the global economy: Robert Zoellick, President of the World Bank,- first 8 minutes Bloomberg video - click on image above to activate...
Showing newest 81 of 253 posts from May 2009. Show older posts
Showing newest 81 of 253 posts from May 2009. Show older posts
Sunday, May 31, 2009
Battle of the Patriots
Dick Cheney: “I ...remain a strong proponent of ..enhanced interrogation...the right thing to do"
versus
Ben Franklin: "Be civil to all;... enemy to none."
versus
the failure to predict financial crises & recessions: Nouriel Roubini (Cliff Küle M-AA*) presentation at the Perimeter Institute - about 51 minutes... http://streamer.perimeterinstitute.ca/Flash/ab952804-4ca2-460e-a0c5-d31aae070990/viewer.html
China sells more vehicles than are sold in US... http://www.cleveland.com/business/plaindealer/index.ssf?/base/business-12/1242722094308510.xml&coll=2
A Policy Mistake...Niall Ferguson disagrees with Paul Krugman..running massive fiscal deficits & issuing"vast quantities of freshly-minted bonds"is likely to push long-term interest rates up, at a time when the Federal Reserve aims at keeping them down- predicts “painful tug-of-war between.. monetary..& fiscal policy" "A further $10,000billion will need to be borrowed in the decade ahead (source: Congressional Budget Office)...& this ignores the vast off-balance-sheet liabilities of Medicare & Social Security.."He cites the Chinese central bank’s latest quarterly report: “A policy mistake...may bring inflation risks to the whole world"-Niall says the mistake has already been made –to adopt the fiscal policy of a world war to fight a recession... concludes with Keynes quote:“even the most practical man of affairs is usually in the thrall of the ideas of some long-dead economist”... http://www.ft.com/cms/s/a635d12c-4c7c-11de-a6c5-00144feabdc0,dwp_uuid=73adc504-2ffa-11da-ba9f-00000e2511c8,print=yes.html
Biting More Than It Can Chew, writes Richard Posner in The Atlantic on the Obama Administration...acknowledges,with Paul Krugman, there is a.. budget problem but emphasizes there is "no long-run solution, or even the groundwork for it"...Obama's long-run program of social & economic improvement will be "immensely costly...& any economic benefits from the program-from having a healthier, better educated population or a slowing of global warming-will be realized long after immense costs..."
Commercial Real Estate Defaults Coming...says Congressional Oversight Panel.. expresses concern this could do significant damage to the already deflating economy... the government may not have estimated the extent of the banks' commercial real estate problem in the stress tests... http://www.time.com/time/business/article/0,8599,1901718,00.html
Bearish Investor Sentiment... Chart - click to enlarge - courtesy of Bespoke, shows this week's survey of investor sentiment from the American Association of Individual Investors (AAII) shows an increase in both bearish and bullish sentiment - bears still outnumber bulls and are at their highest level since March 12...
Saturday, May 30, 2009
Nouriel Roubini (Cliff Küle M-AA*) points out 10 risks to global growth... clarifies why he thinks the recovery will be sub-par and slow for a few years once it does occur, and why there is "even the risk of a double-dip W-shaped recession"... http://www.forbes.com/2009/05/27/recession-depression-global-economy-growth-opinions-columnists-nouriel-roubini.html
Police Tickets to Balance Budgets
Car and Driver magazine is reporting police are issuing more tickets during these hard times at a rate higher than ever to raise revenue to offset budget shortfalls of local governments... it is estimated that Dallas County gets slightly more than half of its annual revenue from fines and fees... http://www.caranddriver.com/reviews/hot_lists/high_performance/features_classic_cars/more_tickets_in_hard_times_feature/(page)/1 and http://www.dallasnews.com/sharedcontent/dws/news/politics/local/stories/020909dnmetcountytickets.35b84f6c.html
Has the US Recovery Begun? asks Martin Feldstein... reviews several factors but concludes: "The positive effect of the stimulus package is simply not large enough to offset the negative impact of dramatically lower household wealth,declines in residential construction, dysfunctional banking system that does not increase credit creation,& the downward spiral of house prices. The Obama administration has developed policies to counter these negative effects, but, in my judgment, they are not adequate to turn the economy around & produce a sustained recovery"... http://www.realclearmarkets.com/articles/2009/05/has_the_us_recovery_begun.html
Chris Nelder writes about future oil prices, peak oil, & the oil market's relation to alternative energies...all in easy-to-understand terms... chart above shows & projects world oil & gas production profiles, courtesy of Colin Campbell (supporting"peak oil")... http://www.getreallist.com/oil-implications-for-cleantech-investors.html
Rising Bond Yields may threaten recovery, says Ed Yardeni...discusses the "bond vigilantes" - those who are selling bonds...emphasizes USA needs to reduce deficits...thinks there will be decoupling between emerging markets & US economy... sees a world recovery led by the emerging markets... http://tinyurl.com/msn3nh
Friday, May 29, 2009
"Business Intelligence"has utilized Jim Rogers in a way that presents 2 important Cliff Küle themes: 1) there will be a meltdown in currencies 2) printing money is a "reverse Robin Hood policy"..take from the poor to give to the rich..like the fall of Rome, authorities are practicing debauchery monetary debauchery ... http://www.bi-me.com/main.php?id=37049&t=1&c=33&cg=4&mset=
Oil Supply Crunch Coming?
Economists Jeff Rubin and James Hamilton say a spike in prices could send the world tumbling back into recession, just as a recovery could begin... they view the current recession as the result of a spike in oil prices, not the collapse in US real estate... they point to several factors - production decline in existing oil fields, economic crisis-triggered slowdown or stop in oil development projects, and general lack of oil industry investment... consulting firm McKinsey & Co says supplies could begin to tighten as early as next year, even if economic growth is weak...
The Parable of the Hotel Receptionist... More realistic parable than the "rich Russian tourist" version is related here by Chan Akya...his conclusions are what is relevant:"Americans and Europeans have to cut their total debts - personal and government respectively... developing countries like China and Brazil are wasting precious resources supporting what cannot be ultimately sustained; namely the continued holdings of US Treasuries and European government bonds. Reducing their holdings of these assets in favor of physical commodities or capital means of production is what they need to do; in turn sparking domestic consumption"... http://www.atimes.com/atimes/Global_Economy/KE30Dj02.html
Inflation - Just a Scare
Paul Krugman (Cliff Küle M-AA*) says big inflation or even hyperinflation do not make any sense for the US except for one "caveat" ... thinks the inflation scare now making circles is more about politics than economics... "when it comes to inflation, the only thing we have to fear is inflation fear itself"... http://www.nytimes.com/2009/05/29/opinion/29krugman.html?_r=1
Bloomberg/Vanity Fair Crisis Panel Conference... Meredith Whitney, founder of Meredith Whitney Advisory Group, Jack Welch, former chief executive officer of General Electric Co., Nobel Prize-winning economist Joseph Stiglitz, Austan Goolsbee, a senior White House economic adviser, and Olivier Sarkozy, co-head of financial services at Carlyle Group LP, participate in a panel discussion on the financial crisis co-sponsored by Vanity Fair and Bloomberg... about 1 hour and 15 minutes in length video... http://tinyurl.com/nxxdnp
Thursday, May 28, 2009
He Changed His Mind !
Jeremy Grantham is a Cliff Küle M-AA*(most-admired adviser) for good reason...those who heeded his advice have thrived..that is why "bulls" should be glad to see him on their side..he says"The stimulus is so great in the US, China & UK, it will kick the economy up"..short term at least..market turns not "when it sees light at the end of the tunnel..It turns when all looks black, but just a subtle less black than the day before"..But (there's always a but) thinks the odds are a bit more than 50-50 the recent low is tested..plans to buy more stocks if the market nosedives & buy each month if the market stays sideways..likes alternative energy & climate change investments over the next 10 - 50 years... http://www.smartmoney.com/investing/economy/why-jeremy-grantham-changed-his-mind/
Paying for Dinner
Marc Faber (Cliff Küle M-AA*) said this week that the US will have hyperinflation approaching levels like Zimbabwe (see posting below)... picture above of a Zimbabwean paying for dinner... http://ftalphaville.ft.com/blog/2009/05/27/56282/marc-faber-hyperinflation-coming-to-the-usa/
Central Banks (foolish?)
John Embry:"If China, arguably the world's most successful economic entity this decade, is adding [gold], other central banks appear foolish if they have been giving their gold at bargain prices"..quotes Bill Buckler of The Privateer citing 3 principles: 1) no nation has advanced its economy by means of monetary inflation 2) no nation has advanced its economy by holding the market rate of interest below the natural,real rate of interest 3) no nation has advanced its economy by aggressive deficit spending... this will result in "escalating inflation" & most assets other than precious metals will be "impacted negatively"...http://www.sprott.com/Docs/InvestorsDigest/2009/may_22_09.pdf
Catch 22 (we're stuck)
US Treasury Bonds are getting massacred since the Fed announced its bond-buying program, observes Mish Shedlock (chart above, courtesy of Mish)...Bloomberg reports the difference in yields between 2-yr & 10-yr treasuries widened to a record "on concern surging sales of US debt will overwhelm the Federal Reserve's efforts to keep borrowings costs low"... Mish questions- if the economy is recovering, this widening should happen but what if this is happening because of the exploding deficits and stimulus plans?... Cliff Note: will it be possible to maintain low borrowing rates when there is recovery? if not, does this mean the recovery can not be sustained? http://globaleconomicanalysis.blogspot.com/2009/05/treasuries-massacred-yield-curve.htmlWednesday, May 27, 2009
Martin Hutchinson on the global government bond glut & what will result in the long-term from it:..foresees ultimately Asia & the Middle East will return to a gold-based reserve system... will "diversify a bit from gold, possibly to silver, but also to non-traditional commodity stores of value such as grain, copper, other metals & especially oil"...a "gold price of $5,000/oz is well within reach" & massive inflation in food & energy costs...
http://www.prudentbear.com/index.php/thebearslairview?art_id=10232
http://www.prudentbear.com/index.php/thebearslairview?art_id=10232
Looming Oil Shortage...Legendary former oil company chairman Jim Gray discusses the latest oil boom/bust, the future of Canadian oil sands, & why he sees a global oil shortage looming... http://watch.bnn.ca/#clip176985 (about 11 minutes)
Buy Oil Outside the US, says Dennis Gartman: bullish on oil stocks in Canada & Brazil (he owns Suncor and Petrobras), but shorting oil stocks in the US...does not think oil going below $50...says eventually the US could get 25% of their oil needs from the Canadian oil sands... click on image above or link below for video (about 5 minutes)... http://watch.bnn.ca/#clip176737
Bullish Oil Chart
Sean Brodrick presents his chart of oil prices (click to enlarge) showing potential target of $78, based on Fibonacci Retracement theory...retracement of an advance (or decline) is likely to be 38%, 50%, or 62% of the advance (or decline)-in this case a retracement of the decline from $147 to $35. http://www.investopedia.com/terms/f/fibonacciretracement.asp
Emerging Markets To Recover First
Goldman Sachs Global Economics team:“Emerging markets are likely to see a return to trend growth about six months ,on average, before advanced economies...Emerging markets...will close their output gaps – the difference between actual growth & trend growth – about two years before advanced economies"...& conclude:* Equity markets have most likely bottomed and volatility should start diminishing
* Countries that get back to trend growth sooner will tighten monetary policy sooner
* Countries that get back to trend growth sooner should see their currencies strengthen
* As the output gap will take many years to close, there should be limited pressure on prices and wages. Deflation will still be a greater concern in the short term than inflation
* Emerging markets, particularly Asia, should offer more opportunities for outperformance for equities and forex, and could support commodity prices, especially industrial metals
Zimbabwe Inflation Levels...is what Marc Faber (Cliff Küle M-AA*)sees eventually... huge inflow of money into the system is temporarily lifting markets & the economy...markets could even make new highs with enough money printing...Asian region is the most attractive by far for investing...accumulate Asian stocks for the long-term, & Japanese stocks for the next 5 years as valuations are very low compared to bond yields in Japan...thinks the next war will be biological... foresees the US not defaulting on its debt, instead keeping short-term rates low long-term, resulting in hyperinflation levels...thinks natural gas is the most undervalued commodity now... http://tinyurl.com/qdptsb (about 23 minutes in length)
Tuesday, May 26, 2009
16% Drop in Oil Prices Coming?... the New York Mercantile Exchange crude oil options trade in July is factoring in a 16% drop... http://www.financialpost.com/news-sectors/story.html?id=1632120
High RPMs, Low Gas
Speedometer analogy of Crisis courtesy of Zero Hedge and JP Morgan
Click to Enlarge
Frank Holmes from Asia: immense opportunities...lots of infrastructure projects driving demand for commodities http://news.goldseek.com/GoldSeek/1243361971.php
Death of the $$$ Exaggerated?
Bryan Rich: US is not the only country printing money & suffering from the economic crisis...& the US$ still is the world's reserve currency...US$ has had 5 distinct trends since 1971 and those trends have lasted on average 7 years -latest trend started in March 2008 with the US$ up 15% so far...Cliff: ? http://www.howestreet.com/articles/index.php?article_id=9604
John Hussman: concerned "about abrupt downside risk"...does not see hyperinflation...rather a "near-doubling of inflation over the next decade,mostly after 3 years or beyond...most likely not in the near years"... http://www.hussmanfunds.com/wmc/wmc090525.htm
The Bailout Bubble is what we are now going to get, according to trend forecaster Gerald Celente, as governments throw more and more money at the economic crisis... these are sometimes followed by war...http://www.cnbc.com/id/30884871
China: Warns Fed over US Money Printing... President of the Dallas Federal Reserve Richard Fisher says "Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature...I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States"... http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5379285/China-warns-Federal-Reserve-over-printing-money.html
Monday, May 25, 2009
Dr Doom: Don't Believe the Optimists!
Nouriel Roubini (Cliff Küle M-AA*): you are wrong if you think you have seen green shoots... recession will continue in developed economies through 2009... growth will remain very slow for at least 2 years into 2010&2011... a double-dip recession remains possible from rising oil prices & interest rates on the public debt of many developed economies..."home prices need to fall at least another 15% to 20% before they bottom out"... http://www.forbes.com/2009/05/20/depression-recession-green-shoots-housing-jobs-opinions-columnists-nouriel-roubini.html
Paul Krugman (Cliff Küle M-AA*): dire situation in California, considered the bellwether state of the US-what happens in California will likely happen to the US later...California is now on the verge of cutting essential services & denying health coverage to millions..."you have to wonder if California’s political paralysis foreshadows the future of the nation as a whole... Who would have thought that America’s largest state, a state whose economy is larger than that of all but a few nations, could so easily become a banana republic?"... http://www.nytimes.com/2009/05/25/opinion/25krugman.html?_r=2
World’s most bullish major currency, South African Rand "may rally another 4 percent if it breaks through 8.23 per dollar & stays there, based on technical analysis by.. Absa Capital"... http://www.bloomberg.com/apps/news?pid=20601110&sid=aFyPvht9_PEU
US loss of highest credit rating is inevitable in the next few years... The US' fiscal problems stem from the stimulus programs, rising health care costs, and rising pension costs... http://network.nationalpost.com/np/blogs/tradingdesk/archive/2009/05/22/u-s-loss-of-aaa-credit-rating-inevitable-bmo.aspx
Sunday, May 24, 2009
Potash to Prevent Food Crisis
Potash is a critical global fertilizer necessary to avert a food crisis and world instability... http://www.stockhouse.com/Columnists/2009/May/20/Potash-crucial-in-preventing-a-global-food-crisis
Obama's Keynesianism... Economist Frank Shostak discusses Obama's approach to the economy, influenced by the ideas of Joseph Stiglitz, Larry Summers, Paul Volcker, Robert Reich, Paul Krugman, & Ben Bernanke... "All these...derive their way of thinking from the writings of John Maynard Keynes......endorse heavy government involvement in the economy"... http://www.brookesnews.com/092505obamaspending.html
Backside of Housing Hurricane
Florida Real Estate Broker Mike Morgan says we're out of the eye of the housing hurricane but here comes the back half.."A lot of people think that we've seen the worst of the housing crisis. They're talking about green shoots & glimmers of hope,when they should be back in the storm shelter,preparing for a flood of inventory that will overwhelm markets & produce another round of falling prices"... http://online.barrons.com/article/SB124303112018248371.html (image from Christoph Hitz)
Marc Faber (Cliff Küle M-AA*): on Goldseek Radio...emphasizes he does not see any deflation,money supply is exploding...create enough money& create rallies -that is what is happening...thinks US $ falling & stock markets going up will be a trend long-term...says on 50-day basis markets are overbought but on 200-day basis not so... foresees extreme volatility; Asian markets outperforming... MP3 version http://radio.goldseek.com/shows/2009/05.23.2009/GSR-05.23.09-c.mp3 or Broadband stream version: http://radio.goldseek.com/shows/2009/05.23.2009/GSR-05.23.09-a.rm (begins at minute 60, ends at minute 90)
Sean Brodrick: US$,Commodities,&China ...says China is buying less US treasury bonds (see chart) & buying lots of commodities... charts the US$ as testing long-term support, if breached, could unleash a massive rise in commodity prices...China has signed billions in currency swap agreements globally, hoping to make the Yuan a truly international currency... http://www.howestreet.com/articles/index.php?article_id=9594
Paradox of Deficits
John Mauldin emphasizes that world trade is shrinking (see chart -click to enlarge) & the world is deleveraging,..debt is being drawn down..with banks cutting back on lending & real estate prices falling,..this should be "massive deflationary"..interest rates should be falling, not rising - but yields on long-term bonds are rising."Watch the bond market. Rates should be going down,not up.The bond market is telling us the deficit simply can’t be financed down the road"... http://www.frontlinethoughts.com/pdf/mwo052309.pdf
Saturday, May 23, 2009
Barron's: be wary of green shoots.."Hold your horses on calling a new bull market - the bear has several years to go"..financial forces likely to push corporate earnings down "that could make for a frustrating equity market until the healing is complete....years away"... http://online.barrons.com/article/SB124303129632948467.html
David Lewin discusses clean coal technology - coal gasification... http://watch.bnn.ca/#clip175347 (about 8 minutes in length)
"7 Deadly Scenarios" -Andrew Krepinevich,a Military Futurist Explores War in the 21st Century...What if the worst that could happen, happens? How would America respond?.. identifies seven deadly scenarios that threaten America's security... Windows version: http://www.netcastdaily.com/broadcast/fsn2009-0523-2.asx ... MP3 version: http://www.netcastdaily.com/broadcast/fsn2009-0523-2.mp3 (about 35 minutes)
Energy, Agriculture & Precious Metals: Jaime Carrasco references Anna Schwartz saying inflation is in the system..sees big transfer from paper assets to hard assets over the next several years...all currencies are coming down against hard assets now...Cliff Note: believe it http://watch.bnn.ca/#clip175350 (about 18 minutes)
Obama: "We are Out of $ Now"
C-Span Interview of Obama... "Scully: Yet, it all takes money. You know the numbers, $1.7 trillion debt, a national deficit of $11 trillion. At what point do we run out of money?OBAMA: Well, we are out of money now. We are operating in deep deficits, not caused by any decisions we've made on health care so far. This is a consequence of the crisis that we've seen and in fact our failure to make some good decisions on health care over the last several decades"... transcript of video: http://cspan.org/pdf/obamainterview.pdf ... and half hour video: http://www.c-span.org/cspanFLVPop.aspx?src=project/politics/politics052309_obama.flv&s=28.395&e=0&live=N&popup=Y
Warning: Scary Numbers
Chart - Click on image above to activate,or scroll to the bottom of the website below to view -
Courtesy of usdebtclock.org
Friday, May 22, 2009
The Crisis & How to Deal With It...Excerpts from a symposium on the economy presented by The New York Review of Books & PEN World Voices at the Metropolitan Museum of Art on April 30...Participants were former senator Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, George Soros, & Robin Wells, with Jeff Madrick as moderator...
http://www.nybooks.com/articles/22756
http://www.nybooks.com/articles/22756
Would You Extend Credit to US ? Pimco's Bill Gross says the US will eventually lose its highest credit rating..yesterday the UK was downgraded from its highest rating, due to the country's deteriorating fiscal situation...both the US & UK are now buying their own bonds to make up for lack of buyers as both countries go heavily into debt to fight the crisis...
http://tinyurl.com/pjt2uf
http://tinyurl.com/pjt2uf
Thursday, May 21, 2009
Stocks Overvalued?
With earnings falling and a huge stock market rally recently, Price-Earnings (PE) ratios have gone through the roof... chart - click to enlarge - courtesy of chartoftheday.com
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