100% Of Economists Agree Yields Will Rise. What That Means Should Send Chills Down Your Spine
When 100% of surveyed economists expect yields to rise you better perk up and pay attention. From a contrarian point of view. In Bloomberg’s recently conducted survey, 67 out of 67 Economists expect interest rates to rise over the next 6 months. In other words, they expect continued economic growth and an eventual tightening by the FED.
That flies in the face of our forecast. In the past I have shown that we expect yields to fall and the yield curve to flatten as the US Economy falls into a severe recession between 2014-2017 What Does The Yield Curve Yield? In fact, over the next 12 months the FED will be looking for ways to stimulate the economy and to print, instead of tightening. As far as I am concerned, 100% of the economists agreeing on the opposite is a direct validation of that view.
Don’t forget, our mathematical and timing work shows a severe bear market between 2014-2017. When it begins to develop, it is only rational that yields decline. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE
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100% Of Economists Agree Yields Will Rise. What That Means Should Send Chills Down Your Spine Google
Market Watch: 100% of economists think yields will rise within six months
Economists are unwavering in their assessment of where yields are headed in the next half year.
Jim Bianco, of Bianco Research, points out in a market comment Tuesday that a survey of 67 economists this month shows every single one of them expects the 10-year Treasury 10_YEAR +0.41% yield to rise in the next six months.
The survey, which is done each month by Bloomberg, has been notably bearish for some time now, with nearly everyone expecting rising rates. In March, 97% expected rising rates. In February, 95% expected yields to climb. And in January, 97% held that expectation. Since the beginning of 2009, there have only been a handful of instances where less than 50% expected rates to rise.
Still, the fact that every single survey participant is bearish is striking. The last time the survey had that result was in May 2012, when benchmark yields were well below 2%.
“Literally there is maybe one economist in the United States straddling the bullish/bearish divide on interest rates. The rest are bearish,” Bianco writes.
He adds that a J.P. Morgan client survey shows that the percentage of money manager respondents who said they are underweight Treasurys is the second highest in seven years.
This is all the more surprising when we consider that investors went into 2014 thinking yields would rise significantly. Instead, the benchmark yield is lower than when the year started, as the market waded throw subpar economic data, geopolitical tensions, and uncertainty over the Federal Reserve. The 10-year note last traded at a yield of 2.72% on Tuesday, down from just over 3% on Dec. 31.
Then again, a separate poll of economists recently showed that exactly zero expect the economy to contract.
But when the entire market thinks one thing is about to happen, the opposite outcome is often in store, notes James Camp, managing director of fixed income at Eagle Asset Management. So don’t count out that result with Treasurys, he advises.
“It’s the most hated asset class,” says Camp, but Treasurys are some of the best performers year-to-date.
Russian Powder Keg Is About To Blow Sky High. US Stock Market About To Collapse?
I continue to maintain that the situation in Ukraine is a ticking time bomb. With American troops landing in Poland and with the Ukrainian forces now attacking Pro-Russian strongholds in East Ukraine, it’s just a matter of time before Russia “officially” invades. I say officially because Russia troops are already operating and technically in control of East Ukraine. Here is the latest and what you need to know.
- Civil war looms as fighting rages in eastern Ukraine LIVE UPDATES
- Kiev military op: Ukrainian army tanks, APCs, troops attack Slavyansk – Expect war. Under no circumstances will Russia let Ukraine fall under the USA control. Make no mistake about this.
- 5 Killed, 1 Injured in Special Operation in Ukraine’s Slaviansk – catalyst?
- Putin Warns of Consequences as Ukraine Steps Up Offensive – Putin is getting ready to go in.
- NYT publishes fake photos of “Russian militant” in Ukraine amid warnings from world media, US gov’t keeps silent – Propaganda galore from all sides.
- Obama avoids ‘red line’ for China, prepared to impose tougher sanctions on Russia – The US is making friends everywhere it goes as it inadvertently pushes China and Russia military alliance together to counterbalance NATO.
Let’s see how markets react when this powder keg blows sky high.
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Russian Powder Keg About To Blow Sky High. US Stock Market About To Collapse? Google
Stock Market Update. April 23rd, 2014. InvestWithAlex.com
A negative day with the Dow Jones down 13 points (-0.08%) and the Nasdaq down 34 points (-0.83%).
The Dow volume remained low as share distribution continued. Even though both the S&P and the Dow are sitting just a smidge away from their all time highs, that in itself doesn’t tell the whole story. For instance, please note a possible head and shoulder technical pattern developing on the Dow. All we need now is a quick leg to the downside to finish a textbook head and shoulders. Such patterns, of course, are indicative and most often seen at stock market tops. What follows thereafter is typically fairly ugly.
This sort of thinking is further confirmed by our mathematical and timing work as it continues to show that the bear market of 2014-2017 is just around the corner. When it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here).
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New Home Sales Plunge. Why The Upcoming Real Estate Crash Will Be Much Worse Than The 2006-2010 Decline
As per the Commerce Department report released a few months ago new home sales have collapsed 14.5% to an eight month low. While industry insiders blame everything from unusually cold weather to baby Jesus for this catastrophic drop, the reality is quite simple. The real estate market is slowly rolling over into a massive bear leg (stage 3) after it’s “dead cat” bounce between (2010-2014). I have outlined all of this in my comprehensive report dating back to October of 2013. Real Estate Collapse 2.0 Why, How & When Thus far, it’s playing out exactly as I predicted.
Here is what most people don’t get. Secular bear markets do not move in straight lines nor do they move fast. Just as bear/bull cycles in the stock markets last 17/18 years, same applies to the real estate cycles.
- Real Estate Bull Market: Arguably, the US real estate boom began at 1991 recession bottom. It lasted until 2006/07 top or 17 years. Stock market equivalent: 1982-2000 bull market.
- Stage 1 – Initial Bear Market Leg In Real Estate. 2007-2010 (3 years). Nationwide, prices declined 20-40%. Stock market equivalent: 2000-2003 Bear Market. The Dow declined about 40%.
- Stage 2 – Real Estate Bounce. Also known as the “Dead Cat” bounce 2010-2014 (4 years). Stock market equivalent 2003-2007 bull market.
- State 3 – Real Estate Collapse: 2014-2017. Stage 3 collapses are notoriously sharp, fast and very nasty. The stock market equivalent would be the bear market of 2007-2009 when the Dow lost 56% of it’s value in 18 months.
Conclusion: While the analysis above is fairly simplistic, it is also extremely accurate when we take our mathematical, timing and cycle work into consideration. The analysis above clearly indicates that the real estate market/sector is about to eat dirt in a massive and a severe Stage 3 decline. This is further confirmed by the undying love for Real Estate in today’s American culture.
Remember, before any bear market terminates itself any sense of “love for an asset class” must be crushed out of the prevailing culture. I am afraid we are at least a decade away from that point when it comes to the American Real Estate.
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Reuters Writes: New home sales dive to eight-month low in March
WASHINGTON (Reuters) – Sales of new U.S. single-family homes tumbled to their lowest level in eight months in March, dealing a setback to the housing market recovery.
The Commerce Department said on Wednesday sales dropped 14.5 percent to a seasonally adjusted annual rate of 384,000 units, declining for a second consecutive month.
February’s sales were revised up to a 449,000-unit pace from the previously reported 440,000-unit rate.
Economists polled by Reuters had forecast new home sales at a 450,000-unit pace last month.
Compared to March last year, sales were down 13.3 percent, the largest decline since April 2011.
The housing market has been slammed by an unusually cold winter, higher mortgage interest rates and a shortage of properties that is limiting options for potential buyers.
House prices, whose increases have outstripped wage gains, are also weighing on the sector.
New home sales are counted at the signing of contracts. Last month’s surprise decline could still be reflecting some of the impact from the cold weather. Sales plunged in the Midwest and the South. They also fell in the West, but rose in the Northeast.
Data on Tuesday showing a mild decline in home resales last month had offered hope the housing market could be stabilizing.
The inventory of new houses on the market increased 3.2 percent to 193,000 units in March, the highest since November 2010. While the stock of new houses on the market has come off a record low hit in July 2012, it remains less than half of its pre-recession level.
March’s weak sales pace pushed the months supply of houses on the market to 6.0, the highest level since October 2011. That was up from 5.0 months in February.
The median price of a new home last month rose 12.6 percent to $290,000 from March last year.
Investment Grin Of The Day
Tech Bubble 2.0 Is Here: Why High Flyers Will Collapse To The Tune Of 70-90%. Scary!
David Einhorn of Greenlight Capital certainly thinks so……
“Now there is a clear consensus that we are witnessing our second tech bubble in 15 years. What is uncertain is how much further the bubble can expand, and what might pop it. The current bubble is an echo of the previous tech bubble, but with fewer large capitalization stocks and much less public enthusiasm,” The firm said it was shorting a group of undisclosed “high-flying momentum stocks.”
We have maintained the same view for quite some time now. With unprecedented level of speculation, overvaluation, FED printing, IPO insanity and asset price inflation, today’s fundamental situation is not that dissimilar to 2007 top. And while Mr. Einhorn is not particularly sure about the timing, we are.
The upcoming collapse in high flying tech specs will unfold in short order as our mathematical and timing work indicates. Again, our work shows a severe bear market between 2014-2017. When it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE
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Tech Bubble 2.0 Is Here: Why High Flyers Will Collapse To The Tune Of 70-90%. Scary! Google
CNBC Writes: Einhorn: Bubble brewing, shorting momentum stocks
David Einhorn has a clear warning for technology investors: we’re in a bubble.
“Now there is a clear consensus that we are witnessing our second tech bubble in 15 years,” Greenlight Capital said in an investor letter Tuesday. “What is uncertain is how much further the bubble can expand, and what might pop it.”
The firm said there were several indications of the over-exuberance, including the rejection of conventional valuation methods; short sellers forced to cover their positions because of losses; and “huge” first-day stock appreciations after their initial public offerings.
“The current bubble is an echo of the previous tech bubble, but with fewer large capitalization stocks and much less public enthusiasm,” the letter said. The firm said it was shorting a group of undisclosed “high-flying momentum stocks.”
A spokesman for Greenlight declined to comment.
The firm also disclosed a number of new long positions, including retailer Conn’s (CONN), Japanese regional bank Resona Holdings and solar plant company SunEdison (SUNE). Shares of Conn’s and SunEdison rose sharply on the news. The firm also closed four short positions: Chipotle Mexican Grill (CMG), Fortescue Metals Group(ASX:FMG-AU), Loblaw Cos. (Toronto Stock Exchange: L-CA) and Michael Kors Holdings (KORS). All lost the firm money, according to the letter.
Greenlight’s main fund fell 1.5 percent in the first quarter, according to the letter. The largest winner was a long bet on Micron Technology (MU) and Green Mountain Coffee Roasters (GMCR), a short, was the most significant loser.
The firm’s largest long positions at the end of March were Alpha Bank, Apple (AAPL), gold, Marvell Technology(MRVL) and Micron.
Separate from its stock holdings, Greenlight discussed its trading costs because of the high-frequency trading concerns raised in the new book, “Flash Boys.”
The firm said the abuses described in the Michael Lewis book “don’t significantly impact us” but said it supports new alternative trading platform IEX. Greenlight said it holds a small stake in the exchange, which has styled itself as a safer place to trade for investors worried about HFT front running.
What You Ought To Know About America’s Constant State Of War. Disturbing.
I cringe, just a little bit, when I pay my taxes. Not because of the dollar values involved, but because I realize that a small portion of the proceeds goes towards waging warfare and killing thousands of people (100K-500K death in Iraq alone) in countries most Americans can’t even identify on a map. Today, the Obama administration, the industrial military complex and the warmongers throughout the US are hell bent on restarting the Cold War over an irrelevant nation 6,000 miles from an American shore. Here is the latest and what you need to know…..
- Do not hurt Russian people with sanctions: Jimmy Carter – What kind of society do we live in when such a peaceful statement by a former president is seen as “weak and crazy”?
- Ukraine’s leaders say have U.S. backing to take on ‘aggressors’ – Yep, let’s start another massive war against Russia over Ukraine as the US Government aligns itself with Neo-Nazis.
- Churkin: US behind Ukraine crisis after investing $5bn in ‘regime change’ – You have got to be a special kind of stupid not to understand that.
- US is ‘running show’ in Ukraine – Lavrov – Yep, everyone knows that, but let’s talk about freedom, democracy, rainbows and unicorns that Ukrainian people will get as the US gets involved.
- Sergey Lavrov: “If Russian Troops Or People Attacked, We’ll Retaliate”
While most Americans could care less, they should. Short-term, this conflict with Russia will have an impact on the US Economy and our capital markets. Long-term, we will face something so horrific that WWII will look like a picnic. I have already outlined the future in my comprehensive report Nuclear World War 3 Is Coming Soon.When, How & Why. Please note how accurately my “fundamental” predictions are lining up with what’s happening in the real world. 
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Click here to subscribe to my mailing list What You Ought To Know About America’s Constant State Of War. Disturbing. Google AFP Writes: Do not hurt Russian people with sanctions: Jimmy Carter
Paris (AFP) – Former US president Jimmy Carter said Tuesday the West should not impose sanctions that would hurt the Russian people over their leaders’ actions in Ukraine.
“So far, we have limited the sanctions to the leadership of Russia, and I think that is the proper approach,” the Nobel peace laureate told AFP on the sidelines of a discussion in Paris on climate change.
“I don’t think we would go so far as to impose sanctions that would hurt the Russian people.”
The statesman was taking part in a meeting with students as a member of The Elders group set up to promote human rights around the world.
US Vice President Joe Biden earlier warned Russia of “more costs” and “greater isolation” if it continued to “pull Ukraine apart”.
Carter, who is credited with brokering the 1978 Cape David peace accords between Egypt and Israel and establishing US diplomatic relations with China, said Russia’s takeover of Crimea had been “inevitable”.
“I don’t think anything could have been done by the US or European countries or anyone else to prevent that eventuality.
“Russia has always considered Crimea to be part of Russia.”
And he said: “my hope and my belief is that (Russian President Vladimir) Putin is not going to use military force” in eastern Ukraine.
“He is going to try to use other means to convince those people who live there that their best option is to cast their lot more towards Russia than towards the West. So I don’t think there is anything we can do that is going to deter Putin.”
Carter said Ukrainians must be allowed to decide their own fate.
And he said he hoped they would be supported by Russia from the East and the United States and Europe from the West so as to “not be torn between the two.”
The US and European Union have imposed targeted sanctions on members of Putin’s inner circle over the crisis and Russia’s annexation of Ukraine’s Crimea peninsula. They have threatened more wide-ranging measures as tensions over the former Soviet republic continue to spiral.
Stock Market Update. April 22nd, 2014. InvestWithAlex.com
Another up day with the Dow Jones up 65 points (0.40%) and the Nasdaq up 40 points (0.97%).
By now, the trauma bottom of a week ago is a long distant memory. With the Dow and the S&P approaching their all time highs the bull market is back on. Or is it? Not to rain on bulls parade but the current rally has all of the trademarks associated with a bear market rally. Low volume, short covering, divergences and sharp advances. While we are not in a technical bear market (not by any traditional measure anyway) it would pay off to start paying close attention to a possibility of a roll over.
In fact, our mathematical and timing work continues to show that the bear market is just around the corner. When it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning exactly when the bear market will start (to the day) and its subsequent internal composition, please CLICK HERE
(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here).
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Stock Market Update. April 22nd, 2014. InvestWithAlex.com Google
The US Economy Is On Fire. Stocks About To Surge Lower?
According to CNBC and Jim Paulsen the US economy is on fire. No surprise there.
“We’re just getting the spring thaw, and we’re going to get better numbers,” Paulsen said on “ Squawk on the Street .” “If you look aggregately at the economy it’s been awful good. The market is going to pay more attention to the economic reports out right on the ground, outside their windshield, than it is through the rearview mirror at an earnings season that everyone knows was highly distorted by the weather,” Paulsen said.
Unfortunately, Mr. Paulsen suffers from a case of mass delusion. While the economy might look good on the surface, it is anything but. Again, most of the economic growth we have seen over the last few years has been driven by a massive amount of speculative credit infused into our economy by the FED. A lot of it flowing directly into the real estate and the stock market to cause massive asset bubbles. Further, our mathematical and timing work does not share in the optimism. It clearly shows that a severe bear market of 2014-2017 is just around the corner. I have a funny feeling that Mr. Paulsen will see the S&P at 1,200 before he sees it at 2,000
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The US Economy Is On Fire. Stocks About To Surge Lower? Google
CNBC: This pushes S&P toward 2,000: Jim Paulsen
Economic growth has picked up as business activity thaws out from a frigid winter, investment strategist Jim Paulsen told CNBC on Monday, and that could push Wall Street past the recent volatility and into record highs.
Paulsen, chief investment strategist for Wells Capital Management, said he believes the U.S. economy is growing at a 4 percent clip in the second quarter of 2014. The Commerce Department will release GDP estimates for 2014’s first quarter at the end of the month. Paulsen said the pickup in economic activity will boost the S&P 500 (INDEX:^GSPC – News) past an all-time high of 1,900 and toward 2,000 points.
“We’re just getting the spring thaw, and we’re going to get better numbers,” Paulsen said on “ Squawk on the Street .” “If you look aggregately at the economy it’s been awful good.”
Economic conditions will hold more weight than the flood of earning reports hitting Wall Street this week, Paulsen said. The biggest factor coming out of earnings season will be forecasts, he added.
“The market is going to pay more attention to the economic reports out right on the ground, outside their windshield, than it is through the rearview mirror at an earnings season that everyone knows was highly distorted by the weather,” Paulsen said.
The department is scheduled to release the advance second-quarter GDP estimate on July 30.
Paulsen added that the boost stocks receive from the strengthening economy could turn into too much of good thing. The Federal Reserve could find itself fighting inflation as bond yields rise and as Wall Street deals with a “mini-overheat panic,” he said.
“Before the year is out, we’re going to bring the Fed back into the equation in a big way,” Paulsen said. “What’s going to do that is economic growth. … There’s a part of me that thinks we’re stirring an overheat cocktail here.”
On the other hand, UBS’ senior vice president of investments, Jim Lacamp, told CNBC the economy may end this year where it started, at around 2.5 percent growth.
“The economy to me is not a runaway economy,” Lacamp said during a later appearance on “Squawk on the Street.” “It seems to be more of a runaway bride economy. Every year we get some promise in the economy and everybody’s optimistic. And then by the end of the year we end up right where we were.”
Read More Earnings are beating estimates-but don’t be fooled
Lacamp believes the markets could still end the year higher. Though he warned investors to remain wary over a variety of factors: rising prices, a poor earnings season so far and stagnant wage growth.
“I don’t want to sound too negative,” Lacamp said. “I think the market goes higher by the end of the year, but over the next several months we’ve got a lot to work through economically.”