The eurocrat’s off balance sheet final solution mIII is rapidly unraveling before our eyes. The implications are unimaginable. There is no off balance sheet financial repression solution without the ECB monetizing debt. The implications of the Chinese offer to lend only yuan to the troubled euro area (EFSF) is clear.. Ie translated ‘we don’t want …
Continue reading “Euro Farse.. Update.. inc Portuguese, Spanish, Italian & French Spreads to Bunds”
We continue to see no ‘off the cliff’ sort of declines in the leading economic indicators. Just as there was a disconnect earlier in the year as regards the weakening data and high equity valuations so too, on the lows of 2 weeks ago, there was a disconnect between the weak (though not disasterous) economic …
Continue reading “Weekly Economic Indicators (WF) -14th Oct 2011”
Apologies for the delay in posting up.. Ive been traveling between beach, mountain & city. Below the UBS technical view. Its a complex report this and contains many gems. The summary is sp500 above 1074 or so (on a closing basis) signifies the low is in for this wave of the cyclical bear. They suggest …
1) Corporate debt cheap and getting cheaper. The yield curve is flattening. Healthy corporate debt yields will likely fall alongside Treasury and MBS yields. 2) Corporate earnings to all other asset classes at extreme positive multiples. To cash or near cash companies yields are on multiples of 10 to 15. ie pes of 4 not …
Continue reading “International Equities.. ‘The Only Show in Town’”
Here below the WF weekly economic indicator report. In summary, the data this week mixed but given the very bearish expectations entering the week the data was a little better than expected with a good surprise in US PMI data and durables. Having said this the data continues to be weak but not the ‘off …
Continue reading “Economic Indicators 30th Sept 2011 – WF pdf”
UBS are of the view that the low is likely in for this leg of the cyclical bear. They do leave the door open to a retest of the lows of this leg in the next week or so but recommend any such move as a ‘buying opportunity’. October rebound scenario. Sectors etc are in …
Continue reading “Buy Stocks – ‘Intermediate Low – Buy Weakness’ UBS Update”
No expansion of the balance sheet. The Fed to: 1) Roll over expiring short term treasuries on to long term treasuries 2) To actively sell $400bn of short end treasuries and buy longer dated treasuries 3) To roll over mortgage back securities that the fed holds on her balance sheet to push mortgage rates lower. …
Continue reading “30 Year Treasuries at 3% Yield – Fed ‘Twists’ & Targets the Long End”
Of course its all probabilities. The Nasdaq is in breakout to the upside. The UBS technical team are sticking to their bearish forecast of the final interim lows to occur at lower levels. A move above 1230 would negate the UBS view.. I cited 1210 SP500 which we are still struggling with. Lets see.. Rich …
Its been “the” inverse correlation which has driven black box trading systems, hedge strategies, risk on and risk management trading systems of the last few years. Very simply as the dollar index declined asset prices rose, especially those assets priced in USDs ie commodities. Every correlation and inverse correlation must have some logical basis to …
Continue reading “DX/Asset Prices – Inverse Correlation Breakdown – Opportunity or Threat?”
UBS-Weekly06-09 A pretty bearish report with no change to the sell the bounces view. A likely top for gold and tactical lows for equities coming end sept. Asian in process of making ‘final leg down’ before rejoining secular bull. Re Asia – “In the next 2 to 3 weeks we would prepare to start buying …
The Swiss Central Bank has declared an “unlimited” expansion of her balance sheet to prevent continued appreciation of the chf. The euro and yen surged 10% at times this am vs the chf as the Swiss Bank sold newly printed CHF’s and purchased Euro Usds, GBPs, Yen, adding them to her hugely bloated balance sheet. …
MS, on the headline, seems to be shifting stance a little towards recessionary risks which would be U turn on their views expressed 10 days or so ago (report published here look for ‘MS rebuff to UBS’). But on closer reader MS have not changed their view that the US will not slip back into …
Continue reading “Morgan Stanley “Dangerously Close to Recession””