Tags: Paul Donovan | China | Treasury Secretary Jack Lew | Dennis Gartman | gold

Gartman More Bullish of Gold

Gartman More Bullish of Gold

By    |   Tuesday, 11 August 2015 10:22 AM

Paul Donovan, Global Economist at UBS, blasts the reported agreement with lenders as not doing anything to avoid default, saying, “We’ve got a bigger problem in Greece, which is, the economy has collapsed. It’s absolutely horrendous, and it’s getting worse.”

This writer continues to wonder what the role of the U.S. authorities is behind the scenes. Congress left for its August recess without Treasury Secretary Lew testifying before the Senate Banking Committee.

At this interesting juncture, Dennis Gartman, publisher of The Gartman Letter, who has not been “bullish of gold” in dollar terms, updated his views, and he now sees a reversal in the dollar, along with strength in currencies, so he thinks the lows might be in for gold in both the dollar and the currencies.

However, Gartman would still confine any buying to yen and euro terms for at least another month.

It’s been a long time since Melissa Lee played the entertaining game “Chinese IPO or Panda,” but on Monday former SEC Commissioner Harvey Pitt, now CEO of Kalorama Partners, advised viewers that China “is going to have to come to grips with reality, and trying to over-manage capital markets is not reality; it will hurt them in the long run.”

He observed that the securities regulators in China had cut back on margins while the financial regulators and banks were funding margins. In summary, Pitt said, “China has promised economic reforms, but it hasn’t yet delivered on those, and until it does, it is going to be constantly facing these kinds of problems.”

Pitt contrasted the circumstance in China with that of the U.S. in that “China hasn’t been dealing with such problems as long as the U.S. has.” He criticized the Chinese market as lacking in information about companies and rules.

This writer looks forward to asking Pitt what he thinks of the state of economic reforms in the U.S. and whether U.S. authorities might end up supporting the Chinese markets as an extension of government sponsorship of U.S. stocks.

U.S. stocks rallied Monday on news of a big acquisition by the legendary investor Warren Buffett. Stephanie Link celebrated signs of renewed confidence on the part of investors, but Josh Brown, CEO of Ritholtz Wealth Management, quipped that it was more like “Who let the dogs out?” Leadership came from companies representing “literally the worst of the worst.”

Brown attributes the rally more to short selling and exhaustion of sellers than to improved fundamentals. To mix metaphors, for Brown it’s a “dead-cat bounce.”

Joe Terranova held out hope for strength based on renewed stock buyback after earnings, derided by critics as artificial support that rides the wave of artificial support emanating from the Federal Reserve.

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Robert-Feinberg
Paul Donovan, Global Economist at UBS, blasts the reported agreement with lenders as not doing anything to avoid default, saying, "We've got a bigger problem in Greece, which is, the economy has collapsed. It's absolutely horrendous, and it's getting worse."
Paul Donovan, China, Treasury Secretary Jack Lew, Dennis Gartman, gold
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2015-22-11
Tuesday, 11 August 2015 10:22 AM
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