Jan 232012
Click below to listen
Jan 212012
You think you have it hard?
As I said last year, to much ridicule, Treasuries can rally further than most think. I don’t know if we’ll see a repeat of 2011′s 30% rally in the 30-year, but don’t rule it out solely because rates are low. Just look at Japan. Nothing is impossible.
With that said, after last year’s rally in Treasuries it is quite understandable that bond bubble talk is resurfacing.
| Ticker | Company | Years of Dividends | Dividend Yield |
| DBD | Diebold | 58 | 3.53% |
| AWR | American States Water | 57 | 3.19% |
| DOV | Dover Corp. | 56 | 2.07% |
| NWN | Northwest Natural Gas | 56 | 3.79% |
| PG | Procter & Gamble | 55 | 3.18% |
| EMR | Emerson Electric | 55 | 3.21% |
| GPC | Genuine Parts | 55 | 2.77% |
| MMM | 3M | 53 | 2.56% |
| PH | Parker Hannifin Corporation | 52 | 1.74% |
| VVC | Vectren Corp | 52 | 4.90% |
| CINF | Cincinnati Financial | 51 | 5.03% |
Another deflationary scare would open the door for a transatlantic QE3. Price inflation across the world has slowed:
Anyone who took even a passing glance in a shop window in the run-up to Christmas must have noticed the drastic discounting going on well before Boxing Day, when the sales traditionally kick off. December’s inflation numbers confirm that retailers were slashing prices much faster than last year, which – coming at the same time as an easing in oil prices fed through to the petrol pumps – led to the sharpest fall in inflation since December 2008.
A deflationary scare could send markets tumbling, but the eventual monetary response (remember, Bernanke is a student of the depression) would be very bullish for risk-assets (at least on a nominal basis).
Jan 162012
From Bloomberg:
Meredith Whitney: “Things are playing out in ways that I expected. I think that 2012 is worse than 2011, and 2013 could be worse than 2012.”
Nassim Taleb: …the world’s predicament is more dire than in 2008. “And, we will pay a higher price. “We haven’t done anything constructive in three and a half years. Nobody wants to do anything drastic now.”
John Hussman: Economic data still suggests “a nearly immediate global economic downturn.” The “marginal” improvement in data does bring the probability of recession to “less than 100 percent,” he said, “but it remains the most probable outcome at present.”
Jim Chanos: “The Chinese banking system is built on quicksand and that’s the one thing a lot of people don’t realize.”
Peter Schiff: “When reality rears its ugly head, and the spell breaks, the reverses can be vicious,” he said. “It happened with dotcom stocks. It happened with real estate, and I believe it will happen with the dollar and Treasuries.”
Mark Spitznagel: “Too much malinvestment has been kept alive, and history shows an inevitable wipeout, which started in 2000.”
Stephen Roach: “With balance-sheet repair only in its early stages and the personal saving rate (at 3.5 percent) still decidedly subpar, the zombie-like behavior of American consumers should persist.”
David Rosenberg: “I see barely more than 1 percent growth in 2012, so yet another year of economic deceleration.”
Michael Panzner: “The fundamental outlook is even worse now than it was a few weeks ago, given (the lack of positive) developments in Europe and growing evidence that the economies of major countries around the world are deteriorating fast.”
John Mauldin: “We’ve got a cancer. That cancer is debt. The longer we take to solve this problem, the more difficult it’s going to be.”
Peter Thiel: Without more rapid advances, “people will have a lower quality of life, where people won’t be able to retire, where governments are pushed toward more and more austerity.”
Gary Shilling: “Severe” recession in Europe. “Hard landing” in China.
Bill Gross: “The financial markets and global economies are at great risk.”
Jan 152012
