- Jeff Gundlach of DoubleLine Capital: Treasuries Could Rally Even Higher - Morningstar video at Pragmatic Capitalism
"if you're going to address the deficit problem even incrementally, low Treasury bond yields make tremendous sense, because addressing the deficit fairly clearly leads to weaker economic growth.
Already, we have $350 billion of fiscal drag coming our way in 2012 if policies are not changed with the sunsetting of tax cuts from the Bush era and also from the payroll tax reduction that was put in place at year-end 2010. $350 billion of fiscal drag is a lot, particularly when we're living with de minimis GDP growth to begin with, in the first half of 2011. Let's remember, the first half of 2011 GDP growth was a beneficiary of stimulus. (from Morningstar transcript)
- "Meredith Whitney discussed how the US banking system is turning Japanese as zombie banks dominate the market" - CNBC at Pragmatic Capitalism
- "Richard Koo (Nomura) discusses the balance sheet recession and how the U.S. is making the same mistakes as Japan (private sector de-leveraging during fiscal consolidation). - Bloomberg at Pragmatic Capitalism
- Charles Nenner thinks gold is going to $2,500, the U.S. Dollar remains the world's reserve currency, and says own Treasury bonds not stocks during the deflationary depression - Breakout video #1, video #2
- Robert Prechter on the bear market, wave 3, gold (he's bearish), deflation and the failure of QE2 - Bloomberg TV
"This decline is a little bit more severe. The advanced/decline ratio on Monday for example was the greatest on record going back to 1926. That's kind of a wake up call. I think it's a confirmation that we're in what I call "Wave 3" under the Elliott Wave model. The first wave down was the 2007-2009 drop and I think we're in another declining portion of the bear market."
- Jeremy Grantham's Latest: "The S&P Is Worth No More Than 950" - Zero Hedge (interesting quote from page 7)
"Here though, for a while anyway, a great surge in government spending made up the difference on the top line, making for the temporary best of all possible worlds for corporate proﬁts, an outcome that I must admit I never saw as even a faint possibility. It belongs, however, to the growing family of can-kicking maneuvers: when the government debt ratio inevitably falls (or even as it rises) at a decelerating rate, it will put offsetting pressure on margins. As individuals continue to restrict their spending and as commodity prices stay high, other pressures on proﬁts also intensify. Lower margins are the great threat to market performance, even more so than the above long-term average P/Es. [Memo: the very long-term normal trailing P/E is about 15. We use 16 in our calculations because we’re friendly. Those who use much higher numbers are looking at the shorter time periods, when the Greenspan-Bernanke regime created a long period of artiﬁcially above-normal stock prices. Be warned!]" ..... P/E going to single digis?
- Andy Xie on China's Holdings of U.S. Debt, the Chinese and U.S. Economy, Dollar/Yuan peg and more - Bloomberg TV
- Nice analysis here: Stealth QE3 is upon us, how Ben did it and what it means - Economic Musings