Tuesday, December 15, 2009
What's happening to the middle class?
Monday, September 21, 2009
Friday, September 11, 2009
Can the Markets Thrive Without Boomers?
Monday, June 1, 2009
BYE, BYE GM
Tuesday, May 26, 2009
The Folly Continues
Friday, May 15, 2009
Monday, March 23, 2009
Sunday, March 22, 2009
Great Summary of the Current Shitstorm the U.S Economy is in and How it Got There
Monday, March 9, 2009
Sunday, March 8, 2009
Good Time to be a Contrarian?
~ Below is an interesting article with the father of contrarian investing, David Dreman. As a true contrarian, Dreman recommends investing in, you guessed it, banks and other heavily discounted equities. He specifically points out KBE, XLF (The former is an financial index fund and the later is an ETF), and GE. Other banking funds that might be of interest are VFH, UYG, IYF. Remember, these funds are not for the faint of heart and carry considerable downside risk. Over the long haul (5, 10, 15 years) some of these heavily discounted funds might prove extremely profitable, yet it takes a lot of courage to invest when 'blood is in the streets.' As the great Warren Buffett once pointed out, "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."
Who got AIG's bailout billions?
NEW YORK (Reuters) – Where, oh where, did AIG's bailout billions go? That question may reverberate even louder through the halls of government in the week ahead now that a partial list of beneficiaries has been published.
The Wall Street Journal reported on Friday that about $50 billion of more than $173 billion that the U.S. government has poured intoAmerican International Group Inc since last fall has been paid to at least two dozen U.S. and foreign financial institutions.
Read the rest here.
Friday, March 6, 2009
Bernanke Won't Reveal Which Banks Received Bailout Money
The Chairman of the Federal Reserve will not reveal which of his Wall Street cronies received bailout money for fear that it might 'tarnish' their reputation. Seems like his strategy is working. Fannie, Freddie, and Citigroup have all performed well over the last several months. Banana Republic U.S.A?
Peter Schiff on BNN
Thursday, March 5, 2009
Krugman Thinks We Should Spend a Bit More
A Sign of The Times: Spam Now a Member of The S&P 500
Will China Save Western Capitalism?
03/05/09 Paris, France Sweden to GM/Saab: Drop Dead!
Finally, a nation with a little backbone…a little integrity…a little good sense.
And guess what, it’s that dreary socialist refrigerator – Sweden. Asked to bailout its GM-owned automaker, Saab, the country’s Prime Minister just said ‘no.’ Good for him…
“Voters did not pick me to buy loss-making car factories,” he explained.
But it’s a time of contradictions, paradoxes and oxymorons. Up is down. Right is left. In is out. Good is bad.
The socialists are the only ones protecting the free market, now. Americans are scuttling it with every chance they get. The stocks of capitalist companies are going up in communist China…but in America, they’re going down. Since November, the Shanghai index has outperformed the S&P by 75%.
And back in the United States, projects that were considered too marginal to justify spending money a year ago are now thought to be indispensable. And the IOUs of the biggest spendthrift on the planet are the hottest item on the market. Ten-year Treasury notes are now priced to yield only 2.99% – just as the Obama administration announces a $1.75 trillion budget deficit.
Read the rest here.
Wednesday, March 4, 2009
Books I Recommend
Here are some books you might want to read to better understand the current financial environment.
Looking for a Job?
697,000 U.S Jobs Lost in One Month
ADP said on Wednesday that private employers cut 697,000 jobs in February versus a revised 614,000 jobs lost in January. The January job cuts were originally reported at 522,000.It was the biggest job loss since the report's launch in 2001 and showed the misery of declining employment spreading broadly and evenly throughout the economy.
Good News for a Change
Leuthold Says Stocks Will Surge, Depression Avoided
By Betty Liu and Lynn Thomasson
March 4 (Bloomberg) -- Steve Leuthold, whose Grizzly Short Fund returned 74 percent last year betting against U.S. stocks, said now is the time to buy equities because investors are too fearful about the economy.
“These comparisons people make with the Great Depression are totally out of touch with reality, and pretty stupid,” he told Bloomberg Television in an interview today. “We’ve been in much worse, much more panicked and more scary situations in the U.S.”
The economy isn’t as bad as it was in 1974, when stocks began rebounding, said Minneapolis-based Leuthold. He predicted the Standard & Poor’s 500 Index will surge to at least 1,000 in 2009, representing a gain of 44 percent from yesterday’s 12-year low of 696.33. The benchmark measure of U.S. stocks rose 1.4 percent to 706.08 at 9:56 a.m. in New York on speculation China will add to a 4 trillion yuan ($585 billion) spending plan.
Read the rest here.
Tuesday, March 3, 2009
Where is the Bottom?
After another down day on the markets we're in shooting distance of 1968 prices on the S&P500. That is, if you take inflation into account.
The following graph shows the real S&P500 price index with current price levels highlighted by the green line. The red line shows what we'd be in store for if we suffer from a repeat of the 1929-32 collapse.
Today I want to highlight the yellow line which reflects a further 10% decline from today's price. That's about what it would take for the S&P500 to be roughly even with its inflation-adjusted level in 1968 based on monthly prices.
Read the rest here.
Monday, March 2, 2009
Jim Kunstler on Peak Oil and the Precarious Future of Agriculture
Isn't that a question, though....
The Peak Oil story was never about running out of oil. It was about the collapse of complex systems in a world economy faced by the prospect of no further oil-fueled growth. It was something of a shock to many that the first complex system to fail would be banking, but the process is obvious: no more growth means no more ability to pay interest on credit... end of story, as Tony Soprano used to say.
There was a popular theory among Peak Oilers the last decade that the world would enter a "bumpy plateau" period when the global economy would get beaten down by peak oil, would then revive as "demand destruction" drove down oil prices, and would be beaten down again as oil prices shot up in response -- with serial repetitions of the cycle, each beat-down taking economies lower -- the only imaginable outcome being some sort of quiet homeostasis. This scenario did not play out as expected. It was predicated on a mistaken assumption that all systems would retain some kind of operational resilience while ratcheting down. Anyway, the banking system was mortally wounded in the first go-round and the behemoth is dying hard.
Read the rest here.
Garth Turner on Canadian Real Estate and the Stock Market Recovery
~ Interesting article by former MP Garth Turner. While his outlook is bleak, we can start seeing a recovery about three years from now.
Economic Update
Recently I posted that the economy will get better. The road back will be led by the stock market, and the rally will be spectacular. Things, I said, will change in days, not months.
This will happen. But jobs, real estate, consumer spending and family finances will take years to catch up.
You see this today and will again Tuesday. Things are getting damn awful, which will lead us closer to the bottom of an abyss that must be plumbed prior to any recovery. This final leg down will be numbing and difficult. Hang on.
Read the rest here