Where Barbara Corcoran Says to Buy Real Estate

http://www.bloomberg.com/news/videos/b/4e009bb1-a4d0-4160-9174-348031152d3f

Barbara Corcoran, founder at The Corcoran Group, talks about New York City real estate,

http://www.bloomberg.com/news/videos/2015-04-30/ny-real-estate-may-be-in-a-new-bubble-barbara-corcoran

Barbara Corcoran, founder at The Corcoran Group, talks about New York City real estate, the lack of affordable housing in the city and why the market may be in a new bubble. She speaks on “Bloomberg Surveillance.” (Source: Bloomberg)

Julian Robertson on the U.S. economy, bond bubbles

https://www.youtube.com/watch?v=UmJLBH_MTaM

 

 

 

Published on Apr 6, 2015

Tiger Management Chairman Julian Robertson discusses the U.S. economy, the markets and bond bubbles.
Watch Maria Bartiromo on Opening Bell.

Seven Year Negative Returns in Stocks

Serious Question for Pension Plans

Given pension plan assumptions of 7-8% annualized returns how many of them can survive negative returns for seven years? It's important to note that GMO is talking about "real" inflation-adjusted returns with an assumption of mean-reversion inflation to 2.2% over 15 years.

Still, that leaves US equities at zero to -1% returns and US bonds at negative 2.4% returns.

Even if GMO is wrong by say 3%, many pension plans will be in deep serious trouble at those returns.

Illinois Pension Plans

I keep harping about this issue, but it's an important one. In the state of Illinois, and in spite of an enormous rally in the stock market since 2009, Illinois pension plans are only 39% funded.

A "Special Pension Briefing" last November, shows the Illinois State Retirement Systems are in dismal shape.

Unfunded Liabilities

• Teachers' Retirement System (TRS): $61.6 Billion
• State Retirement Systems (SERS): $26.2 Billion
• State Universities Retirement System (SURS): $21.6 Billion
• Judicial Retirement System (JRS): $1.5 Billion
• General Assembly Retirement System (GARS): $0.3 Billion

The above numbers show actuarial (smoothed) asset valuations.

Liability Trends - Not Smoothed


image: https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2M3IsOxNu9smIM9Sho1pSTKiC5f7IniTht4AdvATdMsqjwQoAKvjBWLdn8tb33G0uz5FNes4BjVM0Ps1tt2FQPQ3MhwCXmhrvh5xaH3YN2rmeZ5KaoaJuAkhiU44ZDYSqemabgIJ8iiE/s400/Illinois+Pension+System2.png


In spite of the massive stock market rally, Illinois liabilities increased every year since 2011.

For still more details, please see Illinois Pension Plans 39% Funded; Taxpayers On the Hook for $105 Billion in Liabilities; It Will Get Worse!.

Any notion that pension shortfalls can be balanced on the backs of Illinois taxpayers needs to vanish now.

How did Illinois plans became so underfunded?

In general, by promising far more than can possibly be delivered.

Summary of Liabilities and Unfunded Ratios


image: https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuppjW9WlnroH6SHv7KppyMvMop6-7UJofBR8KfAmRjle2yoOk1oS7kvSlE53fsZ0V7hfwOr8JGDR2nHIq_VnPt0_g78nSodP_U_b-yunSUB8GWBy3B3yeTMu99f0QU70D6rDN-tpZw0Y/s400/Illinois+Pension+System1.png

http://globaleconomicanalysis.blogspot.com/2015/04/seven-year-negative-returns-in-stocks.html

click on any chart for sharper image

Congratulations go to the Illinois General Assembly Retirement System (GARS) for having one of the worst, (if not the worst) pension plan in the entire nation. It is 16% funded.

No doubt, that increases the pressure of the General Assembly to put the burden of bailing out the system on the backs of Illinois taxpayers.

Fraudulent Promises

Pension promises were not made in good faith.

Rather, pension promises were the direct result of coercion by public unions on legislators, mayors, and other officials willing to accept bribes because they shared in the ill-gotten gains of backroom deals at taxpayer expense.

Illinois taxpayers cannot be held accountable for coercion of public officials by public unions. Fraudulent promises will be held "null and void" in any "non-stacked" court of law in the nation.

Given the 31% funding of the Illinois Judicial Pension Plan (JRS), the sorry state of Illinois pensions is likely headed to federal courts.

Read more at http://globaleconomicanalysis.blogspot.com/2015/04/seven-year-negative-returns-in-stocks.html#EbGvyF3WlrasX9JU.99

Bloomberg Interview: Martin Pring Chairman of Pring Turner : DEAD Wrong

https://www.youtube.com/watch?v=HRwA4HGYgJc#t=256

Global equity mutual funds, ETFs post $88 billion inflows in 2015: TrimTabs

http://www.reuters.com/article/2015/04/21/us-investing-fundflows-trimtabs-idUSKBN0NC1IW20150421


Reuters) - Global equity mutual funds and exchange-traded funds attracted $88.3 billion of net inflows so far in 2015, putting them on track to surpass the previous four-month record total of $86 billion from December 2005 through March 2006, TrimTabs Investment Research said on Tuesday.
TrimTabs said strong investor interest in non-U.S. equities is broadening from Europe and Japan into emerging markets.

"Heady gains in Chinese stocks are attracting loads of American money," said TimTabs Chief Executive Officer David Santschi. "ETFs focused on Chinese stocks shot up 14 percent in the past month."

Even ahead of China's stimulus measure announced on Sunday, ETFs focused on Chinese equities posted 22 consecutive days of inflows totaling $1.6 billion, TrimTabs said.
The People's Bank of China on Sunday cut by one percentage point the cash banks must hold in reserve, freeing up more than $200 billion for lending.

"For now, central bank stimulus measures are propping up financial asset prices around the world," Santschi said. "The long-term consequences of these policies may not be as pleasant."

(Reporting By Jennifer Ablan; Editing by Chizu Nomiyama and Jonathan Oatis)

Hedge Fund Legend Julian Robertson Warns Of A "Complete Explosion" Unless Fed Contains "Boiling, Bubble" Market

http://www.zerohedge.com/news/2015-04-06/hedge-fund-legend-julian-robertson-warns-complete-explosion-unless-fed-contains-boil


https://www.youtube.com/watch?v=UmJLBH_MTaM



Legendary hedge fund manager Julian Robertson, who has been conspicuously absent from CNBC in recent months, spoke with Fox Business' Maria Bartiromo about his take on markets. He was hardly bullish, which may explain his absence from the cadre of CNBC bubble cheerleaders.
Robertson (in addition to some generic comments on the weather impacting the jobs numbers: apparently the weather only impacted the warmer March, not the freezing January and February) said that "the thing that worries me the most are the twin bubbles that are developing, certainly the Federal Reserve, the people that run their Treasury operations, are trying to create a bubble in bonds and they are doing it."
The other implied bubble of course is that of stocks, because with no upside left in bonds, capital appreciation starved investors have no choice but to go into stocks which as of today just hit 21x on a forward GAAP PE multiple surpassing even David Tepper's 20x bogey.
Asked how the bubble will end, Robertson notes that "nobody knows when bubbles are gonna burst. As a child when you are blowing a bubble you don't know when it's gonna burst and that's part of the fun of the "bubble" bubbles, but this is more serious and I am very worried about it"
Will a bursting bond bubble disrupt the equity rally? Robertson is honest enough intellectually to admit that bond and stock bubbles are connected and says that a bursting bond bubble will crush stocks and the Fed is "frightened to death" over fears a plunge in stocks will also crush the economy.
So what is the solution? According to Robertson the Fed must act and hike rates soon because “the economy warrants it and I think [the Fed is] not crazy enough just to let this thing boil over into complete explosion."
He adds: "I think that eventually we are going to see the Federal Reserve do the responsible thing which is put a little lid on this tea kettle that's boiling over, but I don't know when that's going to be. That will trigger a little bit of a slowdown in the overall economy."
Considering the Fed allowed both prior bubbles boil over into a "complete explosion" and considering this time it is not just the Fed but the BOJ, the ECB, the BOE and the SNB, one wonders why Robertson is so confident that nearly a decade after the start of ZIRP (which in Europe is now NIRP) some academic, somewhere, deep in the bowels of the Marriner Eccles building will do the right now.
Robertson's conclusion: we can certainly see a 2008-like market crash because "the bigger this bubble gets, the bigger the burst."

I am looking at a bubble that is almost sure to pop at some time and I don't know when it's going to happen, but I know it's going to happen.

His conclusion, and the reason why there is no CNBC any time in Julian Robertson's future is his answer to how big a selloff we could get: "I don't think it's at all ridiculous to think of a selloff like we saw in 2008." Obviously, he uses the term "selloff" loosely.
* * *
And so we hit peak irony: when even those who reap the biggest benefits of the Fed's idiotic, bubble-blowing policies explicitly warn that these same policies will lead to a bubble crash that results in a ~70% collapse in stocks. Only this time it will be far, far worse, because once the Fed loses credibility, and no amount of verbal intervention will restore some faith in the grand Ponzi, its only recourse will be to - literally - paradrop money from the skies - an endgame Bernanke himself warned about some 13 years ago. In fact, this final bubble burst may well unleash the war and/or revolution that Paul Tudor Jones warned about.
So buy stocks... unless you want mushroom clouds to become a permanent neighborhood fixtu

Why oil's not hitting lows? 'Phenomenal' demand

http://finance.yahoo.com/news/why-oils-not-hitting-lows-134506439.html


Product inventories are actually pretty low and U.S. refineries are actually coming out of (a period of) maintenance now, (as) the rest of the world goes in."

Her comments come amid some concern about a build-up of oil in U.S. inventories. The U.S. Energy Information Administration said Wednesday that crude inventories increased by 4.8 million barrels in the week ending March 27, from the previous week -- to their highest level for this time of year in at least the last 80 years.

But Sen argued that U.S. supply was being overdone, saying that American producers had "built up a lot less than people think."

"So, on balance I don't think we're going to go through the lows again this year," she said, adding that prices would likely trade sideways, and possibility towards the low $50s, "but that will form the base to go higher."

Analysts at Barclays Research agreed that oil prices would stabilise. "We expect supply and demand dynamics to help the oil market to bottom in the second quarter and gradually rebound over the rest of the year," they said in a note Wednesday.

And some experts are even more bullish. Goldman Sachs this month said it expected "the new equilibrium price" for oil to be around $70 a barrel for Brent, and $65 a barrel for WTI, although it does admit "the risks are skewed to the downside."

These levels imply gains of at around 27 percent for Brent crude from current levels, and a rise of about 38 percent for WTI.