The Population Boom

Traffic

In their century long coverage of exotic places, cultures, and practices, National Geographic Magazine inadvertently sheds light on broad global trends that deeply affect the rest of us. Plus, the pictures are great. A recent issue celebrated the approach of the world's population to 7 billion, and the implications therein. Long time readers of this letter know that … [Read more...]

Who Expensive Oil Hurts the Most

Before-After

Every time the price of oil spikes, we learn vast amounts of information about the global reach of this indispensable commodity. It's like taking a non-core elective in geology at college. So I was fascinated when I found the chart of relative sector winners and losers below. No surprise that energy does best from sky high crude prices. It is followed by telecommunications … [Read more...]

February 15, 2013

Global Market Comments February 15, 2013 Fiat Lux Featured Trade: (FEBRUARY 20 GLOBAL STRATEGY WEBINAR), (THE BOND CRASH HAS ONLY JUST STARTED), (TLT), (TBT), (WATCH SAVINGS RATES FOR INTERNATIONAL MARKET CUES) iShares Barclays 20+ Year Treas Bond (TLT) ProShares UltraShort 20+ Year Treasury (TBT) … [Read more...]

Don’t Miss the February 20 Global Strategy Webinar

Robin Williams

My next global strategy webinar will be held on Wednesday, February 20 at 12:00 noon EST. This one will be open to the public, so login in early to get a space. 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 … [Read more...]

The Bond Crash Has Only Just Started

Grandpa Thomas

When I was a little kid in the early 1950’s, my grandfather used to endlessly rail against Franklin Delano Roosevelt. The WWI veteran, who was mustard gassed in the trenches of France and was a lifetime, died in the wool Republican, said the former president was a dictator and a traitor to his class, who trampled the constitution with complete disregard. Hoover, Landon, and … [Read more...]

Watch International Savings Rates for Market Cues

Fist of Dollars

Often while searching for a piece of data through Google, I stumble across something else, which is far more interesting. That is how I found the table below of international savings rates. Why should you care? Because countries with high savings rates tend to have strong economies and great stock markets, since there is plenty of excess cash available to pour into … [Read more...]

February 14, 2013

Global Market Comments February 14, 2013 Fiat Lux SPECIAL ASIAN HIGH YIELD STOCK ISSUE Featured Trade: (REACHING FOR DIVIDENDS IN ASIA), (SSW), (CHT), (MLYBY), (EWSS) (AN EVENING WITH GENERAL DOUGLAS FRASER) (EWZ), (ECH), (GXG), (CU), (CORN), (SOYB), (WEAT) Seaspan Corporation (SSW) Chunghwa Telecom Co., Ltd. (CHT) Malayan Banking Bhd (MLYBY) iShares MSCI Singapore … [Read more...]

Reaching for Dividends in Asia

High Yield Dividends

You would think buying the highest yielding stocks in the world’s fastest growing countries would be a no brainer. Yet, you hardly ever find decent recommendations in this area. So after spending a few dozen hours scouring the investment universe, I came up with the short list below. Some of these have already had good moves in this yield starved world. But it is still a … [Read more...]

An Evening With General Douglas Fraser

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 me can go to get intelligent, thoughtful forty-year views, and this is one. Wall Street, eat your heart out. Of course, they are planning how to … [Read more...]

February 13, 2013

Global Market Comments February 13, 2013 Fiat Lux Featured Trade: (THE MUNI BOND MYTH), (MUB), (TLT), (JNK), (ACTHX), (BEWARE THE COMING EQUITY CAPITAL FAMINE) iShares S&P National AMT-Free Muni Bd (MUB) iShares Barclays 20+ Year Treas Bond (TLT) SPDR Barclays High Yield Bond (JNK) Invesco High Yield Muni A (ACTHX) … [Read more...]

The Muni Bond Myth

Sculpture

Have I seen this movie before? Four years ago, analysts were predicting default rates as high as 17% for Junk bonds in the wake of the financial meltdown, taking yields on individual issues up to 25%. Liquidity in the market vaporized, and huge volumes of unsold paper overhung the market. To me, this was an engraved invitation to come in and buy the junk bond ETF (JNK) at … [Read more...]

Beware the Coming Equity Capital Famine

Brokers

The world is about to suffer an acute shortage of equity capital over the next eight years, which could total $12.3 trillion. That is the conclusion of the McKinsey Global Institute, an affiliate of McKinsey &Co., a great well of long-term economic thinking which I have been drawing from for the last 40 years. The cause of the coming debacle is quite simple. Investable … [Read more...]

February 12, 2013

Global Market Comments February 12, 2013 Fiat Lux Featured Trade: (TRADE ALERT SERVICE POSTS NEW ALL TIME HIGH), (SPY), (IWM), (FCX), (AIG), (FXY), (YCS), (DON’T GET CAUGHT IN THE NEXT REAL ESTATE BUBBLE), (PHM), (LEN), (KBH) (WHY WATER WILL SOON BECOME MORE VALUABLE THAN OIL), (CGW), (PHO), (FIW), (VE), (TTEK), (PNR), (TESTIMONIAL) SPDR S&P 500 (SPY) iShares … [Read more...]

Trade Alert Service Posts New All Time High

TA Performance - Inception

The Trade Alert Service of the Mad Hedge Fund Trader has posted a 23.76% profit year to date, taking it to another new all time high. The 26-month total return has punched through to an awesome 78.81%, compared to a miserable 14% return for the Dow average during the same period. That raises the average annualized return for the service to 36.4%, elevating it to the pinnacle of … [Read more...]

Don’t Get Caught in the Next Real Estate Bubble

House in Bubble

Before you place a down payment on that next home, consider that you are voluntarily becoming dependent on government welfare, reliant on massive subsidies, and may become the next ward of the state. Don’t kid yourself that the housing market has become anything but another bubble driven by artificially low interest rates and lax lending standards. Without the wholesale … [Read more...]

Why Water Will Soon Become More Valuable Than Oil

Water Fall

If you think that the upcoming energy shortage is going to be bad, it will pale in comparison to the next water crisis. So investment in fresh water infrastructure is going to be a great recurring long-term investment theme. One theory about the endless wars in the Middle East since 1918 is that they have really been over water rights. Although Earth is often referred to as … [Read more...]

February 11, 2013

Global Market Comments February 11, 2013 Fiat Lux Featured Trade: (IS IT TIME TO BUY TECHNOLOGY STOCKS), (AAPL), (MSFT), (GOOG), (QQQ), (BAC), (JPM), (XOM), (CAT), (PG), (NFLX), (AN AFTERNOON WITH CALIFORNIA GOVERNOR JERRY BROWN) Apple Inc. (AAPL) Microsoft Corporation (MSFT) Google Inc. (GOOG) PowerShares QQQ (QQQ) Bank of America Corporation (BAC) JPMorgan Chase … [Read more...]

Is It Time to Buy Technology Stocks?

Apple

Call it the shot heard round the world. David Einhorn’s lawsuit against tech goliath Apple (AAPL) has focused a giant spotlight on what has been one of the worst performing stock market sectors of 2013-- large old technology stocks. Could this be the set up for the biggest sector rotation of the year? Most of the price action in this year can be divided into kinds: big cap … [Read more...]

An Afternoon With California Governor Jerry Brown

Jerry Brown 2

On my last trip to my lakefront estate at Lake Tahoe, I stopped off at the state capital, Sacramento, to look in on my old friend, Governor Jerry Brown. It is crucial that readers across the country, and indeed, around the world, know what Jerry is thinking. California has always been a “pathfinder” state, and what starts here is often adopted across the country. This little … [Read more...]

February 8, 2013

Global Market Comments February 8, 2013 Fiat Lux Featured Trade: (HOW THIS MARKET WILL DIE), (SPY), (SPX), (DOW AVERAGE), (AAPL), (QQQ), (APRIL 12 SAN FRANCISCO STRATEGY LUNCHEON), (THE CRUEL TRUTH ABOUT GOVERNMENT STATISTICS), (TESTIMONIAL) SPDR S&P 500 S&P Large Cap Index Apple Power Shares QQQ … [Read more...]

How This Bull Market Will Die

Bull

The universal question in the market today was “Why is it down” when all the news was good? The weekly jobless claims dropped 5,000 to 366,000, near a five-year low, confirming that the jobs recovery is still on track. Activist shareholder, David Einkorn’s, lawsuit against Apple (AAPL) to unfreeze its cash mountain should have boosted the market’s major buzz kill. Sure, ECB … [Read more...]

The Cruel Truth About Government Statistics

Abbott & Costello

There have been complaints about the quality of government data as long as there have been stock markets. The US is not much better than emerging markets, like China, where numbers are subject to huge, after the fact revisions. A broker friend of mine emailed the conversation below, which has been circulating around the street. Enjoy. Costello: I want to talk about the … [Read more...]

February 7, 2013

Global Market Comments February 7, 2013 Fiat Lux Featured Trade: (HOW MUCH TO GO WITH PALLADIUM), (PALL), (HANGING OUT WITH WOZ), (AAPL), (THANK GOODNESS I DON’T LIVE IN SWEDEN), (EWD) ETFS Physical Palladium Shares (PALL) Apple Inc. (APPL) iShares MSCI Sweden Index (EWD)   … [Read more...]

How Much to Go With Palladium?

Canadian Coin

Palladium has caught absolutely on fire in recent months. The ETF (PALL) for the hedge fund darling has soared by 34% since the September low, and shows no sign of slowing. The CFTC announced that speculative positions in palladium futures leapt 12% last week to an all time high. Also known as the ‘poor man’s platinum,’ demand for palladium for jewelry in China has been … [Read more...]

Thank Goodness I Don’t Live in Sweden!

Model

I recently found the chart below showing world tax rates as a percentage of GDP for the past 40 years. Sweden suffers the world's heaviest tax burden at 51%, compared to only 27% in the US. The US has among the world's lowest tax burdens, which has been falling for the last ten years. Listening to TV pundits, you would think we had the world's highest tax rates, which are … [Read more...]

Why You Should Care About the Iran Rial Collapse

Rial

The Iranian Rial (IRR) has just suffered one of the most cataclysmic crashes in the history of the foreign exchange markets. It is off a mind numbing 75% since the beginning of 2011. One dollar now buys 12,200 Rials. Watch out Zimbabwe! When communications between intelligence agencies suddenly spike, as has recently been the case, I sit up and take note. Hey, do you think I … [Read more...]

When Your Options Are Exercised

I received a few emails from readers whose option holdings have been exercised against them, and have asked me for advice on how best to proceed. So, here we go. The options traded on US exchanges are American style, meaning that they can be exercised at any time by the owner. This is opposed to European style options, which can only be exercised on the expiration … [Read more...]

February is the Cruelest Month

Lady Liberty

Actually, it is the second cruelest month. September is the worst, as indicated by the table below, put together by my friends at Stockcarts.com. I think you have to get some sort of pullback between now and March 15, like of the 2%-4% range. It’s not that we are without fundamental reasons to do so. Don’t forget, we have a sequestration deadline looming on March 1, when the … [Read more...]

Why Gold is Dead

Golden Girl 2

It certainly has been a year of gnashing teeth and tearing hair for inveterate gold bugs (GLD). They got everything they wanted on the fundamental side. Runaway printing presses from the Federal Reserve, profligate spending from the US government, and a series of unending crises threatening our oil supplies in the Middle East. Yet, the barbarous relic has barely budged. It … [Read more...]

February 4, 2013

Global Market Comments February 4, 2013 Fiat Lux Featured Trade: (GOLDILOCKS DELIVERS A NONFARM PAYROLL), (SPY), (SPX), (DOW), (FEBRUARY 6 GLOBAL STRATEGY WEBINAR), (LOOK AT THAT YEN!), (FXY), (YCS) … [Read more...]

Goldilocks Delivers a Nonfarm Payroll

EMSPAY 2-1-13

Does it get any better than this? First, the hometown San Francisco Giants win the World Series in a four game sweep. Then the San Francisco 49er’s play in the Super Bowl. Finally, I win the World Series/Super Bowl of investing by capturing an absolutely pyrotechnic 21% year to date performance, boosting me once again the top ranks of the hedge fund industry. Hey, two out of … [Read more...]

Don’t Miss the February 6 Global Strategy Webinar

Robin Williams

My next global strategy webinar will be held on Wednesday, February 6 at 12:00 noon EST. This one will be open to the public, so login in early to get a space. 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 … [Read more...]

Look at That Yen!

Harakiri - Femail

All of those years spent living in rabbit hutch sized apartments, getting hand packed by white gloved railway men into rush hour train cars, and learning an impossible language, are finally paying off. I have to tell you, I really have to think hard to recall a plunge in a major currency that has been as dramatic as the yen’s over the past two months. Since the Mid-November … [Read more...]

Trade Alert Service Post Blazing 16.75% January Gain

Trade alert Service YTD

The Trade Alert Service of the Mad Hedge Fund Trader posted a 16.75% profit in January, an all time monthly high. The 26-month total return has punched through to 71.80%, compared to a miserable 10% return for the Dow average. That raises the averaged annualized return to 33.13%, elevating to the top of the hedge fund ranks. Global Trading Dispatch, my highly innovative and … [Read more...]

Lunch With Supreme Court Justice Sonia Sotomayor

Sonia Sotomayor

 I have to admit that it was with some trepidation that I joined Supreme Court Justice, Sonia Sotomayor, for lunch this week in San Francisco. I have friends in the New York federal prosecutors office who warned me that she was tough as nails and a complete bitch, first as a prosecutor herself, and later as a judge. I confided this observation to her, and she agreed … [Read more...]

January 31, 2013

Global Market Comments January 31, 2013 Fiat Lux Featured Trade: (WHERE’S THE CRASH?) (TAKING FORD OUT FOR A SPIN), (F), (CHENIERE ENERGY GETS THE GREEN LIGHT), (LNG), (UNG), (THE TECHNOLOGY NIGHTMARE COMING TO YOUR CITY) … [Read more...]

Where’s the Crash?

Headline

That was the questions traders were scratching their heads and asking this morning in the wake of this morning’s shocking Q4, 2012 GDP figure. While most analysis were expecting the government to report a more robust 1%-2% number we got negative -0.1%, the worst since 2009. With growth flipping from a positive 3.1% figure in Q3 many thought that a Dow down 500 points was in … [Read more...]

Taking Ford Out for a Spin

Mustang

I have been trying to buy this stock for a month. Not because I like their pedestrian cars (except the new, muscular, retro Mustang), but because it is one of the great turnaround stories in business history. Today’s earnings announcement gives us that window. It delivered over $3 billion in profits during Q4, 2012. But the market decided to focus instead on the expectation … [Read more...]

Cheniere Energy (LNG) Gets the Green Light

Gas Fire

I have been pounding the table on the attractions of Cheniere Energy (LNG) since last spring. Yesterday, the stock hit a new all time high of $21.50. There is never any guarantee that a government agency will not do something idiotic. Last year it didn’t, thankfully. The Federal Energy Regulatory Commission (FERC) granted the final license needed by Cheniere Energy (LNG) to … [Read more...]

The Technology Nightmare Coming to Your City

Tight Parking

I tell people at my strategy luncheons that living in the San Francisco Bay area is like living in the future. There is an explosion of high tech innovation going on here, and we locals often find ourselves the guinea pigs for the latest hot products. However, sometimes the future is not such a great place to be. I learned this the other day when I received a parking ticket … [Read more...]

January 30, 2013

Global Market Comments January 30, 2013 Fiat Lux SPECIAL HIGH YIELD FOREIGN STOCK ISSUE Featured Trade: (TRADE ALERT SERVICE POSTS FIVE CONSECUTIVE ALL TIME HIGHS). (SPY), (IWM), (FCX), (AIG), (TLT), (FXY), (YCS), (REACH FOR YIELD WITH HIGH DIVIDEND FOREIGN STOCKS), (FTE), (SAN), (BCE), (ECH), (VE), (AWC) … [Read more...]

Trade Alert Service Posts Five Consecutive All Time Highs

TA Service Inception 1-29-13

The Trade Alert Service of the Mad Hedge Fund Trader posted a new all time high today, pushing its two-year return up to 72.67%. The Dow average booked a miniscule 13% gain during the same time period. The industry beating record was achieved on the back of a spectacular January, which so far had earned readers a mind blowing 17.62% profit. Right after the January 2 opening, … [Read more...]

Reach for Yield with High Dividend Foreign Stocks

High Yield Dividends

With the increase of globalization, investing in foreign stocks can be a smart move. Many Americans have low exposure to foreign equities in their portfolio believing that US stocks are safer and more reliable. However, investing in foreign stocks can help to decrease risk, diversify your portfolio, give you access to emerging markets, and deliver dividend yields that you can … [Read more...]

January 29, 2013

Global Market Comments January 29, 2013 Fiat Lux Featured Trade: (BONDS ARE BREAK DOWN ALL OVER), (TLT), (TBT), (MUB), (LQD), (HCN), (JNK), (AMJ), (REPORT FROM THE INAUGURATION) … [Read more...]

Bonds are Breaking Down All Over

TNX 1-25-13

It looks like the Great Bond Reallocation of 2013 is real. The Treasury bond market is getting absolutely hammered this morning, the ten-year yield breaching 2.00%. That smashes the 1.40%-1.90% band, which has imprisoned the bond market for the past year. The immediate trigger was the release of absolute blowout December durable goods figures this morning. They came in at a … [Read more...]

Report From the Inauguration

Obama

I am writing this report from the steps of the Capital Building in Washington DC, scratching my notes on the back of a commemorative program with a golf pencil, absolutely freezing my buns off. I am wearing all the warm clothes I own, including my Marine Corps olive winter weight double knit wool officer’s trousers. These were the pants that successfully executed the retreat … [Read more...]

January 28, 2013

Global Market Comments January 28, 2013 Fiat Lux Featured Trade: (THE RACE TO THE BOTTOM FOR CURRENCIES MEANS A RACE TO THE TOP FOR STOCKS), (SPX), (SPY), (EWG), (DWJ), (FXY), (YCS), (FXE), (RUBBING SHOULDERS WITH “THE 1%” AT INCLINE VILLAGE) … [Read more...]

The Race to the Bottom for Currencies Means a Race to the Top for Stocks

Clint Eastwood

Even the Old Hands, like myself, are somewhat amazed by the strength of the global equity markets this month. The S&P 500 has risen 11 out of the last 12 trading days, and is up almost every day this month. It has been the best January in 18 years. The first week saw the biggest inflows to equity mutual funds in 10 years. Yet, the market went up so fast, most of the … [Read more...]

Rubbing Shoulders With “The 1%” at Incline Village

incline2x

If you really want to get a read on how “the 1%” are faring these days, take a ski vacation to the tony hamlet of Incline Village on the pristine shores of Nevada’s Lake Tahoe. Each morning, I trekked to Starbucks, one of the few local sources for the Wall Street Journal and the New York Times. There, trophy wives line up to buy their chai tea lattes, all tall, thin, and … [Read more...]

January 24, 2013

Global Market Comments January 24, 2013 Fiat Lux Featured Trade: (SPX 1,600, HERE WE COME!), (SPX), (SPY), ($INDU), (TLT), (VIX), (USO) (WHY THE YEN WILL NEVER RECOVER), (FXY), (YCS) … [Read more...]

SPX 1,600, Here We Come!

TESLA

Take a look at the chart below for the S&P 500, and it is clear that we are gunning for an all time high between 1,550 and 1,600. With the debt ceiling crisis now cancelled, you really have to look hard to find any near term reasons to sell stocks, so we could hit those lofty numbers as early as March. A perusal of the short-term charts certainly demands one to conclude … [Read more...]

Why the Yen Will Never Recover

Shinzo Abe

If anyone is expecting the Japanese yen to take back the losses it has suffered over the last two months, you can forget about it happening anytime soon, eventually, or in your lifetime. Naysayers have been pointing to this week’s policy meeting at the Bank of Japan as proof that the yen has stumbled in the international race to the bottom, and that it is running up the … [Read more...]

January 23, 2013

Global Market Comments January 23, 2013 Fiat Lux Featured Trade: (TRADE ALERT SERVICE BLASTS TO NEW ALL TIME HIGH), (SPY), (IWM), (FCX), (AIG), (FXY), (YCS), (TLT) (CATCHING UP WITH DOWNTON ABBEY) … [Read more...]

Trade Alert Service Blasts to New All Time High

Trade Alert Service

The Trade Alert Service of the Mad Hedge Fund Trader posted a new all time high today, pushing its two-year return up to 66%. The Dow average booked a miniscule 12% gain during the same time period. The industry beating record was achieved on the back of a spectacular January, which so far had earned readers a mind blowing 10.92% profit. Right after the January 2 opening, I … [Read more...]

Catching Up With Downton Abbey

John Thomas

I decided to flee the madness in London for a day and visit some old friends in the countryside, the 8th Earl and Countess of Carnarvon. The late 7th Earl was an early investor in my first hedge fund and I have kept in touch with the family ever since. His grandfather, the 5th Earl gained fame and fortune from his co-discovery of King Tut’s tomb in Egypt’s Valley of the … [Read more...]

January 22, 2013

Global Market Comments January 22, 2013 Fiat Lux Featured Trades: (THE DEBT CEILING CRISIS IS CANCELLED), (SPY), (IWM), (FCX), (AIG), (FXY), (YCS),(AAPL), (VIX) (JANUARY 23 GLOBAL STRATEGY WEBINAR) … [Read more...]

The Debt Ceiling Crisis is Cancelled

Tahoe Dock

I am sitting here in front of a crackling hot fire at my lakeshore estate in Nevada’s Incline Village. It is a brilliantly clear day, with mallard ducks skimming the surface of Lake Tahoe, and the Canadian geese flying in formation overhead. Snow covered Mount Tallac, some 30 miles to the South, looks so close I feel I can almost grab it and take out a bite. I am on my way … [Read more...]

Don’t Miss the January 23 Global Strategy Webinar

webinar-2

My next global strategy webinar will be held on Wednesday, December 12 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 … [Read more...]

Attending My Last Electric Nissan Leaf Rally

Nil Gas

It was a typical fall day in San Francisco, the fog wafting in and out through the Golden Gate Bridge. I took the opportunity to attend a company sponsored rally of Nissan Leaf drivers on the Marina Green. These were the fanatics, the diehards, the truly devoted. These were people who were willing to bet big bucks on an untested, unproven new technology. These were the … [Read more...]

Spoiled for Choice

Surfing

Boy, am I spoiled for choice on what to do this weekend. On the one hand, I have been invited to join the president on the reviewing stand for Monday’s inauguration in Washington DC. On the other, the Maverick’s World Surf competition near California’s Half Moon Bay is on the same day, which has not been held for three years. I have to admit that it is temping to don my … [Read more...]

January 17, 2013

Global Market Comments January 17, 2013 Fiat Lux Featured Trades: (APRIL 19 CHICAGO STRATEGY LUNCHEON) (MLP’S ARE ON FIRE), (CVRR), (SXCP), (AMJ), (EEP), (KMP), (TLP) (ALL I WANT TO DO IS RETIRE) … [Read more...]

MLP’s Are On Fire

Pipeline

Master Limited Partnerships have been on fire since the beginning of the year. Once the deal on the “Fiscal Cliff” was done, and these instruments’ special tax treatment protected, it was off to the races. These unique and versatile instruments combine the tax benefits of a limited partnership with the liquidity of publicly traded securities. The explosion in demand has … [Read more...]

All I Want to do is Retire

Dollar in Vice

I have always believed that if you don’t have a sense of humor, then you better get the hell out of this business. Below is a link to a YouTube video entitled “All I Want to do is Retire” which covers the decline of the brokerage industry over the last 20 years. The video is currently going viral and sent to me by a subscriber. Watch this during your next coffee break. The run … [Read more...]

My 2012 Report Card

2012 Daily Perf.

I’ll give myself a “B” on this one. Sure, with the Trade Alert Service generating a 14.87% net profit for the year, I was able to bring in double the Dow average, and triple what most hedge funds delivered, including some of the biggest ones. But for once, I did not achieve true greatness. I feel that, given the amount of work I did, I should have done much better. I issued … [Read more...]

On Executing Trade Alerts

From time to time I receive an email from a subscriber telling me that they are unable to get executions on trade alerts that are as good as the ones I get. There are several possible reasons for this: 1) Markets move, sometimes quite dramatically so. 2) Your Trade Alert email was hung up on your local provider’s server, getting it to you late. This is a function of your … [Read more...]

The Bull Case for AIG

AIG 1-10-13

I was in a huge hurry last week when I sent out a Trade Alert to buy insurance giant American International Group (AIG), operating from a Chicago hotel suite with a stock market that was flying. Now that I am home, and have single handedly brought Oakland’s crime wave to a juddering halt, I have an opportunity to go into depth on this troubled company. I know it well, as it … [Read more...]

Economist David Hale Says the Action will be in Southeast Asia

David Hale

I have been relying on David Hale as my de facto global macro economist for decades, and I never miss an opportunity to get his updated views. The challenge is in writing down David’s eye popping, out of consensus ideas fast enough, because he spits them out in such a rapid-fire succession. Since David is an independent economic advisor to many of the world's government’s, … [Read more...]

January 7, 2013

Global Market Comments January 7, 2013 Fiat Lux 2013 Annual Asset Class Review FOR PAID SUBSCRIBERS ONLY Featured Trades: (SPX), (QQQQ), (AAPL), (XLF), (BAC), (EEM),(EWZ), (RSX), (PIN), (FXI), (TUR), (EWY), (EWT), (IDX) (TLT), (TBT), (JNK), (PHB), (HYG), (PCY), (MUB), (HCP) (FXE), (EUO), (FXC), (FXA), (YCS), (FXY), (CYB) (FCX), (VALE), (MOO), (DBA), (MOS), (MON), … [Read more...]

2013 Annual Asset Class Review

Train

I am writing this report from a first class sleeping cabin on Amtrak's California Zephyr. We are now pulling away from Chicago's Union Station, leaving its hurried commuters, buskers, panhandlers, and majestic great halls behind. I am headed for Emeryville, California, just across the bay from San Francisco. That gives me only 56 hours to complete this report. I tip my porter, … [Read more...]

Order Execution 101

fish

Given the sudden uptick in trade alerts I have been sending out to my Global Trading Dispatch subscribers, some 60 since August 10, I have been inundated with requests for how to execute these. So I thought I’d take some time today to expound on the basics of order execution 101. There are three basic ways to intelligently get an order into the market: 1) The No Brainer … [Read more...]

Bernanke’s Stake Through Romney’s Heart.

Romney-angry

I can just imagine how Ben Bernanke’s announcement of QE3 went down at Mitt Romney’s campaign headquarters in Massachusetts last week. Doors slammed, heads pounded against walls, and hair was torn out. You can almost hear the whoosh of resume’s flying down to conservative think tanks on Washington DC’s “K” street as campaign workers scramble to find post-election employment. … [Read more...]

Oil is Not Looking So Hot.

OIL2

I received another one of those scratchy cell phone calls from my friend in the West Texas oil patch. You could almost feel the dust coming through the ether. He said that while Ben Bernanke his committed to buying $40 billion a month of mortgage-backed securities as part of QE3, he has not promised to buy a single barrel of oil. This is bad for oil. That means Texas Tea has … [Read more...]

Don’t Miss the Big Show in Silver.

silverdollar_zps6afb22b7

Those transfixed by gold blasting through the $1,750 level have been missing the real action in silver. The white metal has soared 34% to $34 since the beginning of the year, compared to only a 14% move for the barbaric relic, an outperformance of 2.4 to one. I have been a raging bull on the precious metals space since early August. Silver gives you additional diversification … [Read more...]

The 30-Year View on What’s Happening Today.

Bubble Dude

Take a look at the 30 year chart of the S&P 500 below, and it’s clear that the market is approaching a critical juncture. With the closely watched index closing at 1,460 today, we are a mere 140 points from the iron ceiling that has been unassailable for the past 13 years. The chart is a roll call of past disasters for American investors. The 2000 peak was the apex of … [Read more...]

If You Had Any Doubts About Gold …

2009201oz20Gold20Eagle20Obv

Since Ben Bernanke’s announcement of QE3 last week, new forecasts for gold have been popping up like acne at a high school prom. They range from the conservative to the absurd, from $1,900 to $55,000. But they all have one thing in common: higher. Before you head down to the local coin store to load up on bags of one ounce American gold eagles, let me go through the simplest of … [Read more...]

Buy What Ben’s Buying.

cnut

In view of Federal Reserve Chairman, Ben Bernanke, yesterday:  it is time to reassess one’s investment strategy.  The former Princeton professor didn’t give us QE3, he gave us QE3 with a turbocharger, on steroids, with an extra dose of adrenaline.  He could spend another $1 trillion before all is said and done.  If ever an economic theory was pursued to extremes, this is it. … [Read more...]

QE3 Blows Out Bears.

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The big surprise today was not that the Federal Reserve launched QE3, but the extent of it.  For a start, they moved the “low interest rate” target out to mid-2015.  They left the commitment to bond-buying open-ended.  The first-year commitment came in at $480 billion, in-line with previous efforts. Reading the statement from the Open Market Committee, you can’t imagine a … [Read more...]

Raising My Apple Target to $1,600.

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Long-term readers of this letter are well aware of my pleadings with them a couple of years ago to buy Apple (AAPL) stock at $250 with a target of $1,000. Certainly, the 200 readers who work for Apple noticed.  That was back when the main concern about the company was that Steve Jobs would die young. In view of the upgrades present in the iPhone 5 announced today, I am going … [Read more...]

My Fed Call.

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My Fed Call. Survey traders and investors today, and you will find that 99% believe further quantitative easing via QE3 will be announced on Thursday. Poll vote Fed governors and you get a more realistic 50% probability. I think it is much less than that – and therein lies the trade. I think that markets are getting rather over-expended up here. They have been discounting … [Read more...]

Another Trade Alert Service All-Time High.

madhedge4

Global Trading Dispatch’s Trade Alert Service posted a new all-time high yesterday, clocking a 63.2% return since inception. The 2012 YTD return is now at 23.05%. That takes the average annualized return up to 33.3%, ranking it among the top performing hedge funds in the world. Those happy subscribers who bought my service on May 23 have seen an amazing 25 consecutive … [Read more...]

Buy the Big Dip in Gold.

bond

Look at the charts for the barbarous relic below and you can only come to one possible conclusion. If the Federal Reserve disappoints on Thursday, just a little bit, even by a smidgeon, and does not deliver QE3 and gold sells off big, you should jump in and by the stuff like crazy. All of the charts for gold and the derivative plays are showing major breakouts to the upside. … [Read more...]

The China News is Big.

A Chinese military delegate to the Natio

NOTE TO READERS: There is a short letter today because I spent the entire weekend writing Trade Alerts, which you will receive right at the Monday morning opening. Last Friday, China announced a $150 billion reflationary public works budget designed to arrest the current free fall in the country’s GDP growth rate. The move came totally out of the blue and caught many China … [Read more...]

Here Comes the Next Peace Dividend.

assad

When communications between intelligence agencies suddenly spike, as has recently been the case, I sit up and take note. Hey, you don't think I talk to all of those generals because I like their snappy uniforms, do you? The word is that the despotic, authoritarian regime in Syria is on the verge of collapse, and is unlikely to survive more than a few more months. The body … [Read more...]

Case Shiller Data Points to Real Estate Bottom.

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Cheers went up from the real estate industry this morning when the Standard & Poor’s/Case Shiller data was released. It showed the first year-on-year increases in prices since 2006. Calls went out from real estate agents around the country announcing that the bottom was in and that you better buy now before prices shoot up. Not so fast. Let’s look at the data first. … [Read more...]

How U.S. Job Losses Will End

vietnam

I was researching comparative Asian wage data the other day and was astounded with what I found. Textile workers earn $2.99 an hour in India (PIN), $1.84 in China (FXI), and $0.49 in Vietnam (VNM). This is an 18-fold increase in labor costs from $0.10 an-hour since Chinese industrialization launched in 1978. This compares to the $8 an hour our much abused illegals get at … [Read more...]

The “Safe” Trade Beats All

corn

I certainly hope you took my advice to load your portfolio with corn and gold and to dump your equities five years ago. What? You didn’t? Then you have almost certainly suffered on the performance front. According to data compiled by my former employer, the Financial Times, corn was the top performing asset class since 2007, bringing in a stunning 146% return. Who knew that … [Read more...]

Reach for Yield With Sovereign Debt

marlyn

During my recent meeting with the senior portfolio managers of the big Swiss banks, I kept hearing the same word over and over: yield, yield, yield! The search for yield by end investors has become so overwhelming that it now trumps all other considerations. So I am starting a series of major pieces on the world’s best yield plays. Those include emerging market debt, REIT’s, … [Read more...]

Watch Out for the Coming Risk Reversal

car

It is a fact of life that markets get overstretched. Think of pulling on a rubber band too hard, or loading too many paddlers at one end of a canoe. Whatever the metaphor, the outcome is always unpleasant and sometimes disastrous. Take a look at the charts below and you can see how extended markets have become. Stocks (DIA), (QQQ), (IWM) have reached the top of decade and a … [Read more...]

The Volatility Death Spiral Continues

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Mr. Market sometimes speaks in mysterious tongues, and you really have to wonder what he is struggling to tell us by taking the Volatility Index (VIX) down to a subterranean $13 handle on Friday, a new five year low. A number of advisors have been recommending that investors load up on the (VIX) in recent months to give them downside protection from an imminent market crash. … [Read more...]

Get Ready to Buy the Bond Market

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The Treasury bond market has just suffered one of the most horrific selloffs in recent memory, taking the yield on ten year paper up from 1.38% to an eye popping 1.83% in weeks, a three month high. Yields have just risen by an amazing 38%. This has dragged the principal Treasury bond ETF (TLT) down from $132 to $120. Those who were pining to get into this safe haven at a … [Read more...]

Time to Pick Up Some Gold

italy-1

Gold has clearly evolved into a call option on global quantitative easing. Don’t think of it just as the stuff your dentist puts in your teeth or the thing your girlfriends gets you to wrap around her finger anymore. I don’t think that the Federal Reserve will implement QE3 at its September 16-17 meeting, or even next year. This shocking realization will be bad for gold … [Read more...]

The Slippery Slope for Oil

oilbarrel

If volatility and lack of direction in the equity market are driving you nuts these days, thank your lucky stars you’re not in the oil market. Only last night, a Japanese supertanker plowed into a US Navy destroyer, causing prices to spike. That’s assuming that you had time to notice while sifting through numerous, contradictory leaks from Israeli intelligence about whether … [Read more...]

Double Up or Bail on Your JC Penny Short?

fish

The stock of the day last Friday was, no doubt, JC Penny (JCP), one of the most heavily shorted stocks in the market, which announced Q2, 2012 earnings. Despite a huge miss, the stock soared by 20% because the losses were not as bad as many expected. This leads to the question of whether traders should double up or bail on the existing short positions. As the dispassionate … [Read more...]

When Bad Becomes Good and Worse is Even Better

medal-1

Welcome to the “Heads I win, tails you lose” market. The prospect of imminent quantitative easing by the US, Europe, China, and even Japan is supporting asset prices globally. The worse the economic data reports, the greater the likelihood of such action, and the higher prices can rise. In this topsy turvey world, bad becomes good, and worse is even better. The only reason … [Read more...]

The Fed Says No QE3

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As I expected, the wildly optimistic expectations for further quantitative easing by the Federal Reserve at yesterday’s Open Market Committee meeting were not matched with substance. All we got was a continuation of existing modest programs and some minor tweaking of language. Bernanke only managed to say that, “further stimulus will be provided as needed.” The Fed left … [Read more...]