(Globe & Mail) David Rosenberg on 2014: Why it's going to feel like 10 years ago


Rosenberg sees better times
Economist David Rosenberg expects a better 2014 than the “write-off for the economy” that was last year, though that doesn’t necessarily translate to the markets.

The chief economist at Gluskin Sheff + Associates believes 2014 will be a "surprise year" for the U.S. economy, similar to 1984, 1994 and 2004.

“In a nutshell, I feel like 2014 is going to feel a lot like 2004 and 1994 when the economy surprised to the high side after a prolonged period of unsatisfactory post-recession growth, as reparation of highly leveraged balance sheets delayed, but in the end did not derail, a vigorous expansion,” he said of the U.S. economy.

“That by no means guarantees a stellar year for the markets because as we saw in 2013 with a softer year for the economy and as for the markets, multiple expansion premised on Fed-induced liquidity can act as a very powerful antidote,” the chief economist at Mr. Rosenberg said in a recent 2014 forecast.

Mr. Rosenberg’s main point for this year is that the economy is “not at all suffering from secular stagnation,” but rather has gone through “a balance sheet adjustment process of epic proportions.”

He cited the periods after the dot-com bust and the recession of the early 1990s, and how things improved.

“The consensus view heading into 2004 was that the economy was never going to recover – what a surprise it then was to see the opposite and the Fed embarking on a tightening program in June of that year,” he said, referring to the tech meltdown that preceded it.

“Go back further to the banking sector financial repair that held back the recovery in 1992-93,” he added.

“Again, terms like ‘structural headwinds,’ ‘jobless recovery’ and ‘credit crunch’ abounded. Then look at what happened in 1994.”

(Makor) Technical Research - Euro Stoxx 50 Index - 2Jan13

Technical Research - Euro Stoxx Index (3,091)

Quick Overview: The Index did make a new cycle high this morning but since then has moved into negative territory. Assuming we close below 3,107 we will get a false break above a cycle high which is a negative development in our view. Even though the day isn't over yet we feel that the risk/reward is attractive. Short Term Strategy: Short from market price, target 2,990 and place a stop on a daily close above 3,135. Good Luck! Support: 3,075, 3,034, 2,990 & 2,919 Resistances: 3,107-3,127 [cid:image001.jpg@01CF07D1.6B8FA8D0]

Summary of Trading Positions - European Indices: Position

Entry Date

Index

Entry Level

Target

S/L Level

Exit Date

Exit Level

P/L

Seller

5/12/2013

SX5E Index

2991

2872

2940

17/12/2013

2,969

0.74%

Seller

10/12/2013

DAX Index

9151

8770

9226

19/12/2013

9,335

-2.01%

Seller

18/12/2013

SX5E Index

2972

2872

3015

19/12/2013

3,031

-1.99%

Seller

2/1/2013

CAC Index

4263

4143

4313

0.13%

Seller

2/1/2014

SX5E Index

3091

2990

3135

0.00%

Total Average Return

-0.61%

Summary of Trading Positions - European Equities: Position

Entry Date

Index

Entry Level

Target

S/L Level

Exit Date

Exit Level

P/L

Buyer

27/11/2013

BCP PL Equity

0.12

0.18

0.11

27/12/2013

0.18

50.00%

Seller

17/12/2013

VIV FP Equity

18.63

16.40

19.36

-1.13%

Buyer

18/12/2013

EOAN GY Equity

13.00

14.14

12.80

1.73%

Seller

18/12/2013

GLE FP Equity

39.78

36.20

41.13

24/12/2013

41.5

-4.32%

Buyer

18/12/2013

HEN3 GY Equity

80.76

83.92

80.50

27/12/2013

83.92

3.91%

Buyer

17/12/2013

BARC LN Equity

254

269

247

27/12/2013

269

5.91%

Total Average Return

9.35%

Summary of Trading Positions - US Indices: Position

Entry Date

Index

Entry Level

Target

S/L Level

Exit Date

Exit Level

P/L

Seller

5/12/2013

SPX Index

1793

1746

1814

18/12/2013

1,810

-0.95%

Total Average Return

-0.95%

>>> US Gapping down


Gapping down

Select Brazil related names showing weakness, attributed to weaker real as central bank pulls back on stimulus: GFA -8.6%, OIBR -4.4%, SBS -4.1%, VIV -4%, BBD -3.6%, PBR -2.8%, EWZ -2.7%, ERJ -2.6%, VALE -2.4%.

Select EU Banks stocks trading lower: DB -2.7%, SAN -2.5%, UBS -1.3%, LYG -1.3%, HSBC -0.9%.

Other news: GYRO -8.7% (trading ex-dividend as of Dec 31), DRYS -7.4% (intends to resume sales under its previously announced $200 million program of at the market issuances of its common shares), TKC -5.7% (may face TRY527.7 mln tax fine, according to reports), UNXL -5.1% (COO resigned effective December 31, 2013), CBMX -1.3% (files to sell 81,910 shares by the selling stockholders in S-3 filing), NOK -0.7% (HTC plans to appeal NOK patent ruling, according to reports).

Analyst comments: ADI -2.8% (downgraded to Sell from Neutral at Goldman and downgraded to Market Perform from Outperform at Wells Fargo), AMRS -2.5% (downgraded to Underperform from Market Perform at Cowen), NXPI -2% (downgraded to Neutral from Buy at Goldman), ONNN -1.8% (downgraded to Neutral from Buy at Goldman), ANF -1.6% (downgraded to Hold from Buy at Jefferies), ARO -1.4% (downgraded to Hold from Buy at Jefferies), AAPL -1% (downgraded to Market Perform from Outperform at Wells Fargo), ALTR -1% (downgraded to Neutral from Buy at Goldman).

>>> US Gapping up

Gapping up

M&A news: WPCS +20.6% (announces several new developments; looks to find a buyer for the 60% interest in its China-based joint venture), CEDU +2.3% (enters into definitive merger agreement for going private transaction for $7 per ADS), YGE +2.2% (entered an agreement to establish a joint venture with Shuozhou Coal Power), .

Select metals/mining stocks trading higher: SLV +3%, AU +2.9%, HMY +2%, GG +1.9%, GDX +1.8%, NEM +1.6%, GFI +1.6%, SLW +1.5%, KGC +1.4%, GLD +1.3%, ABX +1%.

Other news: PLUG +22.6% (announces it has met order targets set for the fourth quarter of 2013), HSOL +4.3% (to supply 11.5 MW to Ikaros Solar), ARIA +3.4% (seeing continued strength;confirmed will present at J.P. Morgan Healthcare Conference Jan 14), ORMP +2.9% (Sabby Management discloses 8.29% passive stake in 13G filing), EMITF +2.5% (announces court's approval of arrangement), USG +1.5% (Berkshire Hathaway (BRK.B) discloses 30.5% active stake in amended 13D filing).

Analyst comments: URBN +4.8% (upgraded to Buy from Hold at Jefferies), MCP +4.4% (target raised to $8 at DA Davidson), AEO +2.8% (upgraded to Buy from Hold at Jefferies), XLNX +2.1% (upgraded to Buy from Neutral at Goldman), X +0.8% (upgraded to Buy from Hold at KeyBanc Capital Mkts), BAC +0.7% (upgraded to Buy from Neutral at Citigroup)

>>> iShares Brazil ETF trading lower by 2.7%...Weaker Real....

iShares Brazil ETF trading lower by 2.7% -- may be attributed to weaker real as central bank pulls back on stimulus

Original Message From: LAURENT CHEKROUN () At: 1/02 13:56:44
Brazil Real Falls to Four-Month Low as Intervention Scaled Back
Brazil’s real dropped to a level weaker than 2.4 per dollar for the first time in four months as the central bank began scaled-back support for the currency.
The real depreciated 1.9 percent to 2.4074 per U.S. dollar at 10:11 a.m. in Sao Paulo, the biggest decline among 24 emerging-market currencies tracked by Bloomberg. Swap rates maturing in January 2016 rose nine basis points, or 0.09 percentage point, to 11.71 percent.
Brazil sold $199 million of currency swaps today under a program announced Dec. 18 to auction $200 million each trading day until at least June 30. The central bank offered $500 million four days a week in 2013.
“The central bank’s intervention is now lighter and should have less of an impact on the market,” Marcelo Schmitt, fixed-income director at Sulamerica Investimentos in Sao Paulo, said in a phone interview.

>>> Brazil Real Falls to Four-Month Low as Intervention Scaled Back

Brazil Real Falls to Four-Month Low as Intervention Scaled Back
Brazil’s real dropped to a level weaker than 2.4 per dollar for the first time in four months as the central bank began scaled-back support for the currency.
The real depreciated 1.9 percent to 2.4074 per U.S. dollar at 10:11 a.m. in Sao Paulo, the biggest decline among 24 emerging-market currencies tracked by Bloomberg. Swap rates maturing in January 2016 rose nine basis points, or 0.09 percentage point, to 11.71 percent.
Brazil sold $199 million of currency swaps today under a program announced Dec. 18 to auction $200 million each trading day until at least June 30. The central bank offered $500 million four days a week in 2013.
“The central bank’s intervention is now lighter and should have less of an impact on the market,” Marcelo Schmitt, fixed-income director at Sulamerica Investimentos in Sao Paulo, said in a phone interview.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: WPCS +8.8%, HSOL +7.2%, MCP +3.4%, ORMP +2.7%, NEM +2.7%, KGC +2.7%, SLV +2.6%, EMITF +2.5%, CEDU +2.3%, AEO +2.1%, YGE +2%, HMY +2%, HMY +2%, SLW +1.9%, GDX +1.8%, AU +1.7%, GFI +1.6%, GG +1.3%, ABX +1.2%, GLD +1.1%

Gapping down: GYRO -7.9%, TKC -6.4%, DRYS -6%, DRYS -6%, SGEN -3.8%, BBD -3.8%, OIBR -3.8%, SAN -2.8%, DB -2.5%, LYG -1.5%, CBMX -1.3%, UBS -1.3%, HSBC -1.1%, NOK -1%

(Economist) Erdogan v Gulen - Old article but interesting if you want to unders

Old article but interesting if you want to understand the siuytation in turkey now...{http://econ.st/1a36iVW}

THE biggest achievement of Recep Tayyip Erdogan, Turkey’s prime minister, during a decade of rule, has been to get the army out of politics. He did it with the help of the country’s most influential Muslim cleric, Fethullah Gulen (pictured), who lives in self-imposed exile in Pennsylvania but commands a global network of schools, charities and media outlets.
Now Mr Erdogan has turned on his former ally in a show of force that is likely to determine his own future as well as that of Turkish politics. Strange though it seems to many, Mr Gulen is perhaps the only force that can halt Mr Erdogan’s drift towards authoritarianism. He is also credited with keeping Turkish Islam moderate.
Will Mr Gulen mobilise his flock, thought to be in the millions, against Mr Erdogan and his Islamist-leaning Justice and Development (AK) party in the March municipal elections? If so, will their support be enough to wrest Istanbul, the biggest municipal prize, from AK? And what of Mr Erdogan’s dream of becoming Turkey’s first popularly elected president when the post becomes vacant in August?
Opinions differ on the outcome of what Kadri Gursel, a pundit, calls the “ugly divorce”. With the levers of power at his disposal, Mr Erdogan might seem the stronger man. He has vowed to phase out thousands of private crammers that prepare students for university exams. A quarter of the schools, a big source of disciples and revenue, are run by Gulenists.t
The decision, announced last month, sparked a barrage of rebukes, including one from Mr Gulen, who inveighed against the tyranny of “pharaohs”. Mr Erdogan has begun to weed out thousands of Gulenists thought to be embedded in the security services, government ministries and judiciary and who, in his words, constitute “a parallel state”. They are rumoured to possess evidence of AK-linked corruption, as well as compromising videos of Mr Erdogan’s associates.
These “agents” are said to be the source of a steady flow of classified documents to the media, one of them a directive from the national security council with Mr Erdogan’s signature on it which calls for defanging religious groups, including the Gulenists. Prosecutors have begun investigating Mehmet Baransu, the journalist who published the document, on “espionage” charges. Never mind that Mr Baransu was hailed as a hero when he published reams of other sensitive evidence used to convict hundreds of alleged coup-plotting generals and their proxies in the controversial Ergenekon trial. The targeting of Mr Baransu and his newspaper, Taraf, is yet another example of Mr Erdogan’s campaign to muzzle dissident voices.
A source of enduring speculation is why Mr Erdogan has chosen this moment to go after the Gulenists. The most likely answer is that Mr Erdogan wanted them to show their hand well before the presidential elections. An increasingly paranoid prime minister is said to believe that a “Gulen-Israel axis” is bent on unseating him. His suspicions were fuelled by Mr Gulen’s very public criticism of Turkey’s rupture with Israel in 2010.
It is too early to say which of the leaders will prevail. Mr Gulen made some conciliatory noises in his most recent sermon. The latest opinion polls suggest that AK continues to command around 50% in support. People close to Mr Gulen acknowledge that the movement’s image has suffered and that much soul-searching has ensued. Mr Erdogan, who rarely admits to any wrong-doing, ought to follow suit. Turkey would be a happier and more democratic place.

>>> Erdogan vs Gulen Part two {http://econ.st/1a3705j}

ON DECEMBER 17th Turkish police detained the sons of three cabinet ministers, a construction tycoon, a banker and a mayor from the ruling Justice and Development (AK) party in dawn raids in Istanbul and Ankara, as part of a corruption probe that saw 49 detentions. The news sent shock waves through the political establishment and financial markets. It is seen as an escalation in the power struggle between Recep Tayyip Erdogan, the AK prime minister, and Turkey’s most influential cleric, Fethullah Gulen, who runs media outlets, schools and charities from rural Pennsylvania.
In his first comments after the arrests, Mr Erdogan struck a characteristically defiant note: “We will not bow to any threats. They can resort to whatever ugly methods and alliances they choose…the AK government will not allow this.” He pointed at “dark foreign forces” that he claimed had orchestrated anti-government protests in June. “Turkey is not a banana republic,” he roared.
The row between the two men has been brewing for a while. Mr Erdogan has accused Mr Gulen’s followers of establishing “a parallel state” by infiltrating ministries, the judiciary and the police. Ironically, after AK shot to power in 2002 the Gulenists were its closest allies in the fight to strip the army of political influence. Recent polls suggest that Mr Erdogan still commands 50% of the vote and, as he says, it is the ballot box that will show his strength against enemies, starting with local elections in March. But he must be getting worried.