Financial Sense Newshour on the Markets

In this segment of the Big Picture, Jim discusses a recent San Francisco Federal Reserve Survey that indicates taxes are rising faster than economic growth. His topic, “Tax Hikes + Sequester = Economic Slowdown” discusses results of the survey and that the vast majority (90%) of the current economic slowdown is attributable to increases in taxes, not spending cuts. In his next Big Picture topic, “Different Times Call for Different Strategies”, Jim discusses how Fed policy has turned the market upside-down in recent years, and how “pie chart” strategies will no longer work. Those looking for predictable yield strategies will no longer be able to just plug money into bond funds and forget about them. Jim looks at alternative strategies for these “different times”. 

Jim is pleased to welcome Harry Markopolos CFA, the man who blew the whistle on Bernie Madoff and the largest Ponzi scheme in history. His book is titled “No One Would Listen: A True Financial Thriller”. Harry discusses how both the SEC and the financial industry ignored his warnings of obvious fraud for years before it all came tumbling down in 2008. Harry tells a fascinating story of money, corruption and power, and how a massive financial fraud such as the Bernie Madoff case could happen again.

Jim welcomes back technician Bert Dohmen of Dohmen Capital Research Institute and publisher of The Wellington Letter. Bert believes all this talk about “tapering QE” is a ploy by the Fed to cool the speculative fever of the markets. He also notes that overwhelmingly bullish opinion in the early stages of a bull market is not a negative indicator because there is plenty of money still on the sidelines. The big question is, are we in the early stages, or is this bull market already four years old? Bert also sees any major problems likely to surface first in China. Also in this segment, Ryan Puplava has this week’s Market Wrap-Up, and Erik Townsend has the Commodity Report.

In this month’s edition of “On the Record” Jim covers a broad array of investment questions, from gold and peak oil, to market corrections, interest rates and dividend stocks. Last but certainly not least, Jim answers your Q-Calls in this segment as well.

Jim welcomes back noted technician Charles Nenner of the Charles Nenner Research Center. Charles sees many of his short-term cycles topping, with other cycles topping over the summer. He believes most of the gains are already in for the year, and feels that the average investor is too optimistic at this stage of the market. Charles sees strength in the US dollar until mid-2014. He sees higher interest rates coming, and is very cautious on bonds. Also this hour, Ryan Puplava has this week’s Market Wrap-Up, Erik Townsend looks at commodities, and Rob Bernard has the Fixed Income Report.

Jim welcomes back Richard Dickson, Chief Market Analyst at Lowry Research. Richard notes that the major trend gauges are all positive at present. He sees a similarity in the markets to 1995, when there were no real corrections before the next advance. He believes the “Great Rotation” from bonds to stocks has not yet begun, but the “Fat Lady is warming up to start singing”, as evidenced by recent weakness in utilities. Also in this segment, Ryan Puplava has this week’s Market Wrap-up, Erik Townsend covers Commodities, and Rob Bernard has the Fixed Income Report.

Jim’s next Big Picture topic centers on Ben Bernanke’s testimony on Capitol Hill this week. His remarks seemed to cause some confusion in the financial markets. Bernanke said premature tightening would carry a substantial risk of ending the economic recovery, but didn’t really provide much detail on when or if the Fed would begin to withdraw stimulus. Jim reads the tea leaves and gives his analysis of the Fed’s exit strategy. In the next topic, “The Risk of Double Taxation” Jim discusses the latest Congressional hunt for more tax revenue, this time focusing on Apple and its hoard of overseas cash. Jim looks at the very high corporate tax rates in the US, and the valid reasons corporations are reluctant to repatriate overseas cash.

Jim is pleased to welcome back Barry Bannister CFA, Managing Director at Stifel Nicolaus. Barry characterizes the first half of 2013 as recovery from a deflationary shock, with defensive stocks outperforming. He sees the second half of the year as a return of the “reflation trade”, with an emphasis on the energy, materials, industrials and technology sectors. Barry also discusses the many parallels between the depression-era policies of 1932-1937 and the current economic policies from 2009 -2013. He sees politicians repeating many of the same policy mistakes, and believes if the economy falters, it will be policy-driven, not from the economic fundamentals. 

The first Big Picture topic this week is “Game of Thrones - the Dollar vs. Gold”. Jim looks at the massive global currency debasement among central banks, and in that current game the dollar is king. Gold is in the background and not a major player. Jim believes this will not last, but for now the dollar is winning the game. The next topic, “Forget a QE Exit Plan, Serial Money Printing is the Wave of the Future”, Jim notes that 14 central banks around the world have cut interest rates, and are printing money with no exit strategy in sight. He notes that the next Fed Chairperson, widely assumed to be Janet Yellen, will make Ben Bernanke look conservative when it comes to money printing.