The European financial markets in the six weeks since the last EU Summit, have had a complete, unofficial and unreported implosion in the bond and credit markets . The current agenda of the upcoming EU Summit does nothing to fundamentally address the underlying causes. MORE>>
The World Economic Forum's 2012 Risks Report, the IMF's Global Financial Stability Report and our proprietary Aggregated Global Risk Level Index (AGRLI) all suggest global macroeconomic risks are increasing. The consensus findings are that the center of gravity of Global Macro issues are a combination of Chronic Fiscal Imbalances and a Global Governance Failure. MORE>> EXPANDED COVERAGE INCLUDING AUDIO & MONTHLY UPDATE SUMMARY
The market action since March 2009 is a bear market counter rally that has completed a classic ending diagonal pattern. The Bear Market which started in 2000 will resume in full force when the current "ROUNDED TOP" is completed. We presently are in the midst of of a "ROLLING TOP" across all Global Markets. We are seeing broad based weakening analytics and cascading warning signals. This behavior is typically seen during major tops. This is all part of a final topping formation and a long term right shoulder technical construction pattern.
MORE>> EXPANDED COVERAGE INCLUDING AUDIO & EXECUTIVE BRIEF
TRIGGER$ publications combine both Technical Analysis and Fundamental Analysis together offering unique perspectives on the Global Markets. Every month “Gordon T Long Market Research & Analytics” publishes three reports totalling more then 380 pages of detailed Technical Analysis and in depth Fundamentals. If you find our publications TOO detailed, we recommend you consider TRIGGER$ which edited by GoldenPhi offers a ‘distilled’ version in a readable format for use in your daily due diligence. Read and understand what the professionals are reading without having to be a Professional Analyst or Technician.
TRIGGER$ ALERTS (SPECIAL 2 WEEK TRIAL AVAILABLE - TRIAL - 2 UPDATES PER WEEK)
2 WEEK FREE TRIAL Our Inter-Issue Updates and Alerts are Included with a Monthly Subscription to Triggers. Between issue publication receive updates on Technical Analysis, Economic Analysis and anything note worthy for your trading and investing.
Technical Analysis Alerts would include hitting potential Trigger Points, Pivots orsome progression that requires you immediate attention.
Economic Analysis Updates alert of any fundamental economic events that may have impact on the markets and what to expect.
Inter-Issue Updates and Alerts allow us to keep current with the markets and provide a more fluid and stable ongoing market evaluation.
Technical Updates occur twice a week, Alerts as the markets dictate. Sign-up now
Latest Public Research ARTICLES & AUDIO PRESENTATIONS
EURO EXPERIMENT : ECB's LTRO Won't Stop Collateral Contagion! Released December 27th, 2011
I would argue that the problem short term is a shortage of real collateral and that US dollar cash, versus 'encumbered' cash flow, is now king. It is clear that the rampant advancing Collateral Contagion will quickly eat the futile LTRO attempt like ravenous wolves. A well circulated Tweet from PIMCO bond king Bill Gross said it all: " What does LTRO stand for? 1- A shell game; 2-Cash for trash; 3 Three-card Monti; or 4. All of the above." Here is the stark reality of what forced the ECB to offer unprecedented three year loans at absurd rates and most alarmingly, the acceptance of collateral that no other financial institutions will accept. The ECB has sacrificed its balance sheet in yet another EU "kick at the can". MORE>>
CURRENCY WARS: EU: A FLAWED FOUNDATION, BUT A BRILLIANT STRATEGY Released May 31st, 2011
It was the perception of getting something of value without any meaningful sacrifice that initially fostered the EU Monetary Union. Though the countries of Europe were fiercely nationalistic they were willing to surrender minor sovereign powers only if it was going to prove advantageous to them. They were certainly unwilling to relinquish sufficient sovereignty to create the requisite political union required for its success. After a decade long trial period it is now time to pay the price for Monetary Union. I suspect that the EU membership is unwilling to do so. Though they likely will see the price as too high to do so, the price to not do so has become even greater. They have unwittingly been trapped by a well crafted strategy. MORE>>
CURRENCY WARS: The Economic Death Spiral Has Been Triggered Released May 27th, 2011
For nearly 30 years we have had two Global Strategies working in a symbiotic fashion that has created a virtuous economic growth spiral. Unfortunately, the economic underpinnings were flawed and as a consequence, the virtuous cycle has ended. It is now in the process of reversing and becoming a vicious downward economic spiral. One of the strategies is the Asian Mercantile Strategy. The other is the US Dollar Reserve Currency Strategy. These two strategies have worked in harmony because they fed off each other, each reinforcing the other. However, today the realities of debt saturation have brought the virtuous spiral to an end. MORE>>
CURRENCY WARS: Debt Saturation & Money Illusion Released April 27th, 2011
Most of the clearly evident financial problems that surround us today stem from one cause - Debt Saturation. Most, intuitively, sense this to be a correct assessment but few can either prove it or articulate it to the less sophisticated. Let me arm you to be the "Nostradamus" amongst your friends and colleagues in explaining the problem and what the future therefore foretells. However, let me make it very clear, this will not make you popular. Smart maybe, but highly likely to make you unwanted at the social gatherings of the genteel. MORE>>
02/08/2012 3:40 AM
Postings begin at 5:30am EST
and updated throughout the day
Articles open in new window
"BEST OF THE WEEK "
HOTTEST TIPPING POINTS
U.S. Sets Money-Market Plan The SEC is finalizing a proposal to shore up the money-market fund industry, more than three years after Lehman's collapse sparked a panic that threatened the savings of millions
Dollar's China Conundrum If a stronger-than-expected recovery in the U.S. combined with continued uncertainty about the future of the euro means the dollar strengthens, it will be more difficult for China to chalk up even limited bilateral gains without having a serious impact on competitiveness elsewhere. Financial markets are pessimistic about the outlook for yuan appreciation. Expectations for the year ahead are for 2% to 3% nominal gains against the dollar in 2012, compared with 5.1% in 2011. With China's exporters facing a tough year, and falling inflation also weakening the case for yuan appreciation, such muted expectations make plenty of sense.
if a stronger-than-expected recovery in the U.S. combined with continued uncertainty about the future of the euro means the dollar strengthens, it will be more difficult for China to chalk up even limited bilateral gains without having a serious impact on competitiveness elsewhere. Pessimistic predictions on the outlook for yuan appreciation could easily come true.
if expectations of continued loose monetary policy in the U.S. and a brighter outlook for the euro push the dollar down, the pressure will be in the opposite direction. A falling dollar opens space for bilateral appreciation without denting competitiveness too much. A weak dollar also raises the cost of the commodities that China imports, so allowing the yuan to follow it down would mean importing inflationary pressure.
Greece was expected to report by noon (5 EST) whether its political parties have agreed to accept austerity proposals, according to a deadline set by Prime Minister Lucas Papademos. Less than an hour before the deadline, however, a Greek official told Reuters that there is no deadline today.
Budget Plan Has Familiar Ring Obama will release a familiar budget plan, calling for $3 trillion in deficit reductions over 10 years, including $1.5 trillion in tax increases to fall mostly on the wealthiest Americans.
Coke's Profit Slides 02/07/12 WSJ Coca-Cola said its earnings fell 71% from a year-earlier period that included a gain from the purchase of some bottling operations, while the soda giant's unit-case volume continued to rise.
Profit Falls at UBS 02/07/12 WSJ Presenting its first set of earnings under new Chief Executive Sergio Ermotti, UBS reported a 76% fall in fourth-quarter net profit, as trading in shares and bonds slowed. The bank will cut its bonus pool 40%
Just read the previous post on market volume hitting decade lows. And while there are just under 2 more months left in the quarter, absent some seismic volatility explosion in the next month (ahem, Greece) we fail to see how bank revenues will grow at all sequentially, let alone QoQ.
Furthermore, with the curve once again flattening, and mortgage rates dropping to all time lows to the point where Net Interest Margin benefits for banks have disappeared (read more on the impact on the liquidity trap from this morning's Bill Gross note),
Key M&A activity being halted by regulators on either side of the pond, and
Facebook about to suck up all IPO unencumbered capital for months, we fail to see how banks hope to generate any incremental pick up in their top line.
Furthermore, SG&A slash and burn (which the BLS fervently refuses to acknowledge ever happened) will only make top line growth far slower if a true rebound for the financial sector ever materializes.
Bottom line: the dash for trash in the financial sector is coming to an abrupt close.
Shaky Profits Threaten U.S. Rally 02/06/12 WSJ U.S. corporate profits are showing signs of flagging, even as share prices reach multiyear highs. Margins are slipping as already-lean firms find it harder to continue cutting costs
Should such a tail risk of financial volatility emanating from Europe be realized, it would drag China’s growth lower. The channels of contagion would be felt mainly through trade, with knock-on effects to domestic demand. In the downside scenario outlined in the WEO Update—which would see global growth falling by 1¾ percentage points relative to the baseline—China’s growth would fall by around 4 percentage points. The risks to China from Europe are, therefore, both large and tangible.
From 8.25% to 4.25% that is.
CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES
TECHNICALS & MARKET ANALYTICS
RISK - FINANCIAL REPRESSION
Itchy Investors Ramp Up the Risk With interest rates likely stuck near zero for nearly three more years, conservative investors face a tough choice: move into riskier investments or continue coming up short from low-risk investments.
FLIGHT TO HARD ASSETS - FINANCIAL REPRESSION
Mining Deals to Pile Up A Glencore-Xstrata merger would create a true rival to global mining heavyweights like Vale, Rio Tinto and BHP Billiton, as well as put pressure on midsize players to either team up or grow through acquisitions.
FAIR USE NOTICEThis site contains
copyrighted material the use of which has not always been specifically
authorized by the copyright owner. We are making such material available in
our efforts to advance understanding of environmental, political, human
rights, economic, democracy, scientific, and social justice issues, etc. We
believe this constitutes a 'fair use' of any such copyrighted material as
provided for in section 107 of the US Copyright Law. In accordance with
Title 17 U.S.C. Section 107, the material on this site is distributed
without profit to those who have expressed a prior interest in receiving the
included information for research and educational purposes.
If you wish to use
copyrighted material from this site for purposes of your own that go beyond
'fair use', you must obtain permission from the copyright owner.
DISCLOSURE 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.