Archives of “January 5, 2019” day

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Goldman Capitulates: Lowers GDP Forecast, Increases Unemployment And Inflation Outlook, Sees Imminent QE "Lite"

  
  Education
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It’s official: the double dip is here. Goldman’s Jan Hatzius just lowered his GDP forecast for 2011 from 2.5% to 1.9% (kiss goodbye all those 93 EPS estimates on the S&P), increased his unemployment forecast from 9.8% to 10.0%, boosted his inflation expectation from 0.4% to 1.0%, and said that QE lite is now on the table, as he expects that “the FOMC to announce that they will reinvest the paydown of mortgage-backed securities in the bond market at next Tuesday’s meeting.” Look for all other sell-side “strategists” (here’s looking at you Neil Dutta) to lower their economic outlook in kind, and the 2011 S&P consensus to decline accordingly.

From Goldman Sachs:

 
 

Over the past two to three months, the US economic recovery has lost a considerable amount of its momentum.   As a result, our forecast of a significant slowing in US growth in the second half of 2010—widely regarded as implausible just three months ago—is now increasingly accepted as the baseline.  As the data disappointments intensified in early July, we indicated that we would consider revisions to our economic outlook.  With the annual revisions to real GDP now behind us, we are making the following changes: (more…)

Soros and the bullion bubble

  
  Education
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George-Soros-goldGold is rallying — but is it all because of one man’s lack of faith in the euro?

As Bloomberg reported on Monday:

George Soros is helping drive up gold prices by doubling his bet in a market even he considers a “bubble” as Goldman Sachs Group Inc., Barclays Capital and HSBC Holdings Plc predict more gains before it bursts.

The billionaire who made his money by shorting sterling in 1992 — and who declared in February that the euro “might not survive — has set his sights on another metal. His buy in to what appears to be an ever-growing bullion bubble has sparked both a rally and some controversy.

At this year’s World Economic Forum in Davos, Switzerland, Mr Soros told CNBC:

When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment.

The ultimate asset bubble is gold.

Both Spanish and Greek prime ministers have accused hedge funds like Soros Fund Management of aggressive short selling of the euro, according to a report in the Independent.

And it appears Soros intends to keep buying into gold, further inflating the so-called “ultimate bubble”.

But there’s some irony here. As Bloomberg pointed out on Monday:

In a Jan. 28 Bloomberg Television interview, the 79-year- old billionaire recalled that former Federal Reserve Chairman Alan Greenspan warned of “irrational exuberance” in financial markets three years before the technology bubble burst in 2000.

So, Mr Soros, tell us, is buying into gold excessive or not?

SOMETIMES I JUST SITS

  
Analysis, Education

Sitting is ok when the markets are not set up for your trading edge…if you have one.  If you do have a trading edge experience has taught you that there are certain times when it works, and works well, and other times when it doesn’t.  The quicker you recognize the difference and make the necessary adjustments to suit market conditions, the quicker you can limit losses, thus leading to greater gains.

And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level, which should show the greatest profit. And their experience invariably matched mine –that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.

Jesse Livermore,  Reminiscences of a Stock Operator

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