Author Archives: Dominique Dassault

     

 

 

Both Political Candidates Demonstrate Economic Ignorance While Pandering For Votes

As we enter the final lap of the presidential race in the United States, as always, the two candidates will say just about anything to secure your vote. And of course the economy is a major topic of conversation. Loud calls for both higher wages and more jobs dominate the rhetoric.

 

Hill-DonThis year’s election may feature very polarizing and idiosyncratic candidates, but much of their rhetoric is not that much different from that heard on occasion of previous elections.

 

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The Only Move for the Fed is Talking Down the Dollar

The Fed has no more maneuvers other than to jawbone the dollar lower. Because for a variety of reasons a strong dollar, in the current market environment, is akin to tighter monetary policy.

 

federal reserveThe Eccles Building

 

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Home of the Anti-Bubble

It seems like almost everybody has an opinion about Twitter (TWTR) – both the company and the stock. As for the company it seems that their “window of opportunity” to massively succeed has essentially closed as user growth and revenue have both slowed, quite dramatically, over the past 18 months. Plus management turnover is clicking at a rapid pace. Company executives typically do not leave if the firm’s future seems bright.

 

DorseyJack Dorsey, the ubiquitous

Photo credit: John Sebastian Russo

 

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Not Just Wrong, but Monumentally Wrong

Massive flaws at SUNE (Sun Edison) + VRX (Valeant) were somehow missed by both of these high profile/ well resourced hedge funds.

 

einhorn-ackman-660x330David Einhorn (Greenlight Capital) and Bill Ackman (Pershing Square) – both fund managers had a terrible year 2015 (down about 20% each), but while Mr. Einhorn has changed his way and righted his ship so far in 2016, Mr. Ackman stubbornly stuck (and at one point even doubled down) on his biggest losing bet. As of early March, the performance spread between the two managers in 2016 had widened to 2,400 basis points in favor of Mr. Einhorn.

Photo credit: Brendan McDermid, Eduardo Munoz / Reuters

 

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Something Is Very Wrong Here

“Activist Investors”, the relatively new classification for corporate agitators, want you to believe that their intellectual tactics/strategies improve both corporate governance and shareholder returns. That may be true but they also seem to be involved in another, less savory, tactic… that is, inflating their company “ownership” claims with extremely large derivatives positions… as outlined in SEC disclosure filings.

 

Icahn-freeport
Carl Icahn, who recently acquired a sizable stake in Freeport

 

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Equity Risk Is Increasingly Non-Existent… By The Numbers

The concept of risk for hedge fund managers is a constant concern. The internal monologue goes something like this…what’s my downside if I initiate this position…how much can I lose if I am not right?”

The real answer is that you really have no idea…despite best efforts…even with stop losses [which I abhor]. The true, measurable risk of any position is only exactly known after you liquidate the position. Plus, risk management is more capital management than single stock management.

 

Beer-StierLittle did he know how it would all end …

Cartoon via wallstreetsurvivor.com

 

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“Game Over” for Greece

The drama… the drama. I’ve had enough of this. And after examining the details any reasonable person ought to agree. The bottom line = Greece is a “free-loading” country with a “free-loading” national manifesto. This nation, and its people, have lived beyond their means for long enough. Their Debt/GDP ratio is > 175% and climbing. More importantly, the outlook for any economic recovery is bleak as Greece’s structural reforms seem insurmountable and definitely, to them, not at all palatable. Plus, the perceived/tolerated graft associated with the people/government Greece is just monumental. The proverbial “ride” they’ve been on has now come to a deservedly screeching halt.

 

shove-it

 

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“The Man” is Playing with Fire 

 

businessman_cigar_money

Photo credit: Keystone

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“We Are All Doing The Same Thing”

I recently listened to a podcast with some all-star [there are awards for everything now] “Black Box” equity trader. It was quite a “telling” interview & I thank him for his insights but I’d heard it all before. His confidence was staggering considering the general unpredictability of the future and, of course, the equity markets. He explained how he had completely converted from a generally unsuccessful, discretionary technical trading style to a purely quantitative and scientific trading mode. He seemed to be so excited that his models, according to him, were pretty much “bullet proof”. Having had more than just some tangential experience with black box modeling and trading myself I thought … you know … some people will just never learn.

 

maxresdefault

Image via iwatchapple.it

 

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Most read in the last 20 days:

  • The Gold Sector Remains at an Interesting Juncture
      Technical Divergence Successfully Maintained In an update on gold and gold stocks in mid June, we pointed out that a number of interesting divergences had emerged which traditionally represent a heads-up indicating a trend change is close (see: Divergences Emerge for the details). We did so after a big down day in the gold price, which actually helped set up the bullish divergence; this may have felt counter-intuitive, but these set-ups always do. Consider now the updated chart below...
  • Confronting the Dragon with Peter Navarro
      Of No Real Use A young man might go to business school believing he is obtaining some sort of academic training that will enable him to make a comfortable living.  His degree may gain him entry into a large corporation, where he can work his way up to a good income.  This may even put him on the fast track to what he envisions as success.   Don't knock it: Being useless can lead to unexpected career opportunities... [PT]   But his academic training likely won't...
  • Trouble in Paradise
      Impressive Zeal for Faded Ideals Uncompromising independence, rugged individualism, and limitless personal freedom were once essential to the American character.  According to popular American folklore, they still are.  We have some reservations.   Rugged individualists suffer mid-life identity crisis. [PT]   The principles that gave rise to the American character died long ago.  Freedom.  Liberty.  Independence.  Limited representative government. Sound...
  • Gold – Macroeconomic Fundamentals Improve
      A Beginning Shift in Gold Fundamentals A previously outright bearish fundamental backdrop for gold has recently become slightly more favorable. Ironically, the arrival of this somewhat more favorable situation was greeted by a pullback in physical demand and a decline in the gold price, after both had defied bearish fundamentals for many months by remaining stubbornly firm.   The eternal popularity contest...   The list of gold fundamentals that have improved is...
  • The United States of Terror
      Bombs Away! Two recent articles* have again demonstrated that the greatest “terrorist” entity on earth are not the bogymen – Russia, China, Iran, North Korea – so often portrayed by Western presstitutes and the American government, but the United States itself!   This is an old cartoon, but still a good one. It perfectly describes the trigger-happy Western political class and the depth of its “thinking”. By happenstance we recently reviewed the Libya intervention...
  • Capitulation and Currency Pain - Precious Metals Supply and Demand
      Waving the White Flag The price of gold rose two bucks last week, though the price of silver fell 10 cents. We have seen several analyses recently predicting big price drops, in one case by at least $500 in gold by the end of the year. Is this what capitulation looks like? It’s said they don’t ring a bell at the top, but they don’t ring a bell at the bottom either.   The give-up moment arrives... [PT]   We have also seen technical analysis arguing that...
  • Maurice Jackson Interviews Rick Rule – Investing in Natural Resources
      Contrarian Investment Opportunities in Natural Resources Maurice Jackson of Proven and Probable has recently interviewed Sprott U.S. Holdings CEO Rick Rule, a well known specialist and “old hand” in the natural resource space. This is quite a wide-ranging and interesting interview, so we decided to present it to our readers. Below you find a summary and our comments on the main topics discussed, a video/podcast of the interview,  as well as a download link to a PDF file of the...
  • The True Sport of MAGA
      Chest Bumps One of the more extraordinary things that investors have seen in living memory is unfolding at this precise moment. This goes for business leaders, money managers, veteran Wall Streeters, value investors, 401(k) holders, momentum traders, FX guys, gold bugs, technical gurus, chartists, pork belly speculators, quants, astrologists, Larry Summers, put option sellers, dweebs and geeks, millennial index fund enthusiasts, and everyone in between.   Pork belly speculators...
  • Black Holes for Capital - Precious Metals Supply and Demand
      Race to the Bottom Last week the price of gold fell $17, and that of silver $0.30. Why? We can tell you about the fundamentals. We can show charts of the basis. But we can’t get into the heads of the sellers.   Other people's fiat: in the global race to the bottom, it was recently the turn of emerging market currencies to tank. [PT]   We can say that in the mainstream view, the dollar is rising. The dollar, in their view, is not measured in gold but in rupees in...
  • US Money Supply and Fed Credit – the Liquidity Drain Becomes Serious
      US Money Supply Growth Stalls Our good friend Michael Pollaro, who keeps a close eye on global “Austrian” money supply measures and their components, has recently provided us with a very interesting update concerning two particular drivers of money supply growth. But first, here is a chart of our latest update of the y/y growth rate of the US broad true money supply aggregate TMS-2 until the end of June 2018 with a 12-month moving average.   US TMS-2: y/y growth rate with...

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THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

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