Bill,
I was going to add my take that the Ritholtz post seemed to lack conviction with the sentence "However, if we continue to see improvements, and especially if Employment gains traction, I will gladly lower that forecast to under 50%." and support of his position is missing-in-action. He cites two upbeat "Bloomberg articles are typical of the consensus:
• Capital Spending Nears 2008 Level as U.S. Skates New Recession
• World Dodges Recession With China-U.S. Buoy
I wanted to see what others thought, without my feelings being in the way. With 20/20 hindsight, I should have added my thoughts or simply foregone the post. I agree with your sentiment.
http://tinyurl.com/6qm234y
"...What most people find especially surprising is my tendency to have a bullish exposure while increasingly raising expectations of a recession. There are a few reasons for this:
1. Frequently, markets and the economy go separate ways;
2. Most recessions have begun in a quarter with positive GDP.
3. S&P 500 companies are deriving profits globally, and recession may be local.
4. Different time periods: Market moves are short term (3-6 months), while economic shifts are intermediate (6-24 months).
Just as no stock market moves in a straight line, so too no economy expands or contracts in a simple linear fashion. We find ourselves in a phase where oscillations within the broader market cycles will increasingly cause people to feel comfort that we have avoided a recession.
From January to today, I have raised my estimates for a recession over the next 18 months from 15% to over 50%.
Based on the data I have reviewed, I see nothing that makes me firmly believe we will miss a recession. However, if we continue to see improvements, and especially if Employment gains traction, I will gladly lower that forecast to under 50%." By Barry Ritholtz - November 7th, 2011, 7:15AM
http://tinyurl.com/6prqrqn
excerpt "...Therefore, the total debt just in the USA both private and public is about equal to the value of the entire world share markets. The TOTAL world derivatives market has been estimated at about $790 trillion on a face or nominal value perspective, which is about 11 times the size of the entire world economy."
Just when I think I have found a new set of indicators I can use, along comes this 11/3/2011 excerpt from Martin Armstrong http://tinyurl.com/6ro6yez
Takeaway -> "...do NOT watch the CDS prices as any indicator of what is really going on.."
"The NY Banks are wiggling out of paying off on sovereign debt issues on Greece. The clever issuers are reneging on the Greek CDS be saying a 50% haircut is not a DEFAULT and thus is not covered. What is now taking place is the CDS prices are collapsing for you cannot trust the banks that issued them. Yields are now rising even on Italy and a new phase of the Sovereign Debt Crisis seems to be unfolding.
Speaking to institutions that bought the CDS to protect their investments, the most likely result is you just have to sell and get out. Thus, yields on the sovereign debt are rising even in the face of ECB intervention that has failed in the case of Italy. The CDSs are collapsing and smart guys are selling them while they can. So do NOT watch the CDS prices as any indicator of what is really going on. The CDS gave false insurance relief, but now when people expected to cash in, the banks change the rules."
KUALA LUMPUR (Reuters) - CME Group (CME.O) said it was changing its margin requirements for customers of collapsed brokerage MF Global Holdings Ltd (MFGLQ.PK), cutting the size of any margin calls when positions are transferred to another brokerage
Separately, IntercontinentalExchange Inc (ICE.N), which operates the London-based ICE Futures Europe, said in a statement that ICE Futures U.S. is temporarily lowering the initial margin rate for all speculative accounts to a level equal to the maintenance margin rate for all contracts.
Bill, thank you once again for your WIR and your superb insights.
Here's the Greece news, which I am certain I have seen earlier, but this is from Bloomberg, By Marcus Bensasson, Maria Petrakis and Natalie Weeks - Nov 6, 2011 8:04 PM ET http://tinyurl.com/ckttqgs
For those who watch Soverign CDS numbers http://tinyurl.com/3nj6tjg, I see Hungary, Ireland and Portugal are all higher than our poster child, Italy. On November 4, Bill noted that Portugal may be the next pressure point.
Sovereign Credit-Default Swaps
Found this link at CNBC http://tinyurl.com/3nj6tjg but it never finished loading. Perhaps the market must be open. Data may come from 'markit' http://tinyurl.com/3of6c2y, which appears to be a paid service.
Thanks for Libor/OIS
CNBC data loaded, I see it comes from CMA Datavision.
Thanks for the article Jack. I'm populating a file with shortcuts to all of these indicators, so I can click through them easily to see the story. I feel that Europe will print, the U.S. will print and they will continue to sacrifice their paper currencies and their own citizens savings and future well-being to keep the global monetary debt-based system from collapsing. You have shown me additional tools, to fight complacency. As Kaimu used to say, "It all works until it doesn't".
Note: (Click on 5Y for the 5 year charts I'm looking at.)
The TED http://tinyurl.com/43v28on spread today is in the range of December 2006 and June 2010.
The VIX http://tinyurl.com/3eueo73 topped out above May 2010 and has been declining, let's hope it continues falling.
The CDX http://tinyurl.com/3mx3df7 is much higher than 2007 and is rising as Steve Rosenbush mentioned in the article you linked to.
The EURIBOROIS http://tinyurl.com/3hgv7un is up to 2007 levels as you mentioned.
All: I am sure there are other indicators of this type we should be watching. Please post them if you have a favorite.
The last line in the Rosenbush interview, could make a magazine cover.
"I hope — I hope to God — they figure this out."
Jack,
I couldn't even spell Euribor spread until you posted it. Apparently it is "the interest rate at which a selection of European banks lend one another funds denominated in euros"
I pulled up the 6-month Euribor rates at this site http://tinyurl.com/4sgqpz
The site includes a 1999 -2011 chart and the Euribor rate for 2011 is far below the rate in 2007. On the chart at the attached link the rate went from about 2 to 5 at the end of 2008. I don't see this indicator as providing anything to be overly concerned about. Perhaps you have a different source for your long term chart of this indicator.
Geoff,
The S&P closed over the 1255 level you mentioned this morning. Maybe there will be a Christmas after all, Thanksgiving day came early this year. I sure hope Mr. Market doesn't take it back.
ennar,
The very small, lightly traded miners will not move much as a rule. You may see a bounce tomorrow. I don't hold any shares in these two, but I think they are good companies.
The very small miners require patience.
http://tinyurl.com/6abvddb
David Pett Oct 27, 2011 – 10:38 AM ET | Last Updated: Oct 27, 2011 11:46 AM ET
The sell off in Extorre Gold Mines Ltd. and other Argentine miners on Wednesday may have been overdone, say analysts.
Argentina announced a decree to repatriate mining revenues that “may have been misinterpreted by the market to mean that companies could no longer transfer mining earnings offshore, which we do not believe is the case,” Daniel Earle, an analyst at TD Securities said in a note to clients.
The Argentine government wants export revenues from mining projects to be repatriated and converted to Argentine currency prior to being distributed either locally or overseas.
The payment for goods and supplies from overseas and the distribution of dividends will then require the Argentine currency to be converted to the foreign currency of the transmittal.
Accordingly, this overturns the previous benefits provided by Argentina to oil and mining companies, in 2002 and 2003-04 respectively, that exempted them from the currency repatriation laws that apply to all other primary producers in the country.
Bill, your advice has been right on the mark. As always, I read your posts. Noting the past months, I did my own research, came to the same conclusion and bought as the market said this was going to be a 2008 redux! So, I experienced a bit of the "tremendous drawdown..." mentioned. However,now everything is in the green and I have some room to absorb the usual pullbacks.
A sincere thank you for all you've done. I'll put a dollar figure on it, when I see you in Toronto 2012.
John
Eric, UXG is the largest position in my portfolio, so I'm interested. I see UXG is up 0.21 premkt to 4.59, gold futures are presently down slightly. I expect to soon hear more info on the effect of the Argentina decree.
From UXG 10/27 news release
"COMMENTARY ON ARGENTINIAN DECREE
US Gold has learned that yesterday the government of Argentina announced a change to a 2004 decree which had previously exempted the mining industry from a requirement to repatriate revenues from exports. As further information becomes available, we will evaluate what impact this may have on the combined US Gold/Minera Andes entity (McEwen Mining). US Gold will keep its shareholders apprised as more information becomes available."
I am interested in all of UXG's projects, but the copper mine has captured my interest of late.
Minera Andes http://tinyurl.com/3tptj9d
"Los Azules is a 100% owned advanced-stage porphyry copper exploration project located in the cordilleran region of San Juan Province, Argentina near the border with Chile. It is one of the world's largest undeveloped copper deposits with a mineral resource of 10.3 billion pounds of copper (inferred) and 2.2 billion pounds of copper (indicated)."
Holding and reading.
http://tinyurl.com/3w5lal3
TORONTO, ONTARIO--(Marketwire - Oct. 27, 2011) - US GOLD CORPORATION (NYSE:UXG)(TSX:UXG) is pleased to announce that exploration drilling within the El Gallo Complex, located in Sinaloa State, Mexico, has intersected significant gold and silver mineralization at the San Dimas prospect. To date, results have been received from 7 holes. Highlights are shown below, with remaining results contained in Table 1. An additional 7 holes have been completed and assays are pending.
has a good post today on his paid subscriber service. His take on PM is the same as Bill, others on this board and myself. Fleck takes issue with Jim Stack, in his most recent newsletter that gold is "a tad bubblish."
I agree with Fleck, the only bubble I see is the bubble composed of global fiat currencies.
Fleck "It is the money printing and consequent erosion of the value of paper currencies that is behind the rise in the gold price."
Here, I'm just preaching to the choir.
J
FD: long PMI, SVM, UXG
Great news for a Friday morning. I hold 7% weighting @0.614 and plan to continue holding. Many thanks to Bill and Kaimu for PMI info. I expect SVM and UXG to also do well in the fullness of time. http://tinyurl.com/3jqob9r
Bill,
I was going to add my take that the Ritholtz post seemed to lack conviction with the sentence "However, if we continue to see improvements, and especially if Employment gains traction, I will gladly lower that forecast to under 50%." and support of his position is missing-in-action. He cites two upbeat "Bloomberg articles are typical of the consensus:
• Capital Spending Nears 2008 Level as U.S. Skates New Recession
• World Dodges Recession With China-U.S. Buoy
I wanted to see what others thought, without my feelings being in the way. With 20/20 hindsight, I should have added my thoughts or simply foregone the post. I agree with your sentiment.
http://tinyurl.com/6qm234y
"...What most people find especially surprising is my tendency to have a bullish exposure while increasingly raising expectations of a recession. There are a few reasons for this:
1. Frequently, markets and the economy go separate ways;
2. Most recessions have begun in a quarter with positive GDP.
3. S&P 500 companies are deriving profits globally, and recession may be local.
4. Different time periods: Market moves are short term (3-6 months), while economic shifts are intermediate (6-24 months).
Just as no stock market moves in a straight line, so too no economy expands or contracts in a simple linear fashion. We find ourselves in a phase where oscillations within the broader market cycles will increasingly cause people to feel comfort that we have avoided a recession.
From January to today, I have raised my estimates for a recession over the next 18 months from 15% to over 50%.
Based on the data I have reviewed, I see nothing that makes me firmly believe we will miss a recession. However, if we continue to see improvements, and especially if Employment gains traction, I will gladly lower that forecast to under 50%." By Barry Ritholtz - November 7th, 2011, 7:15AM
http://tinyurl.com/6prqrqn
excerpt "...Therefore, the total debt just in the USA both private and public is about equal to the value of the entire world share markets. The TOTAL world derivatives market has been estimated at about $790 trillion on a face or nominal value perspective, which is about 11 times the size of the entire world economy."
Just when I think I have found a new set of indicators I can use, along comes this 11/3/2011 excerpt from Martin Armstrong http://tinyurl.com/6ro6yez
Takeaway -> "...do NOT watch the CDS prices as any indicator of what is really going on.."
"The NY Banks are wiggling out of paying off on sovereign debt issues on Greece. The clever issuers are reneging on the Greek CDS be saying a 50% haircut is not a DEFAULT and thus is not covered. What is now taking place is the CDS prices are collapsing for you cannot trust the banks that issued them. Yields are now rising even on Italy and a new phase of the Sovereign Debt Crisis seems to be unfolding.
Speaking to institutions that bought the CDS to protect their investments, the most likely result is you just have to sell and get out. Thus, yields on the sovereign debt are rising even in the face of ECB intervention that has failed in the case of Italy. The CDSs are collapsing and smart guys are selling them while they can. So do NOT watch the CDS prices as any indicator of what is really going on. The CDS gave false insurance relief, but now when people expected to cash in, the banks change the rules."
http://tinyurl.com/83zxsep
KUALA LUMPUR | Sun Nov 6, 2011 8:22pm EST
KUALA LUMPUR (Reuters) - CME Group (CME.O) said it was changing its margin requirements for customers of collapsed brokerage MF Global Holdings Ltd (MFGLQ.PK), cutting the size of any margin calls when positions are transferred to another brokerage
Separately, IntercontinentalExchange Inc (ICE.N), which operates the London-based ICE Futures Europe, said in a statement that ICE Futures U.S. is temporarily lowering the initial margin rate for all speculative accounts to a level equal to the maintenance margin rate for all contracts.
Bill, thank you once again for your WIR and your superb insights.
Here's the Greece news, which I am certain I have seen earlier, but this is from Bloomberg, By Marcus Bensasson, Maria Petrakis and Natalie Weeks - Nov 6, 2011 8:04 PM ET http://tinyurl.com/ckttqgs
For those who watch Soverign CDS numbers http://tinyurl.com/3nj6tjg, I see Hungary, Ireland and Portugal are all higher than our poster child, Italy. On November 4, Bill noted that Portugal may be the next pressure point.
All green: Hang Seng +3%,
US futures -27 perhaps they will be green in the morning as well.
Sovereign Credit-Default Swaps
Found this link at CNBC http://tinyurl.com/3nj6tjg but it never finished loading. Perhaps the market must be open. Data may come from 'markit' http://tinyurl.com/3of6c2y, which appears to be a paid service.
Thanks for Libor/OIS
CNBC data loaded, I see it comes from CMA Datavision.
Thanks for the article Jack. I'm populating a file with shortcuts to all of these indicators, so I can click through them easily to see the story. I feel that Europe will print, the U.S. will print and they will continue to sacrifice their paper currencies and their own citizens savings and future well-being to keep the global monetary debt-based system from collapsing. You have shown me additional tools, to fight complacency. As Kaimu used to say, "It all works until it doesn't".
Note: (Click on 5Y for the 5 year charts I'm looking at.)
The TED http://tinyurl.com/43v28on spread today is in the range of December 2006 and June 2010.
The VIX http://tinyurl.com/3eueo73 topped out above May 2010 and has been declining, let's hope it continues falling.
The CDX http://tinyurl.com/3mx3df7 is much higher than 2007 and is rising as Steve Rosenbush mentioned in the article you linked to.
The EURIBOROIS http://tinyurl.com/3hgv7un is up to 2007 levels as you mentioned.
All: I am sure there are other indicators of this type we should be watching. Please post them if you have a favorite.
The last line in the Rosenbush interview, could make a magazine cover.
"I hope — I hope to God — they figure this out."
Got it. I see what you mean.
Something to keep an eye on, especially if it breaks above 1.0
Jack,
I couldn't even spell Euribor spread until you posted it. Apparently it is "the interest rate at which a selection of European banks lend one another funds denominated in euros"
I pulled up the 6-month Euribor rates at this site http://tinyurl.com/4sgqpz
The site includes a 1999 -2011 chart and the Euribor rate for 2011 is far below the rate in 2007. On the chart at the attached link the rate went from about 2 to 5 at the end of 2008. I don't see this indicator as providing anything to be overly concerned about. Perhaps you have a different source for your long term chart of this indicator.
Geoff,
The S&P closed over the 1255 level you mentioned this morning. Maybe there will be a Christmas after all, Thanksgiving day came early this year. I sure hope Mr. Market doesn't take it back.
ennar,
The very small, lightly traded miners will not move much as a rule. You may see a bounce tomorrow. I don't hold any shares in these two, but I think they are good companies.
The very small miners require patience.
http://tinyurl.com/6abvddb
David Pett Oct 27, 2011 – 10:38 AM ET | Last Updated: Oct 27, 2011 11:46 AM ET
The sell off in Extorre Gold Mines Ltd. and other Argentine miners on Wednesday may have been overdone, say analysts.
Argentina announced a decree to repatriate mining revenues that “may have been misinterpreted by the market to mean that companies could no longer transfer mining earnings offshore, which we do not believe is the case,” Daniel Earle, an analyst at TD Securities said in a note to clients.
The Argentine government wants export revenues from mining projects to be repatriated and converted to Argentine currency prior to being distributed either locally or overseas.
The payment for goods and supplies from overseas and the distribution of dividends will then require the Argentine currency to be converted to the foreign currency of the transmittal.
Accordingly, this overturns the previous benefits provided by Argentina to oil and mining companies, in 2002 and 2003-04 respectively, that exempted them from the currency repatriation laws that apply to all other primary producers in the country.
Bill, your advice has been right on the mark. As always, I read your posts. Noting the past months, I did my own research, came to the same conclusion and bought as the market said this was going to be a 2008 redux! So, I experienced a bit of the "tremendous drawdown..." mentioned. However,now everything is in the green and I have some room to absorb the usual pullbacks.
A sincere thank you for all you've done. I'll put a dollar figure on it, when I see you in Toronto 2012.
John
Eric, UXG is the largest position in my portfolio, so I'm interested. I see UXG is up 0.21 premkt to 4.59, gold futures are presently down slightly. I expect to soon hear more info on the effect of the Argentina decree.
From UXG 10/27 news release
"COMMENTARY ON ARGENTINIAN DECREE
US Gold has learned that yesterday the government of Argentina announced a change to a 2004 decree which had previously exempted the mining industry from a requirement to repatriate revenues from exports. As further information becomes available, we will evaluate what impact this may have on the combined US Gold/Minera Andes entity (McEwen Mining). US Gold will keep its shareholders apprised as more information becomes available."
I am interested in all of UXG's projects, but the copper mine has captured my interest of late.
Minera Andes http://tinyurl.com/3tptj9d
"Los Azules is a 100% owned advanced-stage porphyry copper exploration project located in the cordilleran region of San Juan Province, Argentina near the border with Chile. It is one of the world's largest undeveloped copper deposits with a mineral resource of 10.3 billion pounds of copper (inferred) and 2.2 billion pounds of copper (indicated)."
Holding and reading.
http://tinyurl.com/3w5lal3
TORONTO, ONTARIO--(Marketwire - Oct. 27, 2011) - US GOLD CORPORATION (NYSE:UXG)(TSX:UXG) is pleased to announce that exploration drilling within the El Gallo Complex, located in Sinaloa State, Mexico, has intersected significant gold and silver mineralization at the San Dimas prospect. To date, results have been received from 7 holes. Highlights are shown below, with remaining results contained in Table 1. An additional 7 holes have been completed and assays are pending.
Thanks for the link Kaimu.
has a good post today on his paid subscriber service. His take on PM is the same as Bill, others on this board and myself. Fleck takes issue with Jim Stack, in his most recent newsletter that gold is "a tad bubblish."
I agree with Fleck, the only bubble I see is the bubble composed of global fiat currencies.
Fleck "It is the money printing and consequent erosion of the value of paper currencies that is behind the rise in the gold price."
Here, I'm just preaching to the choir.
J
FD: long PMI, SVM, UXG
Great news for a Friday morning. I hold 7% weighting @0.614 and plan to continue holding. Many thanks to Bill and Kaimu for PMI info. I expect SVM and UXG to also do well in the fullness of time. http://tinyurl.com/3jqob9r