EL COMITE DE CAN ROCH

US MARKET CAP

2011-03-22T14:56:00.001-07:00

Where do you see US market cap in 2012 ?

For sure a lot lower...

WIZ

OIL/COPPER DIVERGENCE

2011-03-07T09:50:00.001-08:00

The divergence between OIl & COPPER shows the worries about the Global Economy and a possible slowdown.

WIZ

CONFIDENCE AND SHILLER

2011-01-25T11:22:00.001-08:00

CONSUMER CONFIDENCE WILL NOT FOLLOW THIS TIME ?

WIZ

PIGS & CINN...

2011-01-03T15:04:00.000-08:00

The competition between PIGS & CINNs is ready to start !!!

CINN ( (CA, IL, NY, NJ )

Happy New Year...

WIZ

NEGATIVE US GDP ANYONE ?

2010-10-29T12:40:00.000-07:00

Courtesy of DCSHORT

WIZ

BANKS

2010-10-21T11:00:00.001-07:00

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

- Thomas Jefferson

SEEMS FAMILIAR ¿?¿?

WIZ

30´s PICTURE

2010-10-13T20:56:00.001-07:00

Are we eerily close to the 30´s ¿?¿?¿?

WIZ

The power of Cycles

2010-10-08T08:44:00.001-07:00

Remember that cycles have a strong influence in outcomes...

WIZ

WHAT RECOVERY ?

2010-09-08T09:08:00.000-07:00

Anyone really things that this looks like a NORMAL recovery ?

WIZ

Courtesy of David Rosenberg

Where is the CONSUMER ?

2010-09-02T09:41:00.000-07:00

WHO SAID THAT 2008 WAS GONE ¿?¿? Almost there again !!!

WIZ

THE REAL BEASTS

2010-09-01T04:57:00.000-07:00

We still in year 10 of the SP500 move !!!

WIZ

SP500 & ECRI

2010-09-01T02:27:00.001-07:00

The GAP will be closed. We think that the SP500 will confirm the SHS to meet ECRI down the road. Seat belts tight !!!

WIZ

BEAR MARKETS

2010-08-16T03:14:00.001-07:00

They stay with us fo a LONG TIME... Let´s remember that this Bear started in 2000 !!!

WIZ

INTERNET 2020

2010-07-18T14:07:00.001-07:00

WIZ

DELEVERAGING

2010-07-16T15:43:00.001-07:00

60 to 1 IS A HUGE DELEVERAGE...

WIZ

1934

2010-07-16T11:17:00.001-07:00

CHICAGO TRIBUNE 1934 Courtesy of Warren Mosler

WIZ

ECRI : TROUBLE AHEAD

2010-07-05T14:19:00.000-07:00

-7,7% IN ECRI´S INDICATOR ALWAYS MEANS LOW GROWTH OR NO GROWHT !!!

WIZ

SPAIN : Deep trouble ahead

2010-06-22T07:35:00.000-07:00

From Ambrose Evans-Pritchard:

"Spain had to pay a near-record spread of 220 basis points over German Bunds last week to clear away an auction of 10-year bonds, roughly what Greece was paying in March. Leaked transcripts of a closed-door briefing to the Cortes by a central bank official revealed that Spanish companies have been shut out of the capital markets since Easter. Given that the Spanish state, juntas, banks and firms have together built up foreign debts of €1.5 trillion, or 147pc of GDP, and must roll over €600bn of these debts this year, this is a crisis unlikely to cure itself. "

Defaults in the EU area loom ahead !!!

WIZ

GEORGE SOROS: Global Economy

2010-06-13T03:44:00.000-07:00

George Soros Speech
Institute of International Finance, Vienna, Austria
June 10, 2010

In the week following the bankruptcy of Lehman Brothers on September 15, 2008 - global financial markets actually broke down and by the end of the week they had to be put on artificial life support. The life support consisted of substituting sovereign credit for the credit of financial institutions which ceased to be acceptable to counter parties.

As Mervyn King of the Bank of England brilliantly explained, the authorities had to do in the short-term the exact opposite of what was needed in the long-term: they had to pump in a lot of credit to make up for the credit that disappeared and thereby reinforce the excess credit and leverage that had caused the crisis in the first place. Only in the longer term, when the crisis had subsided, could they drain the credit and reestablish macro-economic balance. This required a delicate two phase maneuver just as when a car is skidding, first you have to turn the car into the direction of the skid and only when you have regained control can you correct course.

The first phase of the maneuver has been successfully accomplished - a collapse has been averted. In retrospect, the temporary breakdown of the financial system seems like a bad dream. There are people in the financial institutions that survived who would like nothing better than to forget it and carry on with business as usual. This was evident in their massive lobbying effort to protect their interests in the Financial Reform Act that just came out of Congress. But the collapse of the financial system as we know it is real and the crisis is far from over.

Indeed, we have just entered Act II of the drama, when financial markets started losing confidence in the credibility of sovereign debt. Greece and the euro have taken center stage but the effects are liable to be felt worldwide. Doubts about sovereign credit are forcing reductions in budget deficits at a time when the banks and the economy may not be strong enough to permit the pursuit of fiscal rectitude. We find ourselves in a situation eerily reminiscent of the 1930's. Keynes has taught us that budget deficits are essential for counter cyclical policies yet many governments have to reduce them under pressure from financial markets. This is liable to push the global economy into a double dip.

It is important to realize that the crisis in which we find ourselves is not just a market failure but also a regulatory failure and even more importantly a failure of the prevailing dogma about financial markets. I have in mind the Efficient Market Hypothesis and Rational Expectation Theory. These economic theories guided, or more exactly misguided, both the regulators and the financial engineers who designed the derivatives and other synthetic financial instruments and quantitative risk management systems which have played such an important part in the collapse. To gain a proper understanding of the current situation and how we got to where we are, we need to go back to basics and reexamine the foundation of economic theory.

I have developed an alternative theory about financial markets which asserts that financial markets do not necessarily tend towards equilibrium; they can just as easily produce asset bubbles. Nor are markets capable of correcting their own excesses. Keeping asset bubbles within bounds have to be an objective of public policy. I propounded this theory in my first book, The Alchemy of Finance, in 1987. It was generally dismissed at the time but the current financial crisis has proven, not necessarily its validity, but certainly its superiority to the prevailing dogma.

Let me briefly recapitulate my theory for those who are not familiar with it. It can be summed up in two propositions. First, financial markets, far from accurately reflecting all the available knowledge, always provide a distorted view of reality. This is the principle of fallibility. The degree of distortion may vary from time to time. Sometimes it's quite insignificant, at other times it is quite pronounced. When there is a significant divergence between market prices and the underlying reality I speak of far from equilibrium conditions. That is where we are now.

Second, financial markets do not play a purely passive role; they can also affect the so called fundamentals they are supposed to reflect. These two functions that financial markets perform work in opposite directions. In the passive or cognitive function the fundamentals are supposed to determine market prices. In the active or manipulative function market prices find ways of influencing the fundamentals. When both functions operate at the same time they interfere with each other. The supposedly independent variable of one function is the dependent variable of the other so that neither function has a truly independent variable. As a result neither market prices nor the underlying reality is fully determined. Both suffer from an element of uncertainty that cannot be quantified. I call the interaction between the two functions reflexivity. Frank Knight recognized and explicated this element of unquantifiable uncertainty in a book published in 1921 but the Efficient Market Hypothesis and Rational Expectation Theory have deliberately ignored it. That is what made them so misleading.

Reflexivity sets up a feedback loop between market valuations and the so-called fundamentals which are being valued. The feedback can be either positive or negative. Negative feedback brings market prices and the underlying reality closer together. In other words, negative feedback is self-correcting. It can go on forever and if the underlying reality remains unchanged it may eventually lead to an equilibrium in which market prices accurately reflect the fundamentals. By contrast, a positive feedback is self-reinforcing. It cannot go on forever because eventually market prices would become so far removed from reality that market participants would have to recognize them as unrealistic. When that tipping point is reached, the process becomes self-reinforcing in the opposite direction. That is how financial markets produce boom-bust phenomena or bubbles. Bubbles are not the only manifestations of reflexivity but they are the most spectacular.

In my interpretation equilibrium, which is the central case in economic theory, turns out to be a limiting case where negative feedback is carried to its ultimate limit. Positive feedback has been largely assumed away by the prevailing dogma and it deserves a lot more attention.

I have developed a rudimentary theory of bubbles along these lines. Every bubble has two components: an underlying trend that prevails in reality and a misconception relating to that trend. When a positive feedback develops between the trend and the misconception a boom-bust process is set in motion. The process is liable to be tested by negative feedback along the way and if it is strong enough to survive these tests, both the trend and the misconception will be reinforced. Eventually, market expectations become so far removed from reality that people are forced to recognize that a misconception is involved. A twilight period ensues during which doubts grow and more and more people lose faith but the prevailing trend is sustained by inertia. As Chuck Prince former head of Citigroup said, "As long as the music is playing you've got to get up and dance. We are still dancing." Eventually a tipping point is reached when the trend is reversed; it then becomes self-reinforcing in the opposite direction.

Typically bubbles have an asymmetric shape. The boom is long and slow to start. It accelerates gradually until it flattens out again during the twilight period. The bust is short and steep because it involves the forced liquidation of unsound positions. Disillusionment turns into panic, reaching its climax in a financial crisis.

The simplest case of a purely financial bubble can be found in real estate. The trend that precipitates it is the availability of credit; the misconception that continues to recur in various forms is that the value of the collateral is independent of the availability of credit. As a matter of fact, the relationship is reflexive. When credit becomes cheaper activity picks up and real estate values rise. There are fewer defaults, credit performance improves, and lending standards are relaxed. So at the height of the boom, the amount of credit outstanding is at its peak and a reversal precipitates false liquidation, depressing real estate values.

The bubble that led to the current financial crisis is much more complicated. The collapse of the sub-prime bubble in 2007 set off a chain reaction, much as an ordinary bomb sets off a nuclear explosion. I call it a super-bubble. It has developed over a longer period of time and it is composed of a number of simpler bubbles. What makes the super-bubble so interesting is the role that the smaller bubbles have played in its development.

The prevailing trend in the super-bubble was the ever increasing use of credit and leverage. The prevailing misconception was the believe that financial markets are self-correcting and should be left to their own devices. President Reagan called it the "magic of the marketplace" and I call it market fundamentalism. It became the dominant creed in the 1980s. Since market fundamentalism was based on false premises its adoption led to a series of financial crises. Each time, the authorities intervened, merged away, or otherwise took care of the failing financial institutions, and applied monetary and fiscal stimuli to protect the economy. These measures reinforced the prevailing trend of ever increasing credit and leverage and as long as they worked they also reinforced the prevailing misconception that markets can be safely left to their own devices. The intervention of the authorities is generally recognized as creating amoral hazard; more accurately it served as a successful test of a false belief, thereby inflating the super-bubble even further.

It should be emphasized that my theories of bubbles cannot predict whether a test will be successful or not. This holds for ordinary bubbles as well as the super-bubble. For instance I thought the emerging market crisis of 1997-1998 would constitute the tipping point for the super-bubble, but I was wrong. The authorities managed to save the system and the super-bubble continued growing. That made the bust that eventually came in 2007-2008 all the more devastating.

What are the implications of my theory for the regulation of the financial system?

First and foremost, since markets are bubble-prone, the financial authorities have to accept responsibility for preventing bubbles from growing too big. Alan Greenspan and other regulators have expressly refused to accept that responsibility. If markets can't recognize bubbles, Greenspan argued, neither can regulators--and he was right. Nevertheless, the financial authorities have to accept the assignment, knowing full well that they will not be able to meet it without making mistakes. They will, however, have the benefit of receiving feedback from the markets, which will tell them whether they have done too much or too little. They can then correct their mistakes.

Second, in order to control asset bubbles it is not enough to control the money supply; you must also control the availability of credit. This cannot be done by using only monetary tools; you must also use credit controls. The best-known tools are margin requirements and minimum capital requirements. Currently they are fixed irrespective of the market's mood, because markets are not supposed to have moods. Yet they do, and the financial authorities need to vary margin and minimum capital requirements in order to control asset bubbles.

Regulators may also have to invent new tools or revive others that have fallen into disuse. For instance, in my early days in finance, many years ago, central banks used to instruct commercial banks to limit their lending to a particular sector of the economy, such as real estate or consumer loans, because they felt that the sector was overheating. Market fundamentalists consider that kind of intervention unacceptable but they are wrong. When our central banks used to do it we had no financial crises to speak of. The Chinese authorities do it today, and they have much better control over their banking system. The deposits that Chinese commercial banks have to maintain at the People's Bank of China were increased seventeen times during the boom, and when the authorities reversed course the banks obeyed them with alacrity.

Third, since markets are potentially unstable, there are systemic risks in addition to the risks affecting individual market participants. Participants may ignore these systemic risks in the belief that they can always dispose of their positions, but regulators cannot ignore them because if too many participants are on the same side, positions cannot be liquidated without causing a discontinuity or a collapse. They have to monitor the positions of participants in order to detect potential imbalances. That means that the positions of all major market participants, including hedge funds and sovereign wealth funds, need to be monitored. The drafters of the Basel Accords made a mistake when they gave securities held by banks substantially lower risk ratings than regular loans: they ignored the systemic risks attached to concentrated positions in securities. This was an important factor aggravating the crisis. It has to be corrected by raising the risk ratings of securities held by banks. That will probably discourage loans, which is not such a bad thing.

Fourth, derivatives and synthetic financial instruments perform many useful functions but they also carry hidden dangers. For instance, the securitization of mortgages was supposed to reduce risk thru geographical diversification. In fact it introduced a new risk by separating the interest of the agents from the interest of the owners. Regulators need to fully understand how these instruments work before they allow them to be used and they ought to impose restrictions guard against those hidden dangers. For instance, agents packaging mortgages into securities ought to be obliged to retain sufficient ownership to guard against the agency problem.

Credit default swaps (CDS) are particularly dangerous they allow people to buy insurance on the survival of a company or a country while handing them a license to kill. CDS ought to be available to buyers only to the extent that they have a legitimate insurable interest. Generally speaking, derivatives ought to be registered with a regulatory agency just as regular securities have to be registered with the SEC or its equivalent. Derivatives traded on exchanges would be registered as a class; those traded over-the-counter would have to be registered individually. This would provide a powerful inducement to use exchange traded derivatives whenever possible.

Finally, we must recognize that financial markets evolve in a one-directional, nonreversible manner. The financial authorities, in carrying out their duty of preventing the system from collapsing, have extended an implicit guarantee to all institutions that are "too big to fail." Now they cannot credibly withdraw that guarantee. Therefore, they must impose regulations that will ensure that the guarantee will not be invoked. Too-big-to-fail banks must use less leverage and accept various restrictions on how they invest the depositors' money. Deposits should not be used to finance proprietary trading. But regulators have to go even further. They must regulate the compensation packages of proprietary traders to ensure that risks and rewards are properly aligned. This may push proprietary traders out of banks into hedge funds where they properly belong. Just as oil tankers are compartmentalized in order to keep them stable, there ought to be firewalls between different markets. It is probably impractical to separate investment banking from commercial banking as the Glass-Steagall Act of 1933 did. But there have to be internal compartments keeping proprietary trading in various markets separate from each other. Some banks that have come to occupy quasi-monopolistic positions may have to be broken up.

While I have a high degree of conviction on these five points, there are many questions to which my theory does not provide an unequivocal answer. For instance, is a high degree of liquidity always desirable? To what extent should securities be marked to market? Many answers that followed automatically from the Efficient Market Hypothesis need to be reexamined.

It is clear that the reforms currently under consideration do not fully satisfy the five points I have made but I want to emphasize that these five points apply only in the long run. As Mervyn King explained the authorities had to do in the short run the exact opposite of what was required in the long run. And as I said earlier the financial crisis is far from over. We have just ended Act Two. The euro has taken center stage and Germany has become the lead actor. The European authorities face a daunting task: they must help the countries that have fallen far behind the Maastricht criteria to regain their equilibrium while they must also correct the deficinies of the Maastricht Treaty which have allowed the imbalances to develop. The euro is in what I call a far-from-equilibrium situation. But I prefer to discuss this subject in Germany, which is the lead actor, and I plan to do so at the Humboldt University in Berlin on June 23rd. I hope you will forgive me if I avoid the subject until then.

WIZ

GOLD CYCLES

2010-05-28T20:27:00.001-07:00

Source:
It takes two to make a thing go right
John Roque

NO HAY DOS SIN TRES...

WIZ

LIBOR

2010-05-20T17:48:00.001-07:00

UP,UP AND UP...

TROUBLE AHEAD !!!

WIZ

THE END GAME

2010-05-20T17:08:00.001-07:00

THE GAME OVER IS GETTING CLOSE... Lo siento chicos pero parece que la "FIESTA" está acercandose a su final ...

WIZ

Hacia la paridad.

2010-05-16T03:58:00.000-07:00

“Finance ministers in the eurozone might argue that they acted to save the euro, but in reality they acted to save national bond markets – and the euro is the fall guy,” says Steve Barrow at Standard Bank. (via MR)

Capitulo I. 2008. Como consecuencia de los excesos crediticios y sus derivados, el mercado de deuda interbancaria no admite mas volumen y colapsa. El sistema financiero global se queda sin sangre en su sistema circulatorio y cada banco enfrentado a las deficiencias de su propio balance corre serio peligro de desaparecer.

Capitulo II 2008-2009. Los gobiernos, conscientes del enorme daño que el colapso del sistema financiero global puede causar en las economías de cada uno de los países, inyectan todo el dinero necesario al sistema para que vuelva a reconstituirse. Y se hace de común acuerdo, generando déficits fiscales superextraordinarios porque se ve como única vía para salvar el sistema financiero primero y evitar una cruel depresión económica después.

Capitulo III . 2010. Cumplido el primer objetivo de evitar el colapso financiero y el segundo de una cruel depresión en la mayoría de los países. Los déficits son abultados en la mayoría de los países, pero algunos (USA, Europa Central..) han iniciado la senda del crecimiento y el mercado les asigna mas posibilidades de recuperación que a otros (Grecia, España) cuyo crecimiento se ve lejano por problemas estructurales internos (Grecia: exceso de gasto; España: burbuja inmobiliaria sostenida por bancos).
En la Europa del Euro, la salida se complica, al no poder cada país adoptar medidas monetarias individuales (impago de la deuda, devaluación) por estar sujetos a la disciplina de la moneda única.

Descartando la ruptura del Euro que no mejora la situación relativa ni de los que quedan (quien se tendrá que ir después, que moneda es esta de quita y pon) ni de los que se van (colapso y ostracismo), la única vía que les queda al BCE y a los gobiernos europeos es:
1/ Salvar el mercado de Bonos Nacionales.
2/ Salvar la unidad del Euro.
3/ Si eso significa devaluación del Euro mucho mas allá de lo esperado: bienvenida sea.

Los americanos tuvieron que pasar del 0,84 Dolar por euro en el año 2000 al 1,59 Dolar por Euro en el 2008 para combatir las diferentes burbujas de este siglo. A Europa no le vendría nada mal para recuperar competitividad internacional recorrer el mismo camino.

Giovanni Drogo

US HOUSING

2010-05-10T13:14:00.001-07:00

Courtesy of David Rosenberg.

3,5% standard deviations !!! For sure, we have a long path towards price normalization !!!

WIZ

LIBOR

2010-05-06T19:51:00.000-07:00

ANOTHER PIECE OF THE PUZZLE...

WIZ

TED : Back again

2010-05-06T15:43:00.000-07:00

Remember the TED Spread? He’s back:

AND PEOPLE BELIEVE THAT TODAY´S CRASH WHAT A MISTAKE !!! FEAR, GOOD OLD FEAR IS BACK WITH US...

WIZ

US BANKS

2010-05-04T13:40:00.001-07:00

FOR SURE, NOT OUT OF THEW WOODS YET !!!

WIZ

PIIGS warming UP

2010-04-22T18:23:00.001-07:00

Do you remember 97/98 Asian crisis that started in Thailand ???

WIZ

CONTAGION

2010-04-21T06:50:00.000-07:00

FROM FT:

"Markets have been pricing in greater concerns over Portugal’s debt burden as worries over Greece’s bail-out spill into other periphery Eurozone nations.

On Tuesday Portuguese 10-year bond yields rose to 4.65 per cent, up 5 basis points on the day, heading once again towards record highs of 4.77 per cent that it hit in early February.

In recent days it has also become more expensive to buy credit default protection against short-dated Portuguese government bonds rather than long-dated ones. Greece is the only other country in the Eurozone where this is also the case.This anomaly in credit markets – known as a curve inversion – is an indication of market expectations of financial stress and highlights rising concern in markets about contagion from Greece"

Do you know that Spain is the biggest holder of Portuguese debt ?

Club MED is tasting the contagion effects of 97/98 Asian crisis

WIZ

EUROPE´S MALAISE

2010-04-15T12:02:00.000-07:00

European Soverign CDS continues to trade worse the last couple of days with all the gains from the Monday announcement of the Greece rescue package evaporated. At its recent peak, Greece 5yr CDS was trading around 440 bps which subsequently recovered to about 375 bps after details of the European aid was released. It is currently trading around 430 bps. The higher the premium, the higher the market’s perception of a default.

Separately, there appears to be some contagion with Portugal and Spain CDS both spiking on fears that these countries are next in line after Greece. Here is where they are most recently quoted:

CDS	5YR	10YR	5Y1D	5Y1W
——————	————	———-	——	——
AUSTRIA (100)	57/61	62/66	2	-2
BELGIUM (25)	59/63	64/68	2	-1
DENMARK (25)	34/38	39/43	1	1
FINLAND (25)	25/28	28/32	1	2
FRANCE (25)	52/55	57/61	3	-1
GERMANY (25)	32/34	36/39	2	1
GREECE (100)	420/440	360/390	0	-10
IRELAND (100)	149/155	152/162	0	-14
ITALY (100)	126/136	131/141	1	-3
NETHERLANDS (25)	34/38	38/43	0	0
NORWAY (25)	15/19	18/22	0	-1
PORTUGAL (100)	190/200	180/200	15	25
SPAIN (100)	146/156	140/160	10	14
SWEDEN (100)	32/36	35/39	0	-2
UK (100)	73/77	77/81	1	-3
USA (25)	35/41	39/45	0	-4

The unfortunate thing about credit problems are that they never seem to go away….unless you fix the underlying issues (balance sheet, spending, revenue) !!!

WIZ

TREASURIES: 2 superpowers

2010-04-05T11:08:00.000-07:00

http://grantspublishing.s3.amazonaws.com/GrantsFullx.m4v

Excelent debate between Jim Grant and David Rosenberg

Enjoy

WIZ

TECHNICAL ODDS

2010-04-02T10:23:00.000-07:00

From : Michael Panzner

In the last 90 years 11 times a +40 ROC has signaled trouble ahead. In 3 times has signaled Short Pause...

Be carefull with the ODDS !!!

WIZ

USA POWER

2010-03-31T21:30:00.000-07:00

The power of USA will be its demographics for sure !!!

WIZ

US V RECOVERY: Really ???

2010-03-25T08:26:00.000-07:00

Can anybody tell us where is the V Recovery that Mr. Market is discounting ??? Please give us a break !!!

WIZ

España: Death Cross

2010-03-24T20:00:00.001-07:00

La confirmación de la DEATH CROSS ( 50MM/ 200MM) hace preveer que en España se avecinan problemas

WIZ

HOUSING

2010-03-16T07:20:00.001-07:00

BUILDERS DO NOT BUY THE HOUSING RECOVERY !!!

WIZ

FOLLOW THE LEADER !!!

2010-03-15T12:02:00.000-07:00

The ECRI leading economic index for the U.S. fell last week for the 12th week in a row, to stand at its lowest level since July 2009.
Something tells us a slowdown is about to start. Inventorie´s build up is finishing and US Government stimulus is loosing its magic...

WIZ

NEW INDICATOR

2010-02-10T20:44:00.000-08:00

THE COPPER/ GOLD RATIO

The copper price reflects global economic activity and gold reflects financial stability.
Indeed, the ratio does have a 95% correlation with movements in the stock market !!!

WIZ

Bajará o bajará?

2010-01-31T05:25:00.001-08:00

Dos corrientes de opinión se reparten el grueso de predicciones sobre la dirección del mercado de renta variable: los que piensan que bajará y los que piensan que bajará.

El matiz está en hasta donde: Mientras que para unos este es el fin del famoso bear rally y estamos abocados a revisitar los mínimos de marzo (double dip) e incluso mas abajo, otros opinan que pararemos en la media 200 (alrededor de 1000 en el sp500), donde rebotaremos en canal lateral e incluso ligeramente alcista.

Los argumentos bajistas son fuertes y extensos:
1/ No se ha hecho nada para resolver la crisis. Solo cuidados paliativos de mucho coste y poca efectividad.
2/ El desapalancamiento es siempre un proceso largo (mas de 5 años) y doloroso, de bajo crecimiento y destrucción de riqueza, que no admite atajos posibles. (Japón)
3/ El optimismo de los mercados de renta variable no se corresponde con una realidad económica cruda que a pesar de todos los trucos (Quantitative Easing, cocinado de balances por las entidades financieras, tipos de interés cercanos a 0, subvenciones etc.) no presenta signos de recuperación.
4/ Al contrario, el enorme esfuerzo realizado empieza a pasar factura en forma de descontrolados déficits públicos, excesivo endeudamiento y balanzas de pagos distorsionadas en los países mas débiles (Grecia, Portugal, España), añadiendo un nuevo factor de preocupación aun antes de haberse resuelto los anteriores.
La inevitable retirada de los apoyos mostrará una economía que no puede caminar sola, entrando en el circulo vicioso de peores resultados de la empresas, nuevos despidos, menor consumo y vuelta.
5/ Técnicamente, la subida se ha agotado, se ha formado un techo con disminución de volumen que implica un "major market top". Sucesivas caidas se retroalimentaran generando desconfianza que deben llevar a los valores a PER es por debajo de 10 que es donde han llegado en profundas crisis anteriores antes de recuperarse.

Sin embargo, los argumentos de quienes piensan que solo estamos ante una corrección, también tienen su peso:
1/ Si el mundo tiene que continuar, probablemente el mejor refugio para poner el dinero no sera los gobiernos endeudados, los inmuebles con rentas y precios a la baja, los activos improductivos (oro) que no generan ningún rendimiento o los activos líquidos que pagan el 0,5 %, sino empresa solidas organizadas para generar riqueza y cuyos productos o servicios sean necesarios y valorados por la comunidad.
2/ Las empresas han hecho sus deberes (reestructuraciones, despidos etc) para poder seguir generando beneficios en un entorno complicado como el que viene.
3/ De hecho, los resultados de las empresas americanas publicados hasta la fecha, asi como sus cautas previsiones, son mejores de lo esperado .
4/ La vuelta a los mínimos de marzo implicaría una situación de estress semejante a la vivida en aquella época : miedo al colapso del sistema financiero. Todos los agentes políticos y económicos harán lo imposible para que una situación similar no se repita. La tesis es que estamos saliendo de la recesión, con graves problemas sin resolver y un crecimiento futuro de escasa entidad, pero saliendo.
5/ En análisis técnico, una vuelta a la media 200 acabaría con la sobrecompra, los activos estarían mas correctamente valorados y darían oportunidad de entrada al dinero que se ha perdido el rally esperando una corrección.

Antonio Gramsci dijo que contra el pesimismo de la razón está el optimismo de la voluntad. Yo en esta ocasión, me inclino por ser voluntarioso.

Giovanni Drogo

Watch out for Housing

2010-01-27T10:47:00.000-08:00

Courtesy of David Rosenberg... Back into trouble ???

WIZ

THE RING OF FIRE

2010-01-27T07:04:00.001-08:00

Great analysis from PIMCO ( Bill Gros ) of Reinhard/ Rogoff ( This Time is different) book and its implications for countries...

Bill Gross :
"Their conclusions are eerily parallel to events of the past 12 months and suggest that PIMCO’s New Normal may as well be described as the “time-tested historical reliable.” These examples tend to confirm that banking crises are followed by a deleveraging of the private sector accompanied by a substitution and escalation of government debt, which in turn slows economic growth and (PIMCO’s thesis) lowers returns on investment and financial assets. The most vulnerable countries in 2010 are shown in PIMCO’s chart “The Ring of Fire.” These red zone countries are ones with the potential for public debt to exceed 90% of GDP within a few years’ time, which would slow GDP by 1% or more. The yellow and green areas are considered to be the most conservative and potentially most solvent, with the potential for higher growth."

WIZ

ese brillo amarillo

2010-01-23T10:55:00.000-08:00

En la película "La leyenda de la ciudad sin nombre", la ciudad, nacida al calor de miles de buscadores atraídos por el oro encontrado en minas cercanas, crece desordenadamente llenandose de salones y tugurios en los que el polvo del metal circula como moneda de pago. Dos avispados emprendedores (Lee Marvin y Clint Eastwood ) , observan como en las transacciones , parte del polvo cae al suelo (que es de tablas) y razonan que debajo de las tablas debe haber mucho oro. Para recolectarlo , hacen túneles por toda la ciudad, que conectan los diferentes bares , lo cual les facilita la cosecha sin permisos.
La recogida del metal perdido mientras se trabaja (merma) mediante un proceso de reciclaje de la basura (escobillas), sigue siendo en los talleres joyeros artesanos una importante fuente complementaria de ingresos. Para ello se habilitan filtros especiales en los desagües, se cepillan zapatos y manos, se lavan las prendas de ropa dentro del taller y se guarda toda la basura que se genera para proceder a su reciclaje de forma periódica en hornos especiales y con determinadas garantias. Y no es para menos. Cerca de un uno por ciento del total trabajado puede ir a la basura. Asi, un taller medio que trabaje 100 Kg al año, podría tirar 1 Kg de oro (35.000 US dolares) si no tomara estas precauciones.
Tradicionalmente, el 80 % de la producción anual de oro, se ha venido utilizando para joyería. El metal de joyeria se utiliza habitualmente en una aleación del 75% oro y el 25% restante plata y cobre. Es lo que se llama oro de 18 kilates y también oro de ley. La diferente proporción de cobre sobre la plata da lugar al oro rojo. Mientras que sustituyendo algo del cobre o la plata por platino o paladio, se obtendría el oro blanco. En todos los casos, la proporción de oro no debe variar: 75 %. Es posible comercializar aleaciones con menos proporción de oro, pero entonces no se puede llamar (en España) oro de ley. Una aleación muy utilizada, contiene solo el 58,33% de oro, conocida como oro de 14 Ktes y antiguamente oro alemán, por ser un tipo de aleación muy utilizada en dicho país. El oro de inversión, también llamado oro fino o de 24 kilates es practicamente 100 % oro (999,999 por mil), y es el que cotiza en los mercados internacionales. La cotizacion viene expresada en Dolares por onza troy. La onza equivale a 31,103476 grm. Una sencilla división, nos da el precio del gramo de oro fino.
El oro, por sus especiales características físicas, siempre ha ejercido una considerable atracción sobre los humanos. Desde la antiguedad se considera sinónimo de riqueza y ha sido la base de la mayoría de los sistemas monetarios creados para facilitar el trafico de mercancía. No es pues de extrañar que en periodos de desconfianza como los actuales, busquemos un refugio atávico en lo que "siempre" ha tenido valor. (aunque Lenin hubiera querido otra cosa).

En el largo plazo, la oferta y demanda de oro, salvo en periodos convulsos, ha permanecido muy estable. De ahí que su precio, corregido por inflación, también haya permanecido estable en los últimos 100 años. (el oro, a diferencia del petroleo, no se "gasta", y debido a su valor, se suele reciclar aunque sea en cantidades pequeñas). Por el lado de la demanda, tradicionalmente el 80 % iba a joyería, el 10 % a usos industriales y el otro 10 % a inversión. Pero en los últimos 5 años, la aparición de las ETF de oro en 2003 ha facilitado el acceso a oro como inversión, elevando su participación en la demanda a cerca del 20%.

Este cambio en la estructura de la demanda es todavía mas significativo porque representa un 60% de la demanda marginal, y por tanto es tremendamente importante en la fijación del precio.
La consecuencia es que el oro padecerá en el futuro una mayor volatilidad que históricamente.

En los últimos tiempos, el sentimiento negativo hacia el sistema financiero y la desconfianza monetaria, ha impulsado la inversión vía ETF que ya acumula 1780 TM de metal (un 6% de las reservas oficiales en manos de los estados). Un cambio en este sentimiento puede provocar fuertes desinversiones con extraordinarias rebajas en el precio: las peores burbujas se forman en activos no productivos (tulipanes, suelo urbanizable, etc).
Al final de la película "La leyenda de la ciudad sin nombre", el suelo se hunde, tragándose completamente a la ciudad. Los predicadores proclaman que es un castigo de Dios por los pecados. En realidad, es que se habían hecho demasiados túneles.

Giovanni Drogo

US HOUSING STARTS

2010-01-21T09:20:00.000-08:00

FALLING OFF A CLIFF !!!

How about another 10% to 15% downside to housing prices ? Do you think any of that is priced in equities, bonds or financials ???

WE DON´T THINK SO...

WIZ

US BANK CREDIT

2010-01-19T16:00:00.000-08:00

BANK CREDIT STILL CONTRACTING

As Rosemberg said : "The numbers for the first week of the year (to January 6th) were not pretty. Total bank lending slipped $18 billion to $6.697 trillion, and has now contracted a massive $642 billion or 9% from the peak of $7.339 trillion on November 14th, 2007. The decline last week was quite broad based – real estate credit -$8 billion; consumer credit -$6 billion; and commercial/industrial loans -$4 billion. Whoever said the credit contraction was over? " Certainly not Mckinsey !!!

WIZ

What a Picture !!!

2010-01-11T08:16:00.001-08:00

And the Stock Market consider these news GOOD NEWS !!!

WIZ

Synthetic US M·3

2010-01-06T06:53:00.000-08:00

Four years ago the Fed ended tracking the broadest measure of the money stock, known as M3. To fill that gap, John Williams Shadow Government Statistics (www.shadowstats.com) estimates M3 from published sources as part of his mission to strip away the obfuscation prevalent in many government economic statistics.

"Not all economic downturns are triggered by liquidity crises, but all liquidity crises trigger or intensify economic downturns," he asserts.

Double dip recession close ???

WIZ

2009 ASSET CLASSES PERFORMANCE

2009-12-30T15:24:00.000-08:00

Past results are not indicative of expected future results... says WALL STREET to cover against future rainy days...

Be careful with what may come in 2010.

WIZ

HAPPY NEW YEAR 2010

2009-12-29T19:01:00.000-08:00

The year of the Tiger...

We wish ALL of you a Happy New YEAR

WIZ

STOCKS & BONDS CORRELATION

2009-11-23T13:02:00.001-08:00

NOT VERY GOOD NEWS...

US BANKS LENDING: down

2009-10-13T07:20:00.001-07:00

Difficult times ahead to get some credit...

WIZ

US BANKS : Dark picture

2009-09-19T15:41:00.001-07:00

The Banking system in US is failing the TEST : 2.256 F´s !!!

As John Mauldin says : "IRA takes the data from the FDIC and crunches it with their own set of risk parameters. While the FDIC has a little over 400 banks on its current "watch" list, IRA gives 2,256 banks an "F." They project that over 1,000 banks will either fold or be taken over during the current cycle. To date in 2009, a total of 92 banks have failed across the country, compared with 25 for all of 2008, according to the FDIC. 900 more to go. Ouch."

WIZ

MONEY MARKETS : FEAR

2009-09-16T10:57:00.000-07:00

Anybody gessing WHY money markets ( 3 month Treasuries ) are so scared ??? IF and a BIG IF everything is so dandy and rosy in the Equity Markets ???

We for sure, agree with them

US:UNPRECEDENTED CONTRACTION IN BANK CREDIT

2009-09-14T07:17:00.001-07:00

We have never seen that in Modern times !!!

WIZ

GOLD

2009-09-11T16:46:00.000-07:00

Today's close is the HIGHEST WEEKLY CLOSE ever for GOLD !!!

WIZ

US: Consumer credit

2009-09-10T16:07:00.000-07:00

Consumer credit includes credit cards and personal loans. Consumers are sensitive to the economic cycle and slow down their borrowing when recessions occur. Thus, data on borrowing can be a useful indicator for the strength of the economy. The data shows consumers are decreasing the amount of their outstanding credit at a faster rate than has ever occurred since World War II. That suggests that the economy has not pulled out of its difficulties.

WIZ

FALL OF WESTERN SOCIALISM

2009-08-29T22:19:00.000-07:00

Amazing graphic of the Economic Confidence model by Martin A. Amstrong , former President of Princeton Economics International and the Foundation for the study of cycles.

Are we ready for 2011 ??

BTW, he predicts GOLD level of $1350/1750 in 2010 to 2012 but goes far beyond that with new levels of $1750 to $2275 if confidence in Fiat currencies declines...

WIZ

ESPAÑA: Deflación !!!

2009-08-25T07:04:00.001-07:00

Me parece tremendamente desaprensivo el que las Instituciones Españolas sepan que llevamos tres meses en deflación y nadie diga ni haga NADA...

Esta situación no se había producido muchísimo tiempo.

Y no olvidemos que esto sólo es la punta del iceberg !!!

http://ftalphaville.ft.com/blog/2009/08/21/68016/are-spanish-banks-hiding-their-losses/

WIZ

SECULAR BEARS

2009-08-24T07:29:00.000-07:00

Courtesy of John Mauldin and his weekly letter, we can see what happened in the last Secular Bear between 1966/1982.

Volatility and valuations are the drivers yesterday and possibly TODAY...

WIZ

DRAGON´S WEAKNESS ?

2009-08-18T08:31:00.000-07:00

On August 4th the Shanghai composite reached a new high for the year but sported all sorts of technical divergences. During the next two weeks a 17.5% decline from August top.

As in 2007 : First in, First out...

WIZ

Bob Farrell Rules

2009-08-07T04:30:00.000-07:00

Legendary Investor Bob Farrell set a few golden rules that can help a lot in today´s difficult moments :

. Markets tend to return to the mean over time
When stocks go too far in one direction, they come back. Euphoria and pessimism can cloud people’s heads. It’s easy to get caught up in the heat of the moment and lose perspective.

2. Excesses in one direction will lead to an excess in the opposite direction
Think of the market baseline as attached to a rubber string. Any action too far in one direction not only brings you back to the baseline, but leads to an overshoot in the opposite direction.

3. There are no new eras - excesses are never permanent
Whatever the latest hot sector is, it eventually overheats, mean reverts, and then overshoots. Look at how far the emerging markets and BRIC nations ran over the past six years, only to get cut in half.

As the fever builds, a chorus of “this time it’s different” will be heard, even if those exact words are never used. And of course, it - human nature - is never different.

4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways
Regardless of how hot a sector is, don’t expect a plateau to work off the excesses. Profits are locked in by selling, and that invariably leads to a significant correction eventually.

5. The public buys the most at the top and the least at the bottom
That’s why contrarian-minded investors can make good money if they follow the sentiment indicators and have good timing. Watch Investors Intelligence (measuring the mood of more than 100 investment newsletter writers) and the American Association of Individual Investors Survey.

6. Fear and greed are stronger than long-term resolve
Investors can be their own worst enemy, particularly when emotions take hold. Gains “make us exuberant; they enhance well-being and promote optimism”, says Santa Clara University finance professor Meir Statman. His studies of investor behavior show that “Losses bring sadness, disgust, fear, regret. Fear increases the sense of risk and some react by shunning stocks.”

7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names
This is why breadth and volume are so important. Think of it as strength in numbers. Broad momentum is hard to stop, Farrell observes. Watch for when momentum channels into a small number of stocks.

8. Bear markets have three stages - sharp down, reflexive rebound and a drawn-out fundamental downtrend
I would suggest that as of August 2008, we are on our third reflexive rebound - the January rate cuts, the Bear Stearns low in March, and now the Fannie/Freddie rescue lows of July.

We have yet to see the long-drawn-out fundamental portion of the bear market.

9. When all the experts and forecasts agree - something else is going to happen
As Stovall, the S&P investment strategist, puts it: “If everybody’s optimistic, who is left to buy? If everybody’s pessimistic, who’s left to sell?”

Going against the herd can be very profitable, especially for patient buyers who raise cash from frothy markets and reinvest it when sentiment is darkest.

10. Bull markets are more fun than bear markets
Especially if you are long only or mandated to be fully invested. Those with more flexible charters might squeak out a smile or two here and there.

WIZ

VIX : climbing again

2009-08-04T01:51:00.000-07:00

Remember, there are a million reasons to sell...but only ONE reason to buy. While a rising market makes everyone 'feel' better, it's time for caution, especially if the VIX starts to see higher levels.

WIZ

SP500 EARNINGS

2009-07-24T11:02:00.000-07:00

LO SENTIMOS MUCHÍSIMO... Pero es que alguién se puede creer que los "Earnings" son realmente buenos ???

O más bien estamos implorando que la más cruda realidad no nos llegue finalmente.

Realmente nos compramos la visión del Mercado. Todavía vamos a sufrir mucho antes de ver la Luz.

WIZ

SP500 V GE

2009-07-21T10:59:00.001-07:00

Do the Market ( SP500) will follow GE in the next future ? Or we are going to be able to maintain the bullish trend .

Our opinion is that Mr. Market still has many,many problems to solve.

WIZ

Que inflación?

2009-07-12T02:20:00.000-07:00

El panel de expertos no se pone de acuerdo. Cierto que el consenso vaticina una inflación de 1,9 % en USA para finales del próximo año. Pero esta media oculta una profunda divergencia entre los top diez que auguran inflación superior al 3 % y los diez pronosticadores del otro extremo del abanico que preveen ..deflación!!.
Nunca, desde el año 1992, se había producido una divergencia tan amplia en las previsiones, lo que explica la desorientación que padecemos sobre hacia donde nos dirigimos. Esto puede parecer desalentador. Pero también implica que, sea cualquiera la opinión que tengamos, está avalada por un experto.Y es que como decía el Nobel Niels Bohr : "Predecir es muy difícil. Sobre todo si se trata del futuro".

Giovanni Drogo

US Unemployment

2009-07-11T02:26:00.000-07:00

As you can see from the chart here, compliments of the monthly Data Farm feature in The Casey Report, the trend in unemployment remains solidly intact. Unemployment is now reaching a point so dire that soon it won’t be reported on as further evidence of the economic slump but rather as a driving force (among many) in the ongoing collapse.

WIZ

Desapalancar.

2009-06-22T13:33:00.000-07:00

En un incisivo post en clave de humor, Fresh Family Office describe la situación actual de los buenos y malos deudores a la hora de renovar sus condiciones crediticias con la Banca.
En esencia: a los solventes se les niega el crédito mientras a los insolventes se les prorroga.
Ahora bien, ¿puede la banca hacer otra cosa?
Estamos asistiendo a un proceso de desapalancamiento global motivado entre otras cosas por el estallido de la burbuja inmobiliaria y el colapso del mercado de productos de crédito. Desapalancar quiere decir reducir el libro: el volumen en créditos de un determinado banco tiene que ser menor al final del año que al inicio.
Para hacer esto, los bancos deberían cerrar los créditos malos y quedarse con los buenos. Pero Ay! eso no es tan fácil. El crédito malo, si no se prorroga, deviene en impago. Y entonces hay que provisionar. Y eso significa pérdidas. Y las pérdidas socavan la confianza en el banco. Y eso disminuye la otra parte del balance: el pasivo. Y eso obliga a dar menos créditos. Y aumenta la proporción de mora....hasta la quiebra de la entidad.
¿Que camino les queda entonces a los bancos? Reducir el libro rebajando los créditos que pueden ser atendidos (los buenos) y prorrogar los insolventes a la espera de que la mejora de las condiciones económicas (nuevo crecimiento, restauración del mercado de crédito, etc) permita que los insolventes sean solventes de nuevo.
Con esto, dicen algunos, tardaremos años en salir de la crisis. Es posible. Pero haciendo lo correcto, dicen otros, la quiebra del sistema esta servida.

Giovanni Drogo

CHINA : Yellow weeds or something worse

2009-06-20T03:04:00.000-07:00

Do we really think that with Chinese industrial profit growth crashing and with electricity output tumbling a REAL recovery is coming for the Chinese Economy ???

Green shoots, yellow weeds or something worse.

WIZ

Strange bond Market

2009-06-15T09:57:00.001-07:00

The Strange Bond Market

From BIGTRENDS:

"The yield curve is as steep as you'd like to see it from an inflation standpoint. How so? The steep curve displays a future growth rate exceeding 4%, and with all this being the result of an inflationary impact. The increased money supply is washing around the markets and finding a home...call it commodities. We've seen bonds sell down recently and weekly auction seem to be scrutinized with a fine tooth comb. However, yields still are under 4%, hardly a bad number historically. So, while gold and the greenback may be screaming inflation, bonds are not".

WIZ

Tener razón.

2009-06-12T13:43:00.000-07:00

Tener razón, escribe el Sr. Martinez, es algo que todos queremos. Mas que el sexo o el dinero, lo que verdaderamente nos pirra es tener razón y que se reconozca.
Pero con los blogs, que guardan el histórico de nuestro pensamiento pasado, las equivocaciones permanecen indelebles, llamando la atención sobre todo aquello que dijimos, vaticinamos u opinamos erróneamente.
No me extraña que los lideres totalitarios en el libro 1984 de George Orwell hicieran reescribir el pasado para que cuadrara con el presente!
Cuantos analistas y bloggers habrá estos días esperando que el mercado corrija, por favor, aunque solo sea un poquito, para que todos los argumentos a favor del "bear rally", del "exceso de optimismo", de la "subida vertical" expuestos en tantos y tantos análisis y conversaciones se vean corroborados. Para tener razón, en definitiva.
Tranquilos. Al final el Mercado nos dará la razón. Solo hay que esperar .. lo suficiente.

Giovanni Drogo

Inflation/Commodity Play

2009-06-08T13:33:00.000-07:00

The Long term Inflation / Commodity Play is in place.

WIZ

Y la tercera pata?

2009-06-01T13:53:00.000-07:00

El sp500 desde 1990 hasta el cierre de hoy. Falta la tercera pata. La que todo el mundo espera. Es, casi, una cuestión de estética: no se sale de la mayor crisis de los últimos 30 años sin una figura un poco mas equilibrada. No se.. . Tanta gente esperando la tercera pata, igual eso la hace mas corta. O no.

Giovanni Drogo

30 Year Treasury Bond

2009-05-31T14:46:00.001-07:00

18 Years of Bull Market 82-2000 can be explained by Low Interest rates.

What´s next ???

WIZ

The new normal.

2009-05-27T03:25:00.000-07:00

En su reciente informe de Junio, Compass, la revista de estrategia de mercados de Barclays Wealth, cita un estudio del economista Robert Barro que sostiene que “Un pequeño cambio en las estimaciones de los inversores del poco previsible peor escenario, tiene un enorme efecto en los precios de las acciones”. En otras palabras, las 2 visitas a los mínimos en los mercados de acciones (octubre y marzo) habrían sido motivadas por el cambio de consideración en la percepción de los inversores de la quiebra del sistema : de darle cero posibilidad a ser tenida minimamente en consideración.
Si esto fuera así, la posterior recuperación no sería el famoso “bear rally” predicado por tantos, sino el volver a poner los precios en un punto en que la quiebra del sistema sea considerada una posibilidad remota.
PIMCO, con esa capacidad tan suya para definir escenarios (recordemos su famoso paradigma de los últimos años: “desequilibrio estable”), presenta para los próximos años lo que llama “new normal” caracterizada por las siglas DDR. De-leveraging, De-globalization, Re-regulation. Obviamente, el shock ha sido tan fuerte que muchas cosas de la economia real estan cambiando, y mas tienen que cambiar. Pero eso no significa necesariamente que los activos productivos tengan que valer menos.
En definitiva, tiempos distintos, con nuevas reglas de juego que se van a ir implementando. Nuevos retos, nuevos peligros, nuevas oportunidades.
En el corto plazo, ni la época del año (“sell in may .. "), ni el análisis técnico (sobre compra, subida en cuña) ayuda. Pero también hay señales de vida ahí fuera: disminución de la volatilidad, "golden crosses" a go-go y un sentimiento que da menos posibilidades a lo peor.
Algunos institucionales dicen: yo, con estos precios, compraría en Octubre. Puede que algunos se adelanten.

Giovanni Drogo.

$ WEAKNESS

2009-05-21T05:26:00.001-07:00

DOLLAR IS LOOSING ITS TECHNICAL SUPPORT !!!

WHAT´S NEXT ??

WIZ

Un “bear rally” ... como todo el mundo sabe.

2009-05-09T01:22:00.000-07:00

Estaba haciendo cola en la charcuteria, cuando la persona que estaba delante mio le preguntó al tendero: Paco ¿qué te parece la subida de bolsa de estos dos meses? Y Paco, mientras cortaba el jamón en la maquina (muy fino, por favor) le contestó :Bah! Es un “bear rally“.
Claro que es un “bear rally”. Todo el mundo lo sabe. Periódicos, televisiones y blogs, lo proclaman cada día. Los informados, seguro que ya han vendido. Pero es que hay mucha gente que no se entera. Y claro, siguen comprando.

Giovanni Drogo

Banking Sector

2009-05-06T15:38:00.000-07:00

Since the March low, the widely followed Keefe, Bruyette & Woods , sometimes known by its ticker BKX, has rallied an astounding 123% ( Banking index) !!!

What we can see on the charts is an unbroken series of lower highs and lower lows -- the core definition of a bear market. Further, there is no bullish divergence present in momentum indicators, and that strongly suggests that despite this month's exciting bank movement the bear is not through just yet.

So is the BULL back ??? Well, we will like to see a Bull in the banks before ringing the bell.

WIZ

Taliban´s Threat

2009-04-26T23:03:00.000-07:00

WIZ

PANDEMIA

2009-04-26T08:45:00.000-07:00

Wikipedia nos da la siguiente definición para Pandemia: Una pandemia (Vocablo que procede del griego pandêmon nosêma (enfermedad), παν (pan = todo) + dêm (demos pueblo), cuya expresión significa enfermedad de todo el pueblo) es la afectación de una enfermedad de personas a lo largo de un área geográficamente extensa. Técnicamente hablando debería cubrir el mundo entero y afectar a todos. Afortunadamente no ha habido una pandemia en ese sentido de la palabra.

Siguiendo esta definición además de la Gripe porcina Mexicana, que esperamos que no se convierta en una Pandemia, ya que en ese caso afectará también a la economía mundial, por el miedo y evidentemente por la caida demográfica. Y seguro que una combinación perfecta de los elementos como esta nos llevaría a la depresión.

La crisis económico-financiera actual es también una pandemia, más global que las pandemias que señala la definición de Wikipedia.

Esperemos que la medicina que se aplica sea la correcta.

DIXIE

THE PIC

2009-04-21T19:51:00.000-07:00

A few numbers showing where we are today. I think that even after this GREAT RECESSION is over, the World will confront years of adjustment and deleverage.

WIZ

UNCHARTED TERRITORY

2009-04-21T12:53:00.001-07:00

We are in uncharted territory. New home starts have never been so low since they started traking in 1958...

Not even in 1973/1975 recession !!!

WIZ

Stress test y otras pendejadas.

2009-04-19T03:04:00.000-07:00

Vamos a ver, vamos a ver. Se coge el balance de un banco (que es bastante complejo). Se simula informáticamente que pasa con ese balance si viene lo peor (que nadie sabe lo que es). Si así no aparece quebrado, se le da al banco un Certificado de APTO. Si con lo peor quiebra, se le dan seis meses para que recupere los suspensos y apruebe en la nueva revisión.
Hasta aquí todo perfecto. Inútil (nadie sabe que es lo peor y mucho menos el efecto que eso tiene sobre su balance) pero puede servir para que el regulador tenga una radiografia del banco en cuestión.
Pero el problema viene con el compromiso de publicar las calificaciones el próximo 4 de mayo.
Si aprueban todos, el mercado lo verá como una farsa y no habrá servido para reafirmar la confianza, que es el objetivo de las pruebas.
Si suspende alguno, los seis meses para aprobar se convertirán en 6 minutos, que es lo que tardará la bolsa en hundir al banco suspendido, lo que provocará la perdida de confianza y el desanimo: justo lo que se quiere evitar.
La salida mas normal será un aprobado general con algún tirón de oreja, pero sin hacer sangre. Pero en estos tiempos, puede pasar cualquier cosa.
El manejo de la industria financiera requiere un tratamiento mas cuidadoso que los de cualquier otra industria, porque a diferencia de la industria (digamos zapatera) lo que hay en sus almacenes no son zapatos, sino .. el dinero de los demás. ¡Pendejos!

Giovanni Drogo

Bussines as usual.

2009-04-18T16:02:00.000-07:00

Por fin un rally que merece tal nombre. Por primera vez en dos años, se han completado seis semanas consecutivas en positivo.
Recibido por la mayoría de analistas como un “sucker bear rally”, para mi tiene una mayor importancia: es la vuelta a la normalidad.
La Bolsa tiene que subir y bajar. Subidas dentro de las bajadas y bajadas dentro de las subidas: es su esencia.
Lo verdaderamente escalofriante han sido 6 trimestres seguidos negativos. Nunca, ni en la Gran Depresión, había pasado algo similar. Claro, que se trataba del fin del mundo. La quiebra del sistema financiero mundial y el cuestionamiento del sistema capitalista, bien se merecía una debacle bursátil global sin precedente.
Al final, puede que no sea para tanto. Cierto que estamos inmersos en una enorme crisis económica y financiera: los bancos tienen unos balances complicados, el modelo de crecimiento global está en cuestión, ignoramos cuales serán los desequilibrios que se están gestando con las masivas inyecciones de liquidez ..
Pero el sentimiento de caída libre hacia lo desconocido está aminorando. Y que se sigan cerrando Bancos, se incremente el numero de parados y caigan los beneficios empresariales, son vicisitudes con las que habrá que batallar. Y la Bolsa lo recogerá puntualmente. Pero eso no el el Armagedon sino “bussines as usual”.

Giovanni Drogo

THE BEAR IS ARRIVING...

2009-04-15T17:46:00.000-07:00

Technically, SP500 is arriving to the resistance levels...

We also see a rising wedge in its last steps...

What is going to happen next ???

Well, you probably know our opinion

WIZ

CORPORATE CREDIT DO NOT LIE

2009-04-10T11:11:00.000-07:00

New research shows that corporate bonds have been better at predicting where the economy is headed than anyone thought.

Unfortunately, that suggests the economy is going to get much, much worse !!!

WIZ

BEAR MARKET RALLY

2009-04-06T04:01:00.000-07:00

SP500 implied volatility is much lower than corporate credit... How can this relationship keep going ???

Well it is difficult to see corporate risk growing while equities enjoy their run. Something will change soon !!!

WIZ

Fácil, cerca, rápido.

2009-03-28T03:17:00.000-07:00

La sofisticación y globalización de los mercados financieros han acarreado muchos problemas y disgustos como los que actualmente estamos padeciendo. Pero no puede negarse que han traído también una enorme democratización en las posibilidades de inversión. La oferta de inversión es mas amplia y profunda de lo que ha sido en ningún otro momento de la historia. Y la posibilidad de acceso, también.
Cualquier persona con pocos recursos y en el lugar mas apartado del planeta, puede tener un portfolio tan diversificado y complejo como el mayor inversor en el corazón de manhatan. Con solo una cuenta en un broker, un ordenador y acceso a Internet, puede invertir en bonos y acciones internacionales. Pero también en materias primas y opciones y futuros. Puede estar corto o largo, con la divisa cubierta o no..
En este imparable proceso de ampliación de la oferta y sofisticación, unido a la simplificación y facilidad de acceso, acaba de lanzarse en USA una ETF (QAI) que intenta replicar el comportamiento de un índice HEDGE.
Se trata de un sintético que mediante una distribución en otras ETFs pretende conseguir valor absoluto, objetivo primordial de este tipo de productos. Construir la cartera ganadora es cada vez mas sencillo. Se trata de hacer bien los deberes.

Giovanni Drogo

Banks Stress Test

2009-03-24T18:58:00.001-07:00

The stress test for US banks will be done in a few days and guess what... They will probably need more money from the... Tax Payer !!!

And with the new Geithner´s plan these banks will need to do more... write downs !!!

So just let me know if actual valuations can be sustained...

WIZ

EUROPEAN CDSs

2009-03-24T11:25:00.001-07:00

I find amazing that Spanish and Portuguese CDSs are below UK´s ones !!! Let´s not forget that UK has the ability to print money...

WIZ

Saber perder

2009-03-22T02:27:00.000-07:00

Además de ser culpable de cumplir los compromisos adquiridos con sus ejecutivos (“bonus”), AIG la aseguradora americana, es también culpable de cumplir los contratos que la ligan a los mas importantes bancos mundiales.
El sufrido contribuyente americano se enfada porque su dinero sirve para cumplir los compromisos de sus empresas!!.
Y es que en estos tiempos raros solo son inocentes los que no quieren cumplir sus contratos: los hipotecados que no quieren pagar sus cuotas, los participes de fondos MADOFF que no asumen sus perdidas, los compradores de productos estructurados que reniegan de su compra ..
Todos fueron engañados!! . La banca no solo es poderosa y malvada, también alucinógena!!
Que dejación mas universal de la propia responsabilidad: No sabia, no quería, ellos me engañaron, yo solo nunca lo habría comprado, nunca me habría hipotecado así ...
Por favor! Uno de los pilares de la civilización es la asunción de los contratos realizados de buena fe. No solo cuando se gana, sino también y sobre todo, cuando se pierde.

Giovanni Drogo

Demagogia y pedagogía.

2009-03-21T12:31:00.000-07:00

Los “bonus”hay que pagarlos si:

1/ Se han cumplido los objetivos marcados.

2/ No se ha hecho trampas ni delitos para conseguirlos.

Si ha fallado la primera premisa, no hay “bonus”. Si la primera premisa no está de acuerdo con la situación de la empresa, hay que cambiar A FUTURO los objetivos que merecen ser premiados.

Si ha fallado la segunda premisa, hay despido y/o imputaciones penales.

Lo demás es demagogia.

Y cuando en un país, para decir lo que la gente quiere oír, los políticos abandonan la pedagogía y se deslizan hacia la demagogia, se incurre en ineficacia.

El próximo plan del secretario del Tesoro americano para el rescate financiero tiene como novedoso el intentar implicar al sector privado, facilitando su participación en la compra y gestión de los activos tóxicos.

Esta participación privada será mas barata (para los contribuyentes) y masiva en la medida que estos inversores privados se sientan mas confiados en la posibilidad del sistema de superar la crisis y obtener con ello interesantes beneficios a sus inversiones.

Para que el sector financiero permanezca privado, tiene que tener elementos que lo hagan atractivo a sus inversores y a sus ejecutivos. Excesivas regulaciones, culpabilizaciones exageradas y demagogias sobre los “bonus”, no ayudan a ello. Y si no que lo nacionalicen en su totalidad. Y luego, que.

Giovanni Drogo

Es la contabilidad, estúpido !!

2009-03-15T03:49:00.000-07:00

Finalmente será la contabilidad la que rescate el sistema financiero. Cansados de poner dinero en forma de recompra de deuda (TARP) o de nacionalizar acciones devaluadas que solo servía para diluir capital y provocar caídas adicionales del precio de los activos. Después de intentar parar la corriente vendedora de bancos mediante reglas de mercado (Prohibición de ventas “short”, restauración del “uptick rule”). Después de culpar a los banqueros, a los bonos de los empleados, a la codicia (?). Después de darse cuenta que el sistema capitalista necesita al sistema financiero para sobrevivir y que es una incongruencia (además de una barbaridad) un sistema capitalista que tiene como eje la iniciativa privada, distribuyendo efectivamente los recursos a través de un sistema financiero global.. nacionalizado!!. Por fin se ha percibido que quizá sea un problema contable: las normas de M2M (mark to market) van a ser revisadas este lunes por el FASB, para su adecuación a un “mercado ilíquido”. El resultado de esta revisión puede dar balances bancarios mas saneados que los inicialmente previstos lo que ocasionará una mayor confianza entre los bancos y una mejora relevante del flujo crediticio. Y del precio de las acciones bancarias.

Giovanni Drogo

BONDHOLDER´S NIGHTMARE.

2009-03-11T17:36:00.000-07:00

Banks Bondholders may be next to share Bailout Pain...

Contracts on the Markit iTraxx Financial index of CDS linked to senior debt of 25 banks and insurers were more expensive today than Markti Traxx Europe corporate index.

WIZ

Nada dura para siempre.

2009-03-08T15:16:00.000-07:00

Cada temporada tiene sus modas. Cada época sus profetas. Decía Javier Marías “Todo tiene su tiempo para ser creído”. Y ahora en Economía y Finanzas, es el tiempo de la devastación. Es el tiempo del colapso. Los profetas mas creíbles de la actualidad son aquellos que nos previnieron de lo que se nos venía encima y a los que, incrédulos de nosotros, no les hicimos caso: Nouriel Roubini y Robert Shiller. Ellos ya lo anticiparon. Hay que creerlos, puesto que lo “vieron venir”. Y nos dicen que aun no hemos purgado. Que esto durará y durará..
Pero hubo otras épocas no muy lejanas en que los profetas famosos eran otros: Acampora y Abby Cohen, con su “secular bull market” que tan bien predijeron ... hasta el año 2000!!. Luego sus estrellas se apagaron. Cambió el tiempo. Cambió la moda. El secular bull se ha transformado en secular bear .. hasta cuando?. Ya se están produciendo los pequeños desvíos, las mínimas modificaciones que provocaran los grandes cambios que dejaran sin razón a Roubini y Shiller, como antes lo hicieron con Acampora y Cohen. Nada dura para siempre. Demasiadas tendencias “seculares” en un solo siglo.

Giovanni Drogo.

SP 500 VALUATIONS

2009-03-07T16:01:00.001-08:00

Historical Average SP 500 P/E Valuations through history have been reached by SP 500 in March. But we have various exceptions where valuations went to P/E 10 aprox.

If that is today´s reality, we can see SP500 at 500 and DJIA at 5000 before finding the BOTTOM !!!

WIZ

NEGATIVE-FEEDBACK LOOP

2009-03-07T14:03:00.000-08:00

The stock market is down 56 % since 2007´s peak. We are in the middle of a Negative-Feedback Loop in wich the slide in asset values takes a painfully big bite out of household net worth, consumer confidence, spending and finally employment.

The vicious process then feeds right back into more asset and credit defaults. So we are caught in a trap, and 18 months into the credit collapse, there is no sign of stabilization !!!

The worst has yet to be priced into this market in order to get out of this NFL.

WIZ

GOING SOUTH

2009-03-02T10:53:00.001-08:00

Stocks still expensive compared with previous bear markets. The SP 500 traded 6.6 times its companies 10 year average profits in August 1982, it was the Bottom !!!

Today SP 500 12,8 times earnings...

Going South ?

WIZ

SOVEREIGN CREDIT RISK

2009-02-23T03:38:00.001-08:00

European Credit risk is climbing very fast. Portugal, Ireland, Spain, Italy and UK are seeing their risk in a very, very unconfortable position...

Who is taking care of the mess if anybody defaults ??? And the € ???

WIZ

THE BEARS...

2009-02-22T12:28:00.000-08:00

By now we are at the levels of 1973/1975 downturn... It seems to me that Mr. Market is not discounting everything yet (credit crunch phase II, elusive bottom of House market and the companies earnings).

So probably, we have a long way to go.

WIZ

PROTECTIONISM, SP500: 650

2009-02-14T11:12:00.000-08:00

The definition of Protectionism is : The economic policy of restaining trade between nations, through methods such as tariffs on imported goods, restrictive quotas, and a variety of other restrictive government regulations to discourage imports and prevent foreign take-over of local markets and companies.

If we do not start taking care of the Global metldown ASAP, Protectionist calls will pressure for "jobs at home" in every country and the threat of protectionism will become real...

Anyway, we continue with unreal stock valuations and "hope" still with us... Breath in markets has been abysmal and indicators show the worst in many decades is coming. Meanwhile markets stay resilient to the reality...

New bottoms loom ahead. Maybe SP at 650 is not far form us.

WIZ

TREASURIES YIELD CURVE

2009-02-07T21:24:00.000-08:00

The Treasuries Yield curve steepened sharply as the Long term yields rose ahead of US Government borrowing while the short end is anchored by the near zero Fed-funds rates...