Global insights audio-slides-08-19-11

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  • Regarding Europe:Today's market rout was the worst in 3 years according to WSJ2. The dramatic market action MAY push leaders to accelerate the drive towards fiscal integration, although there's ABSOLUTELY no news on this front at all. It doesn't sound like any real action is happening to make this happen. The politics of it are also horrible, as taxpayers in the "core" (Germany, or perhaps Germany and France) will see themselves as perpetually bailing out their neighbors.3. Greece is still a hot story, as the second bailout is not assured given the growing demands among various countries that Greece put up some kind of collateral. Greece doesn't have a ton of time on this, either. It feels like "endgame" or the "beginning of the endgame" is coming in a matter of days—weeks at the very most.
  • JACQUE DELORES"To avoid falling, the choice looks straightforward to me: either member states accept the robust economic partnership I always demanded, or they transfer more powers to the Union," said Delors, who served as European Commission president from 1985 to 1994.His voice joins a chorus of experts and leaders who are calling for eurobonds and a more comprehensive economic and political EU.Delors proposed a part-mutualization of European debt, with nations allowed to harmonize debts worth "up to 60 percent of GDP" and issue joint securities. This is, in his words, "the pump to extinguish the fire."Delors also trash-talked Merkel and Sarkozy for failing to articulate a comprehensive plan to fix the crisis. He also called the creation of a new European finance minister post a "wacky gadget."
  • ITS BEEN A FREE RIDETHE BANKS NEW THIS – ABSOLUTELY!!!!!
  • "I think what the bond market is telling you…is that returns over the next couple of years are going to be significantly lower than they've been over the last 10, 20 years - It's certainly suggestive of an economy that's significantly slower than people thought it would be at this point."said Rick Rieder, chief investment officer of BlackRock Inc.'s actively managed fixed-income funds, with $604 billion under management. "What's going on here is that investors are giving a great probability, in the handicapping of the markets, to a global banking crisis - It's palpable. There's fear in the banking system. There's fear that Europe won't get their act together. And in the United States, people feel something's wrong." said Jeffrey Gundlach, chief executive of DoubleLine Capital, a bond-focused investment firm with $14.5 billion in assets under management.
  • If you look at the progression of the US stock market boom and bust, it's easy to see comparisons to the long deflationary slog experienced by Japan. What's more, we have a similar monetary structure and we're facing a similar crisis (too much private sector debt). The Treasury market shows it as well. The spread between current Treasury yields and yields on Japanese Government Bonds has hit a new multi-decade low. And beyond that, the progression of the Treasury yield collapse has gone at a similar pace. This chart comes from Nomura's Richard Koo, lining up 10-year yields between Japan and the US at the start of their respective crisis. Bottom line: Yields have a lot longer to fall if you think Japan is a good guide. Yesterday’s offering of U.S. five-year TIPS yielded negative 0.825 percent, compared with negative 0.180 percent at the auction of the securities on April 21. Investors bid for 2.49 times the amount of debt offered, versus the average of 2.61 for the past 10 auctions. Indirect bidders, the investor class that includes foreign central banks, bought 47.2 percent, versus the 10-sale average of 35.5 percent. Direct bidders bought a record high 17.1 percent. The Treasury announced that it will sell $35 billion in two-year notes, the same amount of five-year debt and $29 billion of seven-year notes in auctions beginning Aug. 23. The amounts are the same as last month’s offerings. New York Fed President William C. Dudley said the central bank’s commitment on Aug. 9 to keep its benchmark interest rate near zero through at least mid-2013 should help spur growth. Inflation Indexed Treasury
  • If you look at the progression of the US stock market boom and bust, it's easy to see comparisons to the long deflationary slog experienced by Japan. What's more, we have a similar monetary structure (our own currency, with mostly domestically-owned, domestically denominated debt), and we're facing a similar crisis (too much private sector debt). The Treasury market shows it as well. The spread between current Treasury yields and yields on Japanese Government Bonds has hit a new multi-decade low. And beyond that, the progression of the Treasury yield collapse has gone at a similar pace. This chart comes from Nomura's Richard Koo, lining up 10-year yields between Japan and the US at the start of their respective crisis. Bottom line: Yields have a lot longer to fall if you think Japan is a good guide.
  • This looks like a complicated slide so just focus on that blue channel for a moment.It is a REGRESSION ANALYSIS since 2008 when the YEN started to RISE or think of this chart as the YEN CARRY TRADE Unwinding.It has been a beautiful thing to watch – perfectly computer managed!
  • Total collapse!The Philly Fed index just came in at -30.7, an epic drop form the +3.2 we saw last month.Estimates were actually for it to go somewhat higher to +2.The situation confirms the bad news we got earlier this week from the Empire Fed.A horrible sign for the economy, as the double-dip scenario looks more real than ever. Markets at lows of the day.Here's the key summary of the report:Responses to the Business Outlook Survey this month suggest that regional manufacturing activity has dipped significantly. The survey’s broad indicators for activity, shipments, and new orders all declined sharply from last month. Firms indicated that employment and average work hours are lower this month. Price indexes continued to show a trend of moderating price pressures. The broadest indicator of future activity also weakened markedly, but firms still expect overall growth in shipments, new orders, and employment over the next six months. The collection period for this month’s survey ran from August 8-16, overlapping a week of unusually high volatility in both domestic and international financial markets.All Indicators Show DeclinesThe survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a slightly positive reading of 3.2 in July to -30.7 in August. The index is now at its lowest level since March 2009 (see Chart). The demand for manufactured goods, as measured by the current new orders index, paralleled the decline in the general activity index, falling 27 points. The current shipments index fell 18 points and recorded its first negative reading since September of last year. Suggesting weakening activity, indexes for inventories, unfilled orders, and delivery times were all in negative territory this month.Firms’ responses suggest a deterioration in the labor market compared with July. The current employment index fell 14 points, recording its first negative reading in 12 months. About 18 percent of the firms reported an increase in employment, but 23 percent reported a decrease. The percentage of firms reporting a shorter workweek (28 percent) was greater than the percentage reporting a longer one (14 percent). The workweek index fell 9 points.Read more: http://www.businessinsider.com/august-philly-fed-report-2011-8#ixzz1VTE3ZbQd
  • In the UK, economic growth (lower line) slowed again in the second quarter, coming in well below expectations. "[G]rowth was 0.2 percent, but it was probably stronger than that." said the chief economist with the UK Office of National Statistics. Pardon?No, we don't understand this statement either. What remains clear, however, is that British GDP is on its way back toward contraction. As stocks fall, economic growth should continue to disappoint, likely by wide margins.On the jobs front, British unemployment persisted at 7.7% in the three months to May, while the number of people claiming out-of-work benefits shot up by 24,500. Here, too, the jump is the largest in two years, according to the Office for National Statistics. The number of workers who are working part-time because they cannot find full-time jobs is also at a record level of 1.25 million. And youth unemployment remains at its highest levels in 20 years, with one in five 16- to 24-year-olds out of work.One potentially important observation: Just as the banking sector is leading the way down in the markets, it also seems to be far out in front of the employment trend. In June, Britain's biggest mortgage lender, Lloyds Bank, announced it would cut 15,000 British jobs, while Europe's largest bank, HSBC, is set to retire 10,000 positions in the next few months. The number represents about 3% of HSBC's global workforce, but it could triple, given the bank's planned overhaul in the coming years, according to the Financial Times. So, too, have Barclays, Credit Suisse, UBS and Goldman Sachs recently announced plans for massive layoffs.Finally, economists expressed relief at the UK's surprise dip in consumer prices for the month. "The Bank [of England] will breathe a little easier," said the chief economist at the economic forecasting firm IHS Global Insight. We maintain our stance, however, that the looming threat is not inflation, but deflation. And if Primary wave 3 down has begun in earnest, now will probably be one of the last times you read about the dreaded inflation boogeyman for years, perhaps even decades. Far from a sense of relief, the Banks' paramount feeling should soon devolve into an unrelenting dread.
  • Global insights audio-slides-08-19-11

    1. 1. This chart accompanies the podcast recordedAugust 19th, 2011<br />“KICK THE CAN” NO LONGER WORKING??<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    2. 2. This chart accompanies the podcast recordedAugust 19th, 2011<br />“KICK THE CAN” NO LONGER WORKING??<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    3. 3. This chart accompanies the podcast recordedAugust 19th, 2011<br />“KICK THE CAN” NO LONGER WORKING??<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    4. 4. This chart accompanies the podcast recordedAugust 19th, 2011<br />“KICK THE CAN” NO LONGER WORKING??<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    5. 5. This chart accompanies the podcast recordedAugust 19th, 2011<br />“KICK THE CAN” NO LONGER WORKING??<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    6. 6. This chart accompanies the podcast recordedAugust 19th, 2011<br />“KICK THE CAN” NO LONGER WORKING??<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    7. 7. This chart accompanies the podcast recordedAugust 19th, 2011<br />FLIGHT TO SAFETY or SOMETHING ELSE?<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    8. 8. This chart accompanies the podcast recordedAugust 19th, 2011<br />FLIGHT TO SAFETY or SOMETHING ELSE?<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    9. 9. This chart accompanies the podcast recordedAugust 19th, 2011<br />FLIGHT TO SAFETY or SOMETHING ELSE?<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    10. 10. This chart accompanies the podcast recordedAugust 19th, 2011<br />FLIGHT TO SAFETY or SOMETHING ELSE?<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    11. 11. This chart accompanies the podcast recordedAugust 19th, 2011<br />A CONTROLLED UNWIND?<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    12. 12. This chart accompanies the podcast recordedAugust 19th, 2011<br />“STALL SPEED”<br />GROWTH IS NOW OFFICIALLY A PROBLEM<br />THIS FRIGHTENED GLOBAL MARKETS!<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    13. 13. This chart accompanies the podcast recordedAugust 19th, 2011<br />“STALL SPEED”<br />GROWTH IS NOW OFFICIALLY A PROBLEM<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    14. 14. This chart accompanies the podcast recordedAugust 19th, 2011<br />“STALL SPEED”<br />GROWTH IS NOW OFFICIALLY A PROBLEM<br />Not only was May's decline the sharpest deceleration in more than two years, the index has fallen from an all-time high to scarcely above 50 in just five months.<br />The critical level of 50 divides a manufacturing expansion from a manufacturing contraction, and the last time the index crossed below 50 was June 2008, three months before the financial crisis hit full force.<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    15. 15. This chart accompanies the podcast recordedAugust 19th, 2011<br />“STALL SPEED”<br />GROWTH IS NOW OFFICIALLY A PROBLEM<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    16. 16. This chart accompanies the podcast recordedAugust 19th, 2011<br />“KICK THE CAN” NO LONGER WORKING??<br />Listen to the original podcast for this slide at eitherwww.GordonTLong.com/GlobalInsightsorwww.TraderView.com/GlobalInsights<br />The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of this slide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.<br />
    17. 17. DISCLOSURE STATEMENT AND TERMS OF USE<br />THE CONTENT OF THIS SLIDE PRESENTATION AND ITS ACCOMPANYING RECORDED AUDIO DISCUSSION ARE INTENDED FOR EDUCATIONAL PURPOSES ONLY.This slide presentation and its accompanying recorded audio discussion are not a solicitation to trade or invest, and any analysis is the opinion of the author and is not to be used or relied upon as investment advice. Trading and investing can involve substantial risk of loss. Past performance is no guarantee of future returns/results. Commentary is only the opinions of the authors and should not to be used for investment decisions. You must carefully examine the risks associated with investing of any sort and whether investment programs are suitable for you. You should never invest or consider investments without a complete set of disclosure documents, and should consider the risks prior to investing. This slide presentation and its accompanying recorded audio discussion are not in any way a substitution for disclosure. Suitability of investing decisions rests solely with the investor. Your acknowledgement of this Disclosure and Term of Use Statement is a condition of access to it. Furthermore, any investments you may make are your sole responsibility. THERE IS RISK OF LOSS IN TRADING AND INVESTING OF ANY KIND. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.<br />Listen to the original recording for this slide at either www.GordonTLong.com/GlobalInsights or www.TraderView.com/GlobalInsights<br />

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