Home » Posts tagged 'bull'

Tag Archives: bull

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

David Stockman CNBC Interview: “I don’t Know What The Bulls Are Smoking”

February 22, 2016

David Stockman CNBC Interview: “I don’t Know What The Bulls Are Smoking”

Anyone who believes that the global economy isn’t crashing must be delirious, according to David Stockman.

The former director of the Office of Management and Budget argues that a rapidly deteriorating economic environment is going to send stocks and oil prices spiraling even lower than they already have.

“I think your traders are smoking something stronger than what I can legally buy here in Colorado,” Stockman said Thursday on CNBC’s “Futures Now.”

The S&P 500 has fallen 6 percent year to date, and crude oil has plunged more than 17 percent. However, Stockman still sees a long way to go. He expects the S&P 500 to drop to 1,300 before making any new highs, and sees oil falling below $20.

Investors have been too optimistic about the U.S. economy because they are not factoring in global risk, said Stockman, who expects to see a recession by the end of the year.

“Everywhere trade is drying up, shipping rates are at all-time lows,” he said. “There is a recession that’s going to engulf the entire world economy, including the United States.”

Contributing to the turmoil is the ineptitude of central banks, he said. While Stockman doesn’t expect the Federal Reserve to adopt a negative interest rate policy, he said monetary policymakers have exhausted all other options.

“They should have the good graces to resign. They are lost. None of this is helping the economy,” he said.

Add in the 2016 presidential election, and Stockman said the markets will find themselves in a situation similar to that of the global financial crisis.

“The out-of-control election process will feed into and create an environment that we haven’t seen since the fall of 2008,” he said.

Of course, this isn’t the first time Stockman has been bearish. For years, he has been predicting a crash worse than 2008.

Hobson’s Choice

October 24, 2015

Hobson’s Choice

More than two months have passed since the August “flash crash.” Fragilities illuminated during that bout of market turmoil still reverberate. Sure, global markets have rallied back strongly. Bullish news, analysis and sentiment have followed suit, as they do. The poor bears have again been bullied into submission, as the punchy bulls have somehow become further emboldened. The optimists are even more deeply convinced of U.S., Chinese and global resilience (the 2008 crisis “100-year flood” view). Fears of China, EM and global tumult were way overblown, they now contend. As anticipated, global officials remain in full control. All is rosy again, except for the fact that global central bankers behave as if they’re utterly terrified of something.

The way I see it, underlying system fragility has become so acute that central bankers are convinced that they must now forcefully (“shock and awe,” “beat expectations,” etc.) react to any fledgling market “risk off” dynamic. Risk aversion and de-leveraging must not gather momentum. If fragilities are not thwarted early, they could easily unfold into something difficult to control. Such an outcome would risk a break in market confidence that central banks have everything well under control – faith that is now fully embedded in the pricing and structure for tens of Trillions of securities and hundreds of Trillions of associated derivatives – everywhere. With options at this point limited, the so-called “risk management” approach dictates that central banks err on the side of using their limited armaments forcibly and preemptively.

With today’s extraordinary global backdrop in mind, I’m this week noting a few definitions of “Hobson’s Choice”:

“An apparently free choice that actually offers no alternative.” (The American Heritage Dictionary of Idioms)

“A situation in which it seems that you can choose between different things or actions, but there is really only one thing that you can take or do.” (Cambridge Idioms Dictionary)

…click on the above link to read the rest of the article…

Neither Bull nor Bear

October 22, 2015

Neither Bull nor Bear

“Good Economic Management” vs. Larceny

“Will you shut up?!”

That is what we wanted to say this morning, here in Zurich, Switzerland. At the table next to us, a hedge fund promoter is working hard…

“The value proposition… outside of the box… we’re only talking two points… we can dialogue about it… Goldman… our business model… prioritize our priorities… get the balance right…”

 

hi-trudeau-04924780-8colNew Canadian prime minister Justin Trudeau – who actually has more than just one bad idea.
Photo credit: Andrew Vaughan / Canadian Press

Meanwhile, on the front page of the Financial Times is a good-looking guy with a bad idea. Pierre Trudeau’s son, Justin, is Canada’s new prime minister. (Another political dynasty!) He will “take advantage of low interest rates” to embark on a C$60 billion infrastructure program.

Just for the record, the Canuck feds are not taking advantage of low interest rates. They’re cheating savers… retirees… and responsible citizens whose expenses are lower than their incomes.

In much of the developed world, central banks have pushed interest rates to their lowest level in 5,000 years. This is not “good economic management.” It’s larceny. They’re taking money from savers and giving it to borrowers – especially in the financial sector and in government. But on to other things….

Canada, M1This is not just larceny, it is insanity (not unique to Canada to be sure, as it has gone global) – click to enlarge.

12% a Year in Stocks

“We don’t pay any attention to the stock market. We buy good companies at good prices,” an old friend explained about how his private fund operates. (In the interest of full disclosure, we are one of his investors.)

“We aim for 12% a year,” he continued. “And that’s what we get, more or less.”

…click on the above link to read the rest of the article…

 

Bubbles Don’t Correct, They BURST!

August 26, 2015

Bubbles Don’t Correct, They BURST!

I’m practically drowning in interviews. I had half a dozen yesterday and even more today. But it’s time to put the word out that the second greatest bull march in history is finally coming to an end. It’s done.

Wall Street thinks this is a correction – a 10% drop, maybe 20% at worst, followed by more gains. They think we’re just six years into a 10 if not 20 year bull market. This is just a healthy breather.

Of course they think that! It’s the same “bubble-head” logic you find at the top of any extreme market in history!

Every single time – without exception – we delude ourselves into believing there is no bubble. We think: “Life’s good, why should we argue with it?”

And every time, we’re shocked when it’s over. Only in retrospect do we realize, yes, that was clearly a bubble, and oh, how stupid we were for not seeing it.

Bubbles don’t correct. They burst. They always do. And if anyone is still doubting whether this is a bubble, they need to get with the program – now!

Like I said on Fox yesterday, I wasn’t always a bear. I was one of the most bullish forecasters since the late ‘80s because I discovered how you can predict the spending of consumers through demographics.

With one simple indicator I predicted the Japan crash in the ‘90s when everyone was saying they’d overcome the U.S.

I predicted the greatest boom in U.S. history thanks to the spending of the Baby Boomer generation. All from demographic research, driven by my top cycle, the Spending Wave.

And from that, we knew the Boomers would peak in 2007 followed by a slowing economy.

 

…click on the above link to read the rest of the article…

The Big Bad Bear Case

July 26, 2015

The Big Bad Bear Case

coolbear6

My aim with this article is to outline, with facts, large global structural issues that I believe everyone, bulls and bears alike, should be fully aware of. While some of this discussion may rattle the cage a bit you will hopefully find this article well researched and informative.

Recently I’ve outlined why we switched our trading stance from buy mode (Door Shut) to sell mode (Inversion) on stocks. This week I’ve also outlined the aggregate technical factors that have us very cautious on stocks in general (Totality) while not precluding the possibility of new highs.

This article, however, will focus on much larger structural issues that have been building for years, decades indeed. And no this article is not so much about central banks, debt issues, Greece, China, deficits, etc. While all these are important as part of the overall picture, they are mere current symptoms of a much larger issue that is at the core of all that is already in play and will only deepen in our societies in the decades to come: Institutionalized poverty with an ever widening divide between the haves and the have nots which will result in an eventual drastic revaluation of asset classes across the board.

And before you think I’m off on a hyperbolic rant let me assure you my reasoning will be very much fact based and I have reason to believe the US Fed and Janet Yellen are very much aware of it all, but have no solution to prevent it from happening. In fact it is mathematically unavoidable.

A few weeks ago in The Greek Butterfly I discussed the concept of a global math construct that needs to maintain its integrity to make global debt serviceable. To that end I concluded that they would not let Greece default.

 

…click on the above link to read the rest of the article…

Oil prices: A bear and a bull on the rally

April 17, 2015

Oil prices: A bear and a bull on the rally

The price of oil has been rising for more than a week. What gives?

The price of oil has been heading up for eight trading sessions, raising the hopes of energy companies, investors and the whole province of Alberta. But is this rally the real thing, or is the market misreading the signs? Here are two takes on the oil price rally.

The Bear

Stephen Schork is the editor of the Schork Report (Schork Report)

Stephen Schork is the editor of the Schork Report, an investment newsletter that is dedicated to the energy market. Schork describes the current rally as a classic short squeeze rally. Which can be a bit tricky to explain.

‘All of the fundamental drivers in this market point to even lower oil prices.’
– Stephen Schork, The Schork Report

As the price of oil dropped through the fall and winter, many traders started to short futures contracts, essentially betting that the price will continue to go down. In the past two months, the price of oil has started to rise and some of the traders who were shorting futures contracts had to cover their short positions, by buying futures contracts, which pushes the price up higher. Clear?

“All of the fundamental drivers in this market point to even lower oil prices,” said Schork in an interview.

…click on the above link to read the rest of the article…

 

Olduvai IV: Courage
Click on image to read excerpts

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress