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Early Look: Golden Opportunity

Takeaway: This is a brief (complimentary) excerpt from this morning's Early Look note.

“You should acquire physical gold now and put your mind at ease.”

-Jim Rickards

 

Technically speaking (and oh boy do those “technicals” drive emotion), yesterday was the biggest buying opportunity in Gold in the last 3 years. But why the panic in something that has generated such tremendous returns during the #GrowthSlowing panic of 2016?

 

And why is it that everyone in perma bull SPY space understands the concept of buying dips in Amazon (AMZN) but can’t quite wrap their head around the investing exercise when it comes to buying either Long-term Bonds or Gold?

 

As Jim Rickards advises in The New Case for Gold: “Don’t try to time the panic; by the time it’s visible it will already be too late, and the small investor will not be able to get physical Gold. The prudent course is to buy Gold now, have it in a safe place, and when the Gold buying panic comes, you’ll be fine.” (pg 151)

 

Back to the Global Macro Grind

 

Panic? Uh, yeah. Not that memories for the Old Wall and its manic media extend beyond the most recent macro tourist headline, but I assume that the prudent Global Macro investors recalls how Gold did when most US stock market bulls panicked in JAN-FEB 2016.

 

That’s when Gold broke out...

 

Click here to continue reading (subscribe to the Early Look).

 

Early Look: Golden Opportunity - z gold


CHART OF THE DAY | Gold: Buy Or Panic?

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more.

 

"... Not that memories for the Old Wall and its manic media extend beyond the most recent macro tourist headline, but I assume that the prudent Global Macro investors recalls how Gold did when most US stock market bulls panicked in JAN-FEB 2016.

 

That’s when Gold broke out."

 

CHART OF THE DAY | Gold: Buy Or Panic? - 10.05.16 EL Chart


Cartoon of the Day: Boob Tube

Cartoon of the Day: Boob Tube - Central bankers cartoon 10.04.2016

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4 Things To Watch On Deutsche Bank

Takeaway: “All it takes is for an external match to come in and ignite the situation.”

4 Things To Watch On Deutsche Bank - deutsche bank 1

 

Hedgeye Financials analyst Josh Steiner cut through the clutter on The Macro Show yesterday with Hedgeye CEO Keith McCullough. Steiner worries about…

 

  • Lack of Profitability: “The ECB’s negative rates have made it virtually impossible for Deutsche’s core business to make money.”
  • Counterparty Risk: Deutsche Bank’s $50 trillion (“yes, trillion with a T”) in gross derivatives which exposes Europe to a “reflexive downward spiral if fear sets in.”
  • Gravity of Situation: The bank’s derivate exposure is 14X the size of the German economy.
  • Uncertain Political Climate: “German Chancellor Angela Merkel has drawn a line in the sand” making it virtually impossible, in an election year, to rescue Deutsche without massive political backlash.

What happens next?

 

“All it takes is for an external match to come in and ignite the situation,” Steiner says. Watch him in the video below discuss.

 

 

Subscribe to The Macro Show today for access to this and all other episodes. 

 

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IMF Outlook: Taking The Hatchet To Global Growth Estimates (Again)

Takeaway: IMF says, growth "has been too low for too long" ... #SlowerForLonger has been our Macro team's call for the better part of two years.

IMF Outlook: Taking The Hatchet To Global Growth Estimates (Again) - growth cartoon 05.24.2016

Here we go again.

 

The IMF is downgrading its estimates for global growth yet again. Below is a quick rundown of the year-end 2016 growth estimate revisions:

 

  • Advanced Economies, 1.6% versus 1.8% estimate in July;
  • U.S., 1.6% versus 2.2% in July;
  • France, 1.3% versus 1.5% in July;

That's a tiny taste.

(Take a look at the chart below with IMF growth downgrades highlighted in yellow.)

 

IMF Outlook: Taking The Hatchet To Global Growth Estimates (Again) - IMF growth table

 

Consider Maurice Obstfeld, the IMF's chief economist, comments:

 

Growth “has been too low for too long, and in many countries its benefits have reached too few — with political repercussions that are likely to depress global growth further.”

 

Sound familiar?

This story isn't new...

 

We've been warning about #LowerForLonger (rates) and #SlowerForLonger (growth) for the better part of two years. Hedgye Demography sector head Neil Howe makes an interesting point about the IMF in a recent post:

 

"In fact, over the past decade, these highly-compensated, D.C.-based bureaucrats have consistently chosen to revise their predictions downward. Back in 2010, when the IMF took its first stab at growth figures for 2015, the estimate (+4.6 percent) came in at nearly double the final figure." 

 

The World Bank's track record isn't so hot either, Howe writes.

 

IMF Outlook: Taking The Hatchet To Global Growth Estimates (Again) - chart 4

Why do we even listen to these bureaucrats?

 

 


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