With his toes in the sand and the cool waters of the Atlantic Ocean lapping gently at his feet, your editor can fairly say we have reached the end of our little Daily Reckoning Coast-to-Coast Correction Tour. So where to now for your Ho-Jo-hopping correspondent? Ahh, more on that below. First, some more important considerations…
[Read more...]Fed Vows to Maintain Public Financial Health
September 3, 2010 By Leave a Comment
Extend and pretend…
That's the government's way of handling the crisis. Extend credit and cash to those who don't deserve it. Then, pretend that everything is okay…
But the problems don't go away. They just get stretched into the future…
What did the feds do for GM? They took over the company. They extended cash and credit. They put in place a “Cash for Clunkers? program to encourage people to buy cars. Then, they pretended that the problems were solved.
[Read more...]Gold Speculation During the Great Correction
September 2, 2010 By Leave a Comment
Yesterday was a good day for stock market investors. Prices went up. The Dow rose 254 points, leaving us uncertain about its near-term intentions.
Of course, we're always uncertain. But sometimes we're more uncertain than others. What seems certain to us is that stocks are a bad bet.
You might find this interesting, dear reader:
[Read more...]Healthy Correction or Ailing Recovery?
August 31, 2010 By Leave a Comment
Bad day for stocks, yesterday. A bad day. Not a terrible day. Not a crash day. Just a bad day.
The Dow fell 140 points. This was baaaad…because it shows that the stock market does not really buy Bernanke's storyline.
You'll recall that when we left off last week, Ben Bernanke assured the world that while the recovery was not exactly what he had hoped for, he nevertheless had the situation in hand. He said he had the tools necessary to fix the problem and would do whatever was required.
[Read more...]Turning Against the Stock Market
August 24, 2010 By Leave a Comment
It still looks like the US stock market is rolling over. The Dow dropped another 39 points yesterday.
The Fed has already said it will leave its key interest rate at a very low level for a very long time. The US Treasury has already announced a budget with more than $1 trillion of fiscal stimulus in it. “Cash for clunkers? …first time homebuyer tax credits…TALF – the “recovery? programs have all pretty much run their courses.
[Read more...]Bonds vs. Tech Stocks for Bubble Supremacy
August 19, 2010 By Leave a Comment
Nothing much happened on Wall Street yesterday.
And there's not much in the press today. The Financial Times talks of mergers and acquisitions, Australia's upcoming elections, and South Africa's drift towards Zimbabwe.
The International Herald Tribune (the overseas version of The New York Times) is concerned with elections in Haiti, Iraq bombings, and China's banking system.
[Read more...]Boomer Consumers Reduce Spending. Economy Exhales.
August 17, 2010 By Leave a Comment
What were they doing down by the pond?
The Dow was flat yesterday. Gold rose $9 to $1,226.
Has the dip in gold already come and gone?
We were expecting lower stock prices…and lower gold prices too. Both went down earlier in the summer. But neither went down as much as we expected…nor stayed down.
[Read more...]
Why the Feds Are Desperate to Avoid an Economic Correction
Whoa! This is getting interesting.
Two major central banks are tightening – China and the ECB.
But nobody seems to care. These central banks are warning investors to sell their high-risk investments. Instead, gold hits new records! The dollar is at a 15-month low. And oil moves up to $125 a barrel.
[Read more...]