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Albert Edwards: The Market Will Hit New Lows Next Year Joe WeisenthalNov. 10, 2009, 11:34 AM SocGen's resident uber-bear Albert Edwards is at it again: Reuters (via Paul Kedrosky): People should question the happy clappy nonsense from sellside analysts," London-based Edwards, a global strategist with SocGen's Corporate & Investment Banking group, told a media briefing. "We are not saying that people should not participate in the rallies -- that will get you fired as a fund manager -- but they should not become too convinced of the recovery," he said. Edwards is more worried about Japan in the near term...

Rosenberg: Something Big Is About To Happen The Pragmatic CapitalistNov. 10, 2009, 12:59 PM David Rosenberg notes the incredible lop sided trading environment. The dollar short/long equities trade has become the no-brainer trade and is beginning to appear crowded. David notes: Looking at the latest Commitment of Traders (COT) report, we can see some pretty interesting (and potentially disturbing) trends taking place (data for November 3rd): The only areas where the speculators (non-commercial accounts) are net short are in Treasuries and in the U.S. dollar. Everything else has massive net speculative longs and hence near-term vulnerable to a reversal. There...

That 10.2% Unemployment Report Was The Best Thing That Could Happen To Stocks Joe WeisenthalNov. 9, 2009, 6:56 PM Friday was stunning. After a shock unemployment reading of 10.2%, the market surged. And then, after a weekend of stewing things over, markets rocketed higher again today, and are now comfortably sitting at the highs of the year. So why the powerful rally despite the so-so fundamentals? Maybe because rising unemployment guarantees a continuation of sub-0% interest rates. Think about it. In recent months, stocks have maintained a tight 1-to-1 inverse correlation with the dollar. As the dollar declines, stocks go...

Stocks now pay way less than bonds once again, but neither pay much... BLINK and you missed it. US equities offered a greater yield on investment than did US Treasury bonds for less than five months... And from the day this oddity struck, 18 Nov. 2008, the S&P still had another one-fifth to fall. "When this inversion occurred, my two older partners assured me it was an anomaly," wrote the late Peter Bernstein in Nov. 2008. The inversion Bernstein referred to had occurred five decades earlier...back when the dividend yield offered by US equities slipped below the yield offered by...

Go For Gold: If The Fed Keeps Printing, The Dollar Will Keep Falling Posted Oct 22, 2009 07:30am EDT by Peter Gorenstein Gold bugs are buzzing with excitement. While the dollar continues to tank, the cheers from folks like Peter Schiff get louder. Ahbay Deshpande portfolio manager with the First Eagle Gold Fund takes a more measured approach to gold. He says talk of $5000 gold – an idea recently promoted by Schiff on Tech Ticker - is probably premature. However, "eventually we'll get there," he says, noting that "as sure as the Federal Reserve will print money and credit...

At The Value Investing Conference, All Anyone Wanted To Talk About Was Gold Joe WeisenthalOct. 21, 2009, 7:15 AM Rolfe Winkler makes an anecdotal, but important, observation from this week's Value Investing Conference Looking out a few years, I’m as bearish as anyone, I admit. But I’m a little worried that suckers could get caught in this gold rally. A hedge-funder I spoke with at the Value Investing Congress said half of the sessions were devoted to doomsday scenarios, precious metals, etc. Today there was a keynote from Eric Sprott of Sprott Asset Mgmt. Fully 70% of his assets under...

Now that the credit/bank crisis is two years old, and the Dow around 10,000, gold is at highs over $1000. One would think that with $3 trillion of direct US Fed bailout cash, plus $17 trillion of various guarantees and singlehanded support for the US mortgage/financial markets would do something. After the ‘Cash for Clunkers' stimulus, and all the other money thrown into the banking system since the collapse of Lehman a year ago, one would expect some kind of economic rebound. The financial pundits are all making a big deal out of the Dow rally to 10,000. Will it...

Having risen approximately 300% since the start of its bull run in 2001, Gold has far outpaced the investment gains in virtually every other investment class, including stocks, bonds, real estate and cash. Gold bugs feel certain that this time will be the ‘big one,' and that the precious metal will likely hit $2,000 - $3,000 an ounce, if not higher. Commodity experts like Jim Rogers also believe that Gold will continue to surge higher, right along with most energy, food and base metal commodities; in fact, some believe that the bull run in commodities still has another 5 -10...

I can't think of a better way to describe the last 2 years than as times of great uncertainty. Not only did we have two near catastrophic banking failures worldwide, but we also have the ever present Iran Israel nuclear contention. The USD held reasonably well during this period, although it's weaker. In any case, gold has held up amazingly well over the period of the last two years too, in fact is at highs. What else is except US T bonds? Pimco's Bill Gross just said the longer term of the US T yield curve is flattening and that...

Unlike the "legitimate bull markets" of many foreign markets, Peter Schiff believes the U.S. is merely experiencing a "rally in a bear market," and is lagging the rest of the world "for a reason." The worst is not over, according to Euro Pacific Capital's Schiff, who predicts the Dow will fall another 90% from current levels when measured against gold. A longtime dollar bear and gold bull, he foresees gold hitting $5000 per ounce "in the next couple of years," and predicts the Dow and gold will trade on a one-to-one ratio vs. the current level of around 9.7-to-1. Schiff...

"Whether through exuberant hedgies or anxious private investors, gold just keeps pushing higher..." SO SPECULATIVE BETTING on gold going higher now equals a record-busting 752-tonne position in Comex futures and options, yet this is not a bubble according to Michael Pento of Deltaga. Let's say otherwise. Let's say that gold prices, surging by almost $100-per-ounce in barely a month, are very much in a bubble...blown up by near-zero interest rates worldwide and a sharply negative cost of borrowing after inflation. Were that the case, the question before potential and existing investors would be simple: Is this "irrational exuberance" or a...

Hao Ting, who owns a petroleum-equipment business in Beijing, recalls the investment sales pitch from her private banker in Hong Kong at Singapore's DBS Bank: "The world is made for wealthy people. The more wealth you have, the easier it is to make money." Today she's out $10 million and owes the bank another $12 million. Hao and the bank are now suing each other in Hong Kong, with the bank saying it followed "local regulatory guidelines."

Talk is now circulating in financial quarters of a new "mini-bubble" in the making. Apparently the unbounded rise in the stock market is reviving fears of another collapse like the one suffered last year. Another reason that the "hated rally" has sparked fears is that we're about a year removed from the final "hard down" phase of last year's 6-year cycle collapse. September 2008 witnessed the financial markets crater and the intensity of last year's fear was unmatched in our lifetime. Not even the 1972-74 bear market, which was the worst since the Great Depression, witnessed a comparable level of...

Cs, broadband Internet connections, online brokerage accounts. These advances brought democracy to Wall Street, leveling the playing field between everyday investors and the insiders, right? Wrong. In fact, computers are ruining investing for the average investor. Sure, your PC lets you see when your stock is moving. But multiply its computing power by thousands, add a throng of software geniuses earning more than $1 million a year and an army of full-time analysts, and you start to understand how the biggest brokerages and hedge funds can stay a few steps ahead of any move you can make. Yes, you can...

The announcement of record profits for Barclays Capital on Monday was greeted with a bigger dose of resentment than of relief that the financial crisis has not proved absolutely terminal.There remains a deep sense of unease about investment banks and the techniques they use to make money. In my view, this is due in part to the veil of mystery that shrouds their operations. There's a lingering suggestion that money is being generated out of thin air and that this shouldn't be possible. It's unlikely that any hedge fund or investment bank will open their doors and say "look guys, here's how...

Did you know that the election of Barack Obama means that conservatism is dead forever more? The New Yorker thinks it is anyway. Its recent piece on the authors of the “Little House on the Prairie” series not only pronounces conservatism likely dead but also imagines the same fate for capitalism itself. This is just another example of how the self-congratulatory, isolated left constantly announces the death of capitalism and conservatism as it has been doing since FDR, our second most socialist president ever, came to power. So how does one get from talking about the beloved children’s classic of...

Since the 1950's GDP has largely been used to measure the economic well being of nations. It is the arguably the foremost statistical factor that economic growth is derived from. To illustrate the idea of why GDP is a poor gauge of well being in a country consider this example for a moment. In the US, any money spent to re-develop the World Trade center in New York after September 11th has in one way or another counted towards GDP growth. The same goes for any other natural or manmade disaster throughout the country. Likewise, any money spent by the...

The evidence keeps piling up that the U.S. economy has reached bottom and that a recovery of some sort is in the cards for the second half of this year. But that's where the consensus ends. The shape of any recovery remains a matter of heated debate on Wall Street. [...] The end result is that the recession that began in late 2007 has been worse than the initial estimates indicated. That, however, raises the possibility of a V-shaped rebound, because deep recessions typically have been followed by fast comebacks. But as everyone knows, the backdrop for this recession has...

Given the chance to make 30% in stocks or 25% in bonds (from the March lows), you ought to pick the bonds. Why? Two reasons...

Daniel Rice, manager of the BlackRock Energy & Resources Fund, is the best-performing U.S. equity fund manager of the past decade, according to Morningstar. He's also not afraid to speak his mind, especially when it comes to the subjects of global warming and alternative energy, as revealed in the accompanying video. Rice paints a "pretty dire picture" of the whole alternative energy industry, with the possible exception of wind, based on the following: Global warming patterns have reversed in the past decade, Rice says, citing studies by meteorologist Dr. Judah Cohen, whom BlackRock has on retainer. Ten years is microscopic...

Foreign currency funds can protect you from a dollar decline, but they might not be necessary. This week's G-8 meeting in Italy has kicked off with the traditional warm-up event -- yet another debate about whether the dollar will, or should, lose its place as the world's reserve currency. This time the governments of China, Russia and Brazil all plan to raise the issue. In keeping with recent tradition, any demands that the dollar be toppled will, of course, be accompanied by soothing remarks that they are demanding no such thing. For the rest of us, this debate raises three...

President Obama's nomination of federal appeals court Judge Sonia Sotomayor to replace retiring Supreme Court Justice David Souter heralds yet another victory for gun-makers. Yes, you read that right. Let me explain. While most investors have been rightly focused on the crisis in the markets and economy lately, some Americans have been focusing on other political issues, namely the Second Amendment. They wonder, will the Obama Administration and new Supreme Court nominee Sonia Sotomayor put the right to bear arms in jeopardy? Clearly, many think so, as evidenced by an increase in gun sales and an associated rally in gun...

Not one investor in a hundred realizes this, but now is a once-in-a-lifetime opportunity for income investors. Most people will never recognize this opportunity because they don't know what a truly great income investment is. Most income seekers like to buy things like commercial real estate stocks (REITs) to collect rents. REITs have a big problem: They're required by law to pay out 90% of their distributable earnings. So if they want to grow, they have no choice but to take on debt or dilute your interest by selling more shares. That's why so many REIT dividends have been cut...

Islamic supremacism takes another leap. Standard & Poor's starts TSX Islamic index Standard & Poor's is launching an index of large Canadian stocks with criteria defined by Islamic law – no companies with businesses in financial services, entertainment, alcohol, pork-related products or tobacco. The index operator said Wednesday the Shariah-compliant version of the S&P/TSX 60 "will create new opportunities for Islamic investors to benchmark their Canadian investments, and for asset managers to create new investment products serving the Islamic community." The S&P/TSX 60 Shariah index joins Standard & Poor's Shariah-compliant indexes in 51 other markets, including the S&P 500 Shariah,...

Are Bonds the New Stocks? Q&A with Robert D. Arnott This prominent financial analyst contends that the ‘cult of equities’ has obscured for many the importance of bonds, which can outperform equities for extended periods of time.

Maybe your DNA made you do it. Whatever investing mistake you have committed lately, there is probably a gene that is often associated with that behavior. Are you predestined to be the prisoner of your genetic code? To find out, I recently spent a day at the University of Pittsburgh getting a battery of DNA analyses and brain scans. I consider myself a patient and disciplined investor, so I volunteered as a guinea pig in Ahmad Hariri's imaging genetics lab to learn how my genes and brain activity shape my behavior. The results shocked me. After I spit into a...

nternational power broker Henry Kissinger -- who also happens to be Tim Geithner's first employer out of college -- said in a 2007 interview with Charlie Rose that "we're at a moment when the international system is in a period of change like we haven't seen for several hundred years." And what's changing? Former President of the World Bank James Wolfensohn is more specific:

You can't be a successful investor unless you can overcome your fears. So what's bothering you? Maybe, after reading one too many stories about investigations of Ponzi schemes, you are fearful that your entire portfolio may have been embezzled. Huge and scary! Yet I've seen nothing addressing this well and simply. There is one foolproof, easy way to be sure this never, ever happens to you. If you hire anyone to make investment decisions for you, be sure it, he or she is separate from whoever has custody of your money. That's it. Have your assets held at a major-name...

[VIDEO] Excerpt: Then came Warren’s big but (which is totally unrelated to Michelle Obama’s big butt): “…Job one is to win the war, the economic war. Job two is to win the economic war. And job three. And you can’t expect people to unite behind you if you’re trying to jam a whole bunch of things down their throat. So I would, I would absolutely say for the, for the interim, till we get this one solved, I would not be pushing a lot of things that are, you know, are contentious. And I also, I also would do no...

EXCERPT: Note to White House: don’t let the president see today’s issue of the Wall Street Journal. Tell him the dog chewed it up. Tell him the delivery boy threw it on the roof. Tell him they’re still drying it out because it got rained on. Come up with any excuse you want, but don’t let him see the paper.

Investing? Here's the Safe Option By EUGENE SILVER Updated 11:12 AM CST, Thu, Mar 5, 2009 Safes are becoming popular again, due to unpredictable financial markets. Afraid that cash isn't secure even behind the thick walls of banks, more people are turning to something that has protected money since the days of Jesse James and Bonnie and Clyde: safes. Enlarge Photo Safes are becoming popular again, due to unpredictable financial markets. Safes are Flying Off the Shelves Watch Video Safes are becoming popular, again. The metal vaults are so popular in some part of the country that shopper are depleting...

Does anyone here think Ford will eventually increase it's stock price? It is down to nothing and I was thinking of purchasing some shares to see what it does. Any thoughts

As stocks on Friday meandered to another month of losses, investors were especially focused on the S&P 500 Index and whether the broad market gauge would close above or below its November lows, with a finish above 740 to 750 seen as a victory of sorts After the worst January performance in its 113-year history, the Dow industrials were on track for a February decline of more than 900 points or 11.3%. As things stood with 30 minutes to go before the closing bell, the Dow was on track for its worst February point drop ever, and its second-worst percentage...

Has anyone with his own network TV show ever been unfunnier than Bill Maher? OK, maybe Bill Moyers. But we’d call it a toss-up. Maher’s 2009 HBO show just premiered on Friday night. But he’s already in mid-season form when it comes to unfunny. He ended the season-opener with this suggestion: “If we killed two random, rich greedy pigs,...

I am naturally skeptical of anyone that is too confident about their investing strategy. There are no guarantees in the market or the economy so the very fast push for the stimulus (government investment) currently moving through congress is naturally something that is raising warning flags. Whether you agree with the need for a stimulus plan or not don't ignore the uncertainty and risk. Regardless of political feelings, investors can and should be dealing with the risk of the stimulus very proactively. By accepting and dealing with uncertainty you can avoid the investor trap of "talking your position." Too often...

Did I just say, “don’t save for retirement”? Yep. But maybe I just have said, “don’t JUST save for retirement.” I think the government and financial industry, whether unconsciously or not, have perpetuated the retirement savings scam. Through the creation of retirement plans, like 401Ks and IRAs, and financial instruments, like mutual funds and index funds, these organizations want you to put your money in a lock box and pull it out, at the point when you’re least likely to enjoy the benefits of wealth. For the financial industry, this makes sense because the longer it takes you to build...

I had a chat with a friend last week. It was quick because he told me he was on the way to meet some potential partners for a new business. He’s got big ideas about mobile phone technology. “Starting a business in this economy?” I asked, somewhat surprised, even though we’re doing the same thing. He said, “Great ideas don’t read the papers.” Wow. That blew me away. I don’t believe in big media. I really don’t believe in big corporations. The layers of yes-men and yes-women form a barrier to innovation. There’s only one thing worse than big corporations...

Remember Bambi saying he'd destroy the coal industry? That he'd have a cap and trade system for carbon credits covering all of industry? There must be a way to follow this fool's swath through the economy and profit off it. Let's figure out how to trade carbon credits.

Our society tends to see things as black and white, good and bad, and, economically speaking, rich and poor. Like the small town in the Old West, we see the economy as a zero-sum game; there’s only room in this town for one sheriff. This type of thinking promotes the idea that if you are making money, you are taking money. And if you have money, you made someone else poor. The sheriff, in this case, the financial regulator, rides in with a pen and paper a’blazing to try to right the wrongs of this limited economic vision. But, the...

I'm looking for recommendations for simply written, basic books about investment strategies. I have read some books on economics, like Sowell's Basic Economics. What I'd like to learn is investment terminology and how to read the market and information about other investment tools. I know there's no magic bullet, but knowledge is the first step to making wise decisions. Thanks.

NEW YORK (AFP) – Battered US stocks enter the New Year next week on expectations of a gradual market recovery as president-elect Barack Obama moves to drag the world's biggest economy out of recession. The US stock market has risen about 20 percent from its climactic lows reached on November 21 and "chances that we saw the bottom of the bear have increased because of the massive easing done by the Federal Reserve since then," said Alfred Goldman, chief market strategist at Wachovia Securities.

I am not an investment advisor. My dad was quietly successful, and I have been, too. These rules are what I use, most of which originated from watching and helping my dad, and have been firmed by my own war stories.

Okay, so we are looking at a few years of outright democrat control of the WH, Senate and House. The prospects for Americans is rather dour on the whole but there are ways to prosper and build "something" for the future. I fully expect people to jump on and complain about outright government confiscation of wealth and compensation and whatever else they need to say but there are other places to rant about that. What I would like to start a discussion on is how people can make money for themselves, their families and the causes that they choose to...

I don’t mean to turn this blog into a political soapbox, but I think there have been some issues missed by the media, who seem always to boil down arguments to the simplest and most divisive denominators. So, I thought I would explore. By now, we all have met Joe the Plumber. Joe says that a tax hike on people making over $250,000 would hamper his ambitions to expand his company. But there’s a more direct impact of new tax plans. I call him–and her–Joe and Josephine Investor. Capital gains and dividend tax increases will be levied against all investors,...

I have a friend who is a genuine legend in the currency trading business. He retired last year, but before that we worked closely together at one of the largest hedge funds in the world where he was a founding partner. We were talking about politics early in the 2008 presidential campaign and he said that while he preferred a Republican for the well being of the country, the mercenary side of him could be content if the Democrat was elected as well. Hearing him say so really surprised me. My friend was a financial supporter of the “American Enterprise...

Back in July, when he declared his long-term portfolio was 100% in cash backed by T-bills, a lot of people said Todd Harrison was crazy -- or clueless.But Harrison, CEO of Minyanville.com, is looking pretty smart these days given the ongoing turmoil in the financial markets. Just because Warren Buffett is putting money to work doesn't mean the average investor should -- unless you can get the same favorable terms "the Oracle" has gotten from recent investments in GE and Goldman Sachs.In addition, the dollar has been on the rise lately and hit a 13-month high vs. the euro Thursday...

CNBC's Jim Cramer made an on-air apology last night for recommending Wachovia stock just two weeks ago. The recommendation followed an appearance by the bank's CEO Robert Steel. On Sept. 15, the day Steel appeared on the Mad Money, Wachovia stock closed at $10.71/share. Yesterday it closed at $1.84/share. Below is the clip from Sept. 15. And after the jump, Cramer's apology: "I let you down, because I wasn't skeptical enough." [video]

Although Wachovia Corp. has been mentioned as one of the more troubled big U.S. banks, at least some analysts believe it is not at risk and is unlikely to suffer the same fate of Washington Mutual Inc. They also believe that Wachovia will be able to survive on its own, without merging with another big financial institution. Still, shares of the Charlotte, N.C.-based bank plunged Friday as investors, the day after WaMu's failure, shifted their focus to other financial institutions that also suffer under the weight of mounting losses tied to toxic assets. Shares plummeted $4.90, or 35.8 percent, to...

Three years ago, Deep Capture reporter and Overstock CEO Patrick Byrne gave a famous conference call that he titled, “The Miscreant’s Ball.” His thesis was simple: Some short-selling hedge funds collude to destroy public companies by spreading misinformation, orchestrating government witch hunts, filing bogus class-action lawsuits, and, most egregiously, selling billions of dollars worth of phantom stock. In the months that followed “The Miscreants Ball” presentation, a clique of journalists with close ties to short-selling hedge funds and CNBC’s Jim Cramer (himself a former hedge fund manager), set out to sully the reputations of Patrick and everyone else who sought...

The market slump isn't just shredding millions of college funds and retirement accounts. It's also shredding the financial playbook that many American families had come to rely on to protect and grow their savings. Think of all the rules and beliefs that worked reliably for decades, and which have been trashed in the last year.