Nov 15, 2010
Quantitative Easing Update: Move Along...No Inflation Here
The Federal Reserve’s moves are backfiring.
The Fed’s recent announcement that it’s going to keep the free money spigot flowing for at least another six months was the last straw.
China, which has become a big lender to the U.S. to suppress its currency to make its goods cheaper, has criticized the move.
Germany, a large exporter who benefits greatly when the dollar rises against the Euro, has expressed concerns as well.
Now the program where the Fed buys bonds to push up bond prices and interest rates down with newly printed dollars is back in swing whether they like it or not.
There’s no expectation that results will be any different this time though.
The intended impact will never materialize. Consumers will continue to pay down debt as they deleverage. Unemployment will stay high.
The unintended consequences will become more magnified. And the profit potential of those unintended opportunities is only growing more magnified too.
Nov 04, 2010
Insiders are Running for the Exits, Should You Follow?
The Federal Reserve announced its going to pump more than $800 billion of new cash into the economy.
Financial assets, as they’ve done for the past two years, have responded strongly to the pump.
There are, however, a lot of causes for concern. One of the big ones that recently grabbed a lot of headlines is record levels of insider selling.
There’s nothing that spooks investors like insider selling.
The premise is a simple one. Insiders know their company best. They know how well the company is doing. They can see problems months before the markets do.
So when they buy, conventional wisdom views it as a good sign. When they sell, it’s a bad sign. And when they all sell, it’s a bad sign for the overall markets.
That’s why when a recent CNBC report found insider selling has reached record highs, a lot of people are taking note.
This could be the exact wrong move to make right now. Here’s why.
Sep 16, 2010
Investing in Gold and Farmland: Top Speculator Betting Big on...the USA?
Things are looking bleak in the United States. Almost no one is seeing a turnaround anytime soon.
A recent USA Today/Gallup poll found 82% of respondents thought the U.S. was still in a recession. And 54% of them expect the economy to be as bad or worse a year from now.
A very successful speculator, however, is making a surprising wager.
Michael Burry, the hedge fund manager who helped create credit default swaps to profit from the housing bust and was featured in Michael Lewis’ The Big Short, is making a surprising bet.
He is betting big on the United States.
But not the way you probably think.
He’s actually betting on the United States in a way that will prove very successful over the next few years, but most investors will miss out on.
Sep 13, 2010
Investing During a Recession: The Real Impact of the Next Round of Stimulus
A Japan-style lost decade is imminent.
Last week the financial world learned the current administration’s economic “plan.”
Although stocks rose for the week and bonds showed their first weakness in a long time, the current round of “don’t-call-it-a-stimulus” spending and tax breaks are going to have consequences – bad ones.
As we enter the debate for the third stimulus package in as many years (don’t forget about the $152 billion stimulus form February 2008), there are a lot of details to pay attention too.
This one is going to have a little more politically-friendly packaging, but it’s actually signaling a Japan-style lost decade has already started in the United States. And investors who fail to notice will pay a heavy price. Here’s why.
Sep 04, 2010
Investing in Gold: Why You Need to Weight Out the Gold Bull
Recession, depression, or recovery, gold is poised to continue its run.
As gold nears new all-time highs, a minority of investors is in it, more are waiting for a dip, and most will miss out on it altogether. Well, until the top when everyone will be herding into it.
The case for gold is a simple one. But today we’ll look at why the gold boom has much more room to run and how historical evidence shows there isn’t much time to “weight” to get in.