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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (75034)	6/9/2011 9:12:37 AM
From: TobagoJack	Respond to of 217734

i feel excited that usually means trouble this way comes like it a lot

To: carranza2 who wrote (75034)	6/9/2011 11:14:22 AM
From: TobagoJack	1 Recommendation Respond to of 217734

Just in in-tray per greed n fear 1. There is clearly the potential for a renewed pop in risk assets should there be agreement on another temporary “fix up” job for Greece. Still GREED & fear would view any such “pop” as an opportunity to reduce risk further. This is both because the risk of a “euro-quake” remains as real as ever, while from a US perspective “risk” markets are also faced with the unpalatable pending prospect of the end of QE2. 2. On the Eurozone GREED & fear continues to advise investors to look for symptoms of internal revolt from within the periphery as the most likely trigger of a crisis. What GREED & fear means by signs of internal revolt within Greece is growing evidence that the Greek population is no longer prepared to put up with the austerity which is the inevitable consequence of not having the devaluation option. 3. Another key indicator of internal revolt investors should be aware of is the continuing flow of deposits out of the Greek banking system. History suggests that a Greek exit from Euroland would likely lead to forced nationalisation of the banking system and the resulting freezing of bank deposits for a certain period. 4. This is the direction events are heading unless Germany adopts a more coherent, and so more constructive, approach towards pushing fiscal union in Euroland. Still no one should be assuming bold action any time soon from Frau Merkel on this point. 5. GREED & fear continues to advise investors to bet that there will be no further rate hikes by the ECB. But there is a risk that the euro remains stronger for longer because of continuing tough talk from the ECB. The euro remains strong against the US dollar because markets know that the Fed is more likely to do “QE3” before the ECB starts cutting rates. 6. In GREED & fear’s view a decline in the S&P500 of 10-15% to 1230-1160 from the recent peak of 1370 would be enough to set the stage for QE3, most particularly if it was accompanied by a deflationary rebound in the US dollar. Still for this to happen Treasury bond yields would likely have to decline further and inflationary expectations also to decline further. 7. The continuing weakness of US bank stocks is also an indication of renewed deflationary pressures. The rally in government bonds in recent months has led to a renewed flattening in yield curves, thereby putting renewed pressure on bank earnings. But, more importantly, the renewed deflationary market action also causes investors in bank stocks to re-focus on balance sheet concerns. 8. The concentration of US money market fund assets in European bank paper highlights the Euroland banks’ need for US dollar funding, which is why any euro-quake would likely see a dramatic de-leveraging short-covering rally in the US dollar. It is also a consequence of the dramatic contraction in US asset-backed commercial paper which was the legacy of the last credit crisis. 9. The ECB continues to accept asset-backed securities as collateral despite the role these instruments played in triggering the last financial crisis. The obvious vulnerabilities posed by accepting ABS as collateral, combined with the concentration of credit risk within US money market funds, highlights how little in some respects has changed since the credit crisis, and how real systemic risk remains. 10. The record annualised underground lending rate in Wenzhou is as good an indication as any of the reality of continuing credit tightening in China. It explains why the A share market remains in a sideways trading range, and why investor sentiment towards China is now well into the process of going from worrying about “too hot” to worrying about “too cold”. 11. GREED & fear would advise investors not to get too excited about recent concerns about Chinese banks’ credit quality prompted by a Reuters press report of a central government plan to shift Rmb2-3tn of debt off local governments. There may well be a systemic credit crisis in China one day. But for that to happen would require an implosion of the command economy, of which there is at present no sign. 12. The continuing resilience of gold, amidst the recent commodity correction, and the continuing weakness of the US dollar, are both signals that investors think that QE2 is not the end of Billyboy Ben’s experiments in alternative monetary policy. 13. The paper gold market is significantly larger than the physical market. GREED & fear suspects it will be very hard to settle all the paper claims to gold physically in a real scramble for the metal. This is why in a parabolic spike physical gold is likely to trade at a significant premium to paper claims. The 25% allocated to gold bullion in the global portfolio for a US dollar-denominated pension fund is held in physical gold.

To: carranza2 who wrote (75034)	6/9/2011 4:42:01 PM
From: RJA_	4 Recommendations Read Replies (2) \| Respond to of 217734

>>Gold is more or less steady. The virtuous miners who take it out of the ground at increasingly enormous profit are getting slaughtered. C2: IMHO the problem with the miners, and indeed most US stocks, is the dividend if any is ridiculously small. Yes, they are very profitable, but they are keeping all the profits for management or employees, and shareholders supposedly make money on "growth" which IMO is close (but not quite) total BS. You want to end manipulation? Pay a significant and regular dividend. Let a short fight that. They will melt away like ice on a Phoenix sidewalk in August.