Friday, November 11, 2016

Dr. Albert Friedberg* Sees
The Potential For A Bond Blowout,
Worried About A U.S. Entitlement Crisis
In his quarterly conference call, Friedberg worries about challenges facing governments & corporations on their debt, escalating entitlements, the series debt problems in China (non-performing loans are 15%-20% of GDP & rising), rising inflation in the economy .. however the potential for a U.S. corporate tax cut down to the 15% level would be very positive for the markets & the economy .. is bullish on commodity producers & prices though sees oil as potentially going to much lower levels than currently .. on rising inflation in the U.S. - thinks the Federal Reserve members that are leaving will be likely more dovish than hawkish - "we are going to see an expansion of the federal deficit, we are going to see long term interest rates going higher, we are going to see a Federal Reserve chase after inflation going higher."
LINK HERE to the podcast
From A Couple Weeks Ago:
Dr. Albert Friedberg*:
Rarefied Air: The Lack Of Liquidity 
In The Financial Markets Is Real
"The distortions created by central banks over the past seven years have blunted our navigating instruments. If a storm is approaching, we are unable to see it. We navigate by instruments, valuations, historical precedents, official opinions and reassurances. Even when a gigantic tsunami overwhelms one of the ships in a perversely calm sea, we reject the warning, chalking it up to its conductor’s carelessness. That mighty sterling can collapse 6% in a few seconds says only that the Brexiters made a bad choice. Really? Our senses apprehend that all is not well .. 
vanishing liquidity (defined as the ability to rapidly execute large financial transactions at low cost with limited price impact) is the lonely indicator of serious trouble ahead. Liquidity to markets is the equivalent of air to humans.
And permitting myself one more incursion into the figurative world, air gets thinner, more rarified, the higher one climbs. Historically, bull markets have always been accompanied by rising volumes and rising liquidity. They died when far-sighted, sophisticated sellers overwhelmed the throng of new, enthusiastic, short-sighted buyers. This seven-year-old bull market is different. Precious few buyers with conviction and enthusiasm can be spotted. It’s a lack of sellers that has fortuitously allowed the paucity of buyers to drive up prices. This liquidity constriction is felt in our own skin. Positions that were easy to put on months ago have become increasingly difficult to exit. It now takes five to eight days to get out of positions if we do not wish to noticeably affect prices, compared with one to three days in months past. The loss of liquidity is not an empty term; it’s real .. Not until volume rises significantly above the recent pace will we be confident that risks are being properly priced in and that prices are indeed clearing." .. Friedberg is bullish on gold, sees the price as having bottomed out about a year ago .. 
LINK HERE to get the PDF

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