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Putting today’s 7.2% unemployment rate (which is actually over 11% if using an accurate labor participation rate), here is the chart that puts it into perspective courtesy of the an “analysis” by Christina Romer and Jared Bernstein titled “The Job Impact of the American Recovery and Reinvestment Plan” from January 10, 2009. Oh yes, the ARRA did pass.

The chart, and the sheer and recurring economist idiocy, is self-explanatory

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bmdOG9hFnvI/story01.htm Tyler Durden

Putting today’s 7.2% unemployment rate (which is actually over 11% if using an accurate labor participation rate), here is the chart that puts it into perspective courtesy of the an “analysis” by Christina Romer and Jared Bernstein titled “The Job Impact of the American Recovery and Reinvestment Plan” from January 10, 2009. Oh yes, the ARRA did pass.

The chart, and the sheer and recurring economist idiocy, is self-explanatory

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bmdOG9hFnvI/story01.htm Tyler Durden

Stevie Cohen’s beleaguered ‘hedge’ fund SAC Capital has decided to shutter its London office:

• *SAC SAID TO PLAN CLOSING DOWN LONDON OFFICE BY END OF YEAR
• *SAC SAID TO EMPLOY MORE THAN 50 PEOPLE IN LONDON OFFICE
• *SAC SAYS IT CUT SIX U.S. PORTFOLIO MANAGER POSITIONS THIS WEEK

But perhaps, even more importantly – and some suggested responsible for the collapses in several major tech/momo names this morning:

• *SAC SAYS ITS SIMPLIFYING FIRM, REDUCING CAPITAL ALLOCATIONS

With stock prices held up by the marginal levered hedge fund buyer, SAC’s size makes their liquidations as big a threat as anything to this fragile market.

 

Via Bloomberg,

SAC Capital Advisors LP plans to shut down its London office as the $14 billion hedge-fund firm founded by Steven A. Cohen scales back in the face of insider-trading allegations by U.S. prosecutors.

 

…

 

“As our negotiations with the government have unfolded, it has become clear to us that the outcome the government is demanding is likely to have a greater than first anticipated impact on the firm,” Conheeney wrote. “We have concluded that we must operate as a simpler firm and reduce our capital allocations.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/FgwpDMuSz-4/story01.htm Tyler Durden

Just when you thought ObamaCare couldn't stoop any lower in its "pitch", it does…

 

 

and there's more…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/kO7S5lrOo2U/story01.htm Tyler Durden

 

Stanley Druckenmiller founded his hedge fund Duquesne Capital in 1981. From 1986 onward he maintained average annual returns of 30%. He also managed George Soros’ Quantum Fund from 1988-2000. During that latter period he famously facilitated Soros’ “breaking of the Bank of England” trade: the legendary trade which netted over $1 billion in a single day.

 

Druckenmiller closed Duquesne Capital in 2010, stating that he was no longer able to meet his investment “standard[s]” in the post-2008 climate (he made money in 2008 before the Fed began to alter the risk landscape).

 

Druckenmiller’s key strength has always been macro-economic forecasting. That he would feel the capital markets were not offering him the opportunities he needed says a lot.

 

Seth Klarman is another investment legend who is returning capital to clients. Widely considered to be the Warren Buffett of his generation, Klarman recently cited a lack of “investment opportunities” as the cause for his decision to downsize his legendary Baupost Group hedge funds.

 

Other legends or market outperformers who have returned capital to investors or closed their funds to outside investors are Carl Icahn and Michael Karsch. Indeed, even value legend Warren Buffett is sitting on the single largest amount of cash in the history of his 50+ year career as an investor, stating that stocks are “fully valued” at current levels (Buffett largely does not believe in shorting the market, so his decision to be in cash is a strong indicator of opportunities).

 

These men are masters of the capital markets. They are voting with their feet and pulling their capital out of them. Given that their personal compensation is closely linked to assets under management and profit sharing, this decision is akin to the choice to forego additional wealth that could be made quite easily (none of these individuals would have trouble raising several billion more in capital) rather than trying to find opportunities in a challenging market.

 

This is not a permanent situation. At some point once the great adjustment occurs there will be very compelling opportunities in the markets. However, today I see a dearth of them.

 

·      US-based blue chips and other premium companies are trading at decent valuations, but the macro picture is unattractive (in 2012, 10 companies accounted for 88% of profit growth in the S&P 500).

 

·      Bonds appear to be at the beginning of an environment of rising rates. An entire generation of bond managers have not experienced a bear market in bonds before.

 

·      Emerging markets are increasingly risky from a geopolitical perspective (nationalization of resources, etc.). Moreover, the inflationary pressures created by loose monetary policy at Central Banks make for civil unrest and wage hikes. These in turn shrink the US/ emerging market wage differential (note that Apple, Bridgestone and many others are moving manufacturing facilities from China to the US for this reason).

 

·      Commodities are highly influenced by China and Brazil. I am concerned that there are in fact very serious problems emerging in the shadow banking system in the former would could result in a banking crisis there (I’ll be devoting the majority of next month’s issue to this topic). The latter country is experiencing another bout of inflation that has already brought two million people out on the streets in protest.

 

This is not so say that money will not be made in any of these asset classes. I am merely outlining the risks I see in these asset classes.

 

For a FREE Special Report outlining how to protect your portfolio from a market correction, swing by: http://phoenixcapitalmarketing.com/special-reports.html

 

Best

Phoenix Capital Research

 

 

 

 

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_k1bVSv4sfM/story01.htm Phoenix Capital Research

Submitted by Simon Black of Sovereign Man blog,

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CIP1DFPDap8/story01.htm Tyler Durden

Submitted by Simon Black of Sovereign Man blog,

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CIP1DFPDap8/story01.htm Tyler Durden

The last time employees in the “Food Services and Drinking Places” category experienced a monthly job decline was February 2010. Since then, for 42 consecutive months, the US eating and drinking industry went on an epic hiring spree without a single month of net layoffs, adding over 1 million workers and hitting an all time high 10.334 million workers, even as actual restaurant retail sales have recently tumbled as a result of the middle-class US household once again running on fumes as a result of the Fed’s disastrous wealth-transferring policies. Well, as the chart below shows, after 42 months of relentless hiring of bartenders and waitresses, we may have just hit “peak bartenders.”

What this means for the future of the US workforce we don’t know, but whatever it is, it can’t be good for several million Los Angeles-based “actors.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/kGGuV0HlAE8/story01.htm Tyler Durden

The last time employees in the “Food Services and Drinking Places” category experienced a monthly job decline was February 2010. Since then, for 42 consecutive months, the US eating and drinking industry went on an epic hiring spree without a single month of net layoffs, adding over 1 million workers and hitting an all time high 10.334 million workers, even as actual restaurant retail sales have recently tumbled as a result of the middle-class US household once again running on fumes as a result of the Fed’s disastrous wealth-transferring policies. Well, as the chart below shows, after 42 months of relentless hiring of bartenders and waitresses, we may have just hit “peak bartenders.”

What this means for the future of the US workforce we don’t know, but whatever it is, it can’t be good for several million Los Angeles-based “actors.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/kGGuV0HlAE8/story01.htm Tyler Durden

It seems, once again, that Apple shares were bid into the product announcement and sold on the news (though it appears the selling has been front-run here). No one really knows what they will show but expectations are for a shiny new iPad which will wow audiences world wide until they start to use it and realize it’s the same as the old one… (rumors include iPad Mini 2, iPad 5, New Macro Pro, New MacBook Pros, OS X Mavericks, and even Apple TV again…)

 

 

click image for live stream of the presentation from Apple…

 

and here is CNET’s live coverage…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Y6Kwqh5gCTM/story01.htm Tyler Durden