Top of the Market? PIMCO's Bill Gross Continues Auctioning Stamp Collection

We last looked at Bill-the-Philatelist in "Stamp Collecting for Fun and Profit (PIMCO's Bill Gross and his $100 Million Collection Swing By)" with an amazing paper by London Business School Emeritus Fellow /Norwegian sovereign fund strategy chair/ Cambridge prof./all-around good guy Elroy Dimson.

The most recent auction, the first to include U.S. issues, went off on April 9, here's Nightly Business Report with the details:


Here's the Auctioneers announcement via StampAuctionNetwork:

Robert A. Siegel Auction Galleries, Inc. Sale - 1041

  The William H. Gross Collection: 1847 & 1851-56 Issues - April 9, 2013   The 375 lots in this catalogue comprise a selection of items from the 1847 and 1851-56 Issues collected by Mr. Gross during the past twenty years. He possesses an impressive quantity of 1847 and 1851-56 Issue covers. So much, in fact, that he feels he might be depriving other collectors of the opportunity to build their own collections. 

As Mr. Gross and his wife, Sue, have so generously done with all of their stamp proceeds, the money from this auction will be immediately donated to two major charitable institutions—Doctors Without Borders/Medecins San Frontieres and Millennium Villages Project at the Earth Institute.
The auction is held in collaboration with Charles F. Shreve and Tracy L. Shreve. 


First Session (lots 1-123): Tuesday, April 9, 2013, at 10:30 a.m.
Second Session (lots 124-375): Tuesday, April 9, 2013, at 1:30 p.m.   For more information please contact us at:

Robert A. Siegel Auction Galleries, Inc.
60 East 56th Street, 4th Floor
New York, New York 10022
Phone: (212) 753-6421
Fax: (212) 753-6429

To request more information by email. stamps@siegelauctions.com
Visit our Home Page at Robert A. Siegel Auction Galleries, Inc.

Finally, the press release with many more details:

PIMCO Founder Bill Gross Will Sell Some Of His Historic U.S. Stamps in New York City Charity Auction

Questions the World Wants Answered "How quickly does hotness fade?"

From Worthwhile Canadian Initiative:

Ratemyprofessors.com allows students to grade a professor's clarity, helpfulness, ease and - just for fun - rate their appearance as "hot" or "not". A professor with more hot than not votes is awarded a chili pepper on the ratemyprofessors.com web site.

Hotness declines with age, but how quickly? To find out, I combined ratemyprofessors hotness scores with information on when professors acquired their PhD - the best available measure of a professor's age (this information was gathered jointly with my co-author, Anindya Sen, and his co-authors). 

The locally weighted smoothed scatterplot (lowess) line above shows that a male economics professor's hotness peaks shortly after he has completed his PhD, and declines steadily from there. An ordinary least squares regression on the 306 male Ontario economics professors in our sample finds that the relationship between years since PhD and hotness is statistically significant: a male professor's probability of being  rated hot by his students falls by 0.5 percentage points with each passing year (p=0.003 - the same results are obtained by a probit analysis).

The relationship between hotness and age for female professors appears, at first glance, to be similar to the male graph...MORE

Goldman's Jim O'Neill: It Makes Sense For Central Banks To Own Equities

One can assume that this is the official Bilderberger Goldman party line.
From CNBC:

Play Video

As the Bank of Japan ramps up its monetary stimulus to include buying equities, Jim O'Neill, chairman of Goldman Sachs Asset Management, said it makes sense for central banks to own stocks. O'Neill spoke with CNBC at the Goldman Sachs Growth Markets Summit in New York.

After a survey by RBS was published earlier this month that showed a greater appetite for central banks to invest in equities, "I don't think people should worry about that," said O'Neill. He added that many sovereign wealth funds are tied to central banks and are already investing in stocks.


Earlier this month, the Bank of Japan promised to pump $1.4 trillion into the economy in less than two years to combat deflation through open-ended asset purchases. The central bank said on April 4 that it will more than double investments in equity exchange-traded funds by the end of 2014. The Bank currently holds ¥1.4 trillion ($14.1 billion) in ETFs with a target of ¥3.5 trillion ($35.3 billion) in 2014.

"Frankly, it makes a huge amount of sense in a world of floating exchange rates and such incredible opportunity, why should central banks keep so much money in very short term, liquid things when they're not going to ever need it?" O'Neill said. "To help their future returns for their citizens, why would they not invest in equity?"...MORE 

HT: Clusterstock

Did the Tesla Motors Inc. Tweet Spook the Bears? (TSLA)

As we repeated in April 3's "Tesla: The Knives Come Out, Stock Drops 8% (TSLA)" (after the last time Mr. Musk did the tweet thing):

A financing program?
Elon, Elon...underpromise, overdeliver, not overpromise...
The perils of social media exposed.

From Schaeffer's Research:

The shares of Tesla Motors Inc (NASDAQ:TSLA) are bucking early broad-market headwinds, touching a record high of $53.74 after another notable tweet from the company's chief executive. What's more, options traders are once again picking up extremely bullish bets, either to roll the dice on a significant short-term rally, or to protect their short positions.

Most notably, the stock's deep out-of-the-money May 65 call has seen about 750 contracts change hands at a volume-weighted average price (VWAP) of $0.78. Ninety percent of the contracts traded on the ask side, and implied volatility was last seen 4.1 percentage points higher, hinting at buy-to-open activity.

As alluded to earlier, the call buyers have one of two motives: to profit from a 24.4% rally north of $65.77 (strike price plus VWAP) within the next few weeks, or to insure their bearish bets. Currently, short interest accounts for a staggering 42.4% of Tesla Motors' total available float, and would take nearly eight sessions to buy back, at the equity's average pace of trading. By purchasing calls, the shorts can lock in an acceptable price at which to repurchase their shares, should TSLA skyrocket in the near term.

Whatever the motive, today's affinity for out-of-the-money calls merely echoes what we saw on Wednesday, when traders honed in on the May 60 and 65 strikes....MORE

After hitting a new all-time high of $53.74 the stock is now up 3 cents at $52.03.

What If Google Launched a Currency? (GOOG)

The Goog has more or less given up on their energy trading activities so what the heck, use the FX desk for alt-currency!
From Phil Pearlman:

There must be a small group of geniuses inside the Googleplex who have been observing Bitcoin and thinking deeply about potential implications.

While many of us smirk, myself included, at the illiquidity and the volatility, Bitcoin raises some big and novel issues that might seem obscure at this point:

First, Geopolitical & Macroeconomic - Let’s think for a moment about how invested nations have become in trying to control the value of their own currencies. It has been a race to the bottom for the Yen and at times the Dollar in an effort to spur growth while the Chinese collared the Yuan to keep it from rising. Much of this relates to international trade and so all currencies are intrinsically tied to one another. Even the way we trade currencies are paired, relative to each other.

Further, fundamental currency value is only derived from the faith of the underlying issuer. There is no gold or anything else standard.

Next, Technological –  Bitcoin is an experiment. It may fail and I suspect it will but the implication that we are now capable, technologically, of creating an electronic currency not backed by a nation can never be undone. Others, who have learned from the experiment, might create currencies that solve structural and technological shortcomings of Bitcoin. Proof of concept exists and this can not be undone.

(There are also potential sociocultural implications but I will leave a more detailed discussion of this for another day.)

While I don’t hear analysts, political figures or the representatives of financial institutions taking Bitcoin seriously, geniuses who are open to new ideas must be thinking through some of this.

Google does amazing things that at first appear preposterous and that average people mock initially (BTW, Fred Wilson wrote a good piece about this the other day). They’re building driverless cars, experimenting with inexpensive internet services 100x faster than current offerings and building computerized eyewear to name a few.

If Google decided to launch a currency they might resolve 2 of the issues raised above....MORE 

CME Group to Launch Futures Based on Renewable Identification Numbers (RIN credits)

This sure looks like the kind of side bets the 1890's bucket shops used to offer which, if it weren't for that pesky supremacy clause in the Constitution, would be illegal under state anti-gambling and anti-bucketshop laws.
See also: Credit Default Swaps purchased by a party who doesn't own the underlying debt.

From the CME:

CME Group will launch nine futures contracts based on Renewable Identification Numbers (RINs), the credits traded by ethanol makers and fuel companies to comply with a federal biofuels mandate.

The contracts, which will begin trading May 13, will provide a useful hedge for price risk associated with the U.S. Environmental Protection Agency's renewable fuels standard, CME Group said in an April 25 statement.

 "With the recent increase in volatility in RINs prices, we've seen strong interest from our customers and other market participants for cost-effective ways to manage their risk in this market," Gary Morsches, CME Group's Managing Director, Global Energy, said in a statement.

"As the most actively traded marketplace for the benchmark RBOB Gasoline and ULSD Diesel contracts, our new RINs futures contracts will be a strong complement to our existing suite of products and will allow our customers to take advantage of reduced capital requirements and margin efficiencies,"...MORE

Bank of Japan Rolls Out First 2015 Inflation Forecast

Following up on last night's "UPDATED--Japan "Core"* CPI Prints at Negative 0.5%, Gold Pops".
From FT Alphaville:

BoJ sees good things, everywhere…

… including in places completely unrelated to the Bank of Japan, or even Japanese government policy.
It’s been a big day for the Bank of Japan, although nowhere near as big as April 4. First, let’s look at this:

This re-affirms what the BoJ said on April 4 when announcing the big new “Quantitative and Qualitative Monetary Easing” programme: that the BoJ will buy assets at a rate of Y60-70tn per year in order to double the monetary base.

All well and good, though the BoJ wasn’t expected to change its QE programme today, so it didn’t stop the yen strengthening somewhat.

It’s the BoJ’s inflation and GDP forecasts that were most anticipated.
They have been bumped up a lot; the key numbers are 1.4 per cent CPI growth in 2014....MORE

UPDATED--Japan "Core"* CPI Prints at Negative 0.5%, Gold Pops

*Not to be confused with "Core-core", excluding fresh fish ,gasoline, veggies, oil.

Tokyo-area reports one month ahead of "National" i.e. April reporting down 0.3% vs expected -0.4%.
March national CPI was pre-Kuroda April 3-4 easing.

Gold picks up another $10.90 to $1479.10. Somewhere between that price and $1525 (remember $1525? target on the way down?) is a dandy spot to sell some shiny stuff.
Maybe one last "Buy it before it goes higher" spasm for a couple percent.
ZeroHedge is too gleeful, PPI is more important at this stage.

Here's the Statistics Bureau report.

From ZeroHedge:
Abenomics Leads To Worst Core Deflation In Three Years

...The market's immediate reaction: gold is pushing higher, breaking above
$1473, as this means moar, moar, MOAR balance sheet doubling by the
BoJ...

Gold has now retraced Fib 61.8% of its record plunge...

...MORE 

Update--Gold now $1484.40:


And from ForexLive:
Japan CPI – complete figures including ‘Tokyo’ CPI

National CPI (March) -0.9% y/y:

• Prior was -0.7%
• Expected was -0.8%

National CPI excluding fresh food (March) -0.5% y/y (in Japan, thwas was the ‘core’ measure of inflation)

• Prior was -0.3%
• Expected was -0.4%

National CPI excluding food and energy (March) -0.8% y/y

• Prior was -0.9%
• Expected was -0.8%

...MORE

"When Swindlers Worked the ‘Big Con’ on Stock Investors"

From Bloomberg Echoes:

In the 1900s and 1910s, hundreds of swindling teams worked the Big Con in U.S. cities.

The time was right because, by the beginning of the century, the sensational exploits of robber barons and the vast fortunes to be had from railroad, mining and other industrial enterprises had created an appetite for financial speculation that most Americans couldn’t satisfy.

The stock markets were open only to the few who could afford the high share minimum and margin requirements. This moment in history -- after gambling ceased to be widely considered immoral and before securities became a standard part of retirement funds -- left middle-class businessmen quivering for opportunity.

Enter the confidence man, who calibrated his pitch just right: He wasn’t offering something for nothing; he was looking for a wide-awake investor who knew how to read the winds.
The Big Con was a precisely constructed play in nine acts. Take the experiences of J. Frank Norfleet, a prosperous, self- made cattle rancher from the Texas Panhandle, who was visiting Dallas in November 1919 to sell land.

Finding Mark
Norfleet’s swindling began when the members of the Furey gang “put the mark up,” or identified him as a likely victim. They looked for out-of-towners, ideally, rich ones who weren’t too familiar with the financial industry. Norfleet fit the bill.

In the ornate lobby of the St. George Hotel, with his pants tucked into his cowboy boots, Norfleet stuck out. One of the swindlers, Reno Hamlin, befriended him and expressed interest in a carload of mules Norfleet had for sale. Just then, W.B. Spencer strode into the lobby. Hamlin introduced Spencer as a buyer for the Green Immigration Land Company in Minneapolis who might be interested in Norfleet’s land.
Hamlin and Spencer, the steerers of the gang, were “playing the con” for Norfleet, a crucial step that involved fostering intimacy. This took several days, as the ropers wined and dined their mark and earned his trust. Then they “roped the mark,” or transferred his loyalties to the inside man.

Spencer and Hamlin met Norfleet in the lobby of another fine Dallas hotel, the Adolphus, where they intended to discuss their land deal. But as Norfleet sat down, he felt something pressing against his thigh. He discovered a wallet with cash, a cipher code card and other documents, all inscribed with the name J.B. Stetson. The men ascertained that Stetson was a guest of the hotel, and they knocked on his door to return the wallet.

Stetson was, in reality, Joe Furey, the gang’s ringleader. In gratitude for the return of his wallet, he pressed a $100 bill on the rancher. Norfleet refused, as they knew he would. Furey then suggested that he repay Norfleet’s kindness by investing $100 on the local stock exchange and allowing his benefactor to keep any profits.

Thus began Act 4, in which Furey “told the mark the tale.” Furey alias Stetson said his job was to play the market using information in encrypted telegrams sent to him by United Brokers, a clandestine syndicate of Wall Street firms. United Brokers controlled large enough blocks of stock that it could swing the market. Since Furey always knew its manipulations in advance, he could place opportunistic orders.

Furey dashed to the brokerage. Twenty minutes later, he was counting $800 into Norfleet’s hand. It is a truism of the Big Con that no mark has ever been able to resist “the convincer,” the material proof that the mechanism behind the con actually works. Furey then confessed that he was in debt, and asked Norfleet for help. He wasn’t permitted to place his own money on United Brokers’ stock picks, Furey explained. Would Norfleet consent to use Furey’s money but sign his own name on the stock orders, and split the profits? Furey would be happy to reinvest Norfleet’s cut....MORE

Baby Glencore: "Trafigura to invest around $400m in Spanish mine"

It's a big baby, over $125 Billion in revenues, more below the jump.
From Reuters via Mineweb:

The company plans to spend over $390.45 million into a newly-acquired copper, zinc and lead mine in Spain over a period of two years.

GENEVA (Reuters)  - 
Trafigura, the world's third biggest trader in raw materials, said it planned to plough over 300 million euros ($390.45 million) into a newly-acquired copper, zinc and lead mine in Spain over two years.

Privately-held commodity trading firms like Trafigura have adopted a strategy similar to listed rival Glencore and stepped up purchases of oil and mining assets to extend control over supply chains.

Trafigura, the world's second largest independent trader of non-steel related ore, said earlier this month that the mine formed part of a broader strategy to create a standalone, mid-sized and diversified mining company....MORE

Last week the Financial Times was reporting on the disclosure that accompanied Trafigura's bond offering:

Trafigura raises $500m with perpetual bond

Trafigura, one of the world’s largest commodities trading houses, has launched its first perpetual bond, tapping the public capital market in a further sign of change in the way trading titans finance themselves.

The trading house, which last year moved its incorporation from Geneva to Singapore, raised $500m with its bond, up from an initial target of $300m. The note, which was five times subscribed, will yield a 7.65 per cent coupon.

Trafigura is the world’s second-largest independent metals trader after Glencore, and the third-largest oil trader behind Vitol and Glencore.

The bond issue is the latest sign that the traditionally employee-owned commodity trading industry is opening up to new sources of capital, as European banks scale back their lending activities in the sector just as traders need more credit.

Louis Dreyfus Commodities, one of the world’s top food commodities traders, last September tapped the public capital markets for the first time in its 160-year history, raising $350m in a perpetual bond....MORE

And:
Trafigura staff net $1.6bn in share deals

Trafigura, one of the world’s top commodities trading houses, has handed about $1.6bn to its senior employees in the past three years by buying back their shares, according to financial statements revealed in a bond prospectus.

The scale of the buybacks highlights the riches that have accrued to a relatively small elite of traders as a result of the boom in commodity prices unleashed by the industrialisation and urbanisation of China and other emerging countries since 2000....MORE

CEO  Claude Dauphin is a very heavy hitter.

Collaborative Robot That Assembles IKEA Tables, Doesn't Mind Horse Meat

From Quartz:

Hopefully robots can understand these instructions better than humans can.

Robots are great at doing the same thing over and over again in a controlled environment. They are less useful in situations where they need to adapt. Sylvain Calinon and Leonel Rozo, two researchers at the Italian Institute of Technology’s department of advanced robotics in Genoa, are trying to change that.

In a paper to be presented at the conference of the Association for the Advancement of Artificial Intelligence in Washington state later this year, they explain how a robot can learn a task by being shown how to do it.

Their experimental robot differs from earlier robots that can learn by demonstration in two important ways. First, it can not only learn from humans, who are unpredictable and messy, but then work together with them on a task. That is more impressive than dealing with inanimate, predictable objects like conveyor belts. And its learning isn’t confined to the needs of a single person—it can adapt itself to different people, a messier proposition yet. To test it out, the researchers set their robot the task of helping humans build a table from IKEA....MORE

"Lawmakers, aides may get Obamacare exemption"

From Politico:

Congressional leaders in both parties are engaged in high-level, confidential talks about exempting lawmakers and Capitol Hill aides from the insurance exchanges they are mandated to join as part of President Barack Obama’s health care overhaul, sources in both parties said.

The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides. Discussions have stretched out for months, sources said.

A source close to the talks says: “Everyone has to hold hands on this and jump, or nothing is going to get done.”

Yet if Capitol Hill leaders move forward with the plan, they risk being dubbed hypocrites by their political rivals and the American public. By removing themselves from a key Obamacare component, lawmakers and aides would be held to a different standard than the people who put them in office....MORE

Natural Gas Inventory Estimates

First up, via the CME:

Weekly Natural Gas Storage Survey 

By Energy Metro Desk - Thu 25 Apr 2013 08:29:33 CT

Previewing the Energy Information Administration's 4/11/13 report.
Each week, we poll 40 professional storage forecasts for our weekly Natural-Gas Storage Box Scores (as seen in each bi-weekly issue of Energy Metro Desk*). This is North America's biggest and most comprehensive natural-gas storage survey and report.

Energy Metro Desk editors forecast this week:  +33 Bcf
Average: +31.8 Bcf
Median: +32 Bcf
Range: -124 to -148 Bcf
Current Storage Level: 1,704 Bcf
Surplus under/over 2012: 794 Bcf (32%)
Surplus under/over 5 Yr Avg: 74 Bcf (4%)

Natural Gas Storage Tealeaves
This week the range is fairly tight, the standard deviation is really low, the categorical ranges are razor thin and the spread between categories is a hair above 1 Bcf. Nothing, but nothing is signaling a surprise this week. But, then again, there have been some rogue reclassifications lately, at very inopportune times. And, lots of folks have been caught short because of it. Last week's 31 Bcf build was about 5 Bcf below the market. The week before that was even more strange, thanks to one enormous outlier that every major survey included (somebody got rich that week). The change-over period we're currently enjoying so much is prone to producing some odd activities around the quad and last year was a bright and shining example. This time last year EIA published a multi-week correction that impacted pricing and forecasting for months to come. Will we see an encore this week? Dunno, but, we can say that TCO has been shuffling around a whole lot of gas lately, that may or may not have caught up with the EIA weekly release. Just saying.

Genscape's Andy Krebs notes his frustration with recent reclassifications in commentary below. He's not the only one. We've heard a lot of grumbling lately of after-the-fact reclassification reporting and posting on the part of several major players. We've seen the EIA's 912 Form. We see that in the open space at the bottom that reporting companies are to comment on any changes in working gas values do to reclassifications. A lot of good that does everybody a week late; deadlines for submitting the 912 is the following Monday at 5:00 p.m. We think that maybe all base gas reclassifications ought to be noticed in relative real-time. That is, if Bob's Storage and Pipeline Company decides to reclassify 4 Bcf of base to working gas on Tuesday, afternoon, we think an alert should go out to the market shortly thereafter. It's not like this would involve an additional or unreasonable reporting burden. We'll ping EIA on the idea later this week. For now, our Consensus stands with the rest of the market at 31.8 Bcf. Our editor is at 33 Bcf. Our range is 19 to 38 Bcf. The Standard Deviation is a mere 3.5. We don't smell a surprise, but, then again, this week tends to be a bit notorious.

Weather Tealeaves
The 6-10 day warming trends for the midcontinent backed down a little this morning due to some additional cool risks showing up in the latter part of the period per the latest round of modeling. There is considerable disagreement on timing and details, but the general consensus trends were cooler today, which may slightly enhance overnight demand in the North. Otherwise, this next cool push would probably work to suppress Southern cooling demand more. The models also show some stronger Western ridging with hotter risks in California by the late 6-10 day (90s Sacramento, upper 80s Burbank). The 11-15 also trended a bit cooler on the latest guidance with near normal late-season demand in the North, but below normal cooling demand in the South providing an offset....MORE

And from Dow Jones via NASDAQ: 

--Gas futures down 0.3% as traders await EIA report
--Dow Jones survey calls for 31-bcf storage increase, below five-year average for the week
--BofA-Merrill sees prices at $3.50/MMBtu this summer
By Jerry A. DiColo
NEW YORK--Natural gas futures slipped lower Thursday ahead of weekly data on U.S. natural-gas stockpiles.

Natural gas for May delivery fell 1.4 cent, or 0.3%, to recently trade at $4.152 a million British thermal units on the New York Mercantile Exchange.

The U.S. Energy Information Administration is expected to report that 31 billion cubic feet of gas were added to storage last week, according to a  Dow Jones Newswires survey of analysts and traders. If correct, the estimated increase will be smaller than the five-year average increase of 50 bcf for this week.

A smaller-than-average stockpile increase in this week's data would provide another indication that a cold start to spring across most of the U.S. has cut into available fuel supplies.

Inventories as of April 19 are expected to total 1.735 trillion cubic feet, 5.1% below the five-year average for the week.

Still, some analysts and traders are growing concerned that the latest rally, which has pushed gas futures to a 21- month high, is beginning to fade.

Bank of America-Merrill Lynch said in a research report Thursday that investors should start betting on falling prices. The bank said it expects futures to fall to $3.50/MMBtu this summer before rebounding later this year as high gas prices prompt power plants to burn cheaper coal instead of gas to generate electricity....MORE

Keynes on Economists

A repost from 2009:

The study of economics does not seem to require any specialised gifts of an unusually high order. Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy and pure science? Yet good, or even competent, economists are the rarest of birds. An easy subject, at which very few excel!

The paradox finds its explanation, perhaps, in that the master-economist must possess a rare combination of gifts. He must reach a high standard in several different directions and must combine talents not often found together. He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future.

No part of man's nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician.

-John Maynard Keynes in
'Alfred Marshall: 1842-1924' (1924)

Hey, Société Générale's Albert Edwards is Still Alive and Still Looking For the S&P to Trade at 450 (and gold at $10,000)

It's spring and the bears stumble out of their caves, blinking in the sunshine.
Albert has been one of the best on bond yields, one of the worst on equity prices and one of the silliest with the bathtub schtick.
From ZeroHedge:

Albert Edwards' Bleak Crystal Ball Reveals Gold Above $10,000; S&P At 450 ; And Sub-1% Bond Yields

Just because some of the C-grade financial "pundits" out there may have been confused that Albert Edwards was turning bullish in recent months, this should help clear all confusion.

We still forecast 450 S&P, sub-1% US 10y yields, and gold above $10,000

My working experience of the last 30 years has convinced me that policymakers’ efforts to manage the economic cycle have actually made things far more volatile. Their repeated interventions have, much to their surprise, blown up in their faces a few years later. The current round of QE will be no different. We have written previously, quoting Marc Faber, that “The Fed Will Destroy the World” through their money printing. Rapid inflation surely beckons. But that will not occur without firstly a Japanese-style loss of confidence in policymakers as we dive back into recession and produce dislocative market moves.

Andrew Lapthorne passed me a great chart the other day of bond strategists? forecasts. It reminded me of similar charts for analysts? earnings forecasts from my former colleague, James Montier. There are some ever-present truths in this business. Economists usually forecast a return to trend growth and will never forecast a recession. Equity strategists tend to forecast the market will rise 10% each year and will never forecast bear markets. And since the equity bubble burst in 2000, bond strategists, in a discernible break in behaviour, now only ever forecast that bond yields will rise (see chart below).

I agree that bond yields will indeed be heading higher in the next 3-5 years ? much, much higher. But the consensus has still not accepted that we remain locked in an Ice Age environment that will see US (and UK and German) yields converge to Japanese sub-1%.

The late Margaret Thatcher had a strong view about consensus. She called
it: “The process of abandoning all beliefs, principles, values, and
policies in search of something in which no one believes, but to which
no one objects.” The same applies to most market forecasts. With some
rare exceptions (like our commodity analysts? recent prescient call for a
slump in the gold price), analysts don?t like to stand out from the
crowd. It is dangerous and career-challenging. In that vein, we repeat
our key forecasts of the S&P Composite to bottom around 450,
accompanied by sub-1% US 10y yields and gold above $10,000.

Some other thoughts from Albert on 10 Year bonds:

US 10y nominal yields have been edging down recently to 1.70% and the gap with real yields has closed ever so slightly, but the gap itself (implied inflation expectations) remains high.

There is much more, but the most amusing is where SocGen (Edwards) disagrees with SocGen (Legland) on gold...MORE

"Central Banks Load Up on Equities as Low Rates Kill Yields"

First they buy up all the safe assets. Then they start buying into an already shrinking pool of stocks (Equities: The Wilshire 5000 is Down to 3687 Stocks) then...
I'm not sure I like where this is going.
From Bloomberg:

Central banks, guardians of the world’s $11 trillion in foreign-exchange reserves, are buying stocks in record amounts as falling bond yields push even risk- averse investors toward equities.

In a survey of 60 central bankers this month by Central Banking Publications and Royal Bank of Scotland Group Plc, 23 percent said they own shares or plan to buy them. The Bank of Japan, holder of the second-biggest reserves, said April 4 it will more than double investments in equity exchange-traded funds to 3.5 trillion yen ($35.2 billion) by 2014. The Bank of Israel bought stocks for the first time last year while the Swiss National Bank and the Czech National Bank have boosted their holdings to at least 10 percent of reserves.

“In the last year or so, I have spoken with 103 central banks on diversification,” Gary Smith, London-based global head of official institutions at BNP Paribas Investment Partners, which oversees about $649 billion, said in a phone interview. “If reserves are growing, so are diversification pressures. Equities are not for every bank tomorrow, but more are continuing down this path.”...MORE

HT: naked capitalism

See also FT Alphaville's "When stimulus becomes stealth nationalisation" and our "Oy: Israel's Central Bank to Intervene as Natural Gas Boom Inflates the Shekel" and 2008's "Doom and Gloom: What Can the Federal Reserve Do?"

Zeitgeist: Country Starting To Realize New Era Of American Innovation Never Gonna Happen

From America's Finest News Source:

Sources say they have been misled into thinking America was on the verge of an exciting and bold new technological frontier.

WASHINGTON—After nearly a decade of promises that the nation was on the brink of a technological, economic, and scientific golden age, citizens across the country confirmed Monday they are now realizing a bold new era of American innovation is just flat-out not gonna happen.

Citing the fragile economy and an exceedingly volatile political landscape, many Americans told reporters they are now fairly certain that the chances of the United States spearheading global advancements within the likes of biotechnology, health care, or manufacturing are pretty much zilch.

“I always hear politicians talk about America being at the forefront of technological achievement, and it’s just now hitting me how completely absurd that sounds,” said 37-year-old Seattle resident Daniel Townsend. “They’ve been saying that stuff for years as if it’s always right around the corner. If we’ve really been at a crossroads with the next wave of cutting-edge innovation at our fingertips, wouldn’t we have seen at least one huge breakthrough by now? Like something more important and life-changing than a new type of phone?”

“God, even hearing myself say the words ‘next wave of cutting-edge innovation’ out loud makes the whole thing sound even more ridiculous,” Townsend added. “Can anyone honestly say they feel like America is leading the rest of the world into a bold new tomorrow?”

Saying that the United States pioneering daring advancements in clean air technology ain’t gonna happen now, not 10 years from now, not ever, millions of citizens also confirmed they are now coming to terms with the fact that a grand era of sustained American prosperity just isn’t in the cards....MORE

Brent-WTI Spread Drops to Another 52-week Low

From Bespoke Investment Group:

While gold has been hogging the headlines of the commodity space in recent weeks, there has been a notable move within the oil space over the last several weeks as well.  It was only a little more than two months ago that a barrel of Brent crude oil (global benchmark price) was $23 more than a barrel of WTI (US benchmark price).  Today, the spread between the two dropped to $10.50, which is the lowest level since January 2012.

Historically (prior to the last three years), WTI crude has traded right around the same level as Brent crude, so there is still a ways to go before we get back to that type of environment.  It is still encouraging, though, to see the spread between the two benchmark prices narrowing.  Gas prices have typically been more sensitive to moves in Brent crude oil, so any move that makes Brent crude oil cheaper on a relative and/or absolute basis is good for prices at the pump.

In a Desperate Bid to Lift the Stock Price and Re-capture the All-time Highs, Apple Introduces iToke (AAPL; TOKE)

Via Scoopertino:

 

Cupertino, CA — If you thought Apple’s customers were smiling before, wait till you see them now.

Beating all competitors into states and territories where pot has been legalized, Apple has launched iToke — for the perfect “Apple-designed high.”

iToke looks like a small pipe, but that’s where the similarities end. Its built-in USB connector serves as both a power source for the internal ignition coils and direct pathway to your lungs. So you can enjoy instant-on reefer throughout the day — up to seven hours smoke time on a single charge.

iToke is part of a new ecosystem, what Apple is calling a “walled ghanja garden.” Apple controls both the hardware and the cannabis, to ensure the highest-quality highs.

iToke accepts only Apple-made iWeed, which comes in packs of 10 pre-rolled, paperless sticks that fit perfectly into iToke....MORE

Also at Scoopertino:
Think different, dress alike: Apple introduces Steve Jobs fashion line
Apple blasts into supermarkets with revolutionary Apple Water
Apple unveils iBuy: the marriage of typing and spending 
Apple Kool-Aid to go into mass distribution

iRobot Stock Had a Good Year This Morning (IRBT)

What had been a one trick pony oddity has turned into the pure play publicly traded robot company. That said the company has to keep  innovating product to take over from the Roomba.
From The Motley Fool:

Why iRobot Shares Surged 

What: Shares of iRobot (NASDAQ: IRBT  ) soared 15% today after the robot specialist's quarterly results and outlook topped Wall Street expectations.  

So what: The stock was hammered late last year on severe weakness in its defense segment, but strong first-quarter results -- EPS of $0.29 on a revenue increase of 8.4% -- coupled with upbeat guidance for the rest of the year naturally eases those concerns. While defense revenue remained unspectacular, the company's booming home robot business more than offset that softness, giving investors plenty of good vibes about its revenue mix going forward.

Now what: Management now sees full-year EPS of $0.80 to $1.00 on revenue of $485 million to $495 million, up nicely from its prior view of $0.57 to $0.72 and $480 million to $490 million....MORE

The stock close at $28.04 up $3.38‎ (13.71%‎)
I count at least three other Fool posts on IRBT over the last 24 hours:
iRobot Q1 Net Surges, Guidance Raised
iRobot Doesn't Know Its Own Strength: Is That a Good Thing?
Should iRobot Be Worried About Northrop's New Bot?
That last one in particular is worth a read.

Previously on the CI channel:
iRobot Just Violated Asimov's First Law of Robotics (IRBT)
The Doctor's Robot Will See You Now (IRBT)
Fire the Pool Boy: iRobot Unveils Swimming Pool Cleaning Robot (IRBT)
Robopocalypse: iRobot files patent for machine that 3D prints autonomously (IRBT)