Hefaistos

The Case Against Investing in the Dow Industrials (For Now)

Concept for this article is nice... but it is a fundamental error to do this kind of technical analysis of long-term developments based on a linear scale chart. If you redraw the chart with the needed log scale, you will get another picture, other conclusions.

Spain's Unemployment Continues to Surge: Will It Hit 20%?

Thanks for this load of info! It sounds like an outright depression in Spain. Will we see social unrest?

Problem Banks in 2008 Are Nowhere Close to 1990-91

If you look at bankrupcies as an indicator of bad debt, you will see that there is about a two-year lag between the occurence of a financial crisis and the peak of bankrupcies (data from various countries).
Thus, a lot more of problems are to be expected, through 2010.

Can Lundin Go It Alone After Failed Merger?

According to Sophia Shane at IR of Lundin, all mines have positive cash flows now. + Tenke is coming on line later on.

Made in USA Is Alive and Well

I agree with prudentinvestor.

Also, the second graph is a mis-representation. A long term growth graph should always be shown in a log diagram, not with a nominal scale. The correct log graph would probably show that we actually have a declining growth rate.

Another, Better Way of Looking at This Market

That's i mighty broad trading range, from 725 - 1550. I wouldn't say that a market that doubled from say 750 to 1500 was trading a 'range'. Such a broad range means that this analysis has no practical value at all.

Russian Debt and the Euro

I agree, moral hazard protection shouldn't be inflicted on nations. People suffer enough as it is in these countries. The main perpetrators are incompetent bankers in Austria, Sweden, The Netherlands. They never understood what systemic risks they took, in their overzealous expansion into the East. It is those managers that should be punished. Send them further east, to Gulag.

Russia About to Default on Sovereign Debt (Again)

1. The Russian state has very little debt, after repaying most everything that was borrowed
2. A rescheduling is not a default. It is just a way to survive your debt load until cash flows turn positive again. Russian companies are basically ok, they suffer from depressed raw materials prices. But anytime, all the stimulance packages and bailouts will be enough to get growth going again, and oil prices etc will rise, saving those companies. Thus, a rescheduling is the right thing to do.

Another View of Industry Momentum

I disagree, the 'bad bank' is a reality tested and proven concept. It's exactly what's needed, to get away from the mark-to-market hysteria of assets, that is forced upon banks by auditors etc, but which is in reality irrelevant, since those assets were bought with the intention to keep until maturity.

To lift those ailing assets away and let them mature in peace will be good for banks and for the taxpayer as well, since the economy most likely will recover within the average maturity of those assets.

A Picture Says a Thousand Words

OK, exports are somewhat elastic to the dollar rate, as well as imports, thus a falling dollar will improve the trade balance. Another question is of course HOW MUCH the USD would need to fall to bring about some balance in the trade balance.
No country can forever have a negative balance of payments, since it adds to the national debt, and sooner or later too much of domestic assets will be owned by foreigners (Chinese, eg.), who will dictate the policies needed...

Has the U.S. Spent Itself into a Hole It Can't Spend Its Way Out of?

There is really no problem with the figures of debt to GDP as long as it is below 100% and USA keeps its AAA rating. The debt service is still very low, and will remain so. The real trouble will come if deficits will remain, adding to debt levels each year. Deficits should be seen as investments for the future, investments that will bring higher growth and GDP in the future.
Also, debt is a stock, and GDP is a flow, so they are like apples and pears in that respect.

Is Oil Moving Up, Down, or Sideways?

What's interesting with oil, is that it has a strong tendency for long-term trending. Which is of course very tradable, once the trend is set. I'd suggest that new bottoms will be set during spring, due to bad macroeconomic news and bad earnings reports. But I also see that the oil market is very eager to set off on a new up trend, supposedly doubling from the new bottom.

Has Gold Appreciated Too Much to Be Inflation Protection?

The headline to this article is somewhat funny. Supposedly, if gold was an inflation protection, why does it then rise in times of deflation? Ah, because it will rise even more in times of inflation.
I think it's relevant to put the price of gold in relation to the Yen rate. Gold has another 10% or so upward potential in terms of the very strong yen. And japanese are big buyers of paper gold.

John Hussman: Based on Okun's Law Obama's Stimulus Plan May Fall Short

Regarding the last paragraph, that consumers change their preferences for more savings in times of crises is a well known pattern. The most famous example is Sweden, which at the end of 1980's had a slightly negative savings rate. Then a banking crisis erupted, and over the course of only two years, the savings rate rose to a whopping 8%. That of course put an enormous drag on the real economy, since what is saved, isn't consumed. We now see a similar development in the US.

How Will Markets Perform in 2009?

Thanks for a very informative article.
Your forecast for record bankruptcies in 2009 is likely to be fulfilled, especially since many small companies will do it by choice, as you say: "Corporations with debt levels well above the recapture value of the enterprise will have managers and equity holders choosing bankruptcy to cram down liability obligations and redistribute the option value on the equity. In this unique era, there is no shame of bankruptcy for not only the home mortgage holder but also the corporate debtor." I don't see why there should be any 'shame' in a bankruptcy like that. This is more a process of creative destruction, or, it could also be seen as a variant of management buyout, since I believe managements will be the only winners in this.