Excerpt
Bernanke Vs. Gold - Getting Hostile
I was struck with Bernanke’s comment last week at the Economics Club regarding bubbles. He said:
”It is not obvious to me that there are any misalignments in the US financial system”.
This comment has already gotten the attention of the media. Two years from now the blogs will be quoting it along with other notable words from the Chairman. Remember the following? Mr. Bernanke regrets having said this.
“We (the Fed) do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”
When Mr. Bernanke made those comments back in May of 2007 he was either misrepresenting the facts or he simply could not see the implications of the facts that were in front of him. I don’t think he was fibbing to us then. He called it as he saw it. He simply had no clue what the pieces meant. I am concerned that he is equally out of touch today.
How could Mr. Bernanke not see that zero interest rates are a misalignment?
Mr. Bernanke is a student of economic history. He knows that during the 30’s T Bill rates went negative. I am sure that he remembers the panic of 2008 when again Bill yields fell below zero. But those were panic situations. There is no panic today. But bill rates are at zero.
I am sure that Mr. Bernanke is smiling ear to ear as he sees the evidence that his plans are working. Zero interest rates were his objective. He has succeeded and even exceeded his goals.
What Mr. Bernanke has accomplished is making fiat money useless. It now costs you to own the stuff unless you want to gamble with it. Our whole system is based on the notion that money has value. The Fed has established that it has none.
I assume that Mr. Bernanke is acutely aware of day-to-day market movements. He knows that the comments by St. Louis Fed Governor James Bullard that “Maybe we should extend the Agency POMO buys” quickly resulted in a $20 pop in the gold price. You can’t ask for a better example of the market’s attitude towards America’s monetary stance. It is starting to get downright hostile.
It would be a kick in the pants to the entire financial system if the price of gold started to have a meaningful impact on monetary policy. I think that is exactly what is going to happen. It is just going to take a while. Bernanke continues to believe that nothing is misaligned. We are going to wake up and find out that things are horribly misaligned.
2. With the current jobless rate ( still rising) we can expect slugish Holiday season shopping even Wallstreet hişgh flyer wil be cautious as they do not know if any such year will be possible as the public outcry will carry into midterm elections plus this special FED sponsored earning will not be repeatable.
Excerpt
CLOSTER, N.J. (11/xx/09) – The line between outlet stores and mainstream retail is blurring this holiday season as even upscale and luxury chains ratchet back their inventories and slash prices. The success or failure of these value-focused strategies will determine whether some operators manage to stay afloat in 2010, according to Alan Cohen, Chairman of Abacus Advisors, a Closter, N.J.-based turnaround and restructuring firm.
“You can learn a lot simply by walking into stores and observing,” said Cohen, who has more than 30 years of experience working with distressed businesses in all aspects of management and operations. “Throughout the summer and fall, stores at outlet malls like Woodbury Common [in Central Valley, N.Y.] typically are full of great stuff. However, this year inventories appeared to be light at the likes of Neiman Marcus’ Last Call or Saks’ Off 5th. Since these and other better retailers were discounting heavily in their mainline stores, they didn’t have as much excess inventory to send to their outlet locations.”
Deep concern about both the credit crisis and cutbacks in consumer spending has translated into retail strategies marked by caution, Cohen noted. “Manufacturers produced less, and retailers ordered less. In the run-up to the 2009 holiday season, everybody was in a conservative mood.”
In the past, for example, retailers like Nordstrom would bring in holiday merchandise early and reorder the best-selling items. This strategic tool likely will not be available to them this year. “Reorders will be down significantly this year, simply because the merchandise will be unavailable amid these inventory cutbacks,” Cohen explained. “That puts retailers at a strategic disadvantage, and it means shoppers will have a harder time finding certain popular items.”
Naturally, the discount powerhouse Wal-Mart, with its robust grocery sales and aggressive promotions on categories like toys, books and entertainment products, stands to benefit in this cautious environment. “The discounters and off-price chains will continue to do well,” Cohen says. “People will be shopping this Christmas, but they will be very cost-conscious and trading down. Instead of buying five items, they will buy three. Instead of buying an expensive item, they will go with a moderately priced one.”
When all is said and done after the holidays, filing for Chapter 11 bankruptcy protection may be the only option for many chains, Cohen added. “I certainly see more bankruptcies down the road,” he said. “And we will also see vacancies going up at shopping centers and malls across the country. With a limited number of conventional retail, restaurant or entertainment tenants actively looking for space, landlords will be exploring alternative uses like dental or emergency clinics or, in the case of large big-box spaces, flea markets.”
”It is not obvious to me that there are any misalignments in the US financial system”.
This comment has already gotten the attention of the media. Two years from now the blogs will be quoting it along with other notable words from the Chairman. Remember the following? Mr. Bernanke regrets having said this.
“We (the Fed) do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”
When Mr. Bernanke made those comments back in May of 2007 he was either misrepresenting the facts or he simply could not see the implications of the facts that were in front of him. I don’t think he was fibbing to us then. He called it as he saw it. He simply had no clue what the pieces meant. I am concerned that he is equally out of touch today.
How could Mr. Bernanke not see that zero interest rates are a misalignment?
Mr. Bernanke is a student of economic history. He knows that during the 30’s T Bill rates went negative. I am sure that he remembers the panic of 2008 when again Bill yields fell below zero. But those were panic situations. There is no panic today. But bill rates are at zero.
I am sure that Mr. Bernanke is smiling ear to ear as he sees the evidence that his plans are working. Zero interest rates were his objective. He has succeeded and even exceeded his goals.
What Mr. Bernanke has accomplished is making fiat money useless. It now costs you to own the stuff unless you want to gamble with it. Our whole system is based on the notion that money has value. The Fed has established that it has none.
I assume that Mr. Bernanke is acutely aware of day-to-day market movements. He knows that the comments by St. Louis Fed Governor James Bullard that “Maybe we should extend the Agency POMO buys” quickly resulted in a $20 pop in the gold price. You can’t ask for a better example of the market’s attitude towards America’s monetary stance. It is starting to get downright hostile.
It would be a kick in the pants to the entire financial system if the price of gold started to have a meaningful impact on monetary policy. I think that is exactly what is going to happen. It is just going to take a while. Bernanke continues to believe that nothing is misaligned. We are going to wake up and find out that things are horribly misaligned.
2. With the current jobless rate ( still rising) we can expect slugish Holiday season shopping even Wallstreet hişgh flyer wil be cautious as they do not know if any such year will be possible as the public outcry will carry into midterm elections plus this special FED sponsored earning will not be repeatable.
Excerpt
An Unbiased View Of The Holiday Shopping Season
Submitted by Tyler Durden on 11/23/2009 20:17 -0500We present an independent perspective on the 2009 holiday shopping season courtesy of a third-party retail advisor. “The discounters and off-price chains will continue to do well,” Alan Cohen of Abacus Investors says. “People will be shopping this Christmas, but they will be very cost-conscious and trading down. Instead of buying five items, they will buy three. Instead of buying an expensive item, they will go with a moderately priced one.” When all is said and done after the holidays, filing for Chapter 11 bankruptcy protection may be the only option for many chains, Cohen added. Then again, maybe retailers can rely on Cramer's optimism that everyone is massively underestimating the unemployed consumer who has bet the house and the dog on those one hundred shares of Amazon stock.
SLIM PICKINGS AT ONCE-ROBUST OUTLETS OFFER A CLUE TO THE 2009 HOLIDAYS
--A cautionary mood prevails among retailers, lenders and landlords alike,
but ‘this, too, shall pass’ says retailing veteran Alan Cohen of Abacus Advisors
CLOSTER, N.J. (11/xx/09) – The line between outlet stores and mainstream retail is blurring this holiday season as even upscale and luxury chains ratchet back their inventories and slash prices. The success or failure of these value-focused strategies will determine whether some operators manage to stay afloat in 2010, according to Alan Cohen, Chairman of Abacus Advisors, a Closter, N.J.-based turnaround and restructuring firm.
“You can learn a lot simply by walking into stores and observing,” said Cohen, who has more than 30 years of experience working with distressed businesses in all aspects of management and operations. “Throughout the summer and fall, stores at outlet malls like Woodbury Common [in Central Valley, N.Y.] typically are full of great stuff. However, this year inventories appeared to be light at the likes of Neiman Marcus’ Last Call or Saks’ Off 5th. Since these and other better retailers were discounting heavily in their mainline stores, they didn’t have as much excess inventory to send to their outlet locations.”
Deep concern about both the credit crisis and cutbacks in consumer spending has translated into retail strategies marked by caution, Cohen noted. “Manufacturers produced less, and retailers ordered less. In the run-up to the 2009 holiday season, everybody was in a conservative mood.”
In the past, for example, retailers like Nordstrom would bring in holiday merchandise early and reorder the best-selling items. This strategic tool likely will not be available to them this year. “Reorders will be down significantly this year, simply because the merchandise will be unavailable amid these inventory cutbacks,” Cohen explained. “That puts retailers at a strategic disadvantage, and it means shoppers will have a harder time finding certain popular items.”
Naturally, the discount powerhouse Wal-Mart, with its robust grocery sales and aggressive promotions on categories like toys, books and entertainment products, stands to benefit in this cautious environment. “The discounters and off-price chains will continue to do well,” Cohen says. “People will be shopping this Christmas, but they will be very cost-conscious and trading down. Instead of buying five items, they will buy three. Instead of buying an expensive item, they will go with a moderately priced one.”
When all is said and done after the holidays, filing for Chapter 11 bankruptcy protection may be the only option for many chains, Cohen added. “I certainly see more bankruptcies down the road,” he said. “And we will also see vacancies going up at shopping centers and malls across the country. With a limited number of conventional retail, restaurant or entertainment tenants actively looking for space, landlords will be exploring alternative uses like dental or emergency clinics or, in the case of large big-box spaces, flea markets.”
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