Or select individually:
- A Really Long View Of Inflation Shows That It’s All The Fed’s Fault
- Here’s The Kyle Bass Portfolio
- Goldman Sachs Thinks The End Of The Stimulus Is Going To Crush GDP Growth
- Today’s Unemployment Claims Ruined Any Hope Of A Decent Jobs Situation This Year
- How To Blow A Bond Bubble
In its latest investor letter, Matterhorn Asset Management warns of a hyperinflationary depression worse than Japan's, as piles and piles of worthless paper collapse in on themselves.
Who do they blame for this predicament? The Fed, of course.
In this chart, they claim to back-measure the CPI going to 1800, and the point to take away is that while there were inflationary spells in the past, what really got the ball rolling was the creation of The Federal Reserve and the dissolution of the gold standard.
Hedge fund manager Kyle Bass was on CNBC today, scaring the living bejeezus out of folks with his warnings about sovereign debt problems, the European banking system, and the coming hyperinflationary collapse of Japan.
So what's he invested in?
Actually, he's mostly long US assets, though he's not a 'bull' on equities. In fact, he says you'd be a fool to be long.
Bass favours special situations, which makes mimicking his portfolio tough, but here's the broad outline of what he's doing with his cash.
Goldman Sachs (via Zero Hedge) have released what certainly is a depressing sight in their latest GDP report. The bank continues to predict that U.S. GDP will remain positive through 2011, with 1.5% growth in H2 2010 and 1.5% growth for Q1 2011, rising to 3% growth by the year's end. But that's pretty much anemic growth, and below consensus.
More interesting might be the impact of the withdrawal of fiscal stimulus on GDP growth for the U.S. economy.
The positive impact of said stimulus can be viewed in the first half of this chart, pointing to how it dragged up the U.S. growth rate through some more difficult quarters. But now with its withdrawal, its absence will be felt through 2011, where the pace of growth might have been lifted by its retention.
This could partially explain Goldman's projection that unemployment is set to rise back to 10% in the middle of 2011.
Goldman Sachs (via Zero Hedge.)
Initial jobless claims came in today at 500,000, which is a 12,000 increase from the previous week's level, and substantially worse than the 475,000 expected by consensus.
What does this mean? Whereas before jobless claims were merely 'stubbornly high', and not declining meaningfully, now they've clearly gotten worse, as shown below in a chart from Waverly Advisors. What this means is that even if things start to get better, and jobless claims improve, it's fair to say they will remain pretty ugly through year's end.
We continue to anticipate overall unemployment levels to remain sticky near current levels into year-end as softening growth expectations weigh on corporate investment decisions. Anecdotal reports of demand for highly skilled labour appears to have a regional skew that may mute any near-term impact on national averages. Meanwhile it is obvious that job loss and creation will be a primary narrative focus for midterm elections. These converging factors suggest continued downward pressure on consumer sentiment for the foreseeable future.
Investor love for bonds just won't quit. When it comes to U.S. government bonds, today the 10-year bond yield is plummeting, and is on the verge of breaking past its 52-week low of 2.55%.
If we then step back and look at all bonds in aggregate (inclusive of government bonds and corporate bonds), 2010 is indeed on track to be a banner year for bond-love.
As shown below, if we take the U.S. mutual fund flows into bonds for the six months ending June, and multiply it by two, then we arrive at an annualized 2010 fund flow which is set to be larger than even what we saw in 2009 (in blue). Meanwhile, stock fund flows continue to be negative (in red).
Bonds are either 1) Already over-hyped, or 2) Soon will be if this current trend continues:
(Data based on mutual fund tracking by The Investment Company Institute)
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