The Death of the Mutual Fund

turkey

ETF's are much more attractive than mutual fund competitors, with their notoriously bloated expenses and spendthrift marketing costs. You can't miss those glitzy, overproduced, big budget ads on TV for a multitude of mutual fund families. You know, the ones with the senior couple holding hands walking down the beach into the sunset, the raging bulls, etc? You are the sucker who … [Read more...]

Coal’s Hatchet Job on Natural Gas

Psycho_Shower_Scene

After my year in the White House Press Corps, I vowed never to return, and took a really long shower, hoping to scrub every last spec of prejudice, self-interest, and institutionalized dishonesty off of my battered carcass. But sometimes I see some maneuvering that is so unprincipled, crooked, and against the national interest that I am unable to restrain my fingers from the … [Read more...]

The “New Normal” Calls for a Lower Market Multiple

bull2

I am getting tired of the endless procession of perma bulls who keep insisting that, at a 14 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 10. Some 20 years later, Japanese … [Read more...]

The Final Word on the Volatility Index

tiger-swimming-2

The inside story on the collapse of volatility is now out, and as a result, managers are reviewing the harsh lessons learned and tweaking their strategies. It highlights the dangers of buying securities without reading the prospectus and understanding what is under the hood. As investors piled into stocks in February, they also bought downside protection in the form of the … [Read more...]

Dinner With Nobel Prize Winner Dr. Joseph Stiglitz

stiglitz

The great thing about interviewing Joseph Stiglitz over dinner is that you don’t have to ask any questions. You just turn him on and he spits out one zinger after another. And he does this in a kibitzing, wizened, grandfatherly manner like one would expect from a character that just walked off the set of Fiddler on the Roof. The unfortunate thing is that you also don’t get to … [Read more...]

Will Hedge Funds Ruin the Real Estate Market?

house_burning

Still missing in action from this economic recovery has been the residential real estate market. Everyone who is in the business of selling me a new home assures me that we have hit bottom and things are getting better, including the home builders, real estate agents, and countless local chambers of commerce. Look no further than home builder Lennar (LEN), which had more than … [Read more...]

Buy Toyota Motors as a Cheap Yen Play

toyota2

Looking for beneficiaries of the coming collapse of the Japanese yen (FXY), (YCS), Toyota Motors (TM) has to be at the very top of your list. A cheaper domestic currency brings a lower cost of production, high foreign sales proceeds, and wider profit margins all the way around. I am probably the only person in the country who once worked for Toyota, speaks Japanese, and … [Read more...]

Webinar Reminder for Wednesday, March 28

Overworked2-8

Paid subscribers to my Global Trading Dispatch Trade Alert Service are reminded that I will be conducting my next biweekly strategy webinar on Wednesday, March 28 at 12:00 noon EST. That’s when I give you my global take on the current state of play in stocks, bonds, commodities, foreign currencies, precious metals, and real estate. The picture is more muddled than usual … [Read more...]

Momentum is Building for the Yen Shorts.

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I’m hearing from my buddies in Japan that while things are already quite bad in that enchanting country, they are about to get a whole lot worse, and that it is time to start scaling into a major short in the yen. Australia and China have already raised interest rates, to be followed by the US, and eventually Europe. With its economy enfeebled, the prospects of Japan raising … [Read more...]

March 27, 2012 – Quote of the Day

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‘Rupert Murdoch is very smart and is a great leader, but he’s made a mistake. He’s buried in ink, and in my view, there won’t be any newspaper business ten years from now. Fortunately, we’re buried in television and movies, and they’ll be here forever,’ said Sumner Redstone, chairman of Viacom and CBS. … [Read more...]

An Evening With “Government Motors”

GM-CEO-Dan-Akerson-1

Long term readers of this letter are well aware of my antipathy towards General Motors (GM). For decades, the company turned a blind ear to customer complaints about shoddy, uncompetitive products, arcane management practices, entitled dealers, and a totally inward looking view of the world that was rapidly globalizing. It was like watching a close friend kill himself through … [Read more...]

America’s Rapidly Changing Mix

Betty_Crocker

Since I am in the long term forecasting business, it was with some fascination that I caught the Associated Press report that minority children born this year may exceed Caucasian children for the first time. Whites lost their majority in San Francisco many years ago, and will do so in California as a whole in the near future. The report said that the US will have a … [Read more...]

March 26, 2012 – Quote of the Day

warren-buffett-1

“To ask other people to be making sacrifices on taxes during this period, and we are going to ask them to make sacrifices on the revenue side and the expenditure side, and to leave the top income group alone, is a travesty,” said Berkshire Hathaway’s Warren Buffet. … [Read more...]

Volatility Melt Down Continues

roller_coaster2

The market was buzzing today about the continued collapse of volatility and the significance thereof today. Today the chief whipping boy was the double leveraged Velocity Shares 2X Vix ETF (TVIX), which cratered 33% on the day, and down 90% from its October high. This was on a day when the ETF should have gone through the roof, with the Dow down 100 points and a rapidly … [Read more...]

Decoding What’s in Your Pocket

DOLLAR

If you want to impress your friends with your vast knowledge of financial matters, then here are the Latin translations of the script on the backside of a US dollar bill. “ANNUIT COEPTIS” means “God has favored our undertaking.” “NOVUS ORDO SECLORUM” translates into “A new order has begun.” The Roman numerals at the base of the pyramid are “1776.” The better known “E … [Read more...]

A Century Forecast on Emerging Markets

emereg

I love making very long term forecasts, because they give tremendous insights into the future of the global economy, and because at my advanced age, I won’t live long enough to see if I am right or wrong. Check out the chart below which shows predicted GDP growth rates for a 100 year period from 1950 to 2050. It shows why you should be infatuated with emerging markets (EEM) … [Read more...]

Buy Indonesia on the Dip

bali

If you are looking for another emerging market to add to your list of things to buy on big dips, then take a look at Indonesia. The world’s largest Muslim country offers a combination that I love, a population with great demographics that is also a major energy and commodities exporter. The archipelago is the biggest country in Southeast Asia and a huge exporter of oil and … [Read more...]

What’s Going on With the VXX?

0 R

Much of Wall Street was scratching their heads yesterday as the iPath S&P 500 Vix Short Term Futures ETN (VXX) plunged to new lifetime lows despite a 69 point decline in the Dow index. It wasn’t supposed to work that way. Falling markets should send investors scrambling to buy downside protection in the form of put options which would automatically send the volatility index … [Read more...]

The Fusion in Your Future

IGNITION

Expect to hear a lot about ignition in the next year. No, I don’t mean the rebuilt ignition for the beat up ’68 Cadillac El Dorado up on blocks in your front yard. I’m referring to the inauguration of the National Ignition Facility next door to me at Lawrence Livermore National Labs in Livermore, California. Mention California to most people, and images of love beads, tie … [Read more...]

Connecting Up America

SOLAR-1

Until now, the country’s power grid has been divided into three unconnected chunks, making transnational transmission impossible, leading to huge regional mispricing. While California and New York suffered from brown outs and sky high prices, electricity was given away virtually for free in Texas. A group of power companies is now proposing to build the $1 billion Tres … [Read more...]

Sign Up Now for Text Messaging of Trade Alerts

Overworked2-20

Paid subscribers are now able to receive instantaneous text messages of my proprietary Trade Alerts. This eliminates frustrating delays caused by traffic surges on the Internet itself and by your local server. To activate your free service, please log in to your account at www.madhedgefundtrader.com, look under your name on the right, and click on the blue hyperlink that … [Read more...]

An Evening With James Baker III

mush

“We have 3,500 nuclear weapons left over from the cold war we don’t need, they take 20 seconds to re-aim, we’re not afraid to use them. And by the way, they’re already aimed at you.” That is the approach James Baker III thinks America should take with Iran, Ronald Reagan’s Chief of Staff and Secretary of the Treasury and George H.W. Bush’s Secretary of State. At the same … [Read more...]

March 21, 2012 – Quote of the Day

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“I suspect the analysts who follow Apple are great people and are nice to their mothers. But as a group those people missed the last quarter by 40%, so I’m not listening to them. The stock is a trading sardine for a while. It’s a high beta stock which is leveraged to the market which is over extended. So I don’t see a hell of a lot of alpha until we get the next significant … [Read more...]

Time to Pick up Some (TBT)

tbt-18

This is the year of the one way move. That has been the harsh lesson of the marketplace since trading commenced at the New Year. We have seen this in Apple, the S&P 500, the Japanese yen, bank shares, natural gas, the volatility index, and now it looks like the Treasury bond market. Once a move starts, it continues in a straight line. There are no pull backs, … [Read more...]

Good News on MF Global

LossofConfidence

I received an email from the MF Global bankruptcy trustee this morning indicating that they would be returning another $685 million to customers. Of this amount, $600 million will go to customers who traded on US exchanges, $50 million to those who traded on foreign exchanges, and $35 million who were holders of physical metals. That would enable them to increase their payout … [Read more...]

An Apple Dividend at Last!

apple-dollars

After a 15 year hiatus, Apple (AAPL) has restored its dividend, announcing a 2% annual yield that exactly matches the average for the rest of the S&P 500. It also announced a $10 billion share buyback. The only thing missing that the cheerleaders were hoping for was a 10:1 share split. The move now makes Apple eligible to buy for the 40% of US institutions that don’t own … [Read more...]

Investors Will Win the ETF Price War

canibal-1

Many hedge fund traders are unhappy about the current near monopoly enjoyed by the top three ETF issuers, Black Rock, State Street, and Vanguard, which control 83% of the market. At last count more than 1,100 ETF's were capitalized at more than $1 trillion. The result has been grasping management fees, exorbitant expense ratios, and poor structural designs which create massive … [Read more...]

Is an Apple Short the Trade of the Year?

Apple-Logo-Tattoo-Collection-1

When Apple (AAPL) made its three day, $50 move up last week, it created $55 billion in new market capitalization. That 72 hour addition alone would rank it as the 100th largest company in the world besides Boeing (BA), Union Pacific Railroad (UNP), and Nike (NKE). Trading volume in Apple calls is has smashed all records. The action has been more frenzied than seen in any single … [Read more...]

Watch Out for the Millennial Voter

mill

I have been banging the table for years now about the importance of demographic trends for the economy, the financial markets, and the housing market. Well, politics is no different. According to recent surveys, Millennials, who are now aged 19-30 (I have three of them) are suspicious of government, have a strong anti-business bias, are opposed to new regulation, are highly … [Read more...]

The New Carry Trade

tuxedo74

Long the domain of hedge funds and large banks, the carry trade has gone mainstream. Individual investors are increasingly resorting to the techniques employed by the masters of the universe to boost trading and investment returns. But they lack the risk control infrastructure and discipline employed by the big boys. As with other innovations of yore, the net result has been … [Read more...]

Conspiracy Theory of the Day

trade

A confidential report from the Pentagon just made public says that the 2008 financial crisis was the result of targeted attacks by terrorists groups. A ramp up of oil prices that began in 2007 led to the bear raids against Bear Stearns and Lehman Brothers in 2008. The final phase may be in place now, forcing the US to engage in massive and unsustainable borrowing to cope with … [Read more...]

Why Warren Buffet Hates Gold

coins1png

The 'Oracle of Omaha' expounded at length today on why he despises the barbarous relic. The sage doesn't really care about the yellow metal, whatever the price. He sees it primarily as a bet on fear. If investors are more afraid in a year than they are today, then you make money. If they aren't, then you lose money. If you took all the gold in the world, it would form a cube … [Read more...]

A Touchdown for USC

usc

One of my many alma maters, the University of Southern California announced that they had received their largest private donation in history. As a third generation alumni of this fanatical football factory (I went to school with Mark Harmon, Lynn Swan, and, oops, OJ Simpson), I still receive their alumni newsletter, where I learned the good news. David and Dana Dornsife gave … [Read more...]

Is the Fat Lady Singing for the Treasury Bond Market?

fat+lady+sings

With global quantitative easing now getting long in the tooth, I think the party is about to end for the Treasury bond market. For the last four months, this market has been stuck in a tedious, narrow range, with ten year paper stuck between a 1.90% - 2.10% yield. Trading bonds has been as exciting as watching paint dry, with only professionals able to engineer profitable round … [Read more...]

The Structural Bear Case for Treasury Bonds

piggy

If you want to delve into the case against the long term future of US Treasury bonds in all their darkness, take a look at Foreign Affairs, the establishment bimonthly journal read by academics, intelligence agencies, and politicians alike, which I am sure you all have sitting on your nightstands. In a well-researched and thought out article penned by Roger C. Altman and … [Read more...]

Updated 2012 Strategy Luncheon Schedule

matterhorn-Copy2-1

Due to overwhelming demand, I have improved and expanded my 2012 schedule of strategy luncheons. The Phoenix lunch got moved to Scottsdale to access a more stylish hotel. The French said they would start mailing me frog legs if I didn’t come to France, so my European Tour now includes a Paris lunch. The Swiss threatened to they would cancel my invitation to the Davos … [Read more...]

US Headed Towards Energy Independence

bakken-formation-map

My inbox was clogged with responses to my “Golden Age” for the 2020’s piece yesterday, particularly my forecast that the US was moving towards complete energy independence. This will be the most important change to the global economy for the next 20 years. So I shall go into more depth. The energy research house, Raymond James, put out an estimate this morning that domestic … [Read more...]

The Chinese Yuan Takes a Hit

cars-in-Wuhan-china-008

Long time readers of this letter are well aware of my advice to hold cash in the Chinese Yuan ETF (CYB) for the past four years. Those who followed my advice profited nicely. The Yuan to you and me is known domestically in China as the “renminbi”, or people’s currency. China has a quasi-fixed exchange rate against the US dollar that limits movement to just a couple of … [Read more...]

Get Ready for the Next Golden Age

thunderbird_1

I believe that the global economy is setting up for a new golden age reminiscent of the one the United States enjoyed during the 1950’s, and which I still remember fondly. This is not some pie in the sky prediction. It simply assumes a continuation of existing trends in demographics, technology, and economics. The implications for your investment portfolio will be huge. What … [Read more...]

Here Comes the Rolling Top

gorilla-Copy2

The S&P 500 is now at 1,370, and most strategist forecasts for 2012 hover around 1,400, plus or minus some spare change. So the next nine months are going to be incredibly boring. Or they won’t. Even in a bull market, one expects to see pullbacks of at least one third of the recent gain. Apply that logic towards the 317 points the (SPX) has tacked on since the October … [Read more...]

A Different View of the US

USStates10

My mother lives in Pakistan, my daughter in Greece, and I have a ski chalet in in Peru. What's more, I have strategy luncheons planned for Australia, Thailand, and Turkey. At least these would be my conclusions after looking at a map prepared by my esteemed former employer, The Economist magazine, of the United States, renaming each state with its international equivalent in … [Read more...]

More Economic Data Is Turning Mixed

388830-hit_nbsp_urself_head_w_hammer

We received another raft of data this morning confirming my suspicion that the economic data is slowly turning over from modestly positive to mixed. The Challenger, Grey, & Christmas report showed that there were 51,758 job cuts in February, down 3% from January. But the first two months of 2012 revealed that layoffs announced by private companies are up 18% YOY. … [Read more...]

When Sterilization is Not a Form of Birth Control

birth_control_pill_package

I received a flurry of inquires the other day when Ben Bernanke mention the word “sterilization” in his recent congressional testimony. And he wasn’t giving advice to the country’s wayward teenaged girls, either. Sterilization refers to a specific style of monetary policy. Sterilized policies seek to manipulate the money markets without changing the overall money supply. The … [Read more...]

This Week, It’s All About Jobs

we-are-hiring

Don’t expect much market volatility until we get the February nonfarm payroll report on Friday at 8:30 EST. Consensus has them coming in at around 200,000. However, we may have just gotten a valuable preview to those figures. According to the Japanese broker, Nomura Securities, the ADP National Employment Report, a monthly analysis of the hiring trends of 344,000 private … [Read more...]

Take a Look at Cheniere Energy (LNG)

gas

I am constantly asked if there are any ways investors can take advantage of the collapse of the natural gas market, where at $2.34/MBTU prices are plumbing decade lows. I have recently made good money buying puts on the ETF (UNG), but these are not for the faint of heart. They call this contract the “widow maker” for a good reason. You don’t want to touch the gas producing … [Read more...]

The Reception That the Stars Fell Upon

mushroomcloud

My friend was having a hard time finding someone to attend a reception who was knowledgeable about financial markets, White House intrigue, international politics, and nuclear weapons. I asked who was coming. She said Reagan’s Treasury Secretary George Shultz, Clinton’s Defense Secretary William Perry, and Senate Armed Services Chairman Sam Nunn. I said I’d be there wearing … [Read more...]

Oil Isn’t What It Used to Be

horsedrwancar

Virtually every analyst has been puzzled by the seeming immunity of stock markets to soaring oil prices this year. In fact, stocks and crude have been tracking almost one to one on the upside. The charts below a friend at JP Morgan sent me a long way towards explaining this apparent dichotomy. The first shows the number of barrels of oil needed to generate a unit of GDP, … [Read more...]

Why I’m Covering My Bank Short

bac-14

I am going to use the weakness in Bank of America shares today to cover my short position through selling my existing position in the (BAC) May, 2012 $7 puts at $0.24 cents or best. There is such minimal volatility in the market these days that when a little bit comes along, you have to grab it with both hands. The poor performance of these puts illustrates well the general … [Read more...]

March 6, 2012 – Quote of the Day

hedge

“What’s very different today is that when dividend yields are much higher than interest rates, you don’t need as much earnings growth and capital gains to have a great investment,” said professor Jeremy Siegel at the University of Pennsylvania Wharton School of Business. … [Read more...]

Is Quantitative Easing Over?

The-Artist-Jean-Dujardin-e1314351354357

That is certainly the conclusion of the financial markets. When Federal Reserve chairman, Ben Bernanke, failed to mention the magic words in his House Humphrey Hawkins testimony on Wednesday, risk assets were sent into a tailspin. Gold suffered a $100 move plunge in hours, the futures market seeing an almost instantaneous liquidation of $1.3 billion worth of contracts. Silver … [Read more...]

Get Your New Password

Overworked2-8

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...]

Enough is Enough with Apple

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Everyone knows how much I love Apple shares as an investment. For years now, my report forecasting that the stock would hit $1,000 someday has been circulating inside the company for a sought after weekend read. Just today, my old friend, co-founder Steve Wozniak, was quoting from it in making his own $1,000 prediction. I know, because they email me all the time with further … [Read more...]

Buy Christmas Ornaments in January With the (VXX)

Vienna5551

I am a notorious seeker of great bargains. I buy sun hats in the winter, umbrellas in the summer, and Christmas ornaments in January when Costco sells them for ten cents on the dollar. I even go into the barrio to buy Japanese sake where no one knows what it is, and it is sometimes ordered by accident. I’ll tell you what I like about the (VXX). It is a bet that someday, … [Read more...]

The Looking Glass Market

alice

If you feel like this market has sucked you down a rabbit hole, you have plenty of company. I have never seen such a profusion of contrary cross market indicators. Traders are running up shares prices while companies are cutting earnings forecasts. Economists are raising GDP forecasts as rising energy prices are taking them the opposite direction. Natural gas is crashing as … [Read more...]

Taking a Bite Out of Stealth Inflation

girl-2

When I visited the local Safeway over the weekend, I was snared by some uniformed pre-teens, backed by beaming mothers behind a card table selling Girl Scout cookies. I was a pushover. I walked away with a bag of Thin Mints, Lemon Chalet Creams, Do-Si-Dos, and Tagalongs. I have to confess a lifetime addiction to Girl Scout cookies. During the early eighties, one of the … [Read more...]

It’s All About the Euro

10919726-broken-euro--finance-and-politics-in-europe

Wednesday will be all about the Euro. That is the day that the European Central Bank announces the result of the next tranche of its quantitative easing program, the LTRO, or Long Term Financial Reorganization policy. This is the program that allows European banks to borrow unlimited funds at 1% with no questions asked. This is very important for all asset prices worldwide, … [Read more...]

Check Out Obama’s Latest Stimulus Package

Obama-1

There is no limit to how far president Obama is willing to go to stimulate the economy and reassure his election. So I had to be amused when a friend sent me a link to his latest proposal. Warning: the source is a college humor website, so I would take it with so many grains of salt. For a good laugh, click here. Fellow writers should be prepared for the worst. The economy will … [Read more...]

February 29, 2012 – Quote of the Day

tennis

I don’t know that the retail investor matters anymore. They didn’t come back to the market after the 2000 crash. The idea that the individual investor believes in the stock market now is challenged. We have a market that is increasingly institutional investors trading back and forth with each other”, said Dan Greenhouse, chief global strategist at BTIG. … [Read more...]

Tesla Leaps Into the Future With Its New Model X

full40

Elon Musk certainly came up with a winner with his unveiling of Tesla’s Model X on February 9. When I first heard the specifications of Tesla’s new Model X, I was floored. The all- electric vehicle offers four wheel drive. It has spacious seating for seven. It accelerates from zero to 60 miles per hour in 4.4 seconds, a faster jackrabbit sprint than you’ll find in a Porsche … [Read more...]

Rampant Wage Inflation Strikes China

china-2

I rely on hundreds of 'moles' around the world whose job it is to watch a single, but important indicator for the world economy. One of them checks for me the want ads in the manufacturing mega city of Shensen, China, and what he told me last week was alarming. Wage demands by Chinese workers have been skyrocketing this year. The biggest increases have been at the low end of … [Read more...]

Coincident Economic Data Says Market is Topping

fat-1

This is one of the most bizarre markets I have ever seen. The worse the economic outlook gets, the higher the market goes. But it doesn’t breathe like a normal market, with plenty of corrections along the way giving traders a chance to get in. It has been a straight line up with nary a pullback, trapping many players on the sidelines. But it has been going up so slowly that … [Read more...]

The Mad Hedge Fund Trader’s Long Term Model Portfolio

apple-1

I am frequently asked to propose a long term portfolio that investors can just buy and forget about. They have no interest in sitting on the edge of their seat waiting for my next trade alert, staying up all night to catch the European opening, or scanning every wire service headline to glean a momentary trading edge. I have put together a model portfolio that achieves … [Read more...]

February 27, 2012 – Quote of the Day

train

“From an economic standpoint, it is very hard to argue against the idea that the economy is gaining some steam here. A lot of those negative beliefs are starting to turn, such as credit. The upside risks to equities are greater than the downside risks”, said Dan Greenhouse, chief global strategist at BTIG. … [Read more...]

And the Winner is: Ron Paul!

220px-New_York_City_Gridlock

Not just the stock market has been rallying strongly since October. So have the fortunes of President Obama. Since the onset of the current bull move, the likelihood of him winning the next election has risen from the high thirties to the low fifties, according to the Associated Press GfK poll. If you want to put your money where your mouth is, the online site, Intrade (click … [Read more...]

Will the Fall in Jobless Claims Hit a Wall?

hitting-a-wall

If I were trapped on a desert island and could pick only one economic data release to float ashore in a bottle, it would doubtless be the weekly jobless claims. Released by the Department of Labor every Thursday morning at 8:30 EST, this one number is the most accurate leading indicator of future economic activity among the hundreds out there to choose from. If you don’t … [Read more...]

A Cow based Economics Lesson

HappyCow

SOCIALISM You have 2 cows. You give one to your neighbor. COMMUNISM You have 2 cows. The State takes both and gives you some milk. FASCISM You have 2 cows. The State takes both and sells you some milk. NAZISM You have 2 cows. The State takes both and shoots you. BUREAUCRATISM You have 2 cows. The State takes both, shoots one, milks the other, and then … [Read more...]

My Favorite Stock to Short

mihai2091922096

Troubled Bank of America (BAC) certainly earned its title as the premier Dog of the Dow last year. It managed an appalling 58% decline in 2011, the worst of any of the 30 Index stocks. It only managed to stay above the crucial $5 level by a hair’s breadth, below which many pension funds are barred from owning shares. Since the beginning of this year, it has been the best … [Read more...]

How to Avoid the Ponzi Scheme Trap

bernie madoff

I spent a sad and depressing, but highly instructional evening with Dr. Stephen Greenspan, who had lost most of his personal fortune with Bernie Madoff. The University of Connecticut psychology professor had 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 … [Read more...]

China Joins the Quantitative Easing Club

Chinese soccer players sprint during their training session for the upcoming AFC Asian Cup soccer tournament in Kuala Lumpur

The other shoe has fallen in China, with the People’s Bank of China’s move to cut bank reserve requirements by 50 basis points, the second time since November. The relaxation makes the Middle Kingdom a certified, card carrying member of the international quantitative easing club.  It also confirms the country’s time tested preference for announcing major economic policy changes … [Read more...]

Risk Control for Dummies

200day

Whenever I change my positions, the market makes a major move, or reaches a key level, I look to stress test my portfolio by inflicting various scenarios upon it and analyzing the outcome. This is second nature for most hedge fund managers. If fact, the larger ones will use top of the line mainframes powered by $100 million worth of in-house custom program to produce a real … [Read more...]

Nikkei Shows the Yen Move is Real

unclebuck-1

The Bank of Japan renewed its membership in the international quantitative easing club last week, announcing that it was substantially expanding its bond repurchases. Specifically, it will increase them from ¥55 trillion to ¥65 trillion, a jump equivalent to $830 billion. To understand how big this is, consider that Japan’s GDP is one third the size of the US. That would be … [Read more...]

An Evening With General Douglas Fraser

gen

I never cease to be amazed by the intelligence provided me by the US Defense Department, which after the CIA, has the world’s most impressive and insightful economic research team. There are few places a global strategist like myself can go to get an intelligent, thoughtful forty year views, and this is one. Of course, they are planning how to commit ever declining resources … [Read more...]

My Very Last Chance to Buy My Trade Alert Service at the Old Price

Overworked2-8

Due to a number of technical difficulties, many potential new subscribers were denied the opportunity to buy my award winning Trade Alert Service at the old price of $1,997 before the price increase. Among other things, the site crashed a few times because of the sheer volume of people attempting to sign up at once. Since I highly value loyalty, I am therefore offering this … [Read more...]

The Long View on Emerging Markets

emerging-markets-BRIC-MINT

I managed to catch a few comments in the distinct northern accent of Jim O'Neil, the fabled analyst who invented the 'BRIC' term, and who has been kicked upstairs to the chairman's seat at Goldman Sachs International (GS) in London. Jim thinks that it is still the early days for the space, and that these countries have another ten years of high growth ahead of them. As I … [Read more...]

Murray Sayle: The Passing of a Giant in Journalism

sayle

I was saddened to hear of the death of my close friend, the Australian, Murray Sayle, after a long battle with Parkinson's disease at the age of 84. Murray was one of the giants of journalism in the second half of the 20th century. He started by editing the newspaper at University of Sydney, where his incendiary opinions got him expelled from school. It seems there was a … [Read more...]