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Politicians, central bankers, strategists and portfolio mgrs announced New Year’s resolutions. Obama resolved to end his love affair with the left and snuggle up to corporate USA. First off he Volkered Volker (Paul got booted as Chair of the Presidential Advisory Board). Wall Street strategists, pledging to grow bullish balls, rushed to upgrade GDP and S&P forecasts. Goldman raised S&P 500 yr-end target to 1,
Had an unreal Christmas & New Years, hope you did too. Couldn’t help but keep a lazy eye on mkts. NY’s blizzard sealed the few surviving bears deep in their caves, not sure they even got news that China hiked rates, then again, with GDP close to 10% and negative real rates, what’s 25bps? The US economy looked perky, Chicago PMI hit 20yr highs and unemployment claims plunged. Merkel stated, “We must strengthen the
Most things went up in a year-end shortage trade. Stocks, corn & oil hit 2yr highs, copper hit an all-time high. CDS jumped everywhere, though naturally, the real squeeze was in swine flu protection (Greek CDS surged 93bps to 10.63% – so much for that bailout). But there were ample supplies of Dollars, Euro’s and Pounds (they fell versus everything); worries over printing presses, mountains of debt and ugly
US acted decisively, EU dithered, deficits rose and canaries sang away. Obama signed tax legislation increasing deficits by $858bln, “In some ways this was easier than the tougher choices we’re going to have to make next yr.” No doubt he’s right. The EU agreed to a post-2013 “crisis tool” and made a statement that may mean something when translated to German or French, but means nothing in English: “Member States may
Just days after Obama’s debt-reduction commission unveiled our new age of austerity, Bernanke announced on “60 Minutes” he’s prepared to print more money if the latest $600bln doesn’t do the trick. Then Barry made a DC compromise (aka every politician/lobbyist gets what they want), cutting taxes and raising deficits. Ben/Barry are tag-teaming the US’s lumbering giant of an economy, force-feeding it Red Bull using eve
The boys, all dressed up like Ebenezer Scrooge, started Christmas season by cruelly punishing the impoverished Irish and their poor Southern cousins. Oh how they screamed “Bah Humbug!” selling bonds despite an enormous E85bln Irish bailout. But we know how the story goes, the Ghost of Christmas Past arrived on Wed and showed those neurotic bears how soulless they’d become. The ghost whisked ‘em to China where PMI sur
Had a couple quiet days up in Northern CA with Mara, the kiddies and some good friends and family. Sadly, the rest of the planet didn’t hit their pause buttons too. Tensions in Korea added to the panic in peripheral Europe and traders continued to liquidate risk assets and flock to the US Dollar. Weekly Close: S&P 500 -.9% and VIX +4.2 to 22.2. Nikkei +.2%, Shanghai -.6%, Euro Stoxx -1.1%, and Bovespa -3.8%. USD
I read my kids Brothers Grimm Fairy Tales and found myself reading equally frightening stories at work this wk. A few new missives about Chinese rate hikes ending the world made the rounds (of course they’re written by white guys imprisoned in NY/London towers), so I called some folks on the ground in Asia who’ve made their fortunes getting it more right than wrong – they just laughed at how we continually underestim
German Fin Min Schaeuble spoke plainly, “America’s growth model is stuck in a deep crisis, has lived beyond its means for too long, its financial sector is disproportionately inflated and its industrial core neglected.” Called US monetary policy, “Clueless.” China’s rating agency downgraded US sovereign debt, using similarly blunt language. And humbled Obama scurried across Asia looking for a win and came up mostly e