Emerging markets got smacked in the latest global slowdown. China, which had and is booming at record rates of 10% per year saw its stock markets lose a whole lot of value. I think the best place to be right now is in the emerging markets scene as turnarounds in developed areas will create even bigger booms in the growing economies of the world. Read more…
The FDICs call for a bad bank to wipe away all bad assets from bank balance sheets may sound great at first but creating a bad bank doesn’t end the problem. Instead it transfers the loss from private companies to the balance sheet of the government. Read more…
How long do I hold this stock? I bought it just under $40 and today they put the icing on cake by announcing layoffs due to the grime economy. What price does everyone think this stock will end up after the country enters the expansion period after the recession? Also, should I buy more as it dips lower in price.
The relationship between the United States and China is best described as a love-hate. American’s love Chinese goods and the Chinese love American treasuries but the political tensions are heating up as the new Treasury Secretary is taking a similar stance of Treasury Secretary’s before him– the Chinese currency is being manipulated and kept far too undervalued. Read more…
It has been just over a year since Altria spun off its Philip Morris International business to form a new company under the ticker PM. Since the spin off Philip Morris has sunk down to $40 per share off from an IPO price of $50 per share. It shouldn’t be long before this stock comes back and comes back big. Here is my analysis: Read more…
With the deleveraging of the financial markets the dollar has soared in value against other currencies back into the same trend that occurs every few years. This is setting up an excellent forex trade going into the next few years with GBPUSD being one of the best trades. Short, short, short the dollar and long everything else. Read more…
Government stimulus may seem to be the economic savor of a lifetime for the short term but over the longer horizon government stimulus is often overdone and creates huge inefficiencies in a post-stimulus economy. Read more…
Obama has been touted as the next FDR with his stimulus package to mimic that of the New Deal following the Great Depression. Though Obama desires to stimulate the economy in much the same way as the late Roosevelt, he’s got some huge roadblocks in his way. Read more…
Investors are afraid, and for good reason, the market outlook for the next few years has us all wondering where we all might be just a few years down the road. Economist predictions are all over the map ranging from depression-esque slowdowns to a huge market rally in late 2009. In this post I’ll describe how you can afford to take huge risks, without any risk. I swear its possible. Read more…
The bailouts are starting to get ridiculous. After Bank of America reported its first loss in 17 years on huge losses of its recently acquired business Merril Lynch the US government stepped in with another $20 Billion of capital infusion making the American taxpayer the largest shareholder. Read more…
The initial details of the stimulus package are finally making it to the media. The Associated Press is reporting that the stimulus package as drawn up by house democrats will include $550 Billion of spending combined with $275 Billion in tax cuts; a 2:1 ratio of spending to tax cuts. It is in my opinion that the ratio should be reversed with the tax cuts growing to $550 Billion with $275 billion in spending. Read more…
When recession hits people start saving and now we’re starting to see some good in an improving trade deficit.
The trade imbalance worked out to just $40.4 Billion in November led by lower oil costs and also lessened spending by US consumers. The good news is that though we’re running a $40 Billion a month deficit, exports aren’t shrinking nearly as fast as imports which for the long term is very positive news. Read more…
The BLS.gov website is an excellent resource for finding all the government data you’ll never find on the mainstream media. While their latest release of information regarding part time employment was posted on the homepage, there has yet to be any mention of it across the board in any media outlet. After deciphering the data I’ve discovered that part time work is growing but for all the wrong reasons. Read more…
While we slept the Bush administration coupled with the Obama transition team worked to push the remaining $350 Billion of the TARP program through Congress. Dealmaking is being done but apparently the cash will hit the bank right as Obama takes office, not only giving him his first goal as president but also his first challenge. Read more…
During one of the worst financial climates we have seen in decades, consumers are plenty happy to chase state lottery winnings. This has always been my pet peeve, it never makes sense to test your luck when there is a perfectly viable way to get where you want to with the same amount of resources.
A recent Associated Press article on state lotteries declared that recession has spurred spending on state lotteries with many people throwing down a few dollars per week to chase million dollar prizes. But one part of the article caught my attention. One person that was quoted in the article stated that he spent $100 per week on the lottery, and even went on to say “I imagine that I would be a heap better off if I saved this money, but everybody has dreams.” Really? Read more…
Looking back through the past few years it seems now that we’re exactly where we began seven years ago. The stock markets were tanking, one bubble was ending and another beginning. Then it was the tech industry and after that the real estate boom, today its real estate bubble bursting and the treasury bubble beginning (and soon ending.) Read more…
I am convinced that the bottom of the stock market is dependent entirely on low LIBOR rates. The Libor rate, or the rate at which banks lend to banks, represents the best and easiest source of funding for banking institutions. I firmly believe that by timing these events we can accurately time a bottom in the market. Read more…
The Dow to Gold ratio is often regarded as the most simple, yet surprisingly accurate and fundamental view of the economy and the stock market. The dow to gold ratio is following a very simple trend, but its not quite over yet.
While 2009 is set to be an already great year when cash makes it way back to market, I like to identify technical reasons and rationale for why the stock market will follow what the fundamentals are telling us. This time around the technical analysis is completely in favor of a great start to 2009 as two strong trends are forming on both the NASDAQ composite and the S&P 500. Read more…
With recession and a global slowdown comes the need for investors to get smarter about the way they invest. The current market climate is unlike any we’ve seen in decades. Fortunately for the modern investor, this downturn brings many investing opportunities. In the past few days I’ve been all over DXO and SLX as excellent 2009 trading opportunities, but I believe the best investment and ultimate hedge is in this trade right here. Read more…
During the October 2008 meltdown the disappearance of active mutual funds and hedge funds was surely felt. I watched my computer screen as the downtrend continued seemingly forever and each and every day as each level was broken without even a modest test. When the hedge fund industry starts withdrawing cash and investing less, the study of technical analysis is almost lost. Read more…
Cash equivalents have never been so high. Currently there is around $9 Trillion stored in cash equivalents such as treasuries, CDs and money market accounts a total that hasn’t been seen since the recession of 1992. Now with so much money being parked in fixed rate investments, rates are dropping and investors are tired of it. Why invest for no return?
The most promising part of the $9 trillion in cash equivalents is that $9 Trillion is actually 75% of the current worth of the stock market. If that money were to pour back into stocks, stock prices would double. Read more…
