Financial Sense Blog

As part of the next arms reduction treaty between superpowers, the United States has tentatively agreed to unprecedented Russian access to American nuclear missile sites. According to published accounts, Russian weapons inspectors will be given an open door to American nuclear sites in order to monitor the number of missiles and warheads...

It’s been a year since the fallout from the Lehman Brothers collapse that rocked the markets, pushing market volatility to an extreme. The market volatility that was witnessed last fall is not something many of today’s current market participants have ever experienced, a generational type collapse that one would have to turn back the clock to the Great Depression to find a similar environment.

Robert Fisk's article in The Independent on October 6, “The Demise of the Dollar,” has created many shock waves in the currency markets.

This week’s economic releases and earnings results should steer our course for the next month. There are a number of key indicators sitting at key support and resistance. It’s time for investors and portfolio managers to plot their course and make your bets. Many already have, liquidating portfolios last week near the September highs. Was this a mistake? We’ll find out soon enough.

More than 160 years ago Søren Kierkegaard declared that "truth is a power." But it's a power that is rarely acknowledged beforehand because it entails suffering, and most people reject suffering. Eventually, however, the truth proves victorious, and the majority accepts it. "Why?" asked Kierkegaard. Not because it is truth. "They join it," he explained, "because everyone else is joining."

As we entered this year after the collapse in the markets in the fall of 2008, who would have thought it possible that the S&P 500 would put in a major low and then go on to advance by more than 50%? Granted the S&P 500 underwent a mini bear market (20% + correction) within the mamma bear that began in 2007 as it plunged roughly 25% from the start of the year into the March lows, but a 50% rally in just six months is quite the feat.

Consider two categories: (1) grand strategy for states where power is constitutionally constrained; (2) grand strategy for states where power is concentrated in the hands of an unchecked oligarchy. In the first category, the grand strategist is forced into a conservative position. In the second category, the grand strategist takes a revolutionary position. It may be argued that the first position is linked to capitalism, while the second position is linked to socialism and Russia.

As I step back and view the investment landscape I can’t help but be reminded of two things. The first being John Maynard Keynes famous quote, “The market can stay irrational longer than you can stay solvent,” and the second being the dichotomy between the stock market and the consumer that eerily looks familiar with what I saw in 2007, and why I felt the market would peak and that we would enter a recession.

When a child loses a tooth, we talk about the tooth fairy. When it comes to Christmas, we prefer to speak of Santa Claus; at Easter, it is the Easter Bunny. On Halloween we dress our children as ghosts and goblins, and send them off to collect candy. For World War III, we have the Strategic Arms Reduction Fairy. We make up stories to cover the nakedness (and sometimes the barrenness) of our spirit...

I’ve been thinking about recoveries - revisited. Actually I’ve been thinking about my second post-operative return to normal, Creston Booster Days 2009, and the status of the US recovery. Some recoveries are immediate and automatic while others take time and a lot of effort and input.