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Leo Kolivakis  

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  • What's Spooking Markets This Friday The 13th? [View article]
    Thank you MC but my biggest fear is TIME isn't on our side and global policymakers have to wake up and realize that we need to figure a better way out of this economic morass before it gets worse. Thanks for posting this.
    Nov 14, 2015. 09:23 PM | Likes Like |Link to Comment
  • What's Spooking Markets This Friday The 13th? [View article]
    "The Paris attacks will also hurt Europe and the rest of the world. The world economy continues to be a very dangerous place with weak economies threatening to go down at any time. Watch out for the Grinch. "

    Moon, I'm afraid you're right. The nature of these attacks is very disconcerting. See this clip where Eurasia Group's president Ian Bremmer discusses the multiple acts of violence in Paris with Bloomberg's Alix Steel and Scarlet Fu:

    If he's right and ISIS is picking up steam, it will severely hurt the European economy and exacerbate global deflationary headwinds. I hope we never see these attacks ever again but the coordination here is very worrying and it makes you wonder whether intelligence agencies can thwart these attacks in the future.
    Nov 14, 2015. 02:02 PM | Likes Like |Link to Comment
  • What's Spooking Markets This Friday The 13th? [View article]
    @june1234: Interesting, last December I wrote that the plunge in oil will NOT crash markets:

    But the bond king has gone on record to state if oil prices go below $40 a barrel, the geopolitical consequences can be 'terrifying':

    See the clip at the end of that comment where he discusses the high yield bond market. He states that problems will arise in 2018, not now...provided the Fed doesn't start going crazy!
    Nov 14, 2015. 11:55 AM | Likes Like |Link to Comment
  • What's Spooking Markets This Friday The 13th? [View article]
    @Diesel, agreed but I just used Friday the 13th to illustrate the point that something is spooking markets...and now I just learned of Paris terrorist attacks. Just awful!
    Nov 13, 2015. 05:47 PM | Likes Like |Link to Comment
  • What's Spooking Markets This Friday The 13th? [View article]
    @xpan: I'm not so sure the Fed wants or will hike rates in December:

    If equities keep sliding and the USD keeps strengthening, I strongly doubt the Fed will go ahead and hike rates, even if it's a one and done deal.
    Nov 13, 2015. 04:56 PM | 3 Likes Like |Link to Comment
  • What's Spooking Markets This Friday The 13th? [View article]
    @Buyandhold: That all depends on what you're buying. For example, have a look at what top funds bought back in Q2:

    You'll notice Buffett and Gates are long Wal Mart shares and they're getting clobbered on them this year. I personally think Wal Mart shares are cheap now, especially relative to Amazon, but as Keynes famously quipped: "the market can stay irrational longer than you can stay solvent." That goes for rich billionaires too.

    Of course, guys like Buffett and Gates have very deep pockets and can wait it out while most people can't. Also, I would warn you to never fall into a value trap.

    I remember screaming at people here to dump their shares of SeaDrill and they were telling me about it's great dividend. That was at $14. And what happened? Exactly what I predicted, the company cut its divvy and the stock got massacred and is now still close to its 52-week low.

    These markets are merciless. Tread very carefully in this deflationary environment. I continue to steer clear of emerging markets, energy, commodity and now retail shares. They might look like a steal but they could go lower and might just be dead money for a long, long time at best.

    These are tough markets for everyone, just ask Bill Ackman, he's praying Valeant shares will rebound from these oversold levels (I wish him luck).
    Nov 13, 2015. 04:49 PM | 4 Likes Like |Link to Comment
  • One Reason We Think Biotech Has Bottomed [View article]
    I recommended loading up on biotechs in late August:

    It was a huge dip that lasted into September. Still, I think too many people were throwing the baby out with the bathwater.

    Even now, I am not surprised to see shares of Valeant (VRX) and Bluebird (BLUE) getting clobbered as they were hyped up to wazoo, but to deduce that one or two companies will "infect" the entire sector is just plain stupid. Tread carefully in biotech, buy the right dips and remember to sell the rips!
    Nov 7, 2015. 12:52 PM | 2 Likes Like |Link to Comment
  • Capitalism For The Masses [View article]
    "We made a decision about five years ago that we didn't need to cut taxes or spend more going forward, so a half recovery would turn into a full recovery "some day". "

    Don't you mean raise taxes on the 1% to pay for infrastructure spending? That's what the Liberal government in Canada is now promising to do. We'll see if it works as the devil is in the details and things never turn out like politicians hoped for.
    Nov 7, 2015. 12:46 PM | 1 Like Like |Link to Comment
  • Capitalism For The Masses [View article]
    Completely agree with you on the macro effects of inequality. I couldn't resist to comment on Paul Krugman's recent piece, The Conspiracy Consensus, stating the following:

    "The Fed doesn't care about about Republicans or Democrats, only about big banks and their elite hedge fund and private equity clients. Interestingly, while the Fed needed to lower rates and engage in QE to prevent another Great Depression, ZIRP and QE ended up exacerbating inequality via several channels. First, companies were incentivized to borrow big and repurchase shares to pad the bloated compensation of their top brass. Second, U.S. public pensions were forced to take on more risk investing in hedge funds and private equity funds to make their 8% pension rate-of-return fantasy. Lastly, historical low rates punish savers and reward financial speculators as people who need to rely on a fixed income can't invest in fixed income assets that yield enough.

    "This is why I've long argued that U.S. Social Security needs to move the way the Canada Pension Plan has moved which has assets managed by the Canada Pension Plan Investment Board, a national pension fund which directly invests in public and private markets and is supervised by a qualified, independent investment board. But first you need to get the governance right and unfortunately, the U.S. will never get the governance right because there are too many powerful interests milking public pension funds dry. All this to say, there is a conspiracy which is going on at the Fed but it has nothing to do with what the Republicans or Democrats are claiming."

    As Warren Buffett said, the marginal utility of an extra billion to a multi billionaire isn't much but that money can do a lot more good to the restless many struggling under crushing poverty or barely getting by.

    What policymakers fail to realize is that gross inequality is very deflationary and has serious effects on long-term output and debt. Until you address structural unemployment and pervasive inequality, capitalism as we know it is doomed to fail. It may not happen tomorrow but we're already seeing cracks in the system.
    Nov 7, 2015. 11:05 AM | 4 Likes Like |Link to Comment
  • Capitalism For The Masses [View article]
    Those of you interested inequality might also want to look at my recent comment arguing for a new macroeconomic paradigm:

    You can also delve deeply into the issue of inequality by reading Thomas Piketty's The Economics of Inequality, Tony Atkinson's Inequality: What Can Be Done?, Joseph Stiglitz's The Great Divide and Robert Reich's Saving Capitalism: For the Many, Not the Few.

    I found Atkinson's book to be a particularly excellent read as he offers policymakers ideas on tackling rising inequality not simply by taxing the rich but also through tackling poverty.

    Is wider share ownership the answer? Not sure as this will not be enough to make a significant difference. Also, good advice for people working at a company is to diversify their savings away from that company in case things go wrong there. Receiving more shares of a company which is struggling won't lift employees' morale or make them richer.

    Unfortunately, inequality is an endemic and pervasive problem that has gotten much worse through ZIRP and QE. Democrats and Republicans haven't been able to tackle this social problem and I fear it will get much worse before it gets better.
    Nov 7, 2015. 10:18 AM | 4 Likes Like |Link to Comment
  • Prepare For A December Rate Hike? [View article]
    One hedge fund trader who agrees with me shared his thoughts on the mighty greenback and the likelihood of a rate hike in December:

    "Dollar problem now has company (which was not the case during summer deluge): The entire US yield curve backing up aggressively. There will be no hike in December with follow through in all of the above. "
    Nov 6, 2015. 10:47 PM | Likes Like |Link to Comment
  • Prepare For A December Rate Hike? [View article]
    Agreed, the first rate hike is insignificant as it's likely already priced in but the subsequent ones are what matters. Still, in this environment, I don't see an aggressive Fed. Inflation expectations are what matter most and if it hikes too aggressively, they will risk another global meltdown.
    Nov 6, 2015. 09:47 PM | Likes Like |Link to Comment
  • A Good Employment Report, But With Risks [View article]
    It's all about the mighty greenback. Here is my latest on whether investors should prepare for a December rate hike:

    If the USD continues to appreciate from now till December, don't be surprised if the Fed holds out a little longer.
    Nov 6, 2015. 01:41 PM | Likes Like |Link to Comment
  • Which Bond Bubble Worries Her Most? [View article]
    Get my family name right, it's Kolivakis. As for the rest, you obviously haven't read my comments. I am not worried of any bond bubble anywhere as I've been warning global deflation is already upon us. And I still believe the Fed won't raise rates this year and we shall see if it raises rates next year (depends on global recovery).
    Nov 1, 2015. 04:34 PM | Likes Like |Link to Comment
  • Can Central Banks Save The World? [View article]
    Swedish central bankers are now looking at the country’s 240 billion-krona ($30 billion) municipal bond market as a possible channel for further stimulus as its debt purchases risks distorting trading in government debt.

    Stay tuned, this could be the Fed's next big move!
    Oct 14, 2015. 04:08 PM | Likes Like |Link to Comment