Lunes 18/05/15 indice de casas

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14:10 El IPC americano será pro-euro
Bankinter
Eurodólar (€/USD).- La falta de acuerdo con Grecia no parece afectar al euro, que se ha apreciado hasta más allá de 1,14. Esta semana no se esperan novedades sobre este asunto, así que predominará la macro. El jueves se publicarán unos PMIs europeos algo débiles y un Indicador Adelantado americano que podría repetir en +0,2%, lo que debería tender a fortalecer el USD. Pero el viernes se publicará una inflación americana baja (+1,7% desde +1,8%) y eso alejará algomás la expectativa de que la Fed suba tipos este año, por lo que el euro podría consolidarse hasta 1,145 o incluso algo más allá. Rango estimado (semana): 1,143/1,147.

Euroyen (€/JPY).- El yen se deprecia debido a: (i) euro fuerte contra el dólar, y (ii) desaceleración de la economía japonesa. La macro japonesa de esta semana (PIB, Indicador Adelantado, Actas del BoJ…) seguirá reflejando la necesidad de una política monetaria extremadamente laxa y de un yen débil. Rango estimado semanal: 136,16/137,42.


Sobre la restricción financiera

José Luis Martínez Campuzano de Citi
Lunes, 18 de Mayo del 2015 - 14:58:00

Ya hemos comenzado a escuchar las primeras advertencias sobre el fuerte crecimiento de la "banca en la sombra". Al final, no es más que la alternativa a la financiación bancaria. Y en la zona EUR se partía de niveles tan bajos que el fuerte crecimiento en los últimos años podría incluso confundirse con una sana diversificación de las fuentes de financiación del sector privado. Pero, en Estados Unidos la proporción de financiación a través del mercado ya supera ampliamente porcentajes del 60 % lo que ha llevado a la propia Yellen a advertir que estarán muy pendientes de su evolución a futuro. Mientras, en la zona EUR con niveles de financiación no bancaria inferiores al 30 % aún podemos estar tranquilos. ¿O no?

http://blog-imfdirect.imf.org/2015/05/0 ... usinesses/

El título del Blog anterior patrocinado por el FMI ya plantea uno de los debates más relevantes en la Crisis: ¿se acentuó por la restricción de financiación generada por el desapalancamiento y saneamiento de la banca? Después, ya lo saben, vino una regulación más estricta y una supervisión mejor (extrema). ¿Asumir nuevos riesgos de crédito en un contexto de debilidad económica en estas condiciones? Complicado. Las medidas de política monetaria cuantitativa en el fondo han favorecido una mayor profundidad de los mercados de crédito no bancario, aunque la desintermediación ha tenido costes en términos de distorsionar los mercados y facilitar excesos en los precios de los activos. Más tarde, una vez que se comienza a debatir el inicio de la normalización de tipos, vemos como reaparece el riesgo de iliquidez.

If financing is the lifeblood of European small businesses, then the effect of the financial crisis was similar to a cardiac arrest (FMI).

Las pequeñas empresas suponen en estos momentos más del 90 % del producto del área Euro. Su financiación es por tanto fundamental. Otra cosa, como decía antes, que las encuestas de financiación de la banca muestren tres cosas: 1.que la recuperación de la demanda de crédito ha sido lenta; 2. Que la oferta de crédito desde la banca, aunque limitada, ha sido suficiente; 3. Que la demanda solvente de financiación ha sido muy limitada. Con todo, la Titulización se ha convertido para muchas autoridades en un objetivo cuyo cumplimiento puede protegernos frente a otras crisis como la que (aún) estamos superando. Las mismas autoridades piden más transparencia, más infraestructura y apoyo financiero oficial para que se desarrolle este mercado. El ECB ha hecho algo de esto con el mercado de ABS, aunque en el fondo a corto plazo ha facilitado su estrechez. Con todo, es importante recordarlo, dos crisis financieras seguidas en un periodo limitado de tiempo no suelen tener el mismo subyacente. Así, la hipotética restricción de financiación es complicado que se reproduzca en el futuro próximo. Más bien, lo contrario con riesgos derivados de un exceso de liquidez y búsqueda de rentabilidad por parte de inversores que no están acostumbrados a gestionarla.

José Luis Martínez Campuzano
Estratega de Citi en España

[Fenix]

15:07 Dinero, dinero y dinero
José Luis Martínez Campuzano de Citi
Según nuestros datos, durante la semana pasada hubo entradas de dinero en fondos de bolsa mundial por 1.9 bn. Y apenas cambios en los de renta fija, con salidas de 16 M.De nuevo fueron los fondos de bolsa japonesa los más beneficiados por las entradas de dinero, con compras de 4.2 bn. en bolsaEn USA salidas (no ETF) por 5.3 bn. Y la segunda semana consecutiva de salida de dinero de fondos de bolsa europea, por un importe en este caso de 1.2 bn.

Más de 2.8 bn. en ventas de fondos de bolsa emergente durante la semana.

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Financial Execs Urge Fed To Rein In "Over-Exuberance... Hangover Will Be Difficult To Cope With"
Submitted by Tyler D.
05/18/2015 - 14:30

In a stunningly honest turn of events - though likely self-preserving - a number of senior financial services executives are reportedly urged authorities around the world to bolster their crisis-busting arsenals amid fears that ultra-low interest rates have increased the risks of financial instability. As The FT reports, the heads of companies including HSBC, UBS and BlackRock will on Monday release a joint statement demanding policy-makers "address emerging market inefficiencies in the financial system, such as over-exuberance within asset classes." Policy-makers must “lean against something that is making people feel good but is actually going to give them a hangover they will find difficult to cope with."


The San Francisco Fed Just Gave A Green Light For A June Rate Hike
Submitted by Tyler D.
05/18/2015 - 14:04

The punchline from the most recent San Fran Fed "research" paper is that since Glenn "double seasonal adjustment" Rudebusch is one of Yellen's favorite hometown economists, she now has the green light to completely ignore the weakest economic print since last Q1, and to focus entirely on the best economic print in the US: the surge in part-time senior citizen workers, pardon, the "zero slack" unemployment rate of 5.4%. She also has the justification why to ignore it: the bad data wasn't seasonally adjusted enough (the good data was seasonally-adjusted just right).


Atlanta Fed 2 - 0 Wall Street Optimists: Q2 GDP Expectations Crash
Submitted by Tyler D.
05/18/2015 - 13:38

Who could have predicted this? Wall Street's consensus crowd of perennial optimists have taken the machete out to Q2 GDP growth expectations (just as they had to when Q1 showed them all for the worse weather forecasters ever). The tumble in Q2 expectations brings Wall Street once again, closer to where The Atlanta Fed's GDPNow model forecast is... a mere 0.7% growth... and drags total 2015 growth well below trend.

[Fenix]

Investors Are Trapped In A "Twilight Zone", BofAML Warns Of Looming C.R.A.S.H. Risks
Submitted by Tyler D.
05/18/2015 - 12:52

Episodes of “corrections” are apparently happening more frequently according to BofAML's credit strategist Barnaby Martin and given the extremities of liquidity, profits, technological disruption, regulation, and income inequality, BofAML warns 'gently' that the potential for a cleansing drop in asset prices cannot be dismissed. Most likely catalysts: Consumer, Rates, A-shares, Speculation, High Yield. "We advise selling risk into strength, buying volatility into weakness, advocate higher than normal levels of cash and would add some gold."



David Stockman: "We Are Entering The Terminal Phase Of The Global Financial System"
Submitted by Tyler D.
05/18/2015 - 13:14

"What happened in each of those episodes was a short-run break in the system, collapse of confidence and flight to gold. What I think we are facing now is a terminal phase of a monetary system that isn’t viable, stable or sustainable. Therefore gold has but one characteristic - massive upside in the years ahead."


Revealing The Identity Of The Mystery "Belgian" Buyer Of US Treasurys
Submitted by Tyler D.
05/18/2015 - 18:58

After months of speculation and confusion, on Friday we finally got if not direct, then certainly indirect, evidence from this month's TIC data that "Belgium" was merely a front for China.

[Fenix]

This Is What A $240/Share AAPL Would Look Like In Context
Submitted by Tyler D.
05/18/2015 12:26 -0400

If Carl Icahn, whose $6.8 billion in AAPL holdings makes him nearly a 6x bigger holder of the stock than the Swiss National Bank, is correct and AAPL is truly worth $240/share today, or about $1.4 trillion, roughly equivalent to 9% of US GDP, then this is how AAPL would rank if it were a sovereign nation (and yes, we know comparing market cap to GDP is idiotic, but so is everything else these days).

For the purists, at $240/share, AAPL would be 2.2x larger than the entire market cap of the Italian or Swedish stock market, 1.9x larger than all Spanish public companies combined, it would be almost the same size as the market cap of all Swiss companies, and is just about 70% of the market cap of Germany or France.


Carl Icahn thinks Apple is worth ... $1.4 trillion
Carl Icahn is starting to sound like a broken record when it comes to Apple -- which is more than a bit ironic since Apple has played a starring role in the shift to digital music from CDs, vinyl and cassettes.

Icahn has been pressuring Apple (AAPL, Tech30) and CEO Tim Cook to do more with the company's cash since his firm Icahn Enterprises (IEP) first acquired a stake in the company in the summer of 2013. And he's at it again.

In Icahn's latest letter to Cook, he said the stock remains "dramatically undervalued."

Icahn thinks Apple shares should be worth $240 -- 85% higher than where they are now. He had previously estimated that Apple should be worth $203 a share.

At $240, Apple would have a market value of nearly $1.4 trillion.

Related: Will Apple be America's first $1 trillion company?

Apple is already the world's most valuable company. It's currently worth about $750 billion. Shares are only about 3% below the all-time high they hit in April.

The stock, which was added to the Dow Jones Industrial Average earlier this year, is up 18% so far in 2015 and more than 50% over the past 12 months.

Apple's iPhone 6 and 6 Plus have turned out to be a phenomenal success for the company. The company is expected to report overall revenue this year of $231.4 billion.

Related: Apple investors dream of a Tesla tie-up

But Icahn is still not happy. He said that "now is the time for a much larger buyback" -- even though Apple recently announced plans to increase its share repurchase plan from $90 billion to $140 billion.

Investors often applaud stock buybacks because they reduce the number of shares outstanding and boost earnings.

Icahn continues to argue that Apple could buy back more shares while also continuing to invest in research and development. He makes a good point. Apple has $194 billion in cash.

To that end, Icahn also said in his letter that he expects Apple to come out with a TV set -- something that has been rumored for a LONG time -- next year and a car by 2020.

There has been increased chatter about an Apple car lately. Some shareholders have even dreamed that Apple would buy electric car company Tesla (TSLA).

Cook has not talked about any specific new product lines for Apple.

During the company's latest earnings conference call with analysts, he simply said that Apple will keep investing in the future while also returning cash to shareholders because it is "in the very fortunate position of generating more cash than we need to run our business and keep making these important investments."

Related: Icahn invests in ridesharing app Lyft

Icahn claims that the TV and automobile markets are worth about $2.2 trillion and that this justifies why the stock should nearly double from here.

"Apple has clearly demonstrated a track record of excellence and success when entering new categories," Icahn wrote. "We expect this to continue with the Apple Watch, the television, and the car, and the world will look back on today's undervaluation as a fascinating example of market inefficiency."

To quote Billy Joel, Icahn may be right...but he may be crazy.

Apple did not have a comment about Icahn's latest letter.

[Fenix]

S&P 500 Hits Record Above December "Fat Finger" High
Submitted by Tyler D.
05/18/2015 - 11:38

December 18th 2014 saw SPY - the S&P 500 ETF - suddenly spike to 212.97 (on no news whatsoever). We have now taken out that "fat finger" peak.



More Buffett Hypocrisy: "Eco-friendly" Billionaire Seeks to "Squash" Nevada Rooftop Solar
Submitted by Tyler D.
05/18/2015 - 12:01

"Warren Buffett highlights how his Berkshire Hathaway Inc. utilities make massive investments in renewable energy. Meanwhile, in Nevada, the company is fighting a plan that would encourage more residents to use green power," Bloomberg reports, in the latest example of the world's ultra-rich not practicing what they preach.



So Much For The Oil Crash: Cali Gas Price Almost Back To Year Ago Levels; Los Angeles Gallon Rises Over $4.00
Submitted by Tyler D.
05/18/2015 - 10:42

While one could, at least superficially, make the case that for the US consumer (if nobody else) lower oil prices are indeed better than the opposite, we wonder how the same pundits will spin that according to AAA, not only are Los Angeles gas prices now back over $4.00 per gallon, erasing almost all losses from a year ago.

[Fenix]

Homebuilder Sentiment Slides, Misses For 5th Of Last 6 Months
Submitted by Tyler D.
05/18/2015 - 10:06

Since November, HAHB homebuilder sentiment has only beaten expectations once. May printed 54 (notably short of the 57 expectation). Despite all the previous hope for future sales, buyer traffic has fallen as The Midwest saw the biggest drop in sentiment (what about the post-weather bounce?) and The West rising modestly. The story was well-known: pessimism now offset by optimism later: present single family sales falls to 59 vs 61 last month, while future single family sales rise to 64 vs 63 last month, even as prospective buyers traffic falls to 39 vs 40 last month.


Shape Of Greek Endgame Emerges: IMF Discussed "Cyprus-Like" Plan After Tsipras Warned Of Looming Default
Submitted by Tyler D.
05/18/2015 - 09:46

The IMF discussed a "Cyrpus-like" take it or leave it solution for Greece last week, FT reports. With the countdown to outright insolvency down to two weeks, PM Tsipras will meet EU leaders in Latvia on Thursday to make one last push for a last minute deal. Meanwhile, the fate of the Greek banking sector hangs in the balance as the ECB has come under fire for the monetary financing of the Greek government.

[Fenix]

Carl Icahn Would Like Tim Cook To Buyback Some More Of His AAPL Shares
Submitted by Tyler D.05/18/2015 11:18 -0400

Here is the only part that matters in the latest massive, 2000+ word letter Carl Icahn just "sent" to AAPL CEO Tim Cook, in which he advocates an AAPL stock price of $240/share or over $1.3 trillion, or 8% of US GDP:

We are pleased that Apple has directionally followed our advice and repurchased $80 billion of its shares (yielding the company’s shareholders an excellent return), but the company’s enormous net cash position continues to grow while the company’s shares are still dramatically undervalued. With Apple’s shares trading for just $128.77 per share versus our valuation of $240 per share, now is the time for a much larger buyback. We appreciate that the Board just increased the share repurchase authorization by $50 billion, and that it continues to prioritize share repurchases over dividends (as it should). We again simply ask you to help us convince the board of how these two underlying issues (inefficient net cash growth and share undervaluation) persist and combine to enhance the opportunity for accelerated share repurchases in greater magnitude. We also ask you to help us convince the board that this is not a choice between investing in growth and share repurchases. As our model forecasts, despite more than 30% growth in R&D annually through FY 2017 to $13.5 billion (up from $1.8 billion in FY 2010) and your updated capital return program, Apple’s net cash position (currently the largest of any company in history) will continue to build on the balance sheet.



Share Repurchases – we assume share repurchases of $37.5 billion, $31.25 billion, and $37.5 billion over the next three year for our forecast and not the more aggressive pace we hope the Board will undertake

Here are the Cliff notes:

1. Uncle Carl and his two analysts remain convinced they know how to run AAPL better than its CEO and his thousands of employees.
2. Uncle Carl and his two analysts have built up a massive stake in AAPL shares which however they can't get out of in this illiquid market without tipping the market they are selling - a tip which would promptly send the stock plunging - and as a result have come to the only buyer who is big enough to buy all of Icahn's shares without causing a massive ripple: the company itself.

As for AAPL's net cash (excluding debt), it really hasn't moved much in the past 3 years:



And here is just the cash AAPL holds domestically, and which can be used for buybacks and dividends without being forced to repatriate and pay taxes on its offshore cash:



For now, however, Icahn's opinion is all that matters, and the value of AAPL stocks has risen by $8 billion just on one tweet.

* * *

Here is the full letter:

Dear Tim:

We again applaud you and the rest of management for Apple’s impressive operational performance and growth. It is truly impressive that, despite severe foreign exchange headwinds and massive growth in investment (in both R&D and SG&A), the company will still grow earnings by 40% this year, according to our forecast. After reflecting upon Apple’s tremendous success, we now believe Apple shares are worth $240 today. Apple is poised to enter and in our view dominate two new categories (the television next year and the automobile by 2020) with a combined addressable market of $2.2 trillion, a view investors don’t appear to factor into their valuation at all. We believe this may lead to a de facto short squeeze, as underweight actively managed mutual funds and hedge funds correct their misguided positions. To arrive at the value of $240 per share, we forecast FY2016 EPS of $12.00 (excluding net interest income), apply a P/E multiple of 18x, and then add $24.44 of net cash per share. Considering our forecast for 30% EPS growth in FY 2017 and our belief Apple will soon enter two new markets (Television and the Automobile) with a combined addressable market size of $2.2 trillion, we think a multiple of 18x is a very conservative premium to that of the overall market. Considering the massive scope of its growth opportunities and track record of dominating new categories, we actually think 18x will ultimately prove to be too conservative, especially since we view the market in general as having much lower growth prospects.

We are pleased that Apple has directionally followed our advice and repurchased $80 billion of its shares (yielding the company’s shareholders an excellent return), but the company’s enormous net cash position continues to grow while the company’s shares are still dramatically undervalued. With Apple’s shares trading for just $128.77 per share versus our valuation of $240 per share, now is the time for a much larger buyback. We appreciate that the Board just increased the share repurchase authorization by $50 billion, and that it continues to prioritize share repurchases over dividends (as it should). We again simply ask you to help us convince the board of how these two underlying issues (inefficient net cash growth and share undervaluation) persist and combine to enhance the opportunity for accelerated share repurchases in greater magnitude. We also ask you to help us convince the board that this is not a choice between investing in growth and share repurchases. As our model forecasts, despite more than 30% growth in R&D annually through FY 2017 to $13.5 billion (up from $1.8 billion in FY 2010) and your updated capital return program, Apple’s net cash position (currently the largest of any company in history) will continue to build on the balance sheet.

It is our belief that large institutional investors, Wall Street analysts and the news media alike continue to misunderstand Apple and generally fail to value Apple’s net cash separately from its business, fail to adjust earnings to reflect Apple’s real cash tax rate, fail to recognize the growth prospects of Apple entering new categories, and fail to recognize that Apple will maintain pricing and margins, despite significant evidence to the contrary. Collectively, these failures have caused Apple’s earnings multiple to stay irrationally discounted, in our view.

When we compare Apple’s P/E ratio to that of the S&P 500 index, we find that the market continues to value Apple at a significantly discounted multiple of only 10.9x, compared to 17.4x for the S&P 500, awarding the S&P500 with a 60% premium valuation to Apple:

apple - 1

Importantly, as we have noted previously, we assume a 20% tax rate for the purpose of forecasting Apple’s real cash earnings, not the 26.2% “effective” tax rate used by Apple, and view this as a necessary adjustment, often overlooked by both analysts and investors. For more detail on our methodology for this adjustment, please review our letter titled “Carl Icahn Issues Letter to Twitter Followers Regarding Apple” published February 11th, 2015, which you can find here: http://www.shareholderssquaretable.com/ ... ing-apple/

By applying this adjustment to the current consensus FY2015 EPS of $8.96 (among the 45 analysts who have updated their EPS targets since April 22nd), the adjusted result is $9.71. Notably, while previously criticized by some of these analysts as being too aggressive, this consensus EPS forecast, which includes interest income, is now largely in line with our own forecast of $9.60, which does not include interest income. And, once again, we exclude interest income from our EPS forecast because we value Apple’s enormous net cash balance separately from the enterprise, unlike most analysts.

While our forecast for FY 2016 EPS is significantly above Wall Street consensus today, in October 2014 so was our original forecast for FY 2015 EPS, which is now in line with the Wall Street consensus. We are optimistic that ecosystem improvements (Apple Watch, Apple Pay, Homekit and Healthkit in particular) will drive modest growth in iPhone revenues next year, despite the difficult comparison that will result from iPhone’s tremendous performance this year. With a new iPhone expected in September 2016, Apple stands to benefit as iPhone continues to take premium market share (switchers from competitors), as the middle class continues to grow in emerging markets, and as the modest level of upgrades (only 20% to date) indicates pulling demand forward from FY 2016 to FY 2015 may not be as severe as some have highlighted. Along with a more dramatic push into the TV market, increasing traction with Apple Watch, and the introduction of a larger screen iPad, we have confidence in our forecast for FY 2016.

We believe Apple Watch, Apple Pay, Homekit, Healthkit, Beats Music, and further innovation in existing product lines collectively represent a tremendous opportunity that on their own justify a valuation that, at the very least, reflects a market multiple. That being said, we share your excitement that “our best days are ahead of us” and that Apple has “no shortage of growth opportunities to pursue.” The company’s dramatic increase in R&D spending should signal to investors that Apple plans to aggressively pursue these growth opportunities. It may be difficult for some to fathom (only because Apple is already the largest company in the world), but Apple is very much a long term growth story from our perspective, which is exactly why we believe the company’s shares should trade at a premium multiple to the S&P 500, as opposed to the S&P 500 trading at a 60% premium to Apple. While we respect and admire Apple’s predilection for secrecy, the company’s aggressive increases in R&D spending (and some of the more well-supported rumors) have bolstered our confidence that Apple will enter two new product categories: television and cars. Combined, these two new markets represent $2.2 trillion, three times the size of Apple’s existing markets (if we exclude Apple Watch).

Excluding advertising, the addressable market for television is approximately $575 billion, which is larger than the smartphone market. Also, given that people spend an average of 12% of the day watching TV (equating to 25% of their free time), we view television’s role in the living room as a strategically compelling bolt-on to the Apple ecosystem. In addition to an Ultra High Definition television set, we expect Apple to launch a related suite of tiered products and services, including a “skinny bundle” of pay-tv channels (partnered with various media companies) and an updated Apple TV microconsole (which will continue to service the massive install base of televisions offered by other OEMs). This will enable Apple to pursue the entire market by offering multiple products at various price points across the demographic spectrum. Netflix offers a similar tiered approach to pricing today by charging a higher price for those seeking the ability to receive ultra high definition content.

We believe this move into TV will also benefit all the other devices and services in the Apple ecosystem. As just one of many possible examples of this, the Apple Watch could perhaps be used as a remote control. Similarly, as we expect Apple to launch a larger 12.9” iPad, it would offer an enhanced viewing experience for an Apple pay tv service, or act an improved “second screen” to an Apple UltraHD television.

At $1.6 trillion, the enormous addressable market for new cars is approximately four times the size of the smartphone market. It’s estimated that people spend an average of 1 hour every day traveling, mostly in cars, but not everyone drives, implying that the average time that daily commuters spend in a car is much higher. We believe the rumors that Apple will introduce an Apple-branded car by 2020, and we believe it is no coincidence that many believe visibility on autonomous driving will gain material traction by then.

As autonomous driving would release drivers’ attention from the activity of driving and navigating, and perhaps even increase the time people actually want to spend inside a car, both an automobile and the services provided therein become even more strategically compelling. While Apple currently addresses this market with CarPlay, it seems logical that Apple would view the car itself as a the ultimate mobile device to which it could bring its peerless track record of marrying superior industrial design with software and services, along with its globally admired brand, and offer consumers an overall automobile experience that not only changes the world but also adds a robust vertical to the Apple ecosystem. And for Apple, the car market is more than big enough to “move the needle” significantly, even as the world’s largest company.

The rising cost of oil, its impact on global warming, the geopolitical risks associated with oil dependency (especially as fuel for automobiles), followed more recently by the rise of cost effective alternatives presents a “change the world” opportunity for Apple. It is widely believed that the electric battery will play a key role in this transition. The lithium-ion battery already represents a critical component across many of Apple’s existing products (iPhone, iPad, Apple Watch, MacBook, Beats) and any further innovation could be a “game changer” in terms of both battery life and form factor across Apple’s entire ecosystem. Since lithium-ion batteries represent a large percentage of the cost of today’s electric vehicle, we believe Apple should be well positioned to leverage its existing knowledge domain and more robust R&D spending in this area, and in turn apply any energy density / battery life improvements for a car across all the other products in its ecosystem that will share the benefit from such battery innovation (iPhone, iPad, Apple Watch, MacBook, Beats).

As a mobile device that is differentiated by design, brand, and consumer experience where software and services are increasingly critical, an Apple car would seem to be uniquely positioned.

While the television and the car offer tremendous growth opportunities, Apple’s core ecosystem continues to improve and grow, now sometimes referred to as a “mega-ecosystem”, a term we find increasingly appropriate, as we look at the breadth of its components, which now include existing products (iPhone, Apple Watch, Mac, iPad, Beats, Apple TV), software/services (Apple Pay, Homekit, Healthkit, Carplay, iCloud, iTunes, and rumored Beats Music, pay TV service), as well as possible new products in new categories (a Car, a TV set). Furthermore, ongoing innovations and enhancements to all of the above will drive even more premium market share gains for iPhone, which sits at the epicenter of this mega-ecosystem.

Apple has clearly demonstrated a track record of excellence and success when entering new categories. We expect this to continue with the Apple Watch, the television, and the car, and the world will look back on today’s undervaluation as a fascinating example of market inefficiency (and likewise on our valuation at 18x earnings per share as conservative). Because of this, we encourage both accelerated and larger-magnitude share repurchases as you consider how to allocate capital going forward. As you continue to evaluate this opportunity, and consider the right prices at which to opportunistically repurchase shares, we hope you give credence to our advice in light of our investment record. Unlike the many actively managed mutual funds and hedge funds that are underweight Apple and have underperformed the S&P 500, we have exhibited strong outperformance, thanks in part to our large position in Apple. The Sargon Portfolio (a designated portfolio of assets co-managed by Brett Icahn and David Schechter within the private investment funds comprising Icahn Enterprises’ Investment segment and High River Limited Partnership, subject to the supervision and control of Carl Icahn) has generated annualized gross returns of 36.9% since its formation on April 1, 2010 through April 30, 2015 with $8 billion of assets under management as of April 30, 2015.

If you choose not to pursue some of the new categories we highlighted, or you find our growth forecasts too aggressive for any one new category in particular, we’ll be the first to admit that you are more knowledgeable in these areas than we are. But we believe, that under any circumstances, you would agree that in the aggregate, all these new categories taken together (along with those of which we may be unaware) represent one of the greatest growth stories in corporate history, as well as one of the greatest opportunities ever for a company to invest in itself by repurchasing its shares.



Sincerely,

Carl C. Icahn

Brett Icahn

David Schechter

[Fenix]

Gold Hits 3-Month Highs Amid "Frenetic Liquidity"
Submitted by Tyler D.
05/18/2015 - 09:15

Gold topped $1230 this morning - breaking to 3-month highs and up over 4% year-to-date - up 5 days in a row for the best run in 4 months. The surge comes causally or correlatedly coincidental with China's explicit shift into extraordinary measures (LTROs) but, as The FT reports, market participants are concerned that algo-based funds have created a "frenetic liquidity" environment as everyone from real money to central banks "aren’t trading the gold market the way they used to."


Gold Jumps Despite Stronger Dollar As Grexit Gets Ever Nearer, Futures Flat
Submitted by Tyler D.
05/18/2015 - 06:54

With equities having long ago stopped reflecting fundamentals, and certainly the Eurozone's ever more dire newsflow where any day could be Greece's last in the doomed monetary union, it was up to gold to reflect that headlines out of Athens are going from bad to worse, with Bloomberg reporting that not only are Greek banks running low on collateral, both for ELA and any other purposes, that Greece would have no choice but to leave the Euro upon a default and that, as reported previously, Greece would not have made its May 12 payment had it not been for using the IMF's own reserves as a source of funding and that the IMF now sees June 5 as Greece's ever more fluid D-day. As a result gold jumped above $1230 overnight, a level last seen in February even as the Dollar index was higher by 0.5% at last check thanks to a drop in the EUR and the JPY.


Jim Rogers On The Coming Water Wars
Submitted by Tyler D.
05/17/2015 - 23:28

"Water is one of the great opportunities of our times. If you look at the world there are some huge shortages developing in some parts but there is also a lot of water in other parts, just in the wrong place – like water in Siberia for instance, which is not where most people are. There are going to be wars in the Middle East over oil east of the Red Sea, but west of that there will be wars over water since there are serious water problems in that region." Jim Rogers:

[Fenix]

Peak Population Growth?
Submitted by Tyler D.
05/17/2015 - 22:00

"The UN's forecasts misrepresent underlying demographic dynamics - the future we face is not one of too much population growth, but too little."


How China Covered The World In "Liquidity Swap Lines"
Submitted by Tyler D.
05/17/2015 - 19:45

Central bank liquidity lines like those the Fed used to bailout the world seven years ago have become a fixture of the post crisis financial system. Since 2009, China has essentially blanketed the globe with yuan liquidity lines, inking swap agreements with nearly three dozen countries with the primary goal of increasing the degree to which the renminbi is used in international trade.


Chinese Firm Reveals World's First 3D-Printed Five Story Apartment Building
Submitted by Tyler D.
05/17/2015 - 20:27

Not content with building single-family houses (and WinSun's own office), WinSun recently made history when it demonstrated the world's first entirely 3D-printed five-story apartment building and a 1,100 square metre (11,840 square foot) villa, complete with decorative elements inside and out.


Final Pillar Of Bull Market Showing Cracks?
Submitted by Tyler D.
05/17/2015 - 14:45

After a test of the breakout level in March, the index moved to new highs again in April. However, over the last few weeks, the VLG’s triple top breakout has shown initial signs of cracking.


To The Class Of 2015 – You Chumps!
Submitted by Tyler D.
05/17/2015 - 12:39

It is unlikely that we would ever be called upon to give a speech to graduating students. But if we were, we would say the following: Congratulations, Class of 2015: You chumps!

The Wall Street Journal reports that you are the most indebted generation in history. The average graduate with student debt has a little more than $35,000 of it. The whole bill for student debt this year is expected to reach $68 billion – a tenfold increase over the last 20 years. But student debt is like the foul smell of gangrene: It testifies to a deeper, inner corruption...


Leading German Keynesian Economist Calls For Cash Ban
Submitted by Tyler D.
05/17/2015 - 13:15

"Coins and bills are obsolete and only reduce the influence of central banks," German economist and sole Keynesian member of the German Council Of Economic Experts Peter Bofinger tells Spiegel, becoming the latest central planning proponent to suggest that a cashless society would solve the world's economic problems by allowing the government to control who spends what and when in a futile effort to control the business cycle.


Bubble In Higher Education: When Will It Pop?
Submitted by Tyler D.
05/17/2015 - 13:01

Many factors combined to make it the perfect storm: the demographic rise of the millennials, easy money from the Fed, the “Chivas Regal” effect in pricing strategy that many colleges and universities adopted, and the US government virtually taking over the market for student loans. It’s a vicious circle as colleges raise prices, students take out easy loans, and the institutions raise prices again. However, it all seems to be coming to a head as several factors begin to show the chinks in the armor.

[Fenix]

Egypt Sentences Clinton-Backed Former President To Death
Submitted by Tyler D.
05/17/2015 - 11:27

When it comes to spectacularly bad foreign policy outcomes, the US is on an incredible run lately even by its own lofty standards. In the latest example of US meddling gone horribly wrong, Mohammed Morsi — the former Egyptian President who was “democratically” elected following mass protests against Hosni Mubarak — was sentenced to death on Saturday.


One Gauge Of Investor Sentiment Just Hit A 6-Year High
Submitted by Tyler D.
05/16/2015 - 18:45

There’s no question that the general level of stock investor sentiment is at historically high levels at this time. However, what has largely been absent, though, despite the elevated sentiment are examples of veritable investor euphoria. We did see traces of it over the past 2 years, especially in early 2013, but nothing consistent. Yesterday, however, we did see a possible example of this type of euphoria from the International Securities Exchange.


What Goldman Is Telling Its Clients: Sell In May And Don't Come Back For One Year
Submitted by Tyler D.
05/16/2015 - 18:27

In recent months Goldman's chief equity strategist David Kostin has been getting increasingly "toppish" if not outright bearish on stocks. In his latest report he now openly warns that "the market will rise to 2150 by mid-year but fade after the Fed raises interest rates in September for the first time in nine years." As a result Goldman's "year-end forecast is 2100 and its 12-month target equals 2125." Which is where it closed on Friday. In other words, sell in May and come back until next May.

[Fenix]

The Economist "Buries" Gold
Submitted by Tyler D.
05/16/2015 - 15:45

The Economist is a quintessential establishment publication. Keynesian shibboleths about “market failure” and the need to prevent it, as well as the alleged need for governments to provide “public goods” and to steer the economy in directions desired by the ruling elite with a variety of taxation and spending schemes as well as monetary interventionism, are dripping from its pages in generous dollops. The magazine has one of the very best records as a contrary indicator whenever it comments on markets. While gold hasn’t yet made it to the front page, but the Economist has sacrificed some ink in order to declare it “dead” (or rather, “buried”).



This May Just Be The Start Of The Oil Price War Says IEA
Submitted by Tyler D.
05/16/2015 - 13:30

Saudi Oil Minister Ali al-Naimi may be one of the most powerful individuals in the global oil industry. But for all his power, is he the most ingenious? That question arises from the release of two reports on the current state of the oil industry that look at whether or not OPEC’s strategy of forcing US shale to cut back is succeeding.

[Fenix]

Inside China's Insane IPO Market: Full Frontal
Submitted by Tyler D.
05/16/2015 - 12:45

Since the beginning of 2014, the 225 companies that have gone public in China have returned an average of 418% on their way to an average P/E of nearly 100X while growing earnings by an average of just 4%. Most absurd of all, software IPOs have returned 1,124%, have an average P/E of 311X on earnings growth of -5%.