PAUL TUDOR JONES: Commodities Will Be Ugly Until At Least 2020 JULIA LA ROCHE OCT. 21, 2014, 9:11 AM 1,773 2 60 MinutesPaul Tudor Jones II. Commodity prices have been falling around the world, and Paul Tudor Jones II thinks this trend will play out through 2020. On Monday, the legendary macro trader was interviewed by another legend, Stanley Druckenmiller, at the Robin Hood Investors Conference. The conference, which is stacked with hedge fund heavyweights, is off limits to the press. We have a source inside who was kind enough to share his notes from Monday evening's panel. According to our source's notes, Jones says we are in the downturn for the current commodities cycle. Having reached the peak of the cycle a few years ago, we are still heading down to the bottom. Jones said these commodity cycles run in roughly 30-year cycles between peaks — 1999 was a valley, and April 2011 was the peak. He said this cycle would play out through the downside through 2020 or so but would be net positive for the US economy. Jones also touched on other macro topics during the discussion. Jones talked about deleveraging in China and how that would be negative for the financial sector as well as commodities there. He basically said that there was a credit bubble and that the "the piper will be paid and the bubble will burst." He said in about 2029 the US will breach Greek debt levels, according to our source. He also talked about Japan and Japanese Government Bonds, which are up over 30% with extremely low trading volume. He's wondering when the yields will pop. Later in the panel, Jones said the European Central Bank and the Bank of Japan would keep cutting rates. He said the yen needed to depreciate 15% per year to increase inflation 1% to 1.5%. His trade is to get long the dollar versus the yen. According to our source's notes, the dollar rally versus other currencies may have run its course. The panel fell on the anniversary of Black Monday — a market crash event that Jones famously predicted back in 1987 and that netted him millions. According to our source's notes, Druckenmiller asked Jones about the similarities between 1987 and what's going on now. Jones said the 1987 crash was derivative inspired. The S&P futures were down 33% before the open on that Monday. He also said that 1987 was dissimilar to what's going on now. He said we have a bubble now, and he's not sure whether it's in the stock market, according to our source's notes. As for last week's market activity, Jones said that on Thursday we saw a five standard deviation (that's a volatility measure) kind of movement in one day. He said we would see this kind of volatility in the future. Speaking of the volatility of the past two to three weeks, he said that was due to position clearing and that it was similar to October 1998. (Our source pointed out that's when the Long-Term Capital Management event happened. Jones didn't explicitly say that, though.) http://www.businessinsider.com/paul...iller-panel-2014-10?google_editors_picks=true
So we have 30 year cycles, 1999 was a valley, and 2011 was a peak? That makes no sense. I have a feeling there something is wrong here. I see they are quoting a "source". Sounds legit.
He's saying it's 30 years between peaks, e.g., a peak in the early 80s followed by a peak in 2012, with a valley in between.
%%%%%%%%%%%% Thanks; Jim Rogers disagrees with some of that, in his book ''Hot Commodities'' Even though that book was written years earlier. And so much for ''peak oil again'' LOL in ND, SD, Wyoming, and Canada oil supply> than demand . Not a prediction Maybe wrong, but i doubt PTL would forget when the LTC capital brief chart downtrend occurred it was summer of 1998 , not OCT. Thanks for article========================================================================[MY LTC management comment refers to the price downtrend on 1998 summer chart.Russian gov crooks caused some of it also/LTCM]
%%%%%%%%%%%% Actually i have ben studying 1987 + 2000 + 2008 bears lately. But FED[Alan Greenspan ]was raising rates + 1987 was not election year , as 2014 is . However 1987 did have a slight down SEPT....., like 2014 SEPT LOL. Both are old bulls 1987 + 2014 Citibank is now a penny stock [reverse split 10 times $50.07 is really $5.07. BAC was fined 15 billion was it recently?????I am still some what bullish 4th quarter tek stocks tend to be strong 4th quarter; but no question this is an older bull market/uptrend.
Doesn't it kind of depend what the definition of "ugly" is. If you're a trader willing to go long and short, the only time it's really ugly is when the volatility subsides and volume dries up.
%%%%%%%%% Good pointsT,TTT; i hate a sideways slop-chop trend. My read is i think he means; oil[any, all,Texas Tea] is mostly likely trending'' ugly''; since most have a long bias;oil probably lives below 200 day movin average. I am still bullish on tek stocks, but i like 50 dma + 200 dma. Not a prediction but BAC, C will prbably trend ugly[downtrend] Not Just because jim rogers is so bearish on big banks; but BAC has such lousy customer service. IBD book on short selling lists-charts BAC as a great sell; IBD book likes shorts like BAC in bear markets[below 200dma.] Not aprediction; Amen
The best account, by far, of the 1987 crash and why it happened is in this book "A Demon of our own Design" by Richard Bookstaber. Bookstaber was Morgan Stanley's first director of market risk management. This is also one of the best written books of the last one-hundred and fourteen years about market risk by one of the most knowledgeable authors.
Rogers is delusional like any fanatic and I'll take Jones' word over his any time. Commodity future indices Rogers was hyping pre-2008 have been destroyed and are now down 71% from their peak over a 6 year period, yet he still refers to commodities being in a 'simple correction in a long-term bull market'.