I wouldn't buy more gold and silver right now; I might buy more agriculture. I don't like to jump on a moving bus – jim rogers
Some analysts think that there's a chance economic data will surprise on the upside but I think, if anything, it will be on the downside." - in CN – marc faber
Nice photos about Romania
http://blogs.wsj.com/photojournal/2011/07/26/tamas-dezso-at-the-half-king/?mod=
The Market Has Experienced Everywhere Huge Technical Damage
"My view is that the market has experienced everywhere huge technical damage. As of today, all markets are extremely oversold, so a rebound is going to happen (Friday) or on Monday, but the damage technically is so great that the rebound, no matter whether QE3 happens right
here, it's unlikely to lift markets above the May 2 high of the S&P 500 at 1370." - in CNBC, August 5
SocGen, Unicredit On "Brink Of Disaster"
We wonder if in addition to PIIGS bonds, the ECB is ready and prepared to buy stocks of insolvent European banks...
Our thought was, naturally, Dexia, which is the modern equivalent of AIG,
Fears are growing this weekend that two of Europe’s largest banks may require a bailout, having been hugely damaged by the worsening crisis across the eurozone.The First Euro Bond Prints Are In, And The Loser Is...
- Bund 10-year yields +12bp; France yields +11
- Italy 10-year yields -50bp; Spain -37bp
- Greece 1-year yields -8bp; Portugal +14bp
- Bund 2-year yields +8bp; France +8bp
- Italy 2-year yields -59bp; Spain -54
- Greece 2year yields -19bp; Portugal +13
It is still not too late.
Because what America is doing is heading straight for default,
What Trichet has spoken to tonight and on Friday was that they would implement a significant bond purchase program for Spain and Italy...We're expecting $2 billion to $3 billion a day in terms of ECB bond purchase. How many days and weeks that continues, I am not sure
Put all that in a package and it's the dollar more than anything that is vulnerable on the downside
On the super committee concept to tackle the deficit:
http://www.zerohedge.com/news/bill-gross-tells-truth-sp-finally-got-it-right-they-are-enforcing-some-discipline-my-hat-them#
"I think the committee concept is a kick-the-can type of action. What we saw over the past week in terms of the resolution of the debt crisis, perhaps a $25 billion reduction over the next 12 months in terms of the deficit and perhaps over the next several years of $500 billion to $1 trillion. Not much."
"We have talked about the total liabilities of the United States being $12 trillion in terms of actually printed treasuries, and as much as $60 trillion in terms of people walking, 'debt men' walking. That's Medicare, Social Security, Medicaid all in combination. So this country has an enormous problem. It is not just $25 billion. It is not a $1-$2 trillion problem."
"To the extent the U.S. continues to employ that, it becomes an increasing cost for the Chinese. Their number one priority has been to put their people to work. In effect, the whole world is trying to put their people to work, but the Chinese especially. So what they have done is to fix their currency on a relative basis to the dollar, to buy U.S. treasuries and doing so to put their people to work. When those treasuries yield them nothing and become vulnerable from the standpoint of the dollar currency-wise, then that there might be something in the works. That is the most significant rebalancing effort. The ECB can buy bonds. The U.S. can do another QE 2.5. IF and when the Chinese basically revalue their currency significantly, that is a rebalancing effort that might ultimately put a foundation under the global economy."
To the extent that France or some of the inner core of Euroland become vulnerable with their AAA, then it becomes a successive waterfall on the way down…To the extent that the U.S. and other liquid AAA countries such as Japan, France, Germany, Canada, Australia, to the extent that some of those are vulnerable, then there's little room to maneuver.""The U.S. at
AA+, does it make a difference? Perhaps 10-15 to 25 basis points immediately."
We will be sure to point out when it passes $1,800, $1,900 and $2,000 next.
China Enters Bear Market
"the downgrade is effectively a currency downgrade, which seems very reasonable,
We think Treasury obligations today and always will be money-good, but principal and interest will be repaid with bad money."
US Treasury obligations are denominated in US dollars. The current US monetary base, (M0 or currency in circulation plus dollar-denominated bank reserves held at the Fed), is only about 19% of Treasury obligations. So, there is currently insufficient money to repay Treasury debt. Thus, a divided Congress or government may theoretically block further money creation, which would either increase pressure on Treasury to divert available funds towards meeting principal and interest obligations or eventually lead to outright default. We believe S&P’s downgrade is legitimate in light of growing public sentiment, reflected increasingly in the House, not to raise the debt ceiling.
N
Today, China brings its message of helpless (for now) fury to the FT,
the situation is ultimately unsustainable. The longer it continues, the more violent and destructive the final adjustment will be. "
elentless recycling of Chinese trade surplus in the form of US paper which is increasingly looking like it will never get repaid.
what losses is China willing to bear in its foreign exchange reserves in order to slow the pace of the renminbi appreciation?
China is worried about the possibility of a US default for obvious reasons. As the largest foreign holder of US Treasuries, either a default or a downgrade would bring huge losses. Even after this week’s debt deal, however, the risk remains that US debt will continue to grow to the point where its government is left with no option but to inflate the burden away. While there is little China can do about its existing Treasury holdings, it can rethink past policies – and ask both how it fell into this trap, and how it might free itself.
The People’s Bank of China must stop buying US dollars and allow the renminbi exchange rate to be decided by market forces as soon as possible. China should have done so a long time ago. There should be no more hesitating and dithering. To float the renminbi is not costless. However, its benefits for the Chinese economy will vastly offset those costs, while being favourable to the global economy as well.
Alas it won't happen now. And certainly not before it is too late.
he whole world is mad. Stocks will be dropping 30 percent, then rallying 20 percent, and dropping another 30 percent - that's going to be the pattern. And whoever can't live with that shouldn't be buying equities at all.
There is a case to be ultrabearish about everything, and markets are going to go lower, (but) markets are "extremely oversold" and I expect a "snap-back" rally in the U.S. Standard & Poor's 500 Index of about 40-50 points. –
There is a case to be ultrabearish about everything, and markets are going to go lower, (but) markets are "extremely oversold" and I expect a "snap-back" rally in the U.S. Standard & Poor's 500 Index of about 40-50 points. –
We have had this debt charade over the debt ceiling in the US in recent days and the Europeans are not doing anything about their debts either.
There are huge imbalances in the global economy and markets had to crack.
There are huge imbalances in the global economy and markets had to crack.
The shortest bull market for commodities lasted 15 years, the longest 23 years, so if history is any guide, they've got a long way to go. This is not a bubble. –
Shares Silver ETF (SLV), SPDR Gold ETF (GLD), iPath Dow Jones-UBS Cotton Subindex Total Return ETN (NYSE:BAL), ELEMENTS Rogers Intl Commodity Index - Agriculture Total Return ETN (RJA), ELEMENTS Rogers Intl Commodity Index - Total Return ETN (NYSE:RJI), Powershares DB Base Metals Fund (ETF) (Public, NYSE:DBB)
Chinese cars: jam tomorrow
Significant technology transfers and a huge home market, not to mention the usual labour cost edge, will make China a formidable export player fairly soon
The idea that the U.S. is downgraded and the UK is not is lunacy. There are many countries, Belgium, Spain, lots of countries in Europe, that should be downgraded just as the U.S. has been downgraded. –
"First, we'll demand strongly that the United States strengthen its self discipline -- they can't just keep issuing debt without limit. Secondly, we need to speed up the pace of our domestic economic transformation and reduce our accumulation of foreign exchange reserves."
The government will quicken its pace to allow Chinese companies and individuals (to) invest abroad
China should negotiate with the United States to convert part of its Treasury holdings into equity stakes in U.S. financial or energy firms,
Yu Yongding, a former central bank adviser, made a stir on Friday by calling for China to let the yuan float as soon as possible to halt a further build-up in reserves
China's ruling Communist Party has long been reluctant to take any steps that might jeopardize the fast economic growth that has helped it stay in power, and generally sees a quick revaluation of the yuan as too risky.
Real gross domestic product (GDP) growth in the US bottomed out in the second quarter of 2009 and the subsequent rebound has been the weakest on average in more than 60 years. T
During the next five years, the US, UK and mainland Europe will experience subdued growth. A deflationary trend remains intact in the US, which explains the weak economic rebound since 2009. Things aren’t any better in Europe. The continent’s saving grace is Germany and the country will inevitably formally take the reins of the EU, spearheading the financial integration that will be necessary to preserve the EU and the euro.
Sales volumes for Coca-Cola (NYSE: KO) in China grew by 23 percent and the company has doubled its mainland business during the past five years. Management from Yum! Brands (NYSE: YUM) recently said, “… we had simply outstanding results in China while US performance was poor.” McDonald's (NYSE: MCD) said that China accounted for 66 percent of new overseas openings this year, and the number of new stores in China will triple by year end to more than 180.
Finally, Starbucks (NSDQ: SBUX) said that China remains the key market for its international growth strategy. The company expects China to account “for one quarter of international new store additions in 2012” and management has targeted a total of 1,500 stores in China by 2015.
A
employment growth is less -- not more -- positively related to GDP growth than was the case with pre-revision data
"We do expect further downgrades," We doubt the newly appointed bipartisan commission will come up with a credible long-term deficit reduction plan. Hence by November or December we would not be surprised to see S&P downgrade the debt again from AA-plus to AA." Harris said that the U.S. should have avoided the downgrade in the first place by meeting S&P's demands of a $4 trillion deficit cut and a "demonstrating a sensible budget process." What they got instead was a "deficit cut of $2.1 trillion and a budget process that's been extremely chaotic
If a disorderly Treasury market leads to the Fed embarking on QE3, repercussions for the dollar will be catastrophic
Indicator which says buy first time in 20 years
Money markets had their biggest outflows since the collapse of Lehman Brothers as panicked investors worried about a U.S. debt downgrade and sliding stock market.
Investors should not sell into a selling climax, according to Jim Rogers, the CEO and Chairman of Rogers Holdings.
“There are huge imbalances in the global economy and markets had to crack,” added Rogers, who founded the Quantum Fund with George Soros in 1970
The market should be allowed to bottom out. QE1 (the first round of quantitative easing) and QE2 didn’t work. Let the market bottom out as more money printing will just make matters worse” said Rogers.
Roubini : gdp =1.5% -> rebound of the market
here is a great risk of double dip recession and that's may be the only fundamental difference
The response – massive spending cuts – ensures that unacceptably high levels of unemployment (a vast waste of resources and an oversupply of suffering) will continue, possibly for years.
The European Union has finally committed itself to helping its financially distressed members. It had no choice: with financial turmoil threatening to spread from small countries like Greece and Ireland to large ones like Italy and Spain, the euro’s very survival was in growing jeopardy. Europe’s leaders recognized that distressed countries’ debts would become unmanageable unless their economies could grow, and that growth could not be achieved without assistance.
The obvious losers in such a scenario would be governments like Japan's with no means to either defend their markets or stimulate their economies without getting deeper in debt.
he fiscal capacities of Japan, India, Malaysia, Taiwan, and New Zealand have shrunk relative to pre-2008 levels," S&P said in a statement. "If a renewed slowdown comes, it would likely create a deeper and more prolonged impact than the last one.
Moody's warned as much on Monday, telling Japan its intervention in foreign exchange markets last Thursday to weaken the rising yen would both be ineffective and negative for its ratings.
he idea that the U.S. is downgraded and the UK is not is lunacy. There are many countries, Belgium, Spain, lots of countries in Europe, that should be downgraded just as the U.S. has been downgraded," Rogers said in an interview with Reuters Insider.
Rogers said he has long positions on agriculture, gold and other commodities and is short on emerging market equities, government bonds and large U.S. financial institutions.
We Are Going To Have More Sell-Offs In The Next 2 Or 3 Years
This is not a one day thing... this has been building for a while... people have been worried about markets... commodity markets have been doing better but at the moment everything is going down because everybody is afraid of everything.
But certainly in the next year or two, we are going to witness terrible sell-off because the world is in terrible trouble... America has quadrupled its debts in the last 3 years overall situation has gotten worse not better.
But certainly in the next year or two, we are going to witness terrible sell-off because the world is in terrible trouble... America has quadrupled its debts in the last 3 years overall situation has gotten worse not better.
MARK FABER
Global economy has to reboot. The banks will print money à inflation. Postpone the crisis à print money and then WAR. Not cash, bonds ,
stocks are ok, preciously metals and OIL very good
correction gold – 100-150
market correct – 20-30%
rebound oct, nov
not go lower to 2009, because there will be so much printing …. If you adjust $ to inflation … stocks are less
A) Housing bust: housing prices were already down 20-40% off of their highs.
B) Financial crisis: two major banks had gone bankrupt and every other bank was at risk.
C) Mark-to-market accounting was ruining bank balance sheets.
D) The uptick rule had been abolished on short-selling.
E) We were already in a recession.
Housing prices according to the Case-Shiller index are flat compared to a year ago. Not to mention new housing starts are ticking upwards. Inventories are also much lower now than they were in 2008.
The banks have a surplus of $1.3 trillion. They also make money for free by borrowing from retail consumers at 0.2% (our checking account rates), and then lending to the Fed at 3% (or whatever the day’s T-bill rates are). This is called “free money.” They’ve also increased commercial lending for 7 months in a row. The next step will be increased lending to the consumer.
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