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NOVEMBER ISSUE - 40 PAGES

Integrating Macro Research

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Gordon T Long

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READ ALL THE

"EXTEND & PRETEND" SERIES

 

 

Stage I Comes to an End!

 

A Matter of National Security

 

A Guide to the Road Ahead

 

Confirming the Flash Crash Omen

 

Its either RICO Act or Control Fraud

 

Shifting Risk to the Innocent

 

Uncle Sam, You Sly Devil!

 

Is the US Facing a Cash Crunch?

 

Gaming the US Tax Payer

 

Manufacturing a Minsky Melt-Up

 

Hitting the Maturity Wall

 

An Accounting Driven Market Recovery

FOR UPCOMING SHOW TIMES SEE: COMMENTARY READER 


 

 

 


 

READ ALL THE

"SULTANS OF SWAP"

 

ACT I

Sultans of Swap: Smoking Guns!

 

ACT II

Sultans of Swap: The Sting!

 

ACT III

Sultans of Swap: The Get Away!

 

 

ALSO

SULTANS OF SWAP: Explaining $605 Trillion in Derivatives!

 

SULTANS OF SWAP: Fearing the Gearing!

 

SULTANS OF SWAP: BP Potentially More Devastating then Lehman!

 

SULTANS OF SWAP: Gold Swaps Signal the Roadmap Ahead

 

FOR UPCOMING SHOW TIMES SEE: COMMENTARY READER

 


 

 

 

 

READ ALL THE

"EURO EXPERIMENT" SERIES

 

 

 

EURO EXPERIMENT: German Steel or Schmucks?!

 

 

 

FOR UPCOMING SHOW TIMES SEE: COMMENTARY READER

 

 

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Current Thesis Advisory

62 pages

 

Published November 2009

 

EXTEND & PRETEND

 

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READ ALL THE

"INNOVATION" SERIES

 

Innovate or Die

 

INNOVATION: America has a Structural Problem!

 

INNOVATION: What Made America Great is now Killing Her!

 

America - Innovate or Die!

 

FOR UPCOMING SHOW TIMES SEE: COMMENTARY READER

 


 

 

 

READ ALL THE

"PRESERVE & PROTECT" SERIES

 

 

 

 

FOR UPCOMING SHOW TIMES SEE: COMMENTARY READER

 

 

 

 

 

 

 

 

POSTS:  FRIDAY 11-12-10

Last Update: 11/13/2010 08:13 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
                       
Crunch time is fast approaching for the world economy Warner X                  
World economy faces 'difficult and dangerous times' warns Mervyn King Guardian X                  
The IMF is giving UK good fiscal advice FT Wolf X                  
IRELAND                      
Irish contagion hits wider eurozone FT X                  
European Ministers Hold Ireland Debt Crisis Talks at G-20 Bloomberg X                  
Ireland Default Predicted by Majority in Global Investor Poll Bloomberg X                  
G-20 Backs Crisis Warning System as Ireland Concerns Grow Bloomberg X                  
Ireland's cost of borrowing soars after dramatic sell-off Telegraph X                  
Jitters Persist WSJ X                  
Ireland admits investors uneasy as bailout fears mount Reuters X                  
Ireland stares into the abyss Indepnd. X                  
Ireland on Brink as `Beggar' for Aid Bloomberg X                  
Fixing personal debt crisis is 'beyond human intervention' Independ. X                  
USA                      
ECB's Trichet Is Buyer of Only Resort as Debt Crisis Worsens Bloomberg   X                
Global Currency War May Miss Investment-Starved Eastern Europe Bloomberg         X          
Foreclosure Activity Falls 'Artificially' Due to Moratorium CNBC                 X  
                       
ARTICLE SOURCE 11 12 13 14 15 16 17 18 19 20
                       
China's inflation at two-year high WSJ             X      
New credit booms in October Shaghai Daily             X      
Moody's upgrades China ratings on economic resilience Reuters             X      
Deep-Six the Deficit Commission Report Baker                 X  
American Profligacy and American Power Foreign Affairs                 X  
US-South Korea fail to agree trade deal FT                 X  
CENTRAL BANKING & MONETARY POLICY                      
Keynsianism Fallen Upon Hard Times Chapman                    
The Downside of Quantitative Easing FRBSL                    
A Kind Word for Ben McCulley                    
Fed's QE2 Misadventure Costs U.S. Households $4.6 Trillion Smith                    
Why Fed bond-buying plan is raising trade tensions AP                    
QE2 and the Titanic Pettis                    
Cashin: Fed's QE2 Looking Like the 'Titanic' CNBC                    
Palin Blasts Fed's Quantitative Easing Again -- And This Time She Cites Krugman Huffington Post                    
GENERAL INTEREST                      
Sugar Crash BI                    
MARKET WARNINGS                      
Be In Cash, Wait for Stocks to Fall: Jeremy Grantham CNBC                    

G20 MEETING

                     
G20 fails to reach deal on imbalances FT                    
US defensive on dollar at G20 FT                    
History lessons for a world out of balance FT                    
How the G20 glasshouse is under attack FT                    
Obama Presses Hu on Yuan as Trade Imbalances Divide G-20 Bloomberg                    
The eurozone’s stark lessons for the G20 FT Greenspan                    
Greenspan Urges G-20 Adoption of Reserve Limits Bloomberg                    

CURRENCY WARS

                     
Geithner Says Dollar Drop Due to Reversal of Safe-Haven Flows Bloomberg                    
Emerging markets capital flows - how are the BRIC countries faring and coping? DB Research                    
Q3 EARNINGS                      
Cisco Shortfall Shows Risks in Government Spending Cuts Bloomberg                    
MARKET & GOLD MANIPULATION                      
                       
VIDEO TO WATCH                      
                       
                       

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

 

 

 

                    LATEST RESEARCH PUBLICATIONS

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COMMENTARY for all articles by Gordon T Long

 

CURRENCY WARS: Debase, Default, Deny!

 

In September 2008 the US came to a fork in the road. The Public Policy decision to not seize the banks, to not place them in bankruptcy court with the government acting as the Debtor-in-Possession (DIP), to not split them up by selling off the assets to successful and solvent entities, set the world on the path to global currency wars.

 

By lowering interest rates and effectively guaranteeing a weak dollar, the US ignited an almost riskless global US$ Carry Trade and triggered an uncontrolled Currency War with the mercantilist, export driven Asian economies. We are now debasing the US dollar with reckless spending and money printing with the policies of Quantitative Easing (QE) I and the expectations of QE II. Both are nothing more than effectively defaulting on our obligations to sound money policy and a “strong US$”. Meanwhile with a straight face we deny that this is our intention.  

 

Though prior to the 2008 financial crisis our largest banks had become casino like speculators with public money lacking in fiduciary responsibility, our elected officials bailed them out. Our leadership placed America and the world unknowingly (knowingly?) on a preordained destructive path because it was politically expedient and the easiest way out of a difficult predicament. By kicking the can down the road our political leadership, like the banks, avoided their fiduciary responsibility. Similar to a parent wanting to be liked and a friend to their children they avoided the difficult discipline that is required at certain critical moments in life. The discipline to make America swallow a needed pill. The discipline to ask Americans to accept a period of intense adjustment. A period that by now would be starting to show signs of success versus the abyss we now find ourselves staring into.  A future that is now massively worse and with potentially fatal pain still to come. READ MORE

   

 

CURRENCY WARS: Misguided Economic Policy

 

The critical issues in America stem from minimally a blatantly ineffective public policy, but overridingly a failed and destructive Economic Policy. These policy errors are directly responsible for the opening salvos of the Currency War clouds now looming overhead.

 

Don’t be fooled for a minute. The issue of Yuan devaluation is a political distraction from the real issue – a failure of US policy leadership. In my opinion the US Fiscal and Monetary policies are misguided. They are wrong! I wrote a 66 page thesis paper entitled “Extend & Pretend” in the fall of 2009 detailing why the proposed Keynesian policy direction was flawed and why it would fail. I additionally authored a full series of articles from January through August in a broadly published series entitled “Extend & Pretend” detailing the predicted failures as they unfolded. Don’t let anyone tell you that what has happened was not fully predictable!

 

Now after the charade of Extend & Pretend has run out of momentum and more money printing is again required through Quantitative Easing (we predicted QE II was inevitable in March), the responsible US politicos have cleverly ignited the markets with QE II money printing euphoria in the run-up to the mid-term elections. Craftily they are taking political camouflage behind an “undervalued Yuan” as the culprit for US problems. Remember, patriotism is the last bastion of scoundres  READ MORE


  BRIEFS  

Obama's 'Hail Mary' Export Strategy
   
     

 READER ROADMAP -  2010 TIPPING POINTS aid to positioning COMMENTARY

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





11-12-10

 

GEO-POLITICAL TENSIONS - ISRAEL / KOREA / IRAN

 

 

IRAN

 

ISREAL

 

KOREA

 

1- SOVEREIGN DEBT & CREDIT CRISIS

 

SOVEREIGNS

 

 

Crunch time is fast approaching for the world economy Warner
"If we don't do that...then I fear that the next 12 months will be an even more difficult and dangerous period than the one we've been through”

 

World economy faces 'difficult and dangerous times' warns Mervyn King Guardian

 

GREECE

 

SPAIN

 

GERMANY

 

FRANCE

 

UK

The IMF is giving UK good fiscal advice  FT Wolf

 

 

IRELAND

Irish contagion hits wider eurozone  FT

Merkel digs in over cost of future bail-outs

European Ministers Hold Ireland Debt Crisis Talks at G-20  BL

Group of 20 leaders discussed Ireland’s debt crisis, which has driven bond yields to records and weakened the euro on concern the European Union will need to step in with a bailout.

Ireland Default Predicted by Majority in Global Investor Poll  BL

A majority of global investors predict Ireland will default on its sovereign debt, showing that weeks of efforts by the government of the onetime “Celtic Tiger” haven’t allayed concerns about its creditworthiness.

 

G-20 Backs Crisis Warning System as Ireland Concerns Grow  BL

Group of 20 leaders agreed to develop early warning indicators to head off economic turmoil as emergency talks on Ireland’s debt reminded them the recovery from the global financial crisis remains fragile.

 

Ireland's cost of borrowing soars after dramatic sell-off Tele
The sell-off was triggered by a cash-call estimated to be $1bn (£620m)...

Jitters Persist  WSJ

Ireland admits investors uneasy as bailout fears mount Reuters

Ireland stares into the abyss Inde

Ireland on Brink as `Beggar' for Aid BL

Fixing personal debt crisis is 'beyond human intervention' Independent.ie

JAPAN

 

USA

 

 

 

 

 

 

2- EU BANKING CRISIS

   

ECB's Trichet Is Buyer of Only Resort as Debt Crisis Worsens BL

 

 

 

3- BOND BUBBLE

 

 

4- STATE & LOCAL GOVERNMENT

 


5- CENTRAL & EASTERN EUROPE

 

Global Currency War May Miss Investment-Starved Eastern Europe  BL

6-BANKING CRISIS II



7- RISK REVERSAL

 

 

8- COMMERCIAL REAL ESTATE

 

 

9-RESIDENTIAL REAL ESTATE - PHASE II

 

Foreclosure Activity Falls 'Artificially' Due to Moratorium CNBC

 

10- EXPIRATION FINANCIAL CRISIS PROGRAM

 

 

11- PENSION & ENTITLEMENTS CRISIS



12- CHRONIC UNEMPLOYMENT



13- GOVERNMENT BACKSTOP INSURANCE

 

 

14- CORPORATE BANKRUPTCIES

 

 

17- CHINA BUBBLE


China's inflation at two-year high WSJ
“Inflation now replaces asset bubble as the top concern for policymakers as well as investors.”

New credit booms in October Shanghai Daily

Moody's upgrades China ratings on economic resilience Reuters

19- PUBLIC POLICY MISCUES

 

Deep-Six the Deficit Commission Report Baker

 

American Profligacy and American Power Foreign Affairs (R)
The Consequences of Fiscal Irresponsibility

 

US-South Korea fail to agree trade deal  FT


 


OTHER TIPPING POINT CATEGORIES NOT LISTED ABOVE

 

24-RETAIL SALES

 

 

26-GLOBAL OUTPUT GAP

 

 

31-FOOD PRICE PRESSURES

 

 

 

32-US STOCK MARKET VALUATIONS

 

 




BP - British Petroleum

SULTANS OF SWAP: BP Potentially More Devastating then Lehman!

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

 






   

CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES

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

 

Keynsianism Fallen Upon Hard Times Chapman

The Downside of Quantitative Easing FRBSL

A Kind Word for Ben McCulley

Fed's QE2 Misadventure Costs U.S. Households $4.6 Trillion Smith

Why Fed bond-buying plan is raising trade tensions AP

QE2 and the Titanic Pettis

Cashin: Fed's QE2 Looking Like the 'Titanic' CNBC

Palin Blasts Fed's Quantitative Easing Again -- And This Time She Cites Krugman HP

 

 GENERAL INTEREST 

Sugar Crash  BI

 

 

 

MARKET WARNINGS

Be In Cash, Wait for Stocks to Fall: Jeremy Grantham CNBC

 

G20 MEETING

G20 fails to reach deal on imbalances  FT

Pledge to resolve differences with IMF help

US defensive on dollar at G20  FT

History lessons for a world out of balance  FT
History suggests, among other things, that competitive devaluations and capital controls are the inevitable consequence of surplus countries failing to take any responsibility for global payments imbalances

 

How the G20 glasshouse is under attack  FT

At the very least a new pecking order appears to be forming.

 

This is reflected in shifting board representation in the International Monetary Fund and World Bank as developing countries take more votes and seats at the expense of the old powers. The shift is also exacerbated by Europe’s inability to act as one in either the G20 or these institutions, sidelining what should be a heavyweight player.

 Instead it often seems lost in unseemly rearguard actions to preserve a fading status.

In short, this G20 is far from united in its ambition to offer more coherent leadership to the world economy. Rather, it is at risk of being reduced to the sum of its feuding parts as structural trade imbalances, currency wars and very different views of each other’s relative economic prospects drive stakes into the enterprise.

 

Obama Presses Hu on Yuan as Trade Imbalances Divide G-20 BL

 

The eurozone’s stark lessons for the G20  FT Greenspan

 
Currency problems have now spread to the global financial system which, like the euro area, requires adherence to certain rules to sustain it. It is not only the well publicised friction between China and America – both may be right about each other – but also by the drive for competitive export advantage through currency manipulation in a world where a zero global current account balance permits none. Something has to give in this arena of zero-consolidated current account balances.

1- We should not wish to inhibit those market-determined capital flows that reflect the cross-border shifting of resources that enhances global productivity. These flows are the big determinants of desirable realignments of exchange rates over time. But we should discourage reserve accumulation whose sole purpose is to suppress exchange rates for competitive export advantage. This, of course, has been the market-distorting consequences of China’s accumulation of over $2,000bn of reserves since 2000.

2- What the G20 can initiate through the IMF is a set of rules that limits the accumulation of reserve assets and sterilisation of capital inflows. China may need an officially sanctioned extended adjustment period, and provisions may be required to deal with unsterilised capital inflows threatening smaller markets. But that would be far easier to monitor and control than a stability and growth pact that requires control of central government revenues and spending.

 

Delimiting a country’s ability to suppress its exchange rate (reserve accumulation limits) or to blunt the effect of unwanted capital inflows (sterilisation) may not fully dissuade a country bent on other protectionist forms.

 

Greenspan Urges G-20 Adoption of Reserve Limits BL

 

CURRENCY WARS

Geithner Says Dollar Drop Due to Reversal of Safe-Haven Flows BL
“We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy”

 

Emerging markets capital flows - how are the BRIC countries faring and coping? DB Research

 

 

Q3 EARNINGS

Cisco Shortfall Shows Risks in Government Spending Cuts  BL

 

MARKET & GOLD MANIPULATION

 

AUDIO / VIDEO

 

QUOTE OF THE WEEK

"It could unfold very, very quickly. Because deflation is a swing of poverty feedback, it can take awhile to build up. If you try to explain to people what's coming, because it doesn't happen instantly, they tend to go back to sleep. The thing they need to understand, however, is that when it does hit a tipping point, a kind of critical mass, then it can unfold exceptionally quickly. Then it's very much like having the rug pulled out from under your feet. So I tell people all the time, prepare now because it's better to be two years too early than five minutes too late. You can't play with this sort of thing. In September, 2008, we came within a few hours of the banking system seizing up, and that could easily happen again. People wouldn't get a lot of notice. For anyone who's not in the meeting room-it will be too late by the time they find out. My worry is that if there are an enormous number of people who just had the rug pulled out from under their feet, they're going to run around like headless chickens, and the human over-reaction to events will be really responsible for a large percentage of the impact. “

Automatic Earth

 


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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

FRIDAY

11-12-10

NOVEMBER

S M T W T F S
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30        

ARCHIVAL

 

 


 

         

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

 


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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.

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© 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.