John Thomas
05-19-2011, 02:03 PM
Global Market Comments
Macro Millionaire Featured Trades:
(THEY’RE SHOOTING ALL THE GENERALS)
(GS), (AAPL), (FCX), (GOOG)
(TAKING AIM AT SMALL CAPS)
(RUNNING THE BAY TO BREAKERS)
From the desk of John Thomas
The Mad Hedge Fund Trader
Thursday, May 19, 2011
Breakfast With PIMCO’s Mohamed El-Erian.
On the way back from a funeral in Los Angeles last weekend, I thought I would take a walk down Nostalgia Lane and have breakfast at the historic Langham Huntington Hotel, the venue for my senior prom.
I was half way through my eggs benedict in the Terrace Room when, who sits at the next table, but bond giant PIMCO’s brilliant CEO and co-CIO, Mohamed El-Erian. That’s the last time he makes that mistake. I proceeded to grill him on the long term prospects for the global economy.
Mohamed anticipates “a bumpy journey to a new normal”. Developed countries will see sluggish economic growth, high structural unemployment, increased regulation, and constant pressure for private sector deleveraging. Emerging economies will maintain the breakout stage of their development phase. They will deliver high economic growth, strong currencies, and increasingly close the income gap with the developed world.
Policymakers have embraced initiatives designed to boost asset prices, divorcing them from economic fundamentals. The impact on Main Street has fallen well short of expectations. Interest rates have been repressed. The dollar has also seriously weakened. The net effect has been a double edged sword. “Good” asset price inflation has created a hugely positive wealth effect, while “bad” inflation has created a new tax on individuals in the form of higher commodity and energy prices.
Mohamed thinks we will see an uneven and faltering economic recovery over the next five years. He is sticking with his long term growth rate for the US of 2%. Investors face a particularly devilish challenge in that much of our past returns have already been borrowed from the future. Inflation will return. Commodity prices will rise. Yield curves will steepen. High dividend stocks will prosper. Many emerging market currencies will be appreciate.
El-Erian has one of the best 90,000 foot views out there. An Egyptian national, he started out life at the old Salomon Smith Barney in London and went on to spend 15 years at the International Monetary Fund. He joined PIMCO in 1999, and then moved on to manage the Harvard endowment fund. His last book, When Markets Collide, was voted by The Economist magazine as the best business book of 2008. He regularly makes the list of the world’s top thinkers. A lightweight Mohamed is not.
His final piece of advice? Engage in “constructive paranoia” and structure your portfolio to take advantage of these changes, rather than fall victim to them.
8981
8974 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Eliot Wave’s Grim Message.
“Exclusive Content for Macro Millionaire Coaching Students Only” Click here for more information on this exclusive service for serious traders. (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
8975 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Eliot Wave Has Multiple Alarm Bells Ringing
My Favorite Secret Economic Indicator.
It was with an enormous sense of pride and relief that I watched the last of my kids graduate from the University of California at Berkeley. Clutching his hard fought degree in political economics in hand, Robert posed for photos among friends, thousands of beaming parents looking on. His mother died ten years ago, and raising three kids alone, getting them through top colleges, and launching them into the world has not been easy.
There is nothing more electric than attending a ceremony like this. The commencement speak was former Secretary of Labor and my old friend, Robert Reich, whose classes I attended myself. Some 40% of the graduates were Asian, and I spent much of the time explaining symbolism rooted in the middle ages to foreign parents; the robes, mantles, hoods, and swatches of ermine. A dozen unintelligible foreign languages bubbled in the background.
Unfortunately, the unenviable task of him out of his Berkeley hovel fell to me. When I arrived, I was stunned to find nothing less than a war zone. Both sides of every street were piled with mountains of trash, the unwanted flotsam and jetsam of university life cast aside by fleeing students. Computer desk, stained mattresses, broken lava lamps, and an assortment of heavily worn Ikea furniture were there for the taking.
Next year’s sophomores and juniors were foraging en masse, looking for that reusable gem. Diminutive Chinese teenagers were seen pushing massive suitcases on wheels down the sidewalk on their way back to Shanghai, Beijing, and Hong Kong. The university attempted to bring order to the chaos by strategically placing dumpsters on every block, but they were rapidly filled to overflowing.
It was all worth it because of the insight it gave me into one of my favorite, least know leading economic indicators. When I picked up the truck at U-HAUL, the lot was absolutely packed with returned vehicles, and there were more parked on both sides of the streets. The booking agent told me there is a massive influx of people moving into California from the Midwest and the Northwest, with the result that lots all over the San Francisco Bay Area are filled to capacity.
I love this company because, in addition to providing a great service, they get the first indication of any changes to the migratory habits of Americans. The last time I saw this happen was after the dotcom bust, when thousands of technology savvy newly unemployed pulled up stakes in the foggy city and moved to Lake Tahoe to work in “the cloud.” Bottom line: California is enjoying a resurgence of hiring and new economic growth.
UC Berkeley is the world’s greatest public university, producing more PhD’s than any school in history, over 100,000, and also the most Nobel Prizes, at 19. By the way, anyone in the financial services industry looking to hire an ambitious young graduate from this fabulous institution of high learning, please send me an email. Robert moves to New York City in two weeks, to an apartment near Macy’s.
8976
8977
8978 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Quote of the Day
"Because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable" said Ralph Nelson Elliot, the creator of Elliot Wave theory.
8979
8980 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
P.S. If you’d like to sit side by side with me and let me help you multiply your portfolio like a winning hedge-fund manager then I’m happy to mentor you and share my specific trades as I make them just click here to get details on my breakthrough Macro Millionaire coaching program & trading service. (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Macro Millionaire Featured Trades:
(THEY’RE SHOOTING ALL THE GENERALS)
(GS), (AAPL), (FCX), (GOOG)
(TAKING AIM AT SMALL CAPS)
(RUNNING THE BAY TO BREAKERS)
From the desk of John Thomas
The Mad Hedge Fund Trader
Thursday, May 19, 2011
Breakfast With PIMCO’s Mohamed El-Erian.
On the way back from a funeral in Los Angeles last weekend, I thought I would take a walk down Nostalgia Lane and have breakfast at the historic Langham Huntington Hotel, the venue for my senior prom.
I was half way through my eggs benedict in the Terrace Room when, who sits at the next table, but bond giant PIMCO’s brilliant CEO and co-CIO, Mohamed El-Erian. That’s the last time he makes that mistake. I proceeded to grill him on the long term prospects for the global economy.
Mohamed anticipates “a bumpy journey to a new normal”. Developed countries will see sluggish economic growth, high structural unemployment, increased regulation, and constant pressure for private sector deleveraging. Emerging economies will maintain the breakout stage of their development phase. They will deliver high economic growth, strong currencies, and increasingly close the income gap with the developed world.
Policymakers have embraced initiatives designed to boost asset prices, divorcing them from economic fundamentals. The impact on Main Street has fallen well short of expectations. Interest rates have been repressed. The dollar has also seriously weakened. The net effect has been a double edged sword. “Good” asset price inflation has created a hugely positive wealth effect, while “bad” inflation has created a new tax on individuals in the form of higher commodity and energy prices.
Mohamed thinks we will see an uneven and faltering economic recovery over the next five years. He is sticking with his long term growth rate for the US of 2%. Investors face a particularly devilish challenge in that much of our past returns have already been borrowed from the future. Inflation will return. Commodity prices will rise. Yield curves will steepen. High dividend stocks will prosper. Many emerging market currencies will be appreciate.
El-Erian has one of the best 90,000 foot views out there. An Egyptian national, he started out life at the old Salomon Smith Barney in London and went on to spend 15 years at the International Monetary Fund. He joined PIMCO in 1999, and then moved on to manage the Harvard endowment fund. His last book, When Markets Collide, was voted by The Economist magazine as the best business book of 2008. He regularly makes the list of the world’s top thinkers. A lightweight Mohamed is not.
His final piece of advice? Engage in “constructive paranoia” and structure your portfolio to take advantage of these changes, rather than fall victim to them.
8981
8974 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Eliot Wave’s Grim Message.
“Exclusive Content for Macro Millionaire Coaching Students Only” Click here for more information on this exclusive service for serious traders. (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
8975 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Eliot Wave Has Multiple Alarm Bells Ringing
My Favorite Secret Economic Indicator.
It was with an enormous sense of pride and relief that I watched the last of my kids graduate from the University of California at Berkeley. Clutching his hard fought degree in political economics in hand, Robert posed for photos among friends, thousands of beaming parents looking on. His mother died ten years ago, and raising three kids alone, getting them through top colleges, and launching them into the world has not been easy.
There is nothing more electric than attending a ceremony like this. The commencement speak was former Secretary of Labor and my old friend, Robert Reich, whose classes I attended myself. Some 40% of the graduates were Asian, and I spent much of the time explaining symbolism rooted in the middle ages to foreign parents; the robes, mantles, hoods, and swatches of ermine. A dozen unintelligible foreign languages bubbled in the background.
Unfortunately, the unenviable task of him out of his Berkeley hovel fell to me. When I arrived, I was stunned to find nothing less than a war zone. Both sides of every street were piled with mountains of trash, the unwanted flotsam and jetsam of university life cast aside by fleeing students. Computer desk, stained mattresses, broken lava lamps, and an assortment of heavily worn Ikea furniture were there for the taking.
Next year’s sophomores and juniors were foraging en masse, looking for that reusable gem. Diminutive Chinese teenagers were seen pushing massive suitcases on wheels down the sidewalk on their way back to Shanghai, Beijing, and Hong Kong. The university attempted to bring order to the chaos by strategically placing dumpsters on every block, but they were rapidly filled to overflowing.
It was all worth it because of the insight it gave me into one of my favorite, least know leading economic indicators. When I picked up the truck at U-HAUL, the lot was absolutely packed with returned vehicles, and there were more parked on both sides of the streets. The booking agent told me there is a massive influx of people moving into California from the Midwest and the Northwest, with the result that lots all over the San Francisco Bay Area are filled to capacity.
I love this company because, in addition to providing a great service, they get the first indication of any changes to the migratory habits of Americans. The last time I saw this happen was after the dotcom bust, when thousands of technology savvy newly unemployed pulled up stakes in the foggy city and moved to Lake Tahoe to work in “the cloud.” Bottom line: California is enjoying a resurgence of hiring and new economic growth.
UC Berkeley is the world’s greatest public university, producing more PhD’s than any school in history, over 100,000, and also the most Nobel Prizes, at 19. By the way, anyone in the financial services industry looking to hire an ambitious young graduate from this fabulous institution of high learning, please send me an email. Robert moves to New York City in two weeks, to an apartment near Macy’s.
8976
8977
8978 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
Quote of the Day
"Because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable" said Ralph Nelson Elliot, the creator of Elliot Wave theory.
8979
8980 (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)
P.S. If you’d like to sit side by side with me and let me help you multiply your portfolio like a winning hedge-fund manager then I’m happy to mentor you and share my specific trades as I make them just click here to get details on my breakthrough Macro Millionaire coaching program & trading service. (http://wealthinsideralliance.com/macromillionaire/live/?aff_id=664)