanto o
presidente Obama continua a se mover para o centro
03/01/2011 GoldmanSachs Hazius Benchmark 10-year U.S. yields
will climb to 3.75 percent by year-end, Goldman economists led
by Jan Hatzius in New York wrote in the report yesterday, from
3.29 percent now.
The rate will advance to 4.25% by the close of 2012, according to
Goldman, which is one of the 18 primary dealers authorized to
trade directly with the central bank.
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24/12/2010 Gulf CEO: Oil May Near $150 a Barrel by Summer
21/12/2010 Roubini and Greenspan US to grow 3% in 2010
Greesnpan positive about Stocks
17/12/2010 PINCO Gross Puts $17 Million of Own Money Into Bond
Funds After Drop ( inverse of ETF: TBT)
15/12/2010 Citigroup: Dollar May Drop 11 Percent in 2011 as
Treasurys Fall
The dollar may drop 11 percent versus the euro next year as investors shun U.S. assets and
drive bonds lower, according to Citigroup Inc.
―It‘s a bearish U.S. asset dynamic led by the bond market,‖ Tom Fitzpatrick, chief technical
analyst, said in a telephone interview. ―This period has a set-up that is amazingly like what
we saw in the ‗70s, and is similar to what we saw around 1993.‖
The dollar will follow trading patterns from the 1970s, when the housing market experienced
a decline similar to the recent drop, and the 1990s, which also saw a slump in the bond
market, technical analysts led by New York-based Fitzpatrick wrote in a note to clients. U.S.
two-year yields doubled from a low of 3.7 percent in September 1993 to a high of 7.7 percent
in December of 1994, pushing bond prices lower.
The greenback will follow Treasurys lower next year as investor concern mounts the
housing-market recovery will remain constrained and as the Federal Reserve pumps $600
billion into U.S. debt to help a slowing economic recovery, they wrote. Two-year Treasury
notes fell two basis points today to 0.63 percent.
The dollar rose 0.5 percent today to $1.3312 and has gained 7 percent versus the euro this
year.
The analysts project an 8 percent decline next year for the Dollar Index, which
IntercontinentalExchange Inc. uses to track the greenback against the currencies of six
major U.S. trading partners including the euro, yen and pound. The index is up 2.4 percent
this year.
The housing industry has remained near the depths reached during the recession. Housing
starts fell to a 519,000 annual rate in October, the fewest since a record low reached in April
2009.
The euro has dropped this year as member nations struggle to finance budget deficits and
contain a struggling banking sector. Greece and Ireland have both tapped into a near-$1
trillion rescue fund set up by the European Union with backing from the International
09/12/2010 BlackRock: Tax Deal to Push More Cash Into Stocks,
Out of Bonds
U.S. stocks will win investors' favor over Treasurys in 2011 as the
U.S. economy outperforms developed-market peers, and a tax
deal between the White House and Republican leaders will be
icing on the cake, BlackRock's chief equity strategist said.
Bob Doll, who helps manage more than $3.3 trillion in assets, told
the Reuters 2011 Investment Outlook Summit the deal to extend
the Bush-era tax cuts will "accelerate" the move of cash into
equities and out of fixed income.
29/11/2010 The downside to stocks might be contained to the
1,140-1,150 area on the S&P, and the upside might be limited to
1,240-1,260 through the end of the first quarter of next year. While
the downside and upside predictions are revisions from my
previous expectations, this is still a relatively narrow projected
trading range, with a downside risk of 3% to 4% and an upside
reward of 5% to 6%.
13/10/2010 D Rosemberg SOME SECTOR SCREENS
While getting the asset mix right is always extremely critical, so is
getting the sectors right within the equity allocation. With this in
mind, what makes sense is to own the sectors that have this
combination of characteristics:
1.Low correlations to the sluggish U.S. economic growth profile.
2.High correlations to the stronger emerging market
growth profile.
3.Comparable or better dividend yield than you can get in the
bond market.
4.Below average P/E ratios in the search for relative value.
The sectors that stand out as possessing the best attributes after running screens on the
above-mentioned factors (for both Canada and the United States) are Staples, Health Care
and Energy, followed closely by utilities. The sectors that screened poorly were Industrials,
consumer discretionary and financials.
29/09/2010 John Paulson It could be time to sell your low-
yielding bonds and replace them with higher-yielding common
stocks.
Multibillionaire hedge fund operator John Paulson, the investment
genius who made a killing going short subprime mortgages a few
years ago, told a standing room only crowd at New York‘s
University Club that double-digit inflation is about to rear its ugly
head by 2012, killing the bond market, and restoring strength to
equities and gold.
Paulson‘s warning to sell U.S. government bonds is one of the
latest signs that the most successful investors of this generation
believe the run up in bonds is over. Paulson especially
underscored the attraction of equities with earnings yields of 7%-
8% compared to the 2.6% pittance available on 10-year
Treasuries.
Paulson listed his favorite blue-chip stocks; JNJ (Johnson&
Johnson) at a 3.8% yield; KO(Coca Cola);PFE, 4% yield., as well
as C (Citigroup), BAC (BankofAmerica) and STI (Suntrust Banks)
and RF (Regions Financial).
Paulson is a pro at buying the distressed bonds of bankrupt
companies, and then converting the debt to equity in
reorganization and benefiting from the potential run up. He
mentioned one of his greatest plays — K-Mart, which emerged
from bankruptcy at $10 a share and then skyrocketed to $190 a
share.
His crystal ball is for 2% GDP growth for 2011 and 2012 and he
warns that the Fed‘s promise of quantitative easing should
contribute to double-digit inflation over the next few years.
As this is the best time in 50 years to buy homes, Paulson
advised his listeners, crowded into 3 separate dining rooms, to
issue 30 year mortgages to buy a home as ―your debt and interest
payments get locked in at record lows, while the price of your
home will rise.‖
―If you don‘t own a home buy one,‖ Paulson recommended; ‖ if
you own one home, buy another one, and if you own two homes
buy a third and lend your relatives the money to buy a home.‖
27/08/2010 Paul Krugman The important question is whether
growth is fast enough to bring down sky-high unemployment. We
need about 2.5 percent growth just to keep unemployment from
rising, and much faster growth to bring it significantly down. Yet
growth is currently running somewhere between 1 and 2 percent,
with a good chance that it will slow even further in the months
ahead. Will the economy actually enter a double dip, with G.D.P.
shrinking? Who cares? If unemployment rises for the rest of this
year, which seems likely, it won‘t matter whether the G.D.P.
numbers are slightly positive or slightly negative.
23/08/2010 Doug Kass 1020 – 1150 (roughly between 11x and 13x
2011 S&P EPS forecasts) The U.S. stock market has already
discounted a recession/double dip. And the notion of secular
headwinds has been recently adopted by the consensus and has
contributed to a weak equity market.
Domestic economic and stock market expectations are low.
While a number of risk metrics and risk markets have improved,
equities still lie near the bottom of a projected trading range.
Stocks are especially attractive relative to interest rates, and an
extended period of underperformance against fixed income has
soured both hedge funds and retail investors toward equities.
It is time to fade the growing negative consensus and adopt a
variant view by becoming more constructive on stocks
16/agosto/2010 Analise PragmaticCap So, the problem with the
US economy is quite simple really – the labor market is unlikely to
recover until the problem of debt is alleviated. Based on my
research I think it‘s safe to say that the de-leveraging cycle is
likely to last at least into 2012 and that means tepid job‘s growth
is likely to persist. And that ultimately means tepid economic
growth. David Rosenberg is certainly right about one thing – this
recession never ended. Unfortunately, most people (specifically,
those in government) fail to understand that this is not your
typical recession – this is a balance sheet recession and debt
remains the largest impediment to sustained economic recovery.
20/julho/2010 D. Rosemberg Market is 20% overvalued .More
fundamentally, it would seem reasonable to expect that the equity
market will trade down to a valuation level that is historically
commensurate with the end of secular bear markets. This would
typically mean no higher than a price-earnings multiple of 10x and
at least a 5% dividend yield on the S&P 500. So, we very likely
have quite a long way to go on the downside.
But it will not be a straight line and there will be intermittent
rallies, as we experienced a year ago April; however, not even that
80% bounce off the lows managed to violate any of the long-term
trend lines, which continue to portray a primary bear market, not
unlike what we endured from 1966 to 1982. Back then the
principal cause was an inflationary spiral; this time it is a
deflationary debt deleveraging that is the root cause. Within the
next 12 to 18 months, I can see the S&P 500 breaking back below
900, and a substantial test of the March 2009 lows cannot be ruled
out.
16/JULHO/2010 Doug Kass I now view the risk/reward for equities
to be roughly in balance, with an anticipated 2010 S&P range of
1,025-1,150 over the remainder of the year.
13/julho/2010 Bob Doll, Chief Equity Strategist at BlackRock, is
still confident in his bull market thesis despite the recent turmoil
in markets. In Monday‘s strategy note Mr. Doll says the odds of a
double dip are still very low:
07/julho/2010 Doug Kass: We Have Reached The Low For The Year
"We have reached a yearly low for the market for the year. This business is
going to be fun again and it's going to happen sooner than most people
think.
29/june/2010 Trade Shares of Tesla Motors Inc (TSLA) rose 12
percent to $19 in their trading debut on Tuesday, a day after the
company priced its initial public offering above the expected
range.
24/june/2010 Doug Kass The S&P will earn approximately $90 a
share in 2011, so U.S. stocks sell at only 12 times vs. a
multidecade average of 15.3 times and at over 17 times during
comparable periods of quiescent inflation and interest rates.
S&P range of 1,050 to 1,180, implying 11.5 times at the low end
and 13.1 times at the high end off next year's $90 a share S&P
forecast.
22/june/2010 Meredith Whitney‘s macro outlook remains quite
negative. She believes austerity in the USA will lead to a ―very
rough second half‖. In terms of the jobs market she says
unemployment is likely to remain high as structural problems in
the private sector persist. Whitney believes the banks are
―zombies‖ that are still loaded with non-performing loans. In
addition, Whitney says the bank balance sheet problems could
deteriorate as she sees an ―unequivocal‖ double dip in housing:
22/june/2010 Jim Roger We're certainly going to have another
recession in the next two or three years. We've had recessions every
four to six years since the beginning of time. So by 2012, we're getting
ready to have another one, if history's any guide. I suspect it will
happen before then, because there are still so many imbalances in the
world which have to be sorted out.
22/june/2010 David Rosemberg
DOUBLE DIP, ANYONE?
The data suggests that we are now seeing the consumer sputter with
what looks like a very weak handoff into the third quarter. The housing
sector is collapsing again. The export-import data are pointing to a
sudden deceleration in two-way trade flows. Commercial real estate is
dead in the water. Bank credit is in freefall right now.
12/june/2010 Trade Doug Kass trading range S&P 1040-1150
08/june/2010 Trade - Bloomberg
Are Option Prices Signaling A Rally?
―When bearish puts cost 50 percent more than bullish calls, the
S&P 500 rallied 28 times during the next six months and declined
6 times, according to OptionMetrics data going back to 1996
compiled by Bloomberg. The biggest gain started in November
1997, when the index rose 18 percent and the premium increased
to 54.1 percent, data show. The S&P 500 plunged 35 percent after
the skew reached 50.2 percent in June 2008.‖
02/june/2010 Bridgewater Associates
Why the printing of money won't cause inflation?.
The printing of money will offset the deflation that is coming from
the weak demand for goods and services due to weak credit
growth. For example, in March of 1933 the U.S. printed a whole lot
of money, and that had the effect of converting deflation into
modest inflation, but not a high rate of inflation.... My point is, in
developed countries there is too much of most things at the
moment, and that's creating a deflationary environment. There is
too much manufacturing capacity. There is too much labor. There
is too much housing stock. As Europe's economy weakens and
its debt crisis worsens, the printing of money does not mean that
it will produce an accelerating inflation because simultaneously
there is also less being purchased, and the surpluses are already
causing deflationary pressures. That is why, contrary to almost
everybody's belief, I believe the bonds in countries that can print
money will be good investments.
02/june/2010 Bridgewater Associates
Portfolios position
Our portfolio is mostly skewed to Treasury bonds, gold and
emerging-market currencies, especially Asian currencies. We also
hold commodity assets that are limited in supply and that high-
growth emerging countries need. I want to minimize my exposure
to the major developed countries' currencies -- the U.S. dollar, the
euro, the British pound and the yen -- because those countries
have a lot of debt, and they are going to need to print more and
more money and will have more sluggish growth rates. I prefer the
yen to the others.
31/may/2010
Ray Dalio, Chief Investment Officer, Bridgewater Associates
Are you suggesting we will experience something of the
magnitude of 2008-09?
No, that won't be allowed to happen again, although, inevitably,
there is another recession out there. It will probably come sooner
than most recessions do. Usually, there is about five years
between recessions, but for various reasons related to the size of
the debt, the next recession is going to come sooner. We are in
the equivalent now of a quantitative easing-induced cyclical
recovery. But it is a fragile recovery, and credit growth is not
picking up very much, and it goes back to the fact we still have
too much debt. We have not reduced our debt burdens in any way
significantly. What we've done is to largely roll them to the vicinity
of 2012 to 2014. Corporate balance sheets are much, much better
because they extended the maturities of their debt and slashed
expenditures by laying off workers. I would be shocked if we saw
new lows in the economy, but you can't go to new highs anytime
soon, either.... The average American's net worth is less, and
incomes are less and so the amounts they can leverage will be
less -- so for a long time spending rates will be less than they
were at the peaks.
31/may/2010 Nouriel Rubini
A sovereign debt crisis in the euro zone .
European Union-International Monetary Fund rescue plan could
stifle already hobbled global growth.
In contrast, some emerging markets risk overheating and are
showing symptoms of a potential asset bubble.
"Labor market conditions will remain very weak in some
advanced economies,"
"Savings will have to rise faster than consumption for the coming
years. That is why growth will remain anemic,"
The global economy struggled with a credit crisis in 2008-2009,
and investors worry that the fiscal crisis in the euro zone could
hamper growth in advanced economies, which only recently
began to recover.
RED-HOT
In contrast to sluggish growth in advanced economies, the risk
for emerging markets is overheating and asset bubbles.
Record-low interest rates in advanced economies last year
pushed investors toward higher-yielding emerging markets so
quickly that countries like Brazil slapped a tax on capital inflow to
avoid an overvaluation of their currency.
Interest rates in advanced economies would remain close to zero
for a longer time, Roubini added, and it was time for emerging
markets to remove economic stimulus to avoid forming an asset-
price bubble.
There is also a risk that economies would overheat in the so-
called BRIC countries.
To be able to grow at more than 6 percent a year without fueling
inflation pressure, Brazil would have to boost its infrastructure,
improve business conditions and implement structural reforms.
Brazil's economy is expected to grow 6.47 percent this year,
according to the latest weekly central bank survey of local
financial institutions.
Economists in the survey, however, kept their forecast for
benchmark inflation steady for the first time in almost five
months, betting the IPCA consumer index will close the year at
5.67 percent.
China's economic outlook, Roubini said, was full of mixed
signals.
High inflation was a worry and there were signs of an asset
bubble forming, he said. But steps by the Chinese to cool the
economy could also be counterproductive, posing an additional
obstacle to already sluggish global economic growth.
29/may/2010 Ray Dalio - Bridgewater Associates' Bearish
between now and 2012, the economy will probably go down again,
and it will be important for monetary policy and fiscal policy to be
able to be stimulative, and for the Federal Reserve to be able to
purchase assets again.
I would be shocked if we saw new lows in the economy, but you
can't go to new highs anytime soon, either.... The average
American's net worth is less, and incomes are less and so the
amounts they can leverage will be less -- so for a long time
spending rates will be less than they were at the peaks.
Europeans are faced with the same three choices we were facing
in dealing with debt -- print money, redistribute money, or
restructure, there is a risk here that the Europeans will not move
decisively or quickly enough.
Spain, for instance, has to roll over 40% of its external debt, which
is about $700 billion to roll over, and because it is running a
current-account deficit, it actually has to borrow more than that,
which is almost another $80 billion. Just the government has to
roll over about 20%, or about $125 billion. Spain will have to
borrow more than it has ever borrowed before in the next year at
the same time as people's inclination to lend to Spain is reduced.
The government debt of all the peripheral countries in the euro
zone that has to be rolled over in the next three years is the
equivalent of $1.9 trillion, and that doesn't include the private-
sector debt.
It will be painful for Europe for 10 years in the way it was to Latin
America and Japan. The British will happily say, "Thank God we
have never joined the euro zone." The English also have way too
much debt, but they have an independent currency and can print
money and avert a debt crisis. Debtors with no ability to print
money are the ones in trouble.
But China has made some attempts to tighten.
Yes, they are moving to tighten without significantly changing interest
rates. They are raising reserve requirements and they are imposing
administrative controls, essentially trying to limit bank lending. They are
trying to control credit, but they are having a problem controlling the
creation of money. The risks of tightening increase as time passes.
They will, in one fashion or another, tighten more and more. But I don't
think there will be a major change in the exchange rate, even though it
is in their interest.
Our portfolio is mostly skewed to Treasury bonds, gold and emerging-
market currencies, especially Asian currencies. We also hold
commodity assets that are limited in supply and that high-growth
emerging countries need. I want to minimize my exposure to the major
developed countries' currencies -- the U.S. dollar, the euro, the British
pound and the yen -- because those countries have a lot of debt, and
they are going to need to print more and more money
I believe the bonds in countries that can print money will be good
investments.
The printing of money will offset the deflation that is coming from the
weak demand for goods and services due to weak credit growth
27/may/2010 David Rosemberg Gold — we still see $3,000 per
ounce and believe this to be a rather conservative forecast.
26/may/2010 John Murph Support Chart
1st buy 1060 …. 2nd buy 950 …. 3th buy 870 David Rosemberg buying at 920
21/may/2010 David Rosemberg MARKET THOUGHTS
The equity market is technically oversold right now and is due for a
near-term bounce, but that would be a rally that I would fade if we
see it. There has been too much of a rupture to ignore with the S&P
500, Dow and Nasdaq all closing below their 200-day moving
averages (fist time in almost a year for the Nasdaq).
On average, corrections that take place after such a massive
move up from a depressed low is 20%, which would mean that
we could expect to see the S&P 500 still test the 970 level; with a
prospect of a second-order Fibonacci retracement implying a move
below 950. Remember that before the last big leg up in the market
last summer, the S&P 500 was hovering around the 920 level,
which is my target to begin getting interested again.
if you want to be early at calling the low, a test of the 870 to
975 range would be your band in which to scale back in.
Two critical data points to watch for — the May 6 flash-crash
intraday low of 1,065 on the S&P 500, followed by the 1,044.5 low
on February 5. If these don’t hold, and the bulls need these levels to
hold, then another leg down to or through the 950-970 levels is
likely.
To turn bullish, we would need to see Libor-OIS spreads begin to
narrow again, corporate spreads tighten, and stability in the euro.
That would be important signals from the other asset classes.
Technically, it would be encouraging to see two big up-days in the
stock market with large volume — we need a follow-through with
huge participation. It would also help if market sentiments swung
towards the bearish camp — believe it or not, the most recent
Investors Intelligence survey has the bulls at 43.8% and the bears
at 24.7%. At the lows, we would expect these numbers to be
reversed.
19/may/2010 Marc Faber Very Likely That The Rally Has Come To
An End : It is very likely that the rally, which originated in March 2009,
has come to an end and that a correction of 20 to 30 percent from
the recent highs will follow.
18/may/2010 Meredith Whitney: Avoid Banks At All Costs
Unless real focus is afforded to re-engaging small businesses in this
country, we will have a tragic and dangerous unemployment level for
an extended period of time. Small businesses fund themselves exactly
the way consumers do, with credit cards and home equity lines."
"Some of these regulatory proposals are going to make it so difficult for
everyone involved that you'll see, I think, at least another 1.3 trillion
dollars of credit sucked out of the system. It's going to make accessing
capital so difficult for pockets of the country, particularly for small
businesses that often depend on credit cards for funding."
Investors should avoid financials at all costs, because the Senate's
financial reform bill will end up restricting credit and hurt bank earnings,
Meredith Whitney told CNBC. Whitney added European banks are in
even worse shape than their US counterparts
18/may/2010 The trade:UNG Buy a close above resistance and
place a percentage stop below the 50-d moving average. The pattern
projects a measured move to $8.75, but a successful break from this
base could generate a long-term advance.
13/may/2010 Marc Faber: The Next Crisis Will Really Shake The System
"The next big crisis will really shake up the system. But the next crisis may
be coming in 5 to 10 years time. And between if you print enough money,
markets could go up very strongly."
11/may/2010 (Reuters) - Intel Corp expects annual earnings growth to
double over the next few years, bolstered by an expected 15 percent to 16
percent expansion in the global personal computer market
10/may/2010 TEUN Draaisma turns bullish : He thinks we have now
had the correction – the MSCI Europe index was down 13 per cent last
Friday from its mid-April peak – and on a 12-month view its time to turn
bullish.
We think we are in a cyclical bull market for equities, because we
are optimistic on earnings growth, driven by EM, US and corporates.
We are bearish on European GDP growth, especially in the periphery,
but European earnings are a play on global growth. We recognize
there is a risk that the cyclical bull market has ended, if the sovereign
crisis leads to a double-dip for European earnings next year. This is not
our current view, and our EGLI (earnings growth leading indicator) is
predicting 59% earnings growth for the next 12 months, while MSCI
Europe now trades on 10x 2011 IBES PE. Our target of 1280 implies
20% upside and 13x PE, 10% below the long-term average of 14.5x.
We view this correction as a buying opportunity.
We believe the secular bear market is incomplete for a variety of
reasons, including that banking crises and bailouts tend to precede
widespread government debt crises; that the amount of debt has not been
reduced yet (it only changed hands to the government, and now it is moving
between governments); that equity valuations never reached end of bear
market levels; and our historical analysis that equities tend to struggle for
longer in the aftermath of secular bear markets. When the next earnings
recession hits, perhaps in 2012, we expect equities to complete
the bear market that started in 2000. But timing is everything, and
for now we expect positive earnings growth as well as the cyclical
bull market to persist.
06/may/2010 Nouriel Rubini "The markets are going to be bumpy
and very volatile," Roubini, roubini.com chairman and a NYU professor,
said by phone. "Investors need to hedge themselves against risk and
stay more in cash in the event of a sharp market correction." "The rise
in sovereign risk in advanced countries is the next step in this whole
process," Roubini went on to say. "Public debt is going to increase in
most economies."
Roubini also said that the markets are going to remain uneasy for
some time and that there is a weak recovery in the US and the
employment picture is still very weak, despite some job creation.
Roubini said that effects of such a Greek scenario won’t immediately
impact the United States, but predicted that a rough road is ahead in
the second half of 2010 due to other factors.
Just last week, Roubini told CNBC that Europe's current bailout plan
for Greece "is not going to work because Greece is nearly insolvent."
"A restructuring of its debt is going to be necessary," said Roubini on
April 28th.
A collapse of the Greek economy could have domino effect among
other weak eurozone countries—including Portugal, Spain, Italy and
Ireland, he said.
―Suppose you have a disorderly collapse of Greece, two things will
happen," he added. "Financial institutions holding Greek debt—mostly
European—will have massive losses. Secondly, a contagion from
Greece to Portugal to Spain to Italy to Ireland will have a domino
effect."
06/may/2010 FABER & Roger bearish ―Being down 3 or 4 percent is
a big, big number but that’s hardly panic, not yet,‖ Rogers said.
According to Faber, recent declines suggest ―that maybe we’ve made a
major high in the latter part of April this year and that we will, from here
on, have a more meaningful decline.‖
Investors should ―be very careful and cut back‖ on their holdings if they
have any ―doubt,‖ Rogers said. While a bankruptcy for Greece will be a
―good thing‖ for the country and the euro, it may result in ―great
instability‖ for markets as investors worry about contagion in other
economies including the U.K. and the U.S., he said.
Reduce Positions :Faber also advised investors to consider reducing
their positions on any rebound in share prices.
03/may/2010 Marc Faber told Bloomberg TV overnight that the
Chinese equity market is now at risk of a crash:―The signals are all
there, the symptoms of a major bubble are all there. The Chinese
economy is going to slow down regardless. It is more likely that we will
even have a crash sometime in the next nine to 12 months.‖
21/apr/2010 Retail Bearish
Davidowitz & Associates CEO Howard Davidowitz ―I think retail
sales are mixed. They are stronger, the trend is up, stocks are up, it’s a
sucker’s rally,‖ Davidowitz says.
―You’ve got to examine those (retail sales) numbers a little closer,‖
Davidowitz notes, pointing out that Easter apparel sales boosted March
figures considerably.
Moreover, Davidowitz says the sales figures don’t include giant
retailers. ―Wal-Mart, which is 11 percent of retail sales, is down,‖ he
says, as are Kroger, Safeway and Walgreens.
Citibank: The S&P 500 Consumer Discretionary sector’s Retailing
industry group looks worrisome. While retailing stocks have been very
powerful performers this year, up almost 2x the S&P 500’s gain year to
date, there are several reasons to become concerned about the
group’s potential trading trends in the next year, ranging from
fundamentals, to earnings revision momentum and to valuation.
Moreover, potential equity market weakness mid-year could generate
meaningful near-term profit-taking as portfolio manager conviction
seems shallow. Therefore, a ―downgrade watch‖ alert from Market
Weight is appropriate.‖
20/04/2010 JPM Little correction Although the SEC fraud case does
not have direct implications outside Financials, the rise in uncertainty is
negative for equities at a time when equity markets are overbought.
Technicals have been pointing to overbought equity markets for some
time now and Friday’s correction has the potential to drag the S&P 500
down toward 1175 in the near term. But our technical strategists see
very little chance of the S&P 500 falling below 1150, i.e., the January
high, over the coming weeks.‖
19/04/2010 Jim Roger 20% correction
When the markets are ready for a correction, something will come
along ... the straw that breaks the camel's back," he told CNBC.
"Any market that goes up this much, this fast, this steadily without
correction — it's not normal. When that sort of things happens, the
market could be setting itself up for a 15 to 20 percent correction."
Rogers wasn't surprised by the SEC's actions, pointing out that these
kinds of investigations usually take place after major financial
meltdowns
Though Rogers believes this could well be the beginning of a
correction, he doesn’t advise selling just yet. However, he says
investors should start thinking about adding shorts to their portfolio,
and suggested shorting indexes, bank stocks included.
As usual, Rogers strongly suggests buying gold. "Go back to 2008, you
have AIG go broke, Lehman go broke,‖ he notes.
―There was a gigantic forced liquidation in commodities — not because
of fundamentals, but because people were forced to sell ... it would be
an opportunity."
14/04/2010 John Murph bullish Commodities : Historically,
commodites have peaked after stocks (not before). At the moment,
however, stocks are hitting new highs while commodities aren't.
If the USD is truly peaking here, that should enable commodity assets
to start catching up to the stock market. That analysis also suggests
that commodity related stocks (precious metals, energy, and materials)
represent good value at this point.
12/04/2010 David Rosemberg Our U.S. equity models point to roughly
a 15% overvaluation right now for the S&P 500
06/04/2010 BOB DOLL Bullish equity 2010/11―In summary, we
believe that the recession probably ended in June or July of last year,
and while the jobs market normally lags in a recovery, the lag has been
unusually long in this case. Nevertheless, the March payrolls report
signaled what we believe is the start of a long-awaited rebound in the
employment picture, which should be beneficial for the broader
economy. As fiscal and monetary stimulus begins to fade over the
coming months, the economy is going to require some self-sustaining
mechanisms to kick in, and growing employment levels would certainly
be beneficial. Over the course of the next year, we expect that the
economy will successfully shift from an economic recovery to an
economic expansion. This environment of continued improvement in
the economy, combined with still low interest rates and improving
corporate profits, represents a sort of ―sweet spot‖ for risk assets. As
such, we think it makes sense for investors to continue overweighting
equities and credit-related fixed income assets and underweighting
cash and Treasuries.‖
01/04/2010 Johnson Simons So what's the next shoe to drop? Hint:
Markets that are getting too hot now. "The next crisis, the next
meltdown I think will be driven by some big collapses in emerging
markets including China," Johnson says. "Everyone tells you that
China can only go up. That's when you know it could get worse."
31/03/2010 Goldman Sachs Calls Chinese Equities a Short-Term
31/03/2010 Nouriel Roubini Dollar x Yuan
―Markets do not seem to be pricing in the potential consequences of
the U.S. labeling China a 'currency manipulator,' which could be
significant even if both sides avoid taking immediate bilateral actions.‖
Roubini sees a 50 percent chance that the U.S. government will label
China a currency manipulator, which would make it easier for U.S.
companies to seek import duties, Bloomberg reports.
The Treasury Department is ―seriously considering‖ labeling China a
currency manipulator in an April 15 report, Senator Charles Schumer
has said.
China has kept the yuan at 6.83 per dollar since mid-2008 to shield
exporters from the global recession and a contraction in world trade.
U.S. lawmakers taking aim at China's currency policy were given more
ammunition by a study from the Economic Policy Institute that says the
trade deficit with China cost more than 2.4 million U.S. jobs between
2001 and 2008, The Wall Street Journal reports.
"We've known for years that U.S. manufacturing was paying a heavy
price for China's activities, but these figures exceeded even our worst
expectations," Schumer told reporters on a conference call.
25/03/2010 Bloomberg The International Energy Agency, an energy
policy adviser to 28 countries, said it expects nuclear power to be a
more competitive energy source than coal or natural gas when
borrowing costs are low.
25/03/2010 Euro Bearish The largest forex hedge fund is expecting
the euro to trade down to 1.20vis-a-vis the US dollar by this summer:
… problems in Europe are deeper than many suspect. So says the
largest Forex hedge fund in the world. John Taylor, chairman and
chief executive officer of FX Concepts LLC
25/03/2010 Pragmatic Cap this is shaping up to be a ―sell the news‖
earnings season due flat revenue grow
22/03/2010 Marc Faber Chinese economy will avoid a crash though it
will certainly slow in the second half of 2010. Fed will continue to hold
rates near zero as the economy remains weak, might be a positive in
the near-term it is all disastrous in the long-term
22/03/2010 Cheap U.S. healthcare stocks should perform well in
the next few months now that legislative uncertainty about reform in the
sector has been removed, said Legg Mason fund manager Bill Miller.
22/03/2010 Jim Roger Bearish Euro and China House
The European debt crisis sounds the beginning of the death knell for
the euro, says investment icon Jim Rogers.
"The euro will probably break up in the next 15 to 20 years," he says.
"We've had currency unions in history. They didn't survive, and this one
won't survive either," he recently told told CNBC.
Greece suffers from a budget deficit that totals 12.7 percent of GDP,
and public debt that is forecast to exceed 120 percent of GDP this
year. So the European Union has pledged assistance.
"If (the euro zone helps) the Greeks, that weakens the fundamentals of
the euro," Rogers said.
"As the next government comes to demand concessions, they weaken
the currency from within. I would let Greece go bankrupt, because then
everybody will say the euro is a serious currency."
The British pound is in trouble too, though it’s not in danger of
disappearing like the euro, Rogers says. The United Kingdom’s main
problems are ―gigantic debt and a huge trade deficit," he explained.
Indeed, the entire developed world has currencies that are in danger of
falling, Rogers says.
Rogers also sees Chinese real estate and U.S. Treasuries as the two
bubbles brewing for global investors now.
20/03/2010 Bearish Robert Shiller expressed recently his concerns
about market valuations that could lead to another downleg in the stock
market:
"Robert Shiller, the Yale economist who famously predicted the 2000-
02 stock crash, says the market may be in trouble once more. Stocks
already are overvalued, he says. And a renewed housing slump could
send the market tumbling. "I wonder about a return to another break in
the market," he recently told The Wall Street Journal." in the Daily Crux
16/03/2010 Meredith Whitney, Bearish the US housing market will
face another dip while mortgage-backed securities and Treasuries are
likely to face a material correction:
"The housing market surely will double dip.(...) The Fed has been
supporting the housing market, a third of the Fed's balance sheet is
tied to mortgages"
Whitney said that Government programs to support housing have been
murky and when they come to an end, a lot of supply may come to the
market and that's when the real-estate market is likely to go down.
"I don't think there's much the Fed can do to get banks to start lending
again. That's a structural problem, the model is broken.
16/03/2010 Nouriel Rubini Bearish In the executive summary of a
report for clients of his firm Roubini Global Economics (RGE), Roubini
writes, ―A slew of poor economic data over the past two weeks
suggests that the U.S. economy in 2010 is headed for — at best — a
U-shaped recovery.‖
16/03/2010 Goldman Sachs Bullish - Cohen, who made her name with
bullish market calls in the 1990s, expects the S&P 500 to trade around
1,250 to 1,300 at year-end. That would be a 9 percent to 14 percent
increase from the current level of 1,150.
15/03/2010 Mark Mobius Stock Picks – Bullish China xCommodities
PTR, VALE, BNV and ANFGY
12/03/2010 JP Morgan Bullish - They continue to trade the rally from
the bullish side (and the correct side). They say the strength of the
recovery is underestimated and skeptical investors will slowly continue
to pile into risk assets. Of course, they aren’t the only big bank with a
very positive outlook. BlackRock recently released very similar
commentary.
In terms of strategy, they are getting more and more aggressive. They
like Greek government debt, US small caps and a tactical long in oil:
Fixed income: Close shorts in US 2s, but stay short in the UK.
Buy Greek government debt.
Equities: Stay long, focused on small caps and cyclical sectors.
We are reluctant to overweight EM equities despite their higher
beta.
Credit: Investors are becoming more bullish US HG spreads but
have yet to adjust their positions. Stay long US HG.
FX: Take profit on long USD positions against EUR, GBP, and
commodity currencies.
Commodities: Stay long commodities, favoring base and
precious metals near term.
They have a $90 year-end target on oil
12/03/2010 Alert !China will be unable to maintain the fast pace of
industrial output growth seen in the first two months of the year,
industry minister Li Yizhong said on Friday. Industrial output in
January-February rose 20.7 percent from the same period a year
earlier.Speaking at a news conference on the sidelines of China's
annual session of parliament, Li also said that the economic burst
delivered by the country's stimulus package, which was launched in
late 2008, had nearly run its course.
10/03/2010 Bob Doll - BlackRock – Bullish
Bob Doll, Chief Equity Strategist at BlackRock, , is striking a very
bullish tone in his latest strategy note. This is the polar opposite from
his former Merrill Lynch companion, David Rosenberg, who says we
are not recovering (see here). Doll says the recovery is the real deal
and that you better jump on board the risk asset train before you get
left behind. He says the March 2009 lows are here to stay and the
withdrawal of government stimulus will actually prove the recovery to
be quite real (yours truly is a bit more skeptical):
Doll is also very bullish about the jobs market. He thinks Q2 could
produce 300,000 jobs:
8/3/2010 Bear mutual funds at 3,6% cash, last time manager held
such small cash was September 2007, 1 month before S&P crash
57%, its is a yellow flag.
Equity Bull There was very little change this week in the S&P
500’s commitment of traders report. Small speculators reduced their
short positions marginally, but remain heavily net short. As a
contrarian indicator this report continues to spell potentially bad news
for the bears. The small speculators have missed the entirety of the
March 2009 rally as institutions have increased their bullish
positions. We continue to see small speculators on the other side of
this trade.
8/3/2010 Reuters - Most U.S. business economists expect the
Federal Reserve to raise benchmark interest rates within six months by
between a quarter and a half percentage point, according to a survey
released on Monday.
4/3/2010 The latest data from Robert Shiller’s 10 year PE ratio shows
the market currently at a 20.64 multiple. In his morning note, David
Rosenberg noted that this is 26% higher than the long-run average:
3/3/2010Mark Faber : U.S. stocks may drop 20 percent if they top
their January highs, says investment guru Mark Faber. ―I’m not sure we
will make a new high,‖ Faber, editor of "The Gloom, Boom & Doom
Report," told Bloomberg. ―But if we do, I don’t think it will be that far –
maybe 1,200 – and then I wouldn’t rule out a correction of at least 20
percent.‖
3/3/2010 UBP
- Since several months,S&P has showed to be capped
by the 1120 resistance area that is representing 50%
Fibinacci retracement of the 2007-2008 tumble. Instead of
acting as a major reversal point, a lateral consolidation around
the pivot point at 1120 has taken place.
- More than 4 months after having reached back this area,
several indicators shows us that the market his now mature
for a strong breakout toward the next target at 1230.
- Crossing Elliott Wave approach with a more classical pattern
oriented analysis, the expected impulsive wave could be part
of a Head & Shoulder pattern with the first leg of the ―Head‖ to
come
26/02/2010 Bank of America Merrill Lynch: The junk bond
market could be in for big trouble, as more than $600 billion of
high-yield bonds and loans come due starting in 2012.
23/02/2010 Donald Coxe:
1. Underweight natural gas-related stocks
within energy portfolios. Overweight the oil sands companies.
2. Remain bullish on the leading agricultural stocks. Food
price inflation is hitting consumers in many emerged and
emerging economies.
3. Canadian bonds and stocks should be heavily
overweighted in global portfolios.
4. Overweight investment grade corporates in bond portfolios.
Would you rather hold long-term debt from a government that
cannot manage its fnances or from a great company that
manages its money very well?
23/02/2010 Kenneth Rogoff- The U.S. government will delay
any efforts to contain the deficit until Treasury yieldsreach
around 6 percent to 7 percent,
23/02/2010 Kenneth Rogoff -- Ballooning debt is likely to force
several countries to default and the U.S. to cut spending,
according to Harvard University Professor Kenneth Rogoff,
who in 2008 predicted the failure of big American banks.
Following banking crises, ―we usually see a bunch of
sovereign defaults, say in a few years,‖ Rogoff, a former chief
economist at the International Monetary Fund, said at a forum
in Tokyo yesterday.
―I predict we will again.‖ The U.S. is likely to tighten monetary
policy before cutting government spending, sending
―shockwaves‖ through financial markets, Rogoff said in an
interview after the speech.
Fiscal policy won’t be curbed until soaring bond yields trigger
―very painful‖ tax increases and spending cuts, he said.
22/02/2010 Insiders Selling : Interesting data this morning
from RAB Capital showing that U.S. insiders aren’t the only
ones whoremain heavy net sellers of their own shares.
Today’s chart of the day shows the net selling by directorsof
Hong Kong based corporations
22/02/2010 Barton Biggs -Bullish US Stocks : There is every
reason to believe the U.S. is in a strong recovery, and Asia is
in a very strong recovery,‖ he says. While Europe’s growth
has been a bit disappointing, the Greek crisis could actually
help economie on the continent by pushing the euro down, he
told Bloomberg.Biggs thinks the European Union is handling
the Greek situation properly. ―The Europeans sent the right
message, saying if you can convince us you’re going to
practice some discipline, then we’ll take
care of you. And I think that’s going to happen.‖
Biggs also approves of China’s steps to deflate its credit
bubble. ―The Chinese authorities are doing the right thing in
terms of gradually tightening. . . . In all probability China is
going to have a soft landing.‖
22/02/2010 Marc Faber : Don't buy the Rally - ―I would look
at the market to close probably a bit lower than it started the
year in 2010.‖
Equally, I don’t think we have a huge downside risk. If the
Dow and the S&P dropped, say 15-20 percent, in other words
the S&P towards 900, I think there would be more
stimulus and more quantitative easing.‖
16/02/2010 Nouriel Rubini : Indeed, history suggests that
severe recession and socialization of private losses often lead
to anunsustainable build-up of public debt. Moreover, financial
crises triggered by excessive debt and leverage in the private
sector are followed after a few years by sovereign defaults
and/or high inflation to wipe out the real value of public debts.
10/02/2010 Marc Faber - the crisis that he sees coming in the
next 10 years: Interest on U.S. debt will crush other spending
.........―I am convinced that the U.S. government will go
bankrupt, but not tomorrow, and before they go bankrupt
they’ll print money, and then you get very high inflation rate,
then you get depression with high inflation and eventually
they’ll go to war.‖
08/02/2010 Nouriel Roubin - The dollar’s recent rally, which
has taken it to a six-month high, will soon fade against Asian
and commodity currencies
Commodity currencies include:
the Brazilian real, Canadian dollar and Australian dollar.
He anticipates a 15 percent to 20 percent drop by the
greenback against these currencies in the next two to three
years.
03/02/2010 - Mark Mobius : Onde estão as melhores
oportunidades nos emergentes?
Nos mercados chamados "de fronteira", como Vietnã,
Cazaquistão, Ucrânia, Nigéria. Há também o Oriente Médio,
Dubai. Muitos desses países têm mercados muito pequenos
em relação a sua economia.
Espera novas quedas na bolsa, com um ajuste de 20%
28/01/2010 Doug Kass - I remain of the view that stocks will
stayrange-bound and that an extreme market view is not
called for as the S&P 500 settles into the 1,050 to 1,150 range
for the foreseeable future -- an ideal investment setting for
opportunistic traders and sellers of premium
but not so great for longer-term investors.
27/01/2010 Teun Draaisma Morgan Stanley Europa
27/01/2010 Marc Faber is reiterating his negative equity
market outlook in a phone interview with Bloomberg today.
His comments mirror much of what the brilliant Jeremy
Grantham said in his recent
market outlook – the market is overbought, overvalued, and
the real economy remains weak. He says the market could
decline to S&P 920 March, April are seasonally strong
months. We’ll get a rebound
25/01/2010 Nouriel Roubini - A global rally in stocks may end
in the second half of the year amid a muted recovery in the
world’s largest economies and as deflationary pressures limit
gains in corporate earnings, Nouriel Roubini said.
Failure to restrain asset-price bubbles in emerging markets,
fueled by loose monetary policies in the U.S. and around the
world, may also cause an ―unraveling and a significant
correction of asset prices which will be damaging to global
and regional economic growth,
25/01/2010 Jim Roger - Global equities are ―vulnerable to
correction‖
I don’t think anybody has tightened enough. I think everybody
should tighten more,‖ Rogers said. ―We have huge amounts
of money printed throughout the world. It’s going to cause currency
instability. It’s going to cause more inflation. It’s going to cause
higher interest rates.‖
25/01/2010 Jeremy Granthma of GMO has just released his
must read quarterly update. He loves the recent Volcker
rules, says the Fed is playing with fire and that the market is
only worth about 850 on the S&P.
10/01/2010 D. Rosemberg : Those buying stocks in hopes of
catching a classic blow-off to a bubble peak — remember, this
market is already 25% overvalued based on the most tried,
tested and true valuation metric.
05/01/2010(Bloomberg) -- BNP Paribas SA, the most accurate
forecaster of the real’s world-beating rally last year, now says
avoid Brazil’s currency in favor of the won and rupee as Asia’s
central bankers prepare to raise interest rates.
South Korea and India’s currencies will climb 11 percent this
year as Brazil’s rally ends, according to Sebastien Galy, the
senior foreign-exchange strategist at France’s largest bank in
New York. The real, Australia’s dollar and the South African
rand were the best-performingof 16 major currencies in 2009,
gaining more than 25 percent, on
demand for their iron ore, coal and gold. The won rose 8.2
percent and the rupee 4.9 percent.