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HomeConsumer Metrics Institute Projects 3rd Quarter GDP of -2%!! That’s Right -2%!!
Posted by Larry Doyle on June 2nd, 2010 8:25 AM |
Do you hear a grinding sound? Listen a little harder. That sound is the brakes being applied to the U.S. economy.
The current price action in commodities markets (as highlighted in my commentary yesterday, “Commodities Growling Like a Bear”) is very much reflective of this braking process. How do we measure the slowing? Where can we gain evidence? Let’s turn to Rick Davis’ fabulous work at Consumer Metrics Institute.
Recall that Rick has not only been way out in front with his calls on the growth of the U.S. economy, but also very accurate especially given that he is projecting GDP a full 4 months prior to its official release. (more…)
Commodities Growling Like a Bear
Posted by Larry Doyle on June 1st, 2010 2:48 PM |
Does anybody have any doubt that the equity markets are heavily manipulated by the banks and Uncle Sam? I didn’t think so.
The same clearly holds true for our credit markets, primarily the Treasury market. That said, the commodities market, in my opinion, is much more closely aligned with the real economy. What have commodities done over the last few years? The DJ-UBS Commodity Index was up a mere 16% in 2009 and is down 10% so far in 2010. Over the last two years, the index is down approximately 50%, significantly more than most major equity averages.
What are commodities telling us currently? Let’s navigate. (more…)
What Are Insiders Doing, or Pump and Dump?
Posted by Larry Doyle on June 1st, 2010 12:03 PM |
Who truly knows more about a company’s prospects than the executives running the operation? These executives, commonly referred to as insiders, are privy to sensitive, non-public information. Insiders are subject to severe restrictions in how they handle this information, and most importantly in how they manage their own finances.
Insiders selling company stock is not always an indication that the company is having problems. Insiders manage their own finances and will sell for a variety of reasons, especially for tax purposes. That said, monitoring insider activity is always prudent. Are there trends? Is activity heavily skewed in one direction or another? Is there a major inconsistency between insider activity and analyst recommendations? (more…)
European Bank Stress Tests? Nein, Danke!!
Posted by Larry Doyle on June 1st, 2010 8:58 AM |
How do you think the wizards in Washington are feeling about the European bailout structured two weeks ago at their behest? In those two weeks, the Euro has plummeted another 5%, equities continue to suffer, and credit spreads continue to widen.
Our Washington wizards are looking back into their bag of tricks and now recommending another of their ‘shell game’ proposals to their European counterparts. Which proposal might this be? How do you spell charade? Try, bank stress tests.
Treasury Secretary Geithner is pressuring European central bankers to perform and release bank stress tests as a precursor to restoring financial health and stability into the European system. The Wall Street Journal highlights Geithner’s recommendation this morning in writing, U.S. to Push Europe on Stress Tests:
The U.S. intends to urge Europe to disclose publicly the results of bank stress tests as a way to calm jitters over the health of the Continent’s financial system, U.S. officials said. (more…)
Memorial Day 2010: Be a Hero!!
Posted by Larry Doyle on May 31st, 2010 9:39 AM |
Our country is filled with heroes.
Today we remember those individuals who have given their lives so we could be free. These men and women are true heroes. Interestingly enough, though, these fallen brothers and sisters of ours would not see themselves as heroes but just as citizens of this great land who were called to duty and gave of themselves. They gave so much and made the ultimate sacrifice in the process. Does our nation as a whole fully appreciate and embrace their sacrifice? Sometimes I wonder.
I firmly believe the economic challenges we face currently are correlated with the lack of appreciation we have allowed to develop for those who sacrificed for us. How can we regenerate that undying sense of patriotism and love?
On this Memorial Day 2010, how then can we best honor the real heroes who have given everything they had for us? Let us not merely pause and reflect but let us truly take action. What kind of action? Give. The greatest gift you can give is the gift of yourself. While many view giving in terms of resources, the greatest gift one can give is the gift of your time and talents.
Find the opportunity to give of your time and your talents within your homes, your neighborhoods, your communities. In the midst of your barbecues, pool parties, and picnics, think about how you can create an opportunity to make our nation just a little bit better by giving of yourself. In the process, you will be paying the ultimate respect to those who made the ultimate sacrifice for all of us.
As inspiration for your giving and for being a true hero yourself, please consider this short video:
God Bless America!!! Yes, God, the one who gave his only Son so we could be saved.
We need more giving in our world. Let it be you. Let it start today. Be a hero!
LD
Taxes, Taxes, Taxes…
Posted by Larry Doyle on May 28th, 2010 10:38 AM |
Uncle Sam wants your money. In fact, Uncle Sam needs your money. How is he going to get it? Any way he can.
Thank you to a loyal Sense on Cents reader for sharing more details about one of life’s two great certainties and how increased taxes will be coming your way. These details are highlighted in a recently released Credit Suisse research piece, Washington Notes:
While many questions have been raised about the ability of the Administration and Congress to find funding for the new initiatives, it is clear that a reduction in current spending alone will not be enough to cover new programs and therefore it will be necessary for the President and Congressional Democrats to rely heavily on increasing taxes. (more…)
Jeff Gundlach Provides Sense on Cents
Posted by Larry Doyle on May 28th, 2010 7:04 AM |
Sense on Cents is all about helping people understand risk. Would you know risk if and when you see it? How would you handle risk? Are there enormous hidden risks in the markets and economy today?
Jeff Gundlach, CEO and CIO of Doubleline, is an expert on assessing and managing risk. Thanks to a loyal Sense on Cents reader for sharing video clips from discussions Jeff Gundlach recently had with Morningstar’s Jason Stipp.
I guarantee you in the course of ten minutes and in reviewing four clips (European crisis, deflation, credit spreads, too big to fail asset managers) of Jeff Gundlach, you will be more well informed and prepared to effectively navigate the economic landscape.
1. DoubleLine CEO, CIO, and portfolio manager Jeffrey Gundlach says the European debt crisis is not close to being 50% priced into the market yet.
2. DoubleLine CEO, CIO, and portfolio manager Jeffrey Gundlach says deflationary forces of excessive debt remain the most important factor in the market today. (Video clip here)
3. DoubleLine CEO, CIO, and portfolio manager Jeffrey Gundlach says the covenants protecting investors have eroded very quickly in recent bond issuances, which will sow the seeds for bigger default problems and weaker performance in the future. (Video clip here)
4. DoubleLine CEO, CIO, and portfolio manager Jeffrey Gundlach says if Citigroup was too big to fail, then so much greater is the risk for asset managers operating with multiples of that market cap. (Video clip here)
Thanks again to Bud for sharing these clips of the top fixed income manager in the markets today, Doubleline’s Jeff Gundlach.
LD
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Pequot’s Samberg Deserves Hard Time in the Sin Bin for Insider Trading
Posted by Larry Doyle on May 27th, 2010 12:48 PM |
Justice not properly dispensed is ultimately justice denied. Regrettably this reality happens all too often in our country. For whatever reason, white collar crime in general and financial crimes specifically are all too often adjudicated by the imposition of fines. I think this is wrong.
I see this reality playing out yet again in a story just released by Bloomberg, Pequot, Samberg Pay $28 Million to End Insider-Trading Probe,
Pequot Capital Management Inc. and the hedge-fund firm’s founder, Arthur Samberg, will pay almost $28 million to settle regulatory claims they illegally tapped information from a Microsoft Corp. employee to bet on the software maker’s stock. (more…)
Will Miami Declare Bankruptcy?
Posted by Larry Doyle on May 27th, 2010 11:34 AM |
Are the ‘waves’ of municipal debt breaking on Miami about to overwhelm the city and force it to declare bankruptcy? Do not rule it out. If Miami goes this route, will that cause a domino effect for other municipalities around the country, including Los Angeles?
The risk of bankruptcy is very real. Thanks to a loyal Sense on Cents reader for bringing the impending financial doom in Miami to our attention. While municipal finances in our country encompass a whole set of issues, a common denominator is the crush of pension liabilities accrued by unions. (more…)
