A Report To Make You Go "Hmmm…"

“Well, instead of getting a crash as the market broke the neck and shoulders tops, we got a sharp bounce. Ho-hum…that is the way of summer markets. However, nothing that has happened in the last four weeks has changed the risk of some significant downside to come. Chart patterns across major markets still look like large distribution tops,” Raoul Pal writes in his latest edition of the Global Macro Investor, and presents us with evidence of an ongoing depression and of an upcoming second recession.

“While we are on the subject of how lousy things are, this is the worst economic recovery of a recession in recorded history.”

Raoul Pal


The latest edition of the Global Macro Investor by former hedge fund guru, Raoul Pal, is quite interesting reading. Not only do Raoul Pal make a hard hitting analysis of the present and upcoming developments in the financial markets, he also draw some nice historical parallels.

“If you’ve read the book The Fourth Turning by William Strauss and Neil Howe, you’ll notice that this is almost exactly as they predicted,” Pal writes.

At the end of “The Fourth Turning,” the authors describes a process where mankind start an entire new development once again, returning to where the super-cycle began.

“In this case we would be returning to a society much more like the 1950’s which was a time of economic and social conservatism, shunning of debt, economic isolatiosm and a whole heap of insecurity and paranoia.”

“However, we only start again at the first turning once the fourth turning has played out and in that case it means default (and often war….but I won’t go that far!) and a complete shift in social and political values,” Mr. Pal concludes.

“But remember, little did the average man in the 1950’s (the last first turning) know that he could look forward to the 50 best years to come. The authors have identified this social, political and economic cycle back over the last 500 years. I’ve only just come across the book and I pretty much agree with it. We are in the midst of the fourth turning and it’s likely to take at least another decade to work through – if not longer – and then we can start again,” he adds.

“It’s almost Austrian in its theory of creative destruction and for me, it makes a lot of sense.”

“I am often asked what I think is the solution to the current economic problems, but I actually don’t believe there is an easy solution. History tells us time and time again, over the millennial, that these super-cycles inevitably end badly, and it’s the bad outcome that proves to be the best outcome because we can begin again with a clean slate,” the famous hedge fund manager writes in his latest edition of his monthly market analysis, The Global Macro Investor.

A Technical Macro Strategist

Raoul Pal has been publishing The Global Macro Investor since January 2004, in where he draws on his considerable experience in running a hedge fund and advising many more.

Pal retired from managing client money at he age of 36 in 2004 and is now living on the Valencia coast of Spain.

Previously he co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world.

Raoul moved to GLG from Goldman Sachs where he co-managed the hedge fund sales business in equities and equity derivatives in Europe. In this role, Raoul established strong relationships with many of the world’s pre-eminent hedge funds, learning from their styles and experiences.

Other stop-off points on the way were NatWest Markets and HSBC, although he began his career by training traders in technical analysis.

The Future Recession in an Ongoing Depression

That’s the title of the August edition of The Global Macro Investor.

And Raoul Pal provides evidence of both.

“Well, instead of getting a crash as the market broke the neck and shoulders tops, we got a sharp bounce. Ho-hum…that is the way of summer markets. However, nothing that has happened in the last four weeks has changed the risk of some significant downside to come. Chart patterns across major markets still look like large distribution tops.”

“You can see the new downtrend rather clearly if we add regression lines to the chart of the SPX. It’s not as flashy as a crash, but a downtrend it is. Expect the upside to be capped near here…”

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The Worst Recovery In History

“While we are on the subject of how lousy things are, this is the worst economic recovery of a recession in recorded history,” the legendary hedge fund manager writes and points to the fact that most major markets are now roughly where they were during the summer or autumn of 2009.

China and Japan are the worst markets with zero returns since May 2009.

Europe has managed zero returns August 2008 and SPX since September 2008.

Looking farther out, the SPX and Eurostoxx have now produced zero returns since March 1998, the Nikkei since September 2001 and China since 2006.

“By any yardstick these are lousy markets indeed and we have to expect them to worsen again as economy weakens,” Raoul Pal argues.

You’ll find a copy of the full analysis here.

h/t: Zero Hedge

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Merkelomics, The Euro Zone And The United States

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Financial Armageddon To Freedom – Part 1

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Filed under International Econnomic Politics, National Economic Politics

5 responses to “A Report To Make You Go "Hmmm…"

  1. Pingback: China’s Sovereign Wealth Fund To Invest In Nassim Taleb’s Bear Fund « The Swapper

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  3. Every effort should be appreciated in every way..i think this is the only to get more and better in every thing.Thanks for dropping something here.

  4. sarah snow

    Why does Raines Freddie/Fannie own the patent for CO2 carbon computer that some guy who died on 9/11 invented?? The Democratic congress gave it to Raines Nov 2008.. 44 % of the people killed on 9/11 were in competetion with CCX,,Chicago Climate Exchange. Poor souls …Al Gore, Ohbummer and Maurice Strong, plus whatever Congress and House member who own stock in CCX will make TRILLIONS if the can pass Cap & Trade..Funny how that bill they passes yesterday does not include Fanny/Freddie, and Dobbs and Frank that cause the mess will not be investigate,,I think they have a lot of money riding on this Dark Horse!!!

    {{Interesting twist to 9/11::The people at Northwestern University who ran the cap-and-trade simluation which demonstrated the profits possible with a 350ppm cap, also partnered with Boeing and Honeywell to guide the planes on 9/11 and sabotage the evacuation of their number one rival CO2e.com from the North Tower.

    The ADT dispatcher.told everyone in the Twin Towers to return to their offices on 9/11 where Honeywell / Vulcain ventilation systems were rigged to kill them with a toxic/explosive mix of gases

    9/11 real purposes was to scare the climate deniers and remove the competition to the racketeering launch of the Chicago Climate Exchange by Al Gore and Maurcie Strong and Richard Sandor.}}

    “Were Marsh & McLennan, Cantor Fitzgerald/CO2e.com/eSpeed and Aon Corp destroyed to eliminate the competition in a future multi-trillion dollar carbon trading market?”

    “Cantor Fitzgerald/CO2e.com/eSpeed held the patent on the unique software which would be used in the future carbon emissions trading which will result in trillions of dollars of trades. The Carbon Disclosure Project (CDP) located at 10 Downing Street is currently estimated at $64 trillion.”

    “In 2000, the Joyce Foundation provided a grant to Richard Sandor and Northwestern University’s Kellogg School of Management to develop a competing carbon trading software. At the time, Barack Obama was on the board of directors for the foundation. A second grant was made in 2001 and eventually led to the birth of the Chicago Climate Exchange (CCX) the only emissions reduction and trading system for all six greenhouse gases and the only operational cap and trade system in North America.”

    “The Obama administration is currently strongly pushing carbon emission policy. While leaning heavily on congress, they have also instructed the Environmental Protection Agency to declare CO2 a dangerous threat to human health which will lead to regulation of carbon emissions.””
    Powerful forces behind the scenes appear to be orchestrating events to set up and profit from a carbon emissions trading system worth trillions of dollars.

    The impact area of American Airlines Flight 11 in the North Tower was the offices of Marsh & McLennan. ( See below)

    The offices above Marsh & McLennan were primarily Cantor Fitzgerald/CO2e.com/eSpeed. Cantor Fitzgerald was cut off from the rest of the building by the impact and suffered the greatest single loss by any company on 9/11. 658 of its employees died in the north WTC tower. [Business Week, 9/11/2006]

    But Thomas Barnett’s two “mentors” at the firm that he interacts with—Bud Flanagan and Philip Ginsberg—are both out of the building at the time, for “accidental reasons,” and survive the attacks. [Institute of International Studies]

    Marsh & McLennan loses 295 employees & 60 contractors.

    In the South Tower, United Airlines Flight 175 impacts a zone mostly occupied by Fuji Bank. The Aon Corporation offices are above the impact area and they are also cut off. 175 employees of Aon Corp. die in the attacks.

    There were 2605 deaths in 2 towers that day. Marsh & McLennan, Cantor Fitzgerald/CO2e.com/eSpeed and Aon Corp lost a total of 1153 people. That is just over 44% of the total deaths—a staggering proportion.

    The employees of these 3 companies constituted a small fraction of the total number of individuals in the two towers but accounted for 44% of the deaths.”” (#1)

    “From the Washington Examiner:

    When he wasn’t busy helping create a $127 billion mess for taxpayers to clean up, former Fannie Mae Chief Executive Officer Franklin Raines, two of his top underlings and select individuals in the “green” movement were inventing a patented system to trade residential carbon credits.

    Patent No. 6904336 was approved by the U.S. Patent and Trade Office on Nov. 7, 2006 — the day after Democrats took control of Congress. Former Sen. John Sununu, R-N.H., criticized the award at the time, pointing out that it had “nothing to do with Fannie Mae’s charter, nothing to do with making mortgages more affordable.”

    It wasn’t about mortgages. It was about greenbacks. The patent, which Fannie Mae confirmed it still owns with Cantor Fitzgerald subsidiary CO2e.com, gives the mortgage giant a lock on the fledgling carbon trading market, thus also giving it a major financial stake in the success of cap-and-trade legislation.

    Besides Raines, the other “inventors” are:

    * Former Fannie Vice President and Deputy General Counsel G. Scott Lesmes, who provided legal advice on Fannie Mae’s debt and equity offerings;

    * Former Fannie Vice President Robert Sahadi, who now runs GreenSpace Investment Financial Services out of his 5,002-square-foot Clarksburg home;

    * 2008 Barack Obama fundraiser Kenneth Berlin, an environmental law partner at Skadden Arps;

    * Michelle Desiderio, director of the National Green Building Certification program, which trains “green” monitors;

    * Former Cantor Fitzgerald employee Elizabeth Arner Cavey, wife of Democratic donor Brian Cavey of the Stanton Park Group, which received $200,000 last year to lobby on climate change legislation; and

    * Jane Bartels, widow of former CO2e.com CEO Carlton Bartels. Three weeks before Carlton Bartels was killed in the Sept. 11 attacks, he filed for another patent on the software used in 2003 to set up the Chicago Climate Exchange.

    The patent, which covers both the “cap” and “trade” parts of Obama’s top domestic energy initiation, gives Fannie Mae proprietary control over an automated trading system that pools and sells credits for hard-to-quantify residential carbon reduction efforts (such as solar panels and high-efficiency appliances) to companies and utilities that don’t meet emission reduction targets. Depending on where the Environmental Protection Agency sets arbitrary CO2 standards, that could be every company in America.

    The patent summary describes how carbon “and other pollutants yet to be determined” would be “combined into a single emissions pool” and traded — just as Fannie’s toxic portfolio of subprime mortgages were.

    “Fannie Mae earns no money on this patent,” communications director Amy Bonitatibus told the Washington Examiner. “We can’t conjecture as to the cap-and-trade legislation”” (#2)

    “Know the crooks and their roles:
    George Soros, Joyce Foundation and connection to CCX.

    What is CCX, the Chicago Climate Exchange, projected to gross 10 Trillion a year is Cap-N-Tax passes. Obama played a pivotal role in the formation of the CCX. (Click here for expose)

    Barrack Hussein Obama, Board Member of the Joyce Foundation, funded the formation of the CCX. (
    Valerie Jarrett is still on the board, Obama’s top adviser.) Obama sat on board and funneled money to Ayer’s brother (wild huh, just a guy in his neighborhood) and to form the CCX.

    AL Gore–Goldman Sachs– GIM: Hold on to your britches, London-based Generation Investment Management sees the Trillion and they purchased a huge stake in Chicago Climate Exchange (fifth largest shareholder.) The founder of GIM is none other than former Vice President Al Gore along with Goldman people. For example other founders are David Blood (former Goldman executive), Mark Ferguson (Goldman) and Peter Harris (Goldman) to name a few. “

    Franklin Raines, mega crooked banker and bust Fannie Mae head, uses Fannie Mae (taxpayers money) to buy the technology to measure and manage carbon. The patent was award the day after Obama and Dems won the election.

    Goldman Sachs owns ten percent of the CCX and its 10 Trillion a year potential. (CCX is 10% owned by Goldman Sachs (GS) and 10% owned by Generation Investment Management (GIM).) Gore, Goldman, and Cap and Trade – Tangled Web of Corruption” (#4)

    “If we follow the time line on where Obama was during the funding of the Chicago Climate Exchange, he was still a professor at the University of Chicago Law School teaching constitutional law, with his law license becoming inactive a year later in 2002.

    It may be interesting to note that the Chicago Climate Exchange in spite of its hype, is a veritable rat’s nest of cronyism. The largest shareholder in the Exchange is Goldman Sachs. Chicago Mayor Richard M. Daley is its honorary chairman, The Joyce Foundation, which funded the Exchange also funded money for John Ayers’ Chicago School Initiatives. John is the brother of William Ayers.

    What a flap when it was discovered that the senator from Chicago had nursed on Saul Alinsky’s milk, had his political career launched at a coffee party held by domestic terrorist Bill Ayers, and sat for 20 years, uncomplaining in front of the “God-dam-America pulpit of resentment-challenged Jeremiah Wright.

    Folk were naturally outraged that the empty suit who would go on to become TOTUS was spawned from such anti-American activism.

    But the media should have been hollering, “Stop Thief!” instead.

    The same Chicago Climate Exchange promoting public rip-off was funded by Obama before he was POTUS.

    Even as man-made global warming is being exposed as a money-generating hoax, Obama is working feverishly to push the controversial cap-and-trade carbon reduction scheme through Congress.

    Obama was never the character he created for himself in the fairy-tale version in “Dreams of My Father”. He’s the agent of Change and Hope for cohorts making money down at the Chicago Climate Exchange.” (#5)

    “In closing, an article that appeared in FrontPage about a year ago, noted that “CCX’s members include Ford, DuPont, Dow Corning and the states of Illinois and New Mexico. CCX also owns 50 percent of the European Climate Exchange (ECX), which features such members as Shell, British Petroleum, Barclays—and Goldman Sachs.” British Petroleum—better known as BP.

    http://canadafreepress.com/index.php/article/22810

    Enough! We The People demand that a RICO investigation and criminal charges be initiated to uncover the criminal actions of this administration and all of its radical cohorts in crime, like GE, BP, Goldman Sachs, the labor unions, Fannie and Freddie, ACORN, Organizing for America, George Soros, Maurice Strong, Warren Buffett, Al Gore, The Progressive Caucus, anyone who has close ties to this administration.”

    This is a cabal of crooks. All legislation should be halted until this is done. We, The People will not stop. We will know justice. We demand that you do your duty and uphold the oath you took to defend the Constitution. Our Country is depending on you like at no other time in history. (#6)

    Once again, of course, Barack Obama is front and center, along with the Chicago Climate Exchange, the Joyce Foundation, George Soros, Maurice Strong, Edmund de Rothschild, the Federal Reserve, Goldman Sachs, George W. Bush’s Treasury Secretary Henry Paulson, even Fannie Mae, and many others. It entails global Marxofascism / global kleptocracy, with Americans being the chief victims, while a few overlords rule at, and their financiers skim off, the top. If any “mainstream” reporters cared to cover this thoroughly (and could) they could be much bigger characters in U.S. and world history than Woodward and Bernstein. And as for Americans willingly instigating this, it is treason.

    http://investigatingobama.blogspot.com/2010/04/greatest-scandal-in-modern-history.html

    see the brilliance of the plan..Bush’ watch,,bush’s fault..no connections to the chicago boys,,then Ohbummer says the the oil leak is like 9/11..they always return to the scene of the crime..why do they all protect him to a fault,,like picking an actor for their next soap opera drama,,Harry reid’s statement,,put a suit on that boy and he’ll work. fine,,paraphrase,,henry kissinger,,said O was poised in the art of deception,,he can play the part of the prez..everyone knows about soros,,he’s big enough to take the heat,,it’s not what see,,it’s there hole card,,,and the hole card was Cap & trade,,and viola,,Flight 93 landed at it’s target,,Nov 2008..

    (#1) http://www.abeldanger.net/2010/04/specific-companies-in-world-trade.html

    (#2) http://climateerinvest.blogspot.com/2010/04/fannie-mae-owns-patent-on-residential.html

    (#4) http://www.examiner.com/x-14143-Orange-County-Conservative-Examiner~y2010m4d27-Scandal-Obama-Gore-Goldman-Joyce-Foundation-CCX-partners-to-fleece-USA

    (#5)http://warofillusions.wordpress.com/2009/03/30/obama-maurice-strong-al-gore-key-players-cashing-in-on-chicago-climate-exchange/

    (#6) http://investigatingobama.blogspot.com/2010/06/rico-investigation-needed-now-about.html

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