Financial Sense Blog

When it bottomed at $7 per pound in 2001, uranium was one of the most derided commodities on earth.

It has been said that love makes the world go 'round. But to anyone cognizant of how our modern consumer economies operate — from the manufacture of goods to their transportation — it might seem as if the world instead goes 'round on oil. Americans are reluctantly but inexorably learning how dependent they are upon the "black gold", especially when they experience the "pain at the pump" when gassing up their SUVs. Despite these unwelcome lessons, many of them still appear to be unaware of what it takes to create plastic products and ship them from the other side of the planet, ending up on the shelves at Wal-Mart.

Assessing what we know and what we don't know is the ever-present and ongoing psychological battle in investment management, now isn't it? Trying to make an assessment of the fundamental facts and then reconciling this view of life with the reality of very short term financial market outcomes can be quite the trying challenge psychologically, emotionally, and even physically, to be honest.

Economic events in the United States often provide a preview of what’s around the corner for the British economy. Both countries run large external trade deficits, and much like the US, the British economy has been expanding on little else than the availability of easy credit and asset price inflation in the housing market.

Puzzles are a great whole of life experience. As children we rejoiced in the simple fretwork puzzles that taught us about spatial connectivity and which morphed under the relentless pulse of standard business vision stated as "more, better, faster, cheaper", into cardboard nasties that usually had at least one errant piece hiding under the rug to be vacuumed up by mum and lost forever.

Russia and the United States have the world’s largest nuclear arsenals. Both countries have powerful armies, fleets and air forces. The same can be said for China, as well, which stands as the world’s third most powerful country.

In today’s update I want to look at the market from a couple of different perspectives. Recently, I have heard it said that the Dow Theory is now giving a “Buy Signal.” This is not exactly true. In order to explain where we are from a Dow Theory perspective, I first have to explain where we have been.

Cleaning up the mess that Mr. Greenspan left behind was never going to be easy. Banks and brokers around the world face more than half-trillion dollars in write-offs as a consequence of the US sub-prime mortgage crisis, which is spreading from the US property market and roiling global stock markets.