The Dow Jones Industrial Average tumbled 119 points yesterday because, according to Bloomberg News, Ben Bernanke “avoided offering new growth plans.” The Dow continued plummeting another 300+ points today because President Obama is not doing enough to “create jobs” and the European Central Bank is not doing enough to prevent a Greek default.
[Read more...]Print Money and Be Damned!
September 3, 2010 By Leave a Comment
Japan was the world's most admired economy in the '80s. Then it was the world's most despised economy in the '90s. By 1995, economists pointed their fingers and laughed – the world's most admired businessman had lost his left shoe.
But now, much of the world is barefoot. The US inflation rate has been going down since the early '80s and was cut in half since last year. It now hovers barely above zero. Surely Japan – where prices have been falling for two decades – has something to tell us. As we pointed out last week, the Nipponese have been in decline for the last 20 years – with lower stock prices, falling real estate prices, and a falling GDP. Even the population has been sliding for the last five years
[Read more...]More Debt to Fight the Correction and Other Absurdities
August 11, 2010 By Leave a Comment
The big news yesterday was that the Fed decided to do about what we expected – not much.
Bloomberg has the report:
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.
[Read more...]The Role of Consumer Spending in Phony Economic Growth
July 19, 2010 By Leave a Comment
On Friday, everything went down. Well, almost everything. The Dow fell 261 points. Gold dropped $22. Copper. Oil. The dollar. You name it; it went down.
Unless you name US Treasury bonds – which were up!
What does this mean? Maybe nothing. But since it accords with the direction we think the markets ought to be taking, we'll say it's a trend. It's a Great Correction. Asset prices go down. Cash goes up.
[Read more...]US Economy Still Inching Toward a Japan-Like Slump
June 25, 2010 By Leave a Comment
Another week gone by! Another week closer to Tokyo!
The Dow dropped another 145 points yesterday. Gold rose $11.
Will stocks recover today? Or will they just keep going down?
We're not a soothsayer. We can't read the stars…or interpret the charts. Still, we don't mind taking a guess about the future from time to time. And don't bet on it, by the way…
[Read more...]Surrounded by Bursting Bubbles in the Land of Opportunity
June 17, 2010 By Leave a Comment
The Dow Jones Industrial Average added five points yesterday to close at 10,409 – almost exactly where it closed eleven years ago. Amidst giddy fanfare and high fives, the Dow closed above 10,000 for the very first time on March 29, 1999. One month later, amidst even giddier fanfare and high fives, the Dow closed above 11,000 for the very first time.
[Read more...]Investing in China Gets Contrarian
June 15, 2010 By Leave a Comment
An investment quiz to begin today's note. Two-part question:
1) Which country has more money to spend than any other?
2) Which nation currently represents the least-attractive investment environment? In other words, where is the one place a true contrarian would love – where no one wants to invest?
From Bailouts to Bubbles in a Government-Centric America
The Dow Jones Industrial Average tumbled 119 points yesterday because, according to Bloomberg News, Ben Bernanke “avoided offering new growth plans.” The Dow continued plummeting another 300+ points today because President Obama is not doing enough to “create jobs” and the European Central Bank is not doing enough to prevent a Greek default.
[Read more...]