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schatzl

schatzl
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  • Next Up: Spanish Bailout? [View article]
    From a technical viewpoint I'd very much agree. Extremely oversold, especially when compared to the other indices in Europe such as Italy or France.

    Yet honestly, I cannot see any improvement - on the contrary, official estimates to GDP, deficit and banking health are all overly optimistic to prevent further capital flight. Take a look at Euro central bank balance sheets and specifically look at Target2 capital flows. Right now there is an unprecedented capital outflow out of Spain. We are in panic territory here. Mainstream media hasn't realised how bad it really is.

    Personally I'd be glad if the IBEX goes up rapidly. Gives me a safer point of entry for my shorts. Spain really is doomed.
    Mar 31, 2012. 10:52 AM | 2 Likes Like |Link to Comment
  • GDP Growth: The Road Ahead And The Investment Climate [View article]
    " would quibble that with housing the bottom is indeed in"

    How can you say that when average house prices are still falling (see Case-Shiller)? You talk of a bottom once prices have flattened out and first signs of an increase are in. You have neither.

    "in fact I'll proclaim that housing will not subtract from GDP this year"

    So the most important asset to the vast majority of Americans is still depressed and falling, has created negative equity and is considered the pivotal benchmark for personal wealth and with perceived personal wealth being one of the main drivers of consumption and US GDP primarily determined by domestic consumption, yet you perceive it as not playing a role in GDP?

    I think 2012 will disappoint you.
    Mar 31, 2012. 09:34 AM | 2 Likes Like |Link to Comment
  • GDP Growth: The Road Ahead And The Investment Climate [View article]
    That and massive deficit spending. Neither is sustainable. Take away either and you're back to -5% GDP. I fail to see anything positive in this recovery, especially one based on debt fuelled private consumption - as was clearly indicated on Friday.
    Mar 31, 2012. 09:23 AM | 3 Likes Like |Link to Comment
  • Is Extremism In The Defense Of The Gold Standard An Economic Vice? [View article]
    Valid points apart from the pro-cyclical one - at least in regard to seeing it negative in relation to the alternative economic concepts. Political intervention is nearly always pro-cyclical as can be witnessed with the "Keynesians" over the last 40 years. When has budget policy ever been anti-cyclical, apart from the rare occasions such as Clinton? European countries have consistently built up their debt levels, only for an economic downturn to highlight the debt problem, create fear and are then forced to cut spending at the worst possible time. Keynesian policy is just as destined to fail when implemented by our current political systems.
    Mar 31, 2012. 08:54 AM | 1 Like Like |Link to Comment
  • 3 Reasons Why Institutions Are Likely To Dump Large-Cap Tech Going Into Summer [View article]
    I have an itchy finger over the short selling AAPL button, but nowhere is that more dangerous than with that stock. I know what will happen, but I don't know when.
    Mar 31, 2012. 08:36 AM | 1 Like Like |Link to Comment
  • Gold's Fundamentals Shining Again - Time To Cover Shorts [View article]
    To be honest, when G.S. said to buy gold, it really did make me nervous and low and behold, my gold long position bought at 1660 fell from close to 1700 down to 1650. They really have become the contrarians on the market, yet I will stick to the long position. There still remains a strong fundamental case for gold long.
    Mar 31, 2012. 08:33 AM | 2 Likes Like |Link to Comment
  • Next Up: Spanish Bailout? [View article]
    I enjoyed that article, thank you.

    You have basically confirmed my convictions that have manifested themselves over the last four weeks from reading articles here, ZeroHedge and others. On that conviction I have very successfully traded the IBEX and with marginal success traded the Euro.

    I have been shorting the IBEX(fantastic) on and off for two weeks now, Have shorted the € to SEK(good), NOK(neutral) and AUD(bad) and have gone long on gold (slightly good).

    The concept is as follows: either they let Spain continue down the deflationary spiral path or they bail them out with more QE and/or possible haircut. Both scenarios are bad for the Euro, the deflationary spiral has the potential domino effect, though more on the economic side than on the financial (as that is fairly protected by the LTRO and EFSF/ESM), while further QE and haircuts puts pressure on the Euro from a confidence standpoint as well as bringing possible inflationary fears to the fore.

    The Euro-zone really is in deep trouble, no matter what approach they take. Spain really has no chance and possible solutions such as infrastructure investments are fairly senseless in light of the massive infrastructure glut Spain is already burdened with. Huge airports with 75% spare capacities, unnecessary highways running parallel to perfectly fine roads etc. Infrastructure is not something you just build and leave. Infrastructure needs to be maintained and can be costly. All this highlights, is that centrally controlled and typically mistimed Keynesian intervention fails again and again. Misallocation of resources leads to bubbles, wastage and destabilises the entire country.

    Within the Euro, Spain and most of the periphery are destined to fail. Though I believe the concept of GDP growth stimulated by exports through depreciation/devaluation is a concept with a non-convincing track record (see Italy pre-€), yet it may still be the only way out.

    Within the €, Spain and the peripheral rest can only survive if Germany goes the route of massive demand side stimulus, i.e. wages +20%, large deficits and low interest rates etc. but as we are witnessing right now, Germany is showing signs of a beginning housing bubble we saw in Spain and Ireland. +5% increase in house prices y/y, has the alarm bells ringing at the German central bank and as we all know the Germans will NOT let a housing bubble get out of hand, nor will they voluntarily give up their hard fought for global competitive edge.

    Therefore, the only solution I see is either we drop the € completely, or we create a northern € with Germany, Austria, Finland, Holland and Luxembourg and let the periphery float their own currency.

    My further investment strategy will be to short the € with NOK and SEK, stay long gold and find shorting opportunities in the indices. Many investors are still relieved to have overcome the European financial crisis without fully realising the massive economic crisis we are heading into. Most indices have yet to price in the peripheral deflationary spiral and all the while China and the US could (I believe will) add fuel to the fire.
    Mar 31, 2012. 08:00 AM | 9 Likes Like |Link to Comment
  • Market recap: Stocks closed mixed in a quiet session, but the Dow and S&P posted their strongest first quarter since 1998. Data showing increased consumer spending and rising confidence added to the sense that the U.S. economy is gaining momentum. Treasury prices fell, capping a second straight monthly loss. Decliners slightly led advancers on the NYSE.  [View news story]
    So what does that tell us about the US economy? Very little I'm afraid. A disconnect if ever I saw one. Get those shorts ready.
    Mar 31, 2012. 06:40 AM | Likes Like |Link to Comment
  • An Interview With Patrick MontesDeOca On Gold's Outlook In 2012 [View article]
    Tell that to AAPL shareholders and brace yourself.
    Mar 30, 2012. 04:14 PM | Likes Like |Link to Comment
  • Bernanke's Problem With The Gold Standard [View article]
    How many food stamps does the Japanese government distribute?
    Mar 30, 2012. 12:13 PM | Likes Like |Link to Comment
  • Feb. Personal Income and Outlays: Income +0.2% vs. +0.4% expected, +0.3% prior. Personal spending +0.8% vs. +0.6% expected, +0.2% prior. PCE core price index +0.1% in-line with expectations, +0.2% prior.  [View news story]
    I shouldn't be surprised AAPL is doing so well then.
    Mar 30, 2012. 09:19 AM | Likes Like |Link to Comment
  • Feb. Personal Income and Outlays: Income +0.2% vs. +0.4% expected, +0.3% prior. Personal spending +0.8% vs. +0.6% expected, +0.2% prior. PCE core price index +0.1% in-line with expectations, +0.2% prior.  [View news story]
    Yes, great for a short term - but unsustainable boost . This just means more pain down the road.
    Mar 30, 2012. 08:59 AM | 1 Like Like |Link to Comment
  • Feb. Personal Income and Outlays: Income +0.2% vs. +0.4% expected, +0.3% prior. Personal spending +0.8% vs. +0.6% expected, +0.2% prior. PCE core price index +0.1% in-line with expectations, +0.2% prior.  [View news story]
    Should have been expected, as it is in line with the current trend: debt fuelled consumption.
    Mar 30, 2012. 08:40 AM | 1 Like Like |Link to Comment
  • Russia makes its first gold sale in 5 years, according to IMF data showing the country unloaded 3.8 tons in February. It's a big shift for the central bank which had been one of the more aggressive official buyers of the metal, more than doubling reserves since 2006.  [View news story]
    you might be on to something
    Mar 29, 2012. 08:18 PM | 1 Like Like |Link to Comment
  • Pain In Spain Prods Germany To Play Ball [View article]
    I'm stumped as to how we Europeans are going to solve this mess. The more I look at Spain, the less silver linings I see. This year and the following years will be brutal and Spain may yet decide over the fate of the Euro.
    Mar 29, 2012. 06:46 PM | 1 Like Like |Link to Comment
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