Part 2
BACKDOC: WITH SOME EVIDENCE OF INFLATION STARTING TO RAISE ITS HEAD, THE FED WILL BE UNDER PRESSURE SOON TO START RAISING RATES.
THIS USUALLY CAUSES PRESSURE ON STOCK PRICES AS IT SIGNALS A CONTRACTION IN MARKETS AND PRESSURE TO SELL STOCKS. MONEY BEGINS TO LEAVE THE MARKET DURING RECESSIONS AS OPPOSED TO EXPANSIONARY ECONOMIES!
NO STAY WITH ME! SLAP! HEE HEE
IF THE ECB BEGINS ITS EASING POLICY ON THE EURO OTHER CURRENCIES MAY ALSO JOIN THE PARTY LIKE THE YEN! THIS MAY CAUSE A SPIKE IN THE DOLLAR WHICH WILL PUT THE BRAKES ON U.S. EXPORTERS!
....
BACKDOC: WITH SOME EVIDENCE OF INFLATION STARTING TO RAISE ITS HEAD, THE FED WILL BE UNDER PRESSURE SOON TO START RAISING RATES.
THIS USUALLY CAUSES PRESSURE ON STOCK PRICES AS IT SIGNALS A CONTRACTION IN MARKETS AND PRESSURE TO SELL STOCKS. MONEY BEGINS TO LEAVE THE MARKET DURING RECESSIONS AS OPPOSED TO EXPANSIONARY ECONOMIES!
NO STAY WITH ME! SLAP! HEE HEE
IF THE ECB BEGINS ITS EASING POLICY ON THE EURO OTHER CURRENCIES MAY ALSO JOIN THE PARTY LIKE THE YEN! THIS MAY CAUSE A SPIKE IN THE DOLLAR WHICH WILL PUT THE BRAKES ON U.S. EXPORTERS!
....
RECENTLY, CHINA DECREASED THE AMOUNT THAT BANKS WOULD HAVE TO KEEP ON RESERVE IN THEIR BANKS CAUSING A MOODYS DOWNGRADE ON THEIR DEBT! OUCH!
WHY DO I SHARE WHATS GOING ON HERE?
WELL, WE ARE LIKELY VERY CLOSE TO THAT IMPLEMENTATION DAY THAT HAS BEEN TALKED ABOUT BY CHATTY IRAN.
WE HAVE GREAT CONCERN ON HOW WE TRANSITION FROM THE FIAT CURRENCY WORLD INTO THE "GLOBAL NEW REALITY"!
IT COULD BE FINANCIALLY LETHAL FOR OUR FUTURES, BY EXCHANGING OUR 25% GOLD ASSET BACKED DINAR INTO FIAT DOLLARS!
I'M TRYING TO HELP YOU UNDERSTAND THAT FIAT COMPARED TO ASSET BACKED MAY CAUSE A BLACK SWAN EVENT SOMETIME IN JUNE TO SEPTEMBER!
WE JUST FOUND OUT THAT CHINA WILL BE FULLY INTEGRATED INTO THE SDR ON OCTOBER 1ST 2016!
THERE WILL BE AN AUDIT BY THE IMF PRIOR TO THIS EVENT WHICH MAY BE MARKET MOVING!
AS I'VE MENTIONED MANY TIMES BEFORE IT WILL BE DIFFICULT TO MAKE FINANCIAL PLANS UNTIL THE GLOBAL REALITY VALUE IS FINALLY ESTABLISHED! WILL THIS BE AFTER CHINA IS PROPERLY VALUED? MMMMM
8@8, DOC IMO
Thunderhawk: Backdoc Alert
Goldman doubles down on calls to short the euro ahead of ECB
A team of currency strategists at Goldman Sachs is again calling for the European Central Bank to deliver a surprisingly dovish expansion of its easing regimen on Thursday — despite getting burned by a similar call three months ago.
The team, led by chief currency strategist Robin Brooks, believes the ECB will need to act aggressively on Thursday if it wants to jolt the eurozone out of its deflationary spiral and help push price growth back toward its 2% target. More stimulus measures would indirectly weaken the euro against the dollar and its other rivals, driving up the prices of imported goods.
Core prices grew at an annualized rate of just 0.7% in February, down from 1% a month earlier, and only slightly above its level from January 2015, before the ECB announced its program of monthly asset purchases.
Goldman’s economists have called for a 10 basis-point deposit-rate cut, and for the central bank to increase its monthly asset purchases by €10 billion. But Brooks believes the ECB will go even further — possibly cutting its deposit rate by 20 basis points or more while committing hundreds of billions of additional euros to its program of monthly asset purchases.
The Goldman team has stood by its call for the euro to hit parity with the dollar even as many other strategists have backed away from that view over the past six months.
Goldman’s current forecasts put the euro at 95 cents in 12 months.
Brooks said there was “a compelling case” for shorting the euro EURUSD, -0.3541% ahead of the ECB’s December meeting even though the shared currency had already shed 3.5% of its value against the dollar during November.
But the ECB underdelivered, sparking a massive short squeeze in the euro. Shortly after, Brooks & Co. admitted that they badly misread the meeting.
But circumstances have changed since December, Brooks said. If the central bank wants to have a shot at reviving inflation, it will need to drastically expand its stimulus efforts.
“There is little doubt in our minds that the ECB wants to surprise this week, not just because of the inflation picture, but also because it disappointed in December, inadvertently tightening financial conditions materially,” Brooks said.
Brooks believes the eurozone’s persistently weak price growth is linked to labor-market reforms adopted by peripheral countries like Italy and Spain, as both sought to make their industries more competitive.
Wages fell as a result of the reforms, weighing on prices.
Brooks believes the ECB’s decision to hold back in December was meant as a repudiation of ECB President Mario Draghi’s “go it alone” style. This time, Brooks expects the governing council to find a consensus more easily.
“We know that rubbed a lot of governing council members the wrong way because they felt like he was trying to push them into another course of action,” Brooks said. “This time [Draghi] has kept a low profile, that way he can build a coalition and have more consensus.”
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BACKDOC: IT LOOKS LIKE THE BEAR MARKET RALLY MAY BE ROLLING OVER, BASED ON THESE TECHNICAL INDICATORS. ARE WE READY TO TAKE ANOTHER LEG DOWN? MMMM
MAYBE!
I CONTINUE TO WATCH WHAT WILL DEPEG THE DOLLAR FROM OIL?
WILL IT BE SOME ANNOUNCEMENT?
OR WILL IT BE SOMETHING MORE RADICAL LIKE PEGGING OIL TO THE SDR? MMMMM SLAP!
WE WATCH! WE WATCH FOR ACTIONS! DOC IMO
Thunderhawk: Backdoc Alert
I see ‘lower highs and lower lows’: BTIG chartist
The recent stock market advance has been a "relief rally" that may run out of steam, BTIG Chief Technical Strategist Katie Stockton said Tuesday.
"It is a countertrend rally at this point. We do have those lower highs and lower lows," she told CNBC's "Squawk Box," following a five-session winning streak for the S&P 500. The index, as of Monday's close of 2,001.76 , was up 8 percent since its most recent low on Feb. 11.
Looking at the S&P's 200-day moving average, Stockton said: "You can see it's rolled over" and facing "overhead resistance" to 2,025 with the "first major support is near 1,820."
"We've seen a change in the character of the market year to date," Stockton said, pointing to the worst January performance since 2009, which continued for the first nine trading days of February.
"Last year wasn't great either, we saw a lot of negative divergences: less participation on the upside [and] we saw loss of momentum that was very real," she said. "It wasn't until January that we saw a lot of breakdowns. And indeed those breakdowns are very difficulty to recover from."
"We need to respect that," she continued, "[and] have a shorter time frame on long positions and be somewhat noncommittal."
As for U.S. oil prices, up nearly 40 percent since the recent $26.05-per-barrel bottom on Feb. 11, Stockton said she's not convinced of the staying power of the upswing.
We did see WTI crude get above its 50-day moving average," she said. "It could prove to be something more than that later on. But it's early stages." Energy stocks had anticipated "additional stabilization," she added.
But even with the recent surge, West Texas Intermediate crude, the American oil benchmark, was still down over 60 percent since the June 20, 2014, top of $107.26 per barrel.
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REVERSE PSYCHOLOGY FAMILY - GET IT? ThunderHawk
Mountainman: No Of Course CHINA would "NEVER" want to take the "TOP" Economic (SPOT)....RIGHT??? ........That's WHY??? "They" were Stealing Trade Secrets and Manipulating their CURRENCY/MARKET........Ok got It!!!!!!!!.....Well W/ the NEW REALITY on the (HORIZON)........NEW RULES and CONTRACTS will "SET a NEW TONE"....However......In BUSINESS.........One "ALWAYS" has to CYOB...........000358medium_gif........LOL.....
China Has No Intention to Replace US on World Arena
China does not intend to take away the world leadership from the United States, Chinese Foreign Minister Wang Yi said Tuesday.
China does not have any plans to steal the world leadership from the United States:
"Tensions between China and the United States are caused by the constant US concerns regarding strategic deterrence of China, as the US worries that China someday will replace it. I would like to emphasize that China is not the United States and will never become the second United States. We have no intention to replace anybody or capture anybody's leadership," Wang said at a press conference.
In late February, the Chinese foreign minister visited the United States and held a meeting with US President Barack Obama and Secretary of State John Kerry. During these meetings the minister expressed Beijing's willingness to uphold cooperation with Washington on acute regional and international issues and jointly counter global challenges.
The top Chinese diplomat added that the cooperation between the two countries had made major progress under the leadership of Obama and Chinese President Xi Jinping.
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BACKDOC: GLAD I HAVE A SAFE AND REWARDING PLAN GOING FORWARD ON THIS!
FOR NOW I WILL LEAVE THIS ALONE BECAUSE MAKING THOSE MOVES WILL NEED TO HAPPEN AFTER THE GLOBAL REALITY VALUE! DOC IMO
Thunderhawk: Backdoc Alert
Opinion: Why stocks won’t earn you nearly as much money over the next 7 years
CHAPEL HILL, N.C. (MarketWatch) — There’s one thing we know for sure as we celebrate the 7th anniversary of the beginning of the bull market on March 9, 2009: There’s no way the stock market over the next seven years will produce a return anywhere as good as the last seven.
That’s because the stock market’s growth over the last seven years has far outpaced that of the economy in general or publicly-traded companies in particular. Such a divergence can’t keep widening indefinitely.
Though saying so looks as though I’m raining on the stock market’s birthday parade, it’s just as true that I’m celebrating the extent to which the stock market has been an overachiever: U.S. stocks have performed remarkably, despite weak economic growth.
On that fateful day seven years ago when the 2007-2009 bear market came to an end, the Dow Jones Industrial Average DJIA, -0.64% traded as low as 6,516.86 (versus more than 17,000 today), while the S&P 500 SPX, -1.12% dipped to 672.88 (versus 2,001.76 as of Monday).
The Wilshire 5000’s total-return index, which takes all publicly-traded stocks and dividends into account, has risen over the last seven years at an annualized rate of 19.4%.
To appreciate the extent to which the stock market has been an overachiever, start by considering corporate sales: In contrast to the overall stock market’s gain of nearly 20% annualized, per-share sales over the last seven years have grown at an annualized pace of less than 2%. And even that anemic rate comes by comparing recent sales to their depressed level registered during the Great Recession.
As you can see from the chart at the top of this column, a similar divergence exists between the stock market’s seven-year growth rate and that of book value, corporations’ replacement cost, and gross domestic product.
One reason for these wide divergences is widening profit margins: Operating earnings per share for the S&P 500 have grown at a 13.0% annualized rate over the last seven years. That’s far faster than the growth rates of GDP, sales, book value, and so forth.
This impressive overachieving is a double-edged sword. Unless those margins continue to widen even further in coming years from their already lofty levels, earnings per share growth will have no choice but to fall back.
How likely is it that profit margins might widen? Robert Arnott, the founder and chairman of Research Affiliates, is confident they won’t, since it would mean a continued shrinking of the already reduced share of GDP going to worker compensation. He says that if profit margins were to widen from there, “the backlash would be so widespread” that it would no longer be just “Occupy Wall Street” but “Occupy Main Street.”
To be sure, there’s one other way the stock market in coming years could theoretically outpace overall economic growth: Expanding ratios of price-to-earnings, book value, sales, and so forth. But current ratios are already well above historical averages, so the more likely trend in coming years is for ratios to contract rather than expand.
The bottom line: As we celebrate the stock market’s remarkable performance over the last seven years, don’t forget that famous line from British economist John Maynard Keynes: Trees don’t grow to the sky.
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BACKDOC: MAYBE THEY SOLD THEIR GOLD TO BUY SOME FOREIGN CURRENCY THAT WAS GOING TO EXPLODE IN VALUE! HEE HEE DOC IMO
Mountainman: Well I would say......O YAH.......We are "READY" for You IRAN/That's WHY??? We {OFF LOADED} The (MAJORITY) of Our GOLD.......=In "PREPARATION" for You!!!!!!!!.......IMO
Thunderhawk: Canada eager to re-open embassy in Tehran
Canadian prime minster has been quoted as saying that Ottawa is eager to reopen its embassy in Tehran, although reestablishment of full diplomatic relations is time taking and its process has just started.
Justin Trudeau was quoted as saying so in the Tuesday edition of Huffington Post's website in reply to that news media's reporter's question on termination of the anti-Iranian sanctions and the new prime minister's intention to restore relations with Iran, or not, and whether he believes the severing of ties had sent a wrong message to Iran.
Prime Minister Trudeau all the same rejected the idea that the severing of ties by the former premier had been a wrong move, or that it had sent the wrong message to Tehran.
'I believe Canada transmits quite correct signals,' he added.
The Liberal prime minister had earlier said that after four years of severed ties, Ottawa was ready for restoration of full diplomatic ties with Tehran.
'Considering Iran's moves in the framework of the Joint Comprehensive Plan of Action (JCPOA) and Tehran's full commitment to its vowed obligations Iran has taken a major step and we expect restoration of diplomatic relations in near future,' said Trudeau.
He added that he raise the issue in the Canadian cabinet for sure and put the issue to debate there.
The Canadian government had a while ago announced that after the implementation of the JCPOA and the UN confirmation of it Ottawa terminated a part of its anti-Iranian sanctions and was after full restoration of ties with Iran.
The Canadian government had elaborated that the terminated sanction were in the field of comprehensive financial and monetary fields, including banking service, imports and exports.
The Canadian government has said that in addition to lifting the UN sanctions, it will also revise its unilateral economic sanctions.
The former Canadian government had in the summer of 2012 under the US and Zionists' pressure shut down its embassy in Tehran.
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BACKDOC: OK THEN WHY THE SANCTIONS AND ALL THE DRAMA?
LIKE I SAID, THERE'S A GREAT CHANCE THAT IT WAS DESIGNED TO SPREAD WEALTH AROUND AND TO HELP CREATE UNCERTAINTY SO THAT IRAN COULD COMPLETE ITS MONETARY REFORM! DOC IMO
Thunderhawk: US: Iran missile tests did not violate nuclear deal
The United States has said Iran’s recent missile tests do no breach the recent nuclear deal between Iran and the six world powers.
During his news conference on Tuesday, the US State Department spokesman John Kirby said the tests would not constitute a breach of the Iran nuclear deal.
However, the US diplomat added, Iran's latest reported missile test would be in breach of UN resolutions.
He said Washington could take the matter to the Security Council, the AFP reported.
Kirby said he could not confirm Iranian media's claim that Iran had conducted multiple tests, but warned Washington might take unilateral or international action in response.
Number 2231 resolution of the United Nations Security Council banned missile tests by Iran.
'I do want to make it clear that such tests, if they are true, are not a violation of the JCPOA,' he said, referring to the 'Joint Comprehensive Plan of Action' which was struck between Iran and the 5+1 in July.
'We have and we will use unilateral and multilateral tools to address this. If these latest reports are true, we'll take them up appropriately,' he said.
'We're not going to turn a blind eye to this... I'm just trying to get to a technical point here, which is that it's not a violation of the Iran deal itself,” he said according to the new agency.
At the last stage of a massive drill on Tuesday, the Islamic Revolution Guards Corps (IRGC) launched missiles from a multitude of places.
The IRGC said that the event began in the presence of IRGC commander Major General Mohammad Ali Jafari and the Commander of the IRGC Air Force Brigadier General Amir Ali Hajizadeh.
Commenting on the test, the Major General said that Iran's defense might and the country's national security is regarded as IRGC red line, he said adding that the enemies are afraid of Iranian missiles.
Launch of ballistic missiles from different locations is a crushing response to the allegations of the enemies which indicated parts of capabilities of IRGC missiles have been stationed nationwide, said the commander.
Since Zionist regime is within reach of Iranian missiles, it is quite natural that they should be more concerned, Jafari said.
In January, Washington imposed new sanctions on Iran's missile program just 24 hours after separate embargoes targeting its nuclear program had been lifted.
Also on Tuesday, some of the United States' top military commanders raised concerns about what they called Iran's continued 'destabilizing behavior' in the Middle East.
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Mountainman: I'm sure You do Well......While (MANY) Businesses are "LOSING" their Rears and (OTHERS) are "CLEANING HOUSE" while It's on A DOWNSLIDE.....IMO.....and "IF" One (THINKS) these GOLDMAN Boys don't "KNOW" What's Around the CORNER???....."Think Again".......IMO.....= A "RECYCLE of CYCLES"!!!!!!!! and NEW BEGINNINGS (8)
Thunderhawk: Backdoc Alert
A $10 billion hedge fund is bracing for a 2008-type event
Perry Capital, a $10 billion New York-based multistrategy hedge fund led by Goldman Sachs alum Richard Perry, is preparing for another credit event like 2008.
Perry Capital bought $1 billion worth of credit-default swaps (CDS) on about 10 investment-grade corporate bonds, The Wall Street Journal reported last month.
Investment-grade bonds have a rating of BBB or higher by Standard & Poor's or Baa3 or higher by Moody's. They are companies seen as having the safest balance sheets.
Perry stands to profit if those companies are downgraded by ratings agencies.
"I think there are some real interesting examples where the ratings agencies are maybe a year or two behind and still have different credits rated as investment-grade...." Perry said Friday in Austin, Texas, at the University of Texas Management Co.'s 20th-anniversary event.
He added: "But there are interesting opportunities to buy protection on some of those companies as we believe a credit event will occur. Because when the credit event occurs, like in 2008–and we did this then also—you are very prepared as the market starts to tank. You already have a big short in place and it protects you as your start to buy things on the way down."
During the panel, Perry declined to name specific companies he's targeting. However, he hinted that they're companies he thinks will be disrupted by technological changes.
"So we've been building up a book of investment-grade shorts that we think are in businesses where the technology is really something that might look like film, or might look like a long distance telephone call, or might look like a telephone booth, or radio. And all of these [are] things that when I was growing up were fundamental and essential and key parts of the US economy and today essentially are buggy whips," he said.
Later on during the discussion, he used BlackBerry as an example to illustrate his point about companies that once dominated and are now being suddenly disrupted.
REUTERS/Mark Blinch" data-mce-source="Thomson Reuters" data-mce-caption="A sign is seen at the Blackberry campus in Waterloo" width="650" height="487">(Thomson Reuters)
A sign is seen at the Blackberry campus in Waterloo
"Probably everyone in this room was addicted for some period of time 1999 to 2008, 2009, 2010 before everyone evolved and went to a different type of smartphone," he said, adding, "That inflection point from where BlackBerry stopped growing and when they started losing subscribers, that was the beginning of the end."
He also thinks that there are a number of those situations today where a company's stock might look cheap and it might look like there's value, but they will end up being "value traps."
Perry noted earlier in the panel that when putting money into distressed situations it's "important to keep alive" while things aren't quite so active.
"So for us, we'll move quite dramatically. We've had as much as 70 or 80% of our firm in credit and as little as 10% or 20%. But to stay involved in credit, for instance right now, we actually believe that there's a distinct possibility that... we will go into a credit cycle sometime over the next year or two."
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Thunderhawk: Backdoc Alert
A $10 billion hedge fund is bracing for a 2008-type event
Perry Capital, a $10 billion New York-based multistrategy hedge fund led by Goldman Sachs alum Richard Perry, is preparing for another credit event like 2008.
Perry Capital bought $1 billion worth of credit-default swaps (CDS) on about 10 investment-grade corporate bonds, The Wall Street Journal reported last month.
Investment-grade bonds have a rating of BBB or higher by Standard & Poor's or Baa3 or higher by Moody's. They are companies seen as having the safest balance sheets.
Perry stands to profit if those companies are downgraded by ratings agencies.
"I think there are some real interesting examples where the ratings agencies are maybe a year or two behind and still have different credits rated as investment-grade...." Perry said Friday in Austin, Texas, at the University of Texas Management Co.'s 20th-anniversary event.
He added: "But there are interesting opportunities to buy protection on some of those companies as we believe a credit event will occur. Because when the credit event occurs, like in 2008–and we did this then also—you are very prepared as the market starts to tank. You already have a big short in place and it protects you as your start to buy things on the way down."
During the panel, Perry declined to name specific companies he's targeting. However, he hinted that they're companies he thinks will be disrupted by technological changes.
"So we've been building up a book of investment-grade shorts that we think are in businesses where the technology is really something that might look like film, or might look like a long distance telephone call, or might look like a telephone booth, or radio. And all of these [are] things that when I was growing up were fundamental and essential and key parts of the US economy and today essentially are buggy whips," he said.
Later on during the discussion, he used BlackBerry as an example to illustrate his point about companies that once dominated and are now being suddenly disrupted.
REUTERS/Mark Blinch" data-mce-source="Thomson Reuters" data-mce-caption="A sign is seen at the Blackberry campus in Waterloo" width="650" height="487">(Thomson Reuters)
A sign is seen at the Blackberry campus in Waterloo
"Probably everyone in this room was addicted for some period of time 1999 to 2008, 2009, 2010 before everyone evolved and went to a different type of smartphone," he said, adding, "That inflection point from where BlackBerry stopped growing and when they started losing subscribers, that was the beginning of the end."
He also thinks that there are a number of those situations today where a company's stock might look cheap and it might look like there's value, but they will end up being "value traps."
Perry noted earlier in the panel that when putting money into distressed situations it's "important to keep alive" while things aren't quite so active.
"So for us, we'll move quite dramatically. We've had as much as 70 or 80% of our firm in credit and as little as 10% or 20%. But to stay involved in credit, for instance right now, we actually believe that there's a distinct possibility that... we will go into a credit cycle sometime over the next year or two."
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