Gordon T Long

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PRESERVE & PROTECT: The Jaws of Death

 

The United States is facing both a structural and demand problem - it is not the cyclical recessionary business cycle or the fallout of a credit supply crisis which the Washington spin would have you believe.

 

It is my opinion that the Washington political machine is being forced to take this position, because it simply does not know what to do about the real dilemma associated with the implications of the massive structural debt and deficits facing the US.  This is a politically dangerous predicament because the reality is we are on the cusp of an imminent and significant collapse in the standard of living for most Americans.

 

The politicos’ proven tool of stimulus spending, which has been the silver bullet solution for decades to everything that has even hinted of being a problem, is clearly no longer working. Monetary and Fiscal policy are presently no match for the collapse of the Shadow Banking System. A $2.1 Trillion YTD drop in Shadow Banking Liabilities has become an insurmountable problem for the Federal Reserve without a further and dramatic increase in Quantitative Easing. The fallout from this action will be an intractable problem which we will face for the next five to eight years, resulting in the “Jaws of Death” for the American public.  READ MORE

 

 

   

 

PRESERVE & PROTECT: Mapping the Tipping Points

The economic news has turned decidedly negative globally and a sense of ‘quiet before the storm’ permeates the financial headlines. Arcane subjects such as a Hindenburg Omen now make mainline news. The retail investor continues to flee the equity markets and in concert with the institutional players relentlessly pile into the perceived safety of yield instruments, though they are outrageously expensive by any proven measure. Like trying to buy a pump during a storm flood, people are apparently willing to pay any price.  As a sailor it feels like the ominous period where the crew is fastening down the hatches and preparing for the squall that is clearly on the horizon. Few crew mates are talking as everyone is checking preparations for any eventuality. Are you prepared?

 

What if this is not a squall but a tropical storm, or even a hurricane? Unlike sailors the financial markets do not have the forecasting technology to protect it from such a possibility. Good sailors before today’s technology advancements avoided this possibility through the use of almanacs, shrewd observation of the climate and common sense. It appears to this old salt that all three are missing in today’s financial community.

 

Looking through the misty haze though, I can see the following clearly looming on the horizon.

Since President Nixon took the US off the Gold standard in 1971 the increase in global fiat currency has been nothing short of breath taking. It has grown unchecked and inevitably became unhinged from world industrial production and the historical creators of real tangible wealth.  READ MORE


READER ROADMAP -  2010 TIPPING POINTS aid to positioning COMMENTARY

 

 

 

POSTS:  WEDNESDAY 09-22-10

Last Update: 09/23/2010 03:42 AM

SCHEDULE: 1st Pass: 5:30AM EST, 2nd Pass: 8:00 AM, 3rd Pass 10:30 AM. Last Pass 5:30 PM

ARTICLE SOURCE 1 2 3 4 5 6 7 8 9 10
                       
Iran’s Global Ambitions - III YALE                    
                       
Sovereign Subjects - Ask Not Whether Governments Will Default, but How Mauldin X                  
Ireland Sells Bonds, Calms Concern That Bailout Needed Bloomberg X                  
USA                      
Seven More Years of Hard Times? Shiller X                  
Slump Over, Pain Persists WSJ X                  
Believe it or not WSJ X                  
Double-Dip Debate Continues Wells Fargo X                  
Is This What a Recovery Feels Like? NYT X                  
Recovery Deniers Just Got Mugged by Reality Baum X                  
ABC Consumer Confidence Drops, Poll Gets Downright Cynical- "Recession Ends, Nobody Notices" ZH X                  
                       
Treasuries Pare Gain as Fed Refrains From Debt Purchases Bloomberg     X              
Chasing High-Yield: "The Next Disaster"? EW     X              
Bond Markets Get Riskier WSJ     X              
Eye-Popping Chart Shows How Federal Spending Has Surged Like Never Before BI     X              
IBM warns of threat to organic growth FT           X        
Housing Starts in U.S. Increased More Than Forecast in August Bloomberg                 X  
                       
ARTICLE SOURCE 11 12 13 14 15 16 17 18 19 20
                       
Unemployment rises in 27 states last month AP   X                
China must change if it is to sustain its ascent FT Wolf             X      
                       
REMAINING                      
Investors seeing farmland as safer bet than stocks LA Times                   31
Higher Corn Prices Supporting Wheat Prices AGWeb                   31
                       
                       
BP OIL                      
                       
CENTRAL BANKING & MONETARY POLICY                      
FOMC MEETING                      
Statement - Text Changes FRB                    
Fed Says Prepared to Ease Further Bloomberg                    
Fed Under Pressure Amid Confusion Over New Easing Bloomberg                    
QE2 in round trillions Prichard                    
Fed hints it could buy more bonds FT                    
Exploiting Bernanke Sheehan                    
Shelby: Bernanke backs privatizing GSEs Reuters                    
A Look Inside the Fed’s Balance Sheet WSJ                    
GENERAL INTEREST                      
SUMMERS DEPARTURE                      
White House statement on Summers FT                    
Summers to Leave White House After Election Bloomberg                    
Summers to quit Obama’s team FT                    
Exodus - Summers and Geithner leaving? Weekly Standard                    
                       
The Limited Returns to Education Bear's Lair                    
Do US Household Debt Ratios Matter? Alliance Bernstein                    
Pope’s top bankers in laundering probe FT                    
FLASH CRASH                      
                       
MARKET WARNINGS                      
Worst Over in Global Poll Pointing to Reduced Market Returns Bloomberg                    
Individual Investors May Be Coming Back to Stocks, Bespoke Says Bloomberg                    
S&P 500 Breakout Bespoke                    
MARKET & GOLD MANIPULATION                      
Commerzbank Says Central Banks Adding Gold Kitco                    
                       
VIDEO TO WATCH                      
Jim Chanos Fights With Chris Christie Over The Economy BI                    
                       

Complete Legend to the Right, Top Items below.
Articles with highlights, graphics and any pertinent analysis found below.

1

         

1-SOVEREIGN DEBT

2-EU BANKING CRISIS
3-BOND BUBBLE

4-STATE & LOCAL GOVERNMENT

5-CENTRAL & EASTERN EUROPE
6-BANKING CRISIS II
7-RISK REVERSAL

8-COMMERCIAL REAL ESTATE

9-RESIDENTIAL REAL ESTATE - PHASE II
10-EXPIRATION FINANCIAL CRISIS PROGRAM
11-PENSION CRISIS

12-CHRONIC UNEMPLOYMENT

13-GOVERNMENT BACKSTOP INSUR.
14-CORPORATE BANKRUPTCY

TODAY'S TIPPING POINTS UPDATE

RED ALERT

AMBER ALERT

ACTIVITY

MONITOR

Click to Enlarge





09-22-10

 

GEO-POLITICAL TENSIONS - ISRAEL / KOREA / IRAN

 

IRAN

Iran’s Global Ambitions - III YALE

 

 

1- SOVEREIGN DEBT & CREDIT CRISIS

 

SOVEREIGNS

 

 

Sovereign Subjects - Ask Not Whether Governments Will Default, but How Outside The Box

 

IRELAND
Ireland Sells Bonds, Calms Concern That Bailout Needed BL

 

 

USA

 

 

Seven More Years of Hard Times? Shiller

Slump Over, Pain Persists WSJ

Believe it or not WSJ
Commentary: If this is a recovery, what will the next recession be like?

Double-Dip Debate Continues Wells Fargo

Is This What a Recovery Feels Like? NYT

Recovery Deniers Just Got Mugged by Reality Baum

 

ABC Consumer Confidence Drops, Poll Gets Downright Cynical- "Recession Ends, Nobody Notices"  ZH

 

Some funny quotes in the latest weekly ABC Consumer Comfort Index poll, which incidentally dropped from -43 to -46, just inches away from the 2010 lows, but more importantly, just inches away from the lows seen throughout the entire depression, as consumer sentiment has gone nowhere fast in the past two years: "Recession Ends, Nobody Notices." Indeed, as the chart below shows, ABC's weekly poll of about 1,000 random people shows nothing at all good for the economy, which, oh yes, is now out of the recession, but not the depression. And for technicians out there, the reading of 46 dropped just below the 52 week average of -45.98. Joking aside, the report found that: "This week 89 percent of Americans rate the economy negatively, 75 percent say it’s a bad time to spend money and 55 percent rate their own finances negatively." Surely these are the Green shoots that forced Larry Summers to realize that destroying the Harvard endowment is a far less dangerous job than continuing to bring ruin and pestilence to all of America.

 

Full weekly report:

If the recession’s over, maybe no one told the economy.

That’s one conclusion from the latest ABC News Consumer Comfort Index. In last week’s results, optimism for the economy’s future reached its lowest since March 2009. This week, the CCI’s index of current conditions stands at a dismal -46 on its scale of +100 to -100.

That’s even though the National Bureau of Economic Research declared last week that the recession ended in June 2009. Clearly, the public’s economic yardstick is a different one.

Indeed consumer views of current conditions don’t necessarily anticipate the climb out of a trough. While the 1990-91 recession officially ended in March 1991, the CCI didn’t regain its pre-recession level until June 1994 – far too late for the political fortunes of the first President Bush, voted out in 1992 amid continued economic discontent. The CCI in mid-September 1992 was -42, much like it is now.

The challenge, as we showed last week, is employment; the CCI correlates with it strongly, and it’s still weak. The chart below shows that the CCI also correlates with yearly change in the GDP, a basis for dating recessions. For growth to become robust, it suggests, consumer views have a ways to go.

 

The CCI, produced for ABC News by Langer Research Associates, is based on views of the national economy, personal finances and the buying climate. This week 89 percent of Americans rate the economy negatively, 75 percent say it’s a bad time to spend money and 55 percent rate their own finances negatively. The CCI’s -46 compares to a record low -54, a record-high +38 in early 2000 and a long-term average of -13. Recession or not, we’re still in the weeds.

 

2- EU BANKING CRISIS

   

 

3- BOND BUBBLE

 

Treasuries Pare Gain as Fed Refrains From Debt Purchases BL

Chasing High-Yield: "The Next Disaster"? EW


Bond Markets Get Riskier WSJ

Eye-Popping Chart Shows How Federal Spending Has Surged Like Never Before  BI

 

 

 

4- STATE & LOCAL GOVERNMENT

 


5- CENTRAL & EASTERN EUROPE

 


6-BANKING CRISIS II


IBM warns of threat to organic growth  FT
IBM could have to hold off on acquisitions and see its organic growth stunted if it is included on a list of major derivatives users, the technology group’s director of global funding said. Large companies in the US are lobbying hard to escape being designated “major swap participants” by regulators implementing the Dodd-Frank financial reform act. Such a designation will require companies to post margin against derivatives trades. Tammy Evans, director of global funding at IBM, said if the company were designated an MSP “you could potentially have $5bn of capital that’s held up with margin requirements” on its $40bn-$45bn derivatives portfolio.

7- RISK REVERSAL

 

 

8- COMMERCIAL REAL ESTATE

 

 

9-RESIDENTIAL REAL ESTATE - PHASE II

 

Housing Starts in U.S. Increased More Than Forecast in August BL PDF

 

10- EXPIRATION FINANCIAL CRISIS PROGRAM

 

 

11- PENSION & ENTITLEMENTS CRISIS



12- CHRONIC UNEMPLOYMENT


Unemployment rises in 27 states last month AP

13- GOVERNMENT BACKSTOP INSURANCE

 

 

14- CORPORATE BANKRUPTCIES

 

 

17- CHINA BUBBLE


China must change if it is to sustain its ascent  FT Wolf






19- PUBLIC POLICY MISCUES



 


OTHER TIPPING POINT CATEGORIES NOT LISTED ABOVE

 

19-US PUBLIC POLICY MISCUES

 

 

24-RETAIL SALES

 

 

26-GLOBAL OUTPUT GAP

 

 

31-FOOD PRICE PRESSURES

 

Investors seeing farmland as safer bet than stocks LAT

 

Farmland has become hot. Average U.S. farm real estate prices - including the value of land and buildings - have nearly doubled in the last decade.

Farmland has become hot. Average U.S. farm real estate prices including the value of land and buildings have nearly doubled in the last decade to $2,140 an acre, according to the U.S. Department of Agriculture's National Agricultural Statistics Service. Wells Fargo, the nation's top agricultural business lender in total dollar volume, said demand prompted it to increase farm lending 12% from 2008 to 2009. Since the recession began in December 2007, financial analysts say, agricultural investments have easily outperformed the Standard & Poor's 500 index.

Wealthy Americans and private funds alike are gobbling up Washington apple orchards, Illinois cornfields and Louisiana sugar plantations. So are foreigners. In California, investors from countries including Spain, Switzerland, China, Egypt and Iran collectively boosted their holdings 2.5% from February 2007 to February 2009 to 1.08 million acres â?� about 5% of the state's total farmland. Overseas, U.S. and other investors are snapping up tens of millions of hectares of farmland in Africa, Central America and Eastern Europe.

 

Higher Corn Prices Supporting Wheat Prices AGWeb

 

32-US STOCK MARKET VALUATIONS

 




BP - British Petroleum

SULTANS OF SWAP: BP Potentially More Devastating then Lehman!

------------

 






   

CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES

------------

 

Statement - Text Changes


Fed Says Prepared to Ease Further BL

Fed Under Pressure Amid Confusion Over New Easing BL

QE2 in round trillions Pritchard
Whatever Bernanke may think in private, he cannot even command the unity of the Fed Board in Washington...

Fed hints it could buy more bonds  FT
Way eased for new programme of QE

Exploiting Bernanke Sheehan

Shelby: Bernanke backs privatizing GSEs Reuters

A Look Inside the Fed’s Balance Sheet WSJ

 

 GENERAL INTEREST

 

SUMMERS DEPARTURE

White House statement on Summers

 

The White House has been facing increasing pressure to revamp its approach to economic policy, and speculation has been rife that Mr Obama may choose a senior member of the business community to replace Mr Summers in an attempt to counter criticism that its policies are too harsh on corporate America

 

Summers to Leave White House After Election BL

 

Summers to quit Obama’s team FT

Chief economic adviser to return to Harvard

 

Exodus - Summers and Geithner leaving? Weekly Standard

 

 The Limited Returns to Education Bear’s Lair

 

Do US Household Debt Ratios Matter? Alliance Bernstein

 

Pope’s top bankers in laundering probe  FT

Finance police seize €23m held by the Vatican in an Italian bank

FLASH CRASH - HFT - DARK POOLS

 

MARKET WARNINGS

 

Worst Over in Global Poll Pointing to Reduced Market Returns BL

 

Individual Investors May Be Coming Back to Stocks, Bespoke Says BL

 

S&P 500 Breakout  Bespoke


MARKET & GOLD MANIPULATION

 

Commerzbank Says Central Banks Adding Gold Kitco

 

AUDIO / VIDEO

Jim Chanos Fights With Chris Christie Over The Economy BI

 

 

 

 

QUOTE OF THE WEEK

 

“The great enemy of the truth,” John F. Kennedy declared in a 1962 commencement address at Yale University, “is very often not the lie – deliberate, contrived and dishonest – but the myth – persistent, persuasive and unrealistic.”



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Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.ont>

 

© Copyright 2010 Gordon T Long. The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

 

         

TODAY'S NEWS

WEDNESDAY

09-22-10

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TIPPING POINTS

1-SOVEREIGN DEBT & CREDIT CRISIS

2-EU BANKING CRISIS
3-BOND BUBBLE

4-STATE & LOCAL GOVERNMENT

5-CENTRAL & EASTERN EUROPE
6-BANKING CRISIS II
7-RISK REVERSAL

8-COMMERCIAL REAL ESTATE

9-RESIDENTIAL REAL ESTATE - PHASE II
10-EXPIRATION FINANCIAL CRISIS PROGRAM
11-PENSION CRISIS

12-CHRONIC UNEMPLOYMENT

13-GOVERNMENT BACKSTOP INSUR.
14-CORPORATE BANKRUPTCY
 

15-CREDIT CONTRACTION II

16-US FISCAL IMBALANCES
17-CHINA BUBBLE
18-INTEREST PAYMENTS
19-US PUBLIC POLICY MISCUES
20-JAPAN DEBT DEFLATION SPIRAL
21-US RESERVE CURRENCY.
22-SHRINKING REVENUE GROWTH RATE
23-FINANCE & INSURANCE WRITE-DOWNS
24-RETAIL SALES
25-US DOLLAR WEAKNESS
26-GLOBAL OUTPUT GAP
27-CONFIDENCE - SOCIAL UNREST
28-ENTITLEMENT CRISIS
29-IRAN NUCLEAR THREAT
30-OIL PRICE PRESSURES
31-FOOD PRICE PRESSURES
32-US STOCK MARKET VALUATIONS
33-PANDEMIC
34-S$ RESERVE CURRENCY
35-TERRORIST EVENT
36-NATURAL DISASTER

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book Review- Five Thumbs Up for Steve Greenhut's Plunder!  Mish

 

 

   

 

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Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, we recommend that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

Copyright and Disclaimer

© Copyright 2010, Gordon T Long. The information herein was obtained from sources which the Gordon T Long. believes reliable, but we do not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that the Gordon T Long. or its principals may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Gordon T Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from us.