Justice Litle - Seeking Alpha 'Justice Litle' Tag RSS Syndication from SeekingAlpha.com SeekingAlpha.com http://seekingalpha.com/author/justice-litle Has the U.S. Been Playing Loose with Oil Market Data? http://seekingalpha.com/article/173310-has-the-u-s-been-playing-loose-with-oil-market-data?source=feed 173310 Jim Morrison once sang about “Weird scenes inside the gold mine.” Perhaps it should have been weird scenes inside the energy agency.

The International Energy Agency, or IEA, is a 35-year-old quasi-political body headquartered in Paris, France. It was set up in 1974 in response to the budding energy crisis. The IEA’s main focus, as one might expect, is tracking the global oil market. Other energy markets are tracked and studied also.

]]> Fri, 13 Nov 2009 16:30:20 -0500 Justice Litle Jim Morrison once sang about “Weird scenes inside the gold mine.” Perhaps it should have been weird scenes inside the energy agency.

The International Energy Agency, or IEA, is a 35-year-old quasi-political body headquartered in Paris, France. It was set up in 1974 in response to the budding energy crisis. The IEA’s main focus, as one might expect, is tracking the global oil market. Other energy markets are tracked and studied also.


Complete Story »]]> Justice Litle Planet Real vs. Planet Paper: My Biggest Lesson of 2009 http://seekingalpha.com/article/169790-planet-real-vs-planet-paper-my-biggest-lesson-of-2009?source=feed 169790 Market models can be helpful when it comes to trading and investing decisions. For Justice, the year 2009 served up a major insight... Planet Real and Planet Paper are different worlds.
“Essentially, all models are wrong – but some are useful.” That noted quote comes from Dr. George E.P. Box, a grand old man of science and statistics.
It can be disconcerting to embrace the idea that “all models are wrong.” Especially when the insight comes from a legendary statistician!
It makes sense, though, because useful models are simple by definition. Think of a map. What you really need from a good city map is the layout of intersections and streets. A certain level of detail is okay, and even useful. But the more detail that gets added, the more cluttered the map becomes. A map that tried to do too much would cease to become useful at all.
In this sense, the map is “wrong” because it doesn’t give a 100% accurate picture. But, oddly, it is wrong on purpose. It has a very specific purpose and intent, and intentionally leaves things out.
Market models – that is to say, different analogies, metaphors, and ways of observing or thinking about the market – are similar. Like a good city map, the right market model can be extremely useful in terms of aiding trading and investing decisions.
In the spirit of continuous improvement, your editor is always seeking to refine, improve and upgrade his market models. Sometimes this means a small change. Sometimes it means a big change. Sometimes it means discarding a model entirely, or coming up with something entirely new.
In that context, here is one of your editor’s most important lessons learned in 2009...
“Real” and “Paper” Are Different Worlds
Let’s break down the insight in market model terms.
To begin, when it comes to trading and investing, there is the “real” economy and the “paper” economy. The real economy represents what is really and truly happening – the cut and thrust of Main Street, of jobs and wages, of boots on the ground and day-to-day life. The paper economy, in contrast, tracks what’s happening on Wall Street (as reflected in equities, bonds, commodities and currencies).
One can break out the two as follows:
Key Drivers for the “Real” Economy
Key Drivers for the “Paper” Economy
• Jobs, Wages and Unemployment
• Debt Loads/Balance Sheet Quality
• Trade Balances
• Main Street (small business and consumers)
• Realistic Long-Term Outlook
• Negative Government Impact
• Liquidity Levels
• Investor Sentiment
• The “Expectations Game”
• Wall Street (megabanks, connected interests)
• Idealized Short-Term Outlook
• Positive Government Impact
Looking at the factors listed in the table above, it is easy to say, “Duh.” None of these factors are especially new. In fact we’ve talked about them all at one time or another.
But sometimes major realizations are subtle. The market model shift is not always dramatic. Sometimes a small adjustment leads to a game-changing insight.
It is a further irony that big breakthroughs often have a whiff of “duh” to them. This is because a truly useful insight is, more often than not, simple. And sometimes the gain is in reweighting priorities – changing the recipe without changing the ingredients, so to speak.
In this case, the gist could be summed up like this: The real economy and the paper economy are not just “different,” they are different worlds... and thus should be thought about separately and distinctly.
Back to the mental model thing again...
Think of two planets, one slightly larger than the other. These two planets have a relationship. Each holds the other within a mutual gravitational pull.
But, because the relationship is not stable, the distance between the planets changes over time. When there is convergence, the planets move closer to each other. When there is divergence, they move apart.
One of these is “Planet Real.” The other is “Planet Paper.” And thus, if it sometimes seems that the “Real” folks are living on a different planet than the “Paper” folks... that’s because it is more or less true.
A Sharp Disagreement
This market model – seeing “real” and “paper” as distinct worlds to be analyzed separately – is controversial for a number of reasons. Those who embrace standard economic theory, for one, would reject such a model entirely.
Standard theory says that the real economy and the paper economy are very closely linked... that the stock market is both a barometer of health for the real economy and a leading indicator for the real economy’s future direction... and that the main purpose of the market is to allocate capital, i.e. to funnel cash to worthy enterprises and thus aid the real economy.
Your editor has always been skeptical of academic types. As a result of all that’s happened in 2009, his skepticism has morphed into full-on rejection of these common assertions put forth in grad school finance classes. In other words:
• Equity markets are NOT reliable leading indicators as to the health or future direction of the real economy. This would be far more true in an unmanipulated, ungamed free market system, but that is not what we have.
• The primary function of equity markets is NOT efficient allocation of capital (getting investment dollars to businesses that need them). Again, this is the market’s hypothetical function in a free market system. But to the degree that the system is gamed, subject to intervention and coercion, this assertion is not true.
• Efficient market theory has little basis in empirical observation. Why “should” the markets be efficient? Just because academia says they are? Just because we want them to be? Why “should” the markets be rational allocators of capital, when strong influences make them otherwise?
• The “manipulated market” charge is easily supported by visible evidence, and does not require an embrace of conspiracy theory to be shown true. The evidence for efficient markets doesn’t really exist. But the evidence for manipulated markets is plain as day. We see it in the government’s actions. We see it in central bank officials’ openly stated intent. We see it in the actions and disclosures of the major Wall Street players. In other words, we observe evidence of legally sanctioned manipulation most everywhere we look.
• The major benefactors of the “paper” economy are incentivized to make large short-term profits... NOT to sustain logical market valuations. What are equities truly worth? What should they be worth? What is a sober and rational valuation for the market? The streetwise answer is, “Who cares???” That isn’t what the game is about. Economics is supposed to be all about incentives, and yet economists refuse to make the obvious connection. It seems plain that the mutually overlapping incentives of Washington and Wall Street favor markets going as high as the gamers can take them. This has nothing to do with rational valuation. When it comes to incentives for the paper crowd, the real economy is a restraint rather than a guide.
Where the Rubber Meets the Road
So what is the point of all the above in terms of hard-nosed trading and investing? How does this distinction between “real” and “paper” apply to protecting and building wealth?
First, thinking about the “real” economy and the “paper” economy separately can help avoid a number of future pitfalls. If one recognizes that there is a direct correlation between government intervention and market distortion, then one will be more likely to take positive “paper” results with a grain of salt (being aware of how quickly such gains can be spirited away). This realization could lead to better hedging techniques or other methods of protecting near-term capital gains.
What’s more, we are set up to see a LOT of government intervention in the coming years. Not just in the United States, but in Europe, China and elsewhere. 2009 may have only been a preview in that respect.
So the sooner one realizes that such intervention will lead to ever greater market distorting effects, the better... especially when tempted by the analysis of those who present the goings on of the real economy and the paper economy as if they are the same (or otherwise more tightly coupled than they really are).
On the flip side – and this is where your humble editor eats a plateful of crow – distinguishing between the two worlds can also help one avoid the trap of being prematurely gloomy in regard to the nominal direction of asset prices. The moneyed interests driving the paper economy can be extremely powerful... so powerful that they can present the illusion of stocks going up, even as the real (inflation-adjusted) value goes down.
Those who were bearish and cynical from the March lows (including yours truly) were, ironically, not cynical enough.
Opportunity and Turmoil
For many of us, it is a game that must be played (and a game that can still be quite fun, albeit dirty). When Wall Street and Washington have the ability to majorly impact your nest egg for the worse – and when most every central banker in the world is playing some version of the same game – there is no real way to opt out.
The alternative, then, is to “game the gamers” and set about making as much money as possible (what trading and investing is all about). In that respect, the “two worlds” model represents the presence of both opportunity and turmoil.
Think about the convergence and divergence idea again. Sometimes the planets (paper versus real) are rapidly increasing their distance from each other. But then gravity’s pull reasserts itself, causing the planets to reverse course and converge with frightening speed.
This is analogous to the swings between inflationary and deflationary sentiment we can expect moving forward, perhaps for a number of years. Government intervention and Nash-Equilibrium-style market movements will lead to euphoria, i.e., divergence, as Planet Paper moves away from Planet Real. But then the artificial boosters will run out of gas (as happened time and again with Japan), and the two planets will violently recouple.
For your editor, there will be many trickle-down impacts from this adjustment. Not least will be the conviction to never again confuse the natures of “Planet Real” and “Planet Paper”... sometimes converging but never the same, with distinct and separate drivers for each.
]]> Thu, 29 Oct 2009 07:49:53 -0400 Justice Litle Market models can be helpful when it comes to trading and investing decisions. For Justice, the year 2009 served up a major insight... Planet Real and Planet Paper are different worlds.
“Essentially, all models are wrong – but some are useful.” That noted quote comes from Dr. George E.P. Box, a grand old man of science and statistics.
It can be disconcerting to embrace the idea that “all models are wrong.” Especially when the insight comes from a legendary statistician!
It makes sense, though, because useful models are simple by definition. Think of a map. What you really need from a good city map is the layout of intersections and streets. A certain level of detail is okay, and even useful. But the more detail that gets added, the more cluttered the map becomes. A map that tried to do too much would cease to become useful at all.
In this sense, the map is “wrong” because it doesn’t give a 100% accurate picture. But, oddly, it is wrong on purpose. It has a very specific purpose and intent, and intentionally leaves things out.
Market models – that is to say, different analogies, metaphors, and ways of observing or thinking about the market – are similar. Like a good city map, the right market model can be extremely useful in terms of aiding trading and investing decisions.
In the spirit of continuous improvement, your editor is always seeking to refine, improve and upgrade his market models. Sometimes this means a small change. Sometimes it means a big change. Sometimes it means discarding a model entirely, or coming up with something entirely new.
In that context, here is one of your editor’s most important lessons learned in 2009...
“Real” and “Paper” Are Different Worlds
Let’s break down the insight in market model terms.
To begin, when it comes to trading and investing, there is the “real” economy and the “paper” economy. The real economy represents what is really and truly happening – the cut and thrust of Main Street, of jobs and wages, of boots on the ground and day-to-day life. The paper economy, in contrast, tracks what’s happening on Wall Street (as reflected in equities, bonds, commodities and currencies).
One can break out the two as follows:
Key Drivers for the “Real” Economy
Key Drivers for the “Paper” Economy
• Jobs, Wages and Unemployment
• Debt Loads/Balance Sheet Quality
• Trade Balances
• Main Street (small business and consumers)
• Realistic Long-Term Outlook
• Negative Government Impact
• Liquidity Levels
• Investor Sentiment
• The “Expectations Game”
• Wall Street (megabanks, connected interests)
• Idealized Short-Term Outlook
• Positive Government Impact
Looking at the factors listed in the table above, it is easy to say, “Duh.” None of these factors are especially new. In fact we’ve talked about them all at one time or another.
But sometimes major realizations are subtle. The market model shift is not always dramatic. Sometimes a small adjustment leads to a game-changing insight.
It is a further irony that big breakthroughs often have a whiff of “duh” to them. This is because a truly useful insight is, more often than not, simple. And sometimes the gain is in reweighting priorities – changing the recipe without changing the ingredients, so to speak.
In this case, the gist could be summed up like this: The real economy and the paper economy are not just “different,” they are different worlds... and thus should be thought about separately and distinctly.
Back to the mental model thing again...
Think of two planets, one slightly larger than the other. These two planets have a relationship. Each holds the other within a mutual gravitational pull.
But, because the relationship is not stable, the distance between the planets changes over time. When there is convergence, the planets move closer to each other. When there is divergence, they move apart.
One of these is “Planet Real.” The other is “Planet Paper.” And thus, if it sometimes seems that the “Real” folks are living on a different planet than the “Paper” folks... that’s because it is more or less true.
A Sharp Disagreement
This market model – seeing “real” and “paper” as distinct worlds to be analyzed separately – is controversial for a number of reasons. Those who embrace standard economic theory, for one, would reject such a model entirely.
Standard theory says that the real economy and the paper economy are very closely linked... that the stock market is both a barometer of health for the real economy and a leading indicator for the real economy’s future direction... and that the main purpose of the market is to allocate capital, i.e. to funnel cash to worthy enterprises and thus aid the real economy.
Your editor has always been skeptical of academic types. As a result of all that’s happened in 2009, his skepticism has morphed into full-on rejection of these common assertions put forth in grad school finance classes. In other words:
• Equity markets are NOT reliable leading indicators as to the health or future direction of the real economy. This would be far more true in an unmanipulated, ungamed free market system, but that is not what we have.
• The primary function of equity markets is NOT efficient allocation of capital (getting investment dollars to businesses that need them). Again, this is the market’s hypothetical function in a free market system. But to the degree that the system is gamed, subject to intervention and coercion, this assertion is not true.
• Efficient market theory has little basis in empirical observation. Why “should” the markets be efficient? Just because academia says they are? Just because we want them to be? Why “should” the markets be rational allocators of capital, when strong influences make them otherwise?
• The “manipulated market” charge is easily supported by visible evidence, and does not require an embrace of conspiracy theory to be shown true. The evidence for efficient markets doesn’t really exist. But the evidence for manipulated markets is plain as day. We see it in the government’s actions. We see it in central bank officials’ openly stated intent. We see it in the actions and disclosures of the major Wall Street players. In other words, we observe evidence of legally sanctioned manipulation most everywhere we look.
• The major benefactors of the “paper” economy are incentivized to make large short-term profits... NOT to sustain logical market valuations. What are equities truly worth? What should they be worth? What is a sober and rational valuation for the market? The streetwise answer is, “Who cares???” That isn’t what the game is about. Economics is supposed to be all about incentives, and yet economists refuse to make the obvious connection. It seems plain that the mutually overlapping incentives of Washington and Wall Street favor markets going as high as the gamers can take them. This has nothing to do with rational valuation. When it comes to incentives for the paper crowd, the real economy is a restraint rather than a guide.
Where the Rubber Meets the Road
So what is the point of all the above in terms of hard-nosed trading and investing? How does this distinction between “real” and “paper” apply to protecting and building wealth?
First, thinking about the “real” economy and the “paper” economy separately can help avoid a number of future pitfalls. If one recognizes that there is a direct correlation between government intervention and market distortion, then one will be more likely to take positive “paper” results with a grain of salt (being aware of how quickly such gains can be spirited away). This realization could lead to better hedging techniques or other methods of protecting near-term capital gains.
What’s more, we are set up to see a LOT of government intervention in the coming years. Not just in the United States, but in Europe, China and elsewhere. 2009 may have only been a preview in that respect.
So the sooner one realizes that such intervention will lead to ever greater market distorting effects, the better... especially when tempted by the analysis of those who present the goings on of the real economy and the paper economy as if they are the same (or otherwise more tightly coupled than they really are).
On the flip side – and this is where your humble editor eats a plateful of crow – distinguishing between the two worlds can also help one avoid the trap of being prematurely gloomy in regard to the nominal direction of asset prices. The moneyed interests driving the paper economy can be extremely powerful... so powerful that they can present the illusion of stocks going up, even as the real (inflation-adjusted) value goes down.
Those who were bearish and cynical from the March lows (including yours truly) were, ironically, not cynical enough.
Opportunity and Turmoil
For many of us, it is a game that must be played (and a game that can still be quite fun, albeit dirty). When Wall Street and Washington have the ability to majorly impact your nest egg for the worse – and when most every central banker in the world is playing some version of the same game – there is no real way to opt out.
The alternative, then, is to “game the gamers” and set about making as much money as possible (what trading and investing is all about). In that respect, the “two worlds” model represents the presence of both opportunity and turmoil.
Think about the convergence and divergence idea again. Sometimes the planets (paper versus real) are rapidly increasing their distance from each other. But then gravity’s pull reasserts itself, causing the planets to reverse course and converge with frightening speed.
This is analogous to the swings between inflationary and deflationary sentiment we can expect moving forward, perhaps for a number of years. Government intervention and Nash-Equilibrium-style market movements will lead to euphoria, i.e., divergence, as Planet Paper moves away from Planet Real. But then the artificial boosters will run out of gas (as happened time and again with Japan), and the two planets will violently recouple.
For your editor, there will be many trickle-down impacts from this adjustment. Not least will be the conviction to never again confuse the natures of “Planet Real” and “Planet Paper”... sometimes converging but never the same, with distinct and separate drivers for each.

Complete Story »]]> Justice Litle Who Does Ben Bernanke Really Work For? http://seekingalpha.com/article/158865-who-does-ben-bernanke-really-work-for?source=feed 158865 The announcement of Ben S. Bernanke’s successful nomination for a second term brings forth a curious question. Who does the Fed Chairman really and truly work for?

Before we get into today's topic, a quick comment on the state of the market here and now.

]]> Fri, 28 Aug 2009 09:24:16 -0400 Justice Litle The announcement of Ben S. Bernanke’s successful nomination for a second term brings forth a curious question. Who does the Fed Chairman really and truly work for?

Before we get into today's topic, a quick comment on the state of the market here and now.


Complete Story »]]> SPY Justice Litle The Zombies That Ate Japan’s Recovery http://seekingalpha.com/article/149522-the-zombies-that-ate-japans-recovery?source=feed 149522

Field Reporter: Are they slow-moving, chief?

Sheriff McClelland: Yeah, they're dead. They're all messed up.

]]> Fri, 17 Jul 2009 12:37:43 -0400 Justice Litle

Field Reporter: Are they slow-moving, chief?

Sheriff McClelland: Yeah, they're dead. They're all messed up.


Complete Story »]]> DNL EWJ Justice Litle Costs Up, Sales Down – It's Retail Disaster http://seekingalpha.com/article/138320-costs-up-sales-down-it-s-retail-disaster?source=feed 138320 Written by Adam Lass, Senior Editor, WaveStrength Options Weekly

How to earn 367% off American Retail’s “Seven-Ten Split.”

]]> Tue, 19 May 2009 07:34:37 -0400 Justice Litle Written by Adam Lass, Senior Editor, WaveStrength Options Weekly

How to earn 367% off American Retail’s “Seven-Ten Split.”


Complete Story »]]> SHLD SWY Justice Litle Looking at Reflation and Stagnation Trades http://seekingalpha.com/article/138028-looking-at-reflation-and-stagnation-trades?source=feed 138028 Mr. Market has begun to show clear signs of split personality disorder in recent weeks. Now that investors have exhaled in relief that a deflationary apocalypse has been avoided, the new reality of reflation and stagnation is sinking in…

On the one hand, certain areas of the market – the ones much favored in the big run-up – have started to wilt and fade as the much-lauded “green shoots” turn brown. On the other hand, areas of the market which didn’t participate as much in the rally at first have started showing signs of life.

]]> Sun, 17 May 2009 04:51:09 -0400 Justice Litle Mr. Market has begun to show clear signs of split personality disorder in recent weeks. Now that investors have exhaled in relief that a deflationary apocalypse has been avoided, the new reality of reflation and stagnation is sinking in…

On the one hand, certain areas of the market – the ones much favored in the big run-up – have started to wilt and fade as the much-lauded “green shoots” turn brown. On the other hand, areas of the market which didn’t participate as much in the rally at first have started showing signs of life.


Complete Story »]]> DBA IPD Justice Litle What's Driving Gold and Gold Stocks: Part 1 http://seekingalpha.com/article/130120-what-s-driving-gold-and-gold-stocks-part-1?source=feed 130120 Gold and gold stocks have been hit hard in recent days. In part one we examine the reasons as to why, and in part two cover why gold stocks could be one of the biggest trades of 2009.

Gold and gold stocks have been hammered as of late. The yellow metal took a header on Monday, with the futures closing right on the 200-day exponential moving average. If that support doesn’t hold today (Tuesday), gold may even be trading lower by the time you read this.

]]> Wed, 08 Apr 2009 08:33:41 -0400 Justice Litle Gold and gold stocks have been hit hard in recent days. In part one we examine the reasons as to why, and in part two cover why gold stocks could be one of the biggest trades of 2009.

Gold and gold stocks have been hammered as of late. The yellow metal took a header on Monday, with the futures closing right on the 200-day exponential moving average. If that support doesn’t hold today (Tuesday), gold may even be trading lower by the time you read this.


Complete Story »]]> GDX GLD IAU Justice Litle Switzerland Threatens to Start a Currency War http://seekingalpha.com/article/126418-switzerland-threatens-to-start-a-currency-war?source=feed 126418

Let the currency wars begin.
– Chris Turner, head of FX strategy, ING Financial Markets

]]> Tue, 17 Mar 2009 11:27:26 -0400 Justice Litle

Let the currency wars begin.
– Chris Turner, head of FX strategy, ING Financial Markets


Complete Story »]]> FXF Justice Litle Is Gold on a Deflationary Death Watch? http://seekingalpha.com/article/126075-is-gold-on-a-deflationary-death-watch?source=feed 126075 A number of readers have e-mailed me with versions of this question, so we’ll address it head-on today.

By way of background, a few commentators have laid out the bearish case for gold – but none have pounded the table as hard as a guy named Nick Guarino. (I have been made aware of this by correspondence from readers.)

]]> Mon, 16 Mar 2009 04:59:53 -0400 Justice Litle A number of readers have e-mailed me with versions of this question, so we’ll address it head-on today.

By way of background, a few commentators have laid out the bearish case for gold – but none have pounded the table as hard as a guy named Nick Guarino. (I have been made aware of this by correspondence from readers.)


Complete Story »]]> DIA GLD SPY Justice Litle Who Will Win the Economic Battle for Ukraine? http://seekingalpha.com/article/124497-who-will-win-the-economic-battle-for-ukraine?source=feed 124497 Ukraine, a geopolitical linchpin that could tip the balance of power between Russia and the West, is divided right down the middle... and the fate of Europe potentially hangs in the balance.

Bigger Than Europe

]]> Fri, 06 Mar 2009 03:44:54 -0500 Justice Litle Ukraine, a geopolitical linchpin that could tip the balance of power between Russia and the West, is divided right down the middle... and the fate of Europe potentially hangs in the balance.

Bigger Than Europe


Complete Story »]]> EEM RSX Justice Litle Will the EU Fiddle While Eastern Europe Burns? http://seekingalpha.com/article/124394-will-the-eu-fiddle-while-eastern-europe-burns?source=feed 124394 "We should not allow that a new Iron Curtain should be set up and divide Europe."
– Ferenc Gyurcsany, Prime Minister of Hungary

Will Germany prove content to fiddle as Eastern Europe burns? The risk seems real.

]]> Thu, 05 Mar 2009 15:32:00 -0500 Justice Litle "We should not allow that a new Iron Curtain should be set up and divide Europe."
– Ferenc Gyurcsany, Prime Minister of Hungary

Will Germany prove content to fiddle as Eastern Europe burns? The risk seems real.


Complete Story »]]> GUR Justice Litle Buffett and the Banks: Make the Most of a Bad Situation http://seekingalpha.com/article/124034-buffett-and-the-banks-make-the-most-of-a-bad-situation?source=feed 124034 Warren Buffett’s new letter to shareholders is out. One passage in particular reveals just how much government is the problem rather than the solution.

Warren Buffett’s new annual letter to shareholders is out. You can find it (and all letters previous) on the Berkshire Hathaway Web site.

]]> Wed, 04 Mar 2009 06:04:26 -0500 Justice Litle Warren Buffett’s new letter to shareholders is out. One passage in particular reveals just how much government is the problem rather than the solution.

Warren Buffett’s new annual letter to shareholders is out. You can find it (and all letters previous) on the Berkshire Hathaway Web site.


Complete Story »]]> BAC BRK.A BRK.B C Justice Litle What Do Gold-to-Oil and Gold-to-Silver Ratios Say? http://seekingalpha.com/article/121134-what-do-gold-to-oil-and-gold-to-silver-ratios-say?source=feed 121134 The gold-to-oil ratio is at ten-year highs – a single ounce of gold can now purchase 22+ barrels of WTIC crude. But what does it mean?

For individuals, gold remains the best insurance against future shocks and the best store of value.
– William Rees-Mogg, Times Online

]]> Wed, 18 Feb 2009 05:35:43 -0500 Justice Litle The gold-to-oil ratio is at ten-year highs – a single ounce of gold can now purchase 22+ barrels of WTIC crude. But what does it mean?

For individuals, gold remains the best insurance against future shocks and the best store of value.
– William Rees-Mogg, Times Online


Complete Story »]]> GLD OIL SLV USO Justice Litle The Next 100 Years: A Forecast for the 21st Century by George Friedman http://seekingalpha.com/article/120878-the-next-100-years-a-forecast-for-the-21st-century-by-george-friedman?source=feed 120878 I love coming across well-articulated viewpoints that challenge my own. It's almost always a win-win situation when this happens.

If I am convinced of the new point of view on its merits, then my worldview has been enhanced. My stance has moved from a position that is less correct to one that is more correct. If I remain unconvinced, on the other hand, then my original viewpoint has been strengthened... stress-tested and found worthy, as it were. And either way, new layers of nuance and subtlety are always a plus.

]]> Tue, 17 Feb 2009 06:12:09 -0500 Justice Litle I love coming across well-articulated viewpoints that challenge my own. It's almost always a win-win situation when this happens.

If I am convinced of the new point of view on its merits, then my worldview has been enhanced. My stance has moved from a position that is less correct to one that is more correct. If I remain unconvinced, on the other hand, then my original viewpoint has been strengthened... stress-tested and found worthy, as it were. And either way, new layers of nuance and subtlety are always a plus.


Complete Story »]]> Justice Litle Using the Market Quadrant to Understand Market Cycles http://seekingalpha.com/article/117239-using-the-market-quadrant-to-understand-market-cycles?source=feed 117239 Risk appetite is the mother's milk of capitalism.
– Paul McCulley, Managing Director, PIMCO

If Wall Street were more like Sesame Street, this week would be brought to you by the letter "L," for layoffs.

]]> Thu, 29 Jan 2009 04:02:27 -0500 Justice Litle Risk appetite is the mother's milk of capitalism.
– Paul McCulley, Managing Director, PIMCO

If Wall Street were more like Sesame Street, this week would be brought to you by the letter "L," for layoffs.


Complete Story »]]> Justice Litle President Obama Can't Save the Dollar from Its Fate http://seekingalpha.com/article/115658-president-obama-can-t-save-the-dollar-from-its-fate?source=feed 115658

Mrs. Watanabe trusts her government. How far does she trust Uncle Sam? How far, indeed, does Hu Jintao?

From Martin Wolf, Financial Times, "Why Obama's plan is still inadequate and incomplete".

]]> Wed, 21 Jan 2009 08:17:15 -0500 Justice Litle

Mrs. Watanabe trusts her government. How far does she trust Uncle Sam? How far, indeed, does Hu Jintao?

From Martin Wolf, Financial Times, "Why Obama's plan is still inadequate and incomplete".


Complete Story »]]> UDN UUP Justice Litle Questioning the 'King Dollar' Thesis http://seekingalpha.com/article/114669-questioning-the-king-dollar-thesis?source=feed 114669 The dollar is widely regarded these days as a "one-eyed king in the land of the blind." But is the "King Dollar" thesis really all it's cracked up to be?

Last week, when I wrote about building a short position in the greenback, a number of you wrote in to remind me of the 'King Dollar' thesis.

]]> Wed, 14 Jan 2009 04:27:10 -0500 Justice Litle The dollar is widely regarded these days as a "one-eyed king in the land of the blind." But is the "King Dollar" thesis really all it's cracked up to be?

Last week, when I wrote about building a short position in the greenback, a number of you wrote in to remind me of the 'King Dollar' thesis.


Complete Story »]]> FXE FXY UDN UUP Justice Litle 'Wars and Rumors of Wars' - Time to Look at Defense Stocks http://seekingalpha.com/article/114173-wars-and-rumors-of-wars-time-to-look-at-defense-stocks?source=feed 114173 With the prospect for “wars and rumors of wars” on an unsettling rise, now could be a good time to take a closer look at defense stocks.

The backdrop to 2009 thus far reminds me of that old New Testament line: “And ye shall hear of wars and rumors of wars.”

]]> Sun, 11 Jan 2009 06:20:54 -0500 Justice Litle With the prospect for “wars and rumors of wars” on an unsettling rise, now could be a good time to take a closer look at defense stocks.

The backdrop to 2009 thus far reminds me of that old New Testament line: “And ye shall hear of wars and rumors of wars.”


Complete Story »]]> AVAV GD LMT NOC Justice Litle Six Reasons Small Caps Could Lead the 2009 Rally http://seekingalpha.com/article/113618-six-reasons-small-caps-could-lead-the-2009-rally?source=feed 113618 Which class of stocks is more likely to outperform in 2009 – small caps or large caps? If big profits are the goal, here are half a dozen reasons to think small.

Which is better for playing the 2009 rally – small caps or large caps?

]]> Wed, 07 Jan 2009 07:09:00 -0500 Justice Litle Which class of stocks is more likely to outperform in 2009 – small caps or large caps? If big profits are the goal, here are half a dozen reasons to think small.

Which is better for playing the 2009 rally – small caps or large caps?


Complete Story »]]> IWM Justice Litle Treasury Bond Mystery and a Currency Clue http://seekingalpha.com/article/112180-treasury-bond-mystery-and-a-currency-clue?source=feed 112180 U.S. Treasuries look so lousy here that shorting them has become the “obvious” trade. But there is more to this mystery than meets the eye, as Justice explores...

Jim Grant nailed it in a recent Financial Times piece. Known for their “risk-free return” in more normal times, Grant observes that U.S. Treasuries (or USTs for short) now offer “return-free risk.”

]]> Wed, 24 Dec 2008 04:57:22 -0500 Justice Litle U.S. Treasuries look so lousy here that shorting them has become the “obvious” trade. But there is more to this mystery than meets the eye, as Justice explores...

Jim Grant nailed it in a recent Financial Times piece. Known for their “risk-free return” in more normal times, Grant observes that U.S. Treasuries (or USTs for short) now offer “return-free risk.”


Complete Story »]]> IEF TLT Justice Litle