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Tactical Update From Bob Janjuah: "2008 Will Seem Like The Good Old Days"

  
Analysis, Economy, Education, Global Indices
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Worth Reading :

Plse refer to my most recent comments, from 24th May, and 26th April. Things are playing out nicely. This is just a ‘tactical’ update. In my cmmt of the 24th May I set out 2 possible paths for the new bear market we are in, and I want to clarify a little:


 
1 – 1st, the bigger strategic theme is clear and unchanged  – global growth HAS peaked and the deflation trend is clear for the next 3/6mths. This is strategically bullish the USD and USTs (think 1 vs the EURO, and low 2% 10yr yields). And this is strategically BEARISH risk assets (think mid-800s S&P in 3/6mths, and the iTraxx XO index up above 750bps). The strategic asset allocation outlook STRONGLY favours QUALITY as defined by balance sheet strength, balance sheet transparency (which therefore excludes most financials), market position, AND the ability to be a price setter (not taker).
 
The game changers are: A) a massive turnaround in China towards new stimulus & a new credit creation binge etc – for now very unlikely IMHO; B) a massive  turnaround in corporate behaviour resulting in a leverage, capex, investment, hiring & spending binge – extremely unlike for now and for the rest of this yr; C) a new US fiscal package (pretty impossible now), so the most likely and only really viable remaining option is a MASSIVE DEBASEMENT/MONETISATION move led by the Fed (but no doubt globally co-coordinated) thru the announcement of a NEW (say) USD5trn QE package, aided/abetted by maybe another USD5trn of funny money printing by the BoE, the ECB, ther BoJ, the PBOC, the SNB etc etc………HOWEVER, I don’t expect this last bullet to be used until things get REAL UGLY (see above para for levels). If u know u have only 1 bullet left in the rifle – and unless you are amazingly stupid – u don’t try to shoot the charging grizzly bear when its 50 yards away. No, you wait till its 5/10yards away…WHEN we get this final bullet out of the rifle it had BETTER not miss, as if it ‘misses’ we would then have the mother of stagflationnary busts in history where bonds get crushed due to debasement, taking risk assets out with them too. If this is the outcome – and this is really I think a late 2010/2011 story – then trust me, 2008 really will seem like the Good Old Days…..lets hope Uncle Ben not only has the rifle ready, but also that his scope is well lined up and that he has been practising hard… (more…)

Beating The Game

  
  Education
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3575My satisfaction always came from beating the market, solving the puzzle. The money was the reward, but it was not the main reason I loved the market. The stock market is the greatest, most complex puzzle ever invented – and it pays the biggest jackpot….it was never the money that drove me. It was the game, solving the puzzle, beating the market that had confused and confounded the greatest minds in history. For me, that passion, the juice, the exhilaration was in beating the game, a game that was a living dynamic riddle, a conundrum to everyone who speculated on Wall Street. Jesse Livermore

AN ATTITUDE ADJUSTMENT

  
Analysis, Education

Whether it is a child, a spouse, friend, neighbor, or an acquaintance, we have all experienced times where someone gets the best of us. No matter how hard we try to conceal character weaknesses, that other person causes us to lose patience, get angry, agitated, or frustrated. Even a loved one gets “under our skin” from time to time.  Most often, we blame the other person for our irritation and we let it show, thus exposing our own irrational way of dealing with the situation.  We end up being the one who looks out of control.  What is really ironic though is that the one we are so upset with, you know, the one who “got under our skin” usually had no intent to evoke our irrational, immature, and out of control actions.  They are usually ignorant to the cause of our irritation.  When another gets under our skin it is best to look inside, not outside for the answers, knowing that it is our perception of current events that matter most. We should work on changing ourselves to better cope with others instead of trying to change others hoping they will better be able to cope with us!

The stock market evokes the same reactions when we try to change it; when what is really needed is change within.  The market is going to do what it wants, when it wants, how it wants.  It is going to get under our skin if we let it.  Accept the market for what it is and trade with it, not against it.  If we are frustrated, angry, agitated, and fearful of the market look within, not without, for the answers.  Once we do so the relationship will improve and so will our ability to accept the market for what it is instead of what we want it to be.  Making money is so much easier when the market is respected. There is an added bonus also:  we no longer lose patience, get angry and frustrated…like we used to!

We should work on changing ourselves to better cope with the market instead of trying to change the market hoping it will come to terms with our desires.

14 things financial journalists won't tell you.

  
Analysis, Education
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IF YOU’RE READING the business section, you need to read between the lines. Here are 14 things financial journalists won’t tell you:

  1. That unbelievably telling anecdote at the top of my article? I scoured the country for three weeks to find that schmuck.
  2. The Dow industrials fell 263 points today. Why? By the time deadline arrives, I’ll have cooked up a reason.
  3. What qualifications do I possess? An ability to dial a telephone.
  4. Actually, I always wanted to be a sports reporter.
  5. Today, I had to bang out a long feature story on the mortgage market. My editor is looking to buy a new house.
  6. What qualifications do my sources possess? A willingness to pick up the receiver.
  7. If you saw my portfolio, you’d never ask me for financial advice.
  8. In the story, the company’s PR guy is quoted as saying, “no comment.” But on background, the senior counsel sung like a bird.
  9. The more the market falls, the giddier the newsroom gets.
  10. I don’t understand collateralized mortgage obligations, but I just wrote 1,000 words about them.
  11. My sources aren’t nearly as articulate as I make them sound.
  12. That joking, throwaway comment that the CFO made as we hung up? It’ll be in the second paragraph.
  13. We’ll get the online version up now, and figure out the real story for the print edition.
  14. I want my editors and sources to think I’m smart. What about readers? Yeah, I guess they’re also important.

Rouble hits 58 per dollar for first time since July 2015.Last Hope at 55.68

  
Analysis, Education, Forex
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58-RUBThe rouble climbed to its strongest level since July 2015 on Monday morning, as the Russian Central Bank’s pledge to weaken the currency struggles to convince markets.

The rouble had already been appreciating as oil prices have recovered over the last twelve months, and growing optimism since Donald Trump’s victory in the US election has helped it become the best-performing emerging market currency since the vote, up just shy of 10 per cent.

President Trump’s calls for a normalisation of relations with Russia raised hopes of a relaxation of economic sanctions and encouraged international investors to return to the country.

However, economists have been sceptical the bank would be able to have a big impact on the currency, and it has continued to rise a further 1.6 per cent since the announcement, including a 0.5 per cent rise this morning to take it to 57.99 per dollar.

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