Global Market Commentary, Analysis and Investments
Prepare for the worst; hope for the best…
Gold, stocks, oil…little movement yesterday.
Michelle Bachman decided to drop out of the race for the White House. Pundits, pollsters, and gamblers predict that Romney will be the Republican’s man.
Iran told the US to get out of the Strait of Hormuz. “And don’t come back,” it added. Apparently, investors are betting that the threat wasn’t serious.
[Read more...]The euro (EUR) sure enjoyed a better night rebounding from close to its annual low versus the US dollar. A surprisingly upbeat IFO business climate index combined with a pledge of more funds for the bailout and a positive Spanish auction to send the common currency higher. The IFO Institute’s index, based on a survey of 7,000 German business executives, rose to a three-month high of 107.2 from 106.6 in November. Economists had expected the index to drop to 106. November’s number had surprised on the upside also, so this month’s value certainly seems to confirm a trend that indicates Germany’s economy may be able to push through the credit crisis to remain on a solid growth path.
[Read more...]Not much to report from yesterday. Dow up 78 points. Gold bouncing around.
All eyes are on Europe. If the Europeans can pull off a save…well, we’re all saved. At least for a few weeks. Maybe through the holiday season.
The euro has been remarkably stable. It has never collapsed — despite all the talk of Europe falling apart. Apparently, people with money don’t think it is in real danger. They think it is too important to let go. They may be right. And the more people talk about the ‘end of Europe’ the more it doesn’t end. Instead of letting it go, the authorities become more and more stubborn in trying to hold it together.
[Read more...]Right out of the starter blocks this morning, we have news from Germany that’s not good. In fact it’s downright awful… No it’s not a weak data print… And it’s not more Eurozone downgrades… What it is, is something I’ve had nightmares about happening here in the US! OK… With no further beating around the bush… Germany failed to get sufficient bids at their auction this morning for 10-year bunds. 35% of the maximum sales target of 6 billion euros went unsold! Uh-oh! What’s the problem? Ahhh grasshopper… Germany was attempting to auction these bunds at 1.98%… The markets simply said, “We need a higher yield to buy”…
[Read more...]Italy seems to have gone too far. Its 10-year bonds yields are back over 7%. It is “the beginning of the end” say analysts.
But the end of what?
When the going is good people have little patience for questions. They are too busy, earning and spending, buying and selling, and getting where they are going. But then comes a major turnaround, all of a sudden, and they develop the deep torments of a retarded poet in an unhappy marriage.
[Read more...]Yesterday morning I told you that with the day being the last of the month, we could very well see some currency weakness, as traders square their books, and close out short positions in the dollar. And that’s exactly what I think we saw yesterday… The bias switched from dumping dollars to buying them, but not at breakneck speed, just a gentle flow…
[Read more...]So hurricane Irene is over with, but it didn’t take long for economic commentators to make fools of themselves.
David Kotok is the chairman and chief investment officer of Cumberland Advisors. He was on the radio with Larry Kudlow, who asked him about the economic impact of Irene. Kudlow noted how Irene tracked over 1/10th of the nation’s economic output. Here is Kotok writing about it to his investors afterward about Cumberland’s response:
[Read more...]Gold turned the table around yesterday, and instead of being on the chopping block, it was being added to, as the shiny metal rallied. It was pretty incredible to watch, given that gold was down $50 when it turned around to post a $15 gain… It almost erased the previous day’s $77 drop… But the shiny metal is still down on the week, by a lot! I was stopped in the kitchen here, by the darling Danielle, who wanted my opinion on her gold holding… I asked her if she had bought gold as a “trading asset” or a “protection asset”… For if you want to “trade gold” you should buy the ETF… Otherwise, holding physical gold means you are looking to retain a store of wealth, and “corrections” like gold was going through, shouldn’t mean a hill of beans, unless of course, someone is looking to buy more at the new cheaper price! Satisfied, she went back to work, and so did I!
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It May Take a Dragon to Breathe Fire Into Markets
At the Cambridge House’s Vancouver Resource Investment Conference this week, I am part of a special debate on whether China will boom or bust with bestselling author Gordon G. Chang. The title of Chang’s book, The Coming Collapse of China, states his position quite clearly and I look forward to the intellectual challenge of convincing him otherwise.
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