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schatzl

schatzl
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  • Bob Wenzel holds no punches in a speech this week to the NY Fed: "The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or, if you stop printing, another massive economic crash will occur. There is no other way out."  [View news story]
    "Stop listening to others and instead think things through for yourselves."

    Then why do you bother typing a post if you don't want others "listening" to you. The whole purpose of a discussion (or communication) is to listen and learn from others and share your thoughts.

    As to your inflation comment: money always finds a way. Commodities and share prices are assets that have risen sharply since QE, other goods less so, because real wages are stagnant and labour participation rates are dropping sharply, i.e. all that created wealth is not trickling through to the masses. Take a look at prices for goods demanded by the wealthy 1%. You will find they are hardly depressed. Housing and rent for the up-markets are doing really well and charging high prices. Luxury goods producers are selling like crazy and are able to maintain large margins -> a clear inflationary signal, but only for a minority. Inflation in the traditional sense will be difficult to repeat, because not since the 19th century of Charles Dickens has wealth been this unevenly distributed.
    Apr 28, 2012. 05:29 PM | 18 Likes Like |Link to Comment
  • Bob Wenzel holds no punches in a speech this week to the NY Fed: "The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or, if you stop printing, another massive economic crash will occur. There is no other way out."  [View news story]
    What? Since when is the Austrian school "crackpot garbage"?

    It has its place like every other theoretical approach and has earned its share of Nobel prizes. Have you even studied economics?
    Apr 28, 2012. 04:48 PM | 17 Likes Like |Link to Comment
  • The Fed In A Tightening Box [View article]
    Thank you for your insight.

    "this week's reaction was curious to say the least."

    The market reaction to the Fed announcement was that either:

    1. they don't believe the Fed and expect further QE or.
    2. the bull run has reached the uncritical euphoria stage

    Anyone who believes stocks will continue to improve once the QE plug is pulled, is deluded. The US economy is propped up by the two pillars of QE and massive fiscal deficits.

    Rising debt levels means however that debt service becomes more sensitive to interest rates, so the longer the deficits are maintained at current levels, the less likely QE will end. The Fed will need to do everything to keep rates low - even at the cost of inflation.

    A combination of QE and deficit spending cannot be sustainable for long periods of time. I fail to see how the Chinese or the mom & pop bond holders will hold onto low interest rate bonds with a continuously depreciating currency and higher inflation. Either one of these props will need to be taken out of the picture at some time, but I assume the Fed & govt. will hold on to both as long as they can.

    QE is far more sustainable than the current massive fiscal deficits, so expect at least in the medium-long term to see some change on the deficit front. What remains is QE and a locking in of low interest rates which indicate muted inflation risks at least up to a medium term without deficits and high inflation risks with deficits and QE.

    Inflation remains the politically easiest way to reduce real debt and is a small price to pay for providing economic stimulus (at least for the politically short sighted - which all politicians are) and inflation data can be manipulated to be biased to some degree.

    Because I expect the Fed & govt. to maintain QE and deficit spending for as long as possible, I'm long on Gold, but as of yet avoided shorting the stock indices, but am planning on doing so if there are real signs that one of the props gets dismantled.

    Difficult to see it happening before the elections though.
    Mar 18, 2012. 06:50 AM | 17 Likes Like |Link to Comment
  • My Two Cents On Market Nonsense [View article]
    Best rant of the month.

    Good to see others are still just as cynical and wary and haven't all been transformed into lemmings.
    Mar 14, 2012. 05:31 AM | 12 Likes Like |Link to Comment
  • Bob Wenzel holds no punches in a speech this week to the NY Fed: "The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or, if you stop printing, another massive economic crash will occur. There is no other way out."  [View news story]
    Sadly Bob Wenzel will not be heard.
    Apr 28, 2012. 04:25 PM | 11 Likes Like |Link to Comment
  • All Spain All The Time [View article]
    Very thorough article and a great read.

    As a €-tax paying citizen, these articles catch my attention and this one brings together everything that has me worried and doubtful.

    The € will be made or broken in Spain and the way this article describes the situation, it looks more and more like a breaking. The way the Greek debacle was handled with retroactive changes and CACs has not only taken away the belief in the rule of law, but it has destroyed the bond market for retail investors. The periphery can only finance themselves over the ECB in conjunction with their local banks and that is a recipe for disaster.

    Within months my beliefs have changed from a stoic optimist emotionally defending the Euro-zone to one of working out how best to minimise the fallout costs. I would advise all other €-zone citizens to do the same.
    Apr 1, 2012. 07:22 AM | 10 Likes Like |Link to Comment
  • Roger Lowenstein pens an epic love letter to Ben Bernanke in The Atlantic. "The left hates him. The right hates him even more. But Ben Bernanke saved the economy - and has navigated masterfully through the most trying of times." Whatever one's opinion of the man thankfully not yet being called "The Maestro," stuff like this tends to come a lot closer to market tops than bottoms.  [View news story]
    you are confusing "markets advancement" with saving the economy.

    The one is an asset bubble, the other would be a balanced budget, balanced current account, average higher job quality, lesser income inequalities, less people on food stamps and living in tents and more products actually being produced in the US instead of just getting consumed or ending up as inventory.
    Mar 14, 2012. 10:54 AM | 10 Likes Like |Link to Comment
  • Greece might be finally turning things around, says Morgan Stanley analyst Daniele Antonucci. While the country isn't actually recovering, the huge uncertainty that was caused by fears of a Grexit and other factors, and which was destroying economic activity, has been removed. The recession is alleviating, Greece is becoming more competitive and it's almost achieved a primary surplus. [View news story]
    @kmi, great post,

    that Morgan Stanley analyst is not worth the pin-striped suit he's wearing.

    The fundamentals are not only poor, but deteriorating at a scary pace.
    here the latest ELSTAT figures:

    - Industrial orders -15,5% for Nov.
    - Foreign Industrial orders -38,6% for Nov
    - approved constructions - 42,7% in Oct
    - construction down 91% from '05 highs.
    - unemployment up 0,6% to 26,8% Oct
    - industrial production down -2,9% in Nov to 1978 levels.

    I could go on, but alone your post and my numbers discredit those completely absurd claims by Morgan Stanley.

    It highlights the generally poor quality of dissected information that is fed to the public by the banks.

    Muppets beware!
    Jan 21, 2013. 02:00 PM | 9 Likes Like |Link to Comment
  • Apple (AAPL) is proving to be as good at avoiding taxes (here and internationally) as it is at designing smartphones, taking advantage of tax laws designed for the industrial, not the digital economy.  The company had an overall tax rate of less than 10% in 2011, vs. about a 24% average for non-tech companies, reports the NYT, seemingly laying out a blueprint for politicians to shift attacks from big oil to big tech. Ugh.  [View news story]
    Is it legal to casually walk past a begging child lying starving in the gutter? Yes. Is it moral and acceptable? No.

    Just because there are loopholes being abused, doesn't make it right. I am shocked you don't see the injustice of it and don't recognise how morally reprehensible Apple's behaviour is. Every cent they do not pay, is a cent YOU will have to pay. It is money they are stealing from YOU.
    Apr 29, 2012. 08:22 AM | 9 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
  • Spain - The Next Domino Is Getting Ready To Tumble [View article]
    I'm sitting here in Europe and Spain scares me most. Tomorrow I'm selling the remaining Euros I have and buying expensive safe haven currencies. The Spanish banks are in deep deep trouble and they are huge in comparison to their national GDP. Their economy is falling to pieces. The austerity pact was thrown out of the window before the ink was dry. In my opinion 2012 is the beginning of the Euro endgame with massive political and economic fallout. If Spain defaults, it will be the death knell for the Euro as we know it.
    Mar 18, 2012. 06:59 PM | 9 Likes Like |Link to Comment
  • Lessons Learned From An Apple Bull [View article]
    I find this "no Jobs = no innovation" argument completely silly. If you've worked for a large corporation, you'd realize there's thousands of people working hard and given opportunity to input ideas and innovation. Yes, they need to innovate otherwise they'll die in that industry, but it really isn't dependent on one person. It is something I noticed that began with the hero worship of guys like Lee Iacocca at Ford/Chrysler. Yes, these chaps make an impact, but its not like the company lives or dies with them. It's the same hyperbole that drove Apple up to 700.
    Jan 26, 2013. 05:44 AM | 8 Likes Like |Link to Comment
  • With austerity proving "uniquely destructive" to the eurozone, Berkeley's Christina Romer says "measures should be backloaded." I.e., they should be passed now but phased in gradually as economies recover. History shows that it works: e.g., the U.S.'s 1983 Social Security reform, and Sweden's plan to cut its deficit by 8% of GDP in 1995.  [View news story]
    Too funny,

    a US policy advisor to Obama telling Europe it doesn't get it. Now we all know Europe doesn't get it, but does the US get it? So how is that massive deficit spending programme going over there in the States? Any luck yet? Any thoughts on the fiscal cliff approaching fast and growing deeper?
    Apr 29, 2012. 08:31 AM | 8 Likes Like |Link to Comment
  • Google (GOOG) gets its $1,000 price target, with CLSA raising to that level citing improving cost-per-clicks (CPCs). Are they serious? In the meantime, Google is set to take on Microsoft (MSFT) with the sale of touchscreen laptops powered by its Chrome operating system. Shares +0.4% premarket. [View news story]
    This is so funny, yet so tedious and sad. Remember Apple price targets of 1000, even 1111?

    Well now its Google's turn to sucker in the dumb money. Muppets being milked.
    Feb 21, 2013. 08:23 AM | 7 Likes Like |Link to Comment
  • FOMC Announcement: No changes, with $85B/month in asset purchases and ZIRP remaining the monetary law of the land. New FOMC voter, Kansas City Fed chief Esther George, replaces the Richmond Fed's Jeff Lacker as a dissenting vote. The Fed blames a pause in the recovery on weather and other transitory factors. [View news story]
    Upswings are structural and permanent, downswings are transitory and weather induced.
    Jan 30, 2013. 02:44 PM | 7 Likes Like |Link to Comment
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