Archive for January, 2014

Sejarah Panjang Manipulasi Harga Emas

January 31st, 2014 No comments

“Gold is a manipulated market. Period. 2013 was the year that manipulation finally began to unravel. 2014? Well now, THIS could be the year that true price discovery begins in the gold market. If that turns out to be the case, it will be driven by a scramble to perfect ownership of physical gold; and to do that you will be forced to pay a lot more than $1247/oz. Count on it.”

– Grant Williams, the editor of Things That Make You Go Hmmm…


“The gold market is the most manipulated market in the world. It is not free-and-fair in any way. Governments are also setting interest rates at will and this is impacting the housing, commodity markets, and every other financial market. But with a situation like this it is only a matter of time before the gold and silver markets explode higher. I don’t know when the bearish phase in gold and silver will end, but when it does it will end with a bang. Meaning, gold and silver will turn violently higher.”

– Keith Barron


Belakangan ini banyak tulisan mengenai proses “gold fixing” London yang dianggap curang (ada manipulasi), bahkan Bloomberg baru-baru ini menemukan manipulasi yang terang-terangan.

Karena banyak investor yang mungkin belum mengetahui bagaimana manipulasi harga emas ini akan berlanjut, maka dalam kesempatan ini saya persembahkan beberapa artikel yang WAJIB DIBACA yang ditulis oleh Tyler Durden dari

Bacalah artikelnya dengan seksama dan darinya mungkin bisa memberikan Anda keuntungan dari tekanan harga emas:

1)   How Gold Price Is Manipulated During The “London Fix” (November 25th)

There was a time when the merest mention of gold manipulation in “reputable” media was enough to have one branded a perpetual conspiracy theorist with a tinfoil farm out back. That was roughly coincident with a time when Libor, FX, mortgage, and bond market manipulation was also considered unthinkable, when High Frequency Traders were believed to “provide liquidity”, or when the stock market was said to not be manipulated by the Fed, and when the ever-confused media, always eager to take “complicated” financial concepts at the face value set by a self-serving establishment, never dared to question anything. Luckily, all that changed in the past several years, and it has gotten to the point where even the bastions of “serious”, if 3-5 years delayed, investigation are finally not only asking how is the gold market being manipulated, but are actually providing answers.

      Such as Bloomberg.

The topic of gold market manipulation during the London AM fix is not new to Zero Hedge: in fact we have discussed both the historical basis and the raison d’être of the London gold fix, as well as the curious arbitrage available to those who merely traded the AM-PM spread, for years. Which is why we are delighted that none other than Bloomberg has decided to break it down for everyone, as well as summarize all the ways in which just this one facet of gold trading is being manipulated.

      Bloomberg begins:

Every business day in London, five banks meet to set the price of gold in a ritual that dates back to 1919. Now, dealers and economists say knowledge gleaned on those calls could give some traders an unfair advantage when buying and selling the precious metal. The London fix, the benchmark rate used by mining companies, jewelers and central banks to buy, sell and value the metal, is published twice daily after a telephone call involving Barclays Plc, Deutsche Bank AG, Bank of Nova Scotia, HSBC Holdings Plc and Société Générale SA.

The fix dates back to September 1919, less than a year after the end of World War I, when representatives from five dealers met at Rothschild’s office on St. Swithin’s Lane in London’s financial district. It was suspended for 15 years, starting in 1939. While Rothschild pulled out in 2004 and the discussions now take place by telephone instead of in a wood-paneled room at the bank, the process remains much the same.

That much is known. What is certainly known is that any process that involves five banks sitting down (until recently literally) and exchanging information using arcane methods (such as a telephone), on a set schedule that involves a private information blackout phase, even if temporary, and that does not involve instant market feedback, can and will be gamed. “Traders involved in this price-determining process have knowledge which, even for a short time, is superior to other people’s knowledge,” said Thorsten Polleit, chief economist at Frankfurt-based precious-metals broker Degussa Goldhandel GmbH and a former economist at Barclays. “That is the great flaw of the London gold-fixing.”

      There are other flaws.

Participants on the London call can tell whether the price of gold is rising or falling within a minute or so, based on whether there are a large number of net buyers or sellers after the first round, according to gold traders, academics and investors interviewed by Bloomberg News. It’s this feature that could allow dealers and others in receipt of the information to bet on the direction of the market with a high degree of certainty minutes before the fix is made public, they said.

Yes, the broader momentum creation and ignition perspective is also known to most. At least most who never believed the boilerplate that unlike all other asset classes, gold is somehow immune from manipulation.

“Information trickles down from the five banks, through to their clients and finally to the broader market,” Andrew Caminschi, a lecturer at the University of Western Australia in Perth and co-author of a Sept. 2 paper on trading spikes around the London gold fix published online in the Journal of Futures Markets, said by phone. “In a world where trading advantage is measured in milliseconds, that has some value.”

Ah, hypothetical – smart. One mustn’t ruffle feathers before, like in the case of Libor, it becomes fact that everyone was in on it.

There’s no evidence that gold dealers sought to manipulate the London fix or worked together to rig prices, as traders did with Libor. Even so, economists and academics say the way the benchmark is set is outdated, vulnerable to abuse and lacking any direct regulatory oversight. “This is one of the most concerning fixings I have seen,” said Rosa Abrantes-Metz, a professor at New York University’s Stern School of Business whose 2008 paper, “Libor Manipulation?” helped spark a global probe. “It’s controlled by a handful of firms with a direct financial interest in where it’s set, and there is virtually no oversight — and it’s based on information exchanged among them during undisclosed calls.”

Unless we are wrong, there was no evidence of Libor manipulative collusion before there was evidence either. And since the cabal of the London gold fix is far smaller than the member banks of Libor, it is exponentially easier to confine intent within an even smaller group of people. But all that is also known to most.

As is the fact that when asked for comments, ‘spokesmen for Barclays, Deutsche Bank, HSBC and Société Générale declined to comment about the London fix or the regulatory probes, as did Chris Hamilton, a spokesman for the FCA, and Steve Adamske at the CFTC. Joe Konecny, a spokesman for Bank of Nova Scotia, wrote in an e-mail that the Toronto-based company has “a deeply rooted compliance culture and a drive to continually look toward ways to improve our existing processes and practices.”

Next, Bloomberg conveniently goes into the specifics of just how the gold price is manipulated first by the fixing banks, then by their “friends and neighbors” as news of the fixing process unfolds.

At the start of the call, the designated chairman — the job rotates annually among the five banks — gives a figure close to the current spot price in dollars for an ounce of gold. The firms then declare how many bars of the metal they wish to buy or sell at that price, based on orders from clients as well as their own account.

If there are more buyers than sellers, the starting price is raised and the process begins again. The talks continue until the buy and sell amounts are within 50 bars, or about 620 kilograms, of each other. The procedure is carried out twice a day, at 10:30 a.m. and 3 p.m. in London. Prices are set in dollars, pounds and euros. Similar gauges exist for silver, platinum and palladium.

The traders relay shifts in supply and demand to clients during the calls and take fresh orders to buy or sell as the price changes, according to the website of London Gold Market Fixing, which publishes the results of the fix.

.. only this time the manipulation is no longer confined to a purely theoretical plane and instead empirical evidence of the fixing leak is presented based on academic research:

Caminschi and Richard Heaney, a professor of accounting and finance at the University of Western Australia, analyzed two of the most widely traded gold derivatives: gold futures on Comex and State Street Corp.’s SPDR Gold Trust, the largest bullion-backed exchange-traded product, from 2007 through 2012.

At 3:01 p.m., after the start of the call, trading surged to 47.8 percent above the average for the 20-minute period preceding the start of the fix and remained 20 percent higher for the next six minutes, Caminschi and Heaney found. By comparison, trading was 8.7 percent higher than the average a minute after publication of the price. The results showed a similar pattern for the SPDR Gold Trust.

“Intuitively, we expect volumes to spike following the introduction of information to the market” when the final result is published, Caminschi and Heaney wrote in “Fixing a Leaky Fixing: Short-Term Market Reactions to the London P.M. Gold Price Fixing.” “What we observe in our analysis is a clustering of trades immediately following the fixing start.”

The researchers also assessed how accurate movements in gold derivatives were in predicting the final fix. Between 2:59 p.m. and 3 p.m., the direction of futures contracts matched the direction of the fix about half the time.

From 3:01 p.m., the success rate jumped to 69.9 percent, and within five minutes it had climbed to 80 percent, Caminschi and Heaney wrote. On days when the gold price per ounce moved by more than $3, gold futures successfully predicted the outcome in more than nine out of 10 occasions. “Not only are the trades quite accurate in predicting the fixing direction, the more money that is made by way of a larger price change, the more accurate the trade becomes,” Caminschi and Heaney wrote. “This is highly suggestive of information leaking from the fixing to these public markets.”

Oh please, 9 out of 10 times is hardly indicative of any wrongdoing. After all, JPM lost money on, well, zero trading days in all of 2013, and nobody cares. So if a coin landing heads about 200 times in a row is considered normal by regulators, then surely the CTFC will find nothing wrong with a little gold manipulation here and there. Manipulation, which it itself previously said did not exist. But everyone already knew that too.

Cynicism aside, to claim that this clearly gamed process is not in fact gamed, not to say criminally manipulated (because it is never manipulation unless one is caught in the act by enforcers who are actually not in on the scheme) is the height of idiocy. This is why we are certain that regulators will go precisely this route. That too is also largely known. Also known are the benefits for traders who abuse the London fix:

For derivatives traders, the benefits are clear: A dealer who bought 500 gold futures contracts at 3 p.m. and knew the fix was going higher could make $200,000 for his firm if the price moved by $4, the average move in the sample. While the value of 500 contracts totals about $60 million, traders may buy on margin, a process that involves borrowing and requires placing less capital for the bet. On a typical day, about 4,500 futures contracts are traded between 3 p.m. and 3:15 p.m., according to Caminschi and Heaney.

Finally what is certainly known is that the “London fixing” fix would be very simple in our day and age of ultramodern technology, and require a few minutes of actual implementation.

Abrantes-Metz, who helped Iosco formulate its guidelines, said the gold fix’s shortcomings may stretch beyond giving firms and clients access to privileged information. “There is a huge incentive for these banks to try and influence where the benchmark is set depending on their trading positions, and there is almost no scrutiny,” she said.

Abrantes-Metz said the gold fix should be replaced with a benchmark calculated by taking a snapshot of trading in a market where $19.6 trillion of the precious metal circulated last year, according to CPM Group, a New York-based research company. “There’s no reason why data cannot be collected from actual prices of spot gold based on floor or electronic trading,” she said. “There’s more than enough data.”

      This is precisely why nothing will change. Sadly, that is also widely known.

So did Bloomberg put together an exhaustive article in which virtually everything was known a priori? it turns out the answer is no: we learned one thing.

London Gold Market Fixing Ltd., a company controlled by the five banks that administers the benchmark, has no permanent employees. A call from Bloomberg News was referred to Douglas Beadle, 68, a former Rothschild banker, who acts as a consultant to the company from his home in Caterham, a small commuter town 45 minutes south of London by train. Beadle declined to comment on the benchmark-setting process.

You learn something new every day (incidentally, the same Douglas Beadle who acted as a consultant to the LBMA until March 2010 and was involved from the outset in the project to find a suitable scale for the electronic weighing of gold as documented in “Electronic Weighing of Gold – A Success Story“).


2)   The Complete And Unabridged History Of Gold Manipulation (December 4th)

On November 1st, 1961, an agreement was reached between the central banks of the United States and seven European countries to cooperate in achieving a shared, and very clearly stated, aim.

The agreement became known as the London Gold Pool, and it had a very explicit purpose: to keep the price of gold suppressed “under control” and pegged regulated at $35/oz. through interventions in the London gold market whenever the price got to be a little… frisky.

      The construct was a simple one.

The eight central banks would all chip in an amount of gold to the initial “kitty.” Then they would sell enough of the pooled gold to cap any price rises and then replace that which they had been forced to sell on any subsequent weakness.


*Statement is subject to standard terms and conditions and is not necessarily reflective of any evidence. Government entities are excluded from inclusion based on the fact that we can’t really do anything about them and anyway; they could put us out of business; and it would make things really, really bad for them. Also, bullion banks are not covered under this statement because we were told to turn a blind eye; but individual investors are, and we can categorically confirm that, to the best of our knowledge, no individuals are manipulating the precious metals markets (at this time).

But, as Grant Williams explains in this excellent and complete summary of the history of Gold price manipulation, things don’t always go as planned…

Human beings, when given means and motive, have rather a poor history of eschewing the easy profit in favor of doing the right thing. Governments, when faced with dilemmas, have a rather poor history of doing the right thing as opposed to whatever they think they need to do in order to cling to power. It’s quite simple.

Libor, FX rates, and mortgages trades are all fiat in nature. The contracts that are exchanged have no tangible value. (Yes, technically speaking, mortgages have houses underneath them, but the houses are so far down the securitization chain as to be invisible). Such contracts can be created at the push of a button or the stroke of a pen and manipulated easily right up until the point where they can’t.

      Gold is a different beast altogether.

The manipulation of the gold price takes place in a paper market — away from the physical supply of the metal itself. That metal trades on a premium to the futures contract for a very good reason: it has real, intrinsic value, unlike its paper nemesis.

If you want to manipulate the price of a paper futures contract lower, you simply sell that paper. Sell it long, sell it short, it doesn’t matter — it is a forward promise. You can always roll it over at a later date or cover it back at a profit if the price moves lower in the interim.

      And of course you can do it on margin.

If the trading were actually in the metal itself, then in order to weaken the price you would have to continue to find more physical metal in order to continue selling; and, as is well documented, there just isn’t so much of it around: in recent years what little there is has been pouring into the sorts of places from which it doesn’t come back — not at these price levels, anyway.

The London Gold Pool had one thing in common with the rigging of the FX, Libor, and mortgage markets: it worked until it didn’t.

The London Gold Pool proved that central banks can collude cooperate to rig maintain the price of gold at what they deem manageable levels, but it also proved that at some point the pressure exerted by market forces to restore the natural order of things becomes overwhelming, and even the strongest cartels groups (whose interests happen to be aligned) — which are made up of the very institutions granted the power to create money out of thin air — can’t fight the battle any longer.


…The problem now is that currently there are almost 70 claims on every ounce of gold in the COMEX warehouse and serious doubts about the physical metal available for delivery at the LBMA.


This leads us to today…

The London Gold Pool was designed to keep the price of gold capped in an era when the world’s reserve currency had a tangible backing. In defending the price, the eight members of the Pool were forced to sell way more gold than they had initially contributed in order to keep the price from going where it desperately wanted to go — higher.

This time around, the need for the price to be capped has nothing to do with any kind of gold standard and everything to do with the defense of the fractional reserve gold lending system, about which I have written and spoken many times.

Gold is moving to ever stronger hands, and when the dam does inevitably break again, the true price will be discovered by natural market forces, free of interference.

This time, however, those chasing what little gold is available will include all those central banks that have kept their holdings “safe” in overseas vaults.

The Bundesbank has seen the writing on the wall and demanded its gold back. They were told it would take seven years before their 30 tons could be returned to them.

      My guess is, this little scheme doesn’t have seven years left to play out.

      Everybody outta the pool!

      Full Grant Williams letter here:

TTMYGH Twisted (by the Pool)


3)   The FT Goes There: “Demand Physical Gold” As One Day Paper Price Manipulation Will End “Catastrophically” (January 25th)

What have we done: after a series of reports in late 2012 in which we showed, with no ambiguity, that not only might the Bundesbank’s offshore held gold be severely “diluted” (follow our 2012 exposes on German gold here, here, here, and here), but that on at least one occasion, the Fed and the Bank of England conspired against the Buba in returning subpar quality gold, the Bundesbank shocked everyone in early January 2013 when it announced it would repatriate 300 tons of gold held in New York and all of its 374 tons of gold held in Paris. But convincing the Bundesbank to demand delivery was peanuts compared to changing the tune of the Financial Times – that bastion of fiat “money”, and where the word gold is mocked and ridiculed, and those who see the daily improprieties in the gold market as nothing but “conspiracy theorists” – to say the magic words: “Learn from Buba and demand delivery for true price of gold”, adding that “one day the ties that bind this pixilated gold may break, with potentially catastrophic results.

      In other words, precisely what we have been saying since the beginning.

      Welcome to the ‘conspiracy theorist’ club, boys.

From the FT’s Neil Collins: “Learn from Buba and demand delivery for true price of gold: One day the ties that bind the actual and the traded commodity will snap:

A year ago the Bundesbank announced that it intended to repatriate 700 tons of Germany’s gold from Paris and New York. Although a couple of jumbo jets could have managed the transatlantic removal, it made security sense to ship the load in smaller consignments. Just how small, and over how long, has only just become apparent.

Last month Jens Weidmann, Bundesbank president, admitted that just 37 tons had arrived in Frankfurt. The original timescale, to complete the transfer by 2020, was leisurely enough, but at this rate it would take 20 years for a simple operation. Well, perhaps not so simple. While he awaits delivery, Herr Weidmann is welcome to come and look through the bars in the Federal Reserve’s vaults, but the question is: whose bars are they?

In the “armchair farmer” fraud you are told: “Look, this is your pig, in the sty.” It works until everyone wants physical delivery of their pig, which is why Buba’s move last year caused such a stir. After all nobody knows whether there are really 260m ounces of gold in Fort Knox, because the US government won’t let auditors inside.

The delivery problem for the Fed is a different breed of pig. The gold market is far more than exchanging paper money for precious metal. Indeed the metal seems something of a sideshow. In June last year the average volume of gold cleared in London hit 29m ounces per day. The world’s mines are producing 90m ounces per year. The traded volume was many times the cleared volume.

The paper gold in the London Bullion Market takes the familiar forms that bankers have turned into profit machines: futures, options, leveraged trades, collateralized obligations, ETFs . . . a storm of exotic instruments, each of which is carefully logged, cross-checked and audited.

Or perhaps not. High-flying traders find such backroom work tedious, and prefer to let some drone do it, just as they did with those money-market instruments that fuelled the banking crisis. The drones will have full control of the paper trail, won’t they? There’s surely no chance that the Fed’s little delivery difficulty has anything to do with the cat’s-cradle of pledges based on the gold in its vaults?

John Hathaway suspects there is. He worries about all the paper (and pixels) linked to gold. He runs the Tocqueville gold fund (the clue is in the name) and doesn’t share the near-universal gloom of London’s gold analysts, who a year ago forecast an average $1700 for 2013. It is currently $1,260.

As has been remarked here before, forecasting the price is for mugs and bugs. But one day the ties that bind this pixilated gold may break, with potentially catastrophic results. So if you fancy gold at today’s depressed price, learn from Buba and demand delivery.

4)   The Big Reset, Part 2 (January 25th)

      Submitted by Koos Jansen of In Gold We Trust

      This is part two of a Q&A with Willem Middelkoop about his new book The Big Reset. In his book      a chapter on the ‘War on Gold’ takes a prominent position. Willem has been writing about the           manipulation of the gold price since 2002 based on information collected by GATA since the late    1990’s. So part two of our interview will focus on this topic.


The War On Gold 

Why Does The US Fight Gold?

      The US wants its dollar system to prevail for as long as possible. It therefore has every interest in      preventing a ‘rush out of dollars into gold’. By selling (paper) gold, bankers have been trying in the      last few decades to keep the price of gold under control. This war on gold has been going on for       almost one hundred years, but it gained traction in the 1960′s with the forming of the London Gold    Pool. Just like the London Gold Pool failed in 1969, the current manipulation scheme of gold (and     silver prices) cannot be maintained for much longer.


What is the Essence Of The War on Gold

            The survival of our current financial system depends on people preferring fiat money over gold.   After the dollar was taken of the gold standard in 1971, bankers have tried to demonetize gold. One of the arguments they use to deter investors from buying gold and silver is that these metals do not deliver a direct return such as interest or dividends. But interest and dividend are payments to compensate for counterparty risk – the risk that your counterparty is unable to live up to its obligations. Gold doesn’t carry that risk. The war on gold is, in essence, an endeavor to support the dollar. But this is certainly not the only reason. According to a number of studies, the level of the gold price and the general public’s expectations of inflation are highly correlated. Central bankers work hard to influence inflation expectations. A 1988 study by Summers and Barsky confirmed that the price of gold and interest rates are highly correlated, as well with a lower gold price leading to lower interest rates.


When Did the War on Gold Start?

The first evidence of US meddling in the gold market can be found as early as 1925 when the Fed falsified information regarding the Bank of England’s possession of gold in order to influence interest rate levels. However, the war on gold only really took off in the 1960′s when trust in the  dollar started to fray. Geopolitical conflicts such as the building of the Berlin Wall, the Cuban   Missile Crisis and the escalation of violence in Vietnam led to increasing military spending by the US, which in turn resulted in growing US budget deficits. A memorandum from 1961 entitled

US Foreign Exchange Operations: Needs and Methods’ described a detailed plan to manipulate  the currency and gold markets via structural interventions in order to support the dollar and    maintain the gold price at $ 35 per ounce. It was vital for the US to ‘manage’ the gold market;   otherwise countries could exchange their surplus dollars for gold and then sell these ounces on the free gold market for a higher price.


How Was The Gold Price Managed In The 1960′s?

During meetings of the central bank presidents at the BIS in 1961, it was agreed that a pool of $270 million in gold would be made available by the eight participating (western) countries. This so-called ‘London Gold Pool’ was focused on preventing the gold price from rising above $ 35 per ounce by selling official gold holdings from the central banks gold vaults. The idea was that if        investors attempted to flee to the safe haven of gold, the London Gold Pool would dump gold onto       the market in order to keep the gold price from rising. During the Cuban Missile Crisis in 1962, for  instance, at least $ 60 million in gold was sold between 22 and 24 October. The IMF provided   extra gold to be sold on the market when needed. In 2010, a number of previously secret US telex  reports from 1968 were made public by Wikileaks. These messages describe what had to be  done in order to keep the gold price under control. The aim was to convince investors that it was completely pointless to speculate on a rise in the price of gold. One of the reports mentions a         propaganda campaign to convince the public that the central banks would remain ‘the masters of   gold’. Despite these efforts, in March 1968, the London Gold Pool was disbanded because France  would no longer cooperate. The London gold market remained closed for two weeks. In other gold   markets around the world, gold immediately rose 25% in value. This can happen again when the  COMEX will default.


More Evidence About This Manipulation?

From the transcript of a March 1978 Fed-meeting, we know that the manipulation of the gold price  was a point of discussion at that time. During the meeting Fed Chairman Miller pointed out that it  was not even necessary to sell gold in order to bring the price down. According to him, it was  enough to bring out a statement that the Fed was intending to sell gold.

Because the US Treasury is not legally allowed to sell its gold reserves, the Fed decided in 1995  to examine whether it was possible to set up a special construction whereby so-called ‘gold     swaps’ could bring in gold from the gold reserves of Western central banks. In this construction,      the gold would be ‘swapped’ with the Fed, which would then be sold by Wall Street banks in order      to keep prices down. Because of the ‘swap agreement’, the gold is officially only lent out, so Western central banks could keep it on their balance sheets as ‘gold receivables’. The Fed started   to informing foreign central bankers that they expected that the gold price to decline further, and     large quantities of central banks’ gold became be available to sell in the open market. Logistically  this was an easy operation, since the New York Fed vaults had the largest collection of foreign    gold holdings. Since the 1930′s, many Western countries had chosen to store their gold safely in     the US out of fears of a German or Soviet invasion.

Didn’t The British Help As Well By Unloading Gold At The Bottom Of The Market?

Between 1999 and 2002, the UK embarked on an aggressive selling of its gold reserves, when    gold prices were at their lowest in 20 years. Prior to starting, the Chancellor of the Exchequer,   Gordon Brown, announced that the UK would be selling more than half of its gold reserves in a   series of auctions in order to diversify the assets of the UK’s reserves. The markets’ reaction was    one of shock, because sales of gold reserves by governments had until then always taken place   without any advance warning to investors. Brown was following the Fed’s strategy of inducing a fall in the gold price via an announcement of possible sales. Brown’s move was therefore not         intended to receive the best price for its gold but rather to bring down the price of gold as low as possible. The UK eventually sold almost 400 tons of gold over 17 auctions in just three years, just as the gold market was bottoming out. Gordon Brown’s sale of the UK’s gold reserves probably  came about following a request from the US. The US supported Brown ever since.


How Do They Manipulate Gold Nowadays?

The transition from open outcry (where traders stand in a trading pit and shout out orders) to electronic trading gave new opportunities to control financial markets. Wall Street veteran lawyer     Jim Rickards presented a paper in 2006 in which he explained how ‘derivatives could be used to      manipulate underlying physical markets such as oil, copper and gold’. In his bestseller entitled             Currency Wars, he explains how the prohibition of derivatives regulation in the Commodity   Futures Modernization Act (2000) had ‘opened the door to exponentially greater size and variety      in these instruments that are now hidden off the balance sheets of the major banks, making them       almost impossible to monitor’. These changes made it much easier to manipulate financial     markets, especially because prices for metals such as gold and silver are set by trading future        contracts on the global markets. Because up to 99% of these transactions are conducted on          behalf of speculators who do not aim for physical delivery and are content with paper profits,             markets can be manipulated by selling large amounts of contracts in gold, silver or other          commodities (on paper). The $200 crash of the gold price April 12 and 15, 2013 is a perfect         example of this strategy. The crash after silver reached $50 on May 1, 2011 is another textbook          example.

For How Long Can This Paper-Gold Game Continue?

As you have been reporting yourself we can witness several indications pointing towards great           stress in the physical gold market. I would be very surprised when the current paper gold game      can be continued for another two years. This system might even fall apart in 2014. A default in   gold and/or silver futures on the COMEX is a real possibility. It happened to the potato market in         1976 when a potato-futures default happened on the NYMEX. An Idaho potato magnate went       short potatoes in huge numbers, leaving a large amount of contracts unsettled at the expiration       date, resulting in a large number of defaulted delivery contracts.

So it has happened before. In such a scenario futures contracts holders will be cash settled. So I       expect the Comex will have to move to cash settlement rather than gold delivery at a certain             point in the not too distant future. After such an event the price of gold will be set in Asian       markets, like the Shanghai Gold Exchange. I expect gold to jump $1000 in a short period of time and silver prices could easily double overnight. That’s one of the reasons our

Commodity Discovery Fund invests in undervalued precious metal companies with large       gold/silver       reserves. They all have huge up-side potential in the next few years when this             scenario will play out.

       In Gold We Trust

Synopsis of The Big Reset: Now five years after the near fatal collapse of world’s financial system    we have to conclude central bankers and politicians have merely been buying time by trying to           solve a credit crisis by creating even more debt. As a result worldwide central bank’s balance       sheets expanded by $10 trillion. With this newly created money central banks have been buying         up national bonds so long term interest rates and bond yields have collapsed. But ‘parking’ debt at    national banks is no structural solution. The idea we can grow our way back out of this mountain       of debt is a little naïve. In a recent working paper by the IMF titled ‘Financial and Sovereign Debt           Crises: Some Lessons Learned and Those Forgotten’ the economist Reinhart and Rogoff point to            this ‘denial problem’. According to them future economic growth will ‘not be sufficient to cope with       the sheer magnitude of public and private debt overhangs. Rogoff and Reinhart conclude the size     of the debt problems suggests that debt restructurings will be needed ‘far beyond anything      discussed in public to this point.’ The endgame to the global financial crisis is likely to require            restructuring of debt on a broad scale.

 About the author: Willem Middelkoop (1962) is founder of the Commodity Discovery Fund and a        bestselling Dutch author, who has been writing about the world’s financial system since the early      2000s. Between 2001 and 2008 he was a market commentator for RTL Television in the         Netherlands and also appeared on CNBC. He predicted the credit crisis in his first bestseller in      2007.

Link Willem Middelkoop

What Do the Charts Say?

Per 17 Januari ada sekitar 500 ribu troy ounce emas terdaftar, dan ada 111,6 pemilik di setiap troy ounce-nya.

Saat ini ada 41,309 juta troy ounce kontrak berjangka emas yang diperdagangkan – diistilahkan juga dengan ‘paper gold’, artinya bukan emas sungguhan/fisik.

Karena demikian besarnya, tentunya jika hanya sebagian kecil saja para pemilik kontrak berjangka emas tersebut menginginkan delivery, maka dapat mendorong kenaikan harga emas.

Inilah yang oleh John Hathaway, salah satu yang pandangannya terhadap emas paling disegani di dunia, dibahas baru-baru ini dalam wawancaranya dengan King World News


Dalam pembahasannya tersebut, Mr. Hathaway juga menyertakan grafik yang sangat menarik untuk diamati:

“Bullion banks are extending credit to trading entities — probably high-frequency traders, hedge funds, and the other usual suspects — that don’t have any physical gold at all….

These entities are just using the price of physical gold as an index — it’s just like LIBOR.  As far as I’m concerned, the more leveraged these entities are when things turn around, and then they realize they are obviously on the wrong side of the trade, the more explosive the upside will be.

Some are asking, ‘How far can they stretch the rubber band?’  We thought 90 to 1 was pretty stretched, and yet here we are at 112 to 1.


It ultimately comes down to the willingness of bullion banks to extend credit with very little connection to gold, other than using it as a reference point for profit and loss, to people with a huge amount of money so they can speculate.  Let’s face it – the high-frequency guys who have been bashing gold for the last two years, if they decide to turn their trade around, they can drive gold to the moon.

These entities are just looking for profit.  They are a bigger part of the market today than they were back in 2011.  They don’t think in macro-terms — they just look at charts.  If they are running more money today, and if they are caught wrong-footed on the gold trade, that can be extremely explosive for the price of gold.

If we end up with the added fuel of various entities having the desire to own the physical gold instead of the paper contracts, that’s a double-barreled scenario  that would guarantee an explosion in the price of gold.”

Agar tetap ceria setelah mambaca artikel yang cukup panjang ini, saya sertakan juga sebuah gambar lucu berjudul The New Normal:


Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 29 Januari 2013

Categories: Uncategorized Tags:

Apakah Tekanan Jual Emas Mulai Surut?

January 29th, 2014 No comments

“With the Wall Street and banking entities having switched from heavily short to heavily long precious metals, the list of people who benefit from lower prices continues to shrink. Triggering a melt up in prices should be highly profitable to those who have repositioned themselves. The funds who are still heavily short will be the “suckers at the poker table” under such a scenario and stand to lose an enormous amount of money. Those who have not established positions in the precious metals and miners will also suffer a tremendous opportunity cost. Precious metals and especially the high quality mining companies represent the last major beneficiary of the monetary bubble. History has shown us that many multiples of return are possible once a melt up occurs. However, never in history have we seen a monetary bubble of such proportions – never. If precious metals and miners are set free to benefit, the upside potential will be staggering in our view.”

                                                – Robert Fitzwilson, founder of The Portola Group


Seperti sudah kita semua ketahui bahwa penurunan harga emas tahun 2013 lalu merupakan yang terbesarnya dalam 30 tahun, dengan tekanan sebesar 28 persen untuk ditutup di tahun tersebut di sekitar areal $1200 per troy ounce.

Selain itu, emas sebagai logam mulia merupakan aset dengan kinerja terburuk di 2013, mengakhiri akselerasi kenaikannya sepanjang satu dekade.

Namun di awal tahun 2014 ini, emas berhasil bangkit luar biasa hingga mendekati areal $1280 kemarin, seperti dapat Anda lihat dalam grafik di bawah ini:


Sehingga sejumlah pengamat pasar finansial pun mulai mengatakan bahwa ini dapat menjadi awal untuk surutnya tekanan jual emas besar-besaran.

Dalam sebuah wawancara dengan King World News (, James Turk mengingatkan bahwa kenaikan ini dapat menjadi peristiwa sejarah dan meredam tekanan jual emas.

Turk juga menyebut sejumlah target harga emas dan memproyeksikan laju kenaikan akan sangat tidak beraturan karena mereka yang masih melakukan tekanan jual akan panik:

“Gold is like a rocket getting ready to go to escape velocity.  Once gold shows it is going to stay above $1,250 for two consecutive trading days, with a little bit more upside momentum, that’s going to be the signal to the major entities in gold that the downtrend which has been in place for the past two years is over — the mid-cycle correction is over.

This means the traders will have to start playing gold again from the long side.  This also means you will see the momentum players coming in to gold over the next few weeks.

There are two types of short squeezes:  One is where the price is going against you, and a lot of the shorts, I think, have hedged against that price movement.  But there is another more fundamental short squeeze:  It arises from the fractional-reserve banking system.  This is when you are actually short physical metal and you have to deliver physical metal into the market.

This shortage of physical metal is enormous when fully quantified, and that is why this short squeeze could be historic in terms of the price advance.  You can’t create gold from bookkeeping entries.  It has to come out of the ground, or from the existing above-ground stocks.  But over the past two years the existing above-ground stocks have moved into strong hands.

Meaning, it will take much, much higher prices to entice these strong hands to part with any physical gold and take national currencies instead.  So I agree with John Hathaway:  I think you will see a massive short squeeze here.  This squeeze has the potential to literally propel gold over $2,000.

It could get very disorderly very quickly.  When you are seeing a short squeeze in physical metal, and I think that’s what we are seeing here, and when you combine a major short squeeze with the fuel of reckless and ultimately disastrous global central banking policies, you have the makings of a truly historic short squeeze.  And I think that is what we are seeing the early stages of witnessing right now.”

What Do the Charts Say?

Hari ini saya akan lebih banyak menampilkan grafik yang saya yakin juga akan lebih banyak memberikan informasi kepada Anda.

Dalam laporan terbarunya Toby Connor, penulis dari Gold Scents (sebuah blog keuangan yang khusus menitikberatkan pada tren kenaikan emas), menyatakan bahwa emas dapat memberikan sinyal beli besar dalam 2-3 pekan ke depan.

Namun, dirinya juga menekankan agar tetap bersabar karena emas terlebih dahulu harus memberikan konfirmasi rally/kenaikan untuk jangka menengah.

Artinya perlu menembus ke atas $1268 dan dari level tersebut membentuk pola higher high. Jika tidak, maka belum ada sinyal beli seperti yang dikatakan Toby Connor tadi.

Tanpa adanya reversal dari pola lower lows dan lower highs, maka tren bearish belum berakhir dan kenaikan ini belum memenuhi harapan mereka yang bullish.

Berikut adalah komentarnya mengenai emas dan mengapa kesabaran diperlukan:

“So far every time gold gets close to breaking through the $1,250-1,260 resistance zone a huge seller materializes, usually in the pre-market, to dump several million oz. of paper gold on the market and drive gold back down. This happened again yesterday [January 22th].


I can’t stress enough that gold has to get above $1,268 before the FOMC meeting next week. Gold can’t enter the declining phase of its daily cycle from a position of weakness below $1,268. If it does then they are going to beat the crap out of it, and there is a serious threat that they could break the intermediate rally.


If they do break the intermediate rally then we are going to see $1,030 gold over the next 4-5 months.

There is a serious war ongoing for control of the paper gold market and the big seller won a major battle yesterday when it prevented gold from holding above $1,250. Gold needs to recover immediately and get above $1,268 so the declining phase of the daily cycle can begin from a position of strength, not weakness.

So let me stress again: This is still a very dangerous market. The manipulation has not ended. Wait till the next daily cycle bottom before jumping into the sector. That bottom has to hold above the Dec. 31 low, and the only way it’s going to do that is if gold can get above $1,268 before this cycle tops. That means it’s going to have to fight off the continued manipulation that’s holding it down.”


Jumat lalu kepala analis Bank of America, MacNeill Curry, mengingatkan bahwa begitu ada kenaikan ke atas $1270, pergerakan harga emas akan “explosive” karena lolos dari jebakan bearish, yang menjelaskan mengapa tekanan jual mati-matian mempertahankan level-level kritis, seperti resistance 1270.

Berikut penjelasannya mengenai emas:


Gold upside continues – watch $1,270

“Gold continues to trade bullishly. Yesterday’s [January 23th] price action formed a Bullish Outside Bar on daily charts and NOW it is testing pivotal resistance at $1,270.

A close above should be the catalyst for short squeeze higher, exposing the confluence of resistance between $1,362 and $1,394.”


Personal note: Meskipun tekanan jual akan surut dalam jangka pendek, saya masih melihat potensi bearish emas lebih lanjut selama garis downtrend yang terlihat dalam grafik di atas tidak mampu ditembus oleh harga.

Terakhir yang tak kalah penting dari Elliott Wave International’s Global Market Perspective, yang masih yakin bahwa tekanan emas ke harga yang lebih rendah masih mungkin terjadi di tahun ini.

Terlepas dari itu, mereka menyebut bahwa downtrend emas dalam jangka pendek terkompresi, sehingga akan ada kenaikan untuk meringankan penurunan.

Berikut komentar menarik mereka serta grafik yang luar biasa:


“The June 28 low at $1,180 basis spot is the end of wave (3), as shown on the chart.

If wave (4) topped at $1,434 on August 28, wave (5) will draw prices lower still into the early part of the New Year. Wave (5) would equal wave (1) at $1,045, a common wave relationship.

If wave (4) is tracing out a triangle, per the Alt. line at the bottom, wave B is ending now, which means wave C will carry prices to $1,300-$1,350 over the next month or so as part of the corrective process.

By either wave count, gold’s long-term trend remains down.”



Untuk gambaran lebih umum, tren besar emas masih turun. Jadi kenaikan/rally dapat dianggap hanya sementara karena masih ada peluang tekanan ke bawah areal $1180.

Sementara untuk level kenaikan, saya masih fokus pada level puncak Agustus di $1434. Jika harga emas mampu ditutup di atas areal kunci ini ($1434), maka merupakan sebuah indikasi sangat kuat bahwa tren sudah berubah.

Dan nampaknya perjalanan emas menembus areal tersebut masih akan panjang.

Selain itu, harga emas masih berada di bawah MA-200 hari di $1315,80 pada daily chart hari ini. Dan ini pun menjelaskan bahwa bear market masih dominan.

Juga perlu diwaspadai bahwa biasanya pergerakan dalam persentase besar terjadi menjelang reversal.

Artinya adalah tekanan jual akan berlangsung kembali dengan cepat (seketika), menembus low baru, dan kemudian naik lagi untuk proses reversal dan memulai bull market lagi.

Singkatnya, harga emas masih dalam bear market dan belum reversal menjadi bull market.

Jangan mencoba jadi pahlawan dengan mengupayakan ‘bottom picking’ harga emas, melainkan selalu waspada dan gesit saat ada konfirmasi seperti telah dibahas di atas!

Terima kasih sudah membaca dan semoga beruntung!

Dibuat tanggal 28 Januari 2014

Categories: Emas Tags:

Jangan Abaikan Kondisi-kondisi Fundamental Berikut!

January 27th, 2014 No comments

“The bond market has disappointed investors for the past year. So the US Fed and the US government have decided to let the stock market go berserk and this has stocks in a bubble right now. You see the Dow and the S&P hitting new all-time highs on a daily and weekly basis. Against the backdrop of a roaring stock market, you still have 50 million Americans living on food stamps. We have also seen US municipalities go bankrupt. So the decision has been made by the Fed and the Obama White House to initiate a stock market bubble. That’s where we are right now.”

– Keith Barron


[The bubble] could burst any day. I think we are very stretched. Sentiment figures are very, very bullish. Everybody’s bullish. The reality is they’re very bullish because they think the economy will accelerate on the upside. But my view is very different. The global economy is slowing down, because the global economy’s largely emerging economies nowadays, and there’s no growth in exports in emerging economies, there’s no growth in the local economies. So, I feel that the valuations are high; the corporate profits have been boosted largely because of the falling interest rates.”

– Marc Faber, The Gloom, Boom & Doom Report author


Dalam 5 tahun berturut-turut indeks Dow Jones ditutup di wilayah positif. Menurut technical strategist Ryan Detrick, itu adalah prestasi yang baru dicapai 4 kali sejak tahun 1900.

Jadi mengejar kenaikan pasar lebih lanjut hanya berdasarkan momentumnya mungkin bukan strategi yang bagus saat ini, selain itu juga memproyeksikan kenaikan lebih lanjut sebesar 25%-30% di tahun 2014 adalah sebuah harapan yang tinggi.

Oleh karena itu sebaiknya tulisan saya hari ini melihat lebih dekat fundamentalnya, yang pada akhirnya – suka atau tidak – akan menentukan nasib bursa saham AS mendatang.

Seperti halnya Andrew Lapthorne dari SocGen yang secara meyakinkan menunjukkan bahwa, US profits are not growing, companies are over not under investing (they may in fact have overinvested), and corporate are carrying more (not less) net debt than they were in 2009.

It would appear that many believe the opposite to be true, yet corporate report and accounts data seems to say otherwise.”

Berikut hal lain yang ditunjukkan oleh SocGen:

  • When it comes to having a market view there are typically (at least) two sides to every argument. When it comes down to the state of US quoted sector profits and balance sheets there should be little argument, but even here there is a great debate, and several viewpoints with which we do not entirely agree.
  • First is the notion that profits growth accelerated in the US last year. Yes, the pro-forma figures from popular providers such as I/B/E/S show EPS growth of around 6-7%, but pro-forma figures are whatever you wish them to be. Reported earnings growth slowed to almost zero in 2013 and EBIT is largely where it stood at the beginning of 2012.
  • Capital expenditure growth, the great hope for 2014, slowed throughout 2013 as did cash flow growth and sales growth. However, capex as a proportion of sales is at elevated (not depressed) levels. Why would a company step up investment when faced with contracting margins and lackluster demand? Surely sales and profit growth recoveries lead investment and not the other way around?
  • US corporates do indeed hold lots of cash, which is currently at record levels, but they also hold record levels of debt. Net debt (so discounting those massive cash piles) is 15% above the levels seen in 2008/09. The idea that corporates are paying down debt is simply not seen in the numbers. What is true is that deleveraging has occurred through the usual mechanism of higher asset prices (no doubt an aim of central bank policy). This is the painless form of deleveraging. It is also the most temporary, for a simple pull-back in equities and rise in volatility will put the problem back on centre stage.

US profits growth stalled in 2013

When looking at profit growth most people tend to quote pro-forma earnings numbers from the likes of Bloomberg and I/B/E/S which show 12 month forward or trailing EPS to have grown by around 7% over the past year, consistent with the figures you see in our Global Market Arithmetic product, which are based on I/B/E/S supplied data.

However, a better profit series comes from MSCI, which has earnings data going back to 1970 for most major indices. This definition of earnings is not as harsh as the S&P earnings definition incorporated into the likes of Robert Shiller’s CAPE, but neither is it as overly generous as the pro-forma numbers supplied by I/B/E/S. To give you an example of the difference, during the 2009 profit slump S&P core earnings fell peak-to-trough by 92%, MSCI defined earnings fell by 55% and I/B/E/S pro-forma earnings fell by 36%.


As we show above, not only are MSCI reported profits barely growing but the gap in the growth rate between these numbers and the pro-forma numbers is widening, with the proforma number considerably more optimistic. This is a phenomenon that often precedes a more significant profit slump. It is also an indication that the quality of earnings is deteriorating. Based on MSCI reported figures, earnings are no longer growing.

Of course even these MSCI figures have been flattered by a reduction in the share count plus lower interest rates and tax charges. If we look at overall growth in earnings before interest and tax, or indeed gross cash flow, we find that neither has really moved for the last couple of years. It would appear then, that at an aggregate level, most profit growth is the result of astute financial engineering rather than improving cash flow – yet another sign of a tired, long in the tooth, profit cycle. (emphasis mine)


Corporates are overspending relative to sales

Another, perhaps surprising conclusion also to be seen from US report and accounts data is that US corporates are not under spending when it comes to capital expenditure and, in fact, relative to sales they may be overspending! The following chart shows overall capex to sales ratios for the US ex-financials. Rather than being depressed, what we see is that capex levels versus sales are relatively elevated. If anything it would appear from this data that capex levels are too high – not too low – as many are saying.


Indeed, if we look at the evolution of capital expenditure and cash flow growth, we see that we have already been through a long period of substantial capex growth and capex growth has exceeded cash flow growth for some time. Importantly, just as cash flow growth is slowing so too is capex growth and, in the absence of a pick-up in demand, it may continue to do so in an effort to preserve those precious high margins and profitability.

So why are corporates complaining about the lack of investment opportunities and opting largely to engage in share buybacks instead? As has been the case in Japan, we’d argue that the problem is not a lack of desire to invest, but anemic demand reflected in very low sales growth. After all, corporates did step up capital expenditure post the financial crisis only to then be confronted with a lackluster economic recovery. If the demand isn’t there why invest? And, of course, with credit abundant there are easier ways to boost asset prices, so why not pursue those instead?

US companies are carrying far more net debt than in 2007

Another curiosity is this notion that US companies have substantially reduced their debt pile and are therefore cash rich. The latter is indeed true. Cash and equivalents are at historically high levels, but rarely do those who mention the mountains of corporate cash also discuss the massive increase in debt seen over the last couple of years. In fact, debt levels have been growing to such an extent that net debt (i.e. excluding the massive cash pile) is 15% higher than it was prior to the financial crisis.


Kesimpulannya: 2013 adalah tahun penurunan pertumbuhan cash flow, profit, memburuknya kualitas earning, dan penumpukan hutang perusahaan – lagi! Untung bursa saham naik tahun lalu, sehingga Anda tidak memiliki pandangan bearish.

Beberapa poin lain yang kontras dengan faktanya: pertumbuhan laba korporasi diproyeksikan melamban hingga mendekati 0% tahun lalu dan dalam basis EBIT masih flat hingga saat ini. Kualitas earning cenderung memburuk daripada membaik, seperti terindikasi oleh membesarnya gap antara angka resmi dan pro-forma EPS. Sebagai konsekuensinya, akibat overspending berkepanjangan dan absennya lonjakkan demand, maka spending korporasi harus ditekan bukan dinaikkan. Akhirnya, sebagai konsekuensi dari lesunya pertumbuhan, korporasi telah menambah balance sheets untuk mempertahankan momentum EPS melalui langkah share buybacks terus-menerus. Dengan naiknya bursa secara substansial di 2013, maka share buybacks adalah sebuah langkah yang kian mahal. Tak heran jika korporasi harus pinjam uang banyak agar dapat terus melakukan buyback. Saat musim laporan keuangan korporasi Q4 ini, kita dapat mencari bukti dari peningkatan manipulasi earnings, leverage yang semakin besar serta indikasi apakah siklus capex membaik.

Berikut adalah Michael Snyder dari The Economic Collapse blog yang sungguh meragukan langkah pemulihan lebih lanjut, terutama saat ini dengan sekaratnya Sears dan J.C. Penney, 2 perusahaan ritel terbesar AS.

Dia adalah salah satu penulis favorit saya karena memiliki kemampuan luar biasa untuk menggambarkan suatu hal apa adanya tanpa menyamarkannya.

Dan berikut adalah artikelnya yang masuk kategori WAJIB DIBACA:

Two of the largest retailers in America are steamrolling toward bankruptcy.  Sears and J.C. Penney are both losing hundreds of millions of dollars each quarter, and both of them appear to be caught in the grip of a death spiral from which it will be impossible to escape.  Once upon a time, Sears was actually the largest retailer in the United States, and even today Sears and J.C. Penney are “anchor stores” in malls all over the country.

When I was growing up, my mother would take me to the mall when it was time to go clothes shopping, and there were usually just two options: Sears or J.C. Penney.  When I got older, I actually worked for Sears for a little while.  At the time, nobody would have ever imagined that Sears or J.C. Penney could go out of business someday.  But that is precisely what is happening.  They are both shutting down unprofitable stores and laying off employees in a desperate attempt to avoid bankruptcy, but everyone knows that they are just delaying the inevitable.  These two great retail giants are dying, and they certainly won’t be the last to fall.  This is just the beginning.

The Death Of Sears

Sales have declined at Sears for 27 quarters in a row, and the legendary retailer has been closing hundreds of stores and selling off property in a frantic attempt to turn things around.

Unfortunately for Sears, it is not working.  In fact, Sears has announced that it expects to lose “between $250 million to $360 million” for the quarter that will end on February 1st.

Things have gotten so bad that Sears is even making commercials that openly acknowledge how badly it is struggling.  For example, consider the following bit of dialogue from a recent Sears television commercial featuring two young women…

“Wait, the movie theater is on the other side,” the passenger says.

“But Sears always has parking!” the driver responds.

Sears always has parking???

Of course the unspoken admission is that Sears always has parking because nobody shops there anymore.

A couple of months ago I walked into a Sears store in the middle of the week and it was like a ghost town.  A few associates were milling around here and there having private discussions among themselves, but other than that it was eerily quiet.

You can find 18 incredibly depressing photographs which do a great job of illustrating why Sears is steadily dying right here.  This was once one of America’s greatest companies, but soon it will be dead.

The Death Of J.C. Penney

J.C. Penny has been a dead man walking for a long time.  In some ways, it is in even worse shape than Sears.

If you can believe it, J.C. Penney actually lost 586 million dollars during the second quarter of 2013 alone.

How in the world do you lose 586 million dollars in three months?

Are they paying employees to flush giant piles of cash down the toilets?

This week J.C. Penney announced that it is eliminating 2,000 jobs and closing 33 stores.

The CEO of J.C. Penney says that these closures were necessary for the future of the company…

“As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly,” CEO Myron Ullman said in a news release.

Actually, his statement would be a lot more accurate if he replaced “continue to progress toward long-term profitable growth” with “prepare for bankruptcy”.

It would be hard to overstate how much of a disaster 2013 was for J.C. Penney.  The following is an excerpt from a recent CNN article

It’s been a brutal year for J.C. Penney, its stock falling over 60% in the past 12 months. The company has been losing hundreds of millions of dollars per quarter, and is in the midst of another turnaround effort after ousting former Apple executive Ron Johnson last year.

Overall, shares of J.C. Penney have fallen by an astounding 84 percent since February 2012.  And keep in mind that this decline has happened during one of the greatest stock market rallies of all-time.

For now, J.C. Penney will continue to try to desperately raise more cash from investors that are foolish enough to give it to them, but all that is really accomplishing is just delaying the inevitable.

If you would like to see some photos that graphically illustrate why J.C. Penney is falling apart, you can find some right here.

And of course Sears and J.C. Penney are not the only large retailers that have fallen on hard times.  This week the CEO of Best Buy admitted that sales declined at his chain during the holiday season…

Best Buy shares skid on Thursday after the retailer said total revenue and sales at its established U.S stores fell in the all-important holiday season due to intense discounting by rivals, supply constraints for key products and weak traffic in December.

In the immediate aftermath of that announcement, Best Buy stock was down more than 30 percent in pre-market trading.

And Macy’s just announced that it is laying off 2,500 employees in an attempt to move in a more profitable direction.

So why is all of this happening?

Aren’t we supposed to be in the midst of an “economic recovery”?

That is what the Obama administration and the mainstream media keep telling us, but it is simply not true.

In fact, a new Gallup survey has found that the number of Americans that are “financially worse off” than a year ago is significantly higher than the number of Americans that say that they are “financially better off” than a year ago…

More Americans, 42%, say they are financially worse off now than they were a year ago, reversing the lower levels found over the past two years. Just more than a third of Americans say their financial situation has improved from a year ago.

That is why these stores are dying.

Things continue to get even worse for the middle class.

But a lot of people out there will continue to deny what is happening right in front of their eyes.  They are kind of like that woman over in California who was conned out of half a million dollars by a Nigerian online dating scam.  They will never admit the truth until it is far too late to do anything about it.

What Do the Charts Say?

Jika Anda masih yakin bahwa bursa saham adalah pasar untuk transaksi saham yang nilainya sangat ditentukan oleh agregat investor yang cenderung memproyeksikan potensi earning mendatang, maka saya rekomendasikan sejumlah tulisan Tyler Durden dari di bawah ini.

Ini adalah sekilas mengenai realitas ‘fundamental’ yang padanya Anda sedang mempertaruhkan nasib pensiun Anda:

1)   This Won’t End Well (January 14th)

Presented with little comment aside to ask (rhetorically of course) how
much longer the crushed consumer can subsist on a diet of increasingly saturated credit and dwindled-savings before retail sales revert to reality…

Nico-113h/t @Not_Jim_Cramer


2)    Baltic Dry Continues Collapse – Worst Slide Since Financial Crisis (January 14th)

Despite ‘blaming’ the drop in the cost of dry bulk shipping on Colombian coal restrictions, it seems increasingly clear that the 40% collapse in the Baltic Dry Index since the start of the year is more than just that. While this is the worst start to a year in over 30 years, the scale of this meltdown is only matched by the total devastation that occurred in Q3 2008. Of course, the mainstream media will continue to ignore this dour index until it decides to rise once again, but for now, 9 days in a row of plunging prices is yet another canary in the global trade coalmine and suggests what inventory stacking that occurred in Q3/4 2013 is anything but sustained.

Baltic Dry costs are the lowest in 4 months, down 40% for the start of the year, and the worst start to a year in over 30 years…


As we noted yesterday…

Of course, we are sure the ‘lead’ that the Baltic Dry seems to have over global macro will be quickly ignored…

Nico-115Charts: Bloomberg


3)    The Most Important Chart For Albert Edwards (January 15th)

SocGen’s Albert Edwards, who refuses to pull a Hugh Hendry and to “stop looking at himself in the mirror“, remains one of the few coherent realists in a world where soaring nominal asset prices have managed to confuse virtually every pundit into believing central bank balance sheet and stock market expansion means an economic recovery. Today he shares the one chart which as he says “the importance of which we cannot emphasize enough”, and which he believes highlights the biggest risk equity investors – hypnotized by the Fed’s H.4.1 weekly statement and its weekly record high balance sheet – take when they put all their faith in the Bernanke/Yellen grand behavioral experiment.

From Albert Edwards:

One simple chart – the importance of which we cannot emphasize enough – is the divergence of commodity prices and the equity market during QE3 (see chart below). Why is this important? Because the market has firmly got it into its head that QE will always be good news for equities. So if the economy swoons (maybe due to excessive monetary tightening either via tapering or a strong dollar), equities will look through any short-term disappointment as more QE will save the day. Investors see bad economic news as good news for equities.

I do believe this to be utter nonsense. For in the same way as investors believe, axiomatically that QE will drive up equity prices, they believed exactly the same thing of commodities until 2012. Commodities are a risk asset and benefited massively from QE1 and QE2, so why has QE3 had absolutely no effect on commodity prices? Exactly the same thing could happen to equities if a recession unfolds and profits plunge at the same time as the printing presses are running full pelt. Do not assume equities MUST benefit from QE.



4)    What Do “Insiders” Know That You Don’t? (January 19th)

With your local friendly asset-gatherer constantly promoting the cheapness of stocks of the TINA (there is no alternative) to BTFATH, TV talking-heads jabbering over ‘stock-pickers’ markets (infuriating Cliff Asness), and CEOs trotted out day after day to espouse how bright the future looks (even if outlooks in the immediate future are down-down-down-graded); it is hardly surprising that sentiment among the sheeple is so extremely bullish. So, when we saw the chart below… we could only ask – what do the insiders know that the average-Joe-investor doesn’t?


Of course, we are sure someone will try and explain away this avalanche of insider-selling with “tax-related” factors or “taking-profits” but none of that negates the less-than-optimistic tone that it implies about what the short- or medium-term expectations are from management of the firms that comprise the US equity market…

Agar tetap ceria, berikut ini sebuah gambar lucu lagi dari William Banzai, yang berjudul QE HANGOVER:


Terima kasih sudah membaca dan semoga beruntung!

Dibuat tanggal 22 Januari 2014

Categories: Pasar Internasional Tags:

Apakah Sudah Waktunya Jual Euro dan Beli Dolar AS?

January 20th, 2014 No comments

“EURUSD will likely move a bit higher in the near term but as the analogy of “When the US catches a cold the rest of the World catches a fever” kicks in, the USD is likely to go bid again. This may well be across the board as the USD once again sees itself benefit in a “risk off” environment.”

            — Citi FX Technicals


Masih seputar fakta mengenai ancaman terbesar bagi kelanggengan Zona Eropa yakni masyarakatnya tidak menginginkan euro lagi.

Inilah juga adalah salah satu alasan mengapa tanggung jawab mengenai krisis Eropa dilimpahkan ke ECB.

Memberikan uang langsung ke perbankan bukanlah solusi menyenangkan bagi masyarakat Eropa, demikian dengan memakai uang Jerman untuk membantu Yunani.

Sehingga opsi yang paling gampang dan agak transparan adalah mencoba mengangkat dan mengembangkan persoalan hutang serta mendorong pertumbuhan nominal di negara-negara anggota yang terpuruk, dengan cara melemahkan mata uang euro.

Sebenarnya opsi tersebut tidak berbeda jauh dengan kebijakan yang dianut oleh para negara maju maupun (yang coba) diikuti negara-negara berkembang saat ini.

Oleh karena opsi tersebut juga yang paling beresiko kecil secara politis, maka Mario Draghi, presiden European Central Bank (ECB), dapat langsung sepakat dengan para pemimpin Eropa untuk melakukannya.

Juga karena masalah perbankan Eropa masih lebih besar dari lainnya – AS dan Inggris sudah lebih dulu mengalaminya – maka ini akan memaksa ECB menganut kebijakan moneter yang paling longgar ke depannya.

Gordon Long, pendiri sebuah lembaga dana modal ventura swasta, adalah salah satu orang yang memandang bahwa ECB harus segera menekan mata uang euro atau krisis perbankan Eropa, yang tidak pernah terselesaikan dan jika berlanjut akan memicu krisis yang lebih buruk.

Berikut yang dikatakannya dalam tulisan yang berjudul Euro Pressure Going Critical:

“The Draghi Dungeon is a worse predicament than the Bernanke Box!

How could this possibly be a ‘Dungeon’ when the STOXX is going parabolic, the Current Account is surging and the Euro is strong? The answer lies in how this could all occur during six quarters of recession, historic unemployment and slowing exports? Because this is a Euro Currency hole from which Mario Draghi cannot easily escape.


Why Would Draghi Lower Rates When Markets Look Like This?


… And Current Account Flows Look Like This?


... Because

Slowing Growth & A Strong Euro Are Making Bank Loans Rapidly Unpayable

We see the unresolved & ‘papered’ over banking crisis in the EU raising its head once again. This time it will be with more vengeance!

The catalyst for the crisis is now stemming from the CEE (Central & Eastern Europe). Critically, the forgotten money borrowed by Central and Eastern Europe in Euro’s during the EU ‘good times’ is quickly becoming unpayable.

A recent SNB report warned:

Before the onset of the financial crisis, foreign currency loans to the non-banking sector in Europe became remarkably prevalent. In particular, households and non-financial firms were taking bank loans denominated in lower-yielding foreign currencies and investing in high-yielding domestic currencies (e.g., in the form of home mortgages or business investments), even though these agents did not necessarily have a steady income in the foreign currency concerned. Therefore these retail foreign currency loans were usually dubbed ‘small men’s carry trade’. Since the crisis, the outstanding volumes of foreign currency loans to the non-banking sector have been slowly declining in some countries due to macro-prudential measures, deleveraging of banks, and the continued slowdown of European economies. Nevertheless a substantial fraction of households and firms still have foreign currency bank loans.

The chart below shows that as of the second quarter of 2013 the majority of the outstanding loans to the non-banking sector in many non-Euro zone countries continue to be denominated in a foreign currency. For example, in Hungary, Romania, Bulgaria, Croatia, Serbia, and Latvia, between 60% and 88% of the outstanding loans to the non-banking sector are denominated in a foreign currency.

Share of foreign currency loans as a percentage of total loans to the non-banking sector in Europe (2013:Q2)


While foreign currency loans offer some advantages to borrowers – such as lower interest rates and longer maturities compared to domestic currency loans – they also carry a significant exchange rate risk. A sharp depreciation of the domestic currency can prevent unhedged borrowers from being able to service their foreign currency loans. As a result, these loans are now creating a substantial systemic risk to the European banking sector. Banks could fail jointly as a result of their exposure to unhedged households and non-financial firms which default on their loans when the domestic currency depreciates sharply.

Systemic risk measures show that foreign currency loans to the non-banking sector create substantial risks to the banking sector from a ‘common market shock ‘perspective. High persistence and low volatility of the systemic risk measures indicate that short-term policies would be unable to swiftly reduce this risk.

A strong Euro, falling CEE growth and investment and rising Current Account deficits are taking the situation ‘critical’.


The banking situation in the CEE (Central and Eastern Europe) is deteriorating rapidly as can be seen by Poland confiscating Pensions, the Czech Republic wanting the ability to debase their currency by deferring Euro usage, Slovenia’s ‘Cyprus like’ banking problems etc. From the Balkans to the Baltic States the problems are increasing and Draghi is acutely aware of what this means to EU banks.

Draghi Debasement High Probability Outcome


Carry Trade Consolidation Driver: Euro Likely to Weaken Temporarily Relative to Yen

The Japanese Carry Trade (aka ABE-nomics) is consistently shown on a daily basis to be a major controller of liquidity flows. The Japanese Carry Trade Liquidity Pump of $65B/Month is being leveraged up significantly.

This is about to temporarily correct despite the Yen weakening as presently expected by Carry traders.

  • JPY Must Continue to Weaken Expected
  • EUR Must not Weaken Expected The Surprise Factor

Draghi is Running Out of Time



Philippe Herlin, seorang pengajar muda di the Conservatoire National des Arts et Métiers, Paris, dan juga sebagai kontributor pada, juga meyakini bahwa ECB akan kembali membuka keran likuiditasnya:

“As we’ve explained before in this article, LTROs, those gigantic loans, totaling $1 trillion euros from the ECB to the European banks, are akin to the Fed’s quantitative easing plans or, in other words, the use of the printing press. A large part of that money cannot be reimbursed, and the ECB will have to “roll over” the debt, e.g. to propose another gigantic loan.

Terms are approaching. LTROs are three-year loans that were issued in December 2011 and in February 2012. So they are due in December 2014 and next February, meaning very soon. According to the Bank of Italy, of the 255 billion euros borrowed from the ECB through the LTRO, Italian banks only reimbursed 15%, or 38 billion euros. So, there still remains 217 billion euros to be paid in 2014… and for Spain, the amounts are just about the same.

Will the Italian and Spanish banks be able to reimburse those amounts? Serious doubts arise when we discover the contraction of their activities: credit for non-financial businesses is down 5.7% (by October 2013, year-to-year) for the Italian banks and 19.3% for Spanish banks! Consumer loans and mortgages are also down. Credit is an essential component of banks’ business bottom lines, and it’s sharply on the way down, as can be seen.

These poor statistics also contradict the ECB’s discourse, which explains that the liquidity provided by the LTROs, as well as its base rate close to zero (0.25%), are meant to sustain credit creation… It’s obviously not working, so let’s keep on trying! As a matter of fact, the ECB has no choice but to offer another LTRO, lest the Italian and Spanish banks go bankrupt. Thus, there is an urgency to avoid this risk, with a new quantitative easing plan. Markets which, in fact, have a tendency to mistake liquidity for solvency, will be reassured, Mario Draghi will lead the parade and government leaders will proclaim that “the crisis is behind us”.

All this, of course, doesn’t go well with Germany. The problem is, however, that it’s losing the upper ground with the ECB, its position becoming the minority’s. There are now more countries hoping for or satisfied with quantitative easing policies than worried about them… the “doves” have taken over the “hawks”.

The trick is now, for the ECB, to cajole Germany… There is talk about a LTRO which would be issued only to banks willing to augment business credit, but how can one force a bank to lend more? The ECB could buy titles from small businesses (in exchange for fresh money for the banks), but is it the role of a central bank to be holding such assets? In any case, the ECB will be counting on the sentiment of urgency facing the situation of the Italian and Spanish banks to impose a new deluge of liquidities.”

What Do the Charts Say?

Pada bagian ini akan saya mulai dengan artikel luar biasa dan masuk dalam kategori WAJIB DIBACA bagi yang telah atau ingin mengikuti euro, yang dibuat oleh John C. Burford, editor di MoneyWeek Trader.

Dalam tulisannya di bawah ini Anda bisa melihat bagaimana rekomendasinya dan bagaimana pandangannya melalui grafik-grafik yang sangat menarik:

The euro is trading beautifully

On 8 January, I was tracking the progress of the EUR/USD. I forecast the downward move as a five-wave pattern. This was the chart:


So far, the move off the 1.39 spike high is in four waves. What I was looking for was a final fifth wave down to terminate close to 1.35 at the Fibonacci 62% level. Let’s see how this has played out:


I did get my fifth wave. In a textbook move, it carried to the 1.3550 area and on a large positive momentum divergence (red bar). But it didn’t quite carry to the Fibonacci 62% level. Since that does happen, we must be alert to these near-misses.

Knowing when to exit

Incidentally, it never ceases to amaze me how often we do get accurate hits on the Fibonacci levels. In terms of real life trading, it is best to allow the market some room for a possible near-miss and to exit the market just before your exact target. You may give up a few ticks, but I would rather do that and ensure my profit.

If you religiously stick with your exact Fibonacci level as your exit, you may see the market just fail to hit it. The market then moves against you and takes away your hard-earned profit. Don’t let that happen to you!

Could this be a major move up?

When my fifth wave was in, the market made a solid relief rally (which is still in progress). The question is: could this be the start of a major move up or will the relief rally run out of steam with the market going on to new lows?

Let’s back up a little and see where the market is positioned in the larger picture:


The upper tramline pair is the one I showed last time. And with the tramline break, I could draw in my third (lowest) tramline equidistant. This tramline now offers a short-term price target. And lo and behold, the market dropped to the new tramline and turned back up from that support line. Isn’t that pretty?

A short trade taken at the tramline break and exited near the lowest tramline would have produced a gain of 100-150 pips.

No-man’s land

OK, now the market is between tramlines and in no-man’s-land. After a tramline break, the market often attempts a kiss back on the underside of the line. That would take the market up to the 1.38 area again and provide another shorting opportunity. But is there enough buying power left to get it there?

The alternative is for the market to test the lower tramline and eventually break below it. Remember, the current rally is totally expected after the five waves down. Although it can be viewed as a three-wave affair, it is not a totally convincing A-B-C.

It’s time to back up even more and look at the bigger picture:


Here is my large wedge pattern where the trend lines are converging and the market is very close to the lower line. When markets move out of their wedge, they often move very swiftly, which places the area just under the lower line as my danger zone (for the bulls).

And with the clear five waves down just completed on the hourly chart, the main trend is very likely down. (emphasis mine)


Selanjutnya adalah Macneil Curry dari BofAML yang juga meyakini bahwa EURUSD akan beresiko tertekan dalam jangka pendek ini:

“Ahead of event risk, evidence continues to build for a lower EURUSD. A daily close below 1.3581/1.3548 (6m trend line & 100d average) confirms a turn lower, exposing the 200d (now 1.3335) and below.”


Terakhir yang tak kalah penting adalah laporan Citi FX Technicals pekan lalu yang menjelaskan bahwa euro terlalu kuat sehingga memperburuk dampak devaluasi internal Eropa.

Pelonggaran moneter dan pelemahan mata uang lebih lanjut adalah kondisi yang sangat diperlukan agar Zona Eropa dapat pulih/bertahan.

Menurut Citi, runtuhnya arsitektur finansial Zona Eropa ini pernah terjadi dan menawarkan perspektif sejarah yang menarik untuk prospek devaluasi EUR yang signifikan di beberapa tahun ke depan, seperti Anda bisa lihat dalam grafik berikut:




Zona Eropa keluar dari resesi di kuartal kedua namun mengalami kemandekan di kuartal ketiga.

Resiko tekanan masih membayangi pemulihan Zona Eropa melalui tingginya tingkat pengangguran dan rendahnya sentimen bisnis.

Setelah mempertahankan suku bunganya dalam 2 bulan berturut-turut, Mario Draghi memberikan pernyataan bahwa pihaknya (bank sentral Eropa) masih akan mengawasi pasar uang untuk mencegah tekanan lebih lanjut dan berjanji akan mengatasi lemahnya inflasi di Eropa tanpa merinci langkah yang akan diambilnya.

Jangan lupa juga bahwa ketatnya kondisi kredit di Zona Eropa memberikan tekanan pada pertumbuhan dan bisa mendorong ekonominya masuk lagi ke zona resesi.

Selain itu, bahaya deflasi sedang mengancam, meskipun disanggah.

Kesemuanya itu adalah faktor tekanan di Eropa.

Sehingga nantinya (tahun ini) ECB masih mungkin mengambil tindakan untuk mendukung perekonomian, dan ini yang akan membuat mata uang euro tertekan.


Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 17 Januari 2014

Categories: Pasar Internasional Tags:

Apakah Saham-saham AS Masih Murah Atau… Sudah Mahal?

January 17th, 2014 No comments

“Most end games don’t end well, and certainly this one is destined to fall into that category as well. It’s certainly not going to end well for the 99%. The unsustainable rally in stocks which is being fed with the cocaine being supplied by the Fed’s disastrous QE policy, is destined to unravel. The glue that is keeping things together, which is also allowing stock prices to continue to go higher, is excessively low interest rates. Yields by historic norms are far too low, especially given the true financial condition of the West. As yields regress to the mean, and in markets they always regress to the mean, it’s basically game over for the West. Western stock markets will collapse and so will consumer demand. Home demand, consumer spending, and the economy will literally collapse. This is going to be a horrific time for people in the West.”

– William Kaye


Bull markets gugur dalam euforia.

Jika Anda sudah berkecimpung di pasar finansial berpuluh-puluh tahun, maka Anda pernah mengalaminya. Para investor mulai terlalu percaya diri dan kemudian puas.

Dari sinilah persoalan dimulai.

Contohnya adalah kemarin, ketika indeks utama bursa saham AS mengalami penurunan terbesarnya sejak 27 Agustus.


Mari kita kembali ke topik hari ini untuk menjawab apakah harga saham-saham AS masih murah atau justru sudah mahal.

Menurut JP Morgan, indeks S&P 500 saat ini lebih mahal berdasarkan indeks forward P/E daripada kenaikan yang mencapai puncak sebelumnya pada Oktober 2007, sehingga seharusnya membuat kita bertanya apakah saham-saham masih menawarkan nilai yang menarik saat ini.

Dengan indeks forward P/E yang berada di 15,4x, maka indeks S&P 500 kini lebih mahal 0,2 kali dari Oktober 2007, seperti terlihat di bawah ini:


Berikutnya mari kita lihat valuasi berdasarkan indeks Price-to-Book, Price-to-Cash-Flow, dan Price-to-Sales, yang menunjukkan harga S&P 500 juga sudah berada di atas rata-ratanya:

Nico-78Source: JPMorgan


Dalam 2013 Year in Review David B. Collum (e-mail: and Twitter: @DavidBCollum), Betty R. Miller Professor of Chemistry and Chemical Biology di Cornell University, mengatakan keyakinannya bahwa equity bubble kembali tercipta karena saat gelombang investasi untuk aset beresiko memaksa pengelola dana membeli sebuah kelas aset, maka itulah saatnya untuk menjualnya:

“Who’s to say that markets are under- or overpriced? The price is the price, right? Two New York Federal Reserve economists delivered a paper concluding that U.S. stocks were as cheap today as any time in history, which is a little odd given they were 60% cheaper in March 2009. Although the world equity markets rise, the GDP is looking a little green around the gills (Figure 10, below). You can graphically overlay anything on anything and say anything, but Figure 10 does seem to say something.

Nico-79Let’s focus on the U.S. forward-looking earnings, which are said to appear reasonable. Of course, these earnings do not exist except in the minds of optimistic analysts. By contrast, the Case-Schiller p/e using time-averaged earnings is in the scary 24 zone.

John Hussman, a brilliant analyst who must be losing clients by the scores owing to his attempts to protect them, suggests bear market bottoms occur at a Case-Schiller p/e of about 8. The S&P 500 price/revenue ratio of 1.6 is twice its pre-bubble historical norm of about 0.8. (The 1987 peak occurred at a price/revenue ratio of less than 1.0.) The Russell 2000 is now sporting a p/e of 40 using 2014 fabricated earnings but a p/e of 60 times trailing earnings.

Stockman says that by excluding charges – “ex-items” – companies fabricate an additional 30% to the earnings numbers. You can find distortions of comparable magnitude by using the forward earnings that are invariably waaaay too optimistic. As the trailing earnings become discredited by reality, analysts quickly switch to forward earnings.

There are smart guys questioning whether price discovery is working (Fama aside). Jeremy Grantham, the wise old man with $150 billion under management, puts fair market value on the S&P 70% below the current levels, coincidentally the same percentile as the bloated profit margins.

Cliff Asness, looking across all markets, concludes that “the 60-40 portfolio has been cheaper than it is now 98% of the time.” (Cliff wins no award for direct prose.) David Einhorn notes that “the S&P 500 index has advanced this year mostly through multiple expansion”; the gains of 2012 were all multiple expansion as well.

Are the distortions attributable to “ex-items” and “forward earnings” additive? I don’t know, but Peter Boockvar summed it up nicely: “There is 0% chance this ends well.””

“As long as the music is playing, you’ve got to get up and dance…. We’re still dancing.”

      – Chuck Prince, July 2007

Tapi musik tersebut telah melewati irama utamanya setelah Goldman merilis catatan akhir harinya (Jumat, 10 Januari) yang mungkin adalah hal yang paling bearish dalam setahun terakhir dari David Kostin, chief strategist-nya Goldman.

Berikut catatan lengkap dari Kostin yang bertema “market is now overvalued” tersebut:

We believe S&P 500 currently trades close to fair value and the forward path of the market will depend on the trajectory of profits rather than further expansion of the forward P/E multiple from the current 15.9x. We forecast a modest price gain of roughly 3% to our year-end 2014 target of 1900. We expect S&P 500 will climb to 2100 by the end of 2015 and reach 2200 by the end of 2016 representing a gain of 20% over the next three years.

However, many clients argue that the multiple will continue to expand in 2014 leading to another year of strong US equity returns. A forward multiple of 17x or 18x is often cited, with others suggesting 20x is reasonable given the strengthening US economy and low interest rates. Many on the buy-side have year-end 2014 targets between 2000 and 2200 reflecting a price gain of 9% to 20%, well above our more modest projection.

The current valuation of the S&P 500 is lofty by almost any measure, both for the aggregate market as well as the median stock: (1) The P/E ratio; (2) the current P/E expansion cycle; (3) EV/Sales; (4) EV/EBITDA; (5) Free Cash Flow yield; (6) Price/Book as well as the ROE and P/B relationship; and compared with the levels of (6) inflation; (7) nominal 10-year Treasury yields; and (8) real interest rates. Furthermore, the cyclically-adjusted P/E ratio suggests the S&P 500 is currently 30% overvalued in terms of (9) Operating EPS and (10) about 45% overvalued using As Reported earnings.

Reflecting on our recent client visits and conversations, the biggest surprise is how many investors expect the forward P/E multiple to expand to 17x or 18x. For some reason, many market participants believe the P/E multiple has a long-term average of 15x and therefore expansion to 17-18x seems reasonable. But the common perception is wrong. The forward P/E ratio for the S&P 500 during the past 5-year, 10-year, and 35- year periods has averaged 13.2x, 14.1x, and 13.0x, respectively. At 15.9x, the current aggregate forward P/E multiple is high by historical standards.

Most investors are surprised to learn that since 1976 the S&P 500 P/E multiple has only exceeded 17x during the 1997-2000 Tech Bubble and a brief four-month period in 2003-04 (see Exhibit 1). Other than those two episodes, the US stock market has never traded at a P/E of 17x or above.

A graph of the historical distribution of P/E ratios clearly highlights that outside of the Tech Bubble, the market has only rarely (5% of the time) traded at the current forward multiple of 16x (see Exhibit 2).

The elevated market multiple is even more apparent when viewed on a median basis. At 16.8x, the current multiple is at the high end of its historical distribution (see Exhibit 3).

The multiple expansion cycle provides another lens through which we view equity valuation. There have been nine multiple expansion cycles during the past 30 years. The P/E troughed at a median value of 10.5x and peaked at a median value of 15.0x, an increase of roughly 50%. The current expansion cycle began in September 2011 when the market traded at 10.6x forward EPS and it currently trades at 15.9x, an expansion of 50%. However, during most (7 of the 9) of the cycles the backdrop included falling bond yields and declining inflation. In contrast, bond yields are now increasing and inflation is low but expected to rise.

We addressed equity valuation using the Fed model and interest rate sensitivity in our December 6th US Weekly Kickstart. Simply put, the earnings yield gap between the S&P 500 and ten-year Treasury yields currently equals about 325 bp. Goldman Sachs Economics forecasts bond yields will creep higher to 3.25% by year-end 2014, a rise of just 25 bp. If the earnings yield gap remains unchanged, then the ‘fair value’ multiple according to the Fed model would be 15.2x at year-end 2014. The implied index level would be 1900 assuming our 2015 EPS forecast of $125. However, bond yields could rise by more than we expect and hit 3.75% while the yield gap could narrow to perhaps 275 bp. The resulting EPS yield of 6.5% represents a forward P/E of 15.4x implying a S&P 500 level of 1923. Exhibit 4 of the Dec 6th Kickstart shows valuation using various yields and yield gaps.

Incorporating inflation into our valuation analysis suggests S&P 500 is slightly overvalued. When real interest rates have been in the 1%-2% band, the P/E has averaged 15.0x. Nominal rates of 3%-4% have been associated with P/E multiples averaging 14.2x, nearly two points below today. As noted earlier, S&P 500 is overvalued on both an aggregate and median basis on many classic metrics, including EV/EBITDA, FCF, and P/B (see Exhibits 5-8).




What Do the Charts Say?

Toby Connor, penulis blog Gold Scents, akhir taun lalu memberikan update teknikal menarik tentang bursa saham AS:

Dalam tulisan yang berjudul Another Bubble Looking for a Pin, dijelaskannya bahwa the Fed AS merasa telah memberikan “wealth effect”, namun sebenarnya mereka menyebar benih untuk kehancuran berikutnya:

“Well the Fed in its infinite wisdom has gone and done it again. They’ve created another bubble. And this bubble is arguably the 6th in the last 13 years (tech, real estate, credit, bond, oil, and now stocks – again). And let’s footnote the Fed’s creation of the present echo bubble in housing, for good measure.

If one steps back far enough they can see what’s really happening. The Fed has now manufactured a parabolic move in the stock market. This parabola is much more aggressive (and thus even more unsustainable) than witnessed at either the 2000 or 2007 stock market tops.


Now here is the problem – parabolas always collapse. There are never any exceptions. When the pin finds this bubble it’s going to take down not only our stock market, but unleash a destructive force on the global economy.


At some point profit taking starts as nervous professionals fearing a regression to the mean event start to lock in profits. As the big institutional money starts to come out of the market the selling begins to accelerate and the losses quickly mount.

The steeper the parabola the quicker the losses once the parabola breaks. It’s not unusual to see 3-6 months of gains evaporate in the space of days when one of these structures collapses. I have a pretty good idea the level to which this market will fall initially, once the break begins; more on that in a minute.

The path creating this unsustainable market behavior began in 2011. If the Fed had just allowed the market to correct naturally and drop down into its 4 year cycle low in 2012 we would probably now be on a sustainable path into another secular bull market.


Unfortunately the Fed made a catastrophic mistake. Instead of allowing the market to function naturally they began operation Twist, then LTRO, then QE3 and QE4. The result as you can see in the first chart is they’ve created a huge unsustainable parabolic move in the stock market. Try as they have to prevent corrections, the longer they allow this to continue the more devastating the crash is going to be when the market breaks.

Based on the extremely stretched nature of the current intermediate cycle (week 27) I’m looking for a top and the start of the collapse early next year. Possibly as we begin earnings season. If one is in the market trying to catch the last few percent of this upside price movement, please understand we are not in an investor environment this late in the bull market. This is short term trading only and at the first sign the crash has begun, get out and stay out.

Margin debt and money market funds are at levels indicating retail investors are now all in like they always are at market tops.



I expect we are going to see the market fall precipitously to test the previous bull market tops and erase most of last year’s gains in a matter of days or weeks. At that point Yellen will panic and all thoughts of tapering will vanish. As a matter of fact I expect the Fed will increase QE, maybe drastically, to try and reflate the parabola.


But the Fed’s likely attempt to reflate and sustain the stock market will be futile, as the damage will already have been done. All they will accomplish is a violent echo rally common to all collapsing parabolas. From there the bear market will have begun and the more QE the Fed throws at the market, the more and faster the liquidity will leak into the commodity markets until inflation completely destroys the economy and the next recession gets underway.”

Do You Have a Plan?

Pekan lalu Chris Ciovacco, pendiri sekaligus CEO pada Ciovacco Capital Management, LLC (CCM) (, mengingatkan investor lewat laporannya yang berjudul You Need a Plan for the Next Inevitable Bear Market.

Berikut berapa kutipan dari laporannya yang sangat menarik tersebut, yang tentu layak Anda perhatikan:

Not If, But When Next Big Drop Comes





As we noted on January 2, the market’s current profile does not point to an imminent bear market in stocks. However, anyone who studies markets knows strong bull markets are inevitably followed by principal-destroying bear markets. When the market peaks, no one rings a bell; some investors will be prepared, some will not.



Do You Want to Give Back Three Years of Gains?

When the dot-com bubble finally burst in 2000, three years of gains were wiped out. The final damage to principal was on the order of 51%, which is how far the S&P 500 dropped from the bull market peak to the bear market trough.


Eleven Years… Gone in a Flash

Similarly, after the property and mortgage bubble began losing air, the S&P gave back eleven years worth of gains. The final damage to principal was on the order of 58%, which is how far the S&P 500 dropped from the bull market peak to the bear market trough.


If We Know a Bear Is Coming

If it is inevitable a bear market is coming at some point in the future, is it not logical to start putting your protect-my-principal plans in place now? Obviously, the answer is yes.


Investment Implications

Once the declines begin in the early stages of the next bear market, stress levels will begin to rise dramatically. We all make better decisions under low stress conditions. Therefore, now is the time to begin formulating your “inevitable bear market plan”.



Itulah mengapa saya bertanya, “Do you have a plan?”

Jika tidak, maka saran saya agar Anda menggunakan trailing stop losses pada seluruh posisi transaksi yang masih terbuka agar bisa melindungi keuntungan berjalan Anda setidaknya 70% hingga 80%.

Dengan demikian maka Anda masih akan bisa tidur nyenyak tidak perduli apapun yang terjadi.


Saya tahu bahwa pasar dapat bertahan dalam level overbought untuk jangka waktu panjang. Dan saya tidak sedang memberikan arah untuk bear market ataupun bull market.

Yang saya inginkan agar Anda tetap memperoleh untung meskipun akan sulit dan sakit untuk Anda misalnya sudah merealisasikan keuntungan 20% dan kemudian diam tidak bertransaksi hanya untuk melihat harga terus naik dan seharusnya Anda bisa memperoleh keuntungan 30% darinya.

Yang saya lakukan hanya mengingatkan Anda bahwa keyakinan pada saham mengindikasikan tingkat yang sudah demikian tinggi sehingga kenaikan akan terhenti dan yang terjadi kemudian kemungkinan besar adalah hal yang dapat menimbulkan resiko besar.

Ingatlah bahwa ketika ditusuk, sebuah bubble spekulatif tidak hanya mengempis namun bisa juga menggelembung (seperti benjolan) seketika.

Tidak hal lain di dalamnya kecuali udara panas dan harapan, dan ketika sentimen mulai berbalik maka harga akan anjlok.

Dan juga ingat jika Anda mengesampingkan faktor earning dari perusahaan-perusahaan finansial dalam indeks S&P 500, maka tidak akan ada earning growth di tahun 2013.

Selanjutnya, hal-hal dominan yang mendorong kenaikan indeks saham adalah hasil dari stock buybacks.

Adalah sebesar $500 milyar jumlah net stock buybacks di tahun 2013, yang merupakan daya beli yang besar, bahkan mencapai setengah dari total suntikan likuiditas the Fed dalam setahun.

Namun korporasi mulai kembali menjadi net seller, yang artinya adalah: 1) dukungan EPS dari faktor buybacks berakhir dan 2) korporasi pun sudah memandang bahwa harga saham sudah overvalued dan lebih suka jual daripada beli.

Dan dilihat dari pra rilis earning yang menunjukkan indikasi pendapatan-pendapatan negatif bahwa tidak akan ada pertumbuhan tidak hanya untuk earning di 2014 tapi juga untuk EPS, maka kini S&P 500 akan menghadapi tekanan jual massal.

Terakhir yang tak kalah penting, pengurangan stimulus sudah terealisasi dan menurut konsensus yang berkembang suntikan stimulus the Fed akan sepenuhnya dihentikan di akhir musim panas tahun ini.

Tapi jangan juga lupakan data non farm payrolls Desember AS yang dirilis di level terendah dalam hampir 3 tahun.

Jadi apa yang masih dapat mendukung kenaikan harga saham ke depan?

Saya bukan bermaksud memproyeksikan bahwa puncak harga akan dicapai pekan ini, pekan depan ataupun bulan depan, namun yang saya sampaikan di sini adalah bursa saham sangat rentan.

Agar tetap ceria, berikut adalah how to make money from Facebook in 3 simple steps:

Nico-93h/t Lance

Terima kasih sudah membaca dan semoga beruntung!

Dibuat Tanggal 14 Januari 2014

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