McKinsey & Co on State Capitalism, how governments are intervening globally & the effects on globalization & trade...
mckinsey state capitalism -
Tuesday, July 7, 2009
Markets Need Tangible Proof Now... to go higher says technical analyst Frank Barbera... says much of the recent stock market rally has been based on "green shoots" and "second derivative" hope, but now needs proof of real economic growth... sees S&P 880 level as key support, if breached could go down to 840 level... recommends high levels of cash now to allow re-entering a few weeks down the line... http://www.financialsense.com/Market/barbera/2009/0707.html
Oil to Match $147 In 3 Years... says oilman T. Boone Pickens... & in 10 years at $300/barrel... Pickens started a national energy plan on natural gas to reduce US dependence on foreign oil... “The problem is we don’t have the oil... And we’ve got gas coming out our ears"... http://www.bloomberg.com/apps/news?pid=20601087&sid=aQZBAT64L.zk
Deleveraging & Government Stimulus Spending will see-saw for a few years says Jean-Francois Tardif (Cliff Küle M-AA*) causing the markets to go down & up...trade markets between extremes of fear & greed ...sees commodities staying weak for a year or two due to the weak economy...everyone should own some gold for protection from governments printing money... about 25 minutes long & 20 minutes long--2 segments... http://watch.bnn.ca/#clip190893 and http://watch.bnn.ca/#clip1908934
Blackout Coming...Andrew Gordon says cap & trade is likely to cause another energy crisis...details cutbacks in oil development, noting OPEC has cut back production by 2.2 billion barrels a day, UAE has put off plans to expand oil production by 1 million barrels a day, Saudi Arabia has delayed two $10-$20 billion refining projects (and may cancel them altogether), Russia’s biggest oil company,Gazprom, has slashed production spending by 24 %, Venezuela, Nigeria, Malaysia and other national oil companies have cut back on their capital spending, Statoil, EnCana, Petro-Canada, Suncor, Imperial Oil, & Royal Dutch Shell have all delayed or cancelled major projects in Canada’s vast but expensive oil sands... quotes head of Conoco Phillips as saying that government intervention in the energy market "has an impact on the willingness of companies to pour billions into the development of new projects". Total’s CEO Christophe de Margerie says that a rise in demand while supply is constrained will unleash oil prices again... http://www.howestreet.com/articles/index.php?article_id=10080
Oil & Energy Markets May Face Restrictions...US regulators may clamp down on oil & gas price speculators by limiting the holdings of energy futures traders, including index & exchange-traded funds.... Cliff Note: could this drive capital, investment & trading overseas to other financial centers like Dubai, Sydney & Sao Paolo?
http://www.bloomberg.com/apps/news?pid=20601087&sid=aIEgmYChpWg8
http://www.bloomberg.com/apps/news?pid=20601087&sid=aIEgmYChpWg8
Bond King Bill Gross of Pimco discusses reconciling his big-picture views of lower investment returns with his higher-return-oriented investment goals...he is backing away from his investment strategy of "shaking hands with Uncle Sam"... discusses "new normal" of slower growth, lower asset returns, consumer de-leveraging & greater government intervention... makes distinction between investing & saving... recommends bank preferred stocks with good, reliable dividend streams..."the long term future of the $ is suspect"... recommends for US investors to look abroad for opportunities, especially in the BRIC - Brazil Russia India China - countries... about 15 minutes long...
Mortgage Modifications to Soar... says Meredith Whitney (Cliff Küle M-AA*)... "We believe we are on the onset of changes impacting the mortgage market that could meaningfully influence earnings of the banks over the near to medium term"... says this could actually result in higher earnings for banks in the near term... http://www.forbes.com/2009/07/06/mortgage-modifications-whitney-markets-economy-banking-housing.html
Lurching Towards Debt Explosion?... If long-term interest rates double, the US economy could be heading towards a major crisis of debt explosion, unable to pay its debts on bond payments to creditors and potentially plunging it into another recession says the Fed... http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5754447/US-lurching-towards-debt-explosion-with-long-term-interest-rates-on-course-to-double.html
Monday, July 6, 2009
T2 Partners Presentation on the Mortgage Crisis and What Potential Future Risks There Are For The Economy...click below on "T2 Partners Presentation on the Mortgage Crisis" to download or scroll and zoom the document below...T2 Partners Presentation on the Mortgage Crisis
No Amount of Stimulus Will Work... says Mish Shedlock (Cliff Küle M-AA*)... refers to recent comments by Economist Paul Krugman (Cliff Küle M-AA*) - http://krugman.blogs.nytimes.com/2009/07/05/what-didnt-the-vice-president-know/ - saying fiscal stimulus takes time..quotes Ludwig Von Mises on his view "There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final & total catastrophe of the currency system involved"... http://globaleconomicanalysis.blogspot.com/2009/07/no-amount-of-stimulus-will-work.html
America's Fiscal Train Wreck... Morgan Stanley's Richard Berner sees massive long-term federal deficits & debt, unsustainable borrowing & rising interest rates... "Not only will those factors steadily lower our standard of living, but they will imperil economic & financial stability"... http://www.morganstanley.com/views/gef/index.html#anchor098c0c3c-6a29-11de-9228-3fb01e8a07e2
Global Warming Bill Cools the Global Economy? Nouriel Roubini (Cliff Küle M-AA*) explores the effects of the cap & trade measure on the economy... thinks a higher price for carbon-based energy could weigh on US consumption in the near future but "Despite the risks of a new carbon price, this cost, plus the allocation of government & private-sector funds, could spur innovation & energy savings technology that could lead to productivity growth... Higher oil & coal prices could encourage a change in behavior that could boost the position of alternatives in the energy mix, even though carbon-based fuels (albeit higher-cost ones) are likely to fuel the economy for years to come"... http://www.forbes.com/2009/07/01/waxman-markey-cap-and-trade-global-emissions-bill-opinions-columnists-roubini_2.html
Reason for Foreclosures? Negative Equity... says Stan Liebowitz: the evidence from a national database containing millions of individual loans suggests that the single most important factor is whether...the balance of the mortgage is greater than the value.... concludes "this means that most government policies being discussed to remedy woes in the housing market are misdirected"... Cliff Note: is there an elected government that is not motivated to print lots of money to keep home prices up?... http://www.gurufocus.com/forum/read.php?2,59606
Taming the Inflation Beast...Andy Xie: inflation is "the only way to speed up relief for indebted American households. Inflation works well when debts are locked into long-term fixed rates & don’t need new financing"... thinks the Fed will talk tough on inflation & may raise interest rates before the end of the year... this "could spark liquidity panic among commodity & stock market speculators. A market crash is likely" to which the Fed may need to respond with more easing... concludes the Fed will "have to skillfully navigate between bond vigilantes and liquidity junkies".... http://www.cibmagazine.com.cn/Columnists/Andy_Xie.asp?id=992&taming_the_beast.html
Sunday, July 5, 2009
Robert Prechter...Elliott Wave theorist says we are in a bear market rally of a long-term secular bear market... recommends safe cash-based investments; bearish on real estate... says markets are deflationary because, even though government money printing is massive, credit losses are even bigger... "gold is the only real money"... click on image above or link below... about 30 minutes... http://www.kingworldnews.com/kingworldnews/Podcast/Entries/2009/6/26_Robert_Prechter_files/Bob%20Prechter.mp3
Now India Questions US$ Dominance (Joining Russia&China)... “The major part of Indian reserves are in dollars -- that is something that’s a problem for us,” says the chairman of the Prime Minister’s Economic Advisory Council...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaQ9IsrCByAE
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaQ9IsrCByAE
"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved." -Ludwig von Mises (1881-1973)
Demise of the G7 Countries... Ty Andros notes the fall of Rome took decades & sees a parallel between the fall of Rome & the decline of the G7 countries...points out BRIC - Brazil, Russia, India, China - countries are emerging as new global powers..."The solvency crisis in the G7 banking and financial industries is a supercharger to the arrival of the ultimate demise of the G7 EMPIRES, currency and financial systems"... BRIC countries "are creating wealth by producing more than they consume, and accumulating savings and foreign currency reserves"... http://www.financialsense.com/fsu/editorials/andros/2009/0703.html
Saturday, July 4, 2009
America's Achilles' Heel... Puru Saxena (Cliff Küle M-AA*) points out the encouraging green shoots in the economy that suggest the worst of the crisis may be over... sees a "tidal inflationary wave in the form of sky-high prices for natural resources" once the stimulus kicks in and economic activity picks up... highlights the Achilles' heel in America's recovery as the huge debt of distressed homeowners to which he says Obama has "not done much in the way of helping"... http://news.goldseek.com/GoldSeek/1246778940.php
Obama on Cap and Trade
Obama in January 2008: "Under my plan of a cap and trade system, electricity rates would necessarily skyrocket."
Happy Independence DayAmerica! -the rallying cry of the American War of Independence-------------------- "No Taxation Without Representation" Is this a good time to consider when America turned against the principle of "No Taxation without representation"? & why?...Is there anyone who doesn't realize that government debt is a tax on children & unborn babies?...that those children had no representation in that taxation? Will today's children grow up to actually support the principles of the founding fathers...willing to fight & die for the principle that they do not have to pay for spending in which they had no say? or will they believe in the principles that Americans now stand for? tax the next generation of Americans that are yet to be born?
POOR KIDS...will they grow up to support the principles of the founding fathers of America? or will they follow the principles of their parents & grandparents by indebting their own unborn children?....Is Thomas Jefferson correct to say that independence has not been preserved if the government has burdened the people with debt?..or..Is the author of the Declaration of Independence irrelevant? If so, at what point in history did that happen ?
Friday, July 3, 2009
Preserving Your Wealth... is priority #1 in this environment says Nick Barisheff...must have awareness of 3 critical issues: "First, we are in a secular bear market for financial assets (stocks and bonds). Second, the consequences of the global bailouts will likely be highly inflationary. Third, we are at a pivotal point in the long-term investment cycle"... suggests only gold, silver & platinum hold their value in periods of severe deflation & inflation... quotes Will Rogers: "I'm not so much interested in the return on my money as I am the return of my moneyl"... http://www.safehaven.com/article-13803.htm
$ Future in U.S. Hands... writes Henry Liu... questions why Asian economies should be sending real wealth in the form of goods to the U.S. for paper that is declining in value... says China is now demanding its exports be paid in Chinese yuan with no desire to make its currency a reserve currency... concludes "the $ will continue to serve as a preferred reserve currency, but only if the US puts its own financial house in order"... http://www.atimes.com/atimes/China_Business/KG02Cb01.html
Negative Interest Rates ! just announced in Sweden... to stimulate spending & money velocity, depositors will be penalized with negative interest rates... Cliff Note: Will there be a "run" on deposits ? Will the money be spent ? or will it find its way to foreign banks that do pay interest?... http://www.forexyard.com/en/reuters_inner.tpl?action=2009-07-02T104227Z_01_L2601049_RTRIDST_0_SWEDEN-CBANK-UPDATE-3 and http://www.riksbank.com/templates/Page.aspx?id=32047
Fed Must Reassure Markets on Inflation... says Martin Feldstein who explores the reasons why long-term interest rates have increased even though the Fed is buying long-term government bonds to keep rates low... worries that there will be a surge in inflationary lending when the economy begins to expand... recommends the fiscal deficit to be reduced by reducing the social spending advocated by Obama in his election campaign, & for the Fed to reassure that it will not tighten too soon but will raise short-term rates only when the economy begins to expand... may need to register (free)... http://www.ft.com/cms/s/0/6f7526a0-6410-11de-a818-00144feabdc0.html
Thursday, July 2, 2009
10 Reasons to Invest in Energy... says Powers Energy Investor... 1. Low Valuations 2. Peak Oil 3. Peak Natural Gas 4. Terrible Investor Sentiment 5. The Credit Crisis 6. Industry Consolidation 7. Lower Service Costs 8. Rampant Money Growth 9. Relatively Inelastic Demand 10. Very Elastic Supply... http://www.financialsense.com/editorials/powers/2009/0702.html
China's Impact...Joint presentation webcast from China by US Global Investors & Andy Rothman (China expert)... explores what is happening in China now & how China is recovering... key point: not only government spending & investment are stimulating recovery BUT ALSO private spending & investment... click on image above or link below to activate, click link below to download presentation slides... may need to register (worth it)(free)...- webcast: http://www.usfunds.com/adclick.asp?adid=2063
- presentation slides: http://www.usfunds.com/webcast/China_06-2009/ChinaWebcast_6-2009.pdf
McHouses , McHummers & McFlatscreens.... No More Bill Gross elaborates on Pimco's driving thesis - "a 'new normal' where growth is slower, profit margins are narrower & asset returns are smaller than in decades past... based on de-levering & re-regulating the global economy"... sees short-term policy rates being kept low for a long time... recommends secure income offered by bonds & stable dividend-paying equities... points out that stocks, high yield bonds & real estate entail risk... http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2009/Investment+Outlook+July+2009+Gross+Appetit.htm
Commodities in a Bubble?... Chris Puplava explores whether commodities represent a bubble, with the benefit of hindsight looking back at the recent correction in commodities... concludes commodities did not reach bubble status... http://www.financialsense.com/Market/cpuplava/2009/0701.html
Signs of Recovery (!)(?)... US Global Investors CEO Frank Holmes (Cliff Küle M-AA*) searches for signs of recovery from a global perspective... differences between the recovery in the US & in the BRIC (Brazil Russia India China) countries... slide 41 shows the differences between consumption levels between North America, Europe, and Asia...click on image above or link below to activate & link below to download presentation slides... may need to register first (for free)... - webcast: http://www.usfunds.com/adclick.asp?adid=2055
- presentation slides: http://www.usfunds.com/webcast/Recovery_6-2009/RecoveryWebcast_6-2009.pdf
Wednesday, July 1, 2009
Somebody Has to Blink... Economist Mark Lieberman asks a riddle - "when do banks and consumers act the same? When they get money from the government. They’ve both received tons of cash from the federal government in the last several months and aren’t using it"... concludes if a recovery is to happen, someone has to blink and move first, either the bank to lend or the consumer to spend... http://www.foxbusiness.com/story/personal-finance/english-banks-consumers-joined-theaccount/
China Requests Reserve Currency Debate at G8... China has asked to debate proposals for a new global reserve currency at next week's Group of Eight summit in Italy... http://www.reuters.com/article/usDollarRpt/idUSL129307120090701 and Sean Brodrick on China & the US$ audio clip - http://www.howestreet.com/audio/seanbrodrick_2009_0701.mp3
Greater Crisis Coming Soon ?
Duration (in months) of US recessions since 1900 (average duration: 14.43 months)
Sources: US National Bureau of
Economic Research / Trends der Zukunft
Attached paper believes a global system crisis will happen because of 3 rogue waves hitting at the same time... 1) Wave of massive unemployment... 2) Wave of bankruptcies: companies, banks, housing, states, counties, towns... 3) Wave of terminal crisis for the US $, US T-Bonds, Pound Sterling, & return of inflation... http://www.321gold.com/editorials/leap2020/leap2020_063009.html
Interest Rates Near 0% for Years? "not outside the realm of possibility" says Federal Reserve Bank of San Francisco President Janet Yellen - "If we were not at zero, we would be lowering the funds rate"... http://www.bloomberg.com/apps/news?pid=20601087&sid=aoQtYnu9Q5Ck
Will China Lead the World Out Of Recession?... Claus Vogt analyzes freight & shipping rates for indications that China's commodity buying binge is for real, & is China leading the world to recovery?... concludes: "Yes, China’s economy is growing, but a global growth engine? I have my doubts... China may be on its way to displace the US as the world’s... growth engine. But it has not yet done so"... http://www.moneyandmarkets.com/will-china-lead-the-world-out-of-recession-i-still-have-my-doubts-4-34451
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