Global Market Commentary, Analysis and Investments
Look at what happened on Friday. The Dow dropped 93 points. Oil stayed below $100. But gold added $16 to close well above $1,500.
Fluke? Or trend?
Hey, you’re asking the wrong person. What do we know? No one knows.
But what we do know is that the Great Correction is continuing to do its work. All the recent reports tell us that the economy is weak…and weakening. Housing starts, manufacturing output, consumer confidence – all are pointing to a long, hot, sultry, sluggish summer.
[Read more...]It was a good effort…but “federal debt held by the public would double under the President’s budget,” says the Congressional Budget Office (CBO).
While we were exploring gold storage, junior miners and asset protection in Zurich, the CBO did some heavy lifting on the budget proposal advanced by Mr. Obama on Wednesday.
[Read more...]The US now finds itself in much the same fiscal boat as Japan. America’s “stimulus” efforts have become permanent, structural elements of the economy.
Since November, the Fed has injected about $4 billion a day into the economy through its QE2 program. And the federal government gives the economy almost another $5 billion worth of deficit spending a day. Together, this is $63 billion going into the economy each week.
[Read more...]For twelve years the US trade deficit financed the US budget deficit and held down US interest rates. From 1996 to 2008, the US trade deficit exceeded the government’s budget deficit every year. The dollars sent abroad to pay for the trade deficit were accumulated by the central banks of the trade surplus countries, who then reinvested them in US government bonds. As discussed in earlier posts, those central banks bought up the dollars entering their economies in order to hold down the value of their currencies and so perpetuate their countries’ low-wage trade advantage and their export-led economic growth.
[Read more...]Stocks were flat yesterday. Gold was flattish. Oil was flat.
Everything was flat. Nothing much happened, as near as we can tell.
So, let’s turn our attention elsewhere. To greedy old people, for example.
Here’s a letter that appeared in The Financial Times on Saturday:
[Read more...]Erskine Bowles, President of UNC, and former Wyoming Senator, Alan Simpson, the co-chairmen of President Obama’s National Commission on Fiscal Responsibility and Reform, are getting political leaders caught up with the obvious reality of the US' precarious financial state… that the budget deficit is quickly hurtling the nation toward a debt crisis not unlike Greece, but on a much larger scale.
[Read more...]It would be quite an achievement to take an ugly photo of this little slice of the world. From the blue skies overhead, the bottle green water lapping at the shores, to the bronzed bodies thronging the white, sandy beaches, Southern California presents an astonishing vista. Cosmetically, at least, the place is a nip n tucker's dream come true.
[Read more...]What a rally in the risk assets yesterday! And for once, when the rally fizzled out yesterday afternoon, profits weren't taken in the overnight markets… Instead we saw a consolidation, if you will, of the price gains on Thursday in the overnight markets. That's nice to see, eh? For it had been the pattern of recent times to just sell off any gains, and end up back on square one, or even lower than the starting level. So, like I said, this was very nice to see… I checked the levels last night before I went to bed, and noticed that there had not been any sell off, and thought, what a great Friday it would be tomorrow, if these can hold throughout the night… And they did!
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Why Greek Austerity Does Not Equal Solvency
My daughter is not Greek…but she sometimes acts like it. This observation is not meant to disparage my daughter…or the Greeks. It is simply an observation.
My daughter, Gaby, often makes promises, just before asking me for money. Yesterday evening, after she dirtied up a frying pan and a few kitchen utensils to make some pasta, I asked her to clean up the mess.
[Read more...]