Hat Trick Letter – září 2010

Autor článku: 27. 9. 2010

Recese na obzoru? – Is Recession Near?

EL-ERIAN OF PIMCO RECOGNIZES THE MANY RECESSION SIGNALS WITHOUT USING THE DREADED WORD. HE SEEMS TO BE SAYING UNDER HIS BREATH THAT THE USFED AND ECONOMIC ADVISORS HAVE NO IDEA HOW TO SPUR GROWTH. HE ALWAYS STOPS SHORT OF URGING THE NATION TO RETURN TO INDUSTRIALIZATION AND STEP AWAY FROM ASSET BUBBLE PRIORITIES. $$$

Mohamed El-Erian, CEO of Pacific Investment Management Co (PIMCO) has cited alarming data that the USEconomy is slowing dangerously. He loses some credibility by mentioning that the recovery is losing momentum, since it never showed any signs of recovery, only response to a series of mindless clunky programs. He sees bad signals. Unemployment is high; consumer credit is in decline; small companies are being refused bank lines of credit. El-Erian openly states that bigger USGovt fiscal programs and additional USFed debt purchases are unlikely to spur a rebound. He said, „Throughout the summer, data signals have become more alarming. Current policy approaches here and abroad are unlikely to deliver a durable and robust US recovery. The equity markets are again under pressure while yields on Treasury bonds have collapsed, reflecting that market’s growing concerns about the weak economic outlook.“ Plain talk by a bright financial professional. He expects home values to fall further as foreclosures increase. Housing is in extremely deep trouble. He cited in a research note a list of action items, such as tax reform, housing finance reform, infrastructure investment, support for education, job retraining, removal of barriers to interstate competition, and stronger social safety nets, which translates to a complete economic revamp, restructure, and rebuild.

 

Zlato – Gold

A COMMON MAJOR CURRENCY DECLINE RELATIVE TO GOLD SHOULD MAKE FOR SURPRISINGLY EERIE QUIET, WITHOUT ALARM SIGNAL. A TIGHT RANGE SHOULD BE MAINTAINED BETWEEN THE EQUALLY CRIPPLED USDOLLAR & EURO CURRENCYS. THE LOUD GONG ALARM WILL COME FROM GOLD & SILVER, WHICH WILL LARGELY BE IGNORED.

The Wall Street crooks knew that gold might have been the great single beneficiary to an EU bond crisis. So they engineered a selloff in the Euro currency that resulted in a USDollar runup. My belief is that Wall Street firms made a ton of money on the controlled demolition of the Euro, and its short cover rally on the upside also. Watch the EU sovereign debt story trotted out very soon. The US$ DX 80.5 support is not holding, but watch the Europeans step in soon. They will likely announce their own currency debasement initiative. No currency alarm bells would ring, if the ranges hold. Just jousting among allies.

The next chapter will not unfold like the last chapter, as Greece defaults and Spain occur. The next time, the USDollar might rise a little, but not anywhere as much, my forecasted response to renewed European crisis. The main problem is that the United States has a massive crisis ongoing and continuous. This next time GOLD & SILVER will be the beneficiary to currency strife, the global tremor in the monetary system. The paper currencies and their attached sovereign shackles of debt have ruined the approved legal tender format. Faith holds the monetary system and the currencies together, now broken. The financial world has awakened to this fact. Many misled misguided investors and analysts openly and perilously expect the world to hunker down into the USDollar as safe haven. They are tragically mistaken. In the forecasting arena, applying yesterday’s effect to a different world makes for gross errors. My forecast is for all currencies, including the USDollar, to suffer great damage in their purchase power and the all important confidence aspect, but to rotate in focused stories. The broken sovereign debt arena has done untold damage to the monetary system, a story not fully told. Gold & Silver will rise, but the currencies (USDollar, Euro, Pound Sterling, Yen) will experience eerie calm !!! Do not expect much upside movement even in the crude oil price. The lack of hedge activity in crude oil against the US$ will contribute to the strange eerie calm. THE WORLD IS UNDERGOING AN EARTHQUAKE TO SHATTER THE GLOBAL MONETARY SYSTEM, with rotating currency damage in the Competing Currency War. Its primary focal point for recognition is to be Gold & Silver. Watch squirming done by the major financial networks, Wall Street firms, and the spin doctors, who have been wrong about gold for a full decade.

THE GOLD SHORTFALL AT THE LONDON METALS EXCHANGE IS MASSIVE, UNREPORTED, AND SOON TO RESULT IN BREAKDOWN. THE EFFECT ON THE GOLD PRICE IS DIFFICULT TO ASSESS. IT SHOULD DOUBLE QUICKLY, THEN DOUBLE AGAIN.

 

Investoři opouští akciové fondy – Money Exodus From Equity Funds

WITNESS THE EXODUS OF MONEY, IN RESPONSE TO DIVERSE ILL WINDS. ANOTHER $5.4 BILLION WAS REMOVED FROM STOCK FUNDS INSIDE THE UNITED STATES. THE STRING OF WEEKS IN EXODUS CONTINUES. WORSE, ON A SINGLE WEEK, $7.1 BILLION WAS REMOVED FROM GLOBAL STOCK FUNDS. STOCK OUTFLOWS FROM THE USMARKETS CONTINUED FOR THE 17TH STRAIGHT WEEK. MONEY IS FLEEING FROM THE TOXIC BROKEN TINKERED CRIME RIDDEN FINANCIAL CENTERS. $$$

Investors withdrew a net $7.1 billion from equity funds tracked worldwide in the week ending August 25th, according to tracker EPFR Global. They put $5.2 billion into bond funds of many stripes. The United States and Europe are losing momentum. A net $5.4 billion was redeemed from US stock funds. Inflows into emerging nation stock markets were the lowest in 13 weeks, as their bond funds took in $1 billion. US bond funds drew $2.5 billion. European stock funds also posted net outflows, taking losses this calendar year to $15.7 billion. Inflows into emerging market bond funds continued for a 13th consecutive week, taking the annual total beyond 300% of the annual record set in 2005. The previous high in 2005 high was $9.7 billion. Global bond funds are in position to surpass the record inflow of $47 billion set in 2009. Great shifts in flow of funds is occurring.

The 17th consecutive weekly stock fund outflow was recorded in the United States. This is a major exodus, not reported, certainly on CNBC. Stock fund redemptions are actually accelerating. ICI reports $5.4 billion in stock fund outflows, fully 50% more than the previous week. Year to date outflows have now hit $54 billion in 2010, as ever more capital is going into fixed income instruments. The investment community is chasing bonds, the next bubble. The experts are calling them safer. In 2005 and 2006, mortgage bonds were considered safe.

 

Prodeje domů prudce padají – Housing Sales Crash

HOUSING SALES CRASH, AS THEY FALL 27% FROM JUNE TO JULY. THE TAX CREDIT INDUCEMENT HAS DEEPLY AFFECTED FINAL SALES. A CRASH IS IN PROGRESS. NATIONAL LEADERS ARE DELAYING ANY ACTION UNTIL AFTER THE NOVEMBER ELECTIONS. MOMENTUM WILL BE GREAT BY THEN. HOUSING PRICES ARE CERTAIN TO FALL ANOTHER 10% ACROSS THE NATION, MORE IN BUBBLY REGIONS. IT WILL RESULT IN A WAVE OF NEW INSOLVENCIES.

Exising US homes sales plummeted in July to the lowest pace in 15 years, in a resumption of the powerful economic recession. The report by the National Assn of Realtor has struck fear in the hearts of the most deluded bankers, who cling to the illusion of a sluggish recovery. The deterioration is historic. Existing home sales dropped a record 27.2% from June to an annual rate of 3.83 million units, the lowest since May 1995. A whiff of reality came from Michelle Meyer, senior economist at Bank of America Merrill Lynch in New York. She said, „This is a worrisome report. While it reflects the volatility caused by the end of the USGovt home buyer tax credits, it also indicates a deterioration in the underlying trend for housing demand. For the overall economy, the dangerous link to housing is home prices. This report signifies that home prices should fall considerably faster, which could tip the economy back into a recession. We are, however, not quite there yet, but this is a worrisome report.“

 

Situace vysokoškolských studentů – What College Students Are Realizing

COLLEGE STUDENTS ARE REALIZING DEEP DEBT BURDENS BEFORE ENTRY INTO THE JOB MARKET. THEY ARE BANKRUPT OUT OF THE EDUCATIONAL GATE. PREPARE FOR MAJOR CHANGES COMING WHERE YOUNG PEOPLE ESCHEW COLLEGE EDUCATIONS, OFFSET BY THE SHUTDOWN OF MANY UNIVERSITIES FROM HEAVY OPERATIONAL LOSSES. WITNESS ONE MORE FACET TO THE MARCH TO THE THIRD WORLD.

Graduating students are drowning in debt right out of the gate. US college students find themselves helpless to pay off educational costs. They march on the Road to Debt Perdition before paid salary checks. Over $830 billion is owed by US college students, with an astonishing $3000 added every second on the clock. For decades, the main financial baggage for Americans was credit card debt. Behold a shift, as college student debt has taken the lead #1 category. Students graduating in in the last few years have faced the worst job market in a generation. The majority will be unable to pay off the record debt. They will be crippled economic participants, unable to own a home. They will be forced to declare bankruptcy in droves.

 

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Tento výňatek je publikován na základě souhlasu Jima Willieho, jehož Hat Trick Report mám předplacen. Výňatky publikuji formou citátů. Vybírám budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

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