gabe borenstein

Thursday Outlook: Commodities, Global Markets

I have listened to this implied perpetual nonsense about the bearish stock market (from David Fry) for quite some time .I won't waste my time repeating his predicted lows .
It suffices to say that the stimuli in place are impressive .They will trigger a more visible rebound shortly .
An average investor needs to understand that it had taken years to create the current economic turbulance (I have discussed the current risks as early as June 3,2005 in an interview with Mark Gilbert (Bloomberg)-another three months or so of waiting for the recovery is insignificant at this point in time.
Major,noninflationary recovery is on the way .
The stock market indices will attain unprecedented highs.
The increase in the tax revenue due to the economic boom on the way ,will reduce projected deficit to acceptable level.
Major economic surprise lies ahead.
...

Global Stock Markets: Halloween Relief or More?

The word Depression has been used so many times by the investment community and the Newscasters(CNBC),so that clearly the current market levels reflect the worst and that includes the earnings .
The relative dollar strength is reflective of the theglobal confidence in the U.S economy and the system.
It is difficult to treat all of the economic zones eqaully as Europe,Asia nad Emerging markets are cyclically behind the U.S economy.
The U.S was the first to identify and aggressively address the issues.
As we are the global locomotive(still) ,cyclically the other economies are vulnearable untill the U.S recovers.
Since the dollar is the global magnet(flight to quality),the U.S recovery will be fuelled by the foreign investors as well,then other economies will follow,although relatively speaking,the rates outside the U.S are too high.
On any given day ,the downside risk(stock market) exists ,but once we get past the weaker data (discounted),the market will stage another record rally.
The measures in place are the economic rocket fuel-from that perspective the economic zones are behind the U.S.
The only thing to fear is the fear itself.

Wednesday Outlook: Commodities, Emerging Markets

My final response on the topic.
There is a"mother" of the rally in the period ahead.
It will redefine the concept and notions of the bull market.
It will dwarf in magnitude of what transpired yesterday(I have called this rally at 4 A.M).
Yes ,the Dow will hit 20,000 within two years.
We are the witnesses to a market history in making.
The only thing that we should fear is the fear itself.

Wednesday Outlook: Commodities, Emerging Markets

It suffices to say ,that prior to yesterday's rally we have heard the most bearish market perspectives.The word Depression has been used non stop.
What we have seen yesterday is not a part of the market correction in the bear market but rather a beginning of unprecedented rally.
The market volatiolity will continue but ahead lies another spike that will dwarf what transpired yesterday.
Investment community/investors need to understand that all of the approved measures were not fully implemented yet.Then there is a lag (monetary and fiscal).
By the second half of 2009 the U.S GDP will be expanding at 5% .
This will be as difficult to comprehend as my warnings on September 18 of 2007 when I have issued a warnig (one out on many) during the Bloomberg TV interview -Brian Sullivan).
I believe that the author of the current article was still somewhat bullish.
In the next two years,the Dow will reach the 20,000 level- period.
But the fear mongers certainly are contributing to a mass paranoia and psychosis.
One more thing,the synonym for the mega rally will be Gabe.

Another Bloodbath?

For the record ,almost a year ago I have said that deflation not inflation is the issue .I am not a bottom picker but an observer of a cyclical/economic behavior-this is not a precise science.The magnitude of the global dollar inflows and the gold implosion(more on the way)are reflection of the real flight to quality .One more time ,these megadollar inflows will be the catalyst for unprecedented economic rebound.
The only think to fear is the fear itself and most CNBC reporters who perceive themselves as economists/traders and spew quantity of economic/analytical nonsense.

Another Bloodbath?

One more time .....we are heading for a mega bullmarket/rally.
In fact the synonym for this unquantifiable uptrend will be Gabe.

Another Bloodbath?

To answer two key questions we need to understand this.
A) WE are now the global flight to quality magnet attracting unprecedented dollar inflows which will be invested in the U.S assets/economy and create a record employment.
B)the current loss of jobs has to do with the issues that I have originally discussed with Mark Gilbert(Bloomberg -London) in June of 2005 and again repeated them on September 18 ,2007 (Brian Sullivan -FED Time) on Bloomberg TV.
Now ,we are looking at the early stages of the historically
relevan economic/market boom.
The only thing that we should fear is the fear itself.
Now that the U.S economy had become lean mean economic machine,we heading for an 'economic Nirvana".
Remember I have coined the word an economic Armageddon-now I am referring to the period ahead as an" economic Nirvana"-even as the psychosis grips the news media and the investors.

Another Bloodbath?

What we are seeing today ,is a history in making.We are reaching the final stages of the market consolidation and getting ready for an unprecedented market rally .Today's market is a response to the events in Asia and Europe .These economic zones are today ,where the U.S economy was about a year ago.In that time we have identified the problems and the issues and are addressing them.While there is a lag between addressing the economic /structural ills and the economic response ,we are on the way to a major economic/market rebound.The strength in the dollar and the Gold implosion are reflective of the global recognition that the dollar (Not gold) is the ultimate" flight to quality".
It is a matter of short time only before we will see a dollar conversion(cash) into a dollar denominated assets -that includes the equities and the real estate(U.S).
Depression?it is a word coined by CNBC to attract the audience.
Recession? classical recession (two consecutive quarterly declines) will likely to be deflected .The FEd should cut FF another 50 bps.
The only thing that is restraining the major market rally is the mass psychosis/paralysis.
Sit back and relax.
The dollar strength is reflective of the global fears of the Armageddon outside the U.S.
One more time ,these record dollar inflows will shortly induce an unprecedented stock market really and meanigfull stability in the housing sector to be followed by the price spike in the real estate market.
This is history in making. The US GDP will attain 5% growth by the second half of 2009.-hard to believe?
Then againg I have predicted the current turmoil on the Bloomberg TV (Brian Sullivan) September18 /2007 (FED) -I was right.Now I am logical-and will be right.

Thursday Outlook: Commodities, Emerging Markets

To JJC
Your concerns do deserve a response .
The issue of foreclosures is a serious problem.Looking at the data it appears to me that forclosures have peaked.The housing sector is consolidating and very well may be the recipient of foreign investment(as the stock market is and will be).
Consumer credit is of concern ,but the relief is on the way.
Speculative forces(hedge funds and others) have pushed the price of crude oil into the stratosphere.The result was higher gasoline (and with a lag) food prices.Thus consumers disposable income had been decimated.As the crude continues imploding ,the lower gasoline/food prices will increase dramatically the net disposable income allowing greater consumer spending latitude(please allow for some lag).
Unemployment is an issue but it is a lagging economic indicator it reflects the past trends but not the future.WE have seen worse unemployment data in the past.
The stronger dollar will attract foreign capital especially as Europe and Emerging market economies are heading for a contraction.
This foreign investment will enhance our economic rebound and will contribute to the unprecedented stock market rally.
Stronger dollar will initially increase exports as the importers of our goods try to beat the price increases (in real terms).Our exports will not suffer for quite a while.There is something called a J -curve .This curve reflects an impact of a shift of a relative value of a currency(ie dollar) on trade (Exports ).The Curve implies that a lag of up to 18 months exist.Meanig that a major shift favoring dollar will not affect exports for up to 18 months.
One more time,I am very optimistc on the U.S economy.
The economy /market are on the verge of a major rebound.
The problerms in the financial sector have existed for years and are being addressed while their magnitude is distorted by the media and the market bears .
Why? take a look at the record short open interest in the equity market -that is why.
In the period ahead you will see Dow at 20,000 and the NASDAQ over 5000.
Hard to believe? So were my warnings about the current turmoil,issued over the period of more than two years.

Thursday Outlook: Commodities, Emerging Markets

To ROwns
I think that instead of panicking ,the investment community must sit back and evaluate objectively the current status quo.Please remember that untill recently experts have stated that we are in recession but have alluded to hyper inflation as well (stagflation),while the real estate prices were imploding(70% of Americans were/are home owners ).
The reality is that the U.S is not in recession but is experiencing the sub average growth.In fact the reported GDP growth for the second qtr,was 3.2% .Many try to negate that number but it is real.Exports do create jobs,revenue ,growth and disposable income.
In addition the foreign investments in the U.S are and will continue to grow almost geometrically.
Clearly ,the U.S economy/markets are in the process of consolidation.
The negative distortions and gloomy dissemination of analysis, you need to take within the context of record short open interest-mega shorts continue to distort issues and the problems which we were identified and are being addressed.
Which brings me to the question pertaining to my time span on the market/economic recovery.
The data shows consolidation.Major market /economic rebound will be indisputable by October mid November.
At the risk of being repetitive ,I have been warning the investment community about the current problemsfor more than two years .
I have issued a very explicit warning about the suprime related issues which may derail economy on Sepember18,2007 (Bloomberg TV -Brian Sullivan -FED Time).
Now that the problems have been identified and are being addressed in unprecedented effort by the FED ,Treasury ,Congressand the Administration,I am very bullish if sometimes surprised by the volatility caused by the negative rumors and discussions which have no bearing to reality.
Unbelievable ,but market/and economy are in the process of the trend reversal( going up).
Two things would neutralize the negativity
a) The FED should contemplate additional easing.
b) CNBC should stop practicing "Yellow Journalism"
ROwns ,better days are ahead shortly.

Thursday Outlook: Commodities, Emerging Markets

The U.S economy is the process of consolidation on the way to a major rebound.
Some additional easing (FED) may be necessary to allieviate market/investors fears.
It is amazing how consensus had changed from blindly bullish to bearish.
The problems we are facing today were more than two years in making I have warned investors about pending" turmoil" more than two years ago, reiterated the issuesas late as September18,2007.
If only the issues were addressed then.
In the meantime the problems have been identified an are being addressed.Little more time may bee needed to see the economic response to fiscal and the monetary measures(Lag).
We did see a 3.2% GDP growth in the previous quarter ,quickly dismissed by the economic "charlatans".
Economy looks always best on top of the cycle and the worst on the bottom of the cycle.
Yes ,there are some problems that are being addressed but we are on the way to a major market/economic rebound.
Hard to believe.

Tuesday Outlook: Commodities, Emerging Markets

Let's set the record straight.The Primary beneficiary of the Treasury's "rescue " plan was and is the "little guy".
It is because of the existance of the FRE and the FNM ,the little guy was able to obtain competitive mortgage rates.
In the current turmoil both agencies are responsible for up to 80% of the mortgage market acitivity.
The direct take over of the agencies has neutralized self serving and distorted rumors about the financial viability of both agencies clearly disseminated by the record shorts (including hedge funds).
The distortions had a turbulent effect on the rest of the financial sector as well.
With the Treasury's action both agencies have gained an implicit AAA rating .Th e speculators were put on notice that the U.S will not allow a sequential systemic failure which could result in the global economic implosion.All of this becausesome mega shorts had an ability to ferment market disturbances based on the myths and distortions.
With this action ,"bears" will have to move on and will likely try to victimize another sector.
In the period ahead the existance of the "new" agencies will inject stability into financial sector and broader economy as well.
We are in the process of consolidation on the way to a major rebound.
The Treasury's message is loud and clear- it will accomodate the necessary "tranquility".
Some will claim that the share holders are the real victims -at this price level not so.
The share holders have a one dollar call option on the success of the restructured agencies(without expiration date).
It had taken years to create this upheaval(I have warned against it as early as June of 2005).To allow another month or so to resolve the issues is not a crime .
Rebounding econmy will take care of the housing and the market issues.
I think we had enough of the paranoia.
The Treasury is wrong when it intervenes and is wrong when it does not-enough of this nonsense.

Friday Outlook: Commodities, Emerging Markets

Yesterday's sell off is just a reflection of a psychological inestment"dissarray".T... great and unexpected GDP data was ignored some weaker data was utilized as an excuse for a sell off .Untill month ago we have heard that the U.S was in recession and the market had adjusted accordingly.The reality isthat the U.S is in the moderate expansion mode on the way to a major rebound.The volatility will continue as a part of a bottoming process as the both weaker and stronger data is digested by the diversity of investors.One thing for sure ,the market bears are always looking for the excuse..
If it is not the crude then it is the agencies or......?
Let's just relax,the August is the universal vacation month .
It is curious that for all of the negative hysteria the FED appears relatively comfortable with the current status quo.
The market had discounted the worst economic scenario
and the major rebound lies ahead.

Thursday Outlook: Commodities, Emerging Markets

The financial sector of the market is comprised of many segments,some with a greater degree of the risk than the others.It is the sellers (shorts) that had gotten away with impunity by disseminating the rumors or distorting the existing status quo.Untill recently recession was the economic consensus of the U.S status quo(I have always stated that we have decelerated but are not in recession).Now all of the sudden,the consensus had tilted to my opinion.The stock market however had adjusted for a recession.
That consensus miscalculation has created a relative investment value out of the equities(housing sector as well).
Since the financials were "punished " the most, they do offer a significant relative investment value.
In addition we have learned that the FED and the Treasury will "deflect" potentially broader and severe issue by providing more acceptable solutions to the specifific "problems"
In fact in the eighties the example was set as the FED had to address the S&L issues.
In the current cycle we have seen an attempt to subterfuge entities such as MBIA and AMBAC by distorting their status quo.
We have heard distortions about the FRE's and the FNM's ability to fund themselves .In the meantime both agencies have excess capital(above the required margins).
The banking institutions had writtent off "risky assets"quite aggressively and had raised additional capital.
Clearly then the various components of the financial sector had and are addressing the issues with the help of the FED ,Treasury and the Administration.
Selectively this decimated sector offers significant relative value.
I will say this again ......I just wish that the risks in that sector were noted two years ago (I did in the news media) ,if they were, the current debacle would have been avoided.
The market risks always exist,bu the U.S is on the way to a major economic/stock market rebound.

Wednesday Outlook: Commodities, Emerging Markets

The market volatility is not driven by the investors but rather prop desks and hedge funds.The problems ? -they have been identified and are being addressed.
For all of the nonsense ,FRE was able to raise (yesterday)1 billion dollars via reference note ,without any problemsw.In fact it had raised 43 billion dollars in 2008 via this vehicle. The FNM is doing fine .Both agencies have reserves abouve the requirement level, but the "bears " continue to distort the issues .MBIA had managed to write some relevant business and the AMBAC had "restructured" to be in a position to write new business.
The oil speculators have managed to spike the price of crude by spreading fear in the market by comparing every hurricane to Katrina.
Hurricane came and went ,the damage is insignificant and the oil prices have tumbled.
Now I suppose we will have to listen to the "experts" ,telling us about the upcoming OPEC meeting implying that the OPEC will cut the output.In the meantime Libya had already stated that it will not reduce its crude production.
The housing sector is showing signs of consolidation/stabilit... and the mega dollar inflows in the period ahead ,will cause a major price rebound.As it is ,we have seen foreign interests buying some "interesting" commercial properties in the U.S.The economic/political risks outside U.S will enhance dramatically demand for the dollar assets specifically the equities and the real estate (relative value assets).
What we need is more time(lag) to allow the fiscal and the monetary implemented measures to add to the economic jolt.
The time for concern was at least two years ago when the "financial" and the economic risks were becoming evident.
One more time .In June of 2005 ,in an interview with Mark Gilbert (Bloomberg- London) I have expressed my concerns about the issues we have faced to date.On September 18 ,2007 I have reiterated concerns during an interview with Brian Sulliovan (Bloomberg -TV) .
Now that all of the problems have been identified and are being addressed ,I am quite confident that the worst is behind us.
Europe and the Emerging markets are the areas of concern.
In fact I believe that we are in the process of market /economic consolidation which will lead to unprecedented economic rebound and the stock market rally.