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No Timeouts

“I think I have a natural ability to lead."

-Mark Sanchez


Some people confuse a young winner’s conviction with their own insecurity. Most of those people can’t do what it is that winners repeatedly do at the highest levels of American life. We need to embrace our young Americans who have a natural ability to lead. They are our future.


Yesterday, after seeing his New York Jets blow a 16-point lead in the 4th quarter, 24-year old quarterback Mark Sanchez found himself an opportunity to be accountable. His team was trailing the Houston Texans 27-23. There were 49 seconds left on the clock. No timeouts.


He didn’t pout or point fingers. He didn’t blame depression or deflation either. He tied up his chin strap, marched the ball 72 yards down the field in 45 seconds, and stuck the ball in the end zone for the winning touchdown. Jets 30, Houston 27. That’s the kind of American leadership we can believe in.


Never mind the Pretended Patriotism and obfuscation of facts that we hear from conflicted and compromised politicians. Whether they be Irish, Greek, or American, they are embarrassing their last names. There never was a depression in this country. There will be if we continue to let a failed old-boy political network intervene in our markets.


These are early days, but last week showed continued progress. Closing up +0.54% week-over-week, the US Dollar was up for the 3rd consecutive week. As a result, the commodity inflation that’s starving the world’s middle and lower-class abated.


That’s right Mr. Protectionist, we are the world’s free-market leader until we bow down to crony-socialism. We hold the world’s reserve currency in the palm of our hand. It’s time to start wearing the Strong Dollar American jersey with some pride.


With the US Dollar up on the week, here’s what went down week-over-week:

  1. CRB Commodities Index = -1.7%
  2. Oil = -3.4%
  3. Volatility = -12%

For most Americans, these are good things. Playing a game of global chicken (Quantitative Guessing) with inflation isn’t.


Over the course of global economic history there’s never been a world power that’s devalued its way to prosperity. With each and every incremental government intervention attempt (printing money and incurring debt), Japanese, European, and American consumers see:


A)     Shortened economic cycles

B)     Amplified levels of volatility


Normal Americans who hate everything about socializing the losses of Big Auto and Big Banker may not have a sophisticated charting system to show this with a picture rather than prose, so Darius Dale will do that for you this morning in the Hedgeye Chart of The Day. Look at what the VIX (Volatility Index) has done since Ben Bernanke took over the wheel at the Fed in 2006. How’s that for upholding his said objective of “PRICE STABILITY!”


Since Bernanke pandered to the political wind and cut interest rates too early in 2007, this humble looking man has overseen both the highest and most sustained levels of US stock market volatility in American history. Maybe he looks humble when it comes to understanding real-time markets for a reason.


Thankfully, both Americans and the world are figuring this out. This is the advantage of YouTube, Twitter, and a 24-hour news cycle that is starting to hold decision makers accountable.


Better late than never: The Economist spent a very large amount of newspaper space this weekend attempting to teach people what both American and Japanese style Keynesian experiments have turned into. On page 87 of The Economist was a small but important introduction to a question Hedgeye asks every day: “Why is the Austrian explanation for the crisis so little discussed?”


While hope is not an investment process, I can only hope that America’s youth climbs ambition’s proverbial ladder of knowledge and grounds this Heli-Ben of failed academic dogma for good. The debt clock is ticking. The entire world is watching. America, like Ireland, has no more timeouts.


My immediate term support and resistance levels for the SP500 are now 1192 and 1225, respectively. If 1192 holds, that’s immediate term bullish. If it doesn’t, that’s bearish. We are neither short nor long the SP500 as of this morning’s US market open.


Best of luck out there today,



Keith R. McCullough
Chief Executive Officer


No Timeouts - bernankeprice


TODAY’S S&P 500 SET-UP - November 22, 2010

As we look at today’s set up for the S&P 500, the range is 33 points or -0.64% downside to 1192 and 2.11% upside to 1225. Equity futures are trading higher after Ireland agreed to accept a three-year bailout package from the EU and IMF easing concern over the state of the Euro zone.  No important economic data is expected today.

  • Dover Corp. (DOV) may rise as much as 30% as it cuts costs, expands in emerging markets, Barron’s reports, citing analysts
  • Dynegy (DYN): Blackstone Pres. Tony James said $5-shr offer for Dynegy is full and fair, not prepared to raise, in CNBC interview
  • Genzyme (GENZ) said it is on track to meet Nov. 28 deadline to move finishing and filling ops for U.S. products out of its Allston, Mass., plant
  • Merck (MRK)’s cholesterol drug Vytorin safely lowered risk of heart complications in kidney disease patients in study. Jury found in its favor in Fed. Fosamax case
  • Time Warner (TWX)’s “Harry Potter and the Deathly Hallows -- Part 1” opened with $125.1m in U.S. and Canadian ticket sales, a record for series and sixth-best of all time, missed BoxOffice.com est.


  • One day: Dow +0.20%, S&P +0.25%, Nasdaq +0.15%, Russell +0.49%
  • Month-to-date: Dow +0.77%, S&P +1.39%, Nasdaq +0.43%, Russell +2.99%
  • Quarter-to-date: Dow +3.85%, S&P +5.13%, Nasdaq +6.31%, Russell +7.13%
  • Year-to-date: Dow +7.44%, S&P +7.59%, Nasdaq +10.97%, Russell +15.83%
  • Sector Performance: Materials +0.80%, Energy +0.84%, Consumer Discretionary +0.47%, Industrials +0.31%, Tech +0.29%, Consumer Staples +0.07%, Healthcare +0.09%, Financials (0.04%), and Utilities (0.38%)


  • ADVANCE/DECLINE LINE: 534 (-1360)  
  • VOLUME: NYSE - 1101.70 (+8.13%)
  • VIX: - 18.04 -3.79% - YTD PERFORMANCE - (-16.79%)
  • SPX PUT/CALL RATIO: - 1.09 from 1.19 -8.45%  


  • TED SPREAD - 15.46
  • 3-MONTH T-BILL YIELD 0.14% -0.01%
  • YIELD CURVE - 2.36 from 2.38


  • CRB: 298.89 +1.2%
  • Oil: 81.98 -0.53% - NEUTRAL
  • COPPER: 384.25 +0.10% - BEARISH
  • GOLD: 1,353.90 +0.15% - BEARISH


  • EURO: 1.3673 +0.43% - NEUTRAL
  • DOLLAR: 78.504 -0.14%  - BULLISH



European markets:

  • FTSE 100: +0.22%; DAX: +0.47%; CAC 40: 0.27%
    European markets are trading higher in light of Ireland's decision to formally request financial help from its European partners.
  • The request was officially welcomed by the European Union. Sources close to the deal point to a probable 3-year package which will be financed from the EFSM and the EFSF and expected to be in the order of €80-90B.
  • The IMF says it is also ready to join the support program. Contributions from Sweden and UK are also anticipated. Negotiations over the detail of the deal are not expected to conclude before the end of November

Asian markets:

  • Nikkei +0.93%; Hang Seng (0.4%); Shanghai Composite (0.15%)
  • Asian markets mostly rose today on positive sentiment generated by an apparent rescue of Ireland.
  • Construction sent Taiwan higher on news that the government plans to improve housing stock across the island.
  • QR National’s rose 4% on its trading debut to support Australia.
  • South Korea inched up on tech gains, but shippers and financials fell to restrain the overall market.
  • Defensive stocks went up in China, but they weren’t enough to overcome weakness in banks, which fell 1% after their reserve requirement ratios were raised 19-Nov.
  • Property stocks took Hong Kong down after the government imposed new measures to reduce speculation in the real-estate market. 

Howard Penney
Manging Director

THE DAILY OUTLOOK - levels and trends














McCarran Airport volume increased 2% YoY in October.



The calendar was similar to last year and while the hold last year was normal, weak table drop last year provides an easy revenue comparison on the Strip.  Last October, a 9% decline in table drop per visitor contributed to a 10% Strip revenue decline. 


We are estimating Strip revenues increased a solid 2-5% in October 2010.  Our growth estimate would’ve been even higher but October 31st fell on a Sunday which means weekend slot revenues won’t be counted.  Slot handle will be counted so the hold percentage will appear low.  This will reverse in November.


Here are our estimates broken down by metric:



Early Look

daily macro intelligence

Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.

The Week Ahead

The Economic Data calendar for the week of the 22nd of November through the 26th is full of critical releases and events.  Attached below is a snapshot of some (though far from all) of the headline numbers that we will be focused on.


The Week Ahead - cal1

The Week Ahead - cal2

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The Ber-nank Blame

This note was originally published at 8am this morning, November 19, 2010. INVESTOR and RISK MANAGER SUBSCRIBERS have access to the EARLY LOOK (published by 8am every trading day) and PORTFOLIO IDEAS in real-time.

“When you cease to exist, then who will you blame.”

-Bob Dylan


For a global macro analyst, the early morning grind is usually bland. It’s always dark and now it’s getting cold. This morning, however, fired me up! At 530AM EST, Ben Bernanke and his Fiat Friends were holding an academic groupthink session on live TV from Europe.


Before I get into Bernanke’s proactively predictable opening remarks, here’s your morning go-juice:

  1. Bernanke said that calling what the Fed is doing “Quantitative Easing” is “inappropriate”!
  2. As Bernanke was speaking, the Chinese raised rates on their reserve requirements by another 50 basis points (5th time this year)

It’s actually pretty funny. These academic Fiat Fools obviously take themselves quite seriously and while their god of Big Keynesian Government Intervention was speaking, the Chinese poked him again.


At 533AM, the play-by-play hitting the newswires looked like this:

  1. Bernanke says “inflation is expected to be subdued for some time… and the FOMC remains committed to price stability…”
  2. China raises rates again on “global inflation concerns”

You’ll never know what World War III looks likes until it’s staring you in the face, but this war may very well be in motion – a global economic war of both rhetoric and action between the Fiats and the Chinese.


While we wholeheartedly agree with Bernanke that calling Quantitative Guessing (QG) by any other name is “inappropriate”, what we completely disagree with this morning is Bernanke effectively joining the political arms race of blaming the Chinese for American economic problems.


Canadians will remember a South Park song titled “Blame Canada” (it was actually nominated for the Academy Award for Best Song in 1999). For whatever reason the lyrics of this damn song started playing in my head while I was watching Bernanke chirp the Chinese:


                “We must blame them and cause a fuss

                  Before somebody thinks of blaming us!”


It’s really pathetic and sad altogether that the 2010 equivalent of a South Park video has turned out to be the best explanation of what’s really going on here. Xtranormal’s cartoon “Quantitative Easing Explained” video (http://www.youtube.com/watch?v=PTUY16CkS-k) has been spreading to the world’s inboxes like wildfire in the last few weeks – last count as of this morning = 1,796,284 views.


Being at the hub of the Hedgeye exclusive network certainly has its privileges. I get to see what we call “the heat” in terms of what serious people care about on a real-time basis. Serious people aren’t just money managers. We have plenty of upstanding people around the world who work in a variety of professions who are sick and tired of being lied to. We offer them a platform to share their voice.


Washington has abused the global privilege of being the world’s fiduciary of the global reserve currency. Everyone who isn’t paid to be willfully blind gets that by now. The days of conflicted and compromised politicians and financiers living in the shadow inventory of American opacity are ending. If it takes a cartoon to expose the truth, sorry Heli-Ben, YouTube is going to smoke your academic dogma out of its hole.


In a roundabout way, this is all very good news. I don’t think I can handle watching American capitalism fold into the hands of crony-socialism for much longer. Plenty of foreign-born entrepreneurs hiring in the American business community feel the same. This isn’t the country that I came to in 1995.


I’m game to play American Capitalist against the socialists. I’ll even wear the red, white, and blue jerseys instead of my homeland’s. While The Ber-nank’s broken promises have perpetuated nothing but JOBLESS STAGFLATION and a global blame game against America’s #1 client (China), I’ve gone about bootstrapping my own American small business, hired 43 Americans, sucked up Obamacare costs like a slurpee, and liked it.


Back to the data, the lastest Nielson survey shows 89% of rural Chinese citizens expecting to see inflation in the next 12 months. Chinese consumer confidence just fell for the 1st quarter in the last 6 and the #1 concern was, take a wild guess blame gamers – inflation. Meanwhile German producer prices (PPI) came in higher again sequentially (month-over-month) this morning at +4.3% year-over-year growth.


Chairman Bernanke, it’s time to think outside of your Great Depression box and strap on some of global macro and accountability pants. If you don’t start seeing the data as it’s reported real time, “when you cease to exist, who will you blame?”


My immediate term support and resistance levels for the SP500 are now 1191 and 1203, respectively. I sold our entire US Equity position (6% position in the Hedgeye Asset Allocation Model) on yesterday’s fleeting US stock market strength. I don’t buy-and-hold what I don’t trust.


Best of luck out there today and have a great weekend,




Keith R. McCullough
Chief Executive Officer


The Ber-nank Blame - 1