Financial Sense Blog

We are very bullish for the long-term for the resource sector, i.e., gold, silver and the resource shares. However, we need to live life and the markets in real time and the question is where are we now and what should investors do, if anything?

It’s more than coincidence the Arab world is convulsing with social unrest just as the United Nations Food and Agriculture Organization’s widely watched price index recently soared past the previous food price peak set in the summer of 2008. After all, didn’t those same prices ignite food riots throughout the world only three summers ago?

At the risk of stating the obvious, the recent market action in the commodities has been manic with wild gyrations of price in a wide variety of basic materials, metals, and energy. Given these wild fluctuations in price, I thought we could look at an options trade in USO that gives a high probability of success.

Well, it's official. The angst in the bear camp has become palpable. While I prefer to be an agnostic when it comes to taking sides in the market, one of my colleagues who, unfortunately, has leaned toward the dark side over the last couple of months has gone into hiding, while another lamented to me yesterday, "When is it going to end?" And my personal favorite example of strife in the bears' den was the one line email from Tuesday, which read, "What's it gonna take to get a down day around here?"

Following up on Bernanke’s ‘don’t blame me’ shtick last week, Federal Reserve Bank of Atlanta president Dennis Lockhart had this to say yesterday.

Ralph T. Foster in his invaluable book, Fiat Paper Money, The History and Evolution of Our Currency, writes that paper money made its first appearance in Szechwan, a remote province of China early in the 11th century.

Who needs value investing when stock market indexes go straight up day after day? Shouldn't I just buy some index ETFs and be done with it? Why bother trying to find specific niches in the markets that are recession and inflation-proof? All good questions that assume Ben Bernanke and his ilk are going to be in charge of this economy forever. My question back is: what happens when something changes?

The NFIB survey results of small businesses for January 2011 point to an improved outlook. The composite index moved up to 94.1 in January from 92.6 in the prior month. The level of the composite index is close to the pre-recession reading of 94.4 in November 2007. Also, the percentage of respondents who noted that they are planning on capital expenditures rose to 22%, the highest since August 2008.

In December a Wall Street analyst with a big mouth and a business to build (The Meredith Whitney Advisory Group), declared that there would be “hundreds of billions” of dollars of municipal bond defaults in 2011.

Regardless of their ideological persuasion, pundits and politicos reliably repeat the mantra that "small business is the engine of jobs growth." The mantra is followed by the pundit-politico's belief that a "small business jobs boom is right around the corner."