James Grant in among the elite in the financial world. Portrayed as a skeptic, or a bear, he merely analyzes the mathematics and draws conclusions therefrom. Realists like Jim Grant cannot tell you when thing will turn sour, but he can tell you what to expect and why.
Frankly, once the "Grant" or "Fleckenstein" scenario begin playing itself out earlier this year, I sold what wasn't already in cash in June and have been in cash ever since.
The good folks at Minyanville.com, especially Todd Harrison, Bennet Sedecca, and Mr. Practical have also proven invaluable in giving both big picture and real time information on the economic crisis as it has unfolded this year.
In the Face of Mounting Pain, Avoid Extremes [View article]
Agreed. The consumer has been running on fumes for years, all the while the number of retail outlets has multiplied exponentially. Same with car makers. Same with home builders. Too many stores, too many cars, too many homes, too much CAPACITY!
Now, consumption is declining in the face of over-capacity. We should use this destructive time in the economic cycle to re-invent our manufacturing base. An economy rooted in selling each other cheeseburgers and condos is fundamentally flawed.
Since the cost of labor is so much cheaper in China or Mexico, the only way to do this would be to impose protectionist tariffs. Otherwise, it's too expensive to make stuff here.
That 10% up day a week ago has been followed by flattish to up action in the market averages, in spite of some very bad news. With the benefit of hind site, last Tuesday was an intermediate term low.
However, earnings do not seem to support much of a move upward from here. My primary concern continues to be when to dump the US Dollar in favor of another currency.
With an Obama Presidency and the huge Federal Deficit, I foresee much higher interest rates and a much lower value of the dollar. That would, generally speaking, lead to higher commodity prices as well.
The solar stocks took off yesterday in anticipation of an Obama Presidency. I wonder what other sectors would likely benefit? Obama has emphasized creating jobs in "green energy" and "infrastructure."
Reminds me of what I learned about the work programs of the Great Depression under FDR. Anyone know that companies that benefit with road construction?
The problem, as I see it, is that while GM sells plenty of cars, trucks and vans, the market has become highly fragmented, due to the sheer number of other vehicle manufacturers.
You can see the effect of market fragmentation on the ratings of the once dominant big 3 TV networks, or even the circulation of the daily newspapers.
China is a manufacturing superpower, and, like other countries with very low cost of labor, has been draining the developed world of relatively well paying manufacturing jobs. However, we've come full circle, in that our increasingly unemployed middle class cannot afford to purchase the vast amount of goods made countries such as China or Mexico, leading to a slow down in Chinese growth. Ultimately, one wonders whether it will end in US Protectionism.
I'm confused. The FXI (the Chinese market ETF) was up 20% yesterday. The Chinese stock market, as represented by the Shanghai Composite was DOWN 3% last night. And down the night before. So, why does FXI go UP 20% with the Shanghai Composite DOWN about 4% the past 2 days?
Agree. There are many good uses for our tax dollars. Agree with using CNG in cars. I was in Italy over 20 years ago and used something-like CNG then. I do believe we have to "bailout" the banks that made the bad loans and bad bets. We simply cannot allow the financial infrastructure to fail.
I would support some big government works programs like during the depression. What if we decided to employ people to drill for oil and gas in a National Oil Company, like many other countries. What if we expanded the rebuilding of our infrastructure--everyt... from oil and gas pipelines, the electrical grid, to nuclear power plants, to better roads and a much expanded Amtrak. These ideas have worked in other countries.
It seems stupid to have millions of people out of work collecting unemployment checks when there is so much work to be done to improve the back bone and infrastructure of our country.
Ironically, I wrote this piece early yesterday evening, before the Asian markets crashed, and our index futures went "limit down."
However, either on it's own or with a little help from "Hank and Friends" the S&P 500 held the 840 level, the low for this move. However, many stocks and sectors are hitting new lows for this leg down.
Too many cross currents to factor in, including redemptions, but, for now, Hank doesn't want the US Stock Market to put in a series of lower lows. IMHO.
And check out the currency markets! Some serious unwinding! It's almost time to head to Europe, or at least the U.K. The Dollar and Yen are screaming higher.
Sadly, as if there wasn't enough to worry about, the emerging market currencies, debt, and stock markets are crumbling, dependent as they are on the sale of commodities and the influx of foreign capital.
In the good old days just a currency crisis or a single hedge fund crisis could give the stock market a good thrashing. Now it's everything all at once!
Honestly, things are a lot worse now than they were during the bear market lows of 2002-2003, and, fundamentally, the S&P 500 "should" be in the 600 range, IMHO. I figured and still suspect we'll have a trading rally into the end of the year.
The Real Unemployment Numbers [View article]
Gold's Relative Appeal [View article]
The Bubble Years and Beyond [View article]
Frankly, once the "Grant" or "Fleckenstein" scenario begin playing itself out earlier this year, I sold what wasn't already in cash in June and have been in cash ever since.
The good folks at Minyanville.com, especially Todd Harrison, Bennet Sedecca, and Mr. Practical have also proven invaluable in giving both big picture and real time information on the economic crisis as it has unfolded this year.
In the Face of Mounting Pain, Avoid Extremes [View article]
Now, consumption is declining in the face of over-capacity. We should use this destructive time in the economic cycle to re-invent our manufacturing base. An economy rooted in selling each other cheeseburgers and condos is fundamentally flawed.
Since the cost of labor is so much cheaper in China or Mexico, the only way to do this would be to impose protectionist tariffs. Otherwise, it's too expensive to make stuff here.
The Death of Stocks [View article]
Chesapeake Energy Unlikely To Remain this Cheap [View article]
Tuesday's Rally: Classic Bear Trap [View article]
However, earnings do not seem to support much of a move upward from here. My primary concern continues to be when to dump the US Dollar in favor of another currency.
With an Obama Presidency and the huge Federal Deficit, I foresee much higher interest rates and a much lower value of the dollar. That would, generally speaking, lead to higher commodity prices as well.
Get Ready to Buy Like It's 2002 [View article]
Reminds me of what I learned about the work programs of the Great Depression under FDR. Anyone know that companies that benefit with road construction?
Driven to Bankruptcy [View article]
You can see the effect of market fragmentation on the ratings of the once dominant big 3 TV networks, or even the circulation of the daily newspapers.
Increased competition = smaller market share = declining business.
Get Ready to Buy Like It's 2002 [View article]
Wednesday Outlook: Commodities, Emerging Markets [View article]
Wednesday Outlook: Commodities, Emerging Markets [View article]
Is It Time to Buy Yet? [View article]
I would support some big government works programs like during the depression. What if we decided to employ people to drill for oil and gas in a National Oil Company, like many other countries. What if we expanded the rebuilding of our infrastructure--everyt... from oil and gas pipelines, the electrical grid, to nuclear power plants, to better roads and a much expanded Amtrak. These ideas have worked in other countries.
It seems stupid to have millions of people out of work collecting unemployment checks when there is so much work to be done to improve the back bone and infrastructure of our country.
What's Up Now with the U.S. Dollar? [View article]
Is It Time to Buy Yet? [View article]
However, either on it's own or with a little help from "Hank and Friends" the S&P 500 held the 840 level, the low for this move. However, many stocks and sectors are hitting new lows for this leg down.
Too many cross currents to factor in, including redemptions, but, for now, Hank doesn't want the US Stock Market to put in a series of lower lows. IMHO.
And check out the currency markets! Some serious unwinding! It's almost time to head to Europe, or at least the U.K. The Dollar and Yen are screaming higher.
Sadly, as if there wasn't enough to worry about, the emerging market currencies, debt, and stock markets are crumbling, dependent as they are on the sale of commodities and the influx of foreign capital.
In the good old days just a currency crisis or a single hedge fund crisis could give the stock market a good thrashing. Now it's everything all at once!
Honestly, things are a lot worse now than they were during the bear market lows of 2002-2003, and, fundamentally, the S&P 500 "should" be in the 600 range, IMHO. I figured and still suspect we'll have a trading rally into the end of the year.