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Kekhawatiran Terbesar Saya Tahun 2013

January 28th, 2013 2 comments

“The first panacea for a mismanaged nation is inflation of the currency; the second is war.  Both bring a temporary prosperity; both bring a permanent ruin.  But both are the refuge of political and economic opportunists.”

-Ernest Hemingway

“Inflation is like sin; every government denounces it and every government practices it.”

-Frederick Leigh-Ross

Bank-bank sentral besar dunia saat ini tengah melakukan permainan yang sangat berbahaya. Mencoba untuk mengelola ekspektasi inflasi namun terus mengejar kebijakan yang akan mendongkrak  inflasi sudah tentu akan banyak menimbulkan volatilitas di pasar tahun ini.

Meskipun Ben Bernanke telah mempertahankan suku bunga AS mendekati nol, inflasi belum menjadi masalah besar sejak krisis keuangan tahun 2008. Dan banyak pengamat memperkirakan inflasi masih akan stabil.

Masalahnya adalah bahwa bank-bank sentral dunia juga terus menambah pasokan uang. Cina terus menambah pasokan uangnya, Bank Sentral Eropa (ECB) melakukan pembelian obligasi pemerintah negara-negara anggotanya yang bermasalah serta Inggris yang seperti AS melakukan ekspansi pasokan uang hingga senilai hampir seluruh hutangnya untuk menutup defisit anggaran.

Dan yang tak kalah penting, jangan lupa adanya perubahan besar di tahun 2013 yang terjadi di Jepang, dimana pemerintahan baru di bawah kepemimpinan PM Abe telah mendesak bank sentral BoJ untuk melakukan pembelian obligasi pemerintah lebih lanjut dalam rangka mendorong target inflasi hingga 2%.

Semua langkah mencetak uang tersebut dalam jangka panjang kemungkinan besar akan mengakibatkan tingkat INFLASI LEBIH TINGGI. Oleh karena itu, saya berpendapat akan lebih baik untuk menghindar dari obligasi jangka panjang dan tetap menjaga kekayaan Anda dalam aset seperti emas, perak, komoditas dan ekuitas yang terkait dengan komoditas.

Sebaiknya selalu ingat bahwa inflasi memiliki cara penampakan seperti seolah sebagai suatu ancaman jauh sebelum kemudian muncul menyelinap tiba-tiba dan mulai mendorong harga naik. Jadi terlepas dari seberapa cepat atau lambat para hantu inflasi menyelinap, yang terbaik saat ini adalah untuk mempersiapkan inflasi dalam portofolio Anda SEKARANG.

Untuk memberikan Anda pandangan mengapa inflasi bisa menyerang tiba-tiba dan seberapa parah akibatnya, berikut adalah tiga laporan Tyler Durden dari www.zerohedge.com:

1) Peak Monthly Inflation In 1945 Hungary: 12,950,000,000,000,000% And Other Hyperinflationary Facts (June 15, 2012)

For some reason, whenever people want to make a historical example of a hyperinflationary period, they always bring up the Weimar Republic, aka Germany in 1920-1923. Yet with a highest monthly inflation of just under 30,000%, Weimar was a true walk in the park compared to the 309,000,000% monthly inflation in 1992-1994 Serbia, but especially to the 12,950,000,000,000,000% inflation that Hungarians had to deal with in the aftermath of WWII. For these and more  comparative examples of hyperinflation, particularly relevant now that the entire world is rumored (for now) to be getting ready to print, see below.

2) 803 Years of Global Inflation (September 4, 2012)

Spot the point in this 803 year timeline of world inflation, when the Fed was created.

The chart above comes courtesy of Jim Reid’s fantastic “Journey into the Unknown” which we will dissect in much more detail shortly. For now we wanted to bring our readers attention to what is arguably the most important aspect of modern monetary times: the advent of persistent inflation, and the disappearance of deflation.

Figure 18 shows median global inflation first from 1209 (left) and then from 1900 (right). As we’ve discussed in previous notes inflation took on a totally different persona after the start of the twentieth century. The charts are again on a log scale to allow us to easily see the near exponential increase in inflation over the last 100 years or so, especially relative to what occurred before. Note that had we used average instead of median, the chart would look almost absurd given the extreme levels of hyperinflation seen in several  countries over the last century. The data behind the graph is based on a full set of 24 countries where we have inflation data back to 19001. Prior to this many countries have data that goes back several decades with some back through the centuries. We have  included data as and when it becomes available.

It’s not just the general trend of higher prices, it’s the fact that even single years of deflation have been increasingly hard to find globally over the last century. Figure 20 shows the same data set as used above but shows the median YoY inflation back to 1209 (left) and over the shorter period since 1800 (right).

Prior to the twentieth century years of deflation were almost as common as years of inflation. However as discussed above, this all changed over the last 100 years or so. Indeed we haven’t seen a year of deflation on this median Global YoY measure since 1933. So we’ve now had nearly 80 years without a global year on year fall in prices.

Figure 21 extends this analysis showing the percentage of countries in our sample with a negative YoY inflation print and the total number of countries in our sample each year. The number of countries in annual deflation has certainly fallen over the last 100 years and particularly since the Gold Standard link was broken in 1971. Indeed since 1987 no more than 2 countries (out of the maximum 24 in our sample) have seen deflation in any one year and in most cases one of these two countries was Japan.


So although the last 30 years has been a period where inflation was perceived to be under control across the globe, there has generally been a persistent positive bias not seen through longer-term history. The break with Gold has ensured that countries can mostly ensure they don’t have deflation by being free to conduct money creation policies.

Although the hyperinflation list perhaps isn’t 100% inclusive, the trend is absolutely beyond dispute. The 1980s and 1990s saw the vast majority of the examples of these occurrences through history. Although all these have been outside of the developed world, this region has also seen many countries with high inflation over the period and with wide divergence between countries.

Much more coming: in terms of both Reid’s report, and inflation.

3) Guest Post: Inflation Since The American Revolution (January 7, 2013)

Via Michael Krieger of Liberty Blitzkrieg blog,

As is clear by this chart, inflation was virtually unheard of until the Creature from Jekyll Island (the Federal Reserve) took over.  However, more importantly, things didn’t really start to get bad until the 1970?s right after Nixon took the nation off the gold standard in 1971.  Since that time, America has seen a period of non-existent real wage growth and a huge gap grow between the rich and the poor ever since.  Nothing like livin’ the debt slave dream!

Saya kira sebagian besar pembaca secara pribadi belum pernah mengalami hiperinflasi, oleh karenanya berikut saya persembahkan beberapa gambar yang menunjukkan apa yang terjadi ketika inflasi bergerak di luar kendali dan mengikis daya beli mata uang:

Terakhir saya punya sebuah lelucon agar Anda tetap ceria menjalani hari ini:

The Banker and the Frog

A banker was walking in the park one day when she noticed a large frog sitting along the side of the pond.

As she was walking by, the frog suddenly piped up and said, “Excuse me… but… ummm… would you happen to be a banker?”

The banker responded, “Why yes, I am a banker.  Why do you ask?”

“Well,” says the frog, “I was a forecasting economist, and my forecasts didn’t turn out so well.

The CEO I worked for put a smell on me and turned me into a frog.  The spell can be broken if a

banker will kiss me.  Then I can return to being a forecasting economist.”

The banker paused for a moment, then reached out, picked up the frog, put him in her purse, and began walking along.

After a few minutes the frog piped up, “Hey, what are you doing?  If you will just give me a kiss I can walk along on my own and you won’t have to carry me.”

The banker stopped, looked down at the frog, and said, “True… but you’re worth a lot more to me as a talking frog than as a forecasting economist.”

Selamat menjalani hari ini dan semoga beruntung!

Dibuat Tanggal 28 Januari 2013

Categories: Pasar Internasional Tags:

Bursa-bursa Saham Di Persimpangan Kritis (Bagian 2)

January 25th, 2013 4 comments

“We have seen stock markets get a lift because of the so-called fiscal cliff agreement.  We could see global stock markets continue to rise based on optimism and additional QE.  But I think this is a final rise.  The danger is that investors will be sucked into this. Thereafter, I expect a massive, long-term fall in global stock markets.”

-Egon von Greyerz, founder of Matterhorn Asset Management

“There will always be bull markets followed by bear markets followed by bull markets.”

-John Templeton

Kembali saya akan mengetengahkan laporan yang penuh dengan data yang menggugah pikiran serta grafik-grafik yang menunjukkan bahwa seluruh berita-berita positif sepertinya sudah terdiskonto dengan maksimal oleh bursa saham AS sehingga tidak ada lagi hal-hal yang bisa mempertahankan ilusi sebuah bull market yang sehat.

Ini hanya sebuah fakta yang tak terbantahkan bahwa kepuasan para pelaku pasar saat ini sudah berlebihan. Anda bahkan bisa mengatakan mereka terlalu bullish. Ini jelas ditunjukkan oleh the Investors Intelligence Advisors Sentiment Index, bahwa 53,2% dari penulis media dan advisor yang mereka survei adalah bullish.

Kewaspadaan mulai meningkat ketika data mingguan tersebut melampaui 50, dan peningkatkan melampaui 55% dianggap merupakan ‘wilayah berbahaya’. Dengan kata lain, kita semakin dekat dengan zona berbahaya saat ini . Oleh karena itulah, saya kembali ingin mengingatkan investor sekali lagi untuk tidak mengambil risiko yang tidak perlu.

Saya yakin Anda pernah mendengar pepatah lama di Wall Street “overbought doesn’t mean over” atau “markets can stay irrational longer than you can stay solvent”. Maka selalu disarankan untuk mengingatnya karena pasar bisa saja masih akan melanjutkan kenaikan lebih tinggi daripada saat ini sebelum mengalami suatu bearish correction.

Kesimpulan: jangan mengambil resiko di depan kereta bursa yang bullish dan tunggulah dengan sabar kelemahan menunjukkan dirinya sebelum mempertimbangkan posisi bearish atau menjual saham-saham Anda. Untuk mendukung pandangan saya terhadap bursa AS, berikut adalah sejumlah laporan Tyler Durden dari www.zerohedge.com yang telah melakukan pekerjaan yang besar – seperti biasa – dalam menunjukkan bahaya-bahaya yang mengintai:

1) What Happened The Last Four Times That US Macroeconomic ‘Surprises’ Hit A Three-Month Low? (January 6th)

The last week or two has seen Citi’s economic ‘surprise’ indicator (ECO) take a decided turn for the worse. At Friday’s close, the index that tracks not just absolute performance of the major macro prints but their relative performance to expectations, had hit a three-month low. Since the top in the S&P 500 in late 2007, the 3-month rate-of-change has shifted significantly negative four times – and each of these times has been followed by a significant downturn (or change of trend) in the S&P 500. As of Friday’s close, the ECO index’s rate-of-change shifted negative (its most negative in 5 months) and has signaled a quite intriguingly divergent lower high (from Q4 2011′ previous peak) compared to the S&P 500′s higher high. Is the short-term drop in ECO due to ‘cliff’ indecision? Or will earnings season be the market’s catalyst to realize the changing macro landscape?

Late 2009 saw a period of very unusual absolute stagnation in macro data (while QE1′s liquidity lifted stocks) but once the rate-of-change pushed consistently negative, the top was in for stocks in mid 2010.

The blue dotted-line indicates the lower high that macro data has shown during this latest cycle (as opposed to higher high in equities)

Chart: Bloomberg

2) Speculators Rush Into Risk By Most Since 2007 (January 7th)

In the last two weeks we have pointed out that not only are equity futures traders the most net long in six years but NYSE Margin Debt is also near four year highs. Add to this the fact that VIX futures are the most net short they have ever been – crushed by an all too visible hand – and it appears that equity market participants were critically unafraid of the fiscal cliff uncertainty. What is even more concerning, at least for those who care to be modestly contrarian that is, is that the market appears to be running out of greater fools in every asset class as JPMorgan’s speculative position indicator – which combines net positioning across 8 ‘risky’ and 7′safe’ assets – is at its most risk-on since just before the crash began in Q3 2007.

So, for all those taking heads who expect a flood of new money, who still believe there is money on the sidelines that wants to be put to work, the fact is in the last decade we have been more speculatively positioned long only once – and that marked the top in stocks (and risk-assets everywhere).

The risky assets are: Copper, GSCI, AUD, NZD, CAD, RUB, MXN and equities (an aggregate of the S&P500, Dow Jones, NASDAQ & Nikkei).

The safe assets are: Gold, VIX, JPY, CHF, Silver, an aggregate of the UST and Eurodollar futures & an aggregate USD index. The USD series is the inverse of the sum of positions in EUR, JPY, GBP, CHF, AUD, NZD, CAD, RUB and MXN futures. The UST series is a duration weighted aggregate of the Eurodollar, UST2YR, UST5YR, UST10YR, UST long bond & the UST Ultra long bond futures.

Source: JPMorgan

3) 2013 – Macro Déjà Déjà vu (January 10th)

Ever feel like we have been here before? Overwhelmed by the chatter that this time is different and the ‘recovery’ is self-sustaining? Join the crowd (and Goldman). Their MAP indicator – which tracks both absolute (up/down) and relative (beat/miss) moves in macro-economic data – is once again at a level that in the last two years has perfectly marked the tipping point in expectations and absolute macro performance. While the markets (in their infinite wisdom) appear convinced – just as they were in 2007 – perhaps 4 weeks in a row of weakening claims and a gross downward revision of Philly Fed is a glimpse that it really is no different this time.

Chart: Goldman Sachs

4) Is 807 The Number Of The S&P 500 Beast? (January 10th)

In today’s WTF moment, we note that the inexorable rise from the March 2009 lows to the most recent September 2012 highs has created exactly the same 807 point rise that the last bubble-blown levitation managed (from October 2002 to October 2007) . Curiouser and curiouser… and from a suspiciously devilish 666 low print, we can only hope our behavioral biases can cope with these glimpses.

(h/t Brad Wishak at NewEdge)

5) Tom DeMark: “Sell The World” And Soon, The US (January 11th)

Because there are still some traders who adhere to such old normal traditions as charting and technical analysis (because apparently the FOMC committee sits down each month and observes Ichimoku clouds, RSI indicators and Bollinger bands), it is probably notable that one of the most respected chartists, Steve Cohen’s favorite technician Tom DeMark, is now uniformly bearish on virtually all markets around the world which have triggered a sell signal in his studies, and is about to drop the axe on the US as well where a “Daily 13″ signal is imminent. The caveat, of course, is that in a world in which fundamentals haven’t mattered in years, why should technicals?

6) US Q4 GDP: From 2.5% To Sub 1% in Under Six Months (January 11th)

The previously noted surge in the US trade deficit may or may not be due to the iPhone (which either leads to a rise or fall in GDP, depending on which “strategist” is goal seeking their excel model to reality), but the result is clear: Q4 GDP just got slammed. Below is a summary of the Wall Street penguins all of whom had no choice but to revise their Q4 GDPs far lower.

  • Goldman Sachs: 1.8% to 1.3%
  • JPM: 1.5% to 0.8%
  • RBS: 1.5% to 0.7%
  • Nomura: 2% to 1.3%
  • Last, and least, Deutche Bank’s Joe Lavorgna: unchanged at 1.3%

Look forward to hope being forced to surge even more to offset for this cut by nearly 50% of the consensus Q4 GDP estimate of 1.5% prior to today. And while we wait for Bloomberg to compile today’s massive downward revision to economic growth, this is how Q4 GDP tracking estimates looked like in the past 6 months before today’s downward revision which will take the consensus line to 1% or under.

7) Hedge Funds Most Levered And Long Since 2004 (January 14th)

In the last days of 2012 we penned an article describing the current situation of the market as follows: “Margin Debt Soars To 2008 Levels As Everyone Is “All In”, Levered, And Selling Vol.” Today, Bloomberg catches up with this rather critical topic, and confirms that the buying power of the biggest marginal traders left in the market who do not recycled deposits into stocks – hedge funds – is nothing more than debt piled upon debt, as “Leverage among managers who speculate on rising and falling shares climbed to the highest level to start any year since at least 2004, according to data compiled by Morgan Stanley.” BBG also recaps what our readers already know: “Margin debt at NYSE firms rose in November to the most since February 2008, data from NYSE Euronext show.” In other words: everyone is all in and levered. And soon, in about two weeks, Bloomberg will figure out that everyone, or at least a central bank here or there, is, indeed, “selling vol.

From Bloomberg:

Gross leverage, a measure of hedge fund borrowing that shows how much their holdings exceed the cash invested by clients, was 153 percent in the week ended Jan. 4, up from an average of 152 percent in 2012 and 143 percent a year ago, according to data from New York-based Morgan Stanley. The level has averaged 143 percent since 2005, the data show.

Managers are borrowing more amid a 15 percent rally in the S&P 500 since June, a gain that was mostly missed by professional investors who speculated shares would fall, according to data from Hedge Fund Research Inc. and International Strategy & Investment Group.

Borrowing increased as President Barrack Obama and Republican lawmakers reached an agreement averting more than $600 billion in automatic tax increases and spending cuts.

Sadly, Bloomberg’s conclusion is off:

The rising use of borrowed money shows that everyone from the biggest firms to individuals is willing to take more risks after missing the rewards of the bull market that began in 2009. While leverage means bigger losses should stocks decline, investors are betting that record earnings and valuations 9.8 percent below the six-decade average will help push the Standard & Poor’s 500 Index toward the record it set in October 2007.

“The first step of increasing risk is just going long, the second part of that is levering up in order to go longer,” James Dunigan, who helps oversee $112 billion as chief investment officer in Philadelphia for PNC Wealth Management, said in a Jan. 8 telephone interview. “Leverage increasing in the hedge-fund area suggests they’re now getting on board.”

Actually no.

What near record leverage means is that hedge funds have absolutely zero tolerance for even the smallest drop in prices, which are priced to absolute and endless central bank-intervention perfection – sorry, fundamentals in a time when global GDP growth is declining, when Europe and Japan are in a double dip recession, when the US is expected to report its first sub 1% GDP quarter in years, when corporate revenues and EPS are declining just don’t lead to soaring stock prices.

It also means that with virtually all hedge funds in such hedge fund hotel names as AAPL (the stock held by more hedge funds – over 230 – than any other), any major drop in the price would likely lead to a wipe out of the equity tranche at the bulk of AAPL “investors”, sending them scrambling to beg for either more LP generosity, or to have their prime broker repo desk offer them even more debt. And while the former is a non-starter, the latter has so far worked, which means that most hedge funds have been masking losses with more debt, which then suffers even more losses, and so on.

Is this sustainable? Find out soon, perhaps in as soon as one month, when it will finally be up to the flailing market, not some trillion dollar nonsense, to get Congress to a debt-ceiling compromise (because it is not different this time). It is at that point that we will find out just how much the surge in leverage is due to optimism, and how much due to being held hostage by a market in which to keep up with the beta rally one has no choice but to layer debt upon debt upon debt to pretend alpha still works in the New Normal.

Or else: “career risk.

8.) Putting The Near-Record Equity Inflow In Context (January 14th)

There are some people who are very confused by last week’s news of the “second highest inflow into equity funds on history.” First and foremost, this is not “retail” capital reallocation, as EFSF/Lipper compile primarily institutional and ETF flow data. And indeed, as we reported earlier last week, the injection into the market, which also includes allocation to such vehicles as equity funds and ETFs by institutions, was driven primarily by a $220 billion surge in deposits in December, subsequently used by banks to reinvest said capital (most of which, ironically, coming from equity sales by retail investors as banks simply take the proceeds and reinvest into stocks). At the same time, retail investors [sic] continued to solidly pull money out of equity mutual funds. But while the source of funds was wrong, the use of funds was indeed accurate, and in the first week of the year there was a massive, $22 billion allocation to equities, second only to the $23 billion dumped into equity funds in the third week of September 2007.

What happened the first time we such an epic injection (whether it is from deposits, or from levered funding, or who knows what)? Brad Wishak of Newedge shows very clearly what happened then.

Will this comparable attempt to send stocks even higher and fool retail to be the dumb money bag holder once again succeed? Or will this time not be different? Of course, back in 2007 we actually had a market: now it is merely a place where the Fed parks $85 billion in freshly printed money each and every month.  So maybe this time will be different after all.

Pada 21 Januari 2013 lalu presiden Obama menyampaikan pidato pelantikannya di depan gedung Kongres, Capitol, yang berisi 2137 kata dan berdurasi 15 menit. Dalam pidatonya itu, presiden Obama mengajak kita semua bersama-sama untuk mengejar harapan.  Dan, seperti Anda lihat di bawah ini, William Banzai memiliki pandangan uniknya sendiri terhadap pidato presiden Obama tersebut:

Selamat menjalani hari, semoga menguntungkan serta selamat menikmati akhir pekan.

Dibuat Tanggal 25 Januari 2013

Categories: Pasar Internasional Tags:

Apakah Krisis Sterling Akan Terjadi?

January 25th, 2013 No comments

Baik, saya akui bahwa transaksi mata uang favorit saya tahun ini adalah jual pound sterling Inggris (GBP), dan bukan yen Jepang (JPY) seperti yang Anda kira, kan? Transaksi beli USD/JPY dan EUR/JPY begitu banyak dilakukan, begitu tajam pergerakannya dan bisa saja mengalami koreksi tak terduga satu saat jika kemudian terjadi aksi buru level-level stop.

Salah satu alasan utama saya berpandangan bearish pada mata uang Inggris yang dikenal juga dengan istilah cable itu adalah penunjukkan Mark Carney sebagai gubernur bank sentral Inggris (BoE). Sudah ada banyak kekhawatiran tentang pengangkatannya, padahal Carney baru akan mulai bertugas menggantikan Mervyn King pada bulan Juli 2013.

Setelah membaca 3 artikel berikut, saya yakin Anda akan mengerti mengapa saya begitu yakin bahwa pound sterling akan turun.  Khususnya terhadap dolar AS, saya memperkirakan penurunan cable setidaknya akan mencapai level 1.3500 hingga mungkin mendekati level paritasnya.

Dua laporan Tyler Durden dari www.zerohedge.com berikut mungkin bisa merubah pandangan Anda yang masih memproyeksikan penguatan sterling. Silahkan baca keduanya dengan seksama, dan perhatikan pula kalimat-kalimat yang diberi cetak tebal.

1) Goldman Releases Its Analysis On The Appointment Of Goldman As Bank Of England Head (November 26th)

There are so many “meta” things going on in here, we wouldn’t even know where to start, so we will simply present Goldman’s just released analysis of the implications of Carney’s “surprise” appointment to the head of the BOE as is, in all its faux “shock” glory.

From Goldman Sachs, emphasis ours:

UK: Carney surprise choice as BoE Governor

Bottom line: It has been announced today that Mark Carney will succeed Mervyn King as Governor of the Bank of England from July 2013. Mr. Carney, who is currently Governor of the Bank of Canada, will serve for five years (the position is intended to be for eight years). He has a reputation for being a policy pragmatist and innovator (for instance, under his tenure, the BoC was the first G7 central bank to introduce a conditional rate commitment in 2009).

1. The news comes as a surprise. Although there had been some speculation that Mr. Carney might be a candidate prior to the selection process getting under way, the BoC Governor had indicated that he had not applied for the job. Of the five known candidates, Paul Tucker, one of two Deputy Governors at the BoE, was the strong favourite for the job.

2. It is difficult to speculate on the policy implications of an appointment such as this, not least because Mr. Carney will have only one vote (of nine) on the MPC. But the BoC Governor has a reputation for being a policy pragmatist and innovator (under his tenure, the BoC was the first G7 central bank to introduce the conditional rate commitment in 2009). Relative to the conservative approach towards credit easing that the BoE has adopted under Governor King’s stewardship, it is also possible that Governor Carney may be prepared to engage in more ‘unconventional’ forms of QE. Mr. Carney is also perceived in some quarters as being a dove, although this perception may simply be ‘state dependent’ (i.e. his relatively dovish stance reflected the weak state of the global economy during his tenure at the BoC).

3. In addition to chairing the MPC, the new Governor will also chair the Financial Policy Committee, with expanded responsibilities in the areas of financial regulation and oversight.

4. To ensure continuity at the BoE, it has been announced that Charlie Bean (who is also a Deputy Governor) will remain for an additional year, until 2014.

So just in case our warning that Goldman is about to launch turbo-mega QE in the UK weeks after the BOE decided to shelve it, here is Goldman itself confirming it.

Go long the GBP here at your own risk.

2) Goldman’s BOE Tentacle Has Not Even Arrived And Already Advocates Massive Money Printing (December 12th)

When two weeks ago Mark Carney was appointed head of the Bank of England (despite his firm denials of any interest in the position) many were surprised. Not us: we were certain the former Goldmanite, and incidentally current head of the Bank of Canada, would lead the world’s oldest central bank. We were even more convinced Carney would become BOE head after on November 8 the Bank of England halted QE as its “potency was questioned.” Needless to say to the banker sponsors of the MIT monetary genius diaspora (as profiled previously), there is nothing more terrifying than the prospect of an end of electronic money conceived literally out of thin air, and debiting it into perfectly willing excess reserve accounts at any/all banks. So what is a statist financial system caught in the final days of its existence and desperate to extend its life as long as possible to do? Why, appoint the one person who would turn this “disastrous” conclusion on its head, and promptly proceed with doing exactly the opposite: printing like a drunken Hewlett Packard laserjet.

As a reminder, this is precisely what happened when Mario Draghi, another Goldmanite, replaced Trichet: days after his appointment, he not only facilitated the global financial system bailout of November 2011, but announced the arrival of the now defunct $1.3 trillion LTRO.

Sure enough it was only a matter of time before Carney showed his true colors, and we were not at all surprised to read last night that the central banker, largely misperceived modestly hawkish, has done not only a full U-turn but is already suggesting the BOE not only resume QE but hit the pedal to the medal to an extent not even seen at the Fed, by pushing for NGDP targeting. This is nothing but a fancy term for infinite monetary easing.

From the FT:

Mark Carney, the next governor of the Bank of England, has suggested he will act much more aggressively to revive the UK economy when he takes charge next summer, including dumping the BoE’s much-vaunted inflation target if growth fails to pick up.

In a clear break with the views of the BoE’s current senior management, Mr. Carney, now governor of the Bank of Canada, said on Tuesday that central banks should consider more radical measures – such as commitments to keep rates on hold for an extended period of time and numerical targets for unemployment – when rates are near zero.

If those measures fail to have the desired effect, Mr. Carney said central banks should consider scrapping their inflation targets – a cornerstone of economic policy around the world in recent decades, including in the UK.

Mr. Carney suggested that a nominal GDP target, where a central bank sets monetary policy based on both inflation and growth, would do more to boost economic output. “For example, adopting a nominal GDP-level target could in many respects be more powerful than employing thresholds under flexible inflation targeting,” he said.

“If yet further stimulus were required, the policy framework itself would likely have to be changed,” Mr. Carney said in Toronto in his first speech since being named successor to Sir Mervyn King last month. He cautioned that the benefits of any regime change “would have to be weighed carefully against the effectiveness of other unconventional monetary policy measures under the proven, flexible inflation targeting regime”.

The comments are likely to rankle with Sir Mervyn, who masterminded the campaign for an inflation target for the UK, introduced in 1992. The BoE targets inflation of 2 per cent, though prices have risen at a faster rate since 2009.

Any decision on scrapping the inflation target would rest with George Osborne, the chancellor, and would be influenced by the Monetary Policy Committee’s other eight members.

And of course, should Osborne dare to refuse this “proposal” and opt for the existing, and proper, BOE course, then his tenure will be drastically reduced. Just recall what happened to Bunga Silvio when he openly defied the other Goldman nemesis Mario Draghi in the first week of November 2011, just days after the inauguration of the Italian to the ECB throne?

Artikel ketiga akan menjelaskan mengenai the man behind the gun, yakni Mark Carney yang oleh penulisnya disebut dengan Mark Carnage.  Ini merupakan artikel yang HARUS DIBACA bagi yang belum memperoleh petunjuk mengenai latar belakang ataupun pencapaiannya saat – dan sebenarnya masih hingga pertengahan tahun 2013 ini – menjabat sebagai gubernur bank sentral Kanada (BoC):

From John Aziz of Azizonomics

Mark Carnage

The greater story behind Mark Carney’s appointment to the Bank of England may be the completion of Goldman Sachs’ multi-tentacled takeover of the European regulatory and central banking system.

But let’s take a moment to look at the mess he is leaving behind in Canada, the home of moose, maple syrup, Jean Poutine and now colossal housing bubbles.

George Osborne (who as I noted last month wants more big banks in Britain) might have recruited Carney on the basis of his “success” in Canada. But in reality he is just another Greenspan — a bubble-maker and reinflationist happy to pump the banking sector full of loose money and call it “prosperity” before the irrational exuberance runs dry, and the bubble inevitably bursts.

Two key charts. First, household debt-to-GDP.

Deleveraging? Not in Canada.

The Huffington Post noted earlier this year:

Household debt levels have reached a new high, increasing the vulnerability of average Canadians to unexpected economic shocks just at a time when uncertainty is mounting.

Despite signs that Canada’s economic recovery is fizzling, data released by Statistics Canada Tuesday shows that the ratio of credit market debt to personal disposable income climbed to 148.7 per cent in the second quarter, surpassing the previous record of 147.3 per cent set in the first three months of this year.

Second, Canadian house prices:

Famed analyst Jesse Colombo recently wrote:

Booming commodities exports and skyrocketing housing prices are encouraging Canadians to spend far beyond their means, while binging on credit, mimicking their American neighbors’ profligate behavior of six years earlier. (They’re thinking, “Canada is different!”) RBC Global Asset Management’s chief economist warns that Canada’s record household debt could “spell its undoing,” while Moody’s warns that Canadian banks face significant risk due to their exposure to overleveraged Canadian consumers. Maybe things really are different in Canada, where a group of under-21-year-olds got caught by the police for racing $2 million worth of exotic supercars, including Ferraris and Lamborghinis. Or not.

The age-old misperception that this time is different, that Chinese investors will continue to spend millions on crack shacks in Vancouver, that an industrial boom in East Asia will continue to support demand for Canadian commodities, that Canada’s subprime slush isn’t vulnerable, that hot inflows from capital rich low-interest rate environments like Japan and America will continue forever.

In the short term what is going on is that the ex-Goldmanite Carney has pumped up a huge bonanza of securitization and quick profits for big banks and their management who are laughing all the way to the Cayman Islands (or in Carney’s case, Threadneedle Street). Once the easy money quits flowing into the Canadian financial system from abroad, defaults will begin to accumulate, cracks will quickly appear, and Canada will spiral into debt-deflation. Taxpayers in Canada (and in other similar cases like Australia) may well end up bailing out the banks profiting so handsomely now, just like their American and British and Japanese cousins.

The appointment of Carney is a disaster for Britain and a disaster for the Bank of England. Carney has already singled out Andy Haldane for criticism, an economist at the Bank of England with a solid understanding of the dynamics of complex financial systems, and a champion of simple and clear regulation. 

In a hundred years, people may be taking out zero-down mortgages against building geodesic domes on Mars or the Moon, and flipping them off to greater fools for huge profits. Because this time is different, right? And another crash and depression will follow.

What Do the Charts Say?

Berikut adalah sejumlah data statistik menarik untuk diperhatikan, beserta komentar dan grafik yang jelas mengindikasikan tindakan putus asa BoE dalam beberapa tahun ke belakang.  Dominic Frisby, komentator MoneyWeek’s untuk komoditas dan emas, adalah penulis dari artikel pendek di bawah ini (kecuali ada yang menyatakan lain):

“Here’s why I think that some kind of monetary crisis is inevitable. As Patterson, who is the chief economist of Gold Made Simple, notes: “Since the Bank of England started buying up UK debt at the beginning of 2009 the UK has issued about £724bn in new debt. Over that time period the BoE has bought up £365bn. Which means that a staggering 50% of ALL newly issued UK debt has been covered by the BoE”.

At 50%, the BoE has almost become the market for gilts. I can’t see how such artificial intervention can end well for sterling. The BoE is creating an artificial market – a bubble in other words – in government debt. This ability to borrow at artificially low levels means that governments are not being forced to cut spending in the way that they should.

Here’s the BoE balance sheet since 1830, again courtesy of Patterson.

Note the acceleration of the late 1960s and ‘70s. Then the even greater acceleration since 2008, which we see below with the BoE’s balance sheet since 2006. The £400bn threshold has been crossed.

The consequences of expanding the balance sheet in that way will be hard to control. I do hope there are contingency plans in place beyond just reacting to events.

My concern is that now this pattern of balance sheet expansion has been set, there is no way back. Should the economy not recover sufficiently, the answer will be even greater stimulus. That’s not good for the currency.”

Di akhir laporan ini saya akan mengetengahkan sejumlah paraprosdokian, yakni kiasan-kiasan yang biasanya pada bagian akhir kalimat atau frasanya membuat kalimat tersebut menjadi lucu, konyol atau kebanyakan bersifat lelucon.

1. Where there’s a will, I want to be in it.

2. I’m supposed to respect my elders, but it’s getting harder and harder for me to find one now.

3. I didn’t say it was your fault, I said I was blaming you.

4. You do not need a parachute to skydive.  You only need a parachute to skydive twice.

5. Since light travels faster than sound, some people appear bright until you hear them speak.

6. Going to church doesn’t make you a Christian any more than standing in a garage makes you a car.

7. War does not determine who is right – only who is left.

8. In filling out an application, where it says, “In case of emergency, notify:” I put “DOCTOR.”

Dibuat Tanggal 22 Januari 2013

Categories: Pasar Internasional Tags:

AS Masih Akan Hidup Di Luar Kemampuannya

January 24th, 2013 No comments

“It took the United States 193 years (1789-1981) to aggregate $1 trillion of government debt.  It then took 20 years (1981-2001) to add an additional $4.8 trillion and, in the last 10 years (2001-2011), a whopping $9.8 trillion has been added to the federal debt.  Since 1981, the US increased its sovereign debt by 1,560% while its population increased by only 35%…”

-Kyle Bass

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”

-Ogden Nash

Saya mengalami kelelahan dalam 3 hari terakhir ini, oleh karenanya laporan saya kali ini agak singkat.  Isi utamanya mengenai ‘debt ceiling’, atau batas legal dana yang dapat dipinjam pemerintah AS, yang tentunya akan meningkat.

Meskipun tampaknya Partai Republik dan Demokrat tidak mau kompromi – Republik menuntut pemotongan belanja besar sedangkan Demokrat lebih memilih kenaikan pajak – kesepakatan pun dicapai pada menit-menit terakhir. Pada akhirnya, ini hanya akan menjadi drama politik lain yang membosankan yang kemudian diselesaikan dengan bisnis seperti biasanya.

Sebagai informasi untuk Anda, kementerian keuangan AS telah mengatakan bahwa debt ceiling (plafon utang) AS yang akan dibahas sejak pertengahan Februari hingga awal Maret mendatang dapat melampaui $16,4 trilyun.  Sejak tahun 1960, Kongres AS telah menaikkan ataupun merevisi plafon utang AS sebanyak 79 kali, termasuk 49 kali yang dilakukan di bawah presiden dari partai Republik, demikian menurut data kementerian keuangan AS.

Isu terakhir yang berkembang memberikan indikasi bahwa ada potensi kenaikan plafon utang AS karena pihak Republik tidak berkonfrontasi lebih lanjut dengan kebijakan fiskal Obama.  Mereka sedang bersiap untuk memberikan pemerintah AS cukup uang untuk menjalankan operasionalnya dalam 3 bulan ke depan tanpa pemangkasan anggaran belanja.

Salah satu pertanyaan yang ada di benak banyak orang saat ini adalah seberapa JAUH krisis hutang AS sudah terlewati saat ini.  Mari temukan jawabannya dalam sejumlah paragraf berikut, yang ditulis oleh Chris Ferreira dan awalnya dirilis di Economic Reason blog:

“The implications of the US debt crisis are not well understood in most circles, and it is not widely spoken about in the media and during important political debates. The irony is that the US debt is so significant that it plays a monumental role in finance and modern political strategy. The debt poses great risks moving forward, and yet it is referred to in only the vaguest of terms.

Here is why the US debt must grow every year and why it is mathematically impossible for it to continue forever.

Before we can understand why the debt must grow every year, here is is a visual representation, to scale, of how much the current debt is standing at. Each tall uniform column in the background of the picture below refers to a pile of $100 bills stacked one on top of another. Each “tower of debt” consists of 10 x 10 fork-lift palettes that reach out into the sky and are higher than the old World Trade Center buildings. These towers of debt represent $US 16.394 trillion. However, by the time you wake up to read this, it will be larger than that. DemonOcracy does great work on visual representation of the US debt levels.

Why did the US debt grow to these proportions?

Short answer: the US government spends more than what it receives in revenue. In 2012, the US federal government expects to receive $2.5 trillion in revenue, while the total spending carried out by the federal government is $3.8 trillion. The difference ($1.3 trillion) is debt piled onto of the previous debt.

To put $1.3 trillion into context, it is approximately $3,56 billion a day. To make matters worse, the current debt does not take into consideration federal obligations such as social security, Medicare, pension, and retiree health promises. According to David Walker, former controller of the US, when these unfunded programs are added to the enormous debt, it stands at $70 trillion and growing–that is $10 million per minute!

Seventy trillion dollars is over four times the debt in the picture on your left, dwarfing the current US GDP; in fact, it is approximately the world’s annual GDP in 2011. For a current view of the US debt, see the debt clock here.

The government allows for the debt to continue to grow by adding new debt on top of old debt plus compounded interest. Instead of paying back the debt, the government just borrows more to cover previous interest. The interest payments on the debt is over $1 billion a day. When “Uncle Sam” takes out a loan, it is called a bond (I.O.U.). These bonds are purchased by investors, banks, and foreigners. These bonds are a promise to pay capital plus interest. What “Uncle Sam” does, essentially, is pay his investors with his credit card and create new loans to cover interest.

Talk about short-sighted finances with no discipline.

Compounded interest has allowed the debt to grow exponentially, and has reached, in my opinion, unsustainable levels where the debt is reaching at the vertical portion of the “hockey stick” formation.”

Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.

- Albert Einstein

Berikutnya adalah Tyler Durden dari www.zerohedge.com yang baru-baru ini berusaha menghitung dampak perubahan tingkat bunga sebesar 1% terhadap total hutang AS pada tahun 2022.  Dengan kata lain, dirinya merasa perlu menggunakan kekuatan perhitungan tersebut sebagai cara magisnya untuk melihat prospek masa depan… (Petunjuk: Anda mungkin akan terkejut oleh kemungkinan level hutang di masa depan!):

“They say “be careful what you wish for”, and they are right. Because, in the never-ending story of the American “recovery” which, sadly, never comes (although in its place we keep getting now semiannual iterations of Quantitative Easing), the one recurring theme we hear over and over and over is to wait for the great rotation out of bonds and into stocks. Well, fine. Let it come. The question is what then and what happens to the US economy when rates do, finally and so overdue (for all those sell side analysts and media who have been a broken record on the topic for the past 3 years), go up. To answer just that question, which in a country that is currently at 103% debt/GDP and which will be at 109% by the end of 2013, we have decided to ignore the CBO’s farcical models and come up with our own. Our model is painfully simple, and just to give our readers a hands on feel, we have opened up the excel file for everyone to tinker with (however, unlike the CBO, we do realize that when calculating average interest, one needs to have circular references enabled so please do that before you open the model).

Our assumptions are also painfully simple:

i) grow 2012 year end GDP of ~$16 trillion at what is now widely accepted as the ‘New Normal’ 1.5% growth rate (this can be easily adjusted in the model);

ii) assume the primary deficit is a conservative and generous 6% of GDP because America will never, repeat never, address the true cause of soaring deficits: i.e., spending, which will only grow in direct proportion with demographics but as we said, we are being generous (also adjustable), and

iii) sensitize for 3 interest rate scenarios: 2% blended cash interest; 3% blended cash interest and 5% blended cash interest.

And it is here that we get a reminder of a very key lesson, one that even the CBO admitted on Friday they had forgotten about, in what compounding truly looks like in a country that is far beyond the Reinhart-Rogoff critical threshold of 80% sovereign debt/GDP.

The bottom line: going from just 2% to 3% interest, will result in total 2022 debt rising from $31.4 trillion to $34.1 trillion; while “jumping” from 2% to just the long term historical average of 5%, would push total 2022 debt to increase by a whopping $9 trillion over the 2% interest rate base case to over $40 trillion in total debt!

Sadly, this is no “magic” – this is the reality that awaits the US.

And for those more curious about that other critical economic indicator, debt/GDP, the three scenarios result in the following 2022 debt/GDP ratios:

  • 2% interest – 169%;
  • 3% interest – 183.5%; and
  • 5% interest – 217%, or just shy of where Japan is now.

Which reminds us: in the next few days we will recreate the same exercise for Japan’s ¥1 quadrillion in total sovereign debt, which will show why any more “exuberance” arising from Abe’s latest economic lunacy, will promptly send the country spiraling into that twilight zone where every dollar in tax revenue is used only to fund interest expense.

Once again, it is not our intention to predict what US GDP or debt/GDP will be in 2022: only the IMF can do that with decimal level precision, apparently, and not just with anyone, but Greece. The whole point is to show that when dealing with a debt trap lasting a decade, even the tiniest change in input conditions has profound implications on the final outcome. We invite readers to come up with their own wacky and wonderful projections of what the futures of the US may look like.

And that one should, indeed, be careful what one wishes for.

The results summarized for the three scenarios:

Total debt: 2013-2022.

Debt/GDP: 2013-2022:

The Zero Hedge open source model, for everyone to play around with, can be found here. Remember: don’t be a CBO, enable circs!”

P.S. don’t even think of modelling a recession: everything Refs up then.

Hanya untuk memastikan bahwa kita mampu menempatkan debat debt ceiling dalam perspektif yang benar, berikut adalah sejumlah pandangan yang lebih jelas mengenai ‘the debt’ oleh Simon Black dari Sovereign Man blog:

“If you haven’t heard yet, the United States of America just hit $16 trillion in debt yesterday. On a gross, nominal basis, this makes the US, by far, the greatest debtor in the history of the world.

It took the United States government over 200 years to accumulate its first trillion dollars of debt. It took only 286 days to accumulate the most recent trillion dollars of debt. 200 years vs. 286 days. This portends two key points:

  1. Anyone who thinks that inflation doesn’t exist is a complete idiot;
  2. To say that the trend is unsustainable is a massive understatement.

At an average interest rate of 2.130%, Uncle Sam will shuffle $340 billion out the door just in interest payments this year… and it’s a number that’s only going up. To put it in context, China owns so much US debt that the INTEREST INCOME they receive from the Treasury Department is nearly enough to fund their entire military budget.

It’s rather disgusting when you think about it.

Yet when you look at the raw numbers, there is no sign of improvement anywhere on the horizon. Last year, the Treasury Department brought in about $2.3 trillion in tax revenue. They spent $2.9 trillion JUST on -mandatory- programs like Social Security and Medicare, plus the very sacrosanct defense budget.

In other words, the US government was $600 billion dollars in the hole before paying a dime of interest on the debt, or paying the light bill at the White House. In fact the government’s own numbers reflect a budget deficit through the end of the decade, i.e. the debt level is only going to get higher. These are their own figures.

In the 19th century, the Ottoman Empire was facing a similar debt crisis. In just 11-years, the Ottoman central government went from spending 17% of its tax revenue on interest payments, to spending over 52% of its tax revenue on interest payments. Then came default. Eleven years. The US is at 15% right now. How long will it take for the interest burden to become unbearable?

History is full of examples of superpowers bucking under the weight of their debt. This is not the first time that it’s happened, and it won’t be the last.

Sovereign debt is a giant confidence game. Investors buy bonds on the belief that governments can (and will) pay. When that confidence is chipped away, the cost of capital becomes debilitating. And people tend to notice a $16 trillion debt burden.

This is banana republic stuff, plain and simple… and smart, thinking people ought to be planning on capital controls, wage and price controls, pension confiscation, and selective default. Because the next trillion will be here before you know it.”

Terakhir adalah Bill Buckler, penulis The Privateer, yang menjelaskan dasar dari kesemuanya dalam artikelnya berikut:

“To put the magnitude of the current global fiscal and financial profligacy in perspective, The Privateer has in the past made use of a simple illustration. As the “fiscal cliff” looms and as the Treasury’s debt “subject to limit” grows to about $US 60 Billion below that “limit”, we make the point again.

How is it possible for a nation of almost 100 million people to survive – and indeed prosper exceedingly – when the government of that nation has a TOTAL debt of about $US 2 Billion? That question is asked in the context of today. Today, that same nation has a population of a bit more than 300 million people and is “run” by a government whose funded debts approach $US 16,400 Billion and whose TOTAL debts (funded and unfunded) are in excess of $US 200,000 Billion? That is the record of the US over the past century. Its population has tripled. Its government debt has grown by a factor of 100,000.

Which – IN REALITY – is the prosperous nation? Is it the US of 1912 or the US of 2012? Which – IN REALITY – is the nation whose citizens can look confidently towards a future in which their progeny will enjoy the fruits of their parents’ labour WITHOUT being indentured to their parents’ profligacy? Which is the nation that has not yet embarked on currency debasement and which is the nation that is nearing the inevitable end of that same road? Everybody knows the answers to these questions too.”

Last but not least Egon von Greyerz, who is the founder and managing partner at Matterhorn Asset Management, explains why the debt bomb will explode in the future and what we can do to keep our current wealth intact:

“Everyone in the world is in despair over what is happening in Europe, but let’s look at the US.  The US is a ticking time bomb of a much larger magnitude than Europe.  The US will continue to spend and run up the deficits.  The debt is up to more than $16 trillion, and I think in the next few years we are going to see the debt going up almost exponentially.

The US, like many parts of the world, has had a false prosperity built on debt.  The total debt including government, private, banking, etc. is at least $60 trillion.  When you add to that the unfunded liabilities, together they will be at least $70 trillion.  So now you are up to $130 trillion of debt and liabilities.

US derivatives, the official figure for the largest banks in the US, the total is roughly $250 trillion.  If the numbers were correctly reported, I believe the derivatives figure would be closer to $400 trillion.

So when you add in derivatives, the US has over a staggering $500 trillion of risk.  You have to remember that’s at zero interest rates.  Just look at the recent JP Morgan fiasco, the enormous risk that these derivatives represent.  So you are talking about $500 trillion against a GDP of around $15 trillion.

The leverage and debt in the US system is absolutely massive.  The risk is enormous.  The US has just been fortunate to have the focus be on Europe for quite some time.  Soon the US will have the spotlight shined on it, and one day these derivatives will unravel.

I have consistently told people for over a decade to put up to 50% of their money into physical gold stored outside of the banking system.  I now believe investors should consider putting even more of their liquid assets into physical gold.  In my view this is the best way to protect against the risks the financial system faces today, and the chaos that is still in front of us.”

Agar tetap ceria, di akhir laporan ini saya ketengahkan sejumlah gambar kartun lucu mengenai hutang AS yang meningkat secara eksponensial:

Dibuat Tanggal 21 Januari 2013

Categories: Pasar Internasional Tags:

Bursa-Bursa Saham Di Persimpangan Kritis (Bagian 1)

January 21st, 2013 3 comments

“Sober attitudes on the part of investors should be a source of comfort, since in normal times we would expect them to bring down asset prices to the point where they’re attractive.  The problem, however, is that while few people are thinking bullish today, many are acting bullish.  Their pro-risk behavior is having its normal dangerous impact on the markets, even in the absence of pro-risk thinking. I’ve become increasingly conscious of this inconsistency in recent months, and I think it is the most important issue that today’s investors have to confront.”

-Howard Marks of Oaktree

Pertama-tama, saya ingin meminta maaf karena kembali mengganggu Anda dengan berbagai data dan fakta yang menunjukkan keadaan sebenarnya dari ekonomi dan kekuatan internal (atau kelemahan) dari bursa.

Meskipun saya tidak memberikan rekomendasi yang spesifik, saya hanya ingin mengingatkan Anda bahwa sebagian besar pelaku pasar – bahkan para hedge fund – saat ini sungguh sangat berhati-hati.

Dengan kata lain, saya merasa peringatan sudah lama diberikan hanya untuk membuat Anda waspada terhadap awan gelap yang kembali membayangi bursa.  ‘Hujan besar’ bisa saja terjadi kapan saja yang kembali bisa meremukkan harapan para investor untuk pensiun dini.

Jadi KEWASPADAAN benar-benar diperlukan bagi yang peduli pada portofolio investasi, agar dapat menjaga apa yang sudah kita miliki. Saya secara pribadi telah menarik hampir semua uang saya dari bursa saham, dan saya sabar menunggu saat untuk entry point yang jauh lebih baik di kemudian hari.

Saya yakin kenaikan saat ini akan cukup terbatas, jadi mengapa harus mengambil resiko?  Jika dan ketika terjadi koreksi harga saham, saya jamin Anda memiliki banyak waktu untuk secara perlahan masuk ke saham-saham favorit yang tercantum dalam daftar belanja Anda.

Sebagai pendukung sikap saya tersebut, saya akan mengetengahkan komentar Tyler Durden dari www.zerohedge.com, yang memberikan alasan-alasan mengapa kita harus lebih berhati-hati dari biasanya pada beberapa bulan ke depan.

Saya sunggu berharap grafik-grafik beserta komentar-komentar berikut setidaknya dapat meyakinkan anda bahwa tidak semuanya yang di Wall Street dan/atau Amerika Serikat itu bagus:

1) Albert Edwards: “Something Bad Happened In November” (December 17th)

From SocGen’s last standing realist, Albert Edwards, now that both Dylan Grice and James Montier have departed for the buy side.

“Something bad happened in November”……

…I have spotted the excellent Lakshman Achuthan of the Economic Cycle Research Institute (ECRI) doing the rounds reiterating his call that the US economy is already in a recession. He seems to be getting a bit of stick recently, but as I am fully aware, bearers of bad news are usually derided. I think he is doing an excellent job of explaining his stance patiently and clearly in the face of some very hostile interviewers. His recent 7 December analysis on the ECRI website of why a recession is likely to have started around four months ago is well worth an uncomfortable read – link (see also the related video link).

Certainly if the US has already slipped into recession, this would help explain why our preferred measure of whole economy profits declined, albeit marginally, in Q3. We have always monitored pre-tax, domestic, non-financial, whole economy profits particularly closely because this measure of the underlying profitability of the business sector is probably the best leading indicator of domestic business investment, and that has also been weak recently.

Many have attributed the weakness in investment to uncertainty about the fiscal cliff. But if underlying profits are under pressure, then so too will be investment. So although much of the S&P eps downgrading by analysts is being attributed to severe weakness abroad, what the latest whole economy profits data show is that the domestic business situation is also weak. The ECRI recession call should be listened to more closely.

Certainly the latest National Federation of Independent Business (NFIB) survey in November was entirely consistent with an economy already firmly back in outright recession. The headline optimism series plunged 5.6 points in November to 87.5, which the NFIB itself says is one of the lowest optimism readings in the survey’s long 30 year history.

“Something bad happened in November…and it wasn’t merely Hurricane Sandy”, the NFIB chief economist Bill Dunkelberg is quoted as saying – see chart below and link. Even scarier than the decline in the headline measure was the 37% slump to an all-time low in those firms who believe economic conditions will improve over the next six months. That 37% drop is twice the previous record 18% decline, which occurred in the immediate aftermath of the Lehman’s collapse (see chart below). For those who might immediately retort that this is a sentiment indicator that should be used as a contrary indicator – you are wrong. It is a good leading or at worst coincident indicator. I would say this datum is more than consistent with the recession that Lakshman Achuthan of the ECRI has been warning of, wouldn’t you?

2) Who Needs Global Trade Anyway: FedEx Shipments Imply Subzero GDP

(December 18th)

With the entire “market” a synthetic algo-traded derivative (and facilitated by the fat pipe between Liberty 33 and Citadel) reflecting merely where the ES and VIX trades, and completely ignoring such trivial things as underlying corporate cash flows (see next post on market performance vs. earnings) or GDP, concerns about fundamentals have become a total joke. This is obviously exacerbated by such “extenuating” circumstances as tropical storms which are designed to make any negative data irrelevant. Of course, for those still curious about such old school metrics as actual economic performance, untainted by Fed intervention (such as $85 billion in offsetting flow per month), here is one chart, showing the correlation between total FedEx package shipments and Real GDP. And no, sorry, you can’t blame this one on Sandy, on the Cliff, or any of the other spin talking points. From Bloomberg: “The level of FedEx package shipments began to slump as early as the first quarter of 2012 and now appears to be signaling weaker economic conditions for 2013. In late March, FedEx made mention of cooling conditions, with CFO Alan Graf noting the economy was not as strong as  the company hoped it would be a year earlier. According to Fred Smith, FedEx CEO, “Fundamentally, what’s happening is that exports around the world have contracted and the policy choices in Europe and the United States and China are having an effect on global trade.

3) Margin Debt Soars To 2008 Levels As Everyone Is “All In”, Levered, And Selling Vol (December 29th)

There were some readers who took offense at our “bloodbath” recap of yesterday’s market action (modestly different from that provided by MarketWatch). And, all else equal, a modest 28 step drop in the E-Mini/SPX would hardly be earth shattering. However, all else was not equal, and based on peripheral facts, the reason for our qualifier is that as of last week virtually nobody was prepared for a move as violent and sharp as the one experienced in the last minutes of trading yesterday. In such a context a “mere” 1.5% drop in the futures market has a far more pronounced impact on participants than a 10% or even 5% drop would have had, had traders been positioned appropriately. They weren’t. So what was the context? Let’s find out.

First as the NYSE just reported margin debt just soared to a near five year high, with Margin Debt at a whopping $327 billion, surpassing the highest print since the Lehman collapse, and the highest level since February 2008. Not only is everyone all in based on, but they are all in on nearly record amounts of leverage.

As noted previously this happened just as the net long positioning of specs soared to an all time high.

In short – the “sidelines” speculator money is already all in, and is using gobs of leverage.

Second, when it comes to high beta, or traditionally the most volatile stocks, those that serves as either leaders or laggards in the market in its year end phases, we take a look at the Russell 2000 Mini speculative exposure as shown by the CFTC’s weekly Commitment of Traders update. The chart below needs no explanation: the net non-commercial spec longs in the Russell 2000 have never been more bullish. If the market, which is priced to absolute levered perfection disappoints, the high beta exposure will be annihilated.

Third, and last, for all those who have had a sinking feeling ever since June that something was even more broken with the equity market, more so than usual, we have just one chart to prove all of them right. As this chart of net non-commercial CoT VIX exposure shows, starting in June and continuing ever since, the net exposure in VIX futures has gone down in what is virtually a straight line.

But what changed in June? Well, as some may recall, something very substantial – the head of the Fed’s Markets Group, i.e., its trading desk, got a new head: one who has been rumored to have a different PPT style to his predecessor Brian Sack – a style that involves the relentless selling of VIX to take advantage of a market which is drowning in reflexivity, and in which the movement of the vol surface has a far greater impact on the underlying asset than any fundamentals or news flow: want to send the market higher (and have an infinite balance sheet at JV partner Citadel courtesy of your backstop, then just sell, sell, sell VIX).

At least we can now scrap the “rumored” part.

* * *

So to all those who are confused why a 1.5% drop in the market constitutes a bloodbath, now you know: with no hedges on, with massive margin exposure on, and with everyone all in, the last thing the market can sustain is selling, any selling, or else the dreaded margin calls start coming in and PMs have to satisfy margin insufficiency with more selling, setting of an avalanche of even more selling, which ends where, nobody knows. In fact one can argue that in this context a modest 1.5% drop may have a greater impact on sentiment and positioning than a whopping 10% drop did as recently as 2008 when everyone was more or less positioned to expect precisely such a thing. Because if one is 99% levered, a 1.5% move lower just wiped out all equity.

But hey: a few more percent and one can be certain that Wall Street’s unofficial branch of government, the Fed, will get a solemn request by such representatives of “the people” as Chuck Schumer to “get to printwork” as soon as possible…

4) Will Fourth Time Be The Charm For The Market’s Dislocation From Fundamental Reality? (January 3th)

Sometimes you just have to step back and laugh. Three times in the last two years, global stock markets have lurched higher four times (fed by a hosepipe full of central bank largesse) only to fall rapidly back to the fundamentally weak reality of the global economy. If ever there was a chart that summed it all up – and highlighted the inexorable optimism that this time it really is different – the current chasm between Global Manufacturing PMI and MSCI World suggests either stocks are off in fairy-land again or there is about to be the biggest surge in the global economy since 2009 (right as currency wars escalate and the debt-ceiling debate in the US threatens more fiscal drag).

and meanwhile the divergence between developed markets (down) and emerging markets (up) continues to grow…

5) Retail Sales Confirm “You Can’t Spend What You Don’t Have” (January 3th)

Despite all the rancor about seasonally-adjusted ad hoc beats of holiday week retail sales (amid burgeoning discounts), the trend (post the Hurricane Sandy-driven surge) in GAFO (General Merchandise, Apparel and Accessories, Furniture and Other Sales) retail sales is most explicitly lower. As Bloomberg Brief notes, consumer incomes are in a fragile state and between the ATRA deal and a ‘stable’ at best unemployment picture, it seems that the YoY change in retail sales is indicating per capita disposable income is set to decline further. As Rich Yamarone concludes: it appears “You can’t spend what you don’t have.” It seems ‘tax-the-rich’ is also misfiring as those making over $90k per year report recent spending at its lowest for this time of year since 2008.

GAFO Retail Sales appear to be indicating a turn to come in disposable personal income…

and sure enough, via Gallup, Upper-income Americans’ (defined as those making at least $90,000 per year) self-reported daily spending was lower this November — an average of $113 — than in any November dating back to 2008. Upper-income spending has been trending downward since September, although the decline has not been large enough to drag down the overall spending figures.

Although November marks the beginning of the holiday season — generally a time for spending and splurging — Americans did not spend any more than usual this November, and upper-income Americans appear to be spending less than usual.

Source: Bloomberg Briefs and Gallup

6) America’s Bubble Dependent Economy (January 3th)

Via Global Macro Monitor,

Interesting chart (which we marked up) from the JEC of the U.S. Congress illustrating household net worth as a percent personal income.   If that doesn’t look like a head and shoulders formation in the making, nothing does!

The second chart illustrates why the U.S. economy is so dependent on the wealth effect generated by asset bubbles.   It’s stunning to think that average real earnings in the U.S. are almost 11 percent lower than where they were in 1973.

Policymakers’ focus should be on increasing worker productivity through: 1) reforming the country’s education system;  2) unleashing entrepreneurship;  and 3) in the words of ECB chief, Mario Draghi, “doing whatever it takes” to empower small businesses.

This is tough political business, however, so we take the easy way out. The political pandering increases budget deficits, forcing the Fed to repress interest rates and print money to drive up asset prices.   The boom side of the cycle is sustained longer than most expect because of the reserve currency status of the dollar.  This temporarily generates artificially inflated demand (i.e., fake) through the wealth effect, which eventually collapses when asset markets crash.

Wash, rinse, repeat.

This is not a good long term economic strategy and sustainable path for permanent wealth creation, folks.  It probably won’t change until it is forced upon us and then the adjustment will be more abrupt and disruptive than if policymakers were more pre-emptive.

America needs Mario Monti!

Seperti biasa setelah membaca laporan-laporan ini, silahkan menyimpulkan sendiri dan bertindak yang sesuai dengan keyakinan pribadi Anda. Pada akhirnya, tidak ada seorang pun kecuali kita sendiri yang bertanggung jawab untuk pengembalian investasi kita sendiri.

Saya akan lebih senang jika Anda ingat untuk memperketat (trailing) stops Anda dan tidak mengambil resiko yang tidak penting karena bursa-bursa saham di negara-negara maju sedang berada dalam persimpangan kritis saat ini.

Karena semua orang masih membahas fiscal cliff – yang akhirnya mampu dihindari – serta diskusi mengenai plafon utang yang masih berlangsung, berikut adalah pengingat (sebagai lelucon saja) dari situasi genting yang dialami di Amerika Serikat:

Tetap tersenyum dan selamat menjalani hari!

Dibuat Tanggal 16 Januari 2013

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