In my weekly updates of major worlds markets, one of the charts includes an overlay of the amazing bubble in the Shanghai Composite Index. In this commentary we'll build an overlay of four major bubbles across market history to see the variety of shapes a bubble can take. But first let's take a long view of the index.
What’s more important to world oil demand- gasoline prices in the U.S. that are nearly $4 a gallon, or power rationing in China?
There is so much ideological, quasi-religious fanaticism around "free trade" (there is no such thing as "free trade," there are only various permutations of managed trade)and "industrial policy" (every nation has one, explicit or implicit) that it is difficult to make any sense of the many intertwined issues.
What the IMF-distributed paper on Financial Repression really constitutes is a Sheep Shearing Instruction Manual. The "way out" for governments is effectively to put the world's savers and investors in pens, hold them down, and shear them over and over again, year after year.
It will be years before true containment. Health risks still posed by the situation there and what individuals should do (including those on the US west coast) if it worsens.
What is the most dangerous word in the investment world? Using this word is almost assuredly first step toward owning an investment with issues that ultimately lead to unhappiness. That word? Quite simply is, “But. . .” That word can actually take two forms, explicit and implicit.
As China builds out it's passenger railways, others can benefit from the rising consumer culture.
Investors have dealt with a tight roller coaster ride since last February, riding the ups and downs of a "sideways" market. Such volatility doesn't come as a surprise given we've weathered civil unrest in the Middle East, a 25% rise in gasoline, a falling U.S. dollar, economic disruption in Japan, QE jawboning, rising price inflation in raw materials and other input costs, a downgrade and an upgrade in commodities from Goldman Sachs, and funding uncertainty for Greece.
Most of last week’s newsletter was dedicated to a discussion on Chinese debt, specifically on how we should think about the Chinese debt structure and on when would we know how much debt is too much debt.
The Federal Government borrowed and spent $5.1 trillion to get $700 billion in total GDP "growth" from 2008-2011. In constant dollars, there was no growth at all.