valkyrie market & macro march 2013

7/30/2019 Valkyrie Market & Macro March 2013

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C VALKYRIECAPITALMarket and Macro Views

March 7, 2013

Jake Bergmann, Portfolio Manager

[email protected] | 678.522.1521


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2This document is confidential and intended only for the individual to whom its has been delivered.All materials Valkyrie Capital LLC 2013. All Rights Reserved.VALKYRIECAPITAL

Table of Contents

I. STOCK MARKET OUTLOOK . . . . . 3

II. MACRO-ECONOMIC OUTLOOK . . . . 14


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STOCK MARKET OUTLOOK


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All Time Highs: Now vs October 2007The last time the Dow reached these levels, it was October 11th 2007.

Key Data Point Then (Oct 2007) Now (March 2013) % Change

Dow Jones Industrial Average 14,164.5 14,164.5 0.0%

Regular Gas Price $2.75 $3.73 +35.6%

Americans Unemployed (in Labor Force) 6.7 million 13.2 million +97.0%

American on Food Stamps 26.9 million 47.7 million +77.3%

Median Household Income $54,489 $50,054 -8.1%

Consumer Confidence 99.5 69.6 -30.1%

Size of FEDs Balance Sheet $0.89 trillion $3.01 trillion +238.2%

Total US Debt Outstanding $9.01 trillion $16.43 trillion +82.4%

US Debt as Percent of GDP 38% 74% +94.7%

US Annual Budget Deficit $97 billion $976 billion +803.1%

S&P Rating of the USA AAA AA+

10 Year Treasury Yield 4.64% 1.89% -59.3%

Gold $748 $1583 +111.6%


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Long Run Views of the Stock MarketWe are only 14 years into a typical 20 year secular bear market for equities

Sources: Ned Davis Research

Nominal

S&P 500

S&P Priced

in Gold


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Long Run Views of the Stock MarketThis is the third time in this cycle that stocks have pushed toward nominal highs

0

50

100

150

200

250

300

350

400

450

0

500

1000

1500

2000

2500

1870 1890 1910 1930 1950 1970 1990 2010

RealS&PCompositeEarnings

RealS&P500Stock

PriceIndex

Year

Price

Earnings

Source: Robert Shiller, http://www.econ.yale.edu/~shiller/data.htm
http://www.econ.yale.edu/~shiller/data.htmhttp://www.econ.yale.edu/~shiller/data.htm


7/337This document is confidential and intended only for the individual to whom its has been delivered.All materials Valkyrie Capital LLC 2013. All Rights Reserved.VALKYRIECAPITAL

Long Run Views of the Stock MarketOn a 10 year cyclically adjusted PE ratio, stocks are trading well above average

Source: Robert Shiller, http://www.econ.yale.edu/~shiller/data.htm

0

2

4

6

8

10

12

14

16

18

20

0

5

10

15

20

25

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1860 1880 1900 1920 1940 1960 1980 2000 2020

L

ong-Term

InterestRates

Price

-EarningsRatio(CAPE,

P/E10)

Year

19011966

2000

Price-Earnings Ratio

Long-Term Interest Rates

1981

1921

1929

22.91
http://www.econ.yale.edu/~shiller/data.htmhttp://www.econ.yale.edu/~shiller/data.htm



Retail Investors are BuyingRetail investors a classic contrarian indicator - are jumping in while insiders (CEOs,Board of Directors, etc.) are bailing out

Sources: EPFR Research and Insider Trading: http://www.insidertrade.net/category/insider-buying/



And They are Buying on MarginNYSE Margin Debt has reached its highest levels since 2007

Sources: NYSE and Zerohedge, http://www.zerohedge.com/news/2013-03-01/bubble-margin
http://www.zerohedge.com/news/2013-03-01/bubble-marginhttp://www.zerohedge.com/news/2013-03-01/bubble-marginhttp://www.zerohedge.com/news/2013-03-01/bubble-marginhttp://www.zerohedge.com/news/2013-03-01/bubble-marginhttp://www.zerohedge.com/news/2013-03-01/bubble-marginhttp://www.zerohedge.com/news/2013-03-01/bubble-marginhttp://www.zerohedge.com/news/2013-03-01/bubble-marginhttp://www.zerohedge.com/news/2013-03-01/bubble-margin



S&P Net Margin Forecast to Hit RecordWall Street analysts are setting S&P 500 price targets based on record high profitmargin estimates

Source: Goldman Sachs



Record Profit Margins Driven by LayoffsEmployee compensation as a % of GDP is at record lows

Sources: Goldman Sachs



And Lower Tax RatesTaxes have contributed the most to S&P 500 ex-Financials ROE since 1975

Sources: Goldman Sachs and Zerohedge, http://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earnings
http://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earningshttp://www.zerohedge.com/news/2013-02-05/how-obamas-balanced-tax-loophole-closing-will-crush-sp-earnings



So Does Earnings Growth Make Sense?Analyst estimates of S&P 500 forward earnings are heavily weighted in Q3/Q4 2013

Sources: Standard & Poors, Yardeni Research


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MACROECONOMIC OUTLOOK



US Faces Historic Budget and Debt ChallengesHighest peacetime accumulation of debt in history deficit exceeds Great Depression

Source: Zerohedge, http://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inception
http://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inceptionhttp://www.zerohedge.com/news/2012-12-17/charting-us-debt-and-deficit-inception



The Cure Will Impact GDP and S&P Margins2013 tax increases and spending cuts (sequestration) are expected to decrease GDP byas much as 2.5%

Sources: Goldman Sachs and Zerohedge, http://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdp
http://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdphttp://www.zerohedge.com/news/2013-01-16/here-comes-sequester-and-another-1-cut-2013-gdp



But There is a LOT More to CutTax increase and sequester barely cut into the real deficit and debt challenge

2013 Tax Hike

Budget

Deficit

New Tax

Revenue

Sources: Forbes, http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/and

Zerohedge, http://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspective

2013 Sequester
http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.zerohedge.com/news/2013-01-01/putting-americas-tax-hike-perspectivehttp://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/http://www.forbes.com/sites/beltway/2013/02/28/the-sequester-is-not-too-big-it-is-too-stupid/



US Entitlements are UnsustainableDiscretionary spending cuts alone will not balance the budget

Sources: CBO and Zerohedge, http://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlements
http://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlements


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Taxes Must Go Up or Spending Must be CutWithout cuts, Federal spending will be 43% of GDP by 2050, requiring tax rates todouble in order to balance the budget

Sources: CBO and Zerohedge, http://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlements
http://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlementshttp://www.zerohedge.com/news/unabridged-and-illustrated-federal-budget-dummies-part-4-entitlements


20/33


The Alternative: Debt Monetization?The Federal Reserve is buying 90% of new Treasury issuance what are the results?

Source: Bloomber, DoubleLine Funds


21/33


Decreasing Marginal Returns on GDP Growth

Source: Streettalklive.com, DoubleLine Funds


22/33


Unemployment Rate is StagnantA target of 6% employment doesnt even account for people leaving the workforce

Source: BLS, DoubleLine Funds


23/33


Real Household Income is DownNot to mention increasing income inequality

Source: US Census Bureau


24/33


And Boomers Face Financial Repression

Annual Interest Earned on $10 million invested in US 2-Year Treasuries

Source: Grant Williams


25/33


But the Stock Market is at Record HighsImpact of QE is clearly decreasing with each additional round

Source: Zerohedge, DoubleLine Funds


26/33


Gold is the Real Beneficiary of QEGold is up over 100% in the five years it has taken stock markets to reach new highs

Source: Bloomber, DoubleLine Funds


27/33


Meanwhile, How Sustainable is Europe?Economic austerity and mass unemployment lead to nationalism and revolutions

Source: Zerohedge, http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60
http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60http://www.zerohedge.com/news/2013-02-14/greek-youth-unemployment-tops-60


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Youth Unemployment in Europes PeripheryProtest and political surprises (Italy, Catalonia) likely to continue as austerity reduces

growth

Source: Zerohedge, http://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmap
http://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmaphttp://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmaphttp://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmaphttp://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmaphttp://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmaphttp://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmaphttp://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmaphttp://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmaphttp://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmaphttp://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmaphttp://www.zerohedge.com/news/2013-01-09/europes-scariest-heatmap


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US Youth Face Crushing Student DebtAt $1 trillion, student debt is nearly the same size as sub-prime; unlike sub-prime, theonly collateral is a young persons future


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Japanese Trade is Rapidly DeterioratingJanuary marks Japans seventh consecutive month of trade deficits with a record high

deficit of 1.6 trillion


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Australian Home Prices in Record BubbleAnd have not suffered a serious correction since 1991 and this is in an economy that isbuilt on exporting commodities to Japan and China

Sources: ABS, RBA, REIA and debtdeflation.com/blogs


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Im not the Only One Sounding AlarmsThe list of managers who view the world similarly are enviable company

Jeffrey Gundlach, Manager of DoubleLine Funds: Stocks are obviously overbought and he has boughtmore long-term Treasuries in last month than last four years.

Stanley Druckenmiller, Manager of Duquesne Capital: Idontknow when its going to end, but my guessis, its going to end very badly.

Bill Fleckenstein, Manager and Editor of Fleckenstein Capital: The rally is happening because the Fed isprinting money, not strong economic fundamentals.

Hugh Hendry, Manager of Eclectica Asset Management: I have no idea where the stock market is goingto bebutI am long gold and short the S&P.

Kyle Bass, Manager of Hayman Capital: Japan's GDP is falling at an alarming rate, their exports arecollapsing and a change in the dollar/yen is not going to restore their competitiveness of a secular declinein Japan.

Bill Gross, Co-CIO of PIMCO ultimately government financing schemes such as todays QEs or Englandsearly 1700s South Sea Bubble end badly.

Doug Kass, Manager of Seabreeze Partners: Atthe core of my concern is that a global economy built on afoundation of excessive monetary easing is one of low quality, decaying fundamentals and not likely to beeffective or self-sustaining. I remain concerned that much of the current investor optimism expressed in arising stock market is not consistent with the underlying economic and profit data.
http://en.wikipedia.org/wiki/Jeffrey_Gundlachhttp://en.wikipedia.org/wiki/Stanley_Druckenmillerhttp://money.msn.com/bill-fleckenstein/http://en.wikipedia.org/wiki/Hugh_Hendryhttp://en.wikipedia.org/wiki/Kyle_Basshttp://en.wikipedia.org/wiki/Bill_Grosshttp://www.cnbc.com/id/30034580/Douglas_Kasshttp://www.cnbc.com/id/30034580/Douglas_Kasshttp://www.cnbc.com/id/30034580/Douglas_Kasshttp://www.cnbc.com/id/30034580/Douglas_Kasshttp://en.wikipedia.org/wiki/Bill_Grosshttp://en.wikipedia.org/wiki/Bill_Grosshttp://en.wikipedia.org/wiki/Bill_Grosshttp://en.wikipedia.org/wiki/Kyle_Basshttp://en.wikipedia.org/wiki/Kyle_Basshttp://en.wikipedia.org/wiki/Kyle_Basshttp://en.wikipedia.org/wiki/Hugh_Hendryhttp://en.wikipedia.org/wiki/Hugh_Hendryhttp://en.wikipedia.org/wiki/Hugh_Hendryhttp://money.msn.com/bill-fleckenstein/http://money.msn.com/bill-fleckenstein/http://money.msn.com/bill-fleckenstein/http://en.wikipedia.org/wiki/Stanley_Druckenmillerhttp://en.wikipedia.org/wiki/Stanley_Druckenmillerhttp://en.wikipedia.org/wiki/Stanley_Druckenmillerhttp://en.wikipedia.org/wiki/Jeffrey_Gundlachhttp://en.wikipedia.org/wiki/Jeffrey_Gundlachhttp://en.wikipedia.org/wiki/Jeffrey_Gundlach


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Thi d i fid i l d i d d l f h i di id l h i h b d li d

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valkyrie market & macro march 2013

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