Diamond News Archives

Jeffrey Gundlach^[1] hosts DoubleLine Total Return webcast for the month of June 2018, titled, “Push Me, Pull You.”

Q1 hedge fund letters, conference, scoops etc, Also read Lear Capital: Financial Products You Should Avoid?^[2][3]

TAB I - U.S. & Global Markets

Gross Domestic Product - Real and Nominal

Source: Bloomberg

GDP = Gross Domestic Product includes the total amount of goods and services produced within a given country. Nominal GDP is adjusted for inflation.

You cannot invest directly in an index.

LEI (YoY) Heading into Recessions^[4]

January 31, 1968 to April 30, 2018

Source: Bloomberg, DoubleLine as of April 30, 2018

LEI = Leading Economic Indicators is a measurable economic factor that changes before the economy starts to follow a particular pattern or trend. YoY = year‐over‐year. You cannot invest directly in an index.

ISM PMI Leading Up to Recessions

December 31, 1947 to May 31, 2018

Source: Bloomberg, DoubleLine as of April 30, 2018

ISM = Institute of Supply Management. Purchase Manager’s Index (PMI) is an indicator of the economic health of the manufacturing sector and is based on: new orders, inventory levels, production, supplier deliveries and the employment environment. YoY = year‐over year. You cannot invest directly in an index.

Measures of Business and Consumer Sentiment

Source: Bloomberg, DoubleLine as of April 30, 2018

Z‐score indicates how many standard deviations an...

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Brazil’s President Michel Temer issued Tuesday two decrees introducing key changes to the country’s 50-year-old mining regulations, aimed at making the local industry more competitive and sustainable.

The changes, announced by MINING.com last week, seek drawing investment to the sector while implementing rules on the collection of higher mining royalties and their distribution.

Mining is regulated in Brazil by the Mining Code enacted in 1967 and by its Regulations of 1968. While the code has been amended several times, the regulations had remained untouched until today.

The first decree includes measures to allow for mining titles to be used as guarantees for financing, which is expected to spur investment in sector, while allowing miners to continue exploring for minerals even if production license applications are pending, local paper O’ Globo reported.

The new rules also set stricter environmental rules and the enforcement of mine closures planning. From now on, mining companies will have the responsibility of recovering areas degraded by extraction activities.

The tougher regulations are a direct result of a series of mine accidents that have hit the country in the past years, including the 2015 disaster at the Samarco iron ore mine, which killed 19 people, damaged the environment and triggered wave of legal issues and challenges for the still-halted venture owned by Vale SA and BHP.

A separate presidential decree implements rules passed by Congress last year on the collection and redistribution of mining royalties on a variety of minerals.

Latin America’s largest country ground to a halt last month as truck drivers created hundreds of roadblocks...

By now, if you’re not assuming that corporate CEOs are lying to you every time they try to sell you on something, you’re not doing your due diligence. A Harvard study^[1] found that not only do CEOs lie an inordinate amount, they’re really good at it, and a large part of the reason they became CEOs in the first place was because they lied so often and so well.

It’s good policy to begin any critical analysis of CEO statements or behavior with the initial assumption that they are trying to profit from your falling victim to their deception^[2].

For example, the basic conceit of a stock buyback is that a company honestly believes that its stock is so cheap, the best use for its free cash on hand is to buy its own stock. The announcement of a buyback is usually accompanied with high-flown CEO-speak about what a compelling buy the stock is.

Total buyback activity is expected to top $800B in 2018^[3]. These buybacks, in their near entirety, will be funded by the Trump tax cut. By a handout to Wall St. that corporate CEOs did nothing to earn and can use with impunity to drive their stock prices mindlessly higher with relentless open-market buying. And again, it cost them nothing.

Then, more often than not, while the CEO is publicly flogging the narrative that his company’s stock is a great value that should be bought, he and his fellow company insiders sell as much stock as they can^[4], often using the company’s own buyback cash to do so.

Is it illegal? No. Is it immoral, deceitful, and generally reprehensible? Yes, but as discussed, this is the behavior you...