Global Market Commentary, Analysis and Investments
Cash is king.
Ai yi yi…
Last week was the worst for investors in 3 years. Even gold melted down, as we thought it eventually would.
The only things to go up were US Treasury debt and the dollar. As expected, the Great Correction is doing its work.
So far, the stock market has held up as well as it has. But now it seems to be selling off. And gold is selling off too.
[Read more...]First, a brief look at the markets…
Stocks rallied a bit yesterday, reversing a sharp selloff from the previous day. The Dow added 65 points. The S&P 500 ended up a smidge and the NASDAQ finished 40 points ahead of where it began the session. Gold fell off by almost $25…before recouping all of its losses to end the day more or less where it began, at $1,506 per ounce. Silver trended likewise. As did oil.
[Read more...]“High oil prices start to apply the brake on drivers,” says a headline in The Financial Times.
As predicted, the feds’ easy money policies are turning into hard times for the middle and lower classes. Oil prices have gone up with the Fed’s balance sheet. For every dollar the Fed added, the price of oil ticked up too.
[Read more...]The Great Correction intensifies…
The Dow rose on Friday. The dollar fell. Gold is back over $1,400. And the euro – the world’s most despised currency – is back over $1.40.
A chart circulates, supposedly proving that GDP is now back to where it was in ’07, after falling only 4% in the downturn.
[Read more...]What a day the currencies had yesterday! The euro (EUR) gained ground all the way back to 1.3730 (but saw some profit taking at the end of the day) and all the other currencies followed in step… Now… Theres two ways to look at this… Either the euro is like a star thats getting ready to burn out… (It always shines brightest before it burns out), or… Its like a star that had been covered up by another planet, and is coming back into view!
[Read more...]The Chinese economy must be getting out of control, because the Chinese government is doing the unthinkable: It is desperately trying to put the brakes on the economy. When you pump a stimulus package that represents 14% of GDP through a fire hose into an economy, which was already on shaky bubble foundation, in a very short time youll have some serious unintended consequences — youll get super bubbles. ?
[Read more...]What a delight it would be to have some inflation! Yes, dear reader, thats the real reason that fiscal stimulus appears to work. That is, thats the reason inflation can sometimes boost employment. It creates inflation. And inflation lowers wages. Lower wages make it cheaper to hire people. And they make US output more competitive on the world market so exports tend to increase.
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Changing Views on Growth and Economic Recovery
What’s new?
When we signed off last week, the Germans and the French were trying to hold Europe together. This morning, they are still trying.
“Don’t you live in Europe?” asked a friend at a party over the weekend.
“Yes…much of the time.”
“Well, maybe you can tell me what is going on with this European debt crisis?”
[Read more...]