Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Presented by Jack Crooks President Black Swan Capital Agora Financial Investment Symposium - Vancouver 24 July 2009 www.blackswantrading.com www.blackswantrading.com Risk Bid Growth Surprise Muddle through - IWP Source: Stephen Jen, Morgan Stanley www.blackswantrading.com Major “green shoots” disappointment – rethink! - Double-dip recession - China disappointment Global Rebalancing - Emerging market crisis Capitulation out of EM Money flow out of China European banking risk www.blackswantrading.com Hide in US Treasuries Overconsumption <=> Overproduction CA Deficit Nations <=> CA Surplus Nations United States <=> China …an end to the symbiotic relationship! www.blackswantrading.com Potentially an end to the Export Model Subpar global growth for years [Industrial production crushed for majors] Heightened pain for emerging markets Deflation the problem now, not inflation www.blackswantrading.com US-China Symbiotic Relationship Single Currency Zone Argument www.blackswantrading.com US-China Symbiotic Relationship Game Over? Single Currency Zone Argument Chinese Government Explicit Stimulus X Cap Invest @ 45% GDP US Consumer Wealth Fading X X Crunch X Money Locked Inside the System Forcing Asian Trade Partners to Adjust [China surplus up, but exports to West down] Seemingly costless Chinese capital? Property & Stock Bubbles www.blackswantrading.com X X X Source: Leto Research www.blackswantrading.com •50% 6-mo •$35T •Legacy •Non-bank Consumption Free Credit Implicit Weak Dollar Policy Lower CA Deficit Means US Requires Less Int’l Funding www.blackswantrading.com Savings Credit Crunch www.blackswantrading.com Eurostat reports today industrial new orders in the Eurozone declined by 30.1% from a year ago. In Germany, the decline was 32.2%. This is the tenth consecutive month of sharp declines averaging above 30% per month. It seems that industrial contraction in Europe today is twice as bad as in 1929-1930. The fact that export powerhouse Germany leads the collapse raises questions about the euro, whose exchange rate is literally killing German manufacturing. Leto Research, 7/22/09 www.blackswantrading.com Front-end load infrastructure build $1.7 trillion spent in first half, in a $4 trillion economy ▪ Massive inefficiencies and excess capacity ▪ Bubble Trouble…cap controls and fixed currency ▪ Stocks/Real Estate/Banking Lending Demand slack and no exports mean… Rising unemployment = Social tension More consolidation of state power and belligerence www.blackswantrading.com China US Stock Market Crash Japan Creditor Superpower Creditor Superpower 1988 BOJ formula as US Current Account Improved 1. 2. 3. 4. Boost stock & property market Give buffer for export companies to turn inward Stock & property trigger wealth effect Stimulates consumers & residential investment Credit Crunch www.blackswantrading.com Commodities get whacked! 50% fall left? Stocks tumble! The US dollar surges on another major global risk bid! www.blackswantrading.com Black Swan Capital Website www.blackswantrading.com Black Swan Email – [email protected] Black Swan Offerings Currency Currents: Daily Free Global Macro Commentary Subscription-based letters: ▪ ▪ ▪ ▪ Options Forex & Futures Emerging Market Currencies Currency ETF’s Managed Currency Accounts