Ray Dalio Tells Investors: “Don’t Trade Against Pros Like Us, You Will Lose… Own Gold”

Before his presentation to the University of Texas, Bridgewater’s Ray Dalio gave a far-ranging interview to Bloomberg’s Erik Shatzker which we will have more to say about in the coming days, but the overarching theme was what to expect from markets going forward. He said that while there are “asymmetric” risks to the downside, asset prices will correct to a point where risk premiums return and investors come back, and predicted that equities will return about 4% in the long term. The concern he had was whether the slowdown in markets will have negative repercussions for the economy at a time when central bank policy is becoming less effective.
Repeating comments he has given before, Dalio said that the “next big move I believe will have to be toward quantitative easing, rather than a big tightening,’ he said in the interview. The recent developments have surprised the Fed, because it is not paying enough attention to the long-term debt cycle, adding that “If you look around the world, our risk is not inflation and our risk is not overheating economies”, something all too clear to the nearly 30% of global economies currently blanketed by negative interest rates.
He also had some rather dire comments on China which we wil get back to in a future post, but what caught our attention was the following exchange in which Dalio discussed whether ordinary investors have a chance of making money in the current market when faced with institutional behemoths like Brigewater which as the world’s biggest hedge fund manages over $150 billion.
His honesty was refreshing.
SCHATZKER: Broadly speaking, what’s going to work? And what is working, perhaps more appropriately, today?
DALIO: I think there are two ways that the average investor should think of investing. One is, are you going to create a good strategic asset allocation mix that is a balanced portfolio, that means you will not go to the betting table and bet against active investors like me? Look, I’m scared to be wrong in the markets. It is not easy to win in the market. It is more difficult to win in the markets than to compete in the Olympics.

This post was published at Zero Hedge on 03/03/2016.

iShares Gold ETF suspends new shares issuance

WOW! This is a big deal.
Demand for gold has exceeded the issuance of new share creation in the iShares Gold Trust ETF, ‘IAU’.
The way I understand this process, the owner of the ETF, Blackrock Inc. looks to have UNDERESTIMATED the amazingly strong demand for gold and did not register with the SEC to obtain additional shares.
Based on what Dow Jones is saying, under the Securities Act of 1933, subscriptions for new shares in excess of those registered requires additional filings with the SEC.

This post was published at Trader Dan on March 4, 2016,.

Late sell-off leaves stock market down for 3rd month in a row

February 2016 – ECONOMIC NEWS, New York – Late-day selling sent U. S. stocks to a loss Monday and erased nearly all of the market’s gains for the month. Weak earnings for drug companies pushed health care stocks lower, and energy shares fell as natural gas plunged. Investors lost enthusiasm for stocks after two straight weekly gains. Health care stocks fell furthest as drug makers Endo International, Mylan and Mallinckrodt all slumped. Oil prices rose, but natural gas hit a 17-year low. Banks lost ground, partly because investors are worried about potential losses on loans to energy companies.
The Dow Jones industrial average fell 123.47 points, or 0.7 percent, to 16,516.50. The Standard & Poor’s 500 index fell 15.82 points, or 0.8 percent, to 1,932.23. The Nasdaq composite index fell 32.52 points, or 0.7 percent, to 4,557.95. Monday’s loss pushed the S&P 500 and the Nasdaq to a loss for February, their third monthly loss in a row. The Dow eked out a gain of 0.3 percent for its first positive month since November. John Manley, chief equity strategist for Wells Fargo Fund Management, said investors are nervous. ‘A lot of investors have fantastic profits from three or four years (of gains) and they also have terrible memories from seven or eight years ago,’ he said. ‘Why not sell first and ask questions later?’

This post was published at UtopiatheCollapse on March 1, 2016.

3 Things: Recession Odds, Middle-Class Jobs, & Market Drops

Recession Probabilities Rise As I penned earlier this week:
‘Speaking of weather, last year, the BEA adjusted the ‘seasonal adjustment’ factors to compensate for the cold winter weather over the last couple of years that suppressed first quarter economic growth rates. (The irony here is that they adjusted adjustments for cold weather that generally occurs during winter.)
However, the problem with ‘tinkering’ with the numbers comes when you have an exceptionally warm winter. The new adjustment factors, which boosted Q1 economic growth during the last two years will now create a large over-estimation of activity for the first quarter of this year. This anomaly will boost the ‘bullish hope’ as the onset of a recession is delayed until those over-estimations are revised away over the course of the next year. ‘

This post was published at Zero Hedge on 03/03/2016.

This Is Bear Market 2.5 of my Career

This is bear market 2.5 of my career. The half-bear is for the quick one in 1998 during the Asian crisis. It wasn’t the end of the US business cycle but if the Fed hadn’t dropped rates in a hurry back then, it would have been.
Today, we’re still in a ‘bounce’ within an ongoing bear market, and as one market pundit put it, ‘It’s the bounce that never ends.’
In reality though, bounces can have some serious staying power and produce excitable rallies that convince most the worst is over when it’s just about to get worse.

This post was published at Wolf Street on March 5, 2016.

Shortage Of 10-Year Treasuries Hits Record Levels: Repo Rate Plunges To Historic Lows

Yesterday, when looking at the suddenly tumble in the repo rate of the 10 Year, which we noticed that it had drifted sharply into “super duper” special territory, and which according to SMRA was bid at -1.75% while CA saw it as low as -2.75%, we asked: is a major Treasury squeeze on deck.”
We don’t know the answer just yet: so far, we have yet to see a sharp move higher in the price of either the cash or synthetic 10Ys, however what we do know is that as of this morning, whether it is due to shorting or not (and as Credit Agricole’s David Keeble did note yesterday the “specialness may be related to an accumulation of shorts and playing against swap spreads”), there has never been a greater shortage of 10Y paper at least as demonstrated by what just happened in the repo market where the 10Y, according to ICAP unit GovPX, hit a whopping -2.90%, or just shy of the fail rate!
The following chart from Stone McCarthy, which has the 10Y at “only” -2.6%, shows the shortage of 10-Y collateral as the highest since June 12, 2014. If one uses the -2.9% lowest bid, however, it means that there has never been as acute a shortage of 10-Year paper as there is right now.

This post was published at Zero Hedge on 03/03/2016.

So What About ‘Trump University’

It’s amusing to watch people latch onto something that they think is full of red meat and beat their heads against the wall pontificating on it, when there’s just no “there” there.
This is one of those times.
Let’s take the base argument: Trump University was a “per-se” fraud because it wasn’t an accredited school.
Ok, fair enough — and the name was changed to the Trump Entrepreneurship Institute following NY State having a hissy fit over the name. But folks — that’s a naming dispute, not a dispute over the substance of the material.
Schneiderman has his own take on this and is suing; I predict he’s going to lose, but I could be wrong. There’s plenty of spin involved in these allegations by the people doing the suing and quite a bit of appearance of abuse of power (in the case of Schneiderman particularly), but here’s the real problem all these suits have in common: There’s apparently a record from many, if not most, filing evaluations at the time of the seminars in which they claim to be satisfied, and which bears their signatures. In other words where are the damages if almost nobody is unhappy with what they paid for? It certainly makes for a tough road if the essence of the suit is fraud (that is, material misrepresentation that induces someone to do a thing and they suffer loss as a result.)

This post was published at Market-Ticker on 2016-03-05.

Visualising America’s “Irrelevant” Exports & Imports

The U. S. Census Bureau recently released its data on U. S. trade in goods by selected countries and world region for 2015. HowMuch.net built three maps to provide a proportional visualization of the trade that occurs between the U. S. and other countries.
Exports are represented in green, imports are represented in red, and the balance (exports – imports) is represented by red or green depending on whether the U. S. has exported more or less goods than it has imported. For instance, if a country’s imports exceeds its exports, the country will experience a trade deficit, which represents an outflow of domestic currency to foreign markets.
Based on the data, the U. S. exported over $1.5 trillion and imported over $2.2 trillion in goods throughout 2015. This leaves leaves the U. S. with a negative balance of $735 billion!

This post was published at Zero Hedge on 03/05/2016.


It’s my favorite day of the month. The Bureau of Lies & Scams issues their double seasonally adjusted, massaged to provide a happy ending, birth death adjusted unemployment propaganda, designed to keep the masses in the dark about their own dire financial circumstances. Even though the equally manipulated GDP is at 1% or below, retail sales are plunging, corporate profits plummeted by 15% in the 4th quarter and Challenger & Grey corporate layoff announcements were up 42% in January versus last year, our fraudulent friends at the BLS announced glorious employment figures this morning.
The Establishment data that gets all the headlines blared that 242,000 net new jobs were created in February. Of course, 129,000 fake birth/death jobs were factored into that number. Anyone with a functioning brain (excludes Wall Street economists, CNBC shills, and any government apparatchik) knows that more businesses have been closing than opening for the last four years as Obamacare and government solutions destroy the economy. Rather than adding 129,000 jobs, small businesses likely subtracted 50,000 jobs in February. That would put the true number at about 60,000.
In a shocking coincidence, Trim Tabs, a privately run independent company that monitors actual real time payroll withholding tax info issued a report two days ago which said the number of new jobs created in February was between 55,000 and 85,000, based on actual withholding tax data. If you are employed, payroll taxes are automatically extracted. This data cannot be manipulated by the government propagandists. It reveals the truth. No seasonal adjustments, tweaks or phantom jobs added. It’s pure tax data.

This post was published at The Burning Platform on 4th March 2016.

Smith & Wesson Hits All Time High Thanks To Record Gun Demand

Two months ago we presented what we thought was a “very troubling”chart, one showing the latest data on FBI background checks, a proxy for gun purchases. The chart had just hit an all time high.
Since then, the progression has escalated and gun sales have continued to soar as the following update showing gun sales for the month of February over the past decade:

This post was published at Zero Hedge on 03/03/2016.

Gold Enters Bull Market

For the first time since the highs in 2011, Spot Gold has entered a bull market. Now up over 21% from the early December lows, Gold is trading at 13-month highs and outperforming all other asset classes amid the descent into negativity by global central banks…

This post was published at Zero Hedge on 03/03/2016.

The Afghan War Explained In Two Headlines

How often do you notice during an average market day that the mainstream financial news media very often seem to run headlines that not only contradict one another entirely but sometimes emanate from the very same news wire?
Well trust us, it happens all the time. In fact, this type of epic confusion is one of the many “gifts that keeps on giving for us.” For one classic example, see here.

This post was published at Zero Hedge on 03/05/2016.

The Week in Review: March 5, 2016

Murray Rothbard would have turned 90 years old on Wednesday, and his contributions to economics have never been more relevant. As more Americans wake up to the Federal Reserve’s shell game and frustration continues to grow from our dead beat Uncle Sam, Rothbard’s uncompromising assault on the state has made him one of the rare scholars to see his influence and following grow exponentially, even after his passing.
One of the qualities that makes Rothbard special is the incredibly wide scope of scholastic work. Beyond his contributions to Austrian economics that directly led to its revival in America, he was a masterful libertarian political theorist, strategist, revisionist historian and even the occasional playwright.
The new Rothbard Reader, released this past Wednesday, offers readers a convenient way to sample Rothbard’s many contributions to the libertarian tradition.
Dr. Matthew McCaffrey, who along with Dr. Joseph Salerno, served as an editor to this new collection, joined Jeff Deist for the latest episode of Mises Weekends. Matt discusses Rothbard’s amazing range of interests and knowledge, his relationship with Mises, his great opus Man, Economy, and State – written in his early 30s – and his enduring legacy in a sea of forgotten mainstream economists.

This post was published at Ludwig von Mises Institute on MARCH 5, 2016.

9 charts showing Americans never recovered from the Great Recession: If you are wondering why people are so angry look no further.

The press is somewhat baffled as to why Americans are so angry this year. The stock market seems to be doing fine (too bad most Americans don’t own stock). Jobs are being added (too bad most jobs are in the low wage service sector). Housing values are up (too bad the homeownership rate is down because Americans can’t afford home prices at current levels). This is the state of our current economy. One that is mired in stagnation for the majority of people and the mainstream press is largely seen as a megaphone for the wealthy and connected. You don’t have to look too far to see that things are not all that great in the real economy contrary to the headlines. Let us look at a few charts to see how things really are.
9 charts show the economy isn’t doing all that well for many
There are many reason why the disconnect from Wall Street to Main Street is happening. Many large companies make profits overseas and we already know that large companies have cut wages for most workers while profits have risen directly to the top. Americans feel poorer because they are.

This post was published at MyBudget360 on March 4, 2016.

Expert Warns That Unparalleled Financial Destruction Is ‘Just Six Months Away’

The time is nigh.
The crash is coming. It’s waves can be felt pulsing through the system, foretelling its arrival.
But how long will it be until it hits, and how big will its magnitude be?
According to Yale’s Vikram Mansharamani, it is only months away.
Via London Express:
FINANCIAL bubbles across the globe are imploding and the problem is only set to get worse… Prices are falling around the world thanks to the collapse of China’s debt fuelled economic growth and this has triggered a succession of disastrous events that are starting to be realised, according to Vikram Mansharamani, an author and, lecturer at Yale University.
Fears are growing that the world could face a financial crash of unprecedented levels and could even be just six months away.
Bubbles created by the mountain of cheap money made available by low interest rates since the last financial crisis are now starting to burst, said Mr Mansharamani.

This post was published at shtfplan on March 4th, 2016.

Time to Raise Our Sights in Gold

I’ve used a relatively minor ABC rally pattern to keep subscribers on the right side of gold for the last few weeks, but the pattern has stretched far enough to suggest that it is actually a consolidation within a larger, bullish pattern. For a boldly higher new target in April Gold, check out today’s tout. You should also take a gander at my new target for AMZN, since the stock remains my #1 stock-market bellwether.

This post was published at Rick Ackerman on March 4, 2016,.

“The Bounce Has Run Its Course” Bob ‘The Bear’ Janjuah Warns S&P Heading To 1700s

Nomura’s Bob Janjuah warend in January that “the bubble implosion can’t be fixed this time,” and, as he explains in his latest note, he is pleased with all six of his key forecasts for 2016…
In particular on Commodities, with his expectation that crude would trade below $30 (the price per barrel fell from $37 in early January to a low so far of $26 in February).
And on Rates, the 30yr UST yield fell from 2.95% in early January to a low so far of 2.49% in February, below his 2.5% target for 2016, and the 10yr UST yield fell from 2.2% in early January to a low so far of 1.66% in February, in line with his expectation over 2016 of a move in yields down from 2% towards 1.5%.
The reasons for his latest note are:
1. To reiterate my bearish views on risk assets for H1 2016 – I continue to see much lower equity prices, lower core bond yields, wider credit spreads, and weakness in EM and commodities over the next four months (at least). In January I said that the S&P500 would fall from 2000/2050 to the 1500s as my target over 2016. I reaffirm this view. I note with interest that at the global equity market ‘lows’ so far in 2016, seen earlier in February, virtually all major global stock markets were in official bear market territory. For example, the Eurostoxx 50 fell over 30% from its 2015 high to its (so far) 2016 low. The MSCI World fell 20% from its 2015 high to its (so far) 2016 low. The key exception to this move into official bear market territory has been the major US indices, but I expect this to correct itself over the next four months or so.

This post was published at Zero Hedge on 03/05/2016.

How Long Before US Inflation Equals Argentina’s?

The US and Argentina have a lot in common. Both are beautiful countries with a major land mass and an abundance of natural resources and agricultural land. Both had very strong economies around the turn of the last century. Political and economic problems have gradually caused Argentina to grow at a much slower rate than the US. The US has had the major advantage of having the dollar as the reserve currency of the world. This has meant that the US in the last hundred years never had to default like Argentina but could just borrow and print more money. Argentina on the other hand has gone through several periods of default as well as high inflation or hyperinflation since WWII.
As the graph below shows, Argentina is now in yet another period of hyperinflation. Since 2001 gold has appreciated 9,000% against the Peso. And just in the last 12 weeks, gold has gained 90% in Pesos. This is an excellent example of hyperinflation being caused by a collapsing currency. Many emerging economies currently have the same problem. Gold in Russian Rubles for example has gone up 127% in the last two years.

This post was published at GoldSwitzerland on March 4th, 2016.