Emerald

Wednesday Outlook: Commodities, Global Markets

Tune out the noise. The MSM doesn't cover campaign contributions so they can maintain "access" to politicians and continue to report the "noise". Democrats and Fox News jousting is just part of the distracting noise. Who cares. David is correct in that you should simply watch the tape. Government debt will be monetized over the next ten years with higher inflation (but not now) and higher interest rates. Stocks may continue to rise on increased earnings bougth with job layoffs, b ut without increasing revenues, the emperor has no clothes. Look for a 10% correction over the next few months. When that happens, buy.

The End of 'Easy Oil'

Oil will not be replaced by alternatives (solar, wind, electric) in the next 20-30 years. Perhaps alternatives will reach 10-15% twenty years frim now but gasoline will be powering cars for a long time. Batteries have promise but it is limited near term.

Bond ETFs: Winds of Change Begin to Swirl

A year ago, many investors rushed to short the long Treasury and got crushed. We are in a deflationary environment with the consumer tapped out and businesses not looking to borrow. I'm in intermediate corporates, governments and munis, but not shorting.

Friday Outlook: Commodities, Global Markets

This mess started with Clinton/Rubin by allowing Wall Street to gun the derivatives market and was supported and expanded by Bush/Greenspan with low interest rates, two unnecessary wars and the first banking and auto bailouts. Obama is not perfect, but laying all this at his feet is absurd as he inherited most of these problems. How about blaming the clowns selling toxic debt?


On Oct 09 07:01 AM Diogenes of Sinope wrote:

> Some lip service for the US Dollar, a pull back in commodity prices,
> but stocks hanging tough.
>
> In the world of fantasy....
>
> Nobel Peace Prize 2009-- Barak Obama--for his outstanding accomplishments
> in....? National debt? Declining US influence? America reverting
> to the mean?
>
> Previous American Nobel Peace Price recipients:
>
> Al Gore: for bringing attention to global warming at a time of global
> cooling.
>
> Yassar Arafat: for walking away from a US brokered final peace deal
> that gave the Palestinians everything they wanted except the destruction
> of the state of Israel.
>
> Jimmy Carter: for brokering a deal with the North Koreans to halt
> their nuclear program, a few years before they developed nuclear
> weapons.
>
> Stop the world I want to get off.

Wednesday Outlook: Commodities, Global Markets

When everyone is predicting that the USD will collapse and everyone should be in gold, watch out. The dollar will strengthen short term and GLD will correct 10-15% in the next few months. I have taken 75% profits in GLD and have a small position in UUP. Longer term, the deficits will be monetized and I have my energy and foreign stock holdings for protection. Over the next year, investment grade bonds offer yield and safety from an over bought stock market with no top line growth.

REITs Whimper After Relatively Strong Year

Many of the better capitalized apartment REITs are good investments at today's price. Most have refinanced debt that was coming due 2010-2012 and some have cut dividends to correspond with today's depressed cash flows yet still yield in excess of 4%. Cash flow and dividends will grow and produce a strong total return over the next five years. Long EQR.

Bank of America's Lewis Goes Packing

Many people don't want "government" messing with private enterprise. It's not a crime to run a company into the ground to max out your ego. Boards go along for the ride because the CEO picks most of them and they like the perks. Lewis should be fired "for cause" and shown the door without the bag of gold. Don't worry, the government is bought and paid for by corporate lobbyists and won't touch these clowns. All the members of the Senate and House Finance Committees have their reelection campaigns funded by the "too big to fail club".

I'm still waiting for the givebacks from the former CEO's of Merrill, Citi, Lehman, Countywide and Bear Stearns. Meanwhile the crazy cable guys are ranting against our elected represenatives and telling us the world is coming to an end. Rarely a word against corporate socialism where the taxpayers eat the losses. Sad


On Oct 01 10:05 AM HBWOW wrote:

> How can our "government" let Lewis walk (or run) away with his pockets
> full of our money. No prosecution, no payback of ill gotten
> gains, no jail - white collar crime again goes unpunished ?????!!!!!!

6 Strategies to Use in Rebuilding Your ETF Portfolio

Good article. However, there is constant bad reporting of the yield on SHY. It is not 2.85% as noted above but rather 1.54%. Almost every website gets this wrong. Take the current monthly dividend of $0.1075 per share X 12 months divided by today's stock price ($83.75) to get the correct current yield.

Obama Is Losing with Healthcare Reform

There hasn't been any real discussion of other countries plans for both the benefits and drawbacks. Most of this has been noise in the US. There are viable plans that are run by private insurers but are effectively single payer and work. Look at Switzerland that did a lot of research of other countries before enacting their own. To keep costs down, basic care is delivered and priced as a not-for-profit. Other services are sold by private insurers similar to Medicare Advantage. Everyone is required to have health insurance and the system works. The biggest problem in the US are the lobbyists who purchase the votes of our elected officials and subsequently protect their market share and pass on increased costs to all taxpayers. Employees can't easily change jobs and we are quickly becoming uncompetitive with other countries. How many of the multimillionaire clowns on TV purchase their own private policies?

I agree thee is no free lunch and the cost of heath care will keep rising until companies lower benefits to their employees or simply say here is $5,000 a year and go buy your own policy. Maybe then voters will wake up and throw the bums out.

Market Outlook: Bill Gross Has It Exactly Right

It's called spread investing in a deflationary environment. The banks receive taxpayer funds via the Treasury and but Treasuries in return. They have no corporate loan volume and need to earn the spread. "Chasing yield" in government bonds is not the same as high yield debt, CDO's, etc. Bill Gross does have it right!

Time to Switch from Corporate Bonds to Equities?

Yes, everyone should sell their bonds and buy stocks at the top! Forget that we are in a deflaionary environment and the Fed is still keeping monetary policy loose. What a great way to lose money. We will see a 5% retracement in the fouth quarter and then a slow build in the S&P thrpough most of 2010. Bond spreads have tightened but will produce comparable total returns to stocks in 2010. keep average bond duration under six years and you will do fine.

Bond Expert: Friday Outlook

Deflation rules as we pay down excess debt and the consumer saves. All the rest in noise. Rates will stay low for another year.

It's Time to Sell Equities and Look to These 3 Areas

Agree with your comments but would have bond duration out to say 4 years in Treasuries, agencies and investment grade debt. I have invested accordingly. Equities should be in high quality, dividend paying companies.


On Sep 18 12:06 PM Ad Orientem wrote:

> I am an advocate of long term investing and I am inclined to a slightly
> modified form of the late Harry Browne's Permanent Portfolio. (See
> my insta blog.) That said I tend to concur with this assessment.
> If you have made money in the huge rally since March, (or even if
> you haven't) it's time to take some profit and reduce your exposure
> to equities. There is no historical precedent for this kind of a
> rally (without a steep sell off at the end of it). The fundamentals
> simply do not justify a near 60% run up in the equity markets in
> six months. Just as the market was broadly oversold in March, so
> it is overbought now.
>
> If you are over-weighted in equities you need to lighten up and reduce
> your exposure. I like cash, conservative bonds and gold. Both cash
> and bonds are short term only though as there is more than whiff
> of looming inflation in the air. Gold is in a long term bull market
> that will continue for the foreseeable future with the caveat that
> there will of course be occasional dips.
>
> I would not buy any bonds with more than a 2 year maturity. The risk
> level is too high. And to be frank the bond market is a little pricey
> right now too. Bond yields are at historic lows along with interest
> rates. A better move for those seeking some bond security might be
> to look outside the United States. Adding some foreign debt to your
> bond holdings can help diversify your portfolio and reduce the risks
> from inflation. I like Japanese, Australian and Swiss currency denominated
> government or very high grade private bonds. If you want to add a
> little speculation you can buy some Brazilian bonds. With the weakening
> dollar these securities will likely out-perform the US bond market
> in the intermediate future.
>
> Bottom line though is that I think no one should have more than a
> third of their aggregate portfolio in equities for a while. To the
> extent you do own equities stay conservative.

But Cash Is Earning Zero

Short term Treasuries (SHY) and short term investment grade bonds, although slightly more risky, work as cash substitutes for me and yield between 1.5% and 2.5%.

10 Notes on Risk in the Markets

And we pay CEO's of large banks to invest our government suppied equity in government bonds? Cap pay and bonuses on this activity as a percentage of the bank's annual cash flow. Max pay of $100,000 for buying Treasuries. This is the real TARP arbitrage that is ripping us off!