Watch the bonds… We could be seeing the first crack in the bond market. But it seems too early to us. It seems more likely that the bond market will stretch this out…bringing more and more hapless investors on board before finally sinking. Everything takes longer than you expect.
September 9th, 2010 | Bill Bonner | 0 comments | ContinuedAll Posts Tagged With: "debt"
The Needs Justify the Ends
Remember back in the good old days? Back when there was no government in Canberra and stocks rallied because investors knew there wouldn’t be any moron law makers to pass moron laws? Ah yes…the good old days. Sigh. If there’s a deal that puts a Labor/Greens/Independent government in place, you might expect that to be a negative for shares, inasmuch as it could mean mining tax and, down the track, some kind of carbon tax.
September 7th, 2010 | Dan Denning | 3 comments | Continued
Close to Fair Value, But Still Unbalanced
A crucial time is approaching for the global economy and stock markets. The policy induced ‘recovery’ from the credit crisis is now petering out. While this inevitability was hardly consensus opinion months ago, most market participants are now coming around to the viewpoint that the developed world faces a low growth future.
September 7th, 2010 | Greg Canavan | 0 comments | Continued
Millionaire Factory Misfires
The Aussie market is up 2.77% since the Federal election on August 2nd, if you’re using the ASX/200 as your proxy. This whole “not having a government thing” is working out well for investors. It turns on the uncertainty of having no-one in charge is better than the certainty of having someone in charge. Maybe that will all change this week, though. To begin with, the jobs data from the U.S. gave the market a positive lead. We’re not sure this matters one little bit.
September 6th, 2010 | Dan Denning | 1 comment | Continued
Seasons Don’t Fear the Reaper
People tend to overestimate what they think they know and underestimate what they don’t know. It’s best to be modest, work hard, and recognise that sometimes what you get in life is neither what you expect nor what you deserve. But let’s talk about markets and cycles first today before we get on the crazy train. And since yesterday was all about words (even though words can change worlds), let’s look at some pictures.
August 27th, 2010 | Dan Denning | 27 comments | Continued
The Nonsense Recovery
Eventually, investors are going to realize that the discussion of a “recovery” is nonsense. The economy can never recover the pace and frenzy of the bubble years – and so much the better. It has to move on to something new. The big question is: What will this new economy look like?
August 26th, 2010 | Bill Bonner | 0 comments | Continued
To Be Unsure
To be sure, to be sure, you get the feeling S&P could be saying that about a lot of governments in the next few years. Financial sectors in the Western world are still burdened with high levels of debts backed by commercial and residential real estate. To prevent those firms from failing, governments have assumed or backed their debts. But that transfers the ultimate liability for failed private sector investment to the public sector.
August 25th, 2010 | Dan Denning | 31 comments | Continued
Consumer Debt Repayment: The Sign of a Lengthy Correction?
By 2008, consumer debt increased seven times, while the savings rate was seven times lower than in 1980.Now consumers are paying down their debt – or defaulting on it – at a rate of about 6% per year. We don’t know where this process will go, but if consumer debt is to be cut in half.
August 19th, 2010 | Bill Bonner | 0 comments | Continued
!$%*!?
Peter Wilby at The Age has come up with one of the most enraging reads ever read. There is so much wrong and outrageous about this article that we can’t even get to the point of analysing it. We have just provided some of the highlights, not that they do the article justice.
August 14th, 2010 | Nickolai Hubble | 3 comments | Continued
Debunking Deflation
You will recall that during the bottom of the previous bear-market, most of the pundits were shunning ‘risky assets’ (stocks and commodities) and they were advocating a heavy exposure to cash and fixed income assets. Back then, the vast majority of strategists and their devotees were erroneously fretting about deflation.
August 13th, 2010 | Puru Saxena | 8 comments | Continued
A Moment in the Sun
If Goldman Sachs is publicly bullish on gold, is that a good thing or bad thing for gold bulls? Wall Street’s notorious trading house published a report on gold earlier this week setting a price target of US$1,300 in the next six months. The report cited several factors. But before we get into them, we’ll confess it made us a bit nervous. Whenever any broker is saying one thing, you have to wonder if they’re actually doing the opposite.
August 13th, 2010 | Dan Denning | 6 comments | Continued
More Debt to Fight the Correction and Other Absurdities
Federal Reserve officials decided to reinvest principal payments on mortgage holdings into long-term Treasury securities, making their first attempt to bolster growth since March 2009 to keep the slowing US economy from relapsing into recession.”The pace of economic recovery is likely to be more modest in the near term than had been anticipated,” …
August 12th, 2010 | Bill Bonner | 0 comments | Continued
Demanding Demand
What about here in Australia, though? The amount of money being lent for housing fell by 3.9% in June according to the Australian Bureau of Statistics. It was the lowest amount for housing finance since February of 2001, which was over nine years ago. What does that tell you? It tells you that the largest factor on “underlying demand” for Australian housing is the price of money. When the price of money is cheap, the demand for housing goes up.
August 11th, 2010 | Dan Denning | 42 comments | Continued
Monetary Avalanche
Barron’s highlights the big one on this week’s cover:”Why the Fed will soon print $2 trillion,” is its headline. The idea behind the headline is simple enough. The recovery is a flop. All that stimulus spending has done nothing. Unemployment is not getting better. Consumers aren’t shopping. Banks aren’t lending. And the money supply is actually falling.
August 11th, 2010 | Bill Bonner | 22 comments | Continued
Dr. Stock in Africa
The U.S. dollar is falling because it is fundamentally dishonest money. But rather than prove that today, we’ll begin with a man sleeping soundly a camp cot at a mining site in Botswana and show why his visit – and the opportunity he was investigating – is tied directly to the dollar’s dishonesty.The man is Dr. Alex Cowie, or Dr. Stock as we call him around the offices when he’s here and not chasing up some geologist over coffee in the CBD. You may know him as the editor of Diggers and Drillers.
August 10th, 2010 | Dan Denning | 0 comments | Continued
