We are on a bull party, but there are risks involved. No matter how much fun it is hanging around the punch bowl, we must be aware of these risks. No, I do not view the static emanating from Ms. Yellen as a risk. But at some point, building pressures may abruptly cause a power outage when enough party goers have arrived and partaken.
Any psychoanalyst looking at the behavior of investors today would see clear strains of schizophrenia in a comparison between the markets for gold and US Treasuries.
As I look at my neighborhood, the shopping malls, and other locations, I’m reminded about how many 30-somethings are all having babies. I thought, hmm, maybe it’s just because I’ve had two children in the last two years that I’m more aware, but no, the statistics show the U.S. has broken the baby-boom-barrier.
The first thing to know about junior resource exploration stocks is that they are volatile. You can make 50% in a day, and you can lose 50% in a day. This is due largely to the fact that they tend to be thinly traded. Thus, a whiff of good news, or bad, can overwhelm opposing trades. In the absence of a countervailing bid, the stock can move sharply until it reaches the point that someone is willing to step up and take the other side of the trade. If the news is bad and there’s no bid, things get ugly really quickly. Conversely, if the news is good...
Natural gas prices rose modestly through the beginning of the summer, but then faded along with the heat of July and early August. As it became clear that there would be no material adversity caused by hurricanes in the Gulf of Mexico, prices continued to fall. Drilling programs remained robust, in spite of prices in the $3.5-$5.5 range, which has added pressure to already weak fundamentals. It has been a difficult summer for natural gas bulls, as the optimism surrounding shale gas now appears to be justified.
Lately I've been seeing quite a few analysts calling for a top in gold. I have to say these analysts don't really understand what's happening. If they did they would know that far from topping, gold is just getting started.
If what I read recently is correct, the cost of medical care linked to obesity in America is approaching $150 billion a year. (At least we’re not alone; worldwide, an estimated 1.6 billion adults are now overweight, and 400 million of them are classified as obese.) We have gone from “living off the fat of the land” to being “the land of the fat”. Worse yet, for all those baby boomers heading to retirement, there is no question we will get stuck with the bill for a broken medical system fueled by fast food.
Is the Federal Reserve (Fed) experiencing a midlife crisis? Ever since Fed Chairman Bernanke gave a speech in Jackson Hole, Fed behavior can be summarized as, well, bizarre. According to Bernanke, the market’s inflation expectations may be too low.
When markets don’t perform the way politicians want, you can count on them to bypass, manipulate or manage these markets. All too frequently these attempts are motivated by short-term political needs where appearances take priority over substance. Currently market distortions in housing, credit and the financial system are huge and dangerously unstable. We are now beginning to pay the price. There is a critical shortage of political will to tackle the underlying problems and band-aid solutions will likely keep us lurching from one crisis to the next over the coming years.
