July, 2012 European Strategy Tour

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Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy lunches and seminars, which I will be conducting in Europe during July, 2012. A PowerPoint presentation will be followed by an open discussion on the crucial issues facing investors today. I’ll be giving you my up to date view on stocks, bonds, foreign currencies, commodities, precious metals, and real … [Read more...]

Don’t Miss the July 3 Global Strategy Webinar

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My next global strategy webinar will be held on Tuesday, July 3 at 12:00 noon EST. This webinar will be broadcast live from New York City, provided that the technology works and the 19th century wireless is fast enough. I’ll be giving you my updated outlook on stocks, bonds, commodities, currencies, precious metal, and real estate. The goal is to find the cheapest assets in the … [Read more...]

I’m Heading Off to Europe

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My tuxes are packed, the hotels are booked, and the limo is waiting outside. The Lear jet is fully fueled up and waiting for me at nearby Buchanan Field, the flight plan already filed. I am taking off for Europe today for a mix of business and pleasure. Along the way I will be meeting with other hedge fund managers, senior government officials, CEO’s at major banks and … [Read more...]

Be Careful Who You Snitch On

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Buried in the recently passed Dodd-Frank financial reform bill are massive financial rewards for turning in your crooked boss. The SEC is hoping that multimillion dollar rewards amounting to 10%-30% of sanction amounts will drive a stampede of whistleblowers to their doors with evidence of malfeasance and fraud by their employers. If such rules were in place at the time of … [Read more...]

Take Tata Motors Out for a Spin

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Every day, when considering what to write about, I tell myself that I'm not singing enough praises about India. Then events demand that a topic more urgent be thrust upon these august pages. This is a major omission on my part, as friends, like Morgan Stanley Asia's chairman Stephen Roach, believe that India will far and away outperform China over the coming decade. So today … [Read more...]

The Multiples Myth

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I am getting tired of the endless procession of permabulls who keep insisting that at a 15 times multiple, the S&P 500 is cheap. The last time I heard this was in 2000, when NASDAQ multiples went from 100 to 50, on their way to 10. Before that, it was in Japan in 1990, when multiples went from, guess what, 100 to 50 on their way to 15. Some 20 years later, Japanese … [Read more...]

Could You Still Qualify to Become a US Citizen?

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The coming Fourth of July celebration brings back memories of my late wife’s campaign to become an American citizen, who originally came from Japan. Part of the process required a verbal quiz about US history and government. Our family spent a year energetically prepping her, with nightly grillings over dinner about the finest details of our independent form of government. … [Read more...]

Obama’s Unintended Oil Consequences

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Back in March, oil broke the $110/barrel level and gasoline was rapidly approaching the $5/gallon level, threatening to derail Obama’s reelection campaign. The administration enlisted Europe to join it in a boycott of Iranian oil in an effort to get the Islamic republic to retreat from is program to develop a nuclear weapon. Iranian president, Mahmoud Ahmadinejad, responded by … [Read more...]

My Update on India

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The great thing about running an online newsletter is that it is not only self-correcting, it is self-enhancing. Whenever I make a mistake or state a factual error, my inbox catches on fire when corrections, additional data, and chastisements. Ditto when I exclude some key points to bolster my own arguments. So I thought I would publish a letter I received from a reader from … [Read more...]

Sold Out! Last Chance to Attend the Chicago Strategy Luncheon This Friday, June 29th!!

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Come join me for lunch for the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in Chicago on Friday, June 29, 2012. A three course lunch will be followed by a PowerPoint presentation and an extended question and answer period. I’ll be giving you my up to date view on stocks, bonds, foreign currencies, commodities, precious metals, and real estate. … [Read more...]

The Long View of the US Economy

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The retirement of the baby boomers, and the reduced numbers and frugal spending patterns of Generation X, are not only bad news for the real estate market for the next 20 years, they are going to be a huge drag on the economy as a whole. The distinguished economist, Robert J. Gordon, of Northwestern University in Chicago, argues that we are entering the slowest growth period … [Read more...]

India is Catching Up With China

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When I first visited Calcutta in 1976, more than 800,000 people were sleeping on the sidewalks, I was hauled everywhere by a very lean, barefoot rickshaw driver, and drinking the water out of a tap was tantamount to committing suicide. Some 36 years later, and the subcontinent is poised to overtake China's white hot growth rate. My friends at the International Monetary Fund … [Read more...]

A Conversation With the Boots on the Ground

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I have spent many hours speaking at length with the generals who are running our wars in the Middle East, like David Petraeus, and James E. Cartwright. To get the boots on the ground view, I attended the graduation of a friend at the Defense Language Institute in Monterey, California, the world's preeminent language training facility. As I circulated at the reception at the … [Read more...]

Why I Am Chopping My US GDP Forecast to 1.5%

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For the past two years, I have maintained a GDP growth forecast for the US of 2% a year. I have not stuck with this figure because I am stubborn, obstinate, or too lazy to update my analysis of the future of the world’s largest economy. I have kept this number nailed to the mast because it has been right. I have watched other far more august institution with vastly more … [Read more...]

Here’s Your Second Chance to Sell in May

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It was 3:30 am when one of my old staffers from Morgan Stanley in London called. He was now running a proprietary trading desk at Goldman Sachs, and I didn’t think he was rousing me out of a dead sleep to reminisce about the good old days. He told me that the firm’s research department was issuing a call to sell the S&P 500 up here at 1,360 immediately and they were calling … [Read more...]

Get Your New Global Trading Dispatch Password

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Paid up subscribers to Global Trading Dispatch and the Diary of a Mad Hedge Fund Trader newsletter are entitled to a password that gives them access to my premium content. Without it you will be unable to access the best parts of the new website, including my daily real time trading portfolio, trade alert tutorial and user’s manual, my Review of 2011, 2012 Outlook, and live … [Read more...]

Trade Alert Service Blasts to New All Time High

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Global Trading Dispatch’s Trade Alert Service posted a new all-time high yesterday, clocking a 48% return since inception. That takes the average annualized return up to 30.3%, ranking it among the top five performing hedge funds in the world. Those happy subscribers who bought my service in early May reaped an instant 35% profit following my advice. I really nailed the top … [Read more...]

No Fed Action Disappoints QE Bulls

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It’s always nice when intelligent people agree with you. That was my feeling after the Federal Reserve gave notice today that it was downgrading its forecast of US economic growth for 2012 from 2.6% to 2.15%. That is a major step down from the 3% and higher predictions they were hanging on to earlier. The news came in the written statement that followed the Fed’s somewhat … [Read more...]

A Day in the Life of the Mad Hedge Fund Trader

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Diary Entry for Monday, June 18, 2012 Dear Diary, 4:30 PM Sunday- Looks like my Monday is going to start early this week. One of my Athens readers e-mailed me that New Democracy was a slam dunk to win the election and would form a right of center, pro bailout, pro Euro (FXE) coalition government. Looks like it is going to mean a “RISK ON” week. US Treasuries nosedive … [Read more...]

June 20, 2012 – Quote of the Day

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“Now, you are starting to see people front run hedge fund books. People are front running John Paulson’s book. Everybody can see this. People are starting to line up the ducks and ask which hedge funds are going to have redemptions. Which position should I get in front of? Gold is a big problem in that environment. Guess what? The biggest position in the hedge fund community is … [Read more...]

Gold is Making a Comeback

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One of my best calls of the year was to plead with readers to avoid gold like the plague, periodically dipping in on the short side only. The barbarous relic has been in a bear market since it peaked at $1,922 an ounce at the end of August last year. Gold shares have fared much worse, with lead stock Barrack Gold (ABX) dropping 36% since then and the gold miners ETF (GDX) … [Read more...]

Greek Conservative Win Sends Shorts Fleeing

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The victory of the centrist pro bailout New Democracy Party in the Sunday Greek elections sparked a furious rally in the overnight Asian markets, much of it driven by hedge fund short covering. The socialist, anti-bailout parties went down in flames. As I write this on Sunday night, the Dow futures are trading up 78 points from the Friday close and the Japanese yen is in … [Read more...]

The New Deflation Definition

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It seems that all you hear about these days is deflation. That is certainly what the bond market is telling us, with my screen blaring at me a miserable 1.58% yield for the ten year Treasury bond. But there is a new definition for this economic malady that applies to we hapless consumers. In the new deflation, the value of our income falls, while the prices of things we need … [Read more...]

Be Careful What You Wish For

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The wild whipsaw movements in the markets on Thursday reminded us once again how dependent they have become on monetary stimulus from central banks. As if we needed reminding. Almost simultaneously, officials from the US, Japan and the UK hinted at a coordinated move at this weekend’s G-20 meeting in Cabo San Lucas, Mexico. Let’s hope for the sake of global financial … [Read more...]

Don’t Miss the June 20 Global Strategy Webinar

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My next global strategy webinar will be held on Wednesday, June 20 at 12:00 noon EST. I’ll be giving you my updated outlook on stocks, bonds, commodities, currencies, precious metal, and real estate. The goal is to find the cheapest assets in the world to buy, the most expensive to sell short, and the appropriate securities with which to take positions. I will also be opining … [Read more...]

June 15, 2012 – Quote of the Day

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“This is not 2008 or 2009. People are getting overblown with this hysteria. We are only 10% off the highs and have only given back gains. It’s like your wife may have been expecting diamond earrings and now she got a blender,” said Alan Knuckman, chief trading advisor at onestopoption.com. … [Read more...]

The Nationalization of the Bond Market

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I was as stunned as anyone when the yield on the ten year Treasury bond (TLT), (TBT) plummeted to 1.42% two weeks ago. Predictions that long dated government paper would reach subterranean Japanese levels, considered loony as recently as a few months ago, are now donning the mantle of respectability, and even plausibility. Where will this end? With yields at 1.25%, 1%? … [Read more...]

Revisiting the First Silver Bubble

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With smoke still rising from the ruins of the recent silver crash, I thought I’d touch base with a wizened and grizzled old veteran who still remembered the last time a bubble popped for the white metal. That would be Mike Robertson, who runs Robertson Wealth Management, one of the largest and most successful registered investment advisors in the country (click here for his … [Read more...]

How to Avoid Ponzi Schemes

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I spent a sad and depressing, but highly instructional evening with Dr. Stephen Greenspan, who lost most of his personal fortune with Bernie Madoff. The University of Connecticut psychology professor poured the bulk of his savings into Sandra Mansky’s Tremont feeder fund; receiving convincing trade confirms and rock solid custody statements from the Bank of New York. This is … [Read more...]

Shenanigans in Switzerland

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Since I am an avid collector of investment scam stories, I’ve got to update you on what’s been coming out of Switzerland. Two Japanese nationals were caught smuggling $134 billion in US Treasury bonds from Switzerland to Italy in a false bottom suitcase. No, that is not a typo, that is “b” for billion. The two were mysteriously let go the next day. The blogosphere is … [Read more...]

An Evening With Bill Gates, Sr

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I had a chat with Bill Gates, Sr. last night, co-chairman of the Bill and Melinda Gates Foundation, the world’s largest private philanthropic organization. There, a staff of 800 help him manage $30 billion. The foundation will give away $3.1 billion this year, a 10% increase over last year. Some $1.5 billion will go to emerging nation health care, and another $750 million to … [Read more...]

The One Bright Spot in Real Estate

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After my regular dump on residential real estate, I feel obliged to reveal one corner of this beleaguered market that might actually make sense. By 2050 the population of California will soar from 37 million to 50 million, and that of the US from 300 million to 400 million, according to data released by the US Census Bureau and the CIA fact Book (check out the population … [Read more...]

The Ultra Bull Argument for Gold

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I am constantly barraged with emails from gold bugs who passionately argue that their beloved metal is trading at a tiny fraction of its true value, and that the barbaric relic is really worth $5,000, $10,000, or even $50,000 an ounce (GLD). They claim the move in the yellow metal we saw in recent years is only the beginning of a 30 fold rise in prices similar to what occurred … [Read more...]

An Evening With Hillary Clinton

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When Secretary of State Hillary Rodham Clinton passed through San Francisco last week I jumped at the chance to get an up to date overview on American foreign policy. The former first lady was making a brief San Francisco stop on her way to meet leaders on an extended Asian tour. She showed up wearing one of her trademark charcoal pantsuits and a subdued gold necklace, her … [Read more...]

The Next China Boom

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The call was scratchy and barely audible. I was instructed to not mention any names. I should only use the prearranged code words when talking about political parties. You never know when the phones in China are tapped. I was just about to get a heads up that the People’s Bank of China was going to lower interest rates for the first time in four years. Of course, we knew … [Read more...]

Sold Out! Come Join Me For The Beverly Hills June 11, 2012 Strategy Seminar!

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Come join me for the Mad Hedge Fund Trader’s Global Strategy Seminar, which I will be conducting in Beverly Hills at 2:00 PM on Monday, June 11, 2012. A PowerPoint presentation will be followed by an open discussion on the crucial issues facing investors today. Coffee and snacks will be made available, but no food. I’ll be giving you my up to date view on stocks, bonds, … [Read more...]

Ben Bernanke Will Say Nothing on Thursday

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All eyes will be focused on Federal Reserve Chairman, Ben Bernanke, on Thursday looking for any hints that further quantitative easing is on the way. Don’t get your hopes up. I don’t expect the esteemed former Princeton professor to conveniently tip his hand. At the most he might make a reference to “keeping all options open,” and that is it. The Fed’s Beige Book was … [Read more...]

The Mystery of the Government Windfall

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I heard a fascinating story from my friends at the US Treasury the other day. Even though unemployment is high, personal tax refunds were plummeting and tax revenues were soaring. What was even more puzzling was that the states with the worst unemployment rates, like California, Nevada, and Florida were seeing the heftiest increases. Weren’t elevated jobless rates supposed to … [Read more...]

Don’t Miss the June 6 Global Strategy Webinar

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My next global strategy webinar will be held on Wednesday, June 6 at 12:00 noon EST. I’ll be giving you my updated outlook on stocks, bonds, commodities, currencies, precious metal, and real estate. The goal is to find the cheapest assets in the world to buy, the most expensive to sell short, and the appropriate securities with which to take positions. I will also be opining on … [Read more...]

Reach for Yield With Master Limited Partnerships

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The dramatic collapse in the price of oil is creating a rare opportunity to get into some of the highest yielding paper in the financial markets, master limited partnerships (MLP)’s. These are LP’s that are publicly traded on a securities exchanges. These unique and versatile instruments combine the tax benefits of a limited partnership with the liquidity of publicly traded … [Read more...]

Watch the ‘Grapes of Wrath’ Replay in California

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It’s another sign of the times when the weekend fruit picker population is doubled by people hard hit by the economy, looking to save money on food costs. After driving through miles of undulating brown hills studded with oak trees, passing mile upon mile of horse ranches, rusted out cars, and abandoned mobile homes, you come to bucolic Brentwood, the fruit capital of … [Read more...]

Trade Alert Service Racks up Record 20.5% Month in May

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The Mad hedge Fund Trader’s Trade Alert Service posted a 20.5% gain in May, the best monthly performance since its 2010 inception. The 28 trade alerts I sent out during the month also set a new record. That takes the average annualized return up to 22.8%. During the same period, the S&P 500 gained a paltry 10%. This was in a month rated one of the third or fourth most … [Read more...]

Tea With Nancy Pelosi

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Walking through the Capital dome on my way to the House the Representatives, I couldn’t help but sense the presence of ghosts of friends from decades past. There was Tip O’Neill with his ever-present scowl. Ted Kennedy was hurrying off to another meeting, barking orders in his peculiar Boston accent. Mike Mansfield was maintaining his ever aloof and professorial … [Read more...]

Nonfarm Bombshell Sends Markets Scampering

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Say goodbye to 2012. That was the harsh conclusion of the marketplace after the release of the devastating May nonfarm report that forced the Dow to give up its entire year to date performance. The cat was really set among the pigeons this morning when the Department of Labor informed us that only 69,000 jobs were gained in the previous month. The unemployment rate ratcheted … [Read more...]