The Japanese stock market reached its all-time-high on December 29th 1998, and as The Wall Street Journal reports, analysts were still looking forward to another strong year for shares in 1990, despite some signs of danger. Reading through the headline on that day suggests, 25 years later, investors and talking-heads have learned absolutely nothing...
World GDP Growth Expectations for 2015 just dropped dramatically to their lowest since expectations began to be tracked. From 3.40% in early 2013, the consensus is expectating world economic growth at a mere 2.72% (a 20% decline in growth expectations). Of course, there is one thing that is not going down...
Maybe bonds and crude oil are on to something after all?
Varför får Holland tillbaka sitt guld från FED medans Tyskland bara erhållit 5 ton av sina begärda ca 300 ton. Som vanligt när det gäller guld så är det inget som stämmer.
GDX miners är nu kraftigt översåld inför årsskiftet vilket innebär att det finns stor uppgångspotential i början på året
Högre efterfrågan lägre utbud ger lägre pris. Kan bara vara silverpriset som stämmer in på detta mycket udda fenomen.
Vitryssland har nu blivit smittat av Ryssland och valutan tappar snabbt i värde och räntan går i taket
Just to give the reader a sense of how much silver India imported, lets compare it to total global silver mine supply:
2014 Estimated Global Silver Mine Supply = 825 Million oz
2014 Estimated Indian Silver Imports = 234 Million oz
India’s estimated 2014 silver imports at 7,400 mt equals 234 million oz (Moz) or 28% of total world mine supply of 825 Moz in 2014 (GFMS estimate with my adjustment).
- RUSSIAN MONETARY GOLD HOLDINGS RISE VS 37.6M ON NOV. 1
- RUSSIAN MONETARY GOLD HOLDINGS 38.2M TROY OZ AS OF DEC. 1
So we can now add another 600K to Russia's most recent holdings:
Which of course means that the very "Russia is selling" rumors that were so effectively used to keep the price of gold low into the recent risk-flaring episode, were capitalized on by the very same Russia, which we do however know sold some $8 billion in US Treasurys in October bringings its total holdings of US paper to the second lowest since 2008...
Back in June, the average junk bond yield was 3.90 percentage points higher than Treasury securities. The average energy junk bond yielded 3.91 percentage points higher than Treasuries, Lonski says.
That spread has widened to 5.08 percentage points for junk bonds vs. 7.86 percentage points for energy bonds — an indication of how worried investors are about default, particularly for small, highly indebted companies in the fracking business.
When Josh Birnbaum was at Goldman Sachs in 2007, he made a huge bet against subprime mortgages.
Now he’s betting against something else: high-yield bonds.
From The Wall Street Journal:
Joshua Birnbaum, the ex-Goldman Sachs Group Inc. trader who made bets against subprime mortgages during the financial crisis, now has more than $2 billion in wagers against high-yield bonds at his Tilden Park Capital Management LP hedge-fund firm, according to investor documents.
It’s a mania, said Tim Gramatovich of Peritus Asset Management who oversees a bond portfolio of $800 million: “Anything that becomes a mania — ends badly. And this is a mania.”
Bill Gross, who used to run PIMCO’s gigantic bond portfolio and now advises the Janus Capital Group, explained that “there’s very little liquidity” in junk bonds. This is the language a bond fund manager uses to tell people that no one is buying, everyone is selling. Gross added: “Everyone is trying to squeeze through a very small door.”
Bonds issued by individual energy developers have gotten hammered. For instance, Energy XXI, an oil and gas producer, issued more than $2 billion in bonds just in the last four years and, up until a couple of weeks ago, they were selling at 100 cents on the dollar. On Friday buyers were offering just 64 cents. Midstates Petroleum’s $700 million in bonds — rated “junk” by both Moody’s and Standard and Poor’s — are selling at 54 cents on the dollar, if buyers can be found.
IMF har sin kongress i oktober 2015 då man skall avgöra olika länders valutavikt inom SDR. Kina kommer om inte USA använder sitt veto att ingå och frågan är om Kina kommer att tala om för världen hur mycket guld man har innan mötet.
And of course the Chinese have pronounced their fealty to the IMF global currency concept:
The world economic crisis shows the "inherent vulnerabilities and systemic risks in the existing international monetary system," Gov. Zhou Xiaochuan said in an essay released Monday by the bank. He recommended creating a currency made up of a basket of global currencies and controlled by the International Monetary Fund and said it would help "to achieve the objective of safeguarding global economic and financial stability."
The BRICS are not the only nations demanding the U.S. lose its supposed "influence" over the IMF. Germany, the core economic pillar of the EU, called for America to relinquish its veto power back in 2010 just as the reforms measure was announced.
Håller den starkare dollarn på att knäcka den amerikanska ekonomin och hur länge till kan FED vänta med ytterliggare stimulanser
Hur länge behöver vi vänta på QE4. Är det när börsen har stängt gapet mot räntan som FED trycker på knappen.
Håller dollarn på att bryta den långa nedåtgående trenden och hur skall det då gå för EM som har skulder i dollar till mellan 5-9 triljoner dollar.
The FED Didn't Solve Any Problems, They Made Things Worse
That is complete fantasy. There is a bigger disconnect now than there was just before the 2008 financial crisis. The truth of the matter is the Federal Reserve didn’t solve any of our problems. They made them all worse.
Indien köper stora mängder guld, 150 ton bara i november. Beakta då att den genomsnittliga årsproduktionen per månad ligger på ca 185 ton och att Kina köper minst lika mycket som Indien.
Gold Imports ‘Phenomenal’ In India – 571 Percent Surge To 150 Tonnes in November
India’s gold imports were over a staggering 150 tonnes in November and have seen a “phenomenal” rise in India according to India’s Trade Secretary, Rajeev Kher.
A few weeks ago we said that the death of the Indian gold market was greatly exaggerated. The latest gold import data out of India confirms this.
Får vi ett uppställ på börsen under de sista dagarna 2014 för att sedan få ett större fall??????????
Posted by Stock Barometer
on Tuesday, 16 December 2014 08:45
As the oil drop plays out in global economies - Russia's push to 17% interest rates is an ominous sign worldwide. Let's start with our forecast:
To support the potential of a large move lower:
It's all about this move in oil:
A Second Secular Gold Bull Market Is Born In Early 2001
The second (i.e. current) secular gold bull market was birthed with the new millennium. Indeed, investors worldwide stampeded to buy gold as it bottomed at about $256/oz in 2001. And from 2001 to late 2011, the gold price soared hyperbolically +650%. But as all secular bull markets occasionally correct (regardless of asset class), gold too has corrected down 39% during the past three years. Consequently, the shiny yellow today is grossly over-sold…taking into account its extremely bullish fundamentals.
The gold price chart below covers the period from 1960 to 2020 (i.e. 60 years). It is imperative to notice the Price “Y-Axis” is in Logarithmic Scale…as this study suggests the US$ price of gold can go viral from here to the year 2020.
“Eurozone deflation is now inevitable. There is no way around it,” said Andrew Roberts, at RBS. “We think yields on German 10-year Bunds will fall to 0.42pc next year.”
“The ECB is presiding over a deflationary disaster. They need to act fast and aggressively or else markets will start to attack Italian debt. Italy’s nominal GDP is falling faster than their borrowing costs and that is pushing them towards a debt spiral,” he added.
The Bank of Italy’s governor, Ignazio Visco, said any further falls in prices at this stage could have “extremely grave consequences for economies with very high public debt levels, such as Italy”.
$141 miljarder i minskad hushållsförmögenhet under Q3 det är inte vad FED vill höra så snart har vi Q4
Utan Velocity av dollars blir det inte någon fart på ekonomin. Notera att perioden med högre ränta också hade stigande Velocity
Ukraine's new economy minister, Aivaras Abromavicius, said on Wednesday the government wanted the International Monetary Fund to expand its $17 billion bailout package due to Ukraine's worsened economic outlook.
"We want to expand the programme given the difficult situation. Calculations are being made," Abromavicius said at a briefing, adding that it was too early to say how much extra cash would be needed.
The IMF, which is visiting Kiev this week for talks on the bailout programme with the government, warned in September that if Ukraine's conflict with pro-Russian separatists runs into next year, the country may need as much as $19 billion in extra aid.
Centralbankernas värsta fiende deflationen håller nu greppet om marknaderna, bevaka TIPS då den är en indikator på när FED drar igång nya stimulanser.
Deutsche Bank anser att marknaden inte har tagit hänsyn till de negativa konsekvenserna av lägre energie priser
One of the most interesting disconnects that we are currently witnessing on the valuation landscape is that broad market indexes – in equities and in credit – have largely ignored a bear market that has hit energy assets. S&P500 energy stocks are down 19% since their late June highs, while overall index is 5.8% higher and at its all time highs. In credit, energy bonds have widened by 50bp in IG and 310bp in HY, whereas non-energy bonds are wider by 20bp and 60bp respectively. Taking into account the fact that energy is the single-largest sector in all of HY, second-largest in IG, and third-largest in S&P500 (on a level 2 industry basis), this strikes us as an unusual outcome.
In fact, when we went back in history to confirm our suspicions, we found that it is indeed a rare occurrence. In HY, looking at top-three weight sectors trading 200bp above the rest of HY, the only instances that fit these criteria going back to 2000 are Financials in 2009, Media and Autos in 2008, Autos in 2005 (F/GM downgrades), Telecoms in 2001/2002, and Materials in 2001. This makes Autos in 2005 the mildest instance, where a large sector went into distress and the broad market widened by "only" 130bp. Autos were 10% of the market and peaked out at 630bp, whereas Energy today is 15% and trades at 710.
A similar exercise in equities – top three sectors down 20% or more – yields hits in Financials in 2010 and 2007 and Technology in 2000 – all instances where a distress in one sector pulled the rest of the market lower. The smallest impact was left by Technology in early 2013, where the sector dropped 25% and S&P 500 responded with just a 7% pullback.
These observations form the base underneath our view that something has to give here. Either the market is too negative on Energy, or it is not diligent enough in thinking about broader implications. The only argument that stands against this view is that the rest of the economy is supposed to benefit from lower oil, which as we have shown earlier, has its own limitations.
Since then rates have continued to be in a steady decline as real economic strength has remained close to 2% annually, deflationary pressures have risen and monetary velocity has fallen. The chart below is a history of long-term interest rates going back to 1857. The dashed black line is the median interest rate during the entire period.
The last time the price of oil declined by more than 40 dollars in less than six months, there was a financial meltdown on Wall Street and we experienced the deepest recession that we have seen since the days of the Great Depression.
And now many fear that this collapse in the price of oil could trigger another financial panic.
According to Citigroup, the energy sector now accounts for 17 percent of the high yield bond market.
J.P. Morgan says that it is actually 18 percent.
In any event, the reality of the matter is that the health of these “junk bonds” is absolutely critical to our financial system. And according to Deutsche Bank, if these bonds start defaulting it could “trigger a broader high-yield market default cycle”…
Based on recent stress tests of subprime borrowers in the energy sector in the US produced by Deutsche Bank, should the price of US crude fall by a further 20pc to $60 per barrel, it could result in up to a 30pc default rate among B and CCC rated high-yield US borrowers in the industry. West Texas Intermediate crude is currently trading at multi-year lows of around $75 per barrel, down from $107 per barrel in June.
“A shock of that magnitude could be sufficient to trigger a broader high-yield market default cycle, if materialized,” warn Deutsche strategists Oleg Melentyev and Daniel Sorid in their report.
If the price of oil stays at this level or continues to go down, it is inevitable that we will start to see some of these junk bonds go bad.
In fact, one Motley Fool article recently stated that one industry analyst believes that up to 40 percent of all energy junk bonds could eventually go into default…
After the U.S. Mint updated its bullion figures on Monday, 2014 Silver Eagle sales reached a new annual record surpassing last years total by nearly 200,000. Not only was 2014 a banner year for world’s most sought after official coin, the Silver-Gold Eagle ratio also hit a new record high.
The U.S. Mint sold nearly a half million Silver Eagles over the weekend, putting the total for December at 1,317,000. This strong weekend demand pushed total annual Silver Eagle sales to 42,864,000 over last years previous record of 42,765,000. Furthermore, there are still a few more weeks remaining in the month.
As we can see from the chart, investors purchased 82 Silver Eagles for every Gold Eagle ounce in 2014.
S&P lever sitt egna liv vilket det även gjorde 2007 innan finanskrisen. Det är alltid annorlunda nu fast det blir alltid som förr.
Förväntningarna på vinsternas utveckling ligger alldeles för högt vilket kommer att straffa sig med ett kraftigt fall på börsen.
To visualize the current extremes in earnings estimates, we can view the long term cyclicality of earnings. As shown in the next chart, earnings tend to cycle regularly between 6% peak to peak and 5% trough to trough growth in earnings. With 2015 expectations exceeding the current 6% peak to peak growth rate, it is only a question of what will trip up this overly optimistic picture.
Currently, estimates for the end of 2014 have once again began to get knocked down. At the beginning of 2013 it was estimated that 2014 would end at $121.40 versus the June, 2014 estimate of just $114.39. However, just three months later, the 2014 year-end estimate has been reduced to just $110.10. Currently, as of the end of November, that year-end estimate is sitting at $109.67 as economic growth has once again failed to materialize as expected.
Since 2009, the reported earnings per share of corporations has increased by a total of 268%. This is the sharpest post-recession rise in reported EPS in history. The issue is that the sharp increase in earnings did not come from a similar surge in revenue that is reported at the top line of the income statement. Revenue from sales of goods and services has only increased by a marginal 33% during the same period.
Den som handlar aktier efter Tobin’s Q ratio bör nog vara försiktig då börsen endast har varit dyrare en gång på över 100 år.
Japans BNP utveckling fortfarande negativ trots mycket nytryckta pengar. När skall dom lära sig att man kan inte trycka pengar och få framgång.
Following the most recent sell-off, the gold market is showing renewed signs of tightness in physical supply. The 1-month GOFO rate is -0.298%.
Source: Bloomberg, ADM ISI
This is the lowest it’s been since 2001, which marked the low in the gold price prior to the 2001-11 bull market.
BoJ har en balansräkning som uppgår till ca 60% av landets BNP. USA har fortfarande "bara" ca 25% av sin BNP.
It turns out the Swiss referendum last weekend which sought to force the Swiss National Bank to maintain 20% gold reserves was a red herring so far as precious metal markets are concerned.
Vi är nu i den sista uppgångsfasen där i princip alla är bullish. Frågan är hur länge den kan hålla på.
Svenska parlamentet upplever en stökig tid men om man jämför med hur en vanlig röstning i Ukraina går till så är det ganska lugnt i Sverige.
Varför är det bara guldet som man tar ut från ETF fonderna när priset går ned? Silvret behåller det fysiska lagret då priset går ned.
Daniel Stetler författaren till "Debt In The 21st Century" om hur vi befinner oss i världens största Ponzi spel.
When do you think a new “Minsky moment” can arrive?
The late economist Hyman Minsky defined three ways of borrowing: hedge borrowing where borrowers were able to pay interest and principal out of income, speculative borrowing were the borrower could pay the interest but not the principal and relied on someone paying the same price for the asset like he did and Ponzi borrowing were the borrower could not pay the principal nor the interest and hoped that he be bailed out by the next buyer. We all are in a Ponzi world right now. Hoping to be bailed out by the next person. The problem is that demographics alone have to tell us, that there are fewer people entering the scheme then leaving. More people get out than in. Which means, by definition, that the scheme is at an end. The Minsky moment is the crash. Like all crashs it is easier to explain it afterwards than to time it before. But I think it is obvious that the endgame is near.
Kraftigt ökad efterfrågan på silver ger mycket lägre silverpris. Hur kan detta vara möjligt och hur länge till kommer det att vara möjligt.
Silverpriset fortsätter ned trots att det är rekordstort intresse på derivat marknaden. Någonting måste ge efter.
What happens when too much cheap money chases a limited asset? Just like housing, 'cost' of Shale Oil wells have become about the monthly nut, not the all-in as The Fed-fueled pump focuses everyone on the short-term gains (ignorant of long-term pains). As the following chart shows, this credit-fueled exuberance has inflated basic costs for US oil producers dramatically...
...and with their costs of funding exploding higher, the vicious circle of higher costs and lower revenues for these levered firms is spinning faster and faster.
What is the bottom line? Well, as of Q3, when adding the consensus number for Q4 EPS, we find that while non-GAAP EPS is set to rise by a healthy 6.6%, real rarnings, as in GAAP EPS, will actually decline by 1.3% in 2014, meaning that for yet another year, the only upside in stocks has been due to - thank you Fed - multiples expansion.
Med alla marknader utom aktiemarknaden i en deflationstrend kan man undra hur länge till aktiemarknaden kan stå emot.
At 50.3 (missing expectations of 50.5 for the 2nd month in a row), this is the lowest print since March. All 5 components dropped led by notable weakness is outout and new orders (new export orders biggest MoM drop in 17 months) with medium- and small-enterprises heading deeper into contraction (at 48.4 and 47.6 respectively) as the Steel industry PMI craters to 43.3. Japan's PMI dropped marginally to 52 and then HSBC's China Manufacturing confirmed the government data and flash reading with a 50 print - the lowest since May as New Export Orders growth slowed for the 2nd month.