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Who Expensive Oil Hurts the Most

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 […]

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Buy Flood Insurance With the VIX

I am one of those cheapskates who buys Christmas ornaments by the bucket load from Costco in January for ten cents on the dollar because my eleven month return on capital comes close to 1,000%. I also like buying flood insurance in the middle of the summer when the forecast here in California is for […]

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Will Gold Coins Suffer the Fate of the $10,000 Bill?

The conspiracy theorists will love this one. Buried deep in the bowels of the 2,000 page health care bill was a new requirement for gold dealers to file Form 1099′s for all retail sales by individuals over $600. Specifically, the measure can be found in section 9006 of the Patient Protection and Affordability Act of […]

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The Weekly Jobless Claims Blockbuster

Traders were taken aback this morning when the Department of Labor announced a 50,000 drop in weekly jobless claims to 352,000. The street had been expecting a decline of only 19,000. It was the lowest report in almost three years, and the sharpest weekly decline in seven years. I tell people that, if stranded on […]

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Beware the Coming Equity Famine

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. […]

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Fade the Second Half of January

Let me tell you about the real January effect. Many pension and retirement funds only reshuffle weightings between different asset classes once a year, mostly in January. That has created a temporary surge of stock buying and bond selling that exhausts itself by the middle of the month. After that, the market sells off. During […]

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Carnage in the Grain Pits

I have been warning readers away from the agriculture space for the past few months, and on Thursday you found out why. More than 90% of the street was positioned for a bullish report, expecting that the last summer’s blistering drought and ongoing dryness in South American would lead to inevitable shortages. Instead, the US […]

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Demographics as Destiny

If demographics is destiny, then America’s future looks bleak. I have long been a fan of demographic investing which creates opportunities for traders to execute on what I call “intergenerational arbitrage”.  When the numbers of the middle aged are falling, risk markets plunge. Front run this data by two years, and you have a great […]

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Welcome to Nosebleed Territory

When climbing peaks in the Alps, the High Sierras, or the Himalayas, you know you’re getting close to the top when the air becomes thin, it is difficult to breathe, and your nose suddenly starts to bleed. I remember trying to smoke a cigarette at 20,000 feet on Mount Everest. If you didn’t keep puffing […]

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The Muni Bond Myth

Have I seen this movie before? Three 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 […]

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Watch Those Monetary Aggregates!

Call me a nerd, but instead of spending my Sundays watching the NFC playoffs, I pour over data analyzing the monetary aggregates. This is so I can gain insights into the future performance of assets classes. What I am seeing these days is not just unusual; it’s bizarre. Call it a double reverse, a Hail […]

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Tea With Economist David Hale

Before I left Chicago, I managed to catch up with my old friend, David Hale, for a cup of tea at the city’s prestigious University Club. I have been using David as my de facto global macro economist for decades, and I never miss an opportunity to get his updated views. The challenge is in […]

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The Flash Crash Risk is Rising

Those who lived through the cataclysmic “flash crash” that occurred precisely at 2:45 pm EST on May 6, 2010, have been dreading a replay ever since. Their worst nightmares may soon be realized. That is when the Dow Index (INDU) dropped a gob smacking 650 points in minutes, wiping out nearly $1 trillion in market […]

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Those Q4 Earnings Reports Will Not Be So Pretty

Traders and investors have grown comfortable with a steady stream of corporate earnings reports. 2011 as a whole may come in as high as $15 a share for the S&P 500. But the gravy train may end starting next week. The number of companies reducing guidance and downshifting expectations is at a three year high. […]

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The Euro Breaks Down

(Note to Newsletter only subscribers: This trade alert went out to paying customers of my Trade Alert Service last Thursday morning.) I am going to start the New Year with a 25% allocation to the double leveraged short ETF (EUO). It’s time to do the hard trade, sell on weakness, and sell the breakdown. The […]

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