US equities have entered the final, blow-out stage of their bull market. As in 1999 and 2006, investors have decided that it’s different this time and are willing to buy at pretty much any price. Like those previous bubbles, today’s will end badly, probably in 2017. Gold, on the other hand should do just fine.
The world’s central banks clearly have no idea what they’re doing. Yet they keep on making threats, promises and predictions, most either nonsensical or contradictory, while acting in ways that make their countries’ problems worse rather than better. The end of their credibility is in sight.
Brexit is dominating this week’s headlines, but the event itself is less important than what it signifies, which is the increasing loss of faith in governments and central banks. Voters no longer trust big institutions to act in their best interest and are voting for alternatives of various kinds. When this lack of trust spreads […]
The Panama papers claim more victims. US growth slows further. Corporate earnings are still falling. Gold continues to shine, with both central banks and individuals buying it aggressively. Oil jumps, the yen soars and the dollar falls. The Economy 3/09 The new danger from derivatives – Bloomberg 3/09 The new danger from derivatives – Bloomberg […]
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Take a look at the chart below, and note the unnaturally smooth 80% decline. Kind of makes you think “imminent bankruptcy”. But now consider that the security in question is 100% guaranteed not to fall to zero and about 90% guaranteed to stay above 10. It’s VXX, an exchange traded fund that, according to its […]
Everybody, it seems, now has a price target for gold and a scenario to get it there. This is fun on a lot of levels, but the price target thing is a bit of a distraction. Gold, like every other bull market, will peak when the dumb money starts piling in. So to recognize the […]
This showed up in my mailbox this morning: THE ECONOMY IS SO BAD………. The economy is so bad that I got a pre-declined credit card in the mail. It’s so bad, I ordered a burger at McDonalds and the kid behind the counter asked, “Can you afford fries with that?” The economy is so bad […]
Nouriel Roubini warns that an asset bubble is building as money chases commodities. Asian countries are considering capital controls to stem the inflow of hot money. The Wall Street Journal reports that rare coins are soaring at auctions, with a single penny recently breaking the $1 million barrier. U.S. stocks and oil are up 60% […]
Let’s start with a lesson that every investor eventually learns: Short-term trends are almost impossible to play consistently. I base this on both common sense (lots of smart people are trying to do the same thing so unless you have inside information you shouldn’t be playing their game) and painful personal experience: Every time I […]
It’s been obvious for some time that America’s trading partners are caught in a financial catch-22: If China, Japan, and Saudi Arabia keep accepting dollars in return for their cars, toys and oil, their currency portfolios become even more unbalanced and their foreign exchange risks more extreme. But if they sell some of their dollars, everyone else will feel free to […]
Yesterday’s Wall Street Journal ran a great, sad article on the effects of the credit bubble on low-income people. A few excerpts: The ‘Democratization of Credit’ Is Over — Now It’s Payback Time Karen King owes nearly $36,000, more than she’s ever earned in a year. All day long, bill collectors call. She hunts for a second […]
U.S. stocks are up again today, bringing the S&P 500’s bounce off the bottom to 63%. All those buy-and-hold 401(K) investors (and the advisers who told them to hang in) are breathing a sigh of relief and hoping that “normal” times are here again. But the smart money is looking for a short-sale entry point. […]
Yesterday’s Wall Street Journal ran a great, sad article on the effects of the credit bubble on low-income people. A few excerpts: The ‘Democratization of Credit’ Is Over — Now It’s Payback Time Karen King owes nearly $36,000, more than she’s ever earned in a year. All day long, bill collectors call. She hunts for […]
Ron Paul has a bestseller. That sounds so nice I’ll say it twice. Ron Paul has a bestseller. His new book, End the Fed, is number 30 on Amazon as this is written — with 167 mostly glowing reviews — and his reception last week on Jon Stewart’s Daily Show was hugely positive. Stewart, more-or-less […]