The authors of "Water-The Final Resource" are interviewed on Financial Sense. Cycles of climate change and droughts are analyzed in relation to economic cycles and agricultural yields. For the next 2 decades, the waters of the Pacific Ocean are likely to be cooler and the Atlantic likely to be warmer, creating drier weather and water shortages in agricultural regions... conflicts over water are discussed... emerging water technologies are highlighted... food prices likely to go much higher(a theme of ours) http://www.netcastdaily.com/broadcast/fsn2009-0307-2.asx (about 38 minutes in length)
Saturday, March 7, 2009
On the Horizon:Water Crisis
The authors of "Water-The Final Resource" are interviewed on Financial Sense. Cycles of climate change and droughts are analyzed in relation to economic cycles and agricultural yields. For the next 2 decades, the waters of the Pacific Ocean are likely to be cooler and the Atlantic likely to be warmer, creating drier weather and water shortages in agricultural regions... conflicts over water are discussed... emerging water technologies are highlighted... food prices likely to go much higher(a theme of ours) http://www.netcastdaily.com/broadcast/fsn2009-0307-2.asx (about 38 minutes in length)
Mohammed Speaks&Speaks
"FORA.tv claims to help intelligent, engaged audiences get smart". It sounds similar to the aims of Cliff Küle's Notes. When FORA interviews Mohammed El-Erian, a Cliff Küle M-AA* (Most-Admired Adviser), we are inclined to replay it for you..56 minutes in length..less time than attending the forum but more than our usual "notes":
Friday, March 6, 2009
Point of Maximum Pain
Cliff Küle was blessed to learn some things straight from all-time Most-Admired Advisor.. John Templeton..who stressed to buy at points of maximum pessimism..sometimes spoken as:"Buy at the point of maximum pain". Cliff Küle says there is a reasonable chance that CNBC's Friday afternoon interview with Evelyn Davis was the point of maximum pain..and that CNBC found and helped create a buying opportunity..a chart of Friday's market action supports this..listen and judge for yourself: http://www.cnbc.com/id/15840232?video=1054605376&play=1Too Big Has Failed
Federal Reserve Bank of Kansas City President Tom Hoenig has written a 15 page paper with suggestions on tackling the crisis. He says"too big has failed" and current policies & stimulus aren't working... suggests we look at what has worked globally in past crises to provide ideas on what can work better & provide a quicker & cheaper road to recovery..when the President of a Federal Reserve Bank speaks(writes)..Cliff Küle listens (reads): http://www.kc.frb.org/speechbio/hoenigPDF/Omaha.03.06.09.pdf
UK: Massive Money Manufacturing
The British government has started buying its own long-term bonds in an effort to kick start the British economy. This has not been done during the 300+ years of the Bank of England because "it is akin to detonating a nuclear bomb without worrying about the fallout". Will it work? .. if all countries do this, we will get rising commodity prices as all currencies devalue...physical GOLD..no one's DEBT
Eric Sprott, a Cliff Küle M-AA*,says days of prosperity through endless credit creation are likely never returning..thinks government stimulus programs are ruinous to financial stability.. likes gold... Does not recommend the ETF "GLD" due to its complex legal structure and counterparty risk..Eric tells his readers almost exactly what Cliff tells his clients:"GLD does not have the magic characteristic of "no one's promise"..promises can be broken"..Federal Reserve's Lacker:
Federal Reserve Banker Lacker says the weak economy is the cause of weak credit markets.. not the other way around..sees positve growth by end of this year..
"L" Shaped No-Recovery Depression
Economist Nouriel Roubini, a Cliff Küle M-AA* (Most-Admired Adviser), writes that there is a growing risk of an "L" shaped no-recovery depression. Monetary easing is like pushing on a string when the problems are insolvency and credit, and there is a global glut of capacity...Thursday, March 5, 2009
Paper Money Will Be Worth 0
Economist and Financial Commentator Marc Faber, a Cliff Küle M-AA*:- stock markets: "stop shorting the US markets", stocks very oversold, says we may get a sharp bear market rally in the near term
- China: problem of overcapacity, overbuilt in home and commercial sectors, capital spending going down, they should stimulate consumption spending but difficult because no social nets so Asian saving rate very high
- commodities: when the global economy recovers (whenever that is), commodity prices will go up strongly because of money printing and lots of stopped projects due to the credit crisis
- interest rate markets/bonds: manipulated by governments; he covered his shorts on bonds; would short again once bonds rebound
- gold/silver/platinum - recommends owning as store of value, he has been buying gold for many years, near term could have a correction
- Asia - likes dividend yields on Asian equities even if dividends cut
- if Marc were President of the US - he would encourage capital formation and savings, and not consumption-based spending
- cash: paper money will be worth 0 everywhere, eventually we will have hyperinflation
- http://watch.bnn.ca/the-street/march-2009/the-street-march-5-2009/ (about 13 minutes in length)
- http://watch.bnn.ca/the-street/march-2009/the-street-march-5-2009/#clip146489 (about 19 minutes in length)
US Dollar Shines in Depression
Gary Dorsch of the Global Money Trends newsletter, provides commentary-overlaid charts showing the incredible strength of the US Dollar relative to other currencies, emerging as a safe haven currency in the midst of a deepening depression... Gary also observes that China is buying metals...(chart - click to enlarge - courtesy of Gary Dorsch and Global Money Trends)
Reality Bites the Banks
The list of the world's largest banks is changing dramatically. The "big guys"that felt they had the size to hit "home runs" took lots of "steroids"(got highly-leveraged) and have been cut down in size. The "little guys" that didn't feel big enough to hit "homers"are moving way up the list. For years Cliff Küle has been saying "hubris is the nemesis that will lead to a catharsis"...(click to enlarge - courtesy of Alex)
Dow Could Hit 4000
Peter Eliades, of Stock Market Cycles says the market eventually will go to around Dow 4000... he likes gold...
Will Obama Push Oil to $300?
Andrew Mickey writes that Obama's proposed plans include several changes likely to inadvertently drive oil prices much higher: a $31.5 billion tax increase on oil and gas producers, establishing a new excise tax on Gulf of Mexico resources, creating new fees for permitting process of development projects on federal land, eliminating tax deductions for repair, site prep, and transportation costs of drilling, and several others... and suggests maybe the resulting higher oil prices would then create the environment for alternative energy development...Bears Growl For a Short Term Rally
- Steve Leuthold, Leuthold Weeden Capital - http://www.bloomberg.com/apps/news?pid=20601087&sid=aoOD10XZvOPE&refer=home
- Bill Fleckenstein, Fleckenstein Capital - http://www.calculatedriskblog.com/2008/12/fleckenstein-shutting-down-short-hedge.html
- Robert Prechter, Elliott Wave International - http://www.bloomberg.com/apps/news?pid=20601087&sid=aWCVnODJ3GPA&refer=home
- Dominic Frisby, Commodity Watch Radio - http://www.moneyweek.com/investments/stock-markets/stock-markets-are-about-to-rebound-sharply-14650.aspx
Wednesday, March 4, 2009
Clear the Deadwood Out
Paul Van Eeden of Cranberry Capital discusses the global economy, the stimulus and recovery programs, and gold... he says the deadwood of the bad banks should be cleared out for the health of the financial system... http://watch.bnn.ca/#clip145784
Commerical Mortgages Next Meltdown
Pimco's co-CEO Bill Gross discusses whether the US Treasury's plan will be enough to restore investor confidence... he says GE is subject to much forced selling by sovereign wealth funds...
Markets Most Oversold in 109 Years
From MARKET INSIDER BULLETIN whose "MarketMeter", a proprietary compilation of numerous indicators, has been a valuable timing tool for more than 20 years:
"The 14 month RSI (relative strength index) of DJIA , at 18.4 as at the end of February, is at the most oversold level in 109 years. In terms of % year/year declines, the only larger declines in the DJIA were recorded in the 1930s... five of the previous six historical occurrences of the RSI declining below 30 were followed by a rise in the DJIA an average of 28.7% in the following 12 months... The sole exception was during the1929-1932 mother of all bear markets....that one was followed by another57% loss......"
What's Driving Gold ?
US Global Investor's Frank Holmes, a Cliff Küle M-AA* (Most-Admired Adviser), discusses gold... Frank says gold in your portfolio is like car insurance... 25% - 30% of cost of gold mining companies is energy cost, so with recently lower energy prices, this has helped gold mining companies outperform... money supplies growing globally now driving gold prices...http://watch.bnn.ca/market-morning/march-2009/market-morning-march-3-2009/#clip145523 (about 6 minute clip)
The Greatest Depression Coming
Gerald Celente says the government is throwing good money after bad by bailing out financial institutions... the greatest depression coming... social unrest coming... "when people have nothing to lose, they lose it"... sees the end of the American empire... suggests a lifeboat and start rowing... bullish on gold... likes art -"art is the true way of finding the human spirit"... suggests jobs in engineering for efficiency improvement businesses...http://www.howestreet.com/audio/geraldcelente03032009.mp3 (about 17 minute voice interview by Howestreet.com)
Bernanke Resents AIG
Bernanke said insurer AIG operated like a hedge fund and having to rescue them made him “more angry” than any other episode during the financial crisis...http://www.bloomberg.com/apps/news?pid=20601087&refer=&sid=aCrzJbsxzKdk
Tuesday, March 3, 2009
Never Ending Bailouts...
Americans are getting tired of bailout program after bailout program... each new bailout only feeds mistrust of government and weakens public support in the long run...(cartoon above courtesy of russmo.com)
UK Revving Up the Printing Presses
The Bank of England could start buying assets from banks with newly printed money as early as this week to increase lending in the economy, UK Treasury Chief Alistair Darling said in an interview published Tuesday... Cliff Note: the whole world seems to be on the same path to address the financial crisis - printing money, how will this all end?Skilled Immigrants Leaving US
Skilled immigrants constitute only 12% of the US population but have started 52% of Silicon Valley's technology companies and contributed to more than 25% of global patents. They make up 24% of the U.S. science and engineering workforce holding bachelor's degrees and 47% of science and engineering workers who have PhDs. Immigrants have co-founded firms such as Google, Intel, eBay, and Yahoo!. And they are now beginning to leave the US for a variety of reasons...
http://finance.yahoo.com/news/Why-Skilled-Immigrants-Are-bizwk-14523629.html;_ylt=Au8nFHxfmha1gFa_08yFCAe7YWsA
http://finance.yahoo.com/news/Why-Skilled-Immigrants-Are-bizwk-14523629.html;_ylt=Au8nFHxfmha1gFa_08yFCAe7YWsA
Difficulties in Valuing Assets
Axel Merk is Manager of the Merck Hard Currency Fund (www.merkfund.com)
Pension Time Bombs Ticking
Exploding pension fund shortfalls are blowing billion-dollar holes in the balance sheets of some of Chicago's biggest companies, forcing them to make massive contributions to retirement plans at a time when cash flow and credit are already under stress...Geothermal Energy - the next boom?
Article explores the potential for geothermal energy (charts above courtesy of Casey Research)
Europe Needs $22 Trillion Bailout?
Niels Jensen of Absolute Return Partners discusses the mind-boggling bank leverage and financial crisis in Europe. East Europe has accumulated massive debt and West European banks have increased their ownership of Europe banks (see above chart courtesy of FT). Niels comments that on Feb 11, the Daily Telegraph's Brussels correspondent Bruno Waterfield wrote an article under the header: "European banks may need £16.3 Trillion bail out, EC document warns." (note: £16.3 = 22.8 US Dollar) In the article, the reporter says he saw a document produced by the EU Commission which briefed the union's finance ministers on the true extent of the banking crisis. Less than 24 hours later, the article was changed, and two paragraphs had mysteriously disappeared. Here they are says Niels: "European Commission officials have estimated that "impaired assets" may amount to 44pc of EU bank balance sheets. The Commission estimates that so-called financial instruments in the 'trading book' total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets.In addition, so-called 'available for sale instruments' worth £4trillion (4.5 trillion euros), or 11pc of balance sheets, are also added by the Commission to arrive at the headline figure of £16.3 trillion."
Monday, March 2, 2009
Markets Most Oversold in 109 Years
From MARKET INSIDER BULLETIN whose "MarketMeter", a proprietary compilation of numerous indicators, has been a valuable timing tool for more than 20 years:
"The 14 month RSI (relative strength index) of DJIA , at 18.4 as at the end of February, is at the most oversold level in 109 years. In terms of % year/year declines, the only larger declines in the DJIA were recorded in the 1930s... five of the previous six historical occurrences of the RSI declining below 30 were followed by a rise in the DJIA an average of 28.7% in the following 12 months... The sole exception was during the1929-1932 mother of all bear markets....that one was followed by another57% loss......"
Even Dr. Doom is Scared Now
"Dr. Doom" Nouriel Roubini, a Cliff Küle M-AA* (Most-Admired Adviser), says he was one of most bearish people but the global economy has surprised the bears on the downside and says "What's happening in the world now is scary"...while the U.S. economy contracted 6.2% in the fourth-quarter, economic activity in much of the rest of the world is in much worse shape... http://finance.yahoo.com/tech-ticker/article/197164/Even-Dr.-Doom-Is-Scared:-Economy-Much-Worse-Than-Roubini-Predicted (includes a 5 minute video clip also)http://tinyurl.com/deaxwt (18 minute video clip on Bloomberg - Dr. Doom says we are in a multi-year long global recession without sufficient policy action, much like what has happened in Japan)
the ORACLE
It is Cliff Küle’s goal to keep our clients up-to-date with advice from the wisest advisers in the world. Warren Buffett is one of our Most-Admired Advisers (M-AA*). His annual letter to shareholders is recommended reading. In fact, it is recommended to go back and read his letters from previous years; they contain a wealth of wisdom. Reviewing 2008 Warren observes: "As the year progressed, a series of life-threatening problems within many of the world’s great financial institutions was unveiled. This led to a dysfunctional credit market that... soon turned non-functional. The watchword...became the creed I saw on restaurant walls when I was young: 'In God we trust; all others pay cash.'"Click on "Plugin" to get larger view of the below:
Best Thing To Do: Sell Those Rallies
Sean Brodrick of Money and Markets writes that we could see stock market rallies both near and long term. He says there are 5 big forces weighing on stocks and the best thing to do "is to sell those rallies, because the economy is going to serve up a big ol' heaping plate of white-hot doom at least through 2012"...Force #1 - The Banking Crisis Will Drag On
Force #2 - Real Estate Crisis is Nowhere Near a Bottom
Force #3 - Americans Are Unwinding Their Debt
Force #4 - State Budgets Are Going Bust
Force #5 - Slump Is Truly Global
http://www.marketwatch.com/news/story/five-rally-killers-how-survive/story.aspx?guid=%7BC14F962B%2D5681%2D4767%2D83F6%2D151D2E1EBB73%7DInvestment Advice? Start Gardening!
Barack Obama wants to cut subsidies to 81,000 farmers in his 2010 budget... Agriculture Secretary Tom Vilsack says the cuts are needed to address the nation's obesity problem... savings would be diverted to nutrition programs... Cliff Note:Will this make food prices rise?... less may be grown as farmers cut back plantingOnly Solution:Devalue All Currency
Peter Hambro of the Anglo-Russian mining group Peter Hambro Gold says the only solution to the crisis is to devalue all currencies and "The job of central bankers is to allow this to happen in an orderly fashion through inflation. I'm afraid it is the only way to avoid disaster, but naturally investors are turning to gold as a form of wealth insurance."
http://www.telegraph.co.uk/finance/4682554/Gold-hits-record-against-euro-on-fear-of-Zimbabwean-style-response-to-bank-crisis.html
http://www.telegraph.co.uk/finance/4682554/Gold-hits-record-against-euro-on-fear-of-Zimbabwean-style-response-to-bank-crisis.html
L-Shaped Recovery?
Economist Nouriel Roubini, a Cliff Küle M-AA*(Most Admired Adviser), has been saying we will likely get a U-shaped recovery, meaning heading down now, then getting no growth for some time, after which recovering in the future. But now, Nouriel says we "face a 1 in 3 chance that, if appropriate policies are not put in place, this ugly U-shaped recession may turn into a more virulent L-shaped near-depression or stag-deflation (a deadly combination of economic stagnation and price deflation) like the one Japan experienced in the 1990s after its real estate and equity bubbles burst"...Sunday, March 1, 2009
Is Our Fed the Problem?
G.Edward Griffin,author of "The Creature from Jekyll Island" is interviewed on Financial Sense this weekend. Although many today blame the banks and adverse risk-taking for the current financial crisis, Griffin portrays the US Fed as a legalized inflation-creating cartel at the root cause of today's global crisis... - 2009 Interview: http://www.netcastdaily.com/broadcast/fsn2009-0228-2.asx
- 2006 Interview: http://www.netcastdaily.com/broadcast/fsn2006-1028-2b.asx
- 2006 Interview Transcript: http://www.financialsense.com/transcriptions/2006/1018griffin.html
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