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Posts Tagged ‘Gold’

2012/12/04: Cal-Perspective and US Age of Austerity finally here?

December 4, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

The weekly Report & Event Calendar is available through the link in the right hand column. This week’s Summary Perspective is also now available. Yet there is also an interesting anomaly in the fundamental influences. And it is not just the strongish US economic data versus the trepidation over the potential plunge off the Fiscal Cliff… there is also the negative outlook into next year.

The misguided perception in some quarters that the US election would settle enough ‘uncertainty’ to encourage an economic revival on the back of clearer parameters has now been completely dispelled. As noted in our post early last week, nothing could have been further from the truth, as the public pronouncements by highly partisan US political class leave little hope that there is common ground for constructive compromise. And with Mr. Obama’s reelection, we suspect he feels within his rights to push his agenda at the same time Conservatives find it as distasteful and counterproductive as ever.

It’s good old Nanny State Taxulationism1 finally run amok, as the President and his cohorts distract the opposition with outrageous proposals to waylay them from unwinding what’s already the law of the land.

1Taxulationism © 2010 Alan Rohrbach & Jack Bouroudjian. All rights reserved unless explicitly waived

Def.: Combined impact of taxation, regulation and protectionism to an oppressive degree as official policy

And while framing this as a US Age of Austerity might seem a bit harsh, it is something we have warned of since back in 2010 (well, a ‘Frugality’ mania in the first instance.) To revisit those major themes from a previous post, regardless of whether the Fiscal Cliff is addressed, the degree to which 2013 is going to be a tough year has not escaped the watchful eye of the best of the observers…

 

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2012/11/16: The Petraeus Predicament and bye-bye Ho-Ho’s

November 16, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

Let’s begin by allowing that some might wonder what the liquidation of Hostess Brands and today’s Congressional testimony on the Benghazi tragedy from General David Petraeus have to do with the markets? While the near term effect will likely be very transitory (if indeed there is any at all), they each provide interesting insights and might exert some influence on American politics and economics. It is especially the case right now that the former might have a very significant influence on the latter.

Maybe this all seems more important because it is a slow economic data day. An spite of that we will also have more to say about the state of the markets at the end of this post as well.

To begin, General Petraeus’ fall is a tragedy of Shakespearian proportions. A true American hero whose commitment to public service even at high personal physical and political risk was a model for others. And yet, feet of clay leave him embarrassed and dismissed from high public office. Not the first, but surely one of the most poignant examples of this. And as most readers who have followed the multiple threads of the Benghazi consulate attack are aware, there is at least one aspect which is now very interesting to all concerned: to what degree did his desire to keep his personal problem under wraps affect his performance as CIA chief during and in the immediate aftermath of that attack?

Conspiracy theories abound…

 

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2012/11/06: Quick Post: Weekly Calendar and Brief Update access on US election pollsters really wrong in some ways

November 6, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

The weekly Report & Event Calendar is available through the link in the right hand column. The Summary Perspective will available later today in deference to wanting to wait for today’s US market Close to update the technical projections in front of tomorrow’s election response. And whatever the election may bring, one thing is glaringly apparent as the Northeast continues to struggle with Super Storm Sandy’s aftermath…

…the counterintuitive ability of markets to anticipate the degree to which the rebuilding effort is a ‘GDP-positive’ event. That is to say our views on the positive market anticipation of the reconstruction and rehabilitation effort trumping the extreme human tragedy and near term economic damage have been vindicated. It will ultimately provide more of a bump to GDP that the loss of business from the downtime of the businesses waiting for replacement/repair of their buildings and equipment.

And now it’s on to the election follies. And we have covered that at some length in today’s institutional TrendView BRIEF UPDATE, we will leave it for you to decide whether the more aggressive polling organizations and analysts have it right. And whichever side prevails in the race for the White House, there is a case to be made the market response might seem a bit perverse because…

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2012/11/06: Quick Post: Weekly Calendar and Brief Update access on US election pollsters really wrong in some ways

November 6, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

The weekly Report & Event Calendar is available through the link in the right hand column. The Summary Perspective will available later today in deference to wanting to wait for today’s US market Close to update the technical projections in front of tomorrow’s election response. And whatever the election may bring, one thing is glaringly apparent as the Northeast continues to struggle with Super Storm Sandy’s aftermath…

…the counterintuitive ability of markets to anticipate the degree to which the rebuilding effort is a ‘GDP-positive’ event. That is to say our views on the positive market anticipation of the  reconstruction and rehabilitation effort trumping the extreme human tragedy and near term economic damage have been vindicated. It will ultimately provide more of a bump to GDP that the loss of business from the downtime of the businesses waiting for replacement/repair of their buildings and equipment.

And now it’s on to the election follies. And we have covered that at some length in today’s institutional TrendView BRIEF UPDATE, we will leave it for you to decide whether the more aggressive polling organizations and analysts have it right. And whichever side prevails in the race for the White House, there is a case to be made the market response might seem a bit perverse because…

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2012/11/01: Wait for it… heeeere it comes: US General Election Delay?

November 1, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

Yes, indeed, we know. This is something that a few folks have noted before, only to see it immediately refuted by the powers-that-be. But when you think about it…

…does either side have any interest in going forward if it is possible that any major portion of the Northeast remains dysfunctional on Tuesday in the wake of Super Storm Sandy? The Democrats surely wouldn’t want one of their bastions of electoral strength to be left without full and fair representation.

And what about the Republicans? Well, there are areas where they are very strong and the election is critical in Appalachia and elsewhere. Even if the powers-that-be on each side of the political divide allow that it might all average out, isn’t this a dangerous precedent for the standpoint electoral enthusiasm? In an America already suffering from an unhealthy level of voter apathy (at least up until 2010), is a “Don’t worry if you didn’t get to vote; it’ll all average out” a quality ethic for either party?

And there is one more very good reason. Almost all informed observers allow this is more of a battle for the very soul of the United States than the election of any particular individual. While Mr. Obama and Mitt Romney are the standard bearers at the top of each ticket, the stakes are more so the basic philosophy of government that may well dominate the US for a generation.

Is it going to continue to become increasingly statist along the lines of the Obama approach (with a major assist from his predecessor’s abandonment of some cherished Republican precepts)? Or is it going to go back to the more self-sufficient ‘classic’ American tendencies that Mitt Romney and Paul Ryan assert (rightfully or not) they will be able to put back in place?

And there is an important accelerant on all that partisan perspective that neither side has been very vocal about throughout the entire process, precisely because it is the most important prize. The truth that nobody dare speak too loudly is that

 

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2012/10/24: Weekly Perspective and Technicals available into critical market phase

October 24, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

Very short and sweet today, because all of the perspective is still much the same as yesterday’s post on the idea that it is Probably NOT Equities Big Bust …Just Yet. Even though the equities gapped down Tuesday below important supports at the bottom of a six-week trading range, the more important trend decision areas remain below the market. In the first instance there is the old early September gap in the 1,400 area on the December S&P 500 future. And that includes a Tolerance level even somewhat lower than that.

Yet, the most important evolution in the background that has driven the market psychology is the weakness of corporate topline revenues. That psychological discussion on that is available in our Weekly Report & Event Summary Perspective (link in the right-hand sidebar), with Technicals updated through Tuesday’s US Close as well.

That reinforces all of the warnings from the bears (present company included) that the weaker global economy would not allow companies to endlessly ‘manufacture’ attractive profits from sheer cost-cutting alone. At some point the piper would need to be paid with the sort of sustained lower earnings expectations that had been anticipated for the third quarter; and now that moment seem to have arrived…

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2012/10/05: Quick Post: Courtesy MARKET ALERT: Employment Report technical trend assessment

October 5, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

Very short and sweet today, because all of the perspective is still much the same as expressed previous on the critical nature of an effective response to the ‘perverse’ Spanish bailout dynamic. ECB President Draghi did a great job of offsetting the potential political risks by pointing out how forcefully the European Central Bank can and will act once the European powers-that-be reach agreement.

He waxed eloquent on credit spreads, conditionality, and mostly deferred back to the political class to strike the agreements that would allow the ECB to intervene at all. A masterful job of “doing something” without really doing anything more than reconfirming previous positions. And equity markets seemed to appreciate that quite a bit, as it leaves the door open to ECB activating Outright Monetary Transactions (OMT) on all manner of far-flung justifications anytime it can specify the Monetary Policy Transmission channel is disrupted. Possibly even prior to a final agreement by the politicians.

 

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2012/10/01: Quick Post: Weekly Calendar available and QE influence still a factor

October 1, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

The weekly Report & Event Calendar is available through the link in the right hand column. The Technical Projections and Select Comments from late last week are also available and still relevant. This week’s Summary Perspective on Key Influences will be posted later this evening, and we hope you find that useful as well.

As is typical of the first week of the month, it is going to be a heavy data week all week, and that began today with Global Manufacturing PMI’s. Continued disappointment with Asia (including Australia) and Europe was offset to a fairly interesting degree by the better-than-expected US ISM Manufacturing. However here as well, there was some bad news…

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2012/09/28: QE-Infinity ‘Pie in the Face’ metaphor

September 28, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

The massive central bank QE-Infinity influence already seems to be waning just two weeks after ringleader Buzz Lightyear “To Infinity and Beyond” Bernanke inspired the latest asset price surge. While others either preceded (ECB) or quickly followed the Federal Reserve’s leadership in this area, there is little doubt that initiating the steps the FOMC took two weeks ago was easily the most extensive and extended (i.e. “…highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens…”) central bank commitment to massive liquidity expansion. That said, there is still the question of whether this will do much good with a broken ‘monetary policy transmission mechanism’ (i.e. the real root of economic weakness being in misguided fiscal and regulatory regimes.)

And beyond the sheer consideration that it may fail to influence the economy as expected, there are significant risks of not just that failure but of more general central bank authority dilution. That has been reviewed in this blog and our full research both previous and over the past two weeks. It includes the concerns of some very well respected regional Federal Reserve bank presidents and other economic observers, complaints from other countries this is nothing more than a protectionist, beggar-thy-neighbor ‘currency war’ strategy, and the degree to which (at least so far) the impact is as transitory as many of the skeptics had warned.

It seems that the anticipation of the Fed’s QE3 was much more influential than the actual fact. As we have noted recently, now that the central banks are ‘all in’ on this major liquidity expansion effort, the real risk is it may impugn their ability to effectively intervene in a future crisis. And that is where we draw the analogy with the old Pie in the Face comedy routine, which we will discuss below.

But first, review of another key factor is relevant: the degree to which the Fed becoming ‘the market’ in long-dated US bonds and agency debt is pernicious. Among the most consistent critics of the implementation of this policy has been Newedge Senior Director Larry McDonald. As he noted two weeks ago today (i.e. the day after the Fed QE3 announcement), “There’s a new hedge fund… and it’s the Fed.”

For quite a bit more on that and McDonald’s views on Spain, and that dysfunction in the mortgage securitization market and much else, click into the video clip of his appearance on the Fox business News ‘After the Bell’ show that Friday.  It seems that events since then have borne out his assessment.

And if the Fed is indeed nothing more than a new hedge fund in town…

 

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2012/09/26: Quick Post: Courtesy Brief Update: QE disdain and Spain create equities pain

September 26, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

Short & Sweet again on the specific market comments in this post, because today’s TrendView Brief Update is a pointed discussion of the most important trend implications of the recent sharp criticism of quantitative easing efforts. Along with the tumultuous situation in Spain yesterday, the equities were no longer trusting that the central bank QE-phoria was enough to bolster the markets all on its own.

From a technical trend perspective there is the very sharp downward acceleration of the previously limited correction in the December S&P 500 future after the explosive, QE-driven rally earlier this month. In light of the positive balance in the economic data this week (especially out of the US), it is surely the loss of confidence in the effectiveness of quantitative easing efforts that explains the sudden reversal of the previously firm equities trend activity.

This gets back to the question we have posed on many occasions over the past two years

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