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CORNERSTONE INVESTORS NETWORK, January 2007
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Below is a complete copy of the presentation by Stewart Bishop at the Cornerstone Investors Network Conference, Schaumburg, Illinois, January 27, 2007 |
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| PDF LINK | TOPICS |
| Part One | INTRODUCTION & GLOBAL THEME: Globalization and it's affects on Markets and Economies. The ascendance of corporate profits over labor income. Summary of Futures Markets' Outlook |
| Part Two | HOUSING: How excess U.S. housing creation was in part fueled by abundant global capital savings creating artificially low interest rates; Proliferation of risky mortgage financing; Low levels of U.S. consumer savings; U.S. economy highly exposed to housing (32% of jobs created since 2001 are linked to housing, 4X normal); Reasons for possible optimism longer-term: the long-term drivers of housing. |
| Part Three | U.S. & GLOBAL ECONOMY: Current state of U.S. Economy. Consumer weakening, will corporate spending take up the slack? While U.S. economy weakens, the global economy is holding up well. Credit market conditions tightening. |
| Part Four | BABY-BOOM RETIREMENT CHALLENGES. he impact on treasury bonds; Foreign financing of the U.S. "twin deficits"; Artificially low U.S. interest rates [which have in part fueled the U.S. Housing Bubble, see above]; IMF governance of the U.S. economy; Gold breakout in 2005 was at least partially linked to deficits & the risk of currency debasement. Comptroller General and Federal Reserve Chairman both speak about dangers of retirement entitlement programs. Government inaction resulting from "out of sight, out of mind" mentality. |
| Part Five | POLICY. Policy Conundrum. Should the U.S.: Raise Taxes, Cut spending, lower interest rates, or ? For example: one proposal from Nobel Economist Joseph Stiglitz. |
| Part Six | GOLD. Gold market calls; Gold vs. mining stocks as an indicator of trend; Gold breaks out against all major forex in Sep/Oct 2005; implications for long-term currency debasement to finance the baby boom retirement; Calling the May 2006 gold top and selloff; Commodities bubble pops; Will take pressure off inflation and interest rates; Gold now in a "sideways box". Lumber bottoming. |
| Part Seven | ENERGY. Calling the top in crude oil in June '06 "the most significant top in the energy rally in 5 years". Current outlook for energy. |
| Part Eight | CURRENCY. Calling the U.S. dollar rally in Oct. 2004 and Jan. 2005; Dollar technical signals through 2005; the Nov. 2005 dollar top; the dollar selloff in late April 2006; Dollar benefits short-term from safety flight in current market turmoil; Will that be enough to stop the dollar sliding to new lows?; Unclear currency charts as of 6-17-2006; We prefer the sidelines to let clearer patterns emerge in the weeks ahead; Key currency support & resistance levels; the dollar relationship to U.S. corporate earnings. |
| Part Nine | TREASURY BONDS. Bishop's historical bond market calls; The bond top in June 2003; Calling the bond market bottom in June 2006. Status of the current rally and correction in bonds. Relationship of U.S. and European bond markets. |
| Part Ten | CORPORATE BONDS. Corporate bonds were attractive in 2002 with wide yield spreads over Treasuries; Corporate spreads are now pricing perfection & vulnerable to an increase in stock volatility |
| Part Eleven | STOCK MARKETS. Bishop's historical stock market calls; The 2002 stock slide; The October 2002 market bottom; Analysts slash earnings estimates at the 2002 bottom, thereby increasing the probability of "positive surprises" and an eventual rally; Just the opposite is happening today - analysts raising estimates & increasing the risk of "negative surprises"; Calling the 2004 correction as a mere pullback in on-going rally; Calling energy the #1 play during the 2004 correction; Calling the May 2006 stock market selloff; Calling the stock market rally from Sept 2006. Target industry groups. Signs the market at least short-term toppy late in January earnings season. Valuations not unreasonable. Current outlook. |
