Roubini: quick but clear comments...
Monday, September 7, 2009
James Dines: predicted a “Super Major Bull Market” in rare earth metals (REM) on May 22nd of this year (which has already made tremendous amounts of money for his subscribers)... first time in 9 years he has issued a call for a new “Super Major Bull Market.”... in this (Part I) interview Mr. Dines covers gold, silver, oil & the US$... sees incredible bull market in rare earth metals (REM), bigger than the Internet & the uranium bull markets... about 30 minutes ... click on image above to activate...
China, U.S.$, & the Price of Gold... Cheng Siwei, until recently Vice-Chairman of the Communist Party’s Standing Committee, now a sort of economic ambassador for China around the world, says that China has fundamentally lost confidence in the US$ & is shifting to a partial gold standard through reserve accumulation... Cheng plays down other metals such as copper, saying that they could not double as a proxy currency or store of wealth... “Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not stimulate the market"...
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100000821/china-bernanke-and-the-price-of-gold/
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100000821/china-bernanke-and-the-price-of-gold/
Ralph Acampora - legendary technical analyst... uses multiple technical indicators... looks for a pause in short-term on stock markets... points out lot of cash on sidelines, if we only get minor correction here, could be a head fake & market could go a lot higher... likes silver over gold... sees growth in the use of technical analysis in Asia... audio interview about 20 minutes, click on image above to activate...
Sunday, September 6, 2009
China's Plan: Dominate Rare Earth Metals... China Is the OPEC of Rare Earth Metals, accounting for 97% of global production & 60% of consumption of rare earths... Sean Brodrick points out China now plans to curb its exports of the metals, & later to ban exports of one of the most critical of the rare earths, dysprosium, by 2015... "this is part of a 1-2-3 plan China has to dominate the world's rare-earths market for decades to come, and with it, the energy technology for the 21st century"... details...
Platinum, Rhodium & Palladium : Jeffrey Christian reviews "fundamentals": ... electricity supply issues relating to platinum production in South Africa... substitution of palladium for platinum... points out 60% of platinum is for autos... total demand is only 7 million ounces, highly volatile in prices... discussion on fabrication demand, investment demand, coinage use, prices, futures market information... audio about 36 minutes, click link below to activate... - Windows Version: http://www.netcastdaily.com/broadcast/fsn2009-0905-2.asx
- MP3 Version: http://www.netcastdaily.com/broadcast/fsn2009-0905-2.mp3
US Markets Are Topping... say Daniel Aaronson & Lee Markowitz... the liquidity driven rally is coming to an end... show indicatiors that suggest the Fed has "yet to print enough money to offset the ongoing deleveraging .... figure that the Federal Reserve will ultimately succeed in getting all asset prices to rise by continuously printing money"... http://www.safehaven.com/article-14397.htm
Financial stability depends on more capital ... US Treasury Secretary Tim Geithner: 5 areas for a improving bank capital - 1. capital requirements for banks simply must be higher across the board. 2. the regulatory framework should put a greater emphasis on higher-quality forms of capital that best enable financial groups to absorb losses. 3. capital requirements & accounting rules should be more forward-looking, requiring banks to hold a larger buffer over their minimum capital requirements during good times, to be available in bad times. 4. banks should be subject to explicit liquidity standards designed to improve their resilience in the face of runs by creditors... 5. need to improve the rules used to measure risks in banks’ portfolios & the capital required to protect against them, & put greater constraints on banks’ use of leverage ....http://www.ft.com/cms/s/0/638b9eb2-98ba-11de-aa1b-00144feabdc0.html (may need to register for free first)
Rob Arnott :... manager of $40 billion, leader of innovative investing & asset allocation strategies... says US Treasury will never default - may "tacitly" default by inflating their way out of the real value of debt - paid back in diminishing script... as the economy improves, does not think massive inflationary stimulus will be withdrawn in time before huge inflation... discusses commodities, global investing & the economy, the US stock market, portfolio rebalancing strategies, investor psychology, monetary stimulus, the role of government in today's economy & Thomas Jefferson reference about today's economic-political environment & democracy... audio interview about 30 minutes ... click on image above or link below to activate... Rob Arnott Interview
Simon Johnson (M-AA*): The Nature of Modern Finance... Is it more like electricity or junk food?... If like electricity, the global economy obviously can not run without it... "On the other hand, there is growing evidence that the vast majority of what happens in and around modern financial markets is much more like junk food - little nutritional value, bad for your health, and a hard habit to kick... Show me the evidence that this kind of innovation really adds value, socially speaking – rather than providing a very modern way to extract amazing “rents” "... http://baselinescenario.com/2009/09/01/the-nature-of-modern-finance/(definition of rent seeking http://en.wikipedia.org/wiki/Rent_seeking - In economics, rent seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic environment, rather than by earning profits through economic transactions and the production of added wealth.)
Saturday, September 5, 2009
China urging citizens to buy silver & gold A report suggests that the government is pushing China's public to buy gold & silver bullion... "If 1.3 billion Chinese citizens start buying gold & silver, even in tiny quantities, imagine what that will do to the market!"... an incredible change, considering only a few years ago the distribution of gold & silver was strictly controlled... http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=88452&sn=Detail
“In their calmer moments, investors recognize their inability to know what the future holds. In moments of extreme panic or enthusiasm, however, they become remarkably bold in their predictions: they act as though uncertainty has vanished and the outcome is beyond doubt. Reality is abruptly transformed into that hypothetical future where the outcome is known. These are rare occasions, but they are unforgettable: major tops and bottoms in markets are defined by this switch from doubt to certainty.” - Peter Bernstein 1919 - 2009
The Great Deflation/Inflation Debate... Robert Prechter.., long-term deflationist, details the rationale & technical analysis behind his views... sees a long-term unwinding of the credit bubble, with a recent change in attitudes & psychology in society being the main trigger towards more conservatism, more pessimism, a reversal of economic expansion into a deflationary depression... still considers gold as real money... audio interview about 50 minutes long, click on image above or link below to activate...- Windows Version: http://www.netcastdaily.com/broadcast/fsn2009-0905-3a.asx
- MP3 Version: http://www.netcastdaily.com/broadcast/fsn2009-0905-3a.mp3
Odds of Robust US Rebound 'Very, Very Weak'... says Nobel laureate Joseph Stiglitz... does not see a resurgence in consumer spending that has been a key driver of growth... says the US economy faces the possibility of low economic growth over a long-term period or the possibility of a "double-dip" recession ... "It is not possible to predict whether we have a malaise or a W (shaped growth pattern)".... http://www.cnbc.com/id/32684129
Friday, September 4, 2009
How Overpriced Is The S&P 500?... asks Mish Shedlock (Cliff Küle M-AA*)... explores several indicators to find an answer... points out demographics, consumer attitudes, global wage arbitrage, loan loss provisions, & consumer debt levels as considerations also... "Do the forward earnings estimates you hear from bulls make any sense to you? They do not make sense to me... All things considered, I suggest the S&P 500 is easily 50% overvalued based on what we know now. That is not a prediction the S&P will be cut in half, rather it is my belief that it should be cut in half"... points out to difficulty of consider central bank factors... "With that in mind, the S&P could easily meander around this level for a decade while earnings catch up to what are now very poor valuation metrics" - like Japan, see chart above...
Dallas Fed : "Deflationary Risk" #1 Concern... Richard Fisher: "the risk to price stability is a deflationary risk, not an inflationary one,"... still more worried about growth than the risk the Fed's ultra-loose money policies will result in heated inflation... says the private sector is currently grappling with excess capacity, "suffering from shock induced by the trauma of the crisis." - "post-traumatic slack syndrome."... will result in prolonged period of tight budgets as companies seek to preserve their bottom lines... http://www.marketwatch.com/story/dallas-fed-chief-warns-of-deflationary-risk-2009-09-03
What Drives Gold Stock Performance?
Frank Holmes (Cliff Küle M-AA*): “What research has shown is that the leverage is in unhedged gold stocks. That’s where you get a bigger move. And historically a 1 percent move in the price of bullion translates into a 3 percent move for unhedged gold stocks. So that’s what we focus on and we like those companies that protect the shareholders’ value on a per share basis. And what we’ve seen is those companies that have the highest production-per-share growth and reserve-per-share growth end up having the best performance.”
From Financial Crisis to Debt Crisis?... asks Kenneth Rogoff... worries that the current financial crisis may be contained for some time, but another crisis may be brewing within a few years due to all the government debt piling up... "Our models show that even an economy that is massively overleveraged can, in theory, plod along for years, even many decades, before crashing & burning... For now, the good news is that the crisis will be contained as long as government credit holds up. The bad news is that the rate at which government debt is piling up could easily lead to a second wave of financial crises within a few years"... http://todayszaman.com/tz-web/news-186107-opinion-from-financial-crisis-to-debt-crisis.html
Gold Outperforming Major Currencies... weekly chart of gold prices (above) & a basket of 8 currencies below 1) Australian Dollar; 2) Canadian Dollar; 3) Swiss Franc; 4) Eurodollar; 5) British Pound; 6) Singaporean Dollar; 7) Japanese Yen; 8) US Dollar. Relative to these currencies, gold outperforming... Courtesy of thetechnicaltake...
A Matter of Perspective... Michael Panzner points out that talk the economy is on the road the recovery by so-called professionals & economists is growing louder, but ordinary Americans are not believing it... a new CNN/Opinion Research Corporation poll reveals that 87% of those surveyed say the country remains mired in recession, a 13% point jump from June’s tally... Michael provides several charts showing divergent economic indicators... "Given how much closer-to-the-mark average Joes have been during the past few years when it comes to reading the economic tea leaves, especially in comparison to those who are supposedly in the know, it makes sense to bet on the amateurs"...Thursday, September 3, 2009
Gold Moving East - Hong Kong recalls its gold..., touts high-security vault.... Hong Kong is pulling all its physical gold holdings from depositories in London, transferring them to a high-security depository newly built at the city's airport... http://www.marketwatch.com/story/hong-kong-recalls-gold-reserves-from-london-2009-09-03?siteid=rss&rss=1
2009?
“There’s a large amount of money on the sidelines waiting for investment opportunities; this should be felt in the market when 'cheerful sentiment is more firmly entrenched.' Economists point out that banks and insurance companies 'never before had so much money lying idle.'" NOT 2009 August 28, 1930... http://newsfrom1930.blogspot.com/2009/08/favorites-of-week-august-25-august-30.html
On Course to a New Normal... Pimco's Bill Gross believes the highest probabilities favor the following strategic conclusions - 1. Global policy rates will remain low for extended periods of time, 2. The extent & duration of quantitative easing, term financing & fiscal stimulation efforts are keys to future investment returns across a multitude of asset categories, both domestically & globally, 3. Investors should continue to anticipate &, if necessary, shake hands with government policies, utilizing leverage and/or guarantees to their benefit, 4. Asia & Asian-connected economies (Australia, Brazil) will dominate future global growth, 5. The dollar is vulnerable on a long-term basis...
Gross New Normal
Gross New Normal
"If a fellow with no education, a poor diet, and inadequate medical treatment living at 3,500 metres above sea level can figure out that the US dollar is undesirable as a store of wealth, how much longer do you think it can last as the world's reserve currency." - Paul Mylchreest re: local Latin American villagers now preferring their own currency to US dollars...
How Technical Analysis Can Improve Fundamental Analysis... E. James Welsh... "Something each group of economists & strategists have in common is the omission of technical analysis as part of their analysis. It is a critical omission, and accounts for why each group missed either the significant turning points in October 2007, or March 2009"... http://www.ritholtz.com/blog/2009/09/how-technical-analysis-can-improve-fundamental-analysis/
The Future of the Fed
The Fed will have to raise interest rates as aggressively as it cut them when it becomes clear the economic recovery has taken hold, to avoid flaring up inflation, says Philadelphia Fed President Charles Plosser... "Our exit strategy is really quite simple: we have to begin to pull back from our extraordinary programs, we have to begin to shrink our balance sheet, otherwise we will feel inflation in the months and years ahead"... says for the next few quarters inflation is not a problem but it may become so later unless the Fed orchestrates its exit carefully...
Big Move Coming... says Puru Saxena (Cliff Küle M-AA*)... sees the weekly chart for gold looking like a gigantic ‘inverse head & shoulders’ bottom formation, but could be a massive double top if not... either way, it looks like a big move coming. Cliff Note: For decades, markets have gone through periods of strength in the US$ as money seeks"safe haven". Could the "safe haven" status be leaving the US $ & going toward gold ? http://news.goldseek.com/GoldSeek/1251987803.php
Wednesday, September 2, 2009
Rosenberg: Markets in a new phase?
“We may well be in an entirely new phase right now. For months, the equity market had this uncanny ability to rally on any good news, as the psychology took hold that less-negative data was a positive (like having your golf score go up but at a slower rate). Any adverse data that caused a retracement from March to August was treated as a buying opportunity. But having gone from pricing in -2.5 per cent real GDP growth at the lows to +4.0 per cent now, it looks like Mr. Market is becoming a little more discerning in terms of interpreting the economic data. Even before yesterday’s selloff, the equity market was no longer rallying on “good news”, and there were many such data points that rallied the economics community to the sidelines, pom-poms and all, in order to cheerlead the incoming information – durable goods orders, all the housing data, consumer confidence, and even Bernanke’s re-appointment. Three months ago, the stock market would have been rallying like mad based on all these goodies – but it hasn’t this time around.” - David Rosenberg
Is China The New OPEC For Green Energy?... asks Daniel Indiviglio... The NY Times has an interesting article about China tightening its grip on rare earth metals - some of these are essential in various types of green energy infrastructure like wind turbines... China's market share on these rare earth metals is like the Middle East's dominance in oil reserves... "Instead of Americans complaining about being reliant on the Middle East for oil, they will complain about being reliant on China for green energy components in the years to come. Sure, the energy might be cleaner, but the foreign reliance might be virtually the same"... http://business.theatlantic.com/2009/09/is_china_the_new_opec_for_green_energy.php
So What's Behind Moves In Gold?... Mish Shedlock (Cliff Küle M-AA*) explores, through charts, different conditions that make gold move (up or down)... "In general, Gold, like Fiat money does poorly when economic conditions are generally rosy, credit worries are non-existent, & interest rates are falling... Gold does well in "real" terms during deflations." Click above chart to enlarge - http://globaleconomicanalysis.blogspot.com/2009/09/so-whats-behind-moves-in-gold.html
Commodities rattled by China derivatives stance... Caijing magazine quotes an unnamed industry source saying Chinese state-owned companies (called enterprises as SOEs) will be allowed to default on commodity derivative contracts... China's regulator of state owned enterprises, the Assets Supervision and Administration Commission (SASAC), has told 6 foreign banks that SOEs reserved the right to default on contracts...
http://www.reuters.com/article/marketsNews/idUSPEK1183220090831
http://www.reuters.com/article/marketsNews/idUSPEK1183220090831
"With regard to these endeavors we must emphasize three points. First: Inflationary or expansionist policy must result in overconsumption on the one hand and in mal-investment on the other. It thus squanders capital and impairs the future state of want-satisfaction. Second: The inflationary process does not remove the necessity of adjusting production and reallocating resources. It merely postpones it and thereby makes it more troublesome. Third: Inflation cannot be employed as a permanent policy because it must, when continued, finally result in a breakdown of the monetary system." - Ludwig von Mises, Human Action, 4th ed. (San Francisco: Fox & Wilkes, 1996), p. 432.
Optimism Back to Peak Levels... Investors Intelligence's newsletter survey shows optimism is back to peak levels...
Stock Prices & Bond Yields... Technical Analyst Frank Barbera provides the above chart, an overlay chart of stock prices and bond yields: "there has been a slavish relationship in recent months. Every time stock prices begin to advance, bond yields begin to advance, while declines in the equity market have – as traditionally has been the case - triggered declines in Bond yields. In some of my work, I like to watch inverse bond ETF’s, such as TBT, which at the moment appears to be putting in a potentially very major low"... http://www.financialsense.com/Market/barbera/2009/0901.html
Worst of Slump Yet to Come... says economist Ann Pettifor, one of the few who saw it all coming... says only radical action can prevent further gloom... she warned in her book "The Coming First World Debt Crisis" that rich countries were heading for a debt crisis that would overshadow anything seen in the developing world... suggests public money should be used to bail out households & businesses threatened by bankruptcy. “The banks are not using the money productively, yet what we need is for the Government to spend more productively"...
Tuesday, September 1, 2009
Massive Decline or Market ‘Melt-Up’?... asks Sean Brodrick... points out if the US continues to follow Japan’s path (see above chart), should see this rally continue for about 40% higher from here - "That is NOT what the big money is expecting now, here in the US. But I doubt they were expecting it in Japan, either"... http://www.uncommonwisdomdaily.com/wp-content/uploads/2009/08/UWD159.pdf
Bernanke’s Victory Lap... John Browne discusses Bernanke's re-appointment...blames Greenspan & Bernanke for the bubbles leading up to the current crisis... "Greenspan-Bernanke ushered in a new era of big government through their Faustian bargain with Administrations from Reagan to Bush Jr... If Ben Bernanke is distinguished by posterity, it will be in the manner of Juan Peron, a man who was popular, powerful, but ultimately destructive"... http://www.financialsense.com/fsu/editorials/schiff/2009/0901.html
Oil rules may kill price?... Joshua Schneyer explores the debate... regulators looking at measures to curb speculation... how could these measures affect oil prices?... at least one major bank expecting the new rules will trigger a 30% price plunge...
http://www.financialpost.com/most-popular/story.html?id=1945725
http://www.financialpost.com/most-popular/story.html?id=1945725
Peak Water... like Peak Oil says James Quinn... The impact of water scarcity can lead to food shortages, famine, & starvation... discusses several examples & trends of water scarcity & the implications to the economy & recession... concludes: "The devastating combination of peak oil and peak water in the next five years will combine to create a commodity crisis that is likely to spur armed conflict as countries contend for declining resources. The question is who will attack who and when. In the meantime, plant a vegetable garden"...
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