The European Central Bank's (ECB) unprecedented use of a three year, low cost LTRO (Long Term Repurchase Agreement) policy initiative may have removed some of the short term pressures from the EU Banking crisis, but like the Greenspan PUT, the unintended consequences are not yet fully understood. One is the moral hazard which is fostering financial "games" to be played with reckless abandon. Some of the mischievous and cunning games are frankly questionably as being even legal! But then, nothing is illegal if the regulators and those organizations charged with surveillance are not bothering to investigate. Extend > Pretend > Bend is the new approach. MORE>>
The Global Markets have reached the point of waht can be best labeled as "Elevated Risk". Analytics measurements including Fundamenal Analysis, Techncial Analysis and Risk Anlysis all are independently signalling this along with warnings. This months report lays out the Risk Assessment, Risk Levels as determined by our proprietary aggregated Global Financial Risk Index, changes in Tipping Points and the Macro Risk-On, Risk-Off Drivers.
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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.
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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.
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Latest Public Research ARTICLES & AUDIO PRESENTATIONS
Analysts expect demand for such short-term, high-quality floating-rate debt to be strong. New regulations that came in the wake of the financial crisis pushed financial institutions to hold more safe assets such as Treasurys, and floating-rate notes might be more attractive when interest rates eventually begin to rise. Other potential buyers include money market mutual funds and state and local governments looking to manage their cash.
INVESTOR DEMOGRAPHICS - Furtile & Planned Area for Financial Repression on Dividends
Japanification of global interest rates (for currency issuers not users)
will push valuations down and defending equity investment on the back of multiple expansion seems disingenuous at best.
Empirically, the current interest-rate regime (the 2-3% 10Y) is as good as it gets and whether rates rise or fall from here, equity valuations are likely to drop. The market rarely trades at the average multiple, though the current market trades at near average levels currently (not cheap as many would like us to believe). Of course, as Morgan Stanley notes, there are a number of other drivers but on a long-term basis and top-down, equity valuations have a hard hill to climb to prove its different this time.
MOST CRITICAL TIPPING POINT ARTICLES THIS WEEK - APR 22nd - APR 28th, 2012
Basically, all through the Bush years, government was a positive force on GDP. There were some negative blips here and there, but not steadily. Under Obama, on the other hand, we had a few quick spikes in government spending, but we're now seeing a steady drag unlike anything we've seen this century.
CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES
This chart from Bill McBride at Calculated Risk shows one reason why the economy is still sputtering along: Because Americans are still making much less money than they were before the recession. The chart shows real personal income (adjusted for inflation) minus "transfer payments" as a percent of the total before the crash. Transfer payments are welfare payments, unemployment insurance, and other government subsidies. When transfer payments are included, the income picture looks better, but of course those transfer payments are just more government spending.
The chart also shows how much more devastating the recent recession was than other recessions for the past 50 years
Why is personal income so lousy? Because employment still hasn't recovered to pre-recession levels. Here's a second chart from Calculated Risk showing current employment as a percent of pre-recession employment.
CORPORATOCRACY -CRONY CAPITALSIM
GLOBAL FINANCIAL IMBALANCE
STANDARD OF LIVING
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Tipping Points Life Cycle - Explained Click on image to enlarge
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